# STATE OF U.P v. RAM NATH, PARTNER M/S. PANNA LAL DURGA PRASAD, KANPUR

- **Citation:** [1972] 2 S.C.R. 572
- **Court:** Supreme Court of India
- **Decided:** 1971-11-24
- **Case number:** Criminal Appeal No. 41 of 1969
- **Bench:** P. ·Jaganmohan Reddy, D. G. Palekar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-u-p-v-ram-nath-partner-m-s-panna-lal-durga-prasad-kanpur-5674
- **Pages:** 8

## Headnote

Tradi>-and Merchandise Marks Act (43 of 1958), ss. 28, 78, 79 and
89--0fjecnes under ss. 78 and 79-Prosecution if could be initiated by
Inspector of trade n1arks-Discontinuance of trade 1nark-Use by another
-If civil matter.
The Inspector of trade marks wrote a letter to the Magistrate and re·
quested him to take necessary action under law against the respondents on
the allegations that the respondents were producing coins and pieces of gold
and ·were applying to them a trade mark which was deceptively similar
to the registered trade mark of a bank, and which was in force when the
respondents produced the coins. The Magistrate directed the police to
register a case under the Trade and. Merchandise Marks Act, 1958, and
investigate it. On receipt of the police report the Magistrate followed the
procedure prescribed by s. 25 lA of the Criminal Procedure Code, and
framed charges under ss. 78 and 79 of the Act on being satisfied that there
was a prima facie case. After one of the prosecution witnesses was
examined the respondents raised the question that the evidence disclo;ed
that the bank had discontinued the use of the trade mark and a question
of abandonment which could be more suitably dealt with by the
civil
court, had arisen.
The High Court on reference by the Sessions Court held that : (1)
the prosecution could not be initiated by the Inspector of Trade Marks in
view of s. 28 of the Act, (2) whether the question of the abandonment of
the trade mark amounted to an express or implied consent for use by the
respondent was a matter for the civil court and not for a criminal prosecution and (3) the prosecution for offences under ss. 78 and 79 was not
valid because the Bank. was declared to be a foreign bank by the Reserve
Bank of India in 1960 and hence had no rights as a citizen of India.
Allowing the appeal to this- Court,
HELD :
(1) Merely. because s. 89(1) of the Trade and Merchandise
Marks Act refers to the manner of taking cognizance in respect of certain
offences specified, therein, it does not preclude the cognizance of other ·
offences specified in Chapter X of the Trade and Merchandise Marks Act
from being taken under the procedure prescribed by the Criminal Procedure Code. The offences with which the respondents were charged are
punishable with imprisonment of two years
and
hence,
being noncognizable, the procedure followed, in the present case, by the Magistrate,
is unexce_otionable. Section 28 of the Act which is in Chapter JV relating
to the effect of rogistration has no hearing on the question [578 C-H;
579 A-Dl
(2) An offence under ss. 78 and, 79 relates to a trade mark whether it
is registered or unregistered. The application of a ·trade mark 'signifies a
particular type of goods and involves deception. Therefore the fact that
the Ba"k discontinued the use of the trade mark would ndt absolve the
respondents. from criminal llability.
Even if the trade mark was abandoned by the Bank it could only furnish a ground for a person to make
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U.P. STATE v. RAM NATH (Jaganmohan Reddy,!.)
573
an application under s. 46 of the 'frade and Merchandise Marks f\ct to
have the trade mark removed from the register of trade marks, but 1t do~s
not entitle anyone to use the trade mark. [577 A; 578 A-Cl
(3) The question whether the Bank,
bein~ a foreign_ ?ank, is not a
citizen and had no right in the trade mark 1s, therefor;, melevant and
does not affoct the
validity of the
proceedings
agamst the accused.
[577 A-Bl

## Text

572
STATE OF U.P.
v.
