Holding

Section 46(1)(b) cannot be invoked to cancel a trademark when the original registrant has not been impleaded, and the five‑year non‑use period is measured from the date of original registration, not reset by assignment.

Summary

The appellant, Mis. Thukral Mechanical Works, acquired the registered trademark ‘Field Marshall’ for centrifugal pumps from Mis. Jain Industries and used it in its business. The first respondent, P.M. Diesels Pvt. Ltd., the original proprietor of the mark for diesel engines, sought removal of the mark under Section 46(1)(b) of the Trade Marks Act on the ground of non‑use by the registrant for more than five years. The High Court and the Intellectual Property Appellate Board dismissed the application, holding that the non‑use period began afresh from the date of assignment. The Supreme Court held that the non‑use period runs from the date of original registration, that the assignee inherits the same rights as the assignor, and that the original registrant must be impleaded for a Section 46 proceeding. Consequently, the Board’s order was set aside and the matter remitted for fresh determination. The appeal was allowed with costs.

Issues considered

The maintainability of an application under Section 46(1)(b) when the original registrant (assignor) is not impleaded.
The proper interpretation of the phrase ‘for the time being’ in Section 46(1)(b) – whether it refers only to the current proprietor or also to the predecessor.
Whether an assignee of a registered trademark can be held liable for non‑use of the mark by the predecessor.
Whether an allegation of trafficking of a trademark must be proved before the person against whom it is made and what parties are necessary.
The correctness of the Intellectual Property Appellate Board’s dismissal of the rectification application.

Legislation cited

Trade and Merchandise Marks Act, 1958s. 107, s. 36, s. 37, s. 46(1)(b), s. 48, s. 56

Subjects

trademarknon‑useSection 46assignmenttraffickingrectificationregistered proprietorinfringementlegal standing

Judgment

[2008] 17 S.C.R. 1161

MIS. THUKRAL MECHANICAL WORKS A
v.
.. I- P.M. DIESELS PVT. LTD. & ANR.
(Civil Appeal No. 7404 of 2008)

DECEMBER 18 2008

[5.8. SINHA AND CYRIAC JOSEPH, JJ.]

Trade and Merchandise Marks Act, 1958:
Registered. owner of trade mark - Rights of - Held:
Registration of trade mark confers a valuable right - The c
person in whose name the trade mark is registered may take
action against any person for passing off the goods as that
of the registered owner - It confers an exclusive right of use
of the trade mark in relation to the; goods in which the trade
mark is registered - The same is an assignable right in terms p
of Section 36 of the Act, whereas an unregistered trade mark
is not.
s. 46 - Non us~r of mark - Consequences of- Held: Non
"\ user of mark would disentitle registered proprietor from
renewal of registration - s. 46 takes away valuable right of
E
registered proprietor - Registered proprietor of trade mark is
not permitted to circumvent the law of user of the trade mark
for a long time by assigning the same from time to time.
s.46(1 )(b) - Assignment of trade mark - A/legation of
trafficking - Original registrant/assignor not made party -
F
Held: Whether the registered proprietor of the trade mark had
taken recourse to trafficking or not must be determined in an
.. appropriate proceeding - So long as the right to assign a
registered trade mark remains valid, once the same is validly
assigned, the assignee derives the same right as that of the
assignor in terms of the statute - Allegation of trafficking is a G
serious one - It must be proved in presence of the person
against whom such allegations are made - Assignor is a
necessary party - Party - Necessary party.
... '· 1161 H
'
1162 SUPREME COURT REPORTS [2008] 17 S.C.R.

A First respondent is the registered proprietor of trade
mark 'Field Marshall' for diesel engine since 1964.
Appellant commenced its business in centrifugal pumps :>.: '\

also under the trade mark 'Field Marshall'. First
respondent filed a suit in High Court for grant of decree
of permanent injunction alleging infringement of trade
B
mark 'Field Marshall' against appellant. An ex-parte order
of injunction was passed. Mis Jain Industries was
registered proprietor of trade mark 'Field Marshall' for
flour mills, centrifugal pumps etc. and got it renewed from
time to time. D4ring proceedings in the said suit, M/s Jain
c Industries by deed of assignment assigned the said trade
mark in favour of the appellant.
Respondent filed an application under ss.46, 56 and
107 of the Trade and Merchandise Marks Act, 1958
contending that M/s Jain 'Industries having not used the
D trade mark in respect of centrifugal pumps for a period
of more than five years and one month, the mark should
be taken off the register. First respondent claimed user
of said mark since 1963 and sought for rectification of
register. Appellant appeared in the said suit and
E contended that it was registered owner of trade mark
which was sought to be cancelled. In view of that
statement, first respondent requested the court for
permission to withdraw the petition with liberty to file a
fresh petition on same cause of action.
A fresh application was filed by first respondent.
F
However M/s Jain Industries was not impleaded as party
._..
therein. Meanwhile Injunction matter came up for hearing
and the High Court held that appellant having become the "
registered proprietor of said trade mark, no case for grant
of injunction was made out. The interim order of
G injunction was vacated and appellant was permitted to
use their registered trade mark. Correctness of said order
was not questioned. The second rectification application
filed by first respondent was dismissed by Board. High
-
I
Court in writ petition set aside the order of Board and
H

