AMERICAN ID1E PRODUCTS CORPORATION v. MAC LABORATORIES PRIVATE LOOTED AND ANR.

of section 2 of the 1940 Act was the same as the portion of A clause (v) of section 2(1), of th2 1958 Act reproduced above. Under clause (b) of section 2(2) any reference to the use of a mark in relation to the goods is to be construed 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 propritor", B "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; C

(r) '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". D

Clause (x) of section 2(1) defines the expression "tribunal" as meaning "the Registrar or, as the case may be, the High C.Ourt, before which the proceeding concerned is pending".

The other definition which is relevant for our purpose is that of the expression "permitted use" contained 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 -

(i) by a registered user of the trade mark in relation to goods -

(a) with which he is connected in the course 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

(ii) which complies with any conditions or restrictions to which the registration of the trade mark is subject". H

296 SUPREME COURI REPORTS [1985] SUPP.3 s.c.R.

A 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 7(1), the Register is to be divided into two perts called respectively Part A and Part l!. Under section 7(2), the Register or Trade Marks existing at the commencement of the 1958 Act is to be incorporated with and to B form part of Part A of the Register. The Appellant's trade mark 'DIUSTAN' having been registered under the 1940 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 commencement of the 1958. Act, to continue in force and have effect as if made under the corresponding provi- sion of the 1958 Act. Sub-section (l) of section 9 of the 1958 C Act, which corresponds 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 not to be registered in Part A of the Register unless it contains or consists 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". D Sub-section (1) and (4) of section 18 provide as follows

"18. Application for llegi.stration. -

(l) Any person claiming to be the proprietor of a E 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 B of the Register.

F x x x x x x

(4) Subject to the provisions of this Act, the Registrar may refuse the application or may accept Jt absolutely or subject to such amendments, modifica- tions, conditions or limitations, i f any as he may G think fit,"

The Appellant's application for registration of the trade mark 'DRISTAN' was made under section 14(1) of the 1940 Act which provided as follows :

H "14. Application for registration.-

AMERICAN H.P.CORPN. v. MAC LABS. (MADON, J.] 297

( l) Any person claiming 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 Regi5trat may refuse the application or may accept it absolutely or subject to such all!endments, modifications, conditions or limitations, if any, as he may think fit." B

It is pertinent to note that both under section 14(1) of the 1940 Act anc;I 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 pfoposed to be used by him, he is not entitled to registration. Admittedly, in this case the trade mark 'DRISTAN' was not at any time used by the Appellant in India at the date when it made its application for registration on August 18, 1958, nor did it claim in its application that the said trade mark had been so used by it. wbat was stated in the said application was that the said trade mark was proposed to be used by it. Once an application for registration is made and 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 notice of opposition in writing to the registration of such mark. A copy of such notice of opposition is to be served upon the applicant. These provisions made in sections 20 and 21 of the 1958 Act correspond to section 15 of the 1940 Act. Under section 23(1), if the application has not been opposed "'!d the time for giving the notice 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 F "unless the Central Government otherwise directs" to register the said trade mark in Part A or Part B 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. No G notice of opposition to the registration of the trade mark 'DRISTAN' was ever lodged by anyone, and accordingly i t 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 H

298 SUPREME CO{)R1: REPORTS [1985] SUPP.3 s.c.R.

registration, namely, from ~ust 18, 1958, and even after the coming intc force of the 1958 Act to be deemed to be registered from the same date for the purposes of the 1958 Act. Under section 25 of the 1958 Act, which corresponds to section 18 of the 1940 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, ~s the case may be.

The registration of a trade mark confers very valuable c rights upon the registered proprietor of that trade mark. Under section 27(1) of the 1958 Act, no person can institute any proceeding to prevent, or to recover damages for, the infringe- ment of an unregistered trade mark. However, his right of action against any person for passins off goods as the goods of another person or the remedies in r:espect thereof is not affected by reason of the fact that his trade mark is an unregistered one. D 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 tegistered and to obtain relief in respect of that a company is about to be formed and registered under the Companies Act, 1956, and that the applicant intends to assign the trade mark to that company with a view to the use thereof in relation to those goods by the company.

(2) Th!' 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 appli- cation as abandoned.

( 3) 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 company, then, unless within such period as may be prescribed, or within such further period not exceeding six months as the Registrar may, on application being made to him in the prescribed manner, allow, the company has been registered as the proprietor of the trade marks in respect of those goods, the registration H

AMERICAN H.P.CORPN. v. MAC LABS. [MADON, J.] 299

shall ceased to have effect in respect thereof at the expiration of that period, and the Registrar shall amend the register A 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 . B 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 not constitute 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 t~ assign the trade mark. Under section 37, a trade mark is C assignable and transmissible whether with or without the goodwill of the business concerned and that in respect either of all the goods in respect of which the trade mark is registered or of some only of those goods. Under section 38, an unregistered trade mark is not assignable or transmissible except in the cases set out in sub-section (2) of that section. D

Section 45 provides as follows

"45 Proposed use of trade mark by ccmpa11y to be formed.- E (1) No application for the registration of a trade mark in respect of any goods shall be refused, nor shall permission for such registration be withheld, on the ground only that it appears that the applicant does not use or propose to use the trade mark, if the Registrar is satisfied material provisions of section 46 are as follows : F

"46. llemoval' frm register and imposition of limitatioDB on grouod of oon-use.-

(1) Subject to the provisions of section 47, a registered trade mark may be taken off the register in G respect of any of the goods in respect of which it is registered on application made in the prescribed manner to a High Court or to the Registrar by any person aggrieved on the ground either -

(a) that the trade 'mark was registered without any bona fide intention on the part of the applicant for H

300 SUPREME COURT REPORTS [1985] SUPP.3 s.c.R.

registration that it should be used in relation to A those goods by him or, in a case to which the provisions of section 45 apply, by the company concerned, and that there has, 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 (b) that up to a date one month before the date of the application, a continuous period of five years or longer had elapsed during which the trade mark was registered and during which there was no bona fide use thereof in relation to those goods by any proprietor thereof for the time being: c 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, as 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

(3) An application shall not be entitled to rely for the purpose of clause (b) of sub-section (l) or for the purposes of sub-section (2) on any non-use of a trade mark which is shown to have been due to special circ\.DUStances in the trade and not to any intention to abandon or not to use the trade mark in relation to the goods to which the application relates." G The First Respondent's 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 H

AMERICAN H.P.CORPN. v. MAC LABS. (MADON, J.] 301

manner to a High Court or to the Registrar, and the tribunal may make such order for making, expunging or varying the entry as it A may think fit. Under section 56(4), this power can also •be exercised by the High Court or the Registrar of its own motion after giving notice to the parties concerned 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, cancell!Lng or removi·ng .II a trade mark from the Register of Trade Marks., an appeal lies under section 109 to a Single .Judge of the High Court and against an order made by the Single Judge of the High Court, a further appeal lies to a Bench of the High Court.

What is now required to be set out is section 48 .of the 1958 c 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 D "48. Registered users.-

(1) 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 E the trade mark is registered otherwise than as a defP.nsive trade mark; but the Central Government may, by rules made in this behalf, provide that no appli- cation for registration as such shall be entertained unless the agreement between the parties complies with the. conditions laid down in the rules for preventing trafficking in trade marks. F

(2) The permitted use of a trade mark shall be deemed t.o be use by the proprietor thereof, and shall be deemed not 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 G this Act or any other law."

Section 49 prescribes the procedure for registration of a registered user and is in the following terms

"49. Application for registration as registered user.- H

302 SUPREME COURT REPORTS (1985] SUPP.3 s.c.R.

A (1) 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 - B (i) the agreement in writing or a duly authenticated copy thereof, entered into between the registered proprietor and the proposed registered user wi.th respect to the permitted use of the trade mark; and

(ii) an affidavit made by the registered proprietor or c 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 control by the proprietor over the permitted D use which their relationship will confer 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; E (b) stating the goods in respect of which registration is proposed;

(c) stating the conditions or restrictions, i f any, proposed with respect to the characteristics of the F goods, to the mode or place of permitted use, or to any another 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 G (iii) such further documents or other evidence as may be required by the Registrar or as may be prescribed.

