Full Judgment Text
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CASE NO.:
Appeal (civil) 8739-8741 of 2001
PETITIONER:
M/s. Meghraj Biscuits Industries Ltd
RESPONDENT:
Commissioner of Central Excise,U.P.
DATE OF JUDGMENT: 14/03/2007
BENCH:
S.H. KAPADIA & B. SUDERSHAN REDDY
JUDGMENT:
J U D G M E N T
KAPADIA, J.
Aggrieved by the decision of Customs, Excise and
Gold Control Appellate Tribunal (CEGAT) dated
11.4.2000, the appellants (assessee) have come by way of
civil appeals under Section 35L of the Central Excise Act,
1944.
Appellants were engaged in the manufacture of
biscuits classifiable under Sub-Heading 1905.11 of the
Central Excise Tariff. The biscuits were sold under the
brand name "Meghraj". Under show cause notices it was
alleged that the appellants herein (assessee) have sold
the biscuits under the brand name "Meghraj", which was
a registered trade mark of Kay Aar Biscuits (P) Ltd. who
was using the said trade mark on manufacture of
biscuits themselves, and, therefore, the appellants were
not eligible to the benefit of SSI Notification No.1/93-CE
dated 28.2.1993 as amended by Notification No.59/94-
CE dated 1.3.1994. The above show cause notices were
issued by the Department demanding differential duty for
the period April 1994 to June 1994 amounting to
Rs.3,74,948/- plus short paid duty for the period April
1995 to May 1995 amounting to Rs.92,992. The said
demand was based on an agreement detected by the
Department. That Agreement was between Madan
Verma, Director of a company known as M/s. Kay Aar
Biscuits (P) Ltd., Ghaziabad, and M/s. Rich Food
Products (P) Ltd., Noida. Under the said Agreement M/s.
Kay Aar Biscuits (P) Ltd. was Party No.1. Under the
Agreement it was declared that M/s. Kay Aar Biscuits (P)
Ltd. was the owner of the registered trade mark
"Meghraj". Under the Agreement it was stated that M/s.
Kay Aar Biscuits (P) Ltd. was using the aforestated trade
mark "Meghraj" for the manufacture of biscuits. Under
the Agreement there was a recital under which it was
stated that M/s. Rich Food Products (P) Ltd. had put up
a Unit for manufacture of wafers in Noida which it sought
to manufacture under the brand name "Meghraj". Under
the said Agreement M/s. Kay Aar Biscuits (P) Ltd. gave
permission to M/s. Rich Food Products Pvt. Ltd. to use
its trade mark for the manufacture of wafers alone. The
said agreement was valid for three years commencing
from 22.11.1989. At this stage, it may be noted that the
appellants herein claim to have started manufacture of
biscuits in 1991. The biscuits were sold in wrapper
mentioning the name of the appellants, "M/s. Meghraj
Biscuits Industries Ltd." or "Meghraj". The Appellants
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claimed that it has been using the wrapper since
beginning and since 1991 the use of the trade name or
brand name "Meghraj" has never been challenged. The
Assistant Commissioner, Ghaziabad, examined the
printed wrappers. He came to the conclusion vide his
orders that the trade name "Meghraj" was in the form of
a logo printed on the wrapper of the biscuits and,
therefore, the appellants were not entitled to the benefit
of Notification No.1/93-CE dated 28.2.93 as amended by
Notification No.59/94 dated 1.3.94. Consequently, the
Adjudicating Authority called upon the appellants to pay
differential duty for the period April 1994 to June 1994
amounting to Rs.3,74,948 plus short paid duty for the
period April 1995 to May 1995 amounting to Rs.92,992.
Aggrieved by the decision of the Adjudicating
Authority, the assessee preferred appeals to the
Commissioner (A). The said appeals were rejected on the
ground that the appellants were using the brand name
"Meghraj" of another manufacturer M/s. Kay Aar Biscuits
(P) Ltd. on their products (biscuits) and, therefore, they
were not entitled to the benefit of exemption under
Notification No.1/93-CE, as amended. It was held that
the word "Meghraj" was printed on all the printed
wrappers and, therefore, it was wrong to say that the
appellants were not using the brand name "Meghraj" on
its products. In this connection, reliance was placed by
the Commissioner (A) on the said Agreement dated
22.11.89. Before the Commissioner (A) the appellants
herein contended that they had used the name "M/s.
