XXXD

IN THE

LEARNED DISTRICT COURT OF ROHINI

AT NEW DELHI

__________________________________________________________________________

IN THE MATTERS OF

CHRONOS WATCH STRAPS AND CO.

PLAINTIFF

V.

MEERUT LEATHER PRODUCERS UNION

DEFENDANT

ON BEHALF OF THE DEFENDANT

CONTENT...............................................................................................................................II

INDEX OF AUTHORITIES................................................................................................III

STATEMENT OF FACTS.....................................................................................................V

STATEMENT OF JURISDICTION....................................................................................VI

ISSUES OF CONSIDERATION........................................................................................VII

SUMMARY OF ARGUMENTS.......................................................................................VIII

I. Chronos is negligent in its part..............................................................................viii

II. Whether Mr. Singh is an employee of Chronos and whether the assistant could be

considered an agent of Chronos......................................................................................viii

III. Is the Union at fault for not providing “genuine Leather” Mark?.........................viii

IV. Should Union compensate Chronos of Rs 55 lacs for the apology gifting?.............ix

ARGUMENTS ADVANCED..................................................................................................1

I. Chronos is negligent in its part..................................................................................1

II. Whether Mr singh could be considered an employee of chronos and whether the

assistant could be considered as an agent of chronos?.....................................................2

III. The union is not at fault for not providing a “genuine leather” mark......................4

IV. The union should not compensate for Rs 55 lacs arising out of Apology gifting......5

PRAYER OF RELIEF.............................................................................................................7

ii
 INDEX OF AUTHORITIES

CASES

Gajanan Moreshwar Parelkar v. Moreshwar Madan AIR 1942 Bombay 32.............................6

KK Ahuja v. V.K. Vora and ors. 2009 10 SCC 48....................................................................4

Lala Shanti Swarup v. Munshi Singh and Ors. AIR 1967 SC 1315..........................................7

Samir Agrawal vs Competition Commission Of India,(2021) SCC 136...................................5

State of Rajasthan v. Smt Shekhu and ors 2005 ACC 15.........................................................4

STATUTES

Class 18 of the Trademark Rules, 2002..................................................................................viii

Section 124 of the Indian Contracts Act, 1872..........................................................................7

Section 125 of the Indian Contracts Act, 1872..........................................................................7

Section 141 (2) of the Negotiable Intruments Act, 1881...........................................................3

Section 182 of The Indian Contracts Act, 1872.........................................................................3

Section 191 of the Indian Contracts Act, 1872..........................................................................3

Section 3(3) of the Competition Act, 2002................................................................................5

iii
Section 16(2) of the Sales of Goods Act, 1930..........................................................................2

LINKS

Bestleather.org...........................................................................................................................4

BusinessInsider.com...................................................................................................................4

iv
 STATEMENT OF FACTS

A Delhi-based company called Chronos Watchstraps and Co. ("Chronos") offers its clients

luxurious watch straps to the customers. It is known for providing handmade leather watch

straps. The talent and craftsmanship of Mr. Jignesh Singh, a worker at the company who

significantly boosted sales, was the real secret to Chronos's success. Chronos and Meerut

Leather Producers Union ("the Union") entered into a deal on October 8, 2022, for the supply

of leather from various animals. The Union was the largest cartel organisation for leather and

served as the "collective representative" of all leather manufacturers in Meerut, making it an

ideal match for a continuous supply of all leather types. With Chronos receiving many orders

during late October due to Christmas, Chronos kept placing more and more orders with the

Union, with supply of money and product from both sides in a constant flow. The business

took hit when the customers who had prepaid the orders did not pay, because the leather was

missing “genuine leather” mark on the leather. Mr, Singh who was the authorised person also

did not check the products because he was being severely underpaid for the task. Now,

Chronos decided that the only way left to retain its customers was by offering them expensive

watches and new straps as an apology for the problems caused, and retain such customers at

least until the next big gifting season of Diwali. So, Chronos filed a suit in Rohini District

Court, seeking indemnity from the Union.

