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Structured Summary of the Provided Opinion

Factual and Procedural Background

The opinion traces the events surrounding the registration and subsequent challenge to a trade mark called "FINEX". M/s. Forward Auto Industries, a firm of two partners Tilak Raj Bagga and Trilok Chand, was dissolved in 1985. On April 3, 1984 they had registered the trade mark FINEX in Class 12, Part A. On June 15, 1987, Trilok Chand together with Vijay Kumar and Yogesh Kumar trading as M/s. Brakes International applied under Section 44 of the Trade and Merchandise Marks Act, 1958, alleging assignment of the mark in their favour, and obtained registration as proprietors. On May 8, 1988 Tilak Raj Bagga applied under Section 56 for rectification, alleging that the assignment had been obtained by undue influence and misrepresentation; he amended to allege that the Section 44 order was void because it had been passed without notice and opportunity of hearing. On November 7, 1996 the Assistant Registrar of Trade Marks held that the assignment order was passed without notice to Tilak Raj Bagga, violative of natural justice, and ordered removal of the entry in favour of Trilok Chand and others and restoration of the prior position. The present petition is directed against that Assistant Registrar's order. It is also recorded that Tilak Raj Bagga had filed a civil suit in 1988 challenging the alleged assignment, and that the suit remained pending.

Legal Issues Presented

  1. Whether Section 44 of the Trade and Merchandise Marks Act, 1958, which provides for registration of assignments and transmissions, requires the Registrar to afford a pre-decisional hearing (audi alteram partem) to an alleged co-proprietor or other affected person before registering an assignment.
  2. Whether the remedial/post-decisional remedy under Section 56 (power to cancel or vary registrations and to rectify the register) operates so as to exclude or render unnecessary any duty to afford a pre-decisional hearing under Section 44.
  3. Whether an order under Section 44 passed without notice to an affected person is void for violation of the principles of natural justice and thus can be set aside.
  4. What procedural course should follow after a finding that pre-decisional hearing was not afforded — whether the appropriate action is to remit to the Registrar or to leave the matter to the Registrar's discretion under the statutory proviso.

Arguments of the Parties

Petitioner's Arguments (Mr. Madan Bhatia)

  • Section 44 does not specifically require a pre-decisional hearing; consequently, the Assistant Registrar was not justified in invoking the audi alteram partem rule.
  • Form TM-24 (used for an application under Section 44 when not made conjointly by a registered proprietor) does not envisage giving notice to a joint proprietor.
  • Section 56 provides a post-decisional opportunity of hearing; therefore, a post-decisional remedy under Section 56 can suffice and would place the case in the category where pre-decisional natural justice is excluded (relying on Swadeshi Cotton Mills v. Union of India and paragraph 42 of that judgment).
  • Relied on authorities (including Y.C. Shivkumar) emphasizing limits to application of natural justice where urgency or public interest requires flexibility.

Respondent's Arguments (Mr. Mohan Vidhani)

