W.P.(C).No. 4134 of 2014 (N)

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN FRIDAY, THE 5TH DAY OF JUNE 2015/15TH JYAISHTA, 1937 ## WP(C).No. 4134 of 2014 (N) --------------------------- PETITIONER: ------------------ PROF.D.ARAVINDAKSHAN EDAYINETH, SRP MARKET P.O., KARUNAGAPPALLY KOLLAM. BY ADVS.SRI.B.S.SWATHY KUMAR SRI.REMYA MURALI SRI.ASHISH MOHAN SRI.A.K.RAJESH RESPONDENTS: ---------------------- 1. UNION OF INDIA, REPRESENTED BY ITS SECRETARY, MINISTRY OF CORPORATE AFFAIRS NEW DELHI - 110 001. 2. THE REGISTRAR OF COMPANIES, COMPANY LAW BHAVAN, BMC ROAD, THRIKKAKARA, KAKKANAD ERNAKULAM - 682 021. **Addl.3** . AGASTHYA BIOPHARM INDIA LTD., HAVING ITS REGISTERED OFFICE AT : FLAT NO.302 SREE DURGA APARTMENTS, IIIRD MAIN, IIIRD CROSS MALLESH PALAYA, THRIPPASANDRA BANGLORE - 560 075. AND HAVING ITS PROJECT AND CITE OFFICE AT POTHICKEL ERUTHIYAMPATHY P.O., PALAKKAD - 678 555 REPRESENTED BY ITS CHAIRMAN SHRI.K.A.SIDHARTHAN (ADDL.R3 IMPLEADED AS PER ORDER DATED 02.12.2014 IN IA 10372/14.) R1&2 BY ADV. SRI.N.NAGARESH,ASG OF INDIA R3 BY ADV. SRI.K.BABU RAJAN R3 BY ADV. SRI.DIPU.R THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 10.04.2015, THE COURT ON 05-06-2015, DELIVERED THE FOLLOWING: ## **APPENDIX IN WP(C).No. 4134 of 2014 (N)** ## PETITIONER'S' EXHIBITS: |PETITIONER'S' EXHIBITS:|PETITIONER'S' EXHIBITS:| |---|---| |-------------------------------------|| |EXT.P1:|TRUE COPY OF THE JUDGMENT IN WPC NO.21232/2012 DATED 5/11/2012.| |EXT.P2:|TRUE COPY OF THE FORM-IA DATED 26/12/2013 SUBMITTED BY THE| ||PETITIONER.| |EXT.P3:|TRUE COPY OF THE REPRESENTATION SUBMITTED BY THE PETITIONER| ||BEFORE THE 2ND RESPONDENT DATED 3/1/2014.| |EXT.P4:|TRUE COPY OF THE PRINT OUT OF THE E-MAIL DATED 9/1/2014.| |EXT.P5:|TRUE COPY OF THE PETITION SUBMITTED BY THE PETITIONER BEFORE| ||THE 2ND RESPONDENT DATED 29/1/2014.| |EXT.P6:|TRUE COPY OF THE ORDER DATED 5/2/2014 OF THE 2ND RESPONDENT.| |EXT.P7:|TRUE COPY OF THE COMPANY NAMES STARTING WITH AGASTYA.| |EXT.P8:|COPY OF LETTER NO.27/1/2014-CL-III DATED 17.2.2014.| |EXT.P9:|COPY OF LETTER NO.RD/SR/MISC/18/2014 DT.24.6.14.| |EXT.P10:|COPY OF FORM 23 FILED AND ITS APPROVAL ON 16.9.2011.| |EXT.P11:|RELEVANT PAGES OF ARICLES OF ASSOCIATION OF AGASTHYA| ||BIOPHARM INDIA LTD.| |EXT.P12:|TRUE COPY OF LETTER DT.22.6.2011 ISSUED BY THE MINISTRY OF| ||CORPORATE AFFAIRS, GOVT.OF INDIA.| |EXT.P13:|COPY OF NOTICE ISSUED BY THE DIRECTOR(PETITIONER IN WPC)| ||DT.2.8.12.| |EXT.P14:|COPY OF LETTER ISSUED BY THE PETITIONER TO ROC, KARNATAKA,| ||BANGALORE DT.15.8.12.| |EXT.P15:|COPY OF NOTICE PRODUCED BY MR.SIDHARTHAN BEFORE COMPANY| ||LAW BOARD, CHENNAI ON 14.2.2013 IN C.P.NO.53/12 AS R24 SERIES| ||PAGE NO.154.| |EXT.P16:|COPY OF NOTICE ISSUED BY K.A.SIDHARTHAN DT.1.9.2012.| |EXT.P17:|COPY OF NOTICE ISSUED ON 2.9.13.| |EXT.P18:|COPY OF C.M.P.NO.2416/13 PENDING BEFORE JUDICIAL FIRST CLASS| ||MAGISTRATE COURT, KARUNAGAPPALLY.| |EXT.P19:|COPY OF LETTER ISSUED BY THE REGISTRAR OR UNIVERSITY OF| ||CALICUT DT.2.9.13 ISSUED TO THE PETITIONER.| |EXT.P20:|COPY OF RENT AGREEMENT ENTERED BY MR.SIDHARTHAN WITH| ||COL.M.SIVAKUMAR DT.19.1.12.| |EXT.P21:|COPY OF RENT AGREEMENT ENTERED BY MR.SIDHARTHAN WITH| ||COL.M.SIVAKUMAR DT.19.1.12.| |EXT.P22:|COPY OF BANK STATEMENT SHOWING THE SIPHONING OF MONEY| ||FROM PUNJAB NATIONAL BANK, PALAKKAD FROM THE COMPANIES| ||ACCOUNT.| |EXT.P23:|COPY OF PETITION FILED BEFORE THE SUB INSPECTOR OF POLICE,| ||KOZHINJAMBARA, PALAKKAD DT.21.9.13.| |EXT.P24:|COPY OF AFFIDAVIT FILED BY SRI K.SIDHARTHAN AND OTHERS BEFORE| ||THE COMPANY LAW BOARD DT.4.12.2013.| ## RESPONDENT(S)' EXHIBITS --------------------------------------EXT.R2(A): COPY OF GENERAL CIRCULAR NO.45/2011 DT.8.7.2011. EXT.R2(B): COPY OF HISTORY OF STATUS OF NAME APPLICATION FILED BY THE PETITIONER. EXT.R2(C): COPY OF NAME AVAILABILITY LIST. EXT.R3(A): COPY OF MINUTES OF THE 49TH BOARD OF DIRECTORS MEETING OF THE APPLICANT COMPANY HELD ON 5.11.2011. EXT.R3(B): COPY OF MINUTES OF THE 52ND BOD MEETING. EXT.R3(C): COPY OF MINUTES OF THE EXTRAORDINARY GENERAL BODY MEETING HELD ON 27.6.12. EXT.R3(D): COPY OF JUDGMENT DT.28.5.12 PASSED BY THIS COURT IN WPC.10275/12. WP(C).No. 4134 of 2014 (N) EXT.R3(E): COPY OF JUDGMENT DT.27.6.12 PASSED BY THE KARNATAKA HIGH COURT IN C.P.NO.131/12. EXT.R3(F): COPY OF INTERIM ORDER DT.14.5.12 IN C.P.NO.53/12 PASSED BY THE COMPANY LAW BOARD, CHENNAI. EXT.R3(G): COPY OF JUDGMENT DT.5.11.12 PASSED BY THIS COURT IN WPC.21232/12. EXT.R3(H): COPY OF ORDER DT.21.2.2013. EXT.R3(I): COPY OF M.TECH DEGREE CERTIFICATE CLAIMED TO BE OBTAINED BY SRI D.ARAVINDAKSHAN AND PRODUCED BEFORE THE COMPANY LAW BOARD, CHENNAI IN C.P.NO.53/2012. EXT.R3(J): COPY OF RIGHT TO INFORMATION QUERY ADDRESSED TO CALICUT UNIVERSITY ON 21.12.2012. EXT.R3(K): COPY OF INFORMATION PROVIDED BY THE UNIVERSITY OF CALICUT ON 10.1.2013. TRUE COPY P.S.TO JUDGE dsn **ANIL K.NARENDRAN, J. --------------------------------------W.P.(C).No.4134 of 2014 ---------------------------------------Dated this the 5[th] day of June, 2015** ## **JUDGMENT** The petitioner has filed this writ petition seeking a writ of certiorari to quash Ext.P6 communication dated 5.2.2014 issued by the Registrar of Companies, Kerala, the 2[nd] respondent herein, and seeking a declaration that he is legally entitled to be granted the proposed name 'Agastya BioTech Limited' for the company, as sought for in Ext.P2 application dated 26.12.2013. 2. According to the petitioner, in the year 2005 a Public Limited Company was registered in the name 'Agastya Bio-pharm India Limited' and he was the Chief Promoter of that company, which was engaged in the manufacture of allopathic medicines including bio-medicines. Later differences of opinion arose between the directors of the company, which ultimately led to the closure of its Corporate Office at Chavara. Relying on Ext.P1 judgment of this Court in W.P.(C)No.21232 of 2012, the petitioner would contend that the keys of the Corporate Office of Agastya Biopharm India Limited is kept in the safe custody of the Registrar of this Court and that various litigations are pending before the Company Law Board, Chennai, the City Civil Court, Bangalore, and the District Court, Kollam. 2 W.P.