Hence the Present Case.

v
 STATEMENT OF JURISDICTION

The defendant most humbly submit that this learned Court of Rohini has jurisdiction to hear

and adjudicate upon the present matter filed under Section 9 of the Civil Procedure Code,

1908

All of which is urged in detail in the written submission and submitted most respectfully.

vi
 ISSUES OF CONSIDERATION

1. Was Chronos negligent in its part?

2. Whether Mr Singh was an employee of Chronos and whether the assistant could be

considered an agent of Chronos?

3. Is the Union at fault for not providing “Genuine Leather” mark?

4. Should Union compensate for the apology gifting of Rs 55 lacs?

5.

vii
 SUMMARY OF ARGUMENTS

I. CHRONOS IS NEGLIGENT IN ITS PART

Mr. Singh, who is an employee of Chronos, also approved the non-finished leather goods

given that he himself preferred that he refine leather.

II. WHETHER MR. SINGH IS AN EMPLOYEE OF CHRONOS AND WHETHER THE

ASSISTANT COULD BE CONSIDERED AN AGENT OF CHRONOS

Mr. Singh is an employee because being an underpaid employee does not mean that he is not

an employee and further the assistant can also be considered to be an agent of the firm

because of Section 191 of the Indian Contracts Act, 18721

III.IS THE UNION AT FAULT FOR NOT PROVIDING “GENUINE LEATHER” MARK?

It was not required for the Union to ensure that the “Genuine Leather” mark was there. The

customers noticed that the new leather straps were missing the “genuine leather” mark which

only government licensed leather producers could stamp on their products, the Union may not

be a government licensed producer, but it does not necessary mean that the leather was not of

the “Highest Quality” with regards to Genuine Leather.

Class 18 of Trademark2 the statutory legislation that comprehensively deals with leather

trademarks in India. All marks, logos, symbols, or brands that are distinct and distinguish

themselves from other goods and services are termed as ‘Trademarks’. As per the

Trademarks Act, 1999, it is not mandatory to register trademarks in India.

1
Section 191 of the Indian Contracts Act, 1872
2
Class 18 of the Trademark Rules, 2002

viii
 IV. SHOULD UNION COMPENSATE CHRONOS OF RS 55 LACS FOR THE APOLOGY

GIFTING?

No, because for the indemnity holder to be indemnified there must be some loss, but Chronos

did not suffer any loss with regards to the gifts they, themselves decided that they would gift

their customers with expensive watches, but instead they could have retained the customers

by other cheaper methods, moreover with other issues raised earlier, the Union was not

negligent rather it was the wilful misconduct by Chronos which led them to this condition.

ix
 ARGUMENTS ADVANCED

I. CHRONOS IS NEGLIGENT IN ITS PART

Chronos kept placing more and more orders with the Union, with supply of money and

product from both sides in a constant flow, they should have checked the quality at earliest.

Secondly, Chronos must have made due diligence regarding their conduct of employee Mr

Singh.

Chronos was negligent on its part on the following points:

1. They kept ordering the leather from the Union and did not check the quality.

2. They hired Mr. Singh and let the assistant do the work, even Mr. Singh preferred the

leather which was supplied by the Union, as he also approved the non-finished leather

goods given that he preferred that he refine the leather himself, as he was (allegedly)

able to bring out more tones in the leather through his particular style of craft. So, if

the supervisor appointed by the company itself was in favor of the leather supplied

then there was no way in which Union could have known that the supply did not

match the standards which was required by Chronos

3. Chronos did not pay adequate remuneration to Mr. Singh for his work.

Further because the quality of the goods was examined by Mr. Singh, The Union cannot be

made liable for the quality of leather which it sent to Chronos. Because Sub -Section 2 of

Section 16 of the Sale of Goods Act, 1930 3States that “Where goods are bought by

3
Section 16(2) of the Sales of Goods Act, 1930

1
description from a seller who deals in goods of that description (whether he is the

manufacturer or producer or not), there is an implied condition that the goods shall be of

merchantable quality: Provided that, if the buyer has examined the goods, there shall be no

implied condition as regards defects which such examination ought to have revealed.”

