Kerala High Court
Kerala Ayurveda Limited vs State Of Kerala on 6 February, 2007
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE SMT. JUSTICE P.V.ASHA
THURSDAY, THE 28TH DAY OF JULY 2016/6TH SRAVANA, 1938
WP(C).No. 36536 of 2010 (N)
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PETITIONER:
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KERALA AYURVEDA LIMITED,
ATHANI PO, ALUVA,
ERNAKULAM DISTRICT,
REP.BY ITS, EXECUTIVE DIRECTOR DR.K.ANIL KUMAR.
BY ADVS.SRI.ANIL VINCENT
SRI.G.SHRIKUMAR (SR.)
RESPONDENT(S):
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1. STATE OF KERALA
REPRESENTED BY THE SECRETARY(TAXES),
GOVT.OF KERALA,THIRUVANANTHAPURAM,
KERALA 695 001.
2. COMMISSIONER OF EXCISE,
THIRUVANANTHAPURAM, KERALA 695 001.
BY ADV. GOVERNMENT PLEADER SRI JIBU P. THOMAS
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 28-07-2016, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
K.V.
WP(C) NO 36536 OF 2010
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APPENDIX
PETITIONER(S)'ECHIBITS
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P1: COPY OF RELEVANT CERTIFACTE OF INCORPORATION.
P2: COPY OF THE APPLICATION DTED 13.11.2006 IN FORM 1 WITH ITS
ENCLOSURES.
P3: COPY OF THE FRESH COPY OF THE INCORPORATION ISSUED BY THE
REGISTRAR OF COMPANIES.
P4: COPY OF THE FRESH COPYU OF THE INCORPORATION ISSUED BY THE
REGISTRAR OF COMPANIES DATED 6.02.2007.
P5: COPY OF THE AMENDED CERTIFICATES ISSUED BY THE AUTHORITIES
DATED 24.06.2009,05.10.2007,20,10.2007,20,07.2007.
P6: COPY OF THE MENDED CERTIFICATES ISSUED BY THE AUTHORITIES DATED
19.07.2010.22.07.1994.16.6.201.06.07.2009.
P7: COPY OF THE L2 LICENCE NI 21/08/2009 DATED 10.05.1006 BY THE
DEPARTMENT OF EXCISE KERALA.
P8: COPY OF THE APPLICATION DATED03.11.2007.
P9: COPY OF THE ORDER XSC5 22594/2008 R DIS DATED 29.8.2009 ISSUED
BY THE 2ND RESPONDENT.
P10: COPY OF THE CIRCULAR NO 762.K3/06H-EDH,DATED 12.05.2006 ISSUED
BY THE HIGHER EDUCATION DEPARTMENT,
P11: COPY OF THE APPLICATION DATED 03.11.2007.
P12: COPY OF THE ORDER NO XC5-22593/08 DATED `14.01.2010.
P13: COPY OF THE MEMORANDUM OF APPEAL FILED BEFORE NON'BLE SECRETARY
(TAXES)DATED 23.03.2010.
P14: COPY OF THE ORDER GO(RT)NO 698/2010 TD DATED 7.08.2010 OF THE
1ST RESPONDENT.
P15: COPY OF THE ORDER NO.G.O.(MS) 568/2010 H&EFWD DATED 31.08.2010
RESPONDENT(S)'EXHIBITS
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/TRUE COPY/
P.S.TO JUDGE
K.V.
P.V.ASHA, J.
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W.P.(C) No.36536 of 2010
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Dated this the 28th day of July, 2016
J U D G M E N T
The petitioner challenges Ext.P14 order by which the Government upheld the rejection of the request of the petitioner for change of name in the L2 license for manufacture as well as preparation of medicines granted as per Exts.P7 and P8, on the ground that the change in name would be in violation of the Govt Circular.
2. The petitioner was originally incorporated as a Public Limited Company in the name and style of Kerala Ayurveda Company Pharmacy Ltd., in the year 1992 as per Ext.P1. While so, the Board of Directors resolved to change its name as Kerala Ayurveda Ltd. Accordingly application was submitted before the Registrar of Companies on 13.11.2006 as per Ext.P2 and the Registrar of Companies granted approval for change of name as per Ext.P4 certificate of incorporation on 06.02.2007, changing the name as Kerala Ayurveda Limited.
