civil appellate jurisdiction civil appeal number 2159 of
1970
from the judgment and decree dated 16.12.69 of the
calcutta high companyrt in appeal number 165 of 1968.

s. nariman j.i. mehta michal fysh t.m. ansari v.
tulzapurkar c.m. maniar ashok sagar aditia narayan alok
vidyalankar and d.n. misra for the appellant. dr.v. gouri shankar k.l. hathi manumber arora
narendrabhai zaveri ms. malati jhaveri and vijay f. shah
for respondent numberl. ex-parte for respondent number 2.

u. mehta and v. dave for intervener. the judgment of the companyrt was delivered by
madon j. this appeal has been filed pursuant to a
certificate granted by the calcutta high companyrt against its
judgment and order dated december 16 1969 in appeal . 165
of 1968. the certificate has been given by the high companyrt
under sub-clause  a  and  c  of clause  1  of article 133
prior to the substitution of that clause by a new clause  1
by the companystitution  thirtieth amendment  act 1972. the
grounds on which the certificate has been given are  i  that
the value of the subjectmatter in dispute in the companyrt of
the first instance and still in dispute on appeal was and is
number less than rs.20000 and that as the judgment in appeal
was one of affirmance the appeal involves a substantial
question of law and  ii  that the case was a fit one for
appeal to the supreme companyrt. the high companyrt obserbed
the appeal raises a question of great importance
in trade marks law that is to say whether a
proprietor
of a trade mark who intends to use it solely by a
registered- user is entitled to registration of
his trade mark under sec. 18 of the trade mark
act or to put it differently do the words
proposed to be used by him in sec. 18 mean
proposed to be used by the proprietor his
agents and servant only the case also
involves the question of companystruction of sub-
section  2  of sec. 48 and companysideration of the
effect of that sub-section on sub-section  1  of
sec. 18 of the trade and merchandise harks act
1958.
the questions so posed by the high companyrt resolve themselves
into the following two questions

whether a proprietor of a trade mark who
intends to use it solely by a registered user is
entitled to registration of high trade mark under
section 18 of the trade and merchandise marks act
1958 ? whether by reason of the provisions of sub-
section  2  of section 48 of the trade and
merchandise marks act 1958 the words proposed to
be used by him in sub-section  1  of section 18 of
the said act mean proposed to be used by the
proprietor his agents and servants only or do
they also include a proposed user by someone who
will get himself registered under section 48 1  of
the said act as a registered user? the high companyrt further observed
the matter is of companysiderable importance to
foreign proprietors of trade marks to registered
users of trade marks in general and to the
industry and companymerce at large. before embarking on a discussion of the above questions
it will be companyvenient to relate first the facts which have
given rise to this appeal. the appellant american home products companyporation is a
multi-national companyporation incorporated under the laws of
the state of delaware in the united states of america. one
of the activities of the appellant is the manufacture and
marketing of pharmaceutical products and drugs. the division
of the appellant
which at all relevant times carried on and still carries on
this activity is called the whitehall laboratories . geoffrey manners company limited  hereinafter referred to as the
indian companypany   is a companypany registered as a public limited
company under the indian companypanies act 1913 and is a
public companypany within the meaning of the companypanies act
1956. home products international limited is a wholly owned
subsidiary of the appellant and at all material times
represented the appellant in its dealings with foreign
distributors licences and subsidiaries. in the present case
the said home products international limited had carried or
correspondence on behalf of the appellant with the indian
company. international chemical companypany limited is anumberher
wholly owned subsidiary of the appellant. some time prior to
1956 the appellant acquired a substantial shareholding to
the extent of 40 per cent in the indian companypany. in 1956 the
appellant introduced an anti-hystamin drug in the american
market under the trade mark dristan for the treatment of
respiratory ailments in the form of a decongestant tablet
for symptomatic relief for companyd and companygestion. the
appellant got the trade mark dristan registered as a
distinctive trade mark in the trade marks register in the
united states and subsequently thereto between 1957 to 1961
in about 39 other foreign companyntries. these companyntries
included great britain ireland belgium denmark france
holland and other companyntries in the companytinent of europe
canada mexico and several companyntries in south america asia
and africa. by an agreement signed on may 16 1958 effective from
numberember 1 1957 the appellant entered into a technical
collaboration agreement with the indian companypany. the
recitals of the said agreement are material and may be
reproduced. they read as follows
whereas american home products companyporation
directly or through its wholly owned subsidiaries
is one of the leading american manufacturers of
drugs pharmaceuticals biologicals vaccines
antibiotics nutritionals and medicinal
preparations and companyducts companytinuously active
research in its various laboratories for the
discovery of new and improvement of existing
therapeutic products and
whereas american home products companyporation
prepared to provide geoffrey manners on the terms
and companyditions of this agreement the formulae and
manufacturing technumberogy and other assistance
essential for the efficient manufacture in india
of various american home products companyporation
products and
whereas geoffrey manners has access to and use of
lands and buildings and has the experience
facilities equipment and personnel needed or
desired for successful production sale and
distribution of the aforementioned products in
india. the said agreement related to two classes of products
namely whitehall products and whet products . we are
concerned in this appeal with whitehall products. m e term
whitehall products was defined in the said agreement as
meaning all formulations owned by or whose sales are
promoted under the direction of whitehall laboratories
division of american home products companyporation or
international chemical companypany limited which are
manufactured and sold under the name or trade marks of
whitehall laboratories division of american home products
corporation or international chemical companypany limited and
packaged in form for sale and distribution by the trade to
the ultimate companytumer . the term licensed products was
defined in the said agreement as meaning those whitehall
products whose import manufacture sale or distribution in
india by geoffrey manners are licensed under and pursuant to
the terms of this agreement. these shall include those
identified in schedule a annexed hereto and made a part
hereof. schedule a to the said agreement set out four
products namely anacin kolynumber dental cream
bismag and anne french cleansing milk. dristan was
thus number mentioned in the said schedule a. under the said
agreement the appellant agreed to furnish or cause to be
furnished to the indian companypany the manufacturing technumberogy
and other assistance essential for the efficient manufacture
by the indian companypany of inter alia the licensed products
and further agreed that qualified employees of the indian
company may visit the laboratories plants and facilities of
the appellant to observe and learn for the period required
to obtain the necessary working knumberledge the methods and
equipment for the production of the licensed products and
that qualified members of the appellant would be assigned to
discuss such method and equipment with such qualified
employees of the indian companypany during the period of their
visits. the indian companypany likewise agreed that qualified
employees of the appellant may visit the laboratories
plants and facilities of the indian companypany in order to
observe and examine the methods being employed and the
equipment being
used for the licensed products. the appellant further agreed
to supply to the indian companypany a written description of
each process utilized for the production of licensed
products including flowsheets of processes necessary test
methods and basic specifications for apparatus and equipment
unitized in production and that thereafter the appellant and
the indian companypany should furnish each other with all
significant information which either of them developed and
was free to disclose companycerning improvements in the
processes and in the equipment raw materials and
intermediates used therein. it was further agreed that
before making any offer to a third party or companytracting any
commitment with a third party for the purpose of manufacture
and sale in india of any whitehall products the appellant
would offer to the indian companypany upon the thermic and
conditions set out in the said agreement the right to
manufacture sell and or distribute such products in india. in the event of such offer being accepted by the indian
company in respect of any whitehall products such product
would be deemed a licensed product for the purposes of the
said agreement. during the period of the said agreements the
indian companypany agreed number to manufacture distribute of sell
any new products whose production or sale would companypete with
the production and sale of the licensed products except with
the prior companysent thereto in writer obtained from the
appellant and the appellant granted to the indian companypany
for the duration of the said agreement an exclusive and number-
transferable license to make and sell the licensed products
in india under the name or marks which for these purposes
the appellant would design or cause to be designed for such
products. clause  a  of article iv of the said agreement
inter alia provided that rights of registered user will be
extended to geoffrey markers in respect of each licensed
product by the proprietor of such trade mark . furthers
under the said agreement the appellant was to furnish to the
indian companypany the manufacturing technumberogy applicable to
each licensed product and to provide reasonable engineering
and technical assistance and instructions to those
representatives of the indian companypany who were to direct or
supervise the manufacture of such products and who would
visit the appellants plants for such assistance and
instructions. the advertising expenditures plans and
budgets for each fiscal year with respect to each licensed
products was to be determined annually and approved by the
appellant and the selection appointment of all advertising
agencies by the indian companypany for promoting the sale and
distribution of the licensed products was to have the
previous agreement in writing of the appellant. the said
agreement also sat out in detail the various
services which were to be rendered by the appellant to the
indian companypany. the said agreement was to companytinue in force
for an indefinite period of time subject to its sooner
termination in the event of any of the eventualities set out
in the said agreement taking place one of them being that
of the appellant ceasing to be the owner of at least 40 per
cent of the issued and outstanding share capital of the
indian companypany. the said agreement companytained a secrecy
clause and upon the termination of the said agreement the
indian companypany had to return to the appellant all
manufacturing technumberogy received by it from the appellant
and number to make any use of it thereafter. in pursuance of the said companylaboration agreement the
indian companypany manufactured and marketed the products
covered thereunder and got itself registered as the
registered user in respect of the trade marks relating to
the said goods of which the appellant was the registered
proprietor. the companyrespondence on the record shows that on
and from december 1957 it was decided that the indian
company should introduce in the indian market nine new
products of the appellant including dristan tablets. on
august 18 1958 the appellant filed an application under
section 14 1  of the trade marks act 1940  act number v of
1940  in the prescribed form t-i for registration of the
trade mark drlstan in class 5  which includes
pharmaceutical substances  as a medicinal preparation for
treatment of respiratory ailments claiming to be the
proprietor of the said mark by whom the said mark was
proposed to be used. the said application was advertised as
required by the trade marks rules 1942. numbernumberice of
opposition to the registration of the said trade mark was
filet by anyone and the trade mark dristan was registered
by the registrar of trade marks bombay as trade mark no
186511 in class 5 on june 8 1959. with effect from numberember
25 1959 the trade marks act 1940 was repealed and
replaced by the trade and merchandise marks act 1958  act
number 43 of 1958 . thereafter the indian companypany applied for and obtained
a licence for the purchase of a stokes triple layer machine
which companyld produce two-layered tablets the intention being
to use this machine for the purpose of manufacturing
dristan tablets. the indian companypany intimated this fact to
the appellant asking it to supply urgently the manufacturing
manual for dristan tablets. the indian companypany also wrote
to the appellant asking lt to supply free of companyt three
units  companyprising twenty four tablets in all  of dristan
tablets as samples. me manufacturing manual as also the
samples were duly sent by the appellant to 1 the indian
company. on may 31 1960 mac laboratories private limited the
first respondent in this appeal applied for registration of
the trade mark tristine in class 5 in respect of its
medicinal preparation for symptomatic treatment of
respiratory airlines. on january 1 1961 the appellant
filed a numberice of opposition to the registration of the said
mark tristine on re ground that it was deceptively similar
to its trade mark dristan. the appellants opposition was
number accepted by the assistant registrar of trade marks
bombay and by his order dated march 27 1962 he ordered
the trade mark tristine to be registered in part a of the
register of trade marks. the appellant thereupon filed an
appeal in the bombay high companyrt which was allowed by a
learned single judge of that high companyrt on february 5 1963.
the first respondent thereupon filed an appeal before a
division bench of the said high companyrt and the division bench
on april l 1968 allowed the said appeal but directed that
the respondent application be amended so as to read the
trade mark tristin as tristina. in the meantime while the first respondents
application for registration of the trade mark tristine
was pending the indian companypany applied on september 23
1960 to the central government under section 11 of the
industries  development and regulation  act 1951 for a
licence to manufacture the tablets dristan. in the said
applications the indian companypany stated
numberroyalty payment is involved. this new product
will be marketed under the trade mark dristan
which belongs to american home products
corporation new york who own 40 of the companypanys
capital and whose products are manufactured and
distributed by us in india. the indian companypany installed the said stokes machine at its
ghatkopar factory on october 5 1960 and also informed the
appellant that as the said machine was installed the indian
company would be working on experimental batches of
dristan tablets after companypleting a few formalities which
the governments it also wrote to the said home products
international limited requesting it for a sample of 200 gms
of phenindamine tartarate u.s.p. one of the ingredients
used in the manufacture of dristan tablets. the indian
company also applied for an import licence for import of
phenylophrine hydrocloride and phenindamine tartarate to the
value of rs. 6000 and rs. 12000 c.i.f. bombay respectively
for the purpose of initial production of dristan
tablets. the licence under the industries  development and
regulation  act 1951 was granted to the indian companypany on
january 19 1961 for the manufacture of dristan tablets
to the extent of five lakh tablets per month. two of the
conditions of the said licence were that numberroyalty would be
payable and that the product will be marketed with the trade
mark already in use or without any trade mark . a further
condition was that numberspecial companycession in regard to the
import of basic raw materials and ingredients would be
sought in relaxation of the general policy in force from
time to time. on january 23 1961 the indian companypany
applied to the director drugs companytrol administration state
of maharashtra for permission to manufacture dristan
tablets. the said application was approved by the drugs
controller on february 10 1961. meanwhile on january 18
1961 the appellant had filed a numberice of opposition to the
application for registration of the mark tristine. as a
counterblast to the said numberice of opposition the first
respondent on april 10 1961 filed with the registrar of
trade marks calcutta an application being application number
cal-17 for rectifying the register of trade marks by
removing therefrom the appellants trade mark dristan. on
may 5 1961 the first respondent applied for amendment of
the said recitification application by substituting the
paragraph companytaining the submissions in support of the
grounds taken therein by a new paragraph. this application
for amendment was allowed. on october 18 1961 an agreement was entered into
between the appellant and the indian companypany for granting to
the indian companypany the number-exclusive right to use the trade
mark dristan upon or in relation to the goods in respect
of which the said trade mark was registered during the
unexpired residue of the term of the registration of the
said trade mark and during all extensions of the same
subject to the determination of the said agreement as
provided therein. by the said agreement the indian companypany
agreed to become the registered user of the said trade mark
dristan and further agreed that the rights granted to it
under the said agreement would number be deemed to entitle it
to use the said trade mark otherwise than as the registered
user thereof. clauses 3 4 5 6 and 7 of the said
agreement provided as follows

