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PETITIONER: STATE OF U.P.

       Vs.

RESPONDENT: RAM NATH, PARTNER M/S.  PANNA LAL DURGA PRASAD, KANPUR

DATE OF JUDGMENT24/11/1971

BENCH: REDDY, P. JAGANMOHAN BENCH: REDDY, P. JAGANMOHAN PALEKAR, D.G.

CITATION:  1972 AIR  232            1972 SCR  (2) 572  1972 SCC  (1) 130

ACT: Trade and Merchandise Marks Act (43 of 1958), ss. 28, 78, 79 and 89--Offecnes under ss. 78 and 79-Prosecution if could be initiated  by  Inspector of  trade  marks-Discontinuance  of trade mark--Use by another--If civil matter.

HEADNOTE: The  Inspector  of  trade  marks  wrote  a  letter  to   the Magistrate and requested him to take necessary action  under law  against  the respondents on the  allegations  that  the respondents were producing coins and pieces of gold and were applying to them a trade mark which was deceptively  similar to  the  registered trade mark of a bank, and which  was  in force   when  the  respondents  produced  the  coins.    The Magistrate directed the police to register a case under  the Trade  and Merchandise Marks Act, 1958, and investigate  it. On receipt of the police report the Magistrate followed  the procedure  prescribed by s. 251A of the  Criminal  Procedure Code,  and framed charges under ss. 78 and 79 of the Act  on being  satisfied that there was a prima facie  case.   After one   of   the  prosecution  witnesses  was   examined   the respondents raised the question that the evidence  disclosed that the bank had discontinued the use of the trade mark and a question of abandonment which could be more suitably dealt with by the civil court, had arisen. The High Court on reference by the Sessions Court held  that :  (1)  the  prosecution  could  not  be  initiated  by  the Inspector  of Trade Marks in view of s. 28 of the  Act,  (2) whether  the question of the abandonment of the  trade  mark amounted  to  an express or implied consent for use  by  the respondent  was a matter for the civil court and not  for  a criminal  prosecution and (3) the prosecution  for  offenses under  ss.  78  and 79 was not valid because  the  Bank  was declared  to be a foreign bank by the Reserve Bank of  India in 1960 and hence had no rights as a citizen of India. Allowing the appeal to this Court, HELD  :  (1)  Merely  because s.  89(1)  of  the  Trade  and Merchandise  Marks  Act  refers  to  the  manner  of  taking cognizance in respect of certain offenses specified therein, it  does  not  preclude the  cognizance  of  other  offenses specified  in Chapter X of the Trade and  Merchandise  Marks Act  from being taken under the procedure prescribed by  the

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Criminal  Procedure  Code.   The  offenses  with  which  the respondents were charged are punishable with imprisonment of two  years  and hence, being non-cognizable,  the  procedure followed,  in  the  present  case,  by  the  Magistrate,  is unexceptionable.  Section 28 of the Act which is in  Chapter IV relating to the effect of registration has no hearing  on the question [578 C-H; 579 A-D] (2)  An offence under ss. 78 and 79 relates to a trade  mark whether  it is registered or unregistered.  The  application of  a  trade mark signifies a particular type of  goods  and involves  deception.   Therefore,  the fact  that  the  Bank discontinued the use of the trade mark would not absolve the respondents,  from  criminal liability.  Even if  the  trade mark  was  abandoned  by the Bank it could  only  furnish  a ground for a person to make 573 an  application  under s. 46 of the  Trade  and  Merchandise Marks  Act to have the trade mark removed from the  register of  trade marks, but it does not entitle anyone to  use  the trade mark. [577 A; 578 A-C] (3)  The question whether the Bank, being a foreign bank, is not  a  citizen  and  had no Tight in  the  trade  mark  is, therefore,  irrelevant and does not affect the  validity  of the proceedings against the accused. [577 A-B]