3. The petitioner thereupon, submitted applications to incorporate the change in name of the W.P.(C) No.36536 of 2010 2 Company before the Department of Customs/Central Excise, Department of Scientific and Industrial Research and various other Central Government Departments. Accordingly by Ext.P5 the Ministry of Science and Technology, Scientific and Industrial Research Technology Bhavan Department issued certificate with the revised name. Petitioner submitted applications before the various Departments of State Government also. The Departments of Factories and Boilers, Drugs Control, Local Self Government, Local Bodies etc., issued certificates carrying out the change in the name of the Company. But the Commissioner of Excise, rejected the application for change of name in SP VI license as per Ext.P8 order on the ground that there is violation of Government circular dated 12.5.2006.
4. Similarly the Assistant Commissioner of Excise also rejected the application submitted by the petitioner for change of name in respect of L2 license No.21/08-09, as per Ext P9 order, on the very same ground. The petitioner thereupon filed an appeal before the W.P.(C) No.36536 of 2010 3 Government and by Ext.P14, the Government rejected the appeal upholding the orders Exts.P8 and P9 of the Commissioner and the Assistant Commissioner, respectively. The reason stated was that as per Circular dated 12.05.2006, which is produced by the petitioner as Ext.P10, no person shall use or continue to use any name or emblem which may suggest the patronage of the Government of India or State Government, etc., for the purpose of any trade, business or profession etc., without the previous permission of the Central Government. Therefore according to the Government in case a change of name as requested by the petitioner was required, prior sanction from the Central Government was necessary or otherwise it will amount to violation of Section 3 read with Entry 7 of the schedule to the Emblems and Names (Prevention of Improper Use) Act, 1950 (for short 'the Act'). Government also held that certificate of Registration of Trade Mark in the same name does not entitle the company to use such name in the SP VI licence held under the Kerala Spirituous Preparations W.P.(C) No.36536 of 2010 4 (Control) Rules, 1969 and also in L2 licence and as such registration was in violation of Section 4 of the Act.
5. It is under the above circumstances that the petitioner has filed this writ petition. According to the petitioner either the Excise Commissioner or the Assistant Excise Commissioner or Government are not competent authorities to consider any violation of the provisions contained in the Act and thereby to reject the application submitted by the petitioner based on such violations. Petitioner submits that neither there is violation of the provisions contained in Section 3 r/w Entry 7 of the Schedule of the Act nor those in Section 4 of the Act, by using the name Kerala Ayurveda Limited.
6. As per Section 3 the prohibition is against use of name as for the purpose of any trade, business calling or profession or in the title of any patent or in any trade mark or design, any name or emblem specified in the schedule or any colourable imitation thereof without previous permission of the Central Government or officer or authorized person in the Government. Under Section 4 W.P.(C) No.36536 of 2010 5 no competent authority shall register any company, firm or other body of persons which bears any name or register a trade mark or design which bears any emblem or name or grant a patent in respect of an invention which bears a title containing any emblem or name, if the use of such name is in contravention of Section 3. Sub-section (2) provides that in case the competent authority requires any clarification with respect to the emblem towards inclusion in the schedule, the competent authority may refer the question to the Central Government. Entry No.7 under the Schedule to the Act provides that any name which may suggest or be calculated to suggest the patronage of Government of India or the Government of State or connection with any local authority or any corporation or body constituted by Government under any law for the time being in force cannot be used. Therefore the contention of the petitioner is that if at all there is any objection with respect to the name as sought to be changed, it was for the Registrar of Companies to object it. As long as the Registrar of Companies effected the W.P.(C) No.36536 of 2010 6 change issuing a certificate with a revised name the Commissioner of Excise cannot have any authority to object to the change in name and to reject the application submitted by him accordingly. As far as Section 4 is concerned competent authority is defined under Section 2(b) as to any authority competent under any law for the time being in force to register any company, firm or other body of persons. According to petitioner, the Excise Commissioner or the Assistant Excise Commissioner are not competent authorities who can raise objection against the name and nobody other than Registrar of Companies is having the authority to raise any objection against the name of petitioner.
