JUDGMENT <NAME>, J.

(1) What arises-for consideration in this case is the nature and extent of rights of the plaintiff in printed pencil boxes/cartons in which the pencils are being sold by the plaintiff.

(2) In this suit as well as in this application it is contended that the plaintiff is the registered owner of trademark bearing registration No. 324515-B dated 13th April, 1977. It is asserted that the said trade mark is valid, subsisting full legal force. Thattrade'rnark is in reject of fountain pens, pencils, ball pens and refills therefore, 'the registered trade mark in terms of the certificate, of registration in two words <ORG>.

(3) It is also asserted in the application, as also in the suit that the plaintiff is the owner of copyright in the floral design that appear on its printed cartons/boxes and that the design. thereon, in "original artistic work". It is also asserted that the respondents are passing off their goods as goods, of the plaintiff.

(4) It is asserted that the plaintiff is one of the largest manufacturer of art and stationery materials in India and have been exclusively marketing the goods of its manufacture for the past 40 years; that since the year 1977, the plaintiff has been manufacturing and selling their Camlin Flora Pencils in distinctive and artistic cartons.

(5) That distinctiveness, which is claimed, is that the pencil in question has got colour combination of white, pink and green,. that there are .two' strips of while and green next to each other at the rear portion of the pencil, that here is a floral design on the skin of the pencil, which is unique. The unique design comprises of array of pink flowers with a green leaf on the white background. It is also asserted that the same repetitive floral pattern, appears on the cartons. .

(6) The cartons, which .have been annexed Along with the plaint, as stated above, is a printed carton made of some kind of paper board.

(7) It .is also asserted that on account. of extensive, use of the words Camlin Flora on the pencil and the. carton /box vast reputation has been acquired, which denote .a high quality product originating exclusively from the applicant/plaintiff.

(8) It is asserted that the defendants are using deceptively similarly decorated pencil and carton,, which are deceptively similar to .the pencil-decorated with the flowers, and the-cartons which are, and have been in use, ofthe applicant/plaintiffs.

(9) It is asserted that the applicant had got a copyright in the artistic logo script of trade mark Flora as original artistic work.

(10) It is also asserted the application that that Camlin 's the house mark 'of the applicant, regarding Camlin being the house mark of the petitioner there have 'been no arguments urged during the course of hearing, and this question does not need consideration in this application. It may however be mentioned that Trade and Merchandise <NAME> Act does riot define the word 'House Mark'. The concept of House Mark is not to be found anywhere except in an administrative orders of Comptroller General <NAME> in 47RPC, 37, 43 L. 34 which cannot be given any recognition in India, in view of absence of such a concept in the statutory provisions. If is possible that at a future date when the industrialisation of India has resulted in Mega Corporations conglomerates that House Mark may need statutory/legal recognition by Courts. .

(11) The defendants contended that the application is not maintainable on account of unreasonable delay and laches on the part of the applicant/plaintiff and that the defendants' cartons bearing the word Captain Elora with numbers 1180 in connection with their pencil have been in use since 1-4-1981, and that the suit filed in 1985 is without any explanation of the delay Of four years. It is also asserted by the defendants that they are the registered owners of the carton "entitled" Captain Elora which is (registered at No. A-36907/82 under the Copyright Act , 1957 and that registration is still valid. It is asserted that- Elora and Flora are distinctive words. The word Flora indicates flowers. The word Elora refers to the famous caves.

(12) It is also asserted that the cartons used by the defendants and the plaintiff are absolutely distinct and different and there is no similarity between the two. .

(13) It is asserted that the defendants hold. registration of the .cartoons under-the Copyright Act but the plaintiff do not hold any such copyright.

(14) It is also asserted that the suit. which has been Sled, 58 false, frivolous and vexatious and is an attempt on the part of the plaintiff to put the defendants out of business and the market.

(15) What is required to be determined in this case is whether any copyright can exist in 'the subject-matter in which the same. is claimed. That is to say whether there is any copyright in the printed cartons in which the pencils of the plaintiff and defendants are sold (16) In order to determine whether copyright exists in the cartons, it is necessary to keep in view the legally .accepted meaning of 'copyright'. In essence. in law, copyright means the exclusive right to make copies of any copyrightable subject- matter in any tangible material form. Section 13 of the Copyright Act, 1957 which deals with subject-matter of copyright reads as under :

"1.Works in which copyright subsists: (1) Subject to the provisions of this section and the other, provisions of this Act, copyright shall subsist throughout India in the following classes, of work, that is to say (a) original literacy, dramatic, musical and artistic works; (b) cinematograph films; and (c) records. (2) Copyright shall not subsist in any work specified m sub-section(1), other than work 'to which the provisions of section 40 gr Section 41 apply, unless (i) in the case of a published work, the work is first published in India, or where the work is first published outside India, the. author is at the date of such publication or in a case where the author was dead at that date, was at the time of his death, a citizen of India; (ii) in the case of an unpublished work other than an architectural work of art, the author is at the date of the making of the work a citizen of India or domiciled in India; and (iii) in the case of an .architectural work of art, the work is located in India. Explanation. In the case of a work of joint authorship, the conditions conferring copyright specified in this sub-section shall be satisfied by all the authors of the work.

(3)Copyright shall not subsist:- (a) in any cinematograph film a substantial part of the film is an infringement of the copyright in any other work; (b) in any record made in respect of a literary dramatic or musical work, if in making the record, copyright in such work. has been infringed. (4) The copyright is a cinematograph film or a record, shall not affect the separate copyright in any work in respect of which or a substantial part of which, the file, or as the case may be, the; record is made. (5) In the case of an architectural work of art, copyright shall subsist only in the artistic character and design and shall not extent to processes or methods of construction.

(17) In this case, it is contended that the machine printed carton which are in question in which pencils are sold is covered by Section 13 of the Copyright Act, inasmuch as the carton is an "original artistic work"; it is further contended that being a original artistic work copyright subsists, therein, and the plaintiff is entitled to sue for infringement of the copyright in the cartons. .

(18) An examination of the carton would show that it is made out of some cardboard like material which has got printed matter thereon, the printed matter is .printed on the carton in different colours. The colours which are visible on the carton are green, white, red and black. Besides the printed colours on the cartons, what is also visible to the eye, is some printed words which have been impressed upon the carton. The printing of the carton has-been done by utilising any of the various printing processes by which multicolor impression can be applied to cardboard like paper.

(19) A look at the plaintiff's cartons also indicates that it contains the following words: - "FROM The Makers Of Camel Art Materials Contents of this box marked with price. <ORG> Flora 72HV Hexagonal Unbreakable Pencils Product NO. 1130" It is also written on the carton that the <NAME> (an illusturstration) referred to indicate a perfect bond of lead and wood to give an unbreakable point in normal use. (20) A look at the carton of the defendant shows that in addition to the various colours printed thereon there are the following words printed on it: "<ORG> Hb Hexagonal Deluxe Pencils Product No. 1180"

(21) It is clear that both the cartons are printed products, produced by a printing machine. My view that the carton is product of some kind of printing machine is strengthened by the fact that even in the plaint, it is asserted, the goods which are manufactured by the plaintiff are produced in very large quantities and the statement of sales of Camlin Flora Pencil indicate that pencil worth Rs. 1,24,65,552.00 were sold in the year 1982. Since each carton contains a small number of pencils it would riot b.e possible to accept that any process other than a printing process involving skilful use of hands, alone lias been utilised ia the making up of these multicolored cartons in which the pencils are being sold.

(22) In any case, it 'is clear to me that the cartons/boxes filed Along with the plaint could not have been made by an. artist utilising his skills with a paint and brush, (in addition to calligraphic skill). What is, therefore, to be determined Is whether sufficient skill and labor has been expended upon the cartons/ boxes to enable it to be covered by Section 13 of the Copyright Act.

