Ram Krishan and Sons Charitable Trust Vs IILM Business School

S. Ravindra Bhat, J.@mdashThis common order will dispose of several pending applications, (I.A. No. 1343/2009 for amendment of the suit; I.A. No. 5012/2009 and IA 5322/2009, seeking impleadment of the parties and I.A. No. 5123/2009, an application by the defendants for rejection of the plaint on various grounds).

2. In the suit the plaintiff trust claims that it is managing a number of pioneer educational institutions and had set up a school in 1986 as well as a management institute "Institute for Integrated Learning in Management" (i.e. the "IILM") in 1993. The plaintiff claims to have vast experience and expertise in providing specialized educational services in higher learning, such as Post-Graduate Diploma Course in Management Studies, Engineering and Technology, Pharmacy etc. The suit claims that the acronym "IILM" is a coined one and used as a prefix for all institutions managed by it. Thus, in 1996, the IILM Undergraduate Business School was established and approval for the purpose of Post Graduate Diploma in Business Management was granted by the All India Council for Technical Education (hereafter "AICTE") in 1995 for IILM.

3. The plaintiff, a registered Charitable Trust claims use of the trademark uninterruptedly and continuously since 1993 and submits that it is not a dictionary word but is inherently distinctive, possessing characteristics of an invented mark. The plaintiff claims to maintaining official websites � www.iilm.edu; www.iilm.in and www.iilm.ac.in which were registered in 1998, 2005 and 2003 respectively. The plaintiff relies, for the purpose of continuous usage of the mark, the counter-foil of a Paying Slip of the Corporation Bank (1993); copies of Fee Receipts for 1994, issued to students; bills raised by booksellers to IILM since 1994; copies of Prospectuses, inviting applications to various courses with the IILM mark (1994 onwards); specimen brochures for students for the year 2000 etc. The suit claims that the plaintiff had applied for registration of the trade name IILM under the Trademarks Act, in 2003.

4. The suit alleges that the defendant, to confuse the general public and to create an impression of being associated with the plaintiff, from 03.07.2007, without authorization, created and registered the domain name www.iilm.edu.in. It is submitted that the domain name is registered by one J.S. Bedi, whose e-mail identity is identical to that of the plaintiff. The suit alleges that the defendant claims usage of the trade name since 1994 and also that it had advertised in daily newspapers on 09.07.2006 and 16.07.2007 about the courses offered by it. These advertisements claim that the institutions were established in 1992 and that the Trust was established in 1994, thus painting a misleading picture. The plaintiff claims ownership of the trade name and trademark "IILM" in respect of its various educational establishments and courses as well as the domain name, and states that being strongly distinctive and a coined term, no one, including the defendant, has the right to appropriate its use. The plaintiff mentions about its associate college at Gurgaon having received a legal notice on 05.07.2007 from the defendant, claiming that the IILM Business School was managed by them and also claiming ownership of the trade name. It is submitted that when a student enquired from the defendant institution, he was informed that the same is managed by the plaintiff itself. All these, alleges the plaintiff, disclose that the defendant is twisting the facts with an attempt to cheat and mislead the public.

5. Alleging that the cause of action arose in its favor in July 2007, and is continuing since the defendant has not stopped using the impugned mark, The plaintiff claims a decree for permanent injunction, restraining the defendant or anyone acting on their behalf from passing-off educational institutions or any other bodies using the IILM mark or any other deceptively similar mark or in any manner seeking to associate their institutions with that of the plaintiff.

