DELHI HIGH COURT

                                     K. R. Beri and Co.

                                              Vs.

                        Metal Goods Mfg. Co. Pvt. Ltd., (Delhi)

                               F.A.O. (OS) No. 19 of 1972.

                         (Rajindar Sachar and S. N. Kumar, JJ.)

                                          15.5.1980

                                       JUDGEMENT

Rajindar Sachar and S. N. Kumar, JJ.

1. This is an appeal again the order of Prakash Narain, J., by which he
dismissed the petition held by the appellant, under Section 56 of the Trade and
Merchandise Marks Act 1958, (hereinafter to be called the Act).

2. The appellant filed the petition on the allegation that four registered
trademarks in the name of respondent No. 1 be cancelled. The appellant's case
is that he manufactures and sells cycle bells for more than 15 years under its
distinctive trade mark "five 50". Respondent No. 1 has four registered marks
with the trade mark of "O" and "Fifty". It was alleged that in 1958 the
respondent No. 1 had sought to prevent the appellant from using their trade
mark as "Five 50" but that injunction was refused. It is maintained that the
respondents have ceased to use the trade mark and have abandoned the said
trade mark for more than 5 years preceding one month from the date of petition
and therefore the same is liable to be removed from the register.

3. What brought the appellant to court was a threatened action by one M/s.
Cinni Pvt. Ltd., for allegedly using the trade mark "FIVE 50" alleging that they
had a right in it. The respondent countered the allegation and maintained that no
ground had been made out under Sections 46 or 56 of the said Act. It appears
that the learned Judge examined Mr. Dheer, partner of the appellant firm, who
made a statement in court which is as follows :-

"About 7 or 8 months back we first came to know that the respondent has
ceased to use their registered trade mark. We came to know about 7 or 8 months
back that the respondent had given their marks for use to M/s. Cinni Pvt. Ltd.
We came to know that the marks had been given for use to M/s. Cinni Pvt. Ltd.,
about a year back".

4. On this statement the learned Judge framed the following issue:-

"Whether in view of the statement made on behalf of the petitioner today, the
present petition is maintainable?"

No evidence was taken and the learned Judge basing himself on the statement
of Dheer held that it was the appellant's own case that the trade mark was given
for use to M/s. Cinni Pvt. Ltd., by the respondent and therefore it cannot be said
that a period of 5 years and one month had elapsed from the date of filing of the
petition and the trade mark could not be taken off the register. The appellant
being aggrieved has come up in appeal.

5. The main contention of the appellant as put by Mr. Anand, their learned
counsel is that the learned Judge was in error in deciding the case merely on the
statement of Mr. Dheer as the matter was not such which could be decided
without taking evidence.

6. Section 56 of the Act empowers the High Court, on being moved, to cancel
the registration of a trade mark on the ground of any contravention or failure to
observe a condition entered on the register in relation thereto.

7. Section 46 of the Act provides that a registered trade mark may be taken off
the register in respect of any of the goods on the grounds - (a) that the trade
mark was registered without any bona fide intention on the part of the applicant
for registration that it should be used in relation to those goods by him.

............... or

(b) that up to a date one month before the date of the application, a continuous
period of five years or longer had elapsed during which the trade mark was
registered and during which there was no bona fide use thereof in relation to
those goods by any proprietor thereof for the time being.

8. Section 48 provides that a person other than the registered proprietor of a
trade mark may be registered as the registered user thereof. Sub-Section (2) of
Section 48 reads as under:-
"The permitted use of a trade mark shall be deemed to be use by the proprietor
thereof, and shall be deemed not to be used by a person other than the
proprietor, for the purpose of Section 46 or for any other purpose for which such
use is material under this Act or any other law".

Permitted Use' in relation to a registered trade mark has been defined in Section
2(m) to mean the use of trades mark by a registered user of the trade mark in
relation to goods with which he is connected in the course of
trade.................and which complies with any condition or restriction to which
the registration of trade mark is subject to.

