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REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.10434-10435 OF 2011 (Arising out of SLP(C)Nos.3391-3392 of 2011)

SURESH DHANUKA … APPELLANT   

Vs.

SUNITA MOHAPATRA  … RESPONDENT

J U D G M E N T

ALTAMAS KABIR, J.

1. Leave granted.

2. These appeals arising out of SLP(C)Nos.3391-3392 of  

2011, are directed against the judgment and order dated

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27th October, 2008, passed by the Orissa High Court in  

ARBA No.17 of 2008 and the order dated 28th September,  

2010, passed on the Review Application No.21 of 2008.

3. The  Appellant  herein,  Suresh  Dhanuka,  filed  an  

application before the learned District Judge, Khurda,  

being ARB (P) No.576 of 2007, under Section 9 of the  

Arbitration  and  Conciliation  Act,  1996,  hereinafter  

referred to as the “1996 Act”.

4. The  facts  leading  to  the  filing  of  the  said  

application  reveal  that  on  1st April,  1999,  Suresh  

Dhanuka,  the  Appellant  herein,  and  Sunita  Mahapatra,  

the  Respondent  herein,  entered  into  an  Agreement,  

whereby they agreed to jointly carry on business in the  

name and style of “Abhilasha”.  Sunita Mahapatra was  

carrying on business in the name and style of “M/s.  

Nature  Probiocare  Inc.”,  as  the  sole  proprietress  

thereof.  The said Agreement was for a period of five

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years from 1st April, 1999 to 31st March, 2004, which was  

subsequently  extended  till  31st March,  2009.   On  4th  

October,  1999,  the  Respondent  herein  applied  to  the  

Registrar  of  Trade  Marks,  Kolkata,  in  Form  No.TM-1  

under the Trade and Merchandise Marks Act, 1958, for  

registration of the Trade Mark “Naturoma Herbal”, under  

Application No.879695.

5. During the first five-year period of the original  

Agreement dated 1st April, 1999, the Respondent, Sunita  

Mahapatra, executed a Deed of Assignment on 1st October,  

2000, assigning 50% of her right, title and interest in  

the  said  Trade  Mark  “Naturoma  Herbal”,  with  

proportional goodwill of the business concerned in the  

goods  in  respect  of  which  the  Mark  was  permanently  

used, interalia, on the following terms and conditions,  

namely,

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(a) All goods manufactured by the Respondent  

under  the  said  Trade  Mark  would  be  

marketed solely by the Appellant herein;

(b) On the termination of the Joint Venture,  

neither  the  assignor  nor  the  assignee  

would be entitled to use or register the  

Mark in its own name or jointly with some  

other party;

(c) The existing goodwill and further goodwill  

would vest in the owner and the assignee.  

Soon  thereafter, on  28th February,  2001, M/s.  S.  

Majumdar & Co., the authorized Trade Mark agent of the  

Respondent,  filed  an  application  in  Form  No.TM-16,  

along with the Deed of Assignment, with the Trade Mark  

authorities,  together  with  the  fee  of  Rs.20/-  for  

recording  the  name  of  the  Appellant  as  the  Joint  

Proprietor  of  the  Trade  Mark.   The  application  for

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registration of the Trade Mark was advertised in the  

Trade Mark Journal on 13th November, 2003.  While the  

same was pending, the Agreement dated 1st April, 1999,  

was extended by mutual consent till 31st March, 2009.  

It appears that during the period 2003-2007, the sale  

of  the  product  increased  from  Rs.19,99,808/-  to  

Rs.1,88,70,143/-.  Meanwhile, the Agreement dated 1st  

April, 1999, was extended by mutual consent till 31st  

March, 2009, as indicated hereinbefore.   

6. It  appears  that  on  19th July,  2004,  one  Food  

Ingredients  Specialties  S.A.  filed  an  opposition  

No.KOL-167256  to  the  Trade  Mark  application  of  the  

Respondent wherein a joint reply was filed, which was  

affirmed  by  both  the  parties.   It  is  alleged  that,  

thereafter, in 2006, the Appellant and his son floated  

a company by the name of “Naturoma Herbal (P) Ltd.”.  

It is the case of the Appellant that the Appellant and  

his son floated the company with the name of “Naturoma

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Herbal (P) Ltd.”. According to the Appellant, his son  

floated the company with the consent of the Respondent,  

who,  subsequently,  declined  to  participate  in  the  

management thereof.  On 31st August, 2006, the Appellant  

resigned from the company despite the fact that the  

company had not started manufacturing activities until  

then, as was certified by the Chartered Accountant.  On  

21st August, 2007, the Respondent herein filed a Suit,  

being CS No.26 of 2007, before the District Judge at  

Khurda, under Sections 134 and 135 of the Trade Marks  

Act, 1999.  The learned District Judge, by an ex-parte  

order dated 29th August, 2007, restrained the Appellant  

and  the  company  from  selling,  distributing,  

manufacturing and marketing any of the products in the  

name  of  “Naturoma”  or  “Naturoma  Herbal”.   At  this  

stage, on 4th September, 2007, the Respondent filed an  

application  under  Section  9  of  the  1996  Act,  also  

before the District Judge at Khurda.