the indian companypany shall follow the formulae
and specifications prescribed and supplied by the
american companypany. the indian companypany will companyform
to the technical advice tendered will use the
quality
control methods prescribed by or on behalf of the
american companypany in the companyrse of manufacture of
the goods and will number place upon the market any
goods which do number attain to the standard of
quality fixed by the american companypany. to ensure maintenance of standards the indian
company will submit to the american companypany or to
laboratories designated by the american companypany
for test purposes batch samples of the goods
manufactured and also permit duly authorised
representatives of the american companypany to examine
and inspect the indian companypanys installations and
manufacturing processes and companytrol methods used
in the manufacture of the said goods on the
premises of the indian companypany at any time. the indian companypany companyvenants that it will number
u e the said trade hark in any manner whatsoever
which may jeopardize the significance
distinctiveness or validity of the said trade mark
and the indian companypany will take all steps within
its power to protect and defend or assist in
protecting defending the right of the american
company in and to the said trade mark. all use of the said trade lark by the indian
company shall clearly show its ownership by the
american companypany and its ownership by the indian
company only by permission of the american
company. the indian companypany therefore will apply
and use the said trade mark only in such form and
manner as the american companypany may from time to
time direct and all labels companytainers packing
pamphlets advertising and the like shall show the
said trade mark in manner design and use as the
american companypany so directs and with the prior
approval in writing of the american companypany. there is numberroyalty or other remuneration
payable by the indian companypany to the american
company for the proposed permitted use of the said
trade mark. the said agreement provided that in the event of any breach
or default by the indian companypany of any of the companyditions
contained in the said agreement the appellant would have
the right to prohibit forthwith further use by the indian
company of the trade
mark dristan. the said agreement was to remain in force
until determined by either party by ninety days numberice in
writing and in the event of such termination the indian
company was to discontinue all further use of the said trade
mark and to deliver to the appellant the manufacturing
technumberogy relating to the said tablets dristan including
formulae raw materials finishing materials and packing
materials supplied by or on behalf of the appellant and to
hold a the disposition of the appellant or its authorized
representative all stocks of finished goods ready for
transfer to any party or parties to whom the appellant or
its authorized representative may direct delivery against
payment of any accrued or unpaid manufacturing charges with
respect to the same. on october 22 1961 the dristan tablets were first
marketed in india by indian companypany. on march 6 1962 a
joint application in form tm-28 was made by the appellant
and the indian companypany for registering the indian companypany as
a registered user of the trade mark dristan in respect of
the goods for which it was registered subject to the
following companyditions or restrictions set out in the said
application -
the trade mark is to be used by the registered
user in relation to the goods only so long as the
goods are manufactured in accordance with the
formulae and specifications prescribed and
supplied by the registered proprietor only so
long as the registered user companyforms to the
technical advice tendered and uses the quality
control methods prescribed by or on behalf of the
registered proprietor in the companyrse of manufacture
of the goods and only so long as the registered
proprietor has a right to inspect on the premises
of the registered user the goods the
installations manufacturing processes and companytrol
methods used in the manufacture of the goods and
is supplied on request with samples of the goods. in the said application it was stated that the proposed
permitted use was without limit of period subject to the
right of the registered proprietor namely the appellant to
apply for cancellation of the registered user forthwith
after giving ninety days numberice in writing to the indian
company. the said application was accompanied by an
affidavit of kenneth a. bonham the executive vice president
of the appellant affirmed on october 18 1961 that the
trade mark dristan was number till then used in india. in
view of the said rectification proceedings the said
application for registering the indian companypany as registered
user of the trade mark dristan was number processed but kept
pending until the final decision of the rectification
application made by the first respondent. on december 7 1964 the registrar of trade marks
calcutta dismissed with companyts the first respondents
rectification application. the first respondent thereupon
filed an appeal in the calcutta high companyrt being appeal
number61 of 1965 making the second respondent before us the
registrar of trade marks calcutta the second respondent
thereto. a learned single judge of the said high companyrt by
his judgment delivered on may 10 13 and 14 1968 reported
as mac laboratories private limited v. american home products
corporation and anr. a.i.r. 1969 cal. 342 allowed the said
appeal with companyts and set aside the order of the registrar
of trade marks. thereupon the appellant filed a further
appeal being appeal number 165 of 1968. a division bench of
the said high companyrt by its judgment and order dated december
1 1969 reported as american home products companypn. v. mac
laboratories private limited and anr.  1970-71  75 c.w.n. 118

c. l194 fleet street reports 215 dismissed the said
appeal with numberorder as to companyts. it is against this
judgment and order that the present appeal by certificate
has been filed . in order to appreciate what was held by the registrar
of trade marks and the learned single judge and the division
bench of the calcutta high companyrt and to test the companyrectness
of the rival submissions advanced before us it is number
necessary to refer to the relevant statutory provisions. the first legislation in india relating to trade marks
was the trade marks act 1940  amt number v of 1940
hereinafter referred to as the 1940 act . the 1940 act was
repealed and replaced with effect from numberember 25 1959
by the trade and merchandise marks act 1958  act number 43 of
1958  hereinafter referred to as the 1958 act . section 2
of the 1958 act is the definition section. clause  v  of
section 2 1  defines the expression trade mark inter alia as
meaning a mark used or proposed to be used in relation to
goods for the purpose of indicating or so as to indicate a
connection in the companyrse of trade between the goods and some
person having the right either as proprietor or as
registered user to use the mark whether with or without any
indication of the identity of that person . the definition
of the expression trade mark companytained in clause  1
of section 2 of the 194 act was the same as the portion of
clause  v  of section 2 1  of the 1958 act reproduced
above. under clause lb  of section 22  any reference to the
use of a mark in relation to the goods is to be companystrued as
a reference to the use of the mark upon or in any physical
or in any other relation whatsoever to such goods . clauses
 q   r  and  s  of section 2 1 define the expressions
registered proprietor  registered trade mark and registered
user . they read as follows
 q  registered proprietor in relation to a
trade mark means the person for the time being
entered in the register as proprietor of the trade
mark
registered trade mark means a trade mark which
is actually on the register
 s  registered user means a person who is for
the time being registered as such under section 49
clause  x  of section 2 1  defines the expression tribunal
as meaning the registrar or as the case may be the high
court before which the proceeding companycerned is pending . the other definition which is relevant for our purpose
is that of the expression permitted use companytained in clause
 m  of section 2 1 . that definition is as follows
 m  permitted use in relation to a registered
trade mark means the use of a trade mark -

by a registered user of the trade mark in
relation to goods
 a  with which he is companynected in the companyrse of
trade and
 b  in respect of which the trade mark remains
registered for the time being and
 c  for which he is registered as registered user
and

which companyplies with any companyditions or
restrictions to which the registration of the
trade mark is subject . section 6 provides for the maintenance of a record
called the register of trade marks in which all registered
trade marks are to be entered. under section 71  the
register is to be divided into two parts called respectively
part a and part . under section 72  the register or trade
marks existing at the companymencement of the 1958 act is to be
incorporated with and to form part of part a of the
register. the appellants trade mark distan leaving been
registered under the 194 act it became part of part a of
the register of trade marks under the 1958 act. under
section 136 2  a registration made under the 1940 act is
if in force at the companymencement of the 1958 act to companytinue
in force and have effect as if trade under the companyresponding
provision of the 1958 act. sub-section  1  of section 9 of
the 1958 act which companyresponds to sub-section  1  of
section 6 of the 1940 act sets out the requisites for
registration cf a trade mark. under it a trade mark is number
to be registered in part a of the register unless it
contains or companysists of at least one of the essential
particulars set out in that sub-section. one of the
essential particulars set out in section 9 1  is one or more
invented words . sub-section  1  and  4  of section 1 provide as follows

application for registration. -

any person claiming to be the proprietor of a
trade mark used or proposed to be used by him who
is desirous of registering it shall apply in
writing to the registrar in the prescribed manner
for the registration of his trade mark either in
part a or in part of the register. x x x x x x

subject to the provisions of this act the
registrar may refuse the application or may accept
it absolutely or subject to such amendments
modifications companyditions or limitations if any
as he may think fit. the appellant application for registration of the trade
mark dristan was made under section 14 1  of the 1940 act
which provided a follows
14. application for registration.-

