SURESH DHANUKA versus SUNLTA MOHAPATRA

SURESH DHANUKA versus SUNLTA MOHAPATRA

The District Judge's order restraining the respondent from marketing products under the trademark except through the appellant was justified and best protected both parties pending arbitration, since the assignment of 50% rights in the trademark was absolute and forever. Section 9 of the Arbitration Act was properly invoked and Section 27 of the Contract Act was not attracted, as the injunction sought was not a restraint on trade but on use of shared property. The High Court erred both in interfering with the District Judge's order and in relying on an affidavit after hearing, without giving the appellant an opportunity to respond.

Parties
Appellant: Suresh Dhanuka; Respondent: Sunita Mohapatra
Jurisdiction
India
Judgment Date
02 December 2011
Procedural Posture
Civil Appeal / Final Judgment on Appeal From High Court
Outcome
Appeal allowed
Legal Topics
Interim Relief Under S.9 Arbitration and Conciliation Act, Deed of Assignment of Trademark, Negative Covenant Enforcement, Restraint of Trade Under Contract Act S. 27
Arbitration Intellectual Property Contract Law Interim Relief Under S.9 Arbitration and Conciliation Act Deed of Assignment of Trademark Negative Covenant Enforcement Restraint of Trade Under Contract Act S. 27

Case Brief

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Parties

Suresh Dhanuka

Appellant

Sunita Mohapatra

Respondent

Procedural Posture

Civil Appeal / Final Judgment on Appeal From High Court

Legal Issues

  1. 1 Whether High Court was justified in interfering with the District Judge's order restraining the respondent from marketing products under the trademark except through the appellant pending arbitration
  2. 2 Whether the High Court was justified in relying upon an affidavit filed after hearing was concluded and judgment reserved without giving appellant an opportunity to respond
  3. 3 Whether invocation of s.42 of Specific Relief Act, 1963 to enforce negative covenant in Deed of Assignment is contrary to s.27 of Contract Act, 1872 and void

Ratio Decidendi

The District Judge's order restraining the respondent from marketing products under the trademark except through the appellant was justified and best protected both parties pending arbitration, since the assignment of 50% rights in the trademark was absolute and forever. Section 9 of the Arbitration Act was properly invoked and Section 27 of the Contract Act was not attracted, as the injunction sought was not a restraint on trade but on use of shared property. The High Court erred both in interfering with the District Judge's order and in relying on an affidavit after hearing, without giving the appellant an opportunity to respond.

Court Disposition

Appeal allowed

Orders

  • Impugned judgment and order of the High Court set aside; order of District Judge restored.
  • Respondent directed to provide separate account of transactions to the Arbitrator as and when arbitral proceedings are taken.