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Judgment
(Per: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD)
Heard Mr. Rajeev Kumar Jain, learned counsel assisted by Mr. Javed Aslam, for the appellant and Mr. Sidhartha Das, learned counsel assisted by Mr. Gautam Kejriwal, for the Respondent No. 1.
This Court has been informed that so far as Respondent No. 2 is concerned, he is only a dealer appointed by Respondent No. 1 and he is not a contesting party.
This Commercial Appeal has been preferred for setting aside the order dated 08.04.2026 passed by the learned Principal District Judge- cum-Commercial Court, Vaishali at Hajipur (hereinafter referred to as ‘the learned Commercial Court’) in Commercial Suit No. 01/2023 (Samriddhi Rice Mill Private Limited Vs Samriddhi Agro Foods Private Limited and Anr.) by which the learned Commercial Court has been pleased to reject the application under Order XXXIX Rules 1 & 2 read with Section 151 of the Code of Civil Procedure, 1908 (hereinafter referred to as 'C.P.C.') filed by the plaintiff-appellant.
It appears that the appellant is a Private Limited Company. It was incorporated on July 31, 2008. Its principal place of business being Unit No. 302, 3rd Floor, Jokhiram Chamber, Jokhiram Lane, Main Road, P.S.- Hindpiri, Ranchi-834001.
The two subscribers to the memorandum were Mr. Binod Kumar Sekhsaria and Mr. Rishu Chirania. They were the first Directors of the plaintiff-appellant's Company.
So far as the main object of the plaintiff-appellant's Company is concerned, this Court has been taken through the main objects clause of the Memorandum of Association which is available on the record as Annexure-1 to the Memorandum of Appeal. Admittedly, the plaintiff-appellant is dealing in Rice, it has its Rice Mill Factory at Village- Mallar, Post Office- Itki, P.S.- Itki, Ranchi in the State of Jharkhand. The plaintiff-appellant commenced its business on or about April 1, 2010.
It is the case of the plaintiff-appellant that they coined and adopted trademark "Rajaji" written in a style and unique way, where the word "Raja" was written in English alphabet in white colour and "Ji" written in Hindi script in red colour thereby giving a unique and distinctive identity to its brand/mark. It is the case of the plaintiff-appellant that they were using this distinctive identity ever since their incorporation and more particularly, from April 1, 2010. Plaintiff-appellant is using its household name Samriddhi written in a stylized form.
The respondent no. 1 is also a Private Company which was incorporated on August 3, 2012 by the family members of the then Directors and Promoters of the appellant. It is stated that the appellant had acquired a property being Unit No. 302, 3rd Floor, Jokhiram Chambers, Main Road, Ranchi in June, 2015 whereafter the respondent no. 1 approached the appellant and sought its permission to allow the respondent no. 1 to use portion of the said unit as respondent no.1's registered office. This was agreed to by the plaintiff-appellant. Accordingly, a lease agreement of May 16, 2016 was entered into between the appellant and the respondent no. 1, as lessor and lessee respectively. It is stated that respondent no. 1 was incorporated with the main object to carry on the business as manufacturers, producers, buyers and millers of flour, Atta, Maida, Suji, cereals and cereal products.
Learned counsel for the appellant has made efforts to demonstrate before this Court that on a bare reading of the main object clause of the plaintiff, it would appear that while the plaintiff company was dealing in sale of rice, the respondent no. 1 Company was incorporated to deal in the flour, Aata, Maida, Suji, cereals and cereal products.
It is further submitted that respondent no. 1 got a job agreement with ITC Limited in March, 2014 for exclusive production of Aashirvaad Aata for ITC Limited. The respondent no. 1 thereafter sometime on or about August 31, 2014 commenced its commercial production of wheat flour (Aata), wherein respondent no. 1 used to convert wheat into Aata and immediately after production of Aata, packed the Aata in the packaging of ITC Limited under their brand Aashirvaad Aata and thereafter supply and deliver the entire production to the said ITC Limited. It is stated that respondent no. 1 was never into the business of trading and/or growing and/or manufacturing and/or packaging of any sort of rice.
