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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOs.4767-4769 OF 2001

PATEL FIELD MARSHAL AGENCIES AND ANR.             ...APPELLANT(S)

VERSUS P.M. DIESELS LTD. AND ORS.                     ...RESPONDENT(S)

WITH CIVIL APPEAL NO.19937 OF 2017

(ARISING OUT OF S.L.P. (C) NO.1851 OF 2009),

CIVIL APPEAL NO.19938 OF 2017 (ARISING OUT OF S.L.P. (C) NO.27309 OF 2012)

AND  S.L.P. (C) NO.30121 OF 2012

J U D G M E N T

RANJAN GOGOI,J.

1. Leave  granted  in  S.L.P.  (C) No.1851 of 2009 and S.L.P. (C) No.27309 of 2012.

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2. A  relatively  simple  question though  of  considerable  importance  in Intellectual  Property  Rights  jurisdiction has presented itself for an authoritative pronouncement of this Court in the present bunch of appeals. The question arising will be formulated for an answer at a subsequent stage  and  for  the  present  we  will  take notice of the relevant facts giving rise to the issue in question.

3. The  respondent  in  Civil  Appeal Nos.4767-4769 of 2001 (P.M. Diesels Ltd.) is  the  registered  owner  of  three  trade marks, the common feature of all of which is  the  words  “Field  Marshal”.  The  three registration  certificates  issued  by  the Registrar of Trade Marks in favour of the respondent-Company  (through  its predecessor)  is  in  respect  of  the  mark “Field Marshal” (Registration No. 224879);

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the  second  certificate  is  in  respect  of trade  mark  “Field  Marshal”  in  lettering style  (Registration  No.  252070)  and  the last  certificate  is  in  respect  of  trade mark “FM Field Marshal” (Registration No. 252071-B).  The  first  registration certificate  is  dated  16.10.1964  and  the second and third registration certificates are dated 4.10.1968.

4. It appears that some time in the year  1982  the  appellants-Patel  Field Marshal & Anr. applied for registration of the  trade  mark  “Marshal”  for  their  use. Having come to know of the said application and  perceiving  a  similarity  between  the mark in respect of which registration was sought by the appellants and the mark(s) registered in favour of the respondent, the respondent  served  a  legal  Notice  dated 23.07.1982 asking the appellants to desist

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from  using  the  mark  in  question,  i.e., “Marshal”.

5. In the year 1989, the respondent instituted a suit before the High Court of Delhi  (Suit  No.  1612  of  1989)  for infringement of trade mark, rendition of accounts of profit earned by the appellants from  use  of  the  mark  “Marshal”  and  for perpetual  injunction  to  restrain  the appellants from using the trading styles “Patel Field Marshal Agencies” and “Patel Field Marshal Industries”. An Interlocutory Application  for  temporary  injunction  was also filed.

6. The defendants in the suit, i.e., the appellants herein, contested the claims of the plaintiff-respondent on the ground of jurisdiction as well as on merits. In the  written  statement  filed,  the

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appellants-defendants  also  contested  the validity  of  the  registration  of  the respondent’s trade mark “Field Marshal” and claimed  that  the  same  was  liable  to  be rectified in the trade mark register. An issue to the said effect was framed in the suit.  

7. The Delhi High Court by its Order dated  28.09.1995  dismissed  the Interlocutory  Application  filed  by  the plaintiff-respondent for interim injunction on the ground that the High Court did not have  jurisdiction,  both,  pecuniary  and territorial, over the subject matter. In appeal, the Division Bench by Order dated 10.03.1998  reversed  the  decision  of  the learned  single  Judge  and  directed  for consideration  of  the  Interlocutory Application  for  interim  injunction  on merits.  The  matter  was  brought  to  this

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Court  in  Special  Leave  Petition  (C) No.13512 of 1998. During the pendency of the aforesaid S.L.P., in view of the remand order  of  the  Division  Bench  dated 10.03.1998, a learned single Judge of the High Court granted temporary injunction in favour  of  the  respondent-plaintiff.  This was on 07.07.1999. However, by a subsequent Order dated 20.08.2008, the learned single Judge of the High Court held that the court had no jurisdiction and, therefore, ordered for return of the plaint for presentation before the competent court in the State of Gujarat. The said order was challenged by the respondents  herein  (plaintiffs in the suit)  before  the  Division  Bench.  The Division Bench by Order dated 24.10.2008 held  that  in  the  facts  of  the  case  the plaint  ought  not  to  have  been  rejected; however,  as  the  appellant  before  it

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(respondent-plaintiff) had no objection to carry on the proceedings in the competent court at Rajkot, Gujarat, the plaint  was returned to be filed in Rajkot. Thereafter, the  case  was  transferred  from  the  Delhi High Court to the court at Rajkot and the proceedings came to be numbered as Civil Suit  No.  1  of  2009  in  the  file  of  the learned Additional District Judge, Rajkot.

