Supreme Court asks Vodafone to deposit Rs.2,500 crore

Source : Thaindian.com

The Supreme Court Monday asked telecom major Vodafone to deposit, within three weeks, Rs.2,500 crore as a component of its tax liability on its transaction with Hutchinson International Ltd. for acquiring its India operations Hutch Essar.

The apex court bench of Chief Justice S.H.Kapadia, Justice K.S. Radhakrishnan and Justice Swatanter Kumar asked the telecom giant to give a bank guarantee of Rs.8,500 crore for the balance tax liability calculated against it by the tax authorities.

The court said that Rs.2,500 crore should be deposited within three weeks and bank guarantee of Rs.8, 500 crore be given within eight months. The bank guarantee has to be from a nationalised bank.

The court said that if Vodafone succeeds in its case, the tax authorities would refund the excess amount with interest to be decided by the apex court.

Appearing for Vodafone, senior counsel Harish Salve said that after apportionment, its tax liability comes to Rs.1,330 crore. This was countered by Attorney General G. Vahanvati, who argued that the total tax liability was to the tune of Rs.11,000 crore.

The court then asked Vodafone to deposit an amount of Rs.2,500 crore and give a bank guarantee of Rs.8,500 crore.

Vodafone has challenged the Bombay High Court verdict that asked the tax authorities to go ahead with the assessment of the tax liability of telecom giant arising out its acquisition of India operations of Hutch Essar.

Vodafone has contended that it did not attract the jurisdiction of the Indian tax authorities as Vodafone PLC is a Netherlands based and Hutchinson International Ltd. was Hong Kong based.

It has also contended that the transaction of Vodafone acquiring Hutch Essar too took place on foreign soil.

The entire deal between the two telecom giants was to the tune of $11 billion and the tax liability works out to be $2 billion. Upon conversion in rupee, the tax liability along with interest component works out to be Rs. 11,128 crore, the tax athorities have claimed.

Set up Armed Forces Grievances Redressal Commission : Supreme Court

Source : Indlaw.com

The Supreme Court directed the Union government to set up within two months the Armed Forces Grievances Redressal Commission for speedy disposal of the grievances of the serving and retired servicemen and their family members. 

A bench comprising Justice Markandey Katju and Ms Justice Gyansudha Misra directed that the commission would be headed by a retired Supreme Court Judge and Mr Justice Kuldeep Singh shall be the first chairman. 

The Vice-chairman shall be a retired Chief Justice of a High Court and Justice S S Sodhi shall be the first vice-chairman. 

Retired Army Chief General V P Malik, Lieutenant General Vijay Oberoi (retired Vice Chief of Army Staff) and a civil servant to be appointed by the Centre would be the members. 

The commission office bearers would have tenure of two years, renewable after two years. 

The apex court also directed the commission would also frame and recommend to the Centre a scheme for proper rehabilitation of discharged soldiers who usually retire at the age of 40 years if promoted to the rank of Havildar. 

The apex court also recommended that a discharged soldier should be given alternative employment so that he can support his family and the commission will go into this matter also in detail and suggest appropriate scheme for rehabilitation of ex-army men who also include Air Force and Navy personnel who retire at a relatively young age. 

The commission will have its office in Chandigarh with recommendatory power and all authorities in India civil or military (including the secretary defence and the chiefs of the Army, Navy and Air Force) shall extend all cooperation to the commission to enable it to discharge its functions effectively and the Centre would issue the notification constituting the commission forthwith. 

Directions have been issued on the petition of Pushpavanti who was getting Rs 80 per month as pension after the death of her husband, an Army major who had fought 1948, 1962 and 1965 wars for the country and was a highly decorated officer with 14 medals. In these days a kilogram of Ahrar dal costs Rs 80. 

Her petition automatically stands transferred to the commission for speedy disposal and the next hearing of the case would be on February 7, 2011.


Find the Entire Text of the Judgment here.

Descriptiveness & Registration of Trademark : The Law

The Division Bench of the Delhi High Court has held that a descriptive word cannot be registered as a trademark. The decision was rendered in the matter Marico Ltd. v. Agro Tech Foods.

