Citation Codes

Equivalent Citations

citation codes

Case Number

Civil Writ 960/1979.

Attorney(S)

For the Petitioners : Mr. A.R Lall with Miss M. Lahiri, Mr. P.N Sewak and Mr. D.L, Fray, Advocates.
For the Respondents:— Mr. S.L Watel, Sr. Advocate with Mr. Arun Kumar for respondent No. 1.

Judges

V.S. Deshpande, C

Acts

section 49(3) of the Trade and Merchandise Marks Act, 1958 (The Act), and Rule 86 of the Trade and Merchandise Marks Rules, 1959.2.
section 12 of the (English) Tribunals and Inquiries Act, 1958
below:Contentions (1) and (2):7. Section 49(3)
sub-section (2) of section 49,
sub-section (1) of section 49.
sub-section (3) of section 49
Merchandise Marks Act, 1958,
sub-section (2), the Central
section 49(3). But rule 85
rule 86(1) of the Rules
Rule 85 of the Rules
section 49(3).(4)

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Smart Summary

Structured Summary of the Opinion (V.S. Deshpande, C.J.)

Factual and Procedural Background

The dispute arises from applications made under sections 48 and 49 of the Trade and Merchandise Marks Act, 1958 for recordal of an Indian company (petitioner No. 1) as a registered user of the proprietory trade mark "HELLA", owned by a foreign company (petitioner No. 2). The two petitioners had earlier entered into a government-approved collaboration (1961–1971), after which petitioner No. 2 agreed to licence petitioner No. 1 to use the mark. The applications under sub‑section (1) of section 49 were forwarded by the Registrar of Trade Marks to the Central Government under section 49(2).

The Central Government issued a notice (under Rule 86(1) of the Rules) dated 3 January 1976 stating that the Government proposed to refuse the applications on the grounds that registration as registered user was "not in the interest of the general public and the development of indigenous industry in India." The notice used the statutory language but did not detail the facts supporting that conclusion.

The petitioners requested factual reasons. An oral hearing was granted on 31 July 1976, followed by specific questions from the Government asking for information about the collaboration approval, licensed capacity and market share. The petitioners supplied the information in August/September 1976.

By letter dated 16 June 1978 the Registrar informed the petitioners that the Central Government had directed refusal of the applications, referring to the earlier notice of 3 January 1976 and invoking public interest and development of indigenous industry as grounds. Initially the reasons were not communicated fully to the petitioners, but the Government set out fuller reasons in its counter-affidavit on file.

Legal Issues Presented

Whether the show‑cause notice under Rule 86(1) was adequate for the petitioners to have a true opportunity to be heard—i.e., whether merely reciting the statutory headings ("interest of the general public" and "development of indigenous industry") without stating the underlying facts satisfied the requirement of opportunity to be heard.
Whether the impugned decision to refuse recordal was without reasons in violation of principles applicable to quasi‑judicial decisions, and if so whether that would mandate quashing the order.
Whether the Central Government exceeded its jurisdiction under section 49(3) by taking into account matters beyond the scope of trade‑marks law (in particular, whether considerations such as foreign shareholding, prior benefit from a collaboration, and market share were irrelevant or extraneous to section 49(3)).
Whether petitioner No. 1's status as an Indian company (albeit with 34% foreign shareholding) made it impermissible, as a matter of law, to deny recordal on the policy grounds invoked by the Government.

Arguments of the Parties

Petitioners' Arguments

The notice to show cause was inadequate because it did not specify facts that could be rebutted; it merely quoted statutory language and so failed to give a true opportunity to be heard.
The communicated decision lacked reasons; thus the petitioners did not know the grounds on which their applications were rejected and could not effectively challenge the refusal.
The Government improperly took into account considerations beyond section 49(3) — specifically, broader policy matters not directly related to trade marks. Rule 85(1)–(3) was invoked by petitioners to show that considerations under the Act are confined to trade mark matters (bona fides, trafficking, assignments, etc.), and the Government had gone beyond these.
Petitioner No. 1 is indigenous; denying registration on the grounds advanced could not be justified against the public interest or indigenous industry.

