M/S.
Meghraj Biscuits Industries Ltd Vs. Commissioner of Central Excise,U.P. [2007]
Insc 279 (14 March 2007)
S.H. KAPADIA & B. SUDERSHAN REDDY
KAPADIA, J.
Aggrieved by the decision of Customs, Excise and Gold Control Appellate
Tribunal (CEGAT) dated 11.4.2000, the appellants (assessee) have come by way of
civil appeals under Section 35L of the Central Excise Act, 1944.
Appellants were engaged in the manufacture of biscuits classifiable under
Sub-Heading 1905.11 of the Central Excise Tariff. The biscuits were sold under
the brand name "Meghraj". Under show cause notices it was alleged
that the appellants herein (assessee) have sold the biscuits under the brand
name "Meghraj", which was a registered trade mark of Kay Aar Biscuits
(P) Ltd. who was using the said trade mark on manufacture of biscuits
themselves, and, therefore, the appellants were not eligible to the benefit of
SSI Notification No.1/93-CE dated 28.2.1993 as amended by Notification
No.59/94- CE dated 1.3.1994. The above show cause notices were issued by the
Department demanding differential duty for the period April 1994 to June 1994
amounting to Rs.3,74,948/- plus short paid duty for the period April 1995 to
May 1995 amounting to Rs.92,992. The said demand was based on an agreement
detected by the Department. That Agreement was between Madan Verma, Director of
a company known as M/s. Kay Aar Biscuits (P) Ltd., Ghaziabad, and M/s. Rich
Food Products (P) Ltd., Noida. Under the said Agreement M/s.
Kay Aar Biscuits (P) Ltd. was Party No.1. Under the Agreement it was
declared that M/s. Kay Aar Biscuits (P) Ltd. was the owner of the registered
trade mark "Meghraj". Under the Agreement it was stated that M/s.
Kay Aar Biscuits (P) Ltd. was using the aforestated trade mark
"Meghraj" for the manufacture of biscuits. Under the Agreement there
was a recital under which it was stated that M/s. Rich Food Products (P) Ltd.
had put up a Unit for manufacture of wafers in Noida which it sought to
manufacture under the brand name "Meghraj". Under the said Agreement
M/s. Kay Aar Biscuits (P) Ltd. gave permission to M/s. Rich Food Products Pvt.
Ltd. to use its trade mark for the manufacture of wafers alone. The said
agreement was valid for three years commencing from 22.11.1989. At this stage,
it may be noted that the appellants herein claim to have started manufacture of
biscuits in 1991. The biscuits were sold in wrapper mentioning the name of the
appellants, "M/s. Meghraj Biscuits Industries Ltd." or
"Meghraj". The Appellants claimed that it has been using the wrapper
since beginning and since 1991 the use of the trade name or brand name
"Meghraj" has never been challenged. The Assistant Commissioner, Ghaziabad,
examined the printed wrappers. He came to the conclusion vide his orders that
the trade name "Meghraj" was in the form of a logo printed on the
wrapper of the biscuits and, therefore, the appellants were not entitled to the
benefit of Notification No.1/93-CE dated 28.2.93 as amended by Notification
No.59/94 dated 1.3.94. Consequently, the Adjudicating Authority called upon the
appellants to pay differential duty for the period April 1994 to June 1994
amounting to Rs.3,74,948 plus short paid duty for the period April 1995 to May
1995 amounting to Rs.92,992.
Aggrieved by the decision of the Adjudicating Authority, the assessee
preferred appeals to the Commissioner (A). The said appeals were rejected on
the ground that the appellants were using the brand name "Meghraj" of
another manufacturer M/s. Kay Aar Biscuits (P) Ltd. on their products
(biscuits) and, therefore, they were not entitled to the benefit of exemption
under Notification No.1/93-CE, as amended. It was held that the word
"Meghraj" was printed on all the printed wrappers and, therefore, it
was wrong to say that the appellants were not using the brand name
"Meghraj" on its products. In this connection, reliance was placed by
the Commissioner (A) on the said Agreement dated 22.11.89. Before the
Commissioner (A) the appellants herein contended that they had used the name
"M/s.
