Writ Petition No.6007 of 2010

19th October, 2010

Petitioner Counsel: Mr. S. G. LADDA
Respondent Counsel: Mr. H. W. KANE,Mr. S. B. DESHPANDE, Mr. SWAPNIL JOSHI , Mr. S. S. PATUNKAR,J. P. Legal Associates

Cases Cited:
M/s. Dhodha House Vs. S. K. Maingi with M/s. Patel Field Marshal Industries Vs. M/s. P. M. Diesel Ltd., AIR 2006 SC 730 [Para 10,14,16]
Haryana Milk Foods Ltd. Vs. Chambel Dairy Products, 98(2002) DLT 359 [Para 11]
Kusum Ingots and Alloys Limited Vs. Union of India, 2004(5) ALL MR 700 (S.C.)=(2004)6 SCC 254 [Para 12]
Exphar SA Vs. Eupharma Laboratories Ltd., AIR 2004 SC 1682 [Para 19,22]
Wipro Limited Vs. Oushadha Chandrika Ayurvedic India (P) Ltd., AIR 2008 Madras 165 [Para 21,22]

JUDGMENT

JUDGMENT :- Heard Shri. S. G. Ladda, learned Counsel for the petitioner and Shri. H. W. Kane, learned Counsel appearing with S/Shri. S. B. Deshpande, Swapnil Joshi and S. S. Patunkar, advocates for Respondent.

Rule. Rule made returnable forthwith and heard finally by consent of learned Counsel for respective parties.

2. Petitioner herein - original defendant is raising exception to the order dated 05.03.2010, passed by District Judge-3, Ahmednagar, below Exhibit-13 in Trade Mark Suit No.02 of 2009.

3. Respondent herein - original plaintiff instituted suit under the provisions of Sections 27(2), 28 and 29 read with Sections 134 and 135 of the Trade Marks Act, 1999, claiming decree of perpetual injunction against the defendant restraining it from infringing plaintiff's Trade Mark "Aerotide" and further restraining it from passing off deceptively similar goods in the name of "Ferotide" and further relief of damages as well as for rendition of accounts.

4. Plaintiff as well as defendant are the Companies registered under the provisions of Companies Act. Plaintiff Company is having its registered office at Wadodara in Gujarat, whereas, it has its administrative office at Mumbai. Defendant Company has its registered office at Mumbai. Defendant tendered an application at Exhibit-13 under the provisions of Order 7, Rule 11 and Section 151 of the Code of Civil Procedure requesting the Court to reject the plaint. According to defendant, suit has been filed in the Court having no jurisdiction to entertain the suit and secondly, the entire suit is liable to be dismissed on the ground that there is suppression of material facts with a view to mislead the Court. Defendant, in the application, contends that the suit is required to be presented within the local limits of whose jurisdiction the defendant actually and voluntarily resides, or carries on business or personally works for gain, or where the cause of action wholly or in part arises and that the suit is to be instituted in a Court within whose jurisdiction the defendant, or each of the defendants where there are more than one, at the time of commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or that the suit is to be instituted in a Court within whose jurisdiction any of the defendants, where there is more than one, at the time of commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or that the suit is to be instituted in a Court within whose jurisdiction the cause of action, wholly or in part, arises. The objection is based on the provisions of Section 20 of the Code of Civil Procedure. It is contended that there is no averment in the plaint that defendant resides or carries on business or personally works for gain at Ahmednagar and as such, question of applicability of provisions of Section 20(a) or 20(b) does not arise. It is further contended that there is no averment in the plaint that cause of action has taken place within the territorial limits of Ahmednagar district. According to the defendant, provisions of Section 134(2) of Trade Marks Act also will have no applicability for the reason that the person instituting the suit or proceeding, or, where there are more than one such persons, any of them actually and voluntarily resides or carries on business or personally works for gain at Ahmednagar. It is further contended that so far as the Company is concerned, it actually resides where its registered office is situated. The registered office of Plaintiff Company is at Vadodara, Gujarat. Plaintiff Company also does not have any manufacturing activity at Ahmednagar. It is contended that manufacturing activity of the product was being carried out at Dadra Nagar Haveli up to April, 2006 and since thereafter the manufacturing activity has come to a stand still, as per the averments made in the plaint itself. Thus, according to the defendant, the Court at Ahmednagar cannot entertain the suit as the person instituting the suit cannot be said to be actually or voluntarily residing in Ahmednagar or carrying out any business or working for personal gain at Ahmednagar. Thus, it is contended that none of the provisions of Section 134(2) has any applicability.