It is the case of the plaintiff-appellant that sometimes in June-July, 2019, there was an understanding and agreement by and between the appellant and the respondent no. 1 that respondent no. 1 would move out of the said unit of the appellant and shift its registered office and the management, working and control land in the appellant would belong exclusively to Mr. Binod Kumar Sekhsaria and his family members whereas the management, working and control of respondent No. 1 would belong exclusively to Mr. Rishu Chirania and his family members. Accordingly, on July 2, 2019, Amit Kumar Sekhsaria was introduced as a new Director of and in the appellant and Mr. Rishu Chirania resigned from the Directorship of the appellant. Mr. Rishu Chirania and Mr. Siddharth Chirania were introduced as new Directors of and in the respondent No. 1 and Mr. Amit Kumar Sekhsaria resigned from the Directorship of Respondent No. 1. The net effect of the aforesaid changes in management of and in the appellant and the respondent No. 1 was that Sekhsarias' came in complete control of the appellant and the Chiranias' came in complete control of the respondent No. 1.
In course of hearing of the appeal, learned counsel for both the parties have admitted at the bar that the control of the affairs of the plaintiff and that of the respondent no. 1 are with Mr. Amit Kumar Sekhsaria and his family in respect of the appellant and Mr. Rishu Chirania and his family in respect of the respondent no.1.
After both the companies went into exclusive control of the two groups i.e. Sekhsaria and Chirania Groups, the present dispute arose over the use of the trademark " Rajaji". While the plaintiff-appellant claims that the getup and trade dress with the products of the appellant bear also constitute a mark within the meaning of Trademarks Act, 1999 and by virtue of its users for several years, the said marks have become very popular, unique, distinctive and acquired tremendous goodwill and reputation in the market, the grievance of the plaintiff-appellant is that the respondent no. 1 started selling its products including rice under the trademark "Rajaji". The plaintiff-appellant claimed that the plaintiff alone is entitled to use the trademark "Rajaji" and all the trade dress in respect of rice and rice products. It is alleged that the respondents were engaged in the infringement of trademarks of the plaintiff and they were also passing off the products, such a product of rice by using the trademark "Rajaji" and the artistic work which is registered in favour of the plaintiff-appellant under the Copyright Act.
The plaintiff filed a suit in the Court of learned Principal District Judge-cum-Commercial Court, Vaishali at Hajipur raising a commercial dispute, giving rise to Commercial Suit No. 1 of 2023. In the said suit, the plaintiff filed an application under Order XXXIX, Rules 1 & 2 read with Section 151 of the C.P.C. seeking grant of ad-interim injunction against the defendants.
It appears from the records that despite service of notice, the Defendant No. 1 did not appear to contest the application under Order XXXIX, Rules 1 & 2. In such circumstance, the learned Commercial Court proceeded to decide the application of the plaintiff on its own merit. While dismissing the application of the plaintiffs, the learned Commercial Court has recorded in paragraphs 9, 10, 11 and 12 as under:
"9.From perusal of the materials placed on record, it appears that the plaintiff has produced documents relating to its trademark and artistic work along with copies of the labels and packaging used by the plaintiff. The comparison of the labels and packaging shown in the annexure's prima facie indicates similarity between the mark used by the plaintiff and that allegedly used by the defendants but from the averments of the plaintiff/petitioner it appears that: -
a. Binod Kumar Sekhsaria and Rishu Chirania were equal shareholders in Samridhi Rice Mill Private Limited.
b. The defendant/respondent no.1 had obtained a No Objection Certificate from the Trade Marks Registry.
c. The Registrar of Copyrights granted registration of copyright in favour of the defendant/respondent no.1.
d. The plaintiff/petitioner has submitted that there were an understanding and agreement by and between the plaintiff/petitioner and the defendant/respondent no.1 to interchange directorship, but how the goodwill was distributed is not clear.
10.Further, the plaintiff/petitioner has submitted that a miscellaneous Appeal No. 316 of 2024 has also been filed against the Controller General of Patents, Designs and Trademark and others before the Hon'ble High Court, Jharkhand, Ranchi which has been finally admitted on 29.01.2026.
11.In such circumstances, this Court is of the considered view that the plaintiff has not been able to establish a prima facie case in its favour at this stage. So far as the balance of convenience is concerned, unless and until it is explained by the plaintiff about the goodwill of both the primary members i.e. Binod Kumar Sekhsaria and Rishu Chirania who are having equal shares, it is impossible to reach the conclusion that balance of convenience exists in favour of the plaintiff/petitioner.
The petitioner has failed to establish a prima facie case of deceptive similarity as well as balance of convenience that could justify the grant of interim injunction.
