JUDGMENT <NAME>, J.

(1) The plaintiff has filed the present suit for injunction to restrain defendant No.1 from infringing its copyright in its name with the logo and for passing off its trade name/goodwill and for rendition of accounts. Defendant No.2, who was an artist who prepared the logo used by the plaintiff, has been imp leaded as defendant No.2. However, no relief is claimed against him. The said defendant has died in the meanwhile. Therefore, the suit is now only against defendant No.1. Along with the suit, the plaintiff filed an application being I.A.No.14519/91 under Order 39 Rules I and 2 of the Code of Civil Procedure for grant of interim injunction in its favor. On the said application, ex parte interim order was passed in favor of the plaintiff on 5th December,1991 whereby the defendant was restrained from using the trade name '<ORG>' or trade logo, which is deceptively similar to that of the plaintiff. The defendant moved an application being I.A. No. 14690/91 under Order 39 Rule 4 of the Code of Civil Procedure for vacating/discharging the said injunction order. This order will dispose of both the aforesaid applications.

(2) The case of the plaintiff is that for the last over 30 years, the plaintiff company is engaged in the business of transport and carriage of goods and parcels. The said business is being run under the name and style of '<ORG>'. The plaintiff has also been using the artistic work comprising of the figure of a cat with a crown on its head and a parcel in its hands as its logo. According to the plaintiff, the continued user of the words '<ORG>', with the aforesaid logo has acquired a distinct identity. The said logo and the trade name has acquired enormous goodwill for the plaintiff in the transport business. The plaintiff claims to have acquired and established a superior reputation due to its impeccable record of providing high quality service to its clients. It has over 3300 offices all over India and is employing more than 2500 employees. The annual turn over of the plaintiff company is almost Rs.50 crores. The plaintiff has given a break-up of its expenses on advertisement and promotion of its trade name/logo which during the last three years has been about Rs.l5 lakhs, Rs.21 lakhs and Rs.21 lakhs respectively.

(3) On the basis of the above facts, it is claimed that the said trade name/logo have been identified as a trade name and logo of the plaintiff in the entire transport industry through out the country to such an extent that plaintiff's name 'Prakash' and/or the logo comprising of the combination of a cat with a crown and a parcel is displayed, shown or mentioned, the common man associates the same with the plaintiff. The plaintiff claims to have obtained the endorsement of its copyright over the said logo from the Registrar of Companies. By virtue of long and established user coupled with vast publicity given to the said trade mark, the plaintiff claims to have acq2uired exclusive rights as proprietor thereof. The word 'Prakash' and the logo of the cat with a crown and a parcel in its hand is prominently displayed and is written in bold and distinctive writing in all the advertisements, publicity material, hoardings, sign-boards, printed material, price lists, stationary etc. of the plaintiff. Thus, the word 'Prakash' and the logo have become associated distinctively with the enormous goodwill enjoyed by the plaintiff.

(4) It is further the case of the plaintiff that the defendant company has been recently floated by former Directors/employees of the plaintiff company with the malafide intention of exploiting/enchasing/miss-using the goodwill associated with the trade name 'Prakash' and the logo of the plaintiff. The defendant company has been floated under the name and style of '<ORG>'. -The manner of the use of word 'Prakash' in the name of the company and the use of the logo of a cat with a crown and a parcel in its hands used in all its printed material, publicity campaign, stationery etc. along with the word 'Prakash' is deceptively similar/ identical to that of the plaintiff's trade name/logo. The adoption of the name 'Prakash' along with the similar artistic work and the logo shows the malafide intentions of the defendant and the same has been done with a view to taking undue advantage and cashing upon the reputation of the plaintiff with a calculative view of creating deception and confusion in the trade and industry and passing off the name of the defendant as that of the plaintiff. According to the plaintiff, the general public is bound to be deceived because of this. The defendant is alleged to be creating an impression in the trade that it is a part of <ORG>. The former Directors/employees of the plaintiff who have floated the defendant company were involved in the day to day business and functioning of the plaintiff and are in the know of the plaintiff's working and business connections and as such are in a position to mislead the clients of the plaintiff and sway them towards defendant.

(5) The plaintiff has listed various acts of the defendant to show the dishonest intention of the defendant and to establish that the defendant is mis-using the trade name and copyright in the logo vested in the plaintiff. Some of these are :- a) The word 'Prakash' of the plaintiff company's name is being used by the defendant and the same is being used in the same manner and prominent style as that of the plaintiff. The placing, arrangement, configuration and depiction of the word 'Prakash' on the various printed material such as invoices, vouchers, challans, visiting cards and other publicity material including rate lists etc. is identically similar to that of the plaintiff. Even the use of colour combination of red and black ink in the writing of the trade name and the logo is exactly similar to that of the plaintiff. b) The placing arrangement and configuration of the logo by the defendant in its various printed material and on stationery is identical to that of the plaintiff. The defendant's logo is nothing but a literal imitation of the copyright work of the plaintiff with some insignificant variations here and there. c) The consignment notes used by the defendant are identical to that of the plaintiff in all respects. The scheme, the design, the colour and the layout is identicp.l to that of the plaintiff. d) The lorry hire pay orders of the defendant are identical in almost all respects to those used by the plaintiff. It is further stated that lorry hire pay order is a document like cash.

(6) The miss-user of the plaintiff's trade name and the logo by the defendant is stated to have resulted in lowering the goodwill, reputation and credibility of the plaintiff company in the eyes of the general public and particularly within the transport industry. The plaintiff and the defendant are part of the same trade and industry. The possibility of confusion is inevitable. The defendant is thus, according to the plaintiff, infringing and violating the statutory and common copyrights of the plaintiff by mis-using the plaintiff's trade name and logo with impugnity. Such activities of the defendant are claimed to be causing immense injury to the plaintiffs business and reputation. The plaintiff further states that the loss of its reputation and the loss otherwise suffered by the plaintiff on account of such illegal and malafide acts of the defendant can not be measured and compensated in terms of money. Therefore, the plaintiff has sought the relief of rendition of accounts by the defendant. The plaintiff has averred that it estimates that the defendant might have earned Rs.20 lakhs by trading upon the plaintiff's reputation and by infringing its copyright and as such the gain of the defendant is loss of the plaintiff.

(7) I may note at the out-set that during the course of hearing, it has been stated at the Bar that the defendant has given up the use of the logo of the cat with a crown and a parcel in its hand and has also changed the style and the manner in which the word 'Prakash' is written on the material of the defendant. Therefore, it was submitted that the cause of action no longer survives in favor of the plaintiff. So far as the use of the word 'Prakash' by the defendant is concerned, the said word being generic word can not be exclusive property of anybody and it is claimed that the defendant is entitled to use the same. No injunction can be granted with respect to the use of the word 'Prakash' by the defendant.

(8) In its application under Order 39 Rule 4 of the Code of Civil Procedure, defendant has set-out its case in detail. It is submitted by the defendant that the present suit for passing off is not maintainable in as much as the plaintiff is not claiming the relief of passing off in relation to any goods. So far as the use of the word 'Prakash' is concerned, it is the case of the defendant that the said word is a part of the name <NAME>, who was one of the founders of <ORG> including the present plaintiff. It is further submitted that the said <NAME> was illegally ousted from the position of Chairman of the plaintiff company. He and his group still hold about 43% of the shares in equity of the plaintiff company. Therefore, <NAME> and his associates have floated the defendant company and the use of word 'Prakash' being part of his name is a bonafide use by the defendant. Regarding the allegation of the plaintiff that the use of the word 'Prakash' and the logo of the plaintiff by the defendant is likely to cause confusion and deception in the minds of the general public likely to be involved in dealings, it is submitted that the class of persons who are involved is not generally uneducated and illitrate class. A consignor who wishes to book an order for delivery to the consignee normally sends a forwarding note along with the consignment to the carrier. On the basis of the forwarding note, the consignment note is prepared and the consignment is loaded on the lorry/vehicle by the carrier for transportation to the consignee. The choice of the carrier rests with the consignor and the consignee. The forwarding note specifies the name of the carrier. The consignors are invariably persons of repute and belong to a class who are not likely to be deceived. Therefore, it is stated that there is no question of any deception being caused. On the basis of this trade practice, it is pointed out that it is not correct to say that semi literate and illiterate employees of the transporters are involved in booking of consignments.

(9) The defendant has further submitted that a suit has been filed in <ORG> at Bombay by <ORG>, a sister concern of the defendant against <ORG>, a sister concern of the plaintiff praying that the defendant in that suit be restrained from using the word 'Prakash' as part of the corporate name and from using the logo of a cat with a crown and holding envelopes or any other deceptively similar logo. It is submitted on this basis that the present suit is a counter blast to the said suit pending in <ORG>.