(23) I had conveyed it' to counsels, during 'the coarse of arguments, that the card board appeared to be mechanically reproduced article, and that in order to qualify for being covered under the Copyright Act , the carton had to be 'original artistic work, that is to say, the carton must originate from an author who must-have expended his skill and labor upon it. This was put to the counsel for the plaintiff, in view ofthe judgment in 1964 Volume I All England Law Reports, 465 (equal to 1964 (1) Weekly Law Reports, 273) .(1). In that case <ORG>, relying upon the observations in an earlier judgment, said that in Copyright law, -'original' means that which originates from the athor. The observations relied upon by <ORG> contained in (1894) Ac 335 which reads as under:--- "THE word 'original' does not in this connexion mean that the work must be the expression of original or incentive thought, Copyright Act s are not concerned with the originality of ideas, but with the expression of -thought, and in the case of literary work. with in print or writing. The originality which the expression of thought in .print or writing. The originality is required relates to the expression of the thought. But the Act dots not require that expression must be in an original or novel from but that the work must not be copied from another work that it should originate from the. author.

(24) In order, therefore, to be covered by the Copyright Law, any work in which copyright is claimed .must originate-from the author. It also necessarily means, as indicated in the aforesaid passage, that the work in which, copyright is claimed must be something which has not been copied by the author from any one else. It is only when the work has not been copied, that it can be said that it has 'originated' from the author.

(25) As .1 have observed above, the cartons/boxes in question winch have been filed Along with the plaint, appear to be mechanically reproduced one. Because it is mechanically reproduced, I and of the view that it cannot be said that any skill or "labor has been expended upon the allegedly artistic carton which has been-filed in <ORG>, as the same has sheen produced by mechanical actions of.a printing machine, and not by skill and labor having been expended upon them by any natural person. It is .only natural persons who are, because of expenditure of their personal skill and labor upon any work, entitled to protection under the Copyright Law. [1924 <ORG> 75; 1960 (13 <ORG> 53(2).

(26) Because of the provisions of Order 7 Rule 14 (1) of the Civil Procedure Code, it is essential that the documents sued upon be filed with the plaint, in <ORG>; and 'document' in this case is printed boxes/cartons, filed in <ORG> In view of Order 7 Role 14, necessarily, the document sued upon is the machine printed carton which is filed in <ORG> by plaintiff. Inasmuch as the only document which has been filed is the machine printed carton, it must be taken, that the document produced in <ORG> is the original, and, it, has to be determined whether copyright can subsist therein under the Copyright Act .

(27) The counsel for the plaintiff relied upon a number of judgments wherein it was held that labels are copyrightable. It was urged on a parity of reasoning, that mechanically' printed boxes/cartons are copyrightable. He has referred to 1971 R.P.C. 57 (3): Charles <NAME> & Co. Ltd. v. <ORG>, wherein .it was said that there was a copyright in a label. In that case, it was contended by counsel for the plaintiff company that "the <NAME> label is an artistic work within the meaning of Section 3 of the Copyright Act". Justice <NAME>, who, decided the case, said that the label was an artistic work. He found "that label is admittedly an engraving, the design and layout of the label seems to me to be sufficiently distinctive to merit the description "original" within the meaning of Section 3 ". The learned Judge relied upon a judgment reported as 1959 R.P.C. 83 (4).: <CITATION> . .it appears to me that there was an admission in 1961 R.P.C. 57 (5) that .the label in question in that suit was an "engraving". By virtue of the provisions of Section 2(1) of the Indian Copyright Act, 1957, engraving is an artistic work. The label in that case, if it was an "engraving" would also be covered by the protection available to "engraving" under the Indian Copyright Act . According to <ORG> to engrave is "to cut with a graver on wood, steel etc.; to cut into, to impress deeply to form on represent by engraving". The boxes/cartons in question in this suit are not an "engraving". It was stated by counsel for the plaintiff that carton in the instant suit was printed by "Silk spinning process' and look and feel of the carton.shows that nothing has been "engraved" thereon. A product of silk printing process cannot 'be an engraving or a print from engraving. In my view, any print obtained from either an offset printing process or by a letter press or in combination of the various printing cess including silk printing process cannot amount to an engraving. In any case, the printed product like the one in question in the instant suit is not the result of any engraved material within the meaning of the word 'engraving as contained in Section 2 of the Copyright Act. The prints which are contemplated in that Section are the prints from an engraving, like artistic works like lithography, wood-cuts etc. (28) For the reason that in 1961 R.P.C. 57 supra the label was admitted to be an engraving, whereas the carton in question admittedly is not admitted to be an engraving, that case does not hep the petitioner as it does not apply to a printed carton reproduced by a mechanical process, which is the subject matter of this case.

(29) Counsel for the. plaintiff next referred to 1959 Rpc 83 (supra) <CITATION> that case, what was in question was a "sweet tin". The "sweet tins" were printed tins on which was reproduced the original, design made up by some artist What had happened was that <ORG> had copied the printed design/representation which was to be found on the tins of <ORG> in which they had sold sweets. The Court found, at page 87, that the plaintiff's design (which must refer to the original artistic work, and not what was reproduced on the tins was an "artistic work" within the meaning of Copyright Act . The Court found that the plaintiff's artistic work had been copied by the defendant's artist that the differences between the two were small differences, which did not create any substantial difference when examined as a whole. The Court came to the conclusion that "two designs in question were almost exactly similar. The arrangement is almost precisely the same, and the colours though in some cases perhaps slightly darker in the Defendants' design, are exactly similar otherwise, to the plaintiff's, and the series in which they appear in different colours is completely in accordance with the plaintiffs own arrangement. It became obvious to me, and it is now .accepted, that an artist. who was employed by <ORG> to produce a design to the defendants' whether goaded by the defendants or not, did in fact copy the plaintiff's design. It is quite incredible that the result should have been reached in any other way, and, therefore, the defendants' design is a copy of the plaintiff's design, with merely trifling additions in addition to the different background, done, it would appear, with the idea of trying to give the effect that it, was somebody else's effort'.

(30) It is not clear from the reported judgment whether original sketch/painting done by the plaintiffs' artist was produced in <ORG> or not. It, however, appears from the observations, which have been made, by Justice <NAME>, (reproduced above) that the original painting/sketch/drawing made by the plaintiff's artist was produced in <ORG>. No support can be derived by the counsel from this case. Inasmuch as 1959 Rpc 83 (supra.) appears to have proceeded on the basis-.of an original artistic work, which comprised of copyrightable subject matter, was relied upon by the plaintiff and filed in <ORG>.

(31) The counsel next relied upon 1961 Rpc 387 (6); <ORG> v. <ORG> In that. case, what was in question was the shape of 'Coca Cola' bottles, and the action was a passing off action. A penis' of the case- indicates that the said 'passing off' case was decided on the basis of concession made before the <ORG>. A case decided on concession can not be of any assistance to the plaintiffs herein, in any case, that matter related to, What was a design of bottle. and not an artistic work.

(32) The counsel then relied upon 1984 Fsr 210 (7): <ORG> LTD. and others v, <ORG>. The question in that case was labels on bottles. The label in quotation was the label of a soft mineral water drink, known as SCHWEPPES. What was allege to be an imitation of it, was. a label of <ORG> Mineral water. In that case it was conceded is apparent from what is stated at page 211, that copyright subsisted in the <ORG> labels, and that the plaintiff had the copyright in those labels. There is no such concession in the instant case. In any event, a case based on the concession is of no binding authority and of no help to the plaintiff. In <ORG> case there was no consideration of the question whether a mechanically reproduced label is by itself, a good subject matter of copyright or not. It appears to have been assumed in that case, that there was in existence an original copyrighted design executed by an artist; where's, in this case, we have to proceed on the basis that the printed carton placed before the <ORG> is the only "original". .

(33) It is significant that the printed cartons en their face, contain no notice of existence of any copyright therein. Further even on the pencils there is no indication of claim to copyright whether with respect to the pattern on its 'skin' or otherwise.

(34) The counsel next relied on 1970 R.P.C.259; which related to the shape of the bottle of <ORG>'s Dimple Scotch Whisky Bottle. This case can be of no help to the plaintiff for the reason that the Dimple Scotch <ORG> Whisky bottle is a three dimensional object having, peculiar features of shape and configuration. and may have had protection under the Design Laws. The reason for grant of injunction therein was, because the bottle, used by the plaintiff was of a shape which was copied by the defendants, and the defendant's bottle led to confusion between the defendants' bottles and the plaintiffs' bottlts.