5. The application tendered by the defendant was opposed by plaintiff contending that the plaint discloses accrual cause of action. Plaintiff has presented on record that it possesses the factory license and as such the Court at Ahmednagar has jurisdiction to try and decide the suit.

6. The application was heard and disposed of by District Judge-3, Ahmednagar, who was pleased to reject the application in view of the order passed on 5th March, 2010.

7. Shri. Ladda, learned Counsel appearing for the petitioner - original defendant, vehemently contended that in view of provisions of Section 134 of the Trade Marks Act read with Section 20 of the Code of Civil Procedure, the Court at Ahmednagar can have no jurisdiction to entertain the suit. It is contended that on perusal of the plaint, it does not disclose accrual of cause of action and as such, the plaint is liable to be rejected. Section 20 of the Code of Civil Procedure reads thus :

"20. Other suits to be instituted where defendants reside or cause of action arises- Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction -

(a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or

(b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or the cause of action, wholly or in part, arises."

8. Provisions of Section 134 of the Trade Marks Act are quoted as below :

"134. Suit for infringement, etc., to be instituted before District Court -

(1) No suit-

(a) for the infringement of a registered trade mark; or

(b) relating to any right in a registered trade mark; or

(c) for passing off arising out of the use by the defendant of any trade mark which is identical with or deceptively similar to the plaintiff's trade mark, whether registered or un-registered,

shall be instituted in any Court inferior to a District Court having jurisdiction to try the suit.

(2) For the purpose of clauses (a) and (b) of sub-section (1), a "District Court having jurisdiction" shall, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908) or any other law for the time being in force, include a District Court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or proceeding, or, where there are more than one such persons any of them, actually and voluntarily resides or carries on business or personally works for gain."

9. It is the contention of petitioner - original defendant that the registered office of Plaintiff-Company is situate at Vadodara, Gujarat. The Company used to manufacture the product "Aerotide" at its plant situate at Silvassa. The Company neither has any manufacturing activity at Ahmednagar in relation to the product in question nor has its registered office at Ahmednagar. Thus, it cannot be said that the Company is carrying on any business activity at Ahmednagar. Inviting my attention to the provisions of Section 20(c) of the Code of Civil Procedure, it is contended that the cause of action, either in whole or in part, does not arise within the jurisdiction of Court at Ahmednagar. Explanation to Section 20 of the Code provides that, "a Corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place". Plaintiff Company neither has principal office or subordinate office at Ahmednagar nor carries on any manufacturing activity in respect of product in question at Ahmednagar. As such, the District Court at Ahmednagar shall have no jurisdiction to entertain the suit.

10. In order to advance further arguments, petitioner has placed reliance on the judgment in the matter of M/s. Dhodha House Vs. S. K. Maingi with M/s. Patel Field Marshal Industries & others Vs. M/s. P. M. Diesel Ltd., reported in AIR 2006 SC 730. The expression "carries on business" and the expression "personally works for gain" appearing in Section 134 of the Trade Marks Act as well as Section 62(2) of the Copyright Act, is dealt with in para 45 of the judgment, which is as follows :

"45. The expression 'carries on business' and the expression 'personally works for gain' connotes two different meanings. For the purpose of carrying on business only presence of a man at a place is not necessary. Such business may be carried at a place through an agent or a manager or through a servant. The owner may not even visit that place. The phrase 'carries on business' at a certain place would, therefore, mean having an interest in a business at that place, a voice in what is done, a share in the gain or loss and some control there over. The expression is much wider than what the expression in normal parlance connotes, because of the ambit of a civil action within the meaning of Section 9 of the Code. But it is necessary that the following three conditions should be satisfied namely :

(1) The agent must be a special agent who attends exclusively to the business of the principal and carries it on in the name of the principal and not a general agent who does business for any one that pays him. Thus, a trader in the mufassil who habitually sends grain to Madras for sale by a firm of commission agents who have an independent business of selling goods for others on commission, cannot be said to "carry on business" in Madras. So a firm in England, carrying on business in the name of A.B. & Co., which employs upon the usual terms, a Bombay firm carrying on business in the name of C.D. & Co., to act as the English Firm's commission agents in Bombay, does not "carry on business" in Bombay so as to render itself liable to be sued in Bombay.

