Ramji Lal Agarwal Vs. Sourav Agarwal

Commercial Disputes Under the Commercial Courts Act

FACTS:The litigation arose from a long-running business legacy of the Agarwal family that dealt in dry fruits, spices, dry vegetables and similar products under the trade name “Sindharam Sanwarmal”, established by late Mangi Lal Agarwal. Over the years, the business gained strong goodwill and reputation. After the death of key family members, the legal heirs executed a family arrangement dated 13 January 2017.

This family arrangement allotted various business establishments, particularly shop rooms and godowns used for the business, to different branches of the family. It allowed all branches to continue using the goodwill of the name “Sindharam Sanwarmal & Co.”, but included a clear covenant that no branch could run a business using this trade name within one kilometer of the two existing shop rooms at 43/44, Cotton Street, Kolkata. The plaintiff Ramji Lal Agarwal was allotted one of these shop rooms to run “Sindharam Sanwarmal & Co.” while the defendant’s father was allotted the other shop room to run “Shree Hanuman Stores.”

The present dispute began when the defendant Sourav Agarwal, instead of continuing business under the allotted trade name “Shree Hanuman Stores”, began running the same business from the same premises under the trade name “Sindharam Sanwarmal Mewawala”. The plaintiff claimed this violated the covenant against use of the trade name within 1 km of the existing shop rooms.

PROCEDURAL DETAILS:The plaintiff filed CS 126 of 2023 seeking various reliefs including mandatory injunction, perpetual injunction and damages. He also filed IA No. GA 1 of 2023 seeking temporary injunction against the defendant.

The defendant filed IA No. GA 2 of 2023 seeking dismissal of the suit on the ground that the issues involved were commercial disputes under Section 2(1)(c) of the Commercial Courts Act, 2015 and therefore triable exclusively by a Commercial Court, not by the High Court in its ordinary original civil jurisdiction.

On 12 March 2025, the Trial Court dismissed the plaintiff’s injunction application GA 1 of 2023 and allowed the defendant’s application GA 2 of 2023, holding that the dispute was commercial in nature and directing return of the plaint to be filed before the appropriate Commercial Court.

Two cross-appeals arose from this judgement. APOT 99 of 2025 was filed by the plaintiff, arguing that the dispute was purely about family settlement and not commercial. APOT 95 of 2025 was filed by the defendant, supporting the finding of lack of jurisdiction but alleging that the Trial Court should not have made findings on the merits once it decided it lacked jurisdiction.

CORE DISPUTE:The core question before the High Court was whether the suit CS 126 of 2023 arose out of a “commercial dispute” under Section 2(1)(c) of the Commercial Courts Act, 2015. If it did, then the High Court exercising ordinary civil original jurisdiction had no power to entertain it, and only a designated Commercial Court could try the matter.

DETAILED JUDICIAL REASONING:The Court examined the family arrangement thoroughly. Although it referred to 26 immovable properties, the arrangement clearly stated that the parties were already separated in residence and mess. Therefore, the division pertained primarily to business establishments — shop rooms, godowns and other premises exclusively used in trade and commerce under the trade name “Sindharam Sanwarmal.”

The Court noted that under Clause 3, use of the name “Sindharam Sanwarmal” within one kilometer of the existing shop rooms was prohibited, and the dispute brought through the suit was entirely about violation of this covenant and use of goodwill attached to the trade name in competition.

The Court analysed whether this dispute constituted a commercial dispute. Section 2(1)(c)(vii) of the Commercial Courts Act covers “agreements relating to immovable property used exclusively in trade or commerce”, and Section 2(1)(c)(xvii) covers disputes relating to intellectual property rights including registered and unregistered trademarks.

The Trial Court had relied on Ambalal Sarabhai Enterprises Ltd. v. K.S. Infraspace LLP (2020) 15 SCC 585, which held that an immovable property dispute becomes a commercial dispute if the immovable property is actually used exclusively in trade or commerce. The High Court agreed with this reasoning and held that the shop rooms under the family arrangement were being used in trade and commerce exclusively. Therefore, the dispute fell squarely within Section 2(1)(c)(vii) of the Act.

