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Judgment
Janarthanam, J.—Messrs. Power Control and Appliances Company having its base and location at Ambattur, Madras, is the sole
proprietrix concern of one Mrs. Madhuri Mathur. The said company, it is said, had been manufacturing and marketing power operated kitchen
mixies since 1963 under the name and style of ''sumeet'' brand, a registered trade mark since 1970. The mixies are packed in card board boxes
containing a pictorial display on the four sides of the cardboard box and also on the top with attractive and artistic get up. Along with the mixies,
certain operating instructions and a guarantee card are also given. The aforesaid company is the owner of the copyright with respect to the pictorial
display on the four sides of the cardboard boxes, the booklet containing instructions and also the guarantee card, which were devised, conceived
and made by Mrs. Madhuri Mathur with the help of artists, photographers, printers and executives employed for valuable consideration, and she is
the first owner of the said copyright as per S. 17 of the Copyright Act, 1957. The registered Trade Mark in the manner in which it is written, has
been subsequently assigned on 1.1.1981 by Mrs. Madhurri Mathur in favour of Messrs. Sumeet Research and Holdings Limited, 601-E, Poonam
Chambers, Shivsagar Estate, Dr. Annie Besant Road, Worli, Bombay-18.
Power Control and Appliances Company along with other sister concerns filed three suits, viz. C.S. Nos. 343, 431 and 432 of 1992, in April
1992 against Sumeet Machines Private Limited, and Sekar and Sagar (a partnership firm of three partners - Sekar, Shantilal and Bapatlal) for
certain reliefs relatable to the infringement of the copyright, trade mark and design, under the Copyright Act, 1957, the Trade and Merchandise
Marks Act, 1958 and Designs Act, 1911, and also obtained interim injunction in Application Nos. 226, 227, 271 and 272 of 1992 on 25.3.1992
and 9.4.1992.
In the first week of April 1992, Sumeet Research and Holding Limited filed C.C. Nos. 2946 and 2947 of 1992 and Mrs. Madhuri Mathur filed
C.C. No. 2948 of 1992 against the following seven persons,
Sumeet Machines Private Limited, Nasik 402 001,
Mrs. Promila Thukral, General Manager of No. 1 company,
Arun Muthanna, Regional Manager - South of No. l company,
Sekar & Sagar, partnership firm, Madras 600014,
Sekar, partner of No. 4 firm,
Shantilal, partner of No. 4 firm, and
Bapatlal, partner of No. 4 firm,
arraigning them as Accused 1 to 7 for infringement of Sections 78 and 79 of the Trade and Merchandise Marks Act, 1958 and 63 of Copyright
Act, 1957.
Application Nos. 226, 227, 271 and 272 of 1992 came up for further orders and on 29.4.1992 the interim orders granted earlier had been
vacated.
The persons arraigned as Accused 1 to 4 in the aforesaid three complaints have resorted to the present actions, invoking the inherent jurisdiction
of this Court u/s 482 Cr.P.C., to quash the criminal proceedings against them. On 26.5.1992 interim stay was granted in Crl. M.P. Nos. 3362 to
3364 of 1992. The Respondents, on receipt of notice, entered appearance through a counsel of their choice and filed Crl. M.P. Nos. 3959 to
3961 of 1992 to vacate the interim stay granted. By consent, the main petitions themselves were taken up for final disposal and both sides were
heard.
From the submissions emerging on either side, the following points arise for consideration:
i) In a prosecution which gives rise to cause of action for the institution of proceedings - civil or criminal - whether it is legitimately permissible for
both actions to be commenced and continued before both the civil and criminal forums simultaneously?
ii) Whether, on account of the absence of express and explicit averments in the complaint as to any of the persons arraigned as accused to be in
charge of and responsible to the conduct of the business of the company at the time of the commission of offence, the criminal proceedings initiated
against them are liable to be quashed?
Mr. R. Thiagarajan, learned Senior Counsel appearing for the Petitioners, and Mr. U.N.R. Rao, learned Senior Counsel appearing for the
Respondents, projected lively submissions revolving on the questions posed from all facets and also relied on various precedents, and the same
may now be elaborately considered.
