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Issues involved: Suit for permanent injunction on trademark infringement, copyright infringement, passing off, rendition of accounts, and breach of contractual obligations. Application under Section 8 of the Arbitration & Conciliation Act, 1996 regarding arbitration clause in agreements.
Issue 1 - Suit for Permanent Injunction: The respondent, a leading player in management entrance test coaching, sought injunction against trademark infringement, copyright infringement, and passing off damages related to the trademark "IMS." The appellant, a business partner, entered agreements with the respondent but breached terms leading to the suit. Issue 2 - Application under Section 8 of the Arbitration & Conciliation Act: The appellant filed an application under Section 8 of the Arbitration & Conciliation Act, 1996, based on an arbitration clause in the agreements. The application was dismissed by the single Judge, leading to the appeal. The appellant argued that the arbitration clause survived the termination of the agreement as per the Exit Paper dated 1.2.2011. Citing legal precedents, the appellant contended that termination due to breach does not end the arbitration agreement. The Supreme Court's judgment in a similar case was referenced to support this argument. However, the Court disagreed with the appellant's submissions, emphasizing that the Exit Paper, which terminated the agreement, did not contain an arbitration clause. The Court highlighted that the arbitration clause would not survive when a new agreement replaces the original contract, as in this case. The Court referenced legal principles and previous judgments to support its decision, emphasizing that the Exit Paper represented a novation of the original contract. The Court concluded that the agreements dated 1.4.2007 and 1.4.2010 had been superseded by the Exit Paper, which lacked an arbitration clause for dispute resolution. In light of the above analysis, the Court upheld the single Judge's decision to reject the appellant's application. The Court also raised a rhetorical question regarding the practicality of enforcing an arbitration clause in cases of trademark infringement after the original agreement has been terminated. The Court dismissed the appeal and ordered the appellant to pay costs amounting to Rs. 5,000.00. This summary provides a detailed breakdown of the issues involved in the legal judgment, highlighting the arguments presented by the parties and the Court's reasoning in reaching its decision.
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