M.H.S. Ansari, J
1. In terms of the order of this Board dated 19.12.2006, the M.Ps and the main appeals were taken up for hearing on 7.02.2007 at the Circuit Bench
Sitting at Delhi.
2. By this common order we are disposing of the miscellaneous petitions and the three appeals which raise identical questions of facts and law and
there is also identity of the parties in all three appeals. The three appeals have been transferred to this Board in terms of Section 100 of the Trade
Marks Act, 1999 by the High Court of Delhi.
3. The orders impugned in the three appeals are identical and one such order is extracted hereunder:
Subject: Assignment in respect to Regs. Trade Marks No. 493592 in class 31
With reference to the above subject matter, I am directed by the Registrar of Trade Marks to inform you that Documentary evidence filed by you
alongwith your letter dated 18.7.98 has been examined and found not satisfactory. Hence the objection raised to the recordal of assignment has been
rejected and M/s. Vest Pharma Pvt. Ltd. has been recorded as subsequent proprietary of the aforesaid Trade Marks.
4. The trade marks GALFOS AD 3 PLUS, ANIMIN and CALFOS AD 3 PLUS were registered under Nos. 413364, 493592 and 527127 in class 31
in the name of Vets Farma (Private) Limited, Jalandhar (Appellant). Aggrieved by the order with regard to recordal of assignment in favour of first
Respondent the Appellant has filed the three diverse appeals in respect of these three registered trade marks.
5. The order impugned has been extracted in its entirety for the reason that Shri Shailen Bhatia Learned Counsel for the Appellant, relying upon
certain decisions questioned the impugned order mainly on the grounds of violation of principles of natural justice. It is his contention that no hearing
was afforded to the Appellant and despite a request for hearing no notice was issued to the Appellant affording an opportunity of hearing. Impugned
order is one passed in violation of principles of natural justice and is also not a speaking order, it was contended.
6. Shri Amarjit Singh Learned Counsel for the first Respondent assignee company also placed before us a copy of the order as communicated to his
client by the Registry. They are identical and have been filed at pages 13, 14 and 15. That document annexed to the statement of case at page 13
reads as under:
Subject: Request on Form TM-93 dated 6.11.1997 respect of Regd. Trade Mark Nos. 527127 in Class 31 in the name of M/s. Vest Pharma Pvt. Ltd.
The aforesaid request (s) has/have been allowed and necessary entries made in the Register in due course.
Shri Amarjit Singh, Learned Counsel for the first Respondent strenuously urged before us that a few background facts need to be noticed before
considering the contentions based upon violation of principles of natural justice or considering the validity of the impugned order based on the aforesaid
contentions of Learned Counsel for the Appellant. This would be the appropriate stage, in my view, to state few relevant facts of the case which have
been highlighted by Shri Amarjit Singh, Learned Counsel for the first Respondent.
7. The Appellant before us, Vets Farma Private Limited was incorporated in the year 1979. The shareholding was controlled by the families of Dr.
H.R. Gupta and Dr. Sham Tiwari.
8. In January, 1997 another company called Vest Pharma Pvt. Ltd., Respondent 1 herein was incorporated. The two companies, i.e., the Appellant
and the Respondent 1 company, were controlled by the two families, namely the Gupta family and the Tiwari family.
9. Certain differences arose between the two families (Guptas Tiwaris) and a Memorandum of Understanding (MOU) was executed on 27.03.1997
whereby the Appellant agreed to assign the registered trade mark Nos. 527127 and 493592 alongwith 8 other unregistered trademarks to the first
Respondent. It was also agreed to execute a formal deed of assignment for a total consideration of Rs. 1,60,000. The said MOS was executed by Dr.
Sham Tiwari in his capacity as Managing Director of the Appellant and Mr. Guarav Tiwari in his capacity as the Director of the first Respondent.
Deeds of assignment were also executed between the assignor company and the assignee company dated 22.9.97 and 21.10.1997. The signatories to
these documents are the same. The case of the Appellant or the point of dispute between the parties is that a subsequent deed was executed
withdrawing the assignment deed. The Appellants have relied upon a copy of the said deed dated 18.12.1997. It is the case of the Appellants that by
virtue of this deed, the assignment was cancelled. The first Respondent assignee disputed the same.