RAM NATH, PARTNER M/S. PANNA LAL DURGA
PRASAD, KANPUR
November 24, 1971
[P. ·JAGANMOHAN REDDY AND D. G. PALEKAR, JJ.]
Tradi>-and Merchandise Marks Act (43 of 1958), ss. 28, 78, 79 and
89--0fjecnes under ss. 78 and 79-Prosecution if could be initiated by
Inspector of trade n1arks-Discontinuance of trade 1nark-Use by another
-If civil matter.
The Inspector of trade marks wrote a letter to the Magistrate and re·
quested him to take necessary action under law against the respondents on
the allegations that the respondents were producing coins and pieces of gold
and ·were applying to them a trade mark which was deceptively similar
to the registered trade mark of a bank, and which was in force when the
respondents produced the coins. The Magistrate directed the police to
register a case under the Trade and. Merchandise Marks Act, 1958, and
investigate it. On receipt of the police report the Magistrate followed the
procedure prescribed by s. 25 lA of the Criminal Procedure Code, and
framed charges under ss. 78 and 79 of the Act on being satisfied that there
was a prima facie case. After one of the prosecution witnesses was
examined the respondents raised the question that the evidence disclo;ed
that the bank had discontinued the use of the trade mark and a question
of abandonment which could be more suitably dealt with by the
civil
court, had arisen.
The High Court on reference by the Sessions Court held that : (1)
the prosecution could not be initiated by the Inspector of Trade Marks in
view of s. 28 of the Act, (2) whether the question of the abandonment of
the trade mark amounted to an express or implied consent for use by the
respondent was a matter for the civil court and not for a criminal prosecution and (3) the prosecution for offences under ss. 78 and 79 was not
valid because the Bank. was declared to be a foreign bank by the Reserve
Bank of India in 1960 and hence had no rights as a citizen of India.
Allowing the appeal to this- Court,
HELD :
(1) Merely. because s. 89(1) of the Trade and Merchandise
Marks Act refers to the manner of taking cognizance in respect of certain
offences specified, therein, it does not preclude the cognizance of other ·
offences specified in Chapter X of the Trade and Merchandise Marks Act
from being taken under the procedure prescribed by the Criminal Procedure Code. The offences with which the respondents were charged are
punishable with imprisonment of two years
and
hence,
being noncognizable, the procedure followed, in the present case, by the Magistrate,
is unexce_otionable. Section 28 of the Act which is in Chapter JV relating
to the effect of rogistration has no hearing on the question [578 C-H;
579 A-Dl
(2) An offence under ss. 78 and, 79 relates to a trade mark whether it
is registered or unregistered. The application of a ·trade mark 'signifies a
particular type of goods and involves deception. Therefore the fact that
the Ba"k discontinued the use of the trade mark would ndt absolve the
respondents. from criminal llability.
Even if the trade mark was abandoned by the Bank it could only furnish a ground for a person to make
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U.P. STATE v. RAM NATH (Jaganmohan Reddy,!.)
573
an application under s. 46 of the 'frade and Merchandise Marks f\ct to
have the trade mark removed from the register of trade marks, but 1t do~s
not entitle anyone to use the trade mark. [577 A; 578 A-Cl
(3) The question whether the Bank,
bein~ a foreign_ ?ank, is not a
citizen and had no right in the trade mark 1s, therefor;, melevant and
does not affoct the
validity of the
proceedings
agamst the accused.
[577 A-Bl
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No.
41 of 1969.
Appeal from the judgment and order dated September 6, 1967.
of the Allahabad High Court in Criminal Reference No. 265 of
1965.
0. P. Rana, for the appellant.
Nur-ud-din Ahmed and P. N. Bhardwaj, for the respondent.
The Judgment of the Court was delivered by
P. Jaganmohan
Reddy, J.