(10) Another argument raised by the defendant justifying use of the word 'Prakash' in the name of the defendant company is that if the plaintiff is aggrieved, it should have approached <ORG> by way of objection to the registration of the said name as per the provisions of Section 20 of the Companies Act and this <ORG> is not the proper forum for that purpose. The Companies Act being a complete Code in itself, the remedy lies in taking steps under the provisions of the said Act. However, this point was not argued at the time of hearing.

(11) It is also the case of the defendant that the word 'Prakash' is quite commonly used in the transport industry and is not at all distinctive of the plaintiffs group of companies. Apart from the plaintiff, there are a number of other transporters in Delhi alone having the name 'Prakash'. These transport companies have been in existence for quite some time but the plaintiff never objected to the use of the word 'Prakash' in their names. Therefore, the plaintiff can not claim any distinctiveness in relation to the use of the name 'Prakash' for the plaintiff's group of companies.

(12) On merits, it is submitted that <NAME> is in fact the promoter of the plaintiff company. It is he who started the transport business by running a small passenger bus in the year 1955. He himself used to ply the said old passenger bus between Kota and Sangod in Rajasthan. In 1957, the said <NAME> Along with <NAME> and his maternal uncle <NAME> started the firm <ORG> at Bangalore. The business of <ORG> prospered and ultimately in April 1961 <ORG> i.e. the present plaintiff was promoted by <NAME> and was incorporated as a company at Mysore. The family members of the families of the said three persons acquired shares in the said company. Shri <NAME> died in 1984 and Shri <NAME> died in 1989. Subsequently, there were disputes between the family members which ultimately resulted in ouster of <NAME> from the Chairmanship and control of management of the present plaintiff. Reference has been made to some litigation pending at Bangalore between the family members. However, those details are not relevant for the present purpose. It is submitted with reference to the said litigation that it would not be in the interest of justice nor would it serve the balance of convenience to continue the ex parte injunction granted in this case.

(13) During the course of hearing the defendant confined its case to the following points :- 1)It is essential in a suit for passing off that damages suffered should be pleaded in the plaint. The plaintiff having failed to do so, it is not entitled to any injunction. 2) Passing off action can be only in regard to a trade mark in goods and not for services as in the present case. 3) There can not be any specific right with regard to any name, particularly, when promoter of the defendant also has the word 'Prakash' part of his name which makes the user of the word 'Prakash' by defendant bonafide. 4) No action was taken by the plaintiff against others in the same trade using the word 'Prakash' in their names and, therefore, there is no balance of convenience in favor of the plaintiff. 5) The present suit is not bonafide as it stems out of family feuds and litigation which is already pending in other Courts. Further non-discloser of the same in the plaint is malafide and disentitles the plaintiff to any relief.

(14) In support of his first contention counsel for the defendant has submitted that in an action for passing off there has always to be a claim for damages. In the plaint in the present suit, the plaintiff has not claimed any specific amount on account of damages. To support this contention, a reference has been made to the plaint in the suit. From the plaint, counsel for the defendant has tried to show that no claim for damages has been made and, therefore, the passing off action must fail. My attention has also been invited to a passage in Bullen and Leak on Pleadings to emphasise that there are five requirements in a suit for passing off. These very requirements have also been referred to in a passage in Erven Warning by Versus Townsend and Sons (Hull)Ltd. (1979)2 AII.E.R.927 at page 932 which is to the following effect :- "MYLords, <ORG> vs. <ORG> and the later cases make it possible to identify five characteristics which must be present in order to create a valid cause of action for passing off: (l)a misrepresentation (2) made by a trader in the course of trade, (3) to prospective customers of his or ultimate consumers of goods or services supplied by him (4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and (5) which causes actual damage to a business or goodwill of the trader by whom the action is brought or (in a quia timet action) will probably do so."

(15) It is further submitted that each of the above Five requirements or characteristics stand independently and have to be met independently of each other. To illustrate the point, it is submitted that a defendant may admit the First four requirements and say that since no claim for actual damages to the business or goodwill of the plaintiff has been made, the action must fail. In reply to this argument, counsel for the plaintiff has submitted that the nature of the plaintiff's claim in the suit and the defendant's offending action is such that it is difficult to specify the amount of damages in the plaint. The exact amount can not be ascertained and, therefore, can not he stated in the plaint. That is why, it is submitted that the plaintiff has stated in para 19 of the plaint as under:- "THAT the actual amount of the profits earned by the defendant by misusing the plaintiff's trade name/logo can be ascertained only on the defendant rendering true and honest accounts to the Court. However, the plaintiff estimates that the defendant may have earned about Rs.20.00 lacs by trading upon the plaintiffs reputation and by infringing its copyright. Such gains of the defendant are plaintiffs losses.' (16) By reference to para 22 of the plaint which is the prayer clause in the suit it is pointed out that the plaintiff has undertaken to pay the requisite court fee on the amount due to the plaintiff on account of loss/damages being ascertained after the defendant has rendered account. This according to the counsel for the plaintiff also meets requirements as per Order 7 Rule 2 of the Code of Civil Procedure. Thus according to counsel for the plaintiff, the argument on behalf of the defendant that there is no pleadings or claim regarding damages is without any merit or substance. The overall view has to be taken on the basis of the pleadings and the prayer in the suit, to hold whether the requirement of Order 7,Rule 2, Civil Procedure Code . has been met. In the alternative counsel for the plaintiff submits that proof of actual damages is not a sine qua non for an action for passing off. For this, he relies on <ORG> and Company, . In the said judgment, <ORG> of this Court has held as under:- "IN our view the proof of actual damage or fraud is unnecessary in a passing off action whether the relief asked for is injunction alone or injunction, accounts and damages. If there is a likelihood of the offending trade mark invading the proprietary right, a case for injunction is made out. We are fortified in coming to this conclusion by the observations in a bench decision of this Court in <ORG> Vs. <NAME>, 2nd (1974)1 Delhi 545."

(17) In <ORG> Versus <ORG>, it has been noted with approval by a Division Bench of <ORG> that actual sufferance of damages can not be established on the date of the institution of the suit. The Court can not ignore the fact that damages would be suffered by the plaintiff.

(18) Having regard to the provisions of law, and in the light of the submissions made by the Counsel for the parties, I am of the view that the plaintiff has pleaded the necessary facts which could be pleaded at this stage and the plaintiff can not be non suited on the basis of arguments advanced on behalf of the defendant. At this initial stage the plaintiff can not ascertain the exact amount of loss/damages and, therefore, can not claim in the plaint any specific amount by way of loss/damages. The plaintiff has sought relief of rendition of account and has also pleaded that the gain of the defendant is loss of the plaintiff. Therefore, if the plaintiff ultimately succeeds and the accounts are rendered, it will be possible to ascertain the exact amount of loss/damages suffered by the plaintiff and the plaintiff has undertaken to pay the requisite court fee on the basis of the ascertained amount. "The view taken by me is supported by the aforesaid two decisions of the Delhi and <ORG>. It is in view of the difficulty of the plaintiff to ascertain the exact amount of loss/damage at the stage of filing of the suit that the Courts have laid down that no claim for specific amount can be made in the suit. Whatever was required to be said for the purpose of making a claim on account of loss/damage has been said in the plaint. Therefore, the first contention of the defendant regarding plaintiff's failure to plead the necessary ingredients for passing off action fails and is hereby rejected.

(20) The next contention urged on behalf of the defendant is that a passing off action can lie only with regard to goods and not for services. It is submitted that neither the plaintiff nor the defendant is trading in any goods. Both the parties are carrying on business as transporters and as such are providing services. Therefore a passing off action does not lie.

(21) I find myself unable to agree with the proposition that a passing of action must relate only to goods. Even in case of business of rendering services there can be passing-off. Suppose somebody is carrying on business as caterers in a particular name. Another party starting same business in same name or in a deceptively similar name is likely to harm the business, reputation and goodwill of the other party and there is no reason why such activity be not prevented. In <ORG> Versus <ORG>, 29 R.P.C. 289 an injunction was granted against the defendant regarding use of the word '<ORG>' in its name because the same was likely to mislead or deceive the public into the belief that the defendants were the same company as the plaintiffs. The facts in this case were that M/s <ORG> Miller & Company Ld. carried on the business of caterers. They brought an action against <ORG> Ltd. who also traded as caterers to restrain them from carrying on business under that name. Thomas <ORG> had been one of the Assistant Managers of the plaintiff company. He left the plaintiff on the expiry of his agreed term of service and took steps to obtain the formation of the defendant company, with himself as Managing Director and having the same objects as the plaintiff company. In a way the facts of this case are quite similar to those of the present case. It was held that the defendant's use of the name Thomas <ORG> Company Ltd. was likely to deceive the public and, therefore, injunction was granted to restrain the defendant company from carrying on business under their registered name or any other name resembling plaintiff's name and likely to mislead the public into the belief that the business carried on by the defendant company was the same as the business carried on by the plaintiff company, or in any way connected therewith.