(35) Counsel for the plaintiff also referred to 1977 R.P.C. 255(8), Karo Step Trade Mark. That case was a "rectification" proceeding for the purposes of removal of a trade mark from the register. The trade mark, which was sought to be removed, was a four pointed star device. In that case. the four pointed star device was designed by a commercial artist who had assigned the copyright to <ORG>. The question was, whether it was an artistic work within Section 3 of the English Copyright Act. The Court held : "It (the mark) is a drawing, and Section 3(i)(a) expressly classifies drawings on proper subject matter of artistic copyright, irrespective of artistic quality. No doubt a drawing may be so simple 'that it cannot be said to be "a work". For example, a. straight line or a circle for the word "work" itself carries with it t^e idea of the exercise of some degree of skill and labor, but I am unable to accept the submission of counsel for Mrs. <NAME> that the artistic part of this device is go simple a nature that no copyright can reside in it."

(36) If is clear from , part of the judgment reproduced above, that the <ORG> had before it the original drawing, and the deed assigning copyright in the Drawing, and the <ORG> had come to the conclusion that some degree of skill and labor required in producing the design/drawing of the four pointed star composed in a circle within the circle. It is clear from the report that the two words 'Karo Step' were not even suggested to have become subject matter of a literary copyright. This case reiterates that the skill and labor expanded upon a work is the sine qua non for existence of copyright in any work. 'This test has. been applied by <ORG>s for long. See :- 1925, <ORG> 75 (9), and 1960(1) <ORG> 53 (.10).

(37) This case, therefore, does not help the-counsel for the plaintiff as in the instant: case, what is before the <ORG> is a mechanically reproduced article and not the original article on which skill and labor of an artist, has been 'expended. As slated above, the carton relied upon by the counsel doss not say upon its face, by. any of tiles recognised symbol/words., that the subject matter of the carton is copyrighted and that copyright thereof vest in the plaintiff.

(38) The counsel also referred to <ORG> on Copyright, 1980 84 and Modern Law of Copyright by Laddie & Ors; .107. Both of these are commentaries and the comment is based upon the judgments which have been already referred to above, which judgments are. found not to, give any support to the contention which has been raised in this... case that a mechanically printed carton is good subject matter of copyright. In fact, none of the above cases -has even consider. the matter from this angle.

(39) The counsel for the plaintiff referred to 1978 Delhi 250 at 252(11) and particularly the passage at page 252, in support of the proposition that a person who is the first user of the mark is entitled to a right therein. The Mark in question there was 'Raja Rani' and the prior use thereof was held to confer a right to restrain others from using it. In the instant case, the question is not of the first user or the prior user, but whether a right covered by the' law of copyright subsists in the mechanically printed carton. For this proposition 1978 Delhi 250, 252 (Supra) does not have anything to say. It does not give any support to the paintiff. It cannot ev.en be suggested in the instant. case, that the words "CAMLIN FLORA" which are found in the carton are used by the defendants. The words used by the defendants are inter-alia 'NATIONAL ELORA'. There is dear distinction between 'CAMLIN FLORA' and 'NATIONAL ELORA'. The. two sets of word combinations only have to he written to make it evident. It cannot possibly be said that 'CAMLIN FLORA' is same as, or-similar to 'NATIONAL ELORA'.

(40) Another case cited by the counsel is 19.60 R.P.C.page 150 (12). In this case, what was in question was the artistic design impressed upon the plastic container of blankets. In that. case the Court assumed that the plastic container bearing a representation .of the head and shoulders of a woman was an artistic work within the meaning of Copyright Act and it was so conceded (page 151 line 42). That case, based upon a concession, does not help the plaintiff, as there is no such concession. in the instant case, (41) The counsel cited 1977 <ORG> page 41 (13) for the preposition that the certification from the copyright register bearing seal of <ORG> a prima facie evidence of existence of copyright. There is no force in this contention as the judgment does not say so. What the judgment says is that the certificates under the Copyright Act only prima facie, show that the particulars mentioned in the certificate are entered, in the copyright register I am of the view that the mere fact that something is entered in the Copyright Register, does not as, a matter of law establish that what. is registered is in fact and in law copyrightable subject matter. This is so because, the sine qua non to the existence of copyright, is the expenditure of skill and labor on any work which originated from its author and unless the original work, on which skill and labor has been expended by its author is produced in Court to prima facie show that the work has originated from an author, it cannot be said that there is copyright in any work. The existence of artistic merit in any original artistic work is not a matter which determines the existence of copyright therein. The copyrightable matter is that which has originated from the author who has expended skill and labor upon them. In 1977 <ORG> 41 (Supra) there was no finding of fact, that the matter ton the containers was a copyrightable artistic work and the case seems to have proceeded upon the copyright certificate only, arid if that judgment can be said to say that what is printed on tins by a printing process, (Printing process essentially not involving any skill or labor of a natural person) then I respectfully disagree from-that judgment. lt is too well settled in copyright law that without expenditure of skin and labor on a work which has originated from the author, no copyright can come into existence. [1924 <ORG> and 1960(1) Madras Law Journal 53)(Supra). It is also to be kept in view that the judgment in. 1977 <ORG> 41 (Supra) is on an interim application and not a final judgment after trial.

(42) The counsel has referred to 1975 Delhi 130 (14). That case related to Trade and Merchandise Marks Act and the questions which were considered in that case related to assignment of copyright and vesting of copyright and the duration of copyrights. The question decided in that case was not whether a mechanically reproduced printed paper carton can be said to be copyrightable. This case also does not help the petitioner. I am of the view that a mechanically printed card board carton is not copyrightable, there is no skill and labor involved in its production, and. no copyright subsists in it. No suit can be maintained on the basis of any alleged copyright in a printed card board carton.

(43) It was next contended by the counsel for the plaintiff that the words 'FLORA' and 'ELORA' to be found on the respective cartons of the plaintiff and the defendants should be seen ant on an examination it would be seen that the attempt has been made to write the word 'ELORA' in the same calligraphics style. That the alphabet 'E' in the word 'ELORA', and the alphabet 'F' in the word 'FLORA' have been. in the same calligraphic style. It is also asserted that the alphabet 'R' found in both Flora & EL.ORA, are in the same calligraphic style.

(44) There is no doubt that the alphabet 'F' and alphabet 'E' in the plaintiff's Flora as appearing on the carton of the plaintiff, has been written in the same calligraphic style as the alphabet 'E' and 'R' in 'ELORA' on the defendants' carton. With respect to this contention, I am of the view that the maxim : Demonisms Non Curat Lex applies with full force.

(45) This is too minute a comparison. The alphabets F & R in the plaintiff's carton and the alphabet 'E' and 'R' in the defendants' carton are a very small part of the entire carton and in my view, this similarity in the two alphabets is not sufficient to establish an attempt to pass off of the defendants' carton as the plaintiffs carton, for the reason that .the alphabets occupied only a small area of the carton. Another reason why I am of the view that there is no passing off of the defendants. cartons, is that on the defendants carton very prominently printed is a famous sculpture of India "Woman writing a letter". The suggestion . given by the defendants' carton is that this sculpture is from the, Elora Caves. This suggestion may be a misleading one. The sculpture exists at Khujuraho. But the word 'ELORA' Coupled with the figure of 'woman writing a letter', indicates that the defendants' carton has no relationship to flowers, but to a place famous for its painting and sculpture the Elora caves.

(46) The word Flora is used in Botany to mean flowers in general, as a class. The counsel for the plaintiff stated that the phonetics of Elora and Flora are similar and, therefore, relying upon 1970 <ORG> 1649; (15) (Rustom-Ruston) and 1970 Supreme- Court 146 at 148; (16) (Ambal-Andal). it should be held that there is an attempt to pass off the goods.

(47) In my view, flowers do not necessarily represent something which is relatable to art or artists whereas Elora brings clearly to the mind of all Indians something connected with art or artists. Pencils are what are used by artists, and in this case mere phonetics similarity are not so obvious so as to pass nil one for the other. The defendants seek to identify their pencils with artists, and the plaintiff with botanists.

