Kantilal Tulsidas Jobanputra v. Registrar of Trade Marks and Ors.

JUDGMENT

M.L. Pendse, J.

1. These two appeals are preferred under sub-section (2) of section 109 of the Trade and Merchandise Marks Act, 1958, and can be conveniently disposed of by a common judgment as the controversy in both the appeals arise out of the refusal of the Registrar to grant extension of time for filing evidence in support of the opposition lodged by the petitioner for registration of a mark. It is necessary to set out a few facts to appreciate the grievance of the petitioner in both the proceedings. The petitioner and Chandulal Tulsidas Jobanputra and Manilal Tribhuvan Jobanputra were trading since the year 1957 in the name of Popular Pen & Clip Industries. On August 10, 1961, the Trade Mark 'REKHA' was registered in the name of the three partners in relation to the goods included in class 16. The partners were carrying on business in various goods including pens, ball-pens, clips, nibs and parts thereof. Chandulal Tulsidas Jobanputra retired from the partnership concern on December 7, 1964 and on his retirement the remaining two partners continued the partnership by entering into a fresh agreement dated December 8, 1964. The two partners by a Deed of Dissolution dated February 10, 1972 dissolved the partnership and the petitioner Kantilal Tulsidas became the sole proprietor of the business. The Trade Mark 'REKHA' was renewed by the petitioner for a period of seven years with effect from August 10, 1975.

2. The respondent No. 2 Lion Pencils Pvt. Ltd. applied for registration of the trade mark 'REKHA' on August 7, 1973 by filing an application before the Registrar of Trade Marks. The respondent No. 2 sought the registration of the mark in respect of pencils including crayon pencils in class 16. The Registrar of Trade Marks informed the petitioner by letter dated February 24, 1975 about the application filed by the respondent No. 2. On August 12, 1976 the petitioner addressed a letter to respondent No. 2 protesting against the proposed registration of the mark on the ground that he is the registered holder of the identical mark. On September 3, 1976 respondent No. 2 replied to the letter sent by the petitioner and asserted his right to get the mark registered. The Registrar of Trade Marks, after consideration and perusal of the application filed by respondent No. 2 ordered that the application be advertised in the Trade Journal, and accordingly, on July 16, 1976, the application was advertised. On November 16, 1976 within the period of limitation, the petitioner lodged his notice of opposition. Thereafter on December 4, 1976, the respondent No. 2 filed a counter statement in which a preliminary objection was raised as to the maintainability of the opposition on the ground that the mark 'REKHA' was registered in the name of three partners and the petitioner had no right to claim exclusive ownership of the mark. The Registrar forwarded a copy of the counter statement alongwith a covering letter dated December 24, 1976 to the petitioner. By the covering letter, the attention of the petitioner was invited to Rule 53 of the Trade and Merchandise Marks Rules which provides that evidence in support of the opposition shall be filed within a period of two months from the date of service of the copy of the counter statement by the Registrar and on failure to take action within time, the opposition would be deemed to have been abandoned. The petitioner filed an application on February 17, 1977, for effecting change and claimed that in view of the dissolution of the partnership the registration of the mark should be entered exclusively in the name of the petitioner. The application came to be granted on August 6, 1977. In the meanwhile on March 23, 1977, the Registrar passed an order under Sub-rule (2) of rule 53 directing that the opposition be deemed to have been abandoned as the petitioner has failed to file evidence in support of the opposition within the stipulated time. The order was communicated to the petitioner on April 9, 1977 under a covering letter dated April 6, 1977. The order passed by the Registrar is under challenge in Miscellaneous Petition No. 926 of 1977 filed in this court on July 12, 1977.