  • The Registrar must give notice before deciding a petition under Section 44; an order passed in violation of natural justice would be void (relied on Kohinoor Paints Faridabad (P) Ltd. v. Paramveer Singh).
  • Argued that Swadeshi Cotton Mills does not lead to the conclusion that post-decisional remedy under Section 56 would necessarily negate the need for pre-decisional hearing in the present statutory scheme.
  • Pointed out that in Kohinoor Paints the question whether Section 56 provides a post-decisional remedy that would oust pre-decisional audi was not raised or decided therein.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Cooper v. Wandsworth Board of Works (1863) 14 CB (NS) 180 / All ER references Illustration of the audi alteram partem principle; the justice of common law will supply omission of the legislature in relation to fair hearing. Used to support the proposition that even if statute is silent, common-law principles of natural justice may require a hearing; court relied on this to assess the statutory silence of Section 44.
Wiseman v. Borneman (1969) 3 All ER 275 Natural justice/audi alteram partem regarded as an essential part of the philosophy of the law (per Lord Morris of Borth-y-Gest). Cited to underscore the centrality of natural justice and to reinforce the expectation that administrative powers be exercised within those limits.
Mohinder Singh Gill v. Chief Election Commissioner, AIR 1978 SC 851 Describes natural justice as a "brooding omnipresence" in law (quotation from Krishna Iyer, J.). Relied on to highlight the strong judicial tradition in India recognizing pervasive importance of natural justice when interpreting statutory powers.
Fairmount Ltd. v. Secretary of State for the Environment (Lord Russell of Killowen) Parliament is not ordinarily taken to authorise exercise of powers in breach of natural justice; compliance should be implied unless contrary appears. Used to justify implying a duty to afford natural justice where the statute is silent.
Y.C. Shivkumar v. B.M. Vijya Shankar (AIR 1992 SC 952) Natural justice is flexible; courts are cautious in extending it where it would cause more injustice than justice; exceptions exist. Discussed to acknowledge limits to audi alteram partem and to explain that exceptions do not eliminate the core requirement of fair play.
Karnataka Public Service Commission v. B.M. Vijaya Shakar (1992) Contextual citation regarding judicial circumspection in applying natural justice. Referenced to support the proposition that the courts have been careful in extending natural justice where inappropriate.
Swadeshi Cotton Mills v. Union of India, AIR 1981 SC 818 Explains flexibility of audi alteram partem and paragraph 42: where statute contemplates a full post-decisional review/appeal, pre-decisional hearing may be excluded; otherwise courts reluctant to imply exclusion. Examined in detail: court considered whether the Swadeshi principle (post-decisional remedy excluding pre-decisional hearing) applies to Section 56 of the Trade Marks Act and concluded that Section 56 differs materially from the provision considered in Swadeshi.
A.R. Antulay v. R.S. Nayak (1988) 2 SCC 602 (AIR 1988 SC 1531) Violation of principles of natural justice renders the impugned action void; prejudice need not be proved. Applied to support the conclusion that breach of natural justice can render a quasi-judicial administrative decision void.
Ridge v. Baldwin (per Lord Selborne L.C.) Failure to comply with rules as to hearing hurts "the essence of justice". Referred to underline the significance of hearing requirements in administrative decisions.
John v. Rees (1970) 1 Ch 345 Illustrates human consequences of decisions made without hearing and the potential for matters to be explained or answered if hearing allowed. Quoted to emphasize that an opportunity to be heard can materially affect outcomes and sentiments of those affected.
Crane v. Public Prosecutions (1921) 2 AC 299 Description of a proceeding without hearing as "a mis-trial and in truth no trial at all". Quoted when concluding that an order made without affording a hearing was a nullity akin to a mis-trial.
Liberty Oil Mills v. Union of India, AIR 1984 SC 1271 Natural justice may vary in degree; application depends on statute and situation. Used to support the idea that the scope of natural justice can differ from statute to statute and case to case.
Kohinoor Paints Faridabad (P) Ltd. v. Paramveer Singh, 1996 PTC 69 Held that the Registrar must give notice before deciding under Section 44 and that an order in violation of natural justice is void; did not decide whether Section 56 would oust pre-decisional duty. Cited by respondent; court noted the decision and observed that Kohinoor did not address the specific Section 56 issue now before the court.
R. v. Greenwich Country Court Registrar (1885) 15 QBD 54 Authority on the meaning of "party" — that "party" prima facie means a litigant in the Court. Relied on in construing "in dispute between the parties" in the proviso to Section 44 to mean dispute between litigants (i.e., opposing claimants), supporting the need to consider those parties.
Grapulin v. Catons and Corrugated Papers Pty. Ltd. (1961) SR (NSW) 348 Also treats "party" as meaning one of the litigants in the relevant proceeding. Used similarly in interpreting "between the parties" in the proviso to Section 44.

Court's Reasoning and Analysis

The court undertook a statutory and doctrinal analysis, proceeding in several steps as set out in the opinion:

  1. Identification of the competing contentions: the petitioner (through Mr. Madan Bhatia) argued Section 44 is silent and therefore does not require pre-decisional hearing and, because Section 56 provides a post-decisional remedy, the lack of pre-decisional hearing can be cured thereafter; the respondent (through Mr. Mohan Vidhani) argued that Registrar must give notice and hearing before acting under Section 44 and that an order made without hearing is void.
  2. Examination of authorities on natural justice: the court reviewed an array of authorities establishing that audi alteram partem is a core rule of fair administrative decision-making but acknowledged that exceptions exist where urgency or other compelling circumstances make prior hearing impracticable. The court emphasised the core principle of "fair play in action" and quoted authorities (including Swadeshi Cotton Mills) describing the circumstances in which a post-decisional remedy may be treated as sufficient.
  3. Close textual analysis of the Trade Marks Act provisions: the court reproduced Section 44 (registration of assignments and transmissions) and Section 56 (power to cancel or vary registration and to rectify the register), and inspected Rule 71 and Form TM-24 used for Section 44 applications. It noted that Section 44 authorises the Registrar to register an applicant "on proof of title to his satisfaction", which implies an investigative and adjudicative function logically requiring inquiry and, ordinarily, hearing of interested persons.
  4. Interpretation of the proviso to Section 44(1): the court paid special attention to the proviso allowing the Registrar to refuse registration "where the validity of an assignment or transmission is in dispute between the parties" until a competent court determines rights. The judge parsed the phrase "in dispute between the parties" and concluded that "the parties" refers to opposing claimants (i.e., those who would be litigants or affected persons) and thereby the proviso contemplates a situation where the Registrar must consider competing claims — further indicating that pre-decisional hearing ought to be the norm.
  5. Distinction between Section 56 and the provisions considered in Swadeshi Cotton Mills: the court compared Section 56 with Section 18‑F of the Industries (Development and Regulation) Act (the provision considered in Swadeshi) and concluded that Section 56, unlike Section 18‑F, does provide a retroactive full remedial hearing equitable to a full right of appeal at the post-decisional stage. Nevertheless, the court did not accept that the existence of Section 56 necessarily ousted the requirement for pre-decisional hearing under Section 44 in the circumstances of the present case.
  6. Consideration of urgency and statutory purpose: the court observed that Section 44 is not drafted to meet emergency situations; it does not contemplate any urgency compelling denial of pre-decisional hearing. The court found no exceptional circumstances in the facts to justify dispensing with natural justice prior to registration under Section 44.
  7. Application to the facts: given that an alleged assignor (Tilak Raj Bagga) had not been given notice and an inter partes dispute over validity existed (indeed, a civil suit was pending), the court concluded that the order under Section 44 passed without notice offended fair play and natural justice. Citing authorities that a violation of natural justice renders an action void, the court characterised the grant of registration without hearing as akin to "a mis-trial and in truth no trial at all."
  8. Disposition regarding remittal: the court considered the respondent's submission (based on Kohinoor Paints) that remittal to the Registrar was unnecessary because the civil suit already evidenced a dispute. The court declined to impose its own view on how the Registrar should exercise the discretion conferred by the proviso to Section 44 and instead directed the parties to appear before the Registrar (respondent No. 2) on a specified date so that the Registrar could decide, judicially, how to proceed.

Holding and Implications

Holding:

The court held that the principles of natural justice require that, ordinarily, a person affected by an application under Section 44 (registration of assignment or transmission) must be given notice and an opportunity to be heard before the Registrar registers an assignment; the existence of Section 56 does not in the circumstances of this case oust that requirement. An order passed under Section 44 without affording a pre-decisional hearing is void.

Immediate consequences and procedural disposition:

  • The court concluded that the earlier registration/order under Section 44 made without hearing was void for want of natural justice (described as a mis-trial).
  • Rather than directing a specific substantive outcome in favour of any party, the court directed that the parties appear before respondent No. 2 (the Registrar) on June 10, 1997, and left it to the Registrar to determine, judicially and in the exercise of his discretion, how to proceed.

The opinion does not purport to create a new statutory rule beyond applying and reconciling established authorities; rather it applies settled principles of natural justice to the particular statutory context of Sections 44 and 56 of the Trade and Merchandise Marks Act, 1958.

Order accordingly.

    Brakes International v. Tilak Raj Bagga And Another

    Although the various parts of the version put forth do not dovetail very well into one another, let me, in my own way, provide a graph of the events. M/s. Forward Auto Industries was a firm comprising of two partners namely Tilak Raj Bagga and Trilok Chand. It was dissolved in the year 1985. However, much before that, (on April 3, 1984, to be precise) they had got registered in Class 12 and in Part A a trade mark called FINEX. On June 15, 1987 the said Trilok Chand alog with Vijay Kumar and Yogesh Kumar trading as M/s. Brakes International moved a petitioner under Section 44 of the Trade and Merchandise Marks Act, 1958 (hereinafter called the Act) alleging assignment of the said trade mark in their favour and on that basis got themselves registered as propreitors of the same. On May 8, 1988 Tilak Raj Bagga moved an application under Section 56 of the Act for rectification alleging that the assignment had been obtained by Trilok Chand and others by misrepresenting the facts and under undue influence and misrepresentation. Later, by way of amendment, he also sought rectification on the ground that the order under Section 44 was void having been passed without notice and opportunity of hearing. On November 7, 1996 the Assistant Registrar of Trade Marks holding that the order of assignment was passed without notice to Tilak Raj Bagga and as such was violative of the principles of natural justice, ordered the removal of the entry made in favour of Trilok Chand and others and consequent restoration of the position as it existed prior to June 15, 1987. The present petition is directed against the said order of the Assistant Registrar.

    2. Besides what has been noticed above, what more needs to be mentioned is that in the year 1988 Tilak Raj Bagga had filed a civil suit challenging the validity of the alleged assignment on the ground of its having been obtained under undue influence and misrepresentation etc. and for declaration that he continued to be the co-owner of the said Trade Mark along with Trilok Chand. Admittedly the said civil sit is still pending disposal.

