Appeals under HVAT Act, 2003

The term “appeal” is defined to mean “ An application for the judicial examination or review by a higher Court of the decision of any inferior court or authority. Appeal is a proceeding taken before a superior Court or Authority for reversing or modifying decision of an inferior Court or authority on ground of error, a call for help. The appeal is the judicial examination and memorandum of appeal contains the grounds on which judicial examination is invited or sought. (See 21-STC-154, 161 (SC) )

It amounts in essence to a complaint to a higher forum that the decision of the subordinate officer or tribunal is erroneous and liable to be set aside. In the case of Chiranji Lal & Bros vs. State of Delhi (1966) 18-STC-240 (Punjab), the High Court held that It (appeal) embraces all proceedings whereby a superior court is called upon to review, revise, affirm, reverse or modify the decision of an inferior court.

The essential criterion of appellate jurisdiction is, that it revises and correct the proceedings in a cause already instituted and does not create that cause. In reference to judicial tribunals, an appellate jurisdiction, therefore, necessarily implies that the subject matter has been already instituted and acted upon by some other court, whose judgement or proceedings are to be revised.

Contd..2…

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Where a particular statute confers two jurisdictions – one under an appeal and the other under revision, the two cannot be said to be one and the same but are distinct and different in the ambit and scope. While an appeal is a continuation of a suit or proceedings wherein the entire proceedings are again left open for consideration by the appellate authorities which has the power to review the entire evidence subject, of course, to the prescribed statutory limitations. But in the case of revision whatever powers the revisional authority may have, it has no power to reassess and reappreciate the evidence unless the statute expressly confers on it that power. That limitation is implicit in the concept of revision. (Lachhman Dass Vs. Santokh Singh (1995) 4 SCC 201, 205.

It is now a well settled that the right of appeal is not an inherent right. It is a creation of the statute and accordingly is subject to conditions and restrictions imposed on it. It is open to the Legislature to give or not to give right of appeal against decisions made by the authoritieis under the Act and enactment on that account.

The absence of corrective machinery by way of appeal or revision, per se will not make a provision unreasonable. It will depend upon the scheme of the Act, the nature of powers vested in the authorities, the effect and consequences of the orders passed under the Act on the person concerned. If it is found that very serious consequences might flow in the absence of adequate and effective correct machinery by way of appeal or revision, the law can be held to be harsh, oppressive and unjust and violative of Article 14 of the Constitution.

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In fact, it is not the phraseology of statute that governs the situation but it is the effect of the law i.e. decisive. If the effect is to render it arbitrary and oppressive, Article 14 will be attracted. ( 81-STC – 291, page 300 relying upon Babubhai & Co. Vs. State of Gujarat –AIR 1985 SC 613, Express Hotels (P) Ltd. Vs. State of Gujarat – 178 ITR-151, 167 SC. The deprivation of an appellate remedy against an imposition of tax  may render such  provision unconstitutional and also open to challenge as arbitrary and unreasonable and, therefore, violative of Art.14. (B.Ganesha  Krishna Bhatt Vs. State of  Karnatka – 73-STC-267, page 275 ( Karn.) .

Under section 33 of the HVAT Act, 2003, any assessee considering himself aggrieved by an original order may prefer an appeal. The opening words of sub-section (1) of S.33 start from the word “any assessee” and not the term “registered or unregistered dealer” as one normally could assume. Again the term “assessee” has been defined in clause (d) of sub-section (1) of S. 2 of the HVAT Act. The term “assessee” has been defined to mean “ any person who is required to pay any tax, interest, penalty, fee or any other sum under this Act or the rules made thereunder.

From the above what emanates is that an appeal under the HVAT Act can be filed any person on whom a liability to any tax, interest, penalty, fee or any other sum under the HVAT Act and such person not necessary to be the registered dealer under the HVAT or CST Act in the State.

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The person who can be made to pay any tax, interest, penalty, fee or any other sum under the HVAT Act can enter into the shoes of the term “any assessee” and if they are aggrieved by an original order passed by any taxing authority under the HVAT Act can file an appeal under section 33 of the HVAT Act. Such a person could be dealer himself, his successor, his surety, owner of the goods not being a registered dealer, owner-incharge of  the goods, members of HUF in case Karta dies, or any person on whom a liability to pay any tax, interest, penalty, fee or any sum is created.

Second part of sub-section (1) is that the assessee considering himself aggrieved by the an original order may prefer an appeal and appeal shall lie –  if the order is passed by any authority or officer lower in rank to the Jt.ETC, to the JETC and if not lower to the JETC, to the ETC. If the order is made by the ETC, the appeal shall lie to the Tribunal.

Through a Note, it has been explained that an original order means an order passed under this Act except an order passed on appeal or on revision.

By virtue of sub- section ( 2) of S. 33, an appeal can be filed by either side against the orders passed by the Revising or Appellant Authority. Similar provision did not exist under the Haryana General Sales Tax Act. As a result of this the assessing authority or the taxing authority can file appeal against the orders of  JETC Appeal or the Revising authority.

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The limitation period for filing of an appeal under HVAT Act is 60 days from the date of order appealed against. The time spent in obtaining copy of the order is to be excluded from this limitation period. Further the aggrieved person will have to pay the amount of admitted tax and interest thereon. Besides a Bank Guarantee or Adequate Security is to be furnished to the satisfaction of assessing authority in respect of amount in dispute. This requirement is applicable on and from 20th March, 2009. The limitation period for filing of the Departmental Appeal before the Tribunal is 180 days from the date of the order appealed against.

Fee for filing appeals has been prescribed as follows:

a) On a memorandum of first appeal : Rs. One hundred only

b) On a memorandum of appeal before: Rs. Five hundred only

the Tribunal

The Appellant Authority is not obliged to entertain any additional evidence on behalf of either side in appeal, such as any account, register, record or document unless for reasons to be recorded in writing it considers that such account, register, record or document is genuine and the same could not be produced before the authority below for reasons beyond the control of the party producing the same. The effect of this provision is that no assessee is allowed to produce additional evidence except prevented by sufficient cause to produce the same at the first instance in appeal.

