Anil Rathi v. Sanjog Steels Pvt. Ltd. & Ors.

1. Deepak Rathi (S/o Late Mr. Harikishan Rathi)

2. Dhananjay Rathi (S/o Mr. Deepak Rathi)

3. Kshitij Rathi (S/o Mr. Deepak Rathi)

4. Rekha Rathi GROUP C[1]

1. P.C. Rathi, S/o Late Mr. G.D. Rathi, (Deceased)

2. Raj Kumar Rathi (S/o Mr. P.C. Rathi)

3. Pradeep Rathi (S/o Mr. P.C. Rathi) GROUP C[2]

1. Arun Kumar Rathi (S/o Late Mr. G.D. Rathi) GROUP C[3]

1. Anil Rathi (S/o Late Mr. G.D. Rathi)

10. The aforementioned Groups have been granted fixed number of licenses and the same are as follows: • Group A: 4 Licenses including its existing companies being Rathi Super Steel Ltd. and Rathi Alloys & Steel Ltd. • Group B: 4 licenses including its existing companies being KL Rathi Steel Ltd. Delhi, Rathi Steel Ltd., New Delhi and Rathi Rod Mill Ltd. • Group C[1]: 4 Licenses including its existing company Rathi Udyog Ltd. • Group C[2]: 2 Licenses • Group C[3]: 2 Licenses

11. As per Clause 8 of the MoU, the senior most trustee of the group/subgroup has the power to issue the license to use the Trade Mark ‘RATHI’ on behalf of the Rathi Foundation to the company/firm of his group/sub-group provided the company/firm fulfills the conditions laid down in the MoU. It has been further provided in Clause 8.[1] of the MoU that the Rathi Foundation shall be informed in writing about the issue of such license along with acceptance of all terms and conditions of the Trust Deed from the said company/firm by way of Resolution of the Board of Directors of the company/firm to whom the license has been issued and Rathi Foundation shall take the same on record.

12. To ensure excellent quality of the products being manufactured and sold under the trademark ‘RATHI’, the following conditions have been laid down in the MoU which have to be fulfilled by company/companies/firms of any group/sub-group eligible for using the trademark ‘RATHI’: i. As per Clause 9.[1] of the MoU, such companies/firms are set up only by the members, male blood descendants and legal heirs of the group/sub-groups. ii. As per Clause 9.[2] of the MoU, except in case of the existing companies (i) Rathi Super Steel Ltd., and Rathi Alloys & Steel Ltd. (ii), KL. Rathi Steels Ltd.

(iii) Rathi Udyog Ltd., any other company(ies) incorporated to be incorporated in future, in terms of Clause 5.[2] by any of the male blood descendants and/or legal heirs of any group/subgroup, must have the following percentage of equity share holding directly and /or through company(ies) in the same group, to be entitled to get license for use of ‘RATHI’ Trade Mark for their company(ies) and or Rolling Mill units. a. In case of unquoted companies, not less than 51% of the paid-up equity capital of the company and in case, it is later on converted into quoted company then not less than 25% of the paid-up equity capital of the company; b. In case of quoted company not less than 25% of the paidup equity capital of the company; c. In any other case, 100% (hundred percent) capital to be held by the group/sub-group; d. In case the equity share capital of the said incorporated company(ies) is held by other corporate bodies and or company(ies), than the paid up equity share capital of such other corporate body(ies) and or company(ies) should be held by the concerned group sub-group to the extent of minimum 51% (fifty one percent); iv. As per Clause 9.[3] of the MoU, each rolling mill unit to be setup by any Group/Sub-group must be technically sound, ensuring therein the production of which is set up should have a capacity of 24,000 Tonnes per annum on single shift basis and roughing mill of that size which can take a minimum 75mm. sq. or its equivalent cross section area and must have a minimum finishing speed of 10 meter per second for 8mm bars and the reheating furnace of minimum 12 tonnes per hour capacity. All the above features of the rolling mill capacity are to be certified by a Chartered Engineer and certificate to this effect shall be submitted to Rathi Foundation. In case any licensee/group purchases a rerolling mill unit, he will have to upgrade the mill, if required, to fulfill the conditions as laid down in clause 9.[3] of the MoU before he is eligible to use the trade mark ‘RATHI’ on the products manufactured in the said unit. v. As per Clause 10.3(b) of the MoU, the management of the said unit/company has to be in control of Group/Sub-Group.

13. As per Clause 11.[1] of the MoU, the contravention of any of the terms covered under Clauses 9, 9.1, 9.2, 9.3, 9.[4] and 10, 10.1, 10.2, 10.3, 10.4, 10.[5] will be considered as misuse of the trade mark ‘RATHI’ and in such a case the license shall stand cancelled forthwith. Further, the entitlement of the licenses of the Group and/or Sub-Group, whose license has been cancelled, shall stand reduced to the extent of the cancelled license.

14. As per clause 3 (a) of the Trust Deed, the objective of the Rathi Foundation Trust is to give effect to the MoU which forms an integral part of the Trust Deed. Further, it has also been provided that in case of any difference of opinion regarding the interpretation of the terms and conditions, the terms and conditions of MoU shall prevail. Thus, the MoU has been given an over-riding effect in case of any difference of opinion over the Trust Deed and if any clause of the Trust Deed is found in contravention of the MoU.

15. Further, Clause 13 of the Trust Deed of Rathi Foundation provides that Contravention of any of the terms covered under clauses 9, 9.1, 9.2, 9.3, 9.4, 10.1, 10.2, 10.3, 10.4. 10.[5] of the MoU, will be considered as misuse of the trade mark ‘RATHI’, and in such a case, the license shall stand cancelled forthwith and provisions of entitlement of total licenses as provided in MoU shall be applicable.

16. On October 31, 2019, this Court in I.A. 15128/2019 preferred by the plaintiff under Order 39 Rule 1 & 2 of CPC in the present suit, granted temporary injunction against defendant Nos. 1,2,7&8 and 9, their directors, executives, partners, proprietors, their officers, servants and agents or anyone acting for and on their behalf are restrained from manufacturing, exporting, marketing, offering for sale, selling, advertising or in any manner dealing in steel bars, common metals and their alloys; metal building materials; transportable buildings of metal; materials metal for railway tracks; non-electric cables and wires of common metal; ironmongery, small items of metal hardware; pipes and tubes of metal; safes; goods of common metal under the trade mark ‘RATHI’ or from adopting any other mark or label which is identical or deceptively similar to plaintiffs registered trade mark ‘RATHI’ which shall amount to infringement of the said trademark, till the next date of hearing. The relevant portion of the order reads as under:- “12. It is his case that pursuant to the order dated October 16, 2019, the plaintiff conducted market surveys and investigations and received information that the defendant Nos.l to 9 herein are using the mark "RATHI / RATHI POWERTECH / RATHI YUVAATECH" and according to him, it appears that the said marks has been wrongly licensed to defendant Nos.l to 9 by defendant Nos.lO and 11 i.e. Mr. Raj Kumar Rathi and Mr. Pradeep Rathi not only in excess of the total number of licenses i.e. 4 to which Group C-1 is entitled to under the MOU and Trust Deed but also in violation of the terms and conditions of the MOU and Trust Deed. In support of his submissions, he has drawn my attention to the documents showing the marketing of the products by defendant Nos.[2] and 7. He has also relied upon two judgments of the Supreme Court in Laxmikant V. Patel v. Chetanbhat Shah and Anr., 2002 (24) PTC 1 (SC) and Midas Hygiene Industries P. Ltd. & Am. v. Sudhir Bhatia & Ors., 2004 (28) PTC 121 (SC) to contend that the Court while considering the application for interim stay have to apply its mind to the relevant settled principles of law for governing the grant or refusal of interlocutory injunction in trade mark and trade name disputes, inasmuch as a refusal to grant an injunction in spite of the availability of facts, which are prima facie established by overwhelming evidence and material available on record justifying the grant thereof, occasion a failure of justice and such injury to the plaintiff as would not be capable of being undone at a later stage.

