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Piccadily Agro Industries Ltd. v/s Ashok Jain

    I.A. No. 5710 of 2016 in CS(COMM) No. 76 of 2015 & CS(OS) 2326 of 2015 & I.As. 15863 of 2015, 18713 of 2015, 21691 of 2015

    Decided On, 31 May 2017

    At, High Court of Delhi

    By, THE HONOURABLE MR. JUSTICE MANMOHAN

    For the Plaintiff: Siddharath Bambha, Shyam Nandan, Dhruv Dwivedi, Shaikh Bakhtiyar, Snegdha Singh, Advocates. For the Defendant: D1 to D5, Amit Jain, S.K. Sharma, Rahul Sharma, Prayas Aneja, Advocates.



Judgment Text

1. While I.A.No.5710/2016 has been filed in CS(COMM) No.76/2015 by defendant nos. 4 & 5 under Order 7, Rule 10 , CPC, learned counsel for the defendants in CS(OS) No.2326/2015 submitted that the plaint was liable to be returned in accordance with the judgment rendered in an identical case titled as Piccadily Agro Industries Ltd. v. Ashok Narwal and Anr. in CS(OS) No.2550/2015.

2. Learned counsel for the defendants in both the suits stated that the plaintiff had wrongly invoked the jurisdiction of this Court on the ground that defendants have their registered offices in Delhi. They further stated that the plaintiff had wrongly claimed that as decisions regarding manufacturing and marketing of the products of the defendants had been taken at the registered offices of the defendants in Delhi, hence this Court had jurisdiction to entertain or try the present suits. They also stated that as the plaintiff had no registered trademark, no suit for infringement of trademark lie.

3. Learned counsel for the defendants contended that the plaintiff had no reason to file the present suits in Delhi when the plaintiff admittedly was based in Karnal, Haryana and was carrying on its alleged business activities pertaining to the alleged trademark in Haryana only. They stated that the defendants had never done any business in Delhi under the impugned trademark. They emphasised that the defendants had their distillery units in Haryana. Hence, according to them, this Court had no territorial jurisdiction to try and entertain the present suits.

4. The counsel for the defendants submitted that in an identical case, being CS(OS) No.2550/2015, a Coordinate Bench of this Court had directed return of the plaint under Order 7, Rule 10 , CPC on the ground that this Court had no territorial jurisdiction to entertain the suit. The relevant portion of the judgment in CS(OS) No.2550/2015 relied upon by learned counsel for defendants is reproduced herein below:-

"26. In the light of the aforesaid, it is clear that if on a reading of the plaint and the documents filed by the plaintiff, it appears that defendant no.2 has a subordinate office within the jurisdiction of the courts in the State of Haryana - where the cause of action has arisen, then the suit could be brought by the plaintiff against the defendants only in the State of Haryana where the cause of action arises, and not at Delhi where the registered office of defendant no.2 is situated, unless, of course, the plaintiff is able to establish that a part of cause of action has arisen within the jurisdiction of this Court.

27. The plaintiff has placed on record copy of the draft print out of the current status of the trademark application filed by defendant no.2. A perusal of the said print out shows that in its application, defendant no.2 has given its address as "21-M, Industrial Area, Yamuna Nagar-135001, Haryana". Thus, the submission of learned counsel for the plaintiff that on a perusal of the plaint and the documents, it cannot be said that the defendant has a subordinate office in the State of Haryana - where the cause of action has arisen, is not correct. It is well settled that while examining the issue of territorial jurisdiction of the Court on demurrer, the Court is entitled to proceed on the basis of the case disclosed by the plaintiff in its plaint and the documents filed on record by the plaintiff. 28. I now proceed to examine whether any part of cause of action can be said to have arisen within the jurisdiction of this Court merely because defendant no.2 takes its business decisions regarding manufacture and marketing of the impugned product at its registered office in Delhi and it maintains its books of account in Delhi, and takes its administrative decisions in Delhi at its registered office.

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31. In the present case, the fact that defendant no.2 may have taken certain decisions qua manufacture and sale of its country liquor with the impugned brand in Delhi, certainly cannot be said to form part of the bundle of facts constituting a cause of action. It is not necessary either for the plaintiff to plead that such decisions were taken at Delhi, or for the defendant to traverse such pleading. The plaintiff has filed the suit alleging passing off its trademark "Malta". It is wholly irrelevant as to when and where the decision to manufacture and sell its country liquor was taken by the defendant under the impugned brand. Similarly, the submission that because the statutory records and accounts of defendant no.2 are maintained at its registered office in Delhi, this Court would have territorial jurisdiction as the plaintiff have sought rendition of accounts, also has no merit. It is neither necessary for the plaintiff to plead that the defendant No.2 maintains its account at its Registered Office at Delhi, nor is it necessary for the defendants to traverse the said averment, if made. The said fact has no bearing on the lis between the parties.