    3. Mr. Madan Bhatia, the learneed counsel for the petitioner, submits that Section 44 of the Act does not specifically require pre-decisional hearing and the consequently the Assistant Registrar was not justified in invoking the audi alteram partem rule.

    4. Bytes J. tells us in Cooper v. Wandsworth Board of Works, (1863) 14 CB (NS) 180 :

    “I remember to have heard it observe by a very learned man that even God himself did not pass sentence upon Adam before he was called upon to make his defence. “Adam (says God) “Where art thou? Hast thou not eaten of the tree whereof I commanded thee that though shouldest not eat,” And the same question was put to Eve also.”

    The homo sapiens regard this principle of audi alteram partem a “majestic” *Current Legal Problems, 1973, Vol. 26, p. 16 conception, and “an essential part of the philosophy of the law” Per Lord Morris of Borth-y-Gest in Wiseman v. Borneman, (1969) 3 All ER 275 for it keeps arbitrary actions within limits, preserves rule of law, ensures good administration, and an honest or bonafide decision and that is why it has assumed, in the words of Krishna Iyer, J. “a brooding omnipresence” Mohinder Singh Gill v. Chief Election Commissioner, AIR 1978 SC 851. There may be no express provision in the statute requiring it to be followed, “yet”, in the words of Bytes, J. in Cooper v. Wandsworth Board of Work (1861-73) All ER Reg Ext 1554 “the justice of the common law will supply the omission of the legislative”. Even otherwise, in the words of Lord Russell of Killowen in Fairmount Ltd. v. Environment Secretary (H.I(E). “it is to be implied, unless the contrary appears, the Parliament does not authorise by the Act the exercise of powers in breach of the principles of natural justice, and that parliament does by the Act require, in the particular procedures, compliance with those principles.” To say, then, that Section 44 of the Act being silent on the requirement to hear the party would be conclusive of the question would, to borrow the words of Prof. Clark *Clark “Natural Justice, Substance and Shadow” Public Law Journal 1975 take us to an area “benighted by the narrow conceptualism” of the past.

    5. Mr. Bhatia says that the concept of natural justice has its limits. I cannot possibly deny it. Surely, the audi alteram partem rule has its roots in the duty to act fairly and it may be excluded in certain cases. The exception to the rule are well-recognised and find mention in Judicial Review of Administrative Act by S.A de Smith (See 2nd Edition pp. 168 to 179), Mr. Madan Bhatia has drawn my attention to Y.C Shivkumar v. B.M Vijya Shankar, (1992) 4 JT (SC) 348 : (AIR 1992 SC 952), wherein the Supreme Court observed (at pp. 954-55 of AIR) :

    “Natural justice is a concept which has succeeded in keeping the arbitrary action within limits and preserving the rule of law. But with all the religious rigidity with which it should be observed, since it is ultimately weighed in balance of fairness, the Courts have been circumspect in extending it to situations where it would cause more injustice than justice. Even though the procedure of affording hearing is an important as decision on merits yet urgency of the matter, or public interest at times require flexibility in application of the rule as the circumstances of the case and the nature of the matter required to be dealt may serve interest of justice better by denying opportunity of hearing and permitting the person concerned to challenge the order itself on merits not for lack of hearing to establish bona fide or innocence but for being otherwise arbitrary or against rules.”

    The passage merely summarises what has long been established by judicial decisions. We all know that Courts have been circumspect in extending it to situations where it would cause more injustice than justice. (See Karnataka Public Service Commission v. B.M Vijaya Shakar, (1992) 4 JT (SC) 348 : (AIR 1992 SC 952)). But then, what would be apparent from the above quoted passage from Y.C Shivkumar's case is that the exceptions talked of do not in any way militate against the rule which demands, to use the words of Lord Morris of Borth-y-Gest “fair play in action”. The application of audi alteram partem rule may be eschewed in very exceptional circumstances and that too only where compulsive necessity so demands as otherwise it would become lifeless.

    6. Mr. Bhatia has also taken me through the following appearing in Swadeshi Cotton Mills v. Union of India, AIR 1981 SC 818 (Para 76) :

    “The audi alteram partem rule, as already pointed out, is a very flexible, malleable and adaptable concept of natural justice. To adjust and harmonise the need for speed and obligation to act fairly, it can be modified and the measure of its application cut short in reasonable proportion to the exigencies of the situation. Thus, in the ultimate analysis, the question (as to what extent and in what measure) this rule of fair hearing will apply at the pre-decisional stage will depend upon the degree of urgency, if any, evident from the facts and circumstances of the particular case.”