3. The petitioner, before filing Miscellaneous Petition No. 926 of 1977 is this court, filed an application for review under rule 115 on April 18, 1977 before the Registrar requesting that the earlier order dated March 28, 1977 should be reconsidered. The petitioner also filed an application seeking extension of time of filing of evidence. The review application and the application for extension set out in detail the reasons for not filing the evidence within time. It is claimed that the evidence was not filed within time because the petitioner was under an impression that unless the change is effected in the Register in his favour it would not be possible for him to succeed in the opposition. The review application was heard on July 5, 1977 and came to be rejected by an order dated July 7, 1977. The order was communicated to the petitioner on July 23, 1977. The Registrar while rejecting the review application, came to the conclusion that the earlier order was self-operating and there is not discretion left with the Registrar when the application for extension filed beyond the expiry of two months. The Registrar held that even assuming that time can be extended even after the expiry of the period the petitioner has made out no case for exercise of the discretion and on the contrary the petitioner is guilty of serious laches. The order passed on review application is challenged in Miscellaneous Petition No. 1511 of 1977 filed under sub-section (2) of section 109 of the Act. The petition was filed in this court on October 20, 1977. As both the proceedings arise out of a refusal to grant time, they are heard together and disposed of by a common judgment.

4. Shri Tulzapurkar, the learned counsel appearing in support of the petitioners, submitted that the Registrar was in error in assuming that the period of two months cannot be extended in case the application for extension of time is not filed before the expiry of the period. The learned counsel submitted that provisions of rule 53 are clearly directory, the rule being a procedural one and the Registrar was in error in treating the rule as mandatory. The learned counsel further submitted that section 101 of the Act enables the Registrar to extend the time in cases where the period is not fixed by the provisions of the Act itself. Shri Tulzapurkar submitted that looking to the facts of the present case, the Registrar was clearly in error in not exercising the discretion in favour of the petitioner and extending time for filing evidence in support of the opposition. Shri Sethna, the learned counsel appearing on behalf of the Registrar, on the other hand contended that the appeal preferred against the original order has become infructuous because the earlier order merges in the order passed on the review application. Shri Sethna submits that the provision of Rule 53 are mandatory and the Registrar is left with no option but to declare that the opposition is deemed to have been abandoned in cases where the application for extension of time to file evidence is not made within two months. In view of these rival contentions, the question which requires determination in these two petitions is whether the provisions of rule 53 are mandatory or merely directory and where the Registrar was right in refusing to extend the time on the facts and circumstances of this case.

5. Before adverting to the contentions urged by the counsel in support of their claims, it is desirable to have a look at the provisions of the Act for registration of a trade mark. Chapter III relates to procedure for and duration of registration and section 18 requires a person desirous of registering a trade mark to apply in writing to the Registrar in the prescribed manner. On presentation of such application, the Registrar is required to accept the same and direct that it should be advertised. Before the Registrar directs advertisement of the application, a preliminary inquiry is held to determine whether the application is properly presented and whether there is any bar to register the mark. Section 21of the Act enables any person to give notice in writing in the prescribed manner to the Registrar of opposition to the registration. Such notice of opposition is to be given within three months from the date of advertisement of the application, but the Registrar is given power to extend the period by not more than one month. Sub-section (2) of section 21 provides that the Registrar shall serve a copy of the notice of opposition on the applicant, and within two months from the said date, the applicant shall send to the Registrar a counter-statement of the grounds on which he relies for his application. The sub-section (2) further provides that in case such counter-statement is not filed then the application shall be deemed to have been abandoned by the applicant. Sub-section (4) of section 21 requires the applicant and the opponent to submit evidence upon which they rely in support of their claim in the prescribed manner and within prescribed time to the Registrar. Section 101 enables the Registrar, on application being made to him, to extend the time for doing any act, not being a time expressly provided in the Act. The Registrar can extend the time even if the time specified has expired provided the Registrar is satisfied that there is sufficient cause. Section 133 enables the Central Government to make rules to carry out the purposes of the Act, and in pursuance of the powers conferred by this section. Rules have been published by the Central Government in the Gazette. Rule 51 onwards refers to the procedure for opposing the registration of a trade mark. Rule 51 provides for filing of a notice of opposition, while Rule 52 deals with the filing of a counter statement. Rule 53 requires to be quoted in detail as the main argument in these appeals centres round this Rule.