6. The first hearing of the suit was held on 23.07.2007 when summons were accepted on behalf of the defendant; notice in respect of the application for ad-interim injunction, I.A. No. 8114/2007 was also accepted. The Court restrained the defendant from passing-off their institution by using the IILM mark or any other deceptively similar mark till the next date of hearing, i.e. 28.09.2007. The defendant moved an application, in the meanwhile, I.A. No. 8445/2007, under Order 39 Rule 4, seeking vacation of the interim order. It disclosed that its institutions were utilizing the IILM mark since 1992 and that it had been running EIILM since 1995 and NIILM since 1996. The Court also noticed that the defendant''s domain name www.eiilm.com was registered in 2001 while that of the NIILM was registered in 2000 and that it was in continuous use. The defendant also relied upon a Public Notice dated 30.07.2007 issued by the plaintiff. The Court noticed the averments in the application and the contentions of the parties and recorded in its order of 30.07.2007 that the averments in para 13 of the suit about the plaintiff''s knowledge about use by the defendant of the IILM mark on 09.07.2007 was clearly false. The Court noticed prima facie that even as per the plaintiff''s Caution Notice, the defendant had been using the IILM mark as part of its trade name and that the defendant had contended having done so since 1995-96. Relying on several judgments of the Supreme Court to the effect that misstatement and concealment of facts disentitle a litigant for equitable relief including ex-parte injunction, the Court allowed I.A. No. 8445/2007 and dismissed the interim injunction application, I.A. No. 8114/2007. This order was appealed against by the plaintiff, being FAO (OS) 331/2007 to the Division Bench. By a judgment dated 26.11.2008, the Division Bench found no error in the approach of the order of the Court dismissing the temporary injunction application. It, therefore, dismissed the appeal.

7. During the pendency of the above proceedings, the plaintiff moved two applications, I.A. No. 1343/2009 - for amendment of pleadings to incorporate certain averments and I.A. No. 5012/2009 under Order 1 Rule 10(2) for impleadment of necessary parties. By an application, I.A. No. 5322/2009, the plaintiff sought to settle what it termed as a controversy regarding maintainability of the suit by seeking impleadment of five individuals - Ms. Malvika Rai, Ms. Arti Rai, Dr. K.L. Chaudhary, Sh. Tarun Patwa and Sh. Dileep Biswas, Trustees of the institution. The plaintiff also seeks impleadment of a Trust - International Institute for Learning in Management, as Defendant No. 2 in I.A. No. 50 12/2009.

8. It is contended that the objections to maintainability raised by the defendant are frivolous; nevertheless, the applications are moved by way of abundant caution. The plaintiff contends that the suit is maintainable as originally filed since the property in the mark IILM vests in the Trust which ought to be allowed to seek injunction against the defendants in respect of the cause of action pleaded. In I.A. No. 1343/2009, the plaintiff claims amendments to the following effect -

(i) That the application for registration of the trademark IILM was granted on 14.01.2006 and 21.01.2006 with effect from 05.12.2003;

(ii) The plaintiff describes itself as a Trust created by late Manbhari Devi, managed by the Board of Trustees whose names are specifically mentioned;

(iii) The plaintiff claims awareness about the defendant''s management as International Institute for Learning and Management, on an enquiry from the Income Tax authorities under the Right to Information Act and that the Trust was created on 28.06.2007. The plaintiff also asserts to not being aware of the Trust details and disclaims that no individual, much less Sh. Vinay Rai, grandson of Manbhari Devi can appropriate its property in the registered trademark IILM which has been exclusively used by the plaintiff Trust and not by members of Rai family. It claims that the marks EIILM and NIILM were used by different independent foundations - Malvika Foundation and Usha Foundation.

9. In proposed para 11(D), the plaintiff mentions about a family settlement of 19.03 .2000 in which the mark IILM, all its assets and properties, including the trademark was to vest in Anil Rai and that on implementation of the family settlement, Sh. Vinay Rai ceased to be a Trustee of the plaintiff. The plaintiff mentions about another suit CS(OS) 294/2006 by Sh. Anil Rai, seeking enforcement of the family trust. The amendment also seeks to incorporate another family settlement previously recorded on 07.02.2000.