    But then, I do not think the circumstances of this case required the denial of opportunity of hearing in the interest of justice or with a view to “adjust and harmonise the need for speed and obligation to act fairly”. Where were those exceptional circumstancs in the case in hand? What was it in the case which may lead us to hold that interest of justice was served better by denying opportunity of hearing? I see none, I do not discern even a tiny speck of it. In that very case the Supreme Court told us :

    “A quasi-judicial administrative decision reduced in violation of the audi alteram partem rule, wherever it can be read as an implied requirement of the law, is null and void.”

    It reminded us again in A.R Antulay v. R.S Nayak, (1988) 2 SCC 602 : (AIR 1988 SC 1531) :

    “..........No prejudice need be proved for enforcing the fundamental rights. Violation of a fundamental right itself renders the impugned action void. So also the violation of the principles of natural justice renders the act a nullity.”

    And, surely so, for failure to comply with the rules as to hearing hurts “the essence of justice” (Per Lord Selborne L.C in Ridge v. Baldwin see also P.P Craig : Administrative Law 2nd Edn. (1993) pp. 337, 338).

    7. Mr. Bhatia further submits that Sec. 56 of the Act provides post decisional opportunity of hearing and for that reason present is a case which can safely be placed in a category where natural jutice before passing an order under Sec. 44 stands excluded. In support he again leans heavily on the judgment of the Supreme Court in Swadeshi Cotton Mills v. Union of India, AIR 1981 SC 818. Reference has particularly been made to paragraph 42 of the judgment which is as under :

    “In short, the general principle “as distinguished from an absolute rule of uniform application — seems to be that where a statute does not, in terms, exclude this rule of prior hearing but contemplates a post-decisional hearing amounting to a full review of the original order on merits, then such a statute would be construed as excluding the audi alteram rule at the pre-decisional stage. Conversely, if the statute conferring the power is silent with regard to the giving of a pre-decisional hearing to the person affected and the administrative decision taken by the authority involves civil consequences of a grave nature, and no full review or appeal on merits against that decision is provided, Courts will be extremely reluctant to construe such a statute as excluding the duty of affording even a minimal hearing shorn of all its formal trappings and dilatory features at the pre-decisional stage, unless, viewed paragmatically, it would paralyse the administrative process or frustrate the need for utmost promptitude. In short, this rule of fair play “must not be jettisoned save in very exceptional circumstances where compulsive necessity so demands”. The Court must make every effort to salvage this cardinal rule to the maximum extent possible, with situational modifications. But, to recall the words of Bhagwati, J. the core of it must, however, remain, namely, that the person affected must have reasonable opportunity of being heard and the hearing must be a genuine hearing and not an empty public relations exercise.”

    8. Can it be said, in the light of the observations of the Supreme Court as reproduced above, that in the case in hand the pre-decisional natural justice stands excluded by virtue of Sec. 56 of the Act? The answer needs, as a preliminary, a probe into Sections 44 and 56 and a general view of some other provisions of the Act.

    9. Section 44 which deals with registration of assignments and transmissions and under which the present petitioners had applied is as follows :

    “Registration of assignments and transmissions.— (1) Where a person becomes entitled by assignment of transmission to a registered trade mark, he shall apply in the prescribed manner to the Registrar to register his title, and the Registrar shall, on receipt of the application and on proof of title to his satisfaction, register him as the proprietor of the trade mark in respect of the goods in respect which the assignment or transmission has effect, and shall cause particulars or the assignment or transmission to be entered on the register.

    Provided that where the validity of an assignment of transmission is in dispute between the parties, the Registrar may refuse to register the assignment or transmission until the rights of the parties have been determined by a competent Court.

    (2) Except for the purpose of an application before the Registrar under sub-section (1) or an appeal from an order thereon, or an application under Section 56 or an appeal from an order thereon, a document or instrument in respect of which no entry has been made in the register in accordance with sub-section (1), shall not be admitted in evidence by the Registrar or any Court in proof of title to the trade mark by assignment or transmission unless the Registrar or the Court, as the case may be, otherwise directs.”

    10. As per Rule 71 an application under S. 41 has to be made on Form TM-24 or TM-23 according as it is made by such person alone or conjointly with the registered proprietor. As in the present case the application was not made conjointly with the respondent who was admittedly a joint proprietor, the application was admittedly made in Form TM-24 which is in following terms :

    Form TM 24

    TRADE AND MERCHANDISE MARKS ACT, 1958

    Request to register a subsequent proprietor of a trade mark or trade marks upon the same devolution of title. Section 44, Rule 71

    I (or We) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . hereby request that my (or our) name may be entered in the Register of Trade Marks as proprietor of trade marks (s) Nos. (s). . . . . . . . . in Class. . . . . . . . . . . . as from the. . . . . . . . . . . . . .

