Patel Field Marshal Agencies And Anr. vs P.M Diesels Ltd. And Ors.

2

2. A relatively simple question

though of considerable importance in

Intellectual Property Rights jurisdiction

has presented itself for an authoritative

pronouncement of this Court in the present

bunch of appeals. The question arising will

be formulated for an answer at a subsequent

stage and for the present we will take

notice of the relevant facts giving rise to

the issue in question.

3. The respondent in Civil Appeal

Nos.4767-4769 of 2001 (P.M. Diesels Ltd.)

is the registered owner of three trade

marks, the common feature of all of which

is the words “Field Marshal”. The three

registration certificates issued by the

Registrar of Trade Marks in favour of the

respondent-Company (through its

predecessor) is in respect of the mark

“Field Marshal” (Registration No. 224879); 3

the second certificate is in respect of

trade mark “Field Marshal” in lettering

style (Registration No. 252070) and the

last certificate is in respect of trade

mark “FM Field Marshal” (Registration No.

252071-B). The first registration

certificate is dated 16.10.1964 and the

second and third registration certificates

are dated 4.10.1968.

4. It appears that some time in the

year 1982 the appellants-Patel Field

Marshal & Anr. applied for registration of

the trade mark “Marshal” for their use.

Having come to know of the said application

and perceiving a similarity between the

mark in respect of which registration was

sought by the appellants and the mark(s)

registered in favour of the respondent, the

respondent served a legal Notice dated

23.07.1982 asking the appellants to desist 4

from using the mark in question, i.e.,

“Marshal”.

5. In the year 1989, the respondent

instituted a suit before the High Court of

Delhi (Suit No. 1612 of 1989) for

infringement of trade mark, rendition of

accounts of profit earned by the appellants

from use of the mark “Marshal” and for

perpetual injunction to restrain the

appellants from using the trading styles

“Patel Field Marshal Agencies” and “Patel

Field Marshal Industries”. An Interlocutory

Application for temporary injunction was

also filed.

6. The defendants in the suit, i.e.,

the appellants herein, contested the claims

of the plaintiff-respondent on the ground

of jurisdiction as well as on merits. In

the written statement filed, the 5

appellants-defendants also contested the

validity of the registration of the

respondent’s trade mark “Field Marshal” and

claimed that the same was liable to be

rectified in the trade mark register. An

issue to the said effect was framed in the

suit.

7. The Delhi High Court by its Order

dated 28.09.1995 dismissed the

Interlocutory Application filed by the

plaintiff-respondent for interim injunction

on the ground that the High Court did not

have jurisdiction, both, pecuniary and

territorial, over the subject matter. In

appeal, the Division Bench by Order dated

10.03.1998 reversed the decision of the

learned single Judge and directed for

consideration of the Interlocutory

Application for interim injunction on

merits. The matter was brought to this 6

Court in Special Leave Petition (C)

No.13512 of 1998. During the pendency of

the aforesaid S.L.P., in view of the remand

order of the Division Bench dated

10.03.1998, a learned single Judge of the

High Court granted temporary injunction in

favour of the respondent-plaintiff. This

was on 07.07.1999. However, by a subsequent

Order dated 20.08.2008, the learned single

Judge of the High Court held that the court

had no jurisdiction and, therefore, ordered

for return of the plaint for presentation

before the competent court in the State of

Gujarat. The said order was challenged by

the respondents herein (plaintiffs in the

suit) before the Division Bench. The

Division Bench by Order dated 24.10.2008

held that in the facts of the case the

plaint ought not to have been rejected;

however, as the appellant before it 7

(respondent-plaintiff) had no objection to

carry on the proceedings in the competent

court at Rajkot, Gujarat, the plaint was

returned to be filed in Rajkot. Thereafter,

the case was transferred from the Delhi

High Court to the court at Rajkot and the

proceedings came to be numbered as Civil

Suit No. 1 of 2009 in the file of the

learned Additional District Judge, Rajkot.

8. While the aforesaid Order of the

Division Bench dated 24.10.2008 is the

subject matter of challenge in the

connected Civil Appeal arising out of

S.L.P. (C) No. 1851 of 2009 also filed by

the appellant, what is of significance is

that when the suit in question was pending

adjudication in the High Court of Delhi,

the appellants herein initiated parallel

proceedings before the High Court of

Gujarat (in the year 1997) seeking 8

rectification of the registration of the

trade mark(s) granted to the respondent.