8. While the aforesaid Order of the Division  Bench  dated  24.10.2008  is  the subject  matter  of  challenge  in  the connected  Civil  Appeal  arising  out  of S.L.P. (C) No. 1851 of 2009 also filed by the appellant, what is of significance is that when the suit in question was pending adjudication in the High Court of Delhi, the  appellants  herein  initiated  parallel proceedings  before  the  High  Court  of Gujarat  (in  the  year  1997)  seeking

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rectification of the registration of the trade mark(s) granted to the respondent. Specifically,  the  appellants  had  filed three rectification applications bearing RA Nos.  1,  2  and  3  of  1997  under  Sections 46/56 of the Trade and Merchandise Marks Act, 1958 (hereinafter referred to as the “1958 Act”) for removal and cancellation of the three trade marks registered in favour of  the  petitioner  bearing  Nos.  224879, 252070 and 252071. The learned single Judge of the High Court of Gujarat dismissed the three  applications  in  question  by  Order dated 15.04.1998. The said order has been affirmed in appeal by the Division Bench of the Gujarat High Court by its Order dated 25.11.1998. This order has been subjected to challenge in Civil Appeal Nos.4767-4769 of 2001 presently under consideration.

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9. While  the  reasoning  of  the Division  Bench  of  the  High  Court  in dismissing  the  applications  in  question will be noticed in due course, the question calling for an answer by this Court would need  a  formulation  at  this  stage.  An attempt at such formulation is being made hereunder.

In  a  situation  where  a  suit  for

infringement  is  pending  wherein  the  issue  of

validity of  the registration of  the trade mark in

question has been raised either by the plaintiff

or  the  defendant  and  no  issue  on  the  said

question of  validity has been framed in the suit

or  if  framed  has  not  been  pursued  by  the

concerned  party  in  the  suit  by  filing  an

application  to  the  High  Court  for  rectification

under  Sections  111  read  with  Section  107  of

the  Trade  and  Merchandise  Marks  Act,  1958,

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whether recourse to the remedy of rectification

under  Sections  46/56  of  the  1958  Act  would

still  be  available  to  contest  the  validity  of  the

registration of the Trade mark.  

10. The  aforesaid  question  which arises  in  the  present  appeals  in  the context of the 1958 Act continues to be a live  issue  in  view  of  the  pari  materia provisions  contained  in  the  Trade  Marks Act, 1999, i.e., Sections 47, 57, 124 and 125  of  the  Trade  Marks  Act,  1999 (hereinafter  referred  to  as  “the  1999

Act”).

11. The issues arising in Civil Appeal Nos.4767-4769/2001  and  Civil  Appeals arising out of S.L.P. (C) No.27309/2012  and S.L.P.  (C)  No.30121/2012  are  same  and similar. S.L.P. (C) No.30121/2012, however, has since been withdrawn.

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Civil Appeal arising out of S.L.P. (C) No.1851/2009 challenges the order passed by the Delhi High Court on 24.10.2008 by which the plaint was returned to be filed before the competent  court  at  Rajkot,  despite  the conclusion  of  the  Appellate  Bench  that  the order of the learned Single Judge holding that the Delhi High Court had no jurisdiction and hence the plaint should be returned, is not correct. As the said direction of the Division Bench  of  the  High  Court  challenged  in  the appeal was at the instance of the plaintiff (respondent  herein),  who  was  the  appellant before the High Court, we would understand the stand taken to be a virtual withdrawal of the appeal and an undertaking to comply with the direction  of  the  learned  Single  Judge  to present the plaint before the competent court at Rajkot.  In these circumstances, we do not consider it necessary to continue to entertain

the challenge made in the appeal arising out of S.L.P. (C) No.1851/2009 so as examine the

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legality of the correctness of the said order on  merits.  The  person  aggrieved  before  the High Court i.e. the respondent herein chose to comply with the order of the leaned Single Judge. The appellant herein was not aggrieved by the order of the learned Single Judge. The aforesaid  proceeding  i.e.  arising  out  of S.L.P. (C) No.1851/2009, in the circumstances

set  out  above,  is  accordingly  closed. Two appeals,  therefore,  survive  for consideration  i.e.  Civil  Appeal Nos.4767-4769/2001 and Civil Appeal arising out of S.L.P. (C) No.27309/2012.