32. I agree with the submission of Mr. Kirpal that if the excuses given by the plaintiff for invoking the jurisdiction of this Court were to be accepted on the ground that defendant no.2 has taken its business decisions in Delhi at its registered office, and on the ground that defendant no.2 is obliged to maintain its record and accounts at its registered office in Delhi, then in every case it would be possible to file the suit against a defendant corporation at the place where its registered office is situated - even when no cause of action has arisen within the jurisdiction of the Court, where the Registered Office is situated, and the Corporation has a subordinate office where the cause of action has arisen, thereby completely nullifying the scheme contained in Section 20(c) read with its explanation.

33. I agree with Mr. Kirpal that the plaintiff is seeking to confuse between territorial jurisdiction of the Court which can try the cause, and the territorial jurisdiction of the court which can eventually execute the decree for rendition of accounts. I cannot agree with the submission of Mr. Sahni that the decision of the Supreme Court in Patel Roadways (supra) cannot be applied in the context of the facts of this case. This is for the reason that in Patel Roadways (supra), the Court examined and interpreted the explanation following Section 20(c) of CPC, and on the interpretation of the said provision arrived at its conclusion. It is the ratio contained in Patel Roadways (supra) which is binding as a precedent before this Court and Mr. Sahni has not been able to distinguish the present case on its facts to persuade this Court not to follow the binding precedent in Patel Roadways (supra). Therefore, the decision of the Supreme Court in K. Mohandas (supra) relied upon by Mr. Sahni is of no avail.

34. The submission of Mr. Sahni that a part of cause of action had arisen within the jurisdiction of this Court since defendant no.2 has filed its application for registration of trademark at Delhi also has no merit. In Pfizer Products Inc. v. Rajesh Chopra & Ors., 127 (2006) DLT 783, this Court concluded that an advertisement in a trademark journal, by itself, would not confer jurisdiction upon a Court within whose territorial limits the advertisement is published or is seen. A similar plea was rejected by the Court by placing reliance upon Pfizer Products Inc. (supra) in Archie Comic Publications Inc. v. Purple Creations Pvt. Ltd. & Ors. in C.S.(O.S.) No.1420/2005 decided on 22.04.2008.

35. Reliance placed on Indian Performing Rights Society Ltd. (supra) is also misplaced as, even in the said decision, the Supreme Court has reiterated its earlier decision in Patel Roadways (supra). The observation made by the Supreme Court in Indian Performing Rights Society Ltd. (supra) that "'corporation' can be sued at a place having its sole or principal office and where cause of action wholly or in part, arises at a place where it has also a subordinate office at such place", cannot be understood to mean that a suit would be maintainable at either of the two places. It is clear that the observation made by the Supreme Court in para 12 of Indian Performing Rights Society Ltd. (supra), as extracted above, is a mere recapitulation of, inter alia, what was held in Patel Roadways (supra), and Patel Roadways (supra) has not been dissented from or diluted in Indian Performing Rights Society Ltd. (supra).

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37. Consequently, I am of the view that this Court has no territorial jurisdiction to entertain the present suit. Accordingly, the plaint is liable to be returned under Order 7, Rule 10 CPC. The plaintiff may, if it so desire, move an appropriate application under Order 7, Rule 10A CPC."

5. Per contra, learned counsel for plaintiff stated that the present suits were quia timet actions based upon apprehended usage and were intended to prevent apprehended wrongs and anticipated mischiefs. According to him, the fact that the defendants were not selling their products in Delhi, as of today, would not take away part of the cause of action which was preventive of a future course of conduct on the part of the defendants. In support of his contention, learned counsel for plaintiff relied upon para 26 of the plaints. Para 26 of CS(COMM) 76/2015 is reproduced herein below:-

"26. That the Defendants? said impugned product has deliberately been manufactured in a lookalike manner as that of the plaintiff's in order to provide a tool of deception and fraud in the hands of the unscrupulous middlemen to exploit the intending purchasers of the plaintiff's said products. The Plaintiff's and the Defendant's goods are near identically priced and sold through common trading channels to the same class of purchasers who are invariably illiterate/semi-literate and for whom the composite label of the Plaintiff including its name, colour combination, getup, placement, etc. play an important role in the recollection and recognition of the Plaintiffs 'MALTA Mark' and who consider the same individually and together as the distinguishing feature of the Plaintiff's product from those of the other and therefore the Defendants are guilty of passing off their goods and business as the good and business of the Plaintiff."