Contd…6…

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As per section 33 of the HVAT Act, the order passed by the Tribunal is final subject to the provision of section 35 & 36 of the HVAT Act. While section 35 is in respect of review power of the Tribunal, section 36 has been with regard to the reference to be made to the High Court.

Section 36 of the HVAT Act has been substituted by an amended section effective from 20thSeptember, 2011. The provisions of “Reference” as contained in the earlier section have been done away with and in accordance with the substituted section, provisons for Appeal have been incorporated. Instead of Reference, now the aggrieved party – whether the dealer or department can file an appeal against any order of the Tribunal including any order passed under sub-section (5) of S. 56 of the Act can file an appeal before the High Court.

The new section, however, makes a restriction with regard to appeal. The appeal can be filed against the order of the Tribunal, if a “substantial” question of law is involved. The satisfaction of the High Court that the case involves a substantial question of law is a pre-requisite for an appeal before the High Court.

The Commissioner or an aggrieved person may file an appeal within a period of sixty days from the date on which the order appealed against is received by the aggrieved party or the Commissioner.

Contd…7….

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If the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question. The respondent in appeal would be competent to argue to that the case does not involve such question.

The High Court would be vested with the  powers to decide whether a substantial question of law is involved or not.

Filing of appeal to the High Court would not result into automatic stay of recovery in respect of any tax which has been determined to be due from any person by the Tribunal’s order. High Court has not been vested with the powers of staying the recovery of any tax for which Tribunal has passed the order.

Filing of appeal from the orders of the Tribunal is a welcome step because earlier mode of reference resulted in delay and also put extra financial burden on the dealer and the result achieved was the same what has now been granted by way of substituted section 36 of the HVAT Act.

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SC Aims To Check Misuse Of Power Of Attorney In Conveyancing Properties

The Supreme Court recently in Suraj Lamp & Industries (P) Ltd v. State of Haryana on October 11, 2011 has come down heavily on the invalidity of the legal arrangements taking place in the real estate sector in the form of Sale Agreement (SA) / General Power of Attorney (GPA) / Will Transfers; and instead held that the Registered Deed is the only legally valid tool for property transactions. Wherever a purchaser pays the full consideration, and instead of getting a Registered Deed of conveyance gets a SA/ GPA/ Will as a mode of transfer, either at the instance of the vendor or at his own instance, it cannot be treated as legally valid.

This judgement has brought into limelight a practice in India’s real estate, a practice in vogue for a long time, where registration of freehold property is administered through SA/ GPA/Will. In popular notion, and mistakenly at that, all the prospective sales can take place through any of the aforesaid modes, all being equally legitimate for all intents and purposes. It’s however inaccurate because there cannot be a sale or any other kind of transfer of immovable property through SA/ GPA/ Will.

This practice has become prominent because the agreements in the form of SA/ GPA/ Will are not required to be registered compulsorily since they do not involve transfer of any right or title and thereby escapes from the payment of stamp duty. A high rate of stamp duty levied on conveyancing deeds acts as a damper for execution of deeds of conveyance for full value, and encourages SA/ GPA/ Will transfers. When parties resort to such agreements for their transfer of immovable property, the adverse effect is not only loss of revenue (stamp duty and registration charges) but the greater danger of generation of ‘black’ money as these transactions facilitate persons with undisclosed wealth/ income to invest their black money and also earn profit/ income, thereby encouraging circulation of black money and corruption. Also the unscrupulous property owners more often enter into such sale agreements and take huge earnest money and then sell the property to others, plunging the original agreement holder and the subsequent purchaser into litigation. Thus the motive behind such transfers ranges from avoidance of stamp duty, registration charges and capital gains tax, to the fear of defective title of the seller being exposed at the instance of registration.

Furthermore, it is necessary to refer to the hardship, loss and anxiety caused due to the unnecessary litigation in absence of a mechanism for prospective purchasers to verify whether a property is subject to any pending suit, decree or attachment. Compulsory registration of conveyancing of immovable property would definitely reduce the litigation to a considerable extent, by which a prospective purchaser can ascertain this before he decides to purchase the property. This will go a long way towards discouraging generation of black money in real estate matters, and undervaluation to save stamp duty. Whatever be the intention behind the transfer of immovable property through SA/ GPA/ Will, the consequences are distressing in the long run, adversely affecting the economy and the civil society of the country.

This refined decision of the Apex Court was indeed long needed as it tends to clean up the illegal money flourishing in the real estate sector by making all the properties registered by restraining investments of black money under the cover of anonymity conferred by the unregistered transactions. It not only strikes down the transfers through SA/ GPA/ Will, but more manifestly drives the gullible persons holding properties with a title arising out of SA/ GPA/ Will transfers to execute proper conveyance deeds and register them since anything less than the registration would automatically obviate them from full-fledged ownership. This would undoubtedly set the innocent buyers free from the nagging fear of being surpassed by an imposter and would certainly put a reality check on the vehicles of fraud in the real estate sector.

It is disappointing to note here despite of having hundreds of anarchic laws on the subject, such abuse of law is seen so frequently. This suggests that even the legislators are the beneficiaries of the situation and the recent scams are the proof of it. Steps should be taken for reduction of the stamp duty on conveyance so as to encourage public to disclose the maximum sale value and have the sale deeds registered. Though the reduction of the stamp duty may result in an immediate reduction in the revenue by way of stamp duty, in the long run it will be advantageous to the law and order of the country. Thus it is the law makers this time who are supposed to take the call by making amendments in the existing anarchic legal system and uphold the welfare of the society.

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Rule of Law

Rule of law (“la principle de legalite”)

Dicey’s formulation:

Formulation of the concept of rule of law covers up three main principles that are considered classic expositions and there is nothing out dated as misunderstood about the formulation although expounded before more than hundred years. As contained, it is:

“The absolute supremacy or predominance of regular law as opposed to the influence of arbitrary power and excludes the existence of arbitrariness, or prerogative, or even wide discretionary powers, authorization on the part of the Government.”