12. We have heard Mr. Shailen Bhatia, learned  counsel  for  the  appellants  and Mr. Harin P. Raval, learned senior counsel for  the  respondents  in  Civil  Appeal Nos.4767-4769 of 2001.  We have also heard Mr. J. Sai Deepak, learned counsel for the appellant and Mr. Gladys Daniels, learned

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counsel for the respondent in Civil Appeal arising  out  of  S.L.P.  (C)  No.  27309  of 2012.

13. The arguments advanced on behalf of the appellants in the appeals proceed on the basis that Section  107 and 111 of the 1958 Act contemplates grant of permission by the learned Trial Court for filing of a rectification  application,  which requirement, it is urged, does not seem to follow from a reading of the aforesaid two provisions of the 1958 Act. It is submitted that  under  the  1958  Act,  there  are  two categories of right vested; the first in the  owner  of  a  registered  trade  mark (Sections 28 and 29) and the second in a person  aggrieved  by  such  registration (Sections  46  and  56).  The  aforesaid  two rights are parallel and independent of each other.  It  is  submitted  that  the  only

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requirement  for  filing  a  rectification application  under  the  provisions  of Sections 107 and 111 of the 1958 Act is that person filing such an application must be a “person aggrieved” which would include a  person  against  whom  an  infringement action has been taken or is threatened by the registered proprietor of the trade mark as held by this Court in National Bell Co. vs.  Metal  Goods  Mfg.  Co.  (P)  Ltd.  and another1.  The  learned  counsel  for  the appellants has also drawn attention of the Court to the provisions of Section 32 of the 1958 Act which gives conclusiveness to the validity of the registered trade mark after expiry of a period of seven years from  the  date  of  registration  except  in cases covered by sub-Clauses (a), (b) and (c) of Section 32. It is contended that the question of conclusiveness as to validity

1 (AIR) 1971 SC 898

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of the registration of the trade mark can be raised in an infringement suit as also in  a  rectification  application.  The  very requirement of permission of a subordinate court (District Court) for filing of the rectification application before a higher Court (High Court), in the light of the provisions of Section 107 and 111, cannot be the legislative intent.  The provisions of Section 41 (b) of the Specific Relief Act,  1963  which  restrains  a  subordinate court  from  preventing  a  person  from instituting  any  proceeding  in  a  higher court  has  also  been  stressed  upon  and reliance has been placed in this regard on Cotton Corporation of India Ltd. Vs. United Industrial Bank Ltd. and Ors.2  Reliance has also been placed on the decision of the High Court of Madras in B. Mohamed Yousuff Versus  Prabha  Singh  Jaswant  Singh  and

2 (1983) 4 SCC 625

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Others3 and the judgment of the Full Bench of the Delhi High Court in Data Infosys Limited  and  Others  Versus  Infosys Technologies Limited4.

14. In  reply,  on  behalf  of  the respondent,  it  is  contended  that  the provisions of Section 111 of the 1958 Act particularly  sub-sections  (3)  and  (4) thereof make it very clear that once the Civil Court is satisfied with regard to the prima  facie  tenability  of  the  issue  of invalidity of the registration of a trade mark that may be raised before it by any party  to  an  infringement  suit,  the  said question  has  to  be  decided  in  a rectification  proceeding  and  not  in  the suit. The suit will remain stayed and the final decision of the statutory authority in the rectification proceeding will govern

3 ( 2008) 38 PTC 576 Madras DB 4 2016 (65) PTC 209 Delhi FB

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the parties to the suit. It is contended on behalf  of  the  respondents  that rectification proceedings under Sections 46 and 56 of the 1958 Act govern a situation where no suit for infringement is pending. In  a  situation  where  a  suit  for infringement  has  been  filed  and  the question of validity of registration arises therein and the Civil Court is satisfied as to the prima facie tenability of the issue of invalidity of the registration of the trade mark, the provisions of Section 111 would take over and govern the proceedings in  the  suit  including  the  issue  of invalidity.  It  is  further  contended  that there is a deemed abandonment of the rights conveyed under Sections 46 and 56 of the 1958  Act  in  the  event  a  suit  for infringement  is  pending  wherein  the question of invalidity has been raised and

