REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.   7404         OF 2008 (Arising out of SLP (C) No.6145 of 2006)

M/s. Thukral Mechanical Works … Appellant

Versus

P.M. Diesels Pvt. Ltd. & Anr. … Respondents

J U D G M E N T

S.B. Sinha, J.

1. Leave granted.

2. Interpretation  of  the  provisions  of  Section  46(1)(b)  of  the  Trade  and

Merchandise Marks Act, 1958 (hereinafter called and referred to for the sake of

brevity as ‘the said Act’) is involved herein.   

3. The factual matrix of the matter, which is not much in dispute is as under :

First Respondent is the registered proprietor of a trade mark ‘Field Marshal’

for Diesel Engines since 1964 bearing No.228867.  One M/s. Jain Industries got

the trade mark ‘Field Marshal’  registered under clause (7), inter  alia,  for Flour

Mills, Centrifugal Pumps, couplings for machines, pulleys included in class 7 and

valves  (parts  of  machines).   The said  registration  was renewed for  the periods

13.5.1972 and 12.5.1979; 13.5.1979 and 12.7.1986 and 13.7.1986 and  12.7.1993.

Appellant  is  said  to  have  commenced  its  business  of  manufacturing  and

selling centrifugal pumps also under the mark ‘Field Marshall’.

Allegedly, on the premise that the first respondent is the proprietor of the

said mark by reason of long user and, thus, acquired a reputation in that behalf, a

legal notice was issued upon it questioning its right to use the said mark in respect

of centrifugal pumps by the appellant laying a claim that it had been using the said

mark since 1963.

4. Respondent No.1 thereafter filed a suit in the Delhi High Court for grant of

a  decree  of  permanent  injunction  being  Suit  No.2408  of  1985  alleging

infringement  of  the  said  mark  and/or  claiming  right  of  passing  off  in  respect

thereof.  An ex parte order of injunction was passed on 19.12.1985 against the

defendant (appellant herein) to the following effect :

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“Notice for April 8, 1986.  Meanwhile, a temporary ex parte  injunction  is  issued  against  the  defendants restraining  them  from  manufacturing  or  selling  either themselves or through any dealer or representative diesel oil  engines  or parts  thereof with the trade mark ‘Field Marshal’ and/or any other trade mark identical therewith and  all  goods  falling  in  Clause  7  of  the  Trade  and Merchandise  Mark  Rules.   The  plaintiff  shall  comply with the requirements of Order 39 Rule 4 of the Code of Civil Procedure.”

5. Indisputably, during the proceedings in the above suit, M/s. Jain Industries

by a deed of assignment assigned the said trade mark along with its goodwill in

favour of the appellant.  One of the stipulations contained therein reads as under :

“That the party of the second part has satisfied the party of  the  first  part  of  having  used  the  mark  FIELD MARSHAL in respect of Centrifugal Pumps and Valves since 1973.”

6. Indisputably, First Respondent filed an application under Section 46, 56 and

107 of the Act,  marked as C.O. No.9 of 1986, contending that M/s. Jain Industries

having not used the trade mark in respect of Centrifugal Pumps for a period more

than  five  years  and  one  month,  the  mark should  be  taken  off  the  register.   It

claimed  user  of  the  said  mark  since  1963  and  sought  for  rectification  of  the

register by expunging the expression ‘circulation and centrifugal pumps’ from the

specification of goods.  Indisputably, appellant filed an application in form TM 24

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on  17.6.1986.   The  Assistant  Registrar,  Trade  Marks,  passed  an  order  on

10.11.1986 certifying :

“THAT  the  trade  mark  FIELD  MARSHAL  BRAND (word per se) is registered under No.228867 in part ‘A’ of the Register as of the date 13th May, 1965 in class 7 in respect of Flour Mills, circulating and centrifugal pumps; coupling for machines; pulleys included in Class 7, and valves (parts of machines) in the name of Pooran Chand Jain and Kailash Chand Jain, trading as Jain Industries, 1166, Phatak Suraj Bhan, Belanganj Agra.