10. It is the case of the first Respondent assignee that in pursuance of the Board resolution dated 22.2.1997 and the MOU dated 27.3.1997, all rights,
interests and title in the two trade marks No. 493592 and 527127 were assigned in favour of the first Respondent by deeds of assignment dated
22.9.1997 and 21.10.1997 and joint requests on Form TM-23 signed by Dr. Sham Tiwari for and behalf of the assignor company and by Mr. Gaurav
Tiwari on behalf of the assignee company were filed before the Registrar of Trade Marks on 6.11.1997. In respect of the third trade mark No.
413364 the same was assigned in favour of the first Respondent by a deed dated 16.12.1997 executed by Dr. Sham Tiwari in his capacity as the
Managing Director of the Appellant company and Mr. Vishal Gupta in his capacity as Director of the first Respondent company. It is the further case
of first Respondent that on 7.2.1998 a fresh memorandum of settlement (MOS) was executed between the two companies whereby some of the
terms of the earlier MOS dated 27.3.1997 were modified. The total number of trade marks including the three trade marks with which we are
concerned in the three appeals as were agreed to be assigned were reduced from 10 to 7. In the said memorandum of settlement the assignor
company confirmed the assignment of copyright No. A-50398/90. On the same date i.e., 7.2.1998 another agreement titled marketing agreement was
executed between the Appellant and the first Respondent. It is the case of the first Respondent assignee company that the Appellant assignor has in
the said agreement ratified the assignment. Thereafter, on 31.1.1998 Dr. Sham Tiwari resigned from the Directorship of the first Respondent
company and Dr. H.R. Gupta resigned as Managing Director of the Appellant company.
11. The main grievance of the Appellant is the despite the deed of cancellation of assignment the same was neither considered by the Registrar nor
brought to the notice of the Registrar by the Respondent and the application for assignment was proceeded with suppressing the said facts. The
Appellant objected to the recordal of assignment and also filed a notice seeking a hearing before the Registrar in the matter. No hearing was afforded
to the Appellant and the impugned order was passed (extract supra).
12. It is the contention of Shri Amarjit Singh Learned Counsel for the first Respondent that the order passed by the Registrar is based upon the join
application on Form TM-23 unlike that in the cases cited by Shri Bhatia based on Form TM-24 and, therefore, neither the notice of hearing was
required nor the order of assignment was required to be supported by reasons. Shri Amarjit Singh buttressed the submission with an analogy of
memorandum of compromise recorded by Courts. Neither a notice is required to be issued to the parties to the compromise nor reasons are given for
recording the compromise. It is further contended that there is no dispute with regard to the assignment, Appellants have not disputed the execution of
the deed of assignment. It is a case, contends Shri Amarjit Singh, where the assignment is admitted. But according to Appellants, the said assignment
is subsequently cancelled. It is strenuously urged that there is no dispute with regard to assignment. The dispute, if at all, is with respect to the alleged
deed of cancellation of assignment. It was highlighted that the deed of cancellation relied upon by the Appellant is a got up document executed by and
between father and son representing the two companies, assignor - assignee after having resigned from the Directorship of assignee company.
Reliance was placed upon bank statement at page 79 showing encashment of consideration paid by assignor to assignee.
13. Responding to the aforesaid contentions, Mr. Shailen Bhatia, Learned Counsel for the Appellant contended that the Respondents have deliberately
concealed the true facts from the Registrar in assignment proceedings. The cancellation of the deed of assignment itself raised a dispute which was
required to be decided by the Registrar after affording the parties an opportunity of hearing. The further contention of Mr. Shailen Bhatia is that the
procedure laid in Section 39 read with Rule 80 was required to be followed as the memorandum of settlement created multiple rights in the trade
mark. The violation of principles of natural justice has been pleaded by Mr. Bhatia, in that no notice of hearing was either given or any opportunity of
hearing afforded to the assignor company. The impugned order is also not supported by reasons. Certain other contentions have also been raised
pertaining to inadequate stamp duty paid on the deed of assignment and the jurisdiction of the Registrar of Trade Marks, Bombay to pass orders when
the mark is registered at New Delhi. The Miscellaneous petitions filed by the Appellant are for receiving additional evidence, named by, the deposition
of Shri Gupta in the criminal case instituted by the first Respondent. Shri Amarjit Singh submitted that if this Board is inclined to receive the said
additional evidence then he may also be permitted to place certain orders passed in the said criminal case.
14. We enquired from Mr. Shailen Bhatia whether the impugned order is merely a communication of the result by the Registry enabling the Appellant
to apply for detailed reasons by an appropriate application. Shri Bhatia's reply to our query was that such procedure was only prescribed under Rule
40 pertaining to pre-registration.
