K.S. Venkataraman, J.
1. This is an appeal against the order of the learned Assistant Registrar of Trade Marks, dated 20th March, 1965 registering a trade mark in the name of B. Monappa, the first respondent in the appeal. To understand the points in controversy, it is necessary to have an idea of the background and the events which led to the filing of the Application No. 216880 of Monappa. Monappa and the first appellant B. S. Ramappa are the sons of the late B. Ramappa, Monappa being the elder son. The late Ramappa started the business of manufacturing tiles in or about 1921 in Mangalore and invented the trade mark known as the Taj Double Bavta Mark. Bavta means a flag and the mark itself will be described a little later. He was therefore the founder of the trade mark. He registered it in or about 1936 in the Chamber of Commerce, Madras; but at that time there was no statute for registration in this country, and the first statute was passed in the country only in 1940. He was manufacturing titles in two factories, one called the Jayaram Tile Works in Kudroli, Mangalore-3 and the other the Indian National Tile Works, Hoige Bazaar, Bolar, Mangalore-1. The premises of the Indian National Tile Works had been taken by him on lease. The premises of the Jayaram Tile Works belonged to him absolutely.
2. In 1946, the younger son, B. S. Ramappa (the first appellant) made an application, No. 126612 for registration of the Taj Double Bavta mark in his own name under the provisions of the Trade Marks Act (V of 1940) claiming to be the proprietor of the Jayaram Tile Works, Kudroli, and of the trade mark. This was really a false claim because the proprietor was the father B. Ramappa, and the junior son was at, best only a manager. However, the mark was registered on 12th May, 1950 but the registration dated back to 18th December, 1946, the date of the application under Section 16 (1) of the Trade Marks Act of 1940. Vide para. 4 of the decision of Ramaswami, J., in Monappa v. Ramappa A.I.R. 1956 Mad. 184.
3. On 17th January, 1950 the father, B. Ramappa, executed a registered settlement deed of the Indian National Tile Works, Hoige Bazaar, Mangalore-1, on the elder son, B. Monappa, with all the equipment and implements contained in the factory for the manufacture of tiles. The deed purports to be in respect of immoveable and moveable properties described therein. It is the claim of Monappa that under this deed the trade mark, Raj Double Bavata mark, of the founder also was settled on Monappa so far as the Hoige Bazaar factory was concerned. The deed itself does not expressly refer to the trade mark, but Monappa contends that as a matter of inference and true construction of the document, the trade mark passed to him. This contention is based on the fact that in the list of moveable properties given in the deed, wooden frames and iron presses for manufacturing tiles are also mentioned. It is said that these presses contained the disc on which was imprinted the trade mark and that the discs were not removed by the founder.
4. On the above basis Monappa began using the above trade mark with slight alterations. At this stage I may give a brief idea of the mark registered in the name of B. S. Ramappa in 1946 and the slight alterations made by B. Monappa. The registered mark was the original trade mark of the founder and consisted in the main of a label containing the device of a flag and the word " flag " inside an outline of a shield. Just on the top of the shield there was the device of a crown flanked on either side by the device of a flag. At the bottom of the shield there was the legend "Taj Double Bavta" and the numeral '1596'. The alterations made by Monappa were these. At the top of the Crown and the two flags he added the word ' Monappa's '. He shifted the numeral 1596 from the bottom to a place inside the outline of the shield and just above the device of the flag.
5. The younger son, B. S. Ramappa issued a notice on 27th July, 1951 (vide page 24 of the typed set) to Monappa asking him to desist from using the trade mark. B. S. Ramappa claimed to be the proprietor of the trade mark because of the registration in his name in 1946. B. Monappa countered this claim by urging that the registration had been obtained by fraud. Thereupon the younger son obtained a registered deed of settlement dated 8th February, 1953 in his own name from the father in respect of Jayaram Tile Works, Kudroli, specifically conveying the goodwill and the trade mark appertaining thereto--without however specifying the names of the trade marks. B.S. Ramappa then instituted a suit, O.S. No. 14 of 1953, on the file of the District Court of South Kanara against B. Monappa for an injunction restraining Monappa from using the trade mark. B.S. Ramappa relied on the registration of the mark in 1946 and on the assignment of the trade mark by his father by the deed dated 8th February, 1953.
6. Monappa filed a written statement reiterating that the registration of the mark had been obtained by fraud and contending that under the settlement deed of 17th January, 1950 he himself was entitled to use the trade mark on the tiles manufactured by him in the Indian National Tile Works and that in order to distinguish his mark, he had added the word ' Monappa's' and that there was no likelihood of confusion between his mark and the original mark. Monappa did not stop with this. He filed an application, O.P. No. 65 of 1954 in this Court under Section 46 of the Trade Marks Act of 1940 for rectification of the Register of Trade Marks by the removal of the trade mark (No. 126612) which had been registered with effect from 1946 in the name of B.S. Ramappa, on the ground that the registration was obtained by fraud. The application came on for hearing before Ramaswami, J. The father was examined as a witness by Monappa and his evidence is to be found at pages 27 to 34 of the typed set in L.P.A. No. 76 of 1964 furnished to me. It is enough to state here the main features of the father's evidence. He asserted that he was the founder of the Taj Double Bavta Mark and he pleaded ignorance of the registration thereof in 1946 in favour of B.S. Ramappa, the younger son. He admitted that he permitted the elder son Monappa to use the trade mark on the tiles to be manufactured by him in the Indian National Tile Works.