13. Having heard Mr. Sudhir Chandra Agarwala, learned Senior Counsel appearing for the plaintiff, from the above, it is seen that the plaintiff has been able to establish a prima facie case in its favour.

14. Noting the submissions made, it is directed that the defendant Nos. l,2, 7, 8 and 9, their directors, executives, partners, proprietors, their officers, servants and agents or anyone acting for and on their behalf are restrained from manufacturing, exporting, marketing, offering for sale, selling, advertising or in any manner dealing in steel bars, common metals and their alloys; metal building materials; transportable buildings of metal; materials of metal for railway tracks; non-electric cables and wires of common metal; iron mongery, small items of metal hardware; pipes and tubes of metal; safes; goods of common metal under the trademark "RATHI" or from adopting any other mark or label which is identical or deceptively similar to plaintiffs registered trade mark "RATHI" which shall amount to infringement of the said trademark, till the next date of hearing.

15. Let the provisions of Order XXXIX Rule 3 be complied with within a period of ten days from today.”

17. It is to vacate the ex-parte ad-interim injunction granted by the impugned order dated October 31, 2019 that defendant No. 9 (Amba Shakti Steels Ltd.) has moved the present application under Order 39 Rule 4 of CPC. It is stated by defendant No. 9 that the impugned order has had the effect of stopping the business of the applicant / defendant No. 9.

18. It is stated by defendant No. 9 that to fulfill the conditions of MoU for grant of license, the defendant No. 9 has invested huge funds to upgrade its rolling mill, so as to manufacture quality TMT bars similar in quality to the TMT bars being manufactured by other Rathi Family Rolling Mills and applicant has also employed new experienced technical staff to look after manufacturing. It is further stated that the applicant was manufacturing more than eight thousand metric tonnes of TMT bars including Rathi TMT Bars and other Brands, to meet out cost of operations and also to earn some profits. However, after grant ex-parte injunction by this Court vide the impugned order, the defendant No. 9 is not able to manufacture and sell the product of brand / trade mark ‘RATHI’. Thus, production has come to stand still, but the applicant is spending huge amount on salary of employees and also on maintenance for which every month the applicant is incurring huge losses and its business is badly affected but for no fault of it, as applicant has a proper license from the trust Rathi Foundation. The details of quantitative summary of production as well as sales were also reproduced by defendant/applicant as under -: Month Production (in Metric Tonnes) Turnover (in Metric Tonnes) September,2019 7712.030 8845.660 October, 2019 9717.980 9531.810 November, 2019 5473.245 4269.540 December, 2019 6234.225 5202.270

19. It is stated by the applicant/defendant No. 9 that the applicant is a bonafide licensee, who has been granted a license by the Sub-Group C[1] of the Group of Trustees of the Trust Rathi Foundation in accordance with the terms and conditions of the MoU as well as the Trust Deed pertaining to trust Rathi Foundation as evident from the documents relating to grant of license by the trustees of Sub-Group C[1] of the trust Rathi annexed along with the application. It is also stated that the applicant has been granted license in the same manner by which plaintiff has granted licenses to the Companies namely M/s Shri Rathi Steel Ltd and Shri Rathi Steel (Dakshin) Ltd.

20. It is further stated that the plaintiff has alleged that defendant Nos. 10 & 11 (Raj Kumar Rathi and Pradeep Rathi), who are trustees of Sub-Group C[1] of the trust, Rathi Foundation, have exceeded their limits of quota of 4 licenses as permissible under clause 7 of the MoU dated October 24, 1995 on the basis of a false statement that Sub-Group C[1] has issued one license to Rathi Steel and Power Limited (RSPL) (Formerly Rathi Udyog Limited) Ghaziabad and also one license to Rathi steel and Power Limited, Sambalpur Orissa Unit, where as no license was ever issued to RSPL Sambalpur Unit and further Rathi Steel and Power Sambalpur Factory does not possess any rolling Mill and that no product with mark ‘RATHI’ was ever manufactured in said unit, which fact is established from letter dated June 18, 2016 issued by chairman of Trust Rathi Foundation, which has been intentionally concealed by the plaintiff.

21. Moreover, on concealment of material facts it is stated by the applicant/defendant No. 9 that the plaintiff has concealed the order dated June 1, 2018 in CS (Comm) 960/2018, CS (Comm) 961/2018, CS (Comm) 962/2018 and CS (Comm) 963/2018, wherein the plaintiff was refused ex parte ad-interim injunction by a Coordinate Bench of this Court. It is further stated that the plaintiff mislead this Court to believe that in the said Suits, defendant Nos. 10 and 11 herein have admitted that they issued licenses in excess of their allotted quota and that the plaintiff has applied for registration of various marks similar in question and that the RATHI Foundation itself has opposed one of the marks before the Trade Mark Registry. It is stated by the applicant that the plaintiff has intentionally concealed the fact that the other Trustees including family members and their licensees use the mark ‘RATHI’ with some pre-fix or suffix. It is further stated that no meeting of the Trustees has been convened to discuss the issue of misuse/infringement of the mark ‘RATHI’ nor has any authorization been issued/filed on record in favour of the plaintiff by the Trustees to institute the present Suit. In this regard reliance has been placed on S.P Chengaivaraya Naidu v. Jagannath, AIR 1994 SC 853, wherein it was inter-alia held that the party who approaches the court for grant of any relief in equity must come clean and disclose all true facts and produce all relevant documents in his power and possession and a litigant who is guilty of concealing the true facts or withholding relevant document is liable to be thrown out of court.

22. It is averred that as per the statement of defendant NO. 10 at time of filling of this suit only 4 licenses issued by Sub- Group C[1] were in operation, which are as under:- (1) Rathi Steel and Power Limited Ghaziabad. (2) Rathi Steel Enterprises, (3) Nirman Infra Steel Pvt. Ltd. and (4) Amba Shakti Steel Ltd and that the plaintiff has intentionally stated incorrect facts in the plaint for ulterior motives and by such manipulations the plaintiff managed to convince this Court that the defendant NO. 10 & 11 have issued more licenses than their allotted quota under terms of MoU & Trust deed, where as the real facts are otherwise.

23. It is also averred that the male members of Sub-Group C[1], acquired the necessary equity share holding in defendant No. 9 company as per provisions of terms and conditions of the Trust Deed and MoU of Trust Rathi Foundation and thereafter defendant No. 9 applied for grant of license to use the trade mark ‘RATHI’ owned by Trust, Rathi Foundation under NO. 309435 informing that it fulfills all the conditions of the MoU for grant of license to use trade mark ‘RATHI’ as owned by trust Rathi Foundation and the Trustees of Sub-Group C[1] duly considered the said application, verified all the credentials and granted license to defendant no. 9 for use of trade mark ‘RATHI’. It is further averred by the applicant/defendant No. 9 that upon grant of license by the trust Rathi Foundation, it has now acquired the status of a licensee and is a beneficiary of the trust Rathi Foundation and has acquired right, title and interest in the properties of the trust which are similar to the rights vested in plaintiff and no legal action adverse to the rights of the beneficiaries of the trust is maintainable under law.

24. On the locus of the plaintiff, it is stated by the applicant that the Suit has been filed by the plaintiff without any legal right, as the plaintiff is not the legal owner of the trade mark ‘RATHI’ under registration no. 309436, hence not maintainable.

25. Without prejudice it is stated by applicant/defendant NO. 9 that reliance placed on Clause 11.[3] of the MoU is misplaced owing to existence of the Trust Deed which is a subsequent registered document and in fact there is no provision under the Trust Deed for taking action to protect infringement of trade mark and hence only provisions as contained under the Trade Marks Act, 1999 (‘Trade Marks Act’, for short) will apply and the plaintiff has no locus standi to institute the present suit unless he is duly authorized by all other Trustees through a power of attorney, therefore the plaint is liable to be rejected being not maintainable. Further, it is also stated that defendant Nos. 10 and 11 and all other Trustees and the beneficiaries to whom licenses have been granted by persons authorized by Trust Deed are duly protected under Section 30(3)(b) of the Trade Marks Act and any suit to restrain such protected persons from using trade mark ‘RATHI’ is contrary to law and is thus not maintainable under law.