Respondent (Central Government / Registrar) Arguments

The Government's decision was based on materials in the file and arguments at the hearing; the file contained reasons (disclosed in the counter‑affidavit and in an order by the Deputy Secretary) showing that the collaboration approval had lapsed in 1971, and that petitioner No. 1 supplied a substantial share of the indigenous market (roughly 25% in horns and flashers, ~10% in lamps/head‑lights), so continued registration could adversely affect other indigenous industries.
The Government also relied on policy considerations: petitioner No. 1's 34% foreign shareholding and the fact that it had enjoyed a 10‑year collaboration were relevant to whether the company still required the advantage of using a foreign trade mark; these considerations were germane to assessing public interest and development of indigenous industry under section 49(3).
The Government argued that even if reasons were not initially communicated, the reasons existed on the file and were supplied in the counter‑affidavit; subsequent disclosure of reasons may cure initial non‑communication and enable judicial review of the substance of those reasons.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Harinagar Sugar Mills Ltd. v. Shyam Suner Jhunjhunwala and others, AIR 1961 SC 1669	Authority insisting that reasons must be given for quasi‑judicial orders; absence of reasons can lead to quashing.	Cited as part of a line of authority establishing that quasi‑judicial bodies must give reasons for decisions.
Sardar Govindrao and others v. The State of Madhya Pradesh, AIR 1965 SC 1222	Supports the principle that reasons must be given for quasi‑judicial orders.	Reinforces the Court's view that absence of reasons is a ground for judicial intervention.
Maharashtra State Road Transport Corporation v. Shri Balwant Regular Motor Service, (1969) 1 SCR 808	Holds that reasons should be given but may be recorded after the decision; post‑hoc reasons can be considered for judicial review.	Applied to conclude that subsequent disclosure of reasons in the Government's counter‑affidavit could cure the initial failure to communicate reasons.
R.S. (Full citation not provided in text) — referenced as the decision in the record: "Writ petition partly allowed."	This text records the dispositive outcome of the present writ petition.	Used to state the procedural result: the petition was partly allowed and the Government directed to give another hearing.
Unreported Division Bench decision: Registrar of Trade Marks v. The J.B Williams Co. Inc. (Calcutta High Court, Original Order No. 259 of 1974, decided 5 Dec 1978)	Cited to support the proposition that considerations relied upon by the Government were germane to section 49(3).	Court relied on this decision as corroborative authority that the Government's considerations could fall within the ambit of section 49(3).
Shri K.R. Raghavan… Petitioner v. Union of India, ILR (1979) Delhi-1	Establishes that the Government has an inherent power to review administrative/quasi‑judicial orders vitiated by violation of natural justice or causing obvious injustice.	Cited to justify directing the Government to give another hearing and to exercise its power of review, if appropriate.
Mrs. Maneka Gandhi v. Union of India, (1978) 1 SCC 248	Demonstrates that where a hearing was not given initially the Supreme Court allowed reconsideration by the Government rather than quashing the order outright when the Government expressed willingness to hear.	Used by the Court to support granting the petitioners an opportunity of further hearing rather than immediate quashing of the order.
V.S. Deshpande — "Speaking" Orders, AIR 1969 Journal section 147 (article)	Quoted to illustrate the judicial view that reasons enhance accountability and are necessary to prevent perverse or corrupt decisions.	Used in the narrative to underline the need for reasoned administrative decisions and to contextualize the Court's attitude.

Court's Reasoning and Analysis

The Court proceeded in structured fashion, tying statutory text, rule requirements and principles of natural justice to the facts on record:

Interpretation of statutory framework: Section 49(3) of the Trade and Merchandise Marks Act empowers the Central Government, "having regard to all the circumstances of the case and to the interests of the general public, and the development of any industry, trade or commerce in India", to direct refusal or conditional acceptance. The Court noted these are headings describing classes of considerations but do not themselves set out specific facts; the discretion applies to particular facts of each case.
Scope of "opportunity of being heard": Rule 86(1) requires that the Government give written notice stating the grounds on which it proposes to issue a direction and inform the applicant that they are entitled to be heard. The Court held that merely reciting statutory language (as in the 3 January 1976 notice) without indicating underlying facts deprives the applicant of a true opportunity to show cause because the applicant cannot know what specific facts to rebut.
Adequacy of Government's communication: The initial notice and the impugned decision were formulaic and did not set out the facts constituting the public interest or adverse effect on indigenous industry. That made the show‑cause notice inadequate.
Existence of reasons on the file: The Government's counter‑affidavit disclosed that a reasoned order did exist on the file (an order by Deputy Secretary A. Mubayi), which set out factual findings — e.g., the collaboration approval lapse in 1971; petitioner No. 1's market shares (approx. 25% for horns and flashers, 10% for lamps); concerns that continued use of the trade mark could adversely affect other indigenous producers; petitioner No. 1’s 34% foreign shareholding and prior benefits from the collaboration.
Effect of subsequent disclosure of reasons: Drawing on precedents (including the Maharashtra State Road Transport Corporation case), the Court accepted that reasons recorded on the file and disclosed later can be considered in judicial review; hence, failure to communicate reasons at the time does not automatically render an order immune from review or require quashing if reasons are supplied subsequently and are open to challenge.
Relevance of the Government's considerations: The Court examined whether the Government had acted beyond section 49(3). It concluded that the Government's considerations (market share, foreign shareholding, prior collaboration benefits and the effect of recordal on indigenous industry/public interest) were germane to assessing the effect of registration on public interest and industry development, and thus were relevant to section 49(3). The Court relied on an unreported Calcutta High Court Division Bench decision to reinforce this view.
Remedy and exercise of judicial supervision: Although the show‑cause notice was inadequate (a procedural defect), because the Government's reasons existed on the file and were disclosed, the Court determined that it would be wasteful to ignore those reasons. Rather than quashing the order outright, the Court invoked principles (including the Government's inherent review power) and prior Supreme Court practice (Maneka Gandhi) to require the Government to give the petitioners one further hearing specifically to demonstrate that, on the facts, recordal would not prejudice public interest or indigenous industry. The Court explained that after such hearing the Government could review, reaffirm, modify or add to the reasons and then communicate them.
Conclusion on each contention: The Court found the first contention (inadequacy of the show‑cause notice) successful; the second contention (decision without reasons) unsuccessful because reasons were on the file and disclosed; the third contention (irrelevance of Government's considerations) unsuccessful on merits; and the fourth contention (petitioner No. 1's indigenous status) negatived as a matter of policy for the Government to decide.