(48) It is also asserted by counsel that some colour combinations are used on the cartons. I am of the view that the two cartons have different colour combinations, and there are differences in the colour. There are differences in the composition on the printed matter and, therefore, carton of the defendant cannot, on the basis of similarity of colour combination, be said to an attempt to pass off the defendants' carton as cartons of the plaintiff. The counsel for the plaintiff relied upon 1972 Delhi. 41 <CITATION> , for the proposition that normally people have imperfects and fading memory. No doubt it is so but this principle does not apply in this case as the difference in the cartons sufficiently distinguish the two cartons.

(49) Mr. <NAME> did not make any submission at all regarding the copy-right ability of printed cartons as defendants themselves claim copyright in 'such mechanically printed cartons.

(50) His only submission related to passing off only. .Mr. <NAME> contended that there is no similarli.y at all. whether phonetic or visual between the two words Camlin Flora the registered mark of the plaintiff, and National Elora which is used on the cartons of the defendants. In view of the fact that the device of a 'woman writing a letter is to be found on the carton of the defendants, I agree with Mr. <NAME> that on the visual examination of whole of the cartons of the plaintiff, and whole of the carton of the defendant, there is no like hood of confusion.

(51) Mr. <NAME> also asserts that the beginning of the words, which are alleged to cause confusion are important, and that the words have to be viewed as a whole and not merely some of its alphabets. Only the alphabets which go to make up the words are not to be taken into account .in isolation and he refers J970 Supreme Court 2062: (17) <CITATION> case clearly holds that it is the entire word which has' to be seen; that ail the alphabets have to be pronounced when phonetics are to be taken into account, and no alphabets used in a word can be slurred over.

(52) The other judgments referred to by Mr. <NAME> are 1974, Vol. Ii Delhi 151, (18) Mis. <CITATION> , and 1969 (19) Punjab 290, <ORG> v, <ORG>, <ORG> and Another. In the formal case. it was held that the words arc label of "Panghat Ghee" was distinct and different from the word and label "Gopi". In the latter case, the words in question were Elephant and .'Jagjit Hathi', which were found to distinct.

(53) Mr. <NAME> in reply said that: the misspelling of the word Ellora as Ellora by the defendant and copying of the call-graphical style of writing the alphabet 'E' and alphabet 'R' show an intention to deceive and to passing off.

(54) I am of the view that there is no precedent binding on me to hold that a mechanically reproduced printed carton is capable of being subject matter of copyright. In the instant case, what has been produced in <ORG> is only a mechanically reproduced printed card board carton and I find that copyright does Hot subsist therein. In my view, copyright does not subsist therein for the reason that it is impossible to determine who is the "author" of the mechanically reproduced printed carton. Copy right is conferred only upon "authors" or those who are natural person from whom the wort; leas originated or the authors may be legal persons to whom copyright has been assigned in accordance with law. by the authors from whom the work had originated (55) In the circumstances, I hold that plaintiff can not claim any copyright in any carton that has been mechanically reproduced by a printing process as the work cannot said to have 'originated from the author. I am of the view that a machine cannot be "author" of an artistic work, nor can it have copyright therein.

(56) As regards the contention of the plaintiff that defendants have attempted to pass of their cartons as cartons of the plaintiff, I hold that taking into 'account the entirety of the carton, its colour scheme, the subject matter printed thereon, and keeping view the similarities in the caligraphic style of the alphabets, E, F and R, and the apparent differences, it can not be said that there is any likelihood of confusion between the cartons of the defendants and the cartons of the plaintiff as the differences, mentioned earlier, outweight the similarities.

(57) .IN view of what is stated herein above, and in view of my finding that there is non-copyrightable subject matter in mechanically produced printed cartons the only right being claimed in the suit being on the basis that the mechanically reproduced printed carton has copyrightable subject matter in it, the instant suit for infringement of copyright is not maintainable.

(58) As regards the infringement of the plaintiff's trade mark Camlin Flora, I am of the view that the words National Elora in no view of the matter can be said to infringe the trade mark Camlin Flora, nor can the words National Elora be passed of as the words Camlin FLORA.

(59) In my view the suit for infringement of alleged copyright or the alleged infringement of the trade mark of for the alleged passing of can not be maintained. I am further of the view that the use of the word National Elora on the cartons of the defendants do not give any cause of action to the plaintiffs' as they do not infringe the alleged trade mark. <NAME>. In view of my findings, not only the plajnliff's are not entitled to the injunction which they have prayed for but they are not entitled to maintain the suit as brought and framed. The suit as filed, and the documents field Along with the plaint do not dispose a cause of action against the defendants and the plaint is liable to be rejected. The injunction prayed for is refused and the plaint is rejected under provisions of order 7 Rule 11 of the Code of Civil Procedure, as the same discloses no cause of action. I.A. 2209/85 and Suit No. 662/85 are disposed off.


JUDGMENT <NAME>, C.J.

1. This appeal originally came on before <ORG>, who considered it desirable that it should be heard by <ORG> in view of the conflict between decisions of this <ORG>.

2. The appeal is against an order of the Subordinate Judge of Ottapalam remanding a suit to the District Munsiff of Chowghat for disposal on the merits. The suit was filed by the first respondent for eviction of the appellant (first defendant) from a building that had been leased to him by the first respondent's predecessor in 1936. There were also prayers for arrears of rent and for recovery of damages in respect of an annexe to the building constructed by the first respondent. The appellant deposited into Court the entire arrears of rent and interest claimed in the suit, and therefore that part of the plaintiff's claim was satisfied. Following the decision in <CITATION> . (1945) 1 M.L.J. 44 the District Munsiff held that the suit, so far as it related to eviction, was not maintainable, because of the provisions of the Madras Non-Residential Buildings Rent Control Order, 1942, hereinafter referred to as the Rent Control Order. On appeal, the learned Subordinate Judge, following certain decisions of this Court subsequent to <CITATION> . (1945) 1 M.L.J. 44 held that the suit was maintainable and passed an order of remand as mentioned above.

3. The relevant provision of the Rent Control Order is Clause 8, the material portions of which are as follows:

* * * * * * (i) A tenant in possession of a non-residential building shall not be evicted therefrom, whether in execution of a decree, or otherwise and whether before or after the termination of the tenancy, except in accordance with the provisions of this clause. (2) A landlord wishing to evict a tenant in possession shall apply to the Controller for a direction in that behalf.

The Controller shall make an order of eviction only if he is satisfied that one or other of the conditions mentioned is satisfied. These conditions briefly are, non-payment of rent, absence of readiness and willingness to pay a fair rent in future, sub-letting except under certain circumstances and user of the building for a purpose other than that for which it was leased, and absence of occupation of the building for a continuous period of four months without reasonable cause. Then follow provisions for execution of an order for eviction passed by the Controller.

4. Before dealing with the several decisions on the effect of this clause, let us examine its plain language. Sub-clause (1) lays down that a tenant shall not be evicted from a non-residential building of which he is in possession. "Evict" literally means "expel by legal process". Eviction consists in the physical act of throwing out the tenant from the building which he is occupying. This sub-clause therefore, prevents the tenant from being thrown out. One of the methods of such eviction is by the process of execution of a decree for possession. The sub-clause makes it clear that even this method is prohibited. The eviction can only be in accordance with the provisions of Clause 8. There is nothing in this clause, or in any of the other clauses of the Order expressly prohibiting the institution of a suit for possession, or prohibiting <ORG> from passing a decree for possession. No doubt, even though a decree for possession is passed, it may be not be capable of execution by <ORG>. But the passing of the decree itself is not in terms prohibited.

5. Is there any such prohibition which can be necessarily implied? Is there anything in this clause which takes away, by necessary intendment, the ordinary jurisdiction of <ORG> to entertain a suit by a landlord for recovery of possession of his property in the occupation of a tenant ? As their Lordships of the Judicial Committee pointed out in Secretary of State for <CITATION> . (1940) 2 M.L.J. 140 : L.R. 67 I.A. 222 : I.L.R. 1940 Mad. 599 at 614 (P.C.) It is settled law that the exclusion of the jurisdiction of <ORG> is not to be readily inferred, but that such exclusion must either be explicitly expressed or clearly implied.

I fail to see any such clear implication to oust the jurisdiction of the civil <ORG>.

