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Judgment
IA No.14948/2018 (of the defendant under Order VII Rules 10 and 11 of the CPC)
The applicant / defendant, in this suit for permanent injunction restraining infringement of trade mark, copyright, passing off and for ancillary reliefs
seeks, return / rejection of the plaint on the ground of this Court not having territorial jurisdiction to entertain the suit.
The senior counsel for the applicant / defendant was heard at length on 30 th October, 2018 when this application came up first before this Court.
However, on that date, on the request of the senior counsel for the applicant / defendant, the hearing was adjourned to today. Today, the counsel for
the plaintiff also appears and the counsels have been further heard.
The plaintiff, by this suit seeks to restrain the applicant / defendant from infringing the registered trade mark “CRAZY ROMEO†of the
plaintiff by marketing the same goods i.e. alcoholic beverages, under the mark “CRAZY RIDERâ€. The suit came up first before this Court on 8th
October, 2018 when, while issuing summons of the suit and notice of the application for interim relief, the applicant / defendant, vide ex parte ad
interim order, was restrained from dealing in products with the registered trade mark of the plaintiff “CRAZY ROMEO†and / or from dealing in
alcoholic beverages bearing the label “CRAZY RIDER†or any label deceptively similar to the plaintiffâ€s “CRAZY ROMEO†label and a
commission was also issued to visit the factory premises of the applicant / defendant at district Sonipat, Haryana.
The plaintiff, in the memo of parties to the plaint, has given the address of itself as well as of the applicant / defendant at New Delhi. Additional
address of the applicant / defendant at district Sonipat, Haryana has also been given. In the plaint, it is pleaded that (i) the registered office of the
plaintiff is at New Delhi; (ii) the registered office of the applicant / defendant is at New Delhi; and, (iii) the plaintiff came to know of the infringement
when came across the impugned label of the applicant / defendant when the same was filed by the defendant before the Excise Department,
Panchkula, Haryana for approval / registration.
The plaintiff, in para no.33 of the plaint has pleaded as under:
“33. That this Honâ€ble Court has the territorial jurisdiction to try and entertain the present suit as Plaintiff and Defendant both have their
registered office within the territorial jurisdiction of this Honâ€ble Court. That Plaintiff is also invoking jurisdiction of this Honâ€ble Court as the scope
and extent of the Defendantâ€s business is not known at present, it is believed that they have a reasonably large scale business around India and it is
therefore strongly apprehended that they will launch the impugned product in New Delhi and would be available within the jurisdiction of this Honâ€ble
Court. It is submitted that the threat that the Defendant will sell and / or offer for sale the impugned product within the jurisdiction of this Honâ€ble
Court is credible and imminent. Thus, there is a reasonable apprehension that the Defendant has a distribution network in Delhi or likely to sell their
products bearing the impugned mark and label within the jurisdiction of this Honâ€ble Court. Thus, the Honâ€ble Court has the necessary jurisdiction
by virtue of Section 20 of the Code of Civil Procedure, 1908. I verify that the category code is 36017.â€
The applicant / defendant, in the application has pleaded that (i) the territorial jurisdiction of this Court has been invoked pleading that the defendant
has its registered office at Delhi and that there is a reasonable apprehension that the defendant will launch the product in New Delhi; (ii) till date, the
applicant / defendant has not sold the brand in question in Delhi and has no permission from Excise Department to sell the brand / product in question
in Delhi; (iii) the applicant / defendant has no intention to sell the goods in question in Delhi, as the applicant / defendant has only the permission from
Excise Department, Haryana to sell the goods in question in Haryana; and, (iv) the applicant / defendant has its distillery at District Sonipat, Haryana.
The application otherwise runs into 22 odd pages and is full of law and passages from the judgments referred to in the application. However, upon it
being pointed out to the senior counsel for the applicant / defendant on 30th October, 2018 that the application is in violation of the law relating to
pleadings, he stated that the judgments be ignored and only the pleadings made in the application be read.