15. Heard the Learned Counsel for respective parties and with their assistance have also perused the documentary evidence on record. Keeping in
view the main contention that the impugned order (extracted supra) is passed without affording a hearing to the assignor company, the foremost
question for consideration, to my mind, is as to whether the same is passed in violation of principles of natural justice and thus liable to be set aside on
that ground.
16. Assignment of a trade mark and application for bringing on Register the name of subsequent proprietor, the alteration consists in removing the
name of the Appellants and substituting that of the Respondent as the proprietor of the trade mark. As held in Radha Kishan Khandelwal v. Assistant
Registrar of Trade Marks and Ors., AIR 1969 Delhi 324 such action seriously affects the proprietary rights of the Appellant. In para 26 law was laid
down as under:
I am firmly of the view that a proceeding for making an alteration of this nature in the Register of trade marks can by no means be regarded as a
purely administrative proceeding and that the Registrar while discharging his duties in that behalf performs quasi-judicial functions, whereby he
decides, prima facie atleast, the rights of the parties. It is, therefore, of the essence of the procedure required for performing that duty that the party
whose rights are going to be adversely affected by the decision taken by the Registrar should have a notice of those proceedings and the decision
should also be supported by reasons. The necessity for reasons in support of the decision arises also from the fact that the Registrar's decision is open
to an appeal before the High Court.
In M. Ramaswami Chettiar v. T.M. Ramaswamy Chettiar and Company, 1995 AIHC 6569 Radha Kishan Khandelwal was followed and it was held
that:
notice ought to have been given to the erstwhile partners who are co-applicants of the firm even though they have retired and in the absence of any
notice to them the order cannot be said to be a valid one.
In Akal Mechanical Works v. Paras Special Machine Company and Ors., 65 (1997) DLT 945 : PTC (Supp) (1) 150 (Del) Radha Kishan Khandelwal
was followed and the dicta is to the effect:
in my opinion, the point raised by the Learned Counsel is no longer res integra as it has been held by this Court in R. Kishan v. Assistant Registrar of
Trade Marks, AIR 1969 Delhi 324 that is implicit in the Rules framed under the Act that when an application of assignment or transmission is made by
some persons in respect of a trade mark in which the names of certain other persons are shown as registered proprietors, before any action is taken
on that application, the persons whose names are already on the register must have notice of that application.
In Brakes International v. Tilak Raj Bagga, AIR 1998 Delhi 146: 1997 (17) PTC 591 (Del) the Court rejected the contention that Section 44 no where
provides for pre-decisional hearing and that even Form TM-24 does not envisage giving of any notice was negative.
In Shyam Sunder Trikha v. Smt. Sunita, AIR 1998 Delhi 153 the Court considered the contention that Section 44 no where provides for pre-decisional
hearing and even Form TM-24 does not envisage giving of any notice and as Section 56 provides for post-decisional hearing, the observations of the
Supreme Court in para 42 in Swadeshi Cotton Mills case AIR 1981SC 818 would apply and in para 26 of the report held as under:
True, Section 56 of the Act provides post-decisional hearing but at the end of the day, and for the reasons already delineated I remain unconvinced
that it ousts the requirement of pre-decisional hearing. The order passed on the petition under Section 44 of the Act was rightly set aside as being void,
for it was the outcome of, to borrow the words of Lord Summer in Crane v. Public Prosecutions, (1921) 2 AC 299."" a mistrial and in truth no trial at
all.
No doubt as contended by Shri Amarjit Singh there is a difference when the assignment is sought on the joint application on Form TM-23 and the
request by the assignee made on Form TM 24. In the case on hand though the request is jointly made on Form TM 23, the assignor was not
represented before the Registrar nor any notice of hearing was issued despite a request made in that behalf by the assignor. Unless both the assignor
and assignee are duly represented before the Registrar and do not dispute the assignment, the need for compliance with principles of natural justice
cannot be dispensed with. The ratio in Radha Kishen Khandelwal's case (supra) is that the party whose ""rights are going to be adversely affected by
the decision of the Registrar should have notice of those proceedings and the decision should also be supported by reasons. In the light of the said
authority I must reject the contention of Shri Amarjit Singh that no notice of hearing was required to be issued to the assignor and that the order of the
Registrar need not be supported by reasons.
