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HIGH COURT OF DELHI
JUDGMENT
BLUEBERRY BOOKS & ORS ..... Plaintiffs
Through: Mr. Ashwin Kumar DS, Adv.
Through Mr. Satyam Thareja, Adv.
IA No. 2378/2015
1. This application is filed by defendant No.1 under Order VII Rule 11 CPC seeking rejection of the plaint and dismissal of the suit.
2. The present suit is filed by the plaintiffs seeking a decree of declaration that the plaintiffs are the owners of the copyright in the work “Eight Science Olympiad Books Parts 1-8” as per the agreement dated 20.12.2012. A decree of declaration is also sought that the plaintiffs are the owners of the copyright in the work “Maths Olympiad Parts 1-6”. A decree of permanent injunction is also sought to restrain the defendants from interfering or disturbing the peaceful sale or publication or in any manner exploiting the copyright in the said works by the plaintiffs.
3. Plaintiff No. 1-M/s. Blueberry Books is said to be a partnership firm comprising of plaintiffs No. 2 and 3. It has been urged in the plaint that the plaintiffs are the publishers of books and were approached by defendant 2019:DHC:245 No.1 expressing an intention to write books on science subjects. An agreement was entered into between the plaintiffs and defendant No. 1 on 20.12.2012 by which it was agreed that the plaintiffs would publish the work and that all the copyright in the “Eight Science Olympiad Books Parts 1-8” was to vest in the plaintiffs. Similarly, following such publication, defendant No.1 also agreed to write Maths Olympiad Books on behalf of the plaintiffs under a similar arrangement and entered into an oral understanding in this regard. Thereafter on 21.03.2014, the plaintiffs claim to have received a notice from the defendant stating that the terms of the agreement dated 20.12.2012 were incoherent, etc. and that the plaintiffs should stop printing, publishing or distributing any books published on Science Olympiad authored by the defendant. Hence, the present suit.
4. The defendant in the present application states that though the suit is filed by a firm but the plaintiffs have nowhere in the plaint asserted that plaintiff No.1 is a registered partnership firm and that plaintiffs No. 2 and 3 are the registered partners. Reliance is placed on Section 69(2) of the Indian Partnership Act to contend that the mandatory provisions of the said section have not been adhered to and the suit filed by an unregistered firm is liable to be dismissed.
5. I have heard learned counsel for the parties.
6. Learned counsel for the defendants has strenuously urged relying upon the judgment of this court in the case of North Delhi Power Ltd. vs. Jagdamba Gasket (India), 2010 SCC OnLine Delhi 1898 and the provisions of Section 69(2) of the Indian Partnership Act that the present suit is barred by law.
7. Learned counsel appearing for the plaintiffs however relies upon the judgment of the Supreme Court in the case of Haldiram Bhujiawala & Anr. vs. Anand Kumar Deepak Kumar & Anr., (2000) 3 SCC 250 to contend that the a suit seeking enforcement of statutory rights is not barred under law and Section 69(2) of the Indian Partnership Act has no application to such a suit. It is urged that the present suit is for enforcement of statutory rights and hence, the application is misconceived.
8. In rejoinder, learned counsel for the defendants urges that the claim of the plaintiffs is based on an agreement dated 20.10.2012 and other documents to claim exclusive rights on the copyright in question. It is urged that under Section 17 of the Copyright Act, the author of a work is the first owner of the copyright and assignment is possible under Section 18 and 19 of the Copyright Act by a deed in writing signed by the assignor. Hence, it is urged that the defendants being the original author is the original owner of the copyright and the issue revolves around the agreement between the parties.
9. Section 69(2) of the Partnership Act reads as follows:- “69. Effect of non-registration.— (1) xxx (2) No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm. xxx”
10. The Supreme Court in the case of Haldiram Bhujiawala & Anr. vs. Anand Kumar Deepak Kumar & Anr.(supra) was dealing with a case where the suit was filed for permanent injunction to restrain the defendants from infringing the trade mark HALDIRAM BHUJIAWALA or using an identical name/mark deceptively similar thereto. The case related to a dispute within the family. The original trade mark HALDIRAM BHUJIAWALA was registered in the name of the partnership firm. On dissolution of the firm in 1974, the trade mark fell to the exclusive share of one son Sh.Moolchand who became the proprietor of the trade mark while the daughter-in-law was given ownership of the trade mark for West Bengal. In those facts, the issue arose as to whether the suit was barred under Section 69(2) of the Indian Partnership Act as the firm was not registered on date when the suit was filed. The Court held as follows:- “9. The question whether Section 69(2) is a bar to a suit filed by an unregistered firm even if a statutory right is being enforced or even If only a Common Law right is being enforced came up directly for consideration in this Court in M/s. Raptokas Brett Co. Ltd. v. Ganesh Property. In that case, Majmudar J speaking for the Bench clearly expressed the view that Section 69(2) cannot bar the enforcement by way of suit by an unregistered firm in respect of a statutory right or a common law right. On the facts of that case, it was held the right to evict a tenant upon expiry of the lease was not a right 'arising from a contract' but was a common law right or a statutory tight under the Transfer of Property Act. The fact that the plaint in that case referred to a lease and to Its expiry, made no difference. Hence, the said suit was held not barred. It appears to us that in that case the reference to the lease in the plaint was obviously treated as a historical fact. That case is therefore directly in point. Following the said judgment, it must be held in the present case too that a suit is not barred by Section 69(2) if a statutory right or a common law right is being enforced.