THAT Pursuant to a request on form TM-23 dated 17th June, 1986 and order thereon dated 24th October, 1986 Ganga  Ram  Anil  Kumar  (HUF),  Sunil  Kumar  and Sumitra  Rani,  trading  as  Thukral  Mechanical  Works Railway  Road,  Sirhind  (Punjab)  are  registered  as subsequent  proprietors  of  this  mark  as  from 30th May, 1986 by virtue of Agreement dated 30th May, 1986.

AND THAT The registration of the aforesaid trade mark has been renewed from time to time and will remain in force for a period of a seven years from 13th May, 1986 and may be renewed at the expiration of that period and of each succeeding period of a seven years.”

7. In the said C.O. No.9 of 1986 filed by the first respondent against M/s. Jain

Industries, despite service of notice, nobody appeared on behalf of the defendant.

16.1.1987 was the date fixed in the said suit.  Appellant’s counsel appeared on that

date and, inter alia,  contended that presently it  was the registered owner of the

trade  mark  which  was  sought  to  be  cancelled.   In  view  of  that  statement,  a

submission was made on behalf of the first respondent that it may be permitted to

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withdraw the petition with liberty to file a fresh petition on the same cause of

action.  The learned Judge directed recording of statements of the learned counsel

in this behalf; pursuant whereto the same were recorded which reads as under :

“C.O.9 of 1986

Mr. Singh has filed a reply in this petition bringing out that presently he is the registered owner of the trademark which is sought to be cancelled in this petition.  In view of  this  situation  learned  counsel  for  the  petitioner  has submitted  that  he  may  be  permitted  to  withdraw  this petition with permission to file a fresh petition on this very  cause  of  action  after  impleading  M/s  Thakural mechanical  Works  etc.   Let  the  statement  of  learned counsel for the petitioner be recorded.

Statement of Shri K.L. Aggarwal, counsel for petitioner without oath :

In view of the submissions of M/s Thakural Mechanical Works I may be permitted to withdraw this petition with permission to file a fresh petition on this very cause of action.

Statement  of  Shri  Hemant  Singh,  counsel  for  M/s. Thakural Mechanical Works without oath :

I  have  no  objection  if  the  petitioner  is  permitted  to withdraw  this  petition  with  permission  to  file  a  fresh petition on this very cause of action.”

On the basis of the said statement, the following order was passed :

“This  petition  has  been filed  by M/s.  PM Diesels  Pvt. Ltd. Against M/s. Jain Industries and the Dy. Registrar of Trade Marks under Section 46, 56 and 107 of the Trade and  Merchandise  Marks  Act,  1958  for  rectification  of

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entry relating to the Registered Trade Mark No.228867 in  Class  7.   After  the  notice  was  served  upon  the respondent  1,  a  reply  has  been  filed  by M/s  Thakural Mechanical Works bringing out therein that they are now the registered proprietors of said Trade Mark No.228867. In  this  view  of  the  matter  learned  counsel  for  the petitioner  has  submitted  that  he  may  be  permitted  to withdraw  this  petition  with  permission  to  file  a  fresh petition on this very cause of action.  The request is not opposed on behalf of M/s Thakural Mechanical Works. In  these  circumstances  the  request  of  the  plaintiff  is granted  and  petitioner  is  permitted  to  withdraw  this petition  and file  a fresh  petition  on  this  very cause  of action.   The petition is  accordingly filed as withdrawn leaving the parties to bear their own costs.”

8. A fresh application was filed by the first respondent.  The said M/s. Jain

Industries, however, was not impleaded as a party therein.  The cause of action

therefor was stated to have arisen in the following circumstances :

“That the cause of action for the present petition arose in favour of  the petitioner and against  the respondents  in the  month  of  January  1987  when  the  respondent informed  this  Hon’ble  Court  that  they  have  been recorded  as  subsequent  proprietors  of  the  impugned registered trade mark No.228867 in Class 7 in C.O. No.9 of  1986,  whereupon  the  petitioner  withdrew  the  said earlier petition C.O. No.9 of 1986 with permission of the court to file the present petition, because of the changed circumstances.  The cause of action is continuous from day  to  day  till  the  impugned  registration  is cancelled/rectified.”