Holding and Implications

Holding:

Writ petition partly allowed.

Direct consequences and remedial directions:

The Court refused to quash the impugned order on the ground that reasons existed on the file and were disclosed in the Government's counter‑affidavit.
Because the original show‑cause notice was inadequate, the Court directed the Central Government to give the petitioners one further hearing to show cause that recording petitioner No. 1 as registered user would not prejudice the interests of the general public or the development of indigenous industry in India.
After the additional hearing the Government is at liberty to review the impugned order; it may reaffirm, modify or add to the reasons already stated and must communicate the result to the petitioners.
No order as to costs was made.

Wider implications noted by the Court: administrative authorities exercising quasi‑judicial powers must state the factual basis for proposed adverse action; mere recitation of statutory headings is insufficient to satisfy the requirement of meaningful opportunity to be heard. Where reasons exist on the record they may be considered even if not communicated initially, but fair practice compels clear communication of facts and reasons to affected persons.

Disposition: The writ petition was partly allowed in the manner described above.

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J.M.A Industires Ltd. & Another Petitioners v. Union India & Another S

V.S Deshpande, C.J:— It is high time the administrative authorities exercising powers under statutory provisions should realise that whether they are issuing a show cause notice why a certain action should not be taken or are communicating the reasons for decisions it is not sufficient merely to recite the language of the statutory provisions but it is also necessary that the actual facts on which action is proposed to be taken or on which the decision is based should also be stated or indicated. The truth of this observation is borne out by this case in relation to section 49(3) of the Trade and Merchandise Marks Act, 1958 (The Act), and Rule 86 of the Trade and Merchandise Marks Rules, 1959.

2. The facts out of which the question arose may be briefly stated. The Indian company, petitioner No. 1, and the foreign company, petitioner No. 2, entered into a collaboration agreement which was approved by the Government of India from 1961 to 1971 only. The proprietory trade mark “HELLA” of petitioner No. 2 has been registered in India and as a result of the collaboration agreement the petitioner No. 1 has been using it in respect of goods manufactured by it in pursuance of the collaboration agreement. After the collaboration agreement ceased to be in force, the second petitioner agreed to licence the first petitioner to use the said trade mark “HELLA” in relation to the goods to be manufactured by the petitioner in pursuance of the quondam collaboration agreement. The two petitioners applied to the Registrar of Trade Marks under the provisions of sections 48 and 49 of the Act for the recordal of the first petitioner No. 2 in September, October, 1971. The application was in accordance sub-section (1) of section 49. It was forwarded by the Registrar of Trade Marks to the Central Government under section 49(2). The consideration of the powers of the Central Government under sub-section (3) of section 49 being material for the decision of this case, section 43(3) is reproduced below:

“(3) On receipt of an application under sub-section (2), the Central Government, having regard to all the circumstances of the case and to the interests of the general public, and the development of any industry, trade or commerce in India, may direct the Registrar—

(a) to refuse the application; or

(b) to accept the application either absolutely or subject to any conditions, restrictions or limitations which the Central Government may think proper to impose:

Provided that no direction for refusing the application or for its acceptance conditionally shall be made unless the applicant has been given an opportunity of being heard.”