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7. On 12th September, 2007, the Appellant came to learn  

from  the  market  that  in  breach  of  the  Agreements  

entered  into  by  the  parties,  the  Respondent  was  

approaching  the  Dealers  and  Distributors  of  the  

Appellant to take direct supplies from the Respondent  

on a higher discount.  This led to the filing of the  

application  under  Section  9  of  the  1996  Act  by  the  

Appellant before the District Judge, Alipore, Kolkata.  

Thereafter,  on  25th September,  2007,  the  Respondent  

cancelled the Agreement dated 1st April, 1999 and also  

revoked the Deed of Assignment dated 1st October, 2000.  

The Appellant’s application under Section 9 of the 1996  

Act was dismissed on 26th November, 2007, on account of  

the earlier application filed under Section 9 of the  

above Act, by the Respondent before the District Judge  

at  Khurda.   Thereafter,  on  19th December,  2007,  the  

Appellant filed a fresh application under Section 9 of  

the  1996  Act,  before  the  learned  District  Judge,

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Khurda.  On 27th December, 2007, the learned District  

Judge  passed  an  interim  order  restraining  the  

Respondent  from  selling  the  products  in  question  by  

herself or by any other person, save and except through  

the  Appellant.   The  said  interim  order  was  made  

absolute on 22nd May, 2008.   

8. On 1st July, 2008, a corrigendum was made by the  

Trade Mark Registrar in the Trade Mark Journal, showing  

the Appellant as the joint proprietor of the Trade Mark  

“Naturoma Herbal”.           

  9. The Respondent herein preferred an appeal before  

the Orissa High Court on 8th July, 2008, which was heard  

on  18th September,  2008  and  judgment  was  reserved.  

While the matter was pending, the Respondent filed a  

letter with the Trade Mark Authority at Mumbai on 25th  

September, 2008, praying for cancellation of the order  

allowing the request of the Appellant in January, 2001,

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resulting in issuance of the Corrigendum in the Trade  

Mark Journal on 16th September, 2008.  As would appear  

from the materials on record, the Assistant Registrar  

of Trade Marks, Mumbai, cancelled the Corrigendum dated  

1st July, 2008 on 26th September, 2008, without notice to  

the Appellant and such cancellation was published in  

the Trade Mark Journal on 29th September, 2008.  On 30th  

September, 2008, the Respondent filed an affidavit to  

bring  on  record  the  said  cancellation  of  the  

Corrigendum and, though, the same was relied upon by  

the High Court in its judgment dated 27th October, 2008,  

the Appellant was not given an opportunity to deal with  

the same.  The High Court, by its aforesaid judgment,  

allowed the appeal filed by the Respondent.  The Review  

Application  filed  by  the  Appellant  on  28th January,  

2009, against the judgment and order dated 27th October,  

2008, was ultimately rejected by the High Court on 28th  

September, 2010, resulting in the filing of the Special

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Leave Petitions on 7th January, 2011, in which notice  

was issued and a limited interim order was made.  

10. Appearing  for  the  Appellant,  Mr.  P.K.  Ghosh,  

learned  Senior  Advocate,  submitted  that  since  the  

Respondent’s establishment was basically a production  

unit  and  did  not  possess  any  experience  and/or  

expertise  in  the  field  of  marketing,  promotion,  

distribution and management of its manufactured goods,  

she entered into an Agreement with the Appellant to  

market and distribute her products for a period of 5  

years from 1st April, 1999, as indicated hereinbefore.  

The same was extended for a further period of 5 years  

on  1st April,  2004  by  mutual  consent.   Mr.  Ghosh  

submitted that the Appellant incurred huge promotional  

expenses between 1999 and 2007 assessed at about Rs.72  

lakhs and it was only after such promotional schemes  

that there was a substantial increase in the sale of  

the product with the Trade Mark “Naturoma Herbal”.  Mr.

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Ghosh  submitted  that  the  sales  figures  from  the  

accounting year 2003-04 to the accounting year 2006-07  

showed an increase of almost 1 crore 60 lakhs rupees.   

