Sohan Lal and Others v. Amin Chand and Sons and Others

Judgment

The Judgment of the Court was delivered by MATHEW, J. Civil Appeal No. 227 of 1970. There were two firms called 'Amin Chand and Sons" and "Landra Engineering & foundry Works". The partners of the firms were three brothers Bakshi Ram, Shiv Dayal and Kishan Chand, after the retire· ment of the 4th partner. Certain trade marks were registered in the names of the firms. On January 30, 1967, Bakshi Ram gave notices to· the other partners dissolving the firms. The notices were served upon the other partners sometime before March, 1967. On October 3, 1967, Bakshi Ram filed two suits for rendition of accounts against the other two partners in the s11bordinate Judge's court at Jullundur. The defendants in the suits filed applications under s. 34 of the Indian Arbitration Act for stay of the trial of the suits on the ground that the court had no jurisdiction to proceed with the trial in view of the clause for arbitration in the partnership agreements. On February 4, 1968, Bakshi.

Ram died and his legal representatives, 10 in number, were broug_ht on record. On June 24, 1968, the parties agreed to hl!ve the matter refer· red to arbitration. The court stayed the trial of the suits and referred th~ matter to arbitrators. Before the arbitrators, a question was. raised whether the legal representatives of Bakshi Ram were entitled to continue the suits. The arbitrators stated a special case for the opinic;in of the court under the first part of s. 13 (b) of the Act the ques.tion of law! whether the legal representatives are competent to contm~~ ~ swts. On Decem~~r 20, 1968,. a suit was filed by a firm called Amm Chand .and Sons through Shiv Dayal, in the District , Court· at :'lohtak agamst three of the legal representatives of Bakshi Ram tradmg under the names "Bakshi Ram and Sons" "Sohan Lal and· ~rothera" ~ "Kaybus Industries and others", for a ~rmanent in 'unc· hon restrammg them from using certain trade marks.

The plai~tiff- SUPRBMB COUllT IU!POllTS ( 1974} 1 s.C.R. -respondents in the suit applied for restraining the defendant-appellants and their dealers from manufact-Jring or selling agricultural implements under the trade mark Nos. 125062 and 138979 which were 01iginally .-egistered in the name of Amin Chand '1Jld Sons of which Bakshi Ram .. Shiv Dayal and Kishan Chand were partners. The court granted an ex parte injunction. That was vacated on the objection of the defendants in the suit. Thereafter applications were filed by the plaintiff-respondents for reviewing the order dismissing the application for temporary injunction, and .for issue of a temporary injunction, to restrain the defendant-appellants from using the trade marks registered in the name of Amin Chand and Sons of which Bakshi Ram was a partner. These applications were allowed and temporary injunction as prayed for was granted. The defendant-appellants preferred an appeal against that order to the High Court.

The High Court confirmed tbc order. This appeal, by special leave, is directed against that order .. During the pendency of the appeal here, one of the appellants, namely, Dharnm Vir, died on May 14, 1970. The application to implea<l his legal representatives was filed only on July 14, 1970. The respondents, by way of preliminary objection, contended that the appeal has abated. So, the. first question for consideration is whether the appeal has abated. The plaint shows that three persons were sued in the names of the firms under which th~y were carrying on business. The injunction order was issued against these persons in the names of the firms. The injunction qrder operated against these persons as carrying .on business in the names of the firms. Orde1 30 rule 4 of the Civil Procedure Code provides that notwithstanding anything contained in s.

45 of the Indian Contract Act, 1872, two or more persons may sue or be sued in the nan1e of a firm under the foregoing provisions and if any of such persons dies, whethrr before the institution or during the pendency of any suit. it shall not be necessary to join th.e legal representative of the deceased as a party to the suit. We have already said that the injunction order was directed against the partners in the names of the firms and that it operated as against them. The partenrs tiled the appeal in the names of the firms against the order and when one of the parlneIS died, the failure to implead his legal representatives would not cause the appeal to abate under sec. 107 of the C.P.C. the provisions ~f rule 4 of Order XXX will apply to appeals also.