6. The earliest decision dealing with this question is that of <NAME>, J., in <CITATION> . (1945) 1 M.L.J. 44 where the learned Judge held that there was an ouster of the jurisdiction of Civil Courts. His reasoning was as follows:

Mr. <NAME> ingeniously contended that there could be no objection to a decree being passed in this suit though after the decree it might be that he might have to go before the Controller to get possession. This argument fails to take note of two answers. One is that when a special tribunal is indicated for obtaining a particular relief, it is that tribunal that has got exclusive jurisdiction to grant that relief, and to that extent the jurisdiction of Civil Courts is ousted. Secondly, even if it is held that the Court has jurisdiction to grant a decree for eviction it cannot be called upon to indulge in a mere pastime and pass orders which would be brutum fulmen and which cannot be carried into effect without resort being had to other persons or tribunals in whom a discretion is vested to decide if eviction is to be ordered or not. The remedy of the plaintiff is to go before the Controller.

Neither of the two grounds on which the learned Judge based his conclusion commends itself to me. No doubt, when a special tribunal is indicated for obtaining a particular relief, that tribunal has got exclusive jurisdiction to grant that relief. But then that relief must be a relief not available to a party under general law. Further, the relief for which the special tribunal, namely, the Controller, is indicated, is the relief of eviction, that is, the actual throwing out of the tenant. That may only mean that a <ORG> which passed the decree may not have jurisdiction to execute the decree for possession. But I fail to see how the jurisdiction of the Civil <ORG> to entertain a suit and to pass a decree for possession is necessarily ousted. I cannot agree with the learned Judge that a decree for eviction which cannot be executed for a certain time, in this case during the continuance of the Rent Control Order, can be called brutum fulmen or that, passing a decree for eviction which cannot be at once executed, would be indulging in a mere pastime. One can easily give instances of cases in which the decrees duly passed by competent <ORG> cannot be immediately executed. But that fact has never been understood to mean that there is an implied ouster of jurisdiction of the <ORG> to entertain and dispose of the suit. This decision of the learned Judge was expressly dissented from by <NAME>, J., in the two decisions in <NAME> In re (1946) 1 M.L.J. 134, and <CITATION> (1945) 1 M.L.J. 135. He held that the language was not such as to-deprive the Civil <ORG> of their power to entertain suits for eviction and to adjudicate upon them. His conclusion is thus tersely expressed:

It cannot be said that these words are wide enough to deprive <ORG> of their jurisdiction to pass decrees; all that the rule contemplates is the control of the relief of eviction.

Apparently, it was in view of these latter decisions that <NAME>, J., observed as follows in a recent decision, vide <CITATION> (1948) 2 M.L.J. 359.

It must now be taken to be well settled that a decree in ejectment could be passed by <ORG> and all that the order provides is that during the subsistence of the order, <ORG> cannot execute the decree but the landlord will have to take appropriate steps under the provisions of the order.

There are certain general considerations which, in our opinion, support this view, namely, that the order does not take away the jurisdiction of <ORG> to entertain a suit by a landlord against the tenant and pass a decree therein for possession. Many of these considerations are found set out in an unreported decision of Wadsworth, J., in <NAME> v. Fathima Bibi Saheba S.A. No. 80 of 1946. These are such considerations : (1) The cause of action for an application to the Controller would be quite different from the cause of action for a suit in <ORG>; (2) The grounds on which the Controller can order an eviction may be quite different from those on the strength of which <ORG> would grant a decree; (3) The failure by the plaintiff to claim a decree for eviction in <ORG> on grounds which would not justify eviction by the controller might result in grave complications by way of limitation for a suit filed after the Control order ceases to operate; (4) The period during which the execution of a decree is prohibited is limited. The order itself is only for a short duration; and when it is repealed or it expires, a decree of <ORG> can be executed in the ordinary way immediately I hereafter.

7. Having regard to all these considerations and to the language of Clause 8 of the order, I am of opinion that the jurisdiction of <ORG> to entertain and pass a decree in a suit for eviction by a landlord against his tenant is not expressly or impliedly taken away by the provisions of the Rent Control Order.

8. The Civil Miscellaneous Appeal is therefore dismissed with costs.

<NAME>, J.

9. I respectfully agree with my Lord in his reasoning as well as in his conclusion. I wish only to add a few words with reference to one particular view-point expressed by <NAME>, J., in <CITATION> . (1945) 1 M.L.J. 44. Possibly, the learned Judge had in mind the observation of Lord <NAME> in <CITATION> (1888) L.R. 15 I.A. 211 : I.L.R. 11 All. 47 at 56 (P.C), which I shall presently refer to, in making his observations in the case of <CITATION> . (1945) 1 M.L.J. 44 that even if it is held that the Court has jurisdiction to grant a decree for eviction it cannot be called upon to indulge in a mere pastime and pass orders which would be brutum fulmen. The observation of Lord <NAME> that:

It would be an inconvenient state of the law if it were found necessary for a man to institute a perfectly vain litigation under peril of losing his property if he does not.

was made in connection with the discussion of a question of limitation which arose in the case before their Lordships of <ORG> and has since been considered in a number of later decisions of <ORG> in India. According to the interpretation placed upon that observation of the learned Lord by these later decisions it will be too much for any litigant to contend that where the rights as between himself and his adversary have been subjected to adjudication by a competent <ORG>, limitation for other suits between the parties based on such rights should be computed from the date of their final determination. It has been further ruled by these later decisions of <ORG> as well as by decisions of <ORG>, that Courts have, in fact, no power on considerations of hardship or equity to invent new grounds of exemption from the bar of limitation not recognised by the statute. It seems to me, therefore, that the principles laid down by these decisions are a fortiori applicable to a question of limitation which may arise, as pointed out by <NAME>, J., in his unreported decision in S. A. No. 80 of 1946, in relation to a suit in the ordinary <ORG> based on grounds of eviction under the general law, which are by no means identical with the grounds constituting the cause of action for an application to the Controller.


PETITIONER: <ORG>, ENGINEERING KAMGAR SANGH Vs. RESPONDENT: <ORG>, <ORG> & <ORG>. DATE OF JUDGMENT: 05/05/1998 BENCH: S. SAGHIR AHMAD, M. JAGANNADHA RAO ACT: HEADNOTE: JUDGMENT:

THE 5TH DAY OF MAY, 1998 Present:

Hon'ble Mr. Justice <NAME> Hon'ble Mr. Justice <NAME>, Attorney General of India, <NAME>, Sr. Adv. and <NAME>, Adv. with them for the Appellants in C.A. Nos. 2572 and 2573/98 S. <NAME> and <NAME>, Advs. for the appellant in C.A. No. 2574/98 <NAME>, Additional Solicitor General, <NAME>, Ms. <NAME>, <NAME>, Advs. with him for the Respondent in C.A. No. 2572/98 <NAME>, Adv. for the Respondents in C.A.No. 2573/98 and C.A. No.2574/98 J U D G M E N T The following Judgment of the Court was delivered:

WITH CIVIL APPEAL NO .... 2573 ................. /1998 (Arising out of S.L.P. (C) No. 14750/1997) AND CIVIL APPEAL NO ........2574 .............../1998 (Arising out of S.L.P (C) No. 15736/1997) J U D G M E N T M. JAGANNADHA RAO, J.

Special leave granted in all the Special leave petitions.

Civil Appeal arising out of SLP (C) No. 14327/1997 is filed by <ORG>' against order of <ORG> dated 28.7.1997 passed by a Division Bench in an interlocutory appeal appointing a Receiver to take formal possession of the mortgaged properties which are subject matter of suit No. 82 of 1997 pending before a learned Single Judge of the said <ORG> on the Original Side. The respondent <ORG>, which is the plaintiff in the suit is claiming in consortium with <ORG> a sum of Rs. 23.67 crores (approximately) as due to it as on 24.12.1996. Earlier the Single Judge of the Bombay <ORG> in his order dated 10.1.1997 had disallowed the application for appointment of Receiver in view of the stay of appointment of provisional Liquidator granted by a Division Bench of the Bombay <ORG> in winding up proceedings on 20.12.1996.