(2) When the requirements of sub-section (1) have been complied with to his satisfaction, the Registrar shall H forward the application together with his report and all the relevant documents to the Central Government.

AMERICAN H.P.CORPN· v. MAC LABS. [MADON, J,j 303

(3) On receipt of an application under sub-section A (2), the Central Government, having regard to all the circumstances of the case and to the 1nterests of the general public, and the development of any industry, trade or connnerce in India, may direct the Registrar -

(a) to refuse the application; or B

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

Provided that no direction for refusing the appli- c cation or for its acceptance conditionally shall be made unless the applicant has been given an opport- unity of being heard.

(4) The Registrar shall dispose of the application ln accordance with the directions issued by the Central D Government under sub-section (3).

(5) The Central Government and the Registrar shall, i f so requested by the applicant, take steps for securing that Information given for the purpose of an appli- cation Ut-ider this section (other than matters entered E in the register) is not disclosed to rivals in trade.

(6) The Registrar shall issue notice in the prescribed manner of the registration of a person as .a registered user, to other registered users of the trade mark, if any." F As we have seen, before a person can be registered as a registered user of a registered trade mark, the registered user's agreement between the parties is to comply with the conditions laid down in the Rules for preventing trafficking in trade marks. Section 133 confers upon the Central Government, by notification published in the Official Gazette and subject to the condition of G previous publication, the power to make. rules to carry out the purposes of the 1958 Act. Under section 134, all rules so made are to be laid for not 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 modifications as Parliament may make in the session in which they are so laid or the session immediately H

304 SUPREME COURT REPORTS [1985J SUPP.3 s.c.R.

A following. In exercise of this power the Central Government has made the Trade and Merchandise Marks Rules, 1959. Chapter V of these Rules coflsisting of Rules 82 to 93 relates to registered users. Under Rule 82, an application for registering a person as a registerea user is to be made in Form TH-28 jointly by the proposed registered user and the registered proprietor of the B trade mark and is to be accompanied inter alia by the agreement in writing or a duly authenticated copy 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 :

"85. Consideration by the Central Goverooent.- c 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 doc\.Ullents comply with the provisions of the Act and the rules, consider whether the appli- D 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 course 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 course of trade or solely . or mainly for the purpose of permitting others to use it under agree- ments for registered user.

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

\a). whether tlle goods for which the trade mark is registered are similar to or are different from the g:oods in which the registered proprietor h:3.s been trading or dealing before the registration of the mark;

( b) whether the registered proprietor has ever used ll the mark in question in relation to his 11oods l.n the course of trade before the date of the agreement for registered user, and ii 1>0 1 the amount aud duration of such us~r;

(c) whether the terms as to royalty and other C rt!lllu11eratlor. payable by the proposed registered user and reasonat>le taking into account the expenses which the registered proprietor LS likely to incur in exercising control over the permitted use.

~xplanation n. - r'or considering the bona. fidcs of the J) acquisl~.(oa of title undel· clause (3) regara sha.L.L b~ had, besid.is the matters set· out in Explanation I to tho foll~wint> funher matter, n£llllely, whether the rei;istered proprietor hua oot<Lined assignment of other registere<l trade uiarks and 1f so, wt1«ther he has dealt with such other 11lilrks by way of assignment or registered user." C

Three 11rowids were taken in the First Respondent's Appll.- c;;tiou for tw.ccification. lt will focilicate an understundiug of the contl'oversy between the partJ.es if we were to reproduce these ~rounds. 'fhey Jr0 :

"(i) .That the said tr11de mark 'ilRlSTM' ia d~ceptively and confcsi1110lY silllilar t:o the trade wark 'llISTAli' registered wider No. 122391 in class 5 (advertised in l'.M. Journal No. 47) in the nawe of Messrs Prof, Gajjar's Standard Chemical Works Ltd., of Bombay. The said trade mark 'BISTAN' has been used and is beillll usec! by ics said proprietors in respect of their medicinal preparation since several years past.

(ii) That the Registered Proprietor of the said trade mark 'DRISTAN' alleged in the said opposition No. Bom. 76 that the sa:Ld trade mark 'ORISTAN' is deceptively similar to the said trade mark ' TRISl'INE' which the II

306 SUPREME COURT REPORTS [1985] SUPP.3 s.c.R.

Applicants have lawfully been using since October 1960 A in respect of their medicinal preparation.

(iii) That there has been no bonafide 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 1958 Act. The Appellant had contested this position but this particular controversy does not survive for it is no more in dispute that the First C Respondent was person aggrieved.

The submissions 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 lJ "(i) That the said trade mark 'DRISTAN' was not distinctive mark and/or was not registerable trade mark under Sec.6 of the Trade Marks Act, 1940 (corresponding to Section 9 of Act No. 40 of 1958), except upon evidence of its distinctiveness and no such evidence was submitted to the Registrar before registration.

(ii) ·That the said trade mark was registered in contravention of Section 8 of the Trade Marko Act, 1940 (corresponding to Section 11 of the present Act, F of 1958).

(iii) That the said trade mark offends against the provisions of Section 11 of the Act.

(iv) That the said trade mark 'DRISTAN' is not distinctive of the goods of the registered proprietors.

(v) 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 H

AMERICAN H.P.<XlRPN. v. MAC LABS. (MADON, J.] 307

relation to their medicinal preparation for sympto- A matic treatment of respiratory ailments by them and that there has, in fact, been no bona fide use in India of the said trade mark 'DRISTAN' in relation to the sai~ goods by the said proprietors upto a date one month before the date of this application." B All the above submissions were rejected by the Registrar. In coming to the conclusion 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 'llOSTI'l'Cll' Trade Hark, (1963) R.P.c. 183. Accordingly, the Registrar dis- missed the said Rectification Application. During the course of the proceedings, a carton of 'DRISTAN' tablets was filed along with an affidavit made on bahalf of the First Respondent. The legend upon the said carton read as follows :

"MADE IN INDIA BY ; GEOFFREY MANNERS & CO. LIMITED, Magnet House, Doughall Road, Bombay for the Proprie- D tors Whitehall Laboratories, New York, N.Y., U.S.A."

The Registrar held that Whitehall Laboratories was not a separate legal entity and, therefore, the mark could not be registered in its name but only in the name of the Appellant of which it formed a part and accordingly the Registrar ordered the entry in the E Register relating to the Trade Mark 'DRISTAN' to be varied by amending the registered proprietor's name to read as "American Home Products Corporation ( a corporation 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 F registration the Appellant did not have a bona fide intention to use the trade mark 'DRISTAN', by itself. In coming to this con- clusion the learned Single Judge relied upon the decision of the lloard of Trade in England in the case of 'PUSSY GALORE' Trade Mark, (1967) R.P.C. 265, 1954 (hereinafter referred to as the "Shavaksha Committee Report"), and the Report of Mr. Justice G Rajagopala Ayyangar on Trade Marks Law Revision, 1955 (herein- after referred to as "the Ayyangar Report"). The learned Single Judge further held that the Appellant had not 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 H

308 SllPliliME' COURT REPORTS [1985] SUPP.3 s.c.a. '

intv play only after a trade mark was registered and that an A intention to use a trade mark through someone who would subsequently get himself registered as a registered user did not amount to an intention on the part of the applicant for rei;istratlon to use the trade mark himself. The learned Single Judge held that to accept the Appellant's said contention would amount to permitting trafficking in trade marks. In view of the Jl conclusion he had reached/ the learned Single Judge did not decide the question whether trade mark 'DRISTAN' was deceptively and confusingly siwllar to the trade mark 'BISTAN'. The learned Single Judge accordingly allowed the said appeal. In further appeal the Division Bench rejected the contention that the trade mark 'DRISTAN' was deceptively and confusingly similRr to the trade mark 'BISTAN'. It, however, confirmed the judgment of the c learned Single Judge in respect of the construction which he had placed upon section 18 and 48 of the 1958 Act in order to come to the conclusion that the Appellant had no bona fide intention to use itself the trade mark 'DRIS'.I:AN' and that the Appellant had not at any time made use of the said trade mark. It accordingly dis:n.1.ssed the Appellant' a further appeal, The main judlj!UE!nt of the Division 8e11Ch was delivered by s.K. Mukherjee, J., with whom A.K. Mukherjee, J,, agreed and at the conclusion of his judgment D s.K. Mukherjee, J,, pointed out the l)ardship whicli the construc- tion 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 nor good policy to be plus royaliste que le roi, to be· lllOre of a royalist than the king h1maelf. A legal situation which permits use of a registered Lrade 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, F 18 a situation fraught vi.th tllree-'quartera irony aod the rest U11C011Scious bwour.