17. As to the analogy of compromise recorded before a Court, the, submission of Learned Counsel overlooks the material fact that in such
proceedings before a Court of law both the parties to the compromise are present before the Court either personally or through their respective
Advocates duly instructed on their behalf to admit the compromise. It is in those circumstances neither the notice of hearing is required to be given nor
any reasons are to be assigned. In the instant case though a joint application was filed in Form TM-23, there was no representation before the
Registrar on behalf of the assignor company. Only the assignee was represented by its authorised agent. The order as communicated to the Appellant
does not speak of any hearing afforded to the Appellant nor it is the case of the first Respondent that any hearing was afforded to the Appellant or
that the parties were heard. Therefore, I am of the view that the impugned order suffers from violation of principles of natural justice.
18. A bare perusal of the impugned order would show that the objection raised to the recordal of assignment has been rejected. The documentary
evidence filed by the Appellant was ""found not ""satisfactory"". The reasons for coming to such a conclusion have not been stated in the impugned order
nor even a reference has been made to the material based on which the Registrar has come to such conclusion. An omnibus reference in the
impugned order to ""documentary evidence filed"" cannot constitute reference to the materials on record"" The impugned order is benefit of any reasons.
It is a case of 'no hearing' and 'no reasons'. Undoubtedly the decision affects the Appellant's proprietary rights adversely as held in Radha Kishen
Khandelwal case (supra)
19. For the reasons aforestated I am of the view that when objection to the recordal of assignment was raised by the assignor it was for the Registrar
to have heard both the parties on merits after affording them an opportunity of hearing and thereafter disposed of the matter by a reasoned speaking
order. This the Registrar failed to do. It must, therefore, be held that the impugned order cannot be sustained and must be set aside.
20. Question then arises as to the nature of directions to the issued. Two sets of directions had been issued and Mr. Bhatia, Learned Counsel for the
Appellant submitted that either of the two directions may be adopted in the instant case. One such direction is in the Kohinoor Paints Faridabad (P)
Ltd. v. Paramveer Singh and Anr. 1996 (16) PTC 69 (Del) in the following terms.
In the light of the mandatory provisions in the Trade and Merchandise Marks Act, 1958, the Registrar ought to have issued notice to the Petitioner
before ordering the assignment relied upon by the Respondent. Accordingly, the Company 19/94 is allowed, the order of Registrar of Trade Marks,
second Respondent, dated 26th of August, 1994 is set aside and the name of the Petitioner Kohinoor Paints Faridabad (P) Ltd. shall be in the Register
as the proprietor of Trade Mark No. 388107, the petition filed by the first Respondent in Form TM-24 dated 17.8.1994 stands dismissed and the first
Respondent shall be entitled to apply, in the event of his being successful in Suit No. 266/94 on the file of Shri R.C. Jain, Addl. District Judge, Delhi.
There is no order as to costs.
Learned Single Judge in Brakes International case (supra) however differed with the same and issued directions in the following terms and for the
reasons contained therein, which reads as under:
Mr. Vidhani prays that I too should follow suit and pass a similar order. I find myself not inclined. I have already reproduced, in one of the preceding
paragraphs, the proviso to Sub-section (1) of Section 44. Its bare perusal would go to show that where the validity of an assignment or transmission is
in dispute between the parties, the Registrar, may, in his discretion, refuse to register the assignment of transmission until the rights of the parties have
been determined by a components Court. Since the proviso invests the Registrar with such discretion which in the facts and circumstances of the case
he may or may not exercise I would not like to superimpose my own will. Not at this stage, at least.
21. I am inclined, and I say this with respect, to the view as in Brakes International case (supra). In the result the appeals are allowed on the sole
ground of violation of principles of natural justice and for that reason it was not considered necessary to go into the merits of various other contentions
urged before us. The three matters are required to be and are accordingly remitted to the Registrar having jurisdiction in the matter to decide the
question of assignment in accordance with law and in compliance with principles of natural justice. For the said reasons the orders impugned are set
aside. The matters are remitted to the Registry concerned to decide the applications in Form TM-23 afresh in accordance with law. In the facts and
circumstances of the case there shall be no order as to costs.
22. As the main appeals have been disposed of, it is not considered necessary to deal with the MPs filed by the Appellant for receiving certain
additional evidence on record. Accordingly the petitions are disposed with observations that it is open to the parties to place all such records upon
which the respect parties may wish to rely upon before the learned Registrar concerned in accordance with law.