•'
M/S. THUKRAL MECHANICAL WORKS v. P.M. DIESELS 1163
PVT. LTD. & ANR.
~

directed it to adjudicate the dispute on merits. Hence the A
instant appeal.
Allowing the appeal, the Court
HELD:1. The Trade and Merchandise Marks Act, 1958
was enacted to provide for the registration and better
protection of trademarks and for the prevention of the use B
of fraudulent marks of merchandise. Registration of a
trade mark remains valid for seven years. Renewal
applications are required to be filed on the expiry of
seven years. Mis. Jain Industries got itself registered and
/
obtained periodical renewal thereof as is required under c
the Act. There cannot be any doubt that the registration
of a trade mark confers a very valuable right. The person
in whose name the trade mark has been registered may
· take action against any person for passing off the goods
as that of the registered owner. It confers an exclusive
right of use of the trade mark in relation to the goods in D
which the trade mark is registered. The same is an
assignable right in terms of s.36 of the Act, whereas an
unregistered trade mark is not. Non-user of the said mark,
therefore, entails the consequences laid down under
clause {b) of Sub-section (1) of s.46. However, such an E
application can be filed only by a person aggrieved.
When the applicant "before the Board establishes the fact
~ in regard to non-user of the mark for a period of more
than five years on the part of the registered owner, the
latter may show that his case falls within the purview of
sub-section (3) of s.46. [Paras 15, 19 and 20) [1176-D-E; F
., 1177-G-H; 1178-A-C]
Jivendra Nath Kaul v. Collector/District Magistrate and
Anr. (1992) 3 SCC 576; H.H. Maharajadhiraja Madhav Rao
Jivaji Rao ScindiaBahadur of Gwalior, H.H. Maharajadhiraja
Maharana Shri Bhagwat Singhji Bahadur of Udaipur v. Union G
of India and Anr. AIR (1971) SC 530, referred to.

.. ' 2. S.46 is a penal provision. It provides for civil or evil
consequences. It takes away the valuable right of a
registered proprietor. It, therefore, can be taken away only
when the conditions laid down therefor are satisfied. A HI

~
/
1164 SUPREME COURT REPORTS [2008} 17 S.C.R.

A registered proprietor of a trade mark should not be
permitted to circumvent the law of user of the trade mark
for a long time by assigning the same from time to time.
But then such a case has to be made out. Allegation of
trafficking is a serious one. It must be proved in presence
B of the person against whom such allegations are made.
At the time of grant of original registration,
advertisements are issued and objections are called for.
Renewal of registration, in a sense, also is not automatic.
A person who had been using the said trade mark as a
proprietor thereof by user is supposed to keep itself
C abreast with such applications filed by another either for
registration of the trade mark or renewal thereof. The non-
user for a long time would disentitle a registered
proprietor from renewal of the registration. [Par{ls 21 and
22] [1178-D-H]
D 3. s.46(1){b} 'provides for a special remedy. As a
person obtains a right on and from the date of registration
and/or renewal thereof, he can ordinarily be deprived of
his right unless it is shown that the assignment thereof
by his holder was not a bona fide one or had been made
; r
(_
E by way of camouflage. If the assignee has obtained
assignment for bona fide use, he may not be fastened ,--
l
with any liability owing to non-user on the part of his
'
predecessor. In other words, the mistake of the
predecessor should not be visited with non-use of the
present registered owner. It must, however, be observed
F that whether a use is for bona fide purpose would
essentially be a question of fact. Whether s.46(1)(b} read
with s.48 of the Act would bring within its purview, not
only a registered proprietor but also the proprietor who
had otherwise acquired a right would depend upon the
G facts and circumstances of each case. [Paras 23 and 24]
[1179-A-D]
Kabushiki Kaisha Toshiba v. Tosiba Appliances Co. &
Ors. (2008) 8 SCALE 354 and Hardie Trading Ltd. & Anr. v.
Addisons Paint &Chemicals Ltd. (2003) 11 SCC 92, referred
H to.
.. MIS. THUKRAL MECHANICAL WORKS v. P.M. DIESELS 1165
PVT. LTD. & ANR. [S.S. SINHA, J.]

4. The submission that the appellant was an infringer A
::.
both of the right of Mis. Jain Industries as also the first
respondent and, thus, its use was not bona fide in a case
•
" of this nature cannot be accepted. If appellant infringed
the right of M/s. Jain Industries, it was for it to take action
therefor. It did not. First respondent itself accepts that at
B
least immediately prior to the institution of the suit,
appellant had been using the same. Prima facie, therefore,
appellan~ has been held to be the registered owner of the
trade mark. It is one thing to say that for the purpose of
)
frustrating an' application for rectification, the appellant
had colh,~ded with its predecessor for the purpose of c
trafficking by entering into the deed of assignment which
't
is otherwise illegal and bad in law but it is another thing
to say that the appellant could be proceeded against
alone for non-user of the registered 'trade mark for a
period of more than five years. For the purpose of making D
out such a case, both the original registrants as also the
assignee were required to be impleaded as parties. [Para
25] [1180-8-F]
... 5. The Court while construing a statute takes into
consideration the parliamentary intent in amending the E
provisions thereof. It seeks to enhance the period of
moratorium of use of the registered trade mark from one
month to three months so as to prevent speculative
assignment. Thus, a case of speculative assignment is
specifically required to be made out. Such an application
may be maintainable in terms of s.56 of the Act but strictly F
not in terms of s.46(1 )(b) thereof and that too in the
~
absence of the original registered proprietor. [Para 27]
[1181-F-H]
6.1. The explanation offered by the first respondent
that it gave up the case of non-use of the registered trade G
mark against M/s Jain Industries on the basis of
statement made by the appellant cannot be accepted.