53. Evidence in support of opposition.-

Within two months from the service on him of a copy of the counter-statement by the Registrar, the opponent shall either leave with the Registrar such evidence by way of affidavit as he may desire to adduce in support of his opposition or shall intimate to the Registrar and to the applicant in writing that he does not desire to adduce evidence in support of his opposition but intends to rely on the facts stated in the notice of opposition. He shall deliver to the applicant copies of any evidence that he leaves with the Registrar under this sub-rule.

If an opponent takes no action under sub-rule (1) within the time therein prescribed, he shall, unless the Registrar otherwise directs be deemed to have abandoned his opposition.

6. The plain reading of Rule 53 makes it clear that within two months from the date of service of a copy of a counter-statement, the person filing the opposition shall file evidence in support of his opposition before the Registrar or intimate to the Registrar that he does not desire to adduce any evidence but intends to rely on the facts stated in the notice of opposition. Sub-rule (2) of rule 53 prescribed that if the opponent takes no action within the time prescribed, then the opposition shall be deemed to have been abandoned, unless the Registrar directs otherwise. The question for determination is whether the provisions of this Rule are mandatory or merely directory.

7. To determine this question it is necessary to ascertain the real intention of the legislature by finding out the purpose of the prescription, the public injury in the event of the neglect of the rule and the conspectus of circumstances bearing on the importance of the condition. It is well settled that the mere use of the word 'shall' is not sufficient to treat a provision as mandatory and that the proper perspective in which a provision should be appreciated is laid down by the Supreme Court in AIR 1961 SC 751 (State of Uttar Pradesh and others v. Babu Ram Upadhya).

When the statute user the word 'shall' prima facie, it is mandatory, but the court may ascertain the real intention of the legislature by carefully attending to the whole scope of the statute. For ascertaining the real intention of the legislature, the Court may consider, inter alia, the nature and the design of the statute, and the consequences which would follow from construing it one way or the other, the impact of other provisions whereby the necessity of complying with the provisions in question is avoided, the circumstances that the statute provides for a contingency of the non-compliance with the provisions, the fact that the non-compliance with the provisions is or is not visited by some penalty, the serious or trivial consequences that flow therefrom, and, above all, whether the object of the legislation will be defeated or furthered.

8. Rule 53(2) provides that opposition shall be deemed to have been abandoned, unless the Registrar otherwise directs, and that clearly indicates that the legislature never intended to lay down a rigid rule, ignoring the genuine circumstances which may require extension of time for filing evidence beyond the period of two months. Rule 53(2) by using the expression deemed to have been abandoned, provides for a legal fiction and it is settled that legal fiction cannot be stretched beyond the purpose for which it was enacted. The legal fiction is also not absolute but is controlled by the discretion of the Registrar to extend the time and that clearly indicates that legislature never intended to shut out the opposition, merely because the evidence is not filed within the prescribed time. The rule is enacted with a view to indicate the urgency in disposing of the proceedings and viewed in that context, it is clear that the procedural rule is clearly directory. Rule 53(2) enables the Registrar to extend the time for filing evidence in appropriate cases and even if the time is not extended, to permit the party to rely on the facts stated in the notice of opposition. The registration of the mark operates in rem and a duty is cast on the Registrar to maintain the purity of the Registrar and therefore Rule 53 has left wide discretion with the Registrar to extend the time for filing evidence in support of opposition. The rule should be worked to achieve the goal of maintaining the purity of Registrar and not as a weapon to deprive the parties of their right to put their claim before the Registrar.