The arena of discussion may now be entered into on the question as to whether it is legitimately permissible and/or desirable to resort to both
actions, civil and criminal, in the case of the transaction giving rise to cause of action for both proceedings. Rather, it is inconceivable of myriads of
situation in actual life and that perhaps is or may be the reason to prescribe an inflexible rule without any variation applicable to all eventualities and
situations. The paradigms of this aspect of law are conceptual. The principles settled are terse and the adjudication of such disputes are delicate
matters requiring intimate knowledge of factual or actual life situation and the attendant consequences to be flowing therefrom. A dispute as to
possession of property between rival claimants may give rise to causes of action for institution of proceedings before forums having civil and/or
criminal jurisdiction. There is of course no inhibition or interdiction in law for resortment to both actions simultaneously. But pragmatism and
practicalism in the application of law did permit in an impelling fashion for adjudication of such a dispute first in point of time by the civil forum
which alone can be expected to go into the investigation of the implications and nicetices of such a right, taking into account the principles of law
bearing upon its determination and adjudication, and to allow the criminal forum to embark upon such an investigation is not at all desirable
obviously for the reason of the decisions of civil forums on such questions being always binding on the criminal forums. Resortment to initiation of
proceedings u/s 145 of the Code of Criminal Procedure in addition to proceedings before competent civil forums is a glaring instance and in such a
situation what is the best course to be adopted in a pragmatic way had been said by superior courts of jurisdiction and the Apex Court of this
country on occasion more than one. Though a catena of cases had been cited, one emerging from the Apex Court may alone be referred to here,
leaving the rest as unnecessary in a bid to rather highlight the point. In Ram Sumer Puri Mahant Vs. State of U.P. and Others, their Lordships of
Supreme Court expresses:
When a civil litigation is pending for the property where in the question of possession is involved and has been adjudicated, initiation of a parallel
criminal proceeding u/s 145 of the Code, would not be justified. The parallel proceedings should not be permitted to continue and in the event of a
decree of the civil Court, the criminal Court should not be allowed to invoke its jurisdiction particularly when possession is being examined by a
civil court and parties are in a position to approach the civil court for interim orders such as injunction or appointment of receiver for adequate
protection of the property during pendency of the disputes. Multiplicity of litigation is not in the interest of the parties nor should public time be
allowed to be wasted over meaningless litigation.
A contra position is also capable of being conceived in a situation where the main ingredients of the offence into which an investigation is made
depend upon the determination of civil rights. What has to be done had been said in a scintillating fashion by a learned Judge of this Court in
Thankappan v. Thankaraj 1988 L.W. Crl. 395 thus:
It is true that this Court is generally reluctant to quash investigation into crimes. The police have a duty to investigate into cognizable offences and
merely because a civil litigation, is in some way connected with the issue, criminal investigation cannot be stopped. As rightly contended by the
learned Counsel for the Respondent, determination of civil rights by the civil forum would be independent of investigation into crimes committed
with reference to identical properties. However, this would depend upon the facts of each case and no hard and fast rule can be laid down. If the
main ingredients of the offences into which an investigation is made, depend upon the determination of civil rights, then it is desirable that the Civil
Courts are permitted to decide the issue. Requiring the police to go into complicated questions of civil rights, in order to find out whether the
ingredients of the offences are made out, would be beyond the scope of a police investigation into crimes.
As adverted to earlier, ordinarily civil and criminal proceedings are independent of each other and even if the subject matter overlaps, they may
be continued simultaneously. It is also well settled that ordinarily if one of the two proceedings must be stayed, it is the civil proceedings that are
stayed. This is based on the distinction between the two proceedings. Criminal proceedings are based on public policy, while civil proceedings are
intended to determine the rights between the parties. Even to this rule, having regard to peculiar circumstances and the competing inherent
characteristics of the case, a learned Judge of the Delhi High Court made a departure in the sense of quashing criminal proceedings, in Misri Lal v.