.. ' Firstly because consent does not confer jurisdiction;
secondly, because want and/or lack of jurisdiction on the
part of the Tribunal cannot be waived as, if any order is H
..
)-
!
1166 SUPREME COURT REPORTS [2008] 17 S.C.R. '
J

A passed without jurisdiction, the same would be a nullity;
and thirdly because the cause of action, even.according
to the first respondent in his application before the High
Court, was different. [Para 28] [1182-A-B]
~ •
6.2. The counsel appearing on behalf of the appellant
B did not state that it had waived its right so far as non-
impleadment of Mis Jain lnduslries was concerned. It only
consented for grant of liberty in favour of the first
respondent for filing of an application for the ~elf-same
cause of action. The question of maintainability of the
c second suit is absence of the registrant proprietor was '·
not and could not have been the subject matter of
consent at that stage. The cause of action which /

permitted the first respondent to file an application for
rectification agai,nst Mis. Jain Industries was non-user
thereof by it. Its non-user and rectification of the register
D . could not; in the aforementioned situation, have been
tagged with the cause of action, if any, against the
appellant. [Para 28] [1182-C-E]
6.3. The contention that the appellant was an infringer
t
of the trade mark is again a question of fact, The right of
E the first respondent as a proprietor of the trade mark by
reason of a long user is required to be determined vis-a-
vis Mis. Jain Industries as also the appellant in the suit
filed by it which is pending. The Board could not, while
exercising its jurisdiction under s.46(1 )(b), of the Act
F proceeded on the basis of such presumption. [Para 29]
[1182-E-F]
7. It is not correct that no cause of action survived
against Jain Industries. It was not lost by reason of "
assignment. In the suit, only the competing right of the
first respondent qua the appellant can be determined and
G not a right against Mis. Jain Industries. Such a right
cannot be determine~ in a proceeding under s. 46(1 )(b) .;
of the Act which is restricted to non-user of the registered
trade mark. Both the appellant and the respondent No.1
were the infringers of the right of Mis. Jain Industries as ~
H it was the registered proprietor of the trade mark in
MIS. THUKRAL MECHANICAL WORKS v. P.M. DIESELS 1167
PVT. LTD. & ANR. [S.B. SINHA, J.]

respect of the goods in question, namely, centrifugal A
pumps. [Para 29] [1182-G-H; 1183-A]
,, " 8. Two interpretations of s.46(1 )(b) are possible.
While interpreting the same, however, certain basic
principles of construction of statute must be kept in mind.
As it takes away somebody's right, it deserves strict B
construction. Jurisdiction of the Board being dependent
on determination of the foundational facts, the same was
required to be established on the basis of the averments
made in the application and not otherwise. [Para 30]
)
[1183-B-C]
c
9. The right of a registered trade mark is not lost

- automatically on the expiry of five years and one month.
It does not provide for a 'sun set' law. It has to be
adjudicated upon. Whether the registered proprietor of
the trade mark had taken recourse to trafficking or not
must be determined in an appropriate proceeding. The D
principle of 'purchaser of a property has a duty to make
enquiries', therefore, cannot apply in a case of this nature.
So long as the right to assign a registered trade mark
~
remains valid, once the same is validly assigned, the
.assignee derives the same right as that of the assignor E
in terms of the statute. A title to a trade mark derived on
assignment as provided for under the Act cannot be
equated with a defective title acquired in any other
property as admittedly on the date of assignment, the
right of the registered trade mark was not extinguished.
[Para 30] [1183-C-E] F
10. An assignor can transfer only such right which
he possesses. If his title is not extinguished by reason
of a provision of a statute for non-user of the trade mark .
for a period of five years, any assignment made shall be
valid. The Board shall, however proceed to determine G
afresh the application filed by the first respondent in the
light of the legal principles explained above. [Paras 33 and
34] [1184-F-G]
" ' Case Law Reference:
(1992) 3 sec 576 referred to Para 18 H
1168 SUPREME COURT REPORTS [2008] 17 S.C.R.

A AIR (1971) SC 530 referred to Para 18
(2008) 8 SCALE 354 referred to Para 24
(2003) 11 SCC 92 referred to
. ,•1ei-, 1
Para ' .24
CIVIL APPELLATE JURISDICTION ':·civil Appeal No.
7404 of 2008.
B
From the final Judgment and Order dated 18.1.2006 of the
High Court of Delhi at New Delhi in LPA No. 2063 of 2005.
C.A. Sundaram, Amarjit Singh Monga, Rohini Musa,
Hemand Singh, Suruchii Aggarwal, Mamta Jha, Abhishek \
C Gupta and Zafar lnayat for the Appellant.
Sudhir Chandra, R.K. Agarwal, Nandini Gore, Simran Brar,
Rajiv Naik and Bhagabati Prasad Padhy (for Manik ~
Karanjawala) for the Respondent.
The Judgment of the Court was delivered by
D S.S. SINHA, J.1. Leave granted.
. 2. Interpretation of the provisions of Section 46( 1)(b) of the
Trade and Merchandise Marks Act, 1958 (hereinafter called
and referred to for the sake of brevity as 'the said Act') is
i11volved herein.
E 3. The factual matrix of the matter, which is not much in
dispute is as under :
First Respondent is the registe1cd proprietor of a trade
mark 'Field Marshal' for Diesel Engines since 1964 bearing
No.228867. One Mis. Jain Industries got the trade mark 'Field
F Marshal' registered under clause (7), inter alia, for Flour Mills,
Centrifugal Pumps, couplings for machines, pulleys included in
class 7 and valves (parts of machines). The said registration
was renewed for the periods 13.5.1972 and 12.5.1979;
13.5.1979 and 12.7.1986 and 13.7.1986 and 12.7.1993.
·G Appellant is said to have commenced its business of
manufacturing and selling centrifugal pumps also under the mark
'Field Marshall'.
I
Allegedly, on the premise that the .first respondent is the ..
{

proprietor of the said mark by reason of long user and, thus,
H acquired a reputation in that behalf, a legal notice was issued