(C)No.4134 of 2014 3. The petitioner along with others decided to incorporate a new company by the name 'Agastya Bio-Tech Limited'. As mandated under the provisions of the Companies Act, 1956 the petitioner filed Ext.P2 application dated 26.12.2013 in Form-1A before the 2[nd] respondent proposing the following names; (i) 'Agastya Bio-Tech Limited' and (ii) 'AB Tech Limited'. Subsequently, the petitioner submitted Ext.P3 representation before the 2[nd] respondent clarifying that the proposed name of the company 'Agastya Bio-Tech Limited' is not similar to 'Agastya Bio-pharm India Limited' in which he was the Chief Promoter. On 9.1.2014 the petitioner's Chartered Accountant received Ext.P4 e-mail from the office of the 2[nd] respondent, informing that, in terms of the provisions under Regulation 17 of the Companies Regulations, 1956, Ext.P2 application has been examined and marked as sent for resubmission with the following remarks; - “(i) NOC from the Karnataka-based company by way of resolution is to be produced. - (ii) NOC from the Delhi-based trade mark holder who has registered the trade mark in the same class is to be produced.” By Ext.P4, the petitioner was informed that the e-form should be resubmitted complete in all respects by 31.1.2014, failing which the e- form shall be treated as invalid and shall not be taken on record or the transaction shall be cancelled. 4. In response to Ext.P4, the petitioner submitted Ext.P5 reply W.P.(C)No.4134 of 2014 3 before the 2[nd] respondent pointing out that the proposed name of the company 'Agastya Bio-Tech Limited' is in no way similar or identical with 'Agastya Bio-pharm India Limited' and that, as Agastya Bio-pharm India Limited is defunct with effect from 11.10.2012, no resolution can be passed by that company granting NOC. Regarding NOC from the Delhibased trade mark holder, it was submitted that, the name of the Delhibased trade mark holder is not identical with, or too nearly resembles 'Agastya Bio-Tech Limited' and they have not registered the trade mark in the class bio-technology. Thereafter, the petitioner was served with Ext.P6 communication of the 2[nd] respondent by which he was informed that, the proposed name is not available for the reason that he failed to provide the trade mark or copy of authorisation to use trade mark. It is aggrieved by Ext.P6 communication issued by the 2[nd] respondent, the petitioner has approached this court in this writ petition seeking various reliefs. 5. A counter affidavit has been filed on behalf of the 2[nd] respondent, contending that, as per Sub-section (2) of Section 20 of the Companies Act, 1956, a name which is identical with or too nearly resembles the name of an existing company or a registered trade mark of any other person may be deemed to be undesirable by the Central Government. In furtherance to the above provisions, the Ministry of Corporate Affairs has issued Ext.R2(a) Name Availability Guidelines, 2011, vide General Circular No.45/2011. As per the said guidelines, those who W.P.(C)No.4134 of 2014 4 apply for availability of name has to verify whether companies with similar names are already existing on the rolls of the Ministry of Corporate Affairs by using the search facilities provided by the Ministry through its portal www.mca.gov.in/MCA21. Further, the applicant has to verify and confirm that no trade mark violations are involved in the proposed name. In Ext.P2 application the petitioner has verified that, he has used the search facilities available on the portal of the Ministry of Corporate Affairs for checking the resemblance of the proposed name with the companies and Limited Liability Partnerships respectively already registered or the names already approved. He has further verified that the proposed name does not infringe the registered trade mark rights of any entity or person or a trade mark which is subject of an application for registration, of any other person under the Trade Marks Act, 1999. On verification with the Name Availability Portal of the Ministry, the 2[nd] respondent found that the names applied for, i.e., 'Agastya Bio-Tech Limited' and 'AB Tech Limited' resembles with the following companies; - “(i) Agastya Bio-pharm India Limited having registered office at Karnataka, and - (ii) AB Tech (India) Private Limited having registered office at West Bengal.” 6. The 2[nd] respondent contended further that, the main objects of the proposed company are specified as manufacturing, marketing, import and export of pharmaceuticals, nutraceuticals, healthcare, ayruvedic, W.P.(C)No.4134 of 2014 5 homoeo, allopathic and dietary supplement products, spices, spices products, extracts, nano medical equipments, organo metallic compounds, etc. On scrutiny with the database of Trade Mark Registry, the 2[nd] respondent found that, trade mark in class 5 exists for 'Agastya', which is evident from Ext.R2(c) Name Availability List. Class 5 relates to pharmaceutical, veterinary and sanitary preparations, dietetic substances adapted for medical use, food for babies, plasters, materials for dressings, materials for stopping teeth, dental wax, disinfectants, preparations for destroying vermin, fungicides, herbicides. In view of the above, the petitioner was required vide Ext.P4 to resubmit Ext.P2 application, along with NOC from Agastya Bio-pharm India Limited, by way of resolution and also NOC from the Delhi-based trade mark holder who has registered trade mark in the same class, which is evident from Exhibit R2(b) printout of SRN history of Ext.P2 application. However, the petitioner came up for resubmission after 22 days, i.e., on 31.1.2014, without complying the requirements called for by the 2[nd] respondent. Hence it was rejected by Ext.P6. 7. The 2[nd] respondent has also contended that, on verification of the website of the Ministry of Corporate Affairs, the status of the company Agastya Bio-pharm India Limited registered at Karnataka is shown as 'active'. The latest statutory returns filed by that company pertains to the year 2011. Since Section 20 of the Companies Act, 1956 uses the word W.P.