7. The learned Judge had no hesitation in holding that the registration in 1946 had been obtained by fraud, but at the same time felt that the remedy was not the removal of the registered trade mark, but a joint registration of the mark in the names of B.S. Ramappa and B. Monappa. The decision of the learned Judge is reported in Monappa v. Ramappa A.I.R. 1956 Mad. 184. The learned Judge took the view that each of the sons was entitled to use the mark under the relevant settlement deed pertaining to him and that the intention of the founder was that neither should exclude the other. The learned Judge felt that the circumstances of the case would constitute ' special circumstances' to enable B. Monappa to claim registration under Section 10 (2) of the Trade Marks Act V of 1940 (which corresponded to Section 12 (3) of the Trade and Merchandise Marks Act, XLIII of 1958).
8. B.S. Ramappa preferred an appeal, O.S. A. No. 42 of 1955. The appeal was heard by Rajamannar, C.J., and Panchapakesa Ayyar, J., and their decision is reported in Ramappa v. Monappa . The
learned Judge concurred with the finding of Ramaswami, J., that the registration of 1946 had been obtained by fraud. But they differed from Ramaswami, J., in holding that Monappa was entitled to joint registration under Section 10 (2) of the Act of 1940. The learned Judges pointed out that joint registration was dealt with under Section 17 of the Act and expressed the view that before joint registration could be ordered, there should be applications from the two persons, which however was not the case. Regarding Section 10 (2) they observed:
Section 10 (2) of the Act refers to concurrent user which is honest, that is independent concurrent user, that is, user which cannot be traced to the same source.
9. They accordingly directed that the registration in the name of B.S. Ramappa be cancelled and expunged. They then observed:
There was an attempt before us to put forward the claims of both the parties to the trade mark but they need not be discussed in this appeal. The parties will be at liberty to seek to enforce their rights and obligations and nothing said in this order will adversely affect the rights of either party.
10. The above decision was rendered on 13th July, 1956. O.S.No. 14 of 1953 on the file of the District Court of South Kanara, which had been stayed and kept pending till then, was taken up thereafter for trial and was dismissed by the District Judge on 7th January, 1957. The learned Judge took the view that besides B.S. Ramappa, the plaintiff in the suit, B. Monappa, the defendant, was also the successor in title of the founder, B. Ramappa in respect of the trade mark by virtue of the deed dated 17th January, 1950. It was on that view that he dismissed B.S. Ramappa's suit.
11. After the above judgment of 7th January, 1957 there was a lull on the part of the younger son, B.S. Ramappa, for nearly three years. On 18th January, 1960 he issued a notice (pages 15 and 16 of the typed set in L.P.A. No. 76 of 1964) to the father stating that he had undertaken the onerous obligations cast on him by the father under the deed dated 8th February, 1953 (payment of Rs. one lakh in a lump and monthly payment of Rs. 1,000) because of the assurance of the father that under the deed he would become the sole proprietor of the trade mark, Taj Double Bavta Mark, and that the elder son, Monappa, had no right to use the trade mark; but contrary to that assurance the father had deposed (in O.P.No. 65 of 1954) that he had permitted the elder son also to use the mark; and the District Court (in O.S. No. 14 of 1953). had held that Monappa was entitled to use the trade mark. B.S. Ramappa further stated that Monappa was freely using the trade mark. Ramappa wanted the father to make good his assurance, and stated that otherwise he would not be able to make the recurring payments.
12. Thereupon the father on 18th February, 1960 executed a rectification deed (pages 7 to 9 of the typed set in. L.P.A. No. 76 of 1964) stating that under the deed of 8th February, 1953 he had also conveyed to the younger son the three trade marks, one of them being the Taj Double Bavta Mark, and that he had not given the trade mark to anybody else.
13. Thereafter the father also filed the suit, O.S. No. 34 of 1960, against his two sons, on the file of the Sub-Court of South Kanara, for a formal rectification of the deed dated 17th January, 1950 executed in favour of B. Monappa by making it clear that the deed did not convey the trade mark (Taj Double Bavta Mark). The learned Subordinate Judge took the view that the goodwill and the trade mark had deliberately been left out in that deed because the founder wanted to retain the trade mark. In that view of the matter he thought it superflous to rectify the deed of 17th January, 1950 and he dismissed the suit. No appeal was preferred therefrom by the father or by the younger son, who was also a party to the suit. The above judgment was delivered on 31st October, 1962.
