Sultan Singh, J:

1. This first appeal challenges the judgment and order of the Addl. District Judge dated 29th March, 1982 restraining the appellant-defendant No. 2 from selling the products under the trade mark `KISHAN and `SUHNA or any other deceptively similar trade mark and from using the design/art work of the plaintiff existing under the title `SOHNA and from infringing the copyright in the `KISAN label and from trading under the name `KISAN INDUSTRIES or any other deceptively similar copyrights and trade name amounting to infringement and /or passing off till the decision of the suit.

2. Briefly the facts are that M/s. Punjab Food Corporation, a partnership firm, (plaintiff-respondent No. 1) on 5th May, 1981 instituted a suit for passing off Cattle Poultry Feed under the trade name `KISAN or `SOHNA and infringing the copyright besides rendition of accounts. The plaintiffs have alleged that they have been carrying on business of manufacturing Cattle Poultry Feed since 1977 and using distinctive trade mark `KISAN and a distinctive label consisting inter alia, of the word `KISAN, the device of Buffalow and the words Cattle Feed in circles, that they have filed an application for registration of their trade marks `KISANand `SOHNA, that they have been using trade mark `KISAN since 1977 and trade mark `SOHNA since 1978, that trade mark `SOHNA had been registered under the Copyright Act, 1957 on 20th Nov., 1979, that their goods under the aforesaid trade marks and labels have acquired goodwill and reputation in the market because of its excellent and superior quality, that they have spent huge amounts on advertisement, that M/s. Kondli Gharoli Dairy Farm (defendant No. 1-respondent No. 2) is the agent of M/s. Kisan Industries, (appellant-defendant No. 2) for Cattle and Poultry Feed under the Trade marks `KISAN and `SOHNA being manufactured by the appellant at Ludhiana, that the adopted trade mark `KISAN and `SOHNA are deceptively similar to their well known trade mark, that they came to know of the defendants infringing the trade mark in the first week of February, 1981 and therefore sent a notice dated 10th February, 1981 calling upon them to desist from using their trade mark and copyright that defendant No. 1 on 4th May, 1981 sold the spurious and inferior quality goods under the infringing trade mark and copyright `KISANand `SOHNA to the plaintiffs. Along with the suit the plaintiffs filed an application for temporary injunction. An ex parte injunction was issued by the trial Court on 5th May, 1981. The appellant filed an application under O.39, R.4 of the Civil P.C.for vacation of the ex parte injunction order. They also filed reply to the injunction application. The trial Court confirmed the ex parte order on 16th July, 1981. An appeal was filed in this Court which was accepted by Yogeshwar Dayal, J. on 15th Oct.,1981 and the matter regarding grant of temporary injunction was remanded to the trial Court. The trial Court again issued the aforesaid temporary injunction by judgement and order dated 29th March, 1982.

3. The case of the appellants-defendants is that the trade marks `KISAN and `SOHNA were being used by Sant Ram, Proprietor of M/s. Sant Ram & Sons, Ludhiana, that Sant Ram by means of an agreement dt.6th March, 1979 assigned the trade marks `KISAN and `SOHNA along with the goodwill of the business to Virender Kumar, a partner of the appellants firm, that Sant Ram & Sons have been using the said trade mark since 1976 and since assignment the appellants have been using the same, that the appellants being the prior users of the said trade marks cannot be restrained by any injunction or otherwise, that they made applications before the Registry of the Trade Marks with respect to the said trade marks which are still pending, that in fact the plaintiffs, have copied the trade marks and have thus infringed their rights. The appellants have further alleged that after the assignment of the trade marks `KISAN and `SOHNA along with the goodwill of business by Sant Ram in favour of Virender Kumar by means of the deed dated 6th March, 1979, Virender Kumar and others entered into partnership in terms of the deed dated 31st March, 1979 to carry on business of manufacture and re-sale of cattle poultry feed and allied goods under the name and style of `KISAN INDUSTRIES, that they carry on their business at Ludhiana, that the plaintiffs also carry on business at Khanna, that defendant No. 1 has never been their agent and that the Courts at Delhi have no jurisdiction to try the suit.

