Madras High Court Reinstates Sakthi Trademark, Condemning Arbitrary Registry Actions

Introduction

In a significant ruling on trademark administration, the Madras High Court has set aside the Trade Marks Registry's order cancelling the long-standing 'SAKTHI' trademark registration of Sakthi Trading Company without any notice to the proprietor. Justice N. Anand Venkatesh, in CMA (TM) No. 16 of 2025, emphasized that such unilateral actions smack of arbitrariness and violate core principles of natural justice. The appellant, Perundurai Chennimalai Gounder Duraisamy trading as Sakthi Trading Company, challenged the Registry's decision, which had deemed the application abandoned following an opposition from Kumar Food Industries Limited. This decision not only reinstates the 2005 registration but also serves as a cautionary note for administrative bodies handling intellectual property rights, underscoring the need for due process. The case highlights ongoing tensions in India's trademark regime, particularly around procedural fairness, echoing recent Madras High Court observations in other IP disputes.

The bench, comprising a single judge, delivered the judgment on January 27, 2026, after reserving it on January 22, 2026. The ruling comes amid a series of high-profile trademark battles in Indian courts, including the recent rejection of Procter & Gamble's claims over 'Vapo' in the Vicks VapoRub case, where the same court ruled the term as generic.

Case Background

Sakthi Trading Company, a prominent manufacturer of food products based in Erode, Tamil Nadu, adopted the 'SAKTHI' trademark in 1977 for a diverse range of goods, including spice and masala powders, cereals, pickles, edible oils, flour, and papad. The company has traded extensively across India and exported to foreign markets, building substantial goodwill over nearly five decades of continuous use.

To secure statutory protection, the appellant applied for registration under Class 30 for rice on December 13, 1999 (Application No. 891453). Following due process under the Trade Marks Act, 1999, including advertisement in the Trademark Journal on October 16, 2002, the registration was granted on July 15, 2005, via Certificate No. 400179. This registration was renewed periodically, affirming its validity. Additionally, the company obtained copyright registrations for the label's unique style, color scheme, and get-up under the Copyright Act, 1957.

The dispute surfaced unexpectedly in 2023. On February 6, 2023, the Controller General of Patents, Designs and Trademarks issued a public notice in Trademark Journal No. 2090, listing applications slated for abandonment due to failure to file counter-statements in oppositions. Shockingly, the appellant's already-registered application appeared on this list. Upon verifying online records, the company discovered that its 2005 registration certificate had been unilaterally cancelled without any prior notice or opportunity to respond.

Further investigation revealed an opposition filed by the second respondent, Kumar Food Industries Limited, on February 9, 2018—over 12 years after registration. This opposition (No. 920373) was accepted post-advertisement, but the Registry's actions raised questions about procedural integrity. The appellant promptly submitted representations on February 20 and 27, 2023, seeking restoration, to no avail.

Parallel proceedings ensued when affected parties challenged the public notices before the Delhi High Court. The Central Government Standing Counsel assured the court that the notices dated February 6 and March 27, 2023, would be withdrawn within 10 days, leading to the writ petition's disposal on April 13, 2023. Despite this, on May 9, 2025, the Registry issued an order abandoning the application for failure to file a counter-statement, prompting the present appeal under Section 91 of the Trade Marks Act, 1999.

The timeline underscores a procedural anomaly: how could a granted and renewed registration be retroactively treated as pending and then abandoned? This backdrop sets the stage for examining the legal questions of administrative overreach and the sanctity of vested rights in intellectual property.

Arguments Presented

The appellant's counsel, Mr. S. Diwakar, argued that the Registry's cancellation of the 2005 certificate was ex parte and without notice, rendering it a nullity. He highlighted that the trademark had been in open, continuous use since 1977, with formal registration and renewals establishing proprietary rights. The inclusion in the 2023 abandonment list was erroneous, as the application had long been processed and certified. Representations were ignored, and despite the Delhi High Court's directive to withdraw notices, the May 2025 order perpetuated the injustice. No valid opposition could apply to a registered mark; rectification under the Act was the proper recourse for any aggrieved party, not unilateral revocation.

The first respondent, represented by Mr. C. Samivel (Senior Panel-Central Government Standing Counsel), defended the actions by citing Section 21(2) of the Act, which deems an application abandoned if no counter-statement is filed within the stipulated time. Documents showed a notice of opposition served on the appellant in 2020, fixing a hearing for March 18, 2020, which went unanswered. The Registry maintained that the application was rightly treated as pending post-advertisement, justifying the abandonment.

The second respondent's counsel, Mr. M. K. Miglani, contended that the opposition was legitimately filed after the 2018 advertisement in the Trademark Journal, targeting Application No. 891453 specifically. He submitted evidence of the opposition filing and noted similar disputes in other Sakthi applications, resolved via compromises allowing southern India sales and exports. In this case, a similar settlement was proposed: withdrawal of opposition if the appellant confined use to southern states and exports, without prejudice to a fresh application.

During hearings on December 11, 2025, the court scrutinized whether any opposition truly pertained to the registered mark, probing the Registry's records. The second respondent affirmed the opposition's validity with affidavit-backed documents, while the appellant disputed its relevance to the certified trademark.

