Tag: #jurisdiction

-Report by Shreya Gupta

The petition and respondent in this case is SMT. SUNITA GARG and M/S SCRAFT PRODUCT P LTD respectively. The case arose due to the arbitration clause in the lease agreement.

FACTS:

The present case has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 in order of appointment of an arbitrator. The dispute has risen between them due to a lease deed according to which the petitioner is the owner of the property and the respondent is the tenant. The tenant had approx. 25000 sq. feet on ground floor, 25000 sq. feet on first floor, total area 50000 sq. feet which also included the mezzanine floor sides, washroom and rooms at the back, genset panel and the sundry assets area etc. at a monthly rent of Rs. 8,00,000/- exclusive of all other charges.

PETIONER’S CONTENTION:

The petioner contended that the respondent is a defaulter in payment of rents and he is required to pay arrears of rent amounting to Rs.29,49,350/-.

RESPONDENT’S CONTENTION:

The respondent contends that the clause 25 in the lease deed does not constitutes an arbitration agreement rather it states an alternative to reach to the Delhi high court. He also draws attention to the clause 27 of the agreement. He contends further that when cluse 25 is read with clause 27 it gives the option to either invoke arbitration or to approach a civil court for getting the leased premises vacated in the event of any violation or infringement on the part of the lessee, whereas, for the purpose of the claims of the respondent, no such option has been given. He further takes support of the previous judgements of Wellington Associates Ltd. vs. Kirti Mehta and Shri Chand Construction and Apartments Pvt. Ltd and Ors. Vs. Tata Capital Housing Finance Ltd.

JUDGEMENT:

The court stated that “ the contention of learned counsel for the respondent that Clause-25 in the said lease deed gives an option to the petitioner/lessor to either take recourse to the arbitration or pursue her remedies in a court of law, is misconceived and is based on a misreading of the Arbitration Clause. The clause unambiguously provides that any disputes arising with regard to “interpretation and/or implementation of terms and conditions of this deed the same shall be referred to an arbitrator under the Arbitration and Conciliation Act, 1996, whose decision shall be final and binding on both the parties‖. The later part of the clause i.e., the words “and/or the same may be defended subject to Delhi Court Jurisdictions only”, are evidently, intended to convey that any decision of the arbitrator would be subject to jurisdiction of the Delhi Courts. The Clause cannot be construed as giving an option to any party to either take recourse to arbitration or alternatively, file a civil suit.” The court stated that the reliance placed on the previous judgements is completely misconceived. The court appointed Mr. Vikas Gupta as the sole arbitrator in this case.

READ FULL JUDGEMENT: https://bit.ly/41qr3IE

Neutral Citation Number: 2023/DHC/001285                    

-Report by Shweta Sabuji

In the recent case of K.T.V. OIL MILLS PRIVATE LIMITED VERSUS THE SECRETARY TO GOVERNMENT, UNION OF INDIA & ORS., an appeal filed in opposition to the judgment and decree rendered on the file of the Commercial Division of this Honourable High Court on July 3, 2018, by the learned Single Judge in A.No.1253 of 2018 in C.S.No.706 of 2017.

FACTS:

The appellant was established in 2008 as a company under the Companies Act of 1956. The purpose of forming this Company was to take over K.T.V. Oil Mills’ operations. The late Shri. K. T. Varadaraj Chetty launched an oil trading company in Kotwal Market in 1971. Under the name and style “K.T.V Oil Mills,” the company operated from 1999 to 2008 as a partnership firm. The partnership firm was then changed into a private limited company in 2008 under the name “K.T.V. Health Food Private Limited,” and they applied to the Trademark Registry for the registration of the trademark “ROOBINI,” claiming usage as of June 1, 1995.

On December 30, 2007, K.T.V. Oil Mills and the appellant engaged in an assignment deed, and as a result, the trademark “ROOBINI” was transferred. The K.T.V. Oil Mills partners all acquired shares in the appellant-Company. The assignment deed was completed in favor of the appellant by the partners of K.T.V. Oil Mills because they chose to operate the company under the appellant’s Company name. As a result, the appellant learned that the respondent was using the contested trademark “ROOBEN” in 2017, which is a slavish replica of the appellant’s trademark “ROOBINI” regarding a similar product.

PLAINTIFF’S CONTENTIONS:

The plaintiff responded to the request for the plaint to be rejected by filing a counter, claiming that the plaintiff’s predecessor, K.T.V. Oil Mills, conducted business from 1995 to 2007 under the name and style of “ROOBINI,” and that all necessary applications for the trademark’s registration were also made. Ultimately, the trademark “ROOBINI” was registered on 22.01.1999 under registration number 837894, claiming use from 01.06.1995. Totake its business to the next level, K.T.V. Oil Mills, a partnership firm, became a private limited company. As a result, the Partners of K.T.V. Oil Mills assigned their ownership of the entire business as well as the trademark “ROOBINI” to the appellant-Company, which then became known as “K.T.V. Health Food Private Limited.”

On December 30, 2007, an assignment deed was made. After that, the appellant filed the proper paperwork to transfer the trademark “ROOBINI” that the Partnership Firm had previously assigned to the appellant in favor of the plaintiff. As a result, the Trademark Registry registered the same on January 25, 2018. Due to the assignment deed executed on December 30, 2007, only theappellant/plaintiff is currently the owner of the trademark “ROOBINI” at the time the lawsuit was filed.

Additionally, the appellant submitted the required paperwork in 2015 to modify the registration in the appellant Company’s name. As a result, the plaintiff is the “ROOBINI” trademark’s owner. Since the plaintiff has been conducting business through its branch office on Chennai’s Thambu Chetty Street, which is squarely within this Court’s jurisdiction, the matter was brought before this Hon’ble Court.