(2) The person acting as agent must be an agent in the strict sense of the term. The manager of a joint Hindu family is not an "agent" within the meaning of this condition.

(3) To constitute "carrying on business" at a certain place, the essential part of the business must take place in that place. Therefore, a retail dealer who sells goods in the mufassil cannot be said to "carry on business" in Bombay merely because he has an agent in Bombay to import and purchase his stock for him. He cannot be said to carry on business in Bombay unless his agent made sales there on his behalf. A Calcutta firm that employs an agent at Amritsar who has no power to receive money or to enter into contracts, but only collects orders which are forwarded to and dealt with in Calcutta, cannot be said to do business in Amritsar. But a Bombay firm that has a branch office at Amritsar, where orders are received subject to confirmation by the head office at Bombay, and where money is paid and disbursed, is carrying on business at Amritsar and is liable to be sued at Amritsar. Similarly a Life Assurance Company which carries on business in Bombay and employs an agent at Madras who acts merely as a Post Office forwarding proposals and sending moneys cannot be said to do business in Madras. Where a contract of insurance was made at place A and the insurance amount was also payable there, a suit filed at place B where the insurance Co. had a branch office was held not maintainable. Where the plaintiff instituted a suit at Kozhikode alleging that its account with the defendant Bank at its Calcutta branch had been wrongly debited and it was claimed that, that court had jurisdiction as the defendant had a branch there, it was held that the existence of a branch was not part of the cause of action and that the Kozhikode Court therefore had no jurisdiction. But when a company through incorporated outside India gets itself registered in India and does business in a place in India through its agent authorized to accept insurance proposals, and to pay claims, and to do other business incidental to the work of agency, the company carries on business at the place of business in India."

11. Relying on the judgment in the matter of Haryana Milk Foods Ltd. Vs. Chambel Dairy Products, reported in 98(2002) DLT 359, it is contended that, Order 7, Rule 1 enjoins that a plaint shall contain the particulars as to the facts constituting the cause of action and the facts showing that the Court has jurisdiction. It is, therefore, mandatory that a plaintiff must give such particulars as will enable the Court to ascertain from the plaint whether in fact and in law a cause of action did arise as alleged or not. Similarly, if a plaintiff relies on defendant's place of business as giving jurisdiction, the facts showing this must be stated in the body of the plaint. It is imperative that the plaint must contain the facts showing how the Court has jurisdiction. It also cannot be controverted that the question of jurisdiction has to be decided, prima facie, by looking into the averments made in the plaint and not by the defence which may be set up by the defendant. It also does not depend upon the character of the relief prayed for by the plaintiff. It is equally true that to determine the question of jurisdiction of the Court on the basis of bundle of facts, it is not necessary to look at the paragraphs of the plaint but the entire plaint must be taken into consideration to ascertain the bundle of facts which give rise to the cause of action and to determine whether any one or more of such acts occurred within the territorial jurisdiction of the Court.

12. It is contended that on perusal of the plaint, it neither gives details as regards accrual of cause of action nor it makes reference to defendant's place of business for the purposes of investing jurisdiction on the Court. It is also contended, placing reliance on the judgment in the matter of Kusum Ingots and Alloys Limited Vs. Union of India, reported in (2004)6 SCC 254 : [2004(5) ALL MR 700 (S.C.)], that, where it has been enunciated that if only a small part of the cause of action has arisen within the territorial jurisdiction of a particular High Court, it is not bound to entertain the petition. It would be sufficiently empowered to refer the petition to the court where substantially the cause of action has arisen as it would be more convenient to adjudicate the matter in that Court. It is contended that plaintiffs contention that it has a manufacturing facility at Ahmednagar will not invest the Court at Ahmednagar with the jurisdiction to try the suit, as, admittedly, the manufacturing activity at Ahmednagar does not relate to the product in question. Petitioner has also placed reliance on the judgment in the matter of Indian Performing Rights Society Vs. Sanjay Dalia, reported in 2009(39) PTC (sic) (Del.) DB.