It is not for the Courts of Law to provide relief where relief should ?e provided by the le8islature by ignorlns a conscious departure the statute has made, G strain its constl'uction and assume powers which LOore properly belong to the legislature." (llmphasl.s su,,plfod.)

AMERICAN H.P.CORPN. v. MAC LAJ!S, (MADON, J.] 309

A proper construction of the relevant sections of the 1958 Act A shows that the<e is neither any cause for sardonic merriment nor any need to shed tears.

The subnltssions made at the hearing of this Appeal by Mr. F.S. Nariman, learned counsel for the Appellant, may be. thus summarized : B

l. The legal fiction created by sub-section (2) of section 48 is, as expressly stated in that sutrsection, for 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 confine this fiction to a case of an actual use of a trade mark by a C registered user is to confine it onl.Y to 11se for the purposes of clause (b) of section 46(1) which is contrary to the purpose tor which the said fiction ~as created ana,· therefore, when section 18(1) of the 1958 Act (corresponding to section 14(1) of the 1940 Act) uses the words "proposed to be used", these words must be resd as "proposed to be used by a proposed registered user." D

2Copy pinpoint2. To register a trade mark which is proposed to be used by a registered user does not ,per se amount to traffic.king in trade marks and whether it does so or not must depend upon the facts and circtn:nStances of each case. E

3Copy pinpoint3. The reliance placed by the High Court, both by the learned single Judge and Division Bench upon the 'PUSSY GM.ORE' Trade Mark r.aae 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 1940 Act and, therefore, that case has no relevance so far as the construction of section l~(l) read with section 48(2) of the F 1958 Act is concerned.

4Copy pinpoint4. The reliance placed by the High Court (both by the learned single Judge and the Division Bench) upon the Shavaksha Comwittee Report and the Ayyangar Report was equally misplaced as Parliament did not accept the recommendations with respect to G registered users made in either of these reports.

5Copy pinpoint5. 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. H

310 SUPREME COURT REPORTS (1985] SUPP.3 S.C.R.

6Copy pinpoint6. In any event, the Appellant itself had made bona fide use A of the said trade mark up to a date one month before the date of the First Respondent's Application for Rectification.

The submissions made by Dr. Gauri Shankar, learned Counsel for the First Respondent, were as follows : B

1. 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 not by any person who is proposed to be got registered as a registered user and, therefore, the legal fiction enacted in section 48(2) cannot be iQlported into section 18(1). c 2. A registered user can only come into being after a trade mark is registered. Therefore, as at the date of an application for registration of a trade mark, there cannot be any person in existence who is a registered user, the words "proposed to be used" cannot possibly mean "proposed to be used by a proposed registered user". D

3. To permit a trade mark to be registered when the applicant himself does not 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 contrary to the policy underlying the Trade Marks laws. E

4. The only case in which the 1958 Act permits the registration of a trade mark when the applicant for registration does not intend to use it himself but intends to use in through another is the one set out in section 45, namely, where the Registrar is satisfied that a company is about to be formed and registered under the Companies Act, 1956, and the appiicant F intends to assign the trade mark to that company with a view to the use thereof by the Company.

5. 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 concludes this point against the G Appellant.

6. The Shavaksha Committee Report and the Ayyangar Report show the legislative intent not to allow a proposed use by a proposed registered user to be equated with a proposed use by the applicant for registration. H

AMERICAN H.P.CORPN. V• MAC LABS. [MADON, J ·] 311

7Copy pinpoint7. The Appellant had net at any relevant time made use of A the trade mark 'DRISTAN'

8Copy pinpoint8. 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 not disclosing the fact that it proposed to use it through B a proposed registered user.

9, The trade mark 'DRISTAN' was deceptively and confusingly similar to the trade mark 'BISTAN' and, therefore, it cannot be/ allowed to remain on the Register of Trade Marks. c

10Copy pinpoint10. To allow the trade mark 'DRISTAN' to remain on the Register of Trade Marks would be contrary to the policy of the Government of India.

We will now test the correctness of these rival submissions. D The first Respondent's 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 E 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 confusion, would be an entry wrongly remaining on the Register and, therefore, liable to be expunged therefrom. F 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 G 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 now 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 H

312 SUPREME COURT REPORTS [1985] SUPP.3 s.c.R.

registered. The first case is set OJUt iri clause (a) cf section t, 46(1) and the second in clause (b) of that sub-section. There are. two conditions to be satisfied before clause (a) can become applicable. These conditions are :

1. that the trade mark was registered without any bona fide intention on the parl of the a?p.licant for re;;istrationthatit R should be used in relation to those ~oods by him, and

2. that there has, in fact, been no bona fide use of that · trade mark in relation to those goods by any propcietor thereof for the time being up to a date one month before the date of the application under section 46(1).

c The only exception to the first condition 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 company which is about to be formed and registered under the Companies Act, 1956, and to which the applicant intends to assign the trade mark. Both the conditions set out in clause (a) are cumulative and not di.sjuncitve. Clause (a), therefore, will not tl apply where even though there had been no bona fide intent ion 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 not apply where, E 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 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 under section 46(1).

F 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 no bona 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 sec•ion 46(3). Under section 46(3), the non-use G of a trade mark, which is shown to have been due to special circumstances in the trade and not to any intention to abandon or not to use the trade mark in relation to the goods to which the application under section 46(1) relates, will not amount to non-use for the purpose of clause (b).

AMERICA>'i H.P.CORPN • .v. MAC LABS. [MAIJON, .J.] 313

The distinction between clause (a) and clause (b) is that if A the pe~iod specified in clause (b) has elapsdd and during that period there has been no bona 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 registra- tion becomes immaterial and the trade mark is liable to be remo.ved from the Register unless his case falls under section B 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 not been used for a period shorter than five years from the date of its registration will not entitle any person to. have that trade mark taken off the Register. c Under both these clauses the burden of pro.ving 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 ha.ve the trade mark removed from the Register. Thus, where there has been a non-user of the trade mark for a continuous period of five years and the application for taking off the trade mark from the Register has been filed one month after the expiry of such period, the person seeking to have the trade mark removed fmm the Register has only to proVe sush continuous nou-user and has not to pt'ove 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 non-user is for a period of less than five years, the person seeking to remove the trade mark from .the N.egister has not only to prove non-user for the requisite period but has also to prove that the applicant for registration of the trade mark had no bona fide intention to use the trade mark when the application ~or registration was made. F The reason why the two conditions specified in clause (a) are made cumulative is obvious. As the definitio'b of "trade mark" contained in clause (v) of section 2(1) shows, a trade mark is a · mark used or proposed to be used in relation to goods f.lr 'the purpose of indicating or so as to indicate a connection in the course of trade between the goods and some person having the G right to use the mark. It is, therefore, not 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 not commenced and, therefore, goods have not been marketed is none the less entitled to get the trade mark which the proposes to use H

314 SUPREME COURT RF.PORTS [1985] SUPP.3 s.c.R.

A in relation to those goods registered. In the present day world of commerce and industry, a manufacturing industry can neither be commenced nor established overnight. There are innumerable pre- paratory steps required to be taken and formalities to be complied with before the manufacture of goods can start and the B manufactured goods marketed. The processes must of necessity take time. If the position were that the mere non-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, c a trade rival can make an application on the ground set out in clause (a) of section 46(1) claiming that there has been no bona 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 harass- ment and absured result that the two conditions specified in clause (a) have been made cumulative.