9. We agree with the learned Judge that the plea that the mark should be
removed on the ground that the respondent No. 1 did not ever intend to use the
trade mark bona fide, in terms of Section 46(1)(a) has not really been made out
in the petition. Though there is a bald and halting allegation that the respondent
never intended to use the trade mark, this plea lacks any particularity and the
appellants' plea on this ground was rightly rejected. The learned Judge however,
construed the statement of Mr. Dheer to also mean that he had admitted that
prior to 8 months of making the application the respondent was himself using
the trade mark. Now if that construction could be given to it, there is no doubt
that even clause (b) of Sub-Section (1) of Section 46 will not be attracted
because in that case the period of non-use of trade mark for more than 5 years,
and one month would not have elapsed. But with respect we cannot agree. The
statement of Mr. Dheer that he had come to know 7 or 8 months back that the
respondent had given their trade mark for use to M/s. Cinni Pvt. Ltd., does not
mean that he is admitting that earlier to 7 or 8 months the trade mark was being
used by the respondents. The pleading that the respondent had abandoned the
trade mark for more than 5 years, militates against the construction given by the
learned Judge to the statement of Mr. Dheer. It may be noted that in the reply to
the application by the appellant the respondent had specifically denied that he
was not using the trade mark, rather his plea was that he had constantly been
using the trade mark right up to the date of filing of the reply which was in
April 1971, and that this user was within the knowledge of the appellant. Thus
if the case had proceeded to evidence the court would have been in a position to
know whether within a period of 5 years and one month from the date of filing
of the application the respondent had been using the trade mark bona fide or
not. That eventuality however, was cut short because of the construction given
to the statement of Mr. Dheer by the learned Judge. But as said above in our
view the statement of Mr. Dheer cannot be read in such a manner. All that the
statement means is that he came to know about the user by. M/s. Cinni Pvt. Ltd.
of the trade mark of respondent 7 to 8 months back. There is no admission that
prior to 7 to 8 months of his making the statement the trade mark was being
used by the respondent. In that view the court would have to take evidence to
determine whether the respondent had used the trade mark prior to the use by
M/s. Cinni Pvt. Ltd., within a period of four years and five months and only an
that finding being against the appellant, could his application fail. The learned
Judge however, did not consider it necessary to take evidence, evidently
because he accepted the alternative argument of the respondent that the use by
M/s. Cinni Pvt. Ltd. of the trade mark of the respondent was to be treated as if it
was used by the respondent, and naturally in that case the trade mark was used
within the period of 6 to 8 months from the date of making of the application
and therefore Section 46(1)(b) which requires that there should be no bona fide
use in regard to a trade mark up to a date of one month before the date of
application and a continuous period of 5 years must have elapsed, would not
apply, and no question of removal of trade mark from the register could arise.
Mr. Anand does not dispute that it may be possible for a proprietor of a
registered trade mark to permit other person to use his trade mark, What he
however, contends is that if a challenge is made to the removal from the register
on the ground under Section 416(1)(b) of the Act that up to a date one month
before the date of application and for a continuous period of 5 years or longer
has elapsed during which the trade mark was registered and during which there
was no bona fide use thereof in relation to those goods by the proprietor, the
latter cannot plead in his deface the use of the trade mark by some other party,
even if permitted with the proprietor's consent, if it had not been registered as a
registered user under Section 48 of the Act.

Mr. Anoop Singh, the learned counsel for the respondent would have it that so
long as the use of the trade mark has been allowed by the proprietor it is always
open to the latter to take advantage under Section 46 of the Act and claim that
this use was by him, and non-registration under Section 48 of the Act does not
mean that such a user cannot be invoked by the proprietor to save the trade
mark from being removed under Section 46.