Tota Ram 1984 Cri. L.J. 1338. To bring home the point, better it is I think to pen down in an incisive way the crisp facts of the case. The accused
by entering into a conspiracy and forging a will, got the necessary mutations done in the registry. The person affected by the forgery, besides
Launching criminal prosecution, resorted to bringing an action before the competent civil forum for the establishment of his rights. In such a
situation, the question arose as to whether both proceedings should be allowed to come to their logical conclusion simultaneously, or one of the
proceedings should be quashed or stayed till the proceedings are concluded. In this context, the learned Judge observed as follows:
While the proceedings pending in the criminal court would not naturally determine rights, the proceedings in the civil court would conclusively
determine rights between the parties and put an end to the controversy. Moreover, on the outcome of the proceedings in the civil court, the
accused persons could still be prosecuted either at the instance of the Court, or otherwise, should the civil court return a finding that the will was
forged document and that it was used as genuine in the proceedings before the Tahsildar.
.... Having regard, however, to the peculiar circumstances of this case and the competing inherent characteristics pointed out above, I think, I
would be striking a reasonable balance between the conflicting claims to quash the proceedings on the condition that the complainant would be
entitled to seek their revival on the conclusion of the civil proceedings, should he be advised to do so. He would also have the liberty to initiate
fresh proceedings should the cause of action for it survive the decision of the civil court, both directly or through the intervention of the civil court. I
direct accordingly.
Courts in this country have also conceived of situations of conflicting decisions being arrived at by the civil and criminal forums, respecting a
transaction giving rise to cause of actions for both actions. This sort of a view has been taken in (Padmanabhini) Ramanamma Vs. Golusu
Appalanarasayya, and Division Bench of this Court observed as under:
It has often been said in this Court that, where a civil suit and a criminal complaint have been filed, which raise the same issues between the same
parties, the hearing of the complaint should be stayed until the suit has been decided. And this has been put on the ground hat it will avoid a
possible conflict in decision. Our brother Jackson has pointed out in a judgment, in which we entirely concur Gnanasigamani Nadar Vs.
Vedamuthu Nadar, that the risk of such a conflict is one that is inherent in the division of causes into criminal and civil. The judgment of neither is
binding on the other and each must decide the cause on the evidence before it. If they arrive at different conclusions, it is regrettable, but
unavoidable.
Maheswaran, J., while dealing with a contention that a criminal case is not maintainable when a civil suit for recovery is filed, observed thus in
Masilamani v. G. Ranganathan 1987 L.W. Crl. 160:
.....I may at once point out that the two remedies are not mutually exclusive, but clearly co-extensive and essentially differ in content and
consequence, in Pratibha Rani Vs. Suraj Kumar and Another, the Supreme Court has pointed out that there are a large number of cases where
criminal law and civil law can run side by side and that the object of criminal law is to punish the offender who commits an offence against a person
or property or the State for which the accused, on proof of the offence, is deprived of his liberty and in some cases even his life, but that does not
however affect the civil remedies at all for suing a wrong doer in cases like arson, accidents etc., and that it is an anathema to suppose that when a
civil remedy is available, a criminal prosecution is completely barred. The Supreme Court further pointed out that the two types of actions are quite
different in content, scope and import. The objection, therefore, is not well-founded. The petition u/s 482 of the Crl. P.C., is therefore dismissed.
In this jurisprudential setting, an attempt may now be made to sift the facts and circumstances of the instant case to find out the desirability or
otherwise of continuing both actions till a logical conclusion in each case is arrived at. There is no pale of controversy that the trade mark in
question is a registered one. Once a trade mark is registered, certain rights are conferred on the registered owner as per S. 28 of the Trade and
Merchandise Marks Act. Section 29 deals with infringement of trade marks, while S. 30 deals with defences open to the person against whom
infringement action had been brought about, in the sense of stating what acts are not constituting infringement. Section 105 prescribes the forum for
institution of proceedings either for infringement or passing off action, while S. 106 specifies the reliefs that are available. These are thus the various
provisions of the Trade and Merchandise Marks Act, 1958, for an aggrieved person to take recourse before the civil forum in establishment of his
rights and for remedial action. These provisions apart, the said Act in Chapter X, covered by Ss. 76 to 95, deals with offences, penalties and
procedure relatable to proceedings before the criminal forum. Of these provisions, reference may be made to Ss. 77, 78, 79 and 84 which are
relevant for the present purpose. Section 77 deals with falsifying and falsely applying any trade mark while Sections 78 and 79 prescribe penalty
for applying false trade mark, trade description, etc., and for selling goods to which a false trade mark or false description is applied. Section 84
provides the defences open to persons facing prosecution under Ss. 77 to 79 of the Act. Worthy it is to note at this juncture the purpose for which
the said Act has been enacted, as revealed by the preamble of the Act, which is to the following effect:
An Act to provide for the registration and better protection of trade marks and for the prevention of the use of fraudulent marks and merchandise.
