In Brief
Canara Bank assigned a trademark "EENADU" to a borrower who defaulted on a loan, but later cancelled the assignment claiming it violated banking law. The borrower sued for damages. The trial court upheld the assignment as valid. Bank appealed, arguing the assignment breached the Banking Regulation Act (banks cannot trade in goods or earn royalties) and Trade Marks Act (unregistered assignments cannot be used as evidence). The Supreme Court held that a judgment upholding a transaction prohibited by law cannot bind parties in subsequent suits through res judicata doctrine. The Court set aside the lower courts' judgments and dismissed the borrower's claims, finding the assignment violated Sections 6, 8 of the Banking Regulation Act and Section 45(2) of the Trade Marks Act.
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