Dicey’s formulation conveys that the “State should not possess wide discretionary powers”; for discretionary powers, if entrusted to the officers of the government may leave scope of powers being “abused and misused” and consequently subject was bound to face arbitrariness. Second principle that was expounded was that “everybody should enjoy equal status irrespective of privileges and subjected to the same set of laws” And lastly, the “rights and obligations should be regulated by courts on the basis of Custom and precedents (tradition) adopted by the people”. Dicey stated in his formulation, these three principles in view of national situation and compared the system of France and England. In France, many tribunals on different subject have come to be recognized, and therefore, the crown in England enjoyed special immunity of law and the Crown under the guise of constitutional maxim that “king can do no wrong” could ignore many statuses. Subsequently, the immunity was weakened and it was propounded that the “king is under no men, but under law and god”.

There prevailed the discussion and debate on the principle of Droit administruift, but England recognized the need of administrative law, which is now firmly established.

India:

Observation, interpretation and the status:

Indian Constitution is regulating the rule of law. And ADM Jabalpur case is a tainted justice.

In case of Indira Nehru Gandhi vs. Raj Narayan it was observed:

I find it impossible to subscribe to the view that the Preamble of the Constitution holds the key to its basic structure or that the preamble is too holy to suffer a human touch. Constitutions are written, if they are written in the rarefied atmosphere of high ideology, whatever be the ideology. Preambles of written Constitutions are intended primarily to reflect the hopes and aspirations of people. They resolute the ideal, which the Nation seeks to achieve, the target, not the achievement. In parts, therefore, they are metaphysical like slogans.

As such the rule of law runs through every golden thread of the Constitution and to say that it is like a slogan, or like a corporate mission statement, appears to be totally “unsound and motivated”. Rather a tainted judgment. It is expected of the parliamentarians and judiciary to preserve the rule of law, the dignity of the sacred Constitutional document, and also the precious fundamentals enshrined therein. The law should have been carved out in such a fashion that the younger judicial generation may be inspired to follow than to contemptuously condemn. And, really speaking, no Parliamentarian or any judge has any authority to go beyond the Constitution and especially, the oath of the office. Going beyond the oath and administering tainted justice is nothing, but a sheer fraud on judicial power and a robbery of rule of law. Championing supersession of genius orbit could not have been the consideration and Rule of law could have been prime consideration. “Political loyalty”, while administrating justice lays dangerous impact over the Constitutional spinal.

Rule of law is antithesis of arbitrariness. Plato believed the concept of will, but subsequently after experience, modified the position and expounded the test of “government under law” and ultimately expressed the insistence on rule.

H.W.Jones formulated three principles keeping in view the Dicey’s formulation, which is changed to certain extent. According to him the rule of law should cover up the three principles as followed.

1) In a decent society, it is unthinkable that government or any officer of government possesses arbitrary power over the person or the interests of the individual.

2) All members of society, private persons and governmental officials alike, must be equally responsible before the law, and

3) Effective judicial remedies are more important than abstract constitutional declarations in securing the rights of individual against encroachment by the state.

In every democratic country, the people have expected its government to run its business in a civilized manner particularly under the set of well-defined rules and lastly certain limited discretionary powers that may be exercised. The rule of law is accepted, almost in all countries, to pursue and always practice the dominant object of civilization. Without the rule of law the government itself would be chaos and absurdity.

In the language of Shri Aurbindo from Human cycle.

The national unit is not formed and does not exist merely for the sake of existing. Its purpose is to provide a large mound of human aggregation in which the race, and not only classes and individuals may move towards its full human development. So long as the labour of formation continues, this larger development may be held back and authority and order be accepted as the first consideration, but not when the aggregate is sure of its existence and feels the need of inner expansion. Then the old bonds have to be burst; the means of formation have to be discarded as obstacles to growth. The Liberty becomes the watchword of the race.

The ecclesiastical order, which suppressed liberty of thought and new ethical and social development, has to be disposed of it despotic authority, so that man may be mentally and spiritually free. The monopolies wand privileges of the king and aristocracy have to be destroyed, so that all may take the share of the national power, prosperity and activity… for liberty is insufficient, justice also necessary and becomes a pressing demand, the cry for equality arises. Certainly absolute equality is non-existent in this world, but the world was aimed against the unjust and unnecessary inequalities of the old social order. Under a just social order, there must be an equal opportunity, unequal treatment training for all to develop their faculties and to use them, and so far as may be, unequal share in the advantages of the aggregate life as the right of all who contribute to the existence, vigour and development of that life by the use of their capacities. The individual tries to protect the liberty whereas the State tries to impose law and order a leading command, which should be based on fair procedure only.

Supreme Court observed that the rule of law is a golden thread runs through the every provision of the Constitution. AN Ray observed that the preamble of the constitution shows the hopes and aspirations and there is nothing like rule of law in it. Totally unsound statement in the judgment had to be withdrawn as can be seen in subsequent decided case observing that there cannot be any rule of law other than the constitutional rule of law. Rule of law is better described by Justice Khanna in A.D.M. Jabalpur case. A minority view of justice Khanna was stamped as honest view preserving the dignity, ethos and values for the Constitution.

The Preamble of the Constitution provides that “we the people of India, having solemnly resolved to constitute India into a sovereign socialist secular democratic republic and to secure to all its citizens:

Justice, social, economic and politic, liberty of thought expression, belief, faith and worship, Equality of status and opportunity, Fraternity assuring the dignity of the individual and the unity and integrity of the nation…”

In the constitutional background let us see what is the development of rule of law in the country. Article 14 of the Constitution guarantees the equality as between the subjects and equal protection of law and the meaning and philosophy contained in that article must refer to the preamble of the Constitution which says “equality of status and opportunity”. That phrase everybody is created equal shall derive advantage to all in the matter of status and for developing the own viability. However, subject to certain limitations, which may be imposed by the enacted law, the people can enjoy the guarantee.