Being aggrieved by the impugned order dated 08.04.2026 passed by the learned Commercial Court, the plaintiff preferred the present appeal. This Court issued notice to the Defendant/Respondent Nos. 1 and 2 vide order dated 05.05.2026 by both modes. The Defendant No. 1 did not appear, the computer report shows that neither the ordinary service report nor the Registered cover with A/D has yet been received, showing service of notice on Respondent No.1. Respondent no. 2 was duly served. In its order dated 07.07.2026, this Court took note of the fact that the notice was issued to the Respondent no. 1 by registered post with A/D on 05.05.2026 and more than 30 days have gone thereafter but the registered post with A/D has not returned unserved, therefore, this Court presumed the service of notice on respondent no. 1.
After hearing learned counsel for the appellant, this Court recorded in paragraphs 5 and 6 of its order dated 07.07.2026 as under:
"5.Learned counsel for the appellant has drawn the attention of this Court towards the reasoning and rationale provided by the learned Principal District Judge, Vaishali at Hajipur wherein he seems to have proceeded on misconceived notion of law. It is pointed out that the learned Principal District Judge seems to have proceeded to reject the application under Order XXXIX Rules 1 & 2 preferred by the plaintiff- appellant taking a view that the properties of a company incorporated under the Companies Act, 1956 would be the properties of the shareholders as well. It is submitted that the law is well-settled in this regard by a catena of judgments, one of which is the case of Bacha F. Guzdar vs. Commissioner of Income Tax, Bombay reported in (1954) 2 SCC 563 wherein the Hon’ble Supreme Court has extensively held that the company incorporated under the Companies Act is a persona designata. It is a person in the eye of law and the properties of the company cannot be said to be the properties of the shareholders.
6.We prima facie agree with the submissions of learned counsel for the appellant. We, therefore, stay the operation of the impugned order and restrain respondent nos. 1 and 2 from using the trade mark in question till final hearing of this case."
After the order dated 07.07.2026 was passed by this Court, Respondent No. 1 entered appearance before this Court. The counter affidavit has also been filed. This Court took up the hearing of the matter.
In course of hearing of the appeal, this Court noticed that the learned Commercial Court had though found that the plaintiff had produced documents relating to its trademark and Artistic work along with copies of the labels and packaging used by the plaintiff and on comparison, they were prima facie indicating similarity between the mark used by the plaintiff and that allegedly used by the defendants but the learned Commercial Court took a view in sub-paragraph (d) of paragraph 9 that it is not clear as to ''how the goodwill was distributed between the plaintiff and the defendant while interchanging the directorship''. It is agreed by the learned counsel for Respondent No. 1 that this issue with regard to the transfer of goodwill seems to have been brought by the learned Commercial Court on it's own while considering the application under Order XXXIX Rules 1 & 2 because at this stage Respondent No. 1 had not entered appearance and no such plea was taken on behalf of Respondent No. 1.
Towards the end of the submissions, learned counsel for the plaintiff-appellant and learned counsel for Defendant-Respondent No. 1 jointly agreed that this impugned order be set aside by this Court and the matter be remitted to the learned Commercial Court for a fresh consideration of the application under Order XXXIX Rules 1 & 2 read with Section 151 of the C.P.C.
Learned counsel for the Defendant-Respondent No. 1 has undertaken that he will appear in the Commercial Court immediately after this order and in any case, not later than a week from today. Learned Counsel for Respondent No. 1 has submitted that he would file a response to the application under Order XXXIX Rules 1 & 2 in the Commercial Court within three weeks from today. Since the learned counsel for the parties have taken a stand that the matter may be remitted for a fresh consideration, this Court sets aside the impugned order dated 08.04.2026 and remit the matter to the Commercial Court, Vaishali at Hajipur for a fresh consideration.
In order to expedite the hearing in the ad-interim injunction matter, this Court directs the learned Principal District Judge-cum-Commercial Court, Vaishali at Hajipur to fix a date for filing of the response by the Defendant- Respondent No. 1 which would be within three weeks from today whereafter the plaintiff-appellant may be given an opportunity to file rejoinder within one week as agreed and then the matter be heard on day to day basis so as to conclude the same within a period of two months from today.
The records of the Commercial Court be returned forthwith to the Court of the learned Principal District Judge-cum-Commercial Court, Vaishali at Hajipur through a special messenger. The parties shall appear before the Commercial Court on 21st of August at 11 A.M.
It is further directed that the Defendant-Respondent No. 1 shall keep complete accounts of the sales made under the trademark "Rajaji" using the artistic work and style which the plaintiff has claimed. Such account shall be maintained, subject to result of the adjudication in the injunction matter whereafter further order may be passed by the Commercial Court.
It is made clear that this Court has not entered into the merit of the case and the observations hereinabove have been made only in the context of the present order.
This appeal stands allowed to the extent indicated hereinabove.