1. This appeal under Section 109 of the Trade an Merchandise Marks Act, 1958 (hereinafter referred to as the Act) has been filed in the following circumstances:
Baljit Kumar-appellant was allotted factory No.77 situated on G.T.Road, Batala, on 2nd May, 1948. On 15th May, 1948 he formed a partnership with Maya Dhari and Sewa Ram. Vijay Kumar, minor was also admitted to the benefits of partnership. The terms of the oral partnership were reduced to writing in the partnership deed dated 5th February, 1951. Baljit Kumar-appellant's sharer was 7 annas in a rupee whereas Maya Dhari's share was 5 anna in the rupee and Sewa Ram's and Vijay Kumar's share was 2 annas in the rupee each. The goodwill of the firm was to belong to all the partners in accordance with the ratio of the shares at the time of the dissolution.
2. On 5th April, 1954 Sewa Ram left the partnership and so the shares of the remaining partners were re-defined. This firm was dissolved on 9th October, 1954 when a deed of dissolution was executed. The partnership firm was using 'BEUTTONS' trade-mark till the date of dissolution but this had not been got registered. The dissolution deed made the following provision in respect of this trade-mark.
'5. Beuttons Trade Mark which the partnership above referred has been using as its Trade Mark up till today . . . . . . . . . . . As regards para 5 as the dispute with Vijay Lakshmi Engineering Works has not been settled and parties 1 to 3 have been using it in their business thereforee it has been decided now also that parties 1, 2 and party 3 shall make use of it in their respective factories. No one out of parties 1 to 3 shall settle the dispute with Vijay Lakshmi Engineering Works regarding the Trade Mark without the consent of the others. In case Beuttons Trade Mark is sold party No.3 shall be entitled to 5/14 share of the price.'
According to this dissolution deed, Grand Foundry came to the share of Baljit Kumar-appellant and Vijay Kumar-minor. Golden Foundry fell to the share of Maya Dhari.
3. On 16th February, 1955 the appellant applied for the registration of the trade-mark 'Beuttons' in his own name 'trading as Grand Foundry, whose trading or business address is G.T.Road, Balala, Punjab by whom the said mark is being used and who claims to be the proprietor thereof'. The registration was effected as of 10th March, 1955 and was thereafter renewed.
4. By an application dated 21st April, 1962 under Section 56(2) of the Act, Maya Dhari, of Golden Foundry G.T.Road, Batala prayed for rectification of the register of trade marks by removing the entry relating to registration of trade-mark No.168158 in favor of the appellant in respect of the word 'Beuttons'. It was alleged that the appellant had obtained the trade-mark in question by mis-presentation and concealment of facts and by fraud. The appellant resisted this application by stating that he had made no misrepresentation nor had he concealed any material fact nor played any fraud as alleged. He pleaded that he was the owner of the said trade-mark although it was used by partnership firm.
5. During the pendency of the application of Maya Dhari, he died and his legal successors, present-respondents, were brought on record.
6. The Assistant Registrar of Trade-Marks came to the conclusion that the trade-mark in question was a joint property of the appellant, Vijay Kumar and Maya Dehari on the said date of dissolution of the firm. He, thereforee, held that the appellant had made a false representation in his application for registration of the trade-mark that he was its proprietor and had suppressed the material fact about the proprietorship of Maya Dhari and that this amounted to fraud. He, thereforee, ordered that the register be rectified by expunging there from the entry relating to the trade-mark in question. He had also held that the respondents had not been able to make out any case under Section 32(b) of the Act.
7. The main question to be decided in this appeal is whether the trade-mark in question was the joint property of the appellant and Maya Dhar. In case it was so,. Then admittedly, the appellant had obtained the registration by fraud by suppressing the material fact of Maya Dhari's being a joint owner with the appellant.
8. Mr. N.K.Anand, learned counsel for the appellant contends that the appellant was using the trade-mark in question immediately before the formation of the partnership firm in 1948 and had allowed the partnership firm to use this trade-mark. After the dissolution of the firm, the appellant continued to use this trade-mark for Band Saw Machines manufactured by him in the grand Foundry which had come to his share and of which he along Vijay Kumar-minor had become sole owner. Maya Dhari was given the right to use this trade-mark in respect of 'Band-Saw Machiners' manufactured by him in Golden Foundry which had fallen to his share and of which he had become the sole owner. He further contends that whereas the appellant had continuously been using this trade-mark without any break till the date he applied for registration of the same, Maya Dhari could only show that he was using this trade-mark during the years 1958 to 1962.
