MANU/WB/0739/1990

IN THE HIGH COURT OF CALCUTTA

Appeal No. 571 of 1985
Decided On: 06.07.1990
Appellants: Hardie Trading Limited and Ors.
Vs.
Respondent: Addisons Pints & Chemicals Ltd.
Hon'ble Judges/Coram:
P.K. Majumdar, J.
JUDGMENT
P.K. Majumdar, J.
1. This is an appeal under Section 109 of the Trade and Merchandise Marks Act. 1958
(hereinafter referred to as the said Act) preferred by Hardie Trading Ltd. and Hansa
Paints Chemicals, the Indian Agent of the first appellant, from the order dated 12th-
September. 1985 passed by the Joint Registrar of Trade Marks, Calcutta, allowing
three applications of Addisons Paints and Chemicals Ltd. for rectification of the
marks.
2 . The appellant Hardie Trading Ltd. (hereinafter referred to as "Hardie") a non
resident Australian Company was a registered proprietor of three trade marks viz.,
Spartan in Class 2, and Class 3 respectively and Spartan Velox in Class 2, in respect
of lacquers, paints, thinners, cleaners, enamels etc. The said three marks are
registered under Trade Mark No. 122172 in Class 2, 122173 in Class 3 and 122174 in
Class 2.
3. The three applications of rectification were filed by the respondent Addisons Paints
and Chemicals Ltd. under Section 46(1)(b) of the said Act before the Joint Registrar
of Trade Marks, Calcutta for removal of the marks Spartan and Spartan Velox from
the Trade Mark Register. The said applications were made on the ground that the said
marks had not been in use in India for more than 5 years and were, therefore, liable
to be removed from the Register. The said respondent, thereafter, made the removal
of the said marks from the Register of Trade Marks on the ground as aforesaid.
4 . The marks consist of the legend Spartan and are registered in the name of the
Hardie Trading Co. Ltd., the first appellant and relate to paints and allied products.
5 . In December, 1976 the respondent Addisons applied for registration of the said
Spartan marks in its own name but was informed that the registration of the said
marks in its name would not be granted as the said marks were identical or
deceptively similar to the three marks already registered under the name of Hardie
Trading Ltd.
6 . By the order dated 12th September, 1985, the order under appeal. The joint
Registrar, Trade Marks allowed the said three applications of Addisons for
rectification of the said three Marks. Hence this appeal by Hardie Trading Ltd.
7 . The grounds taken by the respondent Addisons in each of the said three

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 applications for rectification are inter alia, that upto a date one month before the date
of the application for rectification a continuous period of five years or longer had
elapsed during which there was no bona fide use thereof in relation to those goods
by the Registered proprietor Hardie Trading Ltd.: that the trade mark registered in the
name of Hardie was disentitled to protection in a court; the balance of convenience
was in favour of expunging the trade mark from the Register; and the entry relating
to the registered trade mark was wrongly remaining on the Register.
8. The background of the case as set forth in the order under appeal is as follows:
(1) From 1948 to 10th July, 1963, Addisons used the trade marks as
licensees of the Registered Proprietors but there was no registration of
Addisons as Registered User;
(2) On 22nd February, 1967, a written agreement was executed between the
Registered Proprietors and Addisons whereby the Registered Proprietors
agreed to assign absolutely the trade marks to Addisons;
(3) On 30th June, 1967, another written agreement was executed by the
Registered Proprietors recording that they have assigned Sparton trade marks
to Addisons. From 11th July, 1963 to 30th June, 1968, Addisons used
Sparton trade marks as Registered Users;
(4) On 31st August, 1968, registration of Addisons as Registered User was
cancelled, following the assignment of the marks to Addisons.
(5) From 1st September, 1968, to November, 1971, Addisons used Spartan
marks for 3 years, without registration as Registered User. The Registered
Proprietors having assigned the marks to Addisons, expressed no objection
to Addisons' using the marks. In December, 1976, Addisons applied for
registration of the mark in its own name. It was claimed therein by Addisons
that during 23 years between 1948 and October 1971 the mark Sparton was
used in India, the same was used by Addisons for 18 years both in law and
in fact:
(6) On 31st March. 1977 the Registered Proprietors purported to enter into
an agreement with a Delhi firm viz. Hansa Chemicals to allow it to use the
trade mark Sparton:
(7) On 27th May, 1977 (the date of a payment of fees being the filing date,
the applications are taken as filed on 30th May, 1977). Addisons applied for
rectification of the Register by removing the impugned trade marks Sparton
registered in the name of the Registered Proprietors.
9. The first question urged before the learned Joint Registrar was that the applicants
in the applications for rectification were not the "persons aggrieved" within the
meaning of Section 56 of the said Act, so as to be entitled to file the rectification
application. The learned Joint Registrar disposing of this ground held that the
applicants Addisons were "persons aggrieved" and it was not in dispute that Addisons
were engaged in the same trade viz., that of manufacture and marketing of paints and
surface coating. The respondent before the learned Joint Registrar (the appellant
herein) contended before the learned Joint Registrar that at once stage in a Court
proceeding the applicant Addisons had waived or abandoned its right to proceed with
registration and rectification application. The learned Joint Registrar considering the