7. The contention of the petitioner is that the petitioner's Company was originally incorporated as 'Kerala Pharmacy Limited' and when it was incorporated as Public Limited Company in the year 1992 its name was Kerala Ayurveda Pharmacy Limited. It was that name which was changed as per Ext.P4 as 'Kerala Ayurveda Limited' by Registrar of Companies which was carried out W.P.(C) No.36536 of 2010 7 by the department under the Central Government as well as the State Government except the department of Excise. Therefore the order Ext.P14 is challenged on the ground that the Commissioner of Excise as well as the Assistant Commissioner of Excise as well as the Appellate Authority, Government do not have any authority to raise any objection with respect to the change in name of the petitioner as 'Kerala Ayurveda Limited'.
8. The respondents have filed a counter affidavit stating that using the name "Kerala" is in violation of Section 3 r/w Entry 7 of the schedule to the Act, 1950. It is stated that the fact that a certificate of registration of trade mark was issued already, does not enable the company to use such name in SP VI licence under Kerala Spirituous Preparations (Control) Rule, 1969 or in the L2 license when such registration of trade mark and incorporation are found to have been made in violation of Section 4 of the Act. According to them the impugned orders were issued strictly in accordance with the Government direction Ext.P10. According to the W.P.(C) No.36536 of 2010 8 respondents using the name "Kerala" cannot be allowed since it suggests patronage of Government and it is contrary to the Circular dated 12.05.2006, which is issued in terms of the provisions contained in the Act, 1950. Respondents also stated that the circular was issued by the Government as it had come to the notice of the Government that there is continued and indiscriminate use of privilege which gives the impression of official patronage which has mislead the people regarding participation of Government in the Company.
9. Heard the learned Senior counsel Sri. G.Sreekumar appearing for the petitioner and learned Government Pleader.
10. Learned Senior counsel relied on the judgment in Goenkarancho Ekvot, a Society registered under the Societies Registration Act v. UOI (AIR 2007 Bombay 184). There writ petition was filed for cancellation of registration of trade mark in respect of Goa 1000 Gutka and other Pan Masala alleging that use of the said trade mark infringed the provisions under the Trade Mark Act, W.P.(C) No.36536 of 2010 9 1958 as well as Section 3 of the Act, 1950. Even though the writ petition was sought to be withdrawn the contentions raised by the petitioner therein were considered, with reference to the provisions contained in the Act. It was held that an accumulative reading of the provisions will only show that a person is prohibited from using in his trade activity any name or emblem specified in the schedule and what was prohibited was only if the name Goa was associated by Government in case Goa was patronage being understood as if the product was having the patronage of State Government. There it was stated that Government of a State cannot be synonymous to the name of a place and therefore the contention raised was a misconception of law. That judgment cannot be of any help to the petitioner, because the name Kerala is for the entire state and there is no place called Kerala as in the case of Goa.
11. The judgment dated 10.04.1987 in W.P.(C). No.553 of 1981 of the Andhra Pradesh High Court was also relied on. There permission was denied for registration of W.P.(C) No.36536 of 2010 10 a firm under Section 58(1) of the Indian Partnership Act, 1932 with the name "the South India Textiles". Learned Single Judge of the Andhra Pradesh High Court held that the refusal to permit use of the word 'India' in the firm's name was in excess of the power and direction was issued to register the name of the firm of the petitioner as per law under Sub-section (1) of Section 58 of the Indian Partnership Act, 1932, on the ground that there will not be any violation of Section 3 r/w Entry 7 of the Act.
