Full Text
HIGH COURT OF DELHI
Date of Decision: 25.11.2024
SANJAY MEHRA .....Petitioner
Through: Mr. Sandeep Sethi and Mr. Darpan Wadhwa, Sr. Advocates
Through: Mr. Jayant K. Mehta, Sr. Advocate
Narayanan, Mr. Kunal Arora, Mr. Archit Gupta, Mr. Sanyam Kumar and Mr. Parth Aggarwal, Advocates
JUDGMENT
1. Allowed, subject to just exceptions.
2. The Application stands disposed of. CM APPL. 68362/2024 [Exemption from filing clear/certified/translated copies]
3. Allowed, subject to the Petitioner filing true typed copies of the annexures within a period of two weeks.
4. The Application stands disposed of. CM APPL. 68361/2024 [Summoning the records]
5. Registry is directed to place on record the digital copy of the record of FAO(OS)(COMM) 280/2022.
6. The Application stands disposed of. CONT.CAS(C) 1862/2024 & CM APPL. 68417/2024 [Interim order]
7. The grievance of the Petitioner as articulated in the present Petition is that the terms of settlement agreed between the Petitioner and the Respondent dated 27.04.2023 [hereinafter referred to as “Settlement Terms”], which were placed on record of the Court before a Division Bench of this Court in FAO(OS)(COMM) 280/2022 captioned as Sharad Mehra v. Sanjay Mehra & Ors. [hereinafter referred to as “DB Matter”] on 27.04.2023 have been violated. 7.[1] On 04.09.2023, the parties undertook before the Division Bench in the DB Matter that they shall not use the word/trade name “Superon” contrary to the terms of the Settlement dated 27.04.2023 and the settlement was taken on record by the Court in the DB Matter.
8. It is the case of the Petitioner that the Petitioner and the Respondent, who are the brothers had, after a series of litigations inter se between them, had reached a settlement on 27.04.2023. This Settlement was recorded in a document called ‘Terms of Settlement’. Briefly, the terms of this settlement were that the parent company would be divided into two Divisions: the Domestic and Export Divisions. The Domestic Division would remain with the Petitioner and the Export Division with the Respondent.
9. Learned Senior Counsel for the Petitioner has drawn the attention of the Court to the Settlement Terms alongwith the Division Bench Order dated 27.04.2023, as well as to the alleged infringing posts which are annexed at Annexures 7 and 8 to the Petition, to submit that these clearly constitute a violation of the Settlement Terms. It is contended that in terms of the settlement, the Domestic Division of the Company would be “hived out” and taken over by the Petitioner under the word/trade name “Superon” and would be used only by the Petitioner alone and any use by the Respondent within the territory of India would have to be in terms of what was stated in the Settlement Terms. 9.[1] In addition, it is stated that Clause 3 and 4 read with Clauses 5, 7 and 9 of the Settlement Terms would show that the use of the word/trade name “Superon” could not be used, except as set out therein. Emphasis has also been laid on Clause 9 of the Agreement which states that the word/trade name “Superon”, IP Rights of Stanvac Chemicals India Ltd and IP Rights of the Petitioner shall not be used by the Respondent “in any manner in India”. 9.[2] Relying on the list of participants as well as the social media/LinkedIn’s post which is available on Pages 93 and 94 of the case file of the Respondent, the learned Senior Counsel submits that the Respondent is violating the terms of the Settlement by using word/tradename “Superon” at the International Fair, which is scheduled to commence on 27.11.2024 at Mumbai [hereinafter referred to as “International Fair”].
10. Learned Senior Counsel for the Respondent has refuted these contentions. He submits that the Settlement Terms clearly provide for the use of the word/trade name “Superon” in India for export and that he will be using this only for purposes of show-casing for export. He further submits that Clause 7 of the Settlement Terms also provides that the Respondent is entitled to use the word/trade name “Superon” on any “visiting cards, letters, e-mails, communications, price list, pamphlets, brochure, packaging etc.” within India for export purposes. 10.[1] It is the contention of the learned Senior Counsel that the use of the word/trade name “Superon” by the Respondent is in consonance with Clause 7 as well as in consonance of the Memorandum of Family Settlement which was executed between the parties on 10.09.2021 [hereinafter referred to as “MOFS of 2021”]. Relying on Paragraph 2 of the order dated 27.04.2023 in DB Matter, learned Senior Counsel submits that the rights to use the word/trade name “Superon” were contained even in the previous settlement between the parties. 10.[2] It is further the contention of the learned Senior Counsel that the Petitioner’s acts are mala fide. His only attempt is to prevent the Respondent from participating in this International Fair. Learned Senior Counsel further submits that the terms of Settlement cannot be read in isolation but have to be read as a whole, along with earlier undertakings and settlement terms as recorded in the various consent orders passed by the Court in terms of Clause 17 of Settlement Terms.
