Madras High Court
M. Ramaswami Chettiar vs M/S T.M. Ramaswamy Chettiar And Co. on 30 May, 1995
Equivalent citations: 1995 A I H C 6569
JUDGMENT Goverdhan, J.
1. This appeal and Trade Mark Appeal coming on for hearing on Friday the 2nd day of December, 1994 and having stood over for consideration till this day the Court delivered the following Judgment.
The defendant is the appellant. The averments in the plaint are briefly as follows :-
2. The plaintiff is a partnership firm carrying on business in Gingelly Oil and Gingelly oil cake under the name and style of Shri Kannan Brand Pure Gingelly Oil" from 1975 onwards. The defendant is one of the partners of this firm. He retired from the partnership on 1.5.1978. After settling the accounts, he received a cash consideration of Rs. 1 Lakh from the plaintiff-firm on 1.5.1978 and severed all his connections from the firm. The firm was reconstituted on 27.2.1979. The defendant who is the senior member of the family was having an upper had and voice in the affairs of the family. He made to executed two registered documents on 21.5.78, one styled as lease deed and another as advisory deed. Since the defendant attempted to interfere with the business of the plaintiff firm, the plaintiff filed O.S. No. 3 of 1979 for the relief of permanent injunction, restraining the defendant from interfering with the user of the trade mark. After contest, the suit was decreed. The defendant preferred an appeal in A.S. No. 427 of 1980 on the file of the High Court. During the pendency of the appeal, the plaintiff had withdrawn the suit with liberty to file a fresh suit on the same property, if necessary. The reliance places upon the alleged agreement dated 21.5.1978 is a mutual mistake, since the defendant has no right in the Trade Mark of the plaintiff-firm, after his retirement. The agreement dated 21.5.1978 is void and is not binding on the plaintiff. The suit O.S. No. 3 of 1979 which has been filed under the mistaken impression made by the defendant has been withdrawn. But this suit is not based upon the said agreement. This suit is filed by the plaintiff as the absolute owner of the trade mark. "Shri Kannan Brand Pure Gingelly Oil." The cause of action for this suit is different from the suit in O.S. No. 3 of 1979.
3. The firm had established reputation as manufacturers of best quality gingelly oil and oil cake. They have a reputation in the market and among the public. The defendant cannot claim any right in the goodwill, brand name, trade mark etc., of the firm, after his retirement from the firm. He had not given any advice on the business advancement by the plaintiff and per the document dated 21.4.1978. On account of the rival acts of the defendant, the plaintiff is suffering damages and hence the suit for injunction.
4. The defendant in his written statement contends as follows :-
Ramaswami Chettiar in the name of the firm is the defendant. He retired from the partnership and at that time agreements were entered into between the defendant on the one hand and other partners on the other hand. As per the above agreement, the trade mark brand name, goodwill and trade name of the erstwhile partnership should become the exclusive property of the defendant. The defendant should permit the other partners to use the same for a period of a ten years from 1.5.1978 on payment of a licence fee of Rupees 5000/- per annum to the defendant. The other partners should use the trade mark etc., in such manner that the reputation of the trade mark is not affected to the detriment of the defendant. The agreement having come into effect from May 1978, the other partners have paid only two installments and committed defaults in payment of the installments. The defendant therefore revoked the licence granted to them by issuing notices. The plaintiff is not entitled to use the name subsequent to the receipt of the notice. After revoking the licence granted to the plaintiff, the defendant started making use of the trade mark etc., in his own business. The other partners have therefore filed the suit O.S. No. 3 of 1979. The defendant preferred an appeal, when the suit was decreed. During the hearing of the appeal, the plaintiff withdraw the suit as it was likely to fail on the question of jurisdiction with liberty to file another suit. The plaintiffs have not paid the cost awarded in their suit. The allegation that the defendant did not get any right over the trade mark is not correct. The original name of the firm was in the name of the defendant and his brother, who is the partners of the firm. In the agreement dated 21.5.1978, the trade mark was accepted and recognised as the exclusive property of the defendant. Trade mark is an asset. The plaintiff being a party to the agreement dated 21.5.1978 as well as the suit and appeal, he is now estopped from contending that the agreement dated 21.5.1978 void. The firm came into existence only on 27.2.1979 and it is a different one from the firm in which the defendant and his sons were partners. Having obtained an injunction the plaintiff began using a deceptively similar trade mark "Selvakannan Brand" and also applied for agmark approval for the same. The defendant was constrained to file O.S. No. 5 of 1980 to restrain Balasubramaniam Chettiar and his sons from using the deceptively similar trade mark. He has also filed O.S. No. 5 of 1980, for injunction from granting agmark approval. The plaintiff is not entitled to the reliefs prayed for and the suit is liable to be dismissed.