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found  to  be  prima  facie  tenable.  It  is urged that the rights under Sections 46 and 56 on the one hand and those contained in Sections 107 and 111 on the other must be understood to be operating in two different fields;  both  sets  of  provisions  cannot mutually exist as such mutual existence and operation may lead to conflicting decisions on the same question i.e. by the High Court under the 1958 Act or by the IPAB under the 1999  Act  on  the  one  hand  and  the  Civil Court adjudicating the infringement suit on the other. It is also submitted on behalf of the respondents that the abandonment of the  plea  of  invalidity  contemplated  by Section  111(3)  of  the  1958  Act  is  a complete relinquishment for all practical purposes and not only for the purpose of the suit.  The abandonment contemplated by Section 111 (3) of the 1958 Act does not

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keep alive the plea of invalidity to be urged/agitated  separately  in  a rectification  proceeding  under  Section 46/56  of  the  1958  Act.   Insofar  as  the decisions of the Madras High Court in B. Mohamed Yousuff (supra) and the Delhi High Court in Data Infosys Limited and Others (supra)  are  concerned,  the  respondents contend  that  the  ratio  of  the  said judgments are not in consonance with the true purport and effect of the legislative scheme  and  therefore  this  Court  may conclusively and authoritatively decide the issue.  

15. Having  noticed  the  respective contentions of the parties, we may now take note of the relevant provisions of the 1958 Act, namely, Sections 46, 56, 107 and 111 which are reproduced below.

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“46.  Removal  from  register  and imposition  of  limitations  on  ground  of non-use.

(1) Subject to the provisions of section  47,  a  registered  trade mark may be taken off the register in respect of any of the goods in respect of which it is registered on  application  made  in  the prescribed manner to a High Court or to the Registrar by any person aggrieved on the ground either— (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,  in  a  case  to  which  the provisions  of  section  45 apply,  by  the  company concerned, and that there has, in fact, been no bona fide use of the trade mark in relation to  those  goods  by  any proprietor  thereof  for  the time being up to a date one month before the date of the application; 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

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16. The  aforesaid  provisions  of  the 1958 Act have been replicated in the 1999 Act. As the judicial precedents that would require elaboration are in the context of the 1999 Act, for purpose of clarity, it would  suffice  to  indicate  that  Sections 46,  56,  111  and  107  of  the  1958  Act (extracted  above)  correspond  to  Sections 47, 57, 124 and 125 of the 1999 Act.  

17. What is the scheme of the Act? The question  does  not  seem  to  have received/engaged  the  attention  of  this Court  at  any  earlier  point  of  time  and therefore will have to be answered by us. The  pronouncements  of  the  High  Court  of Delhi  and  Madras  in  Astrazeneca  UK  Ltd. and  Anr.  Vs.  Orchid  Chemicals  and

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Pharmaceuticals  Ltd.5  and  B.  Mohamed Yousuff (supra) and that of the Full Bench of the Delhi High Court in Data Infosys Limited (supra) have been cited at the Bar in support of the respective contentions.

18. In  Astrazeneca  UK  Ltd.  (supra), the Delhi High Court took the view that while  in  cases  falling  under  Section 124(1)(i) of the 1999 Act, the Civil Court in seisin of an infringement suit would be obliged  to  adjourn  the  proceedings  and await  the  outcome  of  the  rectification proceedings,  in  cases  falling  under Section  124(1)(ii),  access  to  the Intellectual  Property  Appellate  Board (earlier  High  Court)  is  barred  if  the Civil  Court  does  not  find  the  plea  of invalidity  of  the  registration  of  the Trade Mark, raised in the suit to be prima

5 2006 (32) PTC 733

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facie tenable.  In  such  a  situation,  the aggrieved party is left with the remedy of approaching the Appellate Court insofar as the finding with regard to absence of a prima facie case with regard to the plea of invalidity of the registration of the trade mark is concerned.