The senior counsel for the applicant / defendant, on 30th October, 2018 relied on Piccadily Agro Industries Ltd. Vs. Ashok Jain (2017) 241 DLT
424 which in turn relies extensively on Piccadily Agro Industries Ltd. Vs. Ashok Narwal (2016) 229 DLT 604 which was not placed before this
Court. Since the applicant / defendant neither in the application nor during the hearing controverted the registered office of the applicant / defendant
being situated at Delhi, it was on 30th October, 2018 enquired from the senior counsel for the applicant / defendant, whether not owing to the said fact
alone, this Court would have territorial jurisdiction under Section 20 of the CPC which is independent of Section 134 of the Trade Marks Act, 1999
conferring additional territorial jurisdiction with respect to suits for infringement.
The senior counsel for the applicant / defendant contended that since no cause of action had accrued to the plaintiff, notwithstanding the registered
office of the applicant / defendant being at Delhi, this Court would not have territorial jurisdiction. On enquiry, whether not this Court, under Section 20
of the CPC would have territorial jurisdiction owing to the registered office of the applicant / defendant being at Delhi, even if no cause of action had
accrued at Delhi, the senior counsel for the applicant / defendant referred to Patel Roadways Ltd., Bombay Vs. Prasad Trading Company (1991) 4
SCC 270.
On 30th October, 2018, it was also the contention of the applicant / defendant that the plaintiff had committed a fraud and a bunch of papers in
that regard was handed over in the Court. However, on further enquiry in that regard being made, the senior counsel for the applicant / defendant had
sought adjournment and the hearing as aforesaid was adjourned to today.
Today, the senior counsel for the applicant / defendant has confined the ground for return / rejection of the plaint to this Court not having territorial
jurisdiction and has not pressed the other ground of fraud qua which a compilation of judgments was also handed over during the hearing on 30th
October, 2018. Thus, the need to record the said judgments in this order is not felt.
The senior counsel for the applicant / defendant pegs his case on Patel Roadways Ltd. supra and argues that Supreme Court therein has on an
interpretation of Section 20 of the CPC held that a corporation / company cannot be sued at the address of its registered office, if has a subordinate /
branch office elsewhere and where the cause of action has also accrued. It is argued that the plaintiff in the plaint has admitted using the mark / label,
of which infringement is claimed, in Haryana and to having its distillery at Ambala in Haryana. It is argued that the cause of action has accrued at
Haryana and the defendant, owing to having distillery at Sonipat, Haryana has a subordinate office at Haryana and the suit could have been filed at
Haryana only and not at Delhi where though registered office of defendant is but no cause of action has arisen.
It is deemed appropriate, at the cost of adding to the length of this judgment, to set out herein below Section 20 of the CPC (without illustrations)
as under:-
Other suits to be instituted where defendants reside or cause of action arises. â€" Subject to the limitations aforesaid, every suit shall be instituted
in a Court within the local limits of whose jurisdiction â€
(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 â€" 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.
(emphasis added)
and the relevant paragraphs of Patel Roadways Ltd. supra as under:
“9. Clauses (a) and (b) of Section 20 inter alia refer to a court within the local limits of whose jurisdiction the defendant inter alia ""carries on
business"". Clause (c) on the other hand refers to a court within the local limits of whose jurisdiction the cause of action wholly or in part arises. It has
not been urged before us on behalf of the appellant that the cause of action wholly or in part arose in Bombay. Consequently clause (c) is not
attracted to the facts of these cases. What has been urged with the aid of the Explanation to Section 20 of the Code is that since the appellant has its
principal office in Bombay it shall be deemed to carry on business at Bombay and consequently the courts at Bombay will also have jurisdiction. On a
plain reading of the Explanation to Section 20 of the Code we find an apparent fallacy in the aforesaid argument. The Explanation is in two parts, one
before the word ""or"" occurring between the words ""office in India"" and the words
in respect of"" and the other thereafter. The Explanation applies to a defendant which is a corporation which term, as seen above, would include even
a company such as the appellant in the instant case. The first part of the Explanation applies only to such a corporation which has its sole or principal
office at a particular place. In that event the courts within whose jurisdiction the sole or principal office of the defendant is situate will also have
jurisdiction inasmuch as even if the defendant may not be actually carrying on business at that place, it will ""be deemed to carry on business"" at that
place because of the fiction created by the Explanation. The latter part of the Explanation takes care of a case where the defendant does not have a
sole office but has a principal office at one place and has also a subordinate office at another place. The words ""at such place"" occurring at the end of
the Explanation and the word ""or"" referred to above which is disjunctive clearly suggest that if the case falls within the latter part of the Explanation it
is not the Court within whose jurisdiction the principal office of the defendant is situate but the court within whose jurisdiction it has a subordinate
office which alone shall have jurisdiction ""in respect of any cause of action arising at any place where it has also a subordinate office"".