10. The plaintiff alleges malafide intention by the defendant in proposed para 19(b) in respect of the use of the impugned trademark. In proposed Para 19(c), the plaintiff states that it made enquiries and states that none of the alleged institutions of the defendant have the necessary approval of any regulatory body. Consequential amendment in respect of the intervening event, i.e. registration of the trademark, claiming cause of action for infringement is also proposed with a consequential amendment of the relief clause.

11. In addition to the averments, learned senior counsel (for the defendant) emphasized that though the defendant''s notice claimed information of the impugned mark since 1992, the materials on record by way of search of registration of domain names reveal that the latter''s web site was created only on 03.07.2007. On the other hand, the plaintiff''s websites were created on 06.05.1998 and on various dates in 2003 and 2005. These establish that the defendant''s submission of use of the mark since 1992 is false. Learned Counsel also relied upon the reply to the query under the Right to Information Act, 2005, furnished by the Income Tax authorities dated 29.04.2008, revealing that the defendant Trust was established only on 28.06.2007.

12. The plaintiff contends that the application for amendment as well as the application for impleadment have to be granted, having regard to the new facts which have come to light and the intervening developments, whereby the registration of its trademark was granted during the pendency of the suit. The plaintiff argues that the law pertaining to amendments in India is such that the Courts have to adopt a liberal approach and grant proposed amendments or additions in the pleading without considering the merits of the dispute or the averments since that can be established or gone into at the final stage after the parties lead their evidence and test their respective strengths in trial. It is submitted that from the existing pleadings, it is clear that the plaintiff Trust was undeniably created in 1994 and that the first institution bearing the IILM mark was established in 1993.

13. It is contended that the opposition to the amendment of the suit, and impleadment of the proposed defendants/non-parties is groundless. The plaintiff argues that the defendant''s contention regarding fraud or misrepresentation is entirely misplaced. The plaintiff relied upon the judgments reported as Ganesh Trading Co. Vs. Moji Ram, ; Harish Chander Vs. Bharti Bhardwaj, and Usha International v. Usha Television 2002 (25) PTC 184.

14. It is next argued that the suit was originally filed by Dr. R.L. Chaudhary is competent and maintainable as he was Trustee of the plaintiff Trust, authorized by others whose resolution dated 09.07.2007 to institute the proceedings. Reliance was placed upon the judgment reported as Arya Vaidyasala v. K.C. Vijay Kumar 1990 (1) ILR 360 (Del) to say that the addition of other defendants, i.e. Trustees as plaintiffs is not only in order but appropriate and the Court should allow an application in that regard.

15. The defendant, in the written statement, resisted the suit and contended that the case is based upon falsehood as the plaintiff knew about the identity of the defendant but deliberately withheld it from the averments in the case. It is submitted that IILM is a prefix and used by various institutions managed by the Trust of the Rai family. It is also submitted by the defendant that the plaintiff institutions have been granted recognition without the trade name IILM and point to the certification by the AICTE.

16. Learned Counsel for the defendant argues that the identity of the defendant was never concealed from the plaintiff and points to the e-mail ID which in turn refers to the Rai Foundation - a Trust established by Sh. Vinay Rai. It is contended that with such intention to mislead the Court, the plaintiff concealed material facts and obtained interim orders on 23 .07.2007 after which the Public Notice was issued on 30.07.2007 mentioning the names of Sh. Vinay Rai, Rai Foundation, EIILM and NIILM. It is also contended that the defenint''s address - B-II/61, MCIE, Mathura Road, New Delhi is well-known to the Rai family, including Sh. Anil Rai, the main person behind the plaintiff Trust. To establish that the plaintiff never used the acronym IILM, the defendant relied upon the documents stating that:

(a) In 2004, Sh. Anil Rai opened an institution called IILM Institute for Higher Education from the same Lodhi Road premises where the AICTE approved "Institute for Integrated Learning in Management" functions;

(b) IILM Institute for Higher Education is run by the R.K.K.R. Foundation and not the plaintiff;

(c) On 16.03.2007, AICTE objected to the plaintiff''s use of the mark IILM, calling upon them to clarify that the institution at Lodhi Road and Gurgaon were not connected to the plaintiff''s institutions;

(d) The web address of the Institute for Integrated Learning in Management was changed from www.iilm.ac.in to www.igsm.in and the acronym IGSM was used in the website. Copies of the documents in this regard have also been produced, and relied upon. The plaintiff''s Trust''s latest approval is in the name of Graduate School of Management and Integrated Institute for Learning and Management at Greater Noida.

