# November a4. \ Dau Dayal v. The State of Uttar Pradesh Venkataram:J Aiyar ]

- **Citation:** [1959] Supp. 1 S.C.R. 639
- **Court:** Supreme Court of India
- **Decided:** 1958-05-13
- **Case number:** Criminal Appeal No. 118 of 1958
- **Bench:** Venkatarama Aiyar, P. B. Gajendragadkar, A. K. Sarkar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/november-a4-dau-dayal-v-the-state-of-uttar-pradesh-venkataram-j-aiyar-1578
- **Pages:** 8

## Headnote

Criminal Trial-Counterfeiting trade mark-Limitation, of one
year for proscwtion-Prosecu.tion, when commences-Whether on
filing of complaint or on issite of process-Indian Merchandise
Marks Act, I889 (4 of I889), s. IS.
On April 26, l9S4· the appellant was arrested for offences
under ss. 420, 482, 483, 48S and 486 Indian Penal Code and bidis
alleged to bear counterfeit trade marks were seized from him.
On this a complaint was filed on May 26, against the appellant
that he was in possession of counterfeit bidis, wrappers and labels.
After investigation, the police submitted a charge sheet on
September 30, l9S4. and summons was ordered to the appellant
on July 22, l9SS· The appellant raised a preliminary objection
before the Magistrate that the proceedings were barred by s. IS
of the Indian Merchandise Marks Act. He contended that the
offence was discovered on April 26, I9S4. when he was arrested
and the prosecution which commenced with the issue of process
against him on July 22, l9S4. was beyond the period of one year
provided by s. lS.
Held, that the prosecution was not barred by s. IS as the
prosecution commenced on the presentation of the complaint
which was within one year of the discovery of the offence and
not on the issuing of th<\ process. It is settled law that unless
there is something to the contrary in the statute, when a private
complaint is presented it is the date of presentation thereof that
marks the commencement. of the prosecution. The period of
limitation is intended to operate against the complainant and not
against the Court. It will defeat the object of the Act and
deprive traders of the protection of the law if it were held that
the complaint should be thrown out unless process was issued
within one year of the discovery of the offence.
CRlllINAL
APPELLATE
JURISDICTION:
Criminal
Appeal No. 118 of 1958.
Appeal from the judgment a.nd order dated Ma.y
14, 1958, of the Alla.ha.bad High Court in Criminal
Revision No. 1594 of 1956, a.rising out of the judgment
a.nd order of the Court of Additional Sessions Judge
at Kanpur in Criminal Revision No. 13 of 1956.
0. P. Lal, for the appellant.
November a4.
\
Dau Dayal
v.
The State of
Uttar Pradesh
Venkataram:J
Aiyar ].
640
SUPREME COURT REPORTS [1959] Supp.
Gopi Nath Dikshit, for the respondent.
1958. November 24.
The Judgment of the Court
was delivered by
VEN~ATARAMA AIYAR, J.-The facts leading up to
this appeal are these: On April 26, 1954, the appellant
was arrested by the Sisamau Police for offences under
ss. 420, 482, 483, 485 and 486 of the Indian Penal Code
on the allegation that he was in possession of 25 packets
of 'Chand Chhap Biri', which were alleged to bear
counterfeit trade marks. On May 26, 1954, one Harish
Chandra Jain acting on behalf of Messrs. Mohan Lal
Hargovind Das filed a complaint charging that the
appellant was in possession of counterfeit bidis; wrappers and labels and praying that a case under the
sections above mentioned be registered and investigated. On that, the Magistrate passed the following
order:
"S. 0. Sisamau. Please investigate and register
a case."
After investigation, the police submitted their chargesheet on September 30, 1954, and summons was ordered to the appellant on July 22, 1955. On September
17, 1955, the appellant filed an application before the
Magistrate wherein he raised a preliminary objection
that the proceedings were barred by s. 15 of the
Indian Merchandise Marks Act, 1889 (4 of 1889),
hereinafter Teferred to as the Act. That section provides:
"No such prosecution as is mentioned in the last
foregoing section shall be commenced after the expiration of three years next after the commission of the
offence, or one year after the first discovery thereof by
the prosecutor, whichever expiration first happens."