Additionally, the plaint sought perpetual injunction against the defendant to restrain him from using the trade name “Sindharam Sanwarmal” or allowing third parties to use it. This brought the case also within the scope of Section 2(1)(c)(xvii), as the relief directly concerned intellectual property rights in a trade name.

In this light, the Court held that Hari Shankar Singhania v. Gaur Hari Singhania (2006) 4 SCC 658 did not restrict applicability of the Commercial Courts Act merely because the dispute arose out of a family settlement. The relevant question is not whether the origin was familial but whether the underlying dispute is commercial in nature. The present dispute involved exclusive rights of use of a trademark and goodwill in business, which are commercial matters.

The Court also addressed the defendant’s challenge in APOT 95 of 2025 that the Trial Court should not have made observations on merits after finding lack of jurisdiction. The Court clarified that once the plaint is filed before the competent Court, all issues — including limitation, binding effect of the family agreement and enforceability of covenants — will remain open and will not be prejudiced by remarks in the impugned order.

DECISION:The High Court upheld the Trial Court’s finding that all disputes raised in CS 126 of 2023 are commercial in nature and fall within Section 2(1)(c) of the Commercial Courts Act, 2015. Therefore, the High Court exercising ordinary original civil jurisdiction lacked authority to entertain the suit. The plaint must be filed before the appropriate Commercial Court.

Both appeals APOT 99 of 2025 and APOT 95 of 2025 were dismissed, with liberty to the plaintiff to present the plaint before the competent Commercial Court, where all issues will be considered afresh without being influenced by any findings of the Trial Court or High Court.

Case Title: Ramji Lal Agarwal Vs. Sourav Agarwal

Order Date: 14 November 2025

Case Numbers: APOT 99 of 2025 with CS 126 of 2023

Neutral Citation: 2025:CHC-OS:225-DB

Court: High Court of Calcutta

Bench: Hon’ble Justice Debangsu Basak and Hon’ble Justice Md. Shabbar Rashidi

Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

Ramji Lal Agarwal Vs. Sourav Agarwal

Family agreements bind heirs if they accept benefits under them

Introduction:

The case of Ramji Lal Agarwal vs. Sourav Agarwal revolves around a dispute over the right to use the trade name "Sindharam Sanwarmal" in the dry-fruits, spices, and dry-vegetables business. The plaintiff, Ramji Lal Agarwal, sought an interim injunction to restrain the defendant, Sourav Agarwal, from using the trade name within a one-kilometer radius of the plaintiff's shop, citing a family agreement that divided business rights among family members. The defendant opposed the suit, arguing that the trade name was a family asset and that the agreement was not binding on him. The dispute raises questions about family business agreements, trade name rights, and the applicability of the Commercial Courts Act, 2015.

Detailed Factual Background:

The business "Sindharam Sanwarmal" was originally established by Mangi Lal Agarwal, the grandfather of the defendant and father of the plaintiff. Over time, his five sons joined the business, expanding it across India. After the death of Mangi Lal Agarwal in 2006 and his wife in 2016, a Family Agreement was executed on January 13, 2017, to divide the family business among the heirs. This agreement allowed different branches of the family to continue using the trade name "Sindharam Sanwarmal" with a prefix or suffix, but restricted any new business under this name within a one-kilometer radius of the existing shops.

Under this agreement, the plaintiff, Ramji Lal Agarwal, was allotted a shop at 43/44 Cotton Street, Kolkata, operating under the name “Sindharam Sanwarmal.” The defendant's father, Mohan Kumar Agarwal, was allotted a different shop at the same location, operating under the name “Shree Hanuman Stores.” After the death of the defendant’s father in 2019, the defendant took over the shop but started using the name "Sindharam Sanwarmal Mewawala," which the plaintiff claims is a violation of the Family Agreement. The defendant justified his actions by arguing that the trade name was a coparcenary asset under Hindu law, granting him the right to use it.

