Essel Propack Limited vs Essel Kitchenware Limited and Others

G.S. Patel, J—Heard.

The Suit, filed on 12th January 2010, combines an action in trademark infringement with a cause of action in passing off. On 9th July 2011, the 1st Defendant filed its written statement. The allegation in the plaint is that the infringement and passing off is by the 1st Defendant while the 2nd Defendant is a dealer or distributor inter alia for the 1st Defendant''s offending products. The Plaintiffs filed Notice of Motion No. 370 of 2010. At that time, a plea of want of jurisdiction was raised as a preliminary issue under Section 9A of the Code of Civil Procedure, 1908. The record indicates that the preliminary issue was framed on 2nd December 2011 (S.J. Vazifdar, J. as he then was) thus:

Whether this Court has jurisdiction to entertain and try the Suit?

The matter then came up before Mr. Justice S.J. Kathawalla on 15th February 2013. The Plaintiffs indicated that they wished to file an Affidavit of Evidence and documents, and directions were issued for doing so.

The Plaintiffs'' documents were taken up for consideration and some of them were marked in evidence on 17th January 2014. The Plaintiffs led the evidence of two witnesses on 13th February 2014. P.W.-1 was one Mr. Surje Singh, the Manager -Investor Relations of the Plaintiffs and P.W.-2 was Mr. Ajay M. Thakkar, the Company Secretary and Head, Legal of the Plaintiffs. Both witnesses were cross-examined by the counsel for the 1st Defendant. The Defendants themselves chose not to lead any evidence. The matter was set down for arguments on the preliminary issue on 25th February 2015. It appears that it has not reached since. This is the factual background to how the matter came to be placed before me today and the stage of the record.

Before I turn to the preliminary issue raised, I must note the submission made on instructions by Mr. Shah for the 1st Defendant. He states that the 1st Defendant has "now" come into possession of some "material" to indicate that the Plaintiffs have a place of business or carry on business in Kolkata. He seeks leave to lead this evidence. What this material might be and how, precisely, the 1st Defendant has come by it, is not stated. It seems to me decidedly peculiar, if not downright suspicious, that this application comes to be made at this stage over a year after the 1st Defendant chose not to lead any evidence on the preliminary issue that it had itself raised. On the basis, therefore, that the proof of every pudding is only in its eating, I indicated to Mr. Shah that I was willing to allow him to lead in evidence this "additional" material "recently" discovered at the very earliest, i.e., tomorrow morning, immediately after the supplementary board. I indicated that his witness should be asked to remain present and that he be made available for cross-examination. On instructions, Mr. Shah said that this was not possible because the 1st Defendant has its office in Kolkata where the witness presumably works. The offer to lead evidence was, therefore, declined for the second time by the 1st Defendant. I must clarify that I had made it abundantly clear that I was not prepared to adjourn this matter to some distant date in future merely on this kind of application. I must also clarify, in fairness to Mr. Shah, that these submissions were made on instructions.

Mr. Kamat for the Plaintiffs submits that as regards the cause of action in trade mark infringement, the provisions of Section 134 of the Trade Marks Act, 1999 will govern, and as regards the cause of action in passing off, the provisions of Section 134(1)(c) and Section 135 will govern. In short, a suit for infringement can be instituted within the local limits of the Court in the ordinary original jurisdiction of which the plaintiff carries on business (or has its registered office), whereas the Suit for passing off will be filed, ordinarily, where the cause of action has arisen. Usually this would mean the place where the offending goods are available.

In the present case, Mr. Kamat submits that the Plaintiffs not only have their commercial business office in Mumbai but that the 1st Defendant''s goods were and are demonstrably available in Mumbai. Therefore, in his submission, there is no question that the Court has jurisdiction.

Resumed at 11.00 a.m. on 1st September 2015

Sections 134 and 135 of the Trade Marks Act, 1999 read thus:

"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 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.

Explanation. For the purposes of sub-section (1), "person" includes the registered proprietor and the registered user.

Relief in suits for infringement or for passing off.(1) The relief which a Court may grant in any suit for infringement or for passing off referred to in Sec. 134 includes injunction (subject to such terms, if any, as the Court thinks fit) and at the option of the plaintiff, either damages or an account of profits, together with or without any order for the delivery-up of the infringement labels and marks for destruction or erasure.

(2) The order of injunction under sub-section (1) may include a ex parte injunction or any interlocutory order for any of the following matters, namely:-

(a) for discovery of documents;

(b) preserving of infringing goods, documents, or other evidence which are related to the subject-matter of the suit;

(c) restraining the defendant from disposing of or dealing with his assets in a manner which may adversely affect plaintiff''s ability to recover damages, costs or other pecuniary remedies which may be finally awarded to the plaintiff.