14. In the meantime, during the pendency of the above suit, the younger son B. S. Ramappa and his son Chardrakanth, filed an application No. 205533 on 28th October, 1961 before, the Registrar for registration of the Taj Double Bavta Mark, relying on the deed of 8th February, 1953 and the deed of 18th February, 1960. The father filed an affidavit dated 29th March, 1962 supporting the son stating, " I state here that only B.S. Ramappa has the absolute right to use the mark. No other person has got right over the mark". The application was opposed by B. Monappa. The opposition was overruled and the registration was ordered by order dated 15th December, 1963. During the pendency of the above application No. 205533 B. Monappa filed his own application, No. 216880 for registration on 31st July, 1963.
15. It may be mentioned here, that in the order dated 15th December, 1963 the learned Registrar observed that the claim of B. Monappa for registration of the trade mark would have to be dealt with separately, in his own application, and would not constitute an impediment to the registration of the trade mark (Taj Double Bavta) in the names of B.S. Ramappa and his son in their application. Against the above order dated 15th December, 1963 Monappa filed C.M.A.No. 3 of 1964 in this Court. The appeal was dismissed by Venkatadri, J. on 1st January, 1964. L.P.A.No. 76 of 1964 was filed against the decision of Venkatadri, J. It was pending when the Registrar passed the order dated 20th March, 1965 allowing Application No. 216880 of Monappa. L.P.A. No. 76 of 1964 has since been dismissed.
16. The grounds put forward by B. Monappa in his application No. 216880, for registration were twofold : that he got an assignment of the trade mark from his father under the deed of 17th January, 1950 and that he had been honestly and concurrently using the mark as altered by him from 17th January, 1950 and would therefore be entitled to registration under Section 12 (3) of the Act of 1958.
17. B.S. Ramappa and his son filed an opposition contending that the deed of 17th January, 1950 did not convey the trade mark of the founder to B. Monappa, and that even if as a matter of construction it should be held that the trade mark was conveyed thereunder, the conveyance would be invalid because it offended Section 39 of the Act of 1958 in that even after the deed the father still had a right to use the trade mark on the tiles manufactured by him in the Jayaram Tile Works, Kudroli and such (a partial) assignment was prohibited by Section 39 of the Act. In effect the contention was that B. Monappa was not in law the proprietor of the trade mark. It was further contended that the use of the mark under such circumstances could not be honest and further it was not continuous and not sufficient in volume. The mark of B. Monappa was certain to deceive or cause confusion in view of the existing trade mark of B.S. Ramappa and in view of Section 11 (a)of the Act it should not be registered. Further since the mark had been registered in the name of the opponents, Section 12 (1) also would be a bar.
18. The learned Assistant Registrar held that Sections 11 (a) and 12 (1) would bar the registration in the name of B. Monappa but held that he was entitled to registration under Section 12 (3). Regarding Section 11 (a) the learned Registrar pointed out that for all practical purposes the mark of Monappa was a replica of the mark of the opponents and was certain to cause deception and confusion. Similarly he was of the view that Section 12 (1) would also be a bar because the registration had been made in the name of the opponents before the date of the hearing of Monappa's application. Regarding Section 12 (3) the learned Registrar first addressed himself to the question whether the applicant B. Monappa was not the proprietor of the mark. He pointed out that the applicant sought to make out his proprietorship on two grounds : (i) deed dated 17th January, 1950 and (it) lawful, open, extensive and uninterrupted user of the mark and the acquiescence of the opponents . Under the first head, he agreed with the opponents' learned Counsel that the deed of 17th January, 1950 did not as a matter of construction convey the trade mark to Monappa. He held however that even if as a matter of construction the deed was meant to convey the trade mark it would be invalid because of Section 39 of the Act. The learned Registrar thus rejected the first head of the claim of proprietorship of Monappa. The learned Registrar however held in favour of Monappa on the second ground that the user was lawful, because Monappa used it in the honest belief that he had a right to use the mark, and that the founder had not objected to the user of the mark and in fact had deposed in O.P. No. 65 of 1954 that he had permitted B. Monappa to use the mark. No doubt in 1960 he started protesting but that was evidently at the instigation of the younger son. Secondly, the learned Registrar pointed out that the use of the mark by Monappa was open and not surreptitious. Thirdly, the held that it was continuous. Fourthly, in his view even B.S. Ramappa had acquiesced in the use of the mark by B. Monappa. I shall deal with this later.
19. The learned Registrar then considered the objection that the user by Monappa was not honest. The learned Registrar held that it was honest and that it was continuous enough and the volume of the business was sufficient for the purpose of Section 12 (3), and at any rate amounted to commercial use, the criterion pointed by their Lordships of the Supreme Court in the Durex case (1964) 2 S.C.R. 211 : A.I.R. 1963 S.C. 1882. The learned Registrar also held that it was Monappa who had been more honest of the two brothers and that there was no reason for refusing to exercise the discretion vested in the Registrar against Monappa. In the end he ordered registration under Section 12 (3) of the Act.
