Calcutta High Court: The dispute concerning the use of a family trade name in violation of a family settlement was raised before the Commercial Division of this Court. The Single Judge Bench of Aniruddha Roy, J. examined the evidence of record and held that the suit was maintainable because the dispute primarily concerned an alleged breach of contractual restrictions on the location of business, rather than infringement of intellectual property rights. The Court declined to grant an interim injunction that would effectively amount to granting the final relief but directed the defendant to maintain accounts of profits and furnish monthly statements.
Background
The dispute arose between the plaintiff and the defendant concerning the use of the trade name Sindharam Sanwarmal. The plaintiff mentioned that the trade name had been used for approximately 50 years by Mangilal Agarwal, who had established a business dealing in dry fruits, spices, dry vegetables, and other products.
A family agreement was entered on 13 January 2017, where under the family members being the legal heirs of Mangilal Agarwal had decided the manner and mode under which they shall use the trade name and carry on their business. Clause 3 of the family settlement, had specifically provided that none of the parties to the said family settlement, including the deceased father of the defendant, would carry out their business within 1 km radius of the shop room with the trade name Sindharam Sanwarmal with some prefix or suffix.
The plaintiff alleged that the defendant was carrying on business from the very same premises under the name Sindharam Sanwarmal Mewawala, thereby violating the agreed restriction. The plaintiff stated that the grievance was not that the defendant was using the trade name in itself, but that the business was being conducted from a location expressly prohibited by the family settlement. Consequently, the plaintiff instituted the present commercial suit and filed an interlocutory application seeking an injunction against the alleged breach of the family settlement.
The defendant had raised a preliminary objection on maintainability of the suit before the Commercial Division of the Court and submitted that the suit should have been instituted before the Intellectual Property Rights Division (IPR Division). Referring to Section 134, Trade Marks Act, 1999 he submitted that no suit relating to any right in a registered trade mark shall be instituted in any court inferior to a District Court having jurisdiction to try the suit. He also referred to Section 2(k) and (o) from IPR Rules, 2022 to contend that disputes involving substantive intellectual property rights fell within the exclusive domain of the IPR Division, even where the dispute otherwise possessed a commercial character.
The defendant also brought to the Court’s attention an earlier proceeding involving an allegedly identical cause of action, in which the Single Bench and the Division Bench had directed the maintenance of business accounts and the setting apart of profits. The earlier orders reportedly permitted the utilisation of 30 per cent of the profits and required monthly statements concerning the profits and their utilisation to be submitted.
Issues of Consideration
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Whether a suit alleging breach of a family settlement restricting the use of a trade name within a specified geographical area is maintainable before the Commercial Division, or falls within the jurisdiction of the IPR Division?
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Whether an interim injunction restraining the defendant from using the disputed trade name would amount to granting the final relief at the interim stage?
Decision and Analysis
At the outset, the Court observed that the plaint and connected injunction application including the reliefs, prima facie does not claimed infringement or any breach against the defendant for any wrongful user of the trade name Sindharam Sanwarmal with its prefix and suffix but the only contention was that such trade name cannot and should not be used from the said shop room and within 1 km from the said shop room in terms of the family settlement. The Court held that no infringement of a right relating to the trade name or other intellectual property had been alleged. The Court opined that the instant suit was maintainable before this Commercial Division.
The second issue concerned the grant of interim injunctive relief. The plaintiff sought an order restraining the defendant’s allegedly prohibited business activities. The Court stated that the grant of an injunction would amount to granting final relief in the suit, which was not permitted in law at the interim stage. Similarly, at the interim stage the Court cannot hold a mini-trial. The final order of the injunction application, as claimed therein, would also depend on some basic fact-finding enquiry which was not possible without calling for affidavits.
Accordingly, the Court considered it necessary to preserve the relevant financial information and regulate the defendant’s handling of business profits pending further proceedings. The Court directed the defendant to maintain complete accounts of the profits generated by the business conducted from the disputed premises under the name Sindharam Sanwarmal Mewawala. The defendant was required to set apart the profits in its business bank account, while being permitted to utilise 30 per cent of such profits in the ordinary course of business.
The Court further required the defendant to provide monthly statements of accounts to the Advocate-on-Record for the plaintiff. These statements had to be furnished by the 7th day of the succeeding month according to the English calendar. The Court also directed that one month’s prior notice must be served on all parties to the family settlement and/or their respective legal heirs if the defendant proposed to assign or transfer the trade name Sindharam Sanwarmal.
[Ramji Lal Agarwal v. Sourav Agarwal, IA NO. GA-COM/1/2026, decided on 14-10-2026]
*Judgment authored by: Justice Aniruddha Roy
Advocates who appeared in this case:
For the Petitioner: Rajarshi Dutta, V.V.V. Sastry, Advocates
For the Respondent: Sourojit Dasgupta, Varun Kothari, Shayak Mitra, Rupal Singh, Ashok Kumar Singh, Advocates