    I am (or We are) entitled to the trade mark(s) by virtue of. . . . . . . . . . . . . . . of which the original and an attested copy are enclosed herewith.

    The assignment of the trade mark was (not) made otherwise than in connection with the goodwill of the business in which the mark (had been) (was) used (and there is sent herewith a copy of the Registrar's direction to advertise the assignment, a copy of each of the advertisement complying therewith, and a statement of the dates of the issue of any publication containing them.

    I (or we) declare that the facts and matters stated herein are true to the best of my (or our) knowledge, information and belief.

    Dated this. . . . . . . . day of. . . . . . . . . 19. . . . .

    To

    The Registrar of Trade Marks,

    The Office of the Trade Marks Registry at. . . . . . .”

    11. Section 56 which deals with power to cancel or vary registration and to rectify the register, provides as under :

    “56. Power to cancel or vary registration and to rectify the register.— (1) On application made in the prescribed manner to a High Court or to the Registrar by any person aggrieved, the Tribunal may make such order as it may think fit for cancelling or varying the registration of a trade mark on the ground of any contravention, or failure to observe a condition entered on the register in relation thereto.

    (2) Any person aggrieved by the absence or omission from the register of any entry, or by any entry made in the register without sufficient cause, or by any entry wrongly remaining on the register, or by any error or defect in any entry in the register, may apply in the prescribed manner to a High Court or to the Registrar, and the Tribunal may make such order for making expunging or varying the entry as it may think fit.

    (3) The Tribunal may in any proceeding under this section decide any question that may be necessary or expedient to decide in connection with the rectification of the register.

    (4) The Tribunal, of its own motion, may, after giving notice in the prescribed manner to the parties concerned and giving them an opportunity of being heard, made any order referred to in sub-section (1) or sub-section (2).

    (5) Any order of the High Court rectifying the register shall direct that notice of the rectification shall be served upon the Registrar in the prescribed manner who shall upon receipt of such notice rectify the register accordingly.

    (6) The power to rectify the register conferred by this section shall include the power to remove a trade mark registered in part A of the register to part B of the register.”

    12. The contention of Mr. Bhatia is that Sec. 44 nowhere provides for pre-decisional hearing and that even Form TM-24 does not envisage giving of any notice to the joint proprietor and as Sec. 56 provides post-decisional hearing, the observations of the Supreme Court in paragraph 42 in Swadeshi Cotton Mill's case (AIR 1981 SC 818) would apply.

    13. On the other hand, Mr. Mohan Vidhani the learned Counsel for the respondent, has drawn my attention to the judgment coming from the pen of my brother K. Ramamoorthy, J. in Kohinoor Paints Faridabad (P) Ltd. v. Paramveer Singh, 1996 PTC (69). It was held therein that the Registrar must give notice before deciding a petition under Sec. 44 and that an order passed in violation of the principles of natural justice would be void in law. However, as the judgment would reveal the question as to whether Sec. 56 provides post-decisional remedy and if so would it wash away the objection regarding the audi alteram rule at the pre-decisional stage, was neither raised nor dealt with.

    14. Mr. Vidhani says that the judgment of the Supreme Court in the case of Swadeshi Cotton Mills (AIR 1981 SC 818) (supra) itself takes away the sting from the argument of Mr. Bhatia as in that case too although there was a provision for post-decisional hearing it was considered to be of no effect.

    15. Is it so?

    16. The Swadesh Cotton Mill's case (AIR 1981 SC 818) (supra) was under the Industries (Development and Regulation) Act. Section 18-A of the Act gives power to the Central Government to assume management or control of an industrial undertaking in certain cases. Section 18-A invests the Central Government to take over industrial undertakings without investigation in certain circumstances. Section 18-F of the Act invests the Central Government with the power to cancel notified order under Section 18-A. As Mr. Vidhani feels that Section 18-F provides post-decisional hearing, let us have a closer look at it. It runs as follows :

    “18-F. Power of Central Government to cancel notified order under Section 18-A. — If at any time it appears to the Central Government on the application of the owner of the industrial undertaking or otherwise that the purpose of the order made under Section 18-A has been fulfilled or that for any other reason it is not necessary that the order should remain in force, the Central Government may, by notified order, cancel such order and on the cancellation of any such order the management or the control, as the case may be, of the industrial undertaking shall vest in the owner of the undertaking.”

    17. Does Section 18-F provide an effective post-decisional hearing to the aggrieved party? I need pass no judgment on that for the Supreme Court in Swadeshi Cotton Mill's case (AIR 1981 SC 818) (supra) has already said that it does not. The Court observed :

    “The third reason for our forbearance to imply the exclusion of the audi alteram partem rule from the language of S. 18-AA(1)(a) is, that although the power thereunder is of a drastic nature and the consequence of a takeover are far-reaching and its effect on the rights and interests of the owner of the undertaking is grave and deprivatory, yet the Act does not make any provision giving a full right of a remedial hearing equitable to a full right of appeal, at the post-decisional stage.”