. I
... M/S. THUKRAL MECHANICAL WORKS v. P.M. DIESELS 1169
PVT. LTD. & ANR. [S.B. SINHA, Jl

upon it questioning its right to use the said mark in respect of A
centrifugal pumps by the appellant laying a claim that it had
been using the said mark since 1963.
,.. yf
4. Respondent No.1 thereafter filed a suit in the Delhi High
Court for grant of a decree of permanent injunction being Suit
No.2408 of 1985 alleging infringement of the said mark and/ B
or claiming right of passing off in respect thereof. An ex parte
order of injunction was passed on 19.12.1985 against the
defendant (appellant herein) to the following effect:
"Notice for April 8, 1986. Meanwhile, a temporary ex parte
_)
injunction is issued against the defendants restraining them c
from manufacturing or selling either themselves or through
.... any dealer or representative diesel oil engines or parts
thereof with the trade mark 'Field Marshal' and/or any other
trade mark identical therewith and all goods falling iri
Clause 7 of the Trade and Merchandise Mark Rules. The
plaintiff shall comply with the requirements of Order 39 D
Rule 4 of the Code of Civil Procedure."
5. Indisputably, during the proceedings in the above suit,
M/s. Jain Industries by a deed of assignment assigned the said
trade mark along with its goodwill in favour of the appellant.
One of the stipulations contained therein reads as under : E
"That the party of the second part has satisfied the party
of the first part of having used the mark FIELD MARSHAL
"rf
in respect of Centrifugal Pumps and Valves since 1973.''
6. Indisputably, First Respondent filed an application under
F
Section 46, 56 and 107 of the Act, marked as C.O. No.9 of
1986, contending that M/s. Jain Industries having not used the
' trade mark in respect of Centrifugal Pumps for a period more
than five years and one month, the mark should be taken off
the register. It claimed user of the said mark since 1963 and
sought for rectification of the register by expunging th~ G
expression 'circulation and centrifugal pumps' from the
specification of goods. Indisputably, appellant filed an
application in form TM 24 on 17.6.1986. The Assistant
J ' Registrar, Trade Marks, passed an order on 10.11.1986
certifying : H
A
1170 SUPREME COURT REPORTS [2008] 17 S.C.R.

"THAT the trade mark FIELD MARSHAL BRAND (word
..
/

per se) is registered under No.228867 in part 'A' of the
Register as of the date 13th May, 1965 in class 7 in respect ...
"!
of Flour Mills, circulating an_si centrifugal pumps; coupling
for machines; pulleys included in Class 7, and valves (parts
of machines) in the name of Pooran Chand Jain and
B
Kailash Chand Jain, trading as Jain Industries, 1166,
Phatak Suraj Bhan, Belanganj Agra.
THAT Pursuant to a request" on form TM-23 dated 17th
June, 1986 and order thereon dated 24th October, 1986
Ganga Ram Anil Kumar (HUF), Sunil Kumar and Sumitra
c Rani, trading as Thukral Mechanical Works Railway Road,
Sirhind (Punjab) are registered as subsequentproprietors
of this mark as from 30th May, 1986 by virtue of Agreement
dated 30th May, 1986.
AND THAT The registration of the aforesaid trade mark
D has been renewed from time to time and will remain in force
for a period of a seven years from 13th May, 1986 and may
be renewed at the expiration of that period and of each
succeeding period of a seven years."
7. In the said C.O. No.9 of 1986 filed by the first
E , respondent against M/s. Jain Industries, despite service of
notice, nobody appeared on behalf of the defendant. 16.1.1987
was the date fixed in the said suit. Appellant's counsel
appeared on that date and, inter alia, contended that presently
it was the registered owner of the trade mark which was sought
F to be cancelled. In view of that statement, a s.ubmission was
made on behalf of the first respondent that it may be permitted
to withdraw the petition with liberty to file a fresh petition on the ~

same cause of action. The learned Judge directed recording
of statements of the learned counsel in this behalf; pursuant
whereto the same were recorded which reads as under :
G
"C.0.9of1986
Mr. Singh· has filed a reply in this petition bringing out that
presently he is the registered owner of the trademark which )
is sought to be cancelled in this petition. In view of this -..
H
. M/S. THUKRAL MECHANICAL WORKS v. P.M. DIESELS 1171
PVT. LTD. & ANR. (S.B. SINHA, J.]

situation learned counsel for the petitioner has submitted A
that he may be permitted to withdraw this petition with
;.. -{ permission to file a fresh petition on this very cause of
action after impleading M/s Thakural mechanical Works
etc. Let the statement of learned counsel for the petitioner
be recorded. B
Statement of Shri K.L. Aggarwal, counsel for petitioner
without oath :
In view of the submissions of Mis Thakural Mechanical
) WorJ<s I may be permitted to withdraw this petition with
permission to file a fresh petition on this very cause of c
action.
Statement of Shri Hemant Singh, counsel for Mis.
Thakural Mechanical Works without oath :
I have no objection if the petitioner is permitted to withdraw
this petition with permission to file a fresh petition on this D
very cause of action."
On the basis of the said statement, the following order was
passed:
"This petition has been filed by Mis. PM Diesels Pvt. Ltd.
Against M/s. Jain Industries and the Dy. Registrar of Trade E
Marks under Section 46, 56 and 107 of the Trade and
Merchandise Marks Act, 1958 for rectification of entry
relating to the Registered Trade Mark No.228867 in Class
7. After the notice was served upon the respondent 1, a
reply has been filed by M/s Thakural Mechanical Works F
bringing out therein that they are now the registered
• proprietors of said Trade Mark No.228867. In this view of
the matter learned counsel for the petitioner has submitted
that he may be permitted to withdraw this petition with
permission to file a fresh petition on this very cause of
G
action. The request is not opposed on behalf of M/s
Thakural Mechanical Works. In these circumstances the
request of the plaintiff is granted and petitioner is permitted

" ' to withdraw this petition and file a fresh petition on this very
cause of action. The petition is accordingly filed as
withdrawn leaving the parties to bear their own costs." H
·A
1172 SUPREME COURT REPORTS [2008) 17 S.C.R.