Here we may point out that the view which we take finds support from a circumstance which, in our opinion, is relevant. Section 20 of the Code
before its amendment by the Code of Civil Procedure (Amendment) Act, 1976 had two Explanations being Explanations I and II. By the Amendment
Act Explanation I was omitted and Explanation II was renumbered as the present Explanation. Explanation I so omitted read as hereunder:-
Explanation I. â€" Where a person has a permanent dwelling at one place and also temporary residence at another place, he shall be deemed to
reside at both places in respect of any cause of action arising at the place where he has such temporary residence.
This Explanation dealt with the case of place of residence of the defendant and provided with regard to a person having a permanent dwelling at
one place and also temporary at another place that such person shall be deemed to reside at both places in respect of any cause of action arising at
the place where he has such temporary residence. The language used in Explanation II on the other hand which is the present Explanation was
entirely different. Had the intention been that if a corporation had its principal office at one place and a subordinate office at another place and the
cause of action arose at the place where it had its subordinate office it shall be deemed to be carrying on business at both places the language used in
Explanation II would have been identical to that of Explanation I which was dealing with a case of a person having a permanent dwelling at one place
and also temporary residence at another place. The marked difference in the language of the two Explanations clearly supports the view which we
have taken with regard to the interpretation of the present Explanation to Section 20 of the Code which was Explanation II earlier as indicated above.
We would also like to add that the interpretation sought to be placed by the appellant on the provision in question renders the explanation totally
redundant. If the intention of the legislature was, as is said on their behalf, that a suit against a corporation could be instituted either at the place of its
sole or principal office (whether or not the corporation carries on business at that place) or at any other place where the cause of action arises, the
provisions of clauses (a), (b) and (c) together with the first .part of the explanation would have completely achieved the purpose. Indeed the effect
would have been wider. The suit could have been instituted at the place of the principal office because of the situation of such office (whether or not
any actual business was carried on there). Alternatively, a suit could have been instituted at the place where the cause of action arose under clause
(c) (irrespective of whether the corporation had a subordinate office in such place or not). This was, therefore, not the purpose of the explanation. The
explanation is really an explanation to clause (a). It is in the nature of a clarification on the scope of clause (a) viz. as to where the corporation can be
said to carry on business. This, it is clarified, will be the place where the principal office is situated (whether or not any business actually is carried on
there) or the place where a business is carried on giving rise to a cause of action (even though the principal office of the corporation is not located
there) so long as there is a subordinate office of the corporation situated at such place. The linking together of the place where the cause of action
arises with the place where a subordinate office is located clearly shows that the intention of the legislature was that, in the case of a corporation, for
the purposes of clause (a), the location of the subordinate office, within the local limits of which a cause of action arises, is to be the relevant place for
the filing of a suit and not the principal place of business. If the intention was that the location of the sole or principal office as well as the location of
the subordinate office (within the limits of which a cause of action arises) are to be deemed to be places where the corporation is deemed to be
carrying on business, the disjunctive ""or"" will not be there. Instead, the second part of the explanation would have read ""and in respect of any cause of
action arising at any place where it has a subordinate office, also at such place"".
As far as we can see the interpretation which we have placed on this section does not create any practical or undue difficulties or disadvantage
either to the plaintiff or a defendant corporation. It is true that, normally, under clauses (a) to (c), the plaintiff has a choice of forum and cannot be
compelled to go to the place of residence orbusiness of the corporation and can file a suit at a place where the cause of action arises. If a corporation
desires to be protected from being dragged into litigation at some place merely because a cause of action arises there it can save itself from such a
situation by an exclusion clause as has been done in the present case. The clear intendment of the Explanation, however, is that, where the corporation
has a subordinate office in the place where the cause of action arises, it cannot be heard to say that it cannot be sued there because it does not carry
on business at that place. It would be a great hardship if, in spite of the corporation having a subordinate office at the place where the cause of action
arises (with which in all probability the plaintiff has had dealings), such plaintiff is to be compelled to travel to the place where the corporation has its
principal place. That place should be convenient to the plaintiff; and since the corporation has an office at such place, it will also be under no
disadvantage. Thus the Explanation provides an alternative locus for the corporation's place of business, not an additional one.