Specifically, the appellants had filed

three rectification applications bearing RA

Nos. 1, 2 and 3 of 1997 under Sections

46/56 of the Trade and Merchandise Marks

Act, 1958 (hereinafter referred to as the

“1958 Act”) for removal and cancellation of

the three trade marks registered in favour

of the petitioner bearing Nos. 224879,

252070 and 252071. The learned single Judge

of the High Court of Gujarat dismissed the

three applications in question by Order

dated 15.04.1998. The said order has been

affirmed in appeal by the Division Bench of

the Gujarat High Court by its Order dated

25.11.1998. This order has been subjected

to challenge in Civil Appeal Nos.4767-4769

of 2001 presently under consideration. 9

9. While the reasoning of the

Division Bench of the High Court in

dismissing the applications in question

will be noticed in due course, the question

calling for an answer by this Court would

need a formulation at this stage. An

attempt at such formulation is being made

hereunder.

In a situation where a suit for

infringement is pending wherein the issue of

validity of the registration of the trade mark in

question has been raised either by the plaintiff

or the defendant and no issue on the said

question of validity has been framed in the suit

or if framed has not been pursued by the

concer n ed par t y in the suit by filing an

application to the High Cour t for rectification

under Sections 111 read with Section 107 of

the Trade and Merchandise Marks Act, 1958, 10

whether recourse to the remedy of rectification

under Sections 46/56 of the 1958 Act would

still be available to contest the validity of the

registration of the Trade mark.

10. The aforesaid question which

arises in the present appeals in the

context of the 1958 Act continues to be a

live issue in view of the pari materia

provisions contained in the Trade Marks

Act, 1999, i.e., Sections 47, 57, 124 and

125 of the Trade Marks Act, 1999

(hereinafter referred to as “the 1999

Act”).

11. The issues arising in Civil Appeal

Nos.4767-4769/2001 and Civil Appeals

arising out of S.L.P. (C) No.27309/2012 and

S.L.P. (C) No.30121/2012 are same and

similar. S.L.P. (C) No.30121/2012, however,

has since been withdrawn.

11

Civil Appeal arising out of S.L.P.

(C) No.1851/2009 challenges the order passed

by the Delhi High Court on 24.10.2008 by which

the plaint was returned to be filed before the

competent court at Rajkot, despite the

conclusion of the Appellate Bench that the

order of the learned Single Judge holding that

the Delhi High Court had no jurisdiction and

hence the plaint should be returned, is not

correct. As the said direction of the Division

Bench of the High Court challenged in the

appeal was at the instance of the plaintiff

(respondent herein), who was the appellant

before the High Court, we would understand the

stand taken to be a virtual withdrawal of the

appeal and an undertaking to comply with the

direction of the learned Single Judge to

present the plaint before the competent court

at Rajkot. In these circumstances, we do not

consider it necessary to continue to entertain

the challenge made in the appeal arising out

of S.L.P. (C) No.1851/2009 so as examine the 12

legality of the correctness of the said order

on merits. The person aggrieved before the

High Court i.e. the respondent herein chose to

comply with the order of the leaned Single

Judge. The appellant herein was not aggrieved

by the order of the learned Single Judge. The

aforesaid proceeding i.e. arising out of

S.L.P. (C) No.1851/2009, in the circumstances

set out above, is accordingly closed. Two

appeals, therefore, survive for

consideration i.e. Civil Appeal

Nos.4767-4769/2001 and Civil Appeal arising

out of S.L.P. (C) No.27309/2012.

12. We have heard Mr. Shailen Bhatia,

learned counsel for the appellants and

Mr. Harin P. Raval, learned senior counsel

for the respondents in Civil Appeal

Nos.4767-4769 of 2001. We have also heard

Mr. J. Sai Deepak, learned counsel for the

appellant and Mr. Gladys Daniels, learned 13

counsel for the respondent in Civil Appeal

arising out of S.L.P. (C) No. 27309 of

2012.

13. The arguments advanced on behalf

of the appellants in the appeals proceed on

the basis that Section 107 and 111 of the

1958 Act contemplates grant of permission

by the learned Trial Court for filing of a

rectification application, which

requirement, it is urged, does not seem to

follow from a reading of the aforesaid two

provisions of the 1958 Act. It is submitted

that under the 1958 Act, there are two

categories of right vested; the first in

the owner of a registered trade mark

(Sections 28 and 29) and the second in a

person aggrieved by such registration

(Sections 46 and 56). The aforesaid two

rights are parallel and independent of each

other. It is submitted that the only 14

requirement for filing a rectification

application under the provisions of

Sections 107 and 111 of the 1958 Act is

that person filing such an application must

be a “person aggrieved” which would include

a person against whom an infringement

action has been taken or is threatened by

the registered proprietor of the trade mark

as held by this Court in National Bell Co.

