Legal Chronicle

July 2023

UJA | Legal Chronicle July 2023
1Summarized Updates
2Recent Case Laws
3Expert’s Cubicle
5Our Team 

Summarized Updates

Design Susceptible to Cancellation if Already in the Public Domain

In the recent case of Atomberg Technologies Private Limited (Applicant/Plaintiff) vs. Luker Electric Technologies Private Limited (Defendant), the Plaintiff sought interim relief against the defendant for infringement and passing off of its registered design of a ceiling fan named Atomberg Renesa Ceiling Fan, which was registered on September 8, 2018. The Plaintiff claimed that the Defendant had obtained the registration of two ceiling fans, Size Zero Fan 1 and Size Zero Fan 2, fraudulently in March 2022.

The Plaintiff stated in its application that its registered design under the name “Atomberg Renesa Ceiling Fan” can be interchangeably used and includes a reference to “Atomberg Gorilla Renesa Ceiling Fan,” which are the two house marks of the Plaintiff. The Plaintiff claims to have used two house marks, Atomberg and Gorilla, further stating that the Plaintiff gave up the use of its house mark, Gorilla. According to the Plaintiff, it had gained a substantial reputation in the market as a result of its unique and aesthetic ceiling fan and that the Plaintiff had been using the design openly, continuously, and extensively since the year 2018.

In its defence, the defendant alleged that there was a suppression of substantial facts by the Plaintiff, in particular that the Plaintiff’s registered designs were in the public domain and were not of a unique or novel nature to have become eligible for Design Registration under Section 4 of the Design Act, 2000. On this matter, the defendant took note of certain posts by the Plaintiff in the public domain dated August 2018, before the Plaintiff’s design was registered on September 8, 2018. The Defendant then went on to place certain delivery challans and invoices that concluded that the design of the Plaintiff was already in the public domain, although the fans based on the said design were called Gorilla Ceiling Fans. In continuation of the same, the defendant redirected the court to the statement made by the Plaintiff that any reference to Atomberg Renesa Ceiling Fan included Atomberg Gorilla Renesa Ceiling Fan.

Based on the above contentions, the court was of the opinion that the Plaintiff’s design was liable to be prohibited for registration under Section 4 of the Designs Act owing to the fact that the registered design was not new or original and that the designs were in the public domain before they were registered. The Court further pointed out that the Plaintiff had suppressed the material facts of the social media posts and the invoices, which further indicated and concluded that the Plaintiff is not entitled to any interim relief.

Posh And its Applicability in the Case of a Delinquent Employee Working in a Different Workplace

The High Court of Delhi in the recent case of Dr. Sohail Malik vs. Union of India and Anr. ruled that the applicability of the POSH Act is not limited to the instances where a woman employee is harassed by an employee working at the same workplace but also extends to the instances when the delinquent employee is working someplace else.

An officer from the Department of Food and Public Distribution, Ministry of Consumer and Public Distribution, raised a complaint before the Internal Complaints Committee of her department against an officer from the Indian Railway Service (the Petitioner), which was further submitted before the Central Administrative Tribunal (CAT) by the Petitioner, questioning the jurisdiction of the complaint made. The Central Administrative Tribunal upheld the jurisdiction of the ICC (Internal Complaints Committee), which resulted in a writ petition filed by the Petitioner before the High Court of Delhi.

The Petitioner argued that the ICC from the Department where the complainant made the complaint could not have jurisdiction over the delinquent employee (petitioner) who worked in another workplace as the delinquent employee would not be falling under the disciplinary control of the ICC.

The Court opined itself by stating that since POSH is legislation that was enacted for the betterment and welfare of the community, its interpretation cannot be in contravention of its objective, which might further manifest unjust results. Thus, the Court held that POSH does not rationalise or condone the acts of harassment being committed by men  towards women working in a different department or workplace. It was concluded that POSH does not specifically restrict the transfer of a complaint from the ICC of a complainant to the employer of a different workplace, who can exercise disciplinary actions against the employee who has been involved in the said act of harassing a woman in any other department or workplace.

Recent Case Law

Filing an application under Section 7 of the IBC does not bar an application made under Section 11(6) of the Arbitration and Conciliation Act, 1996.

In the case of Sunflag Iron & Steel Co. Ltd. vs. J. Poonamchand & Sons, the Honourable High Court of Judicature at Bombay, Nagpur Bench, held that the mere filing of an application under Section 7(1) of the IBC does not act as a bar to any other statutes until satisfaction is recorded by the Adjudicating Authority and the application is admitted.

Brief Facts:

The Applicant filed an application under Section 11(6) of the Arbitration and Conciliation Act (hereinafter referred to as the “Act”) for the appointment of an Arbitrator in view of arbitration clause no. 15 in the agreement dated August 30, 2019 (p. 16) between the parties, the existence and invocation of which are not disputed. The Applicant further stated that no order as yet has been passed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC” or “IB Code”) in proceedings initiated by the Respondent, and therefore mere initiation of proceedings does not injunct this Court from entertaining and deciding this application. 