10. Now Section 18 of the Act provides for an application for registration being
made by any person claiming to be the proprietor of trade mark used or
proposed to be used by him; Section 21(5) provides for the Registrar to decide
whether and subject to what conditions or limitations the registration is to be
permitted. Section 11 lays down prohibition of registration of certain marks, one
of them being the use of which would be likely to deceive or would cause
confusion. Similarly Sections 12 and 13 also provide for prohibition of certain
trade marks in certain eventualities. The requisites for registration in part 'A'
and 'B' of the register are laid down in Section 9 of the Act. It will be seen that
apart from satisfying the requirements of Sections 9, 11 and 13 one of the
requirements of Section 18 is that only person claiming to be the proprietor of a
trade mark used or proposed to be used by him can apply i.e. to say that a
person who does not propose to use the trade mark himself will not be eligible
to apply under Section 18 of the Act. The law wishes to protect the rights of a
proprietor of trade mark and its use by the proprietor and therefore has provided
under Section 32 that the original registration trade mark shall after the
expiration of 7 years from the date of registration be taken to be valid in all
respects unless obtained by fraud or that the registration was in contravention of
the provisions of Section 11 of the Act. But it is well to note that Section 32 of
the Act is subject to Section 416 of the Act which deals with removal of a trade
mark from the register on the ground of non-use. Sub-Section (3) of Section 46
has contemplated a situation where nonuse of a trade mark is shown to have
been due to special circumstances in the trade mark in relation to the goods and
in such a case the applicant shall not be entitled to rely on clause (b) of Sub-
Section (1) of Section 46, against the proprietor. This will show the legislature's
intention that normally the user contemplated is user by the proprietor himself.

11. The purpose of the Act is to see that the public is not deceived by being
made to buy goods on the representation that they belong to a particular trader
while in fact they are being traded by somebody else. It is possible that the
proprietor may use that trade mark through his servants and agents while
keeping a "quality control" about them in that case it may be treated as a user
by the proprietor. However, legislature has itself provided an exception by
providing in Section 48 of the Act that the 'permitted use' of a trade mark shall
be deemed to be the use of the trade mark by the proprietor. "Permitted use"
being use of a trade mark by a registered user of the trade mark in relation to
goods. Section 49 of the Act prescribes a detailed procedure of how the
application for being registered as a registered user is to be made and lays down
that the application will state the goods in respect of which the registration is
proposed, the conditions or restrictions, if any proposed with respect to the
characteristics of the goods, the period or without limit of period or the duration
thereof, and the relationship existing between proprietor and the proposed
registered user. The said application has to be forwarded by the Registrar to the
Central Government. Sub-Section (3) empowers the Central Government to
direct the Registrar, if having regard to the interest of general public and the
development of any industry, trade or commerce, to refuse the application and
the Registrar has to dispose of the application in accordance with the directions
of the Central Government. The existing registered users' agreement before the
commencement of the Act are to cease to have effect after the expiration of
three years from the commencement. The Registrar has also a power by Section
52 to vary or cancel the registration as registered user.

12. Rules have been framed under the Act. Rule 82 in Chapter V of the Rules
onwards deal with the application for registration and various particulars and
procedure for hearing the applicants or the other interested parties. The
considerations which are to be borne by the Central Government in allowing or
refusing the application are laid down in Rule 85. Some of the considerations
are to see that the permitted use will not contravene the policy of the Act which
is to prevent trafficking in trade mark and consideration of bona fide for
registration is also to be considered. It will thus be seen that a very elaborate,
detailed and purposeful procedure has been laid down by the Act and the Rules
for registering a person as a registered user. Section 48(2) provides an exception
in case of permitted use of trade mark being deemed to be used by the
proprietor and shall be deemed not to be a use by a person other than the
proprietor for the purpose of Section 46. The result of that is that if a registered
user has used the trade mark the ground for removing the trade mark from
register on the ground of non-use ceases to be available. It is an advantage
given to a proprietor but only in case of permitted use by the registered user.
This being the scheme of the Act, is it permissible to accept the contention of
Mr. Anoop Singh (which has been accepted by Prakash Narain, J.) that even
without the use by a registered user of the trade mark, use by any person can be
equated as a use by the proprietor, if it is with the latter's consent? If this
argument was to be accepted this will make the provision of Section 48(2) of
the Act more or less otiose and superfluous. It is well settled that superfluity
cannot be attributed to legislature. When the legislature is creating a fiction by
means of Section 48(2)of the Act to equate the use by a registered user only as
that of proprietor, how can the courts ignore this mandate of the legislature and
hold as the learned single Judge has held that the use of trade mark by Mis.
Cinni Pvt.. Ltd. an unregistered user can be equated to the user by the
respondent. We are afraid we cannot so construe the provisions of the Act which
will be contrary to the intention of the legislature, which ia meant to sub serve
the public interest because it is well settled that that construction should be
adopted that would advance the legislature's object and suppress the mischief
sought to be cured. We are of the opinion that the legislature has expressed
definite intention that any proprietor who wishes to treat the use of trade mark
by somebody else to be equated with his use must do it only in the manner laid
down by the Act.