6. Learned counsel for plaintiff in support of his submission that quia timet actions were maintainable at a place where the defendants were not selling their products at the moment, relied upon a Division Bench judgment of this Court in M/s. Allied Blenders & Distillers Pvt. Ltd. v. Prag Distillery Pvt. Ltd. & Another, FAO(OS) 49/2017 wherein it has been held as under:-

"8. If an application under Order 7, Rule 10 of the Code is to be decided on the assumption that the averments made in the plaint are correct, then, it will have to be assumed that there is a reasonable apprehension that the defendants would sell their product in Delhi bearing the impugned mark and label. There is no dispute with the proposition that a quia timet action is based upon an apprehended use and is preventive in nature intended to prevent an apprehended wrong and an anticipated mischief. If we were, for the time being, to ignore the fact that the respondent No.1/defendant No.1 was already selling the impugned product under the impugned mark and label in Andhra Pradesh, then the mere fact that the plaint contained an averment that there was credible and imminent apprehension that the infringing product would be launched by the defendants within the territorial jurisdiction of this court, would by itself constitute a cause of action. If this be the case, can it be said that just because the defendants were already selling the product in Andhra Pradesh it would take away part of the cause of action which was preventive of a future conduct on the part of the defendants ? We think not."

7. Learned counsel for plaintiff further submitted that the judgment in Piccadily Agro Industries Ltd. (supra) was inapplicable to the present cases because upon a reading of the present plaints, it would not be apparent that the defendants had a subordinate office within the jurisdiction of the State of Haryana.

8. Learned counsel for plaintiff lastly submitted that while deciding an Order 7, Rule 10 CPC application, only the averments in the plaint had to be seen and nothing more. He stated that the plaints in question disclosed that the defendants had violated the plaintiff's trade mark in Delhi and, therefore, a cause of action to sue arise here. In support of his submission, he relied upon a Division Bench judgment in Pfizer Enterprises Sarl v. Cipla Ltd., 2009(39) PTC 358(Del.)(DB) wherein it has been held as under:-

"10. In this analysis, there is no alternative but to conclude that the Defendant Cipla Ltd. must be deemed to have admitted that the Plaintiffs? products, including "DALACIN C" are available for sale and distribution in Delhi and furthermore that the Defendant's products under the impugned mark are also available for sale in Delhi. As categorically pleaded in the Plaint itself, the cause of action has, therefore, undeniably arisen in Delhi. Documents become unnecessary. Even in the absence of an admission facts can be proved by means of Parol and/or documentary evidence. The Division Bench in Intas Pharmaceuticals Ltd. v. Allergan Inc., AIR 2007 Delhi 108 opined that Section 134 of the Trade Marks Act does not override Section 20 of the CPC; rather it provides an additional forum and place for filing the suit. Keeping in view the fact that Defendant in that case had been selling the offending products in Delhi, the Division Bench upheld the view of the learned Single Judge holding that courts in Delhi possessed territorial jurisdiction to entertain the suit. The Division Bench analysed and applied Dhodha House -vs- S.K. Maingi, (2006) 9 SCC 41 and thereupon concludes firstly that since the Plaintiff had pleaded in the plaint that the Defendant was selling the offending product in Delhi, Delhi Courts possessed territorial jurisdiction;

secondly that Section 20(c) of the CPC makes available, in addition to Section 134 of the Trade Marks Act, another forum of adjudication. We are in entire agreement with the views expressed by our Coordinate Bench. These apply on all fours to the case in hand since the Defendant Cipla Ltd. before us must be deemed to have admitted that the Plaintiffs? products are available for sale in Delhi and that their products are also available for sale in Delhi. No further evidence, oral or documentary, has to be produced by the Plaintiff to substantiate these facts."