Counsel for the respondents also raised another objection namely that since the appeal to the High Court was against the order i:ranting a review, the only groun~ which could have been take~ !11 the appeal were those mentioned Ill Order 47, rule 7 of the Civil Pro- SOHAN LAL v. AMIN CHAND & SONS (Mathew,/.) cedure Code and that tlio appellallla are not, therefore,. entitled to clllJYISS the merits of tho Injunction order here. There IS no subs• lllDCC in this objection either. It is not very clear from tbc onler of the trial court whether that court reviewoo us previous erder vacatmg tbe m1~11011 and tn4l!1 J>assed the order ot injunction after granling the review or whether II modified its previous order vacating the Injunction in the ~ercise of its inherent power.

H the <>nl;cr under aJ.>PCBI before th~ Hi&h Court is considered to be one grantlllg the reVleW, then certainly the only pounds on which that order could have been Impeached In the appeal are those stated in rule 7 .of Order 111. But the order appealed against was not only an order granting the review but also an order passed on merits on the application for injunction. It cannot be disputed that an appeal lay from the order granting the injunction, and in such an appeal it was open to the appellan, to urge any grounds . to show that the injunction was wrongly granted. The order of Ute trial court was a combmed order grantmg the review"and d1spvsing of the appli· cation for iniunction on merits and, therefore, the appellants were ·not only entitled to challenge the order on the grounds mentioned in Order 47, rule 7, but also on any other ground open to them, namely, that, on merits, the order of injunction should not have been passed.

Then the question is whether there was any justification for passing the order of injunction and whether the_ appellate court was rig_ht in l:oafuming it. It may be recalled that Bakshi Ram gave notices for lilc dissolution of the two firms in January, 1967 to the other partners. The appellants. contend that \Vi.th the dissolution of the firm assets of the firm including the trade marks registered in the name of the firms be!Onged to. the partners as co-owners and that two of. the partners, namely, the respondents, have no right to appropriate or use the assets of the firm to the exclusion of the legal representatives of the other partnet, Bakshi Ram.

The suit in which the injunction order was passed was filed for a declaration that "Amin Chand and Sons" constituted by the two surviving partners alone was entitled to use the assets of the firm of "Amin Chand and Sons" of which Bakshi Ram was a partner and it was for restraining the appellants from using that firm's assets' namely, the two trade marks in question, that the order of injunctiim was sought. Prima facie, it would appear that the respondents are not entitled to the exclusive use of the two trade marks which formed part of the assets of the partnership of Aminchand and Sons of whicli the fh:ee brothers were partners. The appellants being the legal reprc· sentallves 9f ~akshi Ram were also entitled to a share of the assets of that partnership. If that be so we do not think that the courts were ju~tified in granting the injuncti?Jl restraining the . aopellants from usmg the trade lf!arks.

In ~hese circumstances, we think that the proper course. to adopt 1s to con!m ue in force the order passed by this Court when 1t granted the special leave. on the basis of the application filed by the appellants for stay of the order of injunction, after setting aside· the order under appeal. ( 1974 J 1 S.C.R. We, therefore, order that the injunction granted by the Disliict Judge, Rohtak, on March 20,1969, is varied to the extent that the appellants will be entitled to use the trade l!lark "Amin Chand aad Sons" and "Landra", but they will keep accounts of all goods manufactured and sold and submit six-monthly accounts to the trial court 'during the pendency of the suit and that the respondents will also ·keep similar accounts and furnish accounts to the trial court. The appeal is allowed to the extent indicated but is dismissed in other respects. We make no order as to costs. Civil Appeals No. 1296 and 1297 of 1971 It might be recalled that Bakshi Ram had filed two suits for rendi • ll tion of accounts on the basis that the firms stood dissolved by the c notices issued by him in 1967 and that after his death, the parties to .. the suits had agreed to have the subject matter of the suits referred to arbitration.