Civil Appeal (arising out of SLP (C) No. 14750 of 1997) is filed by the appellant <ORG> against the order passed by another Division Bench of <ORG> dated 8.8.1997 in Appeal No. 1193 of 1996 by which the order of the learned Single Judge on <ORG> Side appointing a provisional Liquidator on 18.10.1996 was affirmed. Thereby an earlier order of stay dated 20.12.96 (granted by the Division Bench in respect of the <ORG> Judge's order dated 18.10.96) stood vacated. The respondents are <ORG>, the creditors, who filed the winding up petition 415/1996 on 6.8.1996 against the appellant in <ORG>.

Civil Appeal (arising out of SLP (C) NO. 15736/1997) is filed by the workmen (Engineering Kamgar Sangh) against the order dated 8.8.1997 passed by <ORG> in winding up proceedings confirming the order of the Single Judge appointing provisional Liquidator. They are supporting the appellant company.

That is how these three appeals have arisen and have come before us. The appellant company had, after taking some adjournments before the Division Bench in the Company Appeal

- which was filed against the order of the learned Single Judge appointing provisional liquidator - submitted a reference before <ORG> (hereinafter called the `<ORG>') on 17.7.1997 under the Sick Industrial Companies (Special Provision) Act, 1985 (hereinafter called the `Act'). The said reference was registered 24.7.1997 as Case No.97 of 1997. The point raised in these appeals is that once the reference was registered by the <ORG> on 24.7.1997, the Division Bench of <ORG> ought not to have passed orders on 8.8.1997 vacating the interim stay granted by it on 24.12.1996 and ought not to have confirmed the order of the learned Company Judge dated 18.10.1996 appointing provisional liquidator, in view of the mandate of section 22 of the Act. Likewise, it is argued that the order of <ORG> dated 28.7.1997 appointing a Receiver in the interlocutory appeal arising out of the Civil Suit is also had in view of section 22 of the Act.

We may state that the order of <ORG> in proceedings arising out of suit - appointing Receiver on 28.7.1997 was stayed by this Court on 5.8.1997 in SLP 14327/1997. Similarly the order of <ORG>, in proceedings arising out of winding up proceedings, dated 8.8.1997 vacating the stay and confirming the Company Judges order appointing provisional Liquidator was stayed on 12.8.1997 in SLP 14750/1997 and it was further ordered that the provisional Liquidator shall not take any further steps.

One other important fact to be noted is that on 10.11.1997 in SLP 14327/1997, this Court passed an order, - after hearing both sides, adjourning the SLPs "to enable the <ORG> to come to a decision'. This Court, however, directed the appellant-<ORG> not to dispose of or alienate or create any third party interests in any of the assets of the <ORG> except with the previous approval of the <ORG> and that before passing any orders, the <ORG> will give hearing to <ORG>. This Court also recorded an assertion by the <ORG> that the Receiver had taken formal possession of the properties. This assertion was no doubt denied by the <ORG>. This Court also noticed that <ORG> had, in its order dated 8.8.97 accepted as true the serious allegations made by <ORG> against the appellant <ORG>.

At this stage, it is necessary to refer to the conduct of the Company, already adverted to, which came up for severe criticism by <ORG> in its order dated 8.8.1997. What happened was that after securing a stay order from <ORG> on 20.12.1996 - in respect of the order of the learned Single Judge appointing a provisional Liquidator, - the Company obtained adjournments before <ORG> on 4.11.1996, 2.12.1996, 9.12.1996, 18.12.1996, 20.12.1996. On 20.12.1996 the case was adjourned to 22.7.1997 when an affidavit was filed - without disclosing that the Company had approached the <ORG> on 17.7.1997 - and the matter was got adjourned to 29.7.1997 and again to 8.8.1997. The factum of registration of the reference by the <ORG> on 24.7.97 was not disclosed to <ORG> till 8.8.1997. The Bench, therefore, rightly criticised the conduct of the appellant for not disclosing these facts to <ORG> before 8.8.1997. Further, in <ORG> the Company was opposing the appointment of provisional Liquidator on the plea that it was a viable unit but when it approached the <ORG>, it was claiming that it was a sick industry. These contradictory pleas also came up for adverse comment by <ORG>. The Bench referred to section 22 and section 16 of the Act and felt that the mere registration of the reference under Section 15 did not amount to "pendency of any inquiry" under Section 16 and that, therefore, section 22 was not attracted and, therefore, the Bench was well within its powers in vacating the stay and confirming the appointment of provisional liquidator or in appointing a Receiver. In that context, <ORG> followed a decision of <ORG> of <ORG> in <CITATION> [1991 (72) Com. Cases 146 (Cal.)] in preference to the Judgments of other High Courts which had taken a contrary view. The Bench then gave several findings to the effect that the Company had indulged in various "irregularities" or "misconduct" in its accounting procedures etc. with a view to show that it was a viable unit and to show that it was not liable to be wound up. Having enumerated the alleged financial irregularities as pointed by the <ORG> and the suppression of facts, <ORG> in its order dated 8.8.1997 vacated the stay order dated 20.12.1996 and confirmed the appointment of provisional Liquidator. It also issued a contempt notice to the officers of the Company.

It is necessary to refer to certain subsequent events which have since taken place after the orders under appeal were passed by <ORG>. These events relate mainly to three orders passed by the <ORG>.

(i) On 9.9.1997, the <ORG> passed orders, after hearing the representatives of the appellant - <ORG> and <ORG> and the <ORG> (which was also to get around Rs. 38 crores from the company), directing the <ORG> under Section 16(2) of the Act to examine and analyse the audited balance sheets of the <ORG> upto 30.6.1997 and submit a status report. The <ORG> was also directed to submit its reaction or comments to the <ORG>. The contentions raised by the <ORG>'s representatives were elaborately set out.

(ii) On 24.11.1997 the <ORG> passed orders recording that the <ORG> had submitted a report and that on that basis and on the basis of the submissions made, "the <ORG> was to be declared as a sick industry' under section 16 read with section 3(o) of the Act. It then said that it is necessary in the public interest to adopt the measures specified in Sections 18 and 19 of the Act in relation to the <ORG>. It accordingly appointed <ORG> as the Operating Agency under Section 16(2) of the Act and directed it under section 17(3) to prepare a rehabilitation Report. The <ORG> was directed under Section 22-A, not to alienate any of its assets.

(iii) A notice was issued by <ORG> fixing 15.12.1997 as the date on which the allegations of <ORG> against the Company would be heard. On 15.12.1997, the <ORG> passed further orders after hearing the <ORG>'s representatives observing that the allegations made by the <ORG> against the Company had been considered by the <ORG> and that the <ORG> had prepared a status report and that the <ORG> was satisfied that the allegations of the <ORG> against the company - in regard to the change in the accounting year and provision for depreciation and interest and in regard to the preparation of the balance sheet - could not be accepted inasmuch as these actions "were permissible under the various provisions of the Companies Act , 1956 and as such these were valid under law". The matter was adjourned to enable the company to submit its revival/rehabilitation proposals. These are the three orders passed by the <ORG> subsequent to the impugned orders of <ORG>.

It was contended before us by <NAME> and <NAME>, appearing for the <ORG> in the two appeals filed by the <ORG> and by the counsel for the workmen in the third appeal that <ORG> ought not have vacated the stay dt. 20.12.96 nor confirmed the appointment of provisional Liquidator dated 18.10.96 by its order dated 8.8.1997 when by that date, Section 22 of the Act had come into play on account of the registration of the reference dated 17.7.1997 by the <ORG> on 24.7.1997. For the same reasons, it was contended that <ORG> could not have appointed a Receiver on 28.7.1997 in the interlocutory appeal filed in the suit proceedings. It was contended that the appeals should, therefore, be allowed and the impugned orders vacated in view of the mandate under Section 22 . Sri <NAME> cited several rulings of <ORG> to contend that registration of the reference was sufficient for purposes of the applicability of Section 22 . It was argued that now the matters have reached the stage of section 17(3) of the Act before the <ORG> and, therefore, no orders can be passed restoring the Receiver or the provisional liquidator. It was also brought to our notice that <ORG> had dropped the contempt proceedings by its order dated 13.2.1998 pursuant to the apology tendered.