(22) In M/s <ORG> Vs. <ORG>, , this Court has also held that a passing off action need not merely relate to goods. This view also find support from a judgment of <ORG> in Re. <ORG> <ORG>, 1931 Vol.48 R.P.C. page 555. In view of the aforesaid legal position the second contention of counsel for the defendant also fails and is hereby rejected.

(23) The next point urged by the counsel for the defendant is that there can be no specific right with regard to a name and in this connection, it is further urged that the word 'Prakash' used by the defendant in its name is part of the name of the promoter of the defendant company and, therefore, there can not be any objection to the use of the said word. In this connection, at the outset I may put it on record that the defendant does not claim that the word 'Prakash' is being used in the sense that it is Hindi vernacular word meaning light. First the case of the defendant is that the word 'Prakash' is part of the name of <NAME> promoter of the defendant company and therefore, he is entitled to use the same. It is true that the word 'Prakash' very commonly occurs in Indian names and in that sence it is a generic word. There can not also be a dispute regarding the proposition that a generic word can acquire a secondary meaning in the trade and as such entitle the person for whom it has acquired a secondary meaning to restrain others from using it in connection with the same trade. However it will always remain a question of fact whether the use of generic word has acquired a secondary meaning as a trade name and whether its use by any party will or will not cause confusion. In the Registrar of Trade Marks Vs. Hamdard National Foundation, Air 1980 Delhi page 182 <ORG> of this Court had occasion to consider the same question in relation to name 'Safi'. The registration of the said word as a trade mark in relation to the products of the respondent in the appeal had been refused by the Registrar of Trade Marks on the ground that it was a generic word. It was held that though it could not be disputed that the word 'Safi' was a generic word meaning pure, fine, clear, yet the word 'Safi' had by its use by the respondent acquired special meaning and can be distinguished as used for the, goods of the respondent from those of other manufacturers. The Court further felt satisfied that the respondent had made out a case that its trade mark 'Safi' was capable of distinguishing his goods from those of others in the trade. The said word had over a course of period become associated with the goods of the respondents.

(24) Again in <ORG> (supra) the plaintiff claimed to be pioneer in the field of air compressors industry in India. The defendant company also used the word 'Khosla' and one of the defenses raised was that the word Khosla was part of the name of the promoter of the defendant company and as such they were entitled to use the same. The argument was precisely the same as in the present case that the defendants could not be restrained from using their own name. The argument was turned down by the Court. To the same effect, is the judgment of <ORG> in <ORG> (supra). In the said case also, the defendant claimed that '<NAME>' was their family name and on the basis of the said name they were using the same as a trade mark on their products. The case of the plaintiff was that the trade name of the plaintiff was widely advertised and had gained wide reputation for a number of years. The goods manufactured by the plaintiff as well as the defendant were similar. The class of buyers for the articles manufactured by both the parties and the out-lets from which they were sold were similar/same. An injunction was granted in favor of the plaintiff restraining the defendant from using trade mark '<NAME>' on its products. It was further observed that the defendants intentionally and dishonestly tried to pass off their goods as that of the plaintiff by use of the name '<NAME>'.

(25) I have also made reference to the case of Kingston Miller, (supra) where the defendant had the word 'Kingston' as part of his name, yet the defendant was restrained from doing business in its trade name of <ORG>.

(26) It follows from this that merely because a particular name is part of the name of the defendant, injunction cannot be refused in favor of the plaintiff who had been using that name much prior to the defendant and had established itself by that name in the trade.

(27) The question, however, remains as to whether the use of the word 'Prakash' by the plaintiff as a matter of fact acquired a secondary meaning so as to entitle the plaintiff for an injunction in its favor on the facts pleaded and secondly whether the user of the word 'Prakash' in its name by the defendant is bonafide. The plaintiff has pleaded that it was established in the year 1961 and has been carrying on business as transporters for the last more than 30 years. It has more than 3300 offices spread all over the country. It employs a large number of staff and is having extensive business. The amount spent on advertisement and promotion of business of the plaintiff itself runs between approximately Rs.l5 lakhs and Rs.21 lakhs during the previous three years. On the other hand admittedly the defendant company has been incorporated in October 1991 and started business thereafter. It is further pointed out on the basis of material placed on record and particularly the affidavit filed on behalf of the defendant that the defendant company has been floated by ex Directors and senior officers of the plaintiff. In fact, it is not disputed that 43% of the equity in the plaintiff company is still held by those who have floated/promoted the defendant company. The plaintiff's case is that the group which has floated the defendant company got into a position of minority in the plaintiff company and, therefore, having lost control of the plaintiff company, started same business in the name of the defendant. By using the word 'Prakash' in its name the defendant is deliberately and intentionally trying to bite into the business of the plaintiff. The promoters of the defendant company being ex Directors/employees of the plaintiff are in the know of its business secrets and its trade connections and they want to exploit the same. Therefore, it is submitted that the use of word 'Prakash' in the name of the defendant is not bonafide. So far as the fact that the defendant has been floated by ex Directors/employees of the plaintiff there is no dispute. Therefore, prima-facie the use of the word 'Prakash' in the name of the defendant does not appear to be bonafide. The use of the said word is prima-facie likely to create an impression in the mind of the clients that the defendant company belongs to the same group that is plaintiff's group, thus causing confusion in the mind of the clients and is likely to affect the business of the plaintiff adversly. The defendant is trying to justify the use of the word 'Prakash' on the basis of the fact that the same is part of the name of the promoters of the defendant company who in fact is stated to be the promoter of the plaintiff company itself. However, since the plaintiff company has by the use of word 'Prakash' in its name over a long period of time prima-facie acquired a right to use the said name, the defendant can not be permitted to carry on the same business under a similar trade name. Therefore, prima-facie, I hold that the word 'Prakash' has acquired a secondary meaning for the plaintiff in the trade on account of its use by the plaintiff over a long period of time and the use of the word 'Prakash' in the name of the defendant is not bonafide.

(28) Counsel for the defendant has submitted that his client has already stopped using the disputed logo and has also changed the style and manner of writing the word 'Prakash' so as to make it distinctly different from that of the plaintiff. Therefore, on this basis, he submits that the plaintiff has no cause of action any more. At this stage, I am of the view that the use of the word 'Prakash' is a dominant feature of the name of the defendant and merely a different style of writing the word 'Prakash' by the defendant as compared to the style of writing by plaintiff will not make much of a difference. The use of the word 'Prakash' itself is prima-facie offensive and the plaintiff is entitled to an injunction in its favor.

(29) Counsel for the defendant, however, submits that there is no balance of convenience in favor of the plaintiff because the class of customers involved is not likely to get confused or affected by the use of the word 'Prakash' in the name of the defendant. As per the trade practice, it is stated that forwarding notes are prepared by qualified persons in the office of the various clients who are big business houses and such persons are able to identify the transporters with whom they want to deal.

(30) However, in view of the nature of the business being identical, coupled with the further fact that even the office of both the parties at least in Delhi are located within close vicinity of each other, it is difficult to rule out the possibility of confusion. As already observed, the use of the word'Prakash' in the name of the defendant gives an impression even to an educated or qualified person that the defendant company belongs to the same group as the plaintiff. Therefore, I prima facie feel that the balance of convenience is also in favor of the plaintiff and demands that an injunction be granted in favor of the plaintiff to save its business and goodwill, <ORG> case reported in 1989(2) AII.E.R.650 cited by the defendant in support of its case does not help the defendant. The facts of the case are totally different. In <ORG> case, a bank incorporated in Switzerland with word <ORG> in its name was sought to be restrained in an action for passing off by <ORG> Bank (Overseas) incorporated in Pakistan from using the words <ORG> in its operations in England on the ground that the overseas bank had the exclusive right in England to the reputation in the <ORG> name. The action failed on the ground that the goodwill and reputation of the plaintiff's branch in England did not become exclusive property of that branch. The plaintiff therefore, could not claim on behalf of the overseas bank, the exclusive right to use the name <ORG> in respect of banking business in England. The facts of the case in hand are totally different. Here both the parties are engaging in business in the same territories and are in direct competition.

(31) It further follows from the above discussion that unless the plaintiffs right to its trade name is protected the plaintiff is likely to suffer an irreparable loss and injury.