(3) Notwithstanding anything contained in sub-section (1), the Court shall not grant relief by way of damages (other than nominal damages) or on account of profits in any case

(a) where in a suit for infringement of a trade mark, the infringement, complained of is in relation to a certification trade mark or collective mark; or

(b) where in a suit for infringement the defendant satisfies the Court

(i) that at the time he commenced to use the trade mark complained of in the suit, he was unaware and had no reasonable ground for believing that the trade mark of the plaintiff was on the register or that the plaintiff was a registered user using by way of permitted use; and

(ii) that when he became aware of the existence and nature of the plaintiff''s right in the trade mark, he forthwith ceased to use the trade mark in relation to goods or services in respect of which it was registered; or

(c) where in a suit for passing off, the defendant satisfies the Court

(i) that at the time he commenced to use the trade mark complained of in the suit he was unaware and had no reasonable ground for believing that the trade mark of the plaintiff was in use; and

(ii) that when he became aware of the existence and nature of the plaintiff''s trade mark he forthwith ceased to use the trade mark complained of."

Section 20 of the Code of Civil Procedure, 1908 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

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

Explanation. A corporation shall be deemed to carry on business at its sole of 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."

Mr. Shah for Defendant No. 1 first drew my attention to the recent decision of the Supreme Court in Indian Performing Rights Society Limited vs. Sanjay Dalia & Anr.1 The question before the Supreme Court was as to the interpretation of Section 62 of the Copyright Act, 1957 and Section 134(2) of the Trade Marks Act, 1999 regarding the place of institution of the suit. The submission before the Supreme Court by the appellants was that in view of the non obstante clause in the special intellectual property laws, the requirements of Section 20 of the Code of Civil Procedure would not be applicable. It was submitted that Section 134 of the Trade Marks Act and Section 62(2) of the Copyright Act have no correlation to the cause of action. In response, it was argued that these two statutes are special legislations and confer a special right on a plaintiff to bring the suit where it carries on business or resides. The Supreme Court, having considered the rival submissions at length, concluded that the provisions of Section 62 of the Copyright Act and Section 134 of the Trade Marks Act must be interpreted in a purposive manner and that there is no doubt that the suit can be filed by the plaintiff, under these provisions, at the place where the plaintiff resides or carries on business or personally works for gain. However, if the plaintiff resides or carries on business at the place where the cause of action, wholly or in part, has also arisen, he must bring the suit at that place.

The Plaintiffs'' case as presented by Mr. Kamat is that not only has the cause of action arisen in Mumbai, but that this is also where the Plaintiffs carry on business. The fact that their registered office might be outside Mumbai makes no difference if it can be shown that the Plaintiffs have a commercial presence and carry on business in Mumbai.

Mr. Kamat relies on several documents. Some of these were marked in evidence during the trial of the Section 9A preliminary issue. I will limit the discussion to such of the documents as were marked in evidence and those documents that are admitted by the 1st Defendant in its written statement. Mr. Kamat does, however, point out that his attorneys gave a notice to admit documents and that that notice is yet without a reply. However, I find that that notice was issued after the close of the trial on the preliminary issue. I am, therefore, not inclined to accept Mr. Kamat''s submissions in this limited behalf.

The documents that are either admitted or in evidence indicate at least this much: the Plaintiffs claim protection in respect of trade mark registrations that show the Plaintiffs'' office as being in Mumbai. The 1st Defendant''s notice of opposition was also sent to the Plaintiffs'' address in Mumbai. It seems that at some point the Plaintiffs had an office at Worli, Mumbai and that this was subsequently shifted to an office in Parel, but that makes very little difference. For the purposes of the present discussion, I will also put aside the cease and desist notices and replies by the 1st Defendant simply because it is entirely possible that the reply by the 1st Defendant was sent as a matter of normal course to the address from which the notice was received in the first place. This would not, in my view, necessarily indicate the 1st Defendant''s acceptance that the Plaintiffs had an office in Mumbai. What is, however, significant is that before the suit was filed, the 1st Defendant filed and issued caveats against the Plaintiffs. These are required to be served, and at least one set of caveats was actually served on the Plaintiffs at their office in Mumbai.