vs. Metal Goods Mfg. Co. (P) Ltd. and

another1. The learned counsel for the

appellants has also drawn attention of the

Court to the provisions of Section 32 of

the 1958 Act which gives conclusiveness to

the validity of the registered trade mark

after expiry of a period of seven years

from the date of registration except in

cases covered by sub-Clauses (a), (b) and

(c) of Section 32. It is contended that the

question of conclusiveness as to validity

1 (AIR) 1971 SC 898 15

of the registration of the trade mark can

be raised in an infringement suit as also

in a rectification application. The very

requirement of permission of a subordinate

court (District Court) for filing of the

rectification application before a higher

Court (High Court), in the light of the

provisions of Section 107 and 111, cannot

be the legislative intent. The provisions

of Section 41 (b) of the Specific Relief

Act, 1963 which restrains a subordinate

court from preventing a person from

instituting any proceeding in a higher

court has also been stressed upon and

reliance has been placed in this regard on

Cotton Corporation of India Ltd. Vs. United

Industrial Bank Ltd. and Ors.2 Reliance

has also been placed on the decision of the

High Court of Madras in B. Mohamed Yousuff

Versus Prabha Singh Jaswant Singh and

2 (1983) 4 SCC 625 16

Others3 and the judgment of the Full Bench

of the Delhi High Court in Data Infosys

Limited and Others Versus Infosys

Technologies Limited4.

14. In reply, on behalf of the

respondent, it is contended that the

provisions of Section 111 of the 1958 Act

particularly sub-sections (3) and (4)

thereof make it very clear that once the

Civil Court is satisfied with regard to the

prima facie tenability of the issue of

invalidity of the registration of a trade

mark that may be raised before it by any

party to an infringement suit, the said

question has to be decided in a

rectification proceeding and not in the

suit. The suit will remain stayed and the

final decision of the statutory authority

in the rectification proceeding will govern 3 ( 2008) 38 PTC 576 Madras DB 4 2016 (65) PTC 209 Delhi FB 17

the parties to the suit. It is contended on

behalf of the respondents that

rectification proceedings under Sections 46

and 56 of the 1958 Act govern a situation

where no suit for infringement is pending.

In a situation where a suit for

infringement has been filed and the

question of validity of registration arises

therein and the Civil Court is satisfied as

to the prima facie tenability of the issue

of invalidity of the registration of the

trade mark, the provisions of Section 111

would take over and govern the proceedings

in the suit including the issue of

invalidity. It is further contended that

there is a deemed abandonment of the rights

conveyed under Sections 46 and 56 of the

1958 Act in the event a suit for

infringement is pending wherein the

question of invalidity has been raised and 18

found to be prima facie tenable. It is

urged that the rights under Sections 46 and

56 on the one hand and those contained in

Sections 107 and 111 on the other must be

understood to be operating in two different

fields; both sets of provisions cannot

mutually exist as such mutual existence and

operation may lead to conflicting decisions

on the same question i.e. by the High Court

under the 1958 Act or by the IPAB under the

1999 Act on the one hand and the Civil

Court adjudicating the infringement suit on

the other. It is also submitted on behalf

of the respondents that the abandonment of

the plea of invalidity contemplated by

Section 111(3) of the 1958 Act is a

complete relinquishment for all practical

purposes and not only for the purpose of

the suit. The abandonment contemplated by

Section 111 (3) of the 1958 Act does not 19

keep alive the plea of invalidity to be

urged/agitated separately in a

rectification proceeding under Section

46/56 of the 1958 Act. Insofar as the

decisions of the Madras High Court in B.

Mohamed Yousuff (supra) and the Delhi High

Court in Data Infosys Limited and Others

(supra) are concerned, the respondents

contend that the ratio of the said

judgments are not in consonance with the

true purport and effect of the legislative

scheme and therefore this Court may

conclusively and authoritatively decide the

issue.

15. Having noticed the respective

contentions of the parties, we may now take

note of the relevant provisions of the 1958

Act, namely, Sections 46, 56, 107 and 111

which are reproduced below.

20

“46. Removal from re gister and imposition of limitations on gr ound of non-use.

(1) Subject to the provisions of section 47, a registered trade mark may be taken off the register in respect of any of the goods in respect of which it is registered on application made in the prescribed manner to a High Court or to the Registrar by any person aggrieved on the ground either—

(a) that the trade mark was registered without any bona fide intention on the part of the applicant for registration that it should be used in relation to those goods by him or, in a case to which the provisions of section 45 apply, by the company concerned, and that there has, in fact, been no bona fide use of the trade mark in relation to those goods by any proprietor thereof for the time being up to a date one month before the date of the application; or

(b) that up to a date one month before the date of the application, a continuous period of five years or longer had elapsed during which the trade mark was registered and during which there was no bona fide use thereof in relation 21

to those goods by any proprietor thereof for the time being:

Provided that , except where the applicant has been permitted under sub-section (3) of section 12 to register an identical or nearly resembling trade mark in respect of the goods in question or where the tribunal is of opinion that he might properly be permitted so to register such a trade mark, the tribunal may refuse an application under clause (a) or clause (b) in relation to any goods, if it is shown that there has been, before the relevant date or during the relevant period, as the case may be, bona fide use of the trade mark by any proprietor thereof for the time being in relation to goods of the same description, being goods in respect of which the trade mark is registered.