(32) This brings me to the fourth contention of the defendant. The defendant has referred to certain pages from the telephone directory to show that under the category of transporters there are other concerns mentioned therein who use the word 'Prakash' with their names. On this basis, it is submitted that the plaintiff can not be allowed to pick on the defendant alone and restrain the defendant from doing its business. This argument to my mind has no force. Merely because no action is taken against certain other parties, it does not mean that the plaintiff is not entitled to take action against the defendant. The other parties may not be affecting the business of the plaintiff. They may be small-time operators who really do not matter to the plaintiff. Therefore, the plaintiff may not chose to take any action against them. On the contrary the plaintiff feels danger from defendant in view of the fact that the defendant's promoters are the ex Directors/employees of the plaintiff who are fully in the know of the business secrets of the plaintiff. Therefore, the mere fact that the plaintiff has not chosen to take any action against such other parties cannot disentitle the plaintiff from taking the present action. This contention is, therefore, prima-facie without any merit and is rejected.

(33) Now, only the last point raised by counsel for the defendant remains to be dealt with. Great emphasis has been put on the conduct of certain present directors of the plaintiff in wresting control of its management from Mr.<NAME> who founded the plaintiff. It is not disputed that those in control of the plaintiff and the defendant are the members of the same larger family or a closely related group. It is also not disputed that groups have emerged within that larger family leading to inter se rivalry and tug of war regarding control of management of th this litigation is pending in other courts. It has also been urged that Shri <NAME> the founder of the plaintiff company has been stabbed in the back and deprived of the position of Chairman of the plaintiff company. Be that as it may, in the present case I feel I am concerned with the legal rights of the plaintiff in protecting its name and goodwill. I have dealt with the matter purely from that angle. Therefore, inter se disputes or pending litigation in other Courts I do not consider relevant.

(34) It has also been mentioned that the present suit is a counter blast to a similar suit pending in Bombay for passing off filed by a sister concern the defendant having word 'Prakash' in its name against a sister concern of the plaintiff. I feel that the said suit will be decided on its own merits and pendency of that suit can not be a ground to non-suit the plaintiff before me.

(35) For the same reason, non-disclosure in the plaint about the pendency of the litigation between the family members at Bangalore and the passing off suit at Bombay, can not be fatal to plaintiffs case. The plaintiff has come to this Court on the basis of a specific case claiming an exclusive right in the use of the word 'Prakash' in its name in relation to transport business. I have prima-facie found that the plaintiff has such a right. Therefore, the plaintiff is entitled to succeed at this stage.

(36) The result of the above discussion is that the interim order dated 5th December, 1991 is confirmed till the disposal of the suit. I.A. 14519/91 is allowed and I.A. 14690/91 is dismissed. In the circumstances of the case, there will be no order as to costs.

(37) I may note here that the above-view is a prima-facie view of the matter for the purpose of deciding the interim applications and the same will be subject to final decision of the suit.


PETITIONER: <NAME> DUTTA Vs. RESPONDENT: <NAME> AND OTHERS DATE OF JUDGMENT: 18/09/1958 BENCH: <NAME>, T.L. VENKATARAMA BENCH: <NAME>, T.L. VENKATARAMA GAJENDRAGADKAR, P.B. SARKAR, A.K. CITATION: 1959 AIR 24 1959 SCR 1309 CITATOR INFO : R 1973 SC2609 (21) ACT: Grant-Construction- Patni settlement-Chaukidari Chakaran lands-Resumption and transfer to Zamindar-Grant of the lands by the Zamindar on Patni to Person who held the village in Patni settlement-Distinct Patni-Sale of lands for arrears of revenue-Validity-Bengal Patni Taluks Regulation, 1819 (Ben. Regulation VIII of 1819), ss. 8, 14-Village Chaukidari Act, 1870 (Ben. VI of 1870), ss. 48, 50, 51. HEADNOTE: The lands in question are situate in lot Ahiyapur which is one of the villages forming part of the permanently settled estate of Burdwan and had been set apart as Chaukidari Chakaran lands to be held by the Chaukidars for rendering service in the village as watchmen. At the time of the permanent settlement the income from these lands was not taken into account in fixing the jama payable on the estate. Some time before the enactment of the Bengal Patni Taluks Regulation, 1819, the entire village of Ahiyapur was granted by the then 1310 Zamindar of Burdwan, to the predecessors-in-title of the defendants on Patni settlement. In 1870 the Village Chaukidari Act came into force and acting under the provisions of that Act the Government put an end to the services of the Chaukidars resumed the lands and imposed an assessment thereon, and, subject to it, transferred the lands to the Zamindar. On June 3, 899, the Zamindar granted the suit lands on Patni to the predecessors-in-title of the defendants who were the then holders of the village in Patni. In proceedings taken by the Zamindar under the provisions of the Bengal Patni Taluks Regulation, 1819, the suit lands were brought to sale for arrears of rent and purchased by him. On February I3, 1941, the Zamindar sold the lands to the appellant who sued to recover possession thereof from the defendants. The defendants resisted the suit on the ground, inter alia, that the effect of the grant of the Chaukidari Chakaran lands on June 3, 1899, was to make them part and parcel of the Patni settlement of the village of Ahiyapur and that, in consequence, the sale of those lands, apart from the village of Ahiyapur, was bad as being a sale of a portion of the Patni. Held, that when the Zamindar made a grant of the Chaukidari Chakaran lands which formed part of a village which had previously been settled in Patni, it was open to the parties to agree that those lands should form a new and distinct Patni and the result of such an agreement would be that while the grantee would hold those lands in Patni right, that is to say, that the tenure would be permanent, heritable and alienable, so far as his liability to pay jama and the corresponding right of the Zamindar to sell it under the Regulation if there was a default in the payment thereof were concerned, the new grant would be a distinct Patni, independent of the original Patni. Held, further, that construing the grant dated June 3, 899, as a whole, the intention of the parties as expressed therein was that the Chaukidari Chakaran lands were to be treated as a distinct Patni and that, therefore, the sale of the lands for arrears of rent was valid. JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 108 of 1954. Appeal from the judgment and decree dated March 21, 1952, of <ORG> in Appeal from Appellate Decree No. 971 of 1950, arising out of the judgment and decree dated August 29, 1950, of <ORG> in Title Appeal No. 247/16 of 1948 against judgment and decree dated September 25, 1948, of <ORG>, in Title Suit No. 7 of 1946/27 of 1947.

<NAME>

<NAME> and <NAME>, for the appellant. <NAME> and <NAME>, for the respondents. 1958. September 18. The Judgment of the Court was delivered by <NAME> is an appeal by the plaintiff against the judgment of <ORG> in a second appeal which, in reversal of the judgments of the Courts below dismissed his suit, which was one in ejectment. The suit property is a Mahal of the extent of 84 Bighas 18 Cottas situated within lot <NAME> village, which is one of the villages forming part of the permanently settled estate of <NAME>. This village was granted by the Maharaja of <NAME> in Patni settlement to the predecessors- in-title of defendants I to 7. The exact date of this grant does not appear, but it is stated that it was sometime prior to the enactment of the Bengal Patni Taluks Regulation, 1819 (Bengal Regulation VIII of 1819), hereinafter referred to as the Regulation, and nothing turns on it. The Mahal with which this litigation is concerned, had been at or prior to the permanent settlement set apart as Chaukidari Chakaran lands; that is to say, they were to be held by the Chaukidars for rendering service in the village as watchmen. In 1870, the Village Chaukidari Act, 1870 (Ben. VI of 1870), hereinafter referred to as the Act, was passed, and s. 48 of that Act provides that all Chaukidari Chakaran lands assigned for the benefit of any village shall be transferred to the zamindar of the estate in the manner and subject to the provisions contained in the Act. Under s. 50, the Collector is authorized to make an order transferring those lands to the Zamindar after determining the assessment payable thereon, and s. 51 enacts that: " Such order shall operate to transfer to such zamindar the land therein mentioned subject to the amount of assessment therein mentioned, and subject to all contracts theretofore made, in respect of, under, or by virtue of, which any person other than the zamindar may have any right to any land, portion of his estate, or tenure, in the place in which such land may be situate. " In accordance with the provisions aforesaid, the suit properties were transferred to the Maharaja of <NAME>, and on June 3,1899, he granted the same to the predecessors-in- title of defendants I to 7, who at that time held the Patni interest in respect of lot <NAME>. Under the grant which has been marked as exhibit B, the yearly rental for the area was fixed at Rs. 126-8 as., out of which Rs. 84-4 as., had to be paid to the Panchayat within the 7th of Baisakh for being credited to <ORG> and the balance of Rs. 42-4 as., was to be paid to the Zamindar within the month of Chaitra. Exhibit B also provides that in default of payment of kist the lands are liable to be sold in proceedings taken under the Bengal Regulation VIII of 1819. Acting under this clause, the Maharaja applied under s. 8 of the Regulation to bring the suit lands to sale for realisation of arrears, and at the auction held on May 15, 1937, himself became the purchaser. On February 13, 1941, he granted the lands again on Patni to the appellant, who filed the suit, out of which the present appeal arises, in <ORG>, <NAME>, to recover possession thereof from the defendants alleging that they had trespassed thereon. The respondents contested the suit on the ground that, in fact, there were no arrears of rent due under Exhibit B, and that the sale was therefore void.