Legal Analysis

Justice N. Anand Venkatesh's reasoning centered on the inviolability of procedural fairness in administrative actions under the Trade Marks Act, 1999. The court dissected the Registry's sequence: unilateral cancellation of a 2005 certificate after 18 years, restoration of the application as pending, fresh advertisement inviting oppositions, and eventual abandonment. This cascade, the judge held, lacked statutory backing and flouted natural justice.

Key to the analysis was the principle that once a registration certificate is issued and renewed, it confers vested rights. Cancellation requires notice and hearing; absent these, it is void ab initio. The court invoked the maxim audi alteram partem (hear the other side), stating: "If this certificate has to be cancelled for any reason, the appellant ought to have been put on notice and an opportunity must have been given to the appellant, failing which, such cancellation will be construed as a nullity in the eye of law."

The Delhi High Court proceedings were pivotal. The Registry's undertaking to withdraw the notices implied reversion to status quo, nullifying subsequent oppositions or abandonments. Proceeding otherwise was "illegal and unsustainable," as no rectification proceedings under Sections 47 or 57 were initiated by aggrieved parties like the second respondent.

The judgment distinguished between pre-registration oppositions (Section 21) and post-registration challenges, clarifying that the latter demand formal rectification, not administrative fiat. It critiqued the Registry's arbitrariness, especially post-Delhi HC, as undermining the Act's objective of efficient IP protection.

No specific precedents were cited in the judgment, but the ruling aligns with broader Indian jurisprudence on natural justice, such as in Maneka Gandhi v. Union of India (1978), which expanded Article 14's fairness mandate to administrative actions. In the IP context, it resonates with cases like N.R. Dongre v. Whirlpool Corp. (1996) on goodwill protection, though here the focus is procedural.

This decision integrates with recent Madras HC trends. In the concurrent 'Vapo' case involving Procter & Gamble and IPI India, the court rejected exclusive rights over descriptive terms like 'Vapo', derived from 'vapour', citing common trade usage since 2013. Both rulings underscore Madras HC's balanced approach: safeguarding honest, long-term users while curbing overreach, whether by registries or dominant brands. Similarly, the Supreme Court's agreement to hear a plea against UGC's 2026 equity regulations highlights systemic procedural scrutiny, though in higher education. In contrast, the Delhi High Court's empathetic stance on court fees—not as a litigant penalty—mirrors the Sakthi ruling's equity focus, ordering refunds where merits are unadjudicated.

The analysis reveals a systemic flaw: overburdened registries risking errors in digital-era processing. Implications extend to thousands of proprietors, urging reforms like mandatory e-notices for cancellations.

Key Observations

The judgment is replete with incisive observations on administrative accountability:

• On procedural illegality: "The impugned order is illegal and unsustainable for more than one reason. The first reason is that the application submitted by the appellant was already acted upon and the Registration Certificate No.400179 was issued to the appellant on 15.07.2005. It was also renewed from time to time."

• On natural justice breach: "The entire procedure followed by the 1st respondent smacks with arbitrariness and it is in utter violation of principles of natural justice."

• On post-registration challenges: "Such a procedure [unilateral cancellation and entertaining opposition] is nowhere contemplated under the Act and Rules."

• On Delhi HC's impact: "Before the Delhi High Court, the Controller General... took a specific stand that they are withdrawing the public notices... within 10 days. This was recorded and the writ petition was closed. In such an event, no consequence can follow."

• On opportunity to be heard: "Once a Registration Certificate is given and if anyone is aggrieved, only a rectification can be filed. Whereas the 1st respondent has proceeded to cancel the certificate unilaterally and restored the application and entertained opposition."

These excerpts encapsulate the court's rationale, emphasizing due process as non-negotiable in IP administration.

Court's Decision

The Madras High Court allowed the appeal, setting aside the Registry's May 9, 2025, order deeming the application abandoned. It directed the Registrar of Trade Marks to reinstate Certificate No. 400179 within four weeks of receiving the order copy, restoring the appellant's rights without costs.

Practically, this reinstates Sakthi Trading Company's exclusive use of 'SAKTHI' for Class 30 goods, preserving decades of goodwill and market position. It halts potential encroachments by competitors like Kumar Food Industries, though the latter's compromise offer remains viable for amicable resolutions.

Broader implications are profound for India's IP ecosystem. The ruling reinforces that administrative bodies cannot act arbitrarily, mandating notice and hearing in cancellations—potentially reducing erroneous listings in public notices. For legal practitioners, it signals a stricter judicial oversight on the Trade Marks Registry, likely increasing rectification petitions under Sections 47 and 57. Future cases may cite this for challenging ex parte actions, promoting efficiency while safeguarding small enterprises like Sakthi against bureaucratic lapses.

In tandem with the 'Vapo' decision, it bolsters defenses for descriptive or long-used marks against dishonest adoption claims, fostering a fairer marketplace. As UGC faces scrutiny over equity rules and courts decry fee penalties, this underscores a judiciary committed to empathetic, principle-driven justice. Ultimately, the Sakthi reinstatement exemplifies how procedural rigor upholds substantive rights, ensuring IP law serves innovation and commerce equitably.