SCA/5042/2006 1/34 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 5042 of 2006 For Approval and Signature: HONOURABLE MR.JUSTICE RAVI R.TRIPATHI ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= WYETH HOLDINGS CORPN. AND ANOTHER VERSUS CONTROLLER GENERAL OF PATENTS, DESINGS & TRADE MARKS AND OTHERS ========================================================= Appearance : MR PM THAKKAR, SENIOR COUNSEL assisted by MR TN DARUWALA, MR PS RACHH AND MR PP BANAJI for the Petitioners MR PJ MALKAN for Respondent Nos.1, 2 and 3 MR RR SHAH for Respondent NO.4 ========================================================= CORAM : HONOURABLE MR.JUSTICE RAVI R.TRIPATHI Date : 08/08/2006 ORAL JUDGMENT 1. The petitioners, manufacturers of pharmaceutical and medicinal preparations being aggrieved of impugned order dated 29.06.2005 passed by the Assistant Registrar of Trade Marks, Ahmedabad – respondent No.2 herein are SCA/5042/2006 2/34 JUDGMENT before this Court. Impugned order dated 29.06.2005 is an order which is not only devoid of any reasons but is also drawn in a very sketchy manner. Though the Intellectual Property Appellate Board (hereinafter referred to as, “the IPAB” for short) has been observing against such orders, time and again, respondent No.2 though in know of such observations of IPAB, refused to take cognizance thereof. In the matter of ASIAN PAINTS LTD. VS. REGISTRAR OF TRADE MARKS AND ANOTHER, reported in 2005 (30) PTC 444 (IPAB), the board observed as under: “......... The impugned order has been drawn up in a very sketchy manner. Quasi judicial orders affecting the vital interests of the society should be put down in a more serious manner.” 2. This very board in yet another matter of HINDUSTAN LEVER LTD. VS. SUNRIDER CORPORATION AND ANOTHER, reported in 2006 (32) PTC 287 (IPAB) has again observed that: “......... In this case we find that the operative part of the order runs into seven lines. A quasi judicial authority should shun such a practice which is abhorrent to the principles of natural justice. All the relevant facts of the case should be brought out in the order and the reasons for arriving at the conclusion be discussed in the order.” 3. Before I deal with the merits of the matter, the SCA/5042/2006 3/34 JUDGMENT judicial conscience warrants me to discharge an unpleasant duty. Mr.P.M.Thakkar, learned senior counsel for the petitioner invited my attention to the fact that a decision of the IPAB in the matter of Asian Paints (supra) was cited before respondent No.2 – the Assistant Registrar before he passed the impugned order. But, still, he has passed the order impugned overlooking a binding decision of IPAB. That being so, this Court called upon learned advocate for respondent Nos,1, 2 and 3 to file an affidavit, so that it may not be said that before passing an order against respondent No.2, an opportunity was not given. It is shocking that an Assistant Registrar has filed an affidavit which shocks the judicial conscience. The Assistant Registrar – respondent No.2 in his affidavit affirmed on 05.08.2006 has admitted that the decision of IPAB was cited before him – respondent No.2 at the time of passing of the order under challenge in this petition. Paragraph No.4 (c). of the affidavit in reply reads as under: “With respect to the binding decision of IPAB delivered in February, 2006, which was required to be followed by me in the judgment passed by me after February, 2005 (sic – 2006), I humbly state and submit that I have observed in my reported judgment, SCA/5042/2006 4/34 JUDGMENT 2006 PTC 32 (REGISTRAR) at para 63 as follows: “The said decision of the Hon'ble IPAB was based on what was argued before it on filmsy (sic – flimsy) ground without taking into consideration the drastic change of fundamental characters in Rules, and clear, specific and imperative language and intent of the Legislature, and the basic principles of law/binding precedent laid down by the Hon'ble Apex Court and the conduct of the opponent. Therefore, with immense respect, the said decision being the decision in personam is applicable to the parties involved therein.” Further, at para 68 of the said Affidavit (sic 0 judgment), it was observed- “As far the reliance placed on the decision of Hon'ble IPAB by the Ld.Advocate for the petitioner/opponent, I am of the view that the facts and circumstances in the case before the Hon'ble Board are entirely different from the facts of the case on hand and as such as per ratio land down by the Hon'ble Apex Court in the case AIR 1975 SC 915 (Supra) and other cases referred to herein above, the decision of the Hon'ble IPAB would not help the petitioner.” 