20. Sri V. Rajagopalachari, the learned Counsel for the appellants, has, in a powerful argument, contended that the learned Registrar was wrong in holding that Monappa had become the proprietor of the trade mark sought to be registered by long open continuous and uninterrupted user. The learned Counsel urges that the user was not lawful because the mark was virtually a reproduction of the mark of the founder and the mark of the founder had not been assigned to Monappa--both as a matter of construction and in view of Section 39 of the Act--as rightly found by the learned Registrar himself. Monappa thus merely adopted with an insignificant variation the mark of the founder and the use of the mark could not be honest, particularly as it would offend the provisions of Section 39. The first point made by the learned Counsel is thus : that in trade mark law, the use of the mark must be lawful even in its origin, and there is no such thing as acquiring a right to the mark by long user adversely to the rightful owner. In this respect there is a difference between the trade mark law and the ordinary law where a man's title to immovable property becomes perfect by adverse possession over a prescribed period usually 12 years. No doubt if the rightful owner stands by and allows the usurper of the trade mark to use it for a long period, the original owner may be estopped and may be considered as having acquiesced in the use of the mark by the usurper. But in this case the learned Counsel contends that there was no such acquiesance by B.S. Ramappa who became the owner of the mark at least from 8th February, 1953, the date of the settlement deed executed by the original founder. The learned Counsel submits that even for claiming the right of registration on the ground of honest user under Section 12 (3) it is necessary for the claimant to make out that he is the proprietor, because the section speaks of the Registrar permitting registration by more than one proprietor of trade marks which are identical or nearly resemble each other in the case of honest, concurrent use or other special circumstances. Section 18 under which the application has to be made no doubt starts by saying that " any person claiming to be the proprietor of a trade mark used or proposed to be used by him who is desirous of registering shall apply in writing to the Registrar ". But the words ' claiming to be the proprietor ' can only mean, according to the learned Counsel, that if the claim is challenged, the applicant must make out his claim. To hold otherwise would defeat the whole object of the trade mark law, namely, that a man cannot steal another man's trade mark. A man may become the proprietor in ever so many ways : (a) by inventing the mark; (b) purchase of the mark; (c) gift; (d) by partition; (e) devolution, inheritance or operation of law. But it is necessary that he should be the proprietor in one of such ways. In this case as a matter of construction it has to be held that the deed of 17th January, 1950 did not pass the trade mark, and even if as a matter of construction it should be held that it passed the trade mark it will not be valid because of Section 39. No doubt the founder's evidence in O.P. No. 65 of 1954 showed that he permitted Monappa to use the mark. But permission would not amount to an assignment and the very deposition would show that the founder himself retained the right to continue to use the trade mark on the tiles manufactured by him in the Jayaram Tile Works, and if so such a partial assignment would offend Section 39. Apart from the alleged assignment the only possible ground of title was that Monappa invented the mark. But that again would not be valid because the mark which he adopted was virtually the original mark and the alteration was only slight.
21. In support of the above argument the learned Counsel has cited the Vitamins, Ltd. case (1956) R.P.C. 1 (12) : (1955) 3 All E.R. 827 at p. 834 : (1956) 1 W.L.R. 1, and the decision of Ramamurthi, J., in Balaji Chettiar v. Lever Brothers India Ltd. , (Paras. 10 and 11) and Halsbury, Volume 38, paragraph 909 and Kerly on Trade Marks, 9th Edition, paragraph 92. In the matter of Vitamins, Ltd.'s Application for a Trade Mark (1956) R.P.C. 1 (12) : (1955) 3 All E.R. 827 at p. 834 : (1956) 1 W.L.R. 1, the relevant facts were these. Vitamins Ltd., had registered the trade mark Pabavel. A.H. Robins Co., incorporated in United States sought to register in England the mark Pabalate, which they had been using in America. They however withdrew their application in order to avoid controversy and expense on account of the opposition of Vitamins Ltd. Shortly thereafter Vitamins Ltd., applied for registration of the mark Pabalate. How they sought to rely on the opening words of Section 17 (1) of the English Act ' any person claiming to be the proprietor of a trade mark....'corresponding to Section 18 of Act XLIII of 1958, and how the Court rejected their contention will appear from the following passage at page 12 of the report 1956 R.P.C.
In my judgment the form which an applicant is required to sign wherein he claims to be the proprietor, indicates an assertion of a present proprietary right. The respondent urges that this is merely an assertion that he claims to become the proprietor or to assume proprietary rights as and when the application is granted. I do not accept that as the true interpretation of a form intended to be completed before registration can be applied for. A proprietary right in a mark sought to be registered can be obtained in a number of ways. The mark can be originated by a person or can be acquired, but in all cases it is necessary that the person putting forward the application should be in possession of some proprietary right which, if questioned, can be substantiated. Where, as here, another party in the same way of business had already put forward a claim to be the proprietor of the identical trade mark and had withdrawn the application for registration merely to avoid controversy and expense, it seems to be impossible to hold that the party who had by opposition secured that result could a few weeks later merely as a result of the withdrawal claim proprietary rights.