This Appeal is by CertifiD
cate against the order of the High Court of Allahabad quashing
the charge framed by the Additional City Magistrate, Kanpur
against the accused Respondent for offences under Sections 78
and 79 of the Trade and Merchandise Marks Act 43 of 1958
(hereinafter referred to as 'the Act'). Respondent 1 to Respon·
dent 4 are the partners of the firm M/s. Pannalal Durga Prasad
i,:
of Nayaganj, Kanpur which is a firm of bu!Iion merchants who
have also been minting gol,d coins with a trade mark said to be
similar to the one which fa the registered trade mark of M/s.
Habib Bank Ltd., Bombay and which was in force on the day
when the alleged offence is said to have bee1i: committed.
On 24th October 1962 the Inspector of Trade Marks on
"'
behalf of the Director of Industries wrote a letter to the Additional
City Magistn'.te I, Kanpur that M/s. Habib Bank Ltd., Bombay
which is one of the foremost refiners of gold has been producing
coins and pieces of gold of various shapes and sizes for sale
commonly known as 'Habib Ka Sona' and Sher Chap Pansa'
under a distinct trade mark, the most striking feature of which
r.
has always been a device of a lion holding a sword with his forearm against the back ground of a risi.ng sun.
This device of
lion is with the word 'Habib Bank Ltd.' above it and 'Shuddha
Sonu' below it in Gujarati script with a dotted circle alon<r the
border on the face of ihe device of a coin and a wreath ;long
the h?rder on the other face with the words 'Habib Bank Ltd ..
if
contamed in the upper half and 'Pure GOid' in the lower half
of ,the space witJiin it i~ English script with the description of
w~1~ht :ind qua.llty.
This trade mar~ it was stated had acquired
d1sttncttveness m respect of gold corns and pieces produced bv
6-L643SnpCI/72
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574
SUPREME COURT REPORTS
[1972] 2 S.C.R.
them on account of long and extensive use, that the people in
that part of the country particularly the people in the rural. areas
have always had a great fancy for the gold pieces a.nd corns. ot
Habib Bank Ltd. on account of their fineness for use m preparing
ornaments as ais'o as the safest investment of their savings
by
purchasing and retaining these coins and pieces, and
consequently such gold coins cont~ued to be highly popular among
the people in the rural areas as well in the bullion trade, and are
distinguished on account of the above noted features and trade
mark.
It was alleged that M/s. Pannalal Durga Prasad, Kanpur are
producing similar coins and pieces of gold and to them they
apply a trade mark which is
deceptively similar to the above
registered trade mark of M/s. Habib Bank Ltd., the only difference between the two was that instead of Habib Bank Ltd., in
Gujarati script on one face and English script on the other face,
the words 'Habib quality' are used. and the words 'pure gold' in
English script is preceded by the letters P & D.
It was averred
that this trade mark adopted by M/s. Panna Lal Durga Prasad
is bound to deceive not only the buyers who are
ignorant of
English and Gujarati scripts, but even unwary purchasers from
urban areas are likely to be deceived.
Though by a registered
letter the Trade Mark office had drawn the attention of the firm
regarding the use of the mark by them and had requested them
to indicate the period for which they had been using it and whether
the mark had been registered as a tradi: mark in their name, thev
had not chosen to reply even though they received the Jetter. It
was further stated that a goldsmith Shri Pyarelal in Nayaganj
market is also falsely applying the registered trade mark of M/s.
Habib Bank Ltd., and has in his possession dies and other instruments for being used for falsifying the trade mark.
On these allegations the Magistrate was requested to take
necessary action under the law against those mentioned in the
letter in respect of offences under Sections 78 and 79 of the Act.
by directing the Police to investigate the case.
On receipt of
this letter on the same day namely 24-10-1962 the Magistrate
directed the Police to register a case and investiaate. The SubInspector of Police thereupon prepared a searcl1 Memo in as
much as there was no sufficient time to get the warrant of search
issued and also because of the possibility of the removal of goods
and eITected ·a search of the premises.