Meghraj Biscuits Industries Ltd." on the wrapper and not
on the product and, therefore, they were entitled to
exemption. This argument was rejected by the
Commissioner (A) saying that the appellants were using
the brand name "Meghraj" on their products. According
to the Commissioner (A), the appellants used the trade
name "Meghraj" in the form of a logo which was printed
on the wrapper. Before the Commissioner (A), it was
argued in the alternative that the logo belonged to M/s.
Kay Aar Biscuits (P) Ltd.; that the same was registered
SSI Unit; that M/s. Kay Aar Biscuits (P) Ltd. was lying
closed since 1.3.93 and, therefore, the appellants have
been using that logo of M/s. Kay Aar Biscuits (P) Ltd.
who was eligible for exemption under Notification
No.1/93-CE, as amended. This contention was rejected
by the Commissioner (A) on the ground that under the
Notification No.1/93-CE, as amended, exemption was not
available to the specified goods bearing brand name or
trade name (registered or not) of another person. Since,
the appellants herein had used the trade name "Meghraj"
on their products which trade name was owned by M/s.
Kay Aar Biscuits (P) Ltd. the appellants were not entitled
to the benefit of exemption under Notification No.1/93-
CE, as amended. Accordingly, the Commissioner (A)
dismissed the appeals. The orders of the Commissioner
(A) have been confirmed by Order dated 11.4.2000
passed by CEGAT. Hence, these civil appeals.
To complete the chronology of events, it may be
pointed out that after the impugned decision of the
Tribunal dated 11.4.2000, the appellants herein moved
an Application for Rectification on 12.5.2000 (ROM
No.72/2000). In that application it was urged on behalf
of the appellants herein that the said brand name
"Meghraj" did not belong to M/s. Kay Aar Biscuits (P)
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Ltd.; that the Department has failed to discharge its
burden to prove that the trade name "Meghraj" belonged
to M/s. Kay Aar Biscuits (P) Ltd.; that a mere Agreement
between M/s. Kay Aar Biscuits (P) Ltd. and M/s. Rich
Food Products (P) Ltd. would not be sufficient to prove
that M/s. Kay Aar Biscuits (P) Ltd. was the lawful owner
of the brand name "Meghraj". In the Rectification
Application it was further pointed out that in fact the
appellants had applied for ownership of the brand name
"Meghraj" vide application dated 30.9.91 to the Registrar,
Trade Marks under the Trade Marks Act and that the
said application for registration was pending before the
competent authority and since the above arguments were
not recorded in the impugned Order of the CEGAT dated
11.4.2000 the same warranted rectification.
By Order dated 8.12.2000, CEGAT rejected the
above Rectification Application made by the Appellants.
One more fact needs to be mentioned that on
30.6.2000 the Registrar of Trade Marks appears to have
issued Registration Certificate on 30.6.2000 registering
the trade mark "Meghraj" in favour of the appellants with
effect form 30.9.91. It appears that issuance of this
certificate was mentioned before the CEGAT which
rejected the Rectification Application on 8.12.2000.
Notification No.1/93-CE dated 28.2.93 was issued
to help the SSI Units to survive in the market dominated
by brand name/trade name. The object of the
Notification, therefore, was to help the SSI Units and
thereby increased industrial production. Under para ’4’
of the said Notification, the benefit of exemption was not
available for excisable goods bearing brand name or trade
name (registered or not) of another person. Explanation
IX defined the word "brand name" or "trade name". The
same is quoted hereinbelow:
"Explanation IX \026 "Brand name" or
"trade name" shall mean a brand name or
trade name, whether registered or not,
that is to say a name or a mark, such as
symbol, monogram, label, signature or
invented word or writing which is used in
relation to such specified goods for the
purpose of indicating, or so as to indicate
a connection in the course of trade
between such specified goods and some
person using such name or mark with or
without any indication of the identity of
that person."
Notification No.1/93-CE dated 28.2.1993 was
subsequently amended by Notification No.59/94 dated
1.3.94. Para ’7’ of Notification No.1/93-CE as amended
read as under:
"Para-7 The exemption contained in this
Notification shall not apply to the specified
goods where a manufacturer affixes the
specified goods with a brand name or trade
name (registered or not) of another person,
who is not eligible for the grant of exemption
under this Notification."