3. The meaning of the expression “opportunity of being heard” used in section 49(2) is to be spelt out by reading it with rule 86(1) of the Rules which is as below:

“(1) Before the Central Government decides to direct the Registrar to refuse an application for registration as registered user or to accept the application subject to any conditions, restrictions or limitations, it shall give notice thereof in writing to the applicant through the Registrar. The notice shall state the grounds on which the Central Government proposes to issue such direction and shall inform the applicant that they are entitled to be heard.”

The notice which was actually given under rule 86(1) of the Rules and 3rd January, 1976, stated that “the Government of India proposes to refuse the above application on the grounds that having regard to all the circumstances of the case, the registration as registered user sought by the applicants is not in the interest of the general public and the development of indigenous industry in India”. Since the notice did not state the facts which constituted pubic interest or the interest of the development of indigenous industry in India, but merely recited the language of section 49(3), the petitioner wrote to the Government on 9th January, 1976 that no reasons had been given why acceptance of the user applications will be detrimental to the interests mentioned in the notice and requested that reasons for coming to such a conclusion may be submitted in relation to such facts and reasons. Though the Registrar of Trade Marks wrote tot he petitioners on 11th May, 1976 that the Central Government had been requested to furnish the information asked for by the petitioners, the information was not supplied but instead oral hearing was granted on 31st July, 1976. As a result of the oral hearing the Government asked the petitioners on 4th August, 1976 to supply the following information:—

“(a) Whether the collaboration agreement between M/s. J.M.A Industries Private Limited, New Delhi and M/s. West falische Metall Industries, GmbH West Germany (F) had the approval of the Government and whether the necessary approval has been conveyed by Government or not;

(b) What was the licensed capacity of M/s. J.M.A Industries for the individual items, the present production of these articles; and

(c) The approximate extent of the market requirements the applicant's production did cater.”

The information was supplied on 13-8-1976 and 14-9-1976. By the impugned letter of 16th June, 1978 the Registrar of Trade Marks informed the petitioners that “the Central Government have carefully considered all the materials in connection with the above noted applications and the arguments advanced at the hearing and have directed the Registrar to refuse the said applications on the grounds already set out in this office letter No. (RU-5037 & 5038)/382 dated 3rd January, 1976”, namely, the interest of the general public and that of the development of indigenous industry in India. It would be thus seen that neither in the notice to show cause why the recordal of the petitioners as a registered user should not be refused, nor in the decision that the recordal has been refused are any facts stated which would constitute the public interest or the interest of the indigenous industry or from which an inference could be drawn that the recordal of the petitioners as a registered user would be detrimental to such interest.

4. The present writ petition prays that the impugned decision be quashed. Mr. A.R Lall, learned counsel for the petitioners, attacked the impugned decision as follows:—

(1) The petitioners did not have a true opportunity to show-cause why the recordal should be refused because the notice to show-cause did not state any facts which would be rebutted by the petitioners.

(2) That the impugned decision communicated to the petitioners was without reasons. Neither the petitioners know why their application was rejected, nor can they properly challenge the rejection before this court as no grounds for the rejection are known.

(3) The interests of the general public or of the indigenous industry in India referred to in section 49(3) should be construed in the context of the Trade and Merchandise Marks Act, 1958, as would be seen by reading Rule 85 of the Rules framed thereunder, which is as below:—

“85. The Central Government, on receipt of an application for registration as registered user forwarded to it by the Registrar under sub-section (2) of section 49, shall, if satisfied that the application and the accompanying documents comply with the provisions of the Act and the rules, consider whether the application should be allowed having regard to the matters specified in sub-section (3) of that section, and in doing so may take into account all or any of the following matters:

(1) whether the permitted use if allowed would contravene the policy of the Act which is to prevent trafficking in trade marks;

(2) whether the registered proprietor has registered the trade mark without any bona fide intention to use it in relation to his goods in the course of trade or solely or mainly for the purpose or permitting others to use it under agreement for registered user; and

(3) whether the registered proprietor has acquired title to the trade mark by assignment without any bona fide intention to use it in relation to his goods in the course of trade or solely or mainly for the purpose of permitting others to use it under agreements for registered user.

Explanation I.—For considering the bona fides of the registration of the trade mark under clause (2) regard shall he had inter alia to—

(a) whether the goods for which the trade mark is registered are similar to or are different from the goods in which the registered proprietor has been trading or dealing before the registration of the mark;

(b) whether the registered proprietor has ever used to mark in question in relation to his goods in the course of trade before the date of the agreement for registered user, and if so, the amount duration of such user;

(c) whether the terms as to royalty and other remuneration payable by the proposed registered user are reasonable taking into account the expenses which the registered proprietor is likely to incur in exercising control over the permitted use.