The Subordinate Judge held that there were arrears of rent due from the respondents, and that further as they had not sued to set aside the sale under s. 14 of the Regulation within the time limited by law, they could not set up its invalidity as a defence to the action in ejectment. The defendants preferred an appeal against this judgment to <ORG>, and there raised a new contention that under the grant, Exhibit B, the suit lands became part of lot <NAME>, and that a sale of those lands was illegal as being a sale of a portion of the <ORG>. The District Judge after observing that the point was taken for the first time, held on a construction of Exhibit B that it created a new <ORG>, and that it could therefore be brought to sale, and he also held that s. 14 of the Regulation operated as a bar to the validity of the sale being questioned on the ground that the rent claimed was not, in fact, due. He accordingly dismissed the appeal. The respondents took the matter in second appeal to <ORG>, and that was heard by a Bench consisting of <NAME> and <NAME> who differed from the District Judge both on the construction of Exhibit B and on the bar of limitation based on s. 14 of the Regulation. They held that the effect of Exhibit B was merely to make the suit lands part and parcel of the <ORG> lot <NAME>, and that, therefore, the sale of those lands only was bad, as being a sale of a part of the <ORG>. They further held that as such a sale was void, s. 14 of the Regulation had no application. They accordingly allowed the appeal, and dismissed the suit. It is against this judgment that the present appeal has been brought on a certificate granted by <ORG> under Art. 133(1)(a).

Mr. <NAME> for the appellant urged the following contentions in support of the appeal: (1) The defendants did not raise either in the written statement or during the trial, the plea that under the sanad, Exhibit B, the Chaukidari Chakaran lands comprised therein became part of the Patni settlement of lot Ahiyapur, and, in consequence, their sale was bad as being of a part of the Patni, and the learned Judges should not have allowed that point to be raised in appeal. (2) Exhibit B properly construed must be held to create a new Patni distinct from lot Ahiyapur, and its sale is therefore valid. (3) Assuming that the sale is invalid as being of a part of a tenure, the only right of the defendants was to sue to have it set aside, as provided in s. 14 of the Regulation, and that not having been done, it is not open to them to attack it collaterally in these proceedings.

We see no substance in the first contention. It is true that the defendants did not put forward in <ORG> the plea that the effect of Exhibit B was to incorporate the suit lands in lot Ahiyapur <NAME>, and that, in consequence, the sale was illegal as being of a part of the <NAME>. On the other hand, the written statement proceeds on the view that Exhibit B created a new <NAME> unconnected with lot Ahiyapur, and the only defence raised on that basis was that no arrears of rent were due under Exhibit B, and that the sale was therefore invalid. But the true nature of the grant under Exhibit B is a matter to be decided on a construction of the terms of the document, and that is a question of law. It is argued for the appellant that it would be proper in determining the true character of the grant under Exhibit B to take into account surrounding circumstances, that to ascertain what those circumstances are, it will be necessary to take evidence, and that, in consequence, a question of that kind could not be permitted to be agitated for the first time in appeal. But it is well-settled that no evidence is admissible on a question of construction of a contract or grant, which must be based solely on the terms of the document, there being no suggestion before us that there is any dispute as to how the contents of the document are related to existing facts. Vide Balkishen Das v. <NAME> (1) and <CITATION> (2). It should, moreover, be mentioned that when the defendants sought to raise this contention in their appeal in <ORG>, no objection was taken by the plaintiff thereto. Under the circumstances, the learned Judges were right in allowing this point to be taken. This contention must therefore be rejected.

The next point for determination is as to the true character of the grant under Exhibit B, whether it amounts to a new Patni with reference to the Chaukidari Chakaran lands as contended for by the appellant, or whether it incorporates those lands in the Patni of lot <NAME>, so as to make them part and parcel of the lands comprised therein, as is maintained by the respondents. To appreciate the (1) (1899) L.R. 27 I.A. 58, 65.

(2) (1917) L.R- 44 I.A. 236, 243.

true position, it is necessary to examine what the rights of the Zamindar and of the Patnidar were with respect to Chaukidari Chakardan lands at the time of the grant, Exhibit B. These lands had been originally set apart as remuneration for the performance of services by the village chaukidars as watchmen, and for that reason when the village was granted to the Zamindar in permanent settlement, the income therefrom was not taken into account in fixing the jama payable by him, though they passed to him under the permanent settlement. Then came the Village Chaukidari Act, and under that Act the <ORG> put an end to the services of the Chaukidars as village watchmen, resumed the lands and imposed assessment thereon, and, subject to it, transferred them to the Zamindar; and where the Zamindar had already parted with the village in which the lands were situate, by granting Patni, it became necessary to define the rights of the Zamindar and the Patnidar with reference to those lands. Dealing with this matter, s. 51 of the Act provides that the title of the Zamindar on resumption and transfer by the <ORG> shall be subject to " all contracts theretofore made ". Under this section, the Patnidar would be entitled to the Chaukidari Chakaran lands in the same right and on the same terms on which lie held the village in which they are situate. The nature of this right has been the subject of consideration in numerous authorities, and the law on the subject is well-settled. <CITATION> (1), it was held by <ORG> that though the reservation under s. 51 is of rights under contracts made by the Zamindar and the word " contract " primarily means a transaction which creates personal obligations, it might also refer to transactions which create real rights, and that it was in that sense the word was used in s. 51 , and that accordingly the Patnidar was entitled to institute a suit against the Zamindar for possession of those lands and was not obliged to suit for specific performance. But this does not mean that the Patnidar is (1) (1918) L.R. 45 I.A. 162.

<NAME>

entitled to hold the lands free of all obligations. He is under a liability to pay to the Zamindar the assessment due thereon, when it is fixed under s. 50 , and also a share of profits. <CITATION> (1), where it was held by <ORG> that when Chaukidari Chakaran lands included in a Patni settlement had been resumed and transferred to the Zamindar under s. 51 of the Act, he is entitled to the payment of a fair and equitable rent in respect thereof, and that the fixing of the rent is a condition to the <NAME> being put in possession. Vide also <NAME> v. <NAME> (2) and <CITATION> (3).

These being the rights and obligations of the Zamindar and the Patnidar under s. 51 of the Act, a grant of the Chaukidari Chakaran lands by the former to the latter serves, in fact, two purposes. It recognises that the grantee is entitled to hold those lands by virtue of his title as Patnidar of the village of which they form part, and it fixes the amount payable by him on account of assessment and share of profits. The question then arises as to what the exact relationship is in which the new grant stands to the original Patni grant. Now, when s. 51 of the Act recognises and saves rights which had been acquired under contract with the Zamindar, its reasonable implication is that the rights so recognised are the same as under the contract, and that, in consequence, the settlement of the Chaukidari Chakaran lands in Patni must be taken to be a continuance of the Patni of the village in which they are included. But it is open to the parties to agree that the Chaukidari Chakaran lands should form a new and distinct Patni, and the result of such an agreement will be that while the grantee will hold those lands in Patni right, that is to say, the tenure will be permanent, heritable and alienable so far as his liability to pay jama and the corresponding right of the Zamindar to sell it under the Regulation if there is any default in the (1) (1925) L.R. 52 I.A. 355. (2) (1906) 14 C.W.N. 995. (3) (1910) I.L.R. 37 Cal. 598.

payment thereof are concerned, the now grant will be an entity by itself independent of the original <ORG>. That that could be done by agreement of parties is well-settled, and is not disputed before us. If that is the true position, then the real question to be considered is, what is the agreement of parties with reference to the Chaukidari Chakaran lands, whether they are to be constituted as an independent <ORG> or whether they should be treated as a continuation of the original <ORG> or an accretion thereto, and the answer to it must depend on the interpretation to be put on the grant.

It is now necessary to refer to the material terms of Exhibit B under which the Chaukidari Chakaran lands were granted to the predecessors of respondents I to 7. It begins by stating that the Patnidars of lot Ahiyapur appeared before the Zamindar and ,prayed for taking Patni settlement of the said 84 Bighas 18 Cottas of land at a yearly rental of Rs. 126/8 as.", and then provides how the amount is to be paid. Then there is the following clause, which is important:

"You will pay the rent etc., <NAME> after <NAME> according to the <NAME>bandi in accordance with law, and if you do not pay the same, I will realise the arrears together with interest and costs by causing the aforesaid lands to be sold by auction by instituting proceedings under Regulation VIII of 1819 and other laws which are in force or will come into force......"