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 order made in that court proceeding found that the respondent had not given any
undertaking not to proceed with the pending applications for registration and
rectification before the registrar of trade marks nor did the, said order of this Court
dated 8th August, 1984 prevent Addisons from proceeding with the said application.
10. Disposing of that preliminary objection by holding that the applicants were the
"persons aggrieved," the learned Joint Registrar proceeded to examine the grounds of
rectification taken by the Addisons. The first ground taken before the learned Joint
Registrar was non-use of the registered trade marks by the Registered proprietors
continuously for a period of five years and one month before the date of rectification
application. The applications for rectifications were all filed on 30th May, 1977.
Therefore, as observed by the learned Joint Registrar, the relevant period for
consideration of the question of non-use was from 30th April, 1972 to 30th April,
1977.
11. The appellant Hardie Trading Ltd, submitted before the learned Joint Registrar
that the goods bearing the impugned marks were available in the Indian market for
sometime during the relevant period, but the non-use was otherwise due to
restriction of imports imposed by the Government and there was no intention on the
part of Hardie Trading Ltd. to abandon to use the trade marks. The learned Joint
Registrar found that there was no attempt on the part of the Registered proprietors
Hardie to show by evidence that goods bearing the trade marks were available during
any part of the relevant period.
12. It was submitted by the respondent Addisons before the learned Joint Registrar
that on 30th March, 1977, Hardai entered into an agreement with Hansa Paints and
Chemicals for use of Spartan mark by Hansa, and it was their, contention that no use
of the said marks had been made by them during the relevant period. The Registrar's
attention was drawn to a letter dated 25th December, 1977 written by the lawyers of
Hansa to the lawyers of Addisons in reply to a legal notice issued by the latter,
stating that "our clients have not used the Spartan trade mark and have neither
manufactured nor sold any product under the said trade mark." Considering the said
letter, the learned Joint Registrar found that neither the registered proprietor nor the
said Hansa Chemicals sold any goods on behalf of the registered proprietors under
the trade mark Spartan in India during the relevant period.
1 3 . As regards the import restrictions, the learned Joint Registrar found that the
registered proprietor and Hansa did not lead any evidence as regards the nature,
scope and applicability of the alleged import restriction, to explain the non-use of the
trade marks. The learned Joint. Registrar has held that the onus to prove this was on
the registered proprietors Hardie. The learned Joint Registrar also found that the
applicants, Addisons led evidence to show that there was no prohibition of imports or
paints during the period relevant for consideration the question of non-use, namely
30th April. 1972 to 30th April, 1977. The learned Joint Registrar considered the
affidavit dated 3rd August, 1982 of one. K.S. Sundaram, Director and General
Manager of the applicant, Addisons, which is exhibit "C" before the learned Joint
Registrar, wherein it was stated that during the period of April. 1972 to May, 1977
import of paints and allied products was permitted under the relevant import trade
control policy. The learned Joint Registrar also referred to an affidavit dated 3rd
August 1982 of Arokiswamy who retired from the Service of the Government of India
as Assistant Collector, now practising as a consultant in Customs and Central Excise
matters, wherein the deponent stated that the paints lacquers and allied products had
been allowed to be imported by actual users, manufacturers exporters and merchant