8. A fresh application was filed by the first respondent. The
said M/s. Jain Industries, however, was not impleaded as a party
th'ereiri. The cause of action therefor was stated to have arisen
-
in the following circumstances :
"' ..:
"That the cause of action for the present petition arose in
8 favour of the petitioner and against the respondents in the
month of January 1987 when the respondent informed this
Hon'ble Court that they have been recorded as subsequent
proprietors of the impugned registered trade mark
No.228867 in Class 7 in C.O. No.9 of 1986, whereupon \.
the petitioner withdrew the said earlier petition C.O. No.9
c of 1986 with permission of the court to file the present
petition, because of the changed circumstances. The
cause of action is continuous from day to day till the
impugned registration is cancelled/rectified."
'·
.D 9. The injunction matter in Suit No.2408 of 1985 came up l
for hea·ring before a learned Single Judge of the High Court.
By an order dated 19.1.1988, having regard to the provisions
· contained in the said Act, the learned Judge opined that
appellant having become the registered proprietor of the said ~
trade mark, no case for grant of injunction has been made out,
E the interim order of injunction passed on 1.9.12.1985 was
vacated and the defendants were permitted 'to use their
registered trade mark subject to the following conditions :
"(a) Defendants will not use the logo/style of the word "Field.
Marshal" of which logo and-Style the plaintiff is the
F proprietor under the Copyright Act.
(b) Defendants shall mention the name of the defendant
~
firm, Thukral Mechanical Works, Sirhind on each and every
centrifugql pump manufactured by them and sold in the
name of 'Field Marshal'.
G (c) The defendants shall maintain proper accounts of the
sale of centrifugal pumps under the trade mark "Field
Marshal" and shall file them in Court as and when directed."
10. Correctness or otherwise of the said order has not !
been questioned. The second rectification application~filed by ..
H
MIS. THUKRAL MECHANICAL WORKS v. P.M. DIESELS 1173
PVT. LTD. & ANR. [S.B. SINHA, J.]

the first respondent, however, was transferred to the Intellectual A·
Property Appellate Board. The said application was dismissed.
A writ petition was filed thereagainst by the first
respondent. A learned Single Judge of the Delhi High Court,
however, refused to stay the operation of the order of the Board
dated 27 .10.2004. An appeal was preferred thereagainst. The B
Division Bench of the High Court thereafter while disposing of
both the writ petition and the Letters Patent Appeal allowed the
writ petition and set aside the order of the Board and directed
it to adjudicate the dispute on merits. The said order of the
Division Bench is under challenge in this appeal.
c
11. The core question which arises for our consideration
is as to whether in the aforementioned facts and circumstances
of the case, the application under Section 46(1 )(b) was
maintainable.
Before adverting thereto, we may take notice of the D
relevant statutory provisions :
12. Sections 46(1)(b),_48(1), 48(2) and 56 .read as under

"Section 46-Removal from register and imposition of
limitations on ground of non-use-(1) Subject to the E
provisions of section 4 7, a registered trade mark may be
taken off the register in respect of any of the goods in
respect of which it is registered on application made in the
prescribed manner to a High Coul1 or to the Registrar by
any person aggrieved on the ground either- F
(a)
...
... (b) that 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 G
fide use thereof in relation to those goods by any
proprietor thereof for the time being:
Provided that, except where the applicant has been
' permitted under sub-section (3) of section 1-2 to
register an identical or nearly resembling trade H
1174 SUPREME COURT REPORTS [2008] 17 S.C.R.

A mark in respect of the goods in question or where
the tribunal is of opinion that he might properly be
permitted so to register such a trade mark, the
tribunal may refuse an application under clause (a)
· or clause (b) in relation to any goods, if it is shown
B that there has been, before the relevent date or
during the relevant period, as the case may be,
bona fide use of the trade mark by any proprietor
thereof foJ the time being in relation to goods of the
same description, being goods in respect of which
\._
the trade mark is registered.
c Section 48-Registered users-(1) Subject to the provisions
of section 49, a person other than the registered proprietor
of a trade mark may be registered as the registered user
thereof in respect of any or all of the goods in' respect of
which the trademark is registered otherwise than as a
D defensive trade mark; but the Central Government may, by
rules made in this behalf, provide that no application for
registration as such shal! be enertained unless the
agreement between the parties complies with the ~
conditions laid down in the rules for preventing trafficking
E in trade marks.
(2) The permitted use of a trade mark shall be deemed to
be used by the proprietor thereof, and shall be deemed
not to be used by a person other than the proprietor, for
the purposes of section 46 or for any other purpose for
F which such use is material under this Act or any other law.
Section 56-Power to cancel or vary registration and to,
rectify the register-( 1) On application made in the .... ""
prescribed manner to a High Court pr to the Registrar by
any person aggrieved, the tribunal may make such order
G as it may think fit for cancelling or varying the registration
of a trade mark on the ground of any contravention, or
failure to observe a condition entered on the register in·
relation thereto.
)
(2) Any person aggrieved by the absence or omission
from the register of any entry, or by any entry made in the
H
MIS. THUKRAL MECHANICAL WORKS v. P.M. DIESELS 1175
PVT. LTD. & ANR. [S.B. SINHA, J.)

register without sufficient cause, or by any entry wrongly A
remaining on the register, or by any error of defect in any
entry in the' register, may apply in the prescribed manner#
"' to a High Court or to the Registrar, and the tribunal may
make such order for making, expunging or varying the
entry as it may thin~ fit. 8
(3) The tribunal may in any proceeding under this section
decide any question that may be necessary or expedient
to decide in connection with the rectification of the register.
) (4) The tribunal, of its own motion, may, after giving notic_e
in the prescribed manner to the parties concerned and c
after giving them an opportunity of being heard, make any
order referred to in sub-section (1) or sub-section (2).
(5) Any order of the High Court rectifying the register shall
direct that notice of the rectification shall b~ served upon
the Registrar in the prescribed manner who shall upon D
receipt of such notice rectify the register accordingly.
(6) The power to rectify the register conferred by this
section shall include the power to remove a trade-mark
registered in Part A of the register to Part B of the register."
13. Indisputably, the scope of the provisions for removal E
from Register in terms of Section 46 and 56 of the Act stand
on different footings. Whereas Section 46 had a limited
application, Section 56 of the Act is wider in nature.
Concededly, clause (a) of sub-section (1) of Section 46 is not
attracted in the case.
F
14. For the purpose of appreciation of the rival contentions,
j.. we may notice the findings of the Board as also the High Court.
The Board has taken. the view that the period of five years
and one month will begin to run from the date on ~hich Thukral
became the proprietor of the trademark, that is, 30th May, 1986 G
and, therefore, the rectification application could have been filed
by the appellant only sometime in 1991. Opining th~t an
application for rectification against the appellant within a period
of seven and a half months from the date of assignment of the
trade mark was not maintainable, the application was
H
dismissed.
1176 SUPREME COURT REPORTS [2008] 17 S.C.R.