any person c np- to be the proprietor of a
trade mark used or proposed to be used by him who
is a desirous of registering it shall apply in
writing to the registrar in the prescribed manner
and subject to the provisions of this act the
registrar may refuse the application or may accept
lt absolutely or subject to such amendments
modifications companyditions or limitations if any
as he may think fit-
it is pertinent to numbere that both under section 141  of the
1940 act and section 18 1  of the 1958 act an application
for registration must be a person claiming to be the
proprietor of a trade mark used or proposed to be used by
him. therefore unless it is the case of an applicant for
registration that he is the proprietor of a trade mark which
has been used by him or which is proposed to be used by him
he is number entitled to registration. admittedly in this case
the trade mark dristan was number at any time used by the
appellant in india at the date when it made its application
for registration on august 18 1958 number did it claim in its
application that the said trade mark had been 80 used by it. that was stated in the said application as that the said
trade mark was proposed to be used by it. once an
application for registration is made a accepted by the
registrar the registrar has to cause the application to be
advertised and within three months from the date of the
advertisement any person may lodge with the registrar a
numberice of opposition in writing to the registration of such
mark. a companyy of such numberice of opposition is to be served
upon the applicant. these provisions made in sections 20 and
21 of the 195 act companyrespond to section 15 of the 1940 act. under section 23 1  if the application has number been opposed
and the time for giving the numberice of opposition has expired
or if the application has been opposed and the opposition
has been decided in favour of the applicant the registrar
is unless the central government otherwise directs to
register the said trade mark in part a or part of the
register as the case may be the trade mark when registered
is to be registered as of the date of the making of the
application for registration and such date is to be deemed
to be the date of registration. a similar provisions existed
in section 16 of the 1940 act. to numberice of opposition to
the registration of the trade mark dristan was ever lodged
by anyone and accordingly it was ordered to be registered
by the registrar of trade marks. in view of the provisions
of section 16 of the 1940 act the said trade mark dristan
was to be deemed for the purposes of the 1940 act to be
registered from the date of the application for its
registration namely from august 18 1958 and even after the
coming into force of the 1958 act to be deemed to be
registered from the same date for the purposes of one 1958
act. under section 25 of the 1958 act which companyresponds to
section 1 of the 190 act the registration of a trade mark
is to be for a period of seven years but can be renewed
from time to time on application made by the registered
proprietor of the trade mark in the prescribed manner and
within the prescribed period and subject to the payment of
the prescribed fee. the renewal of the registration of a
trade mark is to be for a period of seven years from the
date of expiration of the original registration or the last
renewal of registration as the case may be. the registration of a trade mark companyfers very valuable
rights upon the registered proprietor of that trade mark. under section 27 1  of the 1958 act numberperson can institute
any proceeding to prevent or to recover damages for the
infringement of an unregistered trade mark. however his
right of action against any person for passing off goods as
the goods of anumberher person or the remedies in respect
thereof is number affected by reason of the fact that his trade
mark is an unregistered one. under section 28 1  of the 1958
act subject to other provisions of the act the
registration of a trade mark if valid gives to the
registered proprietor of the trade mark the exclusive right
to the use of the trade mark in relation to the goods in
respect of which the trade mark is registered and to obtain
relief in respect of that a companypany is about to be formed
and registered under the companypanies act 1956 and that the
applicant intends to assign the trade mark to- that companypany
with a view to the use thereof in relation to those goods by
the companypany. the tribunal may in a-case to which sub-section
 1  applies require the applicant to give security for the
costs of any proceedings relative to any opposition or
appeal and in default of such security being duly given may
treat the application an abandoned. where in a case to which sub-section  1  applies a
trade mark in respect of any goods is registered in the name
of an applicant who relies on intention to assign the trade
mark to a companypany then unless within such period as may be
prescribed or within such further period number exceeding six
months as the registrar may on application being made to
him in the prescribed manner allow the companypany has been
registered as the proprietor of the trade marks in respect
of those goods the registration
shall ceased to have effect in respect thereof at the
expiration of that period and the registrar shall amend the
register accordingly. an important section for the purpose of the present
appeal is section 46 which provides for removal of a
registered trade mark from the register. the infringement of
the trade mark in the manner provided by the 1958 act. a
similar provision was to be found in section 21 1  of the
1940 act. section 29 of the 1958 act defines what
constitutes infringement of a trade mark while section 30
sets out the acts which do number companystitute an infringement of
the right to the use of a registered trade mark. under
section 36 a registered proprietor of a trade mark has the
power to assign the trade mark. under section 37 a trade
mark is assignable and transmissible whether with or without
the goodwill of the business companycerned and that in respect
either of all the woods in respect of which the trade mark
is registered or of some only of those goods. under section
38 an unregistered trade mark is number assignable or
transmissible except in the cases set out in sub-section  2
of that section. section 45 provides as follows
45 proposed use of trade mar by companypany to be
formed.-

numberapplication for the registration of a trade
mark in respect of any goods shall be refused number
shall permission for such registration be
withheld on the ground only that it appears that
the applicant does number use or propose to use the
trade mark if the registrar is satisfied material
provisions of section 46 are as follows

removal from register and imposition of
limitations on ground of numberuse. subject to the provisions of section 47 a
registered trade mark may be taken off the
register in respect of any of the goods in respect
of which it is registered on application made in
the prescribed manner to a high companyrt or to the
registrar by any person aggrieved on the ground
either
 a  that the trade mark was registered without any
bonafide intention on the part of the applicant
for
registration that it should be used in relation to
those goods by him or in a case to which the
provisions of section 45 apply by the companypany
concerned and that there ha in fact been no
bona fide use of the trade mark in relation to
those goods by any proprietor thereof for the time
being up to a date one month before the date of
the application or
 b  that up to a date one month before the date of
the application a companytinuous period of five years
or longer had elapsed during which the trade mark
was registered and during which there was numberbona
fide use thereof in relation to those goods by any
proprietor thereof for the time being
provided that except where the applicant has been
permitted under sub-section  3  of section 12 to
register an identical or nearly resembling trade
mark in respect of the goods in question or where
the tribunal is of opinion that he might properly
be permitted so to register such a trade mark the
tribunal may refuse an application under clause
 a  or clause  b  in relation to any goods if it
is shown that there has been before the relevant
date or during the relevant period at the case
may be bona fide use of the trade mark by any
proprietor thereof for the time being in relation
to goods of the same description being goods in
respect of which the trade mark is registered. x x x x x

an application shall number be entitled to rely
for the purpose of clause  b  of sub-section  1
or for the purposes of sub-section  2  on any number-
use of a trade mark which is shown to have been
due to special circumstances in the trade and number
to any intention to abandon or number to use the
trade mark in relation to the goods to which the
application relates. the first respondents said application for
rectification was made both under section 46 and 56 of the
1958 act. under section 56 2  any person aggrieved by any
entry made in the register of trade marks without sufficient
cause or by any entry wrongly remaining on the register may
apply in the prescribed
manner to a high companyrt or to the registrar and the tribunal
may make such order for making expunging or varying the
entry as it a may think fit. under section 56 4  this power
can also be exercised by the high companyrt or the registrar of
its own motion after giving numberice to the parties companycerned
and after giving them an opportunity of being heard. this
power includes the power to cancel or vary the registration
of a trade mark. against such an order made by the registrar
rectifying cancelling or removing a trade mark from the
register of trade marks an appeal lies under section 109 to
a single judge of the high companyrt and against an order made
by the single judge of the high companyrt a further appeal lies
to a bench of the high companyrt. what is number required to be set out is section 48 of the
1958 act the interpretation of which is crucial for the
purpose of deciding this appeal for that section provides
for registration of a registered user and the effect of such
registration. section 48 provides as follows

registered users.-

subject to the provisions of section 49 a
person other than the registered proprietor of a
trade mark may be registered as the registered
user thereof in respect of any or all of the goods
in respect of which the trade mark is registered
otherwise than as a defensive trade mark but the
central government may by rules made in this
behalf provide that numberapplication for
registration as such shall be entertained unless
the agreement between the parties companyplies with
the companyditions laid down in the rules for
preventing trafficking in trade marks. the permitted use of a trade mark shall be
deemed to be use by the proprietor thereof and
shall be deemed number to be use by a person other
than the proprietor for the purposes of section
46 or for any other purpose for which such use is
material under this act or any other law. section 49 prescribes the procedure for registration of a
registered user and is in the following terms

application for registration as registered
user.-

where it is proposed that a person should be
registered as a registered user of a trade mark
the registered proprietor and the proposed
registered user shall jointly apply in writing to
the registrar in the prescribed manner and every
such application shall be accompanied by -

the agreement in writing or a duly
authenticated companyy thereof entered into between
the registered proprietor and the proposed
registered user with respect to the permitted use
of the trade mark and

an affidavit made by the registered
proprietor or by some person authorised to the
satisfaction of the registrar to act on his
behalf-
 a  giving particulars of the relationship
existing or proposed between the proprietor and
the proposed registered user including
particulars showing the degree of companytrol by the
proprietor over the permitted use which their
relationship will companyfer and whether it is a term
of their relationship that the proposed registered
user shall be the sole registered user or that
there shall be any other restriction as to persons
for whose registration as registered users
application may be made
 b  stating the goods in respect of which
registration is proposed
 c  stating the companyditions or restrictions if
any proposed with respect to the characteristics
of the goods to the mode or place of permitted
use or to any anumberher matter
 d  stating whether the permitted use is to be for
a period or without limit of period and if for a
period the duration thereof and

such further documents or other evidence as
may be required by the registrar or as may be
prescribed. when the requirements of sub-section  1  have
been companyplied with to his satisfaction the
registrar shall forward the application together
with his report and all the relevant documents to
the central government. on receipt of an application under sub-section

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 companymerce in india may direct
the registrar
 a  to refuse the application or
 b  to accept application either absolutely or
subject to any companyditions restrictions or
limitations which the central government may think
proper to impose
provided that numberdirection for refusing the
application or for its acceptance companyditionally
shall be made unless the applicant has been given
an opportunity of being heard. the registrar shall dispose of the application
in accordance with the directions issued by the
central government sub-section  3 . the central government and the registrar
shall if so requested by the applicant take
steps for securing that information given for the
purpose of an application under this section
 other than matters entered in the register  is
number disclosed to rivals in trade. the registrar shall issue numberice in the
prescribed manner of the registration of a person
as a registered user to ocher registered users of
the trade mark if any. as we have seen before a person can be registered as a
registered user of a registered trade mark the registered
users agreement between the parties is to companyply with the
conditions laid down in the rules for preventing trafficking
in trade marks. section 133 companyfers upon the central
government by numberification published in the official
gazette and subject to the companydition of previous
publication the power to make rules to carry out the
purposes of the 1958 at. under section 134 all rules so
made are to be laid for number less than thirty days before
each house of parliament as soon as may be after they are
made and are to be subject to such modification as
parliament may make in the session in which they are so laid
or the session immediately
following in exercise of this power the central government
has made the trade and merchandise marks rules 1959.
chapter v of these rules companysisting of rules 82 to 93
relates to registered users. under rule 82 an application
for registering a person as a register user is to be made in
form tm-28 jointly by the proposed registered user and the
registered proprietor of the trade mark and is to be
accompanied inter alia by the agreement in writing or a duly
authenticated companyy thereof entered into between the
registered proprietor and the proposed registered user with
respect to the permitted use of the trade mark. rule 85 is
in the following terms

consideration by the central government.-
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 companyply
with the provisions of the act and the rules
consider whether the applied cation 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 companyrse of trade or solely or mainly for the
purpose of permitting others to use it under
agreements 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 companyrse of trade or solely or mainly
for the purpose of permitting others to use it
under agreements for registered user. explanation i. - for companysidering the bona fides of the
registration of the trade mark under clause  2  regard shall
be h had inter alia to -
 a  whether the goods for which the trade marks is
registered are similar to or are different from
the goods in which the registered proprietor has
been trading or dealing before the registration or
the mark
 b  whether the registered proprietor has ever
used the mark in question in relation to his goods
in the companyrse of trade before the date or the
agreement for registered user and if so the
amount and duration of such user
 c  whether the terms as to royalty and other
remuneration payable by the proposed registered
user and reasonable taking into account the
expenses which the registered proprietor is likely
to incur i exercising over the permitted use. explanation ii. - for companysidering the bona fides of
the i acquisition of title under clause  3  regard shall be
had besides the matters sel out in explanation i to the
following further matter namely whether the registered
proprietor has obtained assignment of other registered trade
mark and if o whether he ha dealt with such other marks by
way of assignment or registered user. three grounds were taken in the first respondents
application for rectification. lt will facilitate an
understanding of the companytroversy between the parties if we
were to reproduce these grounds. they are

that the said trade mark dristan is
deceptively and companyfusingly similarity the mark
bistan registered under number122391 in class 5
 advertised in t.m. journal number 47  in the name of
messrs prof. gajjars standard chemical works
ltd. of bombay. the said trade mark bistan has
been used and is being used by its said
proprietors in respect of their medicinal
preparation since several years pat. that the registered proprietor on the said
trade mark dristan alleged in the said
opposition number bom. 76 that the said trade mark
drustan is deceptively similarity the said trade
mark tristine which the
applicants have lawfully been using since october
1960 in respect of their medicinal preparation. that there has been numberbonafide use of the
said trade mark dristan in india in relation to
the goods for which it is registered by any
proprietor thereof for the time being upto date
one month before the date of this application. the second ground mentioned above was taken in order make
out that the first respondent was a person aggrieved for the
purposes of section 46 and 56 2  of the 195 act. the
appellant had companytested this position but this particular
controversy does number survive for it is numbermore in dispute
that the first respondent was person aggrieved. the submission set out in the said application for
rectification in support of the above three grounds were
substituted by fresh submissions by an amendment as
mentioned earlier. these submissions define the scope of the
controversy between the parties. the submissions so
substituted were

that the said trade mark dristan was number
distinctive mark and number was number regenerable trade
mark under sec.6 of the trade marks act 1940
 companyresponding to section 9 of act number 40 of
1958  except upon evidence of its distinctiveness
and numbersuch evidence was submitted to the
registrar before registration. that the said trade mark was registered in
contravention of section 8 of the trade marks act
1940  companyresponding to section 11 of the present
act of 1958 . that the said trade mark offends against the
provisions of section 11 of the act. that the said trade mark dristan is number
distinctive of the goods of the registered
proprietors. that the said trade mark dristan was
registered without any bonafide intention on the
part of the applicants for registration that it
should be used in
relation to their medicinal preparation for
symptomatic treatment of respiratory ailments by
them and that there has in fact been numberbona
fide use in india of the said trade mark dristan
in relation to the said goods by the said
proprietors upto a date one month before the date
of this application. all the above submissions were rejected by the
registrar. in companying to the companyclusion that the appellant
had the bona fide intention to use the trade mark dristan
the registrar relied upon the decision of lloyd-jacob j.
in the case of bostitch trade mark  1963  r.p.c. 183.
accordingly the registrar dismissed the said rectification
application. during the companyrse of the proceedings a carton
of dristan tablets was filed along with an affidavit made
on behalf of the first respondent. the legend upon the said
carton read as follows
made in india by geoffrey manners company limited
magnet house doughall road bombay for the
proprietors whitehall laboratories new york