19. However, the Madras High Court in B.  Mohamed  Yousuff  (supra)   took  a contrary view and held that Sections 124 (1)(i) and (ii) operate at two different levels  and  in  two  different  situations. The former deals with a situation where a rectification  application  is  already pending  whereas  the  latter  governs  a situation  where  no  such  proceeding  is pending.  The Madras High Court was of the view that both the sub-clauses focus their field of operation only with regard to the stay  of  civil  suit  for  infringement  and

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the same does not deal with the discretion of the Court to permit or not to permit the filing of a rectification application. The  High  Court  further  was  of  the  view that a plain reading of Section 124(1)(ii) does not disclose that the said provision of the 1999 Act mandates a party to first obtain  permission/leave  of  the  Court  to file a rectification application which is a  statutory  right  vested  by  the  Act (Sections 47 and 57 of the 1999 Act) and therefore cannot be curtailed by any other provision of the 1999 Act.

20. The issue arose once again before the  Delhi  High  Court  in  Data  Infosys Limited  (supra)  which  was  referred  to  a Full  Bench,  perhaps,  for  a  closer  look into the matter in view of the conflict of opinions  in  Astrazeneca  UK  Ltd.  (supra) and B. Mohamed Yousuff (supra). After an

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elaborate consideration of the matter, the Full  Bench  of  the  Delhi  High  Court concluded  that  where  registration  of  a trade mark is questioned after initiation of a suit for infringement it is open for the  party  setting  up  the  plea  of invalidity  to  apply  to  the  IPAB  under Sections 47 and 57 of the 1999 Act for rectification.  The High Court went on to hold that the effect of the prima facie evaluation of the tenability of the plea of  invalidity  does  not  impinge  on  the right of the party raising such a plea to apply  to  the  IPAB  for  rectification.  In other  words,  the  right  to  seek rectification under Sections 47 and 57 of the 1999 Act does not stand extinguished in  a  situation  where  in  a  suit  for infringement  the  plea  of  invalidity  is found to be prima facie not tenable.  The

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only  difference  according  to  the  High Court is that while under Sections 47 and 57 of the 1999 Act, the aggrieved party can move the Registrar for rectification, in the latter situation i.e. where a suit is  pending  it  is  the  IPAB  which  alone acquires jurisdiction to the exclusion of the Registrar.

21. In Data Infosys, the Full Bench of the Delhi High Court further took the view that the provisions of Section 124(3) of the 1999 Act should be interpreted to mean that if rectification proceedings are not filed within the period stipulated under Section  124(2)  of  the  1999  Act,  or  any extended period, the issue of invalidity of  the  registered  trade  mark  would  not survive to be decided and the said plea would  be  deemed  to  have  been  abandoned. But all these consequences will follow in

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the suit.  If the aggrieved party files a rectification  application  under  Sections 47/57 of the 1999 Act after expiry of the period stipulated under Section 124(2) of the 1999 Act, or the extended period, as may  be,  the  rectification  application would still be maintainable and would have to be decided on merits by the IPAB and the  final  decision  of  the  Board  on  the rectification  application  would  have  no bearing  on  the  suit  notwithstanding  the fact that the plea of invalidity is deemed to have been abandoned therein.  The only effect  of  the  belated  filing  of  the rectification  proceeding  would  be  that there  would  be  no  stay  of  the  suit. According  to  the  Full  Bench,  the jurisdiction  to  decide  disputes  with regard  to  validity  of  registration  of  a trade  mark  is  exclusively  vested  in  the

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statutory  authorities  i.e.  the  Registrar or  the  IPAB  and  the  Civil  Court’s jurisdiction to go into the merits of the plea of invalidity is statutorily barred. Therefore  the  jurisdiction  of  the  IPAB vested under the statute cannot be ousted on the Civil Court’s determination of the prima  facie  tenability  of  the  plea  of invalidity  or  upon  the  failure  of  the aggrieved  party  to  move  a  rectification application  within  the  time  stipulated under Section 124(2) of the 1999 Act.  

22. Insofar  as  its  earlier  view  in Astrazeneca UK Ltd.  (supra) is concerned, the Full Bench was of the opinion that the appellate jurisdiction of the High Court would only be confined to a consideration of  the  question  of  the  prima  facie assessment of tenability which would not touch upon the question of invalidity of

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the  trade  mark  on  merits.   The  view expressed in Astrazeneca UK Ltd. (supra) was held to be unacceptable on that basis. Insofar as the abandonment of the plea of invalidity  is  concerned,  the  Full  Bench was  of  the  opinion  that  Section  124(3) merely  contemplates  abandonment  of  the plea/defence of invalidity in the suit and not an abandonment to claim rectification under Sections 47/57 of the 1999 Act.  

