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Issues: (i) Whether the High Court could exercise jurisdiction under Article 227 of the Constitution of India and Section 482 of the Code of Criminal Procedure, 1973 to quash criminal complaints at the investigation stage. (ii) Whether, after takeover of management under the Textile undertakings (Taking Over of Management) Act, 1983, the registered proprietors of the trade marks could be prosecuted under Sections 78 and 79 of the Trade and Merchandise Marks Act, 1958 for using their own trade marks.
Issue (i): Whether the High Court could exercise jurisdiction under Article 227 of the Constitution of India and Section 482 of the Code of Criminal Procedure, 1973 to quash criminal complaints at the investigation stage.
Analysis: The complaints were at a preliminary stage, but the Court found that the petitioners faced seizure of goods and disruption of business without an effective remedy before the trial court because no process had yet been issued. The material facts and governing legal position were already before the Court, and the case involved a pure legal challenge going to the root of the prosecution. In such circumstances, the Court held that inherent and supervisory jurisdiction could be exercised to prevent unnecessary harassment and to secure the ends of justice.
Conclusion: The High Court could validly entertain and interfere in the proceedings under Article 227 and Section 482.
Issue (ii): Whether, after takeover of management under the Textile undertakings (Taking Over of Management) Act, 1983, the registered proprietors of the trade marks could be prosecuted under Sections 78 and 79 of the Trade and Merchandise Marks Act, 1958 for using their own trade marks.
Analysis: The takeover statute vested only the management of the textile undertaking in the Central Government and did not expressly divest the company of its registered trade mark proprietorship or provide for automatic transmission of the marks to the Custodian. The Court held that Section 7 of the takeover statute did not override the absence of any specific provision extinguishing the registered owners' trade mark rights. Since the petitioners remained the registered proprietors and no registration of transmission or assignment in favour of the Custodian had been effected under Section 44 of the Trade and Merchandise Marks Act, 1958, prosecution for infringement of their own marks was legally untenable. On these special facts, the criminal complaints disclosed no sustainable offence and their continuation would amount to an abuse of process.
Conclusion: The registered proprietors could not be prosecuted for using their own trade marks, and the complaints were liable to be quashed.
Final Conclusion: The criminal writ petitions succeeded, and the pending criminal complaints and all consequential proceedings were set aside; the connected interim orders also stood vacated.
Ratio Decidendi: A takeover of management of a textile undertaking does not, specific statutory provision, divest the registered proprietor of its trade mark rights or authorise prosecution of the proprietor for using its own registered marks; where no offence is disclosed, criminal proceedings may be quashed under the High Court's inherent jurisdiction.
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