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9. The injunction matter in Suit No.2408 of 1985 came up for hearing before a

learned Single Judge of the High Court.   By an order dated 19.1.1988, having

regard to the provisions contained in the said Act, the learned Judge opined that

appellant having become the registered proprietor of the said trade mark, no case

for grant of injunction has been made out, the interim order of injunction passed

on  19.12.1985  was  vacated  and  the  defendants  were  permitted  to  use  their

registered trade mark subject to the following conditions :

“(a) Defendants will not use the logo/style of the word “Field Marshal” of which logo and style the plaintiff is the proprietor under the Copyright Act.

(b) Defendants  shall  mention  the  name  of  the defendant  firm, Thukral Mechanical  Works, Sirhind on each and every centrifugal pump manufactured by them and sold in the name of ‘Field Marshal’.

(c) The defendants shall maintain proper accounts of the sale of centrifugal pumps under the trade mark “Field Marshal”  and  shall  file  them  in  Court  as  and  when directed.”

10. Correctness or otherwise of the said order has not  been questioned.   The

second  rectification  application  filed  by  the  first  respondent,  however,  was

transferred to the Intellectual Property Appellate Board.  The said application was

dismissed.   

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A writ  petition was filed thereagainst  by the first  respondent.   A learned

Single Judge of the Delhi High Court, however, refused to stay the operation of

the order of the Board dated 27.10.2004.  An appeal was preferred thereagainst.

The Division Bench of the High Court thereafter while disposing of both the writ

petition and the Letters Patent Appeal allowed the writ petition and set aside the

order of the Board and directed it to adjudicate the dispute on merits.  The said

order of the Division Bench is under challenge in this appeal.

11. The core question which arises for our consideration is as to whether in the

aforementioned facts and circumstances of the case, the application under Section

46(1)(b) was maintainable.   

Before  adverting  thereto,  we  may  take  notice  of  the  relevant  statutory

provisions :

12. Sections 46(1)(b), 48(1), 48(2) and 56 read as under :

“Section 46—Removal  from register  and imposition of limitations on ground 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) …

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(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 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  relevent  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.

Section  48—Registered  users—(1)  Subject  to  the provisions  of  section  49,  a  person  other  than  the registered proprietor of a trade mark may be registered as the registered user thereof in respect of any or all of the goods  in  respect  of  which  the  trademark  is  registered otherwise than as a defensive trade mark; but the Central Government may, by rules made in this behalf, provide that  no  application  for  registration  as  such  shall  be enertained  unless  the  agreement  between  the  parties complies with the conditions laid down in the rules for preventing trafficking in trade marks.

(2) The permitted use of a trade mark shall be deemed to be used by the proprietor thereof, and shall be deemed not to be used by a person other than the proprietor, for the purposes of section 46 or for any other purpose for which such use is material under this Act or any other law.

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Section 56—Power to cancel or vary registration and to rectify the register—(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  of 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.

(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.”

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13. Indisputably, the scope of the provisions for removal from Register in terms

of Section 46 and 56 of the Act stand on different footings.  Whereas Section 46

had a limited application, Section 56 of the Act is wider in nature.  Concededly,

clause (a) of sub-section (1) of Section 46 is not attracted in the case.

14. For the purpose of appreciation of the rival contentions, we may notice the

findings of the Board as also the High Court.   

The Board has taken the view that the period of five years and one month

will begin to run from the date on which Thukral became the proprietor of the

trademark,  that  is,  30th May,  1986  and,  therefore,  the  rectification  application

could have been filed by the appellant only sometime in 1991.  Opining that an

application for rectification against the appellant within a period of seven and a

half months from the date of assignment of the trade mark was not maintainable,

the application was dismissed.  

The High Court on the other hand opined :

“It  was  not  anybody’s  case  before  us  that  M/s  Jain Industries the registered proprietor of the trademark used it at all.  The trademark was used by the Appellant and Thukral,  neither  of  whom  were  proprietors  thereof, except that Thukral claims to have become its proprietor with effect from 30th May, 1986.

