MODELLA WOOLLEN LIMITED Vs. MODELLA KNITWEARS LIMITED

JUDGEMENT

(1.) This is an appeal from the order of the learned Single Judge dated September 19, 1994 whereby interim order dated March 18, 1994 restraining the respondents from using, selling or offering for sale or advertising goods bearing trade mark 'MODELLA' with and without lion device was vacated and consequently, the application of the appellant-plaintiff, I.A.2754/94 under Order 39 Rules 1 and 2 Civil Procedure Code was rejected and the application of the respondent-defendant, I.A. 3170/94 under Order 39 Rule 4 Civil Procedure Code was allowed. The facts necessary for the disposal of appeal are as under :- The appellant M/s. Modella Woollens Ltd., instituted a suit against the respondent M/s. Modella Knitwears Ltd. for perpetual injunction, infringement and passing off of trade mark, infringement of copyright and rendition of accounts against the respondent. It was averred inter-alia in the plaint by the appellant that the plaintiff was engaged in the business of manufacturing, marketing and dealing in textiles including tweeds, shawls, blankets, yarn, readymade garments including hosiery and knitwears etc. under the trade mark 'MODELLA', which was registered in its favour by the Registrar of Trade Marks. It was further stated that in the last week of September 1993 the plaintiff came to know that the defendant was selling shawls, blankets, tweeds, cardigans and knitwears under the trade mark 'MODELLA' with lion device representing the same artistic manner as that used by the plaintiff. It was asserted that the plaintiff had not authorised or permitted or licenced the defendant to use the plaintiff's trade mark. The plaintiff also alluded to the fact that a notice dated October 1, 1993 was given through its Trade Mark Attorney to the defendant to discontinue the use of the mark 'MODELLA' with lion device in respect of blankets, shawls, tweeds, cardigans, hosiery and knitwears. In the plaint, it is admitted that the defendant replied to the reply through its Attorney on October 26, 1993 but the notice was said to be vague and frivolous. In this regard, it would be advantageous to quote the averments of the appellant in the plaint :-

(2.) In the plaint it was further averred that the defendant has illeglly adopted the trade-mark 'MODELLA' with lion device which belongs to the appellant. The plaintiff also claimed infringement of the copyright by the defendant. Alongwith the plaintiff, an application under Order 39 Rules 1 and 2 Civil Procedure Code was also filed by the appellant. Initially the learned Single Judge on March 18, 1994 issued an ex-parte interim injunction against the respondent. By that order respondent was restrained from using, selling or offering for sale or advertising goods bearing trade mark 'MODELLA' with or without lion device. However, subsequently, as noted above, the order was vacated on September 19, 1994. It is this order which has been impugned by the appellant in the present appeal.

(3.) We have heard learned Counsel for the parties and gone through the record and the order of the learned Single Judge. At the out set we wish to point out that the appellant has been guilty of concealment of facts. In the plaint there is no mention of certain agreements which the appellant had executed. In this regard it will be necessary to state a few facts. The appellant, Modella Woollen Ltd., had another subsidiary, namely, Modella Knitwears Ltd. located at390. Industrial Area, Ludhiana. In a meeting of Board of Directors of Modella Woollens Ltd. on August 22, 1989 it was decided to transfer 50,000 shares of Modella Knitwears which the appellant was holding to an intending buyer. Pursuant to the decision of the Board of Directors of the appellant, by an agreement dated August 28, 1989 between the appellant on the one hand and Mr. M:L. Goel of M/s. Laminator India Pvt. Ltd. on the other, the appellant agreed to sell and Mr.M.L. Goel agreed to purchase the said 50,000 equity shares of Rs. 10.00 each. On the execution of the agreement, the appellant delivered to Mr. M.L. Goel and his nominees certificates in respect of 50,000 shares in the Modella Knitwears Ltd. together with related transfer deed duly signed by the vendor, for which the purchasers paid a sum of Rs. 2,50,000.00 being the full purchase price of the said shares by a bank draft to the appellant. The aforesaid agreement declared that the machinery and equipment installed in the factory premises of Modella Knitwears Ltd. belongs to the company (Modella Knitwears) and the appellant shall have no claim upon it whatsoever. At the time of the agreement, Modella Knitwearsowed a sum of Rs. 16,23,000.00 to the appellant, Modella Woollens Ltd., as principal sunn and Rs. 8,69,000.00 as interest thereon. It was agreed between the parties that upon payment by the Modella Knitwears Ltd. and the purchasers, a sum of Rs. 12,51,000.00 in six equal monthly instalment of Rs. 2,85,000.00, the liabilities of Modella Knitwears to the appellant shall stand discharged. The aforesaid agreement further stipulated that the trade-mark of the company 'MODELLA' used by the company shall be continued to be used by it and the vendor shall not do anything to disturb the user of the same. The relevant clause reads as follows :-