1955 (4) TMI 34 - SC - Companies Law

Whether in the circumstances of the present case the Registrar had exercised his discretion properly in inserting in the register a disclaimer of the word Shree ? Held that - Considering all the circumstances we are not of opinion that the Registrar had gone so wrong as to have made it necessary for the High Court to interfere with his discretion. If it were to be regarded as a matter of exercise of discretion by the High Court as to whether a disclaimer should be imposed or not it is quite clear that the attention of the High Court was not drawn to an important consideration namely the strong possibility of the respondent company claiming a statutory right to the word Shree by virtue of the registration of its trade mark and subject others to infringement actions only on the strength of the registration and without proof of facts which it would have otherwise to establish in order to succeed in a passing off action or a prosecution under the Indian Penal Code and therefore the High Court cannot be said to have properly exercised its discretion. The result therefore is that this appeal must be allowed

Issues Involved:
1. Whether the Registrar of Trade Marks was justified in requiring a disclaimer of the word "Shree" in the respondent company's registered trade mark.
2. Whether the High Court was correct in reversing the Registrar's decision to insert a disclaimer.

Issue 1: Justification of the Registrar's Requirement for a Disclaimer
The Registrar directed the rectification of the register by inserting a disclaimer of the word "Shree" in the respondent company's trade mark, based on the provisions of Section 13 read with Section 46(4) of the Trade Marks Act, 1940. The Registrar found that the word "Shree" was commonly used by Hindus as an auspicious symbol and was not adapted to distinguish the respondent company's goods. The Registrar's decision was influenced by the established practice in the Registry, which either refused registration of the word "Shree" or required a disclaimer if it was part of a trade mark. The Registrar emphasized that the respondent company was claiming a proprietary right to the name "Shree," which was evident from their affidavit and previous actions, including prosecutions for infringement. The Registrar concluded that a disclaimer was necessary to prevent the respondent company from asserting an exclusive right to the word "Shree" and to avoid potential infringement actions based solely on the registration.

Issue 2: High Court's Reversal of the Registrar's Decision
The High Court reversed the Registrar's decision, holding that there was no ground for the order as the respondent company had never claimed an exclusive right to the word "Shree." The High Court acknowledged that "Shree" had numerous meanings and was not exclusively indicative of the respondent company's goods. However, the High Court reasoned that the Registrar's decision was primarily based on an inflexible practice rather than a specific finding of non-distinctiveness in this case. The High Court found the case analogous to the Cadbury Brothers' Application, where the Registrar's practice of requiring a disclaimer was overruled. The High Court concluded that the Registrar's decision lacked good cause beyond the desire for uniform practice and set aside the order of rectification.

Supreme Court's Analysis and Conclusion
The Supreme Court examined the scope and purpose of Section 13 of the Trade Marks Act, emphasizing that the power to require a disclaimer is discretionary and must be exercised for good cause. The Court noted that the Registrar had considered the respondent company's claim to the word "Shree" and the potential for misuse of the registration. The Court found that the High Court had not fully appreciated the Registrar's reasoning and the necessity of a disclaimer to define the respondent company's rights under the registration. The Supreme Court held that the Registrar had exercised his discretion properly and that the High Court had erred in interfering with the Registrar's decision. Consequently, the Supreme Court allowed the appeal, reinstating the Registrar's order for a disclaimer and awarding costs to the appellant.

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