Then follow provisions relating to the transfer by the Patnidars of " the aforesaid lands ", succession by inheritance or by will to " the aforesaid lands " and the registration of the name of the transferee or successor in the Sherista, and it is expressly stated that "so long as the name of the new Patnidar is not recorded in the Sherista, the former Patnidar whose name is recorded in the Sherista will remain liable for the rent, and on a sale of the Mahal by auction on institution of proceedings against him under Regulation VIII of 1819 or any other law that will be in force for realisation of arrears of rent, no objection thereto on the Part of the new Patnidar can be entertained."

Then ,there are two clause on which on the respondents rely, and they are in these terms:

" If in future it transpires that any other persons besides yourselves have Patni rights in the Patni interest of the, said lot <NAME>, such persons shall have Patni rights in these Chakaran lands also to the same extent and in the same manner as they will be found to have interests in the Patni of the aforesaid lot, and if for the said reason any person puts forward any claim against the Raj Estate and the Raj Estate has to suffer any loss therefor, you will make good the said claim and the loss without any objection. If in future the Patni interest in the said lot <NAME> be transferred for liability for arrears of rent or if the same comes to an end for any reason, then your Patni interest in these Chakaran lands also will be transferred or will come to an end alongwith the original Patni ,simultaneously." It is on these two clauses that the learned Judges in the Court below have based their decision that the intention of the par-ties was to treat the suit lands as part of the Patni of lot <NAME>. Now, it cannot be disputed that the two clauses aforesaid afford considerable support to the conclusion to which the learned Judges have come. The first clause provides that if besides the grantee under Exhibit B there were other persons entitled to Patni rights in lot <NAME>, those persons also shall have Patni rights in Chaukidari Chakaran lands to the same extent as in Patni <NAME>. That clearly means that the rights conferred on the grantees under Exhibit B have their roots in the Patni lot of <NAME>. Likewise, the provision in the last clause that the grantees will lose their rights to the Chaukidari Chakaran lands if their interest in <NAME> Patni was sold clearly suggests that the grant under Exhibit B is to be an annexe to the grant of <NAME>.

As against this, the appellant argues that the other clauses in Exhibit B quoted above strongly support his contention, and that when the document is read as a whole, it unmistakably reveals an intention to treat the suit lands as a distinct Patni. We must now refer to these clauses. Exhibit B begins by reciting that the grantees desired to take a Patni settlement of 84 Bighas 18 Cottas, which is some indication, though not very strong, that it is to be held as a distinct entity. We have then the clause which provides that when there is default in the payment of kist, the lands are liable to be sold in proceedings instituted under the Regulation. Now, the law had long been settled that a sale of a portion of a Patni is bad, but that if by agreement of all the parties interested different portions thereof are held under different sadads, which provide for sale of those portions for default in pay- ment of kist payable respectively thereon, then each of those sanads might be held to have created a separate Patni in respect of the portion comprised therein. <NAME> v. Mr. <NAME>) and <NAME> and another v. Mr. <NAME> (2). When, therefore, the Zamindar and the Patnidar agreed under Exhibit B that the lands comprised therein could be sold under the Regulation when there was default in payment of kist fixed therefor, they must clearly have intended that those lands should be constituted into a distinct Patni. Otherwise, the clause will be inoperative and void, and indeed, the learned Judges in the Court below have, on that ground, declined to give any effect to it. Now, it is a settled rule of interpretation that if there be admissible two constructions of a document, one of which will give effect to all the clauses therein while the other will render one or more of them nugatory, it is the former that should be adopted on the principle expressed in the maxim " ut res magis valeat quam per-eat ". What has to be considered therefore is whether it is possible to give effect to the clause in question, which can only be by construing Exhibit B as creating a separate Patni, and at the same time reconcile the last two clauses with that construction. Taking first the provision that if there be other persons entitled to the Patni of lot Ahiyapur they are to have the same rights in the land comprised in Exhibit B, (2) (1873) 20 Weekly Reporter 275.

that no doubt posits the continuance in those persons of the title under the original <ORG>. But the true purpose of this clause is, in our opinion, not so much to declare the rights of those other persons which rest on statutory recognition, but to provide that the grantees tinder the document should take subject to those rights. That that is the purpose of the clause is clear from the provision for indemnity which is contained therein. Moreover, if on an interpretation of the other clauses in the grant, the correct conclusion to come to is that it creates a new <ORG> in favour of the grantees thereunder, it is difficult to see how the reservation of the rights of the other <ORG>dars of lot Ahiyapur, should such there be, affects that conclusion. We are unable to see anything in the clause under discussion, which militates against the conclusion that Exhibit B creates a new <ORG>.

Then there is the clause as to the cesser of interest of the grantees in the Chaukidari Chakaran lands when their title to lot <NAME> comes to an end, and according to the respondents, this shows that under Exhibit B the Chaukidari Chakaran lands are treated as part and parcel of the <NAME> Patni. If that were so, a sale of lot <NAME> must carry with it the Chaukidari Chakaran lands, they being ex hypothesi, part and parcel thereof, and there was no need for a provision such is is made in the last clause. But that clause would serve a real purpose if the Patni under Exhibit B is construed as separate from that of lot <NAME>. In that view, when the major Patni of lot <NAME> is sold, the intention obviously is that the minor Patni under Exhibit B, should not stand out but be extinguished,-a result which could be achieved only by a special provision. We should finally refer to the clauses in Exhibit B providing for transfer of or succession to the Chaukidari Chakaran lands and for the recognition of such transferee or successor as a Patnidar of those lands. It is clear from these provision,s that such a transferee or successor is to hold the lands as a Patnidar, different from the Patnidar of lot <NAME>. Reading these clauses along with the last clause, it seems clear that the intention of the parties was that while a transfer of the <NAME> Patni by sale should extinguish the title of the holders of the Chaukidari Chakaran lands a transfer of these lands would have no effect on the title to the lot <NAME> Patni. Construing Exhibit B, as a whole, we are of opinion that the intention of the parties as expressed therein was that the Chaukidari Chakaran lands should be held as a distinct Patni. We must now refer to the decision on which the learned Judges in the <ORG> below have relied in support of their conclusion. <CITATION> (1), the facts were that the Maharaja of Burdwan had created a Patni of lot <NAME> in 1820. The Chaukidari Chakaran lands situated within that village were resumed under the Act and transferred to the Zamindar who granted them in 1899 to one <NAME> in Patni on terms similar to those in Exhibit B. In 1914 the Patni lot <NAME> was sold under the Regulation, and purchased by Sint. <NAME>. She then sued as such purchaser to recover possession of the Chaukidari Chakaran lands. The defendants who represented the grantees under the Patni settlement of 1899 resisted the suit on the ground that the sale of Patni <NAME> did not operate to vest in the purchaser the title in the Chaukidari Chakaran lands, as they formed a distinct Patni. Dealing with this contention, <NAME> who delivered the judgment of the <ORG>, observed :

concerned to alter the terms of the original patni if they chose to do so; and what we have to see is whether that was done. In order to do that, we have to examine the terms of the pattah by which the Chaukidari Chakaran lands were granted to <NAME>."

The learned Judge then refers to the two clauses cor- responding to the last two clauses in Exhibit B, and comes to the conclusion that their effect was merely to, restore the position as it was when the original <ORG> was created, and that, in consequence, the purchaser was entitled to the <ORG> as it was created in 1820, (1) A.I.R. 1925 Cal. 807, and that the plaintiff was entitled to the possession of the Chaukidari Chakaran lands as being part of the <ORG>. Now, it is to be observed that in deciding that the Chaukidari Chakaran lands granted in 1899 became merged is lot <NAME>, as it was in 1820, the learned Judge did not consider the effect of the clause providing for sale of those lands as a distinct entity under the provisions of the Regulation when there was default in the payment of ret payable thereon under the deed, and that, in our opinion, deprives the deci- sion of much of its value. In the result, we are unable to hold that the two clauses on which the learned Judges base their conclusion are really inconsistent with the earlier clauses which support the view that the grant under Exhibit B is of a distinct <ORG>. Nor do we agree with them that the earlier clause providing for the sale of the Chaukidari Chakaran lands in default of the payment of jama, should be construed so as not to override the later clauses. If, in fact, there is a conflict between the earlier clause and the later clauses and it is not possible to give effect to all of them, then the rule of construction is well-established that it is the earlier clause that must override the later clauses and not vice versa. In <NAME> v. <NAME> (1), Lord <NAME> stated the rule in the following terms : " If in a deed an earlier clause is followed by a later clause which destroys altogether the obligation created by the earlier clause, the later clause is to be rejected as repugnant and the earlier clause prevails. In this case the two clauses cannot be reconciled and the earlier provision in the deed prevails over the later."

We accordingly hold that Exhibit B created a new Patni and that the sale of the lands comprised therein is not bad as of a portion of a, Patni.