The position appears to nave been this, that by reason of their possession and user of the mark " Pabavel " the respondents formed the view--a view which they are entitled to hold--that their reputation was such that the use of the mark--'Pabalate' by another would infringe their rights when, as the result of the development of their business, they desired to introduce other marks into commerce beginning with the same first two syllables, they decided to make this application. No explanation has been given why in the selection of such other ' Paba ' marks they condescended upon the one which had been claimed by another as his property.
Balaji Chettiar applied for registration of the mark ' Surian ', claiming to be the proprietor thereof. But it was found that on the date of the application the mark belonged to a partnership of which Balaji Chettiar was only one of the partners. Consequently it was held that he was not the proprietor of the mark. The learned Judge relied on the observations in the Vitamins' case (1956) R.P.C. 1 (12) : (1955) 3 All E.R. 827 at p. 834 : (1956) 1 W.L.R. 1, and the observations of Fry, L.J., in In re Apollinaries Company's Trade Marks L.R. (1891) 2 Ch.D. 186 at 226, and the observation in 38 Halsbury, para. 909 " that no person is entitled to put the trade mark of another person on the register ".
23. In Kerly, paragraph 92 the following passage occurs with reference to Section 17 (1) of the English Act:
The words in this section really mean no more than ' claiming that he is entitled to be registered as the proprietor.' Nevertheless, it would seem to be settled that the claim must in some sense be a justified one, if the registration is to stand; whether by virtue of the section or under some general jurisdiction, the Court will expunge a registration if the applicant for it could not in good faith make this claim.
24. The second important point made by the learned Counsel is that on the same reasoning indicated above, it has to be held that the adoption of the mark by Monoppa with only a slight variation from 17th January, 1950 could not be said to be really honest. The learned Counsel emphasises that for the use to be honest within the meaning of Section 12 (3) of the Act it is not enough if Monappa believed that he had a right to use it and that it is necessary that in law the belief must be sustainable. The law would not however sustain such a belief because the adoption of the mark virtually resembling the old mark was prohibited by Section 39 of the Act and when it was prohibited by law, the law would not allow the usurper to say that the use of the mark was honest. The learned Counsel submits that even apart prom law it should be obvious that this is the position even to a layman.
25. It will be seen that in the above submissions and indeed in the finding of the learned Registrar himself a large part is played by the proposition that the deed of 17th January, 1950 did not pass the trade mark to Monappa and that even if, it was meant to pass, it would be hit at by Section 39. Before proceeding further it is necessary to deal with that point because the proposition is contested by Sri V. Thiagarajan, the learned Counsel for Monappa. The contention of Sri V. Thiagarajan is that though in the deed dated 17th January, 1950 it is not specifically stated that the goodwill or the trade mark passed, yet the Court should hold (as a matter of necessary inference) that the intention of the settlor was to pass the trade mark to his son. This contention is founded on the fact that in the list of moveable properties mention is made of the implements for making the tiles and those implements included the disc bearing the trade mark and the disc itself had not been removed. I do not think however that this is sufficient to spell out an intention to pass the trade mark. The undisputed fact remains that the settlor was still using the trade mark in the tiles manufactured by him in Jayaram Tile Works and it is not likely that he meant to part with the trade mark to any extent. One would therefore require very clear and explicit words in the deed before one could accept the contention that the trade mark was meant to be passed. In construing the deed of 17th January, 1950 it is really not permissible to take into account the later deposition of the father in O.P. No. 65 of 1954. But even taking that into account, it would amount only to this that the father permitted Monappa to use the trade mark on the tiles manufactured by Monappa. But permission will not necessarily amount to an assignment.
26. In this connection it is worthy of note that Sections 48 and 49 which deal with a case where the owner, A, permits another person, B, to use the mark and provide for the registration of B as a registered user still go on to enact that the permitted use of the trade mark by B shall be deemed to be use by the proprietor thereof, namely, A. That only emphasises the idea that permission would not constitute an assignment. Assuming, however, for the sake of argument and argument only that as a matter of construction it has to be held that the deed of 17th January, 1950 was meant to pass the trade mark to Monappa, it would still be invalid under Sections 31 and 32 of the Trade Marks Act of 1940, which were the provisions in force on 17th January, 1950, the corresponding provisions in Act XLIII of 1958 being Sections 39 and 40.
27. Section 31 of the Act of 1940, so far as it is material ran thus:
(1) Notwithstanding anything in Sections 29 and 30 a trade mark shall not be assignable or transmissible in a case in which as a result of the assignment or transmission, there would in the circumstances subsist, whether under this Act or any other law, exclusive rights in more than one of the persons concerned to the use, in relation to the same goods or description of goods, of trade marks nearly resem-ling each other or of identical trade marks, if, having regard to the similarity of the goods and of the trade marks, the use of the trade marks in exercise of those rights would be likely to deceive or cause confusion.
