Kerala High Court Slams MCA Officials for failure to Apply Mind

Kerala High Court Slams MCA Officials for failure to Apply Mind

The Kerala High Court (HC) in the case titled Kunhi Mhd. Etayattil (Petitioner) v. The Asst. Registrar of Companies & Union of India (Respondents) held that the Registrar of Company was not justified in declining incorporation of LLP on the ground of similarity of the name since it was rejected without application of mind.

The single-judge of the HC Justice N. Nagaresh said that the act of respondents was a "system-generated harassment" as it did not consider the fact that the name proposed by the petitioner could not be said to be identical or deceptively similar.

The petitioner had the order of the respondents before the HC wherein his application was rejected by the Registrar for the incorporation of a Limited Liability Partnership (LLP) under the name "Reef Wellness & Excellence LLP".

It was rejected on the ground that the proposed name includes the word 'Reef', which is a trademark under class 5. However, the petitioner claimed that in an earlier application, the Registrar had expressly approved the name "Reef Wellness & Excellence LLP" twice.

It was contended that "Even under Section 28 of the Trademarks Act, a registration will grant exclusivity only for the class of goods or services in respect of which the trademark is used."

He added that registration under a particular class did not mean that the said name could not be used by anyone else for any other class of goods and services.

Section 15 (2)(b) of the LLP Act had to be read down to mean that, the restriction can be made applicable only if the proposed name included a trademark registered in the same class of goods or services in which the activity of the company was being carried out or was proposed to be carried out.

The HC allowed the petition and criticized the government officials for blindly depending on the system without applying their minds. It showed dissatisfaction with the act of the officials and said that it was a sorry picture of what could be described as a 'system generated harassment' aggravated by non-application of mind by officials.

The Court further stated that "The registration of word marks already granted by the respondents are "REEFLEC', REEF", "REFIT FORTE", "REEFER (HEMATANIC)" which are all for products falling under Class 05."

It further stated that the name proposed by the petitioner could not be said to be identical or deceptively similar. When the petitioner sought for a word name for a service which word name was not identical or deceptively similar to other word names already registered for a different class of products, the respondents were not justified in rejecting the application of the petitioner for the reason that the proposed name included the work "REEF" which was an existing trademark under Class 05.

The HC held that the respondents were not justified in declining incorporation of LLP as sought for by the petitioner on the ground of similarity of name. The writ petition is therefore allowed.

The Court concluded that the respondents were not justified in declining incorporation of LLP as sought for by the petitioner on the ground of similarity of name. It directed to incorporate the LLP without raising any dispute on the name proposed by the petitioner.