D The object underlying section 46(1) is to prevent traffick- ing 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 another. A trade mark, therefore, cannot exist in vacuo. It can only exist in connection with the goods in relation to which it is used or intended to be E used. Its object is to indicate a connection in the course 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 as distinguish- F inggoodsmadeby one person from those made by another; and soon the need was felt to protect traders against those who were unauthorizedly using their marks ana 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 connection with the goods in respect of which it is registered and i f 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

AMERICAN H.P.CORPN. v. MAC LABS. (MADON, J.] 315

A 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 s~t out in section 3~. The proprietor of an unregistered trade mark whose mark is unauthorisedly used by another cannot, however, sue B for the infringement of such trade mark. His only remedy lies in bringing a passing-off action, an inconvenient remedy as compared to an infringement action. In a passing-off action the plaintiff will have to prove that his mark has by uaer acquired such reputation as to become distinctive of the plaintiff's goods so that if it is used in relation to any goods of the kind dealt c with by the plaintiff_, it will be uriderstood by the trade and public as meaning that the goods are the plaintiff's goods. In an infringement action, the plaintiff is not required to prove the reputation of his mark. Further, under section 37 a registered mark is assignable and transmissible either with or without good- will of the buainess concerned while under section 38, an unregistered trade mark is not assignable or transmissible except in the three cases set out in section 38(2).

As the registration of a trade mark confers such valuable rights upon the registered proprietor thereof, a person cannot be permitted to register a trade mark when he has not used it in relation to the goods in respect of which it is sought to be registered or does not intend to use it in relation to such goods. The reason for not permitting such trade marks to be registered was thus stated by Romer, J. , in 1n re the llegistered Trade-illlrks of John Batt & Co. and In re carter• s Applicatioo for a Trade-Hark:, (1898) 2 Ch. D. 432, 436, s.c. 15 R.P.C. 262, 266. F " ••• one cannot help seeing the evils that may result from allowing trade-1Wlrks to be registered broadcast, if I may use the expression, there being no real 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 cannot help seeing that it -.Id lead in SC111e cases to absolute oppression, and to persoos using the positioo they have obtained as registered <Miers of trade marks (which are not really booa fide trade marks) for the purpose of trafficldng in tbea and using t1- as a .....,_ to obtain money from subsequent persoos vbo -y want to use bona fide trade mazks in respect of SC111e classes in respect of which they find those bogus trade-marks registered.• (Emphasis supplied)

316 SUU:)J. C:CLR'J hlf'iJh1:, A

The judgn.ent of l.:on.er, J., in Batt 's Case was confi rn,ed by the Court of Appeal, ('0%) 2 Ch.L. 432 at pa,,es 439-442, aud by the houoe of Lords sub nominee John Batt & co. v. LUDnett and Amo. (1&99) A.G. 420; 5.C. 16 R.P.C. 411. 1 To get a tLade n.ark rt!t:,istered without any intention to use it in relation to any &oods but rr.erely to make n,oney out of it ty selling tc others the rit,ht 'to use it would be trafficking in that trad€ n.ark. In Re American C.reetint,s Corp. 's Application, [ 19&3] 2 All. E.k. 6G9, 619, Lillon, L. J., said in the Court of Appeal : c "1raf1ickin& in a trade n.ark has fron, the outset been one of the cardinal sins of traci.e 11;ark lav1. l)ut there is no statutory definition o.f traffickint,i and one may suspect that, as wi.th usur)' in tht hiddle AE,es, though it is known to be a aeadly sin, it has become less and less clear, as econon.ic cireurr,stances ha\re developed, wt:at the sin rtctually con,prehendr.

1rafficking musl involv~ trading in or dealing with the t~Ade mark for money or money's worth, but. it is not al1 dealin5 wj th a trade rr.ark [or money thut is objectionaLle, since it has alv.'ays b€en accepted that it i.s peru,issible to sell a. trad2 niark together with the f>OOdwill of the business in tht course of which the trade rr.a.rk has '!Jeen used."

(Err.phasis supplied.)

In the sarr,e case, Lord F..ri.ghtmen in the house of Lords, [1984] 1 F All E.R. 426, 433, summed up the position in la" thus:

''fl-iy Lords, although as a n.atter of ordinary English, trafficking in trade marks n.i.5ht mean the buying and selling of trade marks, it seerr.s otvious that it is to have a n.ore specialised rueanint:, in a trade mark context. I have no quarrel with the definitions suggested by the assistant registrar and by Sir Lenys Buckley, but perhaps one further atten...pt on my part rray not be out of place. The courts have to 5rope for some means of delineating the forbidden territory, and different niodes of expression may heli: to indicate boundaries which are not and cannot be rr.arked out with absolute precision. To my mind, trafficking in a trade

AU.RICI>~ !i.LCvhl'~. v. MC LA1S. [MALCt,, J.] 317

A n.zirk cvotext conveys the notion of dealing in a ti.'ade o.ark primarily as .::i commodity in its own ri!$ht and not prinaril; for the pur~ose of ind~ntifyini, or rror:.oting rr...erchandise ip. which the i.ii.:oprietor of the ruark i..s interested. If ther1,;. is no real trade connection between the proi:-ri~tot of tl1i! n..ark and the B licensee or hie. !;OOds, there is roou. for the conclusion that the grant · of the. licence is a trafticidn1; in the mark. lt is a question of fact and deb1·ee ir. every case whether a. sufficient trade connection exists.

we have no hesitation in acceptini; the n.eardn;; eive·., to the expression '"traffickini; in a trade mark'" by Lillon, LJ., and Lord Brightman.

The intention to use a trade mark soubht .to be registered must be, tnereiore, genuine. and real and as po:!.nted out by L Tomlin, J., Jn In re ducker's Trade !ia~k., (1>28) Ch. L 405, 409, the fact that the wark ;,as thought to be son;ethin~ which scu.e day might be useful would 11ot ai..cunt to any deUni te and precise intention at the t.in.e of registration to use. that niB.rk.- The intention to use the mark must exist at the date of tbe application for re!;istration and such intention must Le gem1ine I:. and bona fide. In fact, ser.tiou 46(l)(a) expressly si,eaks of "bona fide intention on the part of the a!'plJ.cant for registration" 1.l>ich would n.ean '"at the ciate when sue\. ni;pl.1.cant makes his aHlic<.tioc for regJ.stratiun.'"

We will tlO"'-' ad<lr'.:'~S ourselves to the c.i.ue&tion ~liether t.hc facts which brin~ into play clause (a) of section 46(1) exist i.n l the present case.· What. io first rt:quire<l to be nscertained for this purpose io whether the Appellant had any intention that the trade mark 'LRIS1M' should be u•ed fo lndJ a in relation to the concerned f.OOds. Assundn& the Ai-Pellant h~d such an intentJ.on, the next question which will fall to be deteruJ.r,ed is whether this intention was an intention on the part of the Appellant to G use the saJ.d trade 1LBrk itself or to use it throuf,h a re1;istered user and if the intention was to use it throuf.h a resi.st.ered user, whether clause (a) of section 46(1) would be attracted. 1he third question will be whether such intention on tl1e eart of the Appellant was a bona fide one. h Intention is a sta~e of mind. ho person can uiake out the state of mind of another person. ~one the less courts are often

318 SUPREME COURT REPORTS l1985] SUPP.3 s.c.R.

A called upon for various purposes to determine the state of a person's mind. The Courts can only do so by deducting the existence of a particular state of mind from the facts of a case. Section 14 cf the Indian Evidence Act, 1872, provides as follows:

"14. Facts showing existence of state of mind, or of B body, or bodily feeliDg.-

Facts showing the existence of any state of mind, such as intention, knowledge, 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 c any such state of mind or body or bodily feeling is in issue or relevant.