26. Reply has been filed by the plaintiff / non-applicant. It is averred by the plaintiff that as per Clause 8 of the MoU and the Trust Deed, only the senior most Trustee of the Group/Sub- Group of Rathi Foundation has the power to issue license for the use of the trade mark ‘RATHI’ on behalf of the ‘FOUNDATION’ to the company(ies) / firm(s) of the group/sub-group. Defendant No. 10 (Raj Kumar Rathi) being the senior most was eligible to issue license of the Group/Sub- Group and hence the license issued by defendant No. 11 to defendant No. 9 is ex facie illegal and invalid.

27. Without prejudice to above averment, it is stated that the alleged license issued to defendant No. 9 is in excess of the number of licenses Sub-Group C[1] is entitled to issue under the MoU and the Trust Deed. The plaintiff/non-applicant has drawn the attention of the Court to the following table reproduced herein under charting down the details of the licenses issued by defendant No. 10 at the time of filing of the present suit.

1. Rathi Steel and Power Ltd. Ghaziabad Plant (Earlier known as Rathi Udyog Limited) Licensee of Group C[1] under MoU and Trust Deed of Rathi Foundation. Registered User Agreement dated 2nd March, 1998 between Rathi Udyog Ltd. and Rathi Foundation. Operational

2. Rathi Steel and Power Ltd. Orissa Plant (Earlier known as Rathi Udyog Limited) Licensee of Group C[1] under MoU and Trust Deed of Rathi Foundation. Registered User Agreement dated 2nd March, 1998 between Rathi Udyog Ltd. and Rathi

3. RGTL Industries Ltd. Exact date of grant of license not readily known to the plaintiff. Although an IRP was appointed on 10/04/2019 and a letter in this regard was received on 7/12/2019, the Plaintiff has received a Caveat in the month of December, 2019 from RGTL Industries Ltd. stating that RGTL Industries is using the trademark ‘RATHI’.

4. Shrivardhan Rathi Date not provided by the Answering Defendants.

OPERATIONAL as per the averments made in paragraph 9(m) (iii) in I.A. No. 260/2020, that “Defendant No.4 has been granted a license by trust Rathi Foundation against the quota of group C[1].”

5. Raghuveer Metal Industries Pvt. Ltd. 27th September, 2016 Operational at the time of filing of suit. Currently not operational. It is submitted that the first statement with respect to revocation / cancellation of the said license was made only in the Affidavit of Admission & Denial filed in Mr. Anil Rathi v. Agarwal Ferro Metallic Pvt. Ltd. CS(COMM) 962/2018 in December, 2019. Further, the said matter beating TM No. 1 of 2017 was listed before the Saket District Court on 6th April, 2019, 5th July 2019, 27th September 2019, 15th October, 2019 and 21st November,

2019. However, no information with respect to the cancellation of license issued by Defendant No.10 to Raghuveer Metal Industries Ltd. was brought to the knowledge of either the Hon’ble Court or the Plaintiff’s Counsel. Therefore, there is no reason to believe that the said license was cancelled prior to filing of the present suit i.e. 30th October, 2019.

6. Aggarwal Ferro Metallic Pvt. Ltd. 29th August, 2017 Operational at the time of filing of suit. Currently not operational. It is submitted that the first statement with respect to revocation / cancellation of the said license was made in the affidavit of Admission & Denial filed in Mr. Anil Rathi v. Jaipur Steeltech India Pvt. Ltd. CS (Comm) No. 961 of 2018 in December, 2019. It is submitted that the matter titled Mr. Anil Rathi v. Agarwal Ferro Metallic Pvt. Ltd. (bearing CS (COMM) NO. 962 of 2018 was listed on various dates including 16th January, 2019, 11th February, 2019, 19th February, 2019, 27th February, 2019, 16th April, 2019, 25th April, 2019, 20th August, 2019, 16th October, 2019, 24th October, 2019 and 18th November, 2019 before this Hon’ble High Court. It is submitted that no information with respect to the cancellation of license was brought to the knowledge of either the Hon’ble Court or Plaintiff’s counsel on the said dates. The fact of cancellation of license issued to Agarwal Ferro Metallic Pvt. Ltd. was recorded before this Hon’ble Court on 12th December, 2019. Therefore, there is no reason to believe that the said license was cancelled prior to filing of the present suit i.e. 30th October, 2019.

7. Nirman Infra Steel Pvt. Ltd. 15th September, 2017 OPERATIONAL as per the statement made by Defendant nos. 3, 4, 10 and 11 in paragraph 7 of I.A. No. 260 of 2020.

8. M/s. Rathi Steel Enterprises 6th June, 2018 OPERATIONAL as per the statement made by Defendant no. 10.

9. Amba Shakti Steels Limited 24th August, 2018 OPERATIONAL as per the statement made by Defendant no. 10.

28. It is thus stated that not only could not have defendant No. 11 issued license to defendant No. 9 but also alleged, the issued license was in excess of the total number of licenses Sub- Group C[1] was entitled to issue as per MoU and Trust Deed.

29. It is further stated by the plaintiff/non-applicant that the Clause 10.[3] of the MoU clearly stipulates that the trade mark ‘RATHI’ will not be licensed/allotted to be used by any company unless its equity share capital is held as per Clause 9.[2] (a), (b) and (c) of the said MoU. In this regard it is stated that none of the Directors of defendant No.9 company are from Rathi Family and the control and management of defendant NO. 9 is in fact not with the Rathi family, on the basis of, without admitting, the shareholding pattern of M/s Amba Shakti Steels Limited, as given on the Documents filed on behalf of defendant Nos. 3 to 7 and 9 to 11, for the following reasons; a. It is submitted that Krishna Associates Pvt. Ltd. allegedly holds 51% shareholding in the defendant No. 9 Company. b. It is further submitted that Shrivardhan Rathi allegedly holds 52.20% in Krishna Associates Pvt. Ltd. c. It is therefore submitted that the Sub-Group C[1] and their family members effectively hold only 26.622% in the defendant No. 9 Company as opposed to non-Rathi family members, who are also the Directors of Amba Shakti Steels Pvt. Ltd. who effectively hold 73.378 % in defendant No. 9. It is therefore submitted that by effectively holding merely 26.622% in the defendant No. 9 company, Group C[1] and their family members cannot be said to be in control of the defendant No. 9 company. Further, a perusal of the shareholding pattern and Directorship of Krishna Associates Pvt. Ltd. and defendant No. 9 shows that the control and management of the said company is not with the members of Rathi Family. In this regard, it is pertinent to note that Ms. Ritu Goel who owns 46.20% shares in Krishna Associates Pvt. Ltd. is also a shareholder in defendant No. 9 Company. The said facts demonstrate some collusion on the part of the said entities and demonstrate their ill motives of circumventing the spirit of the MoU and Trust Deed. d. It is further submitted that none of the Directors of defendant No. 9 Company i.e. Mr. Pankaj Goel, Mr. Atul Munjal, Mr. Rakesh Kumar Gupta, Mr. Pawan Kumar Mittal and Ms. Akanksha Pal are from the Rathi Family.

30. It is also stated that the misleading statements have been made qua investments and current status of the business of defendant No. 9, as it is clearly evident from the present application (paragraph 4) that defendant No. 9 itself has admitted to manufacturing TMT Bars for other brands, and hence the plea that the the ex parte ad interim injunction order has adversely affected the business bringing the production to a standstill is clearly farce.