17. It is submitted that besides not disclosing or materially withholding these facts, the plaintiff claims to have acquired IILM name from an alleged settlement which is the subject matter of dispute in CS 294/2006, which was not originally disclosed but was brought to the notice of the Court during the pendency.

18. The defendant contends that though the general principle underlying Order 6 Rule 17, CPC, indicates that a liberal approach has to be adopted with a view to avoid multiplicity of litigation, such approach would not sub-serve ends of justice in this case because the application is patently mala fide and prejudices the opposite party in that it improves upon deliberate omissions and in fact serves to alter the character of the case. Reliance is placed on the decisions reported as Revajeetu Builders and Developers Vs. Narayanaswamy and Sons and Others, . It is submitted that the mala fide nature of the amendments are demonstrable from the facts as in the suit existing juxtaposed with materials on record. The defendant relies upon this comparison by a tabular statement as follows:

19. It is submitted that the alterations and additions sought to the suit would irrevocably prejudice the defendant''s case as they take away its valuable right to agitate for denial of equitable relief. Besides, submits the defendant, the plaintiff ought not to be permitted to improve upon a blatant attempt to materially distort and conceal facts which would otherwise have entitled the defendant to urge dismissal of the suit on the ground of fraud. Reliance is placed upon the judgment of the Supreme Court, reported as The State of Andhra Pradesh and Another Vs. T. Suryachandra Rao, and S.P. Chengalvaraya Naidu (dead) by L.Rs. Vs. Jagannath (dead) by L.Rs. and others, .

20. So far as the application for impleadment are concerned, the defendant relies upon the Division Bench ruling of this Court in Duli Chand v. Mahabir Pershad Trilok Chand Charitable Trust AIR 1984 Del 145 where it was held as follows:

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This judgment proceeded on the basis that all the trustees could authorize one of them to file the suit. It is possible for some of the trustees to authorize the others to file a suit, but this could only be done by the execution of a power of attorney. It cannot be done by a resolution. If ''A'', ''B'', and ''C'' are owners of a property, they have to bring a joint suit for possession. They are all necessary parties to the suit. They cannot by resolution allow some of the other co-owners to file the suit. In such a suit, all the owners must be joined as parties as either plaintiffs or as defendants. Usually, the co-owners who are not joined in the suit are joined as pro forma defendants. But, it is not possible for some of the owners to file a suit without joining others. As trustees are owners of the property, the same principle applies. They all have to be joined as parties to the suit, but they can execute powers of attorney allowing themselves to be represented by some other co-trustees.

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21. We have examined this application from several points of view. Firstly, we are of the view that there is a considerable misunderstanding regarding the filing of suits like the present. It has been assumed by lawyers that a suit can be fled in the name of a trust. This is because there are several reported decisions of this type showing that suit have been filed in the name of Trust. There are two ways in which of happens - (a) the trust deed permits some specific trustee to file a suit or (b) the trust is registered under the provisions of the Societies Registration Act and the provisions of that Act allow the suit to be filed according to the provisions contained therein. There is also the case where all the trustees are joined, but the trust is also named as a party for convenience. The reports are usually silent as to whether all the trustees have been joined or not. Then as in the case of other corporations or bodies, where the Managing Director, or Chairman or President of the Society, etc. can sue, it is taken for granted that also in the case of a trust, suit can be filed in a similar manner. This is an erroneous impression, but a mistake like it can pass unnoticed in view of the absence of much case-law on this point.

