1990 Supreme(Bom) 478

Bombay High Court
M.F.SALDANHA
Ratansi Mulji - Appellant
Versus
Vinod Ratilal Gandhi - Respondent
Decided On : 11/27/1990

The registered proprietors of the trade-marks cannot be prosecuted for offences involving illegal or unauthorised user of these trade-marks without the knowledge and consent of the Custodian, as the proprietorship of the trade-marks has not been transmitted to the Custodian as a consequence of the takeover and the Custodian can only be categorised as a permitted user of the trade-marks.

Headnote:

TEXTILE UNDERTAKINGS (TAKING OVER OF MANAGEMENT) ACT, 1983 - TRADE AND MERCHANDISE MARKS ACT, 1958 - SECTION 2(M), 2(O), 2(R), 2(S), 2(V), 2(W), 3(1), 3(2), 44, 49 - SECTION 78, 79 - ARTICLE 227 - ARTICLE 482 - CRIMINAL PROCEDURE CODE, 1973 - SECTION 397 - CONSTITUTION OF INDIA - Whether the proprietorship of the existing Trade and Merchandise Marks Act, 1958 can in law be said to have been transmitted to the Custodian as a consequence of such take-over? Whether the Custodian, after such takeover, can be categorised only as the permitted user, or whether the proprietorship of the trade-marks can be said to have been transmitted to the Custodian thereby extinguishing the rights of the company that earlier vested in it? Whether, after such take-over, the registered owners of the trade-marks can be prosecuted for offences involving illegal or unauthorised user of these trade-marks without the knowledge and consent of the Custodian? Whether, in the face of such a prosecution, it is open to the registered owners to move the High Court by way of a petition u/S. 482 of the Code of Criminal Procedure read with Art. 227 of the Constitution of India for the purposes of quashing of the criminal proceedings? Whether it is at all permissible to prosecute the registered proprietor of a trademark for an offence of unauthorised user of his own trade-mark under these circumstances?

Fact of the Case:

The Finlay Mills Ltd., even prior to the take-over of the present unit, were manufacturing and marketing the same goods in respect of which they have been prosecuted in the present set of cases through the manufacturing units other than the one which has been taken over by the National Textile Corporation. It is the case of Mr. Chitnis that there were two distinct sets of goods which emanated from two different sources, both of which were covered by the present set of trade-marks. Admittedly, the present accused were, therefore, using the trade-marks on goods that they manufactured in units other than the one taken over by the National Textile Corporation and they continue to do so even up to the present point of time.

Finding of the Court:

The present case presents certain unique facts which would perhaps not be present in other similar cases. Those facts have already been set out by me, namely, that the present petitioners, who are the registered owners of the trade-marks in question were, even prior to the take-over of the present unit, manufacturing and marketing the same goods in respect of which they have been prosecuted in the present set of cases through the manufacturing units other than the one which has been taken over by the National Textile Corporation. It is the case of Mr. Chitnis that there were two distinct sets of goods which emanated from two different sources, both of which were covered by the present set of trade-marks. Admittedly, the present accused were, therefore, using the trade-marks on goods that they manufactured in units other than the one taken over by the National Textile Corporation and they continue to do so even up to the present point of time.

Issues: 1. What are the rights that have vested in the Custodian under the Textile undertakings (Taking Over of Management) Act, 1983 after takeover, arid whether the property of the Company, namely, the proprietorship of the existing Trade and Merchandise Marks Act, 1958 can in law be said to have been transmitted to the Custodian as a consequence of such take-over? 2. Whether the Custodian, after such takeover, can be categorised only as the permitted user, or whether the proprietorship of the trade-marks can be said to have been transmitted to the Custodian thereby extinguishing the rights of the company that earlier vested in it? 3. Whether, after such take-over, the registered owners of the trade-marks can be prosecuted for offences involving illegal or unauthorised user of these trade-marks without the knowledge and consent of the Custodian? 4. Whether, in the face of such a prosecution, it is open to the registered owners to move the High Court by way of a petition u/S. 482 of the Code of Criminal Procedure read with Art. 227 of the Constitution of India for the purposes of quashing of the criminal proceedings? 5. Whether it is at all permissible to prosecute the registered proprietor of a trademark for an offence of unauthorised user of his own trade-mark under these circumstances?

Ratio Decidendi: The Act of nationalisation of the Mills, though contemplated, has so far not taken place and, therefore, we are still in the position as if obtained; as on 18-3-1983; while only the management of the textile undertaking has been vested in the Central Government under sub-sec. (2) of S. 3 of the Take-over Act, the control over the, property, which is necessarily a function of the management, and the user of the trademarks, which the Division Bench of this: Court has categorised as the property of they undertaking, can be said to have vested in the National Textile Corporation. This would consequently, within the frame work of the Trade and Merchandise Marks Act, 1958, put the National Textile Corporation in the legal status of a permitted user of the trade-marks in question.

Final Decision: In the result, both the criminal writ petitions succeed. The rule in each of them is made absolute with the clarification that Criminal Cases Nos. 16 and 17 I and R of 1989, on the file of the learned Metropolitan Magistrate, 14th Court, Girgaum, Bombay, and Criminal Cases Nos. 89 I and R of 1987, on the file of the learned Additional Chief Metropolitan Magistrate, 19th Court, Esplande, Bombay, are quashed along with the proceedings that are an off-shoot and emanate from these complaints. The interim orders passed in these Criminal Writ Petitions stand vacated. In the circumstances of the case, there will be no order as to costs.