(2) Where in relation to any goods in respect of which a trade mark is registered—

(a) the circumstances referred to in clause (b) of sub-section (1) are shown to exist so far as regards non-use of the trade mark in relation to goods to be sold, or otherwise traded in, in a particular place in India (otherwise than for export from India), or in relation to goods to be 22

exported to a particular market outside India; and

(b) a person has been permitted under sub- section (3) of section 12 to register an identical or nearly resembling trade mark in respect of those goods under a registration extending to use in relation to goods under to be sold, or otherwise traded in, or in relation to goods to be so exported, or the tribunal is of opinion that he might properly be permitted so to register such a trade mark,

on application by that person in the prescribed manner to a High Court or to the Registrar, the tribunal may impose on the registration of the first-mentioned trade mark such limitations as it thinks proper for securing that registration shall cease to extend to such use.

(3) An applicant shall not be entitled to rely for the purpose of clause (b) of sub- section (1) or for the purposes of sub-

section (2) on any non- use of a trade mark which is shown to have been due to special circumstances in the trade and not to any intention to abandon or not to use the trade mark in relation to the goods to which the application relates.

23

xxx

56. Power to cancel or var y re gistr ation and to rectify the re gister.

(1) On application made in the prescribed manner to a High Court or to the Registrar by any person aggrieved, the tribunal may make such order as it may think fit for cancelling or varying the registration of a trade mark on the ground of any contravention, or failure to observe a condition entered on the register in relation thereto.

(2) Any person aggrieved by the absence or omission from the register of any entry, or by any entry made in the register without sufficient cause, or by any entry wrongly remaining on the register, or by any error or defect in any entry in the register, may apply in the prescribed manner to a High Court or to the Registrar, and the tribunal may make such order for making, expunging or varying the entry as it may think fit.

(3) The tribunal may in any proceeding under this section

decide any question that may be necessary or expedient to decide in connection with the rectification of the register. 24

(4) The tribunal, of its own motion, may, after giving notice in the prescribed manner to the parties concerned and after giving them an opportunity of being heard, make any order referred to in sub-section (1) or sub-section (2).

(5) Any order of the High Court rectifying the register shall direct that notice of the rectification shall be served upon the Registrar in the prescribed manner who shall upon receipt of such notice rectify the register accordingly.

(6) The power to rectify the register conferred by this section shall include the power to remove a trade mark registered in Part A of the register to Part B of the register.

Xxx

107. Application for rectification of register to be made to High Cour t in cer t ain cases.

(1) Where in a suit for infringement of a registered trade mark the validity of the registration of the plaintiff's trade mark is questioned by the defendant or where in any such suit the defendant raises a defence under clause (d) of sub- section (1) of section 30 and the 25

plaintiff questions the validity of the registration of the defendant's trade mark, the issue as to the validity of the registration of the trade mark concerned shall be determined only on an application for the rectification of the register, and notwithstanding anything contained in section 46, sub-section (4) of section 47 or section 56, such application shall be made to the High Court and not to the Registrar.

(2) Subject to the provisions of sub-section (1), where an application for rectification of the register is made to the Registrar under section 46 or sub- section (4) of section 47 or section 56, the Registrar may, if he thinks fit, refer the application at any stage of the proceeding to the High Court.

Xxx

111. Stay of proceedings wher e the validity of r egistration of the trade mar k is questioned, etc.

(1) Where in any suit for the infringement of a trade mark—

(a) the defendant pleads that the registration of the plaintiff' s trade mark is invalid; or 26

(b) the defendant raises a defence under clause (d) of sub-

section (1) of section 30 and the plaintiff pleads the invalidity of the registration of the defendant's trade mark, the court trying the suit (hereinafter referred to as the court), shall,--

(i) if any proceedings for rectification of the register in relation to the plaintiff's or defendant's trade mark are pending before the Registrar or the High Court, stay the suit pending the final disposal of such proceedings;

(ii)if no such proceedings are pending and the court is satisfied that the plea regarding the invalidity of the registration of the plaintiff's or defendant's trade mark is prima facie tenable, raise an issue regarding the same and adjourn the case for a period of three months from the date of the framing of the issue in order to enable the party concerned to apply to the High Court for rectification of the register.