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 exporters. With regard to the registered proprietor's contention that the imports were
permitted only for export production, the deponent Arokiswamy said that import of
paint products could be used by the actual user not only for export production; but
also for any other purposes.
1 4 . Considering those affidavits and considering the trade policy in question the
learned Joint Registrar field there was thus no basis for the contention that imports
were permitted only for export production. The Joint Registrar also held that the
registered proprietor had failed to show that the special circumstances relating to
import restrictions were responsible for non-use of the registered marks during the
relevant period. The registered proprietors, however, relied also on other
circumstances and reasons for non-use of the mark and one William Andrew Butters
affirmed an affidavit dated 25th June, 1983 wherein he had stated, inter alia, therein
that the company did not have the trade mark used in India by a registered user
immediately after the applicants ceased using the marks in 1971 but carried on
negotiations with Hansa Paint and Chemicals in 1972 and it took some time to finalise
such agreement. The deponent also stated that having regard to the state of the
market and the demand for the goods in question and also the company's
commitments in other countries, it was not possible nor was it considered economical
to put more goods in the marked immediately.
15. Dealing with this contention, the learned Joint Registrar observed that special
circumstances within the meaning of Section 46(3) of the said Act should be
circumstances peculiar in a particular trade. The learned Joint Registrar also observed
that reasons adduced by the deponent William Andrew Butters that having regard to
the state of the market and the demand for the goods and the company's
commitments in other countries, it was not possible nor was it considered
economical, to put more goods in the market immediately could not be described as
special circumstances in the trade as a whole. The learned Joint Registrar, further
held that non-use was due to considerations of registered proprietors own business
interest and was not attributable to circumstances affecting the trade in general.
16. Relying on a decision of this Court in Vulcan v. Palanichamy 1, where this Court
held that the expression "special circumstances in the trade" means not only special
circumstances merely attendant on or attended to any particular individual business
but it must be a kind of special circumstances for all the trade in those particular
goods, the learned Joint Registrar finally held that the registered proprietor had failed
to prove the use of trade marks during the relevant period and failed to establish the
plea that the non-use was due to any special circumstances in the trade.
1 7 . The second ground taken before the learned Joint Registrar by the applicant
Addisons was that the impugned mark registered in the name of Hansa was
disentitled to protection in a Court. It was contended on behalf of the applicant
Addisons before the learned Joint Registrar that the registered proprietors were not
entitled to rely upon the use of the trade mark by Addisons as their licensee during
the period 1948-63 and again from 1968 to 1971 as it was not equivalent to their use
of the mark. A decision reported in MANU/WB/0357/1969 : 75 C.W.N. 118 was relied
on by the Applicant Addisons where this court held that the use of registered mark by
a person other than the registered user was neither in fact nor in law the use by the
registered proprietor unless such person was registered as registered user of the
mark. It was, therefore, contended on behalf of Addisons before the learned Joint
Registrar that use by Addisons without registration as registered user could not be
taken as the use of the mark by the registered proprietor.