13. Learned Counsel appearing for the Respondent-original plaintiff has supported the order passed by the trial Court and contended that the objections raised by defendant do not bear any substance and ought to be turned down summarily. It is contended that provisions of Section 134 of the Trade Marks Act have to be interpreted in the widest possible manner with a view to invest jurisdiction with the Court and a restricted meaning cannot be given by any reference to provisions of the Code of Civil Procedure. It is pointed out that sub-section (2) of Section 134 of the Trade Marks Act provides that investiture of jurisdiction on the District Court is notwithstanding anything contained in the Code of Civil Procedure or any other law for the time being in force and that the suit is entertainable at District Court by a person or any of them among several persons actually and voluntarily residing or carrying on business or working for personal gain within the limits of jurisdiction of District Court. It is contended that sphere occupied by sub-section (2) of Section 134 is larger than Section 20 of the Code of Civil Procedure. It is contended that plaintiff-Company is having its administrative office at Andheri, Mumbai and has further established a production unit at Ahmednagar. In order to invest jurisdiction with the Court at Ahmednagar, the production activity at Ahmednagar plant need not relate to production of the product in question, which is subject matter before the District Court. The question, that has fallen for consideration before the District Court, is as regards the violation of trade mark by defendant-Company. It is contended that plaintiff-Company does have manufacturing facility at Ahmednagar employing more than 100 employees and as such, suit instituted at Ahmednagar Court is maintainable.

14. Relying on the judgment in the matter of M/s. Dhodha House Vs. S. K. Maingi with M/s Patel Field Marshal Industries & others Vs. M/s P. M. Diesel Ltd. (supra), petitioner contends that to constitute "carrying on business" at a certain place, essential part of business must take at that place. It is principal place of business, which is within contemplation of term "carrying on business" incorporated in sub-section (2) of Section 134 of the Trade Marks Act. It is contended that principal business activity of plaintiff-Company is not confined to the territorial limits of Ahmednagar Court. Moreover, plaintiff-Company does not manufacture the products which are subject matter of the suit at the manufacturing facility situate within the territorial limits of Ahmednagar district. As such, suit at Ahmednagar, shall not be maintainable.

15. To counter this argument, it is contended that such restricted meaning cannot be attached to the term "carrying on business" appearing in sub-section (2) of Section 134 of the Trade Marks Act. Plaintiff-Company does have a manufacturing activity at Ahmednagar employing more than 100 employees and defendant-Company's contention that manufacturing of the article in question does not have any impact on the question of jurisdiction on the Court to entertain the suit at Ahmednagar.

16. That, in the matter of M/s. Dhodha House Vs. S. K. Maingi with M/s. Patel Field Marshal Industries & others Vs. M/s. P. M. Diesel Ltd. (supra), before the Apex Court, the facts were that plaintiff therein was carrying on business of sweet meats in the district of Ghaziabad, whereas defendant was carrying on business in district Faridkot. A suit was preferred by the plaintiff - appellant before the Apex Court with a view to protect his copyrights before the District Judge at Ghaziabad. An application was preferred by the defendant contending that the Court has no jurisdiction, which was allowed by the High Court holding that the District Court has no territorial jurisdiction to try the suit. It was a case before the Court wherein it was contended that the business was being carried out through an agent in the name of principal. The question, that was taken up for consideration and was answered in paragraph 45 of the judgment, on which reliance is placed by the petitioner, is in respect of carrying on business by an agent who was representing the principal. The observations made in para 45 of the judgment are essentially in reference to carrying on business by an agent. In the instant matter, the manufacturing activity at Ahmednagar is being carried out by the plaintiff-Company itself.

17. That, so far as the objection raised by petitioner - original defendant, that the manufacturing activity does not relate to the product in question and as such, the contention of the plaintiff that the Company carries on manufacturing activity at Ahmednagar shall have to be overlooked, if accepted, would tantamount to putting restrictive meaning to the provisions of Section 134(2) of the Trade Marks Act, which, according to me, would be against the legislative intent.

18. It would not be out of context to refer to the similar provisions of Section 62 of the Copyright Act, 1957. Sub-section (2) of Section 62 thereof reads thus :

"62. Jurisdiction of Court over matters arising under this Chapter -

(1) Every suit or other civil proceeding arising under this Chapter in respect of the infringement of copyright in any work or the infringement of any other right conferred by this Act shall be instituted in the district Court having jurisdiction.

(2) For the purpose of sub-section (1), a "district Court having jurisdiction" shall, notwithstanding anyting contained in the Code of Civil Procedure, 1908 (5 of 1908), or any other law for the time being in force, include a district Court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or other proceeding or, where there are more than one such persons, any of them actually and voluntarily resides or carries on business or personally works for gain."