23. Registration of a trade-mark vests in the registered owner an exclusive right to use the mark in relation to the goods in  respect  of  which  the  mark  has  been registered. This is, however, subject to such conditions and limitations as may be incorporated  in  the  registration  itself. It also grants to the registered owner a right to seek and obtain relief in case of infringement of the mark.  Section 46 in

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Chapter  VI  of  the  1958  Act  contemplates removal  from  the  register  of  any registered trade mark,  inter alia, on the ground  that  the  same  was  registered without  any  bona  fide intention  of  use and, in fact, such mark has not been used up to one month prior to the date of the application  for  removal  or  that  for  a continuous period of five years there has been  no  bona  fide  use  of  the  mark. Chapter  VII  of  the  1958  Act  deals  with rectification  and  correction  of  the register  of  trade  marks.   Under  Section 56,  the  Tribunal,  (Registrar  or,  as  the case  may  be,  the  High  Court),  on application,  may  cancel  or  vary  the registration of a trade mark on the ground of  any  contravention,  or  failure  to observe  a  condition  subject  to  which registration was granted.

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24. In  cases  where  in  a  suit  for infringement of a registered trade mark the validity of the registration of the trade mark is questioned either by the plaintiff or by the defendant, Section 107 of the 1958 Act  provides that an application  for  rectification  shall  be made to the High Court and not to the Registrar notwithstanding the provisions contained in Section 46 or Section 56 of the 1958 Act. This would seem to suggest that  in  such  cases  (where  a  suit  for infringement is pending) the legislative scheme is somewhat different.

25. The above seems to become more clear from what is to be found in Section 111 of the 1958 Act which deals with “stay  of proceedings where the validity of  registration of

the trade mark is questioned”.  The aforesaid

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provision of the 1958 Act specifically provides  that  if  a  proceeding  for rectification  of  the  register  in relation to the trade mark of either the plaintiff  or  the  defendant  is  pending before the Registrar or the High Court, as may be, and a suit for infringement is filed wherein the aforesaid plea is raised either by the defendant or by the plaintiff, the suit shall remain stayed. Section  111  further  provides  if  no proceedings  for  rectification  are pending  on  the  date  of  filing  of  the suit and the issue of validity of the registration of the plaintiff's or the defendant's trade mark is raised/arises subsequently and the same is prima facie found  to  be  tenable,  an  issue  to  the aforesaid effect shall be framed by the Civil  Court  and  the  suit  will  remain

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stayed for a period of three months from the date of framing of the issue so as to enable the concerned party to apply to the High Court for rectification of the register. Section 111(2) of the 1958 Act provides that in case an application for  rectification  is  filed  within  the time allowed the trial of the suit shall remain  stayed.   Sub-Section  (3)  of Section 111 provides that in the event no such application for rectification is filed despite the order passed by the Civil  Court,  the  plea  with  regard  to validity  of  the  registration  of  the trade mark in question shall be deemed to  have  been  abandoned  and  the  suit shall proceed in respect of any other issue that may have been raised therein. Sub-section (4) of Section 111 provides that the final order as may be passed in

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the rectification proceeding shall bind the  parties  and  the  civil  court  will dispose of the suit in conformity with such  order  insofar  as  the  issue  with regard to validity of the registration of the trade mark is concerned.  

26. Following  well  accepted principles  of  interpretation  of statutes, which would hardly require a reiteration, the heading of Section 111 of the 1958 Act i.e.  “Stay  of  proceedings where  the  validity  of  registration  of  the  trade

mark  is  questioned,  etc.”,  cannot  be understood  to  be  determinative  of  the true purport, intent and effect of the provisions  contained  therein  so  as  to understand  the  said  section  to  be contemplating  only  stay  of  proceedings of  the  suit  where  validity  of  the

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registration  of  the  trade  mark  is questioned. Naturally, the whole of the provisions of the section will have to be  read  and  so  read  the  same  would clearly  show  lack  of  any  legislative intent to limit/confine the operation of the  section  to  what  its  title  may convey.  