4. Respondent No.2 – the Assistant Registrar has an audacity to file an affidavit and declare on oath in paragraph No.4 (d). The said paragraph reads as under: “I humbly state and submit, that in all the cases of the same nature coming before me, I had adopted the uniform law i.e. the statue and the Trade Mark SCA/5042/2006 5/34 JUDGMENT Rules, 2002 as per new legislature making the rule 50(2) as mandatory.” The IPAB in its decision in the matter of Asian Paints (supra) has dealt with a question as to whether, 'the provisions of Rule 50 of the Trade Marks Rules, 2002, making provision for, filing of evidence in support of opposition, is directory in nature or mandatory.' To quote the reply of this question in the words of the IPAB itself, paragraph Nos.5, 6, 7 and 8 of the decision in the matter of Asian Paints (supra) are reproduced. The same read as under: “5. Learned counsel for the appellant drew our attention to Rule 50 of Trade Marks Rules, 2002 making provision for filing of evidence in support of opposition. She contended that Rule 50(2) is directory in nature. She relied upon the Full Bench Judgment of Delhi High Court in Hastimal Jain v. Registrar of Trade Marks 2000 PTC 24 DEL in this regard. Rule 53(2) of the Trade and Merchandise Marks Rules, 1959, parallel of Rule 50(2) of the Trade Marks Rules, 2002, was held to be directory by the Hon'ble High Court. The immediate effect of this interpretation is that the Assistant Registrar is not under a mandate to deem the opposition as abandoned. In suitable cases, he can permit for grant of extension for filing of evidence in opposition. 6. Learned counsel for the second respondent pointed out that Rule 53 of the Trade and Merchandise Marks Rules, 1959 has undergone material SCA/5042/2006 6/34 JUDGMENT changes in its new transformation as Rule 50 of the Trade Marks Rules, 2002. He pointed out three substantive changes which have been made in the text of the Rule. Sub rule (1) has been modified with a view to provide that the opposition shall be filed within two months from service of a copy of the counter statement or within such further period not exceeding one month in the aggregate thereafter as the Registrar may on request allow. New sub rule (3) has been added with a view to provide that the application for grant of extension of a period of one month mentioned in sub-rule (1) shall be made in Form 56 accompanied by the prescribed fee before the expiry of the period of two months therein. He pointed out that sub-rule(2) has been amended with a view to take away the in built discretion of the Registrar provided under the old Rule in the nature of expression unless Registrar otherwise directs. He submitted that with this new provisions in the Rule no discretion is left with the Registrar to grant extension beyond one month. 7. Learned counsel for the appellant submitted that, besides allowing extension for filing of evidence in opposition, the learned Assistant Registrar should have waited for the evidence to be filed by the respondent on record. The society at large has a vital interest in maintaining the purity of the Register. In view of that with a view to substantiate his claim in the impugned mark the relevant evidence should have been brought on record for arriving at a correct decision. 8. Provisions under Rule 50 of the Trade Marks Rules, 2002 are not to be read in isolation. The other connected provisions under the Act and the SCA/5042/2006 7/34 JUDGMENT Rules made thereunder are to be taken into account.........” The IPAB considered provisions contained in Section 131 of the Trade Marks Act, 1999 and Rule 105 of the Trade Marks Rules, 2002 and then observed as under: “Section 131 of the Trade Marks Act, 1999 and Rule 105 of the Trade Marks Rules, 2002 are reproduction with mutatis mutandis changes, of section 101 of the Trade and Merchandise Marks Act, 1958 and Rule 106 of the Trade Marks Rules, 1959 respectively. The scope of section 105 (sic – 101) had been a matter of consideration under 2000 PTC 24 DEL by the Full Bench of that Court. It is enough to mention that rule 105 provides for grant of extension of time by the Registrar in all matters of excepting a few matters specifically referred to in that rule. Accordingly, provisions of Rule 105 are to be read in furtherance of substantive provisions contain in section 131 of the Act. It is true that Rule 50 in its new incarnation has undergone changes of fundamental character. However, the settled proposition of law is that the provisions in subordinate legislation have to be in conformity with the provisions of principal legislation. Section 131 as interpreted by the Courts by virtue of its parallel provision under Section 101 under the Trade and Merchandise Marks Act, 1958 is very much in place in its old form which unambiguously confers a discretionary power in the Registrar to grant extension. It is a settled position in law that the discretion of the Registrar under section 131 of the Act extends to the grant of SCA/5042/2006 8/34 JUDGMENT extension in matter of filing of evidence in opposition.............” 