P. SURESH Vs. SUPER FOODIS (P.) LTD.

JUDGEMENT

(1.) This Suit is filed for permanent injunction and preliminary decree against the defendant, which is a Private Limited Company carrying on Restaurant under the "SANGEETHA'S Desi mane" at No.23, Old No.35, 10th Avenue, Ashok Nagar, Chennai 600 0083.

(2.) The brief facts of the case as found in the plaint is that, the plaintiff is the Proprietor of the registered trademark "SANGEETHA'S Desi mane" under Clause 42. The registration is valid upto 20th August 2027. It was registered on 20.08.2007 in the name of partnership firm M/s.Sangeetha Caterers & Consultants. Later, the partnership firm was converted into a Limited Liability Partnership Firm (LLP), on 01.04.2015. Pursuant to the conversion, the Directors of the Limited Liability Partnership have submitted Form TM-24, to bring on record the plaintiff name as subsequent Proprietor. The said trademark was assigned by M/s.Sangeetha Caterers & Consultants LLP in favour of the plaintiff vide assignment deed dated 01.04.2016. The trademark Registry passed an order on 17.03.2018 conferring and recognition the ownership over the plaintiff. The Legal Use Certificate issued by the trademark Registry stands in the name of the plaintiff/Mr.P.Suresh, as a single firm Trading as M/s.Sangeetha Caterers & Consultants (LLP). M/s.Sangeetha Caterers and Consultants LLP is also owner of the registered Trademarks "SANGEETHA, SVR SANGEETHA and SANGEETHA (with a veena mark) . These trademarks are household name in the restaurant business. The plaintiff is one of the promoters of M/s.Super Foodis Private Limited, which was incorporated on 24.05.2016. The plaintiff as the brand owner of trademark "SANGEETHA'S Desi mane", had entered into a Franchise agreement dated 12.08.2016 with M/s.Super Foodis (P) Limited, to run a vegetarian restaurant for a period of three years from 12.08.2016 to 11.08.2019. The said restaurant was inaugurated on 11.11.2016. The plaintiff has spent about Rs.15,44,616/- towards promotional expenses. Apart from his shareholding, he has advanced about Rs.3.00 crores in the said Company for its operational expenses. Under the Franchisee agreement, 5% on the gross sale should be paid as running Royalty to the plaintiff. During the month of January 2018, Mr.R.Rajendran and his family members approached the plaintiff for purchase of shares of the Company and the plaintiff agreed to sale the shares to Mr.R.Rajendran and his family members comprising to Mr.R.Adhavan and Mr.C.Arun Kumar. It was agreed that new management under Mr.R.Rajendran will discharge the loan liability to the existing members. Accordingly, the loan liability was partly discharged and a sum of Rs.29,95,461/- due and payable to the plaintiff as on 31.03.2018. After the takeover of the management, the defendant along with Ms.Mary Christina Rozario, one of the Directors of the Company, continue the business operations, after the plaintiff resigned from the Directorship on 19.09.2018. The defendant, in spite of continuing business in terms of the franchisee agreement has not paid the Royalty amount of 5% on the gross sale, as per agreement. From March 2018, a sum of Rs.10,000/- p.m., alone is paid towards part payment of Royalty amount. From the month of March 2018 to August 2018, a sum of Rs.29,88,291/- is the royalty amount payable to the plaintiff. The defendant had wilfully committed default in payment of the same. As per Clause 6.4 of the Franchisee agreement, in case of default in payment of the royalty, the defendant is liable to pay interest at the rate of 12% p.a. That apart, the defendant has violated other terms of franchisee agreement regarding the recruitment and training of personnel in the Franchised outlet. The plaintiff came forward to relinquish his shares in the Company and settle the share value and other dues viz., repayment of loan and arrears of Royalty. In spite of several exchange of notices, the defendant is not ready to settle the dues. Therefore, vide letter dated 19.12.2018, the plaintiff terminated the franchisee agreement dated 12.08.2016 and sought for removal of Sign board "SANGEETHA'S Desi mane" and to surrender all the articles bearing the trademark "SANGEETHA'S Desi mane".

(3.) The defendant, despite termination of the Franchisee agreement, still continue to use the registered trademark of the plaintiff "SANGEETHA'S Desi mane". This creates confusion in the minds of the public and they are deceived by believing that the defendant's restaurant under the trademark "SANGEETHA'S Desi mane" emanates from the plaintiff. The defendant is liable to pay a sum of Rs.16,32,741/- from the date of termination of the agreement, till the date of the suit. Thus, totally a sum of Rs.46,21,741/- towards royalty amount and for the period from 01.03.2018 to 19.12.2018 with interest at the rate of 12% p.a., is due and payable by the defendant. Hence, the suit has been instituted for the following reliefs:- (i). For permanent injunction restraining the defendants from operating the restaurant by name "SANGEETHA'S Desi mane" and from committing the act of passing off. (ii). To surrender all the packing containers, card board boxes, packing materials, covers etc., bearing the trademark "SANGEETHA'S Desi mane". (iii). Preliminary decree to render accounts of profits made by the defendant after 19.12.2018 and money decree for a sum of Rs.1,25,00,000/- as damages for their wrongful and illegal act.