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TMI Blog1996 (5) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... h manufactured cycles with technical assistance by the respondents-Raleigh Industries of U.K. and marketed the bicycles with a brand name and trade marks belonging to the respondents. On April 24, 1954, Sen Raleigh was recorded as permitted users of the trade marks. By agreement dated December 29, 1962, Sen Raleigh and the respondents agreed that Sen Raleigh was registered user for further period upto 1976. Sen Raleigh was taken over by the Government of India on September 8, 1975 under the IDR Act and the Government took over the management of Sen Raleigh ltd. The agreement dated December 29, 1962 was modified and the respondents were given option to terminate the agreement. An agreement dated December 20, 1976 was entered into between the appellant, as registered user and the respondent in respect of 12 trade marks for a period of 5 years. On March 28, 1978, joint application by Sen Raleigh and the appellant duly signed by the respondent as proprietor and Sen Raleigh Ltd. as registered user came to be made before the Registrar of Trade Marks. On October 24, 1980, Sen Raleigh was nationalised and got vested in the appellant-Corporation by publication of the notification under IDR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permitted the appellant to manufacture bicycles etc. according its specifications and to pass off the goods under their trade marks. Though the collaboration and registered user agreements stood expired from October 31, 1981, no agreement came to be executes nor continued to use the specifications on technical know-how. There is no specific bar for an unregistered lincesee to use registered trade mark so long as there is a connection in the course of trade between the licenser and the lincesee. The appellant was unable to prove that there had been no such user of the trade mark for a continuous period of 61 months or longer and the lack of bona fide intention The expression "by any registered proprietors in Section 46(1)(b) should not be restricted to user by proprietor or registered user who should also include bona fide or authorised users The legislature did not intend to register proprietor to be deprived of their property at the instance of user whose use is unregistered. The expression, therefore, should not be restricted to user by the proprietor himself or any registered user but should also take into account bona fide authorised user. Non registration of the user agreemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e burden is on tile respondents to prove that non-user was due to special circumstance of the trade and not due to some other cause which would have operated whether special circumstances had arisen or not Since the respondents were not using the trade mark since April 20, 1954, the plea of special circumstances is not available to the respondents. The Division Bench or the learned single Judge did not record any finding as to the period upto which the bicycles could be imported into India and the period during which the ban was imposed but for which the respondent had an intention to import bicycles but were prevented to do so due to the ban. In the absence of . such a findings the High Court was wrong in law in refusing to rectify the trade mark and striking it off the register. The Court while exercising its discretion under Section 46 should look into not only commercial interest of the parties but also public interest. In normal circumstances, when it is established that the trade mark was not used either by the registered proprietor or the permitted user, the public interest of supply of the quality of the goods marketed by the appellant should be taken into factual considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er in 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) xxx xxx xxx xxx (b) that up to a date of 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." Sub-section (3) envisages that "an application shall not be entitled to rely for the purpose of clause (b) of sub-section (1) or for purpose of sub-section (2) on any non-use 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 relates". Section 48 provides for registered users which reads thus: '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 whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be deemed no to be used by a person other than the proprietor for the purpose of Section 46 or for any other purpose for which such use is material under the Act or any other law. The Central Government is empowered to prevent trafficking in trade mark. It would, therefore, be clear that a permitted use of the trade mark should be done under sub-section (1) of Section 48. It Should be either by the registered proprietor of the trade mark or a person other than the registered proprietor registered under Section 48(1) to use the trade mark by operation of sub-section (2). An un-registered person under Section 48(1) or a person who did not register under Section (1) of Section 48 shall not be deemed to be a registered user for the purpose of Section 46 or any other law. The High Court recorded a finding and it is not disputed across the bar, that the appellant had entered into an agreement with Sen Raleigh which was a permitted user and used the trade mark till November 1, 1976 and thereafter by registered user agreement dated December 20, 1976 used trade mark for a period of 5 years. It is not in dispute that till date of filing of the application, the appellant used the trade mark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse of the trade between the licensor and the passing off lincesee's goods under the trade mark, there would be sufficient connection in the course of the trade between the proprietor and bona fide user of the trade mark by unregistered user. It must, therefore, be held that though the deemed presumption under sub-section (2) of Section 48 is referable to the permitted user or the registered user and it does not extend to unregistered permitted user, the Connecting link of passing off the goods between the licensor's trade mark and the lincesee should bona fide be with the permission or Consent which may be express or implied by long course of dealings. It would connect the registered proprietor and the user of the trade mark by the unregistered lincesee. The appellant must be presumed by course of conduct that he is a bona fide user for the purpose of Section 46(1)(b). In K.R Beri & Co. vs. The Metal Godds Mfg. Co Pvt Ltd. and Anr [AIR 1980 Delhi 299], the Division Bench construed Section 48(2) and held that an unregistered user of the trade mark even With the consent of the proprietor cannot be construed to be a registered user under Section 48(1) and such construction renders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pendency would be a special circumstance in favour of the respondent. Suffice it to hold that sub- section (3) of Section 46 is not attracted to the facts in this case. The question then is: whether the discretion has been properly exercised by both the Division Bench as well the single Judge in refusing to take off the trade mark from the register by striking off trade mark from the register of the Registrar of Trade Marks? It is true that while exercising discretion, the Court under Section 46 of the Act should take into consideration not only commercial interest of the parties but also public interest: In para 21.82 at page 386 of the law of Trade Marks and passing-off by P. Narayanan (4th Ed.), it is stated that the Court or the Registrar has discretion in granting or refusing an application for rectification. Ordinarily, however, the mark will be expunged (taken off) when the factual circumstances necessary for the removal are established unless it is shown that the case comes within the exceptions provided in the sub-section (3). The High Court refused to exercise the discretion to strike off the trade mark from the register. It is seen that the appellant had not abandoned, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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