Meghraj Biscuits Industries Ltd." on the wrapper and not on the product
and, therefore, they were entitled to exemption. This argument was rejected by
the Commissioner (A) saying that the appellants were using the brand name
"Meghraj" on their products. According to the Commissioner (A), the
appellants used the trade name "Meghraj" in the form of a logo which
was printed on the wrapper. Before the Commissioner (A), it was argued in the
alternative that the logo belonged to M/s.
Kay Aar Biscuits (P) Ltd.; that the same was registered SSI Unit; that M/s.
Kay Aar Biscuits (P) Ltd. was lying closed since 1.3.93 and, therefore, the
appellants have been using that logo of M/s. Kay Aar Biscuits (P) Ltd.
who was eligible for exemption under Notification No.1/93-CE, as amended.
This contention was rejected by the Commissioner (A) on the ground that under
the Notification No.1/93-CE, as amended, exemption was not available to the
specified goods bearing brand name or trade name (registered or not) of another
person. Since, the appellants herein had used the trade name
"Meghraj"
on their products which trade name was owned by M/s.
Kay Aar Biscuits (P) Ltd. the appellants were not entitled to the benefit of
exemption under Notification No.1/93- CE, as amended. Accordingly, the
Commissioner (A) dismissed the appeals. The orders of the Commissioner (A) have
been confirmed by Order dated 11.4.2000 passed by CEGAT. Hence, these civil
appeals.
To complete the chronology of events, it may be pointed out that after the
impugned decision of the Tribunal dated 11.4.2000, the appellants herein moved
an Application for Rectification on 12.5.2000 (ROM No.72/2000). In that
application it was urged on behalf of the appellants herein that the said brand
name "Meghraj" did not belong to M/s. Kay Aar Biscuits (P) Ltd.; that
the Department has failed to discharge its burden to prove that the trade name
"Meghraj" belonged to M/s. Kay Aar Biscuits (P) Ltd.; that a mere
Agreement between M/s. Kay Aar Biscuits (P) Ltd. and M/s. Rich Food Products
(P) Ltd. would not be sufficient to prove that M/s. Kay Aar Biscuits (P) Ltd.
was the lawful owner of the brand name "Meghraj". In the
Rectification Application it was further pointed out that in fact the
appellants had applied for ownership of the brand name "Meghraj" vide
application dated 30.9.91 to the Registrar, Trade Marks under the Trade Marks
Act and that the said application for registration was pending before the
competent authority and since the above arguments were not recorded in the
impugned Order of the CEGAT dated 11.4.2000 the same warranted rectification.
By Order dated 8.12.2000, CEGAT rejected the above Rectification Application
made by the Appellants.
One more fact needs to be mentioned that on 30.6.2000 the Registrar of Trade
Marks appears to have issued Registration Certificate on 30.6.2000 registering
the trade mark "Meghraj" in favour of the appellants with effect form
30.9.91. It appears that issuance of this certificate was mentioned before the
CEGAT which rejected the Rectification Application on 8.12.2000.
Notification No.1/93-CE dated 28.2.93 was issued to help the SSI Units to
survive in the market dominated by brand name/trade name. The object of the
Notification, therefore, was to help the SSI Units and thereby increased
industrial production. Under para '4' of the said Notification, the benefit of
exemption was not available for excisable goods bearing brand name or trade
name (registered or not) of another person. Explanation IX defined the word
"brand name" or "trade name". The same is quoted hereinbelow:
"Explanation IX "Brand name" or "trade name" shall
mean a brand name or trade name, whether registered or not, that is to say a
name or a mark, such as symbol, monogram, label, signature or invented word or
writing which is used in relation to such specified goods for the purpose of
indicating, or so as to indicate a connection in the course of trade between
such specified goods and some person using such name or mark with or without
any indication of the identity of that person."
Notification No.1/93-CE dated 28.2.1993 was subsequently amended by
Notification No.59/94 dated 1.3.94. Para '7' of Notification No.1/93-CE as
amended read as under:
"Para-7 The exemption contained in this Notification shall not apply to
the specified goods where a manufacturer affixes the specified goods with a
brand name or trade name (registered or not) of another person, who is not
eligible for the grant of exemption under this Notification."