Section 32 of the Act of 1940, so far as it is relevant, ran as follows:
Notwithstanding anything in Sections 29 and 30, a trade mark shall not be assignable or transmissible in a case in which as a result of the assignment or transmission there would in the circumstances subsist whether under this Act or any other law, an exclusive right in one of the persons concerned to the use of the trade mark limited to use in relation to goods to be sold, or otherwise trade in, in any place in India and an exclusive right in another of these persons to the use of a trade-mark nearly resembling the first mentioned trade mark or of an identical trade !mark in relation to the same goods or description of goods limited to use in relation to goods to be sold, or otherwise traded in, in any other place in India...
28. On the hypothesis that the deed of 17th January, 1950 assigned the right to Monappa to use the trade mark in the tiles manufactured in the Hoige Bazaar factory, the resulting position was that the settlor, Ramappa, himself was entitled to use the trade mark in the tiles manufactured in his own factory, Jayaram Tile Works and Monappa also would have the right to use the trade mark on this own tiles. This is precisely what was prohibited by Sections 31 and 32. That, in my opinion, is an inescapable conclusion on the wording of Sections 31 and 32 of the Act of 1940 though the wording would seem to be, involved. Mr. Thiagaiajan, learned Counsel for the respondent, Monappa, was not able to put forward any contrary interpretation which would avoid this.
29. Both Sri Rajagopalachari, and Sri Thiagarajan submitted that there was no exact case decided either in India or in England on this point, the corresponding provision in the English Act of 1938 being Section 22 (4). That is true. But I find that there are observations in English cases which are quoted with approval in Kerly in paragraph 492 and those observations support the interpretation which I have placed. The passage in Kerly is as follows ::
Section 22 (4) invalidates all transactions which would result in concurrent exclusive rights for two or more of those concerned in the transaction to use in the United Kingdom similar or identical marks, on the same or similar goods, if the exercise of those rights, would be likely to deceive or cause confusion. No doubt the primary function of the sub-section is to exclude assignments to different assignees of confusingly similar marks, or assignments of a mark to different assignees for different but similar goods; but it also serves to prevent an assignment which would leave the assignor with an exclusive common law right to the use of the mark. A proviso to Section 22 (4) permits such splitting assignments where the concurrent rights that result are confined to rights to export to different markets; whilst Section 22 (5) provides for certification by the Registrar that an assignment will not contravene Section 22 (4).
Section 22 (6) invalidates transactions that would result in concurrent exclusive rights in those concerned in the transaction to the use of a mark in different parts of the United Kingdom. This is subject however to a power for the Registrar to certify that the transaction is not against the public interest and thereby to exempt it from Sections 22 (4) and (6).
The authorities quoted are per Master of the Rolls at page 252 in Renter Ltd. v. Mulhens (1953) 3 W.L.R. 789 : (1953) 2 All E.R. 160 : L.R. (1954) Ch.D. 50 : (1953) 70 R.P.C. 235, and at page 57 in Adrema Werke Maschinenbau G. M. B. H. v. The Custodian of Enemy Property, etc. (1957) R.P.C. 49. In Renter Ltd. v. Mulhens (1953) 3 W.L.R. 789 : (1953) 2 All E.R. l60 : L.R. (1954) Ch.D. 50 : (1953) 70 R.P.C. 235 the facts are complicated, but, for our present purpose, they may be simplified thus. The defendant company was the owner of a business in Cologne, Germany, dealing in the celebrated '4711 Eau-de-Cologne.' Reuter Co., Ltd., was a company in England and it claimed to have been rightly registered as proprietors of the trade mark ' 4711 ' in England, and brought the action against the defendant for some reliefs based on that allegation. Before the out-breack of the IInd World War in 1939 between England and Germany, Reuter Co. or its predecessor were the agents in England of Mulhens for the sale of the products and to some extent the product was also manufactured in England. As a result of the legislation enacted during the war period, certain rights of Mulhens who had become an enemy were vested in the Custodian of Enemy Property in England who transferred those rights to Reuter Co., Ltd., and it was by virtue thereof that the assignment had been made by the Custodian in the name of Reuter Co., Ltd. One of the defences was that the assignment was invalid under Section 22 (4) of the Trade Marks Act of 1938. The argument on behalf of the defendant was that the common law rights of the defendant had not been affected and still remained intact and the assignment would leave the rights distributed between the defendant and the plaintiff and would therefore offend Section 22 (4). Evershed, M.R., was inclined to concede that if really the common law rights still inhered in the defendant, the defence should prevail. But he came to the conclusion that the defendant did not have the common law rights so far as England was concerned. The observations relevant for us occur at page 252 and are as follows ::
It follows, then, says Mr. Mould, (for the defendant) that, if notwithstanding an assignment the assignor retains an exlcusive right himself to use the same mark at common law the assignment will be ineffective. That proposition I am prepared, at any rate for the purposes of the assignment, to accept. Thus, to revert to my previous illustration, if upon the sale of the trade mark ' Gold Flake ' it . was provided by or resulted from the sale agreement that the sellers were still entitled to the use of the name or insignia of' Gold Flake ' upon their own products, the assignment would be ineffective, and obviously and necessarily so, for the resultant competition would inevitably create deception and confusion.