4. The trial Court by the impugned judgment has held that the deed of assignment dated 6th March, 1979 and the partnership deed dated 31st March, 1979 relating to the appellants firm are not validly executed documents, that it was not a valid executed documents, that it was not a valid assignment under Sec.38 of the Trade and Merchandise Marks Act, 1958 (hereinafter called `the Act) that under common law trade mark can be assigned only with the whole of the business concern which included the manufacture and other parts of the business, that the manufacturing part of the business of Sant Ram & Sons was not assigned, that in the partnership deed dated 31st March, 1979, Virender Kumar nowhere indentified himself as an assignee of the trade marks in question, that he never agreed to carry on the business under the said trade mark with other partners. The trial Court has further held that the appellants were not the prior users of the two trade marks, that the plaintiffs were the prior users, that the appellants in reply to the notice did not take the plea of assignment of the said two trade marks by Sant Ram in favour of Virender Kumar, that in their applications before the Registrar of the Trade Marks Office for registration of trade mark the appellants claimed user since 27th March, 1979, that prima facie the Delhi Courts have jurisdiction to entertain the suit, that there was no delay on the part of the plaintiffs to institute the suit. Hence this first appeal.

5. Learned counsel for the appellants submits that Virender Kumar, a partner of the appellants firm has been the assignee of the trade marks `KISAN and `SOHNA along with the goodwill of the business by Sant Ram Proprietor of M/s. Sant Ram & Sons, Ludhiana by means of a deed dated 6th March, 1979 that the appellants have been the prior users of the two trade marks since 1976 in view of the said assignment, that the plaintiffs are guilty of passing off their goods as the goods of the appellants and the Courts at Delhi have no jurisdiction to try the suit. In my view the trial Court has wrongly held that the plaintiffs are the prior users of the two trade mark in question . The trial Court has also wrongly held that the assignment deed dated 6th March, 1979 and the partnership deed dated 31st March, 1979 were not valid documents.

6. A registered trade mark can be assigned with or without the goodwill of the business concerned while the unregistered trade mark cannot be assigned except along with the goodwill of the business concerned. Section 37 of the Act provides for the assignment of the registered trade mark while Section 38 provides for assignment of unregistered trade marks. Section 38(1) of the Act reads as under:

"Section 38. Assignability and transmissibility of unregistered trade marks :- (1) An unregistered trade mark shall not be assignable or transmissible except along with the goodwill of the business concerned."

Under this provision an unregistered trade mark can be assigned along with the goodwill of the business. Shri Sant Ram, Proprietor of M/s. Sant Ram & Sons executed the deed dated 6th March, 1979 assigning and transferring the trade marks `KISAN and `SOHNA and goodwill of the business to Virender Kumar in consideration of Rs. 10,000/-. Sant Ram further agreed that he would not at any time use the said trade marks and the goodwill either himself or in collaboration with anybody else. Learned counsel for the plaintiffs has vehemently argued that the deed dated 6th March, 1979 does not amount to assignment of the trade marks within the meaning of Section 38(1) of the Act. The trade marks along with the goodwill of the business have been assigned to Virender Kumar who is a partner of the appellants firm by this deed dated 6th March, 1979. It is desirable to reproduce below the entire agreement which is on a non-judicial stamp paper worth Rs. 2.25:

"This agreement made this day of 6th of March, 1979 between Sh. Sant Ram S/o. Sh. Lachman Dass resident of House No. 455, Iqbal Ganj, Ludhiana carrying the business at 1332 Ram Nagar,Ludhiana (hereinafter called the party of the 1st part) and Sh. Virender Kumar son of Shri Raj r/o Village Hiran, Chandigarh Road, Ludhiana (hereinafter called the party of the second part).

WHEREAS the said Sh.Sant Ram, party of the first part has been carrying the business of sale of Cattle Feed under the trade mark KISAN and SOHNA under the name and style of M/s. Sant Ram & Sons at 1332, Ram Nagar, Civil Lines, Ludhiana and whereas the said Sant Ram is the owner and has been bona fide user of these trade marks KISAN and SOHNA since 1976.

AND WHEREAS The said Sant Ram has agreed with Shri Virender Kumar, party of the 2nd part for the assignment of trade mark KISAN and SOHNA along with the goodwill of the business for a sum of Rupees 10,000/- on following terms and conditions.