In the present case, as stated above M/s. Kay Aar Biscuits (P) Ltd entered
into an agreement on 22.11.89 with M/s. Rich Food Products (P) Ltd. Under that
Agreement the Director of M/s. Kay Aar Biscuits (P) Ltd.
declared that his company was the owner of the registered trade mark
"Meghraj". The name of that Director is Madan Verma. He is the
Director of the appellants (company) also. Further there is no evidence to show
as to whether M/s. Kay Aar Biscuits (P) Ltd. was an "eligible
manufacturer". This aspect is important since one of the arguments
advanced by the appellants herein before the Commissioner (A) was that the
trade mark belonged to M/s. Kay Aar Biscuits (P) Ltd., which was registered SSI
Unit lying closed since 1.3.1993. No explanation has been given as to why Madan
Verma has not been examined by the appellants. He has not been examined even on
the question of alleged transfer of the trade mark in favour of the appellants.
In the circumstances, we do not find any merit in this appeal.
On behalf of the appellants it has been vehemently argued that M/s. Kay Aar
Biscuits (P) Ltd. was never the registered owner of the trade mark
"Meghraj". It was urged that merely because an Agreement stood
entered into on 22.11.89 between M/s. Kay Aar Biscuits (P) Ltd.
and M/s. Rich Food Products (P) Ltd., the Department had erred in alleging
that the trade mark belonged to M/s. Kay Aar Biscuits (P) Ltd. It was urged
that M/s.
Kay Aar Biscuits (P) Ltd. had never got the trade mark registered under the
Trade Marks Act. It was urged that a false declaration was made by M/s. Kay Aar
Biscuits (P) Ltd. under the above Agreement on 22.11.89. It was urged that a
mere agreement between two parties cannot constitute ownership of the trade
mark in favour of M/s.
Kay Aar Biscuits (P) Ltd. It was urged that in any event M/s. Kay Aar
Biscuits (P) Ltd. had stopped its production in 1993; that the company had
become defunct; that the appellants herein had applied to the Registrar of
Trade Marks for registration of the mark "Meghraj" and vide
registration certificate dated 30.6.2000 the Registrar has recognized the
appellants as owner of the trade mark with effect from 30.9.91. In the
circumstances, the appellants submitted that the demand for differential duty
was unwarranted.
We do not find any merit in the above arguments.
In the case of Pahwa Chemicals Pvt. Ltd. v.
Commissioner of Central Excise, Delhi 2005 (189) ELT 257 (SC) this Court
has held that the object of the exemption Notification was neither to protect
the owners of the trade mark nor the consumers from being misled.
These are considerations which are relevant in disputes arising out of
infringement/passing of actions under the Trade Marks Act. The object of the
Notification is to grant benefits only to those industries which otherwise do
not have the advantage of a brand name [See: para '3'].
Applying the ratio of the above judgment to the present case, it is clear
that grant of registration certificate under the Trade Marks Act will not
automatically provide benefit of exemption to the SSI Unit.
In the case of Commissioner of Central Excise, Chandigarh v. Bhalla
Enterprises 2004 (173) ELT 225 (SC), this Court held that the assessee will
not be entitled to the benefit of exemption if it uses on goods in question,
same/similar brand name with intention of indicating a connection with the
goods of the assessee and such other person or uses the name in such manner
that it would indicate such connection. It was further held that the burden is
on the assessee to satisfy the Adjudicating Authority that there was no such
intention [See: paras 6 and 7].
Applying the above test to the facts of the present case, Madan Verma is a
common Director in the two companies. He has filed an affidavit enclosing the
registration certificate dated 30.6.2000. However, in that Affidavit he has not
stated as to on what basis, in the Agreement of 23.11.89 signed by him, he had
declared that M/s. Kay Aar Biscuits (P) Ltd. is the owner of the registered
trade mark "Meghraj". There is no deed of assignment from M/s. Kay
Aar Biscuits (P) Ltd. in favour of the appellants herein. The Department has
rightly placed reliance on the Agreement of 23.11.89. In the circumstances, the
burden was on the assessee (appellants herein) to satisfy the Adjudicating
Authority that there was no intention of indicating a connection with the goods
of the assessee and such other person.
Before us it has been urged that M/s. Kay Aar Biscuits (P) Ltd. is
non-functional since 1.3.93 and, therefore, in any event appellants were
entitled to use the trade mark "Meghraj". This argument is based on
the concept of abandonment. We do not find any merit in this argument.