Romer, L.J. also got over the argument by taking the view that even the common law rights of the defendant vested in the Custodian and nothing survived to the defendant.
30. In Adrema Werke Maschinenbau G. M. B. H. v. The Custodian of Enemy Property (1957) R.P.C. 49, the facts were similar and the same defence was put forward and were repelled for similar reasons. The only additional feature in that case is that an argument was put forward by Mr. Buckley on behalf of the Custodian of Enemy Property in England that Section 22 (4) of the Act would not come into play at all. To put it in simple language, the argument was that Section 22 (4) would apply only where as a result of the assignment itself, there must result a plurality of the right to use the trade mark in two different persons, but that was not the situation in that case, because in 1951 when the trade marks of the German, plaintiff-company were vested in the Custodian of Enemy Property in England, the trade marks and the common law rights of the German plaintiff-company became severed, and it was only after such severance the trade marks were sought to be assigned by the Custodian to an English company called the Adrema Ltd. Lord Evershed, M. R. declined to go into that argument.
31. We have thus arrived at the conclusion that as a matter of construction, there was no assignment of the trade mark to Monappa in the deed of 17th January, 1950 and in any case the assignment would be totally invalid in view of Sections 31 and 32 of Act V of 1940. This was the conclusion reached by the Registrar and I affirm it.
32. I now turn to the argument of Sri V. Rajagopalachari which I have already indicated in full. I agree with him that even in order to entitle to registration under Section 12 (3) on the ground of honest concurrent user or other special circumstances it was necessary for Monappa to establish that he was the proprietor of the trade mark sought to be registered. This contention is fully supported by the wording of Section 12 (3) and Section 18 and the principles underlying the trade mark law and the authorities cited by learned Counsel. To hold otherwise would mean that if Monappa had no right to use the trade mark, he could claim the right of registration on the alleged ground of honest and concurrent use, a position which it is impossible to accept. It seems to me, however, that both the aspects of the argument of Sri Rajagopalachari, that Monappa could not claim to be the proprietor and that the use was not honest, resolve themselves in the last resort only to one criterion, namely, that Monappa, in view of the prohibition contained in Sections 31 and 32 of the Act of 1940 could not claim to have honestly adopted any mark which would virtually be a replica of the mark of the founder. Since the point is important and seems to arise for the first time I shall endeavour to elaborate this to some extent.
33. Suppose for the sake of argument that Monappa in the first place, without making any alteration whatever, had begun to use the trade mark of the founder from 17th January, 1950. It is obvious that in such a case the user would not be honest at all. Even if he claimed that right as a matter of construction of the deed of 17th January, 1950 that claim would be invalid in view of Sections 31 and 32 of the Act of 1940. Hence he could not be considered to be the proprietor of the mark for purposes of Section 12 (3) or Section 18 of the Act of 1958 (the corresponding sections were Section 10 (2) and 14 of the Act of 1940). Obviously the different provisions of Act V of 1940 would have to be construed in harmony. In other words Section 10 (2) and Section 14 of Act V of 1940 should be construed so as to harmonise with Sections 31 and 32 of that Act and similarly Sections 12 (3) and 18 of the Act of 1958 should be construed so as to be in harmony with Sections 39 and 40 of that Act. If under the latter set of provisions the Court could not recognise a partial assignment the Registrar and the Court would not recognise Monappa as the proprietor of the trade mark. Evidently Monappa and his legal adviser were conscious of this and that was why Monappa sought to vary the original mark of the founder by adding the word ' Monappa's, on the top and transposing the numeral ' 1596 ' from the bottom of the shield to a place inside the shield. The idea of Monappa in making this variation was to contend that this variation sufficiently distinguished his mark from the original mark of the founder, so as to avoid the bar of Sections 31 and 32 of Act V of 1940. If really the Court could say that the variation sufficiently distinguished the mark of Monappa from the founder's mark, the Court would be justified in saying that the use of the new trade mark of Monappa would not be likely to deceive or cause confusion and therefore the bar of Sections 31 and 32 would not apply and Monappa could legitimately be described as the inventor of the new mark and could be considered as the proprietor of the new mark for the purposes of Sections 10 (2) and 14 of Act V of 1940 (the corresponding provisions in the Act of 1958 being Sections 12 (3) and 18). Further in such a case the Court could also say that the use of the new mark substantially different from the old mark, could be considered as honest within the meaning of Section 10 (2) of Act V of 1940 and Section 12 (3) of Act XLIII of 1958.
