2021 (5) TMI 35 - HC - Companies Law

Court allows writ petition, directs incorporation of LLP without disputes. Importance of officials applying minds stressed.

Kunhi Muhammed Etayattil, Versus the asst. Registrar of companies, Ministry Of Corporate Affairs, Union Of India, Represented By Ministry Of Corporate

The court allowed the writ petition, set aside Ext.P15, and directed the 1st respondent to incorporate the LLP without raising any dispute on the proposed ... Application for reservation of the name “Reef Center for Wellness and Excellence LLP” - Rule 18(5) of the LLP Rules - HELD THAT:- The petitioner had applied for reserving the name REEF Wellness and Excellence LLP and the name was reserved for the petitioner for three months. True, the petitioner could not make an application for registration of LLP within three months. However, the petitioner submitted an application for incorporation of LLP in the said name as per Ext.P3 on 23.01.2020. Defects in the application were noted by the respondents in instalments as per Exts. P4, P5, P7, P9 and P10 and the petitioner was made to file fresh applications time and again - t is evident from Ext.P16 that the word REEF is now included in the names of entities dealing in Class 05 goods in Fourth Schedule to Trade Marks Rules, 2002, namely, Pharmaceutical, veterinary and sanitary preparations, dietetic substances adapted for medical use, food for babies, plasters, materials for dressings; materials for stopping teeth, dental wax; disinfectants, preparation for destroying vermin; fungicides, herbicides. The petitioner proposes to deal in services and his activity may fall under Classes 44, 35 or 41 as is evident from Ext.P4 communication of the respondents. The Hon'ble Apex Court considered the issue of registering similar trade name by different entities for difference classes of products, in NANDHINI DELUXE VERSUS KARNATAKA CO-OPERATIVE MILK PRODUCERS FEDERATION LTD. [2018 (7) TMI 2176 - SUPREME COURT]. In the said case, the appellant before the Supreme Court was operating a restaurant under the trade mark NANDHINI and the respondent was selling milk and milk products under the mark NANDINI. The Hon'ble Apex Court held that as the products of the appellant and respondents fall in different classes, there is no question of confusion or deception in the matter of Trade Mark. The case of the petitioner in fact stands on a stronger footing. The registration of word mark already granted by the respondents are “REEFLEC', REEF”, “REEFIT FORTE”, “REEFER (HEMATANIC)” which are all for products falling under Class 05. The petitioner seeks the name “Reef Wellness and Excellence LLP”, not for any product but for a service, and that too which does not fall under Class 05. The name proposed by the petitioner cannot be said to be identical or deceptively similar - the respondents are not justified in declining incorporation of LLP as sought for by the petitioner on the ground of similarity of name. Petition allowed. Issues Involved:1. Validity of rejection of the LLP name 'Reef Wellness and Excellence LLP'.2. Compliance with procedural requirements for LLP incorporation.3. Justification of demands for additional documents.4. Applicability of trademark classes to the proposed LLP name.Issue-wise Detailed Analysis:1. Validity of rejection of the LLP name 'Reef Wellness and Excellence LLP':The petitioner sought to incorporate an LLP under the name 'Reef Wellness and Excellence LLP' and had initially received approval for the name reservation. Despite this, the application for incorporation was repeatedly rejected, citing that the name 'REEF' was a trademark under Class 5. The court noted that the trademark 'REEF' under Class 5 pertains to pharmaceuticals and related products, whereas the petitioner's services fall under Class 35, which involves different categories. The court referenced Section 15 of the LLP Act, 2008, and Section 28 of the Trade Marks Act, 1999, emphasizing that the exclusive right to use a trademark is limited to the goods or services for which it is registered. The court concluded that the respondents were not justified in rejecting the application based on the trademark issue, as the services provided by the petitioner did not fall under Class 5.2. Compliance with procedural requirements for LLP incorporation:The petitioner faced multiple rejections due to procedural defects in the application, such as issues with the utility bill address, NOC requirements, and subscriber sheet details. The court observed that the petitioner had complied with the procedural requirements by submitting the necessary documents, including a BSNL telephone bill and NOC from the building owner. Despite this, the respondents continued to raise new defects in a piecemeal manner, causing unnecessary delays.3. Justification of demands for additional documents:The respondents demanded additional documents, including a Business Visa or OCI card for one of the partners, who is a non-resident Indian but holds an Indian passport. The court found this demand unjustified, as there was no requirement for a Business Visa or OCI card for an Indian passport holder. The court noted that the Escalation Authority had acknowledged that the demand for a Business Visa/OCI card was made inadvertently and could be disregarded. The court criticized the respondents for their lack of application of mind and reliance on system-generated responses, leading to harassment of the petitioner.4. Applicability of trademark classes to the proposed LLP name:The court referred to the Supreme Court judgment in Nandhini Delux v. Karnataka Co-operative Milk Producers Federation Limited, which established that similar trade names could be registered for different classes of products or services without causing confusion or deception. The court held that the petitioner's proposed name 'Reef Wellness and Excellence LLP' did not fall under Class 5 and was not identical or deceptively similar to existing trademarks in that class. Therefore, the respondents' rejection on the ground of similarity of name was unjustified.Conclusion:The court allowed the writ petition, set aside Ext.P15, and directed the 1st respondent to incorporate the LLP without raising any dispute on the proposed name 'Reef Wellness and Excellence LLP'. The judgment highlighted the need for officials to apply their minds and avoid unnecessary procedural hurdles, ensuring a fair and efficient process for LLP incorporation.