TMI Blog2019 (12) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... ership firm. Biswanath was shown as the author of the artistic work BANPHOOL in the registration certificate. The plaintiff company was incorporated by the members of the Sharma family with the object of carrying on the same business through a private limited company. The business, assets, liabilities of the partnership firm vested in the plaintiff company. The members of the Sharma family including Biswanath were the subscribers to the Memorandum of Association of the plaintiff. In other words, they were the promoters of the plaintiff company. The CLB divided the business and assets of the plaintiff company in the manner indicated above. The Saraswati Group was given the Kolkata unit of the plaintiff company. The Biswanath Group was given the Delhi and Baddi units. Biswanath Group was directed to float a separate company adding prefix or suffix to the corporate name used by the plaintiff company and was given the liberty to carry on the same business that they had been carrying on through the plaintiff company. It is important to note that neither of the groups challenged the aforesaid CLB order before a higher forum. It is clear that the rights and obligations of the two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the artistic work on the said label and carton was registered in the name of the partnership firm. The registration number for the label was A42227/83 and that for the carton was A41272/83. In the registration certificate, in respect of the label, the name of the author of the artistic work BANPHOOL was shown as Shri Biswanath Sharma, partner of Sharma Chemical Works. The registration certificate in respect of the carton showed the name of the author of the artistic work as Shri Kanakendu Tosh. 3. In the year 1999 the members of the Sharma family vis. Biswanath Sharma (Biswanath), Sheo Shankar Sharma (Sheo Shankar), Prabhu Nath Sharma (Prabhu Nath), Om Nath Sharma (Om Nath), Mrs. Saraswati Sharma (Saraswati), Mrs. Sova Sharma (Sova) and Saroj Kumar Sharma (Saroj) incorporated a private limited company by the name of Sharma Ayurved Private Limited which is the plaintiff herein. The certificate of incorporation under the Companies Act, 1956, was issued by the Registrar of Companies, West Bengal on 09 August, 1999. The main object with which the said company was incorporated, as stated in the objects clause of its Memorandum of Association, was to become vested with righ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iswanath Sharma) on any of their products. (v) The respondent no.2 (Biswanath Group) was directed to float a separate company to carry on the business that they had been already carrying on through the company (plaintiff). (vi) The respondents group would be at liberty to pursue their business through the Delhi and Baddi units. (vii) The Biswanath Group would not use name of the respondent no.1 company (plaintiff herein) but would be at liberty to float the new company by adding some suffix or prefix to the name Sharma Ayurved . 5. The defendant company was incorporated by the Biswanath Group in the year 2012. It is not in dispute that the defendant carries on the business of manufacture and sale of Ayurvedic hair oil using the same label and carton in respect whereof the plaintiff claims to be the copyright owner. This is what the plaintiff which is under the management of Saraswati Group seeks to restrain by way of the present proceeding. 6. It has been submitted on behalf of the plaintiff that all assets and properties of the erstwhile partnership firm, including trademarks, copyrights, trade licences, actionable claims ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion was drawn to the said Schedule A which includes the copyrights in respect of the label and carton in question. 9. It is was further submitted on behalf of the plaintiff that the defendant is carrying on manufacturing activities by wrongfully using the trade license issued in the name of the plaintiff company. My attention was drawn to a letter dated 07 October, 2011 written on behalf of the plaintiff to the Directorate of I.S.M. H., Government of India complaining of the same. 10. It was then submitted that the Biswanath Group who have promoted the defendant company and are in control thereof, had made an application being CA No.94 of 2012 in CP No.49 of 2008 before the CLB wherein one of the prayers was for an order of injunction to restrain the petitioners in the CLB proceeding from in any manner interfering with or disturbing or causing prejudice to the respondents/applicants in the CLB proceeding in carrying on business in the name of BANPHOOL through Delhi or Baddi units of the company. The CLB while disposing of such application by its order dated 14th February, 2017 did not grant such prayer. This means that the Biswanath Group or the defendant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ily business of manufacture and sale of Banphool hair oil . It was he and his group who were being oppressed by the other group so it would not be proper to direct the Biswanath Group to sell their shares in the plaintiff company to the other group just because the Biswanath Group was a minority. Hence, the CLB divided the properties of the company between the two groups. The Kolkata unit was given to the Saraswati Group. The Delhi and Baddi Units were given to the Biswanath Group with liberty to promote a new company and carry on the same business through such company. 