Full Judgment Text
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PETITIONER:
STATE OF U.P.
Vs.
RESPONDENT:
RAM NATH, PARTNER M/S. PANNA LAL DURGA PRASAD, KANPUR
DATE OF JUDGMENT24/11/1971
BENCH:
REDDY, P. JAGANMOHAN
BENCH:
REDDY, P. JAGANMOHAN
PALEKAR, D.G.
CITATION:
1972 AIR 232 1972 SCR (2) 572
1972 SCC (1) 130
ACT:
Trade and Merchandise Marks Act (43 of 1958), ss. 28, 78, 79
and 89--Offecnes under ss. 78 and 79-Prosecution if could be
initiated by Inspector of trade marks-Discontinuance of
trade mark--Use by another--If civil matter.
HEADNOTE:
The Inspector of trade marks wrote a letter to the
Magistrate and requested him to take necessary action under
law against the respondents on the allegations that the
respondents were producing coins and pieces of gold and were
applying to them a trade mark which was deceptively similar
to the registered trade mark of a bank, and which was in
force when the respondents produced the coins. The
Magistrate directed the police to register a case under the
Trade and Merchandise Marks Act, 1958, and investigate it.
On receipt of the police report the Magistrate followed the
procedure prescribed by s. 251A of the Criminal Procedure
Code, and framed charges under ss. 78 and 79 of the Act on
being satisfied that there was a prima facie case. After
one of the prosecution witnesses was examined the
respondents raised the question that the evidence disclosed
that the bank had discontinued the use of the trade mark and
a question of abandonment which could be more suitably dealt
with by the civil court, had arisen.
The High Court on reference by the Sessions Court held that
: (1) the prosecution could not be initiated by the
Inspector of Trade Marks in view of s. 28 of the Act, (2)
whether the question of the abandonment of the trade mark
amounted to an express or implied consent for use by the
respondent was a matter for the civil court and not for a
criminal prosecution and (3) the prosecution for offenses
under ss. 78 and 79 was not valid because the Bank was
declared to be a foreign bank by the Reserve Bank of India
in 1960 and hence had no rights as a citizen of India.
Allowing the appeal to this Court,
HELD : (1) Merely because s. 89(1) of the Trade and
Merchandise Marks Act refers to the manner of taking
cognizance in respect of certain offenses specified therein,
it does not preclude the cognizance of other offenses
specified in Chapter X of the Trade and Merchandise Marks
Act from being taken under the procedure prescribed by the
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Criminal Procedure Code. The offenses with which the
respondents were charged are punishable with imprisonment of
two years and hence, being non-cognizable, the procedure
followed, in the present case, by the Magistrate, is
unexceptionable. Section 28 of the Act which is in Chapter
IV relating to the effect of registration has no hearing on
the question [578 C-H; 579 A-D]
(2) An offence under ss. 78 and 79 relates to a trade mark
whether it is registered or unregistered. The application
of a trade mark signifies a particular type of goods and
involves deception. Therefore, the fact that the Bank
discontinued the use of the trade mark would not absolve the
respondents, from criminal liability. Even if the trade
mark was abandoned by the Bank it could only furnish a
ground for a person to make
573
an application under s. 46 of the Trade and Merchandise
Marks Act to have the trade mark removed from the register
of trade marks, but it does not entitle anyone to use the
trade mark. [577 A; 578 A-C]
(3) The question whether the Bank, being a foreign bank, is
not a citizen and had no Tight in the trade mark is,
therefore, irrelevant and does not affect the validity of
the proceedings against the accused. [577 A-B]
JUDGMENT:
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 41 of
1969,
Appeal from the judgment and order dated September 6, 1967,
of the Allahabad High Court in Criminal Reference No. 265 of
1965.
O. P. Rana, for the appellant.
Nur--ud-din Ahmed and P. N. Bhardwaj, for the respondent.
The Judgment of the Court was delivered by
P.Jaganmohan Reddy, J. This Appeal is by Certificate against
the order of the High Court of Allahabad quashing the charge
framed by the Additional City Magistrate, Kanpur against the
accused Respondent for offenses under Sections 78 and 79 of
the Trade and Merchandise Marks Act 43 of 1958 (hereinafter
referred to as ’the Act’). Respondent 1 to Respondent 4 are
the partners of the firm M/s. Pannalal Durga Prasad of
Nayaganj, Kanpur which is a firm of bullion merchants who
have also been minting gold coins with a trade mark said to
be similar to the one which is the registered trade mark of
M/s. Habib Bank Ltd., Bombay and which was in force on the
day when the alleged offence is said to have been committed.