In the present case, as stated above M/s. Kay Aar
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Biscuits (P) Ltd entered into an agreement on 22.11.89
with M/s. Rich Food Products (P) Ltd. Under that
Agreement the Director of M/s. Kay Aar Biscuits (P) Ltd.
declared that his company was the owner of the
registered trade mark "Meghraj". The name of that
Director is Madan Verma. He is the Director of the
appellants (company) also. Further there is no evidence
to show as to whether M/s. Kay Aar Biscuits (P) Ltd. was
an "eligible manufacturer". This aspect is important
since one of the arguments advanced by the appellants
herein before the Commissioner (A) was that the trade
mark belonged to M/s. Kay Aar Biscuits (P) Ltd., which
was registered SSI Unit lying closed since 1.3.1993. No
explanation has been given as to why Madan Verma has
not been examined by the appellants. He has not been
examined even on the question of alleged transfer of the
trade mark in favour of the appellants. In the
circumstances, we do not find any merit in this appeal.
On behalf of the appellants it has been vehemently
argued that M/s. Kay Aar Biscuits (P) Ltd. was never the
registered owner of the trade mark "Meghraj". It was
urged that merely because an Agreement stood entered
into on 22.11.89 between M/s. Kay Aar Biscuits (P) Ltd.
and M/s. Rich Food Products (P) Ltd., the Department
had erred in alleging that the trade mark belonged to
M/s. Kay Aar Biscuits (P) Ltd. It was urged that M/s.
Kay Aar Biscuits (P) Ltd. had never got the trade mark
registered under the Trade Marks Act. It was urged that
a false declaration was made by M/s. Kay Aar Biscuits (P)
Ltd. under the above Agreement on 22.11.89. It was
urged that a mere agreement between two parties cannot
constitute ownership of the trade mark in favour of M/s.
Kay Aar Biscuits (P) Ltd. It was urged that in any event
M/s. Kay Aar Biscuits (P) Ltd. had stopped its production
in 1993; that the company had become defunct; that the
appellants herein had applied to the Registrar of Trade
Marks for registration of the mark "Meghraj" and vide
registration certificate dated 30.6.2000 the Registrar has
recognized the appellants as owner of the trade mark
with effect from 30.9.91. In the circumstances, the
appellants submitted that the demand for differential
duty was unwarranted.
We do not find any merit in the above arguments.
In the case of Pahwa Chemicals Pvt. Ltd. v.
Commissioner of Central Excise, Delhi \026 2005 (189)
ELT 257 (SC) this Court has held that the object of the
exemption Notification was neither to protect the owners
of the trade mark nor the consumers from being misled.
These are considerations which are relevant in disputes
arising out of infringement/passing of actions under the
Trade Marks Act. The object of the Notification is to
grant benefits only to those industries which otherwise
do not have the advantage of a brand name [See: para
’3’].
Applying the ratio of the above judgment to the
present case, it is clear that grant of registration
certificate under the Trade Marks Act will not
automatically provide benefit of exemption to the SSI
Unit.
In the case of Commissioner of Central Excise,
Chandigarh v. Bhalla Enterprises \026 2004 (173) ELT
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225 (SC), this Court held that the assessee will not be
entitled to the benefit of exemption if it uses on goods in
question, same/similar brand name with intention of
indicating a connection with the goods of the assessee
and such other person or uses the name in such manner
that it would indicate such connection. It was further
held that the burden is on the assessee to satisfy the
Adjudicating Authority that there was no such intention
[See: paras 6 and 7].
Applying the above test to the facts of the present
case, Madan Verma is a common Director in the two
companies. He has filed an affidavit enclosing the
registration certificate dated 30.6.2000. However, in that
Affidavit he has not stated as to on what basis, in the
Agreement of 23.11.89 signed by him, he had declared
that M/s. Kay Aar Biscuits (P) Ltd. is the owner of the
registered trade mark "Meghraj". There is no deed of
assignment from M/s. Kay Aar Biscuits (P) Ltd. in favour
of the appellants herein. The Department has rightly
placed reliance on the Agreement of 23.11.89. In the
circumstances, the burden was on the assessee
(appellants herein) to satisfy the Adjudicating Authority
that there was no intention of indicating a connection
with the goods of the assessee and such other person.
Before us it has been urged that M/s. Kay Aar
Biscuits (P) Ltd. is non-functional since 1.3.93 and,
therefore, in any event appellants were entitled to use the
trade mark "Meghraj". This argument is based on the
concept of abandonment. We do not find any merit in
this argument. Discontinuation of business in respect of
a product does not necessarily amount to abandonment.