According to learned counsel for the Appellant, the use of the trademark by Thukral was not legally permissible

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use inasmuch as Thukral did not have the consent, tacit or otherwise of M/s. Jain Industries to use the trademark. If Thukral did, then it cannot be said that there was no bona fide use thereof by its proprietor, that is, M/s Jain Industries.   This appears to be the position at least  till 30th May, 1986.  In the meantime, as a result of the ex parte  ad  interim  injunction  granted  on  19th December 1985 by this Court in Suit No.2408 of 1985, there was no question of Thukral  using the trademark Field Marshal till the injunction was vacated on 19th January, 1988.”

15. The Act was enacted to provide for the registration and better protection of

trademarks and for the prevention of the use of fraudulent marks of merchandise.

Registration of a trade mark remains valid for seven years.  Renewal applications

are required to be filed on the expiry of seven years.  M/s.  Jain Industries got

itself registered and obtained periodical renewal thereof as is required under the

Act.  First Respondent withdrew the application against M/s. Jain Industries.  The

prayer in the application was to take off the registered trade mark from the register

in respect of centrifugal pumps (goods) so far as the registration made in favour of

the appellant is concerned.

16. It is in the aforementioned situation, we are called upon to determine the

meaning of the words ‘for the time being’ occurring in Section 46(1)(b) of the Act.

Two interpretations thereto which are possible are :

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(1) the said words would denote non-use of the trade mark in relation to the

goods by the appellant for a period of five years or longer; and

(2) The mark had not been used for a period of five years or longer either by the

present proprietor thereof or his predecessor.

17. We  may,  however,  also  notice  that  another  construction  of  the  said

provision has been put forth by Mr. Sunderam, learned senior counsel appearing

on behalf of the appellant, that the word ‘proprietor’ would not mean a registered

proprietor but also a person who has become ‘proprietor’ by long use thereof.   

18. The  words  ‘for  the  time  being’  would  mean  differently  in  different

situations.   It  may mean ‘the moment or existing position’ as was held by this

Court in the case of Jivendra Nath Kaul v. Collector/District Magistrate and Anr.

[(1992)  3  SCC  576]  or  in  the  context  of  clause  (22)  of  Article  366  of  the

Constitution  as has been held in  H.H. Maharajadhiraja Madhav Rao Jivaji  Rao

Scindia  Bahadur  of  Gwalior,  H.H.  Maharajadhiraja  Maharana  Shri  Bhagwat

Singhji Bahadur of Udaipur v.  Union of India and Anr. [AIR 1971 SC 530 para

110] to mean :

“By the  use  of  the  expression  “for  the  time being”  in Clause (22) of Article 366 the President is not invested with  authority  to  accord  a  temporary  recognition  to  a Ruler nor with authority to recognize or not to recognize a Ruler arbitrarily : the expression “for them time being”

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predicts that there shall be a Ruler of the Indian State, that if the first recognized Ruler dies, or ceases to be a Ruler, a successor shall be appointed, and that there shall not be more Rulers than one at a given time.”

The terms also may bring within its umbrage the entire period of five years

or more irrespective of the fact as to whether the registered proprietor was one or

more than one as has been held by the High Court.   

19. There cannot be any doubt or dispute that the registration of a trade mark

confers a very valuable right.  The person in whose name the trade mark has been

registered may take action against any person for passing off the goods as that of

the registered owner.   It  confers  an exclusive right  of use of the trade mark in

relation  to  the  goods  in  which  the  trade  mark  is  registered.   The  same is  an

assignable right in terms of Section 36 of the Act, whereas an unregistered trade

mark is not.

20. Non-user  of the said mark, therefore, entails  the consequences laid  down

under clause (b) of Sub-section (1) of Section 46.   

However,  such  an  application  can  be  filed  only  by  a  person  aggrieved.

When the applicant before the Board establishes the fact in regard to non-user of

the mark for a period of more than five years on the part of the registered owner,

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the latter may show that his case falls within the purview of sub-section (3) of

Section 46.

21. The question which, therefore, arises is as to who can prove that he had the

bona fide intention to use the trade mark on the date of application for registration.

Indisputably,  it  would  be  the  registered  proprietor.   Section  46  is  a  penal

provision.  It provides for civil or evil consequences.  It takes away the valuable

right of a registered proprietor.  It, therefore, can be taken away only when the

conditions laid down therefor are satisfied.