On 24th October 1962 the Inspector of Trade Marks on behalf
of the Director of Industries wrote a letter to the
Additional City Magistrate I, Kanpur that M/s. Habib Bank
Ltd., Bombay which is one of the foremost refiners of gold
has been producing coins and pieces of gold of various
shapes and sizes for sale commonly known as under a
distinct trade mark, the most striking feature of which has
always been a device of a lion holding a sword with his
forearm against the back ground of a rising sun. This
device of lion is with the word ’Habib Bank Ltd.’ above it
and ’Shuddha Sonu’ below it in Gujarati script with a dotted
circle along the border on the face of the device of a coin
and a wreath ’along the border on the other face with the
words ’Habib Bank Ltd., contained in the upper half and
’Pure Gold’ in the lower half of the space within it in
English script with the description of weight and quality.
This trade mark it was stated had acquired distinctiveness
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in respect of old coins and pieces produced by
574
them on account of long and extensive use, that the people
in that part of the country particularly the people in the
rural areas have always had a great fancy for the gold
pieces and coins of Habib Bank Ltd., on account of their
fineness for use in preparing ornaments as also as the
safest investment of their savings by purchasing and
retaining these coins and pieces, and consequently such gold
coins continued to be highly popular among the people in the
rural areas as well in the bullion trade, and are
distinguished on account of the above noted features and
trade mark.
It was alleged that M/s. Pannalal Durga Prasad, Kanpur are
producing similar coins and pieces of gold and to them they
apply a trade mark which is deceptively similar to the above
registered trade mark of M/s. Habib Bank Ltd., the only
difference between the two was that instead of Habib Bank
Ltd., in Gujarati script on one face and English script on
the other face, the words ’Habib quality’ are used and the
words ’pure gold’ in English script is preceded by the
letters P & D. It was averred that this trade mark adopted
by M/s. Panna Lal Durga Prasad is bound to deceive not only
the buyers who are ignorant of English and Gujarati scripts,
but even unwary purchasers from urban areas are likely to be
deceived. Though by a registered letter the Trade Mark
office had drawn the attention of the firm regarding the use
of the mark by them and had requested them to indicate the
period for which they had been using it and whether the mark
had been registered as a trade mark in their name, they had
not chosen to reply even though they received the letter.
It was further stated that a goldsmith Shri Pyarelal in
Nayaganj market is also falsely applying the registered
trade mark of M/s. Habib Bank Ltd., and has in his
possession dies and other instruments for being used for
falsifying the trade mark.
On these allegations the Magistrate was requested to take
necessary action under the law against those mentioned in
the letter in respect of offenses under Sections 78 and 79
of the Act, by directing the Police to investigate the case.
On receipt of this letter on the same day namely 24-10-1962
the Magistrate directed the Police to register a case and
investigate. The Sub Inspector of Police thereupon prepared
a search Memo in as much as there was no sufficient time to
get the warrant of search issued and also because of the
possibility of the removal of goods and effected a search of
the premises. The Inspector went to the Silver and Gold
factory of Panna Lal Durga Prasad and found that Ram Nath
Son of Durga Prasad one of the Respondents was present
there. He made an inspection of the factory in his presence
and seized the dies for the manufacture of coins and gold
575
bars found near the place of goldsmith Munna son of Lakhpat.
The Inspector further in the presence of the witnesses
caused a gold coin of one tola and another of half tola to
be manufactured by way of specimen out of the gold bar found
at the place. These coins were duly seized and preserved,
after obtaining the seal of Ram Nath. It is unnecessary to
give, all the, details of the recoveries because that is not
relevant for the purposes of this case. A police report was
accordingly made to the Magistrate who adopted the procedure
under Sec. 251-A by examining each of the Respondents after
which he framed charges against them. Thereafter he
examined Wadia, P.W. 1, a Senior Attorney Clerk of Habib
Bank Ltd., Bombay on 1-5-64. On 29-5-64 before other
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witnesses could be examined the Respondents filed an
application stating that from the evidence of Wadia, P.W. 1,
Habib Bank had stopped dealing in gold and does not now
manufacture gold coins, that it had also destroyed the dies
And since 1954 this trade mark of Habib Bank has become
ineffective and is thrown open to the public, as such it was
prayed that the case be stayed and the complainant directed
to seek remedy ill the civil court so that the accused
persons may not be unnecessarily harassed. The Magistrate
rejected this contention because it appeared from the
evidence that the registration of the trade mark of Habib
Bank was current upto 1967 and that since the Respondents
have been charged under Sections 78 and 79 of’ the Act the
contention of the accused that in view of Sec. 46 of the
said Act where a trade mark is abandoned for more than
years, the Respondents cannot be said to have committed an
offence, is not tenable. By a well considered order the
