Madras High Court
S.V.S. Agro Refineries Pvt. Ltd. vs Union Of India (Uoi) And Ors. on 6 November, 2001
Equivalent citations: 2003(27)PTC399(MAD)
JUDGMENT P. Shanmugam, J.
1. Petitioner has prayed for the issue of a Writ of Certiorari to quash the order of the second respondent dated 10.8.2001 by calling for the records. The impugned order is passed under Section 22 of the Companies Act, 1956 directing the petitioner to change its name within three months by deleting the word "S.V.S" from its name.
2. According to the petitioner, he is the joint proprietor of the trade mark "S.V.S" as well as the use of the letters "S.V.S". It is stated that The third respondent cannot claim monopoly to the family name and has no locus standi to file an application under Section 22 of the Companies Act. The petitioner, being the joint proprietor of the trade mark and the initials S.V.S., is entitled to use the same in any business carried on by him. According to him, the jurisdiction under Sections 20 and 22 of the Companies Act would arise only where the company with the impugned name is incorporated by a person other than the owner of the trade mark in question. It is contended that the second respondent has failed to consider this question and therefore, the order of the second respondent is liable to be set aside and the matter remanded for fresh consideration.
3. Mr. N.A.K. Sharma appearing on behalf of the third respondent submitted that on account of the use of the name and style of SVS Agro Refineries Pvt. Ltd. by the petitioner, using the Key letters of the respondents firm in the same address, they have initiated proceedings under Sections 20 and 22 of the Companies Act and a reasoned considered order, impugned herein, has been passed. The use of a company's name is permissible only if either the 'owner' of the trade mark consents or gives a no objection certificate. According to him, assuming, without conceding that the claim of the petitioner is that he is the joint proprietor of SVS trade mark, his consent alone does not constitute a consent of the owner for the use of SVS trade mark by the petitioner's company. The three partners of SVS Oil Mills, who are all registered proprietors of SVS trade mark, have neither consented to the use of SVS trade mark by the petitioner company nor they have given any no objection certificate. Hence, Guideline, No. 17 has been clearly violated and the exercise of power under Section 20 is perfectly valid. It is contended that if every joint owner of the registered trade mark is allowed on his own to give consent to the use of a trade mark without reference to the other joint owners, it will amount to flagrant violation of Section 24 of the Trade and Merchandise Marks Act, 1958, besides leaving to trafficking the trade mark. According to him, even under Guideline No. 18, petitioner company is not eligible to be registered under a name which includes the term 'SVS' when it has no connection with the existing firm of long standing and trading under the style SVS Oil Mills. Since SVS Oil Mills have built up enormous reputation and its annual turnover grosses rupees thirty nine crores, if the petitioner company is allowed to use SVS as part of its corporate name, it will mislead any reasonable person that some trade connection exists between the petitioner company and SVS Oil Mills.
4. I have heard both the counsel and considered that matter.
5. Though both the counsel referred to the previous history of the firm and the retirement of the petitioner and the arbitration proceedings. I am of the view that those are not necessary for the disposal of this writ petition. As a matter of fact. Mr. Arvind Dattar has confined himself to the short question of applicability of Guideline Nos. 17 and 18 and sought for remand of the matter for a fresh consideration.
6. It is seen from the impugned order that the second respondent has also confined himself to the Companies Act and the matters related thereto. The second respondent was guided by the principles set out by the Government of India. Department of Company Affairs for giving the name under the Companies Act. Section 20 of the Companies Act says that no company shall be registered by a name which is identical with or too nearly resembling the name in which a company in existence has been previously registered. The Department has evolved certain guiding principles for deciding the availability of norms. As per these instructions, a name which falls within the categories mentioned thereunder will not generally be made available. Clauses 17 and 18 are extracted below :
"(17) If it include a name of registered trade-mark unless the consent of the owner of the trade-mark has been produced by the promoters. It may not be possible in all cases to check up the proposed name with the trade mark, however, if the Registrars are in the knowledge or some interest party/parties bring to their notice a trade mark which is included in the proposed name then it should not be allowed unless a no-objection certificate is obtained from the party who has registered the trade mark in its own name.