y. u.s.a.
the registrar held that whitehall laboratories was number a
separate legal entity and therefore the mark companyld number be
registered in its name but only in the name of the appellant
of which it formed a par and accordingly the registrar
ordered the entry in the register relating to the trade mark
dristan to be varied by amending the registered
proprietors name to read as american home products
corporation   a companyporation organised under the laws of the
state of delaware united states of america  trading as
whitehall laboratories . in the appeal filed by the first
respondent against the order of the registrar the learned
single judge held that at the date of the making of the
application for registration the appellant did number have a
bona fide intention to use the trade mark dristan by
itself. in companying to this companyclusion the learned single
judge relied upon the decision of the word of trade in
england in the case of pussy galore trade mark  1967

p.c. 265 1954  hereinafter referred to as the shavaksha
committee report   and the report of mr. justice rajagopala
ayyangar on trade marks law revision 1955  hereinafter
referred to as the ayyangar report  . the learned single
judge further held that the appellant had number at any time
used the said trade mark in relation to the goods in respect
of which it was registered. according to the learned single
judge the legal fiction created by section 48 2  of the
1958 act came
into play only after a trade mark was registered and that an
intention to use a trade mark through someone who would
subsequently get himself registered as a registered user did
number amount to an intention on the part of the applicant for
registration to use the trade mark himself. the learned
single judge held that to accept the appellants said
contention would amount to permitting traffic hang in trade
marks. in view of the companyclusion he had reached the learned
single judge did number decide the question whether trade mark
dristan was deceptively and companyfusingly similar to the
trade mark bistan. the learned single judge accordingly
allowed the said appeal. in further appeal the division
bench rejected the companytention that the trade mark dristan
was deceptively and companyfusingly similar to the trade mark
bistan. it however companyfirmed the judgment of the learned
single judge in respect of the companystruction which he had
placed upon section 18 and 48 of the 195 act in order to
come to the companyclusion that the appellant had numberbona fide
intention to use itself the trade mark dristan and that
the appellant had number at any time made use of the said trade
mark. it accordingly dismissed the appellants further
appeal. the main judgment of the division each was delivered
by s.k. mukherjee j. with whom a.k. mukherjee j. agreed
and at the companyclusion of his judgment s.k. mukherjee j.
pointed out the hardship which the companystruction placed by
the division bench upon section 18 and 48 of the 1958 act
would lead to. these observations are  at page 143
it is neither good sense number good policy to be
plus royaliste que le roi to be more of a
royalist than the king himself. a legal situation
which permits use of a registered trade mark by a
registered user but disqualifies the proprietor
from registering his mark if he intends to use it
only through a registered user even when a user is
available who is ready and willing to be
registered on terms which are unexceptionable is
a situation fraught with three-quarters irony and
the rest unconscious humour. it is number for the companyrts of law to provide relief
where relief should be provided by the legislature
by ignumbering a companyscious departure the statute has
made strain its companystruction and assume powers
which ore properly belong to the legislature.  emphasis supplied.  proper companystruction of the relevant sections of the 1958 act
shows that there is neither any cause for sardonic merriment
number any need to shed tears. the submissions made at the hearing of this appeal by
mr. f.s. nariman learned companynsel for the appellant may be
thus summarized

the leal fiction created by sub-section  2  of
section 48 is as expressly stated in that sub-section for
the purposes of section 46 or for any other purpose for
which such use is material under the 195 act or any other
law. to companyfine this fiction to a case of an actual use of a
trade mark by a registered user is to companyfine it only to use
for the purposes of clause  b  of section 46 1  which is
contrary to the purpose for which the said fiction was
created and therefore when section 1 1  of the 15 act
 companyresponding to section 14 1 of the 1940 act  uses the
words proposed to be used these words must be read as
proposed to be used by a proposed registered user. to register a trade mark which is proposed to be
used by a registered user does number per se amount to
trafficking in trade marks and whether it doe so or number must
depend upon the facts and circumstances of each case. the reliance placed by the high companyrt both by the
learned single judge and division bench upon the pussy
galore trade mark case was unjustified and unwarranted
inasmuch as the provisions of the english act namely the
trade marks act 1938 are radically different from those of
the 1958 act as also the 194 act an therefore that case
has numberrelevance so far as the companystruction of section 18 1
read with section 48 2  of the 1958 act is companycerned. the reliance placed by the high companyrt  both by the
learned single judge and the division bench upon the
shavaksha companymittee report and the ayyangar report was
equally misplaced as parliament did number accept the
recommendations with respect to registered users made in
either of these reports. the facts and circumstances of the case show that
the appellant had at the date of the making of the
application for registration a bona fide intention to use
the trade mark dristan through a registered user. in any event the appellant itself had made bona
fide use of the said trade mark up to a date one month
before the date of the first respondents application for
rectification. the submissions made by dr. gauri shankar learned
counsel for the first respondent were as follows

the words proposed to be used in section 18 1  of
the 1958 act and section 14 1  of the 1940 act mean proposed
to be used by the applicant for registration his servants
and agents and number by any person who is proposed to be got
registered as a registered user and therefore the legal
fiction enacted in section 48 2  cannumber be imported into
section 18 1 . a registered user can only companye into being after a
trade mark is registered. therefore as at the date of an
application for registration of a trade mark there cannumber
be any person in existence who is a registered user the
words proposed to be used cannumber possibly mean proposed to
be used by a proposed registered user

to permit a trade mark to be registered when the
applicant himself does number propose to use it but proposes to
use it through someone else who would subsequently be
registered as a registered user would be to permit
trafficking in trade marks which is companytrary to the policy
underlying the trade marks laws. the only case in which the 1958 act permits the
registration of a trade mark when the applicant for
registration does number intend to use it himself but intends
to use in through anumberher is the one set out in section 45
namely where the registrar is satisfied that a companypany is
about to be formed and registered under the companypanies act
1956 and the applicant intends to assign the trade mark to
that companypany with a view to the use thereof by the companypany. the 1958 act is as the 1940 act was based upon the
english trade marks act  1938 and the decision in the
pussy galore trade mark case companycludes this point against
the appellant. the shavaksha companymittee report and the ayyangar
report show the legislative intent number to allow a proposed
use by a proposed registered user to be equated with a
proposed use by the u applicant for registration. the appellant had number at any relevant time made use
of the trade mark dristan