The contention of the appellant was that the offence
was discovered on April 26, 1954, when he was arrested and the goods seized, and that, in consequence, the
issue of process on July 22, 1955, was beyond the

## Text

(1) S.C.R. SUPREME COURT REPORTS
DAU DAYAL
v.
639
THE STATE OF UTTAR PRADESH
(VENKATARAMA AIYAR, P. B. GAJENDRAGADKAR
and A. K. SARKAR, J J.)
Criminal Trial-Counterfeiting trade mark-Limitation, of one
year for proscwtion-Prosecu.tion, when commences-Whether on
filing of complaint or on issite of process-Indian Merchandise
Marks Act, I889 (4 of I889), s. IS.
On April 26, l9S4· the appellant was arrested for offences
under ss. 420, 482, 483, 48S and 486 Indian Penal Code and bidis
alleged to bear counterfeit trade marks were seized from him.
On this a complaint was filed on May 26, against the appellant
that he was in possession of counterfeit bidis, wrappers and labels.
After investigation, the police submitted a charge sheet on
September 30, l9S4. and summons was ordered to the appellant
on July 22, l9SS· The appellant raised a preliminary objection
before the Magistrate that the proceedings were barred by s. IS
of the Indian Merchandise Marks Act. He contended that the
offence was discovered on April 26, I9S4. when he was arrested
and the prosecution which commenced with the issue of process
against him on July 22, l9S4. was beyond the period of one year
provided by s. lS.
Held, that the prosecution was not barred by s. IS as the
prosecution commenced on the presentation of the complaint
which was within one year of the discovery of the offence and
not on the issuing of th<\ process. It is settled law that unless
there is something to the contrary in the statute, when a private
complaint is presented it is the date of presentation thereof that
marks the commencement. of the prosecution. The period of
limitation is intended to operate against the complainant and not
against the Court. It will defeat the object of the Act and
deprive traders of the protection of the law if it were held that
the complaint should be thrown out unless process was issued
within one year of the discovery of the offence.
CRlllINAL
APPELLATE
JURISDICTION:
Criminal
Appeal No. 118 of 1958.
Appeal from the judgment a.nd order dated Ma.y
14, 1958, of the Alla.ha.bad High Court in Criminal
Revision No. 1594 of 1956, a.rising out of the judgment
a.nd order of the Court of Additional Sessions Judge
at Kanpur in Criminal Revision No. 13 of 1956.
0. P. Lal, for the appellant.
November a4.
\
Dau Dayal
v.
The State of
Uttar Pradesh
Venkataram:J
Aiyar ].
640
SUPREME COURT REPORTS [1959] Supp.
Gopi Nath Dikshit, for the respondent.
1958. November 24.
The Judgment of the Court
was delivered by
VEN~ATARAMA AIYAR, J.-The facts leading up to
this appeal are these: On April 26, 1954, the appellant
was arrested by the Sisamau Police for offences under
ss. 420, 482, 483, 485 and 486 of the Indian Penal Code
on the allegation that he was in possession of 25 packets
of 'Chand Chhap Biri', which were alleged to bear
counterfeit trade marks. On May 26, 1954, one Harish
Chandra Jain acting on behalf of Messrs. Mohan Lal
Hargovind Das filed a complaint charging that the
appellant was in possession of counterfeit bidis; wrappers and labels and praying that a case under the
sections above mentioned be registered and investigated. On that, the Magistrate passed the following
order:
"S. 0. Sisamau. Please investigate and register
a case."
After investigation, the police submitted their chargesheet on September 30, 1954, and summons was ordered to the appellant on July 22, 1955. On September
17, 1955, the appellant filed an application before the
Magistrate wherein he raised a preliminary objection
that the proceedings were barred by s. 15 of the
Indian Merchandise Marks Act, 1889 (4 of 1889),
hereinafter Teferred to as the Act. That section provides:
"No such prosecution as is mentioned in the last
foregoing section shall be commenced after the expiration of three years next after the commission of the
offence, or one year after the first discovery thereof by
the prosecutor, whichever expiration first happens."