(C)No.4134 of 2014 6 'existing company', unless and until a company is dissolved as per the provisions of the Companies Act, it is deemed to be existing on the rolls. As per the Name Availability Guidelines, 2011, if the proposed name is identical to the name of the company dissolved as a result of liquidation proceedings, it should not be allowed for a period of 2 years from the date of such dissolution since it could be declared void within the aforesaid period as per Section 559 of the Act. Moreover, if the name is identical with the name of a company which is struck off in pursuance of Section 560 of the Act, then that name shall not be allowed before the expiry of 20 years, since company can be restored any time within such period, under Section 560(6) of the Act. 8. According to the 2[nd] respondent, when similarity with the name of an existing company 'Agastya Bio-pharm India Limited' was found out, the petitioner sent Ext.P3 letter informing that, he is the Chief Promoter of that company and was its Chairman and Managing Director and that this Court in Ext.P1 judgment directed the parties to move the Company Law Board or other appropriate forum to resolve the management disputes and such litigations are now pending. Therefore, the 2[nd] respondent presumed that, the petitioner is trying to incorporate a company with a name similar to that of an existing company in which he is no more the Chairman or Managing Director. The petitioner has given NOC, being the Chief Promoter and major shareholder of Agastya Bio- W.P.(C)No.4134 of 2014 7 pharm India Limited. Since the company being a separate legal entity, NOC by way of board resolution was called for, which was not produced. Hence the name 'Agastya Bio-tech Limited' was rejected. The second reason for rejection of the name 'Agastya Bio-tech Limited' was that, the prefix 'Agastya' is a registered trade mark. In Ext.P2 application the petitioner has stated that, the proposed names are neither based on a registered trade mark nor is a subject matter of an application pending for registration under the Trade Marks Act. However, when the name was processed through MCA portal, which was linked to the database of Trade Mark Registry, it was found that the word 'Agastya' is a registered trade mark in Class 5 allotted to Mr. Ruchit Bhajanka, Green Hill Apartments, Flat No.97, Pocket 1, Sector 23, Rohini, New Delhi-110085, which is evident from Ext.R2(c). The second name suggested by the petitioner was 'AB Tech Limited' which was rejected by the 2[nd] respondent in view of similarity with the name of an existing company, namely, 'AB Tech (India) Private Limited'. 9. Therefore, according to the 2[nd] respondent, the proposed names were rejected on valid grounds after examining the explanation submitted by the petitioner, after giving due consideration to Ext.R2(a) guidelines issued by the Ministry, after verifying the name database of MCA portal and the trade mark database of Trade Mark Registry, and after giving due opportunity to the petitioner to produce NOC from the W.P.(C)No.4134 of 2014 8 Karnataka-based company with similar name and also NOC from the trade mark holder, which the petitioner could not produce. The 2[nd] respondent has also stated that, the Regional Director of the Ministry of Corporate Affairs is the next higher authority for the petitioner, if he is aggrieved by the decision in Ext.P6. According to 2[nd] respondent, the petitioner is not entitled for the reliefs prayed for in this writ petition and he may be directed to apply afresh either with new names or with NOC from the concerned parties as indicated in the remarks column of Ext.R2(b). 10. To the counter affidavit filed by the 2[nd] respondent, the petitioner has filed a reply affidavit, reiterating the contentions raised in the writ petition. The petitioner contended that, the guidelines issued vide General Circular No.45/2011 will in no way bar allotment of the name 'Agastya Bio-tech Limited'. Further, in the portal www.mca.gov.in/MCA21 there is no mention of the name 'Agastya Bio-tech' or a registered trade mark similar to or identical with 'Agastya Bio-tech Limited'. The company proposed by the petitioner is a bio-tech company in the wide spectrum of bio-technology and not one with limited spectrum of pharmaceuticals alone like Agastya Bio-pharm India Limited. Further, the trade mark registered is 'Agastya' and not 'Agastya Bio-tech'. Therefore, the petitioner contended that, Ext.P2 application was rejected by the 2[nd] respondent without assigning any valid reasons and the action of the 2[nd] respondent in that regard is illegal, arbitrary and malafide. The petitioner has also W.P.(C)No.4134 of 2014 9 submitted a representation dated 3.1.2014 before the Ministry of Corporate Affairs, which resulted in Ext.P8 Government letter addressed to the Regional Director of the Ministry of Corporate Affairs, Chennai, to take necessary action in the matter as per law. Based on Ext.P8, the Regional Director sent Ext.P9 letter to the 2[nd] respondent to submit the list of similar names and also the reasons for not allowing the name 'Agastya Bio-tech Limited' to the petitioner. 11. Agastya Bio-pharm India Limited has filed I.A.No.10372 of 2014, seeking an order to implead it as additional 3[rd] respondent in the writ petition. To the aforesaid application the petitioner has filed a counter affidavit. By order dated 2.12.2014 this court allowed the said application and Agastya Bio-pharm India Limited was impleaded as the additional 3[rd] respondent. Since various litigations are pending between the parties before the Company Law Board and also before various civil courts, on the management and control of Agastya Bio-pharm India Limited, I am not expressing anything on the merits of the allegations contained in the affidavit accompanying to I.A.No.10372 of 2014 and also that in the counter affidavit filed by the petitioner to that interlocutory application. 12. Heard the arguments of the learned counsel for the petitioner, the learned Assistant Solicitor General appearing for respondents 1 and 2 and also the learned counsel appearing for the additional 3[rd] respondent. I have considered the rival submissions made at the bar. 10 W.P.(C)No.4134 of 2014 13. The sole issue that arises for consideration in this writ petition is as to the legality or otherwise of Ext.P6 communication issued by the 2[nd] respondent by which Ext.P2 application submitted by the petitioner stands rejected. 