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This Product is Licensed to Mr. V. Ponnusamy, Advocate, Karur

Citation :- CDJ 1971 DHC 028

Court : High Court of Delhi Case No : First Appeal Order Judges: THE

206d Of 1964

HONOURABLE MR. JUSTICE V.D. MISRA AS GRAND FOUNDRY, PUNJAB VERSUS RAM SAROOP

Parties : BALJIT KUMAR,Trading Appearing Advocates : For

the Appearing Parties: Anup Singh, N.K.Anand, Advocates.

Date of Judgment : 05-05-1971 Head Note :-

COMPARATIVE CITATION: 1972 AIR(Del) 153

Judgment :-

V. D. MISRA, J. ( 1 ) THIS appeal under Section 109 of the Trade and Merchandise Marks Act, 1958 (hereinafter referred to as the Act) has been filed in the following circumstances: Baljit Kumar appellant was allotted factory No. 77 situated on G. T. Road, Batala, on 2nd May, 1948. On 15th May, 1948 he formed a partnership with Maya Dhari and Sewa Ram. Vijay Kumar, minor was also admitted to the benefits of partnership. The terms of the oral partnership were reduced to writing in the partnership deed dated 5th February, 1931. Baljit Kumar appellant's share was 7 annas in a rupee whereas Maya Dhari's share was 5 annas in the rupee and Sewa Ram's and Vijay Kumar's share was 2 annas in the rupee each. The goodwill of the firm was to belong to all the partners in accordance with the ratio of the shares at the time of the dissolution. ( 2 ) ON 5th April, 1954 Sewa Ram left the partnership and so the shares of the remaining partners were redefined. This firm was dissolved on 9th October, 1954 when a deed of dissolution was executed. The partnership firm was using "beuttons" trademark till the date of dissolution but this had not been got registered. The dissolution deed made the following provision in respect of this trademark:"5. Beuttons Trade Mark which the partnership above referred has been using as its Trade Mark up till today. . . . . . . . . . As regards para 5 as the dispute with Vijay Lakshmi Engineering Works has not been settled and parties 1 to 3 have been using it in their business therefore it has been decided now also that parties 1, 2 and party 3 shall make use of it in their respective factories. No one out of parties 1 to 3 shall settle the dispute with Vijay Lakshmi Engineering Works regarding the Trade Mark without the consent of the others. In case Beuttons Trade Mark is sold party No. 3 shall be entitled to 5/14 share of the price. "according to this dissolution deed. Grand Foundry came to the share of Baljit Kumar appellant. and Vijay Kumar minor. Golden Foundry fell to the share of Maya Dhar. ( 3 ) ON 16th February, 1955 the appellant applied for the registration of the trademark "beuttons" in his own name "trading as Grand Foundry, whose trading or business address is G. T. Road, Batala, Punjab by whom the said mark is being used and who claims to be the proprietor thereof. The registration was effected as of 10th March, 1955 and was thereafter renewed. ( 4 ) BY an application dated 21st April, 1962 under Section 56 (2) of the Act, Maya Dhari, of Golden Foundry G. T. Road, Batala prayed for rectification of the register of trade marks by removing the entry relating to registration of trademark No. 168158 in favour of the appellant in respect of the word "beuttons". It was alleged that the appellant had obtained the trademark in question by misrepresentation and concealment of facts and by fraud. The appellant resisted this application by stating that he had made no misrepresentation nor had he concealed any material fact nor played any fraud as alleged. He pleaded that he was the owner of the said trademark although it was used by partnership firm.