Detailed Procedural Background:

The plaintiff filed an application (GA No. 1 of 2023) for an interim injunction to restrain the defendant from using the trade name within a one-kilometer radius. The defendant, in turn, filed an application (GA No. 2 of 2023) for dismissal of the suit, contending that the agreement was not binding on him as he was not a signatory, that the suit was time-barred since he had been using the trade name since 2017, and that the dispute fell under the Commercial Courts Act, 2015, making it not maintainable before this court.

Issues Involved in the Case:

Whether the Family Agreement dated January 13, 2017, was binding on the defendant despite him not being a signatory?

Detailed Submission of Parties:

The plaintiff argued that the Family Agreement was signed by all branches of the family and applied to heirs and legal representatives. The defendant’s shop was originally under the name “Shree Hanuman Stores,” and he had only started using the name "Sindharam Sanwarmal Mewawala" in 2017, violating the agreement. Clause 3 of the agreement expressly prohibited starting a business under "Sindharam Sanwarmal" within one kilometer of the plaintiff’s shop. The defendant cannot benefit from the agreement (by using the shop allotted to his father) while claiming that it does not bind him.

The defendant contended that the trade name belonged to the joint family and was a coparcenary asset, which he was entitled to use. He argued that the Family Agreement was not binding because he was not a signatory to it and that it was a commercial arrangement rather than a binding legal document. He also claimed that the plaintiff had waived his rights by allowing the defendant to operate under the disputed name for over five years since 2017. The suit was allegedly barred by limitation under the Limitation Act. The defendant further asserted that the dispute was a commercial matter and should have been filed before the appropriate Commercial Court under the Commercial Courts Act, 2015.

Detailed Discussion on Judgments Cited by Parties:

The defendant relied on M.N. Aryamurthy & Another vs. M.D. Subbaraya Setty (1972) 4 SCC 1, arguing that if all family members do not accept a family arrangement, it is not binding. The defendant also cited Kalyani (Dead) by LRs. vs. Narayanan & Ors., 1980 Supp SCC 298, contending that family agreements require consent from all affected members. The defendant further referred to Chairman, State Bank of India & Anr. vs. M.J. James (2022) 2 SCC 301, asserting that the plaintiff delayed filing the suit and thus lost his right to claim an injunction.The court referred to Ambalal Sarabhai Enterprises Ltd. vs. K.S. Infraspace LLP (2020) 15 SCC 585, holding that disputes over immovable property used for business fall under the Commercial Courts Act, 2015.

Detailed Reasoning and Analysis of the Judge:

The court rejected the defendant’s argument that the agreement was not binding, noting that he was enjoying the benefits of the shop allotted under the agreement while refusing to comply with its terms. The court found that the defendant had indeed started using “Sindharam Sanwarmal Mewawala” within a one-kilometer radius, in violation of Clause 3 of the agreement. However, the court ruled that the dispute fell under the Commercial Courts Act, 2015, as it involved trademark rights and commercial agreements related to immovable property. Since the case was not filed before the appropriate court, the suit was dismissed on jurisdictional grounds, without ruling on the merits of the plaintiff’s claim.

Final Decision:

The plaint was returned to the plaintiff, allowing him to file it before the appropriate Commercial Court. GA No. 1 of 2023 (injunction request) was dismissed. GA No. 2 of 2023 (defendant’s application to dismiss) was allowed. CS No. 126 of 2023 (the main suit) was dismissed.

Law Settled in This Case:

Family agreements bind heirs if they accept benefits under them. Commercial disputes over business names and property fall under the jurisdiction of Commercial Courts. A party cannot approbate and reprobate—accept benefits from an agreement while denying its obligations. A suit filed in an incorrect jurisdiction is liable to be dismissed, even if the plaintiff has a valid claim.

Case Title: Ramji Lal Agarwal Vs. Sourav Agarwal

Date of Order: March 12, 2025

Case No.: CS No. 126 of 2023

Name of Court: High Court at Calcutta

Judge: Hon’ble Justice Krishna Rao

Disclaimer:The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman,IP Adjutor [Patent and Trademark Attorney] ,High Court of Delhi