JUDGMENT: CRIMINAL  APPELLATE JURISDICTION: Criminal Appeal No. 41  of 1969, Appeal from the judgment and order dated September 6,  1967, of the Allahabad High Court in Criminal Reference No. 265 of 1965. O. P. Rana, for the appellant. Nur--ud-din Ahmed and P. N. Bhardwaj, for the respondent. The Judgment of the Court was delivered by P.Jaganmohan Reddy, J. This Appeal is by Certificate against the order of the High Court of Allahabad quashing the charge framed by the Additional City Magistrate, Kanpur against the accused Respondent for offenses under Sections 78 and 79  of the Trade and Merchandise Marks Act 43 of 1958  (hereinafter referred to as ’the Act’).  Respondent 1 to Respondent 4 are the  partners  of the firm M/s.  Pannalal  Durga  Prasad  of Nayaganj,  Kanpur which is a firm of bullion  merchants  who have also been minting gold coins with a trade mark said  to be similar to the one which is the registered trade mark  of M/s.  Habib Bank Ltd., Bombay and which was in force on  the day when the alleged offence is said to have been committed. On 24th October 1962 the Inspector of Trade Marks on  behalf of  the  Director  of  Industries  wrote  a  letter  to  the Additional  City Magistrate I, Kanpur that M/s.  Habib  Bank Ltd.,  Bombay which is one of the foremost refiners of  gold has  been  producing  coins and pieces of  gold  of  various shapes  and  sizes  for  sale commonly  known  as   under  a distinct trade mark, the most striking feature of which  has always  been  a device of a lion holding a  sword  with  his forearm  against  the  back ground of a  rising  sun.   This device  of lion is with the word ’Habib Bank Ltd.’ above  it and ’Shuddha Sonu’ below it in Gujarati script with a dotted circle along the border on the face of the device of a  coin and  a wreath ’along the border on the other face  with  the words  ’Habib  Bank Ltd., contained in the  upper  half  and ’Pure  Gold’  in the lower half of the space  within  it  in English  script with the description of weight and  quality. This  trade mark it was stated had acquired  distinctiveness

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in respect of old coins and pieces produced by 574 them  on account of long and extensive use, that the  people in  that part of the country particularly the people in  the rural  areas  have  always had a great fancy  for  the  gold pieces  and  coins of Habib Bank Ltd., on account  of  their fineness  for  use  in preparing ornaments as  also  as  the safest  investment  of  their  savings  by  purchasing   and retaining these coins and pieces, and consequently such gold coins continued to be highly popular among the people in the rural   areas  as  well  in  the  bullion  trade,  and   are distinguished  on  account of the above noted  features  and trade mark. It was alleged that M/s.  Pannalal Durga Prasad, Kanpur  are producing similar coins and pieces of gold and to them  they apply a trade mark which is deceptively similar to the above registered  trade  mark of M/s.  Habib Bank Ltd.,  the  only difference  between the two was that instead of  Habib  Bank Ltd.,  in Gujarati script on one face and English script  on the  other face, the words ’Habib quality’ are used and  the words  ’pure  gold’  in English script is  preceded  by  the letters  P & D. It was averred that this trade mark  adopted by M/s.  Panna Lal Durga Prasad is bound to deceive not only the buyers who are ignorant of English and Gujarati scripts, but even unwary purchasers from urban areas are likely to be deceived.   Though  by a registered letter  the  Trade  Mark office had drawn the attention of the firm regarding the use of  the mark by them and had requested them to indicate  the period for which they had been using it and whether the mark had been registered as a trade mark in their name, they  had not  chosen to reply even though they received  the  letter. It  was  further stated that a goldsmith  Shri  Pyarelal  in Nayaganj  market  is also falsely  applying  the  registered trade  mark  of  M/s.   Habib Bank  Ltd.,  and  has  in  his possession  dies  and other instruments for being  used  for falsifying the trade mark. On  these allegations the Magistrate was requested  to  take necessary  action under the law against those  mentioned  in the  letter in respect of offenses under Sections 78 and  79 of the Act, by directing the Police to investigate the case. On receipt of this letter on the same day namely  24-10-1962 the  Magistrate directed the Police to register a  case  and investigate.  The Sub Inspector of Police thereupon prepared a search Memo in as much as there was no sufficient time  to get  the  warrant of search issued and also because  of  the possibility of the removal of goods and effected a search of the  premises.   The Inspector went to the Silver  and  Gold factory  of Panna Lal Durga Prasad and found that  Ram  Nath Son  of  Durga  Prasad one of the  Respondents  was  present there.  He made an inspection of the factory in his presence and seized the dies for the manufacture of coins and gold 575 bars found near the place of goldsmith Munna son of Lakhpat. The  Inspector  further  in the presence  of  the  witnesses caused  a gold coin of one tola and another of half tola  to be manufactured by way of specimen out of the gold bar found at  the place.  These coins were duly seized and  preserved, after obtaining the seal of Ram Nath.  It is unnecessary  to give, all the, details of the recoveries because that is not relevant for the purposes of this case.  A police report was accordingly made to the Magistrate who adopted the procedure under Sec. 251-A by examining each of the Respondents  after which  he  framed  charges  against  them.   Thereafter   he examined  Wadia,  P.W. 1, a Senior Attorney Clerk  of  Habib Bank  Ltd.,  Bombay  on 1-5-64.   On  29-5-64  before  other

