1955 Supreme(SC) 41

SUPREME COURT OF INDIA
15th April, 1955
S.R. DAS, BHAGWATI AND SINHA JJ.
Registrar of Trade Marks, Appellant
Versus
Ashok Chandra Rakhit Ltd., Respondent.
Civil Appeal No. 116 of 1953.
Advocates appeared
Mr. C. K. Daphtary, Solicitor-General for India (Mr. K. S. Shavakasha and Mr. R. H. Dhebar, Advocates with him), for Appellant; Mr. S. C. Isaacs, Senior Advocate, (Mr. P. K. Ghosh, Advocate with him), for Respondent.

Headnote:Precedents-Trade Marks Law-Value of English decisions.

       Held: As the law of Trade Marks adopted in the Indian Trade Marks Act merely reproduces the English law with only slight modification, a reference to the judicial decisions on the corresponding section of the English Act is apposite and helpful. - Trade Marks Act, 1940 (Act V of 1940), Sections 13, 76 Meaning and scope-Power to impose disclaimer-Exercise of discretion by Registrar-Interference by High Court-Principles.

       The respondent companys registered trade mark No. 3815 was a distinctive device properly registrable under section 6 of the Trade Marks Act, 1940. It was also a fact that it contained, as its prominent part, the word "Shree" which was not separately registered as a trade mark in the name of the respondent company and, indeed, no application had been made by it for the separate registration of that word.

       On 8th March 1947 the Registrar, acting under section 46(4) of the Act issued a notice calling upon the respondent company to show cause why the register should not be rectified by entering a disclaimer of the exclusive right in regard to the word "Shree". The respondent company showed cause by filing an affidavit affirmed by one of its directors. The Registrar came to the conclusion that the word "Shree" was not adopted to distinguish and on the 24th March 1950 directed rectification of the register by inserting a disclaimer of the word "Shree" in the following terms :

       "Registration of this Trade Mark shall give no right to the exclusive use of the word "Shree".

       Feeling aggrieved by the aforesaid decision the respondent company preferred an appeal to the High Court at Calcutta under section 76 of the Act. The High Court also took the view that "Shree" was a word which had numerous meanings and that it would be impossible for any trader to contend that he had an exclusive right to the use of such a word. But the High Court went on to hold that there was no ground whatsoever for the order made by the Registrar as the respondent company had never claimed that it had any right to the exclusive use of the word "Shree". In the result, the High Court allowed the appeal and set aside the order of the Registrar rectifying the register.

       Held: The order of rectification of the register by inserting a dis-elaimer Was made by the Registrar under section 13 read with section 46(4) of the Act.1 The power of the tribunal to require a disclaimer is conditioned and made dependent upon the existence of one of two things which are set out in clauses (a) and (b) of section 13 of the Act and which have been called the jurisdictional facts. It is only on the establishment of the two jurisdictional facts that the Registrars jurisdiction regarding imposition of a disclaimer arises. Before, however, he may exercise his discretion he must find and hold that there are parts or matters included in the trade mark to the exclusive use of which the proprietor is not entitled and it is only after this finding is arrived at that the Registrar becomes entitled to exercise his discretion. The exercise of this power conferred on the Registrar by this section always remains a matter of discretion to be exercised, not capriciously or arbitrarily, but according to sound principles laid down for the exercise of all judicial discretion.2

       (2) The existence of one of the two jurisdictional facts referred to in Clauses (a) and (b) of section 13 and the finding that the trade mark contains parts or matters to the exclusive use of which the proprietor is not entitled does not conclude the matter and it must further be established that some good reason exists for the imposition of a disclaimer and the tribunal will only exercise the discretionary power for good cause shown.