Discontinuation of business in respect of a product does not necessarily amount
to abandonment.
In the present case, there is no evidence from the side of the appellants
indicating abandonment of the trade mark by M/s. Kay Aar Biscuits (P) Ltd.
Although, Madan Verma, the Director of M/s. Kay Aar Biscuits (P) Ltd., has
filed his Affidavit enclosing the registration certificate, he has nowhere
stated that M/s. Kay Aar Biscuits (P) Ltd.
has abandoned the trade mark. In the circumstances, the Department was right
in rejecting the above contention. Abandonment of the trade mark has to be
proved by the appellants in the present case. The burden is on the appellants,
particularly, when the Department is relying upon the agreement dated 23.11.89
between M/s. Kay Aar Biscuits (P) Ltd. and M/s. Rich Food Products (P) Ltd.
Lastly, we are required to examine the retrospective effect of the
registration certificate dated 30.6.2000 with effect from 30.9.91. At the
outset, we may reiterate that the object of the exemption Notification was
neither to protect the owners of the trade mark nor the consumers from being
misled. These are considerations which are relevant in disputes arising under the
Trade Marks Act.
The object of the exemption Notification No.1/93-CE was to grant benefits to
those industries which do not have the advantage of a brand name. However,
since retrospective nature of the registration certificate dated 30.6.2000 is
repeatedly being raised in this Court we would like to examine the case law in
this regard.
The Trade
Marks Act, 1999 has been enacted to amend and consolidate the law relating
to trade marks, to provide for registration and better protection of trade
marks and for prevention of the use of fraudulent marks.
Under Section 28 of the Trade Marks Act,
1999, registration gives to the registered proprietor of the trade mark the
exclusive right to the use of the trade mark in relation to the goods in
respect of which the trade mark is registered and to obtain relief in respect
of infringement of the trade mark in the manner provided by the Trade Marks Act.
It is correct to say that the Registrar, Trade Marks, can issue registration
certificate under Section 28 of the Trade Marks Act
with retrospective effect. The question before us is : what is the effect of
issuance of registration certificate with retrospective effect. This question
has been decided by the Bombay High Court in the case of Sunder Parmanand
Lalwani and Others v. Caltex (India) Ltd. AIR 1969 Bombay 24 in which it has
been held vide paras '32' and '38' as follows:
"32. A proprietary right in a mark can be obtained in a number of ways.
The mark can be originated by a person, or it can be subsequently acquired by
him from somebody else. Our Trade Marks law is based on the English Trade Marks
law and the English Acts.
The first Trade
Marks Act in England was passed in 1875. Even prior thereto, it was firmly
established in England that a trader acquired a right of property in a
distinctive mark merely by using it upon or in connection with goods
irrespective of the length of such user and the extent of his trade, and that
he was entitled to protect such right of property by appropriate proceedings by
way of injunction in a Court of law. Then came the English Trade Marks Act
of 1875, which was substituted later by later Acts. The English Acts enabled
registration of a new mark not till then used with the like consequences which
a distinctive mark had prior to the passing of the Acts. The effect of the
relevant provision of the English Acts was that registration of a trade mark
would be deemed to be equivalent to public user of such mark. Prior to the
Acts, one could become a proprietor of a trade mark only by user, but after the
passing of the Act of 1875, one could become a proprietor either by user or by
registering the mark even prior to its user. He could do the latter after
complying with the other requirements of the Act, including the filing of a
declaration of his intention to use such mark. See observations of Llyod Jacob
J. in 1956 RPC 1. In the matter of Vitamins Ltd's Application for Trade Mark at
p.12, and particularly the following:
"A proprietary right in a mark sought to be registered can be obtained
in a number of ways. The mark can be originated by a person or can be acquired,
but in all cases it is necessary that the person putting forward the
application should be in possession of some proprietary right which, if
questioned, can be substantiated".
Law in India under our present Act is similar.
38. A person may become a proprietor of a trade mark in diverse ways. The
particular mode of acquisition of proprietorship relied upon by the applicant
in this case is of his user for the first time in India in connection with
watches and allied goods mentioned by him of the mark "Caltex", which
at the material time was a foreign mark belonging to Degoumois & Co. of
Switzerland and used by them in respect of watches in Switzerland.
Before the Deputy Registrar and before Mr.