The courts have accepted the test of reasonable classification based on intelligible differentia, and therefore, all citizens are not made subject to certain classification. Similarly, the Honourable the Supreme Court propounded a new principle by interpretative process which according to Court lay new bare. This principle also must be held good. The fairness is the order of the day and arbitrary discretion definitely results into negation to justice. Some jurists belonging to the old school severely criticized the new bare laid, but then the Supreme Court has reinforced the principle in several subsequent decisions.

According to E. P. Royappa:

“The basic principle which, therefore, informs both Articles 14 and 16 is equality and inhibition against discrimination. Now what is the content and reach of this great equalizing principle? It is a founding faith, to use the words of Bose a way of life, and it must not be subjected to a narrow pedantic or lexicographic approach. We cannot countenance any attempt to truncate it’s all embracing scope and meaning, for to do would be to violate its activist magnitude. Equality is a dynamic concept with many aspects and dimension and it cannot be cribbed, cabinet and confined within traditional and doctrinaire limits. From a positivistic point of view, equality is antipathetic to arbitrariness. In fact equality and arbitrariness are sworn enemies, one belongs to the rule of law in a republic while the other, to the whim and caprice of an absolute monarch. Where an act is arbitrary, it is implicit in that it is unequal both according to political logic and constitutional law and therefore violative of Article 14, and if it affects any matter relating to public employment, it is also violate of Article 16. Articles 14 and 16 strike at arbitrariness in State action and ensure fairness and equality of treatment. they require that State action must be based on allied relevant principles applicable alike to all similarly situated and it must not be guided by any extraneous or irrelevant considerations because that would be denial of equality. Where the operative reason for State action as distinguished from motive inducing from the antechamber of the mind is not legitimate and relevant but is extraneous and outside the area of permissible considerations, it would amount to mollified exercise of power and that is hit by articles 14 and 16. Mollified exercise of power and arbitrariness are different lethal rotations emanating from the same vice: in fact the latter comprehends the former. Both are inhibited by Articles 14 and 16.”

The Courts have constantly tried to protect the liberties of the people and assumed powers under the Constitution for judicial review of administrative actions. The discretionary powers have to be curbed, if they are abused or misused. The socio-politic Institution need not cry, if the courts do justice and perform its substantial role. That is the essence of justice. The trend is to read the social justice and to translate it in reality. Welfare State has to discharge its duty fairly without any arbitrary and discriminatory treatment. Courts laid down the standard of reasonableness in Governmental action.

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THE RIGHT WAY TO RUN A PRISON

The Supreme Court was right when it struck down the amendment to a prison ordinance that would have allowed private companies to manage prisons. The court ruled that the state would retain its monopoly to use force against citizens and that only a government agency has the right to restrict a citizen’s freedom. This is not only a matter of civil rights, but also a fundamental concept of government.

Even those who believe that the Supreme Court interferes more than it should in the government’s activities – whether regarding the security fence, routine military operations or government appointments – should agree that this was the right step, even though it impinges on the Knesset’s authority.

In this case, unlike others in which the court has usurped legislative rights, it is clear that by enacting the Basic Law on Human Dignity and Freedom, the Knesset restricted its own authority. The fact that the Supreme Court has largely refrained from striking down legislation and has sometimes tried very hard to avoid doing so attests to laudable self-restraint; if only it would act that way toward the executive branch as well. When the Knesset enacted prison privatization, the MKs acted incorrectly; it is to be hoped that after the latest ruling they will examine themselves rather than merely complain about the court.

Some observers see this ruling as a move by the Supreme Court against privatization in general. They are wrong. Even people who believe that the privatization frenzy that has gripped our political leaders has gravely harmed Israel’s ethical and social image must acknowledge that privatizing prisons – privatization of a key government role – is fundamentally different than the other examples of privatization.

The fight against moves that have harmed the nature of the welfare state or have transferred public assets to tycoons and real estate sharks – sometimes for half their real value – must be waged on the political level, without turning the Supreme Court into the economy’s CEO. On the other hand, attention should be paid to other areas in which the use of force has been handed over to the private sector. They may not be as blatant as prison privatization, but they are no less significant.

The Shin Bet security service, which protects – some say exaggeratedly – the country’s leadership, has transferred some of its functions to private security companies. Although their employees may not have the right to arrest or detain citizens, they bar citizens and their cars from entering certain locations. This borders on a significant infringement of civil rights; it could perhaps be acceptable if done by police officers or soldiers, but not by employees of private companies.

Another example is the army’s transfer to private security firms of its authority at certain crossing points from the West Bank into Israel, including gates in the security fence. This, too, is an unacceptable exercise of government power by private companies, and it does not matter if the people on the receiving end are Israeli citizens or Palestinians. In this respect, Israel has blindly followed the Americans, who delegated broad authority to private companies in Iraq to reduce the number of soldiers serving there.

This has proved problematic. Some employees of these companies have helped cause grave damage and injuries to innocent civilians in that occupied country. But there we are talking about activities that take place outside the borders of the United States. Here the process takes place within our borders or on our borders, and it should be stopped.

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Minimum Wages Act & Organized Sector.

India’s Minimum Wages Act, passed in 1948, is a study in how to convolute a simple idea. Instead of a baseline norm across sectors, the Centre and the state governments both have the power to mandate wages for specific types of jobs. The piecemeal nature of the legislation means that millions of workers fall through the cracks — if their employment is not listed in the schedule to the act, they are invisible in the eyes of the law. The Centre is now proposing to change this. By adding the phrase “any other employment” to the law’s schedule, the attempt is to make the Minimum Wages Act all-encompassing.

The other aspect of the proposed amendment is to beef up enforcement. The fine on cheating employers will be raised to Rs 5000, along with the threat of a six-month jail-term. While in itself welcome, the idea that finer laws will lead to tighter enforcement is a recurring fallacy in our labour laws. Ensuring that employers maintain registers, provide cards and pay slips is difficult even when the employer is the state (witness reports of perfidy in the payment of NREGA wages). Ensuring it for private employers will require a special kind of zeal.