The Inspector went to
the Silver and Gold factory of Panna Lal Durga Prasad and found
that Ram Nath Son of Durga Prasad one of the Respondents was
present there:
He ma,!e an inspection of the factory in his presence and seized the dies for the manufacture of coins and gold
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U.P. STATE v. RAM NATH \]agamnohan Reddy, J.)
575
bars found near the place of goldsmith Munna son of Lakhpat.
The lnspector further in the presence of the witnesses caused a
gold coin of one tola and another of half tola to be manufactured
by way of specimen out of the gold bar found at the place. These
coins were duly seized and preserved, after obtaining the seal of
Ram Nath. It is unnecessary to give all the details of the recoveries because that is not relevant for the purposes of this case.
A police report was accordingly made to the Magistrate
who
adopted the procedure under Sec. 251-A by examining each of
the Respondents after which he framed charges
against them.
Thereafter he examined Wadia, P.W. 1, a Senior Attorney Clerk
of Habib Bank Ltd., Bombay on 1-5-64. On 29-5-64
before
other witnesses could be examined the Respondents filed
an
application stating that from the evidence of
Wadia,
P.W. l,
Habib Bank had stopped dealing in gold and
do~s not now
manufacture gold coins, that it had also destroyed the dies and
since 1954 this trade mark of Habib Bank has become ineffective
and is thrown open to the public, as such it was prayed that the
case be stayed and the complainant directed to seek remedy in
the civil court so that the accused persons may nol be unnecessarily harassed. The Magistrate rejected this contention because
it appeared from the exidence that the registration of the trade
mark of Habib Bank was current upto 1967 and that since the
Respondents have been charged under Sections 78 and 79 of the
Act the contention of the accused that in view of Sec. 46 of the
said Act where a trade mark is abandoned for
more than 5
years, the Respondents cannot be said. to have committed an
offence, is not tenable. By a well considered order the Magistrate dismissed the application and directed the production of the
entire evidence on the next date without fail.
Against this
a
revision was filed before the Sessions Judge of Kanpur. The
Sessions Judge made a reference to the High Court recommending the quashing of the charge on the ground that ''The principle
of abandonment is given legal recognition in Sec. 46 Trade &
Merchandise Marks Act which provides that a registered trade
mark may be taken off the register if it was not used for continuous period of five years or longer." The High Court held that
on the statement of Wadia it is clearly established that Habib
Bank Ltd .. had stopped dealing in gold and coins since 1954 and
there could therefore be no question of the Respondents commiHing any offence under Sections . 78 and 79 of the Act.
On
this reference the Fiigh Court by its Judgment
dated
6-9-67
thought that Sec. 46 had no application inasmuch as, that Section
provided that unless the registration had ~een rectified the propriety rights of the Bank could not be said to have ended only
because the trade mark had not been used for a period of mc.;-e
than 5 years. It observed that there may be cases where th0 non-
576
SUPREME COURI' REPORTS
[1972] 2 S.C.R.
user of the trade mark may have been occasloned on account of
s~~cial reasons and such non-user was explainable; that clause
(m) of Sec. 47 makes it clear that it is open to the owner to
contest the application for rectification of the register, by the
plea, that the non-user of the trade mark was due to special
circumstances in the trade and not due to any intention on his
part to abandon or not to use the trade mark in relation to the
goods to which the application relates. Accordingly the learned
Judge expressed the view that the proceedings are not vitiated
on the ground that the trade mark in question has ceased to be
the property of M/s. Habib Bank Ltd. · It appears that a contention was urged before the High Court that since Habib Bank
Ltd., was declared to be a foreign Bank in the year 1960 by the
Reserve Bank of India as it had become a citizen of Pakistan, it
was not a citizen under the Constitution of India and therefore
had no proprietary rights in this Country. The High Court said
that this submission of the Respondent's Advocate had some
force as the. question raised was a substantial question of law involving the interpretation of the Articles of the Constitution.
that could properly be decided in a civil action rather than by
a Magistrate in a Criminal case.