19. The provisions of Section 62(2) of the Copyright Act, 1957, are pari materia to Section 134(2) of the Trade Marks Act, 1999. The provisions of Section 134(2) are quoted in paragraph no.7 of this judgment. While interpreting provisions of Section 62(2) of the Copyright Act, 1957, the Apex Court, in the matter of Exphar SA and another Vs. Eupharma Laboratories Ltd. & another, reported in AIR 2004 SC 1682, has observed that :

"The word "include" appearing in in S.62(2) makes the jurisdiction wider than as prescribed under the Code of Civil Procedure, 1908."

Referring to the object of introduction of sub-section (2) of Section 62, given in the report of Joint Committee published in the Gazette of India dated 23.11.1956, it is observed in para 13 of the judgment, that :

"It is, therefore, clear that the object and reason for the introduction of sub-section (2) of Section 62 was not to restrict the owner of the copyright to exercise their rights but to remove any impediment from their doing so. Section 62(2) cannot be read as limiting the jurisdiction of the District Court only to cases where the person instituting the suit or other proceeding, or where there are more than one such persons, any of them actually and voluntarily resides or carries on business or personally works for gain. It prescribes an additional ground for attracting the jurisdiction of a Court over and above the 'normal' grounds as laid down in Section 20 of the Code."

20. Thus, it cannot be controverted that the jurisdiction of the Court, dealing with the matters arising out of Copyright Act, would be wider than what has been restricted in Section 20 of the Code of Civil Procedure. The provisions of Trade Marks Act, 1999, are pari materia to the provisions of Section 62 of the Copyright Act, 1957, and the interpretation put by the Apex Court to provisions of Section 62(2) would squarely apply to the provisions of Section 134(2) of the Trade Marks Act, 1999.

21. A Division Bench of Delhi High Court in the matter of Wipro Limited and another Vs. Oushadha Chandrika Ayurvedic India (P) Ltd. and others, reported in AIR 2008 Madras 165, has proceeded to consider these aspects, that there is deliberate departure from Section 20 of the Code of Civil Procedure so as to liberally empower the plaintiff to institute the suit or other proceedings in the Court within whose local limits he carries on the business. It would be appropriate to refer to the observations of the Court in para 14 of the judgment :

"It is, thus, seen that Section 62 of the Copyright Act and Section 134 of the Trade Marks Act prescribe an additional ground for attracting the jurisdiction of a Court over and above the normal ground, as laid down in Section 20 of the C.P.C.. In other words, a special right is conferred on the proprietor of the registered trade mark to institute a suit for infringement of any trade mark or copyright in the district within whose jurisdiction he resides or carries on business. The provisions contained in non-obstante clause by using the phrase "notwithstanding anything contained in the C.P.C., 1908 (5 of 1908) or any other law for the time being in force" is made with a view to give a overriding effect to the said provision. It is equivalent to saying that the provision would hold the field notwithstanding anything contained in the C.P.C., or any other law for the time being in force."

22. Considering the interpretation of the provisions of Section 134(2) of the Trade Marks Act, 1999 by the Division Bench of Delhi High Court in the matter of Wipro Ltd. (supra) and the interpretation put to Section 62(2) of the Copyright Act, 1957, by the Apex Court in the matter of Exphar SA (supra), and that provisions of Section 62(2) of the Copyright Act, 1957 are pari materia to Section 134(2) of the Trade Marks Act, I am of the view that liberal approach is required to be adopted in favour of investiture of the jurisdiction with the Courts, which would also be in consonance with the object of the Enactment.

23. On perusal of the plaint, it appears that paragraph no.22 gives details as regards accrual of cause of action. It is also noted therein that one of the manufacturing units of plaintiff - Respondent herein is situate at Ahmednagar and as per the provisions of Section 134 of the Trade Marks Act, 1999, suit is presented before the Court at Ahmednagar. The objection raised by petitioner - original defendant, that the suit does not disclose accrual of cause of action, does not appear to be correct as details thereof are specifically provided in paragraph 20 of the plaint.

24. For the reasons recorded above, I am of the view that the petition presented by the petitioner does not merit any consideration. The order passed by the trial Court holding that the Court has jurisdiction to entertain the suit does not call for any interference.

25. Writ Petition, therefore, stands dismissed. Rule discharged. In the facts and circumstances of this case, there shall be no order as to costs.

Petition dismissed.