Explanation II.—For considering the bona fides of the acquisition of title under clause (3) regard shall be had, besides the matters set out in Explanation I, to the following further matter, namely, whether the registered proprietor has obtained assignment of other registered trade marks and if so, whether he has dealt with such other marks by way of assignment or registered user.”

In so far as the Central Government took into account wider considerations it exceeded its jurisdiction under section 49(3).

(4) Petitioner No. 1 itself if indigenous industry and it could not be against public interests and the interests of the indigenous industry to grant the application of the petitioners.

5. In the counter affidavit the reasons for the decision which existed on the file were disclosed. After the petitioners supplied the information asked for by the Government after the oral hearing given to the petitioners, the following order was passed by Mr. A. Mubayi, Deputy Secretary to the Government of India, who had given hearing to the petitioners on the application of the petitioners:—

“It is seen that collaboration agreement between J.M.A and their German principals was valid upto 1971 and Government's approval thereafter has not been accorded. In regard to the installed capacity of the production and the percentage of the indigenous market to this unit caters, the figures are available. In the case of horns, the applicant caters to 25 per cent of the total indigenous market, similarly, in the case of flascher units, it is 25 per cent. In the case of lamps which includes head-lights etc., it is roughly 10 per cent.

In the absence of Government's approval to the collaboration agreement, there seems to be no reason why the trade mark should be allowed to continue further. The extent to which the party's production caters to the local markets is also fairly substantial, particularly in the case of flashers and automotive horns. It is quite like that the continued use of the trade mark would have an adverse effect upon the other indigenous industries of these products. This was also the view of D.G.T.D initially, I, therefore, reject the application. RTM may be informed accordingly.”

It was also contended for the Government that petitioner No. 1 company has 34% of foreign share holding and since petitioner No. 1 supplies a substantial share of the market demand for the goods in India it did not need the advantage of being able to use the foreign trade mark. After the advantage obtained by it by having a collaboration agreement with petitioner No. 2 for a period of 10 years, petitioner No. 1 is expected to be able to stand on its own legs in competing with the rest of the indigenous industries and it would be unfair for the Government to give to petitioner No. 1 the additional advantage of being able to use a foreign trade mark. This consideration is germane to section 49(3) and justified the rejection of the application by the government.

6. In the light of the above, the contentions of the petitioners may be dealt with as below:

Contentions (1) and (2):

7. Section 49(3) which gives the discretion to the Central Government to direct the Registrar to refuse the application or to accept it either absolutely or subject to conditions also lays down the guidelines for the exercise of such discretion. They are three-fold. The Government has to consider firstly all the circumstances of the case, secondly the interests of the general public and thirdly, the development of any industry, trade or commerce in India. These guidelines are only headings or topics or the names or description of consideration which would be relevant in dealing with the application. But none of these headings by itself spells out any particular facts which may amount to the description of the heading. For instance, interests of the general public by itself does not consists of any one or more particular facts. It is general concept which can be applied to such facts as may amount to public interest in a particular case. What the facts are would have to be seen by considering the particulars case. The very fact that the decision under section 49(3) is left to the discretion of the Government itself means that the facts to which section 49(3) applies are not themselves stated therein otherwise the power under section 49(3) would be merely to decide on the existence or non-existence of the facts sated therein. But since no facts are stated in section 49(3), the discretion to be exercised thereunder is to bear on the particular facts of a case in which the decision is to be made.

8. It is a common frailty on the part of the administrative authorities to take recourse to generalities and evade facing the actual issues in a case. They, therefore, merely repeat the statutory language in the hope that nobody will be able to catch them on the wrong foot because of the shield afforded by the statutory language.