11. Mr. Ghosh submitted that the Respondent even went  

so far as to sell its goods by using the Trade Mark  

“Naturoma  Herbal”  and  deleting  the  name  “Abhilasha”  

from  the  packaging  of  the  products.   Mr.  Ghosh  

contended  that  suppressing  all  the  above  facts,  the  

opposite party filed a suit, being C.S. No.26 of 2007,  

under  Sections  134  and  135  of  the  Trade  Marks  Act,  

1999, before the District Judge, Khurda,  inter alia,  

praying  for  an  order  of  injunction  to  restrain  the  

Appellant  from  using  the  Mark  “Naturoma  Herbal”  and  

obtained an  ex-parte order of injunction to the above  

effect.   

12. Having obtained an interim order in the aforesaid  

suit,  the  Respondent  terminated  the  Agreement  dated

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1st April, 1999, and also revoked the Deed of Assignment  

dated 1st October, 2000, unilaterally.  The Appellant  

thereupon moved the learned District Judge, Alipore, by  

way of an application under Section 9 of the 1996 Act,  

but the same had to be dropped on account of lack of  

jurisdiction. The Appellant, thereafter, filed another  

application under Section 9 of the above Act, being  

ARBP  No.576  of  2007,  before  the  Court  of  District  

Judge,  Khurda,  in  which  initially  on  22nd December,  

2007,  an  interim  protection  was  given  directing  the  

Respondent not to sell, market, distribute, advertise  

its products under the Trade Mark “Naturoma Herbal”, by  

herself or through any other person save and except the  

Appellant  herein.   The  said  order  was  subsequently  

confirmed on 22nd May, 2008.

13. Mr.  Ghosh  submitted  that  the  Respondent  had  no  

authority to terminate the Agreement dated 1st April,  

1999, on the ground that the same had been misused by

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the Appellant.  Learned counsel submitted that even if  

it be accepted that the Appellant was a Director of the  

Naturoma  Herbals  Pvt.  Ltd.,  between  June,  2005,  to  

August,  2006,  then  there  was  no  substance  in  the  

applications  made  against  the  Appellant  as  the  said  

Company  had  not  conducted  any  business  within  that  

period and, in any event, its product was sold under  

different designs containing the word “SAFFIRE” in bold  

and prominent fonts.   

14. Mr.  Ghosh  submitted  that  the  Respondent  did  not  

also have any right to revoke the Deed of Assignment  

whereby 50% of the right, title and interest in the  

Trade Mark “Natural Herbal” had been assigned to the  

Appellant to be held by him absolutely and forever.  

Mr. Ghosh urged that the Deed of Assignment did not  

contain  any  clause  for  revocation  of  the  right  and  

ownership of the Trade Mark to the extent of 50% and

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such revocation was made with the intention to defraud  

the Appellant and to grab the market created by him.

15. Mr. Ghosh reiterated the conditions contained in  

the Deed of Assignment dated 1st October, 2000, whereby  

50% of the right, title and interest in the Trade Mark  

“Naturoma  Herbal”  with  proportional  goodwill  of  the  

business  concerned  in  the  said  goods  in  respect  of  

which  the  Mark  was  used,  stood  assigned  to  the  

Appellant absolutely and forever.  Mr. Ghosh submitted  

that it was not within the powers of the Respondent to  

terminate the Deed of Assignment, even if the joint  

venture for marketing of the goods manufactured by the  

Respondent  under  the  name  of  “Abhilasha”,  was  

discontinued.   Mr.  Ghosh  reiterated  that  all  goods  

manufactured  by  the  Respondent  under  the  aforesaid  

Trade  Mark  would  have  to  be  marketed  solely  by  the  

Appellant  and  on  termination  of  the  joint  venture,  

neither the assignor nor the assignee would be entitled

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to use or register (emphasis added) the Mark on its own  name  or  jointly  with  some  other  party.   Mr.  Ghosh  

contended  that  the  said  condition  amounted  to  a  

negative covenant which could be enforced under Section  

42 of the Specific Relief Act, 1963.  Learned counsel  

urged  that  while  Section  41  of  the  aforesaid  Act  

indicates  the  circumstances  in  which  an  injunction  

cannot be granted to prevent the breach of a contract,  

the  performance  of  which  could  not  specifically  be  

enforced, Section 42, on the other hand, specifically  

provides  that  notwithstanding  anything  contained  in  

Clause (e) of Section 41, where a contract comprises an  

affirmative agreement to do a certain act, coupled with  

a negative agreement, express or implied, not to do a  

certain act, the Court while not being in a position to  

compel  specific  performance  of  the  affirmative  

agreement,  would  not  be  precluded  from  granting  an  

injunction  to  perform  the  negative  covenant,  if  the

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plaintiff had not failed to perform the contract so far  

as it was binding on him.  Mr. Ghosh urged that in the  

instant case, the conditions in the Deed of Assignment  

made it very clear that except for the Appellant, no  

other  person  would  be  entitled  to  market,  sell,  

distribute and advertise the goods manufactured by the  

manufacturer  under  the  Trade  Mark  “Naturoma  Herbal”.  