31. Further, it is stated by the plaintiff/non-applicant, the stand taken by the defendant No. 9 that it has acquired proper license for the mark ‘RATHI’ along with right, title and interest in the properties of the Trust is misleading, as defendant No. 9 was well-aware of the fact that the license issued by defendant No. 11 is illegal and invalid per se, not in compliance of the MoU and the Trust Deed. In this regard, it is stated that as per Letter dated 21st August, 2018 regarding grant of License/Permission for use of trade mark ‘RATHI’ by defendant No. 11 to defendant No. 9, it is stated explicitly by defendant No. 9 “We hereby accept all the terms and conditions of the trust deed dated 28th June 1995 and MOU dated June 1995 of Rathi Foundation.... We undertake to abide by the rules, regulations of the trust and the MOU executed between its founded trustees..” and also the Minutes of the meeting of the Board of Directors of defendant No. 9 dated August 18, 2018, makes it clear that the Trust Deed and the MoU of the Rathi Foundation were placed before the Board of Directors of the defendant No. 9 and were informed that in order to grant the permission/license to use trade mark ‘RATHI’, all the terms and conditions mentioned in the Trust Deed as well as the MOU would have to be accepted unconditionally and the same were unconditionally accepted by the Directors on behalf defendant No.9.

32. It is stated that plaintiff is well-within its right to file the present Suit being a Trustee of the Rathi Foundation in terms of Section 13, 48 of the Indian Trusts Act, 1882 (‘Indian Trusts Act’, for short) as well as in terms of Clause 11.[3] of the MoU and Clause 3(a) of the Trust Deed. It is also stated that prima facie case, balance of convenience exists in favour of the plaintiff and that vacation of the impugned Order, by which an ex-parte ad interim injunction was granted would result in irreparable harm and injury to the plaintiff.

33. A rejoinder was duly filed by defendant No. 9/applicant. The stand taken by the plaintiff/non-applicant that the defendant No.9/ Sub-group C[1] has exceeded the stipulated number of licenses has been vehemently objected. With regard to the issuance of licenses in favour of various companies as alleged by the plaintiff/non-applicant, it is stated as follows: 1). Rathi Steel and Power Ltd. (Ghaziabad Unit): Not denied that Rathi Steel and Power Ltd., Ghaziabad (RSPL) (earlier known as Rathi Udyog Ltd.) is using one license. 2). Rathi Steel and Power Ltd. Sambalpur Orissa: This company was never granted any license and that the unit never had any rolling mill. Moreover, the facility is lying closed since

2013. 3). RGTL Industries Ltd: Not denied that a license was indeed granted to M/s RGTL Industries Ltd. However, admittedly this company went into liquidation proceedings under IBC and an IRP has been appointed by NCLT. It is stated that the moment IRP was appointed the management of this company was vested in the IRP and its earlier management lost control, therefore automatically in accordance with provisions of clause 10.[3] (b) of MoU the license as granted to this company stood revoked. 4). Shrivardhan Rathi: No license out of quota of Sub- Group C[1] was ever issued to Shrivardhan Rathi (defendant No.4). Moreover, quoting the stand of defendant No.4 in paragraph 9 (v) of the I.A no.260/2020, it is stated that defendant No. 4 can use mark ‘RATHI’ for his products in following three ways:- (a) by promoting and selling his products using family mark ‘RATHI’, (b) by using his surname RATHI as his distinct mark with some prefix and suffix and also (c) by using mark ‘RATHI’, through a license issued by some trustee of the Trust Rathi Foundation under provisions of MoU & Trust deed and further he is also entitled to simultaneously use all three modes to promote his products under Mark ‘RATHI’. 5). Raghuveer Metal industries: License granted to this firm has been revoked and is not in operation. The allegation of plaintiff is that it was operational at time of filling of suit where as the contention of applicant is that it was already revoked and this is essentially a question of proof during course of trial. 6). Aggarwal Ferro Metallic: License as granted to this firm has been revoked and is not operation. The allegation of plaintiff is that it was in operation at time of filling of suit where as the contention of applicant is that it was already revoked and this is essentially a question of proof during course of trial. 7). Nirman Infra Steel Pvt. Ltd.: This license is admittedly in operation. 8). Rathi Steel Enterprises: This license is admittedly in operation. It is placed on record that it is a partnership firm, wherein the defendant No. 4 has 90 % shareholding and the license is granted in name of this firm. No license has been granted in the individual name of defendant no. 4 by any trustee of Sub-Group C[1] of the trustee of Trust, Rathi Foundation. 9). Amba Shakti Steels Ltd.: Admittedly a license has been granted to this company, where defendant No. 4 and a son of defendant No. 11 a trustee of the trust Rathi Foundation. Defendant No. 4 has a controlling stake of more than 51% in the holding company of the defendant No. 9 namely Krishna Associates Pvt. Ltd. and he has been exercising management control over the affairs of the defendant No. 9 company. As defendant No. 4 holds more than 51% shareholding in the corporate entity which itself hold 51% stake in defendant No. 9 company, therefore it amounts to fulfillment of condition mentioned in clause 9.[2] of the MOU and hence the grant of license to defendant no. 9 is perfectly legal and in accordance with terms and conditions of MOU. It is further reiterated that the license was issued upon the consent / direction / instruction of defendant No. 10, Senior Trustee of Sub Group C[1] of Trust Rathi Foundation

34. It is submitted by Mr. Tanmaya Mehta, learned Counsel appearing on behalf of the applicant/defendant No. 9, on the plea taken by the plaintiff/non-applicant that the licenses were not granted by the senior most Trustee of the Sub-Group, that both defendant No. 10 and defendant No. 11 are the sons of Late P.C. Rathi and have stepped into their father’s shoes, who was the senior Trustee of Sub-Group C[1], after his death. The license has been granted by the Sub-Group C[1] to defendant No.9, and in fact defendant No. 10 has ratified the issuance of the license by defendant No.11 in his written statement with a separate affidavit.

35. On the number of licenses exceeding the permissible number of 4, it is submitted by Mr. Mehta that presently only 4 licensees are in operation namely (i) Rathi Steel and Power Ghaziabad.

(ii) Rathi Steel Enterprises, (iii) Nirman Infrasteel and (iv) Amba Shakti steel Ltd. (defendant No.9, applicant herein) and that no license was ever issued to Rathi Steel and Power Ltd. Sambalupur, Orissa and in anyway the same is lying shut since 2013. It is also submitted that the same was not even a Rolling mill but produced only, raw materials on which no stamping or use of trade mark ‘RATHI’ was ever made and there is no mention of license to Rathi Steel and Power at Orissa on the letter issued on June 18, 2016 by the Rathi Foundation.

36. It is further submitted by him that no license was ever granted in the individual name of defendant No.4, and that as per provisions of Clause 10.3(b) of MoU the license stands revoked automatically, without doing anything on part of Trust, if the management of the company of licensee goes out of hand of the Group / Sub-Group, which applies to RGTL Industries and this company is under IBC (Insolvency and Bankruptcy Code, 2016, for short) proceedings and an Interim Resolution Professional (‘IRP’, for short) has been appointed who is controlling and managing affairs of this company as per law. It is submitted by Mr. Mehta that in fact, the plaintiff has himself filed a suit [CS (Comm) 151 of 2020] seeking to restrain RGTL / IRP from using the mark Rathi and if the IRP is doing some act contrary to law, the Trust should approach the NCLT which is the competent forum for appropriate relief, however, for that defendant No. 9 or Sub - Group C[1] cannot be held responsible. However, as far as the trustees are concerned, they have already stated that RGTL is not a licensee anymore. It is undisputed that IRP has been appointed for RGTL and therefore by operation of law, now the management and control is with IRP and not with Sub - Group C[1] and the said license does not survive now.

