K.P. James v. Dr. K.K. Johny and Others (Review Petition)

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE PIUS C.KURIAKOSE WEDNESDAY, THE 27TH AUGUST 2008 / 5TH BHADRA 1930 RP.No. 616 of 2008() -------------------AGAINST THE JUDGEMENT/ORDER IN RFA.476/2007 Dated 11/04/2008 OS.9/2000 of ADDL.DISTRICT COURT, THRISSUR .................... REVIEW PETITIONER/APPELLANT/1ST DEFENDANT: ----------------------------------------- K.P.JAMES, S/O.PAVUNNY, RESIDING AT KALAN HOUSE, NELLAYI P.O., MUKUNDAPURAM TALUK, THRISSUR DISTRICT. BY ADV. SRI.V.CHITAMBARESH (SR.) SRI.SAIGI JACOB PALATTY ## RESPONDENTS: RESPONDENTS/PLAINTIFFS/2ND DEFENDANT: -------------------------------------------------- 1. DR.K.K.JOHNY, S/O.K.P.KOCHUVAREED VAIDYAN, M/S.J & J KALAN PHARMACY, NELLAYI P.O., THRISSUR. 2. KURUNTHOTTAM AYURVEDIC AGENCIES, REPRESENTED BY ITS PARTNER, SHABI MOHAN, T.D.ROAD, KOCHI-35. 3. KHADIRVELU, PROPRIETOR, M/S.SREE SHANBA PRINT PACK 13-B-3/10, P.K.N.ROAD, SIVAKASI 626 189. BY SRI.G.SREEKUMAR ( R1 & R2) THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 27/08/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: ## **PIUS.C.KURIAKOSE, J.** - - - - - - - - - - - - - - - - - - - - - ## **R.P.NO. 616 OF 2008 IN** ## **R.F.A.No. 476 of 2007** - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 27th day of August , 2008 ## **ORDER** The appellant-first defendant seeks review of the judgment of Justice K.Padmanabhan Nair in R.F.A. No. 476/07 mainly on the ground that the learned Judge ignored binding decisions of the Supreme Court pertaining to the effect of incorporation of a company vis-a-vis a proprietary concern. The R.F.A. was preferred by the review petitioner against the decree of prohibitory injunction restraining the review petitioner from manufacturing and marketing hair tonic by name “ Kesamrutham” in an action against passing off.. 2. One of the contentions seriously raised in the suit was that the suit is no longer maintainable since the legal personality of the original plaintiff had been transformed as that of an incorporated company by name J & J Kalan Pharmacy (P)Ltd. Various other contentions also had been raised and the following issues were settled by the court for trial. 1) Whether the suit is maintainable ? R.P.No. 616/08 2 2) Whether the plaintiffs have any cause of action or any right over Kesamrutham ? 3) Whether the plaintiffs have exclusive right to use the trade mark ' Kesamrutham' ? 4) Whether the Kesamrutham is a generic word previously used by others? 5) Whether defendants are liable to be restrained by an injunction from using the trade mark Kesamrutham with cyan and yellow colour ? 6) As to relief and costs. 3. The first plaintiff in the suit was a proprietary concern by name J & J Kalan Pharmacy , Nellai and since it was admitted case that the above proprietary concern using trade name Kesamrutham was converted as private limited company, the plaintiffs themselves filed I.A. No. 1935/05 seeking to implead the said company as the third plaintiff. That I.A. was dismissed. The challenge of the plaintiff against the order dismissing the I.A. for impleadment was also unsuccessful. This aspect was highlighted by the review petitioner- R.P.No. 616/08 3 defendant for arguing that the present suit filed by the proprietary concern which has already been succeeded by a private limited company is no longer maintainable in law. The trial court however repelled the contentions and held that the interest of the company is protected by the first plaintiff who is one of the directors of the company, the other directors of the company being his wife, mother and sister. The court held that the suit is maintainable, answering issue No.1 in favour of the plaintiff. Issues 2 to 4 were also answered by the learned Subordinate Judge in favour of the plaintiff. It was found that the plaintiffs have succeeded in establishing that the first defendant - review petitioner has deliberately used the trade mark Kesamrutham in order to deceive the public and to give an impression to the public that the goods sold by him are the goods marketed by the plaintiffs under their trade mark Kesamrutham and that it injuriously affected the goodwill and reputation and sales turn over established by the plaintiff and thus aused loss to the plaintiff. In the light of those findings, the suit was decreed with cost. 4. This court on re-appreciating the evidence before the trial R.P.No. 616/08 4 court which consisted of the oral testimonies of PWs 1 to 5 on the side of the plaintiff and those of DWs 1 and 2 on the side of the defendants as well as the documentary evidence consisting of Exts.A1 to A109 on the side of the plaintiffs and B1 to B78 on the side of the defendants apart from the material objects produced by either sides i.e. 16 on the side of the plaintiffs and 44 on the side of the defendants would concur with the findings of the trial court holding that the evidence clearly established that the findings of the trial court that the first defendant is passing off his goods as that of the first plaintiff and would in the result dismissed the appeal directing the appellant to surrender the entire stock of un-used cartons and labels containing the offending trade mark within two months. 