It was further stipulated that if the joint venture  

agreement was to be terminated at any point of time,  

neither the assignor nor the assignee would be entitled  

to use or register the Mark in its own name or in the  

name of some other party.     

16. It was submitted by Mr. Ghosh that the corrigendum  

which  had  been  published  by  the  Registrar  of  Trade  

Marks  in  the  Trade  Mark  Journal  on  1st July,  2008,  

showing the Appellant as the joint proprietor of the  

Trade  Mark  “Naturoma  Herbal”  was  cancelled  on  25th  

September, 2008, on the basis of a letter written by

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the Respondent to the Trade Mark Authority at Mumbai,  

seeking  cancellation  of  the  order,  without  any  

opportunity being given to the Appellant who had been  

shown  as  the  joint  proprietor  of  the  Trade  Mark  in  

question.   Mr.  Ghosh  submitted  that  what  is  more  

interesting  is  the  fact  that  such  letter  seeking  

cancellation  of  the  order  by  which  the  name  of  the  

Appellant  was  shown  as  the  Joint  Proprietor  of  the  

Trade Mark was written at a time when the Respondent’s  

appeal against the order of the Registrar of the Trade  

Marks was pending before the Orissa High Court.  In  

fact, after the hearing of the appeal was concluded and  

judgment  was  reserved,  the  Respondent  filed  an  

affidavit before the High Court to bring on record the  

cancellation of the corrigendum published on 1st July,  

2008 and, although, the same was relied upon by the  

High Court, no opportunity was given to the Appellant  

to  deal  with  the  said  document  or  to  make  any

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submissions in respect thereof.  Mr. Ghosh submitted  

that  the  appeal  was  ultimately  allowed  by  the  High  

Court on the basis of documents submitted on behalf of  

the Respondent after the judgment had been reserved in  

the appeal.

17. Mr.  Ghosh  also  submitted  that  the  review  

application filed by the Appellant on the ground that  

the  affidavit  filed  by  the  Respondent  was  taken  on  

record without any opportunity to the Appellant to meet  

the same, was also rejected on 20th September, 2010, on  

the basis of an order of the Registrar of Trade Marks  

which was not on record at the time when the hearing of  

the  appeal  was  concluded  and  judgment  was  reserved.  

Mr. Ghosh submitted that the manner in which the entire  

proceedings had been conducted clearly indicates that  

the High Court had not applied its judicial mind in  

allowing the appeal filed by the Respondent against the  

orders  passed  on  the  Appellant’s  application  under

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Section  9  of  the  Arbitration  and  Conciliation  Act,  

1996, before the District Judge at Khurda.

18. Mr. Ghosh lastly contended that on the application  

made by the Respondent to the Registrar of Trade Marks  

for registration of the Trade Mark “Naturoma”, certain  

objections had been filed in her counter statement.  In  

such objection, it had been clearly indicated that with  

a view to effectively market the products under the  

Trade Mark “Naturoma”, the Respondent joined hands with  

the Appellant by a Deed of Assignment dated 1st October,  

2000, whereby she had transferred 50% of her right,  

title  and  interest  in  favour  of  the  Appellant  and  

pursuant to such assignment, the Trade Mark application  

was now jointly held by Nature Pro Biocare Inc. and  

Abhilasha.  Mr. Ghosh submitted that the Respondent had  

at  all  times  in  no  uncertain  terms  reiterated  the  

assignment  effected  in  favour  of  the  Appellant  with

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regard  to  the  Trade  Mark  and  the  goodwill  of  the  

Company.  Learned counsel submitted that having done  

so,  there  was  no  reason  for  the  Registrar  of  Trade  

Marks to cancel the corrigendum by which the name of  

the  Appellant  had  been  brought  on  the  Trade  Mark  

Journal  as  joint  owner  of  the  Trade  Mark  “Naturoma  

Herbal” and that too not by any order of cancellation,  

but merely by a notification which was issued without  

any  foundation,  since  the  judgment  in  the  appeal  

preferred by the Respondent had not yet been delivered.  

Mr. Ghosh submitted that the order of the High Court  

and that of the Registrar of Trade Marks canceling the  

corrigendum issued by the Registrar of Trade Marks in  

favour of the Appellant, were liable to be set aside.  

19. On  behalf  of  the  Respondent,  Mr.  Shambhu  Prasad  

Singh,  learned  Senior  Advocate,  submitted  that  since  

the arbitral proceeding was at its last stages and the  

Appellant could be adequately compensated in terms of

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money, the prayer for injunction made on behalf of the  

Appellant was liable to be rejected.    