37. On the contention of the plaintiff regarding the shareholding percentage in defendant No. 9 (Amba Shakti Steel Ltd.), it is submitted by Mr. Mehta that 51 % shareholding of Amba Shakti steel Ltd is owned by Krishna Associates Pvt. Ltd i.e. Krishna Associates Pvt. Ltd is a shareholder which has a 51% majority vote during the AGM / EGM. Krishna Associates Pvt. ltd thus exercises control over 51% of voting rights during the AGM / EGM of Amba Shakti steel Ltd., in a position to exercise majority vote during the AGM / EGM of Amba Shakti steel Ltd. And, since 52.20% shareholding of Krishna Associates Pvt Ltd is controlled by defendant No.4, on the same principles, he exercises majority control over Krishna Associates Pvt. Ltd, if he so opts to. Thus, by having 52.20% of Krishna Associates Pvt Ltd., defendant No. 4 is in a position to elect the majority or even all of Directors in defendant No. 9, if he so chooses. Moreover, since Krishna Associates Pvt Ltd owns 51% of Amba Shakti steel Ltd, the latter and former have a holding company / subsidiary company relationship. Defendant No. 4 is thus owning 52.20% of the holding company, and surely in a position to exercise control. Defendant No. 4 is also a Director in the Holding Company, Krishna Associates Pvt Ltd. (The copy MCA record as downloaded from its website is annexed herewith), This clearly shows that 51 % is all that is required, since that gives majority control in election of Directors.

38. It is further submitted by Mr. Mehta that MoU, in Clause 9.2, itself permits indirect 51% arrangement shareholding through Corporate Body(ies) and / or Company(ies). The MoU expressly permits only a minimum 51% shareholding in the other corporate body(ies) and / or Company(ies) / indirect Company, as 51 % shareholding, directly and indirectly, is a significant quantum which gives a person / entity control. In the present case, defendant No. 4 holds 52.20% shareholding (majority shareholder) in Krishna Associates Pvt. Ltd. (i.e. Other Corporate Body / Company being referred in clause 9.[2] of MoU above) and further Krishna Associates Pvt. Ltd. holds 51 % shareholding in defendant NO. 9, as per Clause 9.[2] of the MoU. It is submitted by Mr. Mehta that in fact the plaintiff has admitted the shareholding of defendant No. 4, in Krishna Associates Pvt. Ltd. and shareholding of Krishna Associates Pvt. Ltd. in defendant No. 9 company and that the MoU does not mandate any financial investment by the Rathi family Group directly in the licensee. It only talks of shareholding percentage, or management control, or certain technical thresholds to be met in the rolling mill.

39. On the aspect of being able to exercise ‘control’, it is submitted by Mr. Mehta that a reading of Section 2(27), 2(59) and 2(60) of the Companies Act 2013, and also Regulation 5 along with the definition of ‘control’ under the SEBI Take Over Regulations would show that ‘control’ could be either direct or indirect and is not necessarily linked to any specific shareholding threshold and the statute itself contemplates that persons other than the Board of Directors can be said to be in ‘control’ with the Board answerable to them. Thus, it is submitted by Mr. Mehta, on the basis of the said provisions of law, that the concept of 'control' is factually myriad and a mixed question of fact and law. At this stage, under Order 39, Rule 4, the company defendant No.9 has stated on affidavit in the rejoinder Para 5(9), Page14 and in the affidavit of Amit Munjal director of defendant no. 9 filed in support of the rejoinder, that defendant No. 4, exercises management control over the company. Once the applicant itself, through its Director has stated on affidavit, that defendant No. 4 exercises management control over the company, then if the same is denied by plaintiff, it is a matter of evidence and trial, and at the stage of Order 39, Rule 4, the statement of the applicant ought to be accepted because control can be said to be exercised in many ways, and this would be a matter for trial for the plaintiff to disprove the assertion during course of trial.

40. It is also submitted that the plaintiff himself is guilty of violating the terms of MoU as the plaintiff being Senior Trustee of Sub-Group, C[3], has issued two licenses to his own companies in sheer violations of terms of MoU and the plaintiff as well as his male descendants taken together did not hold 51 % equity holding in his two companies namely Shri Rathi Steel Ltd and Shri Rathi Steel Dakshin Ltd. at the time of issuance of licenses as well as at the time of filing of the present Suit.

41. It is submitted by Mr. Sudhir Chandra, learned Senior Counsel appearing on behalf of the plaintiff/non-applicant that the license granted to defendant No. 9 is not within the stipulated number of 4 licenses. In this regard it is submitted by Mr. Chandra that (i). a license was granted to Rathi Steel and Power Ltd. (Earlier Rathi Udyog Limited) by Group C[1] of Rathi Foundation and the said company is mentioned as a licensee of Group C[1] in MoU itself. This company has two manufacturing units in Ghaziabad & Orissa and the website of Rathi Steel and Power Ltd. shows that both the units appear to be dealing in rolled steel. As per Clause 10.[5] of MoU every manufacturing unit in different locations having a separate factory license shall be deemed to be a separate license for every such location even if it is under the name & style of the same company and the Orissa Plant of Rathi Steel and Power Ltd. ought to be considered as a separate license granted by the Group C[1] of Rathi Foundation; (ii). RGTL Industries Ltd. continues to use/advertise the mark ‘RATHI’ till date and plaintiff instituted a Suit titled Mr. Anil Rathi v. RGTL Industries Ltd. & Ors. bearing CS(Comm) No. 151/2020 seeking restraint against RGTL Industries Ltd. from using the mark ‘RATHI’ on the basis of the statements made by defendant No. 9 and in the said Suit the counsel for Resolution Professional for RGTL also stated that RGTL Industries Ltd. is entitled to use the mark ‘RATHI’ as asset under license; (iii). Based on the statement which reads as “Defendant No. 4 has been granted a license by trust Rathi Foundation against the quota of group C1” made by defendant No. 10 in an application under Order 39 Rule 4 on behalf of defendant Nos. 3, 4, 10 & 11, it is clear from the afore-mentioned admission that the license granted to defendant No. 4 is independent of the License granted to defendant No. 3 i.e. M/s Rathi Steel Enterprises.

42. Mr. Chandra has drawn the attention of this Court to a table, to state that defendant No. 9 is the last entity to have been granted the alleged license to use the mark ‘RATHI’ by Group C[1] and thus outside the stipulated number of 4. The table reads as under:

1. Rathi Steel and Power Ltd. Ghaziabad Plant (Earlier Rathi Udyog Limited) At least since 24th June, 1995 under MOU and Trust Deed.

2. Rathi Steel and Power Ltd., Orissa Plant (Earlier Rathi Udyog Limited) At least since 24th June, 1995 under MOU and Trust Deed.

3. RGTL Industries Ltd. The Plaintiff believes that the said Company has been a Licensee at least since 2009.

4. Shrivardhan Rathi Exact Date not provided.

5. Raghuveer Metal Industries Pvt. Ltd. 27th September, 2016

6. Agarwal Ferro Metallic Pvt. Ltd. 29th August, 2017

7. Nirman Infra Steel Pvt. Ltd. 15th September, 2017 (pg.194, Part3A Vol.1)

8. M/s Rathi Steel Enterprises 6th June, 2018 (pg. 122, Part 3B)

9. Amba Shakti Steels Limited 24th August, 2018 (pg.116, Part 3B)

43. It is also submitted by Mr. Chandra that no member of the Rathi Family owns the requisite shareholding directly or indirectly in defendant No. 9. Clause 9.[2] of MoU provides that, in the case of unquoted companies, the relevant group/subgroup must own atleast 51% shareholding, either directly /indirectly through company (ies) in the same group. The object of clause 9.[2] of the MoU is that the members of the Rathi Family, hold at least 51% either directly/indirectly shareholding in the licensee company so that the control and management of the company remains with the Rathi Family meaning thereby that if a holding company owns 51% in the licensee company then the Rathi Family should own 100% shareholding of the holding company. In the present case, it is submitted by Mr. Chandra that for the Rathi Family to own 51 % shareholding indirectly in defendant No. 9 company, it was imperative that members of the Rathi Family own 100% stake in M/s. Krishna Associates Pvt. Ltd., where as in reality the Rathi family indirectly holds only 26.622 % in defendant No. 9 against the the 73.378% shareholding of the non-Rathi members. In this regard Mr. Chandra has drawn the attention of this Court to the table reproduced below: SHAREHOLDING PATTERN OF DEFENDANT NO. 9 COMPANY Name of the Shareholder / Perce Shareholders of the Holding Holding Co. in D[9] ntage Company Pankaj Goel 5% N/A Ritu Goel 0.002 % N/A S.K. Goel & Sons (HUF) 8.95 % N/A Adhunik Datamatics Pvt. Ltd. (Shareholding/Company Details of the Company annexed herewith as ‘Annexure – C’ 35.04 % Pankaj Goel 90.[5] 44% Ritu Goel 0.17 7% Astrol Dealcome 9.27 8% Manak Goel 0.002 % N/A Arushi Goel 0.002 % N/A Krishna Associates Pvt. Ltd. 51% Mr. Shrivardhan Rathi 52.[2] 0% Mrs. Ritu Goel 46.[2] 0% Mr. Vineet Saxena 1.20 % Mr. Vijay Singh 0.40 %

