Piruz Khambatta & Anr v. Rajmohan Rupaji Modi and Ors MIPR2017 (2)111 (2016)

IN THE HIGH COURT OF DELHI AT NEW DELHI

Introduction: 

This case revolves around the concepts of territorial jurisdiction, return of plaint, section 20 of CpC and section 134 of trademarks act 1999

1. The term "territorial jurisdiction" refers to the authority of a court to hear and determine cases based on the location where the cause of action arises or where the defendant resides or carries on business. The provisions related to territorial jurisdiction of courts in India are primarily governed by the Code of Civil Procedure (CPC). The CpC determines the territorial jurisdiction of courts where the cause of action arises, where the defendant resides, where the subject matter situated and where the contract took place or where business transaction took place

2. Return of plaint

The term "return of plaint" is generally used in the context of civil procedure of order VII rule10 and refers to the process by which a court officially receives a complaint or a pleading filed by a plaintiff or their legal representative. Once a plaintiff files a complaint in court, the court will review the complaint and issue a notice to the defendant to respond to the complaint within a certain period of time. After the defendant responds, the court will typically issue a formal document called a "return of plaint" which acknowledges receipt of the plaintiff's complaint and the defendant's response.

The return of plaint usually contains information such as the case number, the names of the parties involved, the date the complaint was filed, and any other relevant information related to the case. It serves as an official record of the proceedings and is an important document in the civil litigation process.

3. Section 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 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

(c) the cause of action, wholly or in part, arises.

4. Section 134 of Trade mark act ,1999

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 unregistered, 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.

Facts:

The plaintiff Piruz khambatta asserts that flavored soft drinks, which are particularly well-liked by customers because to their low price, were introduced in 1972 and that he originated the idea of soft drink concentrates in India. He is the owner of the Rasna ‘Devil’s workshop’ and their products were distributed under the name of the RASNA which was adopted in 1972 when there no existing similar names to it.

The plaintiff is having a company in Ahmedabad with its registered office and other place of business in the Gujarat and a registered branch in the New Delhi. The plaintiff learned that the 3rd defendant incorporated the name of the RASNA to their business M/s. Rasna Hotels pvt.Ltd with the other defendants Mr. Rajmohan Rupanji Modi and Ms. Lalitha Rajmohan Modi who are the directors of the business under the name RASNA TWO and filed a suit against in the Delhi jurisdiction and claimed the remedies of permanent injunction and compensation for the loss caused. The registered office of the defendant lies in the Ahmedabad and the few places of the business lies in the Gujarat.

Plaintiff also stated that the mere addition of the suffix doesn’t avoid the confusion to the public and the damages caused to us and also stated that it is the infringement and trespass to the proprietary rights of our brand name and effecting our intellectual property.

The defendants filed an application for the return of the plaint as it the suit is filed in the wrong territorial jurisdiction. As both the parties registered office is in Ahmedabad and there is no cause of action held in the Delhi jurisdiction as well. The plaintiff stated that it is claiming as per the section 134 0f the trademarks act 1999 which is un affected by the section 20 of the CPC

Issues:

Whether plaint can be returned under Order VII Rule 10 of the CpC if the court lacks the territorial jurisdiction?

Does the non-obstante provision in intellectual property laws preclude the application of CPC Section 20?

Ratio:

The Delhi High Court's ruling in the case of Piruz Khambatta & Associates v. Rajmohan Rupaji Modi & Associates is significant because it aims to reaffirm that every court has a territorial limit based on the territorial jurisdiction provided by the government and that it is not permitted to exercise its powers outside of this. The court relied on the section 20 of CpC and the territorial jurisdiction of the concept to verify the validity of the jurisdiction where the case is filed

Court determines that the fact that a cause of action originated in a certain location is not sufficient to establish a court's jurisdiction over that location. The Court stops plaintiffs from abusing the law by pointing out that Ahmedabad, not Delhi, is the proper territorial jurisdiction for this matter.

