2023 (6) TMI 1009 - HC - Insolvency and Bankruptcy

CIRP - assignment of trademark in favor of petitioner - Infringement of seven trademarks, having proprietary rights acquired through a deed of assignment - Refusal of grant an order of injunction restraining Duckbill from using the marks - serious allegation of fraud, misrepresentation and suppression of facts and cheating - HELD THAT - There is every reason to believe that as a statutory functionary the liquidator acted regularly in the usual course of his duties and found fourteen registered trademarks in the name of the company. He found nothing in the records to suggest that out of those trademarks, seven had been transferred in 2017 - What is most significant is that these marks were assigned by the father-inlaw on behalf of the company to her daughter-in-law for only Rs. 7,000/- whereas about rupees 5 crores have been paid by Duckbill to purchase these marks. The purported deed of assignment dated 3rd April, 2017 was sought to be lodged with the Registrar on 18th January, 2022 for registering the assignment. This application to record this assignment was made by filling up a form RM-P issued by the Trademark registry. This form provides for an application for post registration changes in a trademark. In the garb of making this application Poulami Mukherjee tried to record with the registry that Duckbill had assigned the seven trademarks to her (see page 168 of the application CAN 2 of 2023) and managed to get the assignment registered on 14th June, 2022. Under Chapter V of the Trade Marks Act, 1999 the right of assignment and transmission is vested in the registered proprietor. In case of these seven marks, the registered proprietor was Duckbill, the custodian of whose assets was the liquidator. So the real proprietor was the liquidator - a deliberate attempt was made by Poulami and her father-in-law to divest Duckbill of its principal assets that is the trademarks and misappropriating them, by backdating a deed of assignment to 2017 and then filing it with the trademark registry five years later. This appeal is dismissed by vacating our interim order dated 24th January, 2023. The impugned judgment and order is affirmed by substituting therein the reasons in this judgment and order.

Summary

Issues Involved:
1. Infringement of trademarks
2. Validity of the deed of assignment
3. Allegations of fraud and misrepresentation
4. Suppression of facts during the appeal

Summary:

1. Infringement of Trademarks:
The case involves an interlocutory application in a suit filed by Poulami Mukherjee against Duckbill Drugs Pvt. Ltd. (Duckbill) alleging infringement of seven trademarks. The learned court initially refused to grant an injunction restraining Duckbill from using the marks. Poulami appealed, and an interim order was granted by the High Court restraining Duckbill from using the marks until 31st March 2023.

2. Validity of the Deed of Assignment:
The deed of assignment dated 3rd April 2017, under which seven trademarks were purportedly assigned by Duckbill to Poulami for Rs. 7,000/-, is under scrutiny. Duckbill claims the deed is backdated and fraudulent, as it was lodged five years later on 18th January 2022 and registered on 14th June 2022. The court found prima facie irregularities in the assignment and registration process, suggesting the deed was backdated to appear valid under Section 45 of the Insolvency and Bankruptcy Code, 2016.

3. Allegations of Fraud and Misrepresentation:
Duckbill alleges that Poulami, in connivance with her father-in-law, Swapan Kumar Mukherjee, fabricated the deed to misappropriate valuable trademarks and deprive the company of its assets. The court found substantial reasons to believe that the deed of assignment was backdated and involved gross irregularity. The involvement of the trademark registry in this fraud also needs investigation.

4. Suppression of Facts During the Appeal:
The application (CAN 2 of 2023) by Duckbill to set aside the interim order dated 24th January 2023 was allowed. The court found that Duckbill was not properly served with the papers, and the representation made by Poulami's counsel was erroneous. The court expressed strong displeasure over the conduct of the advocate-on-record instructing counsel. The interim order was set aside, and the appeal was dismissed on substantive grounds.

Discussion and Conclusion:
The court concluded that the dispute is more about the proprietorship of the trademarks than their infringement. The prima facie findings suggest that the deed of assignment was backdated and irregular. The ultimate order by the learned trial Judge not to pass an interim injunction was justified. The appeal was dismissed, and the interim order dated 24th January 2023 was vacated. The suit was expedited for disposal within two years. The findings and observations are to be treated as prima facie in the suit.