II. WHETHER MR SINGH COULD BE CONSIDERED AN AGENT OF CHRONOS AND

WHETHER THE ASSISTANT COULD BE CONSIDERED AS AN AGENT OF CHRONOS?

According to Section 182 of the Indian Contracts Act 4, an “agent” is a person employed to

do any act for another, or to represent another in dealings with third persons. The person for

whom such act is done, or who is so represented, is called the “principal”. So, we can say that

Mr. Singh is an agent of Chronos, Mr. Singh is liable for his conduct as he delegated his work

to another person and this person did his task negligently and the maxims qui facit per alium

facit per se, which states that "he who does an act through another is deemed in law to do it

himself," and respondeat superior, which states that "let the principal be liable for an

employee's and servant's negligent commissions or omissions that occur during

employment." Section 191 of the Indian Contracts Act, 18725, Defines “sub-agent” as a

person employed by, and acting under the control of, the original agent in the business of the

agency. Employer will be held accountable for the careless or unlawful actions carried out by

his employees or servants by applying these maxims. Sub section 2 of Section 141 in The

Negotiable Instruments Act, 1881 6reads that Notwithstanding anything contained in sub-

4
Section 182 of The Indian Contracts Act, 1872
5
Section 191 of the Indian Contracts Act, 1872
6
Section 141 (2) of the Negotiable Instruments Act, 1881

2
section (1), where any offence under this Act has been committed by a company and it is

proved that the offence has been committed with the consent or connivance of, or is

attributable to, any neglect on the part of, any director, manager, secretary or other officer

of the company, such director, manager, secretary or other officer shall also be deemed to be

guilty of that offence and shall be liable to be proceeded against and punished accordingly

and the said principle was affirmed by SC in K.K. Ahuja v. V.K. Vora and ors7, where the

Supreme Court held that vicarious liability would apply to companies also as the case dealt

with the liability of a deputy manager of a bank in the issue of a dishonoured cheque.

Further, in the case of State of Rajasthan v. Smt Shekhu and ors 8, the deceased and his

brother were going on a bicycle and a jeep, which was owned by District Collector came

from the opposite side and hit them which resulted in the death of the deceased. In this case,

the Court clearly stated that definition of ‘vicarious liability’ means that one person takes or

supplies the place of another so far as the liability is concerned. It means the liability of a

person for the tort of another in which he had no part. The court also stated that an owner of

a car would be liable for an accident caused by his servant during the time of his employment

III.THE UNION IS NOT AT FAULT FOR NOT PROVIDING A “GENUINE LEATHER” MARK

According to Dalgado9“Genuine Leather” is not a qualitative term but only a collective term

to categorize products which are made of real leather. According to definitions of

7
KK Ahuja v. V.K. Vora & Ors. 2009 10 SCC 48
8
State of Rajasthan v. Smt Shekhu & Ors. 2005 ACC 156
9
Dalgado

3
Bestleather 10and Business Insider 11“Genuine leather is actually split leather”. That means

that the lower (inner) layers of the hide are stripped off. The outer, higher-quality parts are

“top grain”, In short Genuine leather means it is leather at least. As mentioned, the Union

was a “Collective Representative” of all the leather makers in Meerut and not a government

licensed Body hence it was not required for the Union to ensure that the “Genuine Leather”

mark was there. The customers noticed that the new leather straps were missing the “genuine

leather” mark which only government licensed leather producers could stamp on their

products, the Union may not be a government licensed producer, but it does not necessary

mean that the leather was not of the “Highest Quality” with regards to Genuine Leather.