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witnesses  could  be  examined  the  Respondents  filed   an application stating that from the evidence of Wadia, P.W. 1, Habib  Bank  had stopped dealing in gold and  does  not  now manufacture gold coins, that it had also destroyed the  dies And  since  1954 this trade mark of Habib  Bank  has  become ineffective and is thrown open to the public, as such it was prayed that the case be stayed and the complainant  directed to  seek  remedy  ill the civil court so  that  the  accused persons  may not be unnecessarily harassed.  The  Magistrate rejected  this  contention  because  it  appeared  from  the evidence  that the registration of the trade mark  of  Habib Bank  was current upto 1967 and that since  the  Respondents have  been charged under Sections 78 and 79 of’ the Act  the contention  of  the accused that in view of Sec. 46  of  the said  Act  where  a trade mark is abandoned  for  more  than years,  the Respondents cannot be said to have committed  an offence,  is  not tenable.  By a well considered  order  the Magistrate  dismissed  the  application  and  directed   the production of the entire evidence on the next date,  without fail.  Against this a revision was filed before the Sessions Judge of Kanpur.  The Sessions Judge made a reference to the High  Court recommending the quashing of the charge  on  the ground  that  "The principle of abandonment is  given  legal recognition  in Sec. 46 Trade & Merchandise Marks Act  which provides  that a registered trade mark may be taken off  the register  if it was not used for continuous period  of  five years or longer." The High Court held that on the  statement of  Wadia it is clearly established that Habib  Bank-  Ltd., had  stopped dealing in gold and coins since 1954 and  there could  therefore  be no question of  the  Respondents  corn- mitting any offence under Sections 78 and 79 of the Act.  On this  reference the High Court by its Judgment dated  6-9-67 thought  that Sec. 46 had no application inasmuch  as,  that Section  provided  that  unless the  registration  had  been rectified the propriety rights of the Bank could not be said to have ended only because the trade mark had not been  used for  a period of more than 5 years.  It observed that  there may be cases where the non- 576 user  of the trade mark may have been occasioned on  account of  special reasons and such non-user was explainable;  that clause  (iii) of Sec. 47 makes it clear that it is  open  to the  owner to contest the application for  rectification  of the  register, by the plea, that the non-user of  the  trade mark  was due to special circumstances in the trade and  not due  to any intention on his part to abandon or not  to  use the  trade  mark  in  relation to the  goods  to  which  the application   relates.    Accordingly  the   learned   Judge expressed the view that the proceedings are not vitiated  on the ground that the trade mark in question has ceased +to be the  property  of M/s.  Habib Bank Ltd.  It appears  that  a contention was urged before the High Court that since  Habib Bank  Ltd.,  was declared to be a foreign Bank in  the  year 1960 by the Reserve Bank of India as it had become a citizen of Pakistan, it was not a citizen under the Constitution  of India  and  therefore  had no  proprietory  rights  in  this Country.   The High Court said that this submission  of  the Respondent’s Advocate had some force as the question  raised was   a   substantial   question  of   law   involving   the interpretation  of  the Articles of the  Constitution,  that could properly be decided in a civil action rather than by a Magistrate  in  a  Criminal  case.   For  this   proposition reliance  was  placed on a decision of that Court  in  Karan Singh v. Mohan Lal(1), which following a Full Bench decision of the Calcutta High Court in Ashutosh Das v. Keshav Chandra