12. The question to be considered in this case is whether the change in name in the licence could have been refused on the ground stated in Ext.P14. The relevant provisions in the Act that require consideration are the following:
"3. Prohibition of improper use of certain emblems and names.- Notwithstanding anything contained in any law for the time being in force, no persons shall, except in such cases and under such conditions as may be prescribed by the Central Government, use, or continue to use, for the purpose of any trade, business, calling or profession, or in the title of any patent, or in any trade mark or design, any name or emblem specified in the Schedule or any colourable imitation thereof without the previous permission of the Central Government or of such officer of Government as may be authorised in this behalf by the Central Government.
4. Prohibition of registration of certain companies, etc.- W.P.(C) No.36536 of 2010 11
(1) Notwithstanding anything contained in any law for the time being in force, no competent authority shall,-
(a) register any company, firm or other body of persons which bears any name, or
(b) register a trade mark or design which bears any emblem or name, or
(c) grant a patent in respect of an invention which bears a title containing any emblem or name, If the use of such name or emblem is in contravention of section 3. (2) If any question arises before a competent authority whether any emblem is an emblem specified in the Schedule or a colourable imitation thereof, the competent authority may refer the question to the Central Government, and the decision of the Central Government thereof shall be final.
Competent authority is defined as follows:
"2. Definitions.--In this Act, unless the context otherwise requires,-- xxxx
(b) "competent authority" means any authority competent under any law for the time being in force to register any company, firm or other body of persons or any trade mark or design or to grant a patent;
Entry 7 in the schedule of Act 50 reads as follows:
7. Any name which may suggest or be calculated to suggest--
(i) the patronage of the Government of India or the Government of a State; or
(ii) connection with any local authority or any corporation or body constituted by the Government under any law for the time being in force.]
13. It is to be noted that by Ext.P4 the Registrar of Companies, already issued revised certificate of incorporation with the revised name. Under section 4, it is the competent authority who is prohibited (1) to register any company which bears a name; (2) to register a trade mark or design which bears any name and (3) to grant a W.P.(C) No.36536 of 2010 12 patent in respect of an invention which bears name. Registrar of Companies, who is one of the competent authorities, has already granted permission to effect change of name. i.e., that competent authority did not entertain any doubt as to application of Section 3 or 4 of the Act or Entry 7 of its schedule. The Excise Commissioner or even the Government or even the Assistant Excise Commissioner can object to the change in name only if they are the competent authorities coming under Section 2, i.e., to register a trade mark or to grant a patent. The Company's name was already revised, on the basis of the application submitted by the petitioner. It is also pertinent to note that change in name was incorporated by the other authorities under the Central Government as well as the State Government as per Exts.P5 and P6.
14. When the petitioner company already changed its name the use of its name as given in the certificate of registration by Registrar of Companies, cannot be termed as improper use. The use of the name has already been W.P.(C) No.36536 of 2010 13 authorised when Ext.P4 certificate was issued. Therefore if at all the respondents entertained any doubt over the change requested for, it should have sought for a clarification from the Central Govt., as provided in subsection 2, which reads:
"xxx (2) If any question arises before a competent authority whether any emblem is an emblem specified in the Schedule or a colourable imitation thereof, the competent authority may refer the question to the Central Government, and the decision of the Central Government thereon shall be final."
15. When the petitioner's application for effecting changes in the licenses was submitted, pointing out the revised name in the certificate of incorporation Ext P4, the Excise Commissioner, even assuming that he is also a competent authority, as defined under Section 2, in case he entertained any doubt as to the name or applicability of the provisions contained in Sections 3 and 4 of the Act, he ought to have taken steps to refer the matter for decision of central Govt., in terms of of Subsection 2 of Section 4 of the Act, 1950, since Ext P4 certificate with the W.P.(C) No.36536 of 2010 14 very same name, based on which the application was made, was already issued by a competent authority. Therefore, the action of the Commissioner of Excise and the Assistant Excise Commissioner in rejecting the applications on the basis of circular issued by Government in Ext.P10, and the order of Govt which upheld those orders cannot stand.
In the above circumstances, respondents shall consider Exts.P6 and P7 applications submitted by the petitioner and pass fresh orders in accordance with law within a period of 'one month' from the date of receipt of copy of a judgment.
Sd/-
P.V.ASHA, JUDGE.
rkc/AS