Food Corporation Of India Workers ... vs Food Corporation Of India ...
2014 Latest Caselaw 893 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                      Date of decision: 18th February, 2014.

+      CS(OS) 348/2004 & I.A. No.692/2014 (of D-1 for dismissal of suit)

       FOOD CORPORATION OF INDIA
       WORKERS UNION                            .....Plaintiff
                   Through: Mr. Rajiv Talwar and Mr. Nipu
                            Patiri, Advocates.

                                   Versus

    FOOD CORPORATION OF INDIA (HANDLING)
    WORKERS UNION & ANR.                      ..... Defendants
                  Through: Mr. Sanjeev Bahl, Mr. Chandan
                           Kumar and Mr. Eklavya Bahl,
                           Advocates for D-1.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1.

The plaintiff Union has instituted this suit, (i) for permanent

injunction restraining the defendant No.1 Union, its office bearers and

members from using or carrying on trade union activities under the name of

"Food Corporation of India (Handling) Workers Union" and using the logo

as appearing in its Letter Heads; and, (ii) for declaration, declaring the

registration of the defendant No.1 Union under the Trade Unions Act, 1926

as nullity, being in violation of Section 7 of the said Act.

2. The suit was entertained.

3. On application of the plaintiff Union for interim relief, vide consent

order dated 3rd December, 2007, it was ordered that the defendant No.1

Union shall change its name to "FCI Handling-Workers Union". The

counsel for the defendant No.1 Union informs that the defendant No.1

Union has since been using the said name, though has not registered the said

changed name with the Registrar of Trade Unions.

4. Though issues have been framed in the suit and trial has commenced

but the matter was listed before this Court yesterday on the application of

the defendant No.1 Union for dismissal of suit on the ground that the

members of the plaintiff Union had passed a resolution for dissolution of the

plaintiff Union; that the same was accepted by the Registrar of Trade

Unions who revoked the registration of the plaintiff Union; the defendant

No.1 Union had earlier applied for dismissal of the suit on this ground but

the said application was not pressed as the plaintiff Union had filed a civil

suit challenging the revocation of its registration and in which an interim

stay of the order of the Registrar of revocation of registration of the plaintiff

Union had been granted; that the said interim order has since been vacated

and the appeals thereagainst have been dismissed.

5. However, when the matter came up yesterday, it was enquired from

the counsel for the plaintiff Union as to how the plaintiff Union could

restrain another Union, also of the workers of Food Corporation of India,

from calling itself a Union of the Workers of Food Corporation of India and

as to how the plaintiff Union can be said to have proprietary rights over the

words "Food Corporation of India" or its workers' union.

6. On request of counsels for parties, the matter was adjourned for

consideration on this aspect to today.

7. The counsel for the plaintiff Union has today contended that the right

of the plaintiff Union to restrain the defendant No.1 Union from using the

same name as the plaintiff Union stems from Section 7 of the Trade Union

Act. It is further contended that the defendant No.1 Union, to obtain

registration, filed an undertaking before the Registrar to the effect that there

was no other Union of the same name and which undertaking is apparently

false. The counsel further invites attention to Sections 10 & 11 of the said

Act, which provide for cancellation of registration and appeals against the

order of the Registrar. The counsel, on enquiry, informs that the only effect

of non-registration of a Trade Union is that it does not have collective

bargaining power with the Management.

8. Having gone through the provisions of Sections 7, 10 & 11 supra, it

has further been enquired from the counsel for the plaintiff Union, whether

the plaintiff Union applied to the Registrar of Trade Unions under Section

10(b) of the Act for cancellation of the registration in favour of the

defendant No.1 Union on the ground of the defendant No.1 Union having

obtained the registration by filing a false undertaking to the effect that there

was no other Trade Union by the said name and if the plaintiff Union has

not done so, how the plaintiff Union can file this suit impugning the

decision of the Registrar of registration of the defendant No.1 Union,

particularly when an appeal is also provided under Section 11 of the Act

against the orders of the Registrar and which appears to be a complete code.

9. The counsel for the plaintiff Union in this regard has drawn attention

to Sections 20 & 22 of The Companies Act, 1956 to contend that the same

are pari materia to the provisions aforesaid of the Trade Unions Act and in

the context of the same, the Division Bench of this Court in Montari

Overseas Ltd. Vs. Montari Industries Ltd. 1996 PTC (16) 142 has held that

a suit before a Civil Court is not barred owing to the existence of a remedy

under Section 22 of the Companies Act. The counsel thus contends that this

Court would have jurisdiction, notwithstanding the availability of alternative

remedy.

