Court Declines Interim Injunction Restricting Trade Name Use but Orders Defendant to Maintain Accounts and Share Monthly Profit Statements Pending Final Adjudication
In a significant ruling on October 14, 2026, the Calcutta High Court, presided over by Justice Aniruddha Roy, clarified the jurisdiction and interim relief aspects in a dispute arising from a family settlement concerning the use of a trade name. The case, Ramji Lal Agarwal v. Sourav Agarwal, centered on allegations of breach of a family settlement restricting the use of the trade name "Sindharam Sanwarmal" within a one-kilometer radius of a specified shop located at 43/44 Cotton Street, Kolkata.
The petitioner, Ramji Lal Agarwal, contended that the respondent, Sourav Agarwal, breached the family settlement dated January 13, 2027, by conducting business under the name "Sindharam Sanwarmal Mewawala" from the shop in question, violating the agreed restriction. The family settlement, entered into by the legal heirs of the original business founder Mangilal Agarwal, expressly prohibited any party from using the trade name or its variations within the defined radius, thereby attempting to avoid intra-family commercial conflicts.
The respondent raised a preliminary objection regarding the maintainability of the suit in the Commercial Division, arguing that since the dispute involved a registered trademark "Sindharam Sanwarmal & Co," the suit should have been filed before the Intellectual Property Rights (IPR) Division in accordance with Section 134 of the Trade Marks Act and the relevant IPR Rules of the Calcutta High Court. The counsel for the respondent emphasized that intellectual property disputes, including those concerning trademarks, must be adjudicated by the IPR Division regardless of the commercial nature of the suit.
However, the Court, after a close examination of the plaint and the nature of the grievance, held that the suit did not allege trademark infringement or wrongful use of the trade name in a general sense. Instead, the grievance was confined to the breach of the family settlement clause relating specifically to the use of the trade name within a restricted geographical radius from the designated shop. The Court found no substantive allegation of trademark misuse or infringement beyond the breach of the family agreement. Therefore, the Court ruled that the dispute was essentially a commercial matter arising out of a family settlement and was thus maintainable before the Commercial Division.
On the question of granting interim relief, the Court declined the petitioner's request for an injunction restraining the respondent from using the trade name at the suit premises at this interlocutory stage. The Court observed that granting such an injunction would amount to granting final relief prematurely, which is impermissible without a full trial and fact-finding. The Court also refrained from conducting a mini-trial based on affidavits at this stage.
Nonetheless, the Court emphasized the necessity of equitable interim arrangements to protect the petitioner's interests pending final adjudication. It directed the respondent to maintain complete accounts of profits earned from the business operated under the trade name "Sindharam Sanwarmal Mewawala" at the shop and to segregate these profits in a separate business bank account. The respondent was permitted to utilize only 30 percent of the profits in the ordinary course of business. Furthermore, monthly statements of account detailing profits and their utilization were to be furnished to the petitioner's counsel by the 7th day of each succeeding month.
The Court also stipulated that any proposed assignment or transfer of the trade name by the respondent would require a one-month prior notice to be served on all parties to the family settlement and their legal heirs, thereby safeguarding the family members' rights under the agreement.
The judgment underscores the importance of distinguishing between trademark infringement disputes and contractual family settlement breaches concerning trade name use. It reiterates the principle that interlocutory injunctions should not be tantamount to final relief and highlights the role of courts in balancing equitable interim measures with procedural fairness.
The matter is now set for further hearing, with affidavits in opposition due by December 15, 2026, and affidavits in reply due by January 15, 2027. The next hearing is scheduled for February 2027 under the "New Motions" listing.
Bottom Line:
Family settlement restricting use of trade name within specified radius - Suit based on breach of family settlement and not on infringement of trademark is maintainable before Commercial Division and not necessarily before IPR Division - At interim stage, Court cannot grant injunction amounting to final relief; defendant directed to maintain accounts, set apart profits and furnish monthly statements.
Statutory provision(s):
Section 134, Trade Marks Act, 1999; Calcutta High Court Intellectual Property Rights (IPR) Rules; Family Settlement Agreement (Contract Law principles)
Ramji Lal Agarwal v. Sourav Agarwal, (Calcutta) : Law Finder Doc Id # 2997089