9. It is easy to see, therefore, that when on 3rd January, 1976 the Government of India proposed to refuse the application of the petitioners on the grounds of “interest of the general public and the development of indigenous industry in India”, the petitioners could not have a true idea as to what facts or circumstances or reasons arising out of their application could be described as coming under the headings—interest of the general public and the development of indigenous industry in India. These general phrases could not indicate the facts which had to be explained or rebutted by the petitioners or what additional facts had to be pleaded by the petitioners to surmount the objections raised by the Government. If the petitioners are merely asked as to why the recordal of registered user in its favour would not be against public interest how could the petitioners answer such a question? The petitioners cannot be expected to imagine all the possible circumstances and facts which should make the registration of their user contrary to public interest. It is true that as a result of the oral hearing some pointed queries were made by the letter of the Government, dated 4-8-1976 and he answers to these queries given by the petitioners could give some idea to the petitioners as to what particular facts were considered relevant by the Government in deciding on their application. But, Mr. Lall contended that the petitioners had no opportunity to tell the Government why these facts should not be construed to mean that the grant of the application of the petitioners would be contrary to public interest and the interest of the indigenous industry. The petitioners could have appended to the information supplied by them such explanation or argument, but the question is whether the petitioners were asked to explain why these facts should not be construed against the petitioners. Of course, the calling of such information by the Government was some notice to the petitioners that these facts would be taken into account. But one general consideration has to be borne by the courts in considering whether adequate hearing has been granted by the Government to the petitioners or a person to be affected by a subsequent order to be passed by the Government. While nothing is lost by the Government in giving an additional opportunity of hearing, when justified by circumstances, irreparable loss would be caused to the petitioners or the affected persons by not being given an opportunity to controvert specific facts. In the peculiar circumstances of this case we are of the view that though the petitioners must have expected that the information supplied by them after the oral hearing was likely to be taken into account by them after the oral hearing was likely to be taken into account by the Government in deciding on their application, the petitioners could not know why these facts were called for and how they would be regarded as being relevant in considering the public interest or the interest of the Indian industry. It is to be noted, however, that if initially or subsequently before taking decision against the petitioners, the Government had called upon the petitioners to show cause why on these facts the Government should not reject the application of the petitioners as being not in the public interest or not in the interest of the indigenous industry in India, then the petitioners should not have been left any ground for complaint. The distinction between asking the petitioners to supply information giving a hint thereby that the said information would be taken into account and specifically asking the petitioners to show cause why such information should not be taken into account against them is perhaps subtle, but the benefit of doubt should be given to the individual and not to the Government for the reasons stated above.

10. The decision conveyed to the petitioners was as cagey as the notice to show cause. A decision to say that the Government is unable to accept the prayer or after fully considering the case the Government rejects the prayer conveys no meaning. Inside these vague phrases are concealed facts which alone can constitute the reasons which may fall under the headings constituted by such phrases. It is not the headings but the facts covered by these headings which have to be stated as reasons for the decision. Then only it would be know why a decision had been arrived at. We are clearly, therefore, of the view that the decision conveyed to the petitioners was without any reasons.

11. If the matter had remained there, there could be no valid defence to the writ petition praying that the impugned decision be quashed. But the counter-affidavit filed by the Government disclosed that the order of rejection passed by the Government was a fully reasoned order. The only mistake committed by the Government was not to communicate the order which was passed on the application of the petitioners, but only the conclusion that the real reasons for the rejection of the application fell under the guidelines set out for the Government in section 49(3). It is this tendency of administrative authorities of informing the petitioners only of the conclusion and not the reasons for the conclusion which creates dissatisfaction and which compels the affected persons to challenge the orders of the Government in courts. This habit is reminiscent of what used to be done by administrative authorities and is still done by arbitrators. Knowing that the remedy by way of a certiorari goes against the record of the order of the administrative authority, it was once believed that if the record contained no reasons for the administrative order or action, then no relief by way of certiorari could be given. Similarly, the arbitrators often give a bare award without reasons, so that no judicial review of it is possible. While the arbitrators still enjoy this protection, the administrative authorities no longer do so. In spite of section 12 of the (English) Tribunals and Inquiries Act, 1958 which requires that certain specified Tribunals shall furnish the statement of reasons for the decision if requested on or before giving of the decision. Professor S.A de Smith could still say as late as 1968 that “there is no general rule of English Law that reasons must be given for administrative (or indeed judicial) decision.” (Judicial Review of Administrative Action, 2nd edition, p. 133). Fortunately, the courts in India were not handicapped by the technicalities which hindered the development of case law in England requiring quasi-judicial authorities to give reasons for decisions.

12. In Harinagar Sugar Mills Ltd. v. Shyam Suner Jhunjhunwala and others, AIR 1961 SC 1669(1), Sardar Govindrao and others v. The State of Madhya Pradesh AIR 1965 SC 1222(2), and Maharashtra State Road Transport Corporation v. Shri Balwant Regular Motor Service, (1969) 1 SCR 808(3), the Supreme Court insisted that reasons must be given for quasi-judicial orders and in the absence of such reasons the orders would be quashed by the courts. “If the immunity from the requirement of giving reasons could lead to the temptation of giving perverse or corrupt decisions, the court had the power to do justice by insisting upon a statement of reasons from quasi-judicial authorities. Justice itself is treated here as a source of law.” (V.S Deshpande—“Speaking” Orders, AIR 1969 Journal section 147 at 148).