27. Rather, from the  resume of the provisions of the 1958 Act made above it becomes  clear  that  all  questions  with regard to the validity of a Trade Mark is  required  to  be  decided  by  the Registrar or the High Court under the 1958 Act or by the Registrar or the IPAB under the 1999 Act and not by the Civil Court. The Civil Court, infact, is not empowered by the Act to decide the said question.  Furthermore, the Act mandates that  the  decisions  rendered  by  the

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prescribed  statutory  authority [Registrar/High  Court  (now  IPAB)]  will bind the Civil Court. At the same time, the Act (both old and new)  goes  on to provide a different procedure to govern the exercise of the same jurisdiction in two  different  situations.  In  a  case where the issue of invalidity is raised or  arises  independent  of  a  suit,  the prescribed  statutory  authority  will  be the  sole  authority  to  deal  with  the matter. However, in a situation where a suit  is  pending  (whether  instituted before  or  after  the  filing  of  a rectification application) the exercise of  jurisdiction  by  the  prescribed statutory authority is contingent on a finding of the Civil Court as regards the  prima facie tenability of the plea of invalidity.

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28. Conversely, in a situation where the Civil Court does not find a triable issue  on  the  plea  of  invalidity  the remedy of an aggrieved party would not be to move under Sections 46/56 of the 1958 Act but to challenge the order of the Civil Court in appeal. This would be necessary to avoid multiple proceedings on the same issue and resultant conflict of decisions.

29. The 1958 Act clearly visualizes that  though  in  both  situations  i.e. where  no  suit  for  infringement  is pending  at  the  time  of  filing  of  the application for rectification or such a suit  has  came  to  be  instituted subsequent  to  the  application  for rectification,  it  is  the  Registrar  or the  High  Court  which  constitutes  the Tribunal  to  determine  the  question  of

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invalidity,  the  procedure  contemplated by the Statute to govern the exercise of jurisdiction  to  rectify  is,  however, different  in  the  two  situations enumerated. Such difference has already been noted.

30. The intention of the legislature is  clear.  All  issues  relating  to  and connected  with  the  validity  of registration has to be dealt with by the Tribunal and not by the civil court.  In cases  where  the  parties  have  not approached the civil court, Sections 46 and 56 provide an independent statutory right  to  an  aggrieved  party  to  seek rectification of a trade mark.  However, in  the  event  the  Civil  Court  is approached,  inter  alia,  raising  the issue of invalidity of the trade mark

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such  plea  will  be  decided  not  by  the civil court but by the Tribunal under the 1958 Act. The Tribunal will however come into seisin of the matter only if the  Civil  Court  is  satisfied  that  an issue with regard to invalidity ought to be framed in the suit.  Once an issue to the said effect is framed, the matter will have to go to the Tribunal and the decision of the Tribunal will thereafter bind the Civil Court.  If despite the order of the civil court the parties do not  approach  the  Tribunal  for rectification, the plea with regard to rectification will no longer survive.

31. The legislature while providing consequences  for  non-compliance  with timelines for doing of any act must be understood  to  have  intended  such

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consequences to be mandatory in nature, thereby, also affecting the substantive rights  of  the  parties.  This  is  how Section 111(3) of the 1958 Act has to be understood. That apart, it is very much within the legislative domain to create legal  fictions  by  incorporating  a deeming clause and the court will have to understand such statutory fictions as bringing about a real state of affairs between  the  parties  and  ushering  in legal consequences affecting the parties unless,  of  course,  there  is  any  other contrary provision in the statue. None exists in the 1958 Act to understand the provisions  of  Section  111(3)  in  any other  manner  except  that  the  right  to raise  the  issue  of  invalidity  is  lost forever if the requisite action to move the  High  Court/IPAB  (now)  is  not

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initiated  within  the  statutorily prescribed time frame.

32. Thus, by virtue of the operation of  the  1958  Act,  the  plea  of rectification, upon abandonment, must be understood to have ceased to exist or survive  between  the  parties  inter  se. Any  other  view  would  be  to  permit  a party to collaterally raise the issue of rectification  at  any  stage notwithstanding that a final decree may have been passed by the civil court in the meantime. True, the decree of the Civil Court will be on the basis of the conclusions on the other issues in the suit.  But  to  permit  the  issue  of rectification,  once  abandoned,  to  be resurrected at the option of the party who had chosen not to pursue the same at an  earlier  point  of  time  would  be  to

