Bombay High Court
Vov Cosmetics Private Limited vs Union Of India on 5 April, 2013
Author: S.J. Vazifdar
Bench: S.J. Vazifdar, Mridula Bhatkar
OSWP2519.12
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 2519 OF 2012
1. VOV Cosmetics Private Limited, a company ]
incorporated under the Companies Act, 1956, ]
having its registered office at A-203-204, Raj ]
Madhur CHS, Near Club Aquaria, Devidas ]
Lane, Borivali (West), Mumbai - 400 053 ]
2. Pioneer Products, a partnership firm having ]
address at 129, Dewan & Shah Industrial Estate ]
No.1, Navghar, Vasai Road (East), Tal. Vasai ]
District Thane. ]
3. Shri Dinesh Bastimal Jain, an Indian adult ]
A-203-204, Raj Madhur CHS, Near Club ]
Aquaria, Devidas Lane, Borivali (West), ]
Mumbai - 400 053. ]
4. Smt. Sharmila Dinesh Jain, an Indian adult ]
A-203-204, Raj Madhur CHS, Near Club ]
Aquaria, Devidas Lane, Borivali (West), ]
Mumbai - 400 053. ]
5. Shri Bastimal K. Jain, an Indian, adult ]
A-203-204, Raj Madhur CHS, Near Club ]
Aquaria, Devidas Lane, Borivali (West), ]
Mumbai - 400 053. ] ... Petitioners
Versus
1. Union of India, Through Government Pleader ]
2. The Regional Director, Office of the Regional ]
SRP 1/18
::: Downloaded on - 09/06/2013 19:48:51 :::
OSWP2519.12
Director, Western Region, Ministry of ]
Corporate Affairs, "Everest". 5th Floor, ]
100, Marine Drive, Mumbai - 400 002. ]
3. The Registrar of Companies, ]
Ministry of Corporate Affairs, "Everest" ]
th
5 Floor, 100, Marine Drive, Mumbai - 400002 ]
4. VOV Cosmetic Private Limited, a Company ]
incorporated under the Companies Act, 1956, ]
having registered office at No.13, Gokul ]
Regency II, Thakur Complex, Kandivali (East) ]
Mumbai - 400 101. ]
5. Shri Dharamshi Manji Patel, an Indian adult, ]
having address at B/404, Gokul Accord,
ig ]
Thakur Complex, Kandivali (East), ]
Mumbai - 400 101. ]
6. Shri Ramji Bhikabhai Ahir, an Indian, adult, ]
having address at B/404, Gardenia Valley of ]
Flowers, Thakur Complex, Kandivali (East), ]
Mumbai - 400 101. ] ... Respondents
Mr. Sanjay Jain with Mr. B.N. Poojari i/b M/s. Asian Patent Law for
the Petitioners.
Mr. A.J. Rana, senior counsel with Mr. D.P. Singh for the Respondent
Nos.1 to 3.
Mr. Shyam Mehta, senior counsel with Ms. Shilpaja V. Kondalkar for
the Respondent Nos.4 to 6.
CORAM : S.J. VAZIFDAR, &
MRS.MRIDULA BHATKAR, JJ.
FRIDAY, 5TH APRIL, 2013
SRP 2/18
::: Downloaded on - 09/06/2013 19:48:51 :::
OSWP2519.12
JUDGMENT :[Per S.J. Vazifdar, J.]
1. Rule. With the consent of the parties, Rule is made returnable forthwith and the Writ Petition is heard finally.
2. The petitioners have challenged an order dated 27th July, 2012, passed by the respondent No. 2 - The Regional Director - under section 22 of the Companies Act, 1956, directing the petitioner No.1 to change its name within three months by deleting the words "VOV COSMETIC" from its name.
3. Petitioner Nos. 3 and 4 are the directors/promoters of petitioner No.1. Petitioner No.2 - Pioneer Products is presently a partnership firm of which petitioner Nos.3 and 5 are the partners. Petitioner Nos.