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21. The above discussion would reveal that the plaintiff is seeking leave to amend the suit, after its initial request for ex-parte injunction was granted, and later, the injunction was vacated at the request of the defendant. This Court, in its order dated 30-7-2007, noticed that the plaintiff could be deemed to have knowledge of certain facts or events, which was apparent from the materials on record. Those facts and events were considered material enough to impel the Court to observe that their not being highlighted in the suit disentitled the plaintiff to equitable injunctive, though ex-parte relief. The plaintiff also seeks leave to implead other individuals to meet the defendant''s objection to the suit''s maintainability, on the ground that all trustees have not been made parties. The defendant wants the plaint to be rejected on the ground that all trustees are not impleaded.

22. It is now well settled that while considering the request of any litigant to amend the suit, the Court ought to adopt a liberal approach, giving as much indulgence to the party concerned, as is reasonably possible, without compromising the imperative of a fair and expeditious trial. This was indicated more than three decades ago, in Ganesh Trading (supra), and has been subsequently followed in later decisions of the Supreme Court, and all High Courts. This general rule, or principle is subject to certain important and well accepted exceptions, such as that such amendments should not prejudice the other party, or should not result in the applicant''s being permitted to withdraw an admission that would have inuring in favour of the opposite party, and that it should advance ends of justice, and a fair trial.

23. In Usha Balashaheb Swami and Others Vs. Kiran Appaso Swami and Others, the Supreme Court held that through an amendment, admissions in pleadings, particularly in the plaint cannot be omitted. It was also held that a request for amendment of the plaint stands on different footing. The relevant observations of the Court are as follows:

19. ...a prayer for amendment of the plaint and a prayer for amendment of the written statement stand on different footings. The general principle that amendment of pleadings cannot be allowed so as to alter materially or substitute cause of action or the nature of claim applies to amendments to plaint. It has no counterpart in the principles relating to amendment of the written statement. Therefore, addition of a new ground of defence or substituting or altering a defence or taking inconsistent pleas in the written statement would not be objectionable while adding, altering or substituting a new cause of action in the plaint may be objectionable.

20. Such being the settled law, we must hold that in the case of amendment of a written statement, the courts are more liberal in allowing an amendment than that of a plaint as a question of prejudice would be far less in the former than in the latter case.

In Revajitu, the Supreme Court indicated the following broad guidelines which Courts in India are to adopt while dealing with application for amendment of pleadings. The said guidelines are as follows:

(1) Whether the amendment sought is imperative for proper and effective adjudication of the case;

(2) Whether the application for amendment is bona fide or mala fide;

(3) The amendment should not cause such prejudice to the other side which cannot be compensated adequately in terms of money;

(4) Refusing amendment would in fact lead to injustice or lead to multiple litigation;

(5) Whether the proposed amendment constitutionally or fundamentally changes the nature and character of the case: and

(6) As a general rule, the court should decline amendments if a fresh suit on the amended claims would be barred by limitation on the date of application....

24. Keeping in mind the above principles, the Court has to consider the nature of amendments proposed by the plaintiff. The first kind of amendment pertains to the description of trustees and incorporation of the trust. These are elaboration of the plaintiff''s constitution, and as would be apparent from the following discussion (dealing with the application for impleadment and the defendant''s application for rejection of the suit) would only elaborate the existing pleadings. The Court discerns no cause for prejudice to the defendants, if these proposed amendments are allowed. Similarly, the grant of trademark registration after institution of the suit, in the Court''s opinion, are clear subsequent events, which have been brought to the Court''s notice at the appropriate stage, and if permitted to be incorporated by amendment, would cut down multiplicity in litigation. So far as Para 11-A and Para 11-B are concerned, it describes the plaintiff''s alleged knowledge of the defendant and mentions about a trust deed, of July 2007, and an income tax assessment order. These are objective facts pertaining to alleged subsequent knowledge; they facially disclose no mala fides. At this stage, their incorporation in the suit does not disclose any prejudice to the defendants.