11. A broad overview of the Settlement Terms show that the settlement between the parties was a division on a geographical basis where one party (Petitioner) was to continue with the use of the word/trade name “Superon” and “Schweisstechnik” within the territory of India, while the second party (Respondent) was to use the word/trade name “Superon” outside the territory of India.
12. It is apposite to extract some of the relevant clauses of the Settlement Terms which shows distribution and use of the word/tradename “Superon” amongst the Petitioner and the Respondent which are extracted below: “…
3. The Domestic Division of the Parent Company shall be demerged out of the Parent Company and taken over by SM by incorporating new Superon company namely M/s Superon Schweisstechnik Industries Limited or any other name as decided by SM, which will conduct the business of manufacture and sale of welding electrodes, welding wires and any other product under the brand name SUPERON only within the territory of India SM undertakes that he or his group companies shall not use the word SUPERON in any manner whatsoever outside the territory of India. SM undertakes that he shall use the full name of the company as “Superon Schweisstechnik Industries Limited” and shall not use acronyms of SDM companies on its all products and packaging within the territory of India.
4. The Export Division of the Parent Company shall continue to remain in the Parent Company. SDM undertakes to change the name of the parent company to another name which shall not contain the words Superon, Schweisstechnik, Stanvac and Starblaze in its new name including any other name which is similar to such words and acronyms of SM companies. SDM undertakes that he or his group companies shall not use the word SUPERON in any manner whatsoever within the territory of India. Furthermore, SDM also undertakes that he or his group companies shall not use the acronyms of SM companies on any of its products and packaging, in any manner whatsoever.
5. The Parent Company shall be the sole manufacturing company to manufacture the products of its three different divisions as follows:i. A-Division This division will be used to sell and market welding electrodes, welding wires and any other product under the brand name SUPERON only for sale outside the territory of India; xxx xxx xxx
7. SDM undertakes that he and his group companies shall not use the trade name, brands, trademarks of all the above three divisions together in any combination and abstain from interlinking the same in any manner including on any visiting cards, letters, emails, communications, price list, pamphlets, brochure, packaging, etc., either directly or indirectly within the territory of India. However, it is clarified that SDM is entitled to use SUPERON on any visiting cards, letters, emails, communications, price list, pamphlets, brochure, packaging etc. within the territory of India only for the purpose of export and not for retail in India or used with any customer in India. All the personnel of the above three Divisions shall be allotted visiting cards only of their respective Division without linking to any other Divisions.
9. Parent Company shall not use the word SUPERON, IP Rights of Stanvac Chemicals India Ltd and IP Rights of Mr. Sanjay Mehra in any manner in India. Similarly, SM Group companies shall not use IP Rights vested with Stanvac Prime Pvt. Ltd. in India. Furthermore, SM Group companies shall also not use the overseas IP Rights of SDM in any manner outside the territory of India.
10. The parties have agreed that the website www.superonindia.com shall not be used by them henceforth.
17. It is clarified that these settlement terms are in addition to the earlier undertakings and settlement terms as recorded in various consent orders passed by this Hon’ble Court.” [Emphasis supplied]
13. Clause 3 of the Settlement Terms states that the Petitioner shall not in any manner use the word/tradename “Superon” outside the territory of India and would not use the acronym of the Respondent’s company name for its products and packaging within the territory of India.
14. Clause 4 further provides that the Respondent would not use the word/trade name “Superon”, “Schweisstechnik”, “Stanvac” and “Starblaze” or similar names whatsoever within the territory of India. Clause 7 sets out that any use of the word/trade name by the Respondent could be on visiting cards, letters, e-mails, communications, price list, pamphlets, brochure, packaging etc. for the purposes of export and not for retail or use with any customers in India.
15. The intent of the parties is also clearly reflected from Clause 9 of the Agreement which states that the Respondent “Parent Company shall not use the word SUPERON, IP Rights of Stanvac Chemicals India Ltd and IP Rights of Mr. Sanjay Mehra in any manner in India”.
