( 1 ) THE questions for determination in this appeal are whether the appellants application under Section 46 of the Trade and Merchandise Marks act, 1958 for removal of the trade mark of the respondent no. 1 on account of non-use was within time and whether non use by respondent no. 1 was on account of restriction on import, constituting special circumstances.

( 2 ) THE appellants have impugned the judgment of the learned single judge under Section 109 (5) of Trade and Merchandise Marks Act, 1958 in the present appeal. The appellants application under section 46 of the Trade and merchandise Marks Act, 1958 was dismissed by order dated 19th September,1997 in co no. 10 of 1982 by a learned Single Judge holding that the application of the appellants under Section 46 of Trade and Merchandise Marks Act, 1958, hereinafter referred to as `act was barred under Section 137 of the Limitation Act,1963 and that the respondent no. 1 had established his intention to use the trade mark and he could not effectively use the trade mark owing to the restriction imposed by the government.

( 3 ) TO comprehend these disputes, the following relevant facts need consideration. Fedders Quiogan Corporation had entered into an agreement dated 21st May, 1956 with M/s Llyod Electric and Engineering Company, a partnership company of Pandit Kanhaia Lal Punj, Mr. Suraj Prakash Punj, Mr. I. P. Punj, Mr. V. P. Punj and S. P. Sawhney. Under this agreement, Fedders Quiogan corporation had to furnish technical information to the partnership concern and a license was granted for five years to deal in air-conditioners, manufactured with parts and technology provided by the said Corporation under the trade name and label fedders. The partnership firm applied for registration of the trade mark `fedders under Application no. 175253 dated 18th July, 1956. On 19th february,1957 the said Trade Mark was registered. It seems that on objection being raised by respondent no. 1, the registration of trade mark was assigned by the partnership firm on 24th February, 1958 and thereafter the mark `fedders was registered in the name of respondent no. 1 on 20th August, 1958.

( 4 ) ON 16th January, 1957, a company Fedders Llyod corporation Private Limited, appellant no. 1 herein was incorporated which was controlled by the persons who were in control of M/s Lloyd Electrical and engineering Company, a partnership firm. Appellant no. 1 was incorporated to take over the business of M/s Llyod Electrical and Engineering Company, the original partnership firm.

( 5 ) APPELLANT no. 1 sought permission from respondent no. 1 to use the trade mark `fedders. In 1963, an agreement was executed between the respondent No. 1 and appellant No. 1 which incorporated grant of exclusive license to manufacture and sell air-conditioners with technical information to be provided by the respondent no. 1 and the air-conditioners were to be sold under the brand name fedders. The appellants availed the benefits under the agreement. However, later on they contended that the agreement dated 11th October, 1963 though was signed by a Director of respondent No. 1, however, clause 13 of the agreement provided that the agreement could be binding only when a duly executed counterpart was received by Fedders Corporation at its principal office. It was contended by the appellants that they had written to Fedders Quiogan Corporation on 8th November, 1963 that the terms of the agreement were not acceptable and consequently, the agreement did not become binding between the parties. Despite the contention of the appellant no. 1 that there was no binding agreement with the respondent No. 1, they continued to use the trade mark `fedders of respondent no. 1, which was assigned to respondent No. 1 in February 1958 by the original partnership firm. In any event of matter the term of the agreement of five years expired in 1968. In October 1968, the parties negotiated for continuance of the agreement, but it did not m