25. As far as the proposed amendments contained in Paras 11-C and 11-D of the plaintiff''s application is concerned, a more careful approach has to be adopted. In the former (Para 11-C) the plaintiff seeks to explain that the two marks EIILM and NIILM are independent Trusts. The underlying assumption here is that these facts are necessary with an explanation about the constitution of the Ttrust, in view of averments made by the defendant in the application for vacation of the interim order (IA 8445/2007) which was eventually allowed by the Court. This amendment, in the opinion of the Court, if allowed, would prejudice the defendant, as it would deprive it the right to urge that IILM was not exclusively used by the plaintiff, but also by itself (and possibly other concerns or trusts). The plaintiff in facts advances an explanation that EIILM and NIILM were used since 1997. As permitting such amendment would certainly deprive the defendant of an advantage of admission (gathered from the omission, and the subsequent order of the court, dated 30th of July, 2007, which was affirmed in appeal) the Court cannot permit the proposed amendment.

26. As regards Para 11-D, here to, the Court discerns an attempt to improve on omissions which were pointed out by the defendant, on the basis of which the interim injunction was vacated. The new averments argue about the previous family settlement, and pending suits, as on the date of the present suit. These facts were certainly within the plaintiff''s knowledge, and no convincing or plausible explanation why they were not disclosed, have been furnished. Permitting these amendment would also deprive the defendant the benefit of urging withholding of material facts. Therefore, the Court cannot permit these amendments.

27. As regards proposed Para 12 and Paras 19-A to Para 19E are concerned, they are either contentious, amplifying existing allegations, or consequential contentions based on averments which focus on subsequent facts. The Court does not see any reason to disallow them, or discern any prejudice to the defendant.

28. As regards the two applications by the plaintiff, regarding impleadment of trustees, and the defendant''s application for rejection of the suit are concerned, there is no doubt that the suit was originally filed only by one trustee, who claimed to be authorized to institute it by the others. The defendant is right in contending that a suit by a trust ought to implead all the trustees, as it does not possess a corporate existence; this much is apparent from a facial reading of Order 31, Rule 1, Code of Civil Procedure. Equally, there are observations in Duli Chand, the Division Bench ruling of this Court, suggesting that a suit by a trust should make all the trustees as parties. However, the Division Bench itself applied the test of prejudice, and permitted the impleadment of the other trustees, to avoid multiplicity of proceedings, holding that procedure is only a hand maiden of justice. Here, the Court is persuaded to adopt a similar approach, and permit the impleadment of the trustees. This is subject to just exceptions, and the without prejudicing the defendant''s right to object to maintainability of the suit, which can also be gone into after evidence, at the final stage of hearing. The defendant''s application for rejection of plaint is founded only on the issue of maintainability, alleging that the suit has to be rejected because all trustees are not impleaded.

29. In view of the above discussion, IA 1343/2009 is partly allowed. All the proposed amendments, save and except proposed Paras 1 1C and 1 1D are allowed. The amended suit incorporating the permitted changes shall be filed in six weeks. IA 5012/2009 and 5322/2009 are allowed; the amended memo of parties, impleading the proposed plaintiffs and defendants is hereby taken on record. For the same reasons, IA 5 123/2009 is hereby rejected. In the circumstances of the case, the plaintiff shall bear the costs of these proceedings, quantified at Rs. 50,000/- for each of the four applications. The total amount of Rs. 2,00,000/- shall be paid to the defendant in four weeks.

CS (OS) 1308/2007

List the suit for further proceedings, to complete pleadings, and admission and denial of documents, before the Joint Registrar, on 19th August, 2010. After completion of admission and denial, the case shall be listed before the Court, on 30th September, 2010.