The Respondent argued in their submission that since the Respondent has approached the NCLT under the provisions of the IB Code, the provisions of Section 11(6) of the Act would become inapplicable, and therefore it would be impermissible to appoint an arbitrator. The Respondent further stated that once the NCLT is seized of the matter upon the respondent having approached it for measures under the provisions of the IB Code, it would have an overriding effect on Section 11(6) of the Act, which then cannot be invoked, for which reliance is placed upon Section 238 of the IB Code.

Section 238 of the IB Code reads as follows:

“238. Provisions of this Code to override other laws The provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect under any such law.”

Decision of The Court:

The Hon’ble held that it would be material to note that there does not appear to be anything inconsistent between the provisions of the Act and the IB Code, since the provisions of Section 238 of the IB Code would come into play only upon an order having been passed by the Adjudicating Authority under Section 7(5) of the IB Code and therefore an application under Section 11(6) of the Act, which until such time cannot be said to be not maintainable. 

The Competition Commission of India (CCI) can take action against CIL for abuse of its dominant position in the coal sector.

In a recent judgement, the Supreme Court of India ruled that Coal India Limited (CIL) and its subsidiary companies are subject to the Competition Act, 2002. The court held that the Competition Commission of India (CCI) can take action against CIL for abuse of its dominant position in the coal sector.

Brief Facts:

Coal India Limited (CIL) is a public-sector undertaking and the largest coal-producing company in India. It is responsible for a significant portion of the country’s coal production and distribution. CIL and its subsidiaries stated that they should be exempted from the Competition Act, 2002, because they are governed by the Coal Mines (Nationalisation) Act, 1973.
CIL argued that as entities geared towards achieving the objectives declared in Article 39(b) of the Indian Constitution, which focuses on the distribution of community resources for the common good, they should not be bound by the Competition Act.

CIL’s claim was dismissed by the Supreme Court, which included Justice K.M. Joseph, Justice B.V. Nagarathna, and Justice Ahsanuddin Amanullah. The Court determined that the claim that the Coal Mines (Nationalisation) Act and the Competition Act cannot be harmonised is without validity. It declared that the Competition Act applies to CIL and its affiliates and that the CCI is empowered to take legal action against them for abuse of a dominant position. 

Decision of The Court:

The 3-judge bench of Justice KM Joseph, Justice BV Nagarathna, and Justice Ahsanuddin Amanullah, JJ, has rejected the contention and observed that “The content of the common good is itself not a static concept. It may take its hue from the context and the times in which the matter falls for consideration by the Court. If Parliament has intended that State monopolies, even if they be in the matter of distribution, must come under the anvil of the new economic regime, it cannot be found flawed by the Court on the ground that subjecting the State monopoly would detract from the common good, which the earlier Nationalisation Act, when it was enacted, undoubtedly succeeded in subserving. We see no reason to hold that a State Monopoly being run through the medium of a Government Company, even for attaining the goals in the Directive Principles, will go outside the purview of the Act.” 

By subjecting Coal India Limited to the Competition Act, other coal producers and players in the market may be able to compete more effectively, leading to increased efficiency and innovation in the sector.

Expert's Cubicle

Picture of Shiwani Agarwal
Shiwani Agarwal

Manager, Company Law and Secretarial

An Insight on Indian Company law

The Companies Act 2013 is a crucial and significant piece of legislation that governs the incorporation, functioning, and dissolution of companies in India. Enacted on August 29, 2013, it replaced the previous Companies Act of 1956 and has since played a pivotal role in shaping the country’s corporate landscape. This comprehensive act aims to ensure transparency, accountability, protection of the interests of stakeholders, and good corporate governance, fostering an environment that fosters growth and investor confidence. 

Here are some key insights into the Indian Companies Act, 2013:

Simplified Incorporation Process:

The Companies Act 2013 provides guidelines for the formation and registration of different types of companies, such as private companies, public companies, one-person companies, and foreign companies operating in India. Each type has specific criteria and regulations governing its incorporation and operations.

The Act introduced a more streamlined incorporation process for companies, enabling entrepreneurs to set up businesses with greater ease in India. It includes provisions for obtaining a Corporate Identification Number (CIN) for company directors, obtaining digital signatures, and filing the necessary documents with the Registrar of Companies (RoC). 

It introduced the concept of One-Person Companies (OPCs) and simplified the requirements for private limited companies, reducing the minimum number of directors and shareholders. The concept of OPC was introduced to allow single entrepreneurs to incorporate and manage companies without the need for partners.

Additionally, the act facilitated the use of electronic means for various statutory filings, making the entire process more efficient and time-effective.

Increased Profit or Returns on Investment:

A significant focus of the Companies Act 2013 is to enhance corporate governance practises among companies. It introduced new provisions for independent directors, board composition, ensuring their impartiality and reducing potential conflicts of interest. The law was amended to impose greater accountability on independent directors to act diligently and independently in the interest of the company. 