13. The order rejecting the application of the petitioners in this case was, however, actually an order supported by reasons even though such reasons were not initially communicated to the petitioners. The only result would be that the petitioners were justified in filing the present writ petition. But after the reasoned order is pronounced by the Government or incorporated in the counter-affidavit the reasons become known to the petitioners. It is then open to the petitioners to attack the order in the same way as the petitioners could have attacked it even if the reasons were communicated to the petitioners before the writ petition was filed. It would be wasteful and unjust for this court to refuse to see the reasons which were originally given in the order on the file and to allow the writ petition only because before the writ petition was filed the reasons were not communicated. The petitioners could have filed a replication in this writ petition challenging the validity of the reasons given by the Government for rejecting the petitioners' application. They did not do so. The mistake committed by the Government in omitting to communicate the reasons of the decision which existed on the file to the petitioners was capable of being corrected and has been corrected by the Government by incorporating the reasons for the order contained in the file in the counter affidavit. It is only in so far as the petitioners have by way of anticipation urged the third ground of attack in this writ petition that the validity of the reasons can be considered by us here.

14. The learned counsel for the petitioners contended that the impugned order must be quashed merely on the ground that the reasons for the order were not communicated to the petitioners along with the order. Such a contention is contrary to the very theory of certiorari. The certiorari goes against the record of the administrative authority or Tribunal containing the order sought to be impugned by recourse to judicial review. If the record is inadequate the court can direct the administrative authority to make it complete. In Maharashtra State Road Transport Corporation case, referred to above, the decision was taken orally in the presence of the parties, but no reasons were recorded at that time. Reasons were recorded subsequently. The contention of the respondent that giving of reasons subsequently and communicating them to the respondent after the order was delivered does not cure the defect of the order as being without reasons. This contention was rejected by the court by the following observation at pages 824 and 825:

“Apart from any requirement imposed by the statute or statutory rules either expressly or by necessary implication we are unable to accept the contention of Mr. Phadke that there is any general principal that a statutory tribunal should always give its judgment in writing and should always give reasons thereof immediately with the pronouncement of the judgment.”

Ramaswami J. who spoke for the court, then proceeded to explain the nature of certiorari in the English law and pointed out that the reasons for the orders could be given by the administrative authority or Tribunal after the order was made. A court may even direct it to draw up a reasoned order in a case in which this has not been done so that the court may know the reasons for the order when sitting in judicial review over the order.

Contention (3):

15. What is the extent of the jurisdiction of the Central Government under section 49(3). It is true that rule 85 requires the Government to take into account all or any of the matters specified therein while considering the application under section 49(3). But rule 85 cannot be used to restrict the meaning of section 49(3). While it was for the Government to indicate some of the consideration to be taken into account under section 49(3), it is for the court to consider the true meaning of section 49(3). Mr. Lall urged that the statement of objects and reasons accompanying the Bill which became the Trade and Merchandise Marks Act, 1958, the preamble of the said Act and the scheme of the Act as a whole would show that it was not concerned with anything which did not pertain to trade marks. He argued that the reason of the Government that the recordal of petitioner No. 1 as registered user of the trade mark of petitioner No. 2 was not justified because petitioner No. 1 company had 34 per cent of foreign share holding, that petitioner No. 1 had already enjoyed the benefit of the collaboration agreement for 10 years and was expected to stand on its own log now and that there was not justification why petitioner No. 1 should continue to get the advantage of foreign trade mark as against the indigenous producers were all irrelevant and extraneous to section 49(3) of the Act. This contention was embodied in the writ petition itself and has been answered by the Government in the counter affidavit. In our view, the use of a foreign trade mark either by the foreign proprietor or by the registered user cannot be considered in isolation. Its effect on public interest and the development of industry in India has to be considered in view of the expressed requirement of section 49(3). Further, it cannot be said that the consideration of such effect is not the consideration of the subject of trade marks. It is only the effect of the use of the trade mark by the recordal of its registration in favour of petitioner No. 1 that was to be considered under section 49(3) and was considered by the Central Government. Had the Central Government considered the interest of the general public or the development of indigenous industry, apart from the effect of the recordal of petitioner No. 1 as a registered user in rejecting the application of the petitioners, then perhaps the petitioners could have contended that those considerations were not germane to section 49(3). But there is no scope for such a complaint. Both section 49(3) and the reasons given by the Government for rejecting the application are concerned with the effect of the recordal of registration on the public interest and the interests of development of indigenous industry in India. We are clearly of the view, therefore, that the reasons for the rejection of the application were relevant and germane to section 49(3). We are fortified in this conclusion by an unreported Division Bench decision of the Calcutta High Court in Registrar of Trade Marks v. The J.B Williams Co. Inc. (4), being an appeal from Original Order No. 259 of 1974, decided on 5th December, 1978, a copy of which was given to us for perusal by Mr. A.R Lall.