~tion 1. A fact relevant as showing the existence of a relevant state of mind must show that the state of mind exists, not generally, but in reference to the particular matter in question. D x x x x

The second Explanation to that section is not material for out purpose.

It was submitted by Dr. Gauri Shankar, learned Counsel for the First Respondent, that in order to ascertain what the Appellant's intention was, the Court 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 not to any events subsequent thereto. F Whether subsequent events are relevant or not would depend upon the facts and circumstances of each case and the question at issue therein. In Srinivas Mall Barirollya and Anr. v. Emperor, A.I.R. 1947 P.C. 135, Appellant No. 1, a Salt Agent for the District Magistrate, was inter alia charged with having abetted Appellant No.2, 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 Distict Magistrate. Appellant No.l was convicted and sentenced to imprisonment under Rule 81(4) of the Defence of India Rules, 1939, relating to the control of prices. In additi.on to the evidence of the three dealers to whom

AMERICAN H.P.CORPN. v. MAC LABS. (MADON, J.] 319

A the salt was sold, nine other dealers who had bought salt from Appellant No. l and had to deal with Appellant No.2 and had obtained salt from him at a price exceeding the fixed maximt..UU price, were also called in evid~nce as prosecution witnesses. The transactions with the other nine dealers took place not only during and shortly before the dates on which the offences were committed but also after the period covered by the dates of the offences. The Judicial Committee of the Privy Council held (at page 139)

The evidence was relevant to the charge of abetting, because it showed an intention to aid the con:mission 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 e.vidence was thus admissible to prove intention under s. 14ll Evidence Act." D (Emphasis supplied.)

!lr. Gauri Shankar then submittied that in any event facts subsequent to the date of the First Respondent's Application for Rectification, namely, April 10, 1961, could not be looked at by the Court. We are equally unable to agree. As we have pointed out earlier t '.<ihere a trade mark has been registered on the ground that the applicant for registration proposes to use such trade Ulark, a trade rival in order to cause vexation and harassment to the registered proprietor can file his application immediately after the expiry of one mvnth from the date of the order registering the trade mark. As pointed out by us, where a trade mark is proposed to be used, the manufacture and marketing of goods in relation to which such trade mark is proposed to be used must of necessity take time; and not 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 cannot look at the technical collaboration agreement and the registered user agreement inasmuch as neither these agreements nor copies thereof :were produced before the High Court but copies thereof were produced for the first tLne during the course of the hearing of this Appeal. This argument also cannot be accepted. Both these agreements have been referred to in the affidavits f ileci before the Registrar and the High Court and also

320 SUPREME COU!tr REPORTS [L98Sj SUPP.3 s.c.R.

A dealt with by the Registrnr, the learned Sir,~.le Judi;~ and the Uivision Hench in their respective judgments. In this connection, it will not be out of place to set out here the c1rcu.1ndtances i.n which copias of these agreements came to be produc~d before thi; Court. During the course of the h·earitl;I. of the Appeal, we calle<l upon learnea Counsel for the Appellant to file before us copies B of the application for registration of the trade mark 'DRISTAN' and the application for registering the Indian Company as the registered user of the said trada mark. The original file relating to the trade mark 'DR.ISTAfl' was before the Registrar when he heard tlte ~"irat Respcndent 1 s Application for Rectification and also before the High Court when the 1Mtter was heard by the Lear.ned Single Judge and the Division Bench. Copies, c however, of th~ said two applications were not on the record, and we wanned to ascert.:3in for ourselves what was stated in those applications. At that ti!lle learned Counsel. for the first Respondent r,ot up alld requested us that the Appellant •hould al:;o be asked to produce copies of th" said two agreetnents and accordingly we directed the Appellant to f il.e copies of tho&e tw agreP.ments aloo, which tt di.d. D It is because the intention of the Appellant at the date ot filing the application for registration is to be ascertain"d frolll tne facts existillll in this case that we have related them at some length in the earlier part of our judgment. We will now SUlllluarize these facts with refereni:e to three periods : (L) events which took place up to the date of the application for registration, namely, Au&ust 18, 1958, (:.:) eventa which happon"d between that date. and the elate of the Application Luc l\ectification, m•aely, Api:il lu, L96l, amt \3) events wlucil happened subsequent to April LU-, L96 J., F So far ad the period up to August J.ll, 1958, is concerned, prior to L956, the Appellant had acquired a substantial shareholding to the extent of 40 per cent in the Indian Company. In 1956 the Appellant introduced 'DKISTAN' tablets In the American market and got the trade mark 'DRISTAN' regist~red J.n the United States of America and in several other countries. .~ G technical collaboration between the Appellant and the Indian Company collllllenced from NoveU1ber l, L957, and an agreeramt !.u that behalf was signed on May L6, 1958. In pursuance of the aaid collaboration agreement the Indiarl Company wanufactured and marketed se"eral prod•JCts of the Appellant. The Appd Lant got. registered its trade marks in respect of such products and the H Indian Compar,y was registered as the re~ist~red user in reap~ct

AMJ::RICAN lf.P.COKPN. v. MAC LABS. [MADON, J.J 321

A of such trade marks. ·As early as 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 for registration of the trade mark 'DRISTAN' and the said trade mark was duly registered on June 8, 1959. B

Dr .• Gauri. shankar, however, submitted that the collaboration agreement was irreleVant because 1 DRISTAN' tablets were not mentioned in Schedule A to the said agreement, and, therefore, the intention to introduce 'DRISTAN' tablets in the Indian market and the facts relating thereto did not have anything to do with c the said collaboration agreement. In this behalf, Dr. Gauri Shanl<ar 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 l.n India, the Indian Company was to be licensed under and pursuant D to the terns of the said collaboration agreement and it further stated that "these shall ioclude those identified in Schedule Annexed hereto and made a part hereto". It is true that Schedule A to the said agreement does not mention 'DRISTAN' tablets but the products set out in Achedule A are not exhaustive of the Licensed Products to ·which· the said collaboration agreeiaent related .and this is made clear by the use of the word "incwde" with reference to the products identified in Sehedule A· There l.s no dispute that 'llRISTAN' tablets are Whitehall Products. The. division of the Appellant, which at all relevant times carried on and still carries on the activity of manufacturi~ and aiarketing 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 i;he Appellant trading as "Whitehall Laboratories. The definit:ioo of ''Licensed Products" in the said collaboration agreement -comprehended not only the Whitehall Products set out in Sched11le A to the collaboration agreement but also other products in respect of which the Indian Company would be licensed for import, manufacture, sale or distribution in India under the terms of the said agreement. The correspondence between the parties leaves no doubt that the manufacture and of the 'DRISTAN tablets by t:l!e Indian CompaI>y in India was to be under the said collaboration agreement.

So far as the second period is concerned~ namely~ that H between August lti, 1958, e1.nd the date of the firs·t l<ec.ponde:mt's

322 . SUPREME COURT REPORTS (1985] 5UFP.3 s.c.R.