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( 5 ) DURING the pendency of the application of Maya Dhari, he died and his legal successors, present respondents, were brought on record. ( 6 ) THE Assistant Registrar of TradeMarks came to the conclusion that the trademark in question was a joint property of the appellant, Vijay Kumar and Maya Dhari on the said date of dissolution of the firm. He, therefore, held that the appellant had made a false representation in his application for registration of the trademark that he was its proprietor and had suppressed the material fact about the proprietorship of Maya Dhari and that this amounted to fraud. He, therefore, ordered that the register be rectified by expunging therefrom the entry relating to the trademark in question. He had also held that the respondents had not been able to make out any case under Section 32 (b) of the Act. ( 7 ) THE main question to be decided in this appeal is whether the trademark in question was the joint property of the appellant and Maya Dhar. In case it was so, then admittedly, the appellant had obtained the registration by fraud by suppressing the material fact of Maya Dhari's being a joint owner with the appellant. ( 8 ) MR. N. K. Anand, learned counsel for the appellant contends that the appellant was using the trademark in question immediately before the formation of the partnership firm in 1948 and had allowed the partnership firm to use this trademark. After the dissolution of the firm, the appellant continued to use this trademark for Band Saw Machines manufactured by him in the Grand Foundry which had come to his share and of which he along with Vijay Kumarminor had become sole owner. Maya Dhari was given the right to use this trademark in respect of the 'bandSaw Machines' manufactured by him in Golden Foundry which had fallen to his share and of which he had become the sole owner. He further contends that whereas the appellant had continuously been using this trademark without any break till the date he applied for registration of the same, Maya Dhari could only show that he was using this trademark during the years 1958 to 1962. According to the learned counsel both the appellant and Maya Dhari had got independent rights to use this trademark and had individual rights to claim its registration. Mr. Anoop Singh, learned counsel for the respondents, contends that the relevant terms of the dissolution deed clearly show that though both the parties had the right to use mis trademark, this right was a joint one and not an independent one. He further contends that in case this trademark was sold, Maya Dhari was entitled to 5/14th share of the price, which by itself shows that he was the joint owner. Moreover, by getting the trademark registered, the appellant had become its statutory owner and had the statutory right to sell it or assign it without any reference to Maya Dhari and against his wish. Had it not been registered, the appellant could not have sold it without selling his goodwill. ( 9 ) THE relevant portion of the dissolution deed extracted above shows that the appellant and Maya Dhari had got the right to make use of this trademark in their respective factories. None of them could have settled the dispute with Vijay Lakshmi Engineering with regard to this trademark without the consent of others. On the sale of this trademark, Maya Dhari was entitled to a share of the price. These terms clearly indicate that neither the appellant nor Maya Dhari had become the exclusive proprietor of this trademark. Though both of them had a right to use it in their respective factories, they continued to be the joint owners thereof. If that was not so. Maya Dhari would not have been given a right to 5/14th share of the price. Moreover, if the intention was to give to both of them independent rights of using the trademark, each would have been entitled to sell the trademark without any liability to pay any part of the price to the other. Even the right of settlement of the dispute with regard to the use of this trademark by Vijay Lakshmi Engineering Works had been obtained by all the partners, which again points out to the joint interest in the trademark. ( 10 ) THE word 'fraud' has not been defined in the Act. Whether an act of commission or omission will amount to fraud will depend on the circumstances of each case. However, it can be safely said that where material facts are suppressed, which result in an advantage to the applicant, which he would not have received, if the true facts had been known, and an injury to another person, would constitute fraud. In this respect I am supported by the case of B. Monappa v. R. S. Ramappa, AIR 1956 Mad 184, wherein it was held:"though it seems impossible to construct a definition which would meet every case which might be brought under the Indian Trade Marks Act, there is little danger in saying that whenever fraud is alleged therein two elements are at least essential, namely, first deceit or intention to deceive or, in some cases a mere secrecy; and secondly, either actual injury or possible injury or an intention to expose some person either to actual injury or to a risk of possible injury by means of deceit or secrecy. This intent, it may be added, is very seldom, the only or the principal intention entertained by the fraudulent person whose principal object in nearly every case is his own advantage. An injurious deception is intended only as a means to an end. Therefore a practically conclusive test as to the fraud practised in trademarks case would be, did the author of the deceit derive any advantage from it which he could not have had if the truth had been known? If so, it is hardly possible that the advantage should not have had an equivalent in loss or risk loss to someone else; and if so there was fraud. In practice people hardly ever intentionally deceive each other in matters of business for a purpose which is not fraudulent. " ( 11 ) THIS proposition of law was approved by a Division Bench of that Court in appeal against this decision in B. S. Ramappa v. Monappa, AIR 1957 Mad 76.
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( 12 ) ADMITTEDLY, an unregistered trademark is a part of goodwill and one cannot be separated from the other. The moment a trademark is got registered it becomes separated from the goodwill and can be transferred or assigned without transferring or assigning the goodwill. Proprietor of the registered trademark can convey good title to the purchaser of the same and can deal with it as his exclusive property. In this case, as already observed, I have come to the conclusion that the respondent had a share in the trademark and it should not be termed as exclusive property of the appellant. There is no force in the contention of Mr. Anand that the present was a case of independent users, and so the appellant was entitled to registration of the trademark without informing the Registrar about the right of the respondent in the trademark. In my opinion, the learned Assistant Registrar of TradeMarks was correct in holding that the parties were general owners of the trademark in question and the appellant by suppressing the material fact of the interest of the respondent in this trademark had obtained the registration by fraud. If this material fact was known then the appellant was not entitled to the registration of the trademark in his name only. ( 13 ) I would, therefore, dismiss the appeal with costs.
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