There may be only one extraordinary situation in which this interpretation may cause an apparent anomaly. This is where the plaintiff has also
his/its place of business at the same place as the corporation but the cause of action has arisen at some other place. The above interpretation would
preclude him from filing a suit in that place of business common to both parties and compel him to go to a court having jurisdiction over the place
where the cause of action has arisen. But this is not really a hardship because such plaintiff must have had some nexus or connection with the place
since some part of the cause of action had arisen there; if he can have dealings with the corporation at such a place giving rise to the cause of action,
there is no reason why he should find it disadvantageous or difficult to file a suit at such place. Equally, the corporation, having a subordinate office at
the place, will suffer no disadvantage.
In this view of the matter since in the instant two cases clause (c) is not attracted to confer jurisdiction on courts at Bombay and the appellant has
admittedly its subordinate offices at the respective places where the goods in these two cases were delivered to it for purpose of trans- port the courts
at Bombay had no jurisdiction at all to entertain the suits filed by the respondents and the parties could not confer jurisdiction on the courts at Bombay
by an agreement. Accordingly no exception can be taken to the findings in this behalf recorded by the trial court and the High Court in these two
cases.â€
(emphasis added)
As would immediately become clear on a careful reading of the aforesaid, Supreme Court in Patel Roadways Ltd. supra though held the
explanation to Section 20 of the CPC to be an explanation to Clause (a) thereof rather than to Clause (c) thereof but was concerned with only the
alternative “carries on businessâ€, of the several alternatives in Clause (a). It was not the contention before the Supreme Court in Patel Roadways
Ltd. supra that the place where the registered office of a corporation / company is situated is also the place where the corporation, if a defendant in
the suit, “actually and voluntarily residesâ€. Thus, no finding was returned in the said judgment on the said aspect. Supreme Court, in the context
only of alternative “carries on business†in Clause (a) of Section 20 having held that by virtue of explanation, which also is only to, where a
corporation shall be deemed to carry on business, having held that where a defendant company / corporation has its principal office at one place and
subordinate office at another place and cause of action arises at a place where the subordinate office is located, suit has to be filed only in the Court
within whose jurisdiction the company / corporation has its subordinate office and not in Court within whose jurisdiction it has its principal office,
cannot be held to have also held that notwithstanding the word “or†between the words “actually and voluntarily resides†or “carries on
business†or “personally works for gainâ€, the alternative of suing the corporation at the place where it actually and voluntarily resides is also not
available. The judgment cannot be read as eclipsing the option given by the legislature to a plaintiff, under Section 20(a) of the Code, of suing at the
place where the defendant, at the time of commencement of the suit, actually and voluntarily resides.
I have not come across any judgment holding that in case a defendant is a company or a corporation, only the option in Section 20(a) of the CPC,
of “carries on business†is available and not the option of “actually and voluntarily residesâ€. In Morgan Stanley Mutual Fund Vs. Kartick Das
(1994) 4 SCC 225, it was held, as far as India is concerned, the residence of the company is where the registered office is located and normally cases
should be filed only where the registered office of the company is situated. Again, in Dhodha House Vs. S.K. Maingi (2006) 9 SCC 41, it was
reiterated that ordinarily the residence of the company would be where its registered office is. Once it is so, a company can always be sued under
Section 20(a) of the CPC, in the Court within whose jurisdiction the registered office of the company is located. Not only as per the language of the
explanation to Section 20 but even as per Patel Roadways Ltd., the explanation to Section 20 is attracted only to the alternative “carries on
business†in Section 20(a) and not to the alternative “actually and voluntarily residesâ€.