3 to 5 are Dinesh Bastimal Jain, Smt. Sharmila Dinesh Jain and Bastimal K. Jain, respectively. The petitioner No. 3 is the son of petitioner No. 5.
Respondent No. 3 is The Registrar of Companies. Respondent No. 4 is VOV Cosmetic Private Limited on whose application the SRP 3/18 ::: Downloaded on - 09/06/2013 19:48:51 ::: OSWP2519.12 impugned order was passed. Respondent Nos. 5 and 6, Dharamshi Manji Patel and Ramji Bhikhabhai Ahir, are the directors of respondent No. 4.
4. From the year 1986, petitioner No. 5 carried on business of manufacturing and marketing cosmetics in the firm name and style of Pioneer Products as the sole proprietor thereof. The products were sold under the mark "VOV".
By and under a deed of partnership dated 20h February, 2012, petitioner Nos.3 and 5 carried on business in the firm name and style of petitioner No.2 - Pioneer Products. Petitioner No.2 continued the business of manufacturing and marketing cosmetic products hitherto carried on by petitioner No.5.
The petitioner stated that with the consent of petitioner No.5, petitioner Nos.2 and 3 "borrowed essential and distinctive characteristic VOV in the name of the company". We presume that by this, it is meant that petitioner No.5 permitted petitioner Nos. 2 and 3 to use the said mark. The petitioners state that with a view to expand their business they proposed the incorporation of petitioner No.1 SRP 4/18 ::: Downloaded on - 09/06/2013 19:48:51 ::: OSWP2519.12 under the Companies Act, 1956 (hereinafter referred to as "the said Act"). Respondent No.3 issued a certificate of incorporation dated 15th September, 2011, certifying that petitioner No.1 was, on that day, incorporated under the said Act.
For the purpose of this petition, it is not necessary to refer to the various applications made by the petitioners for the registration of the said mark. Nor is it necessary to refer to the applications made by the petitioners to other authorities such as the Food and Drug Administration, Maharashtra.
5. As far as the respondent No. 4 - VOV Cosmetic Private Limited is concerned, it is sufficient to note that it was incorporated by that name on 5th May, 2011 i.e. prior to the incorporation of petitioner No.1 under the said Act.
6. On 23rd April, 2012, respondent No. 4 filed an application under section 22 of the said Act to rectify the first petitioner's name, so as not to resemble its name and not to use the word VOV Cosmetic in the rectified name. The respondent No.4 stated that respondent No.5 -
SRP 5/18 ::: Downloaded on - 09/06/2013 19:48:51 :::OSWP2519.12 Dharamshi Manji Patel who was one of its promoters, had applied for the trademark "VOV" in the year 2005. Subsequently, respondent No.4 applied for other marks, a prominent feature whereof was the mark "VOV". The same are pending registration.
7. The names of petitioner No.1 and respondent No.4 are not merely deceptively similar, but are virtually identical.
8.Upon receipt of the fourth respondent's application, petitioner No.1 was issued a notice dated 14th May, 2012, calling upon it to show cause why it ought not be directed under section 22 of the Act to change its name. The Registrar of Companies was also directed to furnish a report in the matter.
Petitioner No.1 by its letter dated 24th May, 2012, replied to the show cause notice and on 24th July, 2012, filed a formal reply to the application. The petitioners admitted that their applications for registration of their trademarks, which included as a dominant part thereof, the word "VOV", were pending. It was admitted before the Regional Director that the marks of petitioner No.1 and respondent SRP 6/18 ::: Downloaded on - 09/06/2013 19:48:51 ::: OSWP2519.12 No.4 were not registered.
9. For the purpose of this Writ Petition, the dates of incorporation of petitioner No.1 and respondent No.4 are important. Respondent No.4 was registered on 5th May, 2011 and petitioner No.1 was registered on 15th September, 2011.
