Cgmp Pharmaplan Pvt. Ltd. vs Regional Director, Ministry Of ...
2010 Latest Caselaw 3315 Del

        IN THE HIGH COURT OF DELHI AT NEW DELHI


        W.P. (C) 3217/2010 & CM APPL Nos. 6437/10 (for stay),
        7265/2010


        cGMP PHARMAPLAN PVT LTD                  ..... Petitioner
                    Through: Mr. Devashish Bharuka with
                    Mr. Gaurav Ray, Advocates

                       versus


        REGIONAL DIRECTOR,
        MINISTRY OF CORPORATE AFFAIRS & ANR ..... Respondents
                      Through: Mr. Sachin Datta, Advocate for R-1.
                      Mr. Sudhir Chandra, Senior Advocate with
                      Mr. Sagar Chandra and
                      Mr. Ishani Chandra, Advocates for R-2.


         CORAM: JUSTICE S. MURALIDHAR

        1. Whether Reporters of local papers may be
             allowed to see the judgment?                     No
        2. To be referred to the Reporter or not?             Yes
        3. Whether the judgment should be reported in Digest? Yes

                                ORDER

16.07.2010

1. The Petitioner is aggrieved by an order dated 21 st April 2010 passed by

the Regional Director (NR), Ministry of Corporate Affairs, Government of

India, Respondent No. 1 herein allowing the representation filed by

Respondent No. 2 NNE Pharmaplan India Private Limited under Section 22

of the Companies Act 1956 („Act‟) and directing the Petitioner under

Section 22 (1) (b) of the Act to delete the word "PHARMAPLAN" from its

existing name and change its name to some other name within three months

from the date of the said order.

2. Respondent No. 2 NNE Pharmaplan India Private Limited was

incorporated initially on 30th December 1997 under the name Pharmaplan

(India) Limited. The present Director of the Petitioner Mr. Ravi Saxena

joined the Respondent No. 2 company on 5th June 1998. It may be

mentioned that the main business of the Respondent No. 2 company was to

provide services as technical and industrial consultants and engineers

especially to planning, consulting, engineering, plant and equipment supply,

pharmaceutical, bio-technology, medical device/products and the health care

industries. Respondent No. 2 was also to act as advisers and consultants on

all matters and problems connected with or related to pharmaceutical, bio-

technology, medical device/product and the health care industries.

3. On 27th June 2008, the name of the Respondent No. 2 was changed to

NNE Pharmaplan India Limited.

4. The employment of Mr. Ravi Saxena in the Respondent No. 2 company

stood terminated with effect from 11th May 2009. Within two months

thereafter on 6th July 2009, the Petitioner was incorporated as a private

limited company with the name cGMP Pharmaplan Private Limited.

5. On 17th July 2009, the Respondent No. 2 filed a Civil Suit No. 1307 of

2009 in this Court seeking, inter alia, an injunction to restrain the Petitioner

herein (Defendant No. 1 in the above suit) from passing-off the name of the

Respondent No. 2 Company as its own. Simultaneously the Respondent No.

2 also filed a representation before the Regional Director on 27th July 2009

under Section 22 of the Act seeking a direction that the Petitioner should

change its name.

6. While disposing of the application filed by the Respondent No. 2 under

Order XXXIX Rules 1 & 2 of the Code of Civil Procedure 1909 („CPC‟) in

CS (OS) No. 1307 of 2009, a learned Single Judge of this Court by an order

dated 18th December 2010 came to the conclusion that there was no prima

facie case made out in favour of the Plaintiff/Respondent No. 2 since "the

names of the Plaintiff and the Defendant company are in no manner similar;

emphasis is essentially on the prefixed words „NNE‟ of the Plaintiff and

„CGMP‟ of the Defendant. They are not only worded differently, the manner

and the nature of the composition of alphabets is also distinct; they are not

likely to cause confusion or deception in the minds of the proposed

customers to whom the Defendant is offering its services."

7. It is stated that the Respondent No. 2 had filed an appeal against the said

order which is pending before a Division Bench of this Court. No stay of the

operation of the said order has been granted by the Division Bench.

8. In the meanwhile, the hearing in the application filed by the Respondent

No. 2 before the Respondent No. 1 proceeded on 18th January 2010. The

written submissions were also filed at the conclusion of the hearing.

9. In the impugned order dated 21st April 2010, the Respondent No. 1

observed that the holding company as well as group companies of NNE

Pharmaplan India Private Limited already held registration in respect of the

trade marks „PHARMAPLAN‟ and „NNE Pharmaplan‟ and filed

application for the registration of these marks world over. It was concluded

that the use by the Petitioner of the word „PHARMAPLAN‟ in its name

would have a misleading effect in the mind of the general public and as such

it was a fit case for issue of direction under Section 22 (1)(b) of the Act. A

direction was accordingly issued to the Petitioner to delete the word

„PHARMAPLAN‟ from its name and change its name to some other name

within three months from the date of the order.

10. Pursuant to the notice issued in this petition on 12th May 2010, the

Respondent No. 2 had filed a reply to which a rejoinder has been filed by the

Petitioner.

11. This Court has heard the submissions of Mr. Devashish Bharuka, learned

counsel appearing for the Petitioner and Mr. Sudhir C. Chandra, learned

Senior counsel appearing for the Respondent No. 2.

