1. This appeal is a continuation of a rather chequered and on the whole unfortunate litigation. As far back as 21-8-1942, the respondent made an application to the Registrar of Trade Marks for registration of his trade mark 'HAUTIN' which he wanted to use in connection with the sole of bidis. On 31-12-1948, the Registrar directed the registration of the trade mark, but limited it to Trichinopnly and Tanjore districts.
The respondent instead of being content with that decision, committed the folly of appealing against that decision, and the appeal came before Snail, J. and that learned Judge on 4-9-1950, remand-ed the matter back to the Registrar and asked him to consider whether he should not register the respondent's trade mark without limitation.
Against that decision the appellant, who has opposed the registration, came in appeal to this Court and the main ground of appeal was that Shah, J, had refused to deal with his cross-objections as in the opinion of the learned Judge the cross-objections were barred. This Court delivering its judgment on 13-9-1951 took the view that Shah, J. was in error in coming to the conclusion that the cross-objections of the appellant were not maintainable, but instead of sending the matter back to Shah, J. this Court sent the matter back to the Registrar and asked him to consider the whole matter 'de novo'.
2. Now, throughout these proceedings a certain agreement, on which the appellant relied, had as--assumcd considerable importance. This was an agreement dated 7-11-1937, and the effect of this agreement was that the respondent had admitted the right and title of the appellant to this particular mark HAUTIN, had admitted the fact that he had wrongfully made use of this mark and agreed to confine the user of his 'bidis' with this mark to the city of Trichinopoly and even conceded the right to the appellant to withdraw this concession even as far as the city of Trichinopoly was concerned.
The Registrar had held this agreement proved. When the matter came before us, the respondent contended that he had not been given an opportunity to lead evidence to satisfy the Registrar that the agreement was not a genuine agreement. Therefore, when we sent the matter back to the Registrar we directed him to take all the necessary evidence that might be led by the parties with regard to the genuineness of this agreement.
The Registrar again came to the conclusion that the agreement was genuine, and basing his decision largely on this agreement he directed that the mark should be registered only for the city of Trichino-poly. The Registrar also came to the conclusion that if any higher Court were to take the view that the agreement was not genuine, then the respondent had established by evidence of user that he had a right to registration in eight districts, and the Registrar expressed his opinion that if the agreement was not held proved, he would have registered the trade mark in respect of the eight districts.
Against this decision the respondent went in appeal to Tendolkar, I. & the appellant filed cross-objections and Tendolkar, J. remanded the matter backto the Registrar and the decision of Tendolkar, J. was substantially based on two grounds. The learned judge took the view that the Registrar had decided mainly on the question of the genuineness of the agreement. According to the learned judge what the Registrar should have considered was whether the trade mark was likely to deceive or cause confusion.
That was the only circumstance the Registrar should have taken into consideration and therefore the learned Judge thought that the Registrar should reconsider the matter ignoring the existence of the agreement. It also appears that the Registrar in the course of his long judgment adverted to the fact that in the statement of the case submitted by the respondent along with his application he had referred to the extent of the sale of his 'bidis' and also the large amount that he had spent on advertisement and in giving the figures which he did he had grossly exaggerated both the extent of his sales and the amount spent by him on the advertisement, and the Registrar expressed the opinion that if he had followed the principles well established in English Courts he would have held that the respondent had mane himself disentitled to any registration by reason ol the false and extravagant statements that be made.
Tendolkar, J. thought that there was no reason why this salutary principle should only be applied in England and not in India, and therefore he asked the Registrar to consider whether the respondent had disentitled himself to relief by reason of the gross exaggerations indulged in by him, accepting the principle of English law as applicable jn India. Against this order of Tendolkar, J. the appellant has come in appeal, and the question that we have to consider is whether Tendolkar, J. should have remanded the matter to the Registrar or should have disposed of the appeal preferred by the respondent and the cross-objections preferred by the appellant himself.