After the arbitrators had entered upon the reference, a question was raised whether the legal representatives of Bakshi Ram were competent to proceed with the two suits. The arbitrators stated ii special case for the opinion of the court under the first part of s. l-3 (b) of the Arbitration Act. o The Court gave the opinion and it is against the opinion that these appeals by way of special leave have been preferred. A preliminary objection was raised by the respondents to the maintainability of th!lSe appeals on the ground that an opinion given pursuant to the first part of s. 13(b) of the Arbitration Act is not a judgment, decree, determination or order as visualiz.ed Jn article 136 of the Constitution and, therefore, the appeals would not lie. · In order to dispose of the objection it is necessary to decide the nature of an opinion given by a court under the first part of s. 13 (b) of the Arbitration Act. Jn British Westing House Electric and Manufacturing Company Ltd. v. Underground Electric Railways Company of London Ltd.(I) · I.he House of Lords held that the opinion of the High Court upon a special case stated by an arbitrator under the Arbitration Act, 1!189, with regard to a question of law arising in the cOUll'se of the r11ference cannot be the subject of an appeal, but, if that opinion is ~ironeous an award. expressed to be founded on that opinion can be s.et aside as containing an erFor of law apparent on the face of the award.

In the course of his speech Viscount Haldane L.C. said : "No doubt an opinion given by the Court under the provisions of the Arbitration Act is not a judgment or order, and 1s, therefore, not susceptible of being the subject of an appeal. But in mY opinion, that is the only reason why it cannot be appealed, and if the law embodied in it is afterwards set out on the face of a final award, I see no reason for thinking with vaughan Williams, L.J. that the Act inten- . (I) [19121 A. C. t73. u ~OHAN LAL I'. AMIN CHAND & SONS (Mathew, I.) ded to make the statement of the law appearing on the face of the awa,rd binding on "l higher tribunal · before which the award might come for review."

Ill re an Arbitration between Knight and the Tabernacee Perma· nent Building Society (1), Lord Esh~r said that when the statute stated (Arbitration Act, 1889) that "any referee, arbitrator or umpire may at any stage of the proceedings under a reference, and shall if so directed by the Court or a Judge, state in the form of a special case for the opinion of the Court any question of Jaw arising in the course of the reference", the words being not "for determination" or "decision" by the court, there. is no determination or decision when the court gives the opinion. He also said that it would be most inexpe· dient that, where an opinion is given by the court under this statute in the course of a reference for the guidance of the arbitrators, there should be an apeal which might be carried up to the House of Lords.

Bowen, L.J. said that it could not have been intended that, whenever a case is stated under this section for the opinion of the Court. such opinion when taken is to be treated as an absolute determination of the rights of the parties with the result that there may be an appeal from it which may be carried to the House of Lords. He furthe.r said that the section in question contemplated a proceeding by the arbitrator for the purpose of guiding himself as to the course he should pursue in the reference and that he does not divest himself of his complete authority over the subject matter of the arbitration but still remains the final judge of law and fact although, a fair and honest arbitrator would, in the absence of special circumstances, be bound in honesty and morality, after taking the opinion of the Court, to act upon such opjnion.

We think that in spite of the opinion given by the Court, the arbitrators are clothed with the final duty of determining the case and that the opinion of the Court does not finally determine the case, althougl\ it rnight bind the arbitrators in honesty and morals to act upon the law as the court stated it. We also think that there could be no appeal from their decision because they did not act upon the opinion although it might be a ground for impeaching their award on the ground of misconduct. I.t. appears to us that this consultative jurisdiction of the Court does not result in a decisi9n which is equivalent to a judgment, decree, determination or order. In Union of India v. Mis. South India Corporation( 2 ) it was held that an opinion on a special case stated under the first part of s. 13 (b) of the A~bitration Act is consultative in character and is not a determination of the rights of the parties. In Union of ln<lia v. M/s. Ram Sukh Das and Others(3 ), the Court said that no appeal will lie from an opinion given by the Court on a special case stated under the first part of s.