(18) If a name is identical with or too nearly resembles, the name of which a company in existence has been previously registered. A few illustrations of closely resembling names are given below for guidance. The names as proposed in column 1 should not (normally) be made available in view of the companies in existence as shown in column 2. However, if a proposed company is to be under the same management or in the same group and like to have a closely resembling name to the existing companies under the same management or group with a view to have advantage of the goodwill attached to the management or group name such a name may be allowed.
Even in the case of unregistered companies or firms which have built up a reputation over a considerable period, the principle (that if a name is identical with or too closely resembles the name by which a company has been previously registered and is in existence, it should not be allowed) should be observed as far as practicable. In view of the difficulty in checking up whether a proposed name is identical with or too nearly resembles the name of an unregistered company or a firm of repute, it should at least be ensured that a proposed name is not allowed if it is identical with or too nearly resembles the name of a firm within the knowledge of the Registrar. The cases of foreign companies of repute should also be similarly treated even if there are no branches of such companies in India.
Proposed name Existing company too nearly resembling name
1. Hindustan Motor and General Finance Company.
Hindustan Motor Limited.
2. The National Steel Mfg. Co. Pvt. Ltd.
National Steel Works.
3. Trade Corporation India Limited.
State Trading Corp. of India Limited.
4. Viswakaram Engg. Works Pvt. Ltd.
Viswakaram Engineer (India) Pvt. Ltd.
5. General Industrial Financing & Trading Co. Ltd.
General Financial & Trading Corporation.
6. India Land & Finance Limited.
Northern India Land & Finance Limited.
7. United News of India Limited.
United Newspapers Limited.
8. Hindustan Chemicals and Fertilizer Limited.
Hindustan Fertilizers Limited.
7. As per Clause 17, if the name includes the name of a registered trade mark, unless the consent of the owner of the trade mark has been produced by the promoters, the said name will not be made available. There is no serious dispute as to the identity of the name being used. It is not under the same management or group for allowing the identical name. There cannot be any dispute and therefore, there is no question of using the name by applying Clause 18. The contention of the petitioner is that he is entitled to use the name since he is also the owner/proprietor of the trade mark. However, this argument did not take into account the fact that if the trade mark is jointly owned by others consent of the other owners of the trade mark also has to be produced by the promoters. Therefore, the objection of the counsel for the third respondent that even assuming, without conceding the claim of the petitioner that S.V. Natesan is a joint proprietor of SVS trade mark, his consent alone does not constitute the consent of the owner. The three partners of SVS Oil Mills, who are all registered proprietors of SVS trade mark, have neither consented to the use of SVS trade mark by the petitioner company nor have they given any no objection certificate and hence. Guideline No. 17 has been clearly violated. This aspect was considered by the second respondent in the following words :
"Therefore, the name of SVS Oil Mills cannot be given to the other party without their no objection certificate, which was not produced to the Registrar of Companies".
The argument of the learned counsel that Guideline No. 17 was not in the minds of the second respondent, therefore, cannot be accepted. Assuming it is so, there is no dispute on this question that the third respondent has not given consent or no objection certificate and the claim of the petitioner is that it is only a joint ownership and therefore, there is no escape from Clause 17.
8. It is further pointed out by the counsel for the third respondent that they have obtained the injunction in O.A. No. 505 of 2001 dated 27.6.2001 restraining the petitioner from manufacturing, marketing, selling, or advertising, or using the expression 'SVS' either as trade mark or as trade name or business name and in any manner using the expression 'SVS' either as prefix or suffix and pass-off their edible oil etc. The said injunction order is still in force.
9. For the above reasons, the order of the second respondent has to be sustained and there are no grounds to interfere with the same. Hence, the writ petition fails and it is accordingly dismissed. No costs. Consequently, W.M.P. No. 26972 of 2001 is closed.