22. While we say so, we are not oblivious of the fact that trafficking in trade

mark is to be discouraged.  A registered proprietor of a trade mark should not be

permitted  to  circumvent  the  law of  user  of  the  trade  mark for  a  long  time by

assigning the same from time to time.  But then such a case has to be made out.

Allegation of trafficking is a serious one.  It must be proved in presence of the

person against whom such allegations are made.  At the time of grant of original

registration, advertisements are issued and objections are called for.  Renewal of

registration, in a sense, also is not automatic.  A person who had been using the

said trade mark as a proprietor thereof by user is supposed to keep itself abreast

with such applications filed by another either for registration of the trade mark or

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renewal  thereof.   The  non-user  for  a  long  time  would  disentitle  a  registered

proprietor from renewal of the registration.

23. It  must  not,  however,  be  forgotten  that  Section  46(1)(b)  provides  for  a

special remedy.  As a person obtains a right on and from the date of registration

and/or  renewal  thereof,  he  can  ordinarily  be  deprived  of  his  right  unless  it  is

shown that the assignment thereof by his holder was not a bona fide one or had

been made by way of camouflage.  If the assignee has obtained assignment for

bona fide use, he may not be fastened with any liability owing to non-user on the

part of his predecessor.  In other words, the mistake of the predecessor should not

be visited with non-use of the present registered owner.  

24. It must, however, be observed that whether a use is for bona fide purpose

would  essentially  be  a  question  of  fact.   Whether  Section  46(1)(b)  read  with

Section  48  of  the  Act  would  bring  within  its  purview,  not  only  a  registered

proprietor  but  also  the  proprietor  who  had  otherwise  acquired  a  right  would

depend upon the facts and circumstances of each case.   

In  Kabushiki Kaisha Toshiba v.  Tosiba Appliances Co. & Ors. [(2008) 8

SCALE 354], this Court held :

“We  do  not  find  any  force  in  the  aforementioned submission.   Clauses  (a)  and  (b)  operate  in  different fileds.   Sub-section  (3)  covers  a  case  falling  within

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clause  (b)  and  not  the  clause  (a)  thereof.   Had  the intention  of  the  Parliament  been  that  sub-section  (3) covers  cases  falling  under  clause  (b)  and  clause  (a), having regard to the similarity of the expressions used, there was no reason as to why it could not be stated so explicitly.

It was furthermore opined :

“There  may be  a  case  where  owing  to  certain  special circumstances,  a  continuous  use  is  not  possible.   The trade  mark  for  which  registration  is  obtained  is  used intermittently.   Such  non-user  for  a  temporary  period may be  due  to  any  exigency  including  a  bar  under  a statute,  or a policy decision of the Government or any action taken against the registrant.”

It was observed that in cases of intermittent use also, clause (b) shall apply.

In Kabushiki Kaisha Toshiba, this Court relied upon Hardie Trading Ltd. & Anr.

V. Addisons Paint & Chemicals Ltd. [(2003) 11 SCC 92] :

“In our  opinion,  the  phrase “person aggrieved” for the purposes  of  removal  on  the  ground  of  non-use  under Section 46 has a different  connotation from the phrase used in section 56 for canceling or expunging or varying an entry wrongly made or remaining in the Register.”

25. The submission of Mr. Sudhir Chandra that the appellant was an infringer

both of the right of M/s. Jain Industries as also the first respondent and, thus, its

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use was not bona fide in a case of this nature cannot be accepted.  If appellant

infringed the right of M/s. Jain Industries, it was for it to take action therefor. It

did  not.   First  respondent  itself  accepts  that  at  least  immediately  prior  to  the

institution of the suit, appellant had been using the same.   

We are not  concerned herein as to  since when it  had been doing so.   It

obtained an or of injunction.  The order of injunction was vacated.  For one reason

or the other, the said order attained finality.  Prima facie, therefore, appellant has

been held to be the registered owner of the trade mark.  It is one thing to say that

for the purpose of  frustrating an application for rectification,  the appellant  had

colluded with its predecessor for the purpose of trafficking by entering into the

deed of assignment which is otherwise illegal and bad in law but it is another thing

to  say that  the appellant  could  be proceeded against  alone for  non-user  of  the

registered trade mark for a period of more than five years.  For the purpose of

making out  such a case,  both the original  registrants as also the assignee were

required to be impleaded as parties.  

