HAMDARD DAWAKHANA WAKF DELHI Vs. STATE OF DELHI

JUDGEMENT

(1.) This is a reference under section 57 (1) (b) of the Indian Stamp Act (to be hereinafter referred to as the Act)

(2.) The letter of the Chief Controlling Revenue Authority, Delhi, referring this case to this Court reads as follows :

(3.) On 11th day of September 1964, Hamdar Dawakhana entered into two agreements one with Institute of History of Medicine and Madical Research, Delhi, and the other with Hamdard National Foundation (India), Delhi. Both these agreements are drawn up more or less in similar terms. Therefore, it will be sufficient if we quote the material clauses from the agreement entered into by the Hamdard Dawakhana with the Institute of History of Medicine and Medical Research, Delhi. The clauses in that agreement which are relevant for our present purpose read thus:- "This agreement witnesseth the Terms and Conditions on which the Institute of History of Medicine and Medical Research has agreed to permit and the Hamdard Dawakhana (Wakf), has convenanted to make exclusive use of the Trade Name, Trade Marks and Patents, within the territory of the Union of India in the manufacture and sale of the User's products within the territory of the Union of India. The terms and conditions are : The owner shall have the right to charge to the user and the User shall be bound to pay to the Owner the said royalty at the following rates:- The royalty for the use of Trade Marks and Patents shall be five per cent (inclusive of know-how) of the selling price of the said medicines and products subject to the Minimum of Rs. 6,000.00 (Rupees six thou- sand) and Maximum of Rs. 25,000.00 (Rupees twenty five thousand) per annum. In case the Turnover (inclusive of Free suppliers) of the said medicines and products exceeds Rupees ten laks (Rs. 10,00,000)- in any Gregorian calendar Year., the royalty payable on the turn-over in excess of Rs. 10,00,000.00 will be at the rate of two and a half (2.5) per cent. The selling price means the gross selling price less the trade discount and rebates at a flat rate of twenty-five per cent in all and nothing more irrespective of the, amount of discounts, rebates, commissions and/or any other deductions, off the selling price, actually allowed by the User to its customers, agents, distributors and others. The Publicity and Advertisement, in all its aspects and kinds shall be paid for wholly and solely by the. User and shall not be deductible from the Turnover. The Royalty shall normally, be paid quarterly but the Owner shall have the option of obtaining interin advances from the User. For calculating the Turn-over (inclusive of Free supplies) also, the trade discount and rebates at the flat rate of twenty-five per cent, as aforesaid, will be deducted. The aforesaid rate of royalty being inclusive of "know-how" the owner shall not claim any charge for "know-how, nor for any Goodwill. In consideration of the payment of the aforesaid royalty, the User shall have the exclusive right, during the currency of this Agreement, to use Trade Name, Trade Marks and Patents in the manufacture and sale of the User's products within the territory of the Union of India, but the User shall not have any right to export outside the said territory, any of its products bearing the Trade Name, Trade Mark and Patents, of which, only the right of use is hereby convenanted for royalty consideration. * * * *