The preamble clearly shows that not only protection was sought to be given to the owners of the registered trade mark in the same sense of
preservation of their rights, but it also gives issuance of an assurance to the gullible public in purchasing genuine goods. To effectuate such a dual
purpose, provisions as indicated supra, had been made.
The analogous provisions in the Copyright Act, 1957, may now be referred to. Chapter XII, covered by Ss. 54 to 62, deals with civil
remedies for infringement of copyright. Section 54 defines ''owner of copyright'' by way of an inclusive definition and S. 55 deals with civil
remedies for infringement of copyright. Section 63 prescribes punishment for the offence of infringement of copyright or other rights conferred by
the Act, while S. 63-A provides for enhanced penalty on second and subsequent convictions.
However, the signal factor to be taken note of here is that no provision had been engrafted in these two Acts interdicting or inhibiting both civil,
and criminal actions being proceeded simultaneously before competent forums.
Taking notice of the fact-situation, impelling or compelling the resorting to one course or the other, or both courses simultaneously, as had been
done by various Courts of superior jurisdiction and the Apex Court in the decisions cited supra, and on an analogy of the various provisions
adumbrated under the two Acts, I am of the view that in the instant case, both actions have to, proceed simultaneously and if done so, no prejudice
is likely to be caused to any of the parties, in as much as both the actions are not mutually exclusive, but clearly co-extensive and quite different in
content and consequence, thereby affixing my seal of approval to the bone of contention urged by Mr. U.N.R. Rao, learned Senior Counsel
appearing for the Respondents.
The second bone of contention as urged is relatable to the feasibility or otherwise of fastening or mulcting liability upon Petitioners 2 to
4/accused 2 to 4 in the facts and circumstances of the case, on the face of the sanguine provisions adumbrated either u/s 88 of the Trade and
Merchandise Marks Act or u/s 69 of the Copyright Act, both provisions being identical in tenor and terms without any variation whatever. There is
no manner of doubt that first Petitioner/accused 1 company would fall within the definition of the term ''company'' as contemplated by either of the
aforesaid provisions. The effect of Sub-section (1) of these provisions is that when an offence is said to have been committed by a company, apart
from fastening the liability upon the company, other personnel who are in charge of and responsible for the conduct of the affairs of the company at
the time when the offence was committed, are also mulcted with liability for the offence stated to have been committed by the company. There is
also an identical proviso appended to both these Sub-sections, according to which, if the person proves that the offence was committed without his
knowledge or that he exercised all due diligence to prevent the commission of such offence, he shall not be liable for any punishment. Sub-section
(2) of the aforesaid provisions stipulates that, notwithstanding anything contained in Sub-section (1) where an offence under those Acts has been
committed by a company and it is proved that the offence has been committed with the consent or connivance of, or that the commission of the
offence is attributable to any neglect on the part of any director, manager, secretary or other officer of the company, such officer shall also be
deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Mr. Thiagarajan, learned Senior Counsel, appearing for the Petitioners, contended that in the absence of specific allegations in the complaint as
to Petitioners 2 to 4/accused 2 to 4 being in charge of and responsible to the Petitioner 1/accused 1 company for the conduct of its business, the
criminal proceedings initiated against them are liable to be quashed. Such a submission, I feel, cannot carry conviction either on facts or on law in
the facts and circumstances of the case. Petitioners 2 and 3 had been respectively described as General Manager and Regional Manager(South) of
Petitioner 1 company. This apart, specific averments had been incorporated in the complaints as to they being in charge of the affairs of the
Petitioner 1 company or responsible for the conduct of its business. In such circumstances, it is possible to presume that they, on the face of Sub-
section (1) of the aforesaid provisions, are guilty of the offence and are liable to be proceeded against and punished accordingly. Such a
presumption is however rebuttable and this aspect of the matter is made crystal clear by the proviso appended to the said Sub-section, according
to which, if they prove that the offence was committed without their knowledge or that they exercised due diligence to prevent the commission of
the offence, they shall not be liable to any punishment. No doubt, true it is that as respects Petitioner 4/accused 4, a partnership firm, it is not
connected with the management of Petitioner 1 company and it is after all dealer of the products of Petitioner 1 company. It is said that Petitioner 4
firm issued publication by way of advertisements in the newspapers displaying the Respondent/complainant''s trade mark ''Sumeet'' as that of
Petitioner 1 company and it is also stated to have sold goods of Petitioner 1 company to which false trade mark had been applied. From the mere
fact that Petitioner 4 firm is not in charge of and responsible to the conduct of the affairs of Petitioner 1 company, it cannot be stated that Petitioner
4 is not prosecutable for the offence committed by Petitioner 1 company, on the fact of the sanguine provision adumbrated under Sub-section (2)
which starts with a ''non-obstante'' clause by the incorporation of the phraseology, ""Notwithstanding anything contained in Sub-section (1)''. This
non-obstante clause has to be given its due meaning in the context, in which it is used, and it makes it plausible to give interpretation in a pragmatic
way to the provisions adumbrated in Sub-sections (1) and (2) of these provisions. Under Sub-section (1), the personnel in charge of and
responsible to the company for the conduct of the affairs of the company shall be deemed to be guilty of the offence and shall be liable to be
proceeded against and punished accordingly and such person charged can rebut such a presumption by showing that the offence was committed
without his knowledge or that he exercised all due diligence to prevent the commission of such offence. Under Sub-section (2), it is legitimately
permissible to prosecute even persons, who were not stated to be in charge of and responsible to the company for the conduct of its business, if it
is proved that the offence has been committed with the consent or connivance of or attributable to the neglect on the part of any of those persons
prosecuted. To put it otherwise, in case of prosecutions of persons under Sub-section (2), presumption of their guilt cannot at all be inferred by
virtue of their positions in the company as in the case of presumption to be drawn in the case of personnel, who had been in charge of and
responsible to the affairs of the company for the conduct of its business. The question of proof for the involvement of persons in the offences
committed by the company would be expected to come only during the course of trial and even in case of persons, prosecuted under Sub-section
(2), a deeming provision had been incorporated therein in a limited way, in the sense of such of those persons deeming to be guilty of the offence
committed by the company. The crux of the appreciable difference between the provisions adumbrated under Sub-sections (1) and (2) bristles to
these: Under Sub-section (1), the burden is on the person charged of the offence to rebut the presumption invoked against him, while under Sub-
section (2), the burden of proof never shifts and it is always on the prosecution to prove by placing proper evidence before Court that the person
charged is guilty of the offence. This sort of interpretation alone, I feel, will tend to give sense to the statutory provisions to achieve the purpose for
which the same had been enacted.
In the decisions cited by Mr. Thiagajan, learned Senior Counsel for Petitioners, in Carborandum Universal v. Food Inspector, Thiruvottiyur
1989 L.W. Crl. 41, Sham Sunder and Others Vs. State of Haryana, and Manian Transports v. S. Krishnamoorihy 1991 L.W. Crl. 137, there
were no specific averments in the complaints as to the persons prosecuted for the offences said to have been committed by the company, being in
charge of and responsible to the conduct of the affairs of the company. Such is not the case here as respects Petitioners 2 and 3 and their
involvement in the management of the company is explicitly stated by incorporation of averments in the complaints. Though the case of Petitioner 4
stands on a different footing, in the sense of not attracting Sub-section (1), yet it attracts liability under Sub-section (2) of the aforesaid provisions,
as stated supra. In the view that I have taken, the second bone of contention also bristles next to nothing.
For all the reasons stated above, all these petitions deserve to be dismissed and they are accordingly dismissed.