Sabu Trade Private Limited & Ors. (Appellants) v. Rajkumar Sabu (Respondent)

(FAO(OS)(COMM) 61 & 62 of 2024

Kameswar Rao and Justice Vinod Kumar, JJ

The Delhi High Court also passed a common order in two related appeals in a family and trademark matter related to the ownership and usage rights of the popular brand “SACHAMOTI”, which is a popular trademark in the sago (sabudana) business. Appeals were against an interim injunction order dated 05 March 2024 granted by a Single Judge restraining the appellants (Sabu Trade Private Limited and family members) from dealing with the trade mark “SACHAMOTI” and label in favour of the respondent, Mr. Rajkumar Sabu.

Members of the Sabu family were party to the litigation. Appellant No. 1 Kaushalya Devi Sabu, Appellant No. 2 Gopal Sabu, and Appellant No. 3 Sabu Trade Private Limited (STPL) were all pitted against Respondent Rajkumar Sabu, the younger brother of Gopal Sabu. Both brothers are sons of the late Smt. Chandrakanta Sabu. The company STPL was incorporated on 5th May 1993 with Kaushalya and Gopal Sabu as Directors. The respondent and appellant No. 2 (Gopal) were jointly involved initially in the business of the sabudana family but subsequently fell at variance regarding the brand ownership of “SACHAMOTI.”

The earlier disputes date back to several suits instituted in various courts:

• Rajkumar Sabu had sued in 2016 before the Delhi High Court, and on June 10, 2016, he obtained an ex parte interim injunction restraining the appellants from using “SACHAMOTI.” The injunction was upheld on January 22, 2019.
• Around the same time, Sabu Trade Private Limited filed a suit before the Principal District Judge, Salem (Tamil Nadu), claiming prior use of the same mark. The trial court dismissed STPL’s interim application, but the Madras High Court later set aside that dismissal on January 7, 2019, recognizing a prima facie case in favour of STPL.
• Both parties went to the Supreme Court, resulting in a composite order dated 18th July 2019, whereby the Salem case was transferred to the Delhi High Court for simultaneous adjudication. The Court further ordered that both interim injunction petitions be reheard on the merits, setting aside past injunctions.

After the transfer, the conflict was bunched up. On March 5, 2024, the learned Single Judge decided in favour of the respondent, issuing an order restraining the appellants from utilizing the “SACHAMOTI” mark. The appellants objected thereto in the Division Bench, which led to these inter-connected appeals.

The appellants argued that Gopal Sabu (Appellant No. 2) was the owner of the brand name “SACHAMOTI.” In their version, Gopal, after finishing his studies in Kolkata, commenced business in 1984 in the name “Sabu Traders”, with Kaushalya Devi as the proprietor and himself as manager. Sabu Traders traded in sago items under the marks “SACHAMOTI” and “CHAKRA.”

In 1993, the company was incorporated as Sabu Export Salem Pvt. Ltd. (SESPL), afterwards renamed as Sabu Trade Private Limited (STPL) in 2006. It was asserted that Sabu Traders amalgamated with STPL and assigned ownership of the trademarks to the company. An Assignment Deed dated 1 March 2016 was executed, assigning all rights in “SACHAMOTI” from Gopal to STPL.

The appellants contended that Rajkumar Sabu knew and even admitted that Gopal was the founder of the brand. They had based their argument on a video of an event conducted in 1994, namely the “Sachamoti Sabudana Recipe Contest” at Indore, in which Rajkumar openly claimed that his elder brother Gopal had initiated the business at Salem, secured AGMARK certification, and established the brand’s reputation. The appellants pointed out that the speech constituted an admission on the part of the respondent.

They also pointed to newspaper notices and trading records indicating that Rajkumar was just a Madhya Pradesh regional distributor, appointed by STPL in 1994. Payments against STPL invoices were made for goods. Further, they claimed AGMARK certification of “SACHAMOTI” to be procured by the appellants as far back as 19 July 1993, establishing prior use.

The learned Single Judge, according to the appellants, had overlooked these documents and admissions while issuing an injunction to the respondent. They contended that the trademark right belonged to the first user and registered proprietor, both of which were the appellants, and the respondent was merely a distributor, and hence the use was only as a distributor.

Although the respondent’s detailed submissions were not replicated in this section of the judgment, it was said that Rajkumar Sabu asserted rights in the trade mark “SACHAMOTI” in family goodwill and asserted his independent business existence under the same mark. The respondent alleged that the appellants unjustifiably sought to push him out of the traditional business and trademark of the family.

The Division Bench observed that the 2019 transfer order of the Supreme Court unequivocally instructed both suits and injunction applications to be resolved together on merits by the Delhi High Court. The top court had also made it clear that it had not conveyed any opinion on the merits of the case, leaving all matters open for determination by the High Court.

Subject to the appeals, the Division Bench, vide a 22nd March 2024 order, ordered status quo ante to be preserved, setting back the situation to what it was before 5th March 2024, acknowledging the dispute to be a matter of a family nature and upholding the balance between the parties pending proceedings.

The appeals, therefore, follow from a multifaceted family-cum-business trademark dispute dating back to decades of common business heritage. The appellants base corporate and documentary ownership of the mark, whereas the respondent predicates family association and age-old use. The Division Bench, in hearing the case, recognized the directions of the Supreme Court and the necessity of exercising sensitive consideration towards prior use, admissions, and documents of ownership before final adjudication.

The Delhi High Court rejected the appeals made by Sabu Trade Pvt. Ltd., Kaushalya Devi Sabu, and Gopal Sabu against the 5th March 2024 order dated passed by the learned Single Judge, which had given an interim injunction in favour of Rajkumar Sabu restraining the appellants from making use of the trademark “SACHAMOTI” and supporting labels.

The Bench confirmed the Single Judge’s conclusions that, considering the nature of the controversy and the documents available on record, the prima facie case and balance of convenience were in favour of the respondent (Rajkumar Sabu). The Court reaffirmed that in appeals out of discretionary interim orders, appellate courts would not substitute their own discretion with that of the trial court except to the extent the latter’s order was arbitrary, capricious, or perverse, or resulted from a wrong application of law.

The Delhi High Court declined to interfere with the Single Judge’s injunction safeguarding the respondent’s rights in respect of the “SACHAMOTI” trademark, reaffirming that appellate intervention in interim orders should be minimal and strictly dictated by principles of judicial discretion.