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 1 8 . The learned Joint Registrar accepted the contention and held that applicants
(addisons) were right in contending that the use of the registered Trade mark by
them during the above periods did not, having regard to section 48(2) of the Act,
accrue to the benefit of the registered proprietors.
19. The third ground of objection by the applicant Addisons before the learned Joint
Registrar was that the balance of convenience required that impugned marks should
be removed from the Register.
20. Regarding this point, the learned Joint Registrar felt that this power whether or
not the trade mark should be removed from the Register is at the discretion of the
Registrar. The learned Joint Registrar took the view considering section 56 of the Act
that once the facts were established, rectification should normally be ordered. The
learned Joint Registrar observed that mere fact that a registered trade mark had been
on the Register for a long period was not by itself a ground for exercise of discretion
in favour of allowing the mark to continue on the Register. On the other hand, the
leaned Joint Registrar felt that the continuance of a mark which was liable to be
removed was an entry wrongly remaining on the Register.
21. Considering the facts of the case, the learned Joint Registrar came to the finding
that during the relevant period when the impugned marks were on the Register, there
has been a non-use of the marks within the meaning of section 46(1)(b) of the said
Act and on this ground the marks could not be allowed to continue to remain any
further in the Register.
22. The learned Joint Registrar, as indicated above, allowed these three applications
of the applicants on a finding of non-use of the impugned marks within the meaning
of Section 46(1)(b) of the said Act, The learned Registrar accordingly, ordered that
the impugned trade marks should be removed from the Register as prayed for by the
applicants.
23. Section 46(1)(b) of the said Act provides that if up to a date one month before
the date of the application, a continuous period of five years or longer had elapsed
during which the trade mark was registered and during which there was no bona fide
use thereof in relation to those goods by any proprietor thereof for the time being,
the said mark is liable to be removed from the register. It is, however, provided
under Section 46(3) of the said Act, that if such non-use is due to "special
circumstances in the trade" and not due to any intention to abandon or not to use the
trade mark in relation to the goods to which application relates, then the mark is
saved. It therefore appears that if the fact of non-use of the mark continuously for a
period as stipulated in Section 46 of the Act is established, then the onus shifts on to
the proprietor to prove the existence of 'special circumstances in the trade' and also
the absence of any intention to abandon or not to use the mark.
24. Considering the facts of the case, it appears that under a collaboration agreement
dated 6th November, 1946 Addisons were appointed Chief Agent in India for sale of
Hardie's products bearing the said marks and Addisons sold the said products as
licensees. In 1948, Addisons also started to manufacture products bearing the said
marks under supervision of Hardie.
2 5 . On 11th July, 1963 Addition and Hardie entered into an agreement whereby
Addisons was allowed to use the said mark as a registered user. The said agreement
was duly registered in the Register of Trade Marks and Addisons began the said use
as a registered user.

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 26. On 22nd February, 1967 by a written agreement Hardie agreed to assign the said
mark to Addisons.
27. On 31st August, 1968 the registration of Addisons as registered user (under the
agreement dated 11th July, 1963) was cancelled, following the assignment of marks
to addisons.
28. In 1967 Addisons duly applied to the Registrar of Trade Mark for registration of
the assignment of the said Marks but the authority concerned insisted on production
of proof of assignment. Addisons was not able to produce such proof and eventually
the application for registration of the assignment was withdrawn.
29. Between 1st September, 1968 and November, 1971 Addisons continued to use
the said mark without registration as a Registered user but to the knowledge of and
with consent of the proprietor i.e. Hardie Trading Ltd.
30. It would appear from the order under appeal that the main points urged before
the learned Joint Registrar were whether (1) there was non-use of the marks during
the relevant period and (2) if so, whether such non-user was due to some import
restrictions during the relevant period.
3 1 . On the question of non-use, it is the position as found by the learned Joint
Registrar that between 27th April, 1972 and 27th April, 1977 there was no use of the
said mark either by Hardie Trading or by any permitted user. It has been found by the
learned Joint Registrar that the Hardie Trading failed to establish that there was use
of the mark during the relevant period. The main defence as stated above, on behalf
of the appellant Hardie Trading Co. Ltd. was that the non-use of the mark was due to
some import restrictions constituting special circumstances within the meaning of
Section 46(3) of the said Act.
32. In the present appeal the appellants have not made any submission on the plea
of the user as argued at length before the Joint Registrar. On the question of special
circumstances it was the contention of the appellants that such non-use, if any, was
due to the import restriction during the relevant period.
3 3 . The appellant Hardie has contended that such special circumstances arose on
account of import restrictions by the Government of India with respect to importation
of paints, lacquers and allied products. The appellant had referred to relevant extracts
of the import trade control policy for the period April, 1973 to March, 1974 and April
1974 to March, 1975. It is contended on behalf of the appellant that under the policy
for the said two years importation could be effected by actual users for export
production only and that too at a certain percentage, not exceeding 10% in the year
permitting maximum import. It is further contended on behalf of the appellant that
the appellant Hardie being a non resident foreign company, there were restrictions on
its part to carry on business in India under the provision of the Foreign Exchange
Regulation Act as applicable during the relevant period. It was also contended that a
foreign company could not have been permitted to use its trade marks in India
without the permission of Reserve Bank of India. The appellant has referred to a
notification being No. GSR dated 19th April, 1975 wherein the Reserve Bank of India
had declared its policy to allow a foreign company to permit others to use the
former's trade marks provided the subject goods were meant for export out of India
only.
34. On the question of special circumstances, the appellant relied on a decision of