44. Moreover, it is submitted by Mr. Chandra that as per Clause 10.[3] (b) of the MoU, the management and control of the licensee company ought to be with the respective group/subgroup of the Rathi Foundation. In fact, it is his submission that no member of the Rathi Family including defendant No. 4 is part of the Board of Directors of defendant No. 9 and the same is an admitted position. Mr. Chandra also submitted that there is a difference between management of a company and shareholding of a company. Management and control of a company vests with the Board of Directors and therefore defendant No. 9 is not in compliance of the terms of the MoU and Trust Deeds.

45. Mr. Chandra also submitted that clause 8 of the MoU provides for the senior-most Trustee of the Group/Sub-group to issue license for the use of the trade mark, whereas in the present case it is an admitted position that the license was issued by defendant No. 11, who is not the eldest member of the group C[1].

46. Having heard the learned counsels for the parties, the broad submissions made by them are as under.

47. According to Mr. Mehta:

1. Defendant No. 10 and defendant No. 11 are the sons of Late P.C. Rathi and stepped into their father’s shoes, who was the senior Trustee of Sub-Group C[1]. After his death, the license has been granted by the Sub- Group C[1] to defendant No.9 and defendant No. 10, has ratified the issuance of the license by defendant No.11.

2. Only 4 licensees (permissible) are in operation namely (i) Rathi Steel and Power Ghaziabad.

(ii) Rathi Steel Enterprises, (iii) Nirman infrasteel and (iv) Amba Shakti steel Ltd. (defendant No.9, applicant herein) and that no license was ever issued to Rathi Steel and Power Ltd. Sambalupur, Orissa and in anyway the same is lying shut since 2013.

3. As per provisions of Clause 10.3(b) of MoU the license stands revoked automatically, without doing anything on part of Trust, if the management of the company of licensee goes out of hand of the Group / Sub-Group, which applies for RGTL Industries as an IRP (interim Resolution Professional, for short) has been appointed who is controlling and managing affairs of this company as per law.

4. Clause 9.[2] of MoU permits indirect 51% arrangement shareholding through Corporate Body (ies) and / or Company(ies). The MoU expressly permits only a minimum 51% shareholding in the other corporate body(ies) and / or Company(ies) / indirect Company, as 51 % shareholding, directly and indirectly, is a significant quantum which gives a person / entity control.

5. 51 % shareholding of defendant No. 9 is owned by Krishna Associates Pvt. Ltd which exercises control over 51% of voting rights during the AGM / EGM of Amba Shakti steel Ltd., in a position to exercise majority vote during the AGM / EGM of Amba Shakti steel Ltd. And, since 52.20% shareholding of Krishna Associates Pvt Ltd is controlled by defendant No.4, he exercises majority control over Krishna Associates Pvt. Ltd, if he so opts to. Thus, by having 52.20% of Krishna Associates Pvt Ltd., defendant No. 4 is in a position to elect the majority or even all of Directors in defendant No. 9, if he so chooses. Moreover, since Krishna Associates Pvt Ltd owns 51% of defendant No. 9, the latter and former have a holding company / subsidiary company relationship.

6. Section 2(27), 2(59) and 2(60) of the Companies Act 2013, and also Regulation 5 along with the definition of ‘control’ under the SEBI Take Over Regulations would show that ‘control’ could be either direct or indirect and is not necessarily linked to any specific shareholding threshold and the statute itself contemplates that persons other than the Board of Directors can be said to be in ‘control’ with the Board answerable to them. The same being disputed fact, evidence needs to be adduced, clearly not at the present stage.

7. Plaintiff, being Senior Trustee of Sub-Group, C[3] is guilty of violating the terms of MoU as he has issued two licenses to his own companies and the plaintiff as well as his male descendants taken together did not hold 51 % equity holding in his two companies namely Shri Rathi Steel Ltd and Shri Rathi Steel Dakshin Ltd. at the time of issuance of license as well as at the time of filing of the present Suit.

48. On the other hand, Mr. Chandra has made the following submissions:

1. License granted to defendant No. 9 is not within the stipulated number of 4 licenses: (i). License was granted to Rathi Steel and Power Ltd. (Earlier Rathi Udyog Limited) by Group C[1] of Rathi Foundation and the said company is mentioned as a licensee of Group C[1] in MoU itself. This company has two manufacturing units in Ghaziabad & Orissa both dealing in rolled steel. (ii). RGTL Industries Ltd. continues to use/advertise the mark ‘RATHI’ till date and the counsel for Resolution Professional for RGTL in suit bearing CS(Comm) NO. 151/2020 has also stated that RGTL Industries Ltd. is entitled to use the mark ‘RATHI’ as asset under license;

(iii) The license granted to defendant

No. 4 is independent of the License granted to defendant No. 3 i.e. M/s Rathi Steel Enterprises. (Based on the statement made by defendant No. 10 in an application under

2. As per Clause 10.[5] of MoU every manufacturing unit in different locations having a separate factory license shall be deemed to be a separate license for every such location even if it is under the name & style of the same company.

3. No member of the Rathi Family owns the requisite shareholding directly or indirectly in defendant No. 9 in terms of Clause 9.[2] of the MoU; on the basis of table reproduced at paragraph 42 and further the license has not been issued by the seniormost member/Trustee.

4. As per Clause 10.[3] (b) of the MoU, the management and control of the licensee company ought to be with the respective group/sub-group of the Rathi Foundation.

5. No member of the Rathi Family including defendant No. 4 is part of the Board of Directors of defendant No. 9 and the same is an admitted position.

49. Having noted the submissions of the learned Counsels for the parties, at the outset, I may state that the interim order dated October 31, 2019 was passed by this Court injuncting defendant Nos. 1,2,7,[8] & 9 from using the mark ‘RATHI’. On the objection of maintainability of the present Suit, taken by defendant No.9, as the same has not been filed by the Registered Proprietor, the Rathi Foundation, but by one of the Trustees masquerading to be the Trust in violation of Clause 10 read with Section 48 of the Indian Trusts Act, which mandates for unanimous action by all Trustees, is concerned, suffice would it be to state, the obligations/rights of a Trustee must be seen in the context of the Trust Deed (which as per Clause 3(a) incorporates the clauses of the MoU) and the Indian Trusts Act. Mr. Chandra has relied upon clause 11.[3] of the MoU and Clause 3(a) of the Trust Deed, which reads as under: “MEMORANDUM OF UNDERSTANDING xxx xxx xxx 11.[3] That in case of mis-use of the Trade Mark “RATHI”, any of the Trustee(s) will be entitled to initiate any action jointly or severally against the person/company/firm including the member (s) of the “FAMILY” and Trustee(s) of the “FOUNDATION”, misusing the Trade Mark “RATHI”. The said Trustee(s) and/or the member(s) of the “FAMILY” will also be entitled to make the “FOUDATION” and other Trustee(s) a party to implead in a proper court of law for suitable action against the said person/company/firm and also against the Trustee(s) having permitted to do so.