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Ghosh(2)  held  that  a  controversy  between-  the  parties relating  to  a complicated question of abandonment  of  the user  and relating to the express or implied consent of  the registered  holder  of the trade mark  are  questions  which should be decided in a civil court rather than by a Criminal Court.   It was also held by the High Court that  Since  the complaint  in  the particular case had not been  made  by  a Proprietor of the trade mark, the prosecution of the accused on  the  complaint  of  the  Trade  Marks  Inspector  and  a subsequent  investigation  by the Police  were  not  tenable under  Sections  78  and  79  of the  Act  in  view  of  the provisions  of Sec. 28 of that Act.  An objection  seems  to have,  been  taken before the learned Judge  that  the  High Court  was  not competent to quash the  proceedings  pending before the Trial Magistrate in that case because no revision petition had been filed against the order of the  Magistrate by  which the charge was framed against him but it was  only after one of the witnesses had been examined that a Revision had  been  filed  which is not competent.   The  High  Court rejected  this  contention  and held that it  had  power  to exercise revisional powers under Sec. 561-A and  accordingly accepted  the  reference  made by  the  Sessions  Judge  and quashed  the  proceedings against the accused  for  offences under Sections 78 & 79 of the Act. (1) 1964 ALJ 653. (2) A.T.R. 1936 Cal. 488. 577 It appears to us that the High Court had misdirected  itself in considering that the submissions which found favour  with it,  were relevant for the purpose of deciding  whether  the proceedings  for prosecution for offences under Sections  78 and  79 of the Act were not valid either because, the  Habib Bank  Ltd.,  being a foreign Bank was not a citizen  and  as such  had  no  rights  or that  the  prosecution  cannot  be initiated  by  the  Inspector of Trade Marks  or  that  the, question  of  the abandonment of trade mark amounted  to  an express or implied consent was a matter for civil court  and cannot be made the subject of a criminal prosecution. Sections  78 and 79 are contained in Chapter X of  the  Act. Section 78 provides that any person who falsifies any  trade mark,  falsely  applies to goods any trade mark;  or  makes, disposes  of,  or  has in his  possession  any  die,  block, machine, plate or other  instrument   for  the  purpose   of falsifying,  or of being used for falsifying a  trade  mark, applies any false trade description to  goods etc. etc. etc. shall  unless  he  proves that he acted  without  intent  to defraud, be punishable with imprisonment for a term    which may  extend to two years, or with fine, or with both,  while Section 79 makes a person liable to similar punishment if he sells  goods or exposes them falsely or for having  them  in his  possession  for  sale or for any purpose  of  trade  or manufacture  any  goods or things to which any  false  trade description is applied. Trade mark has been defined in  Sec. 2 (1) (v)  to mean                (i)  in  relation to Chapter  X  (other  than               Section 81), a registered trade mark or a mark               used  in relation to goods for the purpose  of               indicating  or so as to indicate a  connection               in  the course of trade between the goods  and               some person having the right as proprietor  to               use the mark; and                 (ii) in relation to the other provisions  of               this Act,a mark used or proposed to be used in               relation   to   goods  for  the   purpose   of               indicating  or so as to indicate a  connection