    18. Can it be said that the right of post-decisional hearing available under Section 56 is illusory as in its operation and is prospective and not retroactive? Is it strictly restricted to and dependent upon the post-decisional circumstance? I do feel that Sec. 56 of the Act, unlike Sec. 18-F of the Industries (Development and Regulation) Act, does give a retroactive full right of a remedial hearing equitable to a full right of appeal, at the post-decisional stage. Consequently, Mr. Vidhani cannot draw any solace from what has been said by the Supreme Court with regard to Section 18-F of the Industries (Development and Regulation) Act, 1951.

    19. If Section 56 of the Act provides a full right of remedial hearing at the post-decisional stage which I feel it does, then would it clinch the issue? Does the natural justice concept of pre-decisional hearing thus stand excluded?

    20. Let us have yet another look at Sec. 44 and this time let it be more penetrating. The section envisages no urgency or imperative necessity of taking immediate action. It speaks of no exigencies to cut or even modify the application of the principle of natural justice. The section rather gives a hint, clear and loud, that no order should be passed without a pre-decisional hearing. I say so because the Registrar can order the applicant to be registered as the proprietor of the trade mark only “on proof of title to his satisfaction” and surely this “satisfaction” carries within its embryo the requirement to enquire and investigate and thus need to hear the other side. And, if there still be any doubt with regard to such a construction it is dispelled by the proviso to sub-section (1) of Sec. 44 which, it may be recalled, lays down :

    “Provided that where the validity of an assignment or transmission is in dispute between the parties, the Registrar may refuse to register the assignment or transmission until the rights of the parties have been determined by a competent Court.”

    21. Does this proviso not proclaim the need for pre-decisional hearing? Mr. Bhatia says it does not. According to him the proviso merely covers a situation where the Registrar on his own or at the instance of the petitioner comes to know of a dispute. I am not prepared to give it such a restricted play. Let us take the case in hand. The Registrar had no means to know about the claim of the respondent. The petitioner himself never disclosed the existence of any challenge to the validity of the assignment and yet, admittedly, there is a dispute. What happens to the proviso to sub-section (1) of Section 44 in such a situation? By accepting what Mr. Bhatia wants us to accept, will we be serving or subverting the provision?

    22. We all know by now that a “dispute” envisages a controversy, a contest by opposing argument and expression of opposing views of claims. It means a conflict or contest. It thus arises when there are conflicting claims or when, to say it differently, one makes a subject of disputation or when one opposes, controverts or calls in question or denies the validity of. And then, in the proviso to sub-section (1) of Sec. 44 the verb transitive “dispute” does not stand in isolation. Lest we forget, this is how it goes :

    “Provided that where the validity of an assignment or transmission is in dispute between the parties, the Registrar may refuse to register the assignment. . . . . . . .” (Emphasis supplied)

    23. The “dispute” here is thus one which is “between the parties”. As we have seen “dispute” envisages a person who sets up a claim and a person who opposes it. Any and every such person will be a disputant or disputer. But every such disputant or disputer need not be a “party”. The legislature could easily say :

    “Provided that where the validity of an assignment or transmission is in dispute, the Registrar may refuse to register the assignment.”

    But the legislature did not say so. It said “. . . . . .is in dispute between the parties” and thereby, in my view, limited the range of the disputants or the disputers and so also of the claimants and confined them to only those who were “the parties”.

    24. What do we, the lawmen, mean when we say “between the parties”? Who is a “party” for us? This word too is not defined in the Act though some other Acts do define it. Take, for example, The Supreme Court of Judicature (Consolidation) Act, 1925 (S. 225) and the Country Courts Act, 1959 (S. 201). True, the Acts come from distant shores but then how does it matter? As per the Act of 1925 “Party” includes every person served with notice of or attending any proceeding, although not named on the record. And, as per the Act of 1959 “party” includes every person served with notice of, or attending, any proceeding, whether named as a party to that proceeding or not. I also mention that Sec. 43 of the Country Courts Act, 1856 enabled any “party” requiring an act to be done by a Judge or officer of the country Court to apply to any Superior Court for a rule calling upon such Judge or Officer, and also the “party” to be effected by such act, to show cause why such act should not be done. In R. v. Greenwich Country Court Registrar, (1885) 15 QBD 54, question arose about the meaning of : “That any party requiring such act to be done may apply to any Superior Court”. Brett M.R held that : “the party there means a litigant in the Court”. Another case reported as Grapulin v. Catons and Corrugated Papers Pty. Ltd., (1961) SR (NSW) 348 also related to the meaning of “party”. It revolved around Sec. 104(1) of the Common Law Procedure Act, 1899-1965 (N.S.W), which provides that upon the application of either “party”, the Court may make a rule for the inspection by such party of any real or personal property. Ferguson, J. said : “The word “party” in Section 104 and other sections referred to prima facie means one of the litigants in the relevant action or proceeeding”. And, if that be so, when the proviso to sub-section (1) of Sec. 44 says that where the validity of an assignment or transmission is “in dispute between the parties” does it not lead to the conclusion that “the parties” mean at least the person petitioning under Section 44 and the alleged assignor And, if that be so, and I feel certain that it is so, does it not proclaim loudly and clearly the requirement of pre-decisional hearing?