, A. Application for Rectification, that is, April 10, 1961, during that period tl1e Indian Ccn.pany applied for and obtained a licence for the purchase ·of a Stockes 1riple La)er ~.achine for manufacturin5 'CRI51AN' tablets and li.ihen the said n.B.chine \!las received installed it at its Ghatkopar factory. It also.obtained from the ApJ'ellant three units of 'L1'.151M' tablets as samples B and the ~nufacturing inanual for the said tablets. Eurther, it ,, aplied to the Central Government .under section 11 of the Industries (Development and Regulation) Act, 1551, for a licence ·to manufacture 'tRIS1Al.' tablets ~hich was branted to it. It also applied ·rar and otained a licence to !~port Certain ingredients used -in-the tr.a"nufacture of 'LRIS'IM' tablets and in..ported such ingredients. It further applied for and obtained from the c Director, Lrut.s Control Adndnistration, State of ?-.aharashtra, permission to manufacture 'tRISTAN' tatlets. lhe Appellant also filed a notice of opposition to the Hrst Respondent's Application for registration of their n.atk '1RIS1l~E'. ·

During the third period, naILel), the period subsequent to the ,First Respondent's Appiication for Rectification, that is, D sub~equent to April 10; 1961, on Cctoter 18, 1961, the said registered u·ser _agreen.ent lo/as enter~ intO betloleen the Appellant and the Indian Company. On. October 22, 1561, the 'DRISTIM' tablets "ere first marketed in India b) the lndian Company. On March 6, 1962,.the Appellant and the Indian Curupany jointly made an application to .reiister the Indian Corupany as a registered \. E user of the trade mark 'J;RISTM'. \

The facts set out above clearly show that each of them is an integral link in a chain and that they cannot te divided into three separete periocis as contended by J:r. Gauri Shankar. This continuous chain of events establishes t.eyond doubt that the Appellant had an intention thatthe trade mark 'DRISTAN' should _ be used in relation tO the tablets in <iuesti.on by the n.anufacture and sale of these tablets in India.

'ibis brings us to the question to.:hether the intention of the Appellant co n.arket and manufacture 1 Df..IS1Al.' tablets in India G was to do sv itself or to do rso thrcut:,h a registered user. Y.x. !iariruan, learned Counstl for the A~pellant submitted that as the intention of the. Appellant "as to n.arket 'DiU51All' tablets in India, it could translate that intention into action either l:iy getting it n.anufactureo and marketed b)I a rtgist.:red user in India. or by exportini, the tablets to India and the impf)rt B

AMERICAN H.P.CORPN· v. MAC LABS. [MADON, J.] 323

policy did not permit this to be done, it could export the tablets to India when the import policy was relaxed. This argument is contrary to the facts on the record and must be rejected. A person's iiltention is shown by the facts of a case and not by statements made at the Bar. The facts of this case clearly establish that the Appellant's 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 Company and that for this -purpose the Indian Company 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-~resident of the Appellant, it is categorically stated as follows : c "It was intended that the product bearing the 'DRISTAN' trade mark be introduced in India through Geoffrey Manners & Co. Ltd. should ·be registered as registered user in India of the trade mark 'DRISTAN'. D For this . reason all applications to Government authorities and Drug Control authorities were made by Geoffrey Manners & Co. Ltd. In implementation of the intention to appoint Geoffrey Manners & Co. Ltd. as registered users of the trade mark .'DRISTAN', preparations were undertaken to appoint Geoffrey MaIUlers & Co. Ltd. as registered users and these E culminated into execution of registe~ed user agreement between the Registered Proprietors and Geoffrey Manners & Co. Ltd. which has been dated the 18th October, 1961".

In view of this sworn statement made on behalf of the Appellant F it is not open to Counsel to submit that the proposed use by the Appellant could also have been by exporting 'DRISTAN' tablets to India.

The Appellant's application for registration of the trade mark 'DRISTAN' was made under section 14(1) of the 1940 A.ct and was registered under that Act. Under the said section 14(1), oaly G a person claiming to be the proprietor of a trade mark "usea or ~r<)posed to be used by him" could 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 H 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.

324 SUPREME COURT REPORTS [1985] SUPP.3 S.C.R.

A On behalf of the Appellant it was submitted by Mr. Nariman that the two phrases "proposed to be used by him" and "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 corresponds to section 39(2) of the 1940 Act. According to Mr. Nariman, unless the legal ficti.on enacted in section 48(2) B applied also to the provisions of s«ction 18( l), it would have a very limited operation and can apply only so hr as the second condition of clause (a) of section 46(1) and clause (b) .of that sub-section are concerned, 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). c 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 not 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 no registered user can come into being unless and until a trade mark D has been registered and theredter an application for registration as the registered usei: 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 cannot 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 E 1958 Act and, therefore, the Appellant was not 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 another, he could only do it by having re•wrt to section 45 of the 1958 Act, which corresponds to section 36 of the 1940 Act, by getting i t registered for the purpose of assigning it to F a company to be formed and reg:(.stered under the Companies Act,

1956. In Dr. Gauri Shankar's submission the only three ways in which, therefore, the trade mark 'DRISTAN' could have been used in India were for the A?pellant to have resort to section 45 by floating a company to which, when incorporated, the trade mark would be assigned or by manufact\'ring the tablets 'DRISTAN' G itself in India and thereafter by assigning it to the Indian Company or by Jointly applying along with the Indian Company to have the Indian company regist~red as the registered user of the said trade mark.

The Appellant's application for registration of the trade H mark 'DRISTAN' was made under the 1940 Act and its registration was also ordered under that Act. The application for registering

AMERICAN H.P.CQRPN. v. MAC LABS. [MADON, J.] 325

A the Indian company as the registered user was, however, made under the 1958 Act. If the 1940 Act did not contain a legal fiction similar to that enacted in section 48(2) of the 1958 Act,. the Appellant 1 s 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 not to use.it itself but to use it through B another. The 1940 Act, however, also made provisions with respect to registered users and created a similar legsl fiction in section 39(2) of the Act. Section 39 of the 1940 Act provided as follows : ·

"39. l!egistered users.- C

(1) A person other thah 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 conditions or restrictions.

(2) The permitted use of a trade mark shall be deemed to be use by the proprietor thereof, and shall be deemed not 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 wllile under section 39(2) the legal fiction created by it applies "fer any pt1rpose 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 ruaterial under this Act or any other law". The addition of the words "for the purposes of section 46" in section 48(2) not only does not 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 oy any proprietor thereof for the time being." It cannot 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

326 SUPREME COURT REPORlS [1965] SLtP.3 s.c.R.

A referred to in the second conaition of clause (a) of section 46(1) and not to the use of that trade n.ark referred to in the first condition of the said clause (a). ender section 18(1), an application for registration of a trade n.ark can only be ni.ade by a person who clain.s to be the proprietor of that tracle mark. Therefore, the "1{)rds "applicant for registration" in clause (a) B of section 46(1) "'ould mean "the person claiming to be the proprietor of the tracie mark who is the apylicant for registra- tion of that trade mark". The fir&t condition of clause (a) would, therefore, read "that the trade niark was ret:,istered with- out any bona fide intention on the i;;art of the i:-erson claimin!;_ to be the proprietor of that trade mark who has Thade the application for registration that it should be used in relation to those C goods by him". So read, there can be no difficulty in reading the words "by him" also as ''by a registered user". Sifuilarly, we see no difficult; in arplyini, the legal fiction in section 48(2) to section 1&(1). Section l&(l) in the lit,ht of the said legal fiction would read :_js "any person clain.ing to be the rroprietot of a trade n.ark '1sed or proposed to te used by hin1 or by a regis- tered user". E.y reason of the provisions of i:.ection 39(2) of the D 1940 Act, section 14(1) of that Act should also te read in the same way.

In celebrated passa1;e Lord Asquith of 1ishopstor.e in East End Dwellin&S Co. Ld. v. Finsbury llorOU{)i C.Ouncil (1952) A.c. 109, said (at page 132) : L " If you are tidden to treat an iTLaginary state of affiars as real, you 1L.ust surely, unless prohibited from doing so, also irr.af;ine as real the consequences and incidents which, if tt1e IJUtative state of affairs had in fact existed, n1ust invitatly have flowed from F or accon.panied it."

In the State of Lombay v. Panduran& Vinayak Chaphall.ar and Others [19)3j S.C.K.773, this Court held (at page 778) while approving the above passage of Lord Asquith :

G "When a statute enacts that sorr,ethin& shall be deemed to have been done, \Vhich in fact and truth was not done, the court 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 H carried to its logic conclusion."