There is also no escaping the long-term solution — reforming our stifling labour laws. Inflexible hire and fire policies has resulted in an over-regulated and over-policed “formal” labour market, causing under-regulated and under-policed “informal” labour to grow even larger. By disincentivising the hiring of new employees, our labour laws prevent the absorption of India’s 34 crore unorganised workers into the formal economy. Guaranteeing minimum wages for the informal sector is a good start, if well-enforced. But real benefits to India’s unorganised sector require the Centre to reform our perverse labour laws. Everything else is palliative.

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PASSING OFF UNDER INDIAN TRADEMARKS ACT 1999: “A BIRD’S EYE

INTRODUCTION

The passing off action depends upon the principle that nobody has a right to represent his goods as the goods of somebody. In other words a man is not to sell his goods or services under the pretence that they are those of another person.

Passing off is not defined in the Act. It is referred to in section 27(2), 134(1) (c) and 135.Section 27(2) states that the rights of action against any person for passing off goods as the goods of another person or the remedies in respect thereof. Section 134(1) (c) refers to injunction of courts to try suits for passing off arising out of the use of any trade mark. Section 135 specifies the remedies available in respect of passing off arising from the use of a trademark.

Now the question is arise that why passing off is necessary because already trademark given the protection to goods and services?

The Trademark is providing protection to registered goods and services, but the passing off action is providing a protection to unregistered goods and services. The most important point is that the remedy is same in both the cases but the Trademark is available to only the registered goods and services and passing off is available to unregistered goods and services. To more knowledge of this context we can summaries the case of Durga Dutt vs. Navaratna Pharmaceutical[2]; in this case the Supreme Court is set out the distinction between infringement and passing off. The action for infringement is a statutory remedy conferred on the registered owner of a registered Trade mark and has an exclusive right to the use of the trade mark in relation to those goods. And the passing off is available to the unregistered goods and services.

The second most important point is that the use by the defendant of the trade mark of the plaintiff is not essential in an action for passing off, but in the case of an action for infringement this will not applicable.

The third important distinction between these two is that  if the essential features of the trade mark of the plaintiff have been adopted by the defendant, the fact that the get up, packing and other writing or marks on the goods or on the packets in which he offers his goods for sale marked differences or indicate clearly a trade origin different from that of the registered owner of the mark would be immaterial; but in case of passing off the defendant may escape liability if he can show that the added matter is sufficiently to distinguish his goods from those of the plaintiff.

In the cases of infringement the burden is always lies to the plaintiff. In the case of S.M. Dyechem Ltd. v. Cadbury (India) Ltd. In this case an infringement action is fail where plaintiff cannot prove registration or that its registration extends to the goods or to all the goods in question or because the registration is invalid and yet the plaintiff may show that by imitating the mark otherwise, the defendant has done what is calculated to pass off his goods as those plaintiff.

What the plaintiff must establish in a passing off action?

It is essential for success in a passing off action based on the use of a mark or get up that the plaintiff should show that the disputed mark or get up has become by user distinctive of the plaintiff’s goods so that the use in relation to any goods of the kind dealt in by the plaintiff of that mark or get up will be understood by the trade and the public as indicating the plaintiff’s goods.

When the passing off arise?

The passing off action is arise when there is misrepresentation, when it is harm the existence plaintiff’s goodwill, when it is made by a trader in the course of trade, which is injure the business of another trader and which cause actual damage to the business or goodwill of the trader by the whom action is brought.

But these requirements were reduced to three in Reckitt & Colman Products Ltd. V. Borden Inc.now there are three essential requirements for the passing off action:

v  The Claimant’s Goodwill: Although damage is the gist of an action for passing off, but the plaintiff must show that there is a reasonable reason of his being injured by the defendant’s action, even if the conduct of the defendant might be calculated to deceive the public. A private individual cannot institute a suit for passing off even if the defendant practices deception upon the public, unless it is proved that the defendant’s action is likely to cause damage to the individual.

v  Misrepresentation:  Misrepresentation in the simplest form of passing off. If A says falsely these goods I am selling are B’s goods. It is a clear case of passing off. In simple way we can say that misrepresentation should lead. Or be likely to lead confusion on the part of consumers. In case ofKhemraj v. Garg[8], in this case the defendants had copied the get up, layout, design and colour scheme, etc. and the name “manavpanchang,mani ram panchang” and “shri vallabh Mani Ram panchang” of the plaintiff’s panchang.The court held that it is similar to the plaintiff’s product and Interim injunction was granted.

In the case of Rupa & Co. Ltd v. Dawn Mills Co. Ltd. In this case the defendant manufacture an underwear which named dawn as similar to the plaintiff’s manufactured underwear don, which is creating confusion in the minds of people because the layout, get up and colour combination is same to the plaintiff’s product.

v  Damage: Damages are available in a passing off action. And remedy is available in both cases whether the infringement suit or passing off action in both the cases remedy is given. 

Now the question of how the passing off action arises?

The question of how the passing off action established. I just referred the two cases first case is relating to passing off action in domain name in this regard I just refer the case ofAkash Arora vs. Yahoo Inc, in this case the court held that the yahooindia is creating a confusion in the mind of the people. And the defendant yahooindia is same as the plaintiff’s yahoo. But as a student of law I am not go with the case decision because my views regarding to the case is that his site may be better than his competitors. And second important thing is that those who access the Internet they are capable to distinguish which site is yahoo. in and which one is yahooindia.So the question of confusion is not create when the people are able to distinguish between the sites then there will be no question of passing off arise.