XXX XXX XXX TRUST DEED XXX XXX XXX

3. The object of the “FOUNDATION” shall be: (a)To give effect to the Memorandum of Understanding dated 24th June, 1995, (hereinafter referred to as MOU), annexed hereto, which forms an integral part of this TRUST DEED. In case of any difference of opinion regarding Interpretation of the terms of this TRUST DEED and the terms of the MOU, the terms and conditions contained in the MOU shall prevail.

XXX XXX XXX” On the other hand, Mr. Mehta has relied upon clause 10 of the Trust Deed, which reads as under: “10. It is further expressly understood that any/all decision(s) in the FOUNDATION on any matter will be taken unanimously with written consent of each and every Trustee i.e. 100% strength of the Trustee.”

50. Clause 3 (a) states, in the eventuality of any difference of opinion regarding interpretation of terms of the Trust Deed, it would be clauses in the MoU which would prevail. Similarly, Clause 10 of the Trust Deed stipulates as to how various decisions shall be taken in the Foundation, which provision is quite different from clause 11.[3] of the MoU which provides for the obligation/rights of the Trustee in the eventuality of a misuse of trade mark, with which we are concerned in this case. The said clause also lays down, in the eventuality of a litigation for misuse, the other Trustees shall also be made parties in the case. I find that the plaintiff has arrayed all the Trustees, other than those alleged to infringe the mark ‘RATHI’, as proforma defendants in Suit, which as per law meets the requirement for filing a Suit to protect the Trust Property. Moreover, plaintiff cannot be a mere spectator to the damage/ infringement done to the intellectual property of the name/mark ‘RATHI’, for commercial benefit and protection of which the Trust was constituted. This, I say so in view of the law laid down by the division Bench of this Court in Duli Chand v. Mahabir Pershad Trilok Chand Charitable Trust, AIR 1984 Delhi 145. The relevant portion of the judgment reads as under: “16. It is well-known that a Trust is not a legal entity as such. In fact, a Trust may be defined as an obligation imposed on the ostensible owner of property to use the same for a particular object for the benefit of a named beneficiary or a charity. Thus all Trustees in law are owners of the property but they are obliged to use the same in a particular manner. If a number of trustees exist, they are joint owners of the property. It is not like a Corporation which has a legal existence of its own and therefore can appoint an agent. A Trust is not in this sense a legal entity. It is the trustees who are the legal entities. Section 48 of the Indian Trusts Act, 1882, states:— “When there are more trustees than one, all must join in the execution of the trust, except where the instrument of trust otherwise provides.” Section 47 reads: “A trustee cannot delegate his office or any of his duties either to a co-trustee or to a stranger, unless (a) the instrument of trust so provides, or (b) the declaration is in the regular course of business, or (c) the delegation is necessary, or (d) the beneficiary, being competent to contract, consents to the delegation.’’………….. Xxx xxxx xxx

17. On the other hand, there is a Full Bench judgment of the Gujarat High Court which seems in our view to take the right view. This is Atmaram Ranchhodbhai v. Gulamhusein Gulam Mphiyaddin and another, A.I.R. 1973, Gujarat 113. The judgment of Bhagwati C.J., sets out the facts in that case which was a reference on this very question, i.e., as to whether some out of several co-trustees could file a suit for eviction. And also, on the question whether some out of several co-trustees could determine the tenancy. It was held on both points that all the trustees must join together. On the second question, namely, as to whether a single trustee could maintain the suit, it was found that there was a unanimity amongst all the High Courts on this question and the conclusion of the Full Bench was as follows:— “We are, therefore, of the view that unless the instrument of trust otherwise provides, all co-trustees must join in filing a suit to recover possession of the property from the tenant after determination of the lease. No one single co-trustee, even he be a managing trustee unanimously chosen by the cotrustees, can maintain such a suit against the tenant without joining the other co-trustees.All Co-trustees must be joined in the suit and if any one or more of them are unwilling to be joined in the suit as plaintiffs or for some reason or the other it is not possible to join them as plaintiffs, they must be impleaded as defendants so that all co-trustees are before the Court.” (Emphasis supplied) We completely agree with this view and are, therefore, of the opinion that the suit could not have been maintained by one of the co-trustees and further, no resolution passed unanimously by all the other co-trustees could authorise one of the trustees to file the suit. The position of trustees is exactly the same as of any other set of co-owners who must necessarily join together to file a suit.”

51. Having said that the plea of Mr. Chandra is that the license issued on behalf of Sub-Group C[1] to defendant No.9 has not been issued by the senior-most member of the said Sub- Group, namely Raj Kumar Rathi (defendant No.10). In this regard, I may reproduce the relevant stipulation, Clause 8 of the MoU as under: “ 8.0 Within the ceiling of the number of licenses earmarked for a group/sub-group as defined in clause 7 above, the seniormost Trustee of the group/sub-group will issue the license to use the Trade Mark ‘RATHI’ on behalf of the “Foundation” to the company(ies)/firm(s) of his group/sub-group provided the company(ies)/firm(s) fulfil the conditions laid down in cluases 9,9.1,9.2,9.[3] and 9.[4] hereinafter.”

52. Concedingly, the license has been issued by defendant No.11. In other words, the senior-most member has not issued the license to defendant No.9. The plea of Mr. Mehta is that the issuance of license by defendant No. 11 to defendant No. 9 was as per instructions and consent of defendant No. 10. The relevant portion affidavit as filed by defendant No. 10 reads as under: “…….

3. I say that I have not issued any license in individual name of Shrivardhan Rathi nor any other trustee of sub group C[1] has issued any license to Shrivardhan Rathi in his personal/ individual capacity. The license has been issued in name of partnership firm of Shrivardhan Rathi namely M/s Rathi steel Enterprises (defendant no. 3). The defendant no. 4 Shrivardhan Rathi has 90 % share holding in this firm Rathi steel Enterprises.

4. I say that the defendant no. 9 applied with trustees of sub group C[1], for grant of license to use the Trade Mark “RATHI” owned by the trust Rathi Foundation. On enquiry I was satisfied that since Shrivardhan Rathi has a controlling stake in holding company of defendant no. 9 and has acquired capacity to take controlling decision, therefore following the terms of the MOU, I, approved the grant of license to defendant no. 9 in consultation with my brother and other trustee Sh. Pradeep Rathi. I further say that and my brother also a trustee Sh. Pradeep Rathi, under my instructions and with my consent issued the letter to defendant no. 9 informing grant of license.”

53. The letter referred to above (i.e. August 24, 2019) has not been placed on record by either defendant No.10/defendant No. 11, or by defendant No. 9. I may state here a reference has been made with regard to certain documents, including the letter dated August 24, 2018, having been filed on January 4, 2020 on behalf of defendant Nos. 3-7, 9 & 11. The said documents are not on record. Even the office noting does not depict filing of such documents by defendant Nos. 3-7, 9 &11 on January 4,

2020. In any case the grant of license under the MoU has to be by the senior-most member of the Group/Sub-Group, who is defendant No. 10. In fact, it is noted that licenses have been granted by defendant No. 10, one such license grant by defendant No. 10 to Rathi Steel Enterprises, defendant No.3, on June 06, 2018 records the following: “I hereby represent and state that the trademark “Rathi” bearing trademark No. 309435 registered with the Trademark Registry under Class 6 of Fourth Schedule of the Trade Marks Act, 1999 (the “Trademark”) is owned by Rathi Foundation, a trust registered in India under the Indian Trust Act, 1882 (the “Trust”), I R.K. Rathi, acting in my capacity as a Senior Trustee of the Trust have the right to license and / or authorize use of the Trademark. Being satisfied upon the fulfillment of terms of the trust deed of the Trust, I acting in my capacity as the Senior Trustee of the Trust is pleased to grant you a license to use the Trademark “Rathi” for various rolled steel products viz. cold twisted deformed (CTD) bars, TMT Bars, rounds, structural, plates, wire rods etc. (the “Products”) for a period of 3 years effective from the date hereof (the “Term”) and to grant permission for application of the said Trademark on the Products manufactured for / marked by Rathi Steel Enterprises during the term. Further, I hold the right to forfeit the grant of the above without assigning any reason whatsoever, giving a notice period of 30 (thirty) days. “