NOW THIS AGREEMENT OF ASSIGNMENT WITNESSES AS UNDER:-

1. That in pursuance of the said assignment and in consideration of a sum of Rs. 10,000/- paid by the party of the 2nd part to the party of the Ist part (the receipt whereof the said Sh. Sant Ram hereby admit and acknowledge) and also in consideration of the condition hereafter contained to be observed and performed on the part of the said Virender Kumar party of the 2nd part, the said Sant Ram therefore assign, transfer, the trade mark KISAN and SOHNA and the goodwill of the business.

AND that the said Sh. Sant Ram party of the Ist part do hereby covenent with the party of the 2nd part the said Sh. Sant Ram will not at any time use the trade mark KISAN and SOHNA and the goodwill either himself or in collaboration with anybody else.

In witness whereof the parties to this agreement have signed this document in the presence of the witness who also signed this document."

7. A bare reading of the document shows that the two trade marks along with goodwill of the business were assigned to Virender Kumar.

8. Learned counsel for the plaintiffs submits that the document is not properly stampted. His argument is that the consideration for the assignment is Rs. 10,000/- and proper stamp duty has not been paid. It may be that proper stampt duty has not been paid. An instrument which is not properly stamped is admissible in evidence under Section 35 of the Stamp Act, 1899 on payment of the necessary stamp duty and penalty. This objection of the learned counsel for the plaintiffs at this stage has no force.

9. Next the learned counsel for the plaintiffs submits that this deed does not assign the goodwill of the business. His argument is that in the last but one para what is assigned is the trade marks and the goodwill. His submission is that it does not amount to goodwill of the business. The is not correct.

10. Para one of the agreement specifically assigns the trade marks `KISAN and `SOHNA and the goodwill of the business. The Trial Court has held that the manufacturing part of M/s. Sant Ram & Sons was not assigned. I do not appreciate how this observation has been made. The assignment is of the goodwill of the business. The deed prima facie is in accordance with the language of Section 38(1) of the Act. During trial the parties may prove on record what was transferred or not. It may at best be said to be a disputed question of fact. Prima facie according to this deed the two trade marks along with the goodwill stood transferred by Sant Ram to Virender Kumar.

11. Virender Kumar along with others entered into partnership by means of a deed dated 31st March, 1979. A partner has a right to associate other persons with him to carry on business of any nature whatsoever. Learned counsel for the plaintiffs submits that it was not indicated in the partnership deed that he was the assignee of the two trade marks along with the goodwill of the business. In my opinion it was not necessary. Virender Kumar is the assignee of the two trade marks and goodwill of the business and he has a right to associate others with him to carry on the business of manufacture and resale of cattle and poultry feed. No law has been brought to my notice to the effect that a partner who is the assignee of the trade mark cannot associate with any other person as partner without disclosing that he was assignee of the trade mark. The partnership deed appears to be in accordance with law. The rights to the partners are governed by various terms contained in the deed. The two trade marks and goodwill of the business of M/s. Sant Ram & Sons under the deed dated 6th March, 1979 prima facie vest with the partner Virender Kumar. The trial Court has rightly observed that Sant Ram & Sons might be in the business since 1976. The appellants have placed on record various bills relating to the sale of cattle and poultry feed under the trade marks `KISAN and `SOHNA for the years 1976 to 1979 by Sant Ram & Sons and also various bills with regard to their business under the name and style of M/s. Kisan Industries showing sale of Cattle and Poultry feed under the said two trade marks. The plaintiffs also allege that the appellants have been carrying on the business of manufacturing and re-sale of cattle and poultry feed under the said two trade marks. Admittedly the plaintiffs started their business in 1977 under the mark `KISAN and in 1978 under the trade mark `SOHNA . The plaintiffs thus cannot prima facie be prior users of the two trade marks.

12. During the correspondence between the parties the appellants claimed that he plaintiffs had copied their trade mark, that they would take suitable action against them. The plaintiffs have also alleged infringement of trade mark by the appellants. In Century Traders v. Roshan Lal Duggar & Co., ILR (1977) 2 [LQ/KerHC/1977/147] Delhi 709 ; (AIR 1978 Delhi 250) a Division Bench of this Court has held that the priority in adoption and use of a trade mark is superior to priority in registration and that to succeed in an application for temporary injunction the plaintiff has to establish the user of the trade mark in question prior in point of time than the impugned user by the defendant. In the instant case I am of the opinion that the trial Court was not correct in holding that the plaintiffs were the prior users. On the contrary there is sufficient prima facie documentary evidence that the appellants are prior users of the two trade marks.

