Lulu Mall v. Coolulu Sports Trademark Dispute: Karnataka High Court Directs Centre To Pass Reasoned Orders U/S 16 Companies Act

The Karnataka High Court has directed the Regional Director, Ministry of Corporate Affairs to consider afresh whether the word “lulu” in the title of Coolulu Sports Private Limited company is identical to Lulu International Shopping Malls Private Limited a well known trademark.

A single judge bench of Justice M Nagaprasanna allowed the petition filed by Coolulu Sports Private Limited and set aside the order passed by Regional Director, Ministry of Corporate Affairs, date  30-03-2022, restraining the company from using the word “lulu” from the title of its name. The court has directed the Regional Director to pass orders afresh within three months and till then it has directed the parties to maintain status quo.

Lulu Malls had complained to the Competent Authority that the petitioner is using the name that is too near to its name. On such a complaint, a show cause notice was issued to the petitioner under Section 16 of the Companies Act.

Section 16 deals with rectification of name of the Company. The statute mandates that if through inadvertence or otherwise, a Company on its first registration or on its registration by a new 10 name is registered by a name which is too nearly resembles the trade mark of such proprietor under the Trade Marks Act, 1999, on an application being made within 3 years of such incorporation or registration or change of name of the Company, in the opinion of the Central Government is identical with or too nearly resembles to an existing trade mark, it may direct the Company to change its name and the Company shall change its name or incorporate a new name as the case may be, within three months from the date of such direction.

The petitioner filed its objections and later, on consideration of the material before it the 2nd respondent/Regional Director, passes an order under Section 16(1)(b) of the Act directing the petitioner that it should not use the word ‘Lulu’ in its name and further directs that the name of the Company should be changed within 3 months from the date of the order i.e., 30th March, 2022.

The petitioner contended that there is a world of difference between ‘Lulu’ and ‘Coolulu’. Therefore, the order which directs removal of the name ‘Lulu’ from the title name of the petitioner does not bear any application of mind to any of the provisions of law, it was argued.

Further it was said that plethora of material was placed before the 2nd respondent to demonstrate that the name of the petitioner and the name of the 3rd respondent are not similar. However, those objections were not considered by the 2nd respondent, it was averred.

The bench on going through the order passed by the Regional Director, said “There is no consideration worth the name by the 2nd respondent. The purport of Section 16 is not even considered or the purport of Trademarks Act becoming applicable to Section 16 is again ignored. The order does not demonstrate even a semblance of application of mind for there are no reasons recorded by way of consideration of the contentions of both the parties.”

Noting that in the order it is opined that the name is likely to create confusion between the two and, therefore, it should be removed, the bench said “This is not the purport of Section 16.”

It observed “An order which determines rights of parties, in the case at hand is the rights of parties qua their names, it is trite, should bear application of mind. An order which does not contain any reason is an unreasonable order.”

Following which it held “The phrase would become applicable to the impugned order, as there are no reasons indicated qua the contentions of the respective parties as well as the mandate of the statute.”

It added “Therefore, the 2nd respondent (Regional Director) is required to pass order afresh by recording reasons for the contentions so advanced both by the petitioner and the 3rd respondent (Lulu Malls), which would bear the stamp of application of mind.”

Accordingly it partly allowed the petition.

Case Title: Coolulu Sports Private Limited And Union of India & Others

Case No: WRIT PETITION No.15087 OF 2022

Citation: 2023 LiveLaw (Kar) 149

Date of Order: 05-04-2023

Appearance: Advocate Manu P Kulkarni a/w Advocates Shristi Widge, Sharan Balakrishna, Manoj Raikar for petitioner.

CGC Anupama Hegde for R1, R2, R4.

Senior Advocate Aditya Sondhi a/w Rashmi Deshpande for R3.

Click Here To Read/Download Order