Justice Shah, proprietorship was claimed on the basis that the applicant was
entitled to it as an importer's mark. Several authorities were cited and were
considered and principles deduced and relied upon in that behalf. In our
opinion, it is not necessary in this case to go into details about facts in the
various decided cases dealing with importer's marks. In many of those cases,
the dispute was between a foreign trader using a foreign mark in a foreign
country on goods which were subsequently imported by Indian importers and sold
by them in this country under that very mark. In short it was a competition
between a foreign trader and the Indian importer for the proprietorship of that
mark in this country. We have already reached a conclusion that so far as this
country is concerned, Degoumois & Co.
have totally disclaimed any interest in the proprietorship of that mark for
watches etc. In India, the mark "Caltex" was a totally new mark for
watches and allied goods. The applicant was the originator of that mark so far
as that class of goods is concerned, and so far as this country is concerned.
He in fact used it in respect of watches. There is no evidence that that mark
was used by anyone else in this country before the applicant, in connection
with that class of goods.
Unquestionably, the applicant's user was not large, but that fact makes no
difference, because so far as this country is concerned, the mark was a new
mark in respect of the class of goods in respect of which the applicant used
it. We therefore, hold that the applicant is the proprietor of that mark."
[emphasis supplied] On reading the above quoted paragraphs from the above
judgment, with which we agree, it is clear that the effect of making the
registration certificate applicable from retrospective date is based on the
principle of deemed equivalence to public user of such mark. This deeming
fiction cannot be extended to the Excise Law. It is confined to the provisions
of the Trade
Marks Act. In a given case like the present case where there is evidence
with the Department of the trade mark being owned by M/s. Kay Aar Biscuits (P)
Ltd. and where there is evidence of the appellants trading on the reputation of
M/s. Kay Aar Biscuits (P) Ltd. which is not rebutted by the appellants
(assessee), issuance of registration certificate with retrospective effect
cannot confer the benefit of exemption Notification to the assessee. In the
present case, issuance of registration certificate with retrospective effect
from 30.9.91 will not tantamount to conferment of exemption benefit under the
Excise Law once it is found that the appellants had wrongly used the trade mark
of M/s. Kay Aar Biscuits (P) Ltd.
In the case of Consolidated Foods Corporation v.
Brandon and Co., Pvt. Ltd. AIR 1965 Bombay 35, it has been held vide paras
'27' and '30' that the Trade Marks Act
merely facilitates the mode of proof. Instead of compelling the holder of a
trade mark in every case to prove his proprietary right, the Act provides a
procedure whereby on registration the owner gets certain facilities in the mode
of proving his title. We quote hereinbelow paras '27' and '30' of the said judgment
which read as follows:
"(27) At any rate, it must be remembered that in this case I am not
dealing with a passing-off action or an action for infringement of a trade mark
which is alleged to be common property.
The case put up by the petitioner corporation that it was the first to use
the mark "Monarch"
in this country on its food products and that, in as much as the mark
"Monarch" was admittedly a distinctive mark, it had acquired the
right to get the mark registered in its name and also the right to oppose the
application of any other trader in this country seeking to get that mark
registered in his name in respect of the food products manufactured or sold by
him. Apparently, in such a case there is no question of infringement of any
right of property in a trade mark for which any relief is sought, nor is there
any question of passing- off, so that it might be necessary to enter into
questions of nicety as regards whether there could or could not be any property
in a trade mark. As already stated by me while referring to the observations of
Sir John Romily, it is not really necessary for me to decide in this case as to
whether there could or could not be any property in a trade mark for the
purpose of deciding this case. Even if it is found to be necessary to decide
this question as to property in a trade mark, I have already pointed out that
the Courts of Equity in England granted relief in cases of infringement of
trade marks on the basis of infringement of the right of property in the trade
mark. There was no other basis on which those Courts could give any relief to
the plaintiffs in such cases and for the purpose of such relief the Courts of
Equity did not require the plaintiff to prove that his mark by any length of
user was associated in the minds of the public with his goods. All that was
necessary for the plaintiff to prove was that he had used that mark in respect
of his particular type of goods. That was enough in the eyes of the Courts of
Equity to entitle him to a relief by way of an injunction in case of an