A The High Court on the other hand opined :
"It was not anybody's case before us that Mis Jain
Industries the registered proprietor of the trademark used ..
it at all. The trademark was used by the Appellant and
Thukral, neither of whom were proprietors thereof, except
8 that Thukral claims to have become its proprietor with
effect from 30th May, 1986.
According to learned counsel for the Appellant, the use of
the trademark by Thukral was not legally permissible use
inasmuch as Thukral did not have the consent, tacit or
c otherwise of Mis. Jain Industries to use the trademark. If
Thukral did, then it cannot be said that there was no bona
fide use thereof by its proprietor, that is, Mis Jain Industries.
This appears to be the position at least till 30th May, 1986.
In the meantime, as a result of the ex parte ad interim
injunction granted on 19th December 1985 by this Court
0 in Suit No.2408 of 1985, there was no question of Thukral ·
using the trademark Field Marshal till the injunction was
vacated on 19th January, 1988."
15. The Act was enacted to provide for the registration and
better protection of trademarks and for the prevention of the use
E of fraudulent marks of merchandise. Registration of a trade
mark remains valid for seven years. Renewal applications are
required to be filed on the. expiry of seven years. Mis. Jain
Industries got itself registered and obtained periodical renewal
thereof as is required under the Act. First Respondent withdrew
F the application against Mis. Jain Industries. The prayer in the
application was to take off the registered trade mark from the
register in respect of centrifugal pumps (goods) so far as the A

registration made in favour of the appellant is concerned.
16. It is in the aforementioned situation. we are called upon
G to determine the meaning of the words 'for the time being'
occurring in Section 46( 1)(b) of the Act.
Two interpretations thereto which are possible are :
(1) the said words would denote non-use of the trade )

mark in relation to the goods by the appellant for a
H period of five years or longer: and
MIS. THUKRAL MECHANICAL WORKS v. P.M. DIESELS 1177
PVT. LTD. & ANR. [S.B. SINHA, J.)

(2) The mark had not been used for a period of five A
years or longer either by the present proprietor
thereof or his predecessor.
17. We may, however, also notice that another construction
of the said provision has been put forth by Mr. Sunderam,
learned senior counsel appearing on behalf of the appellant, B,
that the word 'proprietor' would not mean a registered proprietor
but also a person who has become 'proprietor' by long use
thereof.
_)
18. The words 'for the time being' would mean differently
in different situations. It may mean 'the moment or existing c
position' as was held by this Court in the case of Jivendra Nath
Kaul v. Collector/District Magistrate and Anr. [(1992) 3 SCC
576] or in the context of clause (22) of Article 366 of the
·Constitution as has been held in H.H. Maharajadhiraja
Madhav Rao Jivaji Rae Scindia Bahadur of Gwalior, H.H.
0
Maharajadhiraja Maharana Shri Bhagwat Singhji Bahadur of
Udaipur v. Union of India and Anr. [AIR 1971 SC 530 para
110] to mean:
"By the use of the expression "for the time being" in Clause
(22) of Article 366 the President is not invested with E
authority to accord a temporary recognition to a Ruler nor
with authority to recognize or not to recognize a Ruler
arbitrarily : the expression "for them time being" predicts
that there shall be a Ruler of the Indian State, that if the
first recognized Ruler dies, or ceases to be a Ruler, a
successor shall be appointed, and that there shall not be F
more Rulers than one at a given time."
The terms also may bring within its umbrage the entire
period of five years or more irrespective of the fact as to whether
the registered proprietor was one or more than one as has been
held by the High Court. · G
19. There cannot be any doubt or dispute that the
registration of a trade mark confers a very valuable right. The
person in whose name the trade mark has been registered may
take action against any person for passing off the goods as
that of the registered owner. It confers an exclusive right of use H
1178 SUPREME COURT REPORTS [2008] 17 S.C.R.

A of the trade mark in relation to the goods in which the trade
mark is registered. The same is an assignable right in terms
of Section 36 of the Act, whereas an unregistered trade mark
is not.
20. Non-user of the said mark, therefore, entails the
B consequences laid down under clause (b) of Sub-section (1)
of Section 46.
However, such an application can be filed only by a person
aggrieved. When the applicant before the Board establishes
the fact in regard to non-user of the mark for a period of more \._
c than five years on the part of the registered owner, the latter
may show that his case falls within the purview of sub-section
(3) of Section 46.
21. The question which, therefore, arises is as to who can
prove that he had the bona fide intention to use the trade mark
o on the date of application for registration. Indisputably, it would
be the registered proprietor. Section 46 is a penal provision. It
provides for civil or evil consequences. It takes away the
valuable right of a registered proprietor. It, therefore, can be
taken away only when the conditions laid down therefor are
E satisfied.
22. While we say so, we are not oblivious of the fact that
trafficking in trade mark is to be discouraged. A registered
proprietor of a trade mark should not be permitted to circumvent
the law oj_user of the trade mark for a long time by assigning
the same from time to time. But then such a case has to be
F made out. Allegation of trafficking is a serious one. It must be
proved in presence of the person against whom such
allegations are made. At the time of grant of original
registration, advertisements are issued and objections are
called for. Renewal of registration, in a sense, also is not
G automatic. A person who had been using the _said trade mark
as a proprietor thereof by user is supposed to keep itself
abreast with such applications filed by another either for
registration of. the trade mark or renewal thereof. The non-user ,
>
for a long time would disentitle a registered proprietor from
H renewal of the registration.
M/S. THUKRAL MECHANICAL WORKS v.. P.M. DIESELS 1179
PVT. LTD. & ANR. [S.S. SINHA, J.]