In the present case, there is no evidence from the side of
the appellants indicating abandonment of the trade mark
by M/s. Kay Aar Biscuits (P) Ltd. Although, Madan
Verma, the Director of M/s. Kay Aar Biscuits (P) Ltd., has
filed his Affidavit enclosing the registration certificate, he
has nowhere stated that M/s. Kay Aar Biscuits (P) Ltd.
has abandoned the trade mark. In the circumstances,
the Department was right in rejecting the above
contention. Abandonment of the trade mark has to be
proved by the appellants in the present case. The burden
is on the appellants, particularly, when the Department
is relying upon the agreement dated 23.11.89 between
M/s. Kay Aar Biscuits (P) Ltd. and M/s. Rich Food
Products (P) Ltd.
Lastly, we are required to examine the retrospective
effect of the registration certificate dated 30.6.2000 with
effect from 30.9.91. At the outset, we may reiterate that
the object of the exemption Notification was neither to
protect the owners of the trade mark nor the consumers
from being misled. These are considerations which are
relevant in disputes arising under the Trade Marks Act.
The object of the exemption Notification No.1/93-CE was
to grant benefits to those industries which do not have
the advantage of a brand name. However, since
retrospective nature of the registration certificate dated
30.6.2000 is repeatedly being raised in this Court we
would like to examine the case law in this regard.
The Trade Marks Act, 1999 has been enacted to
amend and consolidate the law relating to trade marks,
to provide for registration and better protection of trade
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marks and for prevention of the use of fraudulent marks.
Under Section 28 of the Trade Marks Act, 1999,
registration gives to the registered proprietor of the trade
mark the exclusive right to the use of the trade mark in
relation to the goods in respect of which the trade mark
is registered and to obtain relief in respect of
infringement of the trade mark in the manner provided
by the Trade Marks Act. It is correct to say that the
Registrar, Trade Marks, can issue registration certificate
under Section 28 of the Trade Marks Act with
retrospective effect. The question before us is : what is
the effect of issuance of registration certificate with
retrospective effect. This question has been decided by
the Bombay High Court in the case of Sunder
Parmanand Lalwani and Others v. Caltex (India) Ltd. \026
AIR 1969 Bombay 24 in which it has been held vide
paras ’32’ and ’38’ as follows:
"32. A proprietary right in a mark can be
obtained in a number of ways. The mark can
be originated by a person, or it can be
subsequently acquired by him from somebody
else. Our Trade Marks law is based on the
English Trade Marks law and the English Acts.
The first Trade Marks Act in England was
passed in 1875. Even prior thereto, it was
firmly established in England that a trader
acquired a right of property in a distinctive
mark merely by using it upon or in connection
with goods irrespective of the length of such
user and the extent of his trade, and that he
was entitled to protect such right of property
by appropriate proceedings by way of
injunction in a Court of law. Then came the
English Trade Marks Act of 1875, which was
substituted later by later Acts. The English
Acts enabled registration of a new mark not till
then used with the like consequences which a
distinctive mark had prior to the passing of the
Acts. The effect of the relevant provision of the
English Acts was that registration of a trade
mark would be deemed to be equivalent to
public user of such mark. Prior to the Acts,
one could become a proprietor of a trade mark
only by user, but after the passing of the Act of
1875, one could become a proprietor either by
user or by registering the mark even prior to
its user. He could do the latter after complying
with the other requirements of the Act,
including the filing of a declaration of his
intention to use such mark. See observations
of Llyod Jacob J. in 1956 RPC 1. In the matter
of Vitamins Ltd’s Application for Trade Mark at
p.12, and particularly the following:
"A proprietary right in a mark
sought to be registered can be
obtained in a number of ways. The
mark can be originated by a person
or can be acquired, but in all cases
it is necessary that the person
putting forward the application
should be in possession of some
proprietary right which, if
questioned, can be substantiated".
Law in India under our present Act is similar.
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38. A person may become a proprietor of a
trade mark in diverse ways. The particular
mode of acquisition of proprietorship relied
upon by the applicant in this case is of his
user for the first time in India in connection
with watches and allied goods mentioned by
him of the mark "Caltex", which at the material
time was a foreign mark belonging to
Degoumois & Co. of Switzerland and used by
them in respect of watches in Switzerland.
Before the Deputy Registrar and before Mr.
