Delhi High Court
Mondelez Foods Private Limited vs The Regional Director (North), ... on 7 July, 2017
$~7
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 5289/2014 and CM No. 10518/2014
MONDELEZ FOODS PRIVATE LIMITED ..... Petitioner
Through: Mr Rajeev Virmani, Senior Advocate
with Mr Darpan Wadhwa, Mr Ajay
Bhargava, Mr Ankur Sangal and Ms
Sucheta Roy, Advocates.
versus
THE REGIONAL DIRECTOR (NORTH),
MINISTRY OF CORPORATE AFFAIRS & ORS ..... Respondents
Through: Mr Rajesh Gogna, CGSC for R-1 to
3.
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
ORDER
% 07.07.2017
VIBHU BAKHRU, J
1. Mondelez Foods Private Limited (hereafter „the petitioner‟) has filed
the present petition under Article 226 of the Constitution of India, inter alia,
impugning an order dated 20.06.2014 passed by respondent no.1 (hereafter
„the RD‟), rejecting the representation filed by the petitioner under Section
22 of the Companies Act, 1956 (hereafter „the Act‟). The petitioner is
essentially aggrieved by respondent no.3, that is, Registrar of Companies
(ROC), accepting the change in the corporate name of respondent no.2 from
„Nonstop Logistics India Private Limited‟ to „Mondelez India Private
Limited‟ and registering respondent no.2 under that name.
2. Aggrieved by the aforesaid action, the petitioner had made a
representation to the RD under Section 22 of the Act which was rejected by
the RD principally for two reasons: first, that the petitioner was not the
owner of the trade mark „Mondelez‟, which was owned by M/s Kraft Foods
Global Brands, LLC, a subsidiary of M/s Mondelez International, Inc.; and
second, that the RD was of the view that jursdiction to issue any directions
under Section 22 (1) (i) of the Act had expired on 10.09.2013 and therefore
no directions could be issued to respondent no.2 to change its name.
3. Briefly stated, the controversy in the present case arises in the context
of the following facts:
3.1 The petitioner was incorporated under the Act on 28.05.2012. The
word 'Mondelez' is a distinctive part of the corporate name of the petitioner
and is also a part of the trade mark of Mondelez International Inc., which is
stated to be one of the world's largest snacks companies, with global net
revenues of USD 35 billion in 2012. It is stated that Mondelez International
Inc. has a presence in 165 countries around the world and employs around
1,00,000 persons across the globe.
3.2 That in the year 2010, Kraft Foods, Inc., acquired Cadbury Group and
on 01.10.2012, reorganized its business into two divisions: Mondelez
International, Inc., and Kraft Foods Group, Inc. It is stated that the word
„Mondelez‟ is a coined word from the words „Monde‟ (which in Latin
means „world‟) and delez (which is a fanciful expression evoking the word
„delicious‟). It is also claimed that the word Mondelez was widely published
internationally in several newspapers as early as in March 2012. The
petitioner further states that Mondelez International, Inc. has also filed trade
mark applications for registration of the marks „Mondelez International‟ and
„Mondelez International (logo)‟ across the globe including with the Indian
Trade Marks Registry. The petitioner claims that its corporate name includes
the word „Mondelez‟ with due approval and no objection certificate has been
issued in this regard.
3.3 After the petitioner was incorporated, respondent no.2 - which was
then known as Nonstop Logistics India Private Limited - filed an application
before the ROC, seeking availability of the name „Mondelez India Private
Limited‟. Respondent no.2 also applied for registration of the trade mark
„Mondelez (logo)‟ with the Trade marks Registry in similar class of goods
as dealt with by the petitioner. The documents filed by respondent no.2 with
the ROC indicate that an extraordinary general body meeting of the said
respondent was held on 03.09.2012 for change of corporate name and the
only reason for changing the name was that the directors of respondent no.2
considered the new name to be "lucky for business transactions". The ROC
confirmed the availability of the name „Mondelez India Private Limited‟ and
on an application made by respondent no.2, the ROC issued a fresh
certificate of incorporation on 11.09.2012 under the changed name -
„Mondelez India Private Limited‟.
3.4 The petitioner has alleged that the change of name of respondent no.2
is patently dishonest and was adopted only with a view to negotiate a
settlement in exchange for dropping the word „Mondelez‟.
3.5 In view of the above, the petitioner called upon respondent no.2 to
rectify its corporate name and also caused legal notices dated 25.02.2013
and 26.03.2013 to be served on respondent no.2. Thereafter, on 02.05.2013,
the petitioner filed a rectification petition before the RD and sought
directions from the Central Government (the RD) in exercise of powers
under Section 22(1)(ii)(b) of the Act.
3.6 The Intercontinental Great Brands, LLC (formerly, Kraft Foods
Global Brands, LLC) and the petitioner also filed a suit (being CS(OS)
1587/2013) against respondent no.2 and Vijay and Ajay Marketing Private
Limited and their directors inter alia for restraining the said defendants from
using the mark „Mondelez‟ and/or any other similar mark either as trade
mark, trade name or corporate name or as part of the trade or corporate
name. The said suit was decreed in favour of the plaintiffs therein and
against the defendants (including respondent no.2) on 24.07.2014 and
respondent no.2 has been, inter alia, restrained from using the name
„Mondelez‟ including as part of its corporate name.
4. At the outset, it is necessary to note that despite service of notice,
respondent no.2 did not enter appearance to contest the present petition. In
the circumstances, the allegations made by the petitioner with regard to the
conduct and intention of respondent no.2 remain uncontroverted. It is clear
from a plain reading of the petition that the adoption of the name of
„Mondelez‟ as a part of the corporate name of respondent no.2 was dishonest
and with a mala fide purpose. It is also apparent that the said respondent‟s
corporate name is deceptively similar since the word „Mondelez‟ is a coined
and a distinctive word and is a prominent part of the corporate name of both
the entities (petitioner and respondent no.2).
5. Section 20 of the Act expressly provides that no company shall be
registered by a name which, in the opinion of the Central Government, is
undesirable. Section 20 (2)(1)(i) of the Act also makes it clear that a name
which is identical with, or too nearly resembles the name of an existing
company which has been previously registered, would be deemed to be
undesirable. In this case, it is ex facie apparent that the corporate name
adopted by respondent no.2 is undesirable on the parameters laid down in
Section 20 of the Act and thus the ROC was proscribed from registering
respondent no.2 under its changed name.
6. Section 22 of the Act provides for rectification of the name of the
company which is identical with or too nearly resembles the name of an
existing company which has been previously registered. In terms of Section
22 of the Act, the Central Government could direct the change of a name of
a company which is identical to or resembles the name of a previously
registered company either suo motu or on an application by a registered
proprietor of a trade mark.
7. In the present case, the RD had declined to issue any such directions
principally for the reasons (i) that the petitioner was not the owner of the
trade mark; and (ii) that the period of 12 months from the registration of
respondent no.2 under the changed name had elapsed.
8. Mr Virmani, learned Senior Counsel appearing for the petitioner
contended that none of the aforesaid two reasons were sustainable. He stated
that although the petitioner was not the owner of the trade mark „Mondelez‟
but had due authority to use the same. He contended that the expression
"registered proprietor of a trade mark" as used in Section 22(1)(ii) of the Act
would include a person authorized by the registered proprietor of the trade
mark. Secondly, he contended that the petitioner had made a representation
within the period of twelve months and therefore, it could not be prejudiced
by any delay on the part of RD in issuing the directions as sought for. He
also referred to the proviso to Section 22(1) of the Act, which proscribed the
making of an application by a registered proprietor of a trade mark after five
years of becoming aware of registration of the company with an undesirable
name and, contended that the said proviso clearly implied that a proprietor
of a trade mark could apply to the RD for directing change in name of the
company even after a period of one year.
9. Before proceeding further, it would be relevant to refer to Sections 20
and 22(1) of the Act, which are set out below:-
"20. COMPANIES NOT TO BE REGISTERED WITH
UNDESIRABLE NAMES
(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,-
(i) The name by which a company in existence has been
previously registered, or
(ii) a registered trade mark, or a trade mark which is
subject of 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).
(3) The Central Government may, before deeming a name
as undesirable under clause (ii) of sub-section (2), consult
the Registrar of Trade Marks.
xxxx xxxx xxxx xxxx
22. RECTIFICATION OF NAME OF COMPANY
(1) If, through inadvertence or otherwise, a company on its
first registration or on its registration by a new name, is
registered by a name which-
(i) in the opinion of the Central Government, is identical
with, or too nearly resembles, the name by which a
company in existence has been previously registered,
whether under this Act or any previous companies law, the
first-mentioned company, or
(ii) on an application by a registered proprietor of a trade
mark, is in the opinion of the Central Government identical
with, or too nearly resembles, a registered trade mark of
such proprietor under the Trade Marks Act, 1999, such
company,
(a) may, by ordinary resolution and with the previous
approval of the Central Government signified in writing,
change its name or new name ; and
(b) shall, if the Central Government so directs within
twelve months of its first registration or registration by its
new name, as the case may be, or within twelve months of
the commencement of this Act, whichever is later, by
ordinary resolution and with the previous approval of the
Central Government signified in writing, change its name
or new name within a period of three months from the date
of the direction or such longer period as the Central
Government may think fit to allow.
Provided that no application under clause (ii) made by a
registered proprietor of a trade mark after five years of
coming to notice of registration of the company shall be
considered by the Central Government."
10. In the given facts, it is undisputable that the changed name of
respondent no. 2 is "undesireable" in the context of Section 20 of the Act.
11. The only question that remains to be adressed is whether the RD (as a
delegatee of the powers of the Central Government) could direct change in
name of respondent no.2 after the period of twelve months. Section
22(1)(ii)(b) of the Act obliges a company to change its name, if so directed
by the Central Government within a period of twelve months from the date
of first registration or the date of registration of the change in name. Since,
the RD failed to issue any such directions within a period of twelve months,
respondent no.2 would not be obliged to change its name merely on the
directions of the RD. However Section 22 of the Act was amended by virtue
of the Trade Marks Act, 1999 (with effect from 15.09.2003) and the proviso
to Section 22(1) was inserted. In terms of the said proviso, a proprietor of a
registered trade mark was disabled from making an application for directing
change in name of a company with an undesirable name after expiry of five
years of receiving notice of such company. It is thus implicit in the proviso
that a registered proprietor of a trade mark could make an application within
a period of five years of becoming aware of registration of a company with a
similar name and prima facie indicates that the RD could act on a
representation even after twelve months have elapsed from the registration
of the company with the undesirable name.
12. Section 22 of the Act is not happily worded. Whereas Section 22(1)(i)
of the Act, does not indicate that the Central Government is precluded from
directing change of name in case the same is found to be undesirable;
Section 22(1)(ii)(b) of the Act indicates that the company with an
undesirable name is obliged to change its name only on receipt of such
directions within a period of twelve months from the date of registration.
Further, the introduction of proviso to Section 22(1) must also be given
some meaning; plainly, if the owner of a registered trade mark is not
precluded from making a complaint within a period of five years of
becoming aware of a company with a deceptively similar name, the power
of the RD to examine and address such complaint should be read in the
statutory provision. However, it is not necessary to examine the same in
view of the provisions of the Companies Act, 2013 which are now in force.
In terms of Section 16 of the Companies Act, 2013, the Central Government
is empowered to issue directions to a company to change its name, if it is
similar to the name of a company registered prior in point of time. Section
16 (1) of the Companies Act, 2013 reads as under:-
"16. Rectification of name of company.--(1) If, through
inadvertence or otherwise, a company on its first registration
or on its registration by a new name, is registered by a name
which,--
(a) in the opinion of the Central Government, is identical with
or too nearly resembles the name by which a company in
existence had been previously registered, whether under this
Act or any previous company law, it may direct the company
to change its name and the company shall change its name or
new name, as the case may be, within a period of three months
from the issue of such direction, after adopting an ordinary
resolution for the purpose;
(b) on an application by a registered proprietor of a trade mark
that the name is identical with or too nearly resembles a
registered trade mark of such proprietor under the Trade Marks
Act, 1999 (47 of 1999), made to the Central Government
within three years of incorporation or registration or change of
name of the company, whether under this Act or any previous
company law, in the opinion of the Central Government, is
identical with or too nearly resembles an existing trade mark, it
may direct the company to change its name and the company
shall change its name or new name, as the case may be, within
a period of six months from the issue of such direction, after
adopting an ordinary resolution for the purpose."
13. Since, it is apparent on the facts of the present case that the name of
respondent no.2, Mondelez India Private Limited, too nearly resembles the
name of the petitioner, therefore, the RD would be empowered to direct
respondent no.2 to change its name.
14. In view of the above, the RD is directed to issue the necessary
directions to respondent no.2 to change its name to any other name which is
not identical to or resembles the name of the petitioner or any other existing
company. Respondent no.2 and its directors are also directed to ensure that
respondent no.2 changes its name as indicated above.
15. The petition and the pending application are disposed of with the
aforesaid directions.
VIBHU BAKHRU, J
JULY 07, 2017
pkv