23. It must not, however, be forgotten that Section 46(1)(b) A
provides for a special remedy. As a person obtains a right on
and from the date of registration and/or renewal thereof, he can
ordinarily be deprived of his right unless it is shown that the
assignment thereof by his holder was not a bona fide one or
had been made by way of camouflage. If the assignee has
B
obtained assignment for bona fide use, he may not be fastened
with any liab'ility owing to non-user on the. part of his
predecessor. In other words, the mistake of the predecessor
should not be visited with non-use of the present registered
owner.
24. It must, however. be observed that whether a use is
c
for bona fide purpose would essentially be a question of fact.
Whether Section 46( 1)(b) read with Section 48 of the Act would
bring within its purview, not only a registered proprietor but also
the proprietor who had otherwise acquired a right would depend
upon the facts and circumstances of each case. D
In Kabushiki Kaisha Toshiba v. Tosiba Appliances Co.
& Ors, J(2008) 8 SCALE 354], this Court held :
...... "We- ao not find any force in the aforementioned
submission. Clauses (a) and (b) operate in different fileds.
Sub-section (3) covers a case falling within clause (b) and E
not the clause (a) thereof. Had the intention of the
Parliament been that sub-section (3) covers cases falling
under clause (b) and clause (a), having regard to the
similarity of the expressions used, there was no reason as
to why it could not be stated so explicitly. F
It was furthermore opined~
• "There may be a case where owing to certain special
circumstances, a continuous use is not possible. The trade
mark for which registration is obtained is used
intermittently. Such non-user for a temporary period may G
be due to any exigency including a bar under a statute. or
a policy decision of the Government or any action taken
against the registrant."
It was observed that in cases of intermittent use also.
clause (b) shall apply. In Kabushiki Kaisha Toshiba, this Court H
,
I
...
1180 SUPREME COURT REPORTS [2008] 17 S.C.R.

A relied upon Hardie Trading Ltd. & Anr. V. Addisons Paint &
Chemicals Ltd. [(2003) 11 SCC 92] :
"In our opinion, the phrase "person aggrieved" for the ... '
purposes of removal on the ground of non-use under '
I -
Section 46 has a different connotation from the phrase
B used in section 56 for canceling or expunging or varying i l-
an entry wrongly made or remaining in th~ Register."
25. The submission of Mr. Sudhir Chandra that the
appellant was an infringer both of the right of M/s. Jain Industries
as also the first respondent and, thus, its use was not bona fide "-(
c in a case of this nature cannot be accepted. If appellant ,-
infriflged the right of Mis. Jain Industries, it was for it to take
action therefor. It did not. First respondent itself accepts that at
least immediately prior to the institution of the suit, appellant
had been using the same.
o We are not concerned herein as to since when it had been
doing so. It obtained an or of injunction. The order of injunction
was .vacated. For one reason or the other, the said order
, attained finality. Prima facie, therefore, appellant has been held
to be the registered owner of the trade mark. It is one thing to
say that for the purpose of frustrating an application for
E rectification, the appellant had colluded with its predecessor for (~

'
the purpose of trafficking by entering into the deed of
assignment which is otherwise illegal and bad in law but it is ,,
another thing to say that the appellant could be proceeded
against alone for non-user of the registered trade mark for.a
F period of more than five years. For the purpose of making out
such a case, both the original registrants as also the assignee
were required to be impleaded .as parties.
26. We may, at this stage, notice that in Law of Trade Marks
by Mr. K.C. Kailasam, while commenting on Section 47 of the
G Trade Marks Act, 1999 to which our attention has been drawn
by Mr. Sudhir Chandra, it is stated :
"Notes on c/auses.-This clause corresponds to section 46
of the existing Act and provides for removal of a trade
mark from the register on the ground of non-use~ A trade
H mark which is not used within five years of its registration,
MIS. THUKRAL MECHANICAL WORKS v. P.M. DIESELS 1181
PVT. LTD. & ANR. [S.B. SINHA, J.]

--
becomes liable for removal either completely or in respect A
of those goods or services for which the mark has not been
used. Under Section 46(1 ), it is proposed to clarify that the
five years period will start from the date on which the 'trade
mark is actually entered on the register. Tnis amendment
is intended to remove any ambiguity, as for all other B
purposes, the date of registration will be the date on which
the application was filed vide clause 23(2). Proviso to sub-

_ _...,;
clause (1) also provides that the tribunal may refuse
removal of the mark if it is shown that any proprietor had
in fact made bona fide use of the trademark for goods or
services of the same description or associated goods or C,
services.
It is also proposed to increase the period from 1 to 3
months in clause 47(1)(a) and (b) in which use of the trade
mark, prior to the date of filing of the application for removal
of the trade mark, shall be disregarded. This is intended D
to prevent the registered proprietor to by pass the Act by
such token use after he comes to know that an application
' • for removal is about to be filed. ?Sub-clause (3) protects
a mark from being removed from the register on ground
of non-use if such non-use is shown to have been due to E
!!!f special circumstances in the trade. The clause is proposed
to be mo~ified to clarify that special circumstances in the
trade will include restrictions imposed by any law or
regulation on the use of trade mark in India. Consequential
amendments have been made to cover services. (Clause
47 of the Bill)" F
J 27. The Court while construing a statute takes into
•'
consideration the parliamentary intent in amending the
provisions thereof. It seeks to enhance the period of moratorium
of use of the registered trade mark from one month to three
months so as to prevent speculative assignment. Thus, a case G'
of speculative assignment is specifically required to be made
out. Such an application may be maintainable in terms of I
Section 56 of the Act but strictly not in terms of Section 46( 1)(b)
thereof and that too in the absence of the original registered
proprietor. H
t
\~
.i
', 1~
1182 SUPREME COURT REPORTS [2008] 17 S.C.R.
~