Justice Shah, proprietorship was claimed on
the basis that the applicant was entitled to it
as an importer’s mark. Several authorities
were cited and were considered and principles
deduced and relied upon in that behalf. In our
opinion, it is not necessary in this case to go
into details about facts in the various decided
cases dealing with importer’s marks. In many
of those cases, the dispute was between a
foreign trader using a foreign mark in a foreign
country on goods which were subsequently
imported by Indian importers and sold by
them in this country under that very mark. In
short it was a competition between a foreign
trader and the Indian importer for the
proprietorship of that mark in this country. We
have already reached a conclusion that so far
as this country is concerned, Degoumois & Co.
have totally disclaimed any interest in the
proprietorship of that mark for watches etc. In
India, the mark "Caltex" was a totally new
mark for watches and allied goods. The
applicant was the originator of that mark so
far as that class of goods is concerned, and so
far as this country is concerned. He in fact
used it in respect of watches. There is no
evidence that that mark was used by anyone
else in this country before the applicant, in
connection with that class of goods.
Unquestionably, the applicant’s user was not
large, but that fact makes no difference,
because so far as this country is concerned,
the mark was a new mark in respect of the
class of goods in respect of which the applicant
used it. We therefore, hold that the applicant is
the proprietor of that mark."
[emphasis supplied]
On reading the above quoted paragraphs from the
above judgment, with which we agree, it is clear that the
effect of making the registration certificate applicable
from retrospective date is based on the principle of
deemed equivalence to public user of such mark. This
deeming fiction cannot be extended to the Excise Law. It
is confined to the provisions of the Trade Marks Act. In a
given case like the present case where there is evidence
with the Department of the trade mark being owned by
M/s. Kay Aar Biscuits (P) Ltd. and where there is
evidence of the appellants trading on the reputation of
M/s. Kay Aar Biscuits (P) Ltd. which is not rebutted by
the appellants (assessee), issuance of registration
certificate with retrospective effect cannot confer the
benefit of exemption Notification to the assessee. In the
present case, issuance of registration certificate with
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retrospective effect from 30.9.91 will not tantamount to
conferment of exemption benefit under the Excise Law
once it is found that the appellants had wrongly used the
trade mark of M/s. Kay Aar Biscuits (P) Ltd.
In the case of Consolidated Foods Corporation v.
Brandon and Co., Pvt. Ltd. \026 AIR 1965 Bombay 35, it
has been held vide paras ’27’ and ’30’ that the Trade
Marks Act merely facilitates the mode of proof. Instead of
compelling the holder of a trade mark in every case to
prove his proprietary right, the Act provides a procedure
whereby on registration the owner gets certain facilities
in the mode of proving his title. We quote hereinbelow
paras ’27’ and ’30’ of the said judgment which read as
follows:
"(27) At any rate, it must be remembered that
in this case I am not dealing with a passing-off
action or an action for infringement of a trade
mark which is alleged to be common property.
The case put up by the petitioner corporation
that it was the first to use the mark "Monarch"
in this country on its food products and that,
in as much as the mark "Monarch" was
admittedly a distinctive mark, it had acquired
the right to get the mark registered in its name
and also the right to oppose the application of
any other trader in this country seeking to get
that mark registered in his name in respect of
the food products manufactured or sold by
him. Apparently, in such a case there is no
question of infringement of any right of
property in a trade mark for which any relief is
sought, nor is there any question of passing-
off, so that it might be necessary to enter into
questions of nicety as regards whether there
could or could not be any property in a trade
mark. As already stated by me while referring
to the observations of Sir John Romily, it is not
really necessary for me to decide in this case
as to whether there could or could not be any
property in a trade mark for the purpose of
deciding this case. Even if it is found to be
necessary to decide this question as to
property in a trade mark, I have already
pointed out that the Courts of Equity in
England granted relief in cases of infringement
of trade marks on the basis of infringement of
the right of property in the trade mark. There
was no other basis on which those Courts
could give any relief to the plaintiffs in such
cases and for the purpose of such relief the
Courts of Equity did not require the plaintiff to
prove that his mark by any length of user was
associated in the minds of the public with his
goods. All that was necessary for the plaintiff
to prove was that he had used that mark in
respect of his particular type of goods. That
was enough in the eyes of the Courts of Equity
to entitle him to a relief by way of an
injunction in case of an infringement of his
