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The Nature of Orders and Quorum Requirements at the IPAB (Part I)


In January, I had written a brief post alleging the illegality of the hearings conducted and the orders passed by the IPAB. I had argued that the IPAB had violated the law because it failed to meet the quorum requirements under provisions of the Trade Marks Act, 1999 read with the IPAB (Procedure) Rules, 2003 (‘quorum requirements’) when conducting hearings and passing orders.

Since the retirement of Technical Member Sanjeev Kumar Chaswal on December 5, 2018, the IPAB has remained without a sitting Technical Member, and therefore, without the quorum required under Section 84(2) of the Trade Marks Act. Despite this situation, we had received documents from lawyers at ARS & Associates, Chandigarh, which revealed that the IPAB had conducted hearings on several occasions and passed at least two orders without meeting the quorum requirements (the IPAB website continues to remain dysfunctional). However, some of our readers have suggested that the IPAB is not culpable of any wrongdoing as it had not heard or passed any orders on substantive aspects of pending matters, and is simply ensuring that matters do not get held up needlessly.

In this post, I will attempt to analyse whether hearings and orders that are not on ‘substantive aspects’ of disputes can be legally conducted and passed by the IPAB in the absence of a quorum.

Can Administrative Orders Be Passed Without Quorum?

In my previous post, I had shared two orders that had been passed by the IPAB without a quorum. The first, passed in Puma SE v Arun Jain, was an order of withdrawal which stated:

“The learned Counsel of the applicant seeks to withdraw the present petition. The applicant states that the Trade Marks in question is already removed. The Petition is disposed of. Status report is taken on record.”

The second, passed in Puma SE v Abhishek Kumar, was an order of settlement which stated:

“The Learned Counsel for the applicant states that since the dispute between Applicant and Respondent no. 1 has resolved in Civil Court. In view of the said settlement, the counsel withdraws the said petition. Petition is disposed of.”

I argued that these orders violated the quorum requirements, based on a combined reading of Section 84(2) of the Trade Marks Act and Rule 20 of the IPAB (Procedure) Rules, 2003.

Section 84(2) requires that:

“Subject to the other provisions of this Act, a Bench shall consist of one Judicial Member and one Technical Member and shall sit at such place as the Central Government may, by notification in the Official Gazette, specify.”

Rule 20 of the IPAB (Procedure) Rules, 2003 further requires that:

Order to be signed and dated.—

(1) Every order of the Appellate Board shall be signed and dated by the Members of the Bench.

(2) The order shall be pronounced in the sitting of the Bench.

On the basis of these provisions, I concluded that the IPAB needs to meet the quorum requirements to hear or pass any kind of order for all matters that come before it. However, some readers suggested that the two orders extracted above do not need to fulfil the quorum requirements. They pointed out that the mentioned orders are not on merits and are only administrative in nature as the bench is not adjudicating or applying their mind while passing them. Further, it was argued that not passing such orders would only increase the backlog in the IPAB, which is not desirable either. One of the readers specifically noted:

Re: the “example” of an “order passed without quorum” that the author cites, I have the following comment:

A counsel’s voluntary withdrawal of a proceeding is not an order in the matter or a hearing on merits. When a party withdraws a proceeding, the bench is not adjudicating on it at all. Why should an attorney be inconvenienced and a simple act of withdrawal postponed for lack of quorum? If that happened then the critique would be “non application of mind”, “delays and backlog”, etc. Seems that the IPAB cannot win either way.

I believe that the kind of orders referred to above are administrative orders, and would include orders that do not require an objective determination of rights and obligations of disputing parties. These would include, for example, orders relating to the issuance of summons and payment of batta. Judicial orders, on the other hand, include orders that make an objective determination on the rights and obligations of the disputing parties based on principles of law. The argument, therefore, is that orders not passed on merit do not involve an objective determination of the rights and obligations of disputing parties. They are administrative in nature, and therefore do not require a quorum.

On a literal reading of the quorum requirements, this argument would fail, since they make no distinction between different types of orders. While this leads to the ostensibly inconvenient conclusion that even administrative orders cannot be passed without a quorum, Rule 27, on the additional functions and duties of the Deputy Registrar, reveals that such matters form a part of the functions of a Deputy Registrar of the IPAB:

In addition to the functions and duties assigned under rule 26, the Deputy Registrar shall have the following functions and duties subject to any general or special orders of the Chairman, namely: ­—

(i) to receive all applications, appeals, counter-statements, replies and other documents;

(ii) to decide all questions arising out of the scrutiny of the appeals and applications before they are registered;

(iii) to require any application, appeal, counter-statement, replies presented to the Appellate Board to be amended in accordance with the rules;

(iv) subject to the directions of the Chairman, to fix date of hearing of the application or appeals or other proceedings and issue notices therefor;

(v) direct any formal amendment of records;

(vi) to order supply of copies of documents to parties to proceedings;

(vii) to grant leave to inspect the record of the Appellate Board;

(viii) to requisition records from the custody of any court, Registrar of Trade Marks or other authority;

(ix) to decide questions relating to extension of time in respect of filing of counter-statement, reply, rejoinder, etc.