The contention of the appellant was that the offence
was discovered on April 26, 1954, when he was arrested and the goods seized, and that, in consequence, the
issue of process on July 22, 1955, was beyond the
period of one year provided under s. 15 of the Act, and
that the proceedings should therefore be quashed as
barred by limitation. The Magistrate rejected this
contention, and a Revision Petition preferred against
this order to the Additional Sessions Judge, Kanpur,
(l) S.C.R. SUPREME COURT REPORTS
641
shared the same fate. The appellant then filed a further Revision Petition to the High Court of Allahabad,
being Criminal Revision No. 1594 of 1956, and the
same was heard along with other similar Revision
Petitions by a Bench consisting of James and
Takru, JJ. By their judgment dated May 13, 1958~
the learned Judges held that the prosecution commenced when the complaint was presented on May ~6,
1954, and that as the discovery was on April 26, 1954,
the proceedings were within time under s. 15 of the
Act. In view of the importance of the question raised,
they granted leave to appeal to this Court under Art. 134
(l)(c) of the Constitution, and that is how the matter
comes before us.
The point for decision is, when does a. prosecution
commence for purposes of s. 15 of the Act, whether on
the date when the complaint is preferred, or when the
process is issued thereon ? The word " prosecution "
is not defined in the Act, nor are there any provisions
therein bearing on this question. Now, under the la.w
and apart from statutory prescriptions, a. prosecution
commences, where it is at the instance of a. private
prosecutor; when the complaint is preferred. The position is thus stated in Halsbury's Laws of England,
Vol. X, 3rd Edn., p. 340, para. 630:
"Criminal prosecutions, except where there a.re
statutory provisions to the contrary, may be commenced at any time after the commission of the
offence. A .prosecution is commenced, when an information is laid before a. justice, or, if there is no information, when the accused is brought before a. justice to
answer the charge, or, if there is no preliminary examination before a. justice, when an indictment is pre.
ferred."
It is further stated there that different statutes provide
for various periods of limitation within which a. prosecution could be commenced after the commission of
the offence, and that three yea.rs is the period provided for an offence under the Merchandise Marks Act,
1887, which corresponds to the Indian Merchandise
Marks Act, 1889. It is therefore settled law that unless
81
Dau D11yal
v.
Tli1 511111 of
U ""' Prlllllslt
v 111!111l11r1111111
Aiy11r ].
'
Dau Vayfil
v.
The State oj
Vilar Pra.de.~h
V 6nkatar<lnu1
.4iyar .J.
642
SUPREME COURT REPORTS [1959] Supp.
there is something to the contrary in t.he statute, when
a private complaint is presented it is the date of presentation thereof that marks the commencement of
the prosecution.
Now, what is the nature of the prosecution under
s. 15 of the Act ? It is relevant in this connect.ion to
refer to ss. 13 and 14, which run as ~ollows :
S. 13 : "In the case of goods bronght into India
by sea, evidence of the port of shipment shall, in a prosecution for an offence against this Act or section 18
of the Sea Customs Act, 1878, as amended by this Act,
be prima facie evidence of the place or country in
which the goods were made or produced."
S. 14(1): "On any such prosecution as is mentioned in the last foregoing section or on any prosecution
for an offence against any of the sections of the Indian
Penal Code, as amended by this Aet, which relate to
trade, property and other marks, the Court may order
costs to be paid to the defendant by the prosecutor or
to the prosecutor by the defendant, having regard to
the information given by and the conduct of the
defendant and prosecutor respectively.
(2) Such costs shall, on application to the Court,
be recoverable as if they were fine."
The object of the above provisions is to protect the rights
of persons who manufacture and sell goods with distinct
trade marks against invasion by other persons passing
off their goods fraudulently and with counterfeit
trade marks as those of the manufacturers: Normally,
the remedy for such infringement will be by action in
Civil Courts. But in view of the delay which is incidental to civil proceedings and the great injustice which
might result if the rights of manufacturers are not
promptly protected, the law gives them the right to
take the matter before the Criminal Courts, and prosecute the offenders, so as to enable them effectively
and speedily to vindicate their rights. It is for this
reason that a short period of limitation is provided
for their preferring a complaint under s. 15 of the
Act, and there is also a special provision for award of
the costs of the proceedings to or by the complainant.