Interpretation of the court:

The location of the initiation of a suit for a proper remedy is still governed by Section 20 of the CPC, which includes the location where the cause of action occurs, in whole or in part, in passing off actions under the Trade Marks Act. Plaintiff can file a suit as per the section 134 of the trademark act but it should be with respect to the section 20 of the CpC i.e. where the defendant resides or he carries business or where the cause of action took place .

Section 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 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

(c) the cause of action, wholly or in part, arises.

Section 134 of the TM act 1999 can be used for the convenience of the plaintiff but it cannot override the section 20 of the CpC. On the grounds that it operates in other areas, the plaintiff cannot dismiss a claim that has materially arisen, in whole or in part, at the same location where the plaintiff resides or maintains its principal office. Due to the aforementioned facts, the plaintiff must file their lawsuit in their usual abode or major place of business, which is also the site where their cause of action originated, and not somewhere else.

Judgment:

The court held that plaintiff wrongly invoked the jurisdiction of the court after reviewing the section 20 of the CpC and section 134 of the trademark act. And court highlighted that a person cannot ignore the location where the cause of action arises and the defendants business is conducted , it has be considered with reference whole or partial action of the cause of action as well , these should be given first priority in filing a suit , which was lacked in this case by plaintiffs . The proper jurisdiction for the suit to be filed is in court of Ahmedabad (Gujarat) which is the place of business carried by both the parties and the place where the cause of action took place. So the court returned the plaint under Order VII rule 10 of the CpC due to wrong jurisdiction and the court dismissed the case.

Analysis:

The court stated that section 20 should be considered while filing the suit, so that it falls under the right jurisdiction, which includes the place where the cause of action occurs, in whole or in part.

Indian performing Rights society ltd vs. Sanjay Dalia and Anr[1] which the Court ruled that the Legislature never intended for the plaintiff to drag the defendant to a subordinate office or other location of the business in a remote location on the grounds that the plaintiff/corporation is conducting business through a branch office rather than where he generally resides, its Head Office or registered office, or where he otherwise carries on business or personally works for gain where the cause of action has arisen. So though the plaintiff by applying this point in this case though the plaintiff had a registered branch office in Delhi, while comparing the other leads and other grounds for jurisdiction are supposed to taken to consideration by the plaintiff to file the suit in appropriate jurisdiction. So the plaintiff is insufficient to file the suit in Delhi.

In V Guard Industries Ltd vs Sukan Raj Jain & Anr. on 5 July, 2021[2] According to Section 20 CPC, the defendant's place of business, or the location from which the defendant is conducting business or working for pay, attracts the Court's jurisdiction; however, under Section 134 of the Trade Marks Act, the plaintiff's office location, or the location from which he is conducting business, is a relevant consideration. Despite not being explicitly stated in the wording, the existence of the cause of action has been read into Section 134 of the Trade Marks Act as a determining element, along the lines of Section 20 CPC. Therefore, the courts in that location will have the authority to hear a case against infringement and passing off if some part of the cause of action has arisen there where the plaintiff has its branch or subordinate office. In other words, both Section 20 CPC and Section 134 of the Trade Marks Act hold that the occurrence of the cause of action, or any part thereof, at a location determines whether the court has jurisdiction there.

Personal Commentary:

I truly agree with the court’s decision. The court's decision was based on preventing plaintiffs from abusing the leeway provided by the Copyright and Trademark Acts in terms of territorial jurisdiction. It also appears that the court was upholding explicit provisions dealing with the issue of territorial jurisdiction in disputes of Intellectual Property Rights. It is important to note that the jurisdictional requirements for intellectual property disputes can vary depending on the type of intellectual property at issue, as well as the specific laws governing that intellectual property in the relevant jurisdiction.

Overall, it seems that the court was attempting to prevent potential abuse of the law and reaffirming a shift in law in which plaintiffs are barred from abusing the leeway provided by the Copyright and Trademark Acts in terms of territorial jurisdiction.

  [1] IPRS v. Sanjay Dalia and Anr. MPR 2007 (3) 204   [2] V Guard Industries Ltd vs Sukan Raj Jain & Anr. on 5 July, 2021 CS(COMM) 25/2021