16. The MOFS of 2021, a copy of which has been handed across by the learned Senior Counsel for the Respondent and the paragraph which has been drawn the attention of the Court to, also sets out that the word/trade name “Superon” can be used by the Respondent, however its right is limited to use on its “visiting cards, letter heads and uniforms” in the territory of India but not on “products, packaging material, etc.” It further goes on to state that it should not be used for product promotion, customer solicitations, advertisement, etc. for the purposes of sale inside the territory of India. The relevant extract as is below: “Sharad Mehra of the SDM Group shall be exclusive owner and proprietor of the intellectual property of the Company including, trade-marks, trade names, product names, copyrights, Superon word and logo design on the packaging design and Superon branded promotional and marketing materials outside the territory of India, and shall have exclusive right to use the same in their business operations including use in any fashion on the products, packaging, promotional/marketing material etc. in the well-established “Superon” packaging colour and design or otherwise only for the purpose of marketing and sale of products outside India as more particularly agreed in the Deed of Assignment. Sharad Mehra of the SDM Group shall also have the limited right to use the ‘Superon’ word and logo design on its visiting cards, letterheads and uniforms, if any, to be used inside the territory of India but shall not use the Superon word and logo design on any products, packaging material, promotional materials for sale/marketing of any kind of product promotion, customer solicitation, advertisement etc. for the purposes of sale inside the territory of India, as more particularly agreed in the Deed of Assignment.” [Emphasis supplied]
17. From a plain interpretation of the Settlement Terms, it seems apparent that the intention of the parties was that they “stay out of each other’s hair” and business by geographically dividing the business amongst themselves in the manner as is set out in the Settlement Terms. The restrictions are also reflected in the extract of the MOFS of 2021 which has been shown to the Court.
18. The Respondent has contended that the intention to participate in the International Fair is only for the purpose of export business and that he has previously also participated in the International Fair under the terms of the earlier MOFS. Reliance has been placed by the learned Senior Counsel for the Respondent to the order dated 18.11.2022 passed in the DB Matter where consent terms were recorded with respect to the participation of both parties in International Fair which was held in November, 2022.
19. This Court has enquired from the parties as to whether some similar consent terms can be agreed to, however the parties are unable to reach a consensus.
20. The Settlement Terms in Clause 17 refers that the Settlement Terms are in addition to “earlier undertakings and settlement recorded” in consent orders. However, the fact is that the Settlement Terms which were agreed to by the parties earlier, were even more restrictive in the use of the word/trade name “Superon”. [see Paragraph 16 above]
21. Prima facie, this Court is unable to agree with the interpretation sought to be given by the Respondent to the Settlement Terms. A plain reading of the aforesaid clauses shows that the Respondent has been given a limited right to use the word/trade name “Superon” and only on visiting cards, letters, e-mails, communications, price lists, pamphlets, brochures, packaging within the territory of India, provided it is for the use of export and not for retail. This Clause is wider than the clause extracted in Paragraph 16 above, which has been extracted from the MOFS of 2021 which restricts the Respondent use to only on visiting cards, letter heads and uniforms in the territory of India. Thus, the intention of the parties in the Settlement Terms was to grant additional rights to the Respondent qua the use of the word/trade name “Superon”, but in accordance with terms set out therein. However, the rights could not extend to use of the word/trade name “Superon” on social media posts or advertisements within the territory of India.
22. The LinkedIn Post of the Respondent (which has not been disputed) shows the use of the word/trade name “Superon” in social media which is not in accordance with Clause 7 and Clause 9 of the Settlement Terms which have been reproduced above. Its intended use in the International Fair would constitute use in the territory of India, which is other than the permissive user as agreed to in the Settlement Terms between the parties.
23. There thus appears to be a violation of the Settlement Terms which were agreed to between the parties, before a Division Bench of this Court. Prima facie, since this would be in violation of the undertaking given by the Respondent before this Court in the DB Matter, this Court deems it expedient to pass the interim directions so as to prevent further noncompliance, given the constraints of time and until the matter is examined in detail.
24. It is however clarified that this would not preclude the Respondent from participating in the International Fair, provided that the use of the word/trade name “Superon” is only on visiting cards, letters, e-mails, communications, price list, pamphlets, brochure, packaging etc. and for no other purpose, except as permitted in the Settlement Terms. 24.[1] The Petitioner also undertakes to the Court that he will use the word/trade name “Superon” for any business only within the territory of India and as expressly permitted under the Settlement Terms.
25. Let Affidavits of compliance be filed by both the parties on 26.11.2024.
26. The matter requires further examination.
27. Issue Notice. 27.[1] Learned Counsel for the Respondent accepts Notice and seeks time to file a Reply.
28. Let Reply be filed within a period of four weeks. 28.[1] Rejoinder, if any, be filed before the next date of hearing.
29. List on 05.02.2025.