2020 (8) TMI 217 - HC - Indian Laws

Maintainability of petition - Usage of acronym ICOAI instead of the acronym ICAI - desisting from encroaching into the domains earmarked for the third Respondent - whether the Appellant/Petitioner had the locus standi to maintain the writ petition? - HELD THAT - The third Respondent is a body corporate established by statute and conferred with perpetual succession, the right to a common seal and the right to sue and be sued in its name. The party-in-person has not filed the writ petition in his personal capacity or as a public interest litigation. Instead, it is in the nature of an action for and on behalf of the third Respondent. In effect, using a private law analogy, the present writ petition and the appeal arising there from appear to be in the nature of a derivative action. Even in the realm of private law, derivative actions cannot be maintained unless it is established that the entity on whose behalf such action is initiated is unable, for justifiable reasons, to prosecute proceedings to protect its interest - Neither the party-in-person nor the third Respondent have pleaded nor raised any contention to the effect that the third Respondent was disabled for some valid reasons from initiating proceedings in order to protect its rights and interests. A fortiori, a discretionary public law action cannot be maintained in this situation. Therefore, we concur fully with the findings of the learned Judge in the impugned order that the Appellant/Petitioner does not have locus standi and that the writ petition was not maintainable at his instance. The second plank on which the Appellant's case rests is that the third Respondent obtained a trade mark registration for the acronym ICAI and that consequently, the third Respondent is entitled to restrain the use of the acronym ICAI by the first Respondent. The Trade Marks Act enables the registered proprietor of a trade mark to sue for infringement. Even with regard to an unregistered trade mark, it recognizes the right of the proprietor to initiate an action for passing off under common law - By letter dated 17.06.2020, the Ministry of Corporate Affairs had advised the first Respondent that it is not desirable for the first Respondent to use the acronym ICAI. However, by subsequent letter dated 26.06.2020, the earlier letter was modified and paragraph 7, which dealt with the non-desirability of using the acronym ICAI, was withdrawn by the Ministry of Corporate Affairs. By relying upon these documents, the party-in-person had contended that the Ministry of Corporate Affairs is of the view that the first Respondent should desist from using the acronym ICAI, and that a direction should be issued to that effect. This correspondence was exchanged after the writ petition was filed and in light of the conclusions that we have set out above, we do not propose to issue any such direction. Appeal dismissed.

Summary

Issues Involved:
1. Locus standi of the Appellant to maintain the writ petition.
2. Alleged infringement of statutory rights under the CA Act by the first Respondent.
3. Alleged infringement of trade mark rights under the Trade Marks Act by the first Respondent.
4. Correspondence with the Ministry of Corporate Affairs regarding the use of the acronym ICAI.

Issue-wise Detailed Analysis:

1. Locus Standi of the Appellant to Maintain the Writ Petition:
The Appellant, a member of the Institute of Chartered Accountants of India (ICAI), filed a writ petition to restrain the Institute of Cost Accountants of India from using the acronym ICAI. The court examined whether the Appellant had the locus standi to maintain the writ petition. It was concluded that the Appellant does not have the locus standi as he is not the aggrieved person. The court held that the rights in a trade mark are proprietary rights and only the owner of the trade mark, in this case, the third Respondent, is entitled to initiate proceedings. The court likened the writ petition to a derivative action in private law, which requires the entity on whose behalf the action is initiated to be unable, for justifiable reasons, to prosecute proceedings. Since no such justification was provided, the court concurred with the earlier judgment that the Appellant did not have locus standi.

2. Alleged Infringement of Statutory Rights under the CA Act:
The Appellant argued that the first Respondent's use of the acronym ICAI violates Sections 15-A and 24-A of the Chartered Accountants Act, 1949, which prohibit the use of a name or common seal identical to or deceptively similar to that of the CA Institute. The court noted that the name of the first Respondent, Institute of Cost Accountants of India, is not identical to that of the third Respondent, Institute of Chartered Accountants of India. Furthermore, Section 28 of the CA Act allows prosecution for such violations only upon a complaint by the Council of the CA Institute or the Central Government. Therefore, the court found no basis for exercising discretionary jurisdiction and held that any such dispute should be resolved through appropriate legal proceedings initiated by the third Respondent.

3. Alleged Infringement of Trade Mark Rights under the Trade Marks Act:
The Appellant contended that the third Respondent had registered the acronym ICAI as a trade mark, and thus, the first Respondent's use of the acronym constitutes infringement. The court clarified that the Trade Marks Act allows only the registered proprietor of a trade mark to sue for infringement. Similarly, actions for passing off under common law must be initiated by the proprietor of the trade mark. Since the Appellant is not the registered proprietor, he lacks the locus standi to initiate such actions. The court found no fault in the earlier judgment's conclusion on this issue.

4. Correspondence with the Ministry of Corporate Affairs:
The Appellant referred to a letter dated 17.06.2020 from the Ministry of Corporate Affairs advising the first Respondent that it is not desirable to use the acronym ICAI. However, a subsequent letter dated 26.06.2020 modified the earlier letter and withdrew the paragraph concerning the non-desirability of using the acronym ICAI. The court noted that this correspondence occurred after the writ petition was filed and, given the conclusions reached on the other issues, decided not to issue any direction based on this correspondence.

Conclusion:
The court affirmed the impugned order and dismissed the appeal, concluding that the Appellant lacked locus standi, and that the issues of statutory and trade mark infringement should be addressed through appropriate legal proceedings initiated by the third Respondent. No costs were awarded.