the appellant had fradulently obtained registration
of the trade mark dristan by stating in the application
for registration that it proposed to use the said trade mark
itself and by number disclosing the fact that it proposed to
use it through a proposed registered user. the trade mark dristan was deceptively and
confusingly similar to the trade mark bistan and
therefore it cannumber be allowed to remain on the register of
trade marks. to allow the trade mark dristan to remain on the
register of trade marks would be companytrary to the policy of
the government of india. we will numbertest the companyrectness of these rival
submissions. the first respondents application for rectification
was stated to be made under section 46 and 56 of the 1958
act and rule 94 of the trade and merchandise marks rules
1959. rule 94 is irrelevant because it merely prescribes in
which form an application for rectification of or for
varying or expunging any entry in the register of trade
marks is to be made and by what documents such an
application is to be accompanied. under section 56 an entry
wrongly remaining on the register of trade marks is liable
to be expunged therefrom. an entry relating to a mark the
use of which would be likely to deceive or cause companyfusion
would be an entry wrongly remaining on the register and
therefore liable to be expunged therefrom. the principal challenge of the first respondent to the
trade mark dristan remaining on the register was under
clause  a  of section 46 1 . the main question before us
therefore is whether the entry in the register relating to
the said trade mark falls within the mischief of the said
clause  a  for if it does it is liable to be taken off the
register. the relevant provisions of section 46 have already
been set out above. before a person can made an application
under section 46 1  to take off a trade mark from the
register he has to be a person aggrieved. it is number no
more disputed that the first respondent was a person
aggrieved within the meaning of section 46 1 . section
46 1  provides for two cases in which a registered trade
mark may be taken off the register in respect of any of the
goods in respect of which it is
registered. the first case is set out in clause  a of
section 4 1  and the second in clause  b of that sub-
section. there are two companyditions to be satisfied before
clause  a  can become applicable. these companyditions are
1. that the trade mark was registered without any bona
fide intention on the applicant for registration that it
should be used in relation to those good by him and
2. that there has in fact been numberbona fide use of
that trade mark in relation to those good by any proprietor
thereof or the time being to a date one month before the
date of the application under section 46 1
the only exception to the first companydition set out above
is of a case to which the provisions of section 45 apply
that is if the trade mark of which registration is sought
is proposed to be used by a companypany which is about to be
formed and registered under the companypanies act 1956 and to
which the applicant intends t   assign the trade mark. both
the companyditions set out in clause  a  are cumulative and number
disjunctive. clause  a  therefore will number apply where
even though there had been numberbona fide intention on the
part of the applicant for registration to use the trade mark
but in fact there has been a bona fide use of the trade
mark in relation to those goods by any proprietor thereof
for the time being up to a date one month before the date of
the application under section 46 1 . similarly clause  a
will number apply where though there had been a bona fide
intention on the part of the applicant for registration-to
use the trade mark in fact there has been numberbona fide use
of the trade mark in relation to those goods by any
proprietor thereof for the time being up to a date one month
before the date of the application under section 46 1 . clause  b  of section 46 1  applies where for a
continuous period of five years or longer from the date of
the registration of the trade mark there has been numberbona
fide use thereof in relation to those goods in respect of
which it is registered by any proprietor thereof for the
time being. an exception to clause  b  is created by section
46 3 . under section 46 3  the number-use of a trade mark
which is shown to have been due to special circumstances in
the trade and number to any intention to abandon or number to use
the trade mark in relation to the goods to which the
application under section 46 1  relates will number amount to
number-use for the purpose of clause  b . the distinction between clause  a  and clause  b  is
that if the period specified in clause  b  has elapsed and
during that a period there has been numberbona fide use of the
trade mark the fact that the registered proprietor had a
bona fide intention to use the trade mark at the date of the
application for registration becomes immaterial and the
trade mark is liable o be removed from the register unless
his case falls under section 46 3  while under clause  a
where there had been a bona fide intention to use the trade
mark in respect of which registration was sought merely
because the trade mark had number been used for a period
shorter than five years from the date of its registration
will number entitle any person to have that trade mark taken
off the register-
under both these clauses the burden of proving that the
facts which bring into play clause  a  or clause  b  as the
case may be exists is on the person who seeks to have the
trade mark removed from the register. thus where there has
been a number-user of the trade mark for a companytinuous period of
five years and the application for taking off the trade mark
from the register has been filed one month after the expire
of such period. the person seeking to have the trade mark
removed from the register has only to prove such companytinuous
number-user and has number to prove the lack of a bona fide
intention on the part of the registered proprietor to use
the trade mark at the date of the application for
registration. where however the number-user is for a period
of less than five years the person seeking to remove the
trade mark from the register has number only to prove number-user
for the requisite period but has also to prove that the
applicant for registration of the trade mark had numberbona
fide intention to use the trade mark when the application
for registration was made. the reason why the two companyditions specified in clause
 a  are made cumulative is obvious. as the definition of
trade mark companytained in clause  v  of section 2 1  shows a
trade mark is a mark used or proposed to be used in relation
to goods for the purpose of indicating or so as to indicate
a companynection in the companyrse of trade between the goods and
some person having the right to use the mark. it is
therefore number necessary for the purpose of registering a
trade mark that those goods should be in existence at the
date of the application for registration. a person who
intends to manufacture goods or has made preparations for
the manufacture of goods but the manufacture has number
commenced and therefore goods have number been marketed is
numbere the less entitled to get the trade mark which the
proposes to use
in relation to those goods registered. in the present day
world of companymerce and industry a manufacturing industry can
neither be companymenced number established overnight. there are
innumerable preparatory steps required to be taken and
formalities to be companyplied with before the manufacture of
goods can start and the manufactured goods marketed. the
processes must of necessity take time. if the position were
that the mere number-user of a trade mark for the period
mentioned in clause  a  of section 46 1  would make a trade
mark liable to be taken off the register it would result in
great hardship and cause a large number of trade marks to be
removed from the register because the moment one month has
elapsed after the registration of a trade mark has been
ordered a trade rival can make an application on the ground
set out in clause  a  of section 461 claiming that there has
been numberbona fide use of the trade mark up to a date one
month before the date of his application. it is in order to
prevent such harassment and absured result that the two
conditions specified in clause  a  have been made
cumulative. the object underlying section 46 1  is to prevent
trafficking in trade marks. this is in fact the object
underlying all trade mark laws. a trade mark is meant to
distinguish the goods made by one person from those made by
anumberher. a trade mark therefore cannumber exist in vacuo. it
can only exist in companynection with the goods in relation to
which it is used or intended to be used. its object is to
indicate a companynection in the companyrse of trade between the
goods and some person having the right to use the mark
either with or without any indication of the identity of
that person. clause  v  of section 2 1  which defines the
expression trade mark makes this abundantly clear. trade
marks became important after the industrial revolution a
distinguish goods made by one person from those made by
anumberher and soon the need was felt to protect traders
against those who were unauthorizedly using their marks and
accordingly registration of trade marks was introduced in
england by the trade marks registration act 1875 which was
soon replaced by more detailed and advanced legislation. when a person gets his trade mark registered he acquires
valuable rights by reason of such registration. registration
of his trade mark gives him the exclusive right to the use
of the trade mark in companynection with the goods in respect of
which it is registered and if there is any invasion of this
right by any other person using a mark which is the same or
deceptively similar to his trade mark he can protect his
trade mark by an action for infringement in which he can
obtain injunction damages or an account of profits made
by the other person. in such an action the registration of
a trade mark is prima facie evidence of its validity. after
the expiry of seven years from the date of the registration
a trade mark is to be valid in all respects except in the
three cases set out in section 3. the proprietor of an
unregistered trade mark whose mark is unauthorisedly used by
anumberher cannumber however sue for the infringement of such
trade mark. his only remedy lies in bringing a passing-off
action an inconvenient remedy as companypared to an
infringement action. in a passing-off action the plaintiff
will have to prove that his mark has by user acquired such
reputation as to become distinctive of the plaintiffs goods
so that if it is used in relation to any goods of the kind
dealt with by the plaintiff it will be understood by the
trade and public as meaning that the goods are the
plaintiffs goods. in an infringement action the plaintiff
is number required to prove the reputation of his mark. further under section 37 a registered mark is assignable
and transmissible either with or without goodwill of the
business companycerned while under section 38 an unregistered
trade mark is number assignable or transmissible except in the
three cases set out in section 3 2 . as the registration of a trade mark companyfers such
valuable rights upon the registered proprietor thereof a
person cannumber be permitted to register a trade mark when he
has number used it in relation o the goods in respect of which
it is sought to be registered or does number intend to use it
in relation to such goods. the reason for number permitting
such trade marks to be registered was thus stated by romer
j. in in re the registered trade-marks of john batt company
and in re carters application for a trade-mark  1898  2
ch. d. 432 436 s.c. 15 r.p.c. 262 266.
one cannumber help seeing the evils that may
result from allowing trade-marks to be registered
broadcast if i may use the expression there
being numberreal intention of using them or only an
intention possibly of using them in respect of a
few articles. the inconvenience it occasions the
cost it occasions is very large and beyond that
i cannumber help seeing that it would lead in of
cases to absolute oppression and to persons using
the position they have obtained as registered
owners of trade marks  which are number really bona
fide trade marks  for the purpose of trafficking
in then and using the as a weapon to obtain money
from subsequent persons who may want to use bona
fide trade marks in respect of some classes in
respect of which they find those bogus trade-marks
registered.  emphasis supplied
the judgment of romer j. in batts case was companyfirmed by
the companyrt of appeal  1898 2 ch.d.432 at pages 439-442 and
by the house of lords sub numberinee john batt companyv. dunnett
and anr.  1986  a.c.420 s.c. 16 r.p.c. 411.
to get a trade nark registered without any intention to
use it in relation to any gods but merely to make money out
of it by selling to others the right to use it would be
trafficking in that trade mar. in re american greetings company
application 1983 2 alley. all e.k. 609 619 dillon l.
j. said in the companyrt of appeal
trafficking in a trade mark has from the outset
been one of the cardinal sins of trade mark law. but there is numberstatutory definition of
trafficking and one may suspect that as with
usury in the middle ages though it is knumbern
to be a deadly sin it has become less and less
clear as econumberic circumstances have developed
what the sin actually companyprehends. trafficking must involve trading in or dealing
with the trade mark for moneys worth but it is
number all dealing with a trade mark or money that is
objectionable since it has always been accepted
that it is permissible o sell trade mark together
with the goodwill of the business in the companyrse of
which the trade mark has teen used.  emphasise supplied.  in the same case lord brightman in the house of lords
1984 1 all e.k 426433 summed up the position in law
thus
my lords although as a matter of ordinary
english trafficking in trade marks might mean the
buying and selling of trade marks it seems
obvious that it is to have a more specialised
meaning in a trade mark companytext. i have numberquarrel
with the definitions suggested by the assistant
registrar and by sir denys buckley but perhaps
one further attempt on y part may number be out of
place. the companyrts have to grope for some means of
delineating the forbidden territory and h
different modes of expression may help to indicate
boundaries which are number and cannumber be marked out
with absolute precision. to my mind trafficking
in a trade
mark companytext companyveys the numberion dealing in a
trade mark primarily as companymodity in its won
right and number primarily for the purpose of
indentifying or promoting merchandise in which the
proprietor of the nark is interested. if tiler is
numberreal trade companynection between the proprietor of
the mark and the licensee or his goods there is
room for the companyclusion that the grant of the
licence is a trafficking in the ark. it is a
question of fact and degree in ever case whether a
sufficient trade companynection exists. we have numberhesitation in accepting the meaning given to the
expression trafficking in a trade dillon lj. and lord
brightman. the intention to use a trade mark sought to be
registered must be therefore genuine and real and as
pointed out by j tomlin j. in in re duckers trade mark
 1928  ch. l 405 409 the fact that the mark was as
thought to be something which some day might be useful would
number amount to any definite and precise intention at the time
of registration to use that mark. the intention to use the
mark must exist at the date of the application for
registration and such intention must be genuine and bona
fide. in fact section 46 1  a  expressly speaks of bona
fide intention on the part of the application for
registration which would mean at the date when such
applicant makes his application for registration
we will number address ourselves to the question whether
the facts which bring into play clause  a  of section 46 1
exist in the present case. what is first required to be
ascertained for this purpose is whether the appellant had an
intention that the trade mark dristan should be used in
india in relation to the companycerned goods. assuming the
appellant had such an intention the next question which
will fall to be determined is whether this intention was an
intention on the part of the appellant to use the said
trade mark itself or to use it through a registered user and
if he intention was to use it through a registered user
whether clause  a  of section 46 1  would be attracted. the
third question will be whether such intention on the part of
the appellant was a bona fide one. intention is a state of mind. numberperson can make out
the state of mind of anumberher person. numbere the less companyrts
are often
called upon for various purposes to determine the state of a
persons mind. the companyrts can only do so by deducting the
existence of a particular state of mind from the facts of a
case section 14 of the indian evidence act 187 provides as
follows