3. The main question that we have to consider is whether the learned Judge was right in the view that he took that the Registrar was not entitled to take into consideration the agreement of 7-11-1937, at all, and Mr, Desai has strenuously argued that the view expressed by the learned Judge is the right view and the only possible view looking to the provisions of the Trade Marks Act.
4. Turning to the Act, the scheme of that Act has often been considered by this Court and it is unnecessary to repeat what has been stated before. Rut one or two general principles may be usefully re-enunciated. As has often been said, there is no absolute right in anyone to obtain the registration I of a trade mark. Even though his application may not fall within the prohibition of Section 8 or Section 10, there is no right in the applicant to get the trade mark registered.
Section 14 confers a wide discretion upon the Registrar to refuse registration or to register subject to limitation, and that discretion is not limited or confined in any way by the provisions of Section 8 or Section 10. In other words, there is no obligation upon the Registrar to register a trade mark because the prohibitions contained in Section 8 or Section 10 do not apply to the particular application. It would be fallacious to suggest that as soon as the Registrar has satisfied himself that prohibitions set out in Sections 8 and 10 do not apply in a particular case, there is a statutory obligation upon him to register the trade mark.
The effect of Section 8, 10 and 14 is this that if Section 8 or Section 10 is applicable, then the Registrar has no discretion at all; he must refuse registration. But though the case may not fall within the ambit of Section 8 or Section 10, he has discretion under Section 14 even so not to register the trade mark. The language of Section 14 itself is clear:
'Any person claiming to be the proprietor of a trade mark used or, proposed to be used by him who is desirous of registering it shall apply in writing to the Registrar in the prescribed manner, and subject to the provisions of this Act, the Registrar may refuse the application or may accept it absolutely or subject to such amendments, modifications,, conditions or limitations, if any, as he may think fit'.
Now, 'subject to the provisions of this_ Act' mainly means subject to the provisions of Sections 8 and 10. Therefore, it is not open to the Registrar to exercise his discretion in favour of the applicant If Section 8 or Section 10 militates against the exercise of that discretion. To that extent his discretion has been controlled by the Legislature by Section 8 or Section 10. but the Legislature does not lay down that if, for instance, a trade mark is not likely to deceive or cause confusion, whether the case falls under Section 8 or Section 10, the trade mark must necessarily be registered by the Registrar under Section 14.
5. Unfortunately, the attention of the learned Judge below does not seem to have been drawn at all to the provisions of Section 14, and Mr. Desai does not contest the proposition, as indeed he cannot, that the discretion conferred by Section 14 upon the Registrar is a very wide discretion. It has been often said that the Court will not interfere with the discretion of the Registrar unless the Court is satisfied that the Registrar was clearly wrong or patently in error. Cut what Mr. Desai has been at pains to satisfy us about is that the discretion under Section 14 must be exercised on certain principles, that those principles can be and should be tested by the Court in appeal, and in the present case the Registrar has exercised his discretion on a wrong principle.
In other words, according to Mr. Desai the fact that there was an agreement arrived at between the parties is not a matter which the Registrar should consider in the exercise of his discretion under Section 14.
6. In order to consider this argument perhaps it will be better if we have a look at the leading case on the question of the nature and extent of the Registrar's discretion under Section 14. The decision is of the House of Lords and is reported in -- 'Eno v. Dunn' (1890) 15 AC 252 (A). The learned Law Lords referred to Sections 72 and 73 which substantially corresponded with Sections 8 and 10, and also inferred to Section 62 which corresponded with Section 14 of our Act, and Lord Herschell at page 261 in an oft-quoted passage said this:
'.....The case was argued on behalf ofthe respondent as if he had an absolute right to have any trade mark registered which was not proved to fall within the terms of either the 72nd or 73rd section of the Act. I do not so read the statute. Those sections prohibit the registration of a trade mark in certain specified cases; but there is no duty cast upon the comptroller of registering every other bade mark that may be applied for.