According to the learned counsel both the appellant and Maya Dhari had got independent rights to use this trade-mark and had individual rights to claim its registration. Mr. Anoop Singh, learned counsel for the respondents, contends that the relevant terms of the dissolution deed clearly show that though both the parties had the right to use this trade-mark, this right was a joint one and not an independent one. He further contends that in case this trade-mark was sold, May Dhari was entitled to 5/14th share of the price, which by itself shows that he was the joint owner. Moreover, by getting the trade-mark registered, the appellant had become its statutory owner and had the statutory right to sell it or assign it without any reference to Maya Dhari and against his wish. Had it not been registered, the appellant could not have registered the appellant could not have sold it without selling his good-will.
9. The relevant portion of the dissolution deed extracted above shows that the appellant and Maya Dhari had got the right to make use of this trade-mark in their respectively factories. None of them could have settled the dispute with Vijay Lakshmi Engineering with regard to this trade-mark without the consent of others. On the sale of this trade-mark, Maya Dhari was entitled to a share of the price. These terms clearly indicate that neither the appellant nor Maya Dhari had become the exclusive proprietor of this trade-mark. Though both of them had a right to use it in their respective factories, they continued to be the joint owners, thereof. If that was not so, Maya Dhari would not have been given a right to 5/14th share of the price. Moreover, if the intention was to give to both of them independent rights of using the trade-mark, each would have been entitled to sell the trade-mark without any liability to pay any part of the price to the other. Even the right of settlement of the dispute with regard to the use of this trade-mark by Vijay Lakshmi Engineering Works had been obtained by all the partners, which again points out to the joint interest in the trade-mark.
10. The word 'fraud' has not been defined in the Act. Whether an act of commission or omission will amount to fraud will depend on the circumstances of each case. However, it can be safely said that where material facts are suppressed, which result in an advantage to the applicant, which he would not have received, if the true facts had been know, and an injury to another person, would constitute fraud. In this respect I am supported by the case of B. Monappa v. R.S.Ramappa Air 1956 Mad 184, wherein it was held:
'Though it seems impossible to construct a definition which would meet every case which might be brought under the Indian Trade Marks Act, there is little danger in saying that whenever fraud is alleged therein two elements are at least essential, namely, first deceit or intention to deceive or, in some cases a mere secretary; and secondly, either actual injury or possible injury or an intention to expose some person either to actual injury or to a risk of possible injury by means of deceit or secrecy. This intent, it may be added, is very seldom, the only or the principal intention entertained by the fraudulent person whose principal object in nearly every case is his own advantage. An injurious deception is intended only as a means to an end.
thereforee a practically conclusive test as to the fraud practiced in trade-marks case would be, did the author of the deceit derive any advantage from it which he could not have had if the truth had been known? If so, it is hardly possible that the advantage should not have had an equivalent in loss or risk loss to some-one else; and if so there was fraud. In practice people hardly ever intentionally deceive each other in matters of business for a purpose which is not fraudulent.'
11. This proposition of law was approved by a Division Bench of that Court in appeal against this decision in B.S.Ramappa v. Monappa, : AIR1957Mad76 .
12. Admittedly, an un-registered trade-mark is a part of goodwill and one cannot be separated from the other. The moment a trade-mark is got registered it becomes separated from the goodwill and can be transferred or assigned without transferring or assigning the goodwill. Proprietor of the registered trade-mark can convey good title to the purchaser of the same and can ideal with it as his exclusive property. In this case, as already observed. I have come to the conclusion that the respondent had a share in the trade-mark and it should not be termed as exclusive property of the appellant. There is not force in the contention of Mr. Anand that the present was a case of independent users, and so the appellant was entitled to registration of the trade-mark without informing the Registrar about the right of the respondent in the trade-mark. In my opinion, the learned Assistant Registrar of Trade-Marks was correct in holding that the parties were general owners of the trade-mark in question and the appellant by suppressing the material fact of the interest of the respondent in this trade-mark had obtained the registration by fraud. If this material fact was known then the appellant was not entitled to the registration of the trade-mark in his name only.
13. I would, thereforee, dismiss the appeal with costs.
14. Appeal dismissed.