5. This binding judgment of the IPAB is brushed aside by respondent No.2. Not only that, he has filed an affidavit before this Court stating that, 'he (respondent No.2) has already dealt with the binding decision of the IPAB in his reported judgment in 2006 PTC 32 (REG.)' The language used in paragraph No.63 of that reported judgment, reproduced in paragraph No.3 hereinabove, is offensive and contemptuous. The Assistant Registrar – respondent No.2 is duty bound to follow a binding decision of the appellate forum. He cannot distinguish the same by observing that, “The said decision of the Hon'ble IPAB was based on what was argued before it on filmsy (sic – flimsy) ground without taking into consideration the drastic change of fundamental characters in Rules, and clear, specific and imperative language and intent of the Legislature, and the basic principles of law/binding precedent laid down by the Hon'ble Apex Court.......”. 6. If this is not checked, this will lead to further chaos. As there is already enough chaos. Let there be no further chaos created. A subordinate officer distinguishing a binding decision of the higher forum in such language, must be dealt with strictly. SCA/5042/2006 9/34 JUDGMENT 7. Mr.P.M.Thakkar, learned senior counsel appearing for the petitioners invited the attention of this Court to a decision of the Hon'ble the Apex Court in the matter of UNION OF INDIA VS. KAMLAKSHI FINANCE CORPORATION LTD., reported in 1991 (55) E.L.T. 433 (S.C.). There, the Hon'ble the Apex Court was considering the strictures passed by the Bombay High Court against two Assistant Collectors for flouting Collector Appeals' order. It is a matter of record that the order of the Collector Appeals' was based on a Tribunal judgment against which department had gone in appeal to Supreme Court. The Hon'ble the Apex Court was pleased to uphold the strictures passed by the Bombay High Court. The Hon'ble the Apex Court was pleased to direct the department to pay utmost regard to judicial discipline and give effect to orders of higher appellate authorities which are binding on them. The Hon'ble the Apex Court dealing with the submissions made by the learned Additional Solicitor General had observed as under: “The learned Additional Solicitor General submits that the learned Judges have erred in passing severe strictures [1990 (47) ELT 231 (Bom.)] against the two Assistant Collectors who had dealt with the matter. He submitted that these officers had given reasons for classifying the goods under heading 39.19 and not 85.46 and could do no more. He SCA/5042/2006 10/34 JUDGMENT submitted that they acted bona fide in the interests of Revenue in not accepting a claim which, they felt, was not tenable. Sri Reddy is perhaps right in saying that the officers were not actuated by any mala fides in passing the impugned orders. They perhaps genuinely felt that the claim of the assessee was not tenable and that, if it was accepted, the Revenue would suffer. But what Sri Reddy overlooks is that we are not concerned here with the correctness or otherwise of their conclusion or of any factual mala fides but with the fact that the officers, in reaching their conclusion, by-passed two appellate orders in regard to the same issue which were placed before them, one of the Collector (Appeals) and the other of the Tribunal. The High Court has, in our view, rightly criticised this conduct of the Assistant Collectors and the harassment to the assessee caused by the failure of these officers to give effect to the orders of authorities higher to them in the appellate hierarchy. The impression or anxiety of the Assistant Collector that, if he accepted the assessee's contention, the department would lose revenue and would also have no remedy to have the matter rectified is also incorrect. Section 35-E confers adequate powers on the department in this regard. In the light of these amended provisions, there can be no justification for any Assistant Collector or Collector refusing to follow the order of the Appellate Collector or the Appellate Tribunal, as the case may be, even where he may have some reservations on its correctness. He has to follow the order of the higher appellate authority. 