The act also mandated the establishment of audit committees, nomination and remuneration committees, and Corporate Social Responsibility (CSR) committees, as well as holding regular board meetings to enhance oversight and decision-making and promote accountability and ethical practises.

Shareholder Rights:

The Companies Act 2013 strengthened the rights of shareholders, empowering them with a say on significant corporate decisions. The act introduced the concept of “class action suits,” enabling shareholders to collectively take legal action against companies and seek redressal for corporate mismanagement or wrongful actions. 

Additionally, it mandated the appointment of a full time company secretary for specific classes of companies, further ensuring compliance and adherence to legal requirements.

Corporate Social Responsibility (CSR):

The act made CSR a mandatory obligation for certain qualifying companies. Businesses meeting specific financial thresholds are required to spend a prescribed percentage of their average net profits on CSR activities. This provision aims to encourage companies to contribute positively to society and address various social and environmental challenges. Companies were given more flexibility in spending their CSR funds, including contributing to government schemes and technology incubators. 

Investor Protection:

The Act aims to safeguard the interests of minority shareholders and provides provisions for the prevention of oppression and mismanagement by the majority stakeholders. It promotes transparency in corporate operations. It establishes rules for independent directors, mandates disclosure of financial Information, and introduces class action suits to empower investors to collectively seek remedies for corporate mismanagement and fraudulent practices. These measures aim to enhance investor confidence by ensuring shareholders’ rights are protected and companies operate with greater efficiency. 

Mergers and Acquisitions:

The Act streamlines the process of mergers, acquisitions, and amalgamations, providing clarity and simplification of the procedures involved. The NCLT’s jurisdiction was expanded to include matters related to mergers and acquisitions, reducing the burden on courts and streamlining the process. 

Restructuring, Winding Up and Insolvency:

The Act outlines procedures for the restructuring of companies as well as provisions for voluntary and involuntary winding up. 

The Companies Act of 2013 introduced several provisions to facilitate corporate restructuring and insolvency processes. It established the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) to adjudicate matters related to companies. It also introduced the concept of “Corporate Social Responsibility (CSR)” to protect the interests of stakeholders during the insolvency resolution process.

The Insolvency and Bankruptcy Code was amended to introduce a pre-packaged insolvency resolution process for MSMEs (Micro, Small, and Medium Enterprises).

Notable Amendment in Company Law:

Indian Company Law is primarily governed by the Companies Act, 2013, and various amendments have been made to enhance corporate governance, ease of doing business, and investor protection. Some notable amendments up to 2021 are:

Decriminalization of Offenses:

The government amended the Companies Act to decriminalize certain minor offenses, focusing on promoting ease of doing business and reducing the burden on companies.

National Company Law Tribunal (NCLT) Reforms:

The government amended the Companies Act to decriminalize certain minor offences, focusing on promoting ease of doing business and reducing the burden on companies.

One-Person Company (OPC) Reforms:

The concept of OPC was introduced to allow single entrepreneurs to incorporate and manage companies without the need for partners.

Pre-Packaged Insolvency Resolution Process:

The Insolvency and Bankruptcy Code was amended to introduce a pre-packaged insolvency resolution process for MSMEs (Micro, Small, and Medium Enterprises).

Corporate Social Responsibility (CSR):

Companies were given more flexibility in spending their CSR funds, including contributing to government schemes and technology incubators.

Independent Directors' Liability:

The law was amended to impose greater accountability on independent directors to act diligently and independently in the interest of the company.

Producer Companies' Amendments:

Producer companies were provided with more opportunities to access funds and engage in primary agricultural credit societies.

Registration of Companies:

The registration process for companies was simplified and integrated with other government processes, reducing red tape and improving ease of registration.

Special Courts for Company Law Matters:

The government established special courts to expedite company law-related cases and ensure faster resolution of corporate disputes.


To sum up, the Companies Act, 2013, along with the latest amendments, focuses on promoting transparency, accountability, and efficiency in the corporate sector in India. It has led to significant changes in the corporate landscape, positively impacting the business environment and investor confidence. Companies operating in India must adhere to the provisions of this Act to ensure compliance and responsible business practices. The Company incorporated in India under any type prescribed by the Companies Act must adhere to the provisions mentioned in the Companies Act, 2013, read with relevant Rules and Regulations as applicable, and ensure compliance with the amendments made and notifications passed from time to time by the Ministry of Corporate Affairs.


This document is intended to provide general information and is not intended to be substituted for any legal or professional advice. This document is meant exclusively for informational purposes and not for advertising or solicitation. UJA has made significant efforts to ensure that the information contained in this document is accurate and reliable. However, the information herein is provided “as is” without warranty of any kind. UJA hereby disclaims all responsibility and liability, whether stated or implied, for the accuracy, validity, adequacy, reliability, or completeness of any information provided under this document. In no event shall UJA be held liable for any losses or damages whatsoever incurred as a result of using this document.

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