We are conscious that we are differing from the learned Judges of the <ORG> below on a question relating to a local tenure on which their opinion is, by reason of the special knowledge and experience which they have of it, entitled to the greatest weight. It is also true that the decision in <NAME> v.

(1) [1922] 1 A.C. 256,259.

<NAME>

<NAME> (1) has stood now for over three decades, though it is pertinent to add that its correctness does not appear to have come up for consideration in any subsequent decision of <ORG>, prior to this litigation. But then, the question is one of construction of a deed, and our decision that the effect of an agreement of the kind in Exhibit B was to constitute the Chaukidari Chakaran lands into a distinct Patni will not result in any injustice to the parties. On the other hand, the rule that a portion of a Patni should not be sold being one intended for the benefit of the Patnidars, there is no reason why an agreement entered into by them with the Zamindars providing for the sale of a portion, thereof-which is really to their advantage, should not be given effect to. Having anxiously considered the matter, we have come to the conclusion that Exhibit B creates a distinct Patni, that the sale thereof on May 15, 1937, is valid, and that the plaintiff has therefore acquired a good title to the suit lands under the grant dated February 13, 1941. In this view, it is unnecessary to express any opinion on the point that was the subject of considerable argument before us as to whether it is open to the defendants to raise the invalidity of the sale held on May 15, 1937, in answer to this action, they not having taken steps to have set it aside, as provided in s. 14 of the Regulation.

In the result, the appeal is allowed, the judgment of the lower Court reversed and that of the District Judge restored, with costs throughout.

Appeal allowed.

(1) A.I.R. 1925 Cal. 807.

<NAME>


JUDGMENT <NAME>, J.

1. Both the above reference applications are disposed of by one single order as they relate to two different assessment years 1971-72 and 1975-76, but common question of law is involved in both these applications.

2. The Commissioner of Income-tax, Jaipur, has filed these applications under Section 256(2) of the Income-tax Act, 1961 (for short "the Act", hereinafter), for giving direction to <ORG>, Jaipur, to state the case and refer the following question of law for the opinion of this court: , "Whether, on the facts and in the circumstances of the case, the learned <ORG> was right in law in holding that no error, much less an error which is prejudicial to the interests of the <ORG>, has been established by the <ORG> and, therefore, the Commissioner of Income-tax was not justified in having exercised jurisdiction under Section 263 of the Income-tax Act ?"

3. Brief facts of the case are that the Commissioner of Income-tax passed an order under Section 263 of the Act on April 2, 1979, and another on September 15, 1979. for the two assessment years, namely, 1971-72 and 1975-76, respectively. The settlor of <ORG> (hereinafter referred to as "the Trust") acquired sole selling agency from <ORG> and deposited security to the tune of Rs. 50,000. The settlors were to receive commission on the sale of suga.. at 1.1/8%. The settlors then created a trust on November 3, 1964, by executing a trust deed and the right to receive the commission from the sole selling agency and the security of Rs. 50,000 was created for charitable purpose within the meaning of Section 2(15) of the Act. No return was filed under Section 139(1) of the Act for the assessment year 1971-72 by the assessee-trust as it thought that the entire income accruing to it was exempt under Section 11 of the Act. The Income-tax Officer then served a notice under Section 148 of the Act on the assessee. In response to the above notice, the assessee filed its return of income on February 25, 1974. The assessment was thereafter made by the Income-tax Officer on April 7, 1977, under Section 143(3) of the Act. The Income-tax Officer treated the assessee as a charitable trust within the meaning of Section 2(15) read with Section 11 of the Act and granted exemption. The Income-tax Officer similarly granted exemption to the assessee for the assessment year 1975-76. The intervening assessments were not made at all till then. The Commissioner of Income-tax initiated proceedings under Section 263 of the Act taking the view that the assessments made by the Income-tax Officer were erroneous as they were prejudicial to the interests of the <ORG>. The Commissioner of Income-tax held that the assessment orders passed by the Income-tax Officer were erroneous, as by these orders, the income which was assessable to tax had been declared to be exempt and it has resulted in loss of lawful revenue to the State. The Commissioner of Income-tax, as such, set aside the orders passed by the Income-tax Officer and gave direction to take proceedings for assessment de novo.

4. The assessee-trust, aggrieved against the orders of the Commissioner of Income-tax, filed two appeals before <ORG> in respect of both the assessment years. The <ORG> held that there was no error, much less any error which might be prejudicial to the interests of the <ORG>, on the facts and in the circumstances of the cases. The <ORG> further held that the Commissioner of Income-tax was not justified in having exercised jurisdiction under Section 263 of the Act. The <ORG>, as such, by order dated August 30, 1980, allowed both the appeals and set aside the orders passed by the Commissioner of Income-tax. The Commissioner of Income-tax filed two applications for making references to this Hon'ble court on the question of law referred to above, but these applications were also dismissed by the <ORG> by order dated August 31, 1981. In these circumstances, these reference applications have been filed by the Commissioner of Income-tax under Section 256(2) of the Act before this court.

5. <NAME>, learned counsel for the <ORG>, submitted that the learned <ORG> committed an error in holding that the assessee-trust derived income in accordance with the objects of the trust. It is submitted that the objects of the trust forbid the trustee from indulging in profit-earning activities. It was further submitted that the <ORG> committed an error in assuming without there being any evidence on record, that the assessee-trust received income by way of agency commission on sale of sugar manufactured by <ORG> in specified area. It was further argued by <NAME> that the learned <ORG> committed an error of law in holding that the activities of the assessee-trust in diverting back income received by it and then granting it by way of loans to the donees fulfilled any charitable object of the trust. It was further submitted that the Commissioner of Income-tax had rightly held that the Income-tax Officer did not make any inquiry as to whether the sole selling agency had been renewed by <ORG> in favour of the trust after April 30, 1966. The sole selling agency came to be terminated on May 1, 1969, and, as such, the same was not available to the assessee in the previous years. It was thus submitted that the income received by the assessee, having been derived from selling agency, could not be said to be property held in trust as settled by the authors of the trust. The Commissioner of Income-tax, in these circumstances, was right in giving directions to the Income-tax Officer to make inquiry and pass orders of assessment de novo before holding that the income of the assessee was exempt under Section 11 of the Act,

6. <NAME> further argued that the Commissioner of Income-tax had rightly placed reliance on a decision of <ORG> in <CITATION>  114 ITR 463. The Commissioner of Income-tax had rightly held that the authors of the trust have clearly reserved for themselves unfettered powers of utilising the income of the trust in their absolute discretion for any of the four objects mentioned in clause 5 read with clause 2 of the trust deed and such objects include the advancement of "any other object of general public utility" : whether or not they have actually exercised its powers is immaterial. Thus, the assessee-trust having also engaged itself in the advancement of any object of general public utility and involved itself in any activity for profit, the income of the trust forfeits exemption as provided in the Act. It was proved that the objects of the trust included the advancement of general public utility and it has extensively engaged in activities for profit, and, therefore, the income of the assessee is not exempt under Section 11 read with Section 2(15) of the Act.

7. On the other hand, Shri <NAME>, learned counsel for the assessee-trust, submitted that the view taken by their Lordships of <ORG> in Dharmaposhanam Company's case [1978] 114 ITR 463, has been overruled by a later decision of <ORG> in Addl. <CITATION>  121 ITR 1. It is submitted that the entire basis of the order of the learned Commissioner of Income-tax was Dharmaposhanam Company's case  114 ITR 463 (SC), but when <ORG> itself in <ORG> case  121 ITR 1, has held the same to be no longer good law, the entire order, of the Commissioner of Income-tax falls to the ground and no question of law survives for the opinion of this court. It was pointed out by <NAME> that it was nowhere the case of the <ORG> that the income derived by the assessee-trust has been utilised for any purpose other than charitable objects. There was a clear case of the assessee that after 1969, the assessee-trust has become the sole selling agent and continued to receive the commission income and there was no fundamental change in the character of commission income so far as the applicability of Section 11 of the Act is concerned.

8. <NAME> further contended that it was nobody's case that the assessee showed income which did not belong to it. In no case, can it be said that the commission income that was declared by the assessee in the returns was not income of the trust. It has already been held in <ORG> case [1980] 121 ITR 1 (SC), that if the profit-making activity is subservient to the charitable objects of general public utility, then the exemption has to be allowed under Section 11 of the Act. There is no dispute in the present cases about the application of the income. The profit-making activity was meant for achieving the charitable object of general public utility and such profit-making activity was not an end but only a means to achieve the charitable object of general public utility. It was thus contended that the <ORG> committed no error of law and no question of law arises from the order of the Income-tax Appellate <ORG>, dated August 30, 1980.

