2015 Supreme(P&H) 753
PUNJAB & HARYANA HIGH COURT
Satish Kumar Mittal, Harinder Singh Sidhu, JJ.
Vardhaman Crop. Nutrients Private Limited - Appellant
Versus
Union of India and Ors. - Respondent
LPA No. 101 of 2015 (O&M)
Decided On : 12-05-2015
For the Appellant :Anand Chhibar, Senior Advocate and Riya Bansal, Advocate
For the Respondents:Alok Jain, Advocate, Senior Panel Counsel
The main legal point established is the application of Section 22 of the Companies Act, which empowers the Central Government to direct a newly registered company to change its name if it resembles an existing company's name or registered trademark.
Headnote:
VARDHAMAN - Companies Act - 22(1)(b) - Section 20, Section 22, Section 33 of the Companies Act, 1956, Trade Marks Act, 1999 - The court discussed the application of Section 22 of the Companies Act, which empowers the Central Government to direct a newly registered company to change its name if it resembles an existing company's name or registered trademark. The court also highlighted the effect of acquiescence under Section 33 of the Trade Marks Act and the limitations on the Central Government's jurisdiction in granting injunctions.
Fact of the Case:
The appellant Company was directed to delete the word 'VARDHAMAN' from its name by the Regional Director under Section 22(1)(b) of the Companies Act, 1956, as it infringed the rights of the respondent Company under the Trade Marks Act, 1999.
Finding of the Court:
The court found that the appellant Company's use of the 'VARDHAMAN' brand name infringed the rights of the respondent Company and upheld the order to change the appellant's name.
Issues: The issues included the jurisdiction of the Central Government under Section 22 of the Companies Act, the plea of waiver/acquiescence by the appellant Company, and the desirability of the appellant Company's name.
Ratio Decidendi: The court held that the Central Government has the power to direct a newly registered company to change its name under Section 22 of the Companies Act, and the plea of waiver/acquiescence was not sustainable. It also emphasized the limitations on the Central Government's jurisdiction in granting injunctions.
Final Decision: The appeal was dismissed, and the appellant Company was granted three months to change its name by deleting the word 'VARDHAMAN' from its existing name.
1. This intra-court appeal under Clause X of the Letters Patent has been filed against the order dated 17.12.2014 passed by the learned Single Judge, whereby the writ petition (CWP No. 13589 of 2012) filed by the appellant Company challenging the order dated 07.05.2012 (Annexure P-21) passed by the Regional Director (Northern Region), Ministry of Corporate Affairs (respondent No. 2 herein) directing the appellant Company under Section 22(1)(b) of the Companies Act, 1956 (hereinafter referred to as 'the Companies Act') to delete the word "VARDHAMAN" from its existing name, has been dismissed.
2. We have heard learned counsel for the parties and have gone through the impugned order passed by the learned Single Judge as well as the order passed by respondent No. 2.
3. The brief facts of the case are that respondent No. 4, namely M/s. Vardhaman Fertilizers and Seeds Private Limited, is engaged in business of manufacturing and marketing Class I fertilizers, water soluble fertilizers and micro nutrients. The Company was/is selling its products under the brand name and trade mark "VARDHAMAN" since the year 1991. The respondent Company was incorporated with the Registrar of Companies on 09.07.1987 with the name "M/s. Vardhaman Fertilizers and Seeds Private Limited". The respondent Company got registered its Trade Mark "VARDHAMAN" with the Trade Mark Registry on 08.02.2007 and the same is valid for a period of 10 years upto 08.02.2017. The appellant Company got itself incorporated with the Registrar of Companies on 29.05.2009 and started its business of manufacturing and marketing Class I fertilizers, water soluble fertilizers and micro nutrients, i.e. similar to the business of the respondent Company, under the brand name and trade mark "VARDHAMAN". On 11.10.2011, the respondent Company filed an application under Section 22 of the Companies Act seeking direction to the appellant Company to change/delete the brand name "VARDHAMAN", the registered Trade Mark of the respondent Company, as the same was undesirable and causing great loss of business, reputation and goodwill of its Company, and the appellant Company, doing business in the same field, was not entitled to get its Company registered with the same name. After issuing notice to the appellant Company, providing opportunity of hearing to both the Companies and considering the various documents produced by them, respondent No. 2 vide order dated 07.05.2012 allowed the said application, while recording a finding that "VARDHAMAN" is the registered trade mark of the respondent Company since 08.02.2007 and the appellant Company cannot deal in the same business with the brand name "VARDHAMAN", therefore, use of the same brand by the appellant Company is infringement of the rights of the respondent Company under the Trade Marks Act, 1999 (hereinafter referred to as 'the Trade Marks Act'), and directed the appellant Company to delete the word "VARDHAMAN" from its existing name.
4. The appellant Company challenged the aforesaid order of respondent No. 2 by filing CWP No. 13589 of 2012, which has been dismissed by the learned Single Judge vide the impugned order.
5. Learned counsel for the appellant Company assailed the order passed by respondent No. 2 on the following grounds :--
"(i) That in the facts and circumstances of the case, respondent No. 2 was having no jurisdiction/power to direct the appellant Company to delete the word "VARDHAMAN" from its existing name, on the ground that it infringed the rights of the respondent Company under the Trade Marks Act. In that situation, the respondent Company has the remedy under the common law to file suit for injunction restraining the appellant Company from using the trade name, which is registered in the name of the respondent Company.
(ii) That the respondent Company is not entitled to the relief under Section 22 of the Companies Act, as while entering into an agreement dated 03.08.2009 with the appellant Company, the resp