Ramji Lal Agarwal v. Sourav Agarwal

What happened

The plaintiff alleged that the defendant was acting in breach of a family settlement, of 2017, under which the defendant's father had agreed that no business would be started with the trade name Sindharam Sanwarmal, with any prefix or suffix, within one kilometre of the existing shop at 43/44 Cotton Street, Kolkata, while the defendant admittedly carried on business as Sindharam Sanwarmal Mewawala from that shop. The trade name was used for some 50 years by Mangilal Agarwal for dry fruits and spices, and clause 3 of the settlement among his legal heirs barred any of them from carrying on business under the name within a one kilometre radius. The defendant argued that, under the IPR Rules framed by the Court, a dispute about a trade name has to be heard by the IPR Division. The Court was told that an earlier non-commercial suit on the same cause of action had led to directions to maintain accounts and set apart profits, of which 30% could be used.

Questions before the court

• Does a suit for breach of a family settlement relating to use of a trade name belong to the Commercial Division or the IPR Division, and should an injunction be granted?

Why the court ruled this way

The Court held that no right per se relating to the trade name or any intellectual property was alleged to have been infringed; the allegation was breach of the family settlement, so the suit was maintainable in the Commercial Division (paragraph 13). On interim relief, an injunction on use would in effect grant final relief in the suit, which is not permitted at the interim stage, the Court cannot hold a mini-trial, and the final decision would depend on fact-finding that needs affidavits (paragraph 14). Equity nonetheless required accounts to be kept (paragraph 15).

Controlling point

The suit is maintainable in the Commercial Division as it concerns breach of a family settlement, not infringement of a trade name right; an injunction against use was not granted at the interim stage.

Order and next steps

The defendant must maintain complete accounts of profits while carrying on business from the shop under the name Sindharam Sanwarmal Mewawala, set apart profits in its business bank account, of which 30% may be used in the ordinary course of business, and furnish a monthly statement of accounts to the plaintiff's advocate by the 7th of the following month. In the event of any assignment or transfer of the trade name, a month's prior notice must be given to all parties to the family settlement or their legal heirs. The affidavit in opposition is due by 15 December 2026, the reply by 15 January 2027, and the matter was to appear under New Motions in February 2027.

Practical implications

A family member bound by a settlement over a trade name should frame the claim as breach of the settlement, which keeps the suit in the commercial court, and should expect an account-keeping direction instead of a ban on trading at the interim stage.

Limits of this ruling

• This is an interim order that does not decide whether the settlement was breached or what the final relief should be, and its observations are confined to maintainability and interim directions.