20. Apart  from  the  above,  Mr.  Singh  submitted  that  

although a Deed of Assignment had been executed on 1st  

October, 2010, the same had never been acted upon, but  

the Appellant sought to take shelter under Clause 19 of  

the said Deed after having acted contrary thereto by  

forming  a  Company  in  the  name  of  “Naturoma  Herbals  

Private Limited” and applying for registration of the  

Respondent’s Trade Mark “Naturoma” in his newly-formed  

Company’s  name.   Referring  to  the  Certificate  of  

Incorporation and Memorandum of Association of the said  

Company, Mr. Singh pointed out that the name of the  

Appellant was shown in the Subscribers’ List at Serial  

No.1 holding 5000 shares, while his son, Rahul Dhanuka,  

was shown to be holding the remaining 5000 shares.  

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21. On the question of grant of injunction to implement  

a negative covenant, as envisaged in Section 42 of the  

Specific Relief Act, 1963, Mr. Singh urged that the  

covenant contained in the Deed of Assignment, which had  

not been acted upon, was contrary to the provisions of  

Section 27 of the Indian Contract Act, 1872, and was,  

therefore, void.

22. Mr.  Singh  submitted  that  prior  to  the  Agreement  

entered into between the parties on 1st April, 1999,  

regarding  marketing  and  distribution  of  the  goods  

manufactured  by  the  Respondent,  the  Respondent  had  

obtained Drug Licence on 2nd May, 1997, and Sales Tax  

Licence  on  13th September,  1997,  for  marketing  and  

selling “Naturoma Herbals”.  Mr. Singh urged that even  

eight years after the Assignment Deed was signed by the  

parties, the Respondent’s name continued to be shown in  

the  Trade  Mark  Journal  as  the  proprietor  of  the  

aforesaid Trade Mark.  Learned counsel submitted that

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as per the prayer of the Respondent in the application  

before the District Judge, Khurda, under Section 9 of  

the Arbitration and Conciliation Act, 1996, the Court  

had initially passed an interim order dated 29th August,  

2007, whereby the Appellant and others were restrained  

from selling, distributing, manufacturing and marketing  

any  product  in  the  name  of  “Naturoma  Herbals”  or  

“Naturoma” or in any other name similar or identical to  

the  said  name.  The  said  ad-interim  order  was  made  

absolute on 25th January, 2008, till the disposal of the  

suit.  The appeal preferred from the said order was  

dismissed by the High Court.  The review petition filed  

thereafter was also dismissed.  

23. Mr. Singh then submitted that in addition to the  

aforesaid proceeding before the District Judge, Khurda,  

the Appellant had also filed an application before the  

learned Arbitrator under Section 17 of the Arbitration  

and Conciliation Act, 1996, for the self-same reliefs.

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24. On  the  question  of  enforcement  of  a  negative  

covenant, Mr. Singh submitted that even in such a case,  

the balance of convenience and inconvenience would have  

to  be  taken  into  consideration.   In  this  regard,  

reference was made to the decision of this Court in (i)  

Gujarat Bottling Co. Ltd. vs. Coca Cola Company [(1995)  

5 SCC 545], (ii)  Percept D’Mark (India) (P) Ltd. vs.  

Zaheer Khan [(2006) 4 SCC 227] and (iii)K.T. Plantation  

Ltd. vs. State of Karnataka [(2007) 7 SCC 125].

25. Mr. Singh urged that the impugned decision of the  

High Court was without any illegality or irregularity  

and no interference was called for therewith.

26. In a short reply, Mr. Pradip Ghosh submitted that  

in the instant case there was no violation of Section  

27 of the Indian Contract Act, 1872, as the injunction  

sought for was not on trade or business but in respect  

of use of the Trade Mark.

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27. From  the  submissions  made  on  behalf  of  the  

respective parties and the materials on record, it is  

clear that the Respondent who was a manufacturer of  

herbal  products  entered  into  an  Agreement  with  the  

Appellant resulting in the formation of a Joint Venture  

Company under the name and style of “Abhilasha”.  The  

said Agreement was initially for a period of 5 years  

from 1st April, 1999, and, thereafter, extended till 31st  

March, 2009.   There is also no dispute that a Deed of  

Assignment was executed by the Respondent in favour of  

the Appellant on 1st October, 2010, assigning 50% of the  

right, title and interest in the Trade Mark “Naturoma  

Herbal” registered in the name of the Respondent, with  

proportional goodwill of the business concerned in the  

goods in respect of which the Mark is permanently used,  

on  certain  conditions  which  have  been  extracted  

hereinbefore.  It is also on record that an application  

was filed with the Trade Mark authorities for bringing

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on  record  the  name  of  the  Appellant  as  the  Joint  

Proprietor  of  the  Trade  Mark  and  objections  filed  

thereto were jointly resisted by the Appellant and the  

Respondent, accepting the fact that the Appellant was  

the owner of 50% of the Trade Mark and all rights,  

title  and  interest  accrued  therefrom.   However,  in  

2006, it came to light that the Appellant had floated a  

Company by the name of “Naturoma Herbals (P) Ltd.” and  

it had also applied for registration of the Trade Mark  

in the name of that Company. It is at that stage that  

the Respondent filed a Suit on 21st August, 2007, under  

Sections  134  and  135  of  the  Trade  Marks  Act,  1999,  

being C.S. No.26 of 2007, in which an ex-parte interim  

order was passed on 29th August, 2007, restraining the  

Appellant and the Company from selling, distributing,  

manufacturing and marketing any of the products in the  

name of “Naturoma” or “Naturoma Herbal”.  The said ad-

interim order was made absolute on 25th January, 2008,

27

till the disposal of the suit.  