26. We may, at  this  stage,  notice  that  in  Law of  Trade  Marks  by Mr.  K.C.

Kailasam,  while  commenting  on  Section  47  of  the  Trade  Marks  Act,  1999  to

which our attention has been drawn by Mr. Sudhir Chandra, it is stated :

“Notes on clauses.—This clause corresponds to section 46  of  the  existing  Act  and  provides  for  removal  of  a

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trade mark from the register on the ground of non-use.  A trade  mark  which  is  not  used  within  five  years  of  its registration,  becomes  liable  for  removal  either completely or in respect of those goods or services for which the mark has not been used.  Under Section 46(1), it  is  proposed to clarify that  the five  years  period will start  from the date on which the trade mark is actually entered on the register.  This amendment is intended to remove any ambiguity, as for all other purposes, the date of registration will be the date on which the application was filed vide clause 23(2).   Proviso to sub-clause (1) also provides that the tribunal may refuse removal of the mark if it is shown that any proprietor had in fact made bona fide use of the trademark for goods or services of the same description or associated goods or services.

It  is  also  proposed  to  increase  the  period  from 1 to  3 months in clause  47(1)(a)  and (b)  in  which  use of the trade mark, prior to the date of filing of the application for removal of the trade mark, shall be disregarded.  This is intended to prevent the registered proprietor to by pass the Act by such token use after he comes to know that an application for removal is about to be filed.  ?Sub-clause (3) protects a mark from being removed from the register on ground of non-use if such non-use is shown to have been  due  to  special  circumstances  in  the  trade.   The clause is proposed to be modified to clarify that special circumstances  in  the  trade  will  include  restrictions imposed  by any law or  regulation  on the  use  of  trade mark  in  India.   Consequential  amendments  have  been made to cover services. (Clause 47 of the Bill)”

27. The  Court  while  construing  a  statute  takes  into  consideration  the

parliamentary intent in amending the provisions thereof.  It seeks to enhance the

period of moratorium of use of the registered trade mark from one month to three

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months  so  as  to  prevent  speculative  assignment.   Thus,  a  case  of  speculative

assignment is specifically required to be made out.   Such an application may be

maintainable in terms of Section 56 of the Act but strictly not in terms of Section

46(1)(b) thereof and that too in the absence of the original registered proprietor.

28. We are not satisfied with the explanation offered by the first respondent that

it  gave  up  the  case  of  non-use  of  the  registered  trade  mark  against  M/s  Jain

Industries on the basis of statement made by the learned counsel for the appellant;

firstly because consent does not confer jurisdiction; secondly, because want and/or

lack of jurisdiction on the part of the Tribunal cannot be waived as if any order is

passed without jurisdiction, the same would be a nullity; and thirdly because the

cause of action, even according to the first respondent in his application before the

High Court, was different.   

The counsel appearing on behalf of the appellant did not state that it had

waived its right so far as non-impleadment of M/s Jain Industries was concerned.

It only consented for grant of liberty in favour of the first respondent for filing of

an application for the self-same cause of action.  The question of maintainability

of the second suit  is absence of the registrant proprietor was not and could not

have been the subject matter of consent at that stage.  The cause of action which

permitted the first respondent to file an application for rectification against M/s.

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Jain Industries was non-user thereof by it.   Its non-user and rectification of the

register  could  not,  in  the  aforementioned  situation,  have  been  tagged  with  the

cause of action, if any, against the appellant.   

29. The second contention  of  Mr.  Sudhir  Chandra  that  the appellant  was  an

infringer  of  the  trade  mark  is  again  a  question  of  fact.   The  right  of  the  first

respondent as a proprietor of the trade mark by reason of a long user is required to

be determined vis-à-vis M/s. Jain Industries as also the appellant in the suit filed

by it  which is  pending.   The Board could not,  while exercising its  jurisdiction

under Section 46(1)(b), of the Act proceeded on the basis of such presumption.   