The second case In Reckitt & Colman of India Ltd. vs. M.P. Ramachandran & Anr,Hon’ble Calcutta High Court (Barin Ghosh, J.) laid down five principles for granting an injunction in case of comparative advertising:

i. A tradesman is entitled to declare his goods to be best in the world even though the declaration is untrue;

ii. He can also say that his goods are better than his competitors, even though such statement is untrue;

iii. For the purpose of saying that his goods are the best in the world or his goods are better than his competitors he can even compare the advantages of his goods over the goods of others;

iv. He however, cannot, while saying that his goods are better than his competitors, say that his competitor’s goods are bad. If he says so, he really slanders the goods of his competitors and their goods, which is not permissible.

v. If there is no defamation to the goods or to the manufacturer of such goods no action lies, but if there is such defamation an action lies and if an action lies for recovery of damages for defamation, then the court is also competent to grant an order of injunction restraining repetition of such defamation.

The Hon’ble court also observed in this case that “One can boast about technological superiority of his product and while doing so can also compare the advantages of his product with those which are available in the market. He can also say that the technology of the products available in the market has become old or obsolete. He can further add that the new technology available to him is far more superior to the known technology, but he cannot say that the known technology is bad and harmful or that the product made with the known technology is bad and harmful. What he can claim is only that his product and his technology is superior. While comparing the technology and the products manufactured on the basis thereof, he can say that by reason of the new superior technology available to him, his product is much superior to others. He cannot, however while so comparing say that the available technology and the products made in accordance therewith are bad and harmful.”

CONCLUSION

In the conclusion the researcher concludes that the passing off action is applied in unregistered goods and services, and in infringement of suit and passing off in both the cases the remedy will be same. Then the passing off is arise in three cases first when it is injured the claimants good will, secondly in misrepresentation and thirdly in damages, where the position is same like in infringement suit. And lastly when the concept of passing off is reading with domain name and technological changes then the concept of passing off is in different dimension.

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Struggle of A Lady in Divorce Case

Start with a quote : “Divorce is a game played by lawyers”. -Cary Grant 

I don’t agree with the quotation mentioned above.  The reason of my disagreement is not that I am a lawyer by profession but a complex case which I am sharing  herein. I hope that It will give a good insight in  litigation of a divorce case. It may be helpful to law students and laymen  as well.  Identity and timings are changed for the sake of confidentiality. Any match to any case is just coincident. People is not important at all.  The learning of a case is important for society.

This case is about a boy and a girl  who married happily and enjoyed the marriage life for six years before they entered in  the world of litigation. They had a love marriage. Love was not just a ‘love at first sight’, rather it was a love and probably live- in for six years and thereafter arranged marriage. Lady, hereinafter called ‘wife’ was educated in computers and was running a computer institute. The boy, hereinafter called ‘husband’ was a business man and running private equity holder company. Their love, as is say,  lasted for six years and then marriage and then married life lasted for another six years. No kids. No liabilities. Everything was fine till the  one fine day when  dispute arose on pinpointing each other on a small issue. Small issue turned to ISSUES…BIG ISSUES.  Issues started growing and then turned to suspicion. Suspicion turned to allegations. Allegations turned to heated arguments. Heated arguments lead to threatening and which lead to the forced expulsion of wife from  Husband’s home. Wife was virtually thrown out of house while withholding all the earnings, investments, ornaments, property shares. She was just thrown out with a threat to keep herself from any legal action otherwise be ready for consequence and asked her to arrange a huge sum if she want to return. She was legally not aware and having no idea of what to do. It was passed twelve years with a man whom she relied and trusted the most in the world, he was her husband. She saw the laughing face of her husband on her pain. She felt cheated, betrayed but now, all these words seems to be meaningless.

Afterwards, She returned to her parental home. Parents are parents after all. The happily accepted and supported her. One fine day, She received  a family court summons, intimating her about a divorce petition filed before family court under section 13 of  Hindu Marriage Act filed by her husband. Stunned and hurt…but accepted the  to face the legal battle.  She approached for legal help but can’t afford the fees. She fought the case herself  with the help of her guide, we can better say her legal guide. Then  trial begins in Family case. She learned the fundamentals of law and started gathering information and knowledge  from anywhere and everywhere she could gather. Futhermore, Husband denied any alimony/ ornaments/ clothe/valuable which she was entitle legally.

First provision she learned was section 13 of Hindu marriage Act, 1955. The basis of divorce. There are thirteen grounds given which can be basis of the divorce among Hindu couple. The most common ground “Cruelty” was taken in this case. “Cruelty”. Includes the  physical, emotional and mental.  Wife wanted to live with Husband so for that she had filed case of restitution under section 9 of Hindu Marriage Act. Section 9 of Hindu Marriage Act has a provision of “Restitution of conjugal rights” which means that husband or wife can not live separately without any reasonable cause. So second case filed in the matter.

Since wife was not an earning member so she didn’t had sufficient income to meet out expenses during the pendency of the case so she filed a separate application under section 24 of the Hindu Marriage act (HM Act in Short) before family court. Section 24 of HM Act has provision for pendelite expense and court has ordered 3,000/- on the application.  It was the third case in this matter.

As stated above the wife was asked by her husband to arrange a huge sum of money if she wanted to return the home. This type of demand falls under category of “Dowry” and it is prohibited under law.  She filed a police report  under section 498 A of Indian Penal Code (IPC in short) . Section 498 A of  IPC has provision of punishment for husband and their relatives for cruelty and demand of dowry. Police registered the case and put up before magistrate.This was the forth case in this matter.

During these proceeding, the husband’s sister and brother-in-law has threatened her on the phone to withdraw the cases against her else she would have to face consequences. When it became unbearable then she filed a police report and police has registered a fresh case under 503 IPC. Section 503 IPC had a provision for criminal intimidation which is commonly known as ‘Threatens”.  It was the fifth case in the matter.

The adamant husband has sent few obscene SMSes to her to tease and give a mental agony. She approached the police but police denied to register any case. Aggrieved by this  she filed a private petition under  section IPC 354. IPC 354 has provision for punishment for offense against assault or criminal force to outrage of modesty of a woman. Private petition can be filed under 200 Cr.P.C. Magistrate has order for police inquiry in the matter under section 156 Cr. P.C. On the basis of police report the case of registered and trial begin. It was the sixth case in the same matter.