10. In my opinion, the aforesaid judgment, in the context of intellectual

property rights, would have no application to Trade Unions, which the

counsel for the plaintiff Union also accepts do not have any trademark or

right as the intellectual property right in an entity carrying on business.

Rather, as aforesaid, the Trade Unions Act is a complete code in itself and

thus the provisions thereof cannot be compared with the provisions of The

Companies Act and/or the intellectual property rights of an entity carrying

on business.

11. Section 2(h) of the Trade Unions Act defines a Trade Union as a

combination formed primarily for the purpose of regulating the relations

between workmen and employers or between workmen and workmen or

between employers and employers or for imposing restrictive conditions on

the conduct of any trade or business. Section 15 of the said Act prohibits

the funds of a registered Trade Union being spent on any other objects than

those mentioned therein. As per Clause (c) thereunder, the funds of the

Trade Union can be spent in a legal proceeding only if the said legal

proceeding is undertaken for the purpose of securing or protecting any rights

of the Trade Union as such or any rights arising out of the relations of any

member with his employer or with a person whom the member employs.

12. This Court in Kedar Nath Gupta Vs. J.K. Organization

MANU/DE/0473/1998, including on an interpretation of the provisions of

the Trade Unions Act, held that a Trade Union is not competent to oppose

an application for registration of a trademark. The reason given was that

Trade Unions are subject to specific legislation i.e. the Trade Unions Act

and their activities are to be modulated by the said legislation and Trade

Unions cannot indulge in anything which is repugnant to the Trade Unions

Act. On an interpretation of Section 15 supra, it was held that Trade Unions

are entitled to pursue prosecution or defence in legal proceedings

undertaken only for the purposes mentioned in Clause (c) or Clause (d) of

Section 15. It was held that a Trade Union not concerned with one trade is

not entitled to prosecution or defence of Trade Mark matters of another

trade as a Trade Union is supposed to act within the limitations and

constraints of the Trade Unions Act. The Trade Union was thus held not

entitled to oppose the trade mark registration.

13. Thus, the judgment in Montari Overseas Ltd. supra, holding that the

jurisdiction of the Civil Court to entertain a suit for restraining a company

incorporated under the Companies Act from using the name in which it has

been incorporated is not barred inspite of the alternate remedy available

under Section 22 of the Companies Act of applying for rectification of the

name of the defendant company, for the reason of the plaintiff having a

common law remedy to protect its trade name, is not applicable to a Trade

Union which has no rights as aforesaid in a trade name and which does not

carry on any trade.

14. The counsel for the plaintiff Union has also drawn attention to All

India Trade Union Congress Vs. Dy. Registrar of Trade Unions 2006 II

Current Labour Report 181. However, what was for consideration before

the learned Single Judge of the Bombay High Court in the said judgment,

was a writ petition against the order of the Registrar. The said judgment

also would thus have no application.

15. Even otherwise, once the Legislature has provided an alternative

remedy, the provisions of Section 41 of the Specific Relief Act, 1963 which

bar the grant of an injunction in such cases, would also come into play. I

am even otherwise of the opinion that the Registrar in the first instance is

the best person to deal with the said matters.

16. The counsel for the plaintiff Union at this stage states that the plaintiff

Union be granted liberty to approach the Registrar under Section 10(b) of

the Trade Unions Act.

17. The counsel for the defendant No.1 Union on enquiry states that the

defendant No.1 Union, notwithstanding the disposal of the present suit,

would continue using the name as agreed earlier i.e. "FCI Handling-

Workers Union" and will not revert to the original name and will also within

one month, make an application to the Registrar of Trade Unions for

changing the registration in the said name.

18. The suit is accordingly dismissed as not maintainable, with liberty

however to the plaintiff Union to take remedies under Section 10(b) of the

Act and leaving the parties to bear their own costs.

19. The counsel for the plaintiff Union states that the plaintiff Union will

make such an application within one month hereof.

20. Needless to state, that the Registrar is expected to deal with the same

expeditiously. Needless to further state, that the defendant No.1 Union shall

be entitled to contest such an application on all grounds available to it.

21. In view of the dismissal of the suit, the date of 21st February, 2014

before the Joint Registrar stands cancelled.

RAJIV SAHAI ENDLAW, J.

FEBRUARY 18, 2014 bs..