9. Having heard learned counsel for the parties, this Court is of the view that the averments in the present plaints with regard to territorial jurisdiction are identical to the averments contained in CS(OS) 2550/2015. Para 36 of the plaint filed by the plaintiff in CS(OS) 2550/2015, para 34 of the plaint filed in CS(OS) 2326/2015 and para 36 of the plaint filed in CS(COMM) 76/2015 are reproduced herein below:-

A. Para 36 of the plaint in CS(OS) 2550/2015

"36. That this Hon'ble Court has the jurisdiction to try and entertain the present suit as the registered office of the manufacturer i.e. defendant no.2 is also situated within the jurisdiction of this Hon'ble Court. That apart all business decisions regarding the manufacture and marketing of the impugned product by the defendant no.2 is taken within the jurisdiction of this Hon'ble Court and all books of accounts and other business administration/decisions of the defendant no.2 are taken by it's management within the jurisdiction of this Hon'ble Court and therefore this Hon'ble Court has the territorial jurisdiction to entertain and try the present suit".

B. Para 34 of the plaint in CS(OS) 2326/2015

34. That this Hon'ble Court has the jurisdiction to try and entertain the present suit as the Defendant Nos.1 & 2 are residing within the jurisdiction of this Hon'ble Court. Further the registered office of the Defendant No.3 is also situated within the jurisdiction of this Hon'ble Court. That apart all business decisions regarding the manufacture and marketing of the impugned product by the Defendant No.3 is taken within the jurisdiction of this Hon'ble Court and all books of accounts and other business administration/decisions of the Defendant No.3 are taken by the Defendant Nos. 1 & 2 within the jurisdiction of this Hon'ble Court and therefore this Hon'ble Court has the territorial jurisdiction to entertain and try the present suit."

C. Para 36 of the plaint in CS(COMM) 76/2015

"36. That this Hon'ble Court has the jurisdiction to try and entertain the present suit as the Defendant Nos.1 & 2 are residing within the jurisdiction of this Hon'ble Court. Further the registered office of the Defendant Nos. 4 & 5 is also situated within the jurisdiction of this Hon'ble Court. That apart all business decisions regarding the manufacture and marketing of the impugned product by the Defendant Nos.4 & 5 is taken within the jurisdiction of this Hon'ble Court and all books of accounts and other business administration/decisions of the Defendant Nos. 4 & 5 are taken by the Defendant Nos. 1 to 3 within the jurisdiction of this Hon'ble Court and therefore this Hon'ble Court has the territorial jurisdiction to entertain and try the present suit......."

10. The contention of the plaintiff that there is no averment in the present plaints that the defendants have a subordinate office within the State of Haryana 'cuts no ice' as the plaint has to be read along with the documents filed by the plaintiff. The applications for registration of labels filed by the defendants with the Trade Mark Registry (placed on record by the plaintiffs) clearly show that the defendants have their subordinate office in the State of Haryana.

11. In fact, in the present plaints, there are specific averments that recently in 2014-2015 many infringers had mushroomed in the State of Haryana and had fraudulently adopted the plaintiff's mark in order to encash and ride upon the immense goodwill and reputation

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of plaintiff's mark MALTA. The infringers referred to by the plaintiff surely include the defendants. 12. Also, one of the primary reasons put forward by the plaintiff to contend that the mark of the plaintiff and defendants is identical, is the fact that the labels on the defendants? bottles bear a sale warning/restriction written diagonally across the picture of the fruit i.e. "For Sale in Haryana Only". 13. This Court is further of the opinion that the present suits are not quia timet actions as in the last sentence of para 26 of the plaints, it is the case of the plaintiffs that the impugned marks had recently been put to use for the first time by the defendants. There is no averment in either of the plaints that the defendants intend to launch their products in Delhi. 14. Also in the present plaints, the plaintiff had relied upon the ex parte ad interim injunction in CS(OS) 2550/2015 (valid at that time) to contend that a similar injunction should be passed in the present cases also. 15. In view of the aforesaid, this Court is of the opinion that both the present suits are similar to the earlier suit filed by the plaintiff being CS(OS) 2550/2015 and consequently, the judgment passed by the Coordinate Bench of this Court on 14th March, 2016 "applies on all fours" to the present suits. 16. The Division Bench judgment of this Court in Pfizer Enterprises Sarl (supra) relied upon by the learned counsel for plaintiff is clearly inapplicable to the present cases as there is not even an averment that the defendants? goods are available for sale and distribution in Delhi. 17. Consequently, this Court is of the view that it has no territorial jurisdiction to entertain the present suits. Accordingly, present plaints are directed to be returned under Order 7, Rule 10 CPC. The plaintiff may if it so desire, move appropriate applications under Order 7, Rule 10A CPC. 18. List the matters for return of the plaints before the Registrar on 10th July, 2017.
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