On the contrary, whilst he is in certain cases prohibited from registering, a discretion whether to register or not appears to me to be in all cases plainly conferred. Of course this discretion must be reasonably and not capriciously exercised; but it is, in my opinion, a reasonable exercise of it to refuse registration when it is not clear that deception might not result from it'.
It will be wholly wrong to read into this statement of Lord Herschell. as Mr. Desai wants us to read, that in this particular case because the discretion was exercised in a particular manner Lord Herschell wanted to limit the discretion to that particular case. What Lord Herschell has emphasisedis the wide discretion which the Registrar has and the only limitation placed upon that discretion isthat it must not be arbitrarily or capriciously exercised. In deciding what are the principles upon which that discretion should be exercised it would not be right totally to exclude equitable principles.
It must be remembered that before the Trade Marks Acts were passed it was the Court of equity that came to the rescue of merchants whose trade, marks were being infringed and gave an injunction preventing the infringement of the trade marks, and in exercising the equitable jurisdiction in granting the injunction undoubtedly the Court of equity did not overlook certain well settled principles which apply to the exercise of an equitable jurisdiction, and Lord Macnaghten in this very judgment points out (p. 262):
'Ever since courts of equity have interfered to protect traders in the exclusive use of marks and words which they have lawfully appropriated for the purpose of distinguishing their goods, it has been an established principle that this protection is riot be extended 'to persons whose case is not founded in truth.' That is said to be 'a clear rule'.'
Therefore, if we are satisfied that in ignoring a agreement and in attempting to act contrary to its clear provisions the respondent's case was not founded in truth, then the Registrar had the discretion to compel the respondent to adhere to his solemn covenant and not to give him a relief which would constitute a breach of that covenant. If the agreement is held to be proved, the effect of the agreement is, as we have already pointed out, that the respondent admitted the title of the appellant and agreed not to xise that mark except in the city of Triehinopoly.
It was on the basis of that agreement that the Registrar imposed a limitation upon the registration of the trade mark. In effect what the Registrar held was that no Court of conscience would permit a relief to be granted which would be in its very nature unconscionable, and we see no reason whatsoever why a decision based on the exercise of the Registrar's discretion on the basis of a well established equitable principle is an erroneous decision or how it can possibly be said that his discretion was not based on any principle or that the discretion was exercised arbitrarily or capriciously.
7. Therefore, in our opinion, if the decision of the Registrar is looked at as having been given in the exercise of his discretion under Section 14, it is a proper decision, and with respect to the learned Judge he should not have asked the Registrar to reconsider his decision ignoring the agreement arrived at between the parties.
8. It might be mentioned in passing that it was argued before the learned Judge, as it has been argued by Mr. Gupte before us, that even under Section 8 it was open to the Registrar to take into consideration the agreement arrived at between the parties. What was argued was that under Section 8(a) no trade mark shall be registered by reason of its being likely to deceive or to cause confusion or otherwise be disentitled to protection in a Court of justice, and it was contended that the expression 'otherwise' was not 'ejusdem generis' and it covered any and every case which may not fall within the first category enumerated in Section 8(a).
The learned Judge felt himself bound by a decision of Shah J. who had held that the expression 'otherwise' used in Section 8(a) was 'ejusdem generis', and therefore he took the view that if the Registrar acted under Section 8(a), it was not open to him to consider the existence of the agreement under that subs-section. Inasmuch as we have come to the conclusion that the Registrar exercised his discretion under Section 14 and not under Section 8(a), we think it unnecessary in this appeal to decide whether the expression 'otherwise' is to be construed 'ejusdem generis' or in the wider sense for which Mr. Gupte has contended.
9. The other question as already indicated on which Mr. Jsutice Tendolkar remanded the matter to the Registrar is the fact that the respondent made false and exaggerated statements in the case submitted by him to the Registrar for registration of his trade mark. Apart from authorities, if we are right in the view that we take that considerations of equity cannot be discarded or ignored when the Registrar exercises his discretion under Section 14, then it is clear that if a party comes to Court with a false case the Court may refuse to grant him relief.