mark by some other trader. I have also pointed
out that the statute which came to be enacted
in England in 1875 and the subsequent
statutes did nothing more than to embody the
rights in relation to trade marks which were
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already laid down by the Courts of Equity. As a
matter of fact, the statute enabled a person to
have registered a mark not only which he had
been using but also a mark which he proposed
to use. The latter type of mark would evidently
refer to a distinctive mark, a mark which does
not directly describe the nature or quality of
the goods to which it is attached. In cases of
such marks, whereas the Courts of Equity did
require some slight user before the proprietor
thereof could institute an action for
infringement thereof, the statute enabled the
registration of such mark without any user at
all, because such mark being distinctive per se
it was not necessary for the person applying
for its registration to show that mark had
acquired a reputation in the market, so that it
could be associated only with his goods and of
nobody else. Even so far as this country is
concerned, the Trade Marks Act of 1940 does
not seem to have made any change in the legal
rights of the owner of a trade mark as
established by the Courts of Chancery in
England. In In re Century Spinning and
Manufacturing Co. Ltd., 49 Bom LR 52 : (AIR
1947 Bom 445), Chagla, J. (as he then was)
observed in this connection (at page 59 of Bom
LR : ( at p. 449 of AIR)) as follows :
"The question is whether in India
the Trade Marks Act of 1940 has
made any change in the legal rights
of the owner of a trade mark. To my
mind it is clear that even prior to
the passing of this Act the owner of
a trade mark could maintain an
action for the infringement of a
trade mark and that action could
only be maintained on the
assumption that he was the owner
of the trade mark and he had a
proprietary right in the trade mark.
Sub-clause (I) of Section 20 of the
Trade Marks Act itself assumes and
implies that such a right existed in
the owner of a trade mark because it
says that the unregistered holder of
a trade mark can maintain a suit for
the infringement of a trade mark
provided that the trade mark was in
use before February 25, 1937, and
an application for registration had
been made and refused."
As regards the question whether there could
be any property in a trade mark, the learned
Judge further observed (on the same page) as
follows:
"Again, turning to S. 54 of the
Specific Relief Act, which deals with
cases when a perpetual injunction
may be granted the Explanation to
that section lays down that for the
purpose of that section a trade mark
is property. Therefore, if a person
invaded or threatened to invade the
other’s right to, or enjoyment of,
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property, the Court under Section
54 had the discretion to grant a
perpetual injunction, and trade
mark was as much property for the
purpose of S. 54 as any other kind
of property.
I, therefore, agree with the learned
Advocate General that all that the
Trade Marks Act has done is to
facilitate the mode of proof. Instead
of compelling the holder of a trade
mark in every case to prove his
proprietary right before he could ask
the Court to grant him an
injunction, the Trade Marks Act
provides a procedure whereby by
registering his trade mark the owner
gets certain facilities in the mode of
proving his title. For instance, under
S.23 of the Trade Marks Act
registration is to be prima facie
evidence of the validity of the trade
mark."
This was precisely the view which was
expressed by Lord Justice Romer in (1905) I
KB 592 to which I have already referred in the
earlier part of the judgment. To summarise,
therefore, a trader acquires a right of property
in a distinctive mark merely by using it upon
or in connection with his goods irrespective of
the length of such user and the extent of his
trade. The trader who adopts such a mark is
entitled to protection directly the article having
assumed a vendible character is launched
upon the market. As between two competitors
who are each desirous of adopting such a
mark, "it is, to use familiar language, entirely a
question of who gets there first." Gaw Kan Lye
v. Saw Kyone Saing, AIR 1939 Rang 343 (FB).
Registration under the statute does not confer
any new right to the mark claimed or any
greater right than what already existed at
common law and at equity without
registration. It does, however, facilitate a
remedy which may be enforced and obtained
throughout the State and it established the
record of facts affecting the right to the mark.
Registration itself does not create a trade
mark. The trade mark exists independently of
the registration which merely affords further
protection under the statute. Common law
rights are left wholly unaffected. Priority in
adoption and use of a trade mark is superior
to priority in registration."
(30) It was next contended by Mr. Shavaksha
that the respondent company had itself shown
Kipre and Co. Private Ltd., as the proprietors
of the mark on the labels bearing the mark
"Monarch" on the different kinds of its food
products and, therefore, the respondent
company had no right to apply for registration
in its favours as if it was the proprietor thereof.