AMERICAN H.P.GORPN. v. MAC LA.llS. (MADON, J.] 327

A 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 confine the purpose only to a part of section 46 would be to substantially cut down the operation of the legal fiction. The purpose for B 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 c such fiction its full effect and carrying it to its logical conclusion, no other 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. D In reaching the conclusion which they did, the learned Single Judge and the Division Bench of the High court 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 17(4), the refusal by a Registrar to register the trade mark is subject to appeal to the Board of Trade or to the court at the option of the applicant. If the appeal is to the court, there can be further appeal to the Court of Appeal and from there to the House of Lords, Section 26 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. G Under section 'd7 of the Patents, Designs and Trade Marks Act, 1883 (46 & 47 Viet. c. 57), any registered proprietor could 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 not, however, contain any power in the registered proprietor to grant licences. The English Act of 1938, however, introduced a system H of official approval for licences to use a trade mark

328 (l~ES] SLFP.3 &.C.R.

particularly by providint, for re6istering a rerson other than the proprietor of the trade mark as the ref_istered user of the trade mark. It will be useful to set out the provisions cf the En6 1 ish Act of 193C relating to reE,istered usE:rs in ordtr to focus our attention on the differences between the English Act and the 155& Act with resyect to registered users. B Sub-sections (1), (2) and (4) to (6) of section 28 provide as follol<s

"2&. Registered users.-

(1) Subject to the provisions of this section, a c person other than the proi.:rietor of a trade ·n:.a.rk u.ay be re5istered as a registered user thereof in respect of all or any of the t,OOdS in respect of which it is re5istered (otherwise. than as a defensive trade rr.ark) and either with or without conditions or restrictions.

The use of a trade mark by a re:g,istered user thereof [; in relation to goods with t•;hich he is connected in the course of trade and in respect of which for the tin:e l:.eing the trade niarh. rerr.ains re5istered and he is registered as a registered user, beinb use such as to corr.i-ily with any conditions or restrictions to which liis registration is subject, is in this Act referred E to as the 'IJermitteci use' thereof.

(L) The pern.iitted use of a trade niark shall be deemed to Le use 1)' the 1,roprietor thereof, ano shall be deemed not to be use by a yerson other than the r.-roprietor, for the purpose of section twenty six of E this Act anri for any other puri;oses for wliich such use is niaterial under this Act or at comihOO lav.•.

( 4) Where it is proposeci that a per sun should be registered as a ret,istered user of a traae mark, the propreitor and the proposed reE:,istered user n.ust apply in writing to the Registrar in the prescribed rr,anner and n.ust furnish him with a statutory cieclaration nia.de by the proyrietor, or Ly sonic person aL1thorised to act on his behalf and approved Ly tl1e hegistrar-

(a) !;,ivin!:, i;articulars of the relatiousl1i1•, existing or proF-osed, between the proprietor anci tlie proposed

AMERICAN H.P.CORPN. v. MAC LABS. [NADON, J.] 329

regi8tered user, including particulars showing the degree of control by the proprietor over the permitted use which their relationship will confer 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 conditions or restrictions proposed with respect to the characteristics of the goods, to the mode or place of pennitted use, or to any other matter, and

(d) stating whether the permitted use is to be foe a period or wi_thout limit of period~ and if for a D period, the duration _thereof;

and with such further documents, information or evidence as may be required under the rules or by the Registrar. E (5) When the requirements of the last foregoing subsection have been compled with, if the Registrar, after considering 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 a.ny of them by the proposed registered user subject to any conditions or restricti.ons which the Registrar thinks proper would not be contrary 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. G ( 6) 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 : H "29. Proposed use of trade mark by corporation to be constituted, etc.

330 • SUPREME COURT REPORTS [1985] SUPP.3 s.c.R.

.A (1) No application for the registration of a trade mark in respect of· any goods shall be refused, nor shall. permission for such registration be withheld, on · . the ground only that it appears that the applicant does not use or propose to use the trade mark, - 1 B. (a) if the tribunal is.satisfied that a body corPorate · is about to .be constituted, am! 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 corporation; or

c (b) if the application is accompanied by an applica- tion 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 that person will be registered as a registered user thereof illlmediately after the D ( registration of the trade mark.

(2). The provisions· of section twenty-six of this Act shall. have effect, in relation to a t~ade mark registered under the power conferred by the foregoing sub-section, as if for the refereqce, in paragraph (a) of sub-section (1) of that section, to intention on the part of an applicant for registration that a trade mark shculd be used by him there were substituted a reference to Intention on his part that lt should be used .bY the corporation or registered user concerned.'"

E"-,, ' In the 'l'USSY GAIDRE' Trade Harlt Case a ·company filed , ,forty-six applications for registering different trade marks in respect of goods falling under - seventeen d tf fer.ent classes. An official objection was raised that, owing to the very large and diverse range of goods -.covered' by the several applic.ations, the Registrar was .not satisfied that the applicant company had lt.•elf the necessary intention ·to use the marks applied for. All the marks sought to be registered .related to novels written by the . late Ian Fleming. Thirty-nine of the said application• rel,.ted to marks 'James Bond SeCret. Agent' and '007 Secret Agent', Jaraes '--.Jlond being the hero of those novels and 1 007' beini; his oHic!al cod~ number. Tile remaining seven appitcations were in respect 6f ~ H · the mark . 'PUSSY GALORE'.· fussy Ga tore was a character f~l.url 111', in Ian Fleming's novel 'Godfinger', being'a feinale with S04'ncwhat

Af'iERICJ\N \i.F.CORPN. v. MAC LABS. [MOON, J.] 331

unorthodox fuorals 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 'FUSSY 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 contain references either directly or indirectly to the well~known fictional character James Bond and ~ir. Bevan explained that the applicant company were closely connected with the deviser of that character, the late Mr. Ian Fleming and that his wido'W has some interest in the company. Mr. Bevan c further explained that at the time the various applications were filed ·the applicants did not propose to use the mark themselves but were 'firmly of the intention to seek others who would put the mark to use either as registered users or as licensees. The application was not however accollipanied by application D to register users as !Specified in section 29(l)(b). hr. Devan stated that it was a convenient commercial practice to operate throUf.h regi~tcred users but the latter mit,ht not be agreeable so to act until th~ mark was registered. He submitted that the requirements ot the Act as to intention to use are satisfied ir. these contiitions. •·

The Registrar took the view that the English Act of 1938 required that, to qualify as an applicant, the proprietor of the niark must either possess the intention to use the mark hinself at the time of application or have applied under the conditions of clause (a) or clause (b) of section 29(1). The Registrar accordingly refused F the application. The applicant appealed to the Board of Trade and the appeal was heard by G.W. Tookey, Esq., <,.c., who dismissed the appeal. The relevant passages frolli the judgTuent of the Board of Trade are as follows (at pages 269 and 27C) :

'' having carefully considered the relevant sections of the Act, I conclude that the Registrar's decision is riE,ht. In my view, section 17 has the lind ted meaning attributed to it by the Registrar. There is. no difficulty 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 mark, the use of the mark Ii

332 SUPRE.rJE COURT REPORTS [1985] SLPP.3 s.c.R. A

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 B 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 not by the proprietor at all ••••

c I agree with the Registrar that section 28 is dealing with matters which arise after registration, and has no such bearing upon the interpretation of section 17 and 29 as the applicants have contended. As above indicated, my view is that section 29 states the only cases in which an intended use, ex hypothesi not a use by the applicant, can be regarded as justifying D dispensation from the requirements of section 17. What happens after registration calls for different consideration both as regards the use of marks in accordance with the provisions of the Act and as regards the consequences of use othe~ise than in accordance with the provisions of that Act." E In our opinion, the High Court was unduly impressed by this case and unnecessarily attached great importance to it. The High Court justified its reliance upon that case by ref erring to the following passage from the jµdgment of this Court in The Registrar of 'Irade Marks v. Ashok chandra Iiakbit Ltd. [1955] 2 F 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 corresponding section of the English Act is apposite and must be helpful."