8. In the case on hand, even if, 'the Assistant SCA/5042/2006 11/34 JUDGMENT Registrar had reservation on the correctness of the decision of the IPAB, he had no option then to follow the order of the higher appellate authority.' The conduct of respondent No.2 – the Assistant Registrar is still grave. He has an audacity to come before the High Court and file an affidavit justifying his act. As observed hereinabove, if this is allowed, it will end into, 'an unending chaotic situation', which will not be in the interest of public at large. The public at large still reposes confidence in the judiciary as it still maintains 'judicial discipline.' 9. The Office is directed to send this judgment and order to respondent No.1 – the Controller General of Patents, Designs and Trade Marks for his attention and necessary action, which shall be placed on the record of this case. 10. Coming to the merits of the case, though it is argued at length, in the considered opinion of this Court, the case must not hold this Court for long. Section 21 of the Trade Marks Act, 1999 (hereinafter referred to as, “the Act”) provides for, 'Opposition to registration'. Sub-section (1) thereof permits any person to give notice in writing in the prescribed manner on payment of the prescribed fee of opposition to registration. Sub-section (2) imposes a duty on the 'Registrar' to serve a copy of the notice on the SCA/5042/2006 12/34 JUDGMENT applicant for registration. Sub-section (2) also imposes a duty on the applicant to submit his counter statement consisting of the grounds on which he relies for his application, within two months. It also provides the result of opposition and compliance of filing of counter statement within the prescribed time limit, i.e. two months by saying that, “........ and if he does not do so he shall be deemed to have abandoned his application.” Sub-section (3) of Section 21 requires the Registrar to serve copy of the 'counter statement' on the person who had given notice of opposition. Sub-section (4) of Section 21 provides that, any evidence which the opponent and the applicant wants to rely upon, shall be submitted in the prescribed manner and within the prescribed time to the Registrar, who in turn, is required to give them a part hearing, if they so desire. Sub-sections (5), (6) and (7) are not material for the present as there is no controversy qua them. 11. Section 131 of the of the Act provides for, 'Extension of time', which may be referred to little late as Section 157 of the Act which confers power to make Rules is required to be referred to first. Sub-section SCA/5042/2006 13/34 JUDGMENT (1) of Section 157 empowers the Central Government to frame rules, to carry out the provisions of this Act by notification in the Official Gazette, subject to the condition of previous publication. Sub-section (2) of Section 157 provides the subjects on which the Rules are to be framed. It reads as under: “In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:- (i) X X X (ii) X X X (iii) X X X (iv) X X X (v) X X X (vi) X X X The above Clauses are not material for the present, as the controversy is raised, qua Clause VII only, which reads as under: (vii)the manner of making an application and the fee payable for such application giving notice under sub-section (1) and sending counter- statements under sub-section (2) and submission of evidence and the time therefor under sub- section (4) of Section 21;” By virtue of power conferred under Section 157 of the Act, the Central Government made rules, titled as, “The Trade Marks Rules, 2002” (hereinafter referred to SCA/5042/2006 14/34 JUDGMENT as, “the Rules). Rule 50 of the Rules deals with the subject matter in this petition. The said rule deals with, 'Evidence in support of opposition' Sub-rule (1) of Rule 50 reads as under: “Within two months from service on him of a copy of the counterstatement or within such further period not exceeding one month in the aggregate thereafter as the Registrar may on request allow, the opponent shall either leave with the Registrar, such evidence by way of affidavit as he may desire to adduce in support of his opposition or shall intimate to the Registrar and to the applicant in writing that he does not desire to adduce evidence in support of his opposition but intends to rely on the facts stated in the notice of opposition. He shall deliver to the applicant copies of any evidence that he leaves with the Registrar under this sub-rule and intimate the Registrar in writing of such delivery.” Sub-rule (2) of Rule 50 is the sub-rule under which the Assistant Registrar – respondent No.2 herein has passed the order under challenge. Sub-rule 2 reads as under: “If an opponent takes no action under sub-rule (1) within the time mentioned therein, he shall be deemed to have abandoned his opposition.” 