5. Sri.V.Chitambaresh, senior counsel has addressed me strenuously and persuasively on the various grounds raised in the review petition. The learned senior counsel submitted that there is warrant for reviewing the judgment of Justice K.Padmanabhan Nair since the learned has ignored binding decisions of the Supreme Court and preferred certain passage from Narayana's 'Trade Marks and R.P.No. 616/08 5 Passing off. Learned senior counsel would draw my attention to Section 34 of the Companies Act and also to Rule 10 of Order XXII CPC. He would argue that in view of the conceded position that the first plaintiff who was the proprietor of a proprietary concern and the second plaintiff who was the distributor of that proprietary concern had ceased to have any subsisting interest over the subject matter of the suit, the learned Subordinate Judge should have non-suited the plaintiffs on that store. That an incorporated company has a separate existence in law and the law recognises the incorporated company as having a juristic personality separate from its members and that the personality of the members is different from that of the personality of incorporated company was a first principle of company law which had been settled by judicial precedents. Sri.Chitambaresh would fortify his submissions by various judgments including those of the Supreme Court in **State Trading Corpn. of India, Ltd. v. CTO** (AIR 1963 SCC 1811), **Tata Engineerng and Locomotive Co.Ltd v. State of Bihar** (AIR 1965 SCC 40), **Raghu Lakshminarayanan v. Fine Tubes** (2007 (5)SCC 103), **ARM Group Enterprises Ltd. v. Waldorf** R.P.No. 616/08 6 **Restaurant and others** (2003 (6) SCC 423) and that of this court in **Cherukutty v. Velappu** (1987 1 KLT 565) and **Kil Kotagiri T. & C. Estates Co.Ltd. v. Income Tax Appellate Tribunal** (1988 (2) KLT 271). Learned senior counsel would read over to me the entire paragraph 9 of the judgment and the other paragraphs in that judgment where the issue is considered by the learned Judge. 6. In deference to the submission of the learned counsel supported as they were apparently by judicial authority, I called upon Sri.G.Sreekumar, learned counsel for the respondent to address submissions in reply and Sri.G.Sreekumar would apart from supporting the judgment on its merits, remind me of the narrow contours of this court's jurisdiction for review. 7. The contours of this court's jurisdiction for reviewing its own orders and judgments are well delineated by the provisions of Rule 1 of Order 47 and Section 114 of the Code of Civil Procedure. The Rule provides that a person aggrieved by the judgment or the order can apply for review if he has discovered new and important matter or evidence which even after the exercise of due diligence was not within R.P.No. 616/08 7 his knowledge or could not be produced by him at the time when the judgment or order was passed or if he shows that there is some error or mistake on the face of the records or if he shows that there is any other sufficient reason for seeking review of the judgment or the order. The explanation to the Rule provides that the fact that the decision on a question of law upon which the judgment of the court is based has been reversed or modified by a subsequent decision of a superior court in any other case will not be a ground for review of the judgment or the order. The section (sec. 114) only provides that the conditions necessary for exercise of powers of review are only that no appeal is allowed by the code against the judgment or order sought to be reviewed or that even if appeal is provided the person applying for review has not availed the remedy of appeal. 8. The failure to follow a binding judicial precedent despite its apparent applicability to the issue which arose for consideration, without any endeavor to show that the precedent does not apply in view of the facts situation obtaining in the given case or on any other reason can be a good ground for review because that is a situation R.P.No. 616/08 8 where the error in not following the binding precedent is apparent on the face of the record. At any rate overlooking of a binding precedent rendered by a superior court in the absence of good reason will be “other sufficient reason” within the purview of Sub Rule (1) of Rule 1 of Order 47 C.P.C. But, at the same time, it will have to be noticed that incorrect decision