Whether the falsity in any particular case is such as to disentitle him to relief would depend upon the facts and circumstances of each case. Therefore, if in this case the respondent had gone to the Registrar with a false case in respect of relevant matters which the Registrar had to consider, the Registrar would have been justified under Section 14 to refuse to register the trade mark. We agree with the learned Judge that there is no reason whatever why this salutary principle should be confined to England and should not be applied to eases where applications are made for registration in India.
Respect for truth is no less important here than it is in England and it is not less necessary that respect for truth should be encouraged in our country than it is in England. Not only is this principle based on general equitable principles, but it has been (sic) in clear language in a case reported in 'In the matter of Burcombe & Co. Ltd.'s application' (1948) 65 RPC 179 (B). Mr. Desai is right that as far as the facts of the case were concerned, it was a very gross case.
The question there was of concurrent user and the case fell under the corresponding provision to our Section 10(2), and the question therefore as to the extent of the user by the applicant in that case was extremely material. There was a further fact also that the applicant had used the expression 'Regd.' after his trade mark without the trade mark being registered and in doing so he committed an offence and was liable to be prosecuted. He then tried to conceal the fact that he had used the word 'Regd.' by attempting to tear out that particular word from the copy of the proposed trade mark which he submitted to the Registrar. It was in the light of these facts that the Assistant Comptroller in his judgment slated (p. 180);
'I digress here to point out that when in _ response to request from the Registrar an applicant furnishes an 'ex parte' declaration of this character, the Registrar is not generally in a position to cross-examine the declarant, or in any other way able to verify the accuracy of the information given, and considering that the latter may vitally affect the interest of one or more third parties, i.e., the registered proprietors of the conflicting marks, and also the general public, it is of primary importance that great care should be exercised in ensuring that the information furnished in the declaration is accurate.
If in any instance the Registrar should subsequently ascertain that such a declaration was not made in good faith, e.g., that the statements made therein were exaggerated, misleading or untrue or had been made with recklessness as to their truth, it is my opinion that, as a public official exercising the discretionary powers conferred upon him by the Act, the Registrar should carefully consider whether or not the applicant has debarred himself by his conduct from obtaining the registration sought.'
10. Turning to tlie facts of the case before us, we do not think that the statements made by the respondent, although they are exaggerated and false, were on a question which was very material for the decision of the matter by the Registrar. It would be too _ much to say that in every case where an applicant makes false statements he should be de-barred from any relief. We therefore think that no useful purpose will be served by the matter being again remanded to the Registrar and for the Registrar to consider whether in view of this principle (sic) should completely disentitle the applicant from registration of his trade mark.
In our opinion, therefore, the only question that should have been considered by the learned Judge on the appeal preferred before him by the respondent was whether the agreement which the Registrar held to be proved was in fact proved or not, and the learned Judge should also have considered the cross-objections preferred by the appellant which substantially were on the question of the proprietorship of the trade mark.
11. We will, therefore, set aside the order of the learned Judge remanding the matter to the Registrar, send the matter back to the learned Judge, and ask him to hear the appeal of the respondent and also-the cross-objections of the appellant. We might say this with respect to the learned Judge that we are most anxious that the matter should be finally decided by him and that as far as possible he should avoid the necessity of a further remand to the Registrar.
12. With regard to costs, the learned Judge set aside the order made by the Registrar awarding costs to the appellant and he made no order as to costs with regard to the hearing of the appeal before himself. We will set aside this order passed by the learned Judge and direct him, after hearing the appeal and the cross-objections, to make such order as to costs of the hearing before the Registrar and before himself as he thinks proper. There will be no order as to costs of the appeal before us.
Liberty to the appellant's attorneys to withdrawthe sum of Rs. 500 deposited in Court.
13. Appeal allowed.