10. The next.question is as to the nature of the right that is being enforced in this suit. It is well settled that a passing off action is a common law action based on tort (vide) Bengal Waterproof Ltd. v. Bombay Waterproof Manufacturing Company. Therefore, in our opinion, a suit for perpetual injunction to restrain the defendant not to pass-off the defendant's goods as those of plaintiffs by using the plaintiffs' trade mark and for damages Is an action at common law and is not barred by Section 69(2), The decision in M/s. Virendra Dresses Delhi v. Varinder Garments and the decision of the Division Bench of the Delhi High Court in M/s. Bestochem 'Formulation v. Dlnesh Ayurvedic Agencies state that Section 69(2) does not apply to a passing-off action as the suit is based on tort and not on contract. In our opinion, the above decisions were correctly decided. (The special leave petition No. 18418 of 1999 against the latter was in fact dismissed by this Court on 28-1-2000.) The learned senior counsel for the appellants no doubt relied upon Ruby General Insurance Co. Ltd. v. Pearey Lai Kumar. That was an arbitration case in which the words "arising out of a contract" were widely interpreted but that decision, in our view, has no relevance in interpreting the words "arising from a contract" in Section 69(2) of the Partnership Act.
11. Likewise, if the reliefs of permanent injunction or damages are being claimed on the basis of a registered trade mark and its infringement, the suit is to be treated as one based on a statutory right under the Trade Marks Act and is, in our view, not barred by Section 69(2).
12. For the aforesaid reasons, in both these situations, the unregistered partnership in the case before us cannot be said to be enforcing any right "arising from a contract". Point 1 is therefore decided in favour of the plaintiffs-respondents.” xxxxxxxx “25. Further Section 69(2) is not attracted to any and every contract referred to in the plaint as the source of title to an asset owned by the firm. If the plaint referred to such a contract it could only be as a historical fact. For example, if the plaint filed by the unregistered firm refers to the source of the firm's title to a motor car and states that the plaintiff has purchased and received a Motor Car from a foreign buyer under a contract and that the defendant has unauthorisedly removed it from the plaintiff firm's possession, - it is clear that the relief for possession against defendant in the suit does not arise from any contract with defendant entered into in the course of plaintiff firms' business with defendants but is based on the alleged unauthorised removal of the vehicle from the plaintiff firm's custody by the defendant. In such a situation, the fact that the unregistered firm has purchased the vehicle from somebody else under a contract has absolutely no bearing on the right of the firm to sue the defendant for possession of the vehicle. Such a suit would be maintainable and Section 69(2) would not be a bar, even if the firm is unregistered on the date of suit. The position in the present case is not different.”
11. Reference may also be had to the judgment of the Supreme Court in the case of Raptakos Brett & Co. Ltd. vs. Ganesh Property, (1998) 7 SCC
184. The court there was dealing with a case where the owner of the suit premises had rented out the property by a registered lease deed for a period of 21 years. On the expiry of the said period, the Firm filed a suit for decree of possession. The defendant took the plea that even after the expiry of the lease period as the rent had been accepted, the defendant became a tenant by holding over under Section 116 of the Transfer of Properties Act. The plea of the firm being unregistered was also taken. In those facts, the Supreme Court held as follows:- “14. However, the aforesaid conclusion will not clinch the matter one way or the other. The reason is obvious. While considering the question whether the suit as filed is hit by Section 69 Subsection (2) of the Partnership Act or not, we have to see what the plaintiff claims as his cause of action. It is obvious that if the suit is based solely on the ground that the erstwhile tenant defendant unlawfully remained in possession after the expiry of the lease and is required to hand over possession to the plaintiff, the suit can be said to be based on the sole cause of action for enforcement of a right arising at general law and under the Transfer of Property Act in favour of the plaintiff and against the defendant who was earlier protected by the contract between the parties. Shri Nariman in this connection was right when he contended that the aforesaid decisions of this Court only decide the status of such an erstwhile tenant and there can not be any dispute that the appellant on the expiry of the lease, especially when there was no evidence to show that he was a tenant by holding over, had continued in occupation as a tenant at sufferance. However, the nature of the right sought to be enforced by the plaintiff has to be culled out from the recitals in the plaint even against such a tenant at sufferance. xxxxxx
23. … The net result to this discussion is that the present suit can be said to be partly barred by Section 69 Sub-section (2) so far as it sought to enforce the obligation of the defendant under Clauses 14 and 17 of the contract of lease read with the relevant recitals in this connection as found in paragraph 2 of the plaint. But it was partly not barred by Section 69 Sub-section (2) in so far as the plaintiff based a part of its cause of Action also on the law of the land, namely, Transfer of Property Act where under the plaintiff had sought to enforce its statutory right Under Section 108(q) read with Section 111(a) of the Property Act. Enforcement of the right had nothing to do with the earlier contract which had stood determined by efflux of time. The first point for determination therefore, has accordingly, to be held partly in favour of the plaintiff and partly in favour of the defendant. As the decree for possession is passed on the basis of both parts of causes of Action, even if it is not supportable on the first part, it will remain well sustained on the second part of the very same cause of Action.