5. On the above pleadings the Learned District Judge, Periyar District at Erode, after trial has held that the plaintiff firm is having exclusive right to use the trade mark "Sri Kannan Brand Pure Gingelly Oil" till it is varied in the Trade Marks registry, that the agreement dated 21.5.1978 is unenforceable in respect of the trade mark alone and the defendant cannot claim any right over the trade mark by virtue of the said agreement and the defendant has interfered with the plaintiff's user of the trade mark and granted all the reliefs of declaration and injunction as prayed for. Aggrieved over the same, the defendant has come forward with this appeal.
6. The defendant has also filed an application before the Registrar of Trade Marks, Madras in Form TM-24, to bring on record his name, as the subsequent proprietor of the trade mark "222290," on the basis of the agreement dated 21.5.1978 as the only trade mark used in the business at the time of the agreement and for declaration of the proprietory rights in the trade mark together with the goodwill etc., now vested with him. The Joint Registrar of Trade Marks, who held an enquiry on this application, after considering the objections raised by Balasubramaniam Chettiar and his sons has passed an order on 17.5.1989, to the effect that Ramaswamy Chettiar carries with him the trade mark and the goodwill associated with it, by virtue of agreement dated 21.5.1978, claimed to be registered as the sole proprietor of the trade mark as per his request on form TM-24, dated 3.12.80, which as allowed on that date. Aggrieved over this order of the Joint Registrar of Trade Marks, the plaintiff has filed Trade Marks Appeal No. 2 of 1989.
7. Since the subject matter of the appeal as well the Trade Mark Appeal are the same and relating to the agreement dated 21.5.1978, they are considered together in the ensuing discussion. The learned counsel appearing for the plaintiff in the suit viz., appellant in T.M.A. No. 2 of 1989 would argue that the application before the Registrar of Trade Marks by the defendant is under Section 44 of the Trade and Merchandise Marks Act, 1958, for transfer of the trade mark in his name and the Joint Registrar has allowed the said application, without considering the provisions of law, particularly the period of limitation and parties to the application and therefore, it is liable to be set aside and if the said order of the Join Registrar is set aside, then there is nothing surviving in the appeal in view of the fact, that the agreement dated 21.5.78, upon which the defendant claims right to the trade mark falls to the ground. In these circumstances, the correctness or otherwise of the order passed by the Joint Registrar of Trade Marks has assumed importance. Section 44 of the Trade and Merchandise Marks Act, 1958 (hereinafter referred as Act) provides for registration of assignment and transmissions. It is as follows :-
"(1) Where a person becomes entitled by assignment or transmission to a registered trade mark, he shall apply in the prescribed manner to the Registrar to register his title, and the Registrar shall, on receipt of the application and on proof of title to his satisfaction, registered him as the proprietor of the trade mark in respect of the goods in respect of which the assignment or transmission has effect and shall cause particulars of the assignment or transmission to be entered on the register.
Provided that where the validity of an assignment of transmission is in dispute between the parties, the Registrar may refuse the register the assignment or transmission until the rights of the parties have been determined by a competent Court."
The particular section provides for registration of the trade mark, both on the ground of assignment and transmission. Assignment has been defined in Section 2(a) of the Act as follows :-
"Assignment means an assignment in writing by act of the parties concerned."
Transmission has been defined in Section 2(w) of the Act as follows :-
"Transmissions means transmission by operation of law, devolution on the personal representative of a deceased person and any other mode of transfer, not being assignment."
Thus, Assignment and Transmission are two different matters, through which the registration of a trade mark can be made in favour a person who becomes entitled to an existing trade mark. The Joint Registrar of Trade Marks has decided the issue in favour of the appellant viz., the defendant, relying on the decision of T. I. Muhammad Zumoon Sahib v. Fathimmunnissa alias Bibijan . But the said decision is not applicable to the case on hand of the defendant, since it is a case of a transmission and not assignment. There is no question of death of any registered proprietor in the present case and in the present case the defendant trades his right to the trade mark by virtue of the assignment under the agreement dated 21.5.1978 from the erstwhile firm. Therefore, the decision of the Join Registrar of Trade Marks, granting the registration in favour of the defendant in his order cannot be said to be valid order.
8. The order of the Joint Registrar would not doubt show that all the partners of the plaintiff-firm were given notices and their objections were received before the impugned order was passed. But the learned Joint Registrar has filed to note that the claim made by the plaintiff is through the agreement dated 21.5.78, in which the parties of the second part are Balasubramaniam and his sons alone, but the partners who were originally in the firm viz., those who have retired in 1976 viz., the son of the defendant as well as the son of the sister of the defendant and the one who retired in 1978, are not shown as parties. As per the original registration, Lakshmi Narayanan and Narayanaswamy were also partners of the firm. It is only through the original firm who has got the trade mark No. 222290, the defendant claims rights. Therefore, the order has been passed without giving an opportunity to the persons who were also in the firm prior to that date. In fact, in the cause title, it is referred as "in the matter of the registered trade mark 222290, in the name of Ramaswami Chettiar Balasubramaniam Narayanaswami and Laskshmi Narayanan, trading as "T. N. Ramaswamy Chettiar and Co., Erode." But Narayanaswamy, and Lakshmi Narayanan have not been issued with any notice by the Joint Registrar of Trade Marks before passing impugned order.