12. It is first submitted by Mr. Bharuka that given the scope of the

jurisdiction of this Court under Article 226 of the Constitution, this Court

should set aside the impugned order on the sole ground that the basic

approach by the Regional Director to the application under Section 22(2) of

the Act was erroneous. It is pointed out that instead of determining whether

the name of the Petitioner was either identical with or "too nearly

resembled" the name of Respondent No. 2, Respondent No. 1 proceeded to

examine if the Petitioner‟s name caused "misleading effects" in the mind of

the general public. Thus the Respondent No. 1 had treated this as an action

for infringement under the trade marks.

13. Mr. Bharuka refers to para 28 of the guidelines issued by the Department

of Company Affairs (DCA) which states that where except for the first word,

all other words of the proposed name are "similar to those of an existing

company", then the first word should be considered to be sufficient to

distinguish it from the name of the existing company. In other words, he

submits that the prefix „cGMP‟ was sufficient to distinguish the name of the

Petitioner from that of the Respondent No. 2. He then submits that a search

effected on the website of Respondent No. 1 showed that there were in all

four companies registered by a similar name. No action was taken against

those companies by Respondent No. 2 and, therefore, the entire action was

malafide. It is submitted that Respondent No. 2 was resentful of the

Petitioner‟s Director Mr. Ravi Saxena having left the services of Respondent

No. 2 company and was, therefore, preventing him from functioning by

instituting various vexatious proceedings against him and his company. It is

urged that two names are dissimilar as determined by the learned Single

Judge in the application for injunction in the passing-off suit.

14. Reliance is placed by Mr. Bharuka on the judgment of the Division

Bench of the Calcutta High Court in Kalpana Polytec India Limited v.

Union of India 106 (2001) CC 558 to urge that the Respondent No. 1

exceeded its jurisdiction and adopted an approach unwarranted by Section

22 of the Act. Finally without prejudice to the above submissions, it is

submitted that in the event this Court is not inclined to accept the

Petitioner‟s contention then a further period of three months should be

granted to the Petitioner to comply with the impugned order of Respondent

No. 1.

15. Mr. Sudhir Chandra, learned Senior counsel appearing for the Petitioner

points out that the jurisdiction of the civil court in a passing-off suit is

distinct from and independent of the jurisdiction that is exercised by the

central government through the Respondent No. 1 in dealing with an

application under Section 22 of the Act. He refers to the judgment of the

Division Bench of this Court in Montari Overseas Limited v. Montari

Industries Limited 1996 PTC (16). Mr. Chandra relied on the judgment in

Surya Dev Rai v. Ram Chander Rai (2003) 6 SCC 675 to urge that unless

the Court found that the Respondent No. 1 had acted in violation of the

principles of natural justice or committed an error of jurisdiction, it should

not interfere under Article 226 of the Constitution merely because another

view is possible to be taken in the matter. In other words, if the procedure

adopted was just and fair, this court should not sit in appeal over the decision

of Respondent No. 1 on merits.

16. The above submissions have been considered. This Court finds no error

having been committed by the Respondent No. 1 in coming to the

conclusion that the Petitioner‟s name, i.e., `cGMP Pharmaplan Private

Limited‟ too nearly resembles the name of the Respondent No. 2 i.e. NNE

Pharmaplan India Limited. The prominent part of both names is the coined

word „PHARMAPLAN‟. The two names are to be compared as a whole.

When so compared, the name of the Petitioner too nearly resembles the

name of the Respondent No. 2. In terms of para 28 of the Guidelines, if the

dissimilar portions of the names are removed i.e. NNE and cGMP, then the

remaining portion is the identical word „PHARMAPLAN‟. The word

„PHARMAPLAN‟ being a coined word is indeed the prominent and

distinctive part of the names of both the Petitioner and Respondent No. 2.

When compared as a whole, it would be apparent that the two names

structurally and phonetically too nearly resemble each other.

17. The decision in Montari Overseas Limited makes it clear that a civil

court exercising its powers in terms of the CPC and determining in a

passing-off action if one name is confusingly deceptive or similar to another

name, is exercising a jurisdiction independent of the jurisdiction of

Respondent No. 1 in respect of the registering of a company‟s name. The

latter is a power vested in the central government in terms of Sections 20

and 22 of the Act. While it is true that the Respondent No. 1 cannot

approach the case as it would in a trade mark dispute, it is nevertheless

required to come to the conclusion whether the name of which the

registration is sought or has been granted too nearly resembles the name of

another company. Mr. Chandra is right in his contention that the powers of

the central government under Section 22 of the Act are wider inasmuch as

there is no need to examine whether there is a likelihood of deception or

confusion. It is enough to examine if the name registered too nearly

resembles another registered name. The Respondent no. 2 has been able to

show that both names too nearly resemble each other.

18. This Court is unable to find anything perverse in the conclusion arrived

at by the Respondent No. 1. Respondent No. 2 had indeed made out a case

under Section 22(1)(b) of the Act for a direction to the Petitioner to change

its name by removing the word „PHARMAPLAN‟, within a period of three

months.

19. For all the aforementioned reasons, this Court finds no ground to

interfere with the impugned order of the Respondent No. 1. However, the

time period for the Petitioner to comply with the impugned order and change

its name is extended by two months from today.

20. The petition and the pending applications are dismissed with the above

directions.

S. MURALIDHAR, J JULY 16, 2010 rk