I will turn first to some of the documents that are annexed to the written statement itself before taking up the documents marked in evidence. There is no doubt that the 1st Defendant itself brought a suit number C.S. No. 2 of 2004 against the Plaintiffs in the Calcutta High Court. In the cause title of that suit, (Exhibit "N" to the written statement), the 1st Defendant has shown the Plaintiffs as having an address in Mumbai. That is not all. An annexure to the plaint in the Calcutta High Court suit is a list of the 1st Defendant''s (i.e. the Plaintiff in that suit) distributors and dealers. The very first page of that annexure shows that the 1st Defendant does indeed have distributors and dealers in Mumbai. One of those names is the 2nd Defendant in the present suit. There is an additional dealer at Santacruz, Mumbai as well. This is not material that can be either denied or wished away by the 1st Defendant.

Now to the documents marked in evidence. There are two compilations of documents. Exhibit "P1" is a certified true copy of a fresh Certificate of Incorporation issued by the Registrar of Companies showing the change of the Plaintiffs'' name. This may not be immediately relevant. Exhibit "P2", however, is a certified copy of the circular resolution dated 29th December 2006 and this is specifically in relation to the Plaintiffs'' new Corporate Office at 10th Floor, Times Tower, Kamla City, Senapati Bapat Marg, Lower Parel, Mumbai -400 013. This is also the address shown on the printed letterhead on which this resolution is produced. I find that there is no cross-examination on this document.

Exhibit "P3" is central to the case. This is a cash memo dated 19th March 2011 from one M/s. Shabbir Stores at Goregaon. It is true that this is not the 2nd Defendant but the document itself specifically references the 1st Defendant''s products. It was led in evidence by the Plaintiffs'' witness and I will turn to that evidence shortly.

Exhibit "P4" is a true copy of an entry in the register of trade marks relating to the Plaintiffs'' mark No. 956039 in Class 17. Although Mr. Shah says that this is not a legal proceeding certificate, that is not an objection that I can consider at this stage. It ought to have been raised at the time when the documents were taken up for being marked. This true copy has been received in evidence as Exhibit "P4". It clearly shows the Plaintiffs'' address in Mumbai.

Exhibits "P5" and "P6" are two telephone bills in the name of the Plaintiffs. Both show the Plaintiffs'' Mumbai address. Exhibit "P7" is the Shops & Establishment Licence in favour of the Plaintiffs, also showing their address in Mumbai.

Mr. Shah''s submission that some of these documents and, in particular, the telephone bills, are post the filing of the suit is not of much assistance. It does not seem to be the Defendants'' specific case, and nor is this established, that at the date of the suit the Plaintiffs had absolutely no presence in Mumbai. The cross-examination of the Plaintiffs'' witness has also not been able to bring this out.

The Plaintiffs led the evidence of two persons, P.W.-1 and P.W.-2. The cross-examination of both the witnesses was conducted in Court. P.W.-1, Surje Singh, Manager, Investor Relations of the Plaintiff, in cross-examination categorically stated his office address as being in Mumbai. It is he who was asked to purchase a product of Defendant No. 1 and it is he who obtained the cash memo Exhibit "P3" in evidence. He says in his cross-examination that he did so on 18th March 2011. He says that he was not asked to visit Shabbir Stores in particular for the thermocol plates that he purchased from there. He says that these were in openly displayed packets bearing the name, logo and the address of the 1st Defendant. He purchased two varieties of products, one for Rs. 40/- per packet and the other for Rs. 30/- per packet, and obtained a cash memo for Rs. 70/-. He also admits that some balance items were used by the Plaintiffs. A case was put to P.W.-1 that he had never visited Shabbir Stores, and that the cash memo was false and fabricated. Both these cases, P.W.-1 duly denied. There is nothing, therefore, in the evidence of P.W.-1 to indicate in any manner that Exhibit "P3" is unreliable or that the evidence of P.W.-1 should not be believed.

P.W.-2, Mr. Ajay N. Thakkar, is a Company Secretary and the Head -Legal of the Plaintiffs. He also gave his address as being in Mumbai. He joined the company only in June 2013, i.e., some years after the present Suit was filed. It was he who produced the Certificate of Incorporation of the company, the Shops and Establishment Licence and the MTNL bills to which I referred earlier. Question 15 to 19 of his cross-examination read thus:

"15. Does the Plaintiff have its Registered Office in Mumbai?

Ans. The Plaintiff''s Registered Office is at Thane and Corporate Office is at Mumbai.

Attention of the witness is drawn to paragraph 3 of his Affidavit-in-lieu of Examination-in-Chief.

Since which month in 2006, did the Plaintiff shift its Corporate Office at Lower Parel?

Ans. I am not aware about the month. I also do not know in which month the Corporate Office was shifted in the year 2006 to Lower Parel. However, the Plaintiff has its Corporate Office in Mumbai since 1990. However, earlier the Corporate Office was at Worli.

Whether the Corporate Office of the Plaintiff on the 10th floor is an ownership premise of the Plaintiff or is it taken on rent?