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 Bombay High Court Plaza Chemical Industries v. Kohinoor Chemical Company
MANU/MH/0074/1973 : AIR 1973 Bombay 191.the decision of Delhi High Court in
Philip Morris Belgium S.A. v. Golden Tabacco Co. Ltd. MANU/DE/0599/1985 : AIR
1986 Delhi 145 and a decision of this Court in Express Bottlers Services Pvt. Ltd. v.
Pepsico Inc. MANU/WB/0158/1988 : 1988 (1) CLJ 337.
35. In the Delhi case, it has been held that import restriction justified not use and
would constitute special circumstances within the meaning of Section 46(3) of the
said Act.
36. The Bombay Court on the facts on the case justified not-use of trade mark due to
import restriction.
3 7 . Referring to Pepsico case MANU/WB/0158/1988 : 1988 (1) CL J 337 and also
another decision of the Court, which was referred to by the learned Registrar, in
MANU/WB/0009/1969 : AIR 1969 Cal. 43, it has been held that actual non user of
trade mark must be shown to have been due to special circumstances of the trade
and secondly that non-use must be not due to any intention to abandon or not to use
the trade mark in relation to the goods to which application relates.
3 8 . On the decision of the Bali Trade Mark2 the appellant relying on a quotation
therein submitted that this is a complete answer to the argument on behalf of
Addison that the special circumstances within the meaning of Section 46(3) of the
Act, should be total import ban. The quotation relied on by the appellant is a follows:
It is quite clear however, that the proprietors, the Ball Company, could not
have used the token import scheme unless an interested firm in this country
made the appropriate application, and no such application was made. It was
thus not possible for the company to import under the token scheme and that
was not their fault. Further, what has to be considered is not merely the
existence of an absolute prohibition to import, as might be though from lone,
passage in the Assistant Comptroller decision or a complete impossibility of
importing, but, in the words of Evershad, L.J. (supra) the existence of
conditions "making impracticable the ordinary usages of international trade."
A trade mark is a commercial asset intended to be used commercially by
businessmen, and it seems to me that "special circumstances" have to be
understood and applied in a business sense. In my view, this token import
scheme modification to the earlier general prohibition did not convert what
was before impossible into what was in a business sense, practicable, even if
a firm in this country has made the necessary application under that scheme.
The non use of the trade mark by the Bali Company, even during the token
import scheme period, is thus, in my view, shown to have been due to
special circumstances, in the trade."
39. It has been contended on behalf of the respondent with regard to the special
circumstances in the trade that this expression "special circumstances in the trade has
been held to mean any special circumstances in the trade as a whole in those
particular goods and no special circumstances merely attendant on or attached to any
particular trader. It is also contended on behalf of the respondent that such special
circumstances should not be due to any voluntary act or omission on the part of the
registered proprietor.
40. Referring to the import trade policy during the relevant period and the relevant

