TaxTMI 
TaxTMI 
2007 (4) TMI 786
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....ted 30.9.2006 relating to amendment of the objects clause of the Memorandum of Association with the stipulation that till the disposal of the petition it shall not commence any business other than automotive parts and electrical accessories as indicated in para 5 of its application CA 365 of 2006. 3. The facts giving rise to the appeal are as follows: That the appellant is a company organized and existing under the laws of Austria having its registered office at Sonnenuhrgasse 4, A-1060, Vienna, Austria. It is engaged in the manufacture of "Circular Weaving Machines" and machinery for plastic processing, packaging and textile industries for last 167 years. M/s Lohia Engineering Works, a firm incorporated having its registered office at 73-A, Fazal Ganj, Kanpur, India entered into a contract dated December 14 th, 1980 with Maschinenfabrik Starlinger & Co., the company incorporated under the laws of Austria (now the appellant) to form a new company by the name of Lohia Starlinger Ltd., the respondent or any other company mutually agreed upon for undertaking the manufacture of the machinery for production of PP/ HDPE Woven fabrics, described in the agreement as follows: ....
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.... freight, insurance, customs duty etc. 25. The New Company is bound to keep correct and accurate records of the Machinery manufactured and delivered and shall render to STARLINGER an account of the machines sold and delivered or exported by them every six (6) months. STARLINGER shall have the right to examine and verify such records by an authorised representative of STARLINGER or any independent chartered accountant. 27. That New Company can market their products as Licensee of STARLINGER. 28. The New Company shall be free to export their products to all countries except Brazil and Austria where STARLINGER have already got necessary arrangements. However, in order not to have a clash of interest, it is agreed that the New Company will route all their exports through the worldwide sales organization of STARLINGER. 31. All disputes, differences and disagreements arising in connection with this Agreement shall be settled mutually as far as possible, failing which the same will be rendered to the International Chamber of Commerce, Zurich and finally settled under the Rules of the said Arbitration court of the Chamber shall be final and binding on th....
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.... respective shareholding on an appointed date with a right of renunciation failing which STACO may sell the shares to any other parties. On the other hand if the Lohia family is desirous to disinvest its shares, STACO will have the right of first refusal but this right will not be applicable to transfer between members of the Lohia family themselves. The payment of price was to be worked out in the same manner in which the shares of STACO were to be valued in case of offer of sale to LSL. Cost of shares were to be worked out by adding simple interest at the rate of 10% from the date of payment by STACO to LSL deducting sum total of outstanding paid of LSL in Austrian Shilling. The agreement further provided voting rights held by STACO to be exercised by Mr. F.X. Huemer or his immediate family members and in the event they ceased to be in the management, the LSL shares held by STACO shall be deemed to have been offered for sale to Lohia family in accordance with the agreement. The agreement was subject to arbitration in English language with applicable Indian laws in accordance with the rules of arbitration of International Chambers of Commerce, Paris. 7. A separate contract date....
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.... the company and any other officer responsible for the conduct of affairs of the respondent company to give a notice of atleast 30 days of the meeting of board of directors and the shareholders meetings of the company to the petitioner, henceforth and further direct the notices to be also faxed and e-mailed to the petitioner at its fax numbers -43- 2674-80024 and the e-mail address [email protected]. Pending final decision on the petition, the petitioner seeks issue of the following ad-interim ex-parte orders: (a) to direct the Company Respondents to give sufficient notice of all the shareholders meeting in the timely fashion to the petitioner; (b) to direct the appointment of nominee of the Petitioner on the Board of Directors of the Company till the disposal of the Petition; (c) to direct the Company to permit appointment of an alternate director of nominee of the Petitioner, if allowed to be appointed under (b) above; (d) any other order or direction or any such other relief in the nature thereof as this Hon'ble Bench may deem just fit and proper in the facts and circumstances of the case as may render justice may also be gra....
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....ining them from recognizing the Defendant No. 2 as a share holder in respect of the said STACO Shares and from permitting the said Defendant No. 2 to exercise any share holder rights as holder of the said STACO Shares in the issued and paid up equity share capital of Defendant No. 1 Company. (e) Decree of Injunction be passed directing the Defendant No. 1 to register the transfer of shares in favour of the Plaintiff No. 2 in respect of STACO Shares, the details whereof is given in the Annexure 'A' of the Plaint. (f) Grant such other and further reliefs as may be required by the nature and circumstances of the case, and (g) Costs of the suit. 12. The cause of action to file the suit is stated to have arisen (para 44 of the plaint) to the plaintiff firstly on 5th August, 2005, when the defendant No. 2 filed the Company Petition No. 62 of 2005 before the Company Law Board and thereby sought to repudiate the contract for sale and transfer of STACO shares by the defendant No. 2 to plaintiff No. 2 and then on 1st December, 2005, when the legal notice of the plaintiff demanding specific performance of the contract was served on defendant No. 2 and the....