28. Thereafter, on 25th September, 2007, the Respondent  

cancelled the Agreement dated 1st April, 1999 and also  

revoked the Deed of Assignment dated 1st October, 2000.  

Immediately  thereafter,  on  19th December,  2007,  the  

Appellant filed a fresh application under Section 9 of  

the Arbitration and Conciliation Act, 1996, before the  

District  Judge,  Khurda,  who  on  27th December,  2007,  

passed an ad-interim order restraining the Respondent  

from selling her products by herself or by any other  

person, save and except through the Appellant.   The  

said interim order was made absolute on 22nd May, 2008.

29. At this point of time, there were two apparently  

conflicting orders in existence; one by the District  

Judge,  Khurda,  in  the  Suit  filed  by  the  Respondent  

restraining the Appellant from selling, distributing,  

manufacturing or marketing any of the products in the

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name of “Naturoma” or “Naturoma Herbal”, and on the  

other the District Judge passed an order under Section  

9  of  the  Arbitration  and  Conciliation  Act,  1996,  

restraining the Respondent from selling her products by  

herself or by any other person, save and except through  

the Appellant.   

30. The corrigendum by which the Trade Mark Registrar  

had on 1st July, 2008, altered the entries in the Trade  

Mark  Journal,  showing  the  Appellant  as  the  Joint  

Proprietor  of  the  Trade  Mark  “Naturoma  Herbal”,  was  

cancelled on 26th September, 2008, without notice to the  

Appellant.   After  the  interim  order  passed  on  27th  

December,  2007,  on  the  application  filed  by  the  

Appellant  under  Section  9  of  the  Arbitration  and  

Conciliation Act, 1996, and the same was made absolute  

on 22nd May, 2008, the Respondent preferred an appeal  

before the Orissa High Court on 8th July, 2008, being  

Arb. A. No.17 of 2008.  The same was heard on 18th

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September,  2008,  and  judgment  was  reserved.  After  

reserving  judgment,  the  High  Court  allowed  the  

Respondent  to  file  an  affidavit  to  bring  on  record  

subsequent  events  which  did  not  form  part  of  the  

records, without giving the Appellant an opportunity of  

dealing with the same.  What is also relevant is the  

fact that the said affidavit was relied upon by the  

High  Court  while  allowing  the  Appeal  filed  by  the  

Respondent  herein.  The  questions  which,  therefore,  

arise for determination are :

(i) Whether the High Court was justified in  

interfering with the order passed by the  

District Judge, Khurda in Arb.(P) No.576  

of  2007,  on  account  whereof  pending  

arbitration, the Respondent was restrained  

from marketing the products manufactured  

by  her  under  the  Trade  Mark  “Naturoma  

Herbal”  or  “Naturoma”  by  herself  or

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through  anyone,  except  through  the  

Appellant?

(ii) Whether, pending arbitration proceedings,  

an order could have been passed by which  

the right acquired by the Appellant under  

the  Deed  of  Assignment  of  50%  of  the  

right,  title  and  interest  in  the  Trade  

Mark  “Naturoma  Herbal”,  could  have  been  

suspended  and  he  could  have  been  

restrained from objecting to the use of  

the said Mark by the Respondent?

(iii) Whether the High Court was justified in  

relying upon an affidavit filed on behalf  

of the Respondent after hearing had been  

concluded and judgment had been reserved  

in  the  appeal,  without  giving  the

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Appellant an opportunity of dealing with  

the same?

(iv) Whether the invocation of Section 42 of  

the Specific Relief Act, 1963, to enforce  

the  negative  covenant  contained  in  the  

Deed of Assignment, was contrary to the  

provisions  of  Section  27  of  the  Indian  

Contract  Act,  1872  and  was,  therefore,  

void?