(2) If the party concerned proves to the court that he has made any such application as is referred to in clause (b) (ii) of sub-section (1) within the time specified 27

therein or within such extended time as the court may for sufficient cause allow, the trial of the suit shall stand stayed until the final disposal of the rectification proceedings.

(3) If no such application as aforesaid has been made within the time so specified or within such extended time as the court may allow, the issue as to the validity of the registration of the trade mark concerned shall be deemed to have been abandoned and the court shall proceed with the suit in regard to the other issues in the case.

1851 (4) The final order made in any rectification proceedings referred to in sub-section (1) or sub-section (2) shall be binding upon the parties and the court shall dispose of the suit conformably to such order in so far as it relates to the issue as to the validity of the registration of the trade mark.

(5) The stay of a suit for the infringement of a trade mark under this section shall not preclude the court making any interlocutory order (including any order granting an injunction, directing accounts to be kept, appointing a receiver or attaching any property), during the period of the stay of the suit.” 28

16. The aforesaid provisions of the

1958 Act have been replicated in the 1999

Act. As the judicial precedents that would

require elaboration are in the context of

the 1999 Act, for purpose of clarity, it

would suffice to indicate that Sections

46, 56, 111 and 107 of the 1958 Act

(extracted above) correspond to Sections

47, 57, 124 and 125 of the 1999 Act.

17. What is the scheme of the Act? The

question does not seem to have

received/engaged the attention of this

Court at any earlier point of time and

therefore will have to be answered by us.

The pronouncements of the High Court of

Delhi and Madras in Astrazeneca UK Ltd.

and Anr. Vs. Orchid Chemicals and 29

Pharmaceuticals Ltd.5 and B. Mohamed

Yousuff (supra) and that of the Full Bench

of the Delhi High Court in Data Infosys

Limited (supra) have been cited at the Bar

in support of the respective contentions.

18. In Astrazeneca UK Ltd. (supra),

the Delhi High Court took the view that

while in cases falling under Section

124(1)(i) of the 1999 Act, the Civil Court

in seisin of an infringement suit would be

obliged to adjourn the proceedings and

await the outcome of the rectification

proceedings, in cases falling under

Section 124(1)(ii), access to the

Intellectual Property Appellate Board

(earlier High Court) is barred if the

Civil Court does not find the plea of

invalidity of the registration of the

Trade Mark, raised in the suit to be prima

5 2006 (32) PTC 733 30

facie tenable. In such a situation, the

aggrieved party is left with the remedy of

approaching the Appellate Court insofar as

the finding with regard to absence of a

prima facie case with regard to the plea

of invalidity of the registration of the

trade mark is concerned.

19. However, the Madras High Court in

B. Mohamed Yousuff (supra) took a

contrary view and held that Sections 124

(1)(i) and (ii) operate at two different

levels and in two different situations.

The former deals with a situation where a

rectification application is already

pending whereas the latter governs a

situation where no such proceeding is

pending. The Madras High Court was of the

view that both the sub-clauses focus their

field of operation only with regard to the

stay of civil suit for infringement and 31

the same does not deal with the discretion

of the Court to permit or not to permit

the filing of a rectification application.

The High Court further was of the view

that a plain reading of Section 124(1)(ii)

does not disclose that the said provision

of the 1999 Act mandates a party to first

obtain permission/leave of the Court to

file a rectification application which is

a statutory right vested by the Act

(Sections 47 and 57 of the 1999 Act) and

therefore cannot be curtailed by any other

provision of the 1999 Act.

20. The issue arose once again before

the Delhi High Court in Data Infosys

Limited (supra) which was referred to a

Full Bench, perhaps, for a closer look

into the matter in view of the conflict of

opinions in Astrazeneca UK Ltd. (supra)

and B. Mohamed Yousuff (supra). After an 32

elaborate consideration of the matter, the

Full Bench of the Delhi High Court

concluded that where registration of a

trade mark is questioned after initiation

of a suit for infringement it is open for

the party setting up the plea of

invalidity to apply to the IPAB under

Sections 47 and 57 of the 1999 Act for

rectification. The High Court went on to

hold that the effect of the prima facie

evaluation of the tenability of the plea

of invalidity does not impinge on the

right of the party raising such a plea to

apply to the IPAB for rectification. In

other words, the right to seek

rectification under Sections 47 and 57 of

the 1999 Act does not stand extinguished

in a situation where in a suit for

infringement the plea of invalidity is

found to be prima facie not tenable. The 33

only difference according to the High

Court is that while under Sections 47 and

57 of the 1999 Act, the aggrieved party

can move the Registrar for rectification,

in the latter situation i.e. where a suit

is pending it is the IPAB which alone

acquires jurisdiction to the exclusion of

the Registrar.