Magistrate dismissed the application and directed the
production of the entire evidence on the next date, without
fail. Against this a revision was filed before the Sessions
Judge of Kanpur. The Sessions Judge made a reference to the
High Court recommending the quashing of the charge on the
ground that "The principle of abandonment is given legal
recognition in Sec. 46 Trade & Merchandise Marks Act which
provides that a registered trade mark may be taken off the
register if it was not used for continuous period of five
years or longer." The High Court held that on the statement
of Wadia it is clearly established that Habib Bank- Ltd.,
had stopped dealing in gold and coins since 1954 and there
could therefore be no question of the Respondents corn-
mitting any offence under Sections 78 and 79 of the Act. On
this reference the High Court by its Judgment dated 6-9-67
thought that Sec. 46 had no application inasmuch as, that
Section provided that unless the registration had been
rectified the propriety rights of the Bank could not be said
to have ended only because the trade mark had not been used
for a period of more than 5 years. It observed that there
may be cases where the non-
576
user of the trade mark may have been occasioned on account
of special reasons and such non-user was explainable; that
clause (iii) of Sec. 47 makes it clear that it is open to
the owner to contest the application for rectification of
the register, by the plea, that the non-user of the trade
mark was due to special circumstances in the trade and not
due to any intention on his part to abandon or not to use
the trade mark in relation to the goods to which the
application relates. Accordingly the learned Judge
expressed the view that the proceedings are not vitiated on
the ground that the trade mark in question has ceased +to be
the property of M/s. Habib Bank Ltd. It appears that a
contention was urged before the High Court that since Habib
Bank Ltd., was declared to be a foreign Bank in the year
1960 by the Reserve Bank of India as it had become a citizen
of Pakistan, it was not a citizen under the Constitution of
India and therefore had no proprietory rights in this
Country. The High Court said that this submission of the
Respondent’s Advocate had some force as the question raised
was a substantial question of law involving the
interpretation of the Articles of the Constitution, that
could properly be decided in a civil action rather than by a
Magistrate in a Criminal case. For this proposition
reliance was placed on a decision of that Court in Karan
Singh v. Mohan Lal(1), which following a Full Bench decision
of the Calcutta High Court in Ashutosh Das v. Keshav Chandra
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Ghosh(2) held that a controversy between- the parties
relating to a complicated question of abandonment of the
user and relating to the express or implied consent of the
registered holder of the trade mark are questions which
should be decided in a civil court rather than by a Criminal
Court. It was also held by the High Court that Since the
complaint in the particular case had not been made by a
Proprietor of the trade mark, the prosecution of the accused
on the complaint of the Trade Marks Inspector and a
subsequent investigation by the Police were not tenable
under Sections 78 and 79 of the Act in view of the
provisions of Sec. 28 of that Act. An objection seems to
have, been taken before the learned Judge that the High
Court was not competent to quash the proceedings pending
before the Trial Magistrate in that case because no revision
petition had been filed against the order of the Magistrate
by which the charge was framed against him but it was only
after one of the witnesses had been examined that a Revision
had been filed which is not competent. The High Court
rejected this contention and held that it had power to
exercise revisional powers under Sec. 561-A and accordingly
accepted the reference made by the Sessions Judge and
quashed the proceedings against the accused for offences
under Sections 78 & 79 of the Act.
(1) 1964 ALJ 653.
(2) A.T.R. 1936 Cal. 488.
577
It appears to us that the High Court had misdirected itself
in considering that the submissions which found favour with
it, were relevant for the purpose of deciding whether the
proceedings for prosecution for offences under Sections 78
and 79 of the Act were not valid either because, the Habib
Bank Ltd., being a foreign Bank was not a citizen and as
such had no rights or that the prosecution cannot be
initiated by the Inspector of Trade Marks or that the,
question of the abandonment of trade mark amounted to an
express or implied consent was a matter for civil court and
cannot be made the subject of a criminal prosecution.
Sections 78 and 79 are contained in Chapter X of the Act.
Section 78 provides that any person who falsifies any trade
mark, falsely applies to goods any trade mark; or makes,
disposes of, or has in his possession any die, block,
machine, plate or other instrument for the purpose of
falsifying, or of being used for falsifying a trade mark,
applies any false trade description to goods etc. etc. etc.
shall unless he proves that he acted without intent to
defraud, be punishable with imprisonment for a term which
may extend to two years, or with fine, or with both, while
Section 79 makes a person liable to similar punishment if he
sells goods or exposes them falsely or for having them in
his possession for sale or for any purpose of trade or
manufacture any goods or things to which any false trade
description is applied. Trade mark has been defined in Sec.