14. The provisions with respect to names of companies are contained in Sections 20 to 25 of the Companies Act, 1956. Section 20 of the Act provides that companies not to be registered with undesirable names. As per Sub-section (1) of Section 20, no company shall be registered by a name which, in the opinion of the Central Government, is undesirable. Sub-section (2) provides that, without prejudice to the generality of the foregoing power, a name which is identical with, or too nearly resembles, (i) the name by which a company in existence has been previously registered; or a registered trade mark, or (ii) a trade mark which is subject to an application for registration, of any other person under the Trade Marks Act, 1999, may be deemed to be undesirable by the Central Government within the meaning of Sub-section (1). Clause (ii) of Sub-section (2) was incorporated with effect from September 15.9.2003 and the Trade Marks Act, 1999 also came into operation from that date. Sub-section (3) provides further that, the Central government may, before deeming a name as undesirable under clause (ii) of Subsection (2), consult the Registrar of Trade Marks. Section 22 of the Act deals with rectification of name of company if, through inadvertence or 11 W.P.(C)No.4134 of 2014 otherwise, a company on its first registration or on its registration by a new name, is registered with a name which in the opinion of the Central Government is undesirable, in terms of clauses (i) and (ii) of Sub-section (1) of Section 22 of the Act. 15. The Ministry of Corporate Affairs has issued Name Availability Guidelines, 2011, vide General Circular No.45/2011, which came into force with effect from 24.7.2011. Paragraph 2 of the guidelines provides among other things that, while applying for a name in the prescribed e- form 1A, using digital signature certificate, the applicant shall be required to furnish a declaration to the effect that, he has used the search facilities available on the portal of the Ministry of Corporate Affairs for checking the resemblance of the proposed name with the companies and Limited Liability Partnerships respectively already registered or the name already approved, and that, the proposed name is not infringing the registered trademarks or a trade mark which is subject of an application for registration, of any other person under the Trade Marks Act, 1999. 16. Paragraph 3 of the guidelines provides for a certification by the practising Chartered Accountants, Company Secretaries and Cost Accountants, who will certify that he has used the search facilities available on the portal of the Ministry of Corporate Affairs for checking the resemblance of the proposed name with the companies and Limited Liability Partnerships respectively already registered or the names already W.P.(C)No.4134 of 2014 12 approved and the search report is attached with the application form. He will also certify that the proposed name is not an undesirable name under Section 20 of the Act and that it is also in conformity with the Name Availability Guidelines, 2011. Going by clause (ii) of paragraph 4, were a name has been made available online on the basis of the certification of a practising professional and it is found later on that the name ought not to have been allowed under the provisions of Section 20 of the Act read with these guidelines, the professional shall also be liable for penal action under the provisions of the Act, in addition to the penal action under regulations of respective professional institutes. 17. Paragraph 8 of the guidelines provides that, in determining whether a proposed name is identical with another matters enumerated under clauses (i) to (xi) shall be discarded. Paragraph 8 of the guidelines reads thus; - “ **8.** In determining whether a proposed name is identical with another, the following shall be disregarded: - (i) The words Private, Pvt, Pvt., (P), Limited, Ltd, Ltd., LLP, Limited Liability Partnership; - (ii) The words appearing at the end of the names – company, and company, co., co, corporation, corp, corpn, corp.; - (iii) The plural version of any of the words appearing in the name; - (iv) The type and case of letters, spacing between letters and punctuation marks; - (v) Joining words together or separating the words, as this does not make a name distinguishable from a name that uses the similar, separated or joined words. Such as Ram Nath W.P.(C)No.4134 of 2014 13 Enterprises Pvt. Ltd. will be considered as similar to Ramnath Enterprises Pvt. Ltd.; - (vi) The use of a different tense or number of the same word, as this does not distinguish one name from another. Such as, Excellent Industries will be similar to Excellence Industries and similarly Teen Murti Exports Pvt. Ltd. will be to Three Murti Exports Pvt. Ltd.; - (vii) Using different phonetic spellings or spelling variations, as this does not distinguish one name from another. For example, J.K. Industries limited is existing then J and K Industries or Jay Kay Industries or J n K Industries or J & K Industries will not be allowed. Similarly if a name contains numeric character like 3, resemblance shall be checked with ‘Three’ also; - (viii) The addition of an internet related designation, such as .COM, . NET, .EDU, .GOV, .ORG, .IN, as this does not make a name distinguishable from another, even where (.) is written as ‘dot’; - (ix) The addition of words like New, Modern, Nav, Shri, Sri, Shree, Sree, Om, Jai, Sai, The, etc., as this does not make a name distinguishable from an existing name such as New Bata Shoe Company, Nav Bharat Electronic etc. Similarly, if it is different from the name of the existing company only to the extent of adding the name of the place, the same shall not be allowed. For example, ‘Unique Marbles Delhi Limited’ can not be allowed if ‘Unique Marbles Limited’ is already existing; - Such names may be allowed only if no objection from the existing company by way of Board resolution is produced/ submitted; - (x) Different combination of the same words, as this does not make a name distinguishable from an existing name, e.g., if there is a company in existence by the name of “Builders and Contractors Limited”, the name “Contractors and Builders Limited” should not be allowed; 14 W.P.