54. The above shows that it is the senior-most member of the Sub-Group, who is also the Trustee as well, by representing himself as the senior-most Trustee who can grant the license. The stand of defendant Nos.9,10 & 11 that the license to defendant No.9 was granted under the instructions and the consent of defendant No.10 is not convincing. It is not understood when in the past the grant was by defendant No. 10, why was it by defendant No. 11 in this case and what were the compelling circumstances that defendant No.10 could not have issued the letter granting the license to defendant No.9. There is a purpose for the MoU to put the obligation of granting the license on the senior-most member of a group/Trustee, that is, to avoid indiscriminate issuance of licenses. In other words, the sanctity of a family arrangement must be maintained in letter and spirit. Such arrangements are governed by special equity peculiar to them and are required to be enforced honestly, when the members of the family have agreed for equal/equitable distribution of wealth. It is settled law that if an act has to be done in a particular manner it has to be done in that manner only. The so-called ratification by defendant No.10 cannot validate the grant of license under the signature of defendant No.11 when the same is impermissible under the MoU i.e. the MoU does not stipulate grant of license by member/Trustee who is not the senior-most in that Group/Sub-Group.

55. Even otherwise, Clause 9.[2] of MoU provides that, in the case of unquoted companies, the relevant group/sub-group must own atleast 51% shareholding, either directly /indirectly through company(ies) in the same group. It is an admitted position that defendant No.9 is an unquoted/unlisted company and the grant of license in its favour is justified by defendant Nos. 4,9, 10 & 11 on the ground that defendant No. 4 is having majority shareholding in defendant No. 9 through M/s. Krishna Associates Pvt. Ltd. Moreover, defendant No. 4 has stated in his affidavit filed along with the rejoinder to this application that he has management and control over defendant No. 9 Company and that he in on the Board of Directors of defendant No.9. However, no document whatsoever has been filed by defendant No.4 to justify his stand, while a document filed by the plaintiff (at page 126, serial No.24), which is a printout of the shareholding details of defendant No. 9 of the year 2016, 2017 and 2018 available on the official website of Ministry of Corporate Affairs, does not reflect the name of defendant No.4 as a Director and this document has been admitted by defendant No.4 but stating it to be an old document which is not updated. Whether the defendant No.4 was on the Board of Directors at the time of issue of license to defendant No.9 and is in control of management of defendant No.9 or whether a separate license in existence in the personal name of defendant No.4 are all issues which needs to be mettled out in trial.

56. One of the pleas of Mr. Chandra was also that the licenses beyond the stipulated number of 4 have been granted by Sub-Group C[1]. In support of this plea, he highlighted the license granted to defendant No.4. Defendant No. 4 in the application bearing I.A. No 260/2020 filed by him along with certain other defendants in this Suit has taken a categorical stand stating that he has been granted license by Sub-Group C[1]. Relevant averments of I.A. 260/2020 are the following:

57. Surprisingly, contrary to what has been stated in the application, affidavits have been filed by defendant No. 10 and defendant No.4 himself inter-alia stating that no license has been granted to defendant No. 4 by Sub-Group C[1]. Rather, license has been issued to defendant No. 3 in which defendant No.4 has 90% shareholding. No document has been filed in that regard. It can be stated that the stand taken by defendant No. 4 either in the application or in the affidavit is incorrect/false. This aspect can be ascertained in the trial as to whether defendant No. 4 was granted license at all by the Rathi Foundation. Surely, defendant No. 4 cannot disown his own affidavit stating in affirmative the grant of license by the Rathi

58. I am of the prima facie view that since the stand taken by defendant No.4 himself that he has been issued license by Sub-Group C[1], it follows, the plea of Mr. Mehta that only 4 licenses are operational (which is different from issuance) cannot be accepted as the license issued to defendant No.4 also needs to be counted.

59. In so far as license issued to RGTL is concerned, the issuance is an admitted fact by both the parties, but the validity is contested by Mr. Mehta in view of Clause 10.3(b) of the MoU owing to RGTL undergoing resolution process and being currently under the control of the IRP. It is pertinent to note that a Suit against the RGTL was filed by the plaintiff herein being CS(COMM) 151/2020, wherein the plaintiff has sought a restraint order against the use of the mark ‘RATHI’ by RGTL. However, the IRP has in fact contested maintainability of the Suit as well as defended the use of the mark, stating the same to be an ‘asset’ of RGTL in view of the provisions of IBC. The said Suit is pending before a coordinate bench of this Court. Be that it as it may, from the perusal of the submissions filed on behalf of the plaintiff, the license in favour of RGTL has been stated to have been issued sometime in 2009, whereas defendant No. 9 was issued license in August 24, 2018. The IRP was appointed for RGTL by the NCLT only in the year 2019. The said submissions having been not controverted by Mr. Mehta, shows, much before the appointment of the IRP, license was granted to defendant No. 9, which was beyond four.

60. Further, Raghuveer Metal Industries Pvt. Ltd and Agarwal Ferro Metallic Pvt. Ltd. were granted licenses by Sub- Group C[1] on September 27, 2016 and August 29, 2017 respectively and it is the stand of the Mr. Mehta that the licenses issued in the favour of these two companies have been revoked after the filing of the present Suit and even this position (with regard to Agarwal Ferro Metallic Pvt. Ltd.) has been recorded by this Court in the order dated December 12, 2019 in suit no. CS (COMM) 962/2018. If that is the case, a conjoint reading of the table referred to by Mr. Chandra at paragraph 27 along with the stand of defendant No. 9 at paragraph 33 reveals that at the time of grant of license to defendant No.9, de hors the validity/status of licenses issued to defendant No.4 and RGTL, Sub-Group C[1] had already granted four licenses to the following entities viz. 1. Rathi Steel and Power Ltd. (June 24, 1995); 2. Rathi Steel Enterprises (June 06, 2018); 3. Raghuveer Metal Industries Pvt. Ltd. (September 27, 2016); and 4. Agarwal Ferro Metallic Pvt. Ltd. So, Pradeep Rathi could not have granted license to defendant No. 9 on August 24, 2018, as the same amounted to a spill over and above the stipulated number of four licenses as per the MoU. The facts suggest, stand of defendant No. 10 that defendant No.11 has granted the license to defendant No.9, with his consent appears to be an afterthought. Further, if the licenses could not have been issued to defendant No. 9 as the quota of four available against Sub- Group C[1] having been achieved, the license cannot be validated on the ground that the licenses earlier granted have been revoked or deemed to have been revoked.

61. In view of my above conclusion, I find a credible challenge has been made by the plaintiff to the issuance of licenses in violation of MoU. There is no ground to vacate the ad-interim injunction against defendant No. 9 granted as per the impugned order dated October 31, 2019. This application, being I.A. 1269/2020, is dismissed.

62. I make it clear that the aforesaid conclusion arrived at is tentative. I.A. 15128/2019

63. The interim order dated October 31, 2019 qua defendant No. 9 is confirmed during the pendency of the Suit. This application, being I.A.15128, filed by the plaintiff under Order XXXIX Rule 1 & 2, insofar as defendant No.9 is concerned, is disposed of. CS (COMM) 603/2019, CCP(O) 73/2019, I.As. 1132/2020, 2275/2020, 2276/2020, 2467/2020, 260/2020, 4184/2020 & 4185/2020 List before the Court under the heading ‘Directions’ on 26th November, 2020.

V. KAMESWAR RAO, J