       (3) Section 13 of the Act confides a discretionary power in the "tribunal" which, by virtue of section 2 (n), means the Registrar or, as the case may be, the Court before which the proceeding concerned is pending. An application for the rectification of the register may, under sub-sections (1) and (2) of section 46, be made either to the Registrar or the High Court and sub-section (4) of that section authorises both the High Court and the Registrar to take proceedings suo motu. It must, however, be remembered that it is the Registrar "to whom in the first instance is committed the discretionary power." If that authority has exercised his discretion in good faith and not in violation of any law such exercise of discretion should not be interfered with by the High Court merely on the ground that, in the opinion of the High Court, it could have been exercised differently or even that the High Court would have executed it differently, had the matter been brought before it in the first instance. The proper approach in such a case is for the High Court to consider "whether the Registrar has really gone so wrong as to make it necessary to interfere with his discretion."

       1. Section 13 of the Act reads as follows:

       "If a trade mark contains-

       (a) any part not separately registered as a trade mark in the name of the proprietor, or for the separate registration of which no application has been made, or

       (b) any matter common to the trade, or otherwise of a non distinctive character, the tribunal, in deciding whether the trade mark shall be entered or shall remain on the register, may require, as a condition of its being on the register, that the proprietor shall either disclaim any right to the exclusive use of such part or of all or any portion of such matter, as the case may be, to the exclusive use of which the tribunal holds him not to be entitled, or make such other disclaimer as the tribunal may consider necessary for the purpose of defining the rights of the proprietor under the registration.

       Provided that no disclaimer shall affect any rights of the proprietor of a trade mark except such as arise out of the registration of the trade mark in respect of which the disclaimer is made."

       2. Sharp v. Wakefield I. R. 1891 A. C. 173 at p. 179 referred to.

       (4) The avowed purpose of the section is not to confer any direct benefit on the rival traders or the general public but to define the rights of the proprietor under the registration. The registration of a trade mark confers substantial advantages on its proprietor as will appear from the sections grouped together in Chapter IV under the heading "Effect of Registration". It is, however, a notorious fact that there is a tendency on the part of some proprietors to get the operation of their trade marks expanded beyond their legitimate bounds. Temptation has even led some proprietors to make an exaggerated claim to the exclusive use of parts of matters contained in their trade marks in spite of the fact that they had expressly disclaimed the exclusive use of those parts or matters. The real purpose of requiring a disclaimer is to define the rights of the proprietor under the registration so as to minimise, even if it cannot wholly eliminate, the possibility of extravagant and unauthorised claims being made on the score of registration of the trade marks.

       (5) The proviso to section 13 of the Act preserves intact any right which the proprietor may otherwise under any other law have in relation to the mark or any part thereof. The disclaimer is only for the purpose of the Act. It does not affect the rights of the proprietor except such as arise out of registration. That is to say, the special advantages which the Act gives to the proprietor by reason of the registration of his trade mark do not extend to the parts or matters which he disclaims. In short, the disclaimed parts or matters are not within the protection of the statute. That circumstance, however, does not mean that the proprietors rights, if any, with respect to those parts or matters would not be protected otherwise than under the Act. If the proprietor has acquired any right by long uses of those parts or matters in connection with goods manufactured or sold by him or otherwise in relation to his trade, he may, on proof of the necessary facts, prevent an infringement of his rights by a passing off action on a prosecution under the Indian Penal Code. Disclaimer does not affect those rights in any way.

       (6) Considering all the circumstances of the case, the Registrar had not gone so wrong as to have made it necessary for the High Court to interfere with his discretion. If it were to be regarded as a matter of exercise of discretion by the High Court as to whether a disclaimer should be imposed or not, it is quite clear that the attention of the High Court was not drawn to an important consideration, namely, the strong possibility of the respondent company claiming a statutory right to the word "Shree" by virtue of the registration of its trade mark and subject others to infringement actions only on the strength of the registration and without proof of facts which it could have otherwise to establish in order to succeed in a passing off action or a prosecution under the Indian Penal Code and therefore, the High Court cannot be said to have properly exercised its discretion.