The customers are contending that the leather was not of highest quality but in reality, what

they are contending is that there is no leather present in the watch straps and that is not the

case at all, because the Union has been deemed to be the biggest market producers for the

leather in Meerut. So, it cannot be the case where such a reputed company would make such

a product where it would not even include 1% of leather in their product.

Now, with respect to Cartels which are deemed to be illegal in India according to Section 3

(3) of the Competition act, 200212, which states that “Any agreement entered into between

enterprises or associations of enterprises or persons or associations of persons or between

any person and enterprise or practice carried on, or decision taken by, any association of

enterprises or association of persons, including cartels, engaged in identical or similar trade

of goods or provision of services” this section talks about the dominant position of cartels

and prohibits some activities, however this does not apply to the given situation because as

10
Bestleather.org
11
BusinessInsider.com
12
Section 3 (3) of the Competition Act, 2002

4
observed in the Samir Agrawal vs Competition Commission Of India on 15 December,

202013,The court, in this case, held that there was no violation of Section 3 of the act even

when the information had been exchanged between the competitors. The commission in this

case noted that as there is no fixation of prices in their agreement, thus, the presumption of

appreciable adverse effect on competition (AAEC) did not apply. Similarly, The Union also

did not fix any price with Chronos and hence there was not adverse effect on competition.

Further, the element of collusion is also not present.

IV. THE UNION SHOULD NOT COMPENSATE FOR RS 55 LACS ARISING OUT OF APOLOGY

GIFTING

For indemnity to be claimed there must be a loss or damage suffered by the other party as per

the old rule of the Common Law. As we know that there is no loss or damage suffered by the

party with respect to Rs 55 Lacs, they themselves decided to gift their customers expensive

watches, so with respect to the old rule the Union should not compensate Chronos. Now, with

respect to the new rule which takes into consideration Equity, that is, if there is a liability

arising out of a certain circumstance, then the indemnity holder should be able to claim

indemnity from indemnifier. This was observed in Gajanan Moreshwar Parelkar v.

Moreshwar Madan Mantri,14 where The Court of equity held that if Gajanan’s liability had

become absolute then he was entitled either to get the indemnifier to pay off the claim or to

pay into Court sufficient money which would constitute a fund for paying off the claim

whenever it was made. As a matter of fact, it has been conceded at the bar by Counsel that in

13
Samir Agrawal vs Competition Commission Of India, (2021) SCC 136
14
Gajanan Moreshwar Parelkar v. Moreshwar Madan AIR 1942 Bombay 32

5
England the plaintiff could have maintained a suit of the nature which he has filed here; but,

as a judge has pointed out, that the law in this country is different. He has already held that

Sections 124 15and 125 of the Indian Contract Act, 187216are not exhaustive of the law of

indemnity and that the Courts here would apply the same equitable principles that the Courts

in England do. Therefore, if the indemnified has incurred a liability and that liability is

absolute, he is entitled to call upon the indemnifier to save him from that liability and to pay

it off. In the above case, the judge has used the word ‘Absolute’, which signifies that if the

liability is absolute then only indemnity holder is able to claim indemnity, but Chronos’

liability was not of absolute nature and they could have avoided the liability of gifting them

the expensive watches, hence the equity rule does not apply in the present case. Moreover,

The Equitable rule in the Gajanan’s case is not rule but rather an exception held in Lala

Shanti Swarup v. Munshi Singh and Ors. 17

PRAYER OF RELIEF

Wherefore in the light of the facts stated, issued raised, arguments advanced and authorities

cited, the defendant mostly humbly and respectfully request the Learned District Court to

adjudge and declare that:

1. The Plaint be dismissed

2. The defendants are not liable to indemnify the Chronos.

15
Section 124 of the Indian Contracts Act, 1872
16
Section 125 of the Indian Contracts Act, 1872
17
Lala Shanti Swarup v. Munshi Singh and Ors. AIR 1967 SC 1315

6
 All of which is most humbly and respectfully submitted.

Date: 20th January, 2022 XXXD

Place: New Delhi (Counsel for

Defendant)