It is not correct that no cause of action survived against Jain Industries.  It

was not lost by reason of assignment as was contended by the learned counsel.  In

the suit, only the competing right of the first respondent qua the appellant can be

determined and not a right against M/s. Jain Industries.  Such a right cannot be

determined in a proceeding under Section 46(1)(b) of the Act which is restricted to

non-user of the registered trade mark.  Both the appellant and the respondent No.1

were the  infringers  of  the right  of M/s.  Jain  Industries  as it  was the registered

proprietor  of  the  trade  mark  in  respect  of  the  goods  in  question,  namely,

centrifugal pumps.

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30. Two  interpretations  of  the  said  provision  Section  46(1)(b)  are  possible.

While interpreting the same, however, certain basic principles of construction of

statute must be kept in mind.  As it takes away somebody’s right, it deserves strict

construction.  Jurisdiction of the Board being dependent on determination of the

foundational  facts,  the same was required to be established on the basis  of the

averments made in the application and not otherwise.  

The right of a registered trade mark is not lost automatically on the expiry of

five years and one month.  It does not provide for a ‘sun set’ law.  It has to be

adjudicated upon.  Whether the registered proprietor of the trade mark had taken

recourse to trafficking or not must be determined in an appropriate proceeding.

The principle of ‘purchaser of a property has a duty to make enquiries’, therefore,

cannot apply in a case of this nature.  So long as the right to assign a registered

trade mark remains valid, once the same is validly assigned, the assignee derives

the same right as that of the assignor in terms of the statute. A title to a trade mark

derived on assignment as provided for under the Act cannot be equated with a

defective  title  acquired  in  any  other  property  as  admittedly  on  the  date  of

assignment, the right of the registered trade mark was not extinguished.   

31. Both the findings of the High Court which we have noticed hereinbefore are

findings on question of law and in that view of the matter the contention of Mr.

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Sudhir Chandra that the merit of the matter is yet to be gone into by the Board

cannot be a ground for ignoring the submissions made at the bar.

32. Our attention has again been drawn to a passage from ‘Law of Trade marks

& Geographical Indications’ by Shri K.C. Kailasam, wherein the judgment of the

Tribunal has been criticized in the following terms :

“From the above legislative intent, it would seem that the period  of  non-use of  the  trade  mark is  to be reckoned continuously from the date of its registration.  In the case of  American  Home  Products  Corporation v.  Mac Laboratories Pvt. Ltd. Rendered under the 1958 Act, it was held by the Supreme Court that “the person seeking to  have  the  trade  mark  removed  from the  register  has only to prove such continuous non-user.”

It would appear that neither the U.K. Act, nor the Indian Act, at any time envisaged that the commencement of 5 year period of non-use is to be delinked from the date of registration of the mark, so as to give a fresh lease of life to  the  registration,  every-time  there  is  change  in  the ownership  of  the  mark.   If  that  be  so,  any  registered proprietor  could  easily  defeat  an  application  for rectification by assigning the mark to some other person to  have  a  fresh  period  of  5  years  from  the  date  of assignment and thus effectively frustrate the very object of the provision in section 47(1)(a) and (b).  Further, it is to  be  noted  that  an  assignment  is  subject  to  “the provisions of the Act and any rights vested in any other person”—See section 37.  The assignor cannot obviously transfer more rights than he himself has to the assignee under the Act.”

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33. We do not think that the approach of the learned author is entirely correct.

An assigner can transfer only such right which he possesses.  If his title is not

extinguished by reason of a provision of a statute for non-user of the trade mark

for a period of  five  years, any assignment made shall  be valid  subject  to  such

situation which we have noticed in paragraph 25 supra.

34. For  the  views  we  have  taken,  we are  of  the  opinion  that  the  impugned

judgment  cannot  be  sustained.   It  is  set  aside  accordingly.   The  Board  shall,

however proceed to determine afresh the application filed by the first in the light

of the legal principles explained above.

34. The appeal is allowed with costs.  Counsel’s fee assessed at Rs.1,00,000/-.

……………….…..………….J. [S.B. Sinha]

..………………..……………J.   [Cyriac Joseph]

New Delhi; December 18, 2008

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