10.08.2006 Sub-rule (3) of Rule 50 provides: “An application for the extension of the period of SCA/5042/2006 15/34 JUDGMENT one month mentioned in sub-rule (1) shall be made in Form TM-56 accompanied by the prescribed fee before the expiry of the period of two months mentioned therein.” CHRONOLOGICAL EVENTS 12. Following facts are not in dispute: (I)Respondent No.4 – Rekvina Pharmaceuticals filed application on 05.09.2000 for registration bearing No.953600 in Class-05 for “MOLOX” Trade Mark, claiming user since 01.07.1991. (II)Advertisement published on 04.08.2003 in Trade Marks Journal No.1300 page No.52 in respect of this application. (III)Petitioners lodged opposition to the aforesaid registration application on 01.09.2003. (IV)Respondent No.2 filed its counter statement on 15.12.2003 in the Trade Mark Registry. (V)The Assistant Registrar – respondent No.2 herein sent copy of the counter statement to the petitioners on 01.03.2004. (VI)Petitioners received copy of the counter statement, but the date is not disclosed. (VII)Petitioners filed application for extension of time in Form TM-56 on 21.04.2004. SCA/5042/2006 16/34 JUDGMENT (VIII)Petitioners filed another application for further extension of time in Form TM-56 on 21.05.2004. (IX)Petitioners filed another application for further extension of time in Form TM-56 on 31.08.2004. However, this application is not annexed to the petition, though this fact is mentioned at para 8 of the petition and it is mentioned that it is produced at Exhs.F1 to F3. (X)Petitioners filed affidavit and documents under Rule 50 before respondent No.2 and sent a copy thereof to respondent No.4 on 15.09.2004. (XI)Respondent No.4 received copy of affidavit on 20.09.2004, but then it is contended by respondent No.4 that the same was without documents. (XII)Respondent No.4 filed its evidence under Rule 51 before Respondent No.2 – the Assistant Registrar with a copy to the petitioner on 07.12.2004 (XIII)Respondent No.2 passed order treating opposition is 'abandoned' under Rule 50(2) on 29.06.2005. This order is under challenge in this petition. 13. The aforesaid facts are matter of record and the same are not disputed by either party. The only dispute is as to what is the character of Sub-rule (2) of Rule 50 SCA/5042/2006 17/34 JUDGMENT which provides that, 'if an opponent does not take action under Sub-rule (1) within the time mentioned therein, he shall be deemed to have abandoned his opposition.' It is contented by learned senior counsel appearing for the petitioners that this Rule is 'directory' and therefore, the Assistant Registrar – respondent No.2 herein ought to have considered the applications filed by the petitioners for extension of time on 21.04.2004, 21.05.2004 and 31.08.2004 and should have considered the affidavit and documents filed under Sub-rule (1) of Rule 50. As against that, a contention is raised on behalf of respondent No.4 that the Rule is mandatory, as it provides for the consequences, if the action is not taken under Sub-rule (1) of Rule 50 within the time prescribed therein. Learned advocate for respondent No.4 supported the order impugned and submitted that the order is rightly passed in light of the true spirit of Sub-rule (2) of Rule 50. 14. Both the sides argued the matter at length. Learned senior counsel appearing for the petitioners invited the attention of this Court to the various provisions of the Act and the Rules, viz. Section 21, Rule 50, Section 131 and Rule 105. The thrust of the submissions of the learned senior counsel is that in SCA/5042/2006 18/34 JUDGMENT light of the provisions contained in Section 131, Sub- rule (2) of Rule 50 cannot be construed to be a 'mandatory' one. He submitted that if Sub-rule (2) of Rule 50 is construed 'mandatory' then in his respectful submission, it will be 'ultra virus' inasmuch as, it travels beyond the scope of Section 131, which controls an important aspect of 'grant of extension of time.' The learned senior counsel for the petitioners submitted that if at all the legislature wanted to prescribe the time limit in Sub-rule (2) of Rule 50 for filing of evidence in support of opposition, it could have incorporated the same in Sub-section (4) of Section 21 of the Act. He submitted that the fact that the legislature prescribed time limit for filing of opposition to the registration in Sub-section (1) of Section 21 and prescribed time limit for filing the counter statement to such opposition in Sub-section (3) of Section 21, there was no earthly reason for