During the marriage she and her husband together had purchased a flat with joint earnings but her husband and his family was residing in the flat and enjoying it. However, the 50% of sale price was paid by her  bank account but registry was done only on the name of her husband. That was the situation when both were living in love. Now, during litigation, the husband denied her to live in the home and thrown out of flat. So, she filed a suite of title declaration and possession for the flat as half of the sale price was paid from her bank account and she is equal owner of the property being actual buyer. This was the seventh case begin in the matter.

There was a bank fix deposit receipts on joint name of husband and wife. Which had a condition that it can be encash on  the name of ‘either or survivor’. Wife gave instructions to the bank not  to encash the FDR due to on going litigation but bank released the payment upon request made by husband with connivance of bank officials. She got nothing out of her Joint FDR. Bank didn’t respond to her request. A consumer case was filed and police report made against erring bank officials.  This was  the eighth case begin in the matter 

She filed a fresh case under section 125 Cr.P.C. for maintenance. Section 125 Cr.P.C has provision for payment of maintenance by husband to her wife in case she has not any adequate means to meet out expenses. She got relief from magisterial court and she got monthly maintenance of Rs. 1000/- .. This was ninth case in the matter.

There are few other cases filed meanwhile which we have removed to control the length of this article. After long legal battle, husband understood the seriousness of situation. Late but not the least.

Finally, the long legal battle of nine years both the husband and wife arrived to settlement. Wife, though in the stronger legal position, left much of her claim and given consent for settlement halfheartedly.  and she got satisfactory alimony. Husband filed one case on wife and he attracted the nine or more counter cases. It is apparent that lady struggled a lot to reach out justice. Finally, law has helped her a lot to reach the desired results.

I salute to the courage of the lady. It was her courage  in divorce case which lead her to get hold of what was her since the beginning of the first case.  Such courage is rare to find out. I can say that we should educate our daughters and give  them  strength of legal education so that they can stand firmly in the storm of life. So, Divorce is not the game played by lawyers, on the contrary, it is instrument for relief and justice where lawyers assist to aggrieved one.

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International diplomacy causes national shame

The Foreign Minister of India went on an official visit to Malaysia. In its capital Kuala Lumpur he presented a set of silver bowls to his counterpart which was accepted with thanks. However, on a closer examination of the sterling silver presents it came to light that the silver ware was NOT made of silver but of a cheap alloy. On a further examination of records back home in New Delhi, it was discovered that the Ministry of External Affairs had paid a sum of Rs 44,000/- for the fake silver ware whereas the middle man who had facilitated the transaction had actually paid Rs 14,000 or so for the deal. The hell broke loose thereafter and an investigation in depth was ordered. The facts as stated heretofore were found to be true but no responsibility was pinpointed for bringing the Nation into disrepute.

It was further found that the same Foreign Minister, Shri SM Krishna had presented fake silver bowl to foreign ministers of other countries that he had visited. Not only that, it also came to light that the same middle man had been facilitating purchase and delivery of the fake silverware for the last ten years or so. Apparently some senior officers were also recipients of the largesse of these illegal transactions and they kept their mouths shut for a handful of silver and India continued to be put to shame for presenting fake silver ware to the foreign ministers of  other countries with whom it wished to cultivate close friendly relations.

Nevertheless, no official, senior or junior has been punished for these acts and omissions of cheating that brought shame to our country. It is also not clear whether effective steps have been taken to ensure that there are no repetitions of such fake transactions in future. The law of the and may have to be made more stringent so that the cheats well versed in the art of fooling others do not get away with light punishment for serious crimes of this nature that involve reputation and image of the country.

It is rather unfortunate that the Ministry of External Affairs, Government of India is involved in many acts and omissions of cheating directly or indirectly. There have been press reports about empty pass port books being found abandoned in uninhabited places or by the lake side in remote corners. If the blank pass port books are kept in safe custody under lock and key, there is no way of their disappearance surreptitiously. Many foreign terrorists were found in possession of the Indian pass ports seemingly issued through due process sanctioned by law. However, issuance of pass ports was done after palms of officials were greased and a lot of money changed hands elsewhere.

Moral of the story is that the Ministry of External Affairs, Govt of India has to tighten its belt and ensure that its blank documents or forged documents do not change hands and pass on into the hands of terrorists lest the security of our motherland is jeopardised.

Special Psychology lessons for the officers and clerks of the men and women handling sensitive documents have to be conducted to ensure security of sensitive documents. Now terrorism in many forms is on the ascendancy and any loose talk or inappropriate comment may harm us and benefit the enemy. Of course, no patriotic person will like that to happen. If a traitor is up to an act of this nature it is our sacred duty to prevent it.

Let us remember that our Dharma prohibits us from destroying our values of life and helping the enemy across the border for a handful of silver. Passing on fake silver ware as sterling silver and causing its presentation to a minister of a neighbouring country will indeed destroy friendly relationship. Such acts, if repeated every now and then, will damage the credibility of our country and no other country will take our WORD seriously. Indeed the permanent loss in diplomacy will be ours. The damage done will be irreparable and the isolation of India that is Bharat may be in perpetuity.

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No Right to Life

No… this article doesn’t refer to the Right to Life that is guaranteed to each and every person in India, under article 21 of the Constitution of the Republic of India. On the contrary, it refers to the Right to life… or rather, put in better terms, the Right to Existence of the various states of the Union of India, under the federal structure proclaimed by the makers of our Constitution!!

The form of the Indian Constitution is supposedly Federal in nature.

‘The essential characteristics of a Federal Constitution… are present in the Indian Constitution.’

—— Page A-30 of Constitution of India by V.N. Shukla

According to Professor V.N. Shukla, ‘… the nature of our Constitution is Federal and that none of the terms of the Constitution violate the essentials of a federal polity.’

—— Page A-33 of Constitution of India by V.N. Shukla

In the case State of West Bengal v. Union of India, AIR 1963 SC 1241, Justice Subba Rao, in his dissent, had argued strongly treating the Indian Constitution as Basically Federal.