31. As far as the first two questions are concerned,  

the terms of the Deed of Assignment clearly indicate  

that the Respondent had of her own volition parted with  

50% of her right, title and interest in the Trade Mark  

“Naturoma  Herbal”  with  proportional  goodwill  of  the  

business concerning the goods in respect of which the  

Mark was used, absolutely and forever, from the date of  

the Deed, namely, 1st October, 2000.   It is no doubt

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true  that  on  behalf  of  the  Respondent  it  has  been  

claimed  that  the  Deed  of  Assignment  had  never  been  

acted upon and that, in any event, the same had been  

revoked  on  25th September,  2007,  when  the  Agreement  

dated 1st April, 1999, was cancelled.  However, in view  

of the provisions of the Deed of Assignment, it is yet  

to be adjudicated upon and decided as to whether by  

virtue of the revocation of the Deed of Assignment by  

the Respondent, the Appellant was no longer entitled to  

the  benefits  of  the  Trade  Mark  which  had  been  

transferred to him to the extent of 50% absolutely and  

forever. In such circumstances, the order passed by the  

District  Judge,  Khurda,  in  ARBP  No.576  of  2007,  

restraining the Respondent from marketing her products  

through any person, other than the Appellant, was more  

apposite in the facts of the case, as the rights of  

both the parties stood protected till such time as a  

final decision could be taken in arbitral proceedings,

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which,  in  effect,  is  the  object  and  intention  of  

Section  9  of  the  Arbitration  and  Conciliation  Act,  

1996.

32. As far as the third question is concerned, it was  

inappropriate on the part of the High Court to allow  

the Respondent to file an affidavit, on which reliance  

was placed, after the hearing had been concluded and  

judgment  had  been  reserved,  without  giving  the  

Appellant  an  opportunity  of  dealing  with  the  same.  

However  innocuous  the  additional  affidavit  may  have  

been, once the hearing was concluded and judgment was  

reserved, it would have been prudent on the part of the  

High  Court  to  have  given  an  opportunity  to  the  

Appellant to deal with the same before allowing it to  

be  taken  on  record.  It  has  been  submitted  that  the  

additional affidavit which was filed on behalf of the  

Respondent after the judgment had been reserved by the  

Appeal  Court,  only  sought  to  bring  on  record  the

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proceedings  whereby  the  corrigendum  which  had  been  

issued by the Trade Mark Registrar on 1st July, 2008,  

showing the Appellant as the Joint Proprietor of the  

Trade  Mark  “Naturoma  Herbal”,  had  been  subsequently  

cancelled  on  26th September,  2008.   Since  what  was  

produced was a record of the official proceedings, the  

Appellant  could  not  have  been  prejudiced  since  he  

himself had knowledge of the same.

33. Coming  to  the  last  question,  as  to  whether  the  

invocation of Section 42 of the Specific Relief Act,  

1963, to enforce the negative covenant contained in the  

Deed of Assignment, was contrary to the provisions of  

Section 27 of the Indian Contract Act, 1872, or not, we  

are inclined to accept Mr. Ghosh’s submissions that the  

injunction  sought  for  by  the  Appellant  was  not  to  

restrain  the  Respondent  from  carrying  on  trade  or  

business, but from using the Trade Mark which was the  

subject matter of dispute. Accordingly, the provisions

35

of Section 27 of the Indian Contract Act, 1872, would  

not be attracted to the facts in this case.  For the  

sake  of  reference,  Section  27  of  the  above  Act  is  

reproduced hereinbelow :-

27.  Agreement  in  restraint  of  trade,  void.-  Every agreement by which any one is restrained  from exercising a lawful profession, trade or  business of any kind, is to that extent void.  

Exception 1.- Saving of agreement not to carry  on business of which goodwill is sold.- One who  sells the goodwill of a business may agree with  the buyer to refrain from carrying on a similar  business,  within  specified  local  limits,  so  long as the buyer, or any person deriving title  to the goodwill from him, carries on a like  business  therein,  provided  that  such  limits  appear to the Court reasonable, regard being  had to the nature of the business.”

It is obvious that what is declared to be void by  

virtue of Section 27 is any Agreement to restrain any  

person  from  exercising  his  right  to  carry  on  a  

profession  or  trade  or  business  and  any  restraint  

thereupon by an Agreement would be void.

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34. As will be seen from the materials on record, the  

Appellant did not ask for any injunction against the  

Respondent from carrying on any trade or business, but  

he objected to the use by the Respondent of the Trade  

Mark, in which he had acquired a 50% interest, while  

selling her products.  

35. The conditions in the Deed of Assignment clearly  

stipulate  that  all  the  goods  manufactured  by  the  

Respondent  under  the  Trade  Mark  “Naturoma”  would  be  

marketed  solely  by  the  Appellant.   It  was  also  

submitted that the said Trade Mark would be used only  

in relation to goods connected in the course of trade  

with both the parties.  One of the other conditions of  

the Deed of Assignment was that both the parties would  

be entitled to assign their respective shares in the  

Trade  Mark  subject  to  prior  written  consent  of  the  

other party, which presupposes that the parties were  

the absolute owners of their respective shares in the

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Trade  Mark  and  even  on  termination  of  the  joint  

venture, as has been done in the instant case, neither  

of the parties would be entitled to use or register the  

Mark  in  their  own  names  or  jointly  with  some  other  

party.  