infringement of his mark by some other trader. I have also pointed out that the
statute which came to be enacted in England in 1875 and the subsequent statutes
did nothing more than to embody the rights in relation to trade marks which were
already laid down by the Courts of Equity. As a matter of fact, the statute
enabled a person to have registered a mark not only which he had been using but
also a mark which he proposed to use. The latter type of mark would evidently
refer to a distinctive mark, a mark which does not directly describe the nature
or quality of the goods to which it is attached. In cases of such marks,
whereas the Courts of Equity did require some slight user before the proprietor
thereof could institute an action for infringement thereof, the statute enabled
the registration of such mark without any user at all, because such mark being
distinctive per se it was not necessary for the person applying for its
registration to show that mark had acquired a reputation in the market, so that
it could be associated only with his goods and of nobody else. Even so far as
this country is concerned, the Trade Marks Act
of 1940 does not seem to have made any change in the legal rights of the owner
of a trade mark as established by the Courts of Chancery in England. In In re
Century Spinning and Manufacturing Co. Ltd., 49 Bom LR 52 : (AIR 1947 Bom 445),
Chagla, J. (as he then was) observed in this connection (at page 59 of Bom LR :
( at p. 449 of AIR)) as follows :
"The question is whether in India the Trade Marks Act
of 1940 has made any change in the legal rights of the owner of a trade mark.
To my mind it is clear that even prior to the passing of this Act the owner of
a trade mark could maintain an action for the infringement of a trade mark and
that action could only be maintained on the assumption that he was the owner of
the trade mark and he had a proprietary right in the trade mark.
Sub-clause (I) of Section 20 of the Trade Marks Act
itself assumes and implies that such a right existed in the owner of a trade
mark because it says that the unregistered holder of a trade mark can maintain
a suit for the infringement of a trade mark provided that the trade mark was in
use before February 25, 1937, and an application for registration had been made
and refused."
As regards the question whether there could be any property in a trade mark,
the learned Judge further observed (on the same page) as follows:
"Again, turning to S. 54 of the Specific Relief Act, which deals with
cases when a perpetual injunction may be granted the Explanation to that
section lays down that for the purpose of that section a trade mark is
property. Therefore, if a person invaded or threatened to invade the other's
right to, or enjoyment of, property, the Court under Section 54 had the
discretion to grant a perpetual injunction, and trade mark was as much property
for the purpose of S. 54 as any other kind of property.
I, therefore, agree with the learned Advocate General that all that the Trade Marks Act
has done is to facilitate the mode of proof. Instead of compelling the holder
of a trade mark in every case to prove his proprietary right before he could
ask the Court to grant him an injunction, the Trade Marks Act
provides a procedure whereby by registering his trade mark the owner gets
certain facilities in the mode of proving his title. For instance, under S.23
of the Trade
Marks Act registration is to be prima facie evidence of the validity of the
trade mark."
This was precisely the view which was expressed by Lord Justice Romer in
(1905) I KB 592 to which I have already referred in the earlier part of the
judgment. To summarise, therefore, a trader acquires a right of property in a
distinctive mark merely by using it upon or in connection with his goods
irrespective of the length of such user and the extent of his trade. The trader
who adopts such a mark is entitled to protection directly the article having
assumed a vendible character is launched upon the market. As between two
competitors who are each desirous of adopting such a mark, "it is, to use
familiar language, entirely a question of who gets there first." Gaw Kan
Lye v. Saw Kyone Saing, AIR 1939 Rang 343 (FB).
Registration under the statute does not confer any new right to the mark
claimed or any greater right than what already existed at common law and at
equity without registration. It does, however, facilitate a remedy which may be
enforced and obtained throughout the State and it established the record of
facts affecting the right to the mark.
Registration itself does not create a trade mark. The trade mark exists
independently of the registration which merely affords further protection under
the statute. Common law rights are left wholly unaffected. Priority in adoption
and use of a trade mark is superior to priority in registration."
(30) It was next contended by Mr. Shavaksha that the respondent company had
itself shown Kipre and Co. Private Ltd., as the proprietors of the mark on the
labels bearing the mark "Monarch" on the different kinds of its food
products and, therefore, the respondent company had no right to apply for registration
in its favours as if it was the proprietor thereof.