24. In view of our conclusion on point No. 1, though the appellant partly succeeds thereon the ultimate decree for peaceful possession against the appellant would remain well sustained.”
12. In the present case, it is clear that the suit is based on statutory rights arising under the Copyright Act especially sections 18 & 19 of the said Act. Reference in this context may be had to the judgment of this court in The Gramophone Company of India Ltd. v. Super Cassette Industries Ltd., 2010(44) PTC 541 (Del), where the court held as follows: “27. At the outset, Section 16 of the Act may be noticed. Section 16 provides that no copyright can be acquired in respect of any work except in accordance with the provisions of the Act. Therefore, copyright is a statutory right. Only those rights which the Copyright Act creates; to the extent it creates, and; subject to the limitations that the Act imposes, vest in the owner of the copyright in the work, whether it is a primary work such as a literary, dramatic or musical work, or a derivate work such as a sound recording or cinematograph film. No right, which the Copyright Act does not expressly create can be inferred or claimed under the said Act.”
13. Hence, copyright is a statutory right. No doubt, to explain as to how the copyright vests in the plaintiffs a narration of historical facts has been made. This narration of historical facts are ancillary and incidental to the rights which are sought to be agitated by the plaintiffs, namely, its copyright.
14. In my opinion, the judgment of the Supreme Court in the case of Haldiram Bhujiawala & Anr. vs. Anand Kumar Deepak Kumar & Anr.(supra) would be squarely applicable. Merely because some additional or ancillary issues are also arising in the course of adjudication of the controversy in the plaint, would not be sufficient to hold that the suit is barred under Section 69(2) of the Partnership Act.
15. That apart I may note that in the interregnum the plaintiffs have on 26.05.2016 got the firm registered. The firm is hence, now a registered firm. The Supreme Court in such facts in the case of Raptakos Brett & Co. Ltd. vs. Ganesh Property(supra) held as follows: “29. We, prima facie, find substance in what is contended by Dr. Singhvi for the respondent. It is obvious that even if the suit is filed by an unregistered partnership firm, against a third party and is treated to be incompetent as per Section 69 Sub-section (2) of the Partnership Act, if pending the suit before a decree is obtained the plaintiff puts its house in order and gets itself registered the defect in the earlier filing which even though may result in treating the original suit as still born, would no longer survive if the suit is treated to be deemed to be instituted on the date on which registration is obtained. If such an approach is adopted, no real harm would be caused to either side. As rightly submitted by Dr. Singhvi that, Order 7 Rule 13 of the CPC would permit the filing of a fresh suit on the same cause of Action and if the earlier suit is permitted to be continued it would continue in the old number and the parties to the litigation would be able to get their claim adjudicated on merits earlier while on the other hand if such subsequent registration is not held to be of any avail, all that would happen is that a fresh suit can be filed immediately after such registration and then it will bear a new number of a subsequent year. That would further delay the adjudicatory process of the court as such a new suit would take years before it gets ready for trial and the parties will be further deprived of an opportunity to get their disputes adjudicated on merits at the earliest and the arrears of cases pending in the court would go on mounting. It is axiomatic to say that as a result of protracted litigation spread over tiers and tiers of court proceedings in hierarchy, the ultimate result before the highest court would leave both the parties completely frustrated and financially drained off. To borrow the analogy in an English poem with caption "death the leveller", with appropriate modification, the situation emerging in such cases can be visualised as under: "upon final court's purple alter see how victor victim bleed". All these considerations in an appropriate case may require a re-look at the decision of the two member Bench of this Court in Shreeram Finance. However, as we have noted earlier, on the facts of the present case, it is not necessary for us to express any final opinion on this question or to direct reference to a larger Bench for reconsidering the aforesaid decision. With these observations we bring down the curtains on this controversy. Point No. 2, therefore, is answered by observing that it is not necessary on the facts of the present case in the light of our decision on the first point to decide this point one way or the other. Point No. 2 is, therefore, left undecided as not surviving for consideration.”
16. Keeping in view the observation of the Supreme Court above, even otherwise the present suit would be maintainable.
17. The present application is accordingly dismissed. List before the Joint Registrar on 18.02.2019.
JAYANT NATH, J. JANUARY 14, 2019/rb/v