State of U.P. Vs. Ram Nath, Partner
M/S. Panna Lal Durga Prasad, Kanpur [1971] INSC 322 (24 November 1971)
REDDY, P. JAGANMOHAN 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 trademarks-Discontinuance of trade mark--Use by
another--If civil matter.
HEADNOTE:
The Inspector of trademarks 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 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 trademarks, 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]
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 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 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 BankLtd., had stopped dealing in gold and coins since
1954 and there could therefore be no question of the Respondents cornmitting
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 non576 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 Ghosh(2) held that a controversy betweenthe 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 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
Bankhad 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 registered 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, friable 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 in charge 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 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.
Back