including a mistake in appreciating the ratio decidendi of the decision of a superior court cited as an authority for a given proposition will not constitute a ground for review unless the mistake is so glaring and apparent as to catch the eye of anybody without the aid of detailed investigation or elaborate arguments. The pith point which was urged by Sri.V.Chitambaresh, the learned senior counsel, was that the entirety of the interest of the original plaintiffs in the suit have been assigned to an incorporated company and, therefore, it is that company and not the present plaintiffs who can rightfully claim the reliefs. The present plaintiffs who are only individuals cannot any longer be entitled for relief since the cause of action on the basis of which the suit is instituted is no longer available to them for pursuing the action initiated by them. According to R.P.No. 616/08 9 Sri.V.Chitambaaresh, the judgments of the Supreme Court in S **tate Trading Corporation of India Ltd. v. CTO and others ( AIR 1963 SC 1811)** and **Tata Engineering and Locomotive Co. Ltd. v. State of Bihar ( AIR 1965 Supreme Court 40)** are the binding precedents which were ignored by this court. A reading of the judgment at paragraph 12 will show that this court did refer to those decisions and also to the decision of the Supreme Court in **Raghu Lakshminarayanan v. Fine Tubes (2007 5 SCC 103)** and the argument that a proprietary concern cannot have any juristic personality distinct from that of its proprietor while a limited company and to a certain extent a partnership firm will have juristic personality distinct from that of its constituents. It cannot be stated that this court blindfoldly overlooked those decisions. This court in fact noticed on the basis of those decisions that a proprietary concern and an incorporated company are different in various respects. But, this court went deep into the facts as emerging from the evidence on record and found that what has actually happened in this case is that the business concern of the first plaintiff by name J & J Kalan Pharmacy R.P.No. 616/08 10 itself had been converted as a private limited company by the very same name. This court found on the evidence that the first plaintiff had been manufacturing and marketing the product “ Kesamrutham” for a long period and himself is continuing the business using the same name for the product which is continued to be manufactured by the newly formed company under his own directorship. This court accepted the case of the respondents that this was not a case of an individual assigning his right and the trade mark upon which the action for passing off is founded to a stranger company and the further case that the original plaintiffs in as much as he continues to be director and principal officer of the newly formed company is entitled to protect the trade mark. label, logo in respect of which the decree of injunction has been issued and directions for surrender of unused offending trade mark and logos had been made. In fact, the circumstance that the plaintiffs themselves had filed an application for impleading the new company as the additional third plaintiff without success and that this court confirming the order dismissing that application for injunction was highlighted before me by the learned senior counsel R.P.No. 616/08 11 Sri.Chitambaresh. This court noticed that in the judgment of the Division Bench of this court in **Cherukutty v. Velappu (1987 (1) KLT 565)** it is held that it is not absolutely necessary for the assignee to have his name brought on record in the place of the plaintiff, if he is satisfied that his rights will be sufficiently protected by the assignor - plaintiff. If the assignee has confidence in the assignor he can remain in the background and allow the assignor to continue in the proceedings. After all the assignee is virtually a family company of the assignor himself. 9. I am unable to accept the submissions of the learned senior counsel that there is warrant for exercising powers of Review under under Order 47 Rule 1 on the judgment of this court. It cannot be stated that binding decisions of the Supreme Court were ignored by this court and commentaries of Narayana were preferred without any application of mind. This court might have gone wrong in interpreting the decision and understanding and in applying the ratio decidendi of the decisions. May be the petitioner has reason to be aggrieved by the judgment, but he should seek redressal of his grievance by filing a R.P.No. 616/08 12 regular appeal since I find that this court has chosen to hold that the decisions cited do not apply in view of the facts emerging from the evidence adduced in the case. The result is that the review petition will stand dismissed. **PIUS.C.KURIAKOSE JUDGE** sv. R.P.No. 616/08 13