36. Accordingly,  having  regard  to  the  arbitration  

clause,  which  is  Condition  No.10  of  the  terms  and  

conditions of the Deed of Assignment, the interim order  

passed  on  the  application  under  Section  9  of  the  

Arbitration and Conciliation Act, 1996, filed by the  

Appellant  in  keeping  with  the  terms  and  conditions  

agreed  upon  between  the  parties,  was  justified  and  

within the jurisdiction of the District Judge, Khurda.  

As we have mentioned hereinbefore, the interim order  

passed  by  the  learned  District  Judge,  Khurda,  

restraining the Respondent from selling her products by  

herself or by any other person, save and except through  

the Appellant, was apposite to the circumstances. The

38

said  order  took  into  consideration  the  interests  of  

both the parties flowing from the Agreement and the  

Deed  of  Assignment,  pending  decision  by  an  Arbitral  

Tribunal.  The cause of action for the suit filed by  

the Respondent before the District Judge, Khurda was  

the incorporation of a Company by the Appellant with  

his son under the name and style of “Naturoma Herbals  

(P) Ltd.” and the subsequent application made before  

the  Registrar  of  Trade  Marks  to  register  “Naturoma  

Herbal” in the name of the said Company.  It is in that  

context that the interim order was passed restraining  

the  Appellant  from  distributing,  manufacturing  or  

marketing any of the products in the name of “Naturoma”  

or Trade Mark “Naturoma Herbal”.  The said order of  

injunction did not permit the Respondent to manufacture  

and  market  the  goods  under  the  said  Trade  Mark  in  

violation of the provisions of the Deed of Assignment  

referred to hereinabove.

39

37. The learned Single Judge of the High Court, while  

referring to some of the provisions of the Agreement  

between  the  parties,  apparently  overlooked  the  

provisions  relating  to  the  use  of  the  Trade  Mark  

contained  in  the  Deed  of  Assignment.   Although,  

reference was made to Clause 19 of the Agreement, the  

High  Court  failed  to  notice  that  the  same  was  not  

contained in the Deed of Assignment, whereby 50% of the  

right,  title  and  interest  of  the  Respondent  in  the  

Trade Mark “Naturoma Herbal” was assigned in favour of  

the  Appellant  absolutely  and  forever.   As  has  been  

emphasized hereinbefore, even upon termination of the  

joint venture under the Agreement between the parties,  

neither  the  Appellant  nor  the  Respondent  would  be  

entitled to use or register the Mark in their own names  

or  jointly  with  some  other  party.   In  fact,  the  

relevant terms and conditions of the Deed of Assignment  

had been extracted by the learned Single Judge in the

40

impugned judgment, but the same appear to have been  

lost  sight  of  while  considering  the  terms  and  

conditions  of  the  Agreement  executed  between  the  

parties.

38. In our view, this is not a case where money can be  

an  adequate  compensation,  since  the  Appellant  has  

apparently acquired a 50% interest in the Trade Mark in  

question, together with the goodwill of the business in  

relation to the products in which the Trade Mark is  

used.

39. We are, therefore, of the view that the High Court  

erred in reversing the order passed by the District  

Judge in ARBP No.576 of 2007 filed by the Appellant,  

under which the status-quo would have been maintained  

till the dispute was settled in arbitration.  

40. We, accordingly, allow the Appeals, set aside the  

impugned judgment and order of the learned Single Judge

41

of the High Court impugned in the Appeals and restore  

that of the District Judge, Khurda in ARBP No.576 of  

2007.

41. However, before parting with the matter, we have to  

refer to the order passed by us on 28th January, 2011,  

whereby  the  Respondent  had  been  allowed  to  continue  

with the running of the business, but she was directed  

to  maintain  a  separate  account  in  respect  of  the  

transaction and to place the same before us at the time  

of hearing of the matter.  Such account does not appear  

to have been filed, but since we are disposing of the  

matter by restoring the order of the District Judge,  

Khurda, in ARBP No.576 of 2007, we further direct the  

Respondent,  as  and  when  arbitral  proceedings  may  be  

taken, to furnish such account upto this day before the  

learned Arbitrator so that the claims of the parties  

can be fully decided by the learned Arbitrator.  

42

42. Having regard to the facts of the case, the parties  

will  bear  their  own  costs  in  these  appeals  all  

throughout.   

……………………………………………………J. (ALTAMAS KABIR)

……………………………………………………J. (SURINDER SINGH NIJJAR)

……………………………………………………J. (GYAN SUDHA MISRA)

New Delhi Dated: 02.12.2011