21. In Data Infosys, the Full Bench of

the Delhi High Court further took the view

that the provisions of Section 124(3) of

the 1999 Act should be interpreted to mean

that if rectification proceedings are not

filed within the period stipulated under

Section 124(2) of the 1999 Act, or any

extended period, the issue of invalidity

of the registered trade mark would not

survive to be decided and the said plea

would be deemed to have been abandoned.

But all these consequences will follow in 34

the suit. If the aggrieved party files a

rectification application under Sections

47/57 of the 1999 Act after expiry of the

period stipulated under Section 124(2) of

the 1999 Act, or the extended period, as

may be, the rectification application

would still be maintainable and would have

to be decided on merits by the IPAB and

the final decision of the Board on the

rectification application would have no

bearing on the suit notwithstanding the

fact that the plea of invalidity is deemed

to have been abandoned therein. The only

effect of the belated filing of the

rectification proceeding would be that

there would be no stay of the suit.

According to the Full Bench, the

jurisdiction to decide disputes with

regard to validity of registration of a

trade mark is exclusively vested in the 35

statutory authorities i.e. the Registrar

or the IPAB and the Civil Court’s

jurisdiction to go into the merits of the

plea of invalidity is statutorily barred.

Therefore the jurisdiction of the IPAB

vested under the statute cannot be ousted

on the Civil Court’s determination of the

prima facie tenability of the plea of

invalidity or upon the failure of the

aggrieved party to move a rectification

application within the time stipulated

under Section 124(2) of the 1999 Act.

22. Insofar as its earlier view in

Astrazeneca UK Ltd. (supra) is concerned,

the Full Bench was of the opinion that the

appellate jurisdiction of the High Court

would only be confined to a consideration

of the question of the prima facie

assessment of tenability which would not

touch upon the question of invalidity of 36

the trade mark on merits. The view

expressed in Astrazeneca UK Ltd. (supra)

was held to be unacceptable on that basis.

Insofar as the abandonment of the plea of

invalidity is concerned, the Full Bench

was of the opinion that Section 124(3)

merely contemplates abandonment of the

plea/defence of invalidity in the suit and

not an abandonment to claim rectification

under Sections 47/57 of the 1999 Act.

23. Registration of a trade-mark vests

in the registered owner an exclusive right

to use the mark in relation to the goods

in respect of which the mark has been

registered. This is, however, subject to

such conditions and limitations as may be

incorporated in the registration itself.

It also grants to the registered owner a

right to seek and obtain relief in case of

infringement of the mark. Section 46 in 37

Chapter VI of the 1958 Act contemplates

removal from the register of any

registered trade mark, inter alia, on the

ground that the same was registered

without any bona fide intention of use

and, in fact, such mark has not been used

up to one month prior to the date of the

application for removal or that for a

continuous period of five years there has

been no bona fide use of the mark.

Chapter VII of the 1958 Act deals with

rectification and correction of the

register of trade marks. Under Section

56, the Tribunal, (Registrar or, as the

case may be, the High Court), on

application, may cancel or vary the

registration of a trade mark on the ground

of any contravention, or failure to

observe a condition subject to which

registration was granted.

38

24. In cases where in a suit for

infringement of a registered trade mark

the validity of the registration of the

trade mark is questioned either by the

plaintiff or by the defendant, Section

107 of the 1958 Act provides that an

application for rectification shall be

made to the High Court and not to the

Registrar notwithstanding the provisions

contained in Section 46 or Section 56 of

the 1958 Act. This would seem to suggest

that in such cases (where a suit for

infringement is pending) the legislative

scheme is somewhat different.

25. The above seems to become more clear

from what is to be found in Section 111

of the 1958 Act which deals with “stay of

proceedings where the validity of re gistr ation of

the trade mar k is questioned” . The aforesaid 39

provision of the 1958 Act specifically

provides that if a proceeding for

rectification of the register in

relation to the trade mark of either the

plaintiff or the defendant is pending

before the Registrar or the High Court,

as may be, and a suit for infringement

is filed wherein the aforesaid plea is

raised either by the defendant or by the

plaintiff, the suit shall remain stayed.

Section 111 further provides if no

proceedings for rectification are

pending on the date of filing of the

suit and the issue of validity of the

registration of the plaintiff's or the

defendant's trade mark is raised/arises

subsequently and the same is prima facie

found to be tenable, an issue to the

aforesaid effect shall be framed by the

Civil Court and the suit will remain 40

stayed for a period of three months from

the date of framing of the issue so as

to enable the concerned party to apply

to the High Court for rectification of

the register. Section 111(2) of the 1958

Act provides that in case an application

for rectification is filed within the

time allowed the trial of the suit shall

remain stayed. Sub-Section (3) of

Section 111 provides that in the event

no such application for rectification is

filed despite the order passed by the

Civil Court, the plea with regard to

validity of the registration of the

trade mark in question shall be deemed

to have been abandoned and the suit

shall proceed in respect of any other

issue that may have been raised therein.