On the other hand, the learned Additional Solicitor General, <NAME> contended that while the contention of the appellants in relation to Section 22 could be correct, the appellant was guilty of suppression of facts before <ORG> of <ORG> as pointed in the order dated 8.8.1997. It took adjournments before <ORG> without informing the Court that it was either approaching or that it had approached the <ORG> and got its reference registered. The Company also took contradictory pleas before <ORG> and before the <ORG>, in regard to its viability. This conduct was wholly unbecoming. On account of its suppression of facts and mutually contrary pleas, the reference to the <ORG> must be treated as vitiated and as amounting to `fraud' and, therefore, all consequential orders of the <ORG> must be ignored.

On the basis of the above contentions, the following points arise for consideration:

(1) Could it be said that the conduct of the appellant Company before <ORG> on account of the contrary pleas taken by it before <ORG> and the <ORG> and on account of the suppression of facts, - would render the reference under section 15 and the registration of the reference and the subsequent orders of the <ORG> bad? (2) Whether, once the <ORG> had registered the reference dated 17.7.97 on 24.7.97 under section 15 of the Act read with the Regulations, it was permissible for <ORG> of <ORG> to pass orders on 8.8.97 vacating the stay order dated 20.12.96 and confirming the appointment of provisional liquidator on the company side and also whether it was permissible for <ORG> of the High court to appoint a Receiver on 28.7.97 in the proceedings arising out of the suit, in view of section 22 of the Act?

Point 1:

It is true that in the winding up proceedings and in the civil suit, the appellant company contended that it was a viable unit and that neither a Receiver nor a provisional liquidator could be appointed. The appellant was, on the one hand seeking adjournments before <ORG> while on the other hand it had approached the <ORG> on 17.7.97 and got its reference registered on 24.7.97 seeking to be declared a sick company. It is also true that in the affidavit filed on its behalf in <ORG> on 22.7.97 seeking an adjournment, it had not disclosed to <ORG> that it had moved the <ORG> on 17.7.97. The Company sought an adjournment to 29.7.97 and then again to 8.8.97. Neither on 22.7.97 nor on 29.7.97 was <ORG> informed about the application filed before the <ORG> nor about its registration. A disclosure of these facts was made only on 8.8.97.

This conduct of the appellant, in our view, was certainly very unfair to <ORG> and, therefore, <ORG> had rightly depreciated the same. In our view, there was a clear attempt to keep the <ORG> in the dark.

But the question is whether, on that account, the reference application to the <ORG> would become bad. It is clear from the application filed before the <ORG> that the <ORG> was informed about the proceedings taken against the company in <ORG> both on the company side and on the original side. So far as the <ORG> was concerned, there was no suppression of facts before it. We are at a loss to understand as to how any conduct of the appellant company before <ORG> of Bombay could make the registration of the reference before the <ORG> bad. If any orders were obtained by the <ORG> from <ORG> by way of fraud it was certainly open to the respondent to ask <ORG> to recall such orders. No such thing was done. We, therefore, cannot accept the contention of the respondents that the reference under section 15 of the Act and the registration thereof by the <ORG> became bad because of any conduct of the <ORG> before <ORG>. It follows that equally the subsequent orders passed by the <ORG> on the reference cannot, on that account, be said to be invalid. This contention of the respondents is rejected. Point 1 is held against the respondents.

Point 2:

The legal issue under this point is of considerable importance in proceedings arising under this Act.

We shall, therefore, refer to the relevant provisions of the Act and Regulations and the headings of the Chapters in the Act and the headings of the Chapters in the Regulations.

Chapter III of the Act contains section 15 to section 22A and bears the heading "Reference, Inquiries and Schemes". Section 15 of the Act refers to the `Reference to Board' either by the industrial Company under sub-clause (1) of Section 15 or by <ORG> or <ORG> or <ORG> or by a public financial institution or by <ORG> local institutions or <ORG>. Section 16 refers to `Inquiry into the working of Sick Industrial Companies' and to the declaration of the unit as a sick industry, after inquiry. Section 17 deals with `Powers of Board to make suitable orders on the completion of inquiry' to the company so as to make its net worth exceed its accumulated losses within a reasonable time or to direct the operating agency to prepare a scheme in the manner provided in section 18 . Section 19 deals with `Rehabilitation by the giving financial assistance'. Section 20 refers to the winding up of the industrial unit if it is not likely that the Company will be able to make its net worth exceed its accumulated losses. Section 22 of the Act with which we are concerned here, deals with `Suspension of legal proceedings, contracts etc.' where `an inquiry under section 16 is pending or any scheme under Section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under section 25 before the appellate authority (<ORG>) is pending.

The point which has, in this context, been raised in several <ORG> is that the mere registration of a reference by the <ORG> under the Act, would not result in the automatic cessation of all proceedings which are pending either in civil courts or in <ORG> etc. as against its assets. It is argued that in order that section 22 of the Act can come into operation, the <ORG> must - subsequent to the registration of the reference under section 15 - apply its mind and consider it necessary under section 16 to make an inquiry and issue notices on the reference to the affected parties who are required to be heard, and that only then it can be said that an `inquiry' is pending. Unless an inquiry is pending there cannot be a statutory stay of proceedings etc. as contemplated by section 22 of the Act.

For the purpose of understanding the above point, it is necessary to refer to sub-clauses (1) to (4) of section 16 and section 22(1) of the Act. They read as follows:

"S. 16: Inquiry into working of sick industrial companies - (1) The Board may make such inquiry as it may deem fit for determining whether any industrial company has become a sick industrial company-

(a) upon receipt of a reference with respect to such company under Section 15 ; or

(b) Upon information received with respect to such company or upon its own knowledge as to the financial condition of the company. (2) The Board may, if it deems necessary or expedient so to do for the expeditious disposal of an inquiry under sub-section (1), require by order any operating agency to enquire into and make a report with respect to such matters as may be specified in the order.

(3) The <ORG> or as the case may be, the operating agency shall complete its inquiry as expeditiously as possible and endeavour shall be made to complete the inquiry within sixty days from the commencement of the inquiry. Explanation - For the purposes of this sub-section, an inquiry shall be deemed to have commenced upon the receipt by the <ORG> of any reference or information or upon its own knowledge reduced to writing by the <ORG>.

(4) Where the Board deems it fit to make an inquiry or to cause an inquiry to be made into any industrial company under sub- section (1) or, as the case may be, under sub-section (2), it may appoint one or more persons to be a special director or special directors of the company for safeguarding the financial and other interests of the company or in the public interest.

" Section 22(1) : suspension of legal proceedings, contracts etc.: Where in respect of an industrial company, an inquiry under Section 16 is pending or any scheme referred to under Section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under section 25 relating to an industrial company is pending, then, notwithstanding anything contained in the Companies Act , 1956 , or any other law or the memorandum and articles of association of the industrial company or any other instrument having effect under the said Act or other law, no proceedings for the winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof (and no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans or advance granted to the industrial company) shall lie or be proceeded with further, except with the consent of the <ORG> or, as the case may be, <ORG>."

It is to be noticed that according to section 22 , in case an "inquiry under section 16 " is pending, then, notwithstanding anything in the Companies Act or any other instrument etc., no proceedings for the winding up of the company or for execution or distress or the like against the property of the company or for the appointment of a receiver and no suit for recovery of money or enforcement of any security or of any guarantee - shall lie or be proceeded with further, except with the consent of the <ORG> or, as the case may be, by the appellate authority. Section 22A permits the <ORG> pass certain conditional orders.