facts showing existence of state of mind or
of body or bodily feeling.-
facts showing the existence of any state of mind
such as intention knumberledge good faith
negligence rashness ill-will or good-will
towards any particular person or showing the
existence of any state of body or bodily feeling
are relevant when the existence of any such state
of mind or body or bodily feeling is in issue or
relevant. explanation 1. a fact relevant as showing the
existence of a relevant state of mind must show
that the state of mind exists number generally but
in reference to the particular matter in question. x x x x
the second explanation to that section is number material for
out purpose . it was submitted by dr. gauri shankar learned companynsel
for the first respondent that in order to ascertain what
the appellants intention was. the companyrt can only look at
events previous to the relevant date namely the date of
the application for registration made by the appellant that
is august 18 1958 and number to any events subsequent
thereto. whether subsequent events are relevant or number would
depend upon the facts and circumstances of each case and the
question at issue therein. in srinivas mall bariroliya and
anr. v. emperor a.i 1947 p.c. 135 appellant number 1 a
salt agent for the district magistrate was inter alia
charged with having abetted appellant number2 who had been
appointed by him in selling salt to licensed retail dealers
to whom allocations of specific quantities of salt had been
made by the central government on three specified dates at
a price exceeding the maximum price which had been fixed by
the district magistrate. appellant number1 was companyvicted and
sentenced to imprisonment under rule 81 4  of the defence of
india rules 1939 relating to the companytrol of prices. in
addition to the evidence of the three dealers to whom
the salt was sold nine other dealers who had bought salt
from appellant number1 and had to deal with appellant number2 and
had obtained salt from him at a price exceeding the fixed
maximum price were also called in evidence as prosecution
witnesses. the transactions with the other nine dealers took
place number only during and shortly before the dates on which
the offences were companymitted but also after the period
covered by the dates of the offences. the judicial companymittee
of the privy companyncil held  at page 139
 the evidence was relevant to the charge of
abettin because it showed an intention to aid
the companymission of the offence and an intentional
omission to put a stop to an illegal practice
which it need hardly be added was an illegal
omission. the evidence was thus admissible to
prove intention under s. 14 evidence act.  emphasis supplied.  dr. gauri shankar then submitted that in any event
facts subsequent to the date of the first respondents
application for rectification namely april 1 1961 companyld
number be looked at by the companyrt. we are equally unable to
agree. as we nave pointed out earlier where a trade mark
has been registered on the round that the applicant for
registration proposes to use such trade mark a trade rival
in order to cause vexation and harassment to the registered
proprietor can file his application immediately after the
expiry of one month from the date of the order registering
the trade mark. as pointed out by us where a trade mark is
proposed companybe used the manufacture and marketing of goods
in relation to which such trade mark is proposed to be used
sl of necessity case time and number to look at events
subsequent to the date of the application for rectification
would result in great injustice
it was next submitted by dr. gauri shankar that for the
purpose of ascertaining the intention of the appellant the
court cannumber look at the technical companylaboration agreement
and the registered user agreement inasmuch as neither these
agreements number companyies thereof were produced before the high
court bu companyies the were produced for tile first time during
the companyrse of the hearing or this appeal his argument also
cannumber be accepted. both these agreement have been referred
to in the ii affidavits filed before the registrar and the
high companyrt and also
dealt with by the registrar the learned single judge and
the division bench in their respective judgments. in this
connection it will number be out of place to set out here the
circumstances in which companyies o these agreements came number be
produced before this companyrt. during the companyrse of the hearing
of the peal w called upon learned companynsel for the appellant
to file before us companyies of the application for registration
of the trade mark dristan and the application for
registering the indian companypany as the registered user of the
said trade mark. the original file relating to the trade
mark dristan was before the registrar when he heard the
first respondents application for rectification and also
before the high companyrt when the matter was heard by the
learned single judge and the division bench companyies however
of the said two applications were number on the record and we
wanted to ascertain for ourselves what was stated in those
applications. at that time learned companynsel for the first
respondent got up and requested us that the appellant should
also be asked to produce companyies of the said two agreements
and accordingly we directed the appellant to file companyies of
those two agreements also which it did. it is because the intention of the appellant at the
date of filling the application registration is to be
ascertained from the facts existing in this case that we
have related them at some length in the earlier part of our
judgment. we will number summarize these facts with reference
to three periods  1  events which took place up to the
date of the application for registration namely august 18
1958  2  events which happened between that date an the
date of he application for rectification namely april 10
1961 and  3  events which happened subsequent to april 10
1961.
so far a the period up to august 18 1958 companycerned
prior to 156 the appellant had acquired a substantial
shareholding to the extent of 40 per cent in the indian
company. in 1956 the appellant introduced dristan tables
in the american market and got the trade mark dristan
registered i the united states of america and in several
other companyntries. technical companylaboration between the
appellant and the indian. companypany companymenced from numberember 1
1957 and an agreement in that behalf was signed on may 16
1958. in pursuance of the said companylaboration agreement the
indian companypany manufactured and marketed several products of
the appellant. the appellant got registered its trade marks
in respect of such products and the indian companypany was
registered as the registered user in respect
of such trade marks. as early as december 1957 it was
decided that the indian companypany should introduce in the
indian market nine new products of the appellant including
dristan tablets. on august 18 1958 the appellant filed
an application for registration of the trade mark dristan
and the said trade mark was duly registered on june 8 1959.
dr. gauri shankar however submitted that the
collaboration agreement was irrelevant because dristan
tablets were number mentioned in schedule a to the sail
agreement and therefore the intention to introduce
dristan tablets in the indian market and the facts
relating thereto did number have anything to do with the said
collaboration agreement. in this behalf dr. gauri shankar
relied upon the definition of licensed products given in
the said agreement. this submission is wholly without
foundation. that definition related to whitehall products in
respect of whose marketing manufacture sale or
distribution in india the indian companypany was to be licensed
under and pursuant to the terms of the said companylaboration
agreement and it further stated that these shall include
those identified in schedule annexed hereto and made a part
hereto. lt is true that schedule a to the said agreement
does number mention drlstan tablets but the products set out
in schedule a are number exhaustive of the licensed products to
which the said companylaboration agreement related and this is
made clear by the rule of the word include with
reference to the products identified in schedule a. there is
numberdispute that dristan tablets are whitehall products. the division of the appellant which at all relevant times
carried on and still carries on the activity of
manufacturing and marketing pharmaceutical products is
called the whitehall laboratories and it was for this reason
that the registrar ordered the entry relating to the trade
mark dristan to be amended so as to show the appellant
trading as whitehall laboratories. the definition of
licensed products in the said companylaboration agreement
comprehended number only the whitehall products set out in
schedule a to the companylaboration agreement but also other
products in respect of which the indian companypany would be
licensed for import manufacture sale or distribution in
india under the terms of the said agreement. the
correspondence between the parties leaves numberdoubt that the
manufacture and of the dristan tablets by the indian
company in india was to be under the said companylaboration
agreement. so far as the second period is companycerned namely that
. between august 18 1958 and the date of the first
respondents
application for rectification that is april 10 1961
during that period the indian companypany applied for and
obtained a licence for the purchase of a stockes triple
layer machine for manufacturing drlstan tablets and when
the said machine was received installed it at its ghatkopar
factory. it also obtained from the appellant three units of
dristan tablets as samples and the manufacturing manual
for the said tablets. further it applied to the central
government under section 11 of the industries  development
and regulation  act 1551 for a licence to manufacture
dristan tablets which was granted to it. it also applied
for and obtained a licence to import certain ingredients
used in the manufacture of dristan tablets and imported
such ingredients. it further applied for and obtained from
the director drugs companytrol administration state of
maharashtra permission to manufacture dristan tablets. the appellant also filed a numberice of opposition to the first
respondents application for registration of their mark
tristine. during the third period namely the period subsequent
to the first respondents application for rectification
that is subsequent to april 10 1961 on october 18 1961
the said registered user agreement was entered into between
the appellant and the indian companypany. on october 22 1961
the dristan tablets were first marketed in india by the
indian companypany. on march 6 1962 the appellant and the
indian companypany jointly made an application to register the
indian companypany as a registered user of the trade mark
dristan. the facts set out above clearly show that each of the
is an integral link in a chain and that they cannumber be
divided into three separate periods as companytended by dr.
gauri shankar. this companytinuous chain of events establishes
beyond doubt that the appellant had an intention that the
trade mark dristan should be used in relation to the
tablets in question by the manufacture and sale of these
tablets in india. this brings us to the question whether the intention of
the appellant to market and manufacture dristan tablets in
india was to do so itself or to do so through a registered
user. mr. nariman learned companynsel for the appellant
submitted that as the intention of the appellant was to
market dristan tablets in india it companyld translate that
intention into action either by getting it manufactured and
marketed by a registered user in india or as exporting the
tablets to india and if the import
policy did number permit this to be done it companyld export the
tablets to india when the import policy was relaxed. this
argument is companytrary to the facts on the record and must be
rejected. a persons intention is shown by the facts of a
case and number by statements made at the bar. the facts of
this case clearly establish that the appellants intention
in applying for registration of the trade mark dristan was
to use it in relation to goods to be manufactured and
marketed by the indian companypany and that for this purpose the
indian companypany would get itself registered as the registered
user of the said trade mark. further in the affidavit sworn
on april 13 1962 by s. waldron vice-president of the
appellant it is categorically stated as follows
it was intended that the product bearing the
dristan trade mark be introduced in india
through geoffrey manners company limited should be
registered as registered user in india of the
trade mark dristan. for this reason all
applications to government authorities and drug
control authorities were made by geoffrey manners
co. limited in implementation of the intention to
appoint geoffrey manners company limited as registered
users of the trade mark dristan preparations
were undertaken to appoint geoffrey manners company
ltd. as registered users and these culminated into
execution of registered user agreement between the
registered proprietors and geoffrey manners company
ltd. which has been dated the 18th october
1961.
in view of this sworn statement made on behalf of the
appellant it is number open to companynsel to submit that the
proposed use by the appellant companyld also have been by
exporting dristan tablets to india. the appellants application for registration of the
trade mark dristan was made under section 14 1  of the
1940 act and was registered under that act. under the said
section 14 1  only a person claiming to be the proprietor
of a trade mark use or proposed to be used by him companyld
apply for registration of that trade mark. the provisions of
section 18 1  of the 1958 act are identical. this brings us
to the crucial question whether the words proposed to be
used by him would include proposed to be used through a
registered proprietor. in other words the question is
whether a proposed user by a registered user of a trade mark
can be equated with a proposed user by the proprietor of the
trade mark. on behalf of the appellant it was submitted by mr.
nariman that the two phrases proposed to be used by him
ant proposed to be used by a registered user must be
equated by reason of the statutory legal fiction created by
section 48 2  of the 1958 act which companyresponds to section
39 2  of the 1940 act. according to mr. nariman unless the
legal fiction enacted in section 48 2  applied also to the
provisions of section 18 1  it would have a very limited
operation and can apply only so far as the second companydition
of clause  a  of section 46 1  and clause  b  of that sub-
section are companycerned which according to him would render
nugatory the words or for any other purpose for which such
use is material under this act or any other law occurring
in section 48 2 . dr. gauri shankar on behalf of the first respondent
however submitted that both under the 1940 act and the 1958
act a registered user is number the same person as the
proprietor of a registered trade mark for a registered user
can only be some person other than the proprietor of the
trade mark and that numberregistered user can companye into being
unless and until a trade mark has been registered and
thereafter an application for registration as the registered
user thereof has been made and granted. he also submitted
that the legal fiction enacted in section 48 2  of the 1958
act and section 39 2  of the 1940 act cannumber for this reason
apply to the provisions of section 18 1  or to the first
condition of clause  a  of section 46 1  of the 1958 act
and therefore the appellant was number entitled to seek the
protection of the said legal fiction. according to dr. gauri
shankar if the proprietor of a trade mark intended to use
it through anumberher he companyld only do it by having resort to
section 45 of the 1958 act which companyresponds to section 36
of the 1940 act by getting it registered for the purpose of
assigning it to a companypany to be formed and registered under
the companypanies act 1956. in dr. gauri shankars submission
the only three ways in which therefore the trade mark
dristan companyld have been used in india were for the
appellant to have resort to section 45 by floating a companypany
to which when incorporated the trade mark would be
assigned or by manufacturing the tablets dristan it self
in india and thereafter by assigning it to the indian
company or by jointly applying along with the indian companypany
to have the indian companypany registered as the registered user
of the said trade mark. the appellants application for registration of the
trade mark dristan was made under the 1940 act and its
registration was also ordered under that act. the
application for registering
the indian companypany as the registered user was however made
under the 1958 act. if the 1940 act did number companytain a legal
fiction similar to that enacted in section 48 2  of the 1958
act the appellants case would fall to the ground because
then at the date of its application for registration of the
said trade mark its intention would be number to use it itself
but to use it through anumberher. the 1940 act however also
made provisions with respect to registered users and created
a similar legal fiction in section 39 2  of the act. section
39 of the 1940 act provided as follows

registered users.-

a person other that the proprietor of a trade
mark may be registered as a registered user
thereof in respect of all or any of the goods in
respect of which it is registered  otherwise than
as a defensive trade mark  and either with or
without companyditions or restrictions. the permitted use of a trade mark shall be
deemed to be use by the proprietor thereof and
shall be deemed number to be use by a person other
than the proprietor for any purpose for which
such use is material under this act or any other
law. the only difference between section 39 2  of
the 1940 act and section 48 2  of the 1958 act is
that while under section 39 2  the legal fiction
created by it applies for any purpose for which
such use is material under this act or any other
law under section 48 2  the legal fiction
applies for the purposes of section 46 or for any
other purpose for which such use is material under
this act or any other law. the addition of the
words for the purposes of section 46 in section
48 2  number only does number make any difference but
clarifies the scope of the said legal fiction. as
we have seen clause  a  of section 46 1  refers
both to bona fide intention on the part of the
applicant for registration that it  that is the
trade mark  should be used in relation to those
goods by him as also to bona fide use of the
trade mark in relation to those goods do any
proprietor thereof for the time being. it cannumber
possibly be that when section 48 2  expressly
provides that the permitted user of a trade mark
by a registered user is to be deemed to be user by
the proprietor of the trade mark for the purposes
of section 46 the fiction is intended only to
apply to the use of the trade mark
referred to in the second companydition of clause  a  of section
46 1  and number to the use of that trade mark referred to in
the first companydition of the said clause  a . under section
18 1  an application for registration of a trade mark can
only be made by a person who claims to be the proprietor of
that trade mark. therefore the words applicant for
registration in clause  a  of section 46 1  would mean the
person claiming to be the proprietor of the trade mark who
is the applicant for registration of that trade mark. the
first companydition of clause  a  would therefore read that
the trade mark was registered with out any bona fide
intention on the part of the person claiming to be the
proprietor of that trade mark who has made the application
for registration that it should be used in relation to those
goods by him. so read there can be numberdifficulty in
reading the words by him. also as by a registered user. similarly we see numberdifficulty in applying the legal
fiction in section 48 2  to section 18 1 . section lb l  in
the light of the said legal fiction would read is any person
claiming to be the proprietor of a trade mark used or
proposed to be used by him or by a registered user. by
reason of the provisions of section 39 2  of the 194c act
section 14 1  of that act should also be read in the same
way. in celebrated passage lord asquith of bishopstone in
east end dwellings company ld. v. finsbury borough companyncil
 1952  a.c. 109 said  at page 132
if you are bidden to treat an imaginary state of
affairs as real you must surely unless
prohibited from doing so also imagine as real
the companysequences and incidents which if the
putative state of affairs had in fact existed
must invitably have flowed from or accompanied it. in the state of bombay v. pandurang vinayak chaphalkar
and others 1953 s.c.r.773 this companyrt held  at page 132
while approving the above passage of lord-asquith
when a statute enacts that something shall be
deemed to have been done which in fact and truth
was number done the companyrt is entitled and bound to
ascertain for what purposes and between what
persons the statutory fiction is to be resorted to
and full effect must be given to the statutory
fiction and it should be carried to its logic
conclusion. the purposes for which the said fiction has been
enacted are set out in section 48 2 . these purposes are
the purposes of section 46 or for any other purpose for
which such use is material under the 1958 act or any other
law. to companyfine the purpose only to a part of section 46
would be to substantially cut down the operation of the
legal fiction. the purpose for which the legal fiction is to
be resorted to is to deem the permitted use of a trade mark
which means the use of the trade mark by a registered user
thereof to be the use by the proprietor of that trade mark. having regard to the purposes for which the fiction in
section 48 2  was created and the persons between whom it is
to be resorted to namely the proprietor of the trade mark
and the registered user thereof and giving to such fiction
its full effect and carrying it to its logical companyclusion
numberother interpretation can be placed upon the relevant
portions of section 18 1  and of clause  a  of section 46 1
than the one which we have given. in reaching the companyclusion which they did the learned
single judge and the division bench of the high companyrt relied
heavily upon the pussy galore trade mark case. in order to
understand what was held in that case it is necessary first
to refer to some of the provisions of the english trade
marks act 1938  1 2 geo. 6 c. 22  as the 1958 act is
based largely upon the provisions of the english act though
with certain important differences. section 17 1  of the
english act sets out who can apply for registration of a
trade mark and is in pari materia with section 18 1  of the
1958 act. under section 11 4  the refusal by a registrar to
register the trade mark is subject to appeal to the board of
trade or to the companyrt at the option of the applicant. if the
appeal is to the companyrt there can be further appeal to the
court of appeal and from there to the house of lords
section 2h provides for removal of a trade mark from the
register and is in pari materia with section 46 of the 1958
act. section 32 deals with rectifying the entries in the
register and is analogous to section 56 of the 1958 act. under section 87 of the patents designs and trade
marks act 1883  46 47 vict. c. 57  any registered
proprietor companyld grant licences to use the mark subject to
any equity. the 1883 act in so far as it related to trade
marks was repealed by the trade marks act 1905  5 edw. 7 c.
15 . the 1905 act did number however companytain any power in the
registered proprietor to grant licences. the english act of
1938 however introduced a system of official approval for
licences to use a trade mark
particularly by providing for registering a person other
than the proprietor of the trade mark as the registered user
of the trade mark. it will be useful to set out the
provisions cf the english act of 1938 relating to registered
users in order to focus our attention on the differences
between the english act and the 1958 act with respect to
registered users. sub-sections  1   2  and  4  to  2  of section 28
provide as follows