Sub-section (4) of Section 111 provides

that the final order as may be passed in 41

the rectification proceeding shall bind

the parties and the civil court will

dispose of the suit in conformity with

such order insofar as the issue with

regard to validity of the registration

of the trade mark is concerned.

26. Following well accepted

principles of interpretation of

statutes, which would hardly require a

reiteration, the heading of Section 111

of the 1958 Act i.e. “Stay of proceedings

where the validity of re gistr ation of the trade

mar k is questioned, etc.” , cannot be

understood to be determinative of the

true purport, intent and effect of the

provisions contained therein so as to

understand the said section to be

contemplating only stay of proceedings

of the suit where validity of the 42

registration of the trade mark is

questioned. Naturally, the whole of the

provisions of the section will have to

be read and so read the same would

clearly show lack of any legislative

intent to limit/confine the operation of

the section to what its title may

convey.

27. Rather, from the resume of the

provisions of the 1958 Act made above it

becomes clear that all questions with

regard to the validity of a Trade Mark

is required to be decided by the

Registrar or the High Court under the

1958 Act or by the Registrar or the IPAB

under the 1999 Act and not by the Civil

Court. The Civil Court, infact, is not

empowered by the Act to decide the said

question. Furthermore, the Act mandates

that the decisions rendered by the 43

prescribed statutory authority

[Registrar/High Court (now IPAB)] will

bind the Civil Court. At the same time,

the Act (both old and new) goes on to

provide a different procedure to govern

the exercise of the same jurisdiction in

two different situations. In a case

where the issue of invalidity is raised

or arises independent of a suit, the

prescribed statutory authority will be

the sole authority to deal with the

matter. However, in a situation where a

suit is pending (whether instituted

before or after the filing of a

rectification application) the exercise

of jurisdiction by the prescribed

statutory authority is contingent on a

finding of the Civil Court as regards

the prima facie tenability of the plea

of invalidity.

44

28. Conversely, in a situation where

the Civil Court does not find a triable

issue on the plea of invalidity the

remedy of an aggrieved party would not

be to move under Sections 46/56 of the

1958 Act but to challenge the order of

the Civil Court in appeal. This would be

necessary to avoid multiple proceedings

on the same issue and resultant conflict

of decisions.

29. The 1958 Act clearly visualizes

that though in both situations i.e.

where no suit for infringement is

pending at the time of filing of the

application for rectification or such a

suit has came to be instituted

subsequent to the application for

rectification, it is the Registrar or

the High Court which constitutes the

Tribunal to determine the question of 45

invalidity, the procedure contemplated

by the Statute to govern the exercise of

jurisdiction to rectify is, however,

different in the two situations

enumerated. Such difference has already

been noted.

30. The intention of the legislature

is clear. All issues relating to and

connected with the validity of

registration has to be dealt with by the

Tribunal and not by the civil court. In

cases where the parties have not

approached the civil court, Sections 46

and 56 provide an independent statutory

right to an aggrieved party to seek

rectification of a trade mark. However,

in the event the Civil Court is

approached, inter alia, raising the

issue of invalidity of the trade mark 46

such plea will be decided not by the

civil court but by the Tribunal under

the 1958 Act. The Tribunal will however

come into seisin of the matter only if

the Civil Court is satisfied that an

issue with regard to invalidity ought to

be framed in the suit. Once an issue to

the said effect is framed, the matter

will have to go to the Tribunal and the

decision of the Tribunal will thereafter

bind the Civil Court. If despite the

order of the civil court the parties do

not approach the Tribunal for

rectification, the plea with regard to

rectification will no longer survive.

31. The legislature while providing

consequences for non-compliance with

timelines for doing of any act must be

understood to have intended such 47

consequences to be mandatory in nature,

thereby, also affecting the substantive

rights of the parties. This is how

Section 111(3) of the 1958 Act has to be

understood. That apart, it is very much

within the legislative domain to create

legal fictions by incorporating a

deeming clause and the court will have

to understand such statutory fictions as

bringing about a real state of affairs

between the parties and ushering in

legal consequences affecting the parties

unless, of course, there is any other

contrary provision in the statue. None

exists in the 1958 Act to understand the

provisions of Section 111(3) in any

other manner except that the right to

raise the issue of invalidity is lost

forever if the requisite action to move

the High Court/IPAB (now) is not 48

initiated within the statutorily

prescribed time frame.

32. Thus, by virtue of the operation

of the 1958 Act, the plea of

rectification, upon abandonment, must be

understood to have ceased to exist or

survive between the parties inter se.