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 notification, relied on by the appellant, the contention of the respondent is that it is
not in dispute that there was no total ban of import of paints, lacquers and other,
allied products, It has been contended on behalf of the respondent that on a
reference to import trade control policy during the relevant period it would appear
that the import of paint etc., for actual user of export production was permissible and
that would be clear from the excerpts of the Government of India Publication
"Monthly Statistics for Foreign Trade in India" and it is further contended that the
said. Excerpts would also show that a substantial quantity of paints was imported'
into India during the relevant period.
41. It has also been contended on behalf of the respondent that no evidence had
been led on behalf of the appellant before the learned Joint Registrar that there was
any ban on the import of ingredients of paints lacquers etc., during the relevant
period According to the respondent, in fact, there was no such restriction oh the
import of ingredients of paints in India and manufacture of paints in India under the
said marks.
4 2 . Referring to the Calcutta decision of this Court in Pepsi case, (supra), it is
contended by the respondent that there was a complete ban on import not only of the
finished products but also of the ingredients thereof and on this fact the court held in
that case that there were special circumstances.
43. As indicated above, the learned Joint Registrar in the order under appeal referred
to the affidavit on behalf of the appellant. It appears from the said affidavit that
considering the said marks and the demand for the goods in question and also
Company's commitment in other countries it was not possible nor was it considered
economical for the appellant to put more goods on the market immediately. The
learned Joint Registrar found that this is the difficulty of a particular trader and that
cannot be taken as special circumstances in the trade as contemplated by Section 46
of the Act. It has been held by this Court in Vulcan v. Palanichamy Nadar (supra) that
the expression "special circumstances in the trade" has been held to mean not any
special circumstances merely attendant on or attended to any particular individual
business. The Court held that it must be a kind of special circumstances for all the
trade in those particular goods.
44. I fully agree with the observation and findings arrived at by the learned Joint
Registrar in this regard. It would also appear from the facts of the case and also on
reference to the relevant import trade control policy that there was no total ban on
import of paints lacquers and other allied products and this fact has also been
admitted by the appellant in their affidavit affirmed by said William Andrew Butters
(page 231 line 20-23 (part-1) Volume I of the Paper Books). So the case as sought to
be revealed in the said affidavit filed on behalf of the appellant before the learned
Joint Registrar was that it was not import restrictions but economic, commercial and
other factors which were applicable only to the appellants. The observation in Bali
case (supra) is in fact on a particular case before it that the impracticability of
carrying on business was due to reasons like War and also there was complete
impossibility of importing goods. But on the facts of this case it has been found by
the learned Joint registrar to which I do not find any reason to interfere with that the
non-user was not due to any import restriction but due to some economical
consideration peculiar to the appellant's business.
45. The appellant has also taken a point that the applicants were not the persons
aggrieved before the learned Joint Registrar. As I have indicated above, the main

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 burden of the argument on behalf of the appellant was that there were special
circumstances within the meaning of Section 46 of the said Act. I have already
indicated above the findings of the learned Joint Registrar on this question. From the
facts it would appear that Addisons used the said marks under some arrangement
with Hardie Ltd. The learned Joint Registrar also observed that the said marks were
likely to be associated in the mind of the public to belong to the Addisons. According
to the learned Joint Registrar, Addisons therefore, rightfully claimed to be entitled to
registration in respect of the said mark. As the continuance of the marks in the
Register in the name of Hardie stood in the way of such registration Addisons made
the present applications for rectification as the persons aggrieved. It has been held in
Powel's Trade Mark Case, (supra) that any trader is an aggrieved person within the
meaning of the law whenever registration of a particular trade mark operates as a
restraint on what would otherwise have been his legal right. In the present case,
Addisons being in the same trade as Hardie may be able to use the said marks in
relation to its own goods but for the existence of the registered mark in the name of
Hardie. Therefore, I feel that the learned Joint Registrar rightly held that Addisons
were persons aggrieved and were entitled to present application before him.
46. I do not see any reason to interfere with the order made by the learned Joint
Registrar dated 12th September, 1986 whereby the learned Joint Registrar made an
order that the impugned trade marks be removed from the Register as prayed for by
the applicant Addisons. I also agree with the findings arrived at by the learned Joint
Registrar in the order under Appeal. The order under appeal dated 12th September,
1985, is therefore, affirmed and sustained.
47. For the reasons aforesaid, this appeal is dismissed. There will be no order as to
costs.

1 MANU/WB/0009/1969 : AIR 1969 Calcutta 43

2 1966 R.P.C. 387
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