For this proposition reliance
was placed on a decision of that Court in Karan Singh v. Mohan
Lal, (1), which following a Full Bench decision of the Calcutta
High Court in Ashutosh Das v. Keshav Chandra Ghosh( 2 ) held
that a controversy between the parties relating to a complicated
question of abandonment of the user and relating to the express
or implied consent of the registered holder of the trade mark are
questions which should be decided in a civil court rather than
by a Criminal Court. It was also held. by the High Court that
since the complaint in the particular case had not been nrade by
. a Proprietor of the trade mark, the prosecution of the accused
on the complaint of the Trade Marks Inspector and a subsequent
investigation by the Police were not tenable under Sections 78
and 79 of the Act in view of the provisions of Sec. 28 of that
Act. An objection seems to have been taken before the learned
Judge that the High Court was not competent to quash the proceedings pending before the Trial Magistrate in that case because
no revision petition had been filed ;:gains! the order of the Magistrate by which the charge was framed against him but it was only
after one of the witnesses had been examined that a Revision had
been filed which is not competent. The High Court rejected this
contention and held that it had power to exercise revisional
powers under Sec. 561-A and accordingly accepted tl~e refere~ce
made by the Sessions Judge and quashed the proceedmgs agamst
the accused for offences under Sections 78 & 79 of the Act.
(ll 1964 A lJ 653.
(2) A.T.R. 1936 Cal. 48R.
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u.P. STATE l'. RAM NATH ( Jaganmolwn Reddy, J.)
It appears to us that the High Court had misdirected itself in
considering that the submissions which found favour
with
it,
were relevant for the purpose of deciding whether the proceedings
for prosecution for offences under Sctions 78 and 79 of the Act
were, not valid either because the Habib Bank Ltd.,
being a
foreign Bank was not a citizen and as such had no rights or that
the prosecution cannot be initiated by the Inspector of Trade
Marks or that the question of the abandonment of trade mark
amounted to an express or implied consent was a matter for civil
court and cannot be made the subject of a. criminal prosecution.
Sections 78 and 79 are contained in Chapter X of the Act.
Section 78 provides that any person who falsifies any trade mark,
falsely applies to goods any trade mark; or makes, disposes of,
or has in-his possession any die, block, machine, plate or other
instrument for the purpose of falsifying, or of being used for
falsifying a trade mark, applies any false
trade description to
goods etc. etc. etc. shall unless he proves that he acted without
intent to defraud, be punishable with imprisonment for a term
which may extend to two years, or with fine, or with both, while
Section 79 makes a person liable to similar punishment if he
sells goods or exposes them falsely or for having them in his
possession for sale or for any purpose of trade or manufacture
any goods or things to which any false trade description is
applied.
Trade mark has been defined
in Sec. 2(1)(v)
to
mean:
" ( i) in relation to Chapter X (other than Section
81), a registered trade mark or a mark used in relation
to goods for the purpose of indicating or so as to indi-
. cate a connection in the course of trade between the
goods and some person having the right as proprietor
to use the mark; and
(ii) inrelation to the other provisions of this Act,
a mark used or proposed to be used in relation to goods
for the puq:10se of indicating or so as to indicate a connection in .the course of trade between the goods and
'ome perrnn having the right, either as proprietor or
as registered user, to use the mark whether with or
without any indication of_ the identity of that pcroon.
and includes a certification trade mark registered as
such u11der the provisions of Chapter VIII."
It is apparent from this definition that for the purposes of Chapter X of the Act which deals with criminal offences, a trade mark
includes a registerd as well as un-rcgistered
trade mark.