(1) S.C.R. SUPREME COURT REPORTS
643
In Ruppell v. Ponnuswami Tewan (1), the question
a.rose whether a prosecution launched by the complainant in 1898 in respect of goods sold and marked
with what was alleged to be a counterfeit trade mark
in 1893 was in time. In deciding that it was barred
under s. 15 of the Act, the Court observed as follows :
"Section 15 of the Merchandise Marks Act IV of
1889, enacts that no prosecution such as the present
shall be commenced after the expiration of one year
after the first discovery of the offence by the prosecutor. The reason for this limitation is clear.
Ordinarily the infringement of a trade mark is
rather a civil than a criminal wrong, but as civil proceedings may require much time and expenditure to
bring them to a conclusion, the Legislature, in its
anxiety to protect traders, has allowed resort to the
criminal courts to provide a speedy remedy in cases
where the aggrieved party is diligent and does not by
his conduct show that the case is not one of urgency.
If, therefore, the person aggrieved fails to resort to
the criminal courts within a vear of the offence coming to his knowledge, the law' assumes that the case
is not one of urgency, and it leaves him to his civil
remedy by an action for injunction."
It will be notic~d that the complainant is required
to resort to the Court within one year of the discovery
of the offence if he is to have the benefit of proceeding under the A~t. That means that if the complaint
is presented within one year of such discovery, the
requirements of s. 15 are satisfied. The period of
limitation, it should be remembered, is intended to
operate against the complainant and to ensure diligence on his part in prosecuting his rights, and not
against the Court. Now, it will defeat the object of the
enactment and deprive traders of the protection which
the law intended to give them, if we were to hold that
unless process is issued on their complaint within
one year of the discovery of the offence, it should be
thrown out. It will be an unfortunate state of the
law if the trader whose rights had been infringed and
who takes up the matter promptly before the Criminal
(1) (1899) J.L.R. 22 Mad. 488.
Dau Dayal
v.
Tll1 Sla/1 of
Ullar Ptad1Slo
V enkatarama
Aiyai J.
Dau Dayal
v.
Tlt6 Stat6 of
Uttar Prad1sh
V 1nltatarama
Aiyar ].
644
SUPREME COURT REPORTS [1959) Supp.
'
Court is, nevertheless, denied redress owing to the
delay in the issue of process which occurs in Court.
The appellant relies on certain decisions as showing
that the prosecution must be held to commence only
when process is issued and not when complaint is
filed. In Sheik Meeran Sahib v. Ratnavelu Mudali ('),
De Rozario v. Guiab Chand Anundjee (')and Golap Jan
v. Bholanath Khettry (3) cited by the appellant, the
question was whether an action for damages for malicious prosecution would lie when the complaint was
dismissed without notice to the plaintiff. It was held
that the plaintiff could not be held to have been prosecuted unless process was issued to him and that
where the complaint was dismissed without such process being issued, there was no prosecution and no
action for damages in respect of such prosecution
would lie. These decisions have no bearing on the
present question. In suits for damages for malicious
prosecution, one of the points to be decided is, whether
the plaintiff was, in fact, prosecuted ; and if he was,
no question arises as to when the prosecution commenced. On the other hand, the point for decision in a
prosecution under the Act is, not whether there was a.
prosecution but when it was instituted ;·and a question
as to whether there was prosecution or not would be
wholly foreign to it. Indeed, in an action for damages
for malicious prosecution, when it is held that there
was prosecution, that could properly be held to have
commenced when the complaint was filed and not when
the process was issued. Vide the observations of
Woodroffe, J., in the course of the argument in Golap
Jan v. Bholanath Khettry (') at p. 884. The decisions
in Sheik Meeran Sahib v. Ratnavelu Mudali ('), De
Rozario v. Gulab Chand Anundjee (') and Golap Jan v.
Bholanath Khettry (') therefore do not throw any light
on the matter now under consideration. It may be
that these decisions may have to be reconsidered in
the light of the recent decision of the Privy Council
in Mohamed Amin v. Jogendra Kumar Bannerjee ('),
wherein it was observed:
(1) (1912) I.L.R. 37 Mad. 181.
(3) (1911) I.L.R. 38 Cal. 880.
(2) (1910) I.L.R. 37 Cal. 358.
(4) [1947] A.C. 322, 331.
(1) S.C.R. SUPREME COURT REPORTS
645
"The test is not whether the criminal proceedings have reached a. stage a.t which they may be
described a.s a. prosecution; the test is whether such
proceedings have reached a. stage a.t which damage to
the plaintiff results."