What the High Court overlooked was that in Ashok Chandra Rakhit's Case the section of the 1940 Act which fell for interpretation was in pari materia with the corresponding section of the English Act of 1938 which had been judicially interpreted by the courts in England. As pointed out by this Court in Forasol v. Oil and Natural Gas Caunission [1984] 1 s.c.R. 5£6, 549, 567; s.c. (1984) Supp. s.c.c. 263, 280, Z95, in the absence of any binding

AMERICAN H.P.CORPN. v. MAC LABS. [MADON, J.] 333

A authority of an Indian Court 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 courts of a country from which Indian Jurisprudence and a large part of our law is derived, for they are uuthorities of high presuasive value to which the court may legitimately turr. for .B assistance; but whether the rule laid down in any of these cases can be applied by our courts must, however, be judged in the context of cur own laws and legal procedure and the practical realities of litigation in our country.

The relevant provisions relating to registered users in the English Act and in the 1958 Act are materially different. The c English Act creates two legal fictions. The first is contained in .section 28(2) which relates to the permitted use of a trade mark. That fiction is for the purpose of section .26 (which corresponds to section 46 of the 1958 Act) and for any other purpose for which such use is material under the English Act or at common law. D The second is contained 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 secion 46(1) of the 1958 Act. The 1958 Act, however, contains only one fiction. It is .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 contained in section 29(2) of the English Act does not make any difference if one were to see the said section 29(2) in its proper setting and conte~t. The English Act does not prescribe, just as the 1958 Act does not, 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 it to be used by that person in relation to those goods and is also satis- G fied that that person will be registered as a registered user thereof after the registration of the trade mark, it will not 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 simulataneously with the application for registerilll;; the trade mark and if both are found to be satis- factory, the application for registration would be granted and H

334 SUPREME roURT REPORTS [1985] SUPP.3 s.c.R. A immediately thereafter the registration of the registered user wuld 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 tr.at trade mark by the appl1ca11t for registra- B tion. lhis is a .special provision applicable to a special case. The fictl.on created by section 29(2} is also !llade applicable to the· case· of• a. corporation abo-Jt to be constituted to which the applicant intends to assign the trade mark. There is no such fiction re1ating to.inte~tion express1y,provided in.the 1958 Act.· nor is .there any provision for simultaneously making an applica- tion .for .. registration of a trade mark and an application· for C registering a person as· the registered user of the trade mark. It appears to us that the purpose for which fiction ~-as 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 th~ proprietor of a trade mark and tr.ereafter going io search of some person who will use it as the registered user thereof. Assuming thai: the existence of the D · special fiction. created by section Z9 (2) cut's dow:i the full operation' of the general fiction enacted in section 28(2). it does not follow that the absence of such special fiction in the 1958 Act will. also cut down· the operation· of the fiction in section 4U(2) in the. sa:ne way by limiting it to the .actual use of a trade mark only. A• pointed out earlier, in the 1958 Act E wherever the phrase "used by hlru" occurs the fiction will apply. 0

·In other ,words,. the pP.tmitted use of a trade mark is,' by the fiction enacted in section 4b(2), equated with "use by the regis- , tered f·roprietor". Co·asequentlY: wherever the word "use" accurs ·with- all its permutations and c01lll1llltations, . as for instance in '' phrases such as .. proposed to be used by him" or .. intended to be , F used by him", the fiction will apply. At this stage, it is perti- '·· neot to note that form No. rn-2, which is the form prescribed for ' · an application for registration of ·a trade mark prescribed by the Eilglish Trade : Marks Rules, 1938, wo.s substitut<ad in 1982 and under · the substituted Form a new column is provided which requires details of an ·application under section 29(1) to be G given~ The old Form No. TH-2 rlid not contain this requirement nor does form rn-1 ap)!ended to the 'fr~de and Merchandise Marks Rules, 195S.

There is another v!tal point of distinction between thP. provisions of the. tni;lish kt and.those of the 1958 Act relating to re&lst~red users. U11~er the 1958 Act, an application foi:; regLsttation of a ·trade mark as also an application for

---------------------------------------- AMERICAN·H.P.CORPN. v. MA.:: LABS. [MADON, J.j 335

registering a registered user are to be made to the Registrar and A it is the Registrar who has to grant both of them. The Registrar would refuse the application i f it appears to him that the grant thereof would t~nd to facilitate trafficking . in a trade mark. Thfs question• is to be considered by the Registrar himself. The • provisions of the 1940 Act were the ~ame but the provisions of the 1958 Act are radically different. Under the 1958 Act, though B .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 appli- cation for registration of the trade mark only. So far as the application- for registeiihg." a person as a registered user is concerned, he has to forward it together with his report to the c Central Government and it is for the Central Government to decide whether to permit 8uch application to be granted or not. In order to decice this, the Central Government has to take into account the matters set out_ in sub-section ·(3) of section 49 and in rule BS of the. Trade Marks Rules, 1959. The mattere to, be considered by the Central Government include not onl~ whether the permitted D use, i f allowed, would amount to trafficking in trade marks but also the interests of the gen~ral public and the development of any industry, trade or commerce 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 autho<- E ity 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 considerations 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 F registered; If an intended use by a person who will be registered user is not to be Included in the legal . fiction created by section 4ll(2) it \JOuld Make that fiction operate within a very narrow compass , and almost render, the provisions relating to registered users m.ea·ntngless. I:: ts in very r:ire cir.:!umstances that a person· will get " .trade .mark regist11red as prGposed to l:>e G used by himself, use it in relatia11 to the conc:.erned goods, and . therecifter permit it to be used by another a~ a registere.d user:· It is also not open to everyolle who t{ant:s to resister a trade mark to form a company to· lithit.h after the tTade (r\ark is registered and the · prvposed C.O(llpa:iy is ioc.orporated, th-= trade mark will be assigned. Y.1ese t'\ii11&s are not pr&Ctlcal n~itles and Parliament could not have intended such almlt'J rQSults. The

336 SUPREME COURT REPORTS [1985] SUPP.3 s.c.R.

A ' argument of Dr. Gauri Shankar that the Appellant should have got the trade mark registered with the intentlon 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 li mark to the Indian Company or to get the Indian Company registered as the registered user of that trade mark is illogical. By reason of our foreign exchange and industrial policies it is not possible for a foreign company to establish its own industry in India. It can only do so by entering into a collaboration with Indian entrepreneurs in which the foreign company would not be permitted to have more than 40 per cent c shareholding and would be subject to other restrictions. Even assuming that a foreign proprietor of a trade mark ;;ere to be establish an industry of his own in India, it would be absurd to imagin that it would thereafter cease manufacturing the goods and allow someone else to do so. Equally illogical is the argument of Dr. r.auri Shankar that the Appellant and the Indian Company should have jointly applied for registration of the trade mark o 'DRISTAN'. The Appellant was already in collaboration with the Indian Company. There was no need for it to seek other collaborators to establish a new company. To assign the trade mark to the Indian Company or to make jointly with the Indian Company an application for registration of the trade mark 1 DKISTAN' would be to destroy the Appellant's proprietorship in

E that trade mark. lt is well-known principle of interpretation of statutes that a construction should not be put upon a statutory provision which would lead to manifest absurdity or futility, palpable inJUS tice, or absurd inconvenience or anomaly. (see: M. Pentiah aod Ors. V• HiKlda!a Veeramallappa and Ors. [196lj 2 $.C.R. 295, 303. The Division Bench of the Calcutta High Court F saw the absurdity, inconvenience and hardship resulting from the construction 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 construction and failed to give to the legal fiction enacted by section 48(2) its full force and effect. G The 'PUSSY GALORE' Trade Mark Csse was a decision of the Board of Trade and not of any English Court. As against that case, we have the decision of the High Court of Australia in Ast:on v. Harlee Manufacturing Caapany, (1959-60) 103 C.L.R. 391, on which Fullagar, J,, held (at pages 402-3) : H "I would only add that the 'registered user' provisions of the Trade Marks Act were introduced in