A 28. We are not satisfied with the explanation offered by
the first respondent that it gave up the case of non-use of the
registered trade mark against M/s Jain Industries on the basis
of statement made by the learned counsel for the appellant;
......
firstly because consent does not confer jurisdiction; secondly, '
because want and/or lack of jurisdiction on the part of the
B
Tribunal cannot be waived as if any order is passed without
jurisdiction, the same would be a nullity; and thirdly because the
cause of action, even according to the first respondent in his
application before the High Court, was different.
..
"--...-
The counsel appearing on behalf of the appellant did not
c state that it had waived its right so far as non-impleadment of
M/s Jain Industries was concerned. It only consented for grant
of liberty in favour of the first respondent for filing of an
'1
application for the self-same cause of action. The question of (
;..
maintainability of the second suit is absence of the registrant
D proprietor was not and could not have been the subject matter
of consent at that stage. The cause of action which permitted
the first respondent to file an application for rectification against
Mis. Jain Industries was non-user thereof by it. Its non-user and )-; ~
rectification of the register could not. in the aforementioned
E situation, have been tagged with the cause of action, if any,
against the appellant.
29. The second contention of Mr. Sudhir Chandra that the
r-
appellant was an infringer of the trade mark is ag'ain a question
t--
of fact. The right of the first respondent as a proprietor of the
trade mark by reason of a long user is required to be ,....
;

F r
determined vis-a-vis M/s. Jain Industries as also the appellant
in the suit filed by it which is pending. The Board could not, ..),

while exercising i~sjurisdiction under Section 46(1)(b), of t~e lit-
Act proceeded on the basis of such presumption.
It is not correct that no cause of action survived against
G
Jain Industries. It was not lost by reason of assignment as was
contended by the learned counsel. In the suit, only the f-c
competing right of the first respondent qua the appellant can ).~

f'
be determined and not a right against M/s. Jain Industries. I

Such a right cannot be determined in a proceeding under
l\
H Section 46(1 )(b) of the Act which is restricted to non-user of Ji
~
l
~
MIS. THUKRAL MECHANICAL WORKS v. P.M. DIESELS 1183
PVT. LTD. & ANR. [S.B. SINHA, J.]

the registered trade mark. Both the appellant and the A
respondent No.1 were the infringers of the right of Mis. Jain
Industries as it was the registered proprietor of the trade mark
in respect of the goods in question. namely, centrifugal pumps.
30. Two interpretations of the said provision Section
46(1)(b) are possible. While interpreting the same, however, B
certain basic principles of construction of statute must be kept
in mind. As it takes away somebody's right, it deserves strict
construction. Jurisdiction of the Board being dependent on
determination of the foundational facts, the same was required
to be established on the basis of the averments made in the C
application and not otherwise.
The right of a registered trade mark is not lost automatically
on the expiry of five years and one month. It does not provide
for a 'sun set' law. It has to be adjudicated upon. Whether the
registered proprietor of the trade mark had taken recourse to
trafficking or not must be determined in an appropriate
0
proceeding. The principle of 'purchaser of a property has a duty
to make enquiries', therefore, cannot apply in a case of this
nature. So long as the right to assign a registered trade mark
remains valid, once the same is validly assigned, the assignee
derives the same right as that of the assignor in terms of the E
statute. A title to a trade mark derived on assignment as
provided for under the Act cannot be equated with a defective
title acquired in any other property as admittedly on the date
of assignment, the right of the registered trade mark was not
extinguished. F
31. Both the findings of the High Court which we have
noticed hereinbefore are findings on question of law and in that
view of the matter the contention of Mr. Sudhir Chandra that the
merit of the matter is yet to be gone into by the Board cannot
'
ee a ground for ignoring the submissions made at the bar.
G
32. Our attention has again been drawn to a passage from
'Law of Trade marks & Geographical Indications' by Shri K.C.
Kailasam, wherein the judgment of the Tribunal has been
criticized in the following terms :
"From the above legislative intent, it would seem that the H
1184 SUPRE~ COURT REPORTS [2008] 17 S.C.R.

A period of non-use of the trade mark is to be reckoned
continuously from the date of itsregistration. In the case
of American Home Products Corporation v. Mac
Laboratories Pvt. Ltd. Rendered under the 1958 Act, it was
held by the Supreme Court that "the person seeking to
B have the trade mark removed from the register has only
to prove such continuous non-user."
It would appear that neither the U.K. Act, nor the Indian Act,
at any time envisaged that the commencement of 5 year
period of non-use is to be delinked from the date of
registration of the mark, so as to give a fresh lease of life
c to the registration, every-time there is change in the
ownership of the mark. If that be so, any registered
proprietor could easily defeat an application for rectification
by assigning the mark to some other person to have a
fresh period of 5 years from the date of assignment and
0 thus effectively frustrate the very object of the provision in
section 47(1)(a) and (b). Further, it is to be noted that an
assignment is subject to "the provisions of the Act and any
rights vested in any other person"-See section 37. The
assignor cannot obviously transfer more rights than he
E himself has to the assignee under the Act."
33. We do not think that the approach of the learned author
is entirely correct. An assigner can transfer only such.right which
he possesses. If his title is not extinguished by reason of a
provision of a statute for non-user of the trade mark for a period
F of five years, any assignment made shall be valid subject to
such situation which we have noticed in paragraph 25 supra.
34. For the views we have taken, we are of the opinion
th~t the impugned judgment cannot be sustained. It is set aside
accordingly. The Board shall, however proceed to determine
G afresh the application filed by the first in the light of the legal
principles explained above.
35. The appeal is allowed with costs. Counsel's fee
assessed at Rs.1,00,000/-. ·
D.G. Appeal allowed.
H