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....rt of the amendment application stated that a proposal was made on July 21st, 2006 during the submissions made by the counsels appearing on behalf of both the parties, at an interim stage, that respondent No. 2 purchases the shares of the company held by the petitioner at a price to be determined by CLB and to delete the name 'Starlinger' from the corporate name of respondent No. l. The respondents, however, declined to amicably settle the matter and to end the oppression and mismanagement. Having regard to breakdown of relationship, lack of confidence between each other, and the exclusion of the petitioner from participating in the affairs of the company, coupled with the fact that company wanted to start business in an area in which the petitioner is not involved to continue to use the word 'Starlinger' as part of its corporate name, illegally implying the trade connection between petitioner and the said products, it would be just and fair that the respondents be directed to buy out the shares of the petitioner at a price determined by the Board and further to direct the respondent No. l to omit the word 'Starlinger' from its corporate name since the joint....
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.... of action to file a suit to frustrate the entire efforts and jurisdiction of the Board. The agreements between the parties have come to an end on November 4th, 1998. Thereafter, the respondent company has engaged itself in the illegal activity of using the name 'Starlinger' in manufacturing and selling the machinery. The action not only infringes the appellant's trade mark and amounts to 'passing of goods', in the name of 'Starlinger', it also amounts to misleading the public/ consumer and at the same time damaging the reputation/ goodwill of the appellant. The manufacture of automotive parts and accessories was not the objective for which the new company was initially set up. The essence of the agreement between the parties was to manufacture machinery described in the agreement and use of name 'Starlinger' as part of corporate name, which has come to an end. The CLB has failed to exercise its jurisdiction in protecting the intellectual property rights of the appellant. As a minority shareholder under an agreement, which basically transferred the technical knowhow with certain conditions, the interest of the minority shareholder is intricately ....
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.... law in the context of Section 66(1) of the Indian Income Tax Act and held that the construction of a statute or a document of title, the legal effect of the facts found where the point for determination, is a mixed question of law and fact, and a finding of fact unsupported by evidence or unreasonable and perverse in nature is a question of law on which the appeal may be filed. 22. In the present case Shri Ravi Kant submits that the questions raised in the ground of appeal are questions of fact and not questions of law to be considered by the Court. Further he submits that the appellant had clearly held out in para 6.31 of the company petition that the misuse of trade mark was already under judicial scrutiny of the Kanpur Court for reference to arbitration, and thus the same could not be agitated and made subject matter of the petition. The prayers made in the company petition have not been amended so far, and thus the issue with regard to use of the trade name 'Starlinger' could not be raised and considered by the CLB. He further submits that the appellants have not produced the resolution of Board of Directors authorising Ms. Manjula Chawla to represent the company re....
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....he Court relying upon Needle Industries (India) Ltd. v. Needle Industries Newey (India) Holding Ltd. [1981] 3 SCR 698; Piercy v. S. Mills & Co. Ltd. (1920) 1 Ch.77; Hogg v. Cramphorn Ltd. (1967) 1 Ch 254; and Tea Brokers (P) Ltd. v. Hemendra Prasad Barooah (1998) 5 Comp LJ 463 held in para 29 as under: In the present case we are concerned with the propriety of issue of additional share capital by the Managing Director in his own favour. The facts of the case do not pose any difficulty particularly for the reason that the Managing Director has neither placed on record anything to justify issue of further share capital nor has it been shown that proper procedure was followed in allotting the additional share capital. Conclusion is inevitable that neither was the allotment of additional shares in favour of Ramanujam bona fide nor was it in the interest of the company nor was a proper and legal procedure followed to make the allotment. The motive for the allotment was mala fide, the only motive being to gain control of the company. Therefore, in our view, the entire allotment of shares to Ramanujam has to be set aside. 25. The facts and circumstances prima facie demonstrate....
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....f the contract. There was no other permission or license to use the name 'Starlinger'. Once the agreement has come to an end and cannot be enforced between the parties, the right to use the name 'Starlinger' is also not available to the respondents. 28. In Baker Hughes Ltd. and Anr. v. Hiroo Khushlani and Anr. 2004 (29) PTC 153 (SC) the Supreme Court upheld the judgment of the single Judge and set aside the appellate judgment holding that the single Judge acted well within its jurisdiction in granting an interim injunction that the respondent company shall not use the name 'Baker' as part of their corporate name or in any other manner. The injunction was granted keeping in mind the well established principles, which governed the grant of injunction in an action of passing off and in which the appellant's transporter's reputation and goodwill was likely to be affected. The Supreme Court upheld the reasoning given by the single Judge that the use of name by the respondents is likely to cause confusion and dispassion and that the appellant will suffer damage, if the interim relief was not granted. 29. In Chaneshwar Nath Tewari v. Ghanshyam Dhar Mi....
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...., along with them in AGM in pursuance of agreement, which had fallen apart and was no longer enforceable, has brought the parties to an situation, where they cannot swim and/ or sail together. When the parting of ways is inevitable, the rights and liabilities of the shareholders have to be protected to be adjusted in a fair and equitable manner. In such a case allowing unfair advantage to a party, which has not only taken the benefit of the corporate name of the minority shareholder, in manufacture and sale of specified machinery, but also made an attempt to take away the trade name and the goodwill acquired by minority shareholder globally, would visit them with Consequences, which may not only affect the grant of damages in a passing off action, but will also prejudice the others to seek such ventures in India. The use of corporate name even if it was not a registered mark at the time of agreement, having no legal right of property in the name, may not be an infringement of the trade mark, it may however, be a contractual right granted by joint venture agreement, which is to be withdrawn as soon as the agreement is terminated by an efflux of time or falls apart. 33. In Dawnay ....