13. The trial Court has observed that the appellants, before the Registry of Trade Marks, claimed user since 27.3.1979. This observation is contrary to record. Certified copy of the applications for the registration of the two trade marks `Kisan and `Sohna filed by the appellants have been placed on the record of this appeal. Photostat copies of these applications are also available on the record of the trial Court. These copies show that the trade mark was being used by M/s. Sant Ram and Sons since 1976 which has been assigned by means of a deed dated 6.3.1979 and since 27.3.1979 Kisan Industries have been continuously using the trade mark. Prima facie these applications for registration of the trade marks disclose that the user of the trade marks has been since 1976. It appears that the trial Court has taken into consideration the user of the two trade marks by the appellants firm only from March, 1979 and has not taken into consideration the user by the assignor Sant Ram and Sons during the period from 1976 till the date of assignment.

14. The plaintiffs have sent a notice dated 10.2.1981 requiring the defendants to stop the user of the said two trade marks. A reply was sent by the appellants on 25.3.1981 wherein they alleged that they were the prior users and were entitled to use the two trade marks. They made allegations against the plaintiffs, that they, had copied the two trade marks and indulged in passing off the goods of the appellants. The appellants however did not refer to the assignment deed in their reply dated 25.3.1981. The trial Court on account of failure to allege assignment in the reply to the notice held that they were not the prior user. This is not a correct approach. In the reply to the notice allegations were controverted by the appellants. In the application under Order 39, Rule 4 of the Civil Procedure Code for vacation of the ex parte injunction order and also in the written statement the appellants alleged that they were the prior users on account of the assignment deed dated 6.3.1979 by Sant Ram and Sons in favour of Virender Kumar a partner of the appellants firm. It has also been alleged that Sant Ram, proprietor of Sant Ram and Sons has been using the said mark since 1976. As already stated various bills issued by Sant Ram and Sons were also placed on record.

15. Learned counsel for the appellants further submits that the plaintiffs carry on business at Khanna while the appellants carry on business at Ludhiana, that defendant No. 1 was never their agent, that defendant No. 1 is a fictitious person that no cause of action arose at Delhi and as such Courts at Delhi have no jurisdiction to entertain the suit of the plaintiffs. The plaintiffs and defendant No. 2 admittedly neither reside nor carry on business at Delhi. The only question is whether the plaintiffs, have any cause of action for instituting the suit at Delhi. According to the allegations in the plaint it is on the basis that defendant No. 1 acts as an agent of defendant No. 2 at Delhi. This is a disputed question of fact which has to be decided during the trial of the suit. It is not necessary to express any opinion even prima facie whether the Courts at Delhi have jurisdiction to entertain the suit. Learned counsel for the plaintiffs also submits that there is no allegation by the appellants that they or their assignor were advertising the goods under the trade marks in question. On the other hand the plaintiffs, he says, have been advertising and spending lot of money on advertisement and this fact may be taken into consideration while determining the grant of temporary injunction in an action for passing off. The crucial question for decision however is the date of user. In other words, the Court has to determine who is the prior user of the trade marks. In the instant case prima facie I am of the opinion that the appellants are the prior users of the two trade marks that the two trade marks were being used by Sant Ram and Sons since 1976 and that the two trade marks along with goodwill of the business were assigned to Virender Kumar, partner of appellants firm by means of the deed dated 6th March, 1979. In my view the trial Court therefore was wrong in holding that the plaintiffs were the prior users. The trial Court under these circumstances ought not to have issued any injunction against the appellants. The application for the grant of temporary injunction under Order 39, Rules 1 and 2 of the Civil Procedure Code therefore has no merit and is liable to be dismissed.

16. Learned counsel for the plaintiffs submits that the appellants till the decision of the suit should in the alternative maintain accounts and file the same in Court. This is a reasonable request. The appellants are directed to maintain accounts relating to the two trade marks and file a statement of their sales thereof once in three months. First such statement may be filed on 1st April, 1983.

17. The appeal is accepted and the impugned order is set aside. The plaintiffs application for the issue of temporary injunction is dismissed. The appellants however shall maintain accounts and file the same in trial Court as above. No costs.