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open  the  doors  to  reopening  of decrees/orders  that  have  attained finality  in  law.   This  will  bring  in uncertainty if not chaos in the judicial determinations between the parties that stand  concluded.  Besides,  such  an interpretation would permit an aggrieved party  to  get  over  the  operation  of  a statute providing for deemed abandonment of the right to raise an issue relevant; in  fact,  fundamental  to  the  lis.  The position may be highlighted by reference to  a  suit  for  infringement  where  the defendant raises the plea of invalidity of the plaintiff's trade mark and also in the alternative takes up any of the defenses available in law. The defendant by operation of Section 111(3) of the 1958 Act is deemed to have abandoned the plea of invalidity. In the trial it is

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found that the defendant is guilty of infringement  and  is  appropriately restrained  by  a  decree  of  the  Civil Court.  If the right under Section 46/56 of the 1958 Act is to subsist even in such  a  situation,  the  possible uncertainty  and  possible  anarchy  may well  be  visualized.  This  is  why  the legislature by enacting Section 111 of the 1958 Act has mandated that the issue of invalidity which would go to the root of the matter should be decided in the first  instance  and  a  decision  on  the same would bind the parties before the civil  court.  Only  if  the  same  is abandoned or decided against the party raising it that the suit will proceed in respect of the other issues, if any.  If the  above  is  the  legislative  intent, which seems to be clear, we do not see

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how the same can be overcome by reading the rights under Sections 46 and 56 of the  1958  Act  to  exist  even  in  a situation where the  abandonment of the same  right  under  Section  111(3)  has taken effect in law.  The mandate of the 1958  Act,  particularly,  Section  111 thereof,  appears  to  be  that  if  an aggrieved  party  does  not  approach  the Tribunal for a decision on the issue of invalidity  of  registration  as  provided for under Section 111(2) and (3), the right to raise the issue (of invalidity) would  no  longer  survive  between  the parties to enable the concerned party to seek enforcement of the same by recourse to  or  by  a  separate  action  under  the provisions of Section 46/56 of the 1958 Act.  

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33. Having dealt with the matter in the above manner, certain subsidiary and incidental  questions,  urged  and  argued by  the  parties,  would  also  need  an answer.

34. The first question posed is how an approach to the superior Court i.e. the High Court, under Section 111 of the 1958  Act,  can  be  contingent  on  a permission or grant of leave by a court of  subordinate  jurisdiction.  The  above is also contended to be plainly contrary to the provisions of Section 41 (b) of Specific Relief Act, 1963.  It is also urged that Section 32 of the 1958 Act provides  a  defence  to  a  claim  of infringement which is open to be taken both in a proceeding for rectification as well as in a suit.  The said defence statutorily  available  to  a  contesting

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party cannot be foreclosed by a deemed abandonment of the issue of invalidity, it has been contended.  

35. Section 111 of the 1958 Act and the  corresponding Section 124 of the 1999 Act nowhere contemplates grant of permission by the civil court to move the High Court or the IPAB, as may be, for rectification. The true purport and effect of Sections 111/124 (of the old and  new  Act)  has  been  dealt  within detail and would not require any further discussion  or  enumeration.  The requirement of satisfaction of the civil Court regarding the existence of a prima facie case of invalidity and the framing of an issue to that effect before the law operates to vest jurisdiction in the statutory  authority  to  deal  with  the issue  of  invalidity  by  no  means,

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tantamount to permission or leave of the civil court, as has been contended. It is a basic requirement to further the cause  of  justice  by  elimination  of false, frivolous and untenable claims of invalidity  that  may  be  raised  in  the suit.

36. While  Section  32  of  the  1958 Act,  undoubtedly,  provides  a  defence with  regard  to  the  finality  of  a registration by efflux of time, we do not see how the provisions of aforesaid section can be construed to understand that the proceedings under Sections 46 and 56 on the one hand and those under Sections 107 and 111 on the other of the 1958 Act and the pari materia provisions of the 1999 Act  would run parallelly. As already held by us, the jurisdiction of  rectification  conferred  by  Sections

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46 and 56 of the 1958 Act is the very same  jurisdiction  that  is  to  be exercised under Sections 107 and 111 of the  1958  Act  when  the  issue  of invalidity is raised in the suit but by observance  of  two  different  procedural regimes.

37. In the light of the above while answering  the  question  arising  in  the manner indicated above, we dismiss all the  appeals  under  consideration  and affirm  the  order  passed  by  the  High Courts.

...................,J.     (RANJAN GOGOI)

...................,J.  (NAVIN SINHA)

NEW DELHI NOVEMBER 29, 2017