10. Before referring to the impugned impugned order, it would be convenient to set out sections 20 and 21 of the Companies Act :-
"20. Companies not to be registered with undesirable names.--(1) No company shall be registered by name which, in the opinion of the Central Government, is undesirable.
(2) Without prejudice to the generality of the foregoing power, a name which is identical with, or too nearly resembles,--
(i) the name by which a company in existence has been previously registered, or
(ii) a registered trade mark, or a trade mark which is subject of an application for registration, of any other person under the Trade Marks Act, 1999, may be deemed to be undesirable by the Central Government within the meaning of sub-section (1). (3) The Central Government may, before deeming a name as undesirable under clause (ii) of sub-section (2), consult the Registrar of Trade Marks.
.......................
22. Rectification of name of company.--(1) If through inadvertence or otherwise, a company on its first SRP 7/18 ::: Downloaded on - 09/06/2013 19:48:51 ::: OSWP2519.12 registration or on its registration by a new name, is registered by a name which,--
(i) in the opinion of the Central Government, is identical with, or too nearly resembles, the name by which a company in existence has been previously registered, whether under this Act or any previous companies law, the first-mentioned company, or
(ii) on an application by a registered proprietor of a trade mark, is in the opinion of the Central Government identical with, or too nearly resembles, a registered trade mark of such proprietor under the Trade Marks Act, 1999, such company,
(a) may, by ordinary resolution and with the previous approval of the Central Government signified in writing, change its name or new name; and
(b) shall, if the Central Government so directs within twelve months of its first registration or registration by its new name, as the case may be, or within twelve months of the commencement of this Act, whichever is later, by ordinary resolution and with the previous approval of the Central Government signified in writing, change its name or new name within a period of three months from the date of the direction or such longer period as the Central Government may think fit to allow :
Provided that no application under clause (ii) made by a registered proprietor of a trade mark after five years of coming to notice of registration of the company shall be considered by the Central Government.
(2) If a company makes default in complying with any direction given under clause (b) of sub-section (1), the company, and every officer who is in default, shall be punishable with fine which may extend to one thousand rupees for every day, during which the default continues;"
11. By the impugned order, respondent No.2 - the Regional Director - observed that petitioner No.1 had obtained permission to be SRP 8/18 ::: Downloaded on - 09/06/2013 19:48:51 ::: OSWP2519.12 incorporated in it's present name on the basis of an incorrect statement in it's Chartered Accountant's certificate and in the application signed by its promoter - petitioner No.3, that petitioner No.3, who was the promoter of petitioner No.1, was the owner of the registered trademark "VOV" since December, 2002. That this was an incorrect statement is admitted before us. Respondent No.2 observed that the name was obtained using the Straight Through Process without going through the ROC by furnishing a false declaration in form 1-A filed in the MCA system. The impugned order directed action to be taken against the Chartered Accountant, but observed that, that was a separate issue and was not dealt with in the impugned order. The order, after setting out the facts as well, proceeds to read as under :-
"...................... Hence, what has to be decided u/s. 22(1)
(i) is whether in the opinion of the Central Government, the name obtained under sec.20 of the Companies Act, 1956, by the respondent company is undesirable as it is identical with or resembles with the name of the company in existence which has been previously registered under the Companies Act, 1956.
........................ The provisions of sec.22(1)(i) of the Act is clearly attracted.
WHEREAS, ..................................the Central Government is of the opinion that the respondent company has registered its company with an identical SRP 9/18 ::: Downloaded on - 09/06/2013 19:48:51 ::: OSWP2519.12 name as that of the applicant company and hence respondent company is hereby directed u/s.22 of the Companies Act, 1956, by the undersigned ..........................................................to change its name within 3 months of the date of this order by deleting the word "VOV COSMETIC" from its name and accordingly apply for such name as may be available u/s.21 of the Act to the ROC and comply with the other provisions of the Companies Act for affecting such change of name, failing which the company and its officers in default shall be punishable with a fine of Rs.1000/- every day from the date from which the default continues."