(C)No.4134 of 2014 - (xi) Exact Hindi translation of the name of an existing company in English especially an existing company with a reputation. For example, Hindustan Steel Industries Ltd. will not be allowed if there exists a company with name ‘Hindustan Ispat Udyog Limited’;” 18. Paragraph 9 of the guidelines provides that, in addition to above, the user shall also adhere to the guidelines enumerated under clauses (i) to (x) of paragraph 9. Clause (v) of paragraph 9 provides that, if the proposed name is identical to the name of a company dissolved as a result of liquidation proceedings it should not be allowed for a period of 2 years from the date of such dissolution since the dissolution of the company could be declared void within the period aforesaid by an order of the court under Section 559 of the Act. Moreover, if the proposed name is identical with the name of a company which is struck off in pursuance of action under Section 560 of the Act, then the same shall not be allowed before the expiry of 20 years from the publication in the official Gazette being so struck off since the company can be restored anytime within such period by the competent authority. 19. For deciding the question as to whether a name is identical with, or too nearly resembles, the name by which a company in existence has been previously registered; or a registered trade mark, or a trade mark which is subject to an application for registration, of any other person under the Trade Marks Act, 1999, in the context of Section 20 of the Act, depends upon whether the similarity in the names of the two W.P.(C)No.4134 of 2014 15 companies taken together with the attendant circumstances satisfies the court that the name of the proposed company is calculated to deceive the public and to cause confusion among the public between the two companies or to mislead the public or to divert the business from the existing company. 20. In **Ewing v. Buttercup Margarine Co. Ltd. [(1917) 2 Ch 1 (CA)]** , the plaintiff one Andrew Ewing had since 1904 carried on a business dealing with Margarine under the name and style of 'Buttercup Dairy Company'. The business was largely carried on in Scotland and to some extent in the North of England but it was gradually extending southwards. The defendant company was registered in November 1916 and as soon as the plaintiff heard of it he complained promptly and sought an injunction to restrain the defendant from carrying on business under the name 'Buttercup Margarine Co. Ltd.' He argued that such a name would likely cause confusion and serious injury to his business. It was held that the name chosen by the defendant so nearly resembled that under which the plaintiff was trading that people who had dealings with the plaintiff were likely to believe that the defendant’s business was a branch of or was connected with the plaintiff’s business. The court held that, it will restrain the defendant from causing injury to the plaintiff as a trader by adopting a name which will cause confusion leading to people to conclude that the defendant is connected in some way with the plaintiff or are W.P.(C)No.4134 of 2014 16 carrying on a branch of the plaintiff's business. Therefore, the plaintiff with an old established business trading under the name of 'Buttercup Diary Company' was held entitled to an injunction restraining the defendant company which had not yet started business from using the name of 'Buttercup Margarine Co. Ltd.' 21. In **M/s. Montari Overseas Limited v. M/s. Montari Industries Limited [ILR 1997 (1) Delhi 64]** the plaintiff/respondent Montari Industries Ltd. was incorporated on 17.1.1980. The defendant/appellant Montari Overseas Ltd. was incorporated later on April 21, 1993. On coming to know of the existence of the defendant, the plaintiff filed a suit seeking injunction against the use of the name ‘Montari’ in the corporate name of the defendant. It was contended on behalf of the defendant that there was no evidence to show that any confusion had been created in the mind of the customers or members of the public by the use of the word ‘Montari’ in the corporate name of the defendant nor was there any evidence to show that the business of the plaintiff had been diverted by the defendant. Rejecting the contention of the appellant/defendant a Division Bench of the Delhi High Court, inter alia, observed as under; " **13.** …… Normally a company cannot adopt a name which is being used by another previously established company, as such a name would be undesirable in view of the confusion which it may cause or is likely to cause in the minds of the public. Use of name by a company can be prohibited if it has adopted the name of another company. It is W.P.(C)No.4134 of 2014 17 well settled that no company is entitled to carry on business in a manner so as to generate a belief that it is connected with the business of another company, firm or an individual. The same principle of law which applies to an action for passing off of a trade mark will apply more strongly to the passing off of a trade or corporate name of one for the other. Likelihood of deception of an unwary and ordinary person in the street is the real test and the matter must be considered from the point of view of that person. Copying of a trade name amounts to making a false representation to the public from which they have to be protected. …. ” 22. In the case on hand, in Ext.P2 application filed before the 2[nd] respondent, the names proposed by the petitioner are 'Agastya Bio-Tech Limited' and 'AB Tech Limited'. As far as the second name 'AB Tech Limited' is concerned, it is having similarity with the name of an existing company 'AB Tech (India) Pvt. Ltd.', which are identical names, going by the criteria under paragraph 8 of the Name Availability Guidelines, 2011 issued by the Ministry of Corporate Affairs. 23. As far as the first name proposed by the petitioner 'Agastya Bio-Tech Limited' is concerned, it is not in dispute that the petitioner is the Chief Promoter of Agastya Bio-pharm India Limited and was also its Chairman and Managing Director. As borne out from the pleadings on record, the petitioner has given an NOC, being the Chief Promoter and major shareholder of Agastya Bio-pharm India Limited, stating that Agastya Bio-pharm India Limited has no objection in registering 'Agastya Bio-Tech Limited'. When the 2[nd] respondent insisted for production of NOC W.P.