9. It has been held in the decision reported in the case of Radha Kishan Khandelwal v. Assistant Registrar of Trade Marks , as follows :-
"While considering the alteration in certification of registration by removing name of person entered as proprietor and substituting is his place name of another person either by assignment or transmission or for any other reason, the Registrar discharging his duties in that behalf performs quasi-judicial functions inasmuch as he decides Prima facie at least right of parties and person adversely effected should have a notice of proceedings and would be entitled to a copy of order being supplied."
Even though Narayanaswamy and Lakshmi Narayanan have retired from the firm, they can become partners in future and they were the original partners of the firm, which has got the trade mark in its name registered. The above two persons are parties, who will be adversely affected and if notice is not issued to them before passing the order, the order cannot be said to be valid one. The same point is also emphasised in the decision in the case of Madan Mohan Lal Garg v. Brijmohan Lal Garg , wherein it has been stated as follows :-
"Where one of the partners who was co-applicant in the original application prays for an amendment of it claiming registration of Trade Mark in his name only, other co-applicant partners are entitled to a notice and an opportunity of being heard before any decision is taken. Even if the order allowing amendment is assumed to be administrative, it would make no difference."
The decisions referred to above would make it clear that when the defendant has filed an application for registering his name, as the owners of the trade mark, notice ought to have been given to the erstwhile partners who are co-applicants of the firm even though they have retired and in the absence of any notice to them the order cannot be said to be a valid one.
10. The order of the Joint Registrar cannot be sustained on one more ground, viz., limitation. This application by the defendant before the Join Registrar was filed only on 3.12.1980. Section 41 of the Trade and Merchandise Marks Act, 1958 provides for conditions for assignment otherwise than in connection with the goodwill of business and it is as follows :-
"Where an assignment of a trade mark, whether registered or unregistered is made otherwise than in connection with the goodwill of the business in which the mark has been or is used, the assignment shall not take effect unless the assignee, not later than the expiration of six months from the date on which the assignment is made or within such extended period, if any, not exceeding three months in the aggregate, as the Registrar may allow, applies to the Registrar for directions with respect to the advertisement of the assignment and advertises it in such form and manner and within such period as the Registrar may direct."
The above section makes it clear that the appellant who claims registration as an assignee should file an application before the expiry of six months from the date on which the assignment is made and the Registrar has got a discretion for extending the period by another three months and in all, the application should have been filed within nine months. The document under which the claim is made by the appellant is dated 21.5.1978. The application filed by appellant him under Section 44 is dated 3.12.1990. It is beyond the period of nine months. Therefore, the application is barred by limitation. It is thus seen, that the order passed by the Joint Registrar of Trade Marks, can not be said to be a valid order, enabling the defendant/appellant to claim a right over the trade mark.
11. The learned counsel appearing for the appellant has argued that the respondent cannot contend that the agreement is a void one, when they have entered into the same with the plaintiff and when the suit has been filled and followed by an appeal, during which proceedings it was not the case of the respondent that the agreement is a void one. It is no doubt true that during their earlier stand, the respondents have not contended that the agreement is a void one. The learned trial Judge has also given a finding that the plaintiff and his sons cannot contend that they were not aware of the contents of the agreement and signed the same. The learned counsel appearing for the appellant would refer to this observation of the learned District Judge and would argue that there is no appeal filed by the respondents against this finding and therefore, it is not open for them to contend that the agreement is invalid. The respondents would in reply to the same state that there is no necessity to challenge the said findings, since the decision was in their favour in the trial Court. In view of the fact that the suit was decreed as prayed for by the plaintiffs, they have not challenged the finding of the learned District Judge and I am of the opinion that it cannot enable the defendant to get a right over the Trade Mark, which he claims through the agreement dated 21.5.78. It is more so, the order of the Joint Registrar of Trade Marks, granting the registration of the same in the name of the defendant is held to be an invalid and unlawful order.
12. In this appeal, the appellant contends that the learned Judge has failed to consider that the registration by the Registrar of Trade Marks confers title to the Trade Mark in the name of the appellant. The entire appeal is only on the ground. But the registration has been held as invalid in T.M.A. No. 2/89. The Judgment in trial Court has not been challenged by the appellant on any other ground. Considering all these aspects, I am of the opinion that the appeal is without merits and it liable to be dismissed.
13. In the result, A.S. No. 752 of 1988 is dismissed confirming the Judgment of the trial Court. T.M.A. No. 2 of 1989 is allowed, setting aside the order of Joint Registrar of Trade Marks, dated 17.5.1982.
14. Order accordingly.