Ans. It is rented premises.

What was the area of the Corporate Office on the 10th floor?

Ans. I am not aware since I have not seen the 10th floor office.

Are you aware how many employees were sitting on the 10th floor office in the year 2006?

Ans. I am not aware."

In my view, this clearly shows that the 1st Defendant elicited in cross-examination the fact that the Plaintiffs have a corporate office in Mumbai and that their shift from one place to another within Mumbai took place some time in 2006. It matters little whether the new premises are owned or rented, or whether within the same building at Parel, the Plaintiffs moved to another floor at a subsequent date. The fact of the matter is that the 1st Defendant has now obtained as a matter of evidence in cross-examination the statement that the Plaintiffs, several years prior to the suit, had an office in Mumbai. Again, when it was put to P.W.-2 that in the year 2010 the Plaintiffs did not carry on business in Mumbai and that the products of the 1st Defendant were not commercially available in Mumbai, both suggestions were denied. Mr. Shah''s submission that the cash memo Exhibit "P3" is one that was obtained after the filing of the suit is actually a submission that, in my view, works against him. I do not see how it can possibly assist the 1st Defendant to allege that on the date of the suit goods were not available in Mumbai but they may have been available thereafter. This cash memo is not to be read in isolation. It is to be seen in the context of the 1st Defendant''s admission in its own suit filed in Kolkata that it had (or has) dealers and distributors in Mumbai.

Mr. Kamat is, in my view, justified in his submission that whether the 1st Defendant actually had dealers in Mumbai and whether or not its products are or were available in Mumbai are matters specially within the 1st Defendant''s knowledge within the meaning of Section 106 of the Evidence Act. It is only the 1st Defendant''s witness who could depose to those facts. If the 1st Defendant has chosen not to lead evidence and chosen to keep back this information, then, firstly, the 1st Defendant cannot be permitted to take advantage of that by contending that there is a failure or lacuna in the Plaintiffs'' evidence. Second, and more importantly, as pointed out in Tomaso Bruno Vs. State of U.P.(2015) 4 AD 1 : (2015) CriLJ 1690 : (2015) 1 Crimes 105 : (2015) 2 JCC 884 : (2015) 1 RCR(Criminal) 678 : (2015) 1 SCALE 498 : (2015) 2 SCJ 328 an adverse inference must be drawn against the 1st Defendant for its failure to lead evidence in this regard. I must also note that the application made by Mr. Shah today, and which I noted, i.e., for leave to now lead evidence, was not an application to lead evidence on this aspect of the matter at all, but only to introduce material to show that the Plaintiffs had or have an office in Kolkata. That is not the same thing at all. For, if the 1st Defendant''s products are and were available in Mumbai and this is shown, then the cause of action has arisen in Mumbai; and if the Plaintiffs have, in addition, a place of business in Mumbai that is surely sufficient and it is no answer at all to say that the Plaintiffs might also have a place of business elsewhere. Nothing in Sanjay Dalia or in the statute requires the Plaintiffs to chase the 1st Defendant to a place of its convenience. Indeed, this argument was specifically negatived by the Supreme Court.

The result of the forgoing discussion is that there is no manner of doubt that the Plaintiffs not only had a place of business in Mumbai on the date of filing of the suit and for several years prior to that date, but that the cause of action has arisen within the jurisdiction of this Court. The preliminary issue as framed is, therefore, answered in the affirmative, viz., that this Court does indeed have jurisdiction to entertain and try the suit.

The Notice of Motion can now be taken up for hearing and final disposal.

At this stage, Mr. Shah says, on instructions (and only on instructions) that the 1st Defendant has not yet been served with the Notice of Motion. To put it mildly, I find this extraordinary, given that the preliminary issue under Section 9A was framed at the instance of the 1st Defendant and this could only be done at the hearing of the Motion.

Mr. Kamat, also on instructions, states that this is a transferred brief and he cannot speak for what was or was not done in the past. He says the Motion will be served immediately. Given the fact that the suit has been pending since 2010 and there is now a complete written statement, the 1st Defendant will file its Affidavit in Reply and will adopt the written statement already on record, as indeed it must. Any deviation in the Affidavit in Reply from the written statement would at the very least be most interesting.

Motion to be served during the course of the day today.

Affidavit in Reply as indicated above to be filed and served on or before 16th September 2015. Affidavit in Rejoinder, if any, to be filed and served on or before 25th September 2015.

Notice of Motion to be included in the list of motions for final hearing in the week commencing on 28th September 2015.

11 Civil Appeal Nos. 10643-10644 of 2010, decided on 1st July 2015.