(C)No.4134 of 2014 18 from Agastya Bio-pharm India Limited, in the form of a resolution, the petitioner contended that, that company is defunct and hence no NOC by way of resolution could be obtained. But the 2[nd] respondent on verification of the website of the Ministry of Corporate Affairs found that the status of Agastya Bio-pharm India Limited is 'active' and that, the latest statutory returns filed by that company pertains to the year 2011. 24. Since section 20 of the Companies Act uses the word 'existing company', unless and until a company is dissolved as per the provisions of the Companies Act, it is deemed to be existing on the rolls. Even in the case of dissolution of a company, going by paragraph 9 of the Name Availability Guidelines, 2011, the name of a company dissolved as a result of liquidation proceedings should not be allowed as the proposed name for a period of two years since the dissolution of the company would be declared void within the period aforesaid by an order of the Court under Section 559 of the Act. Paragraph 9 further provides that if the proposed name is identical with the name of the company, which is struck off in pursuance of an action under Section 560 of the Companies Act, then the same shall not be allowed before the expiry of 20 years from the publication in the official Gazette being so struck off, since the company can be restored any time within such period by the competent authority. Therefore, the contention of the petitioner that, there is no necessity to obtain NOC from Agastya Bio-pharm India Limited can only be rejected. W.P.(C)No.4134 of 2014 19 25. In **Santhosh Babu P. T. (Dr.) v. Jayabharatham Nursing Home (Pvt) Limited [2014 (4) KLT 45]** a Division Bench of this Court (to which I am a party) held that, a company incorporated under the provisions of the Companies Act is a separate legal entity distinct from its individual shareholders or Directors. A company is a juristic person and has an existence independent from that of the shareholders and it is the company which owns its assets and not the shareholders. There is nothing in the Companies Act to warrant the assumption that a shareholder who buys shares buys any interest in the property of the company, which is a juristic person entirely distinct from the shareholders. On buying shares a shareholder becomes entitled to participate in the profits of the company in which he holds the shares, if and when the company declares that profits or any portion thereof should be distributed by way of dividend among the shareholders. The shareholders have a further right to participate in the surplus assets of the company which would be left over after distribution among creditors, on winding up of the said company. Therefore, merely for the reason that the petitioner is the Chief Promoter and major shareholder of the company Agastya Bio-pharm India Limited, he cannot take any decision for and on behalf of that company on the issuance of NOC for consideration of Ext.P2 application. 26. The fact that there are disputes between the petitioner and persons controlling the affairs of the company Agastya Bio-pharm India W.P.(C)No.4134 of 2014 20 Limited is not in dispute. As borne out from pleadings, various litigations between the parties are pending before the Company Law Board, Chennai as well as before various civil courts. Therefore, the 2[nd] respondent cannot be found fault with in concluding that the petitioner is attempting to incorporate a company with a name similar to that of an existing company in which he is no more the Chairman or Managing Director. 27. The 2[nd] respondent has also noticed that the prefix 'Agastya' used in the proposed name is a registered trade mark, whereas in Ext.P2 application, the petitioner has stated that the proposed names are neither based on a registered trade mark nor is the subject matter of an application pending for registration under the Trade Marks Act, 1999. However, when the proposed name was processed by the 2[nd] respondent with reference to the database of the Trade Mark Registry, it was found out that the word 'Agastya' is a registered trade mark in Class 5 allotted to one Mr. Ruchit Bhajanka of New Delhi. Though the petitioner was asked to obtain NOC from the registered trade mark holder, he could not produce the same. 28. In **Kothari Products Ltd. v. Registrar of Companies [2001 (103) Com. Case 841 (Allahabad)]** , the petitioner’s company is known as ‘Kothari Products Limited’. The company markets certain edible items and one of the registered trade mark used by the petitioner’s company is ‘Parag’, which is registered under the Trade and Merchandise W.P.(C)No.4134 of 2014 21 Act, since the year 1986. The Registrar of Companies registered the third respondent-company under the name 'Parag International (KNP) Pvt. Ltd.' without the latter producing the consent of the petitioner who is the owner of the registered trade mark ‘Parag’. The petitioner, in a petition filed before the Allahabad High Court contended that this was violative of Section 20 of the Companies Act, 1956 and the Central Circular which stated that a company will not be allowed to be registered with a name, if it includes the name of a registered trade mark unless the consent of the owner of registered trade mark has been produced by the promoters. Upholding the contentions of the petitioner a learned Judge of the Allahabad High Court observed as under; “Section 20 of the Companies Act, reads as under: - ‘20. (1) No company shall be registered by a name, which, in the opinion of the Central Government, is undesirable. - (2) Without prejudice to the generality of the foregoing power, a name which is identical with, or too nearly resembles, the name by which a company in existence has been previously registered, may be deemed to be undesirable by the Central Government within the meaning of Sub-section (1).’ The Circular Letter No. 10(1)-RS/GO, dated April 1, 1960, states that the name is considered undesirable within the meaning of Section 20 of the Companies Act and a company will not be allowed to be registered with such a name . . . (k) if it includes the name of a registered trade mark unless the consent of the owner of the trade mark has been produced by the promoters. There is no dispute that the petitioner is the owner of the trade W.P.