9. It was urged by Mr. Tulzapurkar that Sub-section (4) of section 21 of the Act does not provide for contingency for non-compliance nor such non-compliance is visited by penalty. The learned counsel further submitted, that whenever thought fit, the legislature has specifically provided, in the Act itself, the penalty for non-compliance of provisions within the prescribed time. Section 21(2) does provide that failure to file a counter-statement within time would lead to the abandonment of the applications. In this connection it is also necessary to take into account provisions of section 101 of the Act. That section confers upon the Registrar, the power to extend the time in cases where the time is not prescribed by the Act. The Registrar can extend the time, whether the time specified under the Rules has expired or otherwise. The reading of these provisions makes it amply clear that the legislature never intended to treat non-compliance of Rule 53(2) as fatal. The failure of an applicant to file a counter-statement under section 21(2) results in dismissal of the application but failure of the opposition, but would not automatically lead to registration of the applicant's mark. Whether the registration of a mark is opposed or not, the Registrar has to determine that the requirements of the Act are satisfied before registering the mark. In other words, the non-compliance of the opponent to file evidence in time may lead to abandonment of opponent to file evidence in the prescribed time does not create any substantive right in favour of the applicant. Considering all these facts it is clear that Rule 53(2) is merely directory and non-compliance thereof is not fatal.

10. In this connection it would be appropriate to quote a passage from the judgment of the Supreme Court reported in AIR 1976 SC 1177 (The State of Punjab and Another v. Shamlal Morari and Another). The Supreme Court while considering the interpretation of Rule 3 of the Punjab and Haryana High Court Rules, requiring filing of three copies of memorandum of appeal for valid presentation of letters patent appeal observed:

We must always remember that procedural law is not to be a tyrant but a servant, not an obstruction but an aid to justice. It has been wisely observed that procedural prescriptions are the handmaid and not the mistress, a lubricant, not a resistant in the administration of justice. Where the non-compliance, the procedural prescriptions will thwart fair hearing or prejudice doing of justice to parties, the rule is mandatory. But, grammar apart, if the breach can be corrected without injury to a just disposal of the case, we should not enthrone a regulatory requirement into a dominant desideratum. After all courts are to do justice, not to wreck this end product on technicalities. Viewed in this perspective, even what is regarded as mandatory traditionally may, perhaps, have to be moderated into wholesome directions to be complied within time or in extended time.

11. Taking into consideration the real intention of the legislature and applying the test laid down by the Supreme Court, in my judgment, Rule 53(2) is clearly directory and violation of it cannot be condemned as fatal in every case. The Registrar is clearly in error in holding that the power to extend the time for filing evidence stands extinguished, in case the application for extension is not filed or extension is not granted before expiry of the period. A plain reading of Rule 53 (2) and section 101 of the Act is sufficient to discard the view. It is open to the parties to apply for extension of time on sufficient grounds and it is equally permissible for the Registrar to extend the time on being satisfied of such grounds, and such application and order can be made even after the expiry of the prescribed period. It is not possible to read any limitation in the Rule as suggested on behalf of the Registrar.

12. Shri Sethna in support of his submission that the Registrar can extend the time for filing evidence provided an application is filed and the order is passed thereon before the expiry of the time relied upon the judgment of a single judge of the Delhi High Court reported in Industrial Property Law Reported Vol. 3 1978 page 148 (Hindustan Emproidery Mills Pvt. Ltd. v. Hemla Embroidery Mills Pvt. Ltd. and Anr.) The learned Judge held that it is not for the Registrar to resuscitate an opposition which had deemed to be abandoned under Rule 53(2). It was further held that Registrar can exercise the power for extension of time, provided that the application for extension is filed before expiry of two months. The learned single Judge further held that if the Registrar did not give any directions under Rule 53(2) within a period of two months, then he was not entitled thereafter to allow the evidence to be filed, because by that method the Registrar would be defeating the purpose of the provision of Rule 53(2). For the reasons mentioned hereinabove I am unable to share the view taken by the learned single judge. With respect, the interpretation put on the Rule by the learned Judge is contrary to the well settled principles laid down by the Supreme Court for interpretation of procedural rules. In my judgment, it is not necessary for the party to file an application for extension of time to file evidence within two months of the date of receipt of the counter-statement, nor the powers of the Registrar to extend the time extinguished by mere passage of two months.