Rule 27, therefore, reveals that the burden of fulfilling administrative duties in matters is, therefore, upon the Deputy Registrar. A bench need not concern itself with the same. A literal reading of the quorum requirements, which would require a quorum for all orders, would therefore not lead to any administrative inefficiencies or inconveniences at the IPAB since the Deputy Registrar is capable of taking care of the same.

Can Orders on Withdrawal and Settlement Be Classified as Administrative Orders?

Even if we were to ignore this understanding of the quorum requirements, and argue that administrative orders do not require a quorum, it would be incorrect to classify the orders on withdrawal and settlement as administrative orders.

On several occasions, the Supreme Court has attempted to articulate the distinction between administrative and judicial orders. In Shankarlal Aggarwal v Shankarlal Poddar, it noted:

One of the tests would be whether a matter which involves the exercise of discretion is left for the decision of the authority, particularly if that authority were a Court, and if the discretion has to be exercised on objective, as distinguished from a purely subjective, consideration, it would be a judicial decision. It has sometimes been said that the essence of a judicial proceeding or of a judicial order is that there should be two parties and a lis between them which is the subject of adjudication, as a result of that order or a decision on an issue between a proposal and an opposition. No doubt, it would not be possible to describe an order passed deciding a lis before the authority that it is not a judicial order but it does not follow that the absence of a lis necessarily negatives the order being judicial.

In the context of an order passed by a Magistrate, in Nara Chandrababu Naidu v State of Telangana, the Supreme Court also noted:

Whether an order is a judicial order or administrative order depends on the following two conditions: (i) whether any discretionary power is left over to the Magistrate and if so, exercising of such discretionary power should be based on sound principles of law; and (ii) the order passed by the Magistrate directly or indirectly or by necessary implication affects the rights of the parties to the proceedings. If the order passed by the Magistrate satisfies the above two conditions, it is a judicial order. If not, it is only an administrative order. In other words, passing of a judicial order mandates application of mind by the Court as the same eventually affects the rights and personal liberty of an individual. An administrative order is one which regulates the proceedings of the Court without affecting the rights of the parties to the proceedings. For example: (i) issuance of summons, (ii) payment of batta, etc. The test to be applied is whether the impugned order passed by the learned Special Judge affects the rights and liabilities of the petitioner or not. If the answer is affirmative, it falls within the ambit of judicial order and if the answer is negative, it falls within the ambit of administrative order.

Based on these principles, I would argue that orders of withdrawal and settlement would qualify as judicial orders. This is because both orders require an objective assessment of the appropriateness of allowing a withdrawal or settlement in light of adduced evidence (Order XXIII of the Civil Procedure Code, 1908), to ensure that proper consent has been taken, the application has been made in the proper form and no impropriety in the withdrawal or settlement. Further, these orders affect the rights of the parties to seek recourse before the IPAB, since a fresh case on the same cause of action is generally not permitted after withdrawal or settlement. Therefore, even though a withdrawal or settlement may not feature arguments from parties, it still requires an objective application of principles of law that affects the rights of parties and is therefore judicial in nature.

In similar contexts, the Supreme Court has noted that orders passed relating to admissions, under Order XII of the CPC, cannot be referred to as administrative orders. Further, the Kerala High Court also noted that an order granting an adjournment cannot be classified as an administrative order (see paragraph 10 of Babu Premarajan vs Superintendent of Police). Orders relating to admission and adjournments are not always contested or critical to a dispute, but are still not considered to be administrative in nature. It would therefore be consistent with this line of jurisprudence to find that orders of withdrawal and settlement are also judicial orders.

It may be worth noting that while the IPAB is not bound by the Civil Procedure Code, it possesses all the trappings of a civil court by virtue of the powers vested in it under Section 92 of the Trade Marks Act and must follow the principles of natural justice. The above discussion, therefore, would be relevant for the IPAB in coming to a decision.

Can the IPAB hear cases on grounds of backlog of matters?

Another argument put forth by our readers was that the IPAB should be allowed to conduct hearings and pass orders on non-substantive aspects of a matter because this would ensure that there is no unnecessary piling up of cases at the IPAB.

However, if we were to accept the literal interpretation of the quorum requirements, which permits no exceptions for types of orders, then allowing hearings and orders to be passed would be patently illegal. Allowing such a violation of the law would not be appropriate, no matter how noble the objective is.

In a similar fact situation in NGT Bar Association v Union of India, the Supreme Court did not allow the National Green Tribunal to continue hearing matters without an expert member on the bench, despite having knowledge of the consequent backlog that would arise due to vacancies at the tribunal.

Further, as one of our readers pointed out that classifying orders of withdrawal and settlement as administrative would result in indiscriminate refiling of suits with the same cause of action, with legal principles such as res judicata remaining inapplicable to administrative orders. This may even result in an increase in the work-load of the IPAB, since parties may misuse this loophole to refile cases as many times as they deem fit.

Conclusion

The IPAB has, therefore, by passing orders relating to withdrawal and settlement, flouted the quorum requirements under the Trade Marks Act and IPAB (Procedure) Rules, because there is no exception for administrative orders. Even if there were such an exception, orders relating to settlement and withdrawal are not administrative in nature. Further, the noble goal of reducing the backlog at the judiciary cannot justify violating a provision of law.

In the next post, I will discuss Section 84 in more detail, specifically checking if the Chairman has the power to override the quorum requirements.

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