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             in  the course of trade between the goods  and               some  person  having  the  right,  either   as               proprietor  or as registered user, to use  the               mark whether with or without any indication of               the  identity  of that person and  includes  a               certification  trade mark registered  as  such               under the provisions of Chapter VIII." It is apparent from this definition that for the purposes of Chapter  X of the Act which deals with criminal offenses,  a trade  mark  includes a registered as well  as  unregistered trade  mark.  An offence under Sections 78 or  79  therefore relate  to  a  trade  mark  whether  it  is  registered   or unregistered.  The contention that the 578 registered  trade  mark  of the Habib Bank  Ltd.,  has  been abandoned since the said Bank- had discontinued its use from 1954   will  not  absolve  the  respondents  from   Criminal liability  because  even  if it was abandoned  it  can  only furnish  a ground for a person to make an application  under sec.  46 to have the trade mark removed from the  registers. It does not however entitle him to use a trade mark  whether it is current or has been removed from the register, or  has been abandoned or even if it has never been initially regis- tered  but has acquired the currency of a trade  mark.   The offenses under Sections 78 and 79 consists in the  deception and  application of a trade mark which is in use  and  which signifies  a particular type of goods containing that  mark. There is, therefore, no validity in the contention that  the infringement  of the trade mark of Habib Bank  Ltd.,  merely gives  rise  to  a  civil action, in  respect  of  which  no prosecution  will lie.  The provisions contained in  Chapter IV  in  which is contained Sec. 28 relate to the  effect  of registration and have no bearing on the question before us. It  was neatly urged that the Trade Marks Inspector  had  no right  to  make  a complaint under Sections 78  and  79  and therefore the prosecution was invalid.  This contention also in  our  view is misconceived.  A perusal of sub-s.  (2)  of Sec.  89  would  show that no Court inferior to  that  of  a Sessions  Judge, Presidency Magistrate or Magistrate of  the 1st Class shall try an offence under this Act; while  sub-s. (1)  provides  that  no Court shall take  cognizance  of  an offence  under  Sec.  81,  Sec. 82  or  Sec.  83  except  on complaint  in writing made by the Registrar or  any  officer authorised by him in writing.  Merely because sub-s. (1)  of Sec. 89 refers to manner of taking cognizance in respect  of offence  under  the Section specified therein, it  does  not preclude cognizance of other offenses specified in Chapter X from  being  taken  under the procedure  prescribed  by  the Criminal Procedure Code.  It is apparent that offenses under Sections  78 and 79 are punishable with imprisonment of  two years or with three years if they fall under the  respective provisos to the said Sections.  In cases where an offence is punishable  with  imprisonment of one year and  upwards  but less than 3 years, under Chapter XXIII of Schedule 11 it  is non-cognizable  and  is a summons case, triable  as  already stated  under Sec. 89(2) by the Sessions  Judge,  Presidency Magistrate or a Magistrate of the 1st Class.  In such  cases under  Sec.  155  of the Criminal  Procedure  Code  when  an information  is given to an officer incharge of  the  Police Station  of the commission of a non-cognizable  offence,  he has  to enter the substance of the information in a book  to be  kept  for the purpose and refer ’the  informant  to  the Magistrate but he cannot under sub-s. (2) investigate such a case  without the order of a Magistrate.  On receiving  such an order any Police officer may exercise the same powers  in

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respect of the investigation (except the power to arrest 579 without  warrant) as an Officer in charge of police  station may  exercise in a cognizable case.  On receipt of a  report from  the,  Police  in  compliance  with  such  orders,  the Magistrate may it the report discloses the commission of  an offence  try the accused by the procedure  prescribed  under Sec.  251-A of the Criminal Procedure Code.  This being  the legal  position in this case the Magistrate in our view  has followed the correct procedure.  The information in  respect of the commission of an offence under Sections 78 and 79  of the  Act  was brought to the notice of the Magistrate  by  a letter  from  the  Trade  Marks  Inspector,  The  Magistrate directed  the police to register a case and investigate  it. The  Police accordingly complied with it and made  a  report thereon.  On receipt of the report the Magistrate  satisfied himself  that  the respondents had received  the,  documents referred  to  in Sec. 173.  After a consideration  of  those documents  he  examined  the accused  and  after  giving  an opportunity to both the prosecution and the accused framed a charge on being satisfied that there was a prima facie case. The  procedure followed therefore is  unexceptionable.   The question  whether the Habib Bank Ltd., being a foreign  Bank is  not a citizen and whether it has any right in the  trade mark  is  therefore  irrelevant  and  does  not  affect  the validity of the proceedings or of the charges framed against the accused.  We accordingly allow the appeal, set aside the Judgment  of  the High Court and direct  the  Magistrate  to proceed with the case in accordance with law. V.P.S.                                 Appeal allowed. 580