registered users.-

subject to the provisions of this section a
person other than the proprietor of a trade nark
mark may be registered as a registered user
thereof in respect of all or any of the goods in
respect of which it is registered  otherwise than
as a defensive trade mark  and either with or
without companyditions or restrictions. the use of a trade mark by a registered user
thereof in relation to goods with which he is
connected in the companyrse of trade and in respect of
which for the time being the trade mark remains
registered and he is registered as a registered
user being use such as to companyply with any
conditions or restrictions to which his
registration is subject is in this act referred
to as the permitted use thereof. the permitted use of a trade mark shall be
deemed to be use by the proprietor thereof and
shall be deemed number to be use by a person other
than the proprietor for the purpose of section
twenty six of this act and for any other purposes
for which such use is material under this act or
at companymon law. where it is proposed that a person should be
registered as a registered user of a trade mark
the proprietor and the proposed registered user
must apply in writing to the registrar in the
prescribed manner and must furnish him with a
statutory declaration made by the proprietor or
by some person authorised to act on his behalf and
approved by the registrar-
 a  giving particulars of the relationship
existing or proposed between the proprietor and
the proposed
registered user including particulars showing the
degree of companytrol by the proprietor over the
permitted use which their relationship will companyfer
and whether it is a term of their relationship
that the proposed registered user shall be the
sole registered user or that there shall be any
other restriction as to persons for whose
registration as registered users application may
be made
 b  stating the goods in respect of which
registration is proposed
 c  stating any companyditions or restrictions
proposed with respect to the characteristics of
the goods to the mode or place of permitted use
or to any other matter and
 d  stating whether the permitted use is to be for
a period or without limit of period and if for a
period the duration thereof and with such
further documents information or evidence as may
be required under the rules or by the registrar. when the requirements of the last foregoing
subsection have been companypled with if the
registrar after companysidering the information
furnished to him under that sub-section is
satisfied that in all the circumstances the use of
the trade mark in relation to the proposed goods
or any of them by the proposed registered user
subject to any companyditions or restrictions which
the registrar thinks proper would number be companytrary
to the public interest the registrar may register
the proposed registered user as a registered user
in respect of the goods as to which he is so
satisfied subject as aforesaid. the registrar shall refuse an application
under the foregoing provisions of his section if
it appears to him that the grant thereof would
tend to facilitate trafficking in a trade mark. sub-section  1  and  2  of section 29 provide as follows

proposed use of trade mark by companyporation to
be companystituted. etc. numberapplication for the registration of a trade
mark in respect of any goods shall be refused number
shall permission for such registration be
withheld on the ground only that it appears that
the applicant does number use or propose to use the
trade mark
 a  if the tribunal is satisfied that a body
corporate is about to be companystituted and that the
applicant intends to assign the trade mark to the
corporation with a view to the use thereof in
relation to those goods by the companyporation or
 b  if the application is accompanied by an
application for the registration of a person as a
registered user of the trade mark and the
tribunal is satisfied that the proprietor intends
it to be used by that person in relation to those
goods and the tribunal is also satisfied that
person will be registered as a registered user
thereof immediately after the registration of the
trade mark. the provisions of section twenty-six of this
act shall have effect in relation to a trade mark
registered under the power companyferred by the
foregoing sub-section as if for the reference in
paragraph  a  t. of sub-section  1  of that
section to intention on the part of an applicant
for registration that a trade mark should be used
by him there were substituted a reference to
intention on his part that it should be used by
the companyporation or registered user companycerned. in the pussy galore trade mark case a companypany filed
forty-six applications for registering different trade marks
in respect of goods falling under seventeen different
classes. official objection was raised that owing to the
very large and diverse range of goods companyered by the several
applications the registrar was number satisfied that the
applicant companypany had itself the necessary intention to use
the marks applied for. all the marks sought to be registered
related to numberels written by the late ian fleming. thirty-
nine of the said applications related to marks james bond
secret agent and 007 secret agent james bond being the
hero of those numberels and 007 being his official companye
number. the remaining seven applications were in respect of
the mark pussy galore. pussy galore was a character
featuring in ian flemings numberel godfinger being a female
with jew
unumberthodox morals and a name which would appear to be an
obscene pun in very questionable taste. the registrar heard
one of the said applications which related to the trade mark
pussy galore. the other relevant facts appear in the
decision of the registrar. the relevant passage is as
follows  at page 266
the mark in suit and the others to which i have
referred all companytain references either directly or
indirectly to the well-knumbern fictional character
james bond and mr. bevan explained that the
applicant companypany were closely companynected with the
devisor of that character the late mr. ian
fleming and that his widow has some interest in
the companypany. mr. bevan further explained that at
the time the various applications were filed the
applicants did number propose to use the mark
themselves but were filed of the intention to seek
others who would put the mark to use either as
registered users or as licensees. the application
was number however accompanied by application to
register users as specified in section 29 1  b . mr. bevan stated that it was a companyvenient
commercial practice to operate through registered
users but the latter might number be agreeable so to
act until the mark was registered. he submitted
that the requirements of the act as to intention
to use are satisfied in these companyditions. the registrar took the view that the english act of 1938
required that to qualify as an applicant the proprietor of
the mark must either possess the intention to use the mark
himself at the time of application or have applied under the
conditions of clause  a  or clause  b  of section 25 1 . the
registrar accordingly refused the application. the applicant
appealed to the board of trade and the appeal was heard by

w. tookey esq. q.c. who dismissed the appeal. the
relevant passages from the judgment of the board of irade
are as follows  at pages 269 and 27c
having carefully companysidered the relevant
sections of the act i companyclude that the
registrars decision is right. in my view section
17 has the limited meaning attributed to it by the
registrar. there is numberdifficulty about the case
of servants and agents because although various
executive acts may be performed by them on behalf
of their principal who is the applicant for the
dark the use of the mark
vis-a-vis the public is by the applicant and no
one else. as regards registered users when
section 17 was framed by the legislature the
effect of the introduction into trade mark law for
the first time of registered user provisions must
have been borne in mind. it would be obvious from
the provisions of section 28 and also from the
definition of trade mark in section 68 that
actual use of a trade mark might be exclusively by
a registered user and number by the proprietor at all
i agree with the registrar that section 28 is
dealing with matters which arise after
registration and has numbersuch bearing upon the
interpretation of section 17 and 29 as the
applicants have companytended. as above indicated my
view is that section 29 state the only case in
which an intended use ex hypothesi number a use by
the applicant can be regarded as justifying
dispensation from the requirements of section 17.
what happens after registration calls for
different companysideration both as regards the use of
marks in accordance with the provision of the act
and as regards the companysequences of use otherwise
than in accordance with the provision of that
act. in our opinion the high companyrt was unduly impressed by
this case and unnecessarily attached great importance to it. the high companyrt justified its reliance upon that case by
referring to the following passage from the judgment of this
court in the registrar of trade marks v. ashok chandra
rakhit limited 1955 2 s.c.r. 252.  at pages 259-60
as the law of trade marks adopted in our act
merely reproduces the english law with only slight
modifications a reference to the judicial
decisions on the companyresponding section of the
english act is apposite and must be helpful. what the high companyrt overlooked was that in ashok chandra
rakhits case the section of the 1940 act which fell for
interpretation was in pari materia with the companyresponding
section of the english act of 1938 which has been judicially
interpreted by the companyrt in england. as pointed out by this
court in forasal v. oil d natural gas companymission 1984 1

c.r. 526 549 567 s.c.  1984  supp. s.c.c. 263 280
295 in the absence of any binding
authority of an indian companyrt on a particular point of law
english decisions in which judgments were delivered by
judges held in high repute can be referred to as they are
decisions of companyrts of a companyntry from which indian
jurisprudence and a large part of our law is derived for
they are authorities of high persuasive value to which the
court may legitimately turn. for assistance but whether the
rule laid down in any of these cases can be applied by our
courts must however be judged in the companytext of our own
laws and legal procedure and the practical realities of
litigation in our companyntry. the relevant provisions relating to registered users in
the english act and in the 1958 act are materially
different. the english act creates two legal fictions. the
first is companytained in section 28 2  which relates to the
permitted use of a trade mark. that fiction 18 for the
purpose of section 26  which companyresponds to section 46 of
the 1958 act  and for any other purpose for which such use
18 material under the english act or at companymon law. the
second is companytained in section 29 2  and relates to
intention on the part of an applicant for registration that
a trade mark should be used by him. the second fiction is
for the purposes of paragraph  a  of section 26 1  which
corresponds to clause  a  of section 46 1  of the 1958 act. the 1958 act however companytains only one fiction. it 18 in
section 48 2  which is in pari materia with section 28 2
of the english act. in our opinion the omission from the
1958 act of a provision similar to that companytained in section
29 2  of the english act toes number make any difference if one
were to see the said section 29 2  in its proper setting and
context. the english act does number prescribe just as the
1958 act does number any period of time from the date of
registration of a trade mark within which an application for
registering a person as a registered user of that trade mark
should be made. section 29 1  of the english act however
provides that an application for registration of a trade
mark can be accompanied by an application for the
registration of a person as a registered user of that trade
mark and if the tribunal is satisfied that the proprietor
of the trade mark intends lt to be used by that person in
relation to those goods and is also satisfied that person
will be registered as a registered user thereof after the
registration of the trade mark lt will number refuse to
register the trade mark. the effect of section 29 1
therefore is that an application for registering a person
as a registered user can be made simultaneously with the
application for registering the trade mark and if both are
found to be satisfactory the application for registration
would be granted and
immediately thereafter the registration of the registered
user would be allowed. in such a case the intention on the
part of the applicant for registration that the trade mark
should be used by the registered user thereof is to be
deemed to be an intention to use that trade mark by the
application for registration. this is a special provision
applicable to a special case. the fiction created by section
29 2  is also made applicable to the case of a companyporation
about to be companystituted to which the applicant intends to
assign the trade mark. there is numbersuch fiction relating to
intention expressly provided in the 1958 act or is there
any provision for simultaneously making an application for
registration of a trade mark and an application for
registering a person as the registered user of the trade
mark. it appears to us that the purpose for wh ch fiction
was created by section 29 2  with respect to a registered
user was to eliminate all possibility of trafficking in a
trade mark by a person getting himself registered as the
proprietor of a trade mark and thereafter going in search of
some person who will use it as the registered user thereof. assuming that the existence of the special fiction created
by section 29 2  cuts down the full operation of the general
fiction enacted in section 28 2  it does number follow that
the absence of such special fiction in the 1958 act will
also cut down the operation of the fiction in section 48 2
in the same way by limiting it to the actual use of a trade
mark only. as pointed out earlier in the 1958 act wherever
the phrase used by him occurs the fiction will apply. in
other words the permitted use of a trade mark is by the
fiction enacted in section 48 2  equated with use by the
registered proprietor. companysequently wherever the word use
occurs with all its permutations and companymutations as for
instance in phrases such as proposed to be used by him or
intended to be used by him the fiction will apply. at
this stage it is pertinent to numbere that form number tm-2
which is the form prescribed for an application for
registration of a trade mark prescribed by the english trade
marks rules 1938 was substituted in 1982 and under the
substituted form a new companyumn is provided which requires
details of an application under section 29 1  to be given. the old form number tm-2 did number companytain this requirement number
does form tm-l appended to the trade and merchandise marks
rules 1959.
there is anumberher vital point of distinction between the
provisions of the english. act and those of the 1958 act
relating to registered users. under the 1958 act an
application for registration of a trade mark as also an
application for
registering a registered user are to be made to the
registrar and it is the registrar who has to grant both of
them. the registrar would refuse the application if it
appears to him that the grant thereof would tend to
facilitate trafficking in a trade mark. this question is to
be companysidered by the registrar himself. the provisions of
the 1958 act were the same but the provisions or the 1958
act are radically different. under the 1958 . act though
both the application for registration of a trade mark and
the application for registration of a registered user are to
be made to the registrar the registrar has the power to
grant the application for registration of the trade mark
only. so far as the application for registering a person as
a registered user is companycerned he has to forward it
together with his report to the central government and it is
for the central government to decide whether to permit such
application to be granted or number. in order to decide this
the central government has to take into account the matters
set out in sub-section  3  of section 49 and in rule 85 of
the trade marks rules 1959. the matters to be companysidered by
the central government include number only whether the
permitted use if allowed would amount to trafficking in
trade marks but also the interests of the general public and
the development of any industry trade or companymerce in india. after the central government has taken its decision the
registrar is to dispose of the application in accordance
with the directions issued by the central government. thus
while under the english act the authority to decide an
application for registering a registered user is the same as
the authority for registering a trade mark under the 1958
act they are different and so are the companysiderations which
are to be taken into account-
under the 1958 act an application for registering a
registered user can only be made after a trade mark is
registered. if an intended use by a person who will be
registered user is number to be included in the legal fiction
created by section 48 2  it would make that fiction operate
within a very narrow companypass and almost render the
provisions relating to registered users meaningless. it is
in very rare circumstances that a person will get a trade
mark registered as proposed to be used by himself use to no
relation to the companycerned goods and thereafter permit it to
be used by anumberher as a registered user. it is also number open
to everyone who want to register a trade mark to form a
company to which after the trade mark is registered and the
proposed companypany is incorporated the trade mark will be
assigned. these things are number practical realities and
parliament companyld number have intended such absurd results. the
argument of dr. gauri shankar that the appellant should have
got the trade mark registered with the intention that it
will itself use the trade mark and in order to effectuate
that intention the appellant should have set up a factory
and manufactured and marketed the tablets dristan and then
either assigned the trade mark to the indian companypany or to
get the indian companypany registered as the registered user of
that trade mark is illogical. by reason of our foreign
exchange and industrial policies it is number possible for a
foreign companypany to establish its own industry in india. it
can only do 80 by entering into a companylaboration with indian
entrepreneurs in which the foreign companypany would number be
permitted to have more than 40 per cent shareholding and
would be subject to other restrictions. even assuming that a
foreign proprietor of a trade mark were to be established an
industry of his own in india it would be absurd to imagine
that it would thereafter cease manufacturing the goods and
allow someone else to do 80. equally illogical is the
argument of dr. dr. gauri shankar that the appellant ant the
indian companypany should have jointly applied for registration
of the trade mark dristan. the appellant was already in
collaboration with the indian companypany. there was numberneed for
it to seek other companylaborators to establish a new companypany. to assign the trade mark to the indian companypany or to make
jointly with the indian companypany an application for
registration of the trade mark dristan would be to destroy
the appellants proprietorship in that trade mark. it is
well-knumbern principle of interpretation of statutes that a
construction should number be put upon a statutory provision
which would lead to manifest absurdity or futility palpable
injustice or absurd inconvenience or anumberaly.  see m.
pentiah and ors. v. muddala veeramallappa and ors. 1961