12. Respondent No.2 appears to have proceeded on the basis that the moment it is found that a name of the subsequently registered company is identical with or resembles the name of a company in existence, it should be deemed to be an undesirable name. Respondent No.2 proceeded on the basis that in that event, the provisions of section 22(1)(i) are attracted and the name of such subsequently registered company is to be rectified / changed.
13. Mr. A.J. Rana, the learned senior counsel appearing on behalf of respondent Nos.1, 2 and 3 and Mr. Shyam Mehta, the learned senior counsel appearing on behalf of the respondent Nos.4, 5 and 6 supported the order. They submitted that where, through inadvertence SRP 10/18 ::: Downloaded on - 09/06/2013 19:48:51 ::: OSWP2519.12 or otherwise, a company is registered by a name which is identical with or too nearly resembles the name by which a company in existence has been previously registered, the Central Government is bound to direct such subsequently registered company to change its name in the manner provided in section 22(1). They contended that in such a case the Central Government has no option but to order the name to be changed. We are unable to agree.
14.Firstly, section 20 does not bar the Central Government from registering by a name which is identical with or too nearly resembles the name by which a company in existence has been previously registered. In other words, section 20 does not provide that a name by which a company desires to be registered is not undesirable merely because it is identical with or too nearly resembles the name by which a company in existence has been previously registered. Whether such name is undesirable or not would depend on the facts and circumstances of the case. This is clear from sub-section (2) of section 20 which provides that such a name "may be deemed to be undesirable" by the Central Government within the meaning of sub-
SRP 11/18 ::: Downloaded on - 09/06/2013 19:48:51 :::OSWP2519.12 section (1). It is merely a presumption which is clear from the use of the word "may" in sub-section (2). If it were otherwise, instead of the word "may", the Legislature would have used the word "shall".
Indeed if it were otherwise, the language of the section would have been entirely different. It would have provided for a bar to the registration of a company by a name which is identical with or too nearly resembles the name by which a company has been previously registered.
15. This is with good reason. Companies alone are not entitled to own trademarks. Any person is entitled to own a trademark. The inclusion of a mark in the name of a company constitutes the use of a mark and the same can, therefore, be restrained by an injunction in an action for infringement and/or passing off. Section 20, therefore, safeguards the proprietary rights and interests of the owners of a trademark against infringers. Were it otherwise, an infringer could easily defeat the rights of the proprietor of the mark by the simple expedient of having a company registered by a name, a prominent and dominant part whereof contains the mark of another. In such a case, it SRP 12/18 ::: Downloaded on - 09/06/2013 19:48:51 ::: OSWP2519.12 could not be said that the name by which the subsequent applicant seeks registration of a company is undesirable though he is the proprietor of the mark entitled to use the same to the exclusion of others.
16. It was contended on behalf of the respondents that, in any event, the language of section 22 is entirely different from that of section 20.
It was contended that under section 22, the Central Government is bound to direct the change in the name of a company if it is inadvertently or otherwise registered by a name which is identical with or too nearly resembles the name by which a company in existence has been previously registered.
17. The submission is not well founded. Section 22 also confers a discretion upon the Central Government in such cases. Section 22 (1), in the present case, would read as under :-
"22. Rectification of name of company.--(1) If through inadvertence or otherwise, a company on its first registration ..............., is registered by a name which,--
(i) in the opinion of the Central Government, is identical with, or too nearly resembles, the name by which a company in existence has been previously registered, SRP 13/18 ::: Downloaded on - 09/06/2013 19:48:52 ::: OSWP2519.12 .........................................................................................., the first-mentioned company, ....
(ii) ...........................
(a) ...........................