13. It is an undisputed dictum of law that when a statute requires a thing to be
done in a certain manner it shall be done in that manner alone and the court
would not expect its being done in some other manner vide State of Bihar v.
J.A.C. Saldhanha14. Similarly it is also well settled that where a power is given
to do a certain thing in a certain way the thing must be done in that way or not
at all. Other methods of performance are necessarily forbidden, vide Nazir
Ahmad v. King Emperor, 2

15. Thus when Section 48(2) of the Act provides that a user by a registered user
will be deemed to be user by the registered proprietor it necessarily excludes
any argument that user by a person other than the registered user can be deemed
to be user by the registered person. Legislature having only recognized the
permitted use of a trade mark, for the purpose of Section 46, necessarily
excludes any other user being taken advantage of for avoiding the rigor of
Section 46. There is no hardship involved. If a proprietor wishes to get the
benefit of Section 48(2) he must get that person registered as registered user.
But if for any special reasons he does not wish to do so the law cannot compel
him. But surely in that eventuality a proprietor cannot claim that he should be
given the benefit provided under Section 48(2) even thought he has not
complied with the conditions laid down under the Act. If therefore the
proprietor wishes to take advantage he must follow the law which provides
registration as a registered user under Sections 48 and 49 of the Act, and in
default to be ineligible to take advantage of Section 48(2) of the Act.

16. Mr. Anoop Singh, for his argument that even user by an unregistered person
can be taken advantage of by the proprietor, sought to derive assistance from
some of the cases decided by English courts. It may be noted that Section 48 of
our Act is borrowed from Section 28 of the English Act. In that connection he
especially referred us to the following observation in (1963 RPC 183 at p. 195)
:-

"Both parties appear to have misconceived the provisions of Section 28, for this
is not a mandatory but a permissive Section and cannot fairly be construed to
provide a protective cover for any trade mark use which would otherwise be
deceptive or confusing. It creates what is termed "permitted use" available only
in circumstances approved by the Registrar as not contrary to the public interest
(and in consequence not prima facie contrary to the provisions of Section 11)
and is of value to the registered proprietor as supplementing his own use of the
trade mark, if any, and thus protecting him against removal of the mark from the
register under Section 26, and to the registered user, provided the conditions
and restrictions contained in the agreement are observed, as a protection against
allegations of infringement, and additionally as a means of attacking
infringements by third parties. There is nothing anywhere in this Section to
justify the view that an agreement between a registered proprietor of a trade
mark and a party concerned to use such mark requires to be registered, still less
that in the absence of registration, its effect upon the validity of the mark, if
called in question, will be in any way different".

17. In our view that case is distinguishable. In that case the foreign proprietor of
a trade mark 'Bo stitch' sold his goods in the United Kingdom through a local
distributor. The local distributor was selling the goods and indicating broadly
that the goods belonged to the foreign proprietor. Later on disputes arose
between the parties and the distributor took the stand that as there was no
registered users' agreement the goods in the market had come to be associated
with the goods belonging to the distributor and thus were no longer distinctive
of the proprietor. The court found that the trade mark was still distinctive of the
foreign proprietor. The court also found that there was no deception or
confusion in the use which has been permitted by the foreign proprietor to the
distributor and therefore the application for removal of the existing trade mark
from the register was rejected. It is important to note that it is a case which was
fought on the ground that the use of the trade mark by the English company had
come to be associated with the goods of that company and that the continuous
use of trade mark by the plaintiff would be to cause deception and confusion
and therefore should be removed. Proceedings were in infringement of the trade
mark. No question whether user by an unregistered person can be taken
advantage by the proprietor arose for decision. Similarly in British Petroleum
Co. Ltd. v. European Petroleum Distributors Ltd. 3 where the point raised for
removal of the registered mark was that 'BP' petrol was not sold by the plaintiff
but by Shell Mex. In that case the challenge was made to the registered trade
mark 'BP' on the ground that it was not distinctive and that it was also deceptive
because the petrol was not sold by it but by an associate company of the
plaintiffs. The court found that the conditions or restrictions subject to which
'BP' and 'Shell Mex' are operating the unregistered license were the same
conditions as of other trademarks under which 'BP' and 'Shell Mex' were
registered as users of the marks and therefore it thought that the mere fact that
this agreement was not registered as registered user of the mark, for some time
did not make any difference from the point of deceptiveness. There was no
discussion of equating the user by an unregistered license, as the proprietors for
the purpose of Section 26 (Section 46 of our Act).