It was conceded by Mr. Shah that the labels
which were used on the food products
manufactured by Kipre and Co. Private Ltd,
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did bear the name of Kipre and Co. Private Ltd.
immediately below the mark "Monarch" and
that the respondent company’s name was
printed below it as sole distributors. Mr. Shah,
however, contended that by an agreement Ex.
F. made between the respondent company and
Kipre and Co. Private Ltd. in 1951 it was
clearly provided that the mark "Monarch"
belonged to the respondent company, that
Kipre and Co. Private Ltd. were only to
manufacture the food products as ordered by
the respondent company and that the food
products so manufactured were to be bottled
and packed by them for its use and benefit
and that, therefore, in spite of Kipre and Co.’s
name appearing on the labels, the respondent
company was the true proprietor of the mark
"Monarch" and that, therefore, it was entitled
to apply for its registration as proprietor
thereof. Now, once again turning to the
provisions of section 18 sub-section (I), it is
clear that only a person claiming to be the
proprietor of a trade mark used by him or
proposed to be used by him could make an
application to the Registrar for the registration
thereof. According to this provision, not only a
person should claim to be the proprietor of a
trade mark but he should prove that he had
used it as such proprietor on his goods. Then
turning to the label as it stood at the date of
the application, two names appeared on the
label, one of Kipre and Co. and the other of the
respondent company. If these two names had
stood by themselves without any further
description of either of them, it could be said
that both Kipre and Co. and the respondent
company were jointly the owners of the mark
as well as the owners of the goods to which the
label was affixed. But, that is not the case. The
respondent company is described as the sole
distributors on the label. The reasonable
inference that could be drawn from this
description surely is that the goods were the
property of Kipre and Co. and so also the
mark. If the respondent company was really
the proprietor of the mark and also the owner
of the goods one would expect some such
words as "Manufactured by Kipre and Co. for
Brandon and Co., Private Ltd." In the absence
of any such words, a person buying any of
these goods on reading the label would
naturally believe that what he was buying was
the property of Kipre and Co. which was selling
its goods under the mark "Monarch". It is true,
as contended by Mr. Shah, that even
distributors and sellers may have marks of
their own, but then, there are ways and ways
of indicating on the label itself that the mark
embodied therein is the mark belonging to
such distributor or seller. Obviously, therefore,
on the label as it stood, it could not be said
that the respondent company was the
proprietor of the mark "Monarch" nor could it
be said that the mark was used by the
respondent company as proprietor thereof."
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(emphasis supplied)
Applying the principle of deemed equivalence we
may clarify that if the SSI unit wrongly affixes a trade
mark of another person, be it registered or not, or if it
uses the trade mark of an ineligible person then such
default would not be eliminated by the above principle of
deemed equivalence embodied in Section 28 of the
Trade Marks Act, 1999 as that principle is based on a
deeming fiction which fiction is confined only to the
provisions of the Trade Marks Act.
Before concluding we may refer to the Judgment of
this Court in the case of Commissioner of Central
Excise, Mumbai v. Bigen Industries Ltd. \026 2006 (197)
ELT 305. In that matter a show cause notice was issued
calling upon the assessee to show cause why the
exemption be not denied to the assessee. In para ’19’ of
the show cause notice the authority accepted the
existence of a deed of assignment. However, the show
cause notice denied the exemption on the ground that
Notification No.140/83-CE did not make any distinction
between a brand name owned by a person in India or
abroad. In the present case, the facts are entirely
different. In the present case, there is no deed or
assignment from M/s. Kay Aar Biscuits (P) Ltd. to the
M/s. Meghraj Biscuits Industries Ltd. (appellants herein).
As stated above, there is no proof of acquisition on
payment or consideration by the appellants to M/s Kay
Aar Biscuits (P) Ltd. In the present case, there is no
evidence of assignment or licence from M/s. Kay Aar
Biscuits (P) ltd. to the appellants. In the present case, we
are concerned with the retrospective effect of the
certificate issued by the Registrar of Trade Marks on
30.6.2000 with effect from 30.9.91. In the
circumstances, the judgment of this Court in the case of
Bigen Industries (Supra) has no application.
For the aforestated reasons, we do not find any
merit in these civil appeals. Before concluding we may
point out that we do not wish to express any opinion on
the subsequent events which have taken place in this
case. Our judgment is confined only to the period in
question under the impugned show cause notices.
Accordingly, the civil appeals stand dismissed with
no order as to costs.