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2018 (4) TMI 1901 - SC - Indian LawsPrinciples of Res-Judicata - unilateral cancellation of assignment agreement - limitation period for filing of an appeal - what is to be done in matters where the hearing in the second case is shortly after the limitation period for filing an appeal in the first case has ended? - HELD THAT - If the period of limitation for filing an appeal has not yet expired or has just expired, the Court hearing the second proceeding can very well ask the party who has lost the first round whether he intends to appeal the aforesaid judgment. If the answer is yes, then it would be prudent to first adjourn the second proceeding and then stay the aforesaid proceedings, after the appeal has been filed, to await the outcome of the appeal in the first proceeding - Many factors have to be considered before exercising this discretion for example, the fact that the appeal against the first judgment is grossly belated; or that the said appeal would, in the ordinary course, be heard after many years in the first proceeding; or, the fact that third party rights have intervened, thereby making it unlikely that delay would be condoned in the appeal in the first proceeding. As has been stated, the judicious use of the weapon of stay would, in many cases, obviate a Court of first instance in the second proceeding treating a matter as res judicata only to find that by the time the appeal has reached the hearing stage against the said judgment in the second proceeding, the res becomes sub judice again because of condonation of delay and the consequent hearing of the appeal in the first proceeding. This would result in setting aside the trial Court judgment in the second proceeding, and a de novo hearing on merits in the second proceeding commencing on remand, thereby wasting the Court s time and dragging the parties into a second round of litigation on the merits of the case. In the present case, a belated review petition was filed after arguments were heard and judgment reserved by the appellate Court. Would this Court have to await the outcome of the said review petition before deciding whether the judgment dated 27.4.2013 is res judicata? Obviously not. It is clear that a review petition filed long after the judgment dated 27.4.2013, with a condonation application for a delay of over four years, could not possibly be held to be anything but an abuse of the process of the Court. Both the trial Court and the first appellate Court were entirely wrong in treating the statutory prohibition contained in Section 45(2) of the Trade Marks Act as res judicata. It is obvious that neither Court has bothered to advert to Section 45 and/or interpret the same - A cursory reading of Section 45(2) of the Trade Marks Act makes it clear that the assignment deed, if unregistered, cannot be admitted in evidence by any Court in proof of title to the trademark by the assignment, unless the Court itself directs otherwise. It is clear, therefore, that any reliance upon the assignment deed dated 8.10.2003 by the earlier judgment cannot be sanctified by the plea of res judicata, when reliance upon the assignment deed is prohibited by law. Equally, a reference to Sections 6, 8 and 46(4) of the Banking Regulation Act would also make it clear that a bank cannot use the trademark Eenadu to sell agarbathies. This would be directly interdicted by Section 8, which clearly provides that notwithstanding anything contained in Section 6 or in any contract, no banking company shall directly or indirectly deal in the selling of goods, except in connection with the realisation of security given to or held by it. Also, granting permission to third parties to use the trademark Eenadu and earn royalty upon the same would clearly be outside Section 6(1) and would be interdicted by Section 6(2) which states that no bank shall engage in any form of business other than those referred to in sub-section (1) - the trademarks are not part of any security for loans or advances that have been made to the first respondent, or connected with the same. It is thus clear that the assignment deed dated 8.10.2003 is clearly hit by Section 6(2) and Section 8 read with the penalty provision contained in Section 46(4) of the Banking Regulation Act. The judgment of the trial Court and the first appellate Court are set aside - Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Doctrine of Res Judicata 2. Validity of Assignment Deed under Trade Marks Act, 1999 3. Validity of Assignment Deed under Banking Regulation Act, 1949 4. Jurisdiction of Civil Court Detailed Analysis: 1. Doctrine of Res Judicata: The judgment extensively discusses the doctrine of res judicata, which is based on the maxims "res judicata pro veritate accipitur," "interest reipublicae ut sit finis litium," and "nemo debet bis vexari pro una at eadem causa." The doctrine is fundamental in ensuring that litigation comes to an end and that a party is not vexed twice for the same cause. However, the judgment delineates exceptions to the doctrine, particularly when an erroneous decision on the jurisdiction of a court or a decision that sanctions something illegal is involved. The court emphasized that res judicata applies only when the matter directly and substantially in issue has been heard and finally decided by a competent court. 2. Validity of Assignment Deed under Trade Marks Act, 1999: Section 45(2) of the Trade Marks Act, 1999, stipulates that an assignment deed must be registered to be admitted in evidence. The court observed that the assignment deed in question was not registered, and thus, could not be admitted in evidence. The trial court and first appellate court erred in treating the statutory prohibition contained in Section 45(2) as res judicata. The judgment emphasized that reliance on an unregistered assignment deed is prohibited by law. 3. Validity of Assignment Deed under Banking Regulation Act, 1949: Sections 6 and 8 of the Banking Regulation Act, 1949, prohibit banks from engaging in activities other than those specified, including trading in goods or earning royalties from trademarks. The court found that the assignment deed, which allowed the bank to use and sub-license the trademark "Eenadu," violated these provisions. The court concluded that the assignment deed was void as it contravened the statutory prohibitions under the Banking Regulation Act. 4. Jurisdiction of Civil Court: The court addressed the issue of jurisdiction, noting that an erroneous decision on jurisdiction cannot confer jurisdiction where none exists. The earlier judgment, which upheld the validity of the assignment deed, was found to be erroneous as it did not consider the statutory prohibitions under the Trade Marks Act and the Banking Regulation Act. The court emphasized that jurisdictional issues are exceptions to the doctrine of res judicata. Conclusion: The Supreme Court allowed the appeal, setting aside the judgments of the trial court and the first appellate court. It held that the assignment deed was invalid under both the Trade Marks Act and the Banking Regulation Act, and thus, the suit filed by respondent No.1 was dismissed. The court reiterated that statutory prohibitions and jurisdictional issues are exceptions to the doctrine of res judicata, ensuring that illegal or erroneous decisions do not attain finality.
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