Mention in this regard may also be made of a dicta of the Division Bench of the High Court of Bombay in Pratap Singh Vs. The Bank of America
1976 SCC OnLine Bom 111, concluding on an interpretation of Clause 12 of the Letters Patent of that Court but at par with Section 20 of the CPC
and also referring thereto, that the word “defendant†in Section 20 must be given its proper meaning and would include within its compass both
natural and artificial persons i.e. living beings as well as corporations and no distinction is made in law between corporations as are incorporated in
India and corporations as are incorporated outside India. It was further held that under Section 20, a suit can be brought if the defendant, at the time of
institution of the suit, “dwells†or “carries on business†or “personally works for gain†within the limits of the Court and that for
consideration of jurisdiction under Section 20(a), the consideration whether the cause of action has accrued wholly or in part within or without the
limits of said jurisdiction is wholly irrelevant. Though Clause 12 of the Letters Patent uses the word “dwells†instead of “resides†but Mulla, in
his treatise on the Code of Civil Procedure, 19th Edition, has authored that there is no distinction between the word “resides†as used in Sections
16,19 and 20 of the CPC and the word “dwell†in Clause 12 of the Letters Patent and the cases decided on the latter word would be authorities
on the consideration of the former. Mention, at this stage may be made of Union of India Vs. Sri Ladulal Jain AIR 1963 SC 1681 holding that the
principle behind Section 20(a) and Section 20(b) of the CPC is that the suit be instituted at a place where the defendant be able to defend the suit
without undue trouble. Applying the said principle also, I fail to see as to how the defendant herein is put to any trouble by being sued in the courts at
Delhi within whose jurisdiction the registered office of the defendant is situated. Rather, Supreme Court in Morgan Stanley Mutual Fund supra held
that where a corporation is sued with respect to urgent reliefs, as of restraining its public issue, not at the place of the registered office but at the place
of its subordinate office, the Court should have regard to the time taken in the subordinate office receiving instructions from the registered office.
In this context, it may also be noticed that Patel Roadways Ltd. supra was concerned with challenge by Patel Roadways Ltd. to the jurisdiction of
the Courts at Madras, where the subordinate office of the defendant Patel Roadways Ltd., wherein the goods were entrusted to Patel Roadways Ltd.
for transportation to Delhi. Patel Roadways Ltd. contested jurisdiction of the Courts at Madras on the plea that as per the agreed terms and conditions
of transportation, the exclusive jurisdiction was of the Courts at Bombay where the registered office of Patel Roadways Ltd. was situated. It was in
this context held that since Patel Roadways Ltd. had a subordinate office at Madras, the plaintiff situated at Madras could not be compelled to travel
to Bombay to sue Patel Roadways Ltd. and by consent jurisdiction could not be conferred on the Courts at Bombay which did not have jurisdiction.
Patel Roadways Ltd. supra thus, was not a case where the defendant was sued in Court of the place where registered office of defendant was
situated. Though in Piccadily Agro Industries Ltd. Vs. Ashok Narwal supra, the registered office of the defendant no.2, being the manufacturer of the
impugned product (defendant no.1 was the agent), was at Delhi but it was not the contention that the defendants therein could be sued at Delhi owing
to the defendant no.2, who was the main contesting defendant, actually and voluntarily residing at Delhi on account of having its registered office at
Delhi and thus the question as has been adjudicated herein, did not come to be decided.
Patel Roadways Ltd. supra was followed, holding that no part of the cause of action had accrued at Delhi. Same was the position in Piccadily Agro
Industries Ltd. Vs. Ashok Jain supra.
It is a settled position in law that a judgment is not a precedent on what was not for adjudication therein, what was not discussed and debated. The
Courts, in Patel Roadways Ltd., Piccadily Agro Industries Ltd. Vs. Ashok Narwal and Piccadily Agro Industries Ltd. Vs. Ashok Jain supra, having
not considered the effect of a defendant company being sued in the Court within whose jurisdiction its registered office is situated, though also having
a subordinate office at another place and where the cause of action had also accrued, the said judgments do not constitute precedent for the
proposition that such a company cannot be sued at the place of its registered office under Section 20(a), owing to actually and voluntarily residing
within the jurisdiction of that Court.
Mention in addition may also be made of my dicta in Millennium & Copthorne International Ltd. Vs. Aryans Plaza Services Pvt. Ltd. 2018 SCC
OnLine Del 8260 against which no appeal is found to have been preferred, holding territorial jurisdiction under Section 19 of the CPC to be also
available qua suits