34. Suppose however the Court is to hold that the variation made by Monappa is not significant enough to distinguish the mark from the founder's mark, then the Court would be justified in saying that in view of Sections 31 and 32 of the Act of 1940 (the corresponding provisions in Act XLIII of 1958 being Sections 39 and 40) the use of the mark of Monappa could not be said to be honest within the meaning of Section 10 (2) of the Act of 1940 or Section 12 (3) of the Act of 1958 and further on the same criterion Monappa could not be recognised as the proprietor of the new mark. In a technical sense no doubt Monappa would be the proprietor of the new mark in so far as the new mark was different from the old mark even to some extent and was therefore not the identical mark as the original mark. But surely it is not in this technical sense that the word ' proprietor ' is used in the Trade Marks Act because if this technical sense were to prevail there would be a travesty of Sections 31 and 32 of the Act of 1940 and the corresponding provisions, Sections 39 and 40, in the Act of 1958. This is why I stated that both the aspects of the argument of Sri Rajagopalachari resolve themselves ultimately into one criterion, namely, whether the new mark adopted by Monappa sufficiently distinguished itself from the original mark of the founder. If it sufficiently distinguished itself, Monappa would at the same stroke of the pen be considered as the proprietor of the new mark and as the honest user of the new mark. If, however, the new mark is not sufficiently distinguishable from the old mark the result would just be the opposite,
35. In my opinion the above way of looking at the matter would provide one simple criterion and would effect a reconciliation between the different provisions of the Act, namely, Sections 10 (2) and 14 of the Act of 1940 on the one hand and Sections 31 and 32 of the Act on the other, or the corresponding provisions of the Act of 1958. I put forward this approach to the learned Counsel, Sri V. Rajagopalachari and Sri V. Thiagarajan and in order to avoid embarrassment to them in their relationships to their clients, I merely content myself with describing their reaction in negative terms, namely, they are not able to urge anything to shake the validity of this approach.
36. The matter may also be looked at from a different angle but leading to the same result. Thus in so far as some variations were made to the old mark and the variations were made by Monappa, he could be considered as the proprietor of the new mark, but this would not be sufficient to entitle him to succeed unless he makes out to the satisfaction of the Court that the use was honest. That again would depend on compliance with Sections 31 and 32 of the Act of 1940. In other words, if the variations were not sufficient to distinguish the new mark sufficiently from the old mark, the use of the mark cannot be recognised as honest in view of Sections 31 and 32 of Act V of 1940. But if the variations would sufficiently distinguish the new mark from the old, the Court could legitimately say that the use of the new mark is honest and would not offend Sections 31 and 32 of Act V of 1940.
37. The question therefore finally resolves itself into the simple one, whether the variations adopted by Monappa to distinguish the new from the old were sufficient. 1 am not prepared to say that the variations were sufficient to distinguish the new mark from the old, but at the same time I think it will be unjust to Monappa to deprive him of the right to registration absolutely of any mark. The circumstances of the case are special and are such that the proper course for the Court to adopt will be to permit the registration to stand with further alterations in the new mark, so as to distinguish it sufficiently from the old mark. The Court has power to do this under the concluding portions of Sections 12 (3) and 18 (4) of the Act of 1958. Further, on account of the special circumstances of the case, the Court will be justified in taking the view, if necessary, that the variations now going to be proposed by me might be considered as having been effected even from 17th January, 1950 so as to cure any defect in the content of honesty and proprietorship on the part of Monappa. The variations which I direct are these. The two flags on the top of the shield (one either side of the crown) and the numeral ' 1596 ' inside should be deleted. The other features may remain, namely, the words Taj Double Bavuta; the device of the shield with the device of the flag and the word ' flag ' inside the shield, the device of the crown on the top of the shield and the word ' Monappa's on the top. In my opinion this will do substantial justice to Monappa. In the view I have taken of the matter it is unnecessary to discuss in further detail the reasoning of the Registrar. It is however necessary to refer to his finding that the younger brother, B. S. Ramappa, had recognised Monappa's proprietorship of the mark and allowed him to build up the trade. This finding is opposed to the evidence and hardly does justice to the determined efforts made by B. S. Ramappa from 1951 onwards to prevent Monappa from using his mark. In 1951 he issued the notice on 27th July, 1951. On 8th February, 1953 he got the settlement deed in his own favour and then filed the suit, O.S. No. 14 of 1953. When he lost in O.P. No. 65 of 1954 before Ramaswami, J., he carried the matter in appeal. He had to wait for sometime till 1960 because the father had supported the elder brother, Monappa, in his deposition in O.P. No. 65 of 1954 to some extent in stating that he had permitted his elder son to use the mark. On 18th February, 1960 B. S. Ramappa secured a rectification deed from the father. Then he filed the application for registration, No. 205533 supported by an affidavit of the father, dated 29th March, I962. He entered opposition along with his son in the application of Monappa.
38. In the result I direct modification of the trade mark to be registered in the name of Monappa as indicated above, and otherwise, dismiss the appeal. The parties will bear their own costs.