It was conceded by Mr. Shah that the labels which were used on the food
products manufactured by Kipre and Co. Private Ltd, did bear the name of Kipre
and Co. Private Ltd.
immediately below the mark "Monarch" and that the respondent
company's name was printed below it as sole distributors. Mr. Shah, however,
contended that by an agreement Ex.
F. made between the respondent company and Kipre and Co. Private Ltd. in
1951 it was clearly provided that the mark "Monarch"
belonged to the respondent company, that Kipre and Co. Private Ltd. were
only to manufacture the food products as ordered by the respondent company and
that the food products so manufactured were to be bottled and packed by them
for its use and benefit and that, therefore, in spite of Kipre and Co.'s name
appearing on the labels, the respondent company was the true proprietor of the
mark "Monarch" and that, therefore, it was entitled to apply for its
registration as proprietor thereof. Now, once again turning to the provisions
of section 18 sub-section (I), it is clear that only a person claiming to be
the proprietor of a trade mark used by him or proposed to be used by him could
make an application to the Registrar for the registration thereof. According to
this provision, not only a person should claim to be the proprietor of a trade
mark but he should prove that he had used it as such proprietor on his goods.
Then turning to the label as it stood at the date of the application, two names
appeared on the label, one of Kipre and Co. and the other of the respondent
company. If these two names had stood by themselves without any further
description of either of them, it could be said that both Kipre and Co. and the
respondent company were jointly the owners of the mark as well as the owners of
the goods to which the label was affixed. But, that is not the case. The
respondent company is described as the sole distributors on the label. The
reasonable inference that could be drawn from this description surely is that
the goods were the property of Kipre and Co. and so also the mark. If the
respondent company was really the proprietor of the mark and also the owner of
the goods one would expect some such words as "Manufactured by Kipre and
Co. for Brandon and Co., Private Ltd." In the absence of any such words, a
person buying any of these goods on reading the label would naturally believe
that what he was buying was the property of Kipre and Co. which was selling its
goods under the mark "Monarch". It is true, as contended by Mr. Shah,
that even distributors and sellers may have marks of their own, but then, there
are ways and ways of indicating on the label itself that the mark embodied
therein is the mark belonging to such distributor or seller. Obviously,
therefore, on the label as it stood, it could not be said that the respondent
company was the proprietor of the mark "Monarch" nor could it be said
that the mark was used by the respondent company as proprietor thereof."
(emphasis supplied) Applying the principle of deemed equivalence we may
clarify that if the SSI unit wrongly affixes a trade mark of another person, be
it registered or not, or if it uses the trade mark of an ineligible person then
such default would not be eliminated by the above principle of deemed
equivalence embodied in Section 28 of the Trade Marks Act,
1999 as that principle is based on a deeming fiction which fiction is
confined only to the provisions of the Trade Marks Act.
Before concluding we may refer to the Judgment of this Court in the case of
Commissioner of Central Excise, Mumbai v. Bigen Industries Ltd. 2006 (197) ELT
305. In that matter a show cause notice was issued calling upon the assessee to
show cause why the exemption be not denied to the assessee. In para '19' of the
show cause notice the authority accepted the existence of a deed of assignment.
However, the show cause notice denied the exemption on the ground that
Notification No.140/83-CE did not make any distinction between a brand name
owned by a person in India or abroad. In the present case, the facts are
entirely different. In the present case, there is no deed or assignment from
M/s. Kay Aar Biscuits (P) Ltd. to the M/s. Meghraj Biscuits Industries Ltd.
(appellants herein).
As stated above, there is no proof of acquisition on payment or
consideration by the appellants to M/s Kay Aar Biscuits (P) Ltd. In the present
case, there is no evidence of assignment or licence from M/s. Kay Aar Biscuits
(P) ltd. to the appellants. In the present case, we are concerned with the
retrospective effect of the certificate issued by the Registrar of Trade Marks
on 30.6.2000 with effect from 30.9.91. In the circumstances, the judgment of
this Court in the case of Bigen Industries (Supra) has no application.
For the aforestated reasons, we do not find any merit in these civil
appeals. Before concluding we may point out that we do not wish to express any
opinion on the subsequent events which have taken place in this case. Our
judgment is confined only to the period in question under the impugned show
cause notices.
Accordingly, the civil appeals stand dismissed with no order as to costs.
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