JUDGEMENT:

Following a hearing with both parties, the learned Single Judge granted the request to dismiss the complaint, concluding that the telephone bills by themselves were insufficient to establish that the appellant was operating at the branch office, which is located at Thambu Chetty Street in Chennai. Furthermore, the appellant/plaintiff was not the owner of the trademark “Roobini” when it was registered. Even if it is assumed without admission that the assignment deed was executed in the plaintiff’s favor and that the trademark “Roobini” was registered in the plaintiff’s name as a result of the said assignment deed, the plaintiff is not entitled to any rights in the trademark “ROOBINI” based on the assignment deed.

The plaintiff is also not permitted to file the current lawsuit in this court without having their principal place of business within its jurisdiction, even though they maintain a branch office at Thambu Chetty Street in Chennai, which they claim is within that court’s jurisdiction because those provisions, as well as Sections 134(2) of the Trademarks Act and Section 62(2) of the Copy Act, define “carrying on business” respectively.

The plaint is therefore susceptible to being dismissed as long as neither the defendant nor the plaintiff’s primary place of business is engaged in business within the jurisdiction of this Court. As a result, the plaint was dismissed by the contested order. The appellant has chosen the current Original Side Appeal because he is unhappy with the aforementioned order.

READ FULL JUDGEMENT: https://bit.ly/3I1cbcl

–Report by Prapti Prajeeta

In this case of IFB AGRO INDUSTRIES LIMITED vs SICGIL INDIA LIMITED, the court determined the forum appropriate for adjudication and determination of violations of SAST and SEBI Regulations. In this case, the contention that under Section 59 the National Company Law Tribunal exercises a parallel jurisdiction with the Securities and Exchange Board of India for addressing violations of the Regulations framed under the SEBI Act was rejected.

In this very case, an appeal was filed against the National Company Law Appellate Tribunal for a judgment passed. 

FACTS:-

The Appellant is a company listed and engaged in manufacturing and selling rectified spirits, etc. And respondent No. 1 is a too-listed company engaged in producing the same type of products. Other respondents are the managing director, his wife and some close relatives of the respondents. 

In August 2003, one respondent came up with a proposal for a business between the Appellant and Respondent No. 1. The Appellant rejected the proposal. After this rejection, the Respondents started acquiring shares of the Appellant from the open market to eliminate competition and strengthen its dominant position in the relevant market. 

As of 2004, the Respondents held under 5% of the Appellant’s total paid-up share capital. At the same time, Respondent No. 1 acquired 600 equity shares of the Appellant, and as a result, the respondents aggregate shareholding crossed the paid-up share capital of the Appellant in total by 5%, it triggered the SEBI (SAST) Regulation 7(1)9

Four months later, Respondent No. 1 acquired additional shares of the Appellant; as a result, the total paid-up share capital of the Appellant exceede5% by shareholding. This triggered the SEBI (PIT) Regulations, and Respondent No. 1 failed to disclose within the prescribed time. 

After this, the Appellant filed a petition before the Company Law Board under the 1956 Act for its register rectification by deleting the name of the Respondents as the owner of shares over and above the 5% threshold. 

Upon receiving notice of the petition above, but then Respondent No. 1 sold a few shares of the Appellant and then brought down to 4.91%its shareholding. But the Appellant claims that Respondent No. 1 never reduced its shareholding. Then SEBI was also informed that the individual shareholding of Respondent No. 1 stands below 5%. And as a result, SEBI has not taken any regulatory action.

But then the matter stood transferred to the Tribunal. The tribunal held that it violated the SEBI (PIT) Regulations. Further, the Tribunal also held that there had been SEBI (SAST) Regulations violation as the Respondents did not disclose in the proper format. However, the Tribunal held that the CLB and SEBI exercised powers fall in different and distinct jurisdictional fields. The tribunal thus allowed the company petition.

The Respondents then went to Appellate Tribunal in an appeal where it allowed the appeal and set aside the order of the Tribunal. Being aggrieved by it the plaintiff brought this appeal.

APPELLANT’S CONTENTIONS:-

the Appellant contended that no time intimation was prescribed in format and given by the Respondents when SEBI (SAST) Regulations got triggered; Respondent Nos. 1 – 6 were “connected persons” and were “acting in concert.” He then emphasized that the Respondents had previously admitted to the non-disclosure. Thus the Appellant has the right under Section 111A of the Act to approach the tribunal for rectification of the register. 

DEFENDANT’S CONTENTIONS:-

The Respondents contended that filing a petition under Section 111A is an abuse of process. No violation under the SEBI (SAST) Regulations has occurred as the Respondents did give timely intimation in the prescribed format. The SEBI (PIT) Regulations do not apply to the other Respondent as shareholding never crossed 5% in individual limit. And under section 111A (3), the Tribunal doesn’t have any power to annul the transfer or to direct the buy-back of the shares.

JUDGMENT:-

The court held that the SEBI (SAST) regulation is a comprehensive scheme, the complained transaction should suffer regulator scrutiny and only the regulator has to determine the provisions of the SEBI Act and the Regulations.

Further, the court held that the Appellant is not justified to invoke the CLB jurisdiction under Section 111A for violation of SEBI regulations. And the Tribunal was wrong in allowing and entertaining the company petition filed under Section 111A of the 1956 Act. However, the tribunal did exceed its jurisdiction, so the Appellate Tribunal’s decision in setting aside the judgment was correct. The court then dismissed the appeal with no order as to costs.