(b) shall, if the Central Government so directs within twelve months of its first registration .............................., by ordinary resolution and with the previous approval of the Central Government signified in writing, change its name or new name within a period of three months from the date of the direction or such longer period as the Central Government may think fit to allow :"
Thus, even assuming that the subsequent company is, through inadvertence or otherwise, registered by a name which is identical with or to nearly resembles a name by which a company in existence has been previously registered, it does not follow as a matter of course that it should be directed by the Central Government to change it's name. This is clear from the use of the words "if the Central Government so directs" in section 22(1)(b). The word "if" indicates that it does not follow as a rule that merely because a company is, through inadvertence or otherwise, registered by a name which is identical with or to nearly resembles the name by which a company in existence has been previously registered, it is bound to be ordered to change it's name. The Central Government must satisfy itself that the name by which the subsequent company registered through SRP 14/18 ::: Downloaded on - 09/06/2013 19:48:52 ::: OSWP2519.12 inadvertence or otherwise is undesirable. Section 22 complements section 20 for it takes care of a situation where despite the provisions of section 20, a company is, through inadvertence or otherwise, registered by a name that is undesirable by providing for the rectification of the name of such company.
18. There appears to be good reason for conferring such discretion upon the Central Government even where a subsequently registered company is registered by an identical name or a name that closely resembles the name of a previously registered company through inadvertence or otherwise. If, for instance, the subsequent registration is merely through inadvertence, there is no reason why it's name should be changed despite the fact that the Central Government comes to the conclusion that the name is not undesirable. There may also be cases where the facts that transpire after such inadvertent registration warrant the continuation of the registration by the said name. Take for instance a case where after the inadvertent registration, the company obtains a registration of the trademark under the Trademarks Act or where such a company obtains an injunction restraining the previously SRP 15/18 ::: Downloaded on - 09/06/2013 19:48:52 ::: OSWP2519.12 registered company from using the mark as part of it's corporate name. It would be an empty formality for the Central Government to first require the change in the name and thereafter entertain a fresh application under section 20.
19. The word "otherwise" in section 2(1) is not defined in the Act.
It is neither possible nor necessary to provide an exhaustive list of circumstances that fall within its ambit. It would include cases where a party makes an application fraudulently or by suppressing material.
In the present case, therefore, one of the issues that would arise is whether the statement in the application for registration to the effect that the mark was registered in the name of petitioner No.3 was deliberate or inadvertent. If it is found to be deliberate, the question would arise whether by reason thereof alone, an order for change in the name must follow irrespective of the facts of the case prior to the incorporation and even thereafter. We keep this question open.
20. The impugned order has been passed only on the basis that the name of petitioner No.1 is almost identical to the name of respondent SRP 16/18 ::: Downloaded on - 09/06/2013 19:48:52 ::: OSWP2519.12 No.4 which was registered earlier. It was not even based on the incorrect statement made in Form 1 by petitioner No.3 - the promoter of petitioner No.1 and the Chartered Accountant of petitioner No.1.
This is clear from the order which stated that, that was a separate matter which was not dealt with in the order. It could certainly be a relevant factor, but it was not made the basis of the order.
21. In an application for rectification of a name under section 22, it is necessary for the Regional Director to consider various aspects. It is neither possible nor desirable to exhaustively enumerate them.
Suffice it to state that merely because the name of a company subsequently registered is identical with or too nearly resembles the name of a company which has already been registered, albeit, through inadvertence or otherwise, it does not follow that an order for rectification is bound to be passed.
22. The impugned order is, therefore, liable to be quashed and set aside only on this ground. The Registrar of Companies shall, after affording the parties an opportunity of being heard, pass a fresh order SRP 17/18 ::: Downloaded on - 09/06/2013 19:48:52 ::: OSWP2519.12 after considering the relevant facts in an application under section 22.
23. Rule is made absolute in terms of prayer (a). Respondent No.2 shall pass a fresh order on the application of respondent No.4, after affording the parties an opportunity of being heard.
There shall, however, be no order as to costs.
MRS.MRIDULA BHATKAR, J.
ig S.J. VAZIFDAR, J.
SRP 18/18
::: Downloaded on - 09/06/2013 19:48:52 :::