In Panchhi Petha Store v. Union of India & Ors, the Delhi High Court on 11 November 2024 in W.P.(C) 773/2019 set aside the order dated 27.08.2018 passed by Respondent No.2 (Regional Director) rejecting the petitioner’s application for rectification of the company name of Respondent No.4, M/s. Pancchi Petha Private Limited.
The dispute arose from a family-run sweets business where the petitioner, claiming prior use and registration of the trademark “PANCHHI”, sought removal/rectification of the respondent company’s name under Section 16(1)(b) of the Companies Act, 2013, alleging it was identical and deceptively similar. The Regional Director had rejected the application while making observations on trademark ownership, holding that the petitioner was not the owner of the mark.
Justice Tara Vitasta Ganju observed that the Regional Director exceeded its jurisdiction under Section 16 of the Companies Act by adjudicating upon trademark ownership, which is a matter for the Intellectual Property Division or appropriate trademark forums. The Court clarified that the RD’s role is limited to examining whether a company name is identical or too nearly resembles an existing company name or registered trademark, without delving into contested trademark ownership disputes.
The petition was allowed, the impugned order was quashed, and parties were granted liberty to approach the Regional Director afresh in accordance with law, with all rights and contentions kept open.
Disclaimer: Donot treat this as substitute for legal advise as it may contain subjective errors. Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
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Introduction
In a significant ruling concerning the interplay between company name registration and trademark rights, the Delhi High Court has clarified the scope of authority of the Regional Director under Section 16 of the Companies Act, 2013. The judgment underscores that while the Regional Director can direct changes in company names that are identical or deceptively similar to existing trademarks, the authority cannot adjudicate upon complex questions of trademark ownership or infringement, which fall within the domain of specialized intellectual property proceedings.
Factual and Procedural Background
Panchhi Petha Store, a well-known entity dealing in traditional sweets, filed a petition challenging an order dated 27 August 2018 passed by the Regional Director (Northern Region). The petitioner had approached the Regional Director seeking rectification and removal of the name of a company called “Panchhi Petha Private Limited” from the Register of Companies. The petitioner claimed prior rights and ownership over the trademark “PANCHHI”, which had been registered and used for a long time in relation to its business.
The Regional Director rejected the application, observing that the petitioner was not the owner of the trademark, as the registrations stood in the name of one Subhash Chander. The order also noted the existence of ongoing disputes between the parties before trademark authorities and courts. Aggrieved by this decision and particularly the finding on trademark ownership, the petitioner approached the Delhi High Court by way of a writ petition under Article 226 of the Constitution.
Dispute
The core dispute revolved around whether the Regional Director, while exercising powers under Section 16 of the Companies Act, 2013, could examine and give a conclusive finding on the ownership of a trademark. The petitioner argued that the Regional Director overstepped its jurisdiction by delving into trademark ownership issues instead of limiting itself to examining similarity of names for the purpose of preventing public confusion. The respondents defended the order, contending that the Regional Director had correctly exercised jurisdiction under Section 16(1)(b).
Reasoning and Analysis of the Judge
Justice Tara Vitasta Ganju carefully examined the scope of Section 16 of the Companies Act, 2013. The provision empowers the Central Government (through the Regional Director) to direct a company to change its name if it is identical with or too nearly resembles the name of an existing company or a registered trademark.
The Court referred to the judgment of a Coordinate Bench in CGMP Pharmaplan (P) Ltd. v. Regional Director, Ministry of Corporate Affairs (2010 SCC OnLine Del 2387), which in turn relied upon the Division Bench decision in Montari Overseas Ltd. v. Montari Industries Ltd. (1995 SCC OnLine Del 864). These judgments clarify that the Regional Director’s inquiry is limited to determining whether the name “too nearly resembles” another name or trademark so as to cause confusion in the minds of the public. The powers are not as wide as those exercised by a civil court in a passing-off action or by the Intellectual Property Division in trademark disputes.
Justice Ganju observed that the Regional Director had gone beyond this limited mandate by recording a finding that the petitioner was not the owner of the trademark “PANCHHI”. Such a determination on ownership involves intricate questions of prior use, registration, and validity of trademarks, which require detailed evidence and are best left to specialized forums like the Trade Marks Registry or the High Court in IP matters.
The Court emphasized that both parties belong to the same extended family and are locked in multiple litigations concerning the brand. In such family business disputes involving intellectual property, the Regional Director cannot act as an arbiter of trademark rights. The object of Section 16 is to prevent public confusion regarding the identity of companies, not to resolve substantive trademark ownership disputes.
Final Decision of the Court
The Delhi High Court set aside the impugned order dated 27 August 2018. However, liberty was granted to both parties to approach the Regional Director afresh, if necessary, in accordance with law. All rights and contentions of the parties were left open. The petition was disposed of accordingly.
Point of Law Settled in the Case
The judgment settles that the jurisdiction of the Regional Director under Section 16 of the Companies Act, 2013 is confined to examining similarity or identity of names for preventing confusion in the market. The authority cannot adjudicate upon questions of trademark ownership, validity, or infringement, which are beyond the scope of the provision. This maintains a clear demarcation between company law proceedings for name rectification and specialized intellectual property litigation.
Case Details Title: Panchhi Petha Store v. Union of India & Ors. Date of Order: 11 November 2024 Case Number: W.P.(C) 773/2019 Neutral Citation: Not Available Name of Court: High Court of Delhi Name of Hon’ble Judge: Justice Tara Vitasta Ganju
Disclaimer: Readers are advised not to treat this as substitute for legal advise as it may contain errors in perception, interpretation, and presentation.
Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
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Headnote: Delhi High Court holds that Regional Director under Section 16 of Companies Act cannot decide trademark ownership while directing change of company name; such disputes must be resolved in appropriate IP forums. Impugned order set aside with liberty to parties to approach afresh.
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