Any other view would be to permit a

party to collaterally raise the issue of

rectification at any stage

notwithstanding that a final decree may

have been passed by the civil court in

the meantime. True, the decree of the

Civil Court will be on the basis of the

conclusions on the other issues in the

suit. But to permit the issue of

rectification, once abandoned, to be

resurrected at the option of the party

who had chosen not to pursue the same at

an earlier point of time would be to 49

open the doors to reopening of

decrees/orders that have attained

finality in law. This will bring in

uncertainty if not chaos in the judicial

determinations between the parties that

stand concluded. Besides, such an

interpretation would permit an aggrieved

party to get over the operation of a

statute providing for deemed abandonment

of the right to raise an issue relevant;

in fact, fundamental to the lis. The

position may be highlighted by reference

to a suit for infringement where the

defendant raises the plea of invalidity

of the plaintiff's trade mark and also

in the alternative takes up any of the

defenses available in law. The defendant

by operation of Section 111(3) of the

1958 Act is deemed to have abandoned the

plea of invalidity. In the trial it is 50

found that the defendant is guilty of

infringement and is appropriately

restrained by a decree of the Civil

Court. If the right under Section 46/56

of the 1958 Act is to subsist even in

such a situation, the possible

uncertainty and possible anarchy may

well be visualized. This is why the

legislature by enacting Section 111 of

the 1958 Act has mandated that the issue

of invalidity which would go to the root

of the matter should be decided in the

first instance and a decision on the

same would bind the parties before the

civil court. Only if the same is

abandoned or decided against the party

raising it that the suit will proceed in

respect of the other issues, if any. If

the above is the legislative intent,

which seems to be clear, we do not see 51

how the same can be overcome by reading

the rights under Sections 46 and 56 of

the 1958 Act to exist even in a

situation where the abandonment of the

same right under Section 111(3) has

taken effect in law. The mandate of the

1958 Act, particularly, Section 111

thereof, appears to be that if an

aggrieved party does not approach the

Tribunal for a decision on the issue of

invalidity of registration as provided

for under Section 111(2) and (3), the

right to raise the issue (of invalidity)

would no longer survive between the

parties to enable the concerned party to

seek enforcement of the same by recourse

to or by a separate action under the

provisions of Section 46/56 of the 1958

Act.

52

33. Having dealt with the matter in

the above manner, certain subsidiary and

incidental questions, urged and argued

by the parties, would also need an

answer.

34. The first question posed is how

an approach to the superior Court i.e.

the High Court, under Section 111 of the

1958 Act, can be contingent on a

permission or grant of leave by a court

of subordinate jurisdiction. The above

is also contended to be plainly contrary

to the provisions of Section 41 (b) of

Specific Relief Act, 1963. It is also

urged that Section 32 of the 1958 Act

provides a defence to a claim of

infringement which is open to be taken

both in a proceeding for rectification

as well as in a suit. The said defence

statutorily available to a contesting 53

party cannot be foreclosed by a deemed

abandonment of the issue of invalidity,

it has been contended.

35. Section 111 of the 1958 Act and

the corresponding Section 124 of the

1999 Act nowhere contemplates grant of

permission by the civil court to move

the High Court or the IPAB, as may be,

for rectification. The true purport and

effect of Sections 111/124 (of the old

and new Act) has been dealt within

detail and would not require any further

discussion or enumeration. The

requirement of satisfaction of the civil

Court regarding the existence of a prima

facie case of invalidity and the framing

of an issue to that effect before the

law operates to vest jurisdiction in the

statutory authority to deal with the

issue of invalidity by no means, 54

tantamount to permission or leave of the

civil court, as has been contended. It

is a basic requirement to further the

cause of justice by elimination of

false, frivolous and untenable claims of

invalidity that may be raised in the

suit.

36. While Section 32 of the 1958

Act, undoubtedly, provides a defence

with regard to the finality of a

registration by efflux of time, we do

not see how the provisions of aforesaid

section can be construed to understand

that the proceedings under Sections 46

and 56 on the one hand and those under

Sections 107 and 111 on the other of the

1958 Act and the pari materia provisions

of the 1999 Act would run parallelly.

As already held by us, the jurisdiction

of rectification conferred by Sections 55 46 and 56 of the 1958 Act is the very

same jurisdiction that is to be

exercised under Sections 107 and 111 of

the 1958 Act when the issue of

invalidity is raised in the suit but by

observance of two different procedural

regimes.

37. In the light of the above while

answering the question arising in the

manner indicated above, we dismiss all

the appeals under consideration and

affirm the order passed by the High

Courts.

...................,J.

(RANJAN GOGOI)

...................,J.

(NAVIN SINHA) NEW DELHI NOVEMBER 29, 2017