9. We have given our thoughtful consideration to the arguments advanced by learned counsel for the parties. The <ORG> considered the question whether there was any error in the order of the Income-tax Officer within the meaning of Section 263 of the Act and whether such error caused any prejudice to the interests of the <ORG>. In order to assume jurisdiction under Section 263 of the Act, two things have to be established, (i) that there is an error in the orders of the Income-tax Officer, and (ii) that the error is prejudicial to the interests of the <ORG>.

10. The Commissioner of Income-tax in respect of the assessment year 1971-72 pointed out an error in the order of the Income-tax Officer that the sole selling agency commission could have continued at the most up to the year 1969 and thereafter the trust could not have received any income by way of commission from the sole selling agency. The Commissioner of Income-tax pointed out that no investigation was made by the Income-tax Officer, whether the sole selling agency continued after the year 1969 and without inquiring into this vital aspect, the Income-tax Officer granted exemption under Section 11 of the Act. Another mistake pointed out by the Commissioner of Income-tax was that the assessee declared an income of Rs. 4,96,790, being sugar rate difference from <ORG>, Poona. In this regard, the Commissioner of Income-tax observed that the Income-tax Officer did not even make any inquiry as to whether the profits shown by the assessee resulted by purchase and sale of sugar by way of actual delivery or otherwise and not to talk of the verification of the profit declared before accepting the same. The Commissioner of Income-tax took the view that the name, "sugar rate difference", indicated that it was an income from a speculative business.

11. The <ORG>, in this regard, held as under:

"We are unable to understand as to how he says that commission income was not available to the assessee after May, 1969. No material has been pointed out on the record by the Commissioner of Income-tax to show that the assessee-trust could not have received and did not receive any commission income from the principal after May, 1969. Simply because in the agreement deed dated September 3, 1964, it was stipulated that the sole selling agency agreement will not be renewed for more than five years, the Commissioner of Income-tax was not justified in concluding that the assessee could not have received any commission income thereafter and that the property that was settled by the settlors with the trust had extinguished during the years under appeal. The right to receive the commission income is purely a matter of agreement. In a given agreement, which prohibited anything may be modified at any subsequent stage by agreement of the parties (sic). In short, any agreement can be modified and revised by a subsequent agreement. Simply because there was a provision for not continuing the sole selling agency for more than five years in the agreement deed dated September 3, 1964, the Commissioner of Income-tax was not right in concluding that the question of receiving the commission income during the years under appeal would not have arisen in terms of the agreement deed dated September 3, 1964. There would have been an error had the Commissioner of Income-tax brought any material on record that after May, 1969, no agreement was made with the principal for the continuance of commission income. In the absence of any material showing the contrary, the Commissioner of Income-tax concluded simply from the agreement deed dated September 3, 1964, that no commission income was received by the assessee-trust after May, 1969, and, therefore, the error arose in the orders of the Income-tax Officer. This conclusion is wholly unwarranted. The clear case of the assessee is that after 1969, the trust became the selling agent in contradiction to the sole selling agency and continued to receive the commission income and there was no fundamental change in the character of commission income so far as exempting provisions of Section 11 is concerned."

12. As regards the other mistake pointed out by the Commissioner of Income-tax, the <ORG> held that from a meticulous perusal of the observations of the Commissioner of Income-tax, it is obvious that he himself could not categorically say that the income of Rs. 4,96,790 represented income from speculative business. The Commissioner of Income-tax simply observed that the expression "sugar rate difference" occurring in the return of the assessee relating to the assessment year 1971-72 indicated that it was income from speculative business. The <ORG> held that a given expression may indicate something which may not be conclusive proof of anything. The error envisaged by Section 263 was not one which depended on possibility or guesswork but it should be actually an error either of fact or of law. Unless the Commissioner of Income-tax categorically says that there was some income from speculative business which could not qualify for deduction, much less exemption under Section 11 , it cannot be said that there was any error in the order of the Income-tax Officer relating to the assessment year 1971-72. This error was not relevant to the assessment year 1975-76.

13. In our view, the above findings recorded by the <ORG> are purely findings of fact based on material on record and no question of law arises in the matter of such findings.

14. Now, so far as the question of profit-making activities in order to advance any object of general public utility is concerned, the matter is now set at rest by the pronouncement of their Lordships of <ORG> in <ORG> case [1980] 121 ITR 1. The Commissioner of Income-tax had placed reliance on an earlier decision of <ORG> in <ORG> case [1978] 114 ITR 463, which is admittedly no longer good law. Had the case of <ORG> [1978] 114 ITR 463 (SC), been not overruled by <ORG> in <ORG> case [1980] 121 ITR 1, there would have been valid ground for a question of law arising in the present case but the said decision having been overruled, there remains no res integra for being considered by this court.

15. In the result, we find no force in these reference applications and the same are dismissed without any order as to costs.


JUDGMENT

1. The petitioners who have obtained the present Rule are the editor, the printer and the publisher of the Bengali newspaper called <ORG>. On the 23rd April 1926 an item headed "Telegram to the Nakhoda Mosque" was published in a conspicuous position at the top of a column. The petitioners were thereupon charged before the Chief Presidency Magistrate with having committed an offence under Section 153A of the I.P.C. The defence taken was that they published the telegram to draw the attention of the authorities to a piece of information received from a reliable source so that they might trace the persons responsible for the disturbances and find some means of securing peace between the two communities.

2. The learned Chief Presidency Magistrates took the view that the publication of this telegram did not fall within the explanation of Section 153A . But having regard to the circumstances of the case he came to the conclusion that it would be sufficient to deal with the petitioners under Section 562 of the Criminal P.C., and dismissed them with a warning not to publish rumours of this nature in future particularly at a time of tension. The telegram in question is in these terms:

It is rumoured that a certain Moslem has sent a telegram to <ORG> from Port Louis Mauritius to the following effect : 'Let the quarrel between Hindus and Moslems be carried on; whatever money will be spent, I will pay up on going. I am soon going to Calcutta. Will <ORG> cf the mosque disclose whether or not this telegram has come?

3. Now the defence taken by the petitioners was that this item of news was base upon a telegram which had been actually received in Calcutta from Mauritius and the telegraph officer has produced the original in Court. It is addressed to <NAME>, Nakhoda Masjid, Jakaria Street, Calcutta in these terms:

Wait, starting Naringa, take money for food Mirzapuri.

and is signed by <NAME> Mr. <NAME> who has appeared for the petitioners construes this message as meaning that the writer was shortly starting for Calcutta by the steamer "Naringa" and was bringing money with him to feed Mirzapuris by which he means goondas if that is the correct interpretation of the message the question is whether the editor of a paper is justified in translating it into the words which find expression in the paper. Beading the wording in the newspaper as a whole we think that this is a possible interpretation of the telegram.

4. The next question is whether in publishing a message of this kind the petitioners brought themselves within the scope of Section 153A . The learned Magistrate has expressed his view in this way:

If the accused honestly thought there was anything in it requiring investigation he could have given particulars of his information to the police. I cannot sea any honesty in this pretence of informing the authorities by quoting rumours. It is the obvious duty of a paper not to give currency to rumours at such times.

5. The editor of a newspaper has certain public duties, one of which is to publish matters-which it is to the public interest should be known and if he does so honestly he is evidently not liable to be dealt with by a criminal Court. Section 153A says that a person is liable under this section if he promotes or attempts to promote feelings of enmity or hatred between different classes of His Majesty's subjects. The explanation says that it does not amount to an offence within the meaning of this section to point out without malicious intention and with an honest view to their removal matters which are producing or have a tendency to produce feelings of enmity or hatred between different classes of His Majesty's subjects. It is well settled as Mr. <NAME>, the learned Counsel, who has appeared for the <ORG> has stated that the essence of an offence under this section and also under Section 108 of the Criminal P.C. is malicious intention.

6. In the recent case of <CITATION> A.I.R. 1926 Cal. 1133, <NAME>, makes the following observations : "In substance my opinion of this case" (he is referring to the prosecution of the paper "Forward"):

is that the newspaper here has given its readers in the ordinary way a perfectly legitimate and sensible piece of news without any intention to utilize that piece of news for the purpose of promoting or furthering class hatred and that even if the news is of such a character that it is possible to suppose that some people reading it may momentarily or foolishly be induced to entertain unreasonable feeling towards a class of other people, this is not enough to bring it within the mischief either of Section 153A of the I.P.C. or Section 108 of the Criminal P.C.

7. Applying that test to the present case we are of opinion that there is no indication of any such intention as to bring the case within the purview of Section 153A . Learned Counsel for the Crown has contended that that is not enough but that the petitioners must also show that the publication was with an honest view to remove certain matters which have a tendency to produce feelings of enmity between the various classes. If there is no malicious intention in the publication we think honesty of purpose may safely be inferred. Upon the facts found in the present case we are not satisfied that the action taken by the Magistrate in dealing with the petitioners was necessary. The order made under Section 562 should be vacated.

8. The rule is accordingly made absolute.