13. Shri Sethna then submitted that in any event the Registrar has given cogent reasons for not exercising discretion and extending the time as sought by the petitioner. In my judgment, the submission is not correct. The Registrar in his order on the review application has given three reasons for holding that the petitioner is guilty of serious laches and is not entitled to the extension in the discretionary exercise of powers under section 101 of the Act. The reasons are (1) that the petitioner did not take any action as required under Rule 53(1) within two months (2) no application was filed for extension before the expiry of two months, and (3) the application for change was filed after an inordinate delay of five years. In my judgment, the three reasons given by the Registrar for refusing to exercise the discretion are totally incorrect. The first two reasons are not correct, because the petitioner has stated in his application for extension of time that he was under an impression that the opposition would not be entertained unless the change is effected. The petitioner in fact filed an application within a period of two months from the service of counter-statement for effecting change in the Register. That application remained pending for a period of about six months. The petitioner failed to file the evidence because he was under a misconception. Shri Sethna complained that it was not necessary for the petitioner to wait till the change was effected in the Register to file the evidence. It may be so, but it cannot be overlooked that ultimately the Rules of procedure before any Tribunal are for advancement of cause of justice and not to close the doors preventing the parties to get determination on merits. It may be that the petitioner was not very careful in complying with the rules, but that should not prevent him from agitating his claim. The Registrar should have extended the period and should have permitted the petitioner to proceed with the opposition. The third ground is also equally without any merit, because though the petitioner has filed the application for effecting five years, it was not with an idea to take any advantage. The application for change was filed as soon as respondent No. 2 raised an objection in the counter-statement. The facts of the case clearly indicate that the mistake committed by the petitioner in not effecting the change in the Register earlier was a bonafide one. In such circumstances, in my judgment, the Registrar was not right in declining to exercise his discretion in favour of the petitioner. In my judgment, the Registrar ought to have extended the time and permitted the petitioner to file his evidence in support of the opposition.

14. Shri Sethna then submitted that the petitioner should not be granted any relief in present proceedings for two reasons, first that the mark of respondent No. 2 has already gone on the Register and therefore even if the present proceedings are decided against the petitioner, the petitioner has got a remedy to file an application for rectification. Secondly, submits Shri Sethna, the appeal against the order of the Registrar holding that the opposition is abandoned is not maintainable in view of the order on Review petition, and the appeal against the order passed on the Review Petition is not permissible under the Act. In my judgment, both the submissions are not correct. It is true that the petitioner can adopt the proceedings for rectification of the mark, but in my judgment, it would not be proper to drive the parties to such proceedings when the Registrar has clearly committed an error in not extending the time. The contention of Shri Sethna that both appeals are not maintainable is also not correct. The order passed by the Registrar on the review application is clearly appealable under sub-section (2) of section 109 as by refusing to extend the time the Registrar has finally determined that the opposition stands abandoned. I am not inclined to refuse the relief to the petitioner by upholding the technical contentions raised by Shri Sethna on behalf of the Registrar.

15. In the circumstances, both the appeals are allowed and the order passed by the Registrar on March 28, 1977 and July 7, 1977 are set aside and it is directed that the Registrar should permit the petitioner to file his evidence in support of the opposition within a period of one month from today. The Registrar should thereafter proceed with the inquiry in respect of the registration of the mark of respondent No. 2. It is hardly required to be stated that the mark of respondent No. 2 which has gone on the Register, should be removed and the inquiry should be held afresh to determine whether such mark should be registered or not. In the circumstances of the case, there will be no order as to costs.