(C)No.4134 of 2014 22 mark ‘Parag’. There is also no dispute that the said trade mark ‘Parag’ is registered since 1986. It is not the case of respondent No.2 that any consent of the petitioner (as owner of registered trade mark) was produced for the purposes of registration of the company (respondent No.3). The name of respondent No.3 is ‘Parag International (KNP) Pvt. Ltd.’ The name includes the registered trade mark ‘Parag’ and, therefore, respondent No.3 could not have been registered under that name without producing the consent of the petitioner who was the owner of registered trade mark ‘Parag’. The Registrar of Companies has registered respondent No.3 on May 13, 1998, in violation of the provisions of Section 20 of the Companies Act, as clarified by the aforesaid circular.” 29. Section 29 of the Trade Marks Act, 1999 deals with infringement of registered trade marks. As per Sub-section (4) of Section 29 of the Act, a registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which is identical with or similar to the registered trade mark; which is used in relation to goods or services which are not similar to those for which the trade mark is registered; and that the registered trade mark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trade mark. Similarly, as per Sub-section (5) of Section 29 of the Act, a registered trade mark is infringed by a person if he uses such registered trade mark, as his trade W.P.(C)No.4134 of 2014 23 name or part of his trade name, or name of his business concern or part of the name, of his business concern dealing in goods or services in respect of which the trade mark is registered. Sub-sections (4) and (5) of Section 29 seeks to prevent a person from adopting someone else’s trade name as part of that person’s trade name or business name by explicitly providing that such action shall also constitute an infringement under that Act. Section 20 of the Companies Act, 1956 has also been amended with effect from 15.9.2003 to provide that, the companies not to be registered if a name is identical with or too nearly resembles the name which has been previously registered or a registered trade mark or a trade mark which is a subject of an application for registration under the Trade Marks Act, 1999. A reading of Clause (ii) of Sub-section (2) of Section 20 makes it explicitly clear that, the said provision is incorporated in order to avoid litigations before Civil Courts and a duty is cast upon the Registrar of Companies to apply his mind at the time of granting registration of the name of a company. 30. In **Bloomberg Finance LP v. Prafull Saklecha and others [2013 (56) PTC 243]** a learned Judge of the Delhi High Court has held that, under Section 29(1), (2) and (3) of the Trade Marks Act, 1999 for infringement to result (i) the impugned mark has to be either similar to or identical with the registered mark and (ii) the goods or services for which the impugned mark is used has to also either be identical with or similar W.P.(C)No.4134 of 2014 24 to the goods or services for which registration has been granted. The scenario is different as regards Section 29(4) of the Act. For the purpose of Section 29(4), the use of a mark as part of a corporate name would also attract infringement. In other words, if the registered mark is used by a person, who is not the registered proprietor of such mark or a permitted user, as part of the corporate name under which he trades then also infringement would result. What is however important is that the registered trade mark must be shown to have a reputation in India and should be shown to have been used by the infringer 'without due cause’. Further, it should be shown that such adoption or use has resulted in the infringer taking unfair advantage of the registered mark or is detrimental to the distinctive character or repute of the registered trade mark. The element of having to demonstrate the likelihood of confusion is absent under Section 29(4) of the Act. Turning to Section 29 (5) of the Act, it can be seen that it relates to a situation where (i) the infringer uses the registered trade mark as his trade name or part of his trade name, or name of his business concern or part of the name, of his business concern and (ii) the business concern or trade is in the same goods or services in respect of which the trade mark is registered. If the owner/proprietor of the registered trade mark is able to show that both the above elements exist then an injunction order restraining the infringer should straightway follow. For the purpose of Section 29(5) of the Act, there is no W.P.(C)No.4134 of 2014 25 requirement to show that the mark has a distinctive character or that any confusion is likely to result from the use by the infringer of the registered mark as part of its trade name or name of the business concern. Paragraphs 41 to 44 of the judgment read thus; “ **41.** Turning to Section 29(5) of the Trade Marks Act 1999, it is seen that it relates to a situation where (i) the infringer uses the registered trademark "as his trade name or part of his trade name, or name of his business concern or part of the name, of his business concern" and (ii) the business concern or trade is in the same goods or services in respect of which the trade mark is registered. If the owner/proprietor of the registered trade mark is able to show that both the above elements exist then an injunction restraining order the infringer should straightway follow. This is in the nature of a per se or a 'no-fault' provision which offers a higher degree of protection where both the above elements are shown to exist. For the purpose of Section 29(5) of the Trade Marks Act 1999, there is no requirement to show that the mark has a distinctive character or that any confusion is likely to result from the use by the infringer of the registered mark as part of its trade name or name of the business concern. **42.** However, in a situation where the first element is present and not the second then obviously the requirement of Section 29(5) is not fulfilled. The question is whether in such a situation the owner or proprietor of the registered trade mark is precluded from seeking a remedy under Section 29(4) of Trade Marks Act, 1999 if the conditions attached to Section 29(4) are fulfilled. **43.