15. It was submitted that the CLB order of 14th September, 2011 permits the defendant to carry on the same business as that of the plaintiff. The term business means an activity which is carried on with a motive of making profit and not for pleasure. To regard an activity as business there must be a course of dealing either actually continued or contemplated to be continued with a profit motive. The only profit making product in the present case is the Banphool hair oil . By allowing the Biswanath Group to continue the same business through the instrumentality of a newly promoted company, the CLB has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trol and management of the plaintiff before the CLB being CA No.270 of 2012 in CP No.49 of 2008, under Section 634A of the Companies Act, 1956 wherein prayers f and i were as follows: f) The respondents and/or their assigns, men, agents and servants and all those acting on their behalf be directed not to use the mark BANPHOOL and the carton in the manner as described and/or shown in Annexure I and J hereinabove; i) The respondents and/or their assigns, men, agents and servants and all those acting on their behalf be restrained from using packaging as shown in Annexure H herein or any other packaging which is similar to packaging which is presently being used by the petitioners in Annexure L herein. Learned Counsel submitted that those prayers are substantially the same as prayer a of the present interlocutory application. This amounts to forum shopping and indulging in multiplicity of proceedings. Further, in the present petition there is only a passing reference to CA No.270 of 2012 filed before the CLB without disclosing the prayers made in such application. This amounts to sharp practice and suppression of material facts from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f company was incorporated by the members of the Sharma family with the object of carrying on the same business through a private limited company. The business, assets, liabilities of the partnership firm vested in the plaintiff company. The members of the Sharma family including Biswanath were the subscribers to the Memorandum of Association of the plaintiff. In other words, they were the promoters of the plaintiff company. 22. Disputes and differences arose between two groups of the Sharma family. The Saraswati Group filed a company petition under Sections 397/398 of the Companies Act, 1956 before the CLB. Such company petition was disposed of by the CLB by an order dated 14th September, 2011. In the said order the CLB noted that the plaintiff company is a closely held family company of the Sharmas and the company deserved to be dealt with in that line. The CLB also observed, inter alia, as follows: I observed that the sensitivities of family structure are strained, though it is the company law that governs, in the case of a family company, it must be seen who is considered as head of the family, what the role is played by him, what place others given to him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and obligations of the two groups vis-a-vis each other in relation to the family business of manufacture and sale of Banphool hair oil crystallized in the CLB order. The Saraswati Group was given exclusive control of the plaintiff company and the right to carry on the family business at the Kolkata unit through the instrumentality of the plaintiff company. The Biswanath Group was granted liberty to carry on the same family business through a newly floated private limited company at the Delhi and Baddi units. There was thus, an equitable division of the business and assets of the plaintiff company between the two groups. 27. In the aforesaid factual backdrop, I am unable to accept the plaintiff s argument that the defendant is precluded from producing or selling or marketing the hair oil in question using the label and carton (Copies whereof are Annexures K L ) to the petition). As per liberty granted by the CLB, the Biswanath Group floated the defendant company to carry on the same family business which would necessarily entail marketing the defendant s product under the brand BANPHOOL . It is the clear finding of the CLB which remains unchallenged, that the famil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the present proceeding. It is a matter of record that the Saraswati Group which was given control and management of the plaintiff company by the CLB filed an application before the CLB being CA No.270 of 2012 under Section 634A of the Companies Act, 1956, prayers f and i of which have been set out above. Although in the present petition the factum of filing such application before the CLB has been mentioned, the prayers in such application have not been indicated in the present petition. The said prayers in the said CLB application are substantially the same as those in the present petition. The plaintiff ought to have, in all fairness, been frank and transparent and should have pointed this out to the Court. Unfortunately this similarity of the prayers was brought to Court s notice by the defendant. A party who seeks an equitable relief like injunction from court has the bounden duty of making full and frank disclosure of material facts of the case to the Court. One who seeks equity must do equity. Suppression of material facts is an act bordering on fraud and a party indulging in such an act is disentitled to any relief from the Court. However, since I am inclined to rej ..... X X X X Extracts X X X X X X X X Extracts X X X X
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