18. In (1970 RPC 339) GEC (English company) had moved for rectification of
the trade mark 'GE' (American company) on the ground of such trade mark
causing confusion. The main discussion in that case was whether the mark 'GE'
was likely to lead to the deception or confusion of a very substantial proportion
of the public, and therefore it was necessary to order rectification under Section
32 of the Act corresponding to Section 56 of our Act. It will be again seen that
the main discussion in the court of appeal case was on the ground whether the
mark 'GE' which was a mark of American company would lead to deception or
confusion with the mark of 'GEC' of the English company in England. One
other point sought to be raised was that because 'GE' had permitted its goods to
be sold by its subsidiary it had muddied its mark simply because it was not
registered as a registered user

The court found that the American company retained "quality control" over its
products and therefore it was held that there was sufficient connection in the
course of trade of the American company to satisfy the definition of a trade
mark which like our Act means in relation to a registered trade mark or mark
used in relation to goods for the purpose of indicating or so as to indicate the
connection in the course of trade between the goods and some person having the
right as proprietor to use the mark. That is why Cross L.J. at p. 395 held that the
authority given by 'GE' to its subsidiary was not open to objection because the
user might fairly be considered as user by 'GE' and because the license of a
mark whether registered or unregistered does not deprive it of the character of a
trade mark provided that the owner of the trade mark retained a sufficient
connection in the course of trade to the relevant goods, which connection can be
maintained. The connection in the course of trade was held to include the right
to control the standards to be maintained in the manufacture of goods. It will
thus be seen that the main reason why the challenge to the rectification of the
registration failed was because there was a substantial "quality control" over the
goods sold by the person, even though not registered as a registered user. This
case therefore, did not lay down that benefit of Section 28 (Section 48 of our
Act) is available even in the absence of being a registered user. These cases
thus only lay down that the use by a non-registered user does not necessarily
mean that the use is deceptive or causes confusion so as to become liable to be
removed under Section 46 of our Act. Actually in 'Bostitch' case the Judge
himself recognized that permitted use is of value to the registered proprietor as
supplementing his own use of the trade mark, if any and thus protecting him
against removal of the mark from Register under Section 26 (corresponding to
Section 48 of our Act), which would mean that to invoke Section 48 of our Act,
the permitted use must be by a registered user. That this was the understanding
of 'Bostitch' case ia also clear from the judgment of Cross L.J., at page 394 (25)
that it was not necessary.

19. We do not read the English cases cited by Mr. Anoop Singh to lay down that
without being registered as a registered user the use by that person can be
equated to as the use by the registered proprietor. As admittedly M/s. Cinni Pvt.
Ltd. was not registered as a registered user, the admission of Mr. Dheer, partner
of appellant firm that for the last 6 to 8 months M/s. Cinni Pvt. Ltd. were
permitted to use the trade mark by the respondent would not avail them (the
respondent) for the purpose of Sections 46 and 48 of the Act. That of course
would not result in removal of the trade mark from the register because the
respondents had taken the plea that they were using the trade mark themselves
right for all these years and have even taken steps to prevent their trade mark
from being infringed right up to 1970 i.e. even a few months before the
application was brought by the applicant. That issue, however, requires
evidence and that is why the matter will have now to be remitted back to the
learned single Judge. This course is necessary because as no evidence was led
and as the parties are at variance on questions of fact and as to the use by the
respondents themselves of the trade mark, the only manner of finding out is for
the case to go on trial and then alone the finding can be given. The result is that
we would therefore allow the appeal, set aside the order of Prakash Narain and
remit the case back to the learned single Judge for deciding the same in
accordance with law and merits and in the light of opinion expressed by us in
this appeal. There will be no order as to costs.

MMM Order accordingly.

Cases Referred.

1. (1980) I SCC 554.

2. AIR 1936 PC 253 at p. 257.

3. (1968 RPC 54 at p. 62)