Vide also Ra.ma.swami Iyer on The Law of Torts,
4th Edn., p. 318.
The decision in R. R. Chari v. The State of Uttar
Prade8h (1) was relied on by the appellant as showing
that until process wa.s issued, there was no prosecution. There, the appellant was proceeded against
under the provisions of the Prevention of Corruption
Act No. 2 of 1947. The Deputy Magistrate, Kanpur,
issued a warrant for his arrest on October 22, 1947.
Thereafter, on December 6, 1948, the prosecution
obtained the necessary sanction under the Act. The
contention of the appellant was tha.t the prosecution
must be held to have been instituted against him on
October 22, 1947, when he was arrested, that as no
sanction for his prosecution had been obtained at that
time, the proceedings were bad, and that the defect
was not cured by sanction being obtained subsequently on Decemhe.r 6, 1948. This Court held that
under the special provisions of the Prevention of Corruption Act, the police had the power to arrest the
appellant pending investigation and that was all the
effect of the order of the Deputy Magistrate dated
October 22, 1947, and that therefore there was no
prosecution on the date of the arrest. But here, we
are dealing with a private complaint, and as pointed
out at p. 315 of the Report, s. 190(l)(a) of the Criminal Procedure Code would apply to such cases, and
the Magistrate must be held to have taken cognizance
when the complaint was received. This decision, in
our opinion, does not assist the appellant; nor does
the decision in Gopal Marwari v. King-Emperor (2).
There, considering ss. 200 and 202 of the Criminal
Procedure Code, the learned Judges observed that
there was a. distinction between initiation of proceed·
ings before the Magistrate a.nd his taking cognizance
of the same. It is sufficient to say that tha.t is not
(1) [1951] S.C.R. 312.
(2) (1943) I.L.R. 22 Pat. 433.
Dau Dayal
v.
Tha Stall of
U lla1 P1adash
V tnkala1ama
Aiya1 ].
Dnu 0nyal
v.
The Stnt~ of
Uttar Pnidesh
Venkatarama
Aiyor j.
646
SUPREME COURT REPORTS [1959] Supp.
the question which we have got to decide here, and
on the language of s. 15 of the Act, which is what we
are concerned with in this appeal, all that is required
is that. a private prosecutor should prefer his complaint within one year of the discovery of the offence,
and if that is done, the bar under that section cannot
apply.
We agree with the decision of the learned
Judges of the Court below that the proceedings are
not barred by s. 15 of the Act.
This appeal is accordingly dismissed.
Appeal dismissed.
G. VEKKATASWAMI NAIDU. & CO.
v.
THE COMMISSIONER OJ!' INCOME-TAX
(T. L. VENKATARAMA AIYAR, P. B. GAJENDRAGADKAR
and A. IC SARKAR, JJ.)
luco111e 1"ax-l nconie froui isolated fransactt'ons--" Adventure
in the nature of trade~ "-Business incon:e· -Indian. l11co1n,~ 1'ax Act.
1922 (XI of r922), SS. 2(4), IO.
Reference to High Court-Transaction, whether ur not an advcn~
lure in the nature of trade-Mixed question of law and fact-lndia11
Income-tax Act, r922 (XI of 1922), s. 66(1).
The appellant, who was a firm acting as managing agents of
a limited company (the Mills), purchased four plots of land
adjoining the Mills on various dates between 1941 and 1942, and
about five years later sold them to the Mills, as a result of which
the appellant realised a sum of Rs. 43,887 in excess of the purchase price.
For the assessment year r948-49 the Income.tu
Officer treated the amount as the income of the appellant and
assessed it to income-iax under head 'business', on the grounrl
that there was no evidence to show that the appellant had purchased the said lands for agricultural purposes or that they were
acquired as an in\·estrnent. and that since the lands \Vere adjacent
to the Mills the appellant must have purchased them solely with a
view to sell them to the Mills with profit. He considered that
the transaction had all the elements of a business transaction
and was· thus an adventure in the nature of trade withins. 2(4)
of the Indian Income-tax Act, 1922. The Appellate Tribunal
rejected the explanation given by the appellant regarding the
object with which it had purchased the plots of land and agreed