An
offence under Sections 78 or 79 therefore relate to a trade mark
whether it is registered or ,unregistered. The contention that the
578
SUPREME COURT REPORTS
[1972] 2 S.C.R.
registered trade mark of the Habib Bank Ltd., has been abandoned since the said Bank had discontinued its use froni 1954 will
not absolve the respondents from Criminal liability because even
if it was abandoned it can only furnish a ground for a person to
make an application under sec. 46 to have the trade mark removed
from the registers. It does not however entitle him to use a trade
mark whether it is current or has been removed from the register,
or has been abandoned or even. if it has never been initially registered but has acquired the currency of a trade mark. The offences
under Sections 78 and 79 consists in the deception and application
of a trade mark which is in use and which signifies a particular
type of goods containing that mark. There is, therefore, no
validity in the contention that the infringment of the trade mark
of Habib Bank Ltd., merely gives rise to a civil action, in respect
of which no prosecution will lie.
The provisions contained in
Chapter IV in .which is contained Sec. 28 relate to the effect of
registration and have no bearing on the question before us.
It was nextiy urged that the Trade Marks Inspector had no
right to make a complaint under Sections 78 and 79 and therefore
the prosecution was invalid.
This contention also in our view
is misconceived.
A perusal of sub-s. (2) of Sec. 89 would show
that no Court inferior to that of a Sessions Judge, Presidency
Magistrate or Magistrate of the 1st Class shall try an offence under
this Act; while sub-s. ( 1) provides that no Court shall take cognizance of an offence under Sec. 81, Sec. 82 or Sec. 83 except on
complaint in writing made by the Registrar or any officer authorised by him in writing. Merely because sub-s. ( 1) of Sec. 89 refers to
manner of taking cognizance in respect of offence under
the
Section specified therein, it does not preclude cognizance of other
offences specified in Chapter X from being taken under the procedure prescribed by the Criminal Procedure Code. It is apparent that offences under Sections 78 and 79 are punishable with
imprisonment of two years or. with three years if they fall under
the respective provisos to the said Sections. In cases where an
offence is punishable with imprisonment of one year and upwards
but less than 3 years, under Chapter XXIII of Schedule II it is
non-cognizable and is a summons case, triable as already stated
under Sec. 89 (2) by the Sessions Judge, Presidency Magistrate
or a Magistrate of the 1st Class.
In such cases under Sec. 155
of the Criminal Procedure Gode when an information is given to
an officer incbarge of the Police Station of the commission of a
non-cognizable offence, he has to enter the substance of the
information in a book to be kept for the purpose and refer the
informant to the Magistrate but he cannot under sub-s. (2) investigate such a case without the order of a Magistrate. On
receiving such an order any Police officer may exercise the same
powers in respect of the investigation (except the power to arrest
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u.P. STATE v. RAM NATH (Jaganmohan Reddy, J.)
579
without warrant) as an Officer in charge of police station may
exercise in ii cognizable case. On receipt of a report from the
Police in compliance with such orders, the Magistrate may if the
report discloses the commission of an offence try the accused by
the procedure prescribed under Sec. 251-A of the Criminal Procedure Code. This bieng the legal position in this case the Magistrate in our view has followed the correct procedure. The information in respect of the commission of an offence under Sections
78 and 79 of the Act was brought to the notice of the Magistrate
by a letter from the Trade Marks Inspector. The Magistrate directed the police to register a case and investigate it. The Police
accordingly complied with it and m~de a report thereon. On
receipt of the report the Magistrate satisfied himself that the respondents had received the docum•mts referred to in Sec. 173. After
a consideration of those documents he examined the accused and
after giving an opportunity to both the prosecution and the accused
framed a charge on being satisfied that there was a prima facie
case. The procedure followed therfeore is unexceptionable. The
question whether the Habib Bank Ltd., being a foreign Bank is not
a citizen and whether it has any right in the trade mark is therefore irrelevant and does not affect the validity of the proceedings
or of the charges framed against the accused. We accordingly
allow the appeal, set aside the Judgment of the High Court and
direct the Magistrate to proceed with the case in accordance with
law.
V.P.S.
Avpeal allowed.