** In the considered view of this Court, given the object and purpose of Section 29(1) to (4), Section 29(5) cannot be intended to be exhaustive of all situations of uses of the registered mark as part of the corporate name. Section 29(5) cannot be said to render W.P.(C)No.4134 of 2014 26 Section 29(4) of the Trade Marks Act, 1999 otiose. In other words, the legislature may not be said to have intended not to provide a remedy where the registered trade mark is used as part of the corporate name but the business of the infringer is in goods or services other than those for which the mark is registered. **44.** The Statement of Objects and Reasons of the Trade Marks Act 1999 explain that sub-section (5) of Section 29 "seeks to prevent a person from adopting someone else's trade mark as part of that person's trade name or business name by explicitly providing that such action shall also constitute an infringement under this Act. This provision will bring this clause in harmony with the proposed amendments to Sections 20 and 22 of the Companies Act, 1956." Sections 20 and 22 of the Companies Act have been amended to provide that where the name of a company resembles a registered trade mark, then the registration of the company in that name can be refused. The Registrar of Companies is expected to gather information from the Trade Mark Registry. Under Section 22(5) of the Companies Act, the owner of the registered trade mark can apply to have the name of a company that is purportedly infringing the mark cancelled. All of this only strengthens the conclusion that where Section 29(5) offers a high degree of protection where both the elements envisaged in that provision exist, it is not meant to preclude the owner of a registered mark remediless when only the first and not the second element exists." 31. In **M/s. S. Oliver Bernd Freier Gmbh & Co. v. M/s Rasul Exports [2014 (57) PTC 475]** another learned Judge of the Delhi High Court has held that, where the registered trade mark is used as part of the corporate name but the business of the infringer is in goods or services other than those for which the mark is registered, the owner or 27 W.P.(C)No.4134 of 2014 proprietor of the registered trade mark is not precluded from seeking a remedy under Section 29(4) of the Trade Marks Act,1999 if the conditions attached to Section 29(4) are fulfilled, and that Section 29(5) cannot be said to render Section 29(4) otiose. 32. The pleadings on record make it explicitly clear that, the main objects of the proposed company are manufacturing, marketing, import and export of pharmaceuticals, nutraceuticals, healthcare, ayruvedic, homeo, allopathic and dietary supplement products, spices, spices products, extracts, nano medical equipments, organo metallic compounds, etc. On scrutiny with the database of Trade Mark Registry, the 2[nd] respondent found that, trade mark in class 5 exists for 'Agastya', which is evident from Ext.R2(c) Name Availability List. Class 5 relates to pharmaceutical, veterinary and sanitary preparations; dietetic substances adapted for medical use, food for babies, plasters, materials for dressings, material for stopping teeth, dental wax, disinfectants, preparations for destroying vermin, fungicides, herbicides. One of the main objects of the proposed company is manufacturing, marketing, import and export of pharmaceuticals, in respect of which the Delhi-based registered trade mark holder is having trade mark registration. Therefore, it squarely falls within the ambit of Sub-section (5) of Section 29 of the Trade Marks Act, 1999 and the 2[nd] respondent cannot be found fault with in insisting the petitioner to obtain NOC from the registered trade mark holder. 28 W.P.(C)No.4134 of 2014 33. Relying on Ext.P7 list of Companies with names starting with 'Agastya', the learned counsel for the petitioner would contend that there are innumerable Companies with the name 'Agastya' registered in various States and in such circumstances, the defect noted in Ext.P4 that the petitioner failed to obtain NOC from the Delhi-based trade mark holder who has registered trade mark in the same class cannot be sustained. There is nothing on record to show that the business of those Companies included in Ext.P7 is in goods or services falling under Class 5 for which the Delhi based trade mark holder is having registered trade mark. Therefore, the contention raised by the learned counsel for the petitioner relying on Ext.P7 list can only be rejected. 34. Though the petitioner would contend that, the company proposed by him is a bio-tech company in the wide spectrum of biotechnology and not in the narrow spectrum of pharmaceuticals only like Agastya Bio-pharm India Ltd., the additional 3[rd] respondent herein, the sustainability of such a contention taken by the petitioner, in the context of Clause (i) of Sub-section (2) of Section 20 of the Companies Act, 1956 depends upon the question whether the similarity in the two names taken together with attendant circumstances satisfies the Court that, the name of the proposed company is calculated to deceive the public or to cause confusion among the public between the two companies or to mislead the public. Admittedly, there are disputes between the petitioner and persons 29 W.P.(C)No.4134 of 2014 controlling the affairs of the Company Agastya Bio-pharm India Limited and litigations are pending before the Company Law Board as well as before various civil courts. The fact that the petitioner is attempting to register a company with an identical name of the existing company is discernible from the pleadings on record, which alone is sufficient to hold that the name 'Agastya Bio-Tech Limited' proposed by the petitioner is an undesirable name in terms of Section 20(2)(i) of the Act. 35. Therefore, I find absolutely no grounds to interfere with the reasoning of the 2[nd] respondent in rejecting Ext.P2 application made by the petitioner and Ext.P6 order passed by the 2[nd] respondent warrants no interference at the hands of this Court. In the result, the writ petition fails and the same is dismissed. There will be no order as to costs. Sd/- **ANIL K.NARENDRAN, JUDGE** dsn