2 (1) (v) to mean
(i) in relation to Chapter X (other than
Section 81), a registered trade mark or a mark
used in relation to goods for the purpose of
indicating or so as to indicate a connection
in the course of trade between the goods and
some person having the right as proprietor to
use the mark; and
(ii) in relation to the other provisions of
this Act,a mark used or proposed to be used in
relation to goods for the purpose of
indicating or so as to indicate a connection
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in the course of trade between the goods and
some person having the right, either as
proprietor or as registered user, to use the
mark whether with or without any indication of
the identity of that person and includes a
certification trade mark registered as such
under the provisions of Chapter VIII."
It is apparent from this definition that for the purposes of
Chapter X of the Act which deals with criminal offenses, a
trade mark includes a registered as well as unregistered
trade mark. An offence under Sections 78 or 79 therefore
relate to a trade mark whether it is registered or
unregistered. The contention that the
578
registered trade mark of the Habib Bank Ltd., has been
abandoned since the said Bank- had discontinued its use from
1954 will not absolve the respondents from Criminal
liability because even if it was abandoned it can only
furnish a ground for a person to make an application under
sec. 46 to have the trade mark removed from the registers.
It does not however entitle him to use a trade mark whether
it is current or has been removed from the register, or has
been abandoned or even if it has never been initially regis-
tered but has acquired the currency of a trade mark. The
offenses under Sections 78 and 79 consists in the deception
and application of a trade mark which is in use and which
signifies a particular type of goods containing that mark.
There is, therefore, no validity in the contention that the
infringement of the trade mark of Habib Bank Ltd., merely
gives rise to a civil action, in respect of which no
prosecution will lie. The provisions contained in Chapter
IV in which is contained Sec. 28 relate to the effect of
registration and have no bearing on the question before us.
It was neatly urged that the Trade Marks Inspector had no
right to make a complaint under Sections 78 and 79 and
therefore the prosecution was invalid. This contention also
in our view is misconceived. A perusal of sub-s. (2) of
Sec. 89 would show that no Court inferior to that of a
Sessions Judge, Presidency Magistrate or Magistrate of the
1st Class shall try an offence under this Act; while sub-s.
(1) provides that no Court shall take cognizance of an
offence under Sec. 81, Sec. 82 or Sec. 83 except on
complaint in writing made by the Registrar or any officer
authorised by him in writing. Merely because sub-s. (1) of
Sec. 89 refers to manner of taking cognizance in respect of
offence under the Section specified therein, it does not
preclude cognizance of other offenses specified in Chapter X
from being taken under the procedure prescribed by the
Criminal Procedure Code. It is apparent that offenses under
Sections 78 and 79 are punishable with imprisonment of two
years or with three years if they fall under the respective
provisos to the said Sections. In cases where an offence is
punishable with imprisonment of one year and upwards but
less than 3 years, under Chapter XXIII of Schedule 11 it is
non-cognizable and is a summons case, triable as already
stated under Sec. 89(2) by the Sessions Judge, Presidency
Magistrate or a Magistrate of the 1st Class. In such cases
under Sec. 155 of the Criminal Procedure Code when an
information is given to an officer incharge of the Police
Station of the commission of a non-cognizable offence, he
has to enter the substance of the information in a book to
be kept for the purpose and refer ’the informant to the
Magistrate but he cannot under sub-s. (2) investigate such a
case without the order of a Magistrate. On receiving such
an order any Police officer may exercise the same powers in
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respect of the investigation (except the power to arrest
579
without warrant) as an Officer in charge of police station
may exercise in a cognizable case. On receipt of a report
from the, Police in compliance with such orders, the
Magistrate may it the report discloses the commission of an
offence try the accused by the procedure prescribed under
Sec. 251-A of the Criminal Procedure Code. This being the
legal position in this case the Magistrate in our view has
followed the correct procedure. The information in respect
of the commission of an offence under Sections 78 and 79 of
the Act was brought to the notice of the Magistrate by a
letter from the Trade Marks Inspector, The Magistrate
directed the police to register a case and investigate it.
The Police accordingly complied with it and made a report
thereon. On receipt of the report the Magistrate satisfied
himself that the respondents had received the, documents
referred to in Sec. 173. After a consideration of those
documents he examined the accused and after giving an
opportunity to both the prosecution and the accused framed a
charge on being satisfied that there was a prima facie case.
The procedure followed therefore is unexceptionable. The
question whether the Habib Bank Ltd., being a foreign Bank
is not a citizen and whether it has any right in the trade
mark is therefore irrelevant and does not affect the
validity of the proceedings or of the charges framed against
the accused. We accordingly allow the appeal, set aside the
Judgment of the High Court and direct the Magistrate to
proceed with the case in accordance with law.
V.P.S. Appeal allowed.
580