It is also to be noticed that sub-clause (1) of section 16 says that the <ORG> `may' make such inquiry as it may deem fit for determining whether any industrial company has become a sick industrial unit - (a) upon receipt of a reference under section 15 or (b) upon information received by it or upon its own knowledge as to the financial condition of the company. Under sub-clause (2) of section 16 , the <ORG> `may', if it deems it necessary or expedient, require any operating agency to inquiry and report to it. Under sub-clause (3), the <ORG> or the operating agency is to endeavour to complete the inquiry within 60 days from the date of commencement of the inquiry. Explanation below sub- clause (3) explains that for purposes of sub-clause (2), that is to say, for computing the period of 60 days, an inquiry shall be deemed to have commenced upon the receipt by the <ORG> or any reference or information or upon its own knowledge reduced to writing by the <ORG>. Under sub-clause (4), when the <ORG> deems it fit to make an inquiry under sub-clause (1) or (2) of section 16 , it may (the word `shall' has been omitted by Act 12 of 1994) appoint one or more directors etc. Relying on the use of the word `may' in section 16(1) of the Act it has been contended in some High Courts that the word `may' in that section shows that the <ORG> has power to reject a reference summarily without going into merits and that it is only when the <ORG> takes up the reference for consideration on merits under section 16(1) that it can be said that the `inquiry' as contemplated by section has commenced. It is argued that if the reference before the <ORG> is only at the stage of registration under section 15 , then section 22 is not attracted. This contention, in our opinion, has no merit. In our view, when section 16(1) says that the <ORG> can conduct the inquiry "in such manner as it may deem fit", the said words are intended only to convey that a wide discretion is vested in the <ORG> in regard to the procedure it may follow for conducting an inquiry under section 16(1) and nothing more. In fact, Once the reference is registered after scrutiny, it is, in our view, mandatory for the <ORG> to conduct an inquiry. If one looks at the format of the reference as prescribed in the Regulations, it will be clear that it contains more than fifty columns regarding extensive financial details of the <ORG>'s assets, liabilities, etc. Indeed, it will be practically impossible for the <ORG> to reject a reference outright without calling for information/documents or without hearing the <ORG> or other parties. Further, the Act is intended to revive and rehabilitate sick industries before they can be wound up under the Companies Act , 1956. Whether the <ORG> seeks a declaration that it is sick or some other body seeks to have it declared as a sick <ORG>, it is, in our opinion, necessary that the <ORG> be heard before any final decision is taken under the Act. It is also the legislative intention to see that no proceedings against the assets are taken before any such decision is given by the <ORG> for in the case the <ORG>'s assets are sold, or the company wound up it may indeed become difficult later to restore the status quo ante. Therefore, in our view, <ORG> in <CITATION> . [1990 67 Comp. Cases 412 (All)], <ORG> in <CITATION> . [1990 68 Comp. Cases 201 (AP)], <ORG> in <CITATION> .  78 Comp. Cases 264] are right in rejecting such a contention and in holding that the inquiry must be treated as having commenced as soon as the registration of the reference is completed after scrutiny and that from that time, action against the <ORG>'s assets must remain stayed as stated in section 22 till final decisions are taken by the <ORG>.

The other view that mere registration does not amount to "commencement of inquiry under section 16(1) " for purposes of section 22(1) has been taken by <ORG> in Bengal Lamps Case (supra), and by <ORG> in <CITATION> . [1995 82 Comp. cases 485 (Raj)]. This view is mainly based upon the provisions of the Regulations made under the Act.

We shall refer to these Regulations briefly. Chapter II of the Regulations framed under section 13 of the Act bears the heading `Reference under section 15 ' and contains Regulation 19. Chapter III deals with `General provisions regarding Inquiries' and contains Regulation 20 while Chapter IV which bears the heading "Inquiry under section 16 " contains Regulations 21 to 25. Chapter V deals with proceedings under section 17 and contains Regulation 26. For the present purpose, we are not referring to the other Chapters which are not very relevant.

The Division Bench of <ORG> in Bengal Lamps Ltd Case (supra) - which case has been relied upon by <ORG> in the impugned order dated 8.8.1997,

- has held that at the stage of registration of the Reference under section 15 of the Act read with Regulation 19 (in Chapter II of the Regulations which refers only to section 15 ), there can be no question of commencement of any `inquiry' referable to section 16 of the Act. Such an inquiry can be treated as having commenced only at the stage of section 16 read with Regulation 21 (in Chapter IV of the Regulations which refers to section 16 ). On that reasoning it held that there can be stay as contemplated by section 22 only when section 16(1) stage of inquiry has arrived and not at the stage of section 15 dealing with registration of the reference. It further held that it is only when the <ORG>, i.e. the Bench of the <ORG> issues notices under section 16(1) for inquiry or asks the operating agency to inquire, - that the `inquiry' can be said to have commenced. This line of reasoning has been applied by <ORG> also and by <ORG> in the judgment under appeal. Question is whether this view is correct?

Now, Regulation 19(4) which is concerned with section 15 requires that upon receipt of a reference, an acknowledgement is to be issued stating expressly that the reference has been received `subject to verification that the reference is in order'. If on scrutiny, the reference is in order, then it will be registered under Regulation 19(5). Regulation 19(5) has been amended recently with effect from 24.3.1994 which is of a date very much subsequent, in point of time, to the date of Judgment of <ORG>. The new Regulation 19(5) as substituted w.e.f. 24.3.1994 is in two parts and reads as follows:

"Reg. 19(5): If on scrutiny, the reference is found to be in order, it shall be registered, assigned a serial number and submitted to the Chairman or assigning it to a Bench. Simultaneously, remaining information/documents required, if any, shall be called for from the informant."

The first part says that the reference, if it is in order, will be registered. The second part says that simultaneously notice shall be issued calling for information or documents from the informant. The effect of the amended Regulation 19(5) is that even before any Bench of the <ORG> can think of calling for information under Regulation 20(1) or under Regulation 21 read with section 16 , it is now mandatory after the amendment that as soon as a reference is registered, information/documents shall be called for from the informant straightaway. The point is whether when such information/documents are required to be simultaneously called for at Regulation 19(5) stage, can it be said that an `inquiry' under section 16(1) has commenced?

The above question depends upon what is meant by the word `inquiry' used in section 16(1) of the Act. According to the New Standard Dictionary, the word `inquiry' includes `investigation' into facts, causes, effects and relations generally; `to inquire', according to the same dictionary means `to exert oneself to discover something. Chamber's 20th Century Dictionary lays down that the meaning of the term `to inquire' is "to ask, to seek" and the meaning of the term `inquiry' is given as: "search for knowledge; investigation : a question".

Inasmuch as under the latter part of Regulation 19(5) it is necessary that simultaneously with the registration of the reference, information/documents are to be called for from the informant - the `inquiry' must, in our opinion, be deemed to have commenced under section 16 of the Act at that stage itself, namely, at stage of the second part of Regulation 19(5) and it is no longer permissible to say that such a stage is reached only when the <ORG> issues notices and starts an inquiry under Regulation 20 calling for additional information `in relation to the inquiry' or only when orders are passed by the <ORG> under Regulation 21, read with section 16(1) . The result is that strictly speaking, after the amendment of Regulation 19(5) on 24.3.1994 the latter part of Regulation 19(5) falls into Chapters III and IV of the Regulations which are referable to `Inquiries' under section 16 of the Act, rather than into Chapter II which deals with `References' under section 15 . The Chapter headings cannot, in out opinion, be treated as rigid compartments.

There can, therefore, be no difficulty in holding that after the amendment to Regulation 19 w.e.f. 24.3.1994, once the reference is registered and when once it is mandatory simultaneously to call for information/documents from the informant and such a direction is given, then inquiry under section 16(1) must - for the purposes of section 22 - be deemed to have commenced. Section 22 and the prohibitions contained in it shall immediately come into play. In that view of the matter, we need not go into the correctness of the view expressed by the Calcutta, Rajasthan and Bombay <ORG> which relied upon the unamended Regulation 19. Point 2 is decided accordingly.

On the facts of this case, the impugned orders dated 28.7.1997 and 8.8.1997 of <ORG> have been passed after the BIFR proceedings reached the stage of second part of Regulation 19(5) on 24.7.1997 that is to say, when proceedings, as per the amended Regulation 19(5) reached the stage of inquiry under section 16(1) . It must, therefore, be deemed that the said orders are illegal and are in violation of the prohibition contained in section 22 of the Act.

For the aforesaid reasons, the order passed by the Division Bench on 28.7.97 appointing Receiver and the order passed by another Bench of <ORG> on 8.8.97 restoring the provisional liquidator, are set aside. The Civil appeals are accordingly allowed. There will be no order as to costs. The respondents are free, if need be, to approach the <ORG> under section 22 and section 22A of the Act for further orders, if any, in addition to the orders already passed by the <ORG> in this behalf.