Deceptive similarity and dishonest adoption required refusal of trade mark registration despite territorial limits on prior rights.

A later trade mark was found deceptively similar and dishonestly adopted, so the Registrar was required to refuse registration under Section 18. Although the earlier mark was registered only in Delhi and there was no proof of use or reputation outside that territory, Sections 11(a) and 12(1) operated only within Delhi on those facts and did not bar registration outside it. The Court nevertheless held that the visual resemblance, common vernacular meaning of the device as "Sher," and shared label expression established dishonest imitation. The order permitting registration was therefore set aside.

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Issues: Whether the respondent's trade mark, being deceptively similar to the appellant's registered mark, was entitled to registration outside the territorial limit of the appellant's existing registration, and whether the Registrar ought to have refused registration on the ground of dishonest adoption.

Analysis: The appellant's mark was registered only in the Union Territory of Delhi, and there was no proof of use or reputation outside that territory. On that footing, Section 12(1) of the Trade and Merchandise Marks Act, 1958 barred registration of the respondent's mark only within Delhi and not outside it. Section 11(a) also did not operate beyond Delhi, because the absence of evidence of the appellant's use outside Delhi meant that confusion outside that territory was not established. The Court nevertheless found that the two marks were deceptively similar, not only because both devices were commonly understood as "Sher" in vernacular usage, but also because the visual resemblance of the devices and the common label expression showed dishonest imitation. The Registrar's refusal to exercise discretion under Section 18 proceeded on an erroneous view that there was no dishonest trade practice.

Conclusion: The respondent's adoption was dishonest, the Registrar's discretion was wrongly exercised, and the order permitting registration was set aside. The appeal succeeded in favour of the appellant.

Ratio Decidendi: Where a later mark is found to be deceptively similar and dishonestly adopted, the Registrar's discretion under Section 18 must be exercised against registration, even though territorial limitations in the prior registration may confine the operation of Sections 11 and 12(1).

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