Breach of Family Settlement Over Trade Name Falls Under Commercial Division, Not IPR Division: Calcutta High Court

Declining to grant an interim injunction, Justice Aniruddha Roy instead directed the defendant to maintain accounts and set apart profits from the disputed business.

The plaintiff, Ramji Lal Agarwal, sued Sourav Agarwal, alleging breach of a family settlement among the heirs of Mangilal Agarwal, who had built the business over about 50 years.

Under Clause 3, parties to the settlement, including the defendant's late father, Mohan Kumar Agarwal, agreed not to run a business under the name Sindharam Sanwarmal, with any prefix or suffix, within one kilometre of the shop room at 43/44 Cotton Street, Kolkata.

It was admitted that the defendant runs his business as “Sindharam Sanwarmal Mewawala” from that very shop room.

The defendant's counsel challenged maintainability. He cited Section 134 of the Trade Marks Act and the Court's IPR Rules, particularly Sections 2(k) and 2(o), to argue that any dispute touching a trademark must go to the IPR Division even if the suit is commercial in nature.

He pointed to a registered mark, “Sindharam Sanwarmal & Co”, and said the plaintiff's real claim concerned the trade name and its use.

The Court disagreed. It found that the plaintiff has not claimed infringement nor alleged wrongful use of the name as such. The only grievance was that the name could not be used from the shop room or within one kilometre of it.

The Court also noted it was not the plaintiff's case that he would object to use of the name beyond that radius.

“No right per se relating to the trade name or any intellectual property, has been alleged to have been infringed. The allegation of the plaintiff is an alleged breach of the family settlement,” the Court remarked, concluding that the suit is maintainable before the Commercial Division.

On interim relief, the Court refused to restrain the defendant.

An injunction on use “would in effect amount to granting final relief in the suit, which is not permitted in law at this interim stage,” it said, adding that a mini-trial was impermissible and that the outcome depended on fact-finding that needed affidavits.

The defendant's counsel also told the Court that an earlier non-commercial suit on an identical cause of action had resulted in similar accounting directions from a Single Bench and a Division Bench.

Still, the Court said equity also demands that the defendant keep complete accounts of profits from the business run under the name Sindharam Sanwarmal Mewawala at the shop room.

The Court directed the defendant to deposit the profits in its business bank account, with 30 per cent usable in the ordinary course of business.

A monthly statement of accounts must be given to the plaintiff's advocate on record by the 7th of each following month. If the defendant assigns or transfers the trade name, one month's prior notice must go to all parties to the family settlement and their legal heirs.

The defendant's affidavit in opposition is due by December 15, 2026, and the plaintiff's reply by January 15, 2027.

The application will be listed under 'New Motions' in February 2027.

For Petitioner: Advocates Rajarshi Dutta and V.V.V. Sastry

For Respondent: Advocates Sourojit Dasgupta, Varun Kothari, Shayak Mitra, Rupal Singh and Ashok Kumar Singh