However, some scholar/institutions hesitate to characterise the Indian Constitution as truly federal because according to them, in certain circumstances the Constitution empowers the Centre to interfere in the state matters and thus places the states in a subordinate position which violates the Federal Principle.

For example, in the above mentioned case, i.e. State of West Bengal v. Union of India, the Supreme Court had held by majority, led by Chief Justice Sinha, that the Constitution is not truly federal.

Professor M.P. Singh, through his writing in M.P. Singh: Indian Federalism: Structure and Issues, lays down that he does not accept the stand that the Constitution of India is federal in the sense in which the known federal constitutions are. He follows somewhat of a similar position as has been taken by the Supreme Court, that the Constitution has some federal features but it does not fully accord with any established model of federalism.

There is also, the existence of such views, which question whether the Constitution of India can be said to be a federal Constitution at all ? They are, at best, amenable to the opinion that the Constitution is ‘quasi-federal‘ or ‘unitary with federal features‘ at best.

According to K.C. Wheare, ‘the specific provisions on the basis of which it is asserted that the fundamental postulate of a federal polity that the Central and State Governments functioning under it are coordinate authorities, each independent within its own sphere, is so greatly modified in the relationship between the Union and the State under the Indian Constitution, that the Indian Constitution cannot be called a federal Constitution. Wheare holds that the Constitution establishes a system of Government which is at the most ‘quasi-federal’, almost devolutionary in character, a Unitary State with subsidiary federal features rather than a federal state with subsidiary unitary features.’

—— K.C. Wheare: India’s New Constitution Analysed.48 All LJ 21

A similar view has been put forth by Professor P.K.Tripathi in Federalism: The reality and the Myth, 3J. Bar Council of India,251 (1974).

However, all such evaluations of the degree of federalism enshrined within the Constitution of India has been generally made with reference to the emergency related provisions that have been laid down in it, emergency being such a period, when the normal distribution of power between the Centre and the States undergo a vital change. The Parliament gets empowered to make laws with respect to any matter enumerated in the State List and it also gets empowered to give directions to any State as to the manner in which the State’s executive power is to be exercised. Moreover, Article 356 is cited by the detractors of the view that the Indian Constitution is a federal one, as an example wherein the States are shown to be in a subordinate position to the Centre. Under this Article, if the President is satisfied that the Government of a State cannot be carried on in accordance with the provisions of the Constitution, then he can dismiss the State Ministry and dissolve the Legislature and assume all functions of the State.

It is alleged by the detractors that these provisions enable the Union Parliament to convert the Union into a unitary State, which vitally affects the federal character of the Indian Constitution.

Along with the above mentioned provisions, another provision of the Indian Constitution, which is generally overlooked while discussing the character of the Constitution, can be cited to support the view that not only does the Constitution fail to be ‘truly federal’ in character, but it also goes very close to being a ‘unitary’ Constitution having certain ‘subsidiary federal characters’, in reality.

The provision being talked about in the above paragraph is Article 3 of the Constitution of the Republic of India. Article 3 of the Constitution of India deals with the ‘Formation of new States and alteration of areas, boundaries or names of existing States’.

Quote the section:-

The Indian Constitution, vide Article 3, has empowered the Parliament of India to alter the boundary and/or name of any State/States arbitrarily and unilaterally. In order to do any of the above mentioned work, a Bill to this effect must be compulsorily introduced in the Parliament. The Bill thus introduced, must satisfy at least two conditions.

1. The concerned Bill has to be introduced in either House of the Parliament, only on the recommendation of the President, and

2. If the Bill affects the area, boundaries or name of any State, then the President is required under Article 3, to refer the Bill to the Legislative Assembly/Assemblies of the concerned State/States, so that they can express their views regarding the Bill. The President is compulsorily required to specify in the reference, the period within which the concerned State Legislative Assembly/ Assemblies are supposed to express their views regarding he Bill introduced in the Parliament, under Article 3. The period so specified by the President can be extended by him, for such time as he may deem fit. However, if the opinion of the concerned State Legislature/Legislatures is/are not received within the specified or extended time, then the second condition shall automatically stand fulfilled.Thus, the Bill may be introduced in the Parliament even though the views of the concerned State/States have not been obtained by the President.

Now, what if the concerned State/ States expresses its/their views within the specified time and such views go against the proposal contained in the Bill? Nothing… nothing at all happens. The Parliament can still go ahead with the Bill and pass it, to make it into a law, against the wishes of the State Legislature/Legislatures. It was held in Babulal Parate v. State of Bombay, AIR 1960, SC 51, that if the State Legislature expresses its views within the time so specified and extended, the Parliament is not bound to accept or act upon the views of the State Legislature. It was further stated in the above mentioned case, that a fresh reference to the State Legislature is not necessary for an amendment of the Bill, if the amendment is proposed and accepted in accordance with the rules of procedure of Parliament and is germane to the subject-matter of the original proposal or is not a direct negation of it. The same was upheld in re, Berubari Union, AIR 1960 SC 858 at p. 860, wherein it was stated that it is not necessary to make a fresh reference to the State Legislature every time an amendment to the Bill is proposed and accepted.

Hence, it can clearly be understood from above that it is totally on the whims and fancies of the Centre, that the existence of a State of the Union depends. That the States do not have any right to existence and is subject to the sweet will of the Central Government, for their existence!! Thus, in accordance with the provisions of Article 3 of the Constitution, the Parliament may form a new State or alter the boundaries, name etc. of the existing ones and thereby change the political map of India vide a simple majority in the Parliament and by ordinary legislative process. This Article is merely held to be an example of the flexibility of the Indian Constitution by the proponents of the view that the Constitution is majorly federal in character. But the detractors may pretty well point out that it may be termed as a provision that actually hits the federalism present in the Constitution, where it hurts the most, i.e. by gifting the very life line of the States to the Centre, thereby making their subjugation and subordination at the hands of the Union Government that much more blatant and complete.

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