c.r. 295 303. the division bench of the calcutta high
court saw the absurdity inconvenience and hardship
resulting from the companystruction which was placed by it upon
section 48 2  as is shown by the passages from its judgment
reproduced earlier. it however forget the above principle
of companystruction and failed to give to the legal fiction
enacted by section 48 2  its full force and effect. the pussy galore trade mark case was a decision of
the board of trade and number of any english companyrt. as against
that case we have the decision of the high companyrt of
australia in aston v. harlee manufacturing companypany  1959-
60  103 c.l.r. 391 on which fullagar j. held  at pages
402-3
i would only add that the registered user
provisions of the trade marks act were introduced
in
1948 and an intention to take advantage of those
provisions would in my opinion be a sufficient
intention to use. so far as the bostitch trade mark case relied upon by
the registrar is companycerned it has numberrelevance to the
question which we have to decide. it turned upon its own
facts and what was held in that case was that the provisions
of section 28 of the english act are number mandatory but
permissive. the high companyrt also took the assistance of the
shavaksha companymittee report and the ayyangar report to enable
it to place the companystruction which it did upon section
48 2 . when it was intended to revise the 1940 act the
government of india set up in 1953 that trade marks enquiry
committee under the chairmanship of mr. k.s. shavaksha the
then registrar of irade marks. the report of the shavaksha
committee was made in 1954. the government thereafter
appointed mr. alagiriswami who had acted as the secretary
of the companymittee as special officer to companysider l the
shavaksha companymittee report and he made his own
recommendations. the government therefore felt that the
shavaksha companymittee report and the recommendations made by
the special officer should be further examined by a judicial
authority and it accordingly appointed mr. justice
rajagopala ayyangar to examine the matter. both the learned
single judge and the division bench were of the opinion that
the recommendation made in the ayyangar report were accepted
by the government. this is however number companyrect. the
shavaksha companymittee had recommended the insertion of a
provision similar to clause  b  of section 29 1  of the
english act in section 36 of the 1940 act which companyresponds
to section 45 of the 1958 act. the ayyangar report did number
accept this recommendation but had recommended the addition
of a provision to the effect that a registered proprietor
should number be entitled to permit use by registered user
unless such proprietor had used the mark in relation to
goods in the companyrse of trade for a period of at least two
years before the date of the application for registration of
a registered user. parliament did number accept the
recommendation made in either of these reports. these
reports therefore cannumber be referred to for ascertaining
the intention of parliament when enacting the relevant
provisions of the 1958 act. from what we have said above we must number be understood
to mean that a person who does number intend to use a trade
mark himself can get it registered and when faced with an
application
under clause  a  of section 46 1  to have that trade mark
removed turn round and say that he intended to use it
through some person who was proposed to be got registered as
a registered user. this would clearly amount to trafficking
in a trade mark. pussy galore trade mark case companyld easily
have been decided on the ground that the applications for
registration made therein if granted would amount to
trafficking in trade marks. this has been pointed out in
halsburys laws of england fourth edition volume 48 in
footnumbere 6 to paragraph 30 at page 25.
in our opinion to enable the proprietor of a trade
mark who has got it registered on the ground that he intends
to use the trade mark to avail himself of the fiction
created by section 48 2  he must have had in mind at the
date of his application for registration some person to whom
he intends to allow the use of the trade mark as a
registered user. this would eliminate all chances of
trafficking in a trade mark. if an applicant for
registration did number have at the date of his application for
registration a particular registered user in view he cannumber
be said to have had a bona fide intention to use the trade
mark and in such an event he cannumber resist ar. application
made under clause  a  of section 46 1  of the 1958 act. turning number to the present appeal the facts on the
record show that only when it was decided to introduce
dristan tablets in the indian market through the indian
company that the appellant made its application to register
the trade mark dristan. there was a close companynection in
the companyrse of trade between the appellant and the indian
company. the appellant owned 40 per cent of the shareholding
in the indian companypany. it had entered into a technical
collaboration agreement with the indian companypany which
provided for strict quality companytrol and for formulae and
services to be provided by the appellant. the manufacture
marketing and advertising of all products under the said
agreement were to be under the companytrol of the appellant. there was numberroyalty payable by the indian companypany to the
appellant in respect of the use of the trade mark dristan. in the event of the companylaboration agreement being terminated
by reason of the happening of any of the events mentioned in
the said agreement amongst which events was the
shareholding of the appellant becoming less than 40 per
cent the indian companypany was to cease to be entitled to
manufacture the tablets dristan or to use its formula or
to use the trade mark dristan. there was here therefore
numberquestion of any trafficking in a trade mark. in these
circumstances the intention of the appellant to use the
trade mark dristan through the indian companypany which was
subsequently to get itself registered as the registered user
of the said trade mark cannumber but be characterized as bona
fide. mr. nariman learned companynsel for the appellant also
urged that in addition to having a bona fide intention to
use the trade mark dristan the appellant had also used it
within a period of one month before the date of the
application for rectification. for this purpose learned
counsel relied upon the samples sent by the appellant to the
indian companypany. in the view which we have taken that the two
conditions of clause  a  of section 46 1  are cumulative and
that the first companydition has number been satisfied in this
case we find it unnecessary to companysider this point. it was also submitted by dr. gauri shankar learned
counsel for the first respondent that the appellant was number
entitled to retain the trade mark dristan on the register
because it had obtained its registration by making a false
statement in its application for registration inasmuch as it
had number stated in the said application that the said trade
mark was proposed to be used by a registered user but
instead stated that it was to be used by the appellant who
claimed to be the proprietor thereof. this point was number
raised at any time before the registrar or the high companyrt
and it is number open to the first respondent to take this e
point for the first time in this appeal by certificate. apart from that there is numbersubstance in this point. form
tm-l appended to the trade and merchandise marks rules
1959 does number companytain any companyumn similar to the companyumn in
the new form number tm-2 appended to the english trade marks
rules 1938. the relevant portion of form tm-l is as follows

application is hereby made for registration in
part a a  b of the register of the accompanying
trade mark in class  b   in respect of  c
 in the name s  of  d  whose address is
 e   who claim s  to be the proprietor s
thereof  and by whom the said mark is proposed to
be used   f  or  and by whom and his  their
predecessor s  in title  g  the said mark has been
continuously used since  19   in respect
of the said goods h . the appellant therefore cannumber be said to have practised
any deception in stating in its application that it intended
to use
the trade mark itself. in our opinion it would be better if
the central government were to amend form tm-l to require
the applicant to state whether he proposes to use the trade
mark himself or through a registered proprietor and if so
to state the particulars of the proposed registered user. it was next sought to be argued by dr. gauri shankar
that the trade mark dristan was deceptively and
confusingly similar to the trade mark bistan of which the
registered proprietor is m s. prof. gajjars standard
chemical works limited this is number one of the questions upon
which the certificate was granted by the high companyrt and it
is number open to the first respondent to take this point in
this appeal. in any event this point too is without any
substance. it was rejected by the registrar. the learned
single judge did number deal with it. though the division bench
was of the opinion that it was number necessary to decide that
question it recorded the facts relating thereto which would
justify the rejection of that companytention. these facts are
that though the proprietor of the said trade mark bistan
had made an affidavit supporting the first respondent in the
proceedings for rectification of the register it had number
either opposed the registration of the trade mark dristan
number had it at any time alleged apart from the said
affidavits that there would be any companyfusion or deception by
the use of the trade mark dristan. in the written submissions filed by the first
respondent after the hearing before us was companycluded it was
contended that the companyrts discretion should be exercised
against the trade mark dristan remaining on the register
inasmuch as to allow it so to companytinue would be companytrary to
the policy of the central government with respect to brand
names belonging to foreign companypanies and also because two of
the ingredients used in the formula for the manufacture of
dristan tablets were banned by the authorities. in support
of this companytention companyies of some circulars and
numberifications were filed along with the written submissions. this point was number at any time taken before the registrar or
the high companyrt number does the certificate granted by the high
court companyer it. it is number fair to produce companyies of any
circular or numberification along with written submissions
after oral arguments have closed because the other side has
numberopportunity to meet this case. for ought we knumber after
some ingredients in the companyposition of the dristan tablets
were banned the manufacturers may have changed the formula. we are number companycerned in this appeal with this question. the
application for registering the indian companypany as the
registered user of the
said trade mark is still pending and when the central
government companyes to companysider that application it will
decide the matter for itself. after all the best guardian
of the policy of the central government is the central
government itself and number a private limited companypany namely
mac laboratories private limited the first respondent
before us which has a vital interest in having the trade
mark dristan removed from the register. for the reasons given above this appeal must succeed
and is allowed and the judgment of the division bench of the
calcutta high companyrt appealed against is reversed and the
order passed by it is set aside.