    25. I have already said that Sec. 44 is not drafted to meet any emergency. It does not even envisage any. It is a measure of leisurely pace. While it is not designed to meet any extreme urgency brooking absolutely no delay, an order passed under it without notice say to the alleged assignor may grievously hurt his rights. Can, in such a case, the order be upheld merely because the assignor can later ask for its cancellation? Will such an approach be in consonance with the essential principles of fair play? Let us not forget what Megarry, J. said in John v. Rees, (1970) 1 Ch 345 at p. 405 :

    “As everybody who has anything to do with the law well-knows, the path of the law is strewn with examples of open and shut cases which, somehow, where not; of unanswerable charges which, in the event, were completely answered; of inexplicable conduct which was fully explained; of fixed and unalterable determination that, by discussion, suffered a change. Nor are those with any knowledge of human nature who pause to think for a moment likely to underestimate the feelings of resentment of those who find that a decision against them has been made without their being afforded any opportunity to influence the course of events.”

    26. Going back to Swadeshi Cotton Mill's case (AIR 1981 SC 818) (supra), what was observed was that in cases where owing to the compulsion of the fact-situation or the necessity of taking speedy action, no pre-decisional hearing is given but the action is followed soon by a full post-decisional hearing to the person affected, there is in reality no exclusion of the audi alteram partem rule. Where is that situational urgency in our case? One can understand exclusion of pre-decisional hearing where the statute itself excludes it thereby leaving no option to the Court. I can also understand its exclusion where the danger to be averted or the act to be prevented is imminent or where the action to be taken can brook no delay. I can also understand pre-decisional natural justice being excluded when the decisions taken are of ad interim nature pending investigation or enquiry unless, of course, the statute itself provides for hearing before the order is made. But, bereft of such or similar situation or situations, how can we do away with the audi alteram rule merely on the ground that there is a provision for post-decisional hearing? Natural justice is not a lip-service. It is not even a mere linguists' jargon. It is a finger print of human civilization. We cannot feel satisfied with feet on a ground hardly higher than a hillock. Let us not forbid the eye to wander beyond the frame of the stage. There may be instances when defect is so flagrant, the consequences so severe that most perfect of re-hearing may not be sufficient to produce a just result. That is why it is said that there can be no tape-measure of the extent of natural justice. It may indeed it may vary from statute to statute, situation to situation and case to case (See Liberty Oil Mills v. Union of India, AIR 1984 SC 1271). I can only say, in the circumstance of the case that I have rehearsed and in view of all that has been so ably urged, the respondent has not had “a fair crack of the whip”. 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 Sumner in Crane v. Public Prosecutions, (1921) 2 AC 299, “a mis-trial and in truth no trial at all”.

    27. Mr. Vidhani submits that since the validity of the alleged assignment is in dispute and as a civil suit challenging the alleged assignment is admittedly pending, there is no need to make a remittal order to the Registrar. In support he relies again on the judgment in Kohinoor Paints Faridabad (P) Ltd. v. Paramveer Singh, 1996 PTC 69 (supra). In the said case too a civil suit was pending with regard to the alleged assignment. It was held :

    “The first respondent has filed the suit No. 266/94 on the file of Shri R.C Jain, Addl. District Judge, Delhi. Therefore, it is clear that there is a dispute between the parties as the alleged assignment is challenged by the petitioner herein. I don't feel it proper to make a remittal order to the Registrar (second respondent) for the purposes of coming to a prima facie view about the existence of the dispute within the meaning of proviso to Section 45.

    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 Co. 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 17-8-94 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.”

    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 Sec. 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 or transmission until the rights of the parties have been determined by a competent 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.

    28. Let the parties appear before respondent No. 2 on June 10, 1997 and let him thereafter decide, judicially no doubt, in what direction he wants to proceed, and what course he wants to adopt. I need say no more.

    Order accordingly.
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