Contention (4):

16. The petitioner No. 1 is indigenous, but has 34 per cent of foreign share holding. Moreover, as an Indian company, it is entitled to be treated only equally but not preferentially as against other Indian producers. The Government is not convinced why it should enjoy the advantage of using a foreign trade mark. This is really a question of policy for the Government with which this court cannot interfere. We may also observe that petitioner No. 1 may be able to use the trade mark registered in favour of petitioner No. 2 even though the Government has not acceded to the request of the petitioners to be recorded as a registered user under section 49. In view of section 46 of the Act petitioner No. 2 would run the risk of his trade mark being taken off the register of trade marks if for five years such a trade mark is not used in India in respect of goods to which it relates. If the import of the goods manufactured by petitioner No. 2 into India is not allowed the only way the trade mark of petitioner No. 2 can continue to be used in relation to the same goods in India is for petitioner No. 2 to continue to consent to the use of the trade mark by petitioner No. 1 in relation to the goods to which the trade mark relates. Otherwise petitioner No. 2 would be left only with the possibility of obtaining a defensive registration under section 47. So long as petitioner No. 2 continues to consent a trade mark by petitioner No. 1 would be exclusive. Petitioner No. 1 has also used the trade mark from 1961 onwards. The petitioners would also be able to prevent other persons from using the trade marks in India by recourse to the law of torts. If the same is insisted in India, passing off action would lie against it at the instance of the petitioners. The prejudice, if any, to petitioner No. 2, by the impugned order would thus be substantially reduced. This contention is also, thereof, fails.

17. To sum up, the first contention of the petitioners that the show cause notice was inadequate succeeds. The second contention that the impugned decision was without reasons does not succeed because the decision as given was supported by reasons recorded on the file. The production of the reasoned order in the counter-affidavit made the petitioners aware of the reasons for the decision. It was the duty of the petitioners to show before us that even the reasoned order was illegal for any reason. The petitioners had an idea as to the reasons because of the facts which the Government had obtained from the petitioners. The petitioners pleaded by anticipation that these reasons were irrelevant and beyond the scope of the Act. This is the third contention of the petitioners. It fails on merits. The second contention also fails on merits and also because the third contention has not succeeded. The fourth contention has already been negatived.

18. Since the petition fails on the second, third and fourth contentions, can any relief be given to the petitioners on their success on the first contention? In a sense, even if the show cause notice was inadequate the petitioners had the opportunity of impugning the order itself and since they have failed to get it quashed, the success of the petitioners on contention No. (1) is only theoretical and it is doubtful if any actual prejudice has been caused to them by the inadequacy of the show cause notice. However, as we have said above, the Government ought to be fair and liberal in dealing with private persons. As held by a Full Bench of this court in Shri K.R Raghavan…Petitioner v. Union Of India, Etc.…S, ILR (1979) Delhi-1(5) the Government has always an inherent power to review its administrative and quasi-judicial orders if they are vitiated by violation of natural justice or they have caused obvious injustice to some-one.

19. In Mrs. Maneka Gandhi v. Union of India, (1978) 1 SCC 248(6), the order impounding the pass-port of the petitioner had been passed without giving her a hearing. Even though the order itself could not be said to have been passed by the Government without applying its mind to the facts of the case of the petitioner, nevertheless the Supreme Court thought that the petitioner should have been given an opportunity to show cause against the impounding of the pass-port. As the Government expressed its willingness to give such a hearing to the petitioner, the Supreme Court did not quash the order but apparently left it to the Government to review the said order, if necessary, after hearing the petitioner.

20. While, therefore, we refuse to quash the impugned order, the reasons for which have been disclosed by the Government, we direct the Government to give one more hearing to the petitioners to show cause that on the facts of the case of the petitioners no prejudice would be caused to the interests of the general public or to the development of indigenous industry by the recordal of petitioner No. 1 as the registered user of the trade mark of petitioner No. 2. If after such hearing the Government is satisfied that the impugned order should be reviewed the Government would be free do to so. If the Government is, on the other hand, of the view that even after such hearing there is no need to review the impugned order, the Government would say so. In the communication to the petitioners after such a hearing the Government may reaffirm the reasons already stated or may modify them or add to them.

21. The petition is thus disposed of as above without any order as to costs.

R.S Writ petition partly allowed.

J.M.A Industires Ltd. & Another Petitioners v. Union India & Another S

Structured Summary of the Opinion (V.S. Deshpande, C.J.)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Petitioners' Arguments

Respondent (Central Government / Registrar) Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

J.M.A Industires Ltd. & Another Petitioners v. Union India & Another S

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