YASMIN KHALIQUE & ORS Vs. MUKHTAR ALAM

JUDGEMENT

(1.) This is an application under Section 9 of the Arbitration and Conciliation Act, 1996, as amended by Act No. 3 of 2016 (in short, "the Act of 1996").

(2.) The petitioner nos. 1 and 2 and the sole respondent are the partners of the petitioner no. 3 firm namely, M/S. Md. Musa & Co. (hereinafter referred to as "the petitioner no. 3 firm") which carries on business of manufacturing and dealing in tobacco gul under the brand name, "Musa Ka Gul". The petitioner no. 1 is the mother of the petitioner no. 2 and the respondent is the brother- inlaw (husband's brother) of the petitioner no. 1. Until March 31, 1992 the respondent had been carrying on the business of manufacturing and dealing in tobacco gul , under the name and style of Md. Musa & Co as the sole proprietor thereof. By a deed of partnership dated April 1, 1992 entered into between the petitioner no. 1 and the respondent, the petitioner no. 3 firm was constituted which took over the proprietorship business of the respondent. Under the said partnership deed dated April 01, 1992 each of the parties therein had 50% share in the profit and loss of the petitioner no.3 firm. Subsequently, there was a reconstitution of the petitioner no. 3 firm and by a deed of partnership dated April 01, 2006, the petitioner no. 2 was inducted as a partner of the petitioner no.3 firm. As per the said deed of partnership dated April 01, 2006 (hereinafter referred to as "the deed of partnership") the petitioner nos. 1 and 2 each has 25% share and the respondent has 50% share in the profit and loss of the business of the petitioner no.3 firm. Clause 12 of the deed of partnership provides that each partner shall be just and faithful to the other partners in all the transactions relating to the partnership and shall at all times be responsible to give the other partners a just and faithful account of the partnership's affairs. As per clause 15 of the deed of partnership, all matters of differences relating to the affairs of the partnership shall be referred to arbitration according and subject to the provisions of the Arbitration Act in force, for the time being. Clause 16 of the deed of partnership contemplates that matters for which no provision has been made, shall be controlled and governed by the Indian Partnership Act and/or any statutory modification thereto. According to the petitioners, the petitioner no. 3 firm is the owner of the trade mark "Musa Ka Gul" duly registered by the Registrar of Trade Marks. A copy of the registration certificate issued by the Trade Marks Registry, as disclosed by the petitioner reflects that the registration of the said trade mark "MUSA KA GUL" in favour of the petitioner no. 3 firm is valid up to April 19, 2019. By consent of all partners, by three royalty agreements dated April 01, 2011, April 01, 2012 and August 01, 2012 the petitioner no. 3 granted licence in favour of the three organisations namely, M.M. Industries, J.S. Industries and M.M.I. Tobacco, respectively to use its said trade mark upon payment of royalty. The said royalty agreements were signed by the respondent on behalf of the partners of the petitioner no. 3 firm. According to the petitioners, during the year 2017 they noticed sudden fall in the sale of the product of the petitioner no. 3 firm and many spurious and/or deceptively similar products have surfaced in the market. In February, 2018 the petitioners received a letter from one of its sales representative at Bareily , in the state of U.P. that one M/S M.S. Industries has been selling 'Gul' with the brand name, "Musa Ka Gul". Upon a complaint being lodged with the Police Authorities at Bareily the said sales representative of the petitioner received a tax invoice issued by one M/s. M.S. Industries of 53, Phears Lane, Kolkata 700 012 selling huge quantities on "Musa Ka Gul" to the dealer of Bareily, U.P. He also got a circular issued by the respondent, in the letter head of the petitioner no. 3 firm, alleging himself to be the owner of "Musa Ka Gul Super" and that M/s. M.S. Industries situated at Pakuria, Domjur, Howrah is an associated company of the petitioner no. 3 firm, entitled to manufacture in the brand name of "Musa Ka Gul Super". It was further alleged that the product manufactured by M/s. M.S. Industries was absolutely genuine and requested all the customers not to lend their ears to false rumor. Thereafter, the petitioner no. 1 and 2 became suspicious and upon enquiries, came to know that huge quantities of spurious "Musa Ka Gul" being manufactured and sold by M/s. M.S. Industries who has its factory at Domjur, Distric: Howrah. They further came to learn that the said M/s. Industries is owned by Shaheena Mukter, the wife of the respondent who has got herself registered with the Goods and Service Tax Authorities as well as the Central Excise Authorities and that the respondent and her said wife had opened a bank account in their name with Vijaya Bank, C.R. Avenue, Kolkata by furnishing the address of the petitioner no. 3 firm. Apart from the allegations that the respondent, with his wife Shaheena Muktar have committed various acts of fraud upon them, the petitioners have claimed that as a partner of the petitioner no. 3 firm the respondent is legally liable and obliged not to indulge in or run any parallel business like that of the petitioner no.3 firm or compete with the business of the latter. It is asserted that as a partner of the petitioner no. 3 firm the respondent has an obligation to be faithful and trustworthy to the petitioner nos. 1 and 2 but by reason of his parallel business through M/S M.S. Industries, the respondent is clandestinely diverting the business of the petitioner no.3 firm. The petitioners further claim that the said brand name "Musa Ka Gul" and the products are the property of the petitioner no.3 firm and each of the partners of the petitioner no. 3 firm has contractual, as also legal obligation to secure such property and not to do any such act or deed which would in any way cause harm to or loss of the said property vis-à-vis the partnership firm. The petitioners have also raised a claim of Rs. 1, 77,41,960/- against the respondent on account of fall of sales turn over and loss or damage suffered by them due to illegal diversion of the business in favour of M.S. Industries.

(3.) On May 04, 2018 the petitioners filed the application, A.P. No. 282 of 2018, under Section 9 of the Act of 1996, praying for, inter alia, an order of injunction restraining the respondent whether by himself or his wife or servants or agents or otherwise howsoever from running a parallel business of manufacturing or dealing with or selling "Musa Ka Gul" or "Tobacco Gul" by the name of M/s. M.S. Industries or in any manner whatsoever and for appointment of a special officer to inspect the office, factory and sales office of M/s. M.S. Industries at 53, Phears Lane, Kolkata and at Pakuria, Lakshmanpur, Howrah, to make an inventory and submit a report before this Court. The petitioners also prayed for an order directing the special officer to take custody of the books, accounts, ledgers, documents and stock of Gul relating to M/s. M.S. Industries. Upon the application being moved, on May 11, 2018 a learned Single Judge of this Court passed an order appointing an advocate of this Court as the special officer to inspect the office, factory or wherever the respondent is operating from or manufacturing, selling or circulating products under the name/mark "Musa Ka Gul" manufactured by M/s. M.S. Industries or under any other name or entity under which the respondent may be operating at any given point of time. The special officer was further directed to make an inventory and submit a report to this Court. In terms of the said order dated May 11, 2018 the special officer filed his report before this Court stating that the office address of M/s. M.S. Industries at 53,Phears Lane, Kolkata 700 012 is in fact the residential accommodation of one Mehfooz Alam and no business is being carried on therein. In his report the special officer further stated that when he visited the factory of M/S M.S. Industries at Domjur, huge quantities of tobacco gul manufactured for sale, in filled containers and packed in cartoons were lying thereat. He also found huge quantities of raw materials for manufacture of tobacco gul lying at the said factory premises. As per the report of the special officer, during his visit to the said factory of M/S M.S. Industries the durwan of the factory connected him, over mobile phone, to the respondent who expressed his inability to be present at the said factory