In a recent case, 2 statutory bodies were at loggerheads before the Madras High Court regarding the use of the acronym ‘ICAI’ wherein the Institute of Chartered Accountants of India (‘Chartered Accountants Institute’) wanted Institute of Cost Accountants of India (‘Cost Accountants Institute’) to refrain from using it. This appeal was filed by a Chartered Accountant, Mr Venkata Siva Kumar to set aside the dismissal order in a writ petition filed by him seeking directions from the Court for the Cost Accountants Institute to stop using the acronym ICAI.
The Cost Accountants Institute was incorporated in the year 1944 as the Institute of Cost and Works Accountants of India and got statutory recognition in 1959. In 2011 the Cost and Works Accountants (Amendment) Act, 2011 was passed, whereby its name was changed to the Institute of Cost Accountants of India. Upon such a change of name, it began using the acronym ICAI. This was the bone of contention, as ICAI is the acronym used by the Chartered Accountants Institute from its inception.
Arguments of the Petitioner
Mr Siva Kumar stated that he is entitled to maintain the writ petition because he is a member of the Chartered Accountants Institute. Mr Siva Kumar argued the Cost Accountants Institute is not entitled to use the acronym ICAI as such usage would cause confusion and lead the public to believe that the Cost Accountants Institute and the Chartered Accountants Institute are the same entity. He further submitted that the Chartered Accountants Institute is a statutory body in existence for over 70 years and has acquired a reputation. It is known amongst the members of the public as ICAI which is also a registered trademark owned by the Chartered Accountants Institute. The Ministry of Corporate Affairs had also told the Cost Accountants Institute that it is not desirable for it to use the acronym ICAI.
Cost Accountants Institute’s Response
Its main contention was that Mr. Siva Kumar does not have the locus standi to maintain the present writ petition as he is not an aggrieved person. The Cost Accountants Institute also contended that the Chartered Accountants Institute should institute appropriate proceedings if it intends to challenge the use of the acronym ICAI and that the present writ appeal should be dismissed, as an efficacious alternative remedy is available. It also contended that its adoption of the acronym ICAI was bonafide. The Cost Accountants Institute also clarified that the MCA by a subsequent letter had withdrawn its earlier letter which dealt with the non-desirability of using the acronym ICAI.
Chartered Accountants Institute’s arguments
It contended that under Section 15-A (sub Section 3) of the CA Act, any other university or body is precluded from adopting a name which is similar to that of the Chartered Accountants Institute. It added that Section 24-A, prohibits use of a name or common seal which is identical with or deceptively similar to the name or common seal of the Chartered Accountants Institute. The Chartered Accountants Institute claimed that the present proceeding is maintainable as it pertains to the violation of statutory provisions and that the existence of an alternative remedy is not material in such an event.
The Court concurred with the findings of the Ld. Judge who dismissed the writ petition and stated that “the rights in a trademark are proprietary rights and that only the owner of the trademark is entitled to initiate proceedings in respect thereof”. Since Mr. Siva Kumar is not the person aggrieved, he does not have the locus standi to maintain the writ petition. The Court explained the concept of derivative action by which, in private law, a person can act on behalf of another entity only if the entity is unable to protect its own interests. In the present case, the Chartered Accountants Institute is a body corporate and thus has the right to sue and be sued in its name.
However, since detailed submissions were made by Mr. Siva Kumar and the Chartered Accountants Institute with regard to the alleged infringement of statutory rights of the Chartered Accountants Institute, the Court reviewed the contentions.
With regard to the first contention of the Chartered Accountants Institute, the Court held that Section 24-A of the CA Act protects the name ‘Institute of Chartered Accountants of India’. It does not encompass the acronym. Since the name of Cost Accountants Institute is the Institute of Cost Accountants of India, it is not identical to that of the Chartered Accountants Institute. The Court added that even if there had been a case, Section 28 of the CA Act enables prosecution only when a complaint is made by the Council of the Chartered Accountants Institute. Hence, no case is made out for the exercise of discretionary powers by this Court on account of the use of the acronym ICAI.
The court further held that under the Trade Marks Act, only a registered proprietor of the trademark can sue for infringement. As far as an action of passing off is concerned it also can be initiated by a proprietor of the mark and not any other person. Since Mr. Siva Kumar lacks the locus standi to initiate either an action for infringement or passing off, the Court upheld the dismissal order and dismissed the present appeal.