13 (b) of the Arbitra· (1) [1892) 2 Q. B. D. 613. (2) A. I. R. 1960 Andhra Pradesh 346. (3) A. I. R. 1959 Punjab 61. SUPREME COURT Rl!PORTS [ 1974} 1 S.C.R, t ion Act. TI1e same view was taken in Adamji Lukmanji and Louis Dreyfus & Co. In the matter of an Arbitration('). Counsel for the appellants relied on the ruling in Clive Mills Ltd. "· Swalal Jain(2) and submit~ that there are ~aterial. diJ!erences between the English Arbitration Act and the Ind1~ Arbitration Act and therefore. the decision of the House of Lords nught not be a safe guide: We do not thinlc that there is any material difference in the II language of the corresponding section of the English Act with whicli the House of Lords was dealing. Counsel for the appellants submitted that the opinion given by court has to be incorporated in the award under s. 14 (3) and therefore, the opinion was binding on the arbitrators. Section 14 (3) 1irovides: "14 (3)

Where the arbitrators or umpire state a special case under clause (b) of s. 13, the Court after giving notice to the parties and hearing them, shall pronounce its opinion thereon and such opinion shall be added to, and shall form part of the'llward." The marginal note to s. 14 says: "Award to be signed and filed". Section 14 ( 1) says that when the award is made by the arbitrators. they shall sign it and give notice to the parties of the making and signing of the award; s. 14 (2) provides that the arbitrators shall, at the request of any party to the arbitration agreement, cause the award to be filed in court and that the court shall thereupon give notice to the parties of the filing of the award. Then comes sub-section ( 3) of s. 14 The entire scheme of the section would show that the section is concerned with the making of an award. Therefore, the reasonable way to read s. 14 (3) is that it is oonc~ed only with the latter part of s. 13 (b), because the latter part of s.

13(b) provides for stating the award wholly or in part in the form of a special case of such question for the opinion of the court. The opinion given under the latter part of s. 13 (b) should be added to and form part nf the award under s. 14(3). We do not think that an opinion given under the first part of s. 13 (b) sh.ould be added to and from part of the award. The reason why the opinion given under the latter part of s. 13 ( b) should be added to and becomes part of the award is because the arbitrators have stated the award wholly or in part in the form of a special case of such question for the opinion of the court. This view is further strengthened by the circumstance that under s. 39(1) (ii), an appeal is provided only against an order on an award' stated in the form of a special case.

The reason why an appeal is provided for in such a case is that the opinion of the <WJurt has to be added to and form part · of the award and it therefore becomes a decision of the court, notwithstanding the fact that it is incorporated in the award. There is no provision for an appeal against an opinion given by the court on · a · specisl case stated to the court under the first part of s. 13 (b) or against the decision to state a special case for the opinion of the) · (I) A. J. R. 1925 Sind 83. (2) A. I. R. 1957 Calcutta 692. II SOHAN LAL v. AMIN CHAND & SONS (Mathew, !.) court for the reason that the opinion is not a decision. Nor is it to be incorporated in the award. If, as a matter of fact, the opinion given by the conrt on a special case stated under first part of s.

13 (b) is binding on the arbitrators and has to be incorporated in the award, there was no reason why the legislature should not have provided for an appeal againsf the opinion or against the reference which led to the opinion. The scheme of the Act shows that the legislature wanted to provide for an appeal only when there is· to be a decision by the court binding on the parties, not when it tenders an opinion which is not binding on the arbitrators and which is not to be incorporated in the ·award. It might be that the arbitrator may choose to act upon the opinion. But that is not for the reason that it is a binding determination or a decision. We have, therefore no hesitation in holding that the appeals are incompetent. The appellan_ts' coun,sel argued that the opinion expressed b:1 the conrt is prima facie wrong foi; the reason that it did not t.ake into account the real issue.

The real issue, according to counsel, was whether the partnerships "Amin Chand and Sons" and "Landra Engineering & Foundry Works" stood dissolved by the notices issued by Bakshi Ram in 1967, whether . the two suits instituted by Bakshi Ram for rendition of accounts were competent, and whether there was any bar in his legal representatives continuing the suits. Counsel argued that under s. 43' of the Indian Partnerships Act, it was open to BakShi Ram to dissolve the partnerships by giving notice' to the other partners as the partnerships ·were partnerships at will arid that clauses 14 and 15'-of the partnership agreement have nothing to do with the competency of one of the partners to dissolve the firms or the legal representatives of Bakshi Ram to continue the suits.

Apparently, it would seem that there was no bar to Bakshi Ram filing the suits for rendition of accounts if the partnerships stood dissolved by the notices issned by him and perhaps there would then be no reason also why his legal representatives could not continue the suits. However, we do not _express any final opinion on the merits of the controversy. We need only say' that that opinion of the court is . not binding on the arbitrators ·and counsel for the respondents did not contend other· wise. The appeals have to be dismissed and we do so but in the circnrnwithout any order as to costs. Civil Miscellaneous Petitions No. 2183 and 2184 of 1972 .This" app~cation is for taking proceedings for contempt of court agamst ".'-= Chand. '.llld Sons" represented by Shiv Dayal, the res· pondent m these petitions, for having disobeyed the interim order passed by this Conrt on the application for stay while admitting .Special Leave Petitioµ (Civil) No. 1851 of 1969 on January .29, 1970.

That order provided as follows:- . "~pecial leave granted. The injnnction granted by the D1stnct Judge, Rohtak on 20·3·69 is varied to the extent that the petitioner will be entitled to use the trade mark "Amin Clland and Sons and Landra", ,bnt they will keep 4-L382Sup Cl/74 [ 1974 J 1 s.c.R. :ccounts of all goods manufactured and sold and submit iix-monthly accounts to the Trial Court. during the pendency ·cf the appeal. The r~spondents will also . keep similar cccounts and furnish accounts to the Trial Court." The main alkgation in this application is that the respondent Shiv Dayal filed a criminal complaint before the Judicial Magistrme, I Class. Phillaur stating that the applicants were using the uade marks "Special Landra" . and "Amin Chand" without authority and that they were u~ing the name of "Amin Chand and Sons" under which the respondent Shiv Dayal and his partner were carrying on their trade.

On the objection of the applicants as to the maintainability of the complaint, the learned Magistrate passed an order holding that the complaint was maintainable because one of the allegations in the complaint was that the applicants were using the name of "Amin Chand and Sons", the firm under which Shiv Dayal and his partnei: are carrying on the trade on the goods manufactured by the applicants and thus passed off their goods as goods manufactured by "Amin Chand and Sons'. On a perusal of the complaint, it is clear that there are allegatiops to show that the applicants were using the name of the fu'm "Amin Chand and. Sons" under which the respondent Shiv Dayal and his partner are carrying on the business, on the goods manufactured by the applicants.

In these circumstances, we do riot sec how the respondent has committed any contempt by disobeying the order of this Court There can be no dispute that the respondent wa,s entitled to file a complaint on the ground that the applicants were manufacturing goods under the trade marks as being manufactured by the finn of "Amin Chand and Sons" and. were passing off the goods as manufactured by the respondent firm. It would appear that the applicants have filed a petition under s. 561-A of the Code of Criminal Procedure before the High Court of Punjab and Haryana for quashing the order of the Magistrate holding that the complaint was maintainable. The High Court will pass .the appropriate order on that petition. \Ve see no substance in this petition. We therefore dismiss it. V.P.S. C.A. 227 of 1970 allowed. Other matters dismissed.