Regional Director Under Companies Act Has No Jurisdiction To Decide Ownership Of Trademark: Delhi High Court In Plea By 'Panchhi Petha'

Providing relief to the Panchhi Petha Store/petitioner against the Regional Director's order, the Court remarked that a Regional Director cannot undertake to examine trademarks in the manner of an Intellectual Property Division of a Court.

The Regional Director had rejected the petitioner's application for rectification/change in the name of the Respondent No.4 Company. Through its order, the Regional Direction observed that the petitioner was not the owner of the trademark 'PANCHHI'. The petitioner thus challenged the Regional Director's order, particularly these observations.

The petitioner's counsel referred to Section 16 of the Companies Act, which provides that the Regional Director may pass directions for a change in the name of the company based on an application filed by a registered proprietor of the trademark. The counsel contended that the observations in the impugned order, which decided the ownership of the trademark is beyond the purview of Section 16.

Justice Tara Vitasta Ganju noted that the objective of Section 16 of the Companies Act is that the customers and general public should not be confused that a company is similar to another company.

The Court stated that while deciding an application under Section 16, the Regional Director cannot determine the ownership of trademarks in a way the Intellectual Property Division of a Court would.

It held that such determination is not within the jurisdiction of the Regional Director under the Companies Act.

It referred to CGMP Pharmaplan (P) Ltd. v. Regional Director, Ministry of Corporate Affairs (2010), where the Delhi High Court observed that the Regional Director is required to examine if the name of a company resembles another and not approach it as a trade mark dispute.

Here, the Court noted that both the parties (petitioner and respondent no.4) claim ownership and rights over the 'Panchhi' mark. It noted that both the parties form part of the same extended family and are engaged in legal proceedings against each other in relation to the impugned trademark and other intellectual property related rights.

Observing that the Regional Director lacked the jurisdiction to examine rights in a trademark, the Court set aside the order.

“In the present case, the parties are two entities which are from the same lineage, which are embroiled in disputes over the intellectual property of a brand. The Regional Director while deciding an Application under Section 16 of the Companies Act cannot undertake an examination of the marks as the Intellectual Property Division of a Court would. It cannot also decide the ownership of a mark while deciding such an Application under Section 16 of Companies Act, where these are disputed contentions. The same is not the subject matter of jurisdiction of the Regional Director under the Companies Act.”

Case title: Panchhi Petha Store vs. Union Of India & Ors (W.P.(C) 773/2019)