Marico, which uses the expressions “losorb” and “Lo-sorb” for its product Saffola and Sweekar, had filed the injunction application stating that it has coined the word and got the registration of it. However, the court held that the word was a common descriptive expression and while rejecting the appeal, held as under;

19. Our conclusion is that we have in fact totally failed to appreciate the argument as raised on behalf of the appellant. Surely, when rights are claimed over a word mark as a trademark and which word mark is in fact a mere tweak of a descriptive word indicative of the kind, quality, intended purpose or other characteristics of the goods, it is not open to urge that although the respondent is using the descriptive word mark in fact only as a part of sentence as a description (and even assuming for the sake of argument only the descriptive word mark in itself) alongwith another independent trademark, yet the use of descriptive words are to be injuncted against. How can it at all be argued that though the respondent is in fact shown to be using the disputed word(s) only with a descriptive intendment, yet, such use should be taken not in a descriptive manner but as a trademark. If we permit such an argument to prevail then what will happen is that what cannot be directly done will be indirectly done i.e., whereas the appellant is not entitled to succeed in the infringement action because the use by the respondent is in furtherance of its statutory rights of the user of the words which are descriptive of the kind, quality, intended purpose or characteristic of the goods, yet, merely because the appellant states that the respondent is using the same as a trademark, the same should be taken as infringement of the trademark of the appellant. Not only the plaintiff has no exclusive rights whatsoever to the trademarks because they are such which fall within the mischief of Section 30(2)(a), the respondent/defendant is always fully justified and entitled to use the descriptive words in any and every manner that it so chooses and pleases to do. If there are no rights of the plaintiff to exclusive user of the trademark then where does arise the question of disentitlement of a defendant to use the trademark of the appellant inasmuch as any person who adopts a descriptive word mark does so at its own peril in that any other person will also be fully entitled to use the same in view of a specific statutory rights thereto, and there are various other statutory rights including that under Section 30(2) (a), and which is what is being done by the respondent in the facts of the present case and its rights being further stronger because of the use alongwith the simultaneous use of its trademark "Sundrop". In the facts and circumstances of the present case, Section 30(2)(a) clearly applies in entitling the respondent to use the expression "WITH LOW ABSORB TECHNOLOGY" because that is only a descriptive use by normal English words in the English language indicative of the kind, quality, intended purpose of characteristic of the goods. There is no use of the expression "bonafide" in Section 30(2)(a) as is found in Section 35, and we do not propose to import in Section 30(2)(a) the expression "bonafide" because the subject matters of the two Sections i.e. Section 32(a) and Section 35 are though common on certain limited aspects, however the two sections do in fact operate in separate fields. Also looking at the issue in another way, "bonafide" aspect can in a way be said to be very much included in Section 30(2)(a) because the use of words which indicate their relation to the goods for the kind, quality, intended purpose or other characteristics etc. of the goods, is clearly only a bonafide user of the same and which "bonafideness" does not have to be additionally proved. In fact, there is ordinarily not only no lack of bonafides in using the normal descriptive word, and on the contrary there is in fact malafides of a plaintiff in adopting otherwise a descriptive word mark and for which adaption there is ordinarily an absolute ground for refusal of registration of the trademark. There is no malafides of the respondent as alleged by the appellant because the respondent is using the expression "LOW ABSORB" as part of a sentence in a descriptive manner and the respondent is also prominently using its own trademark "Sundrop", an aspect we have repeatedly referred to otherwise in this judgment. Merely because the respondent used "TM" earlier after the expression "LOW ABSORB TECHNOLOGY" is not such as to wipe out statutory rights/defences of the respondent. We are also of the opinion that once the person, against whom a suit is filed on the ground of infringement of a trademark which is in fact a descriptive word, then, if a defendant is using his own word mark as a trademark prominently in addition to the descriptive word mark which the plaintiff claims to be his trademark, nothing further is required to show the bonafides of the defendant against whom infringement of a registered trademark is alleged. In the facts of the present case, we have already adverted to in detail the prominent use by the respondent of its independent trademark "Sundrop", and, the fact that the expression "LOW ABSORB" is being used only as part of the sentence which reads "WITH LOW ABSORB TECHNOLOGY".

20. We may however note that when two identical trademarks are used by two parties in the market, or that a use of a descriptive word by a defendant can be confused with the trademark of a plaintiff, then a Court is always entitled to ensure that such distinction is brought or conditions are imposed qua the two identical or deceptively similar trademarks by imposing such conditions of use on both or either of the parties so that a third vital/important stakeholder in these Intellectual Property Rights (IPR) disputes viz. the public, is not in any manner deceived/confused and whose rights are not prejudicially affected. This has been held by us in a recent judgment in Cadila Healthcare Ltd. Vs. Diat Foods (India) decided on 29.9.2010, in which this Court (speaking through Sanjay Kishan Kaul, J) has relied upon another Division Bench judgment of this Court in the case of Goenka Institute of Education and Research Vs. Anjani Kumar Goenka & Anr. AIR 2009 (Delhi) 139: 2009 (160) DLT 417 as also Section 12 of the Act and held the entitlement of a Court to issue directions to ensure that there is no confusion in the public with respect to two separate products which are sold under identical or deceptively similar trademarks. Of course, in this case of Cadila Healthcare Ltd. use by the respondent/defendant was not as a trademark but only in the descriptive sense, and yet, to avoid confusion to the public, directions were issued. Similar would be the entitlement of a Court afortiorari when two parties use same or deceptively similar descriptive word marks as trademarks.

CONCLUSIONS

21. The following conclusions thus emerge:-

(i) A mark which is sought to used as a trade mark, if, is one falling under Section 9(1)(a) to (c), then the same ordinarily ought not to be afforded protection as a trade mark.

(ii) Before the marks which fall under Section 9(1) (a) to (c) are given protection as a trade mark, the distinctiveness must of an undisturbed user of a very large/considerable number of years, with the emphasis being on discouragement on appropriation of such marks which fall under Section 9(1) (a) to (c).

(iii) A civil court in a suit filed for infringement of a registered trade mark is entitled (if there is no earlier judgment which has achieved finality in cancellation proceedings) to consider the validity of registration for the purpose of passing an interlocutory order including of grant or refusal of an interim injunction- once the objection as to invalidity of registration is taken up in the pleading/written statement. 

(iv) A trademark which falls under Section 9(1) (a) to (c) cannot be registered on proposed to be used basis. Evidence on distinctiveness with respect to trade marks falling under Section 9(1) (a) to (c) should be the evidence of user evidencing distinctiveness as on the date of application for registration or at the best of evidence up to the date of registration.

(v) In infringement actions the court is entitled to consider the evidence of distinctiveness up to the date of registration for the purpose of passing any interlocutory order and not evidence showing distinctiveness post registration. However, in cancellation proceedings evidence of distinctiveness post registration of the trade mark can also be considered.

(vi) Even if there is finality to registration of a trade mark, yet the defendant in infringement action can take statutory defences under Sections 30 to 35 to defeat the infringement action.

22. In view of the above, we find that the appeal is not liable to succeed. The appellant does not have a prima facie case in its favour in view of the above discussion. The balance of convenience is in favour of the respondent who will be caused grave and irreparable injury if the injunction as prayed for is granted. The law is that as an appellate Court we should not interfere with the well reasoned judgment of learned Single Judge in terms of Skyline Education Institute (India) Private Limited Vs. S.L. Vaswani and Another (2010) 2 SCC 142. The appeal is therefore dismissed. We may state that ordinarily being a commercial matter where giant companies can afford to pay costs we would have imposed actual costs on the appellant, however, we desist from doing so because there is no authoritative pronouncement of a Division Bench of this Court on certain aspects we have dealt with in this judgment including with respect to an entitlement of a plaintiff to an infringement action with respect to a descriptive word trademark and related word marks which are otherwise such for which there is an absolute ground for refusal of registration.

Government introduces another version of Enemy Property Amendment Bill in Lok Sabha

Source : IndLaw.com

The Government today introduced in the Lok Sabha yet another version of Enemy Property amendment Bill that provides all enemy properties will vest in the custodian till they are divested by the Centre, and such property could be divested only to the owner or his or her lawful heir.

If, however, the enemy property had been divested from the Custodian by a valid order made under section 18 before July 2, 2010 or where the property had been returned to the owner or his lawful heir, such enemy property would continue to remain with such persons. 

The amended version of the four-decade-old law proposes to allow Indian legal heirs to inherit the properties of their relatives who migrated to Pakistan after Partition. 

The Bill, entitled The Enemy Property (Amendment and Validation) Second Bill, 2010 was introduced by Home Minister P Chidambaram amidst pandemonium in the House created by the Opposition over its demand for a JPC probe into the alleged corruption in the allotment of 2G spectrum. 

The Bill also provides that nothing contained in the Act shall affect the claim made by any person before any court of law or other authority against the owner or his lawful heir to whom the property was or may be returned under this Act and such claim shall be decided in accordance with law by the court or any other authority. The Bill also says that transfer of any enemy property shall not include any transfer or any claim of transfer made through oral will or oral gift or if it has been done without the permission of the competent authority and no court shall have jurisdiction to order divestment from the custodian or direct the central government to divest enemy property. 

However, the court will have jurisdiction to adjudicate whether the property claimed to be vested in the custodian was an enemy property or not. 

Before introducing the new Bill today, the Government withdrew the old amendment Bill, which had faced strong BJP Opposition in the House in the last session of Parliament. 

The Bill seeks to replace the Enemy Property (Amendment and Validation) Ordinance, promulgated by the President on July 2. 

The government had enacted a law in 1968 by which it declared the properties left behind by those who migrated to Pakistan during partition as enemy properties. 

Introducing the Bill, Mr Chidambaram said that the 1968 Act was brought in to provide for continued vesting of enemy property vested in the Custodian of Enemy Property for India under the Defence of India Rules, 1962 and other connected matter. 

‘Of late, there have been a number of judgements by various courts that have adversely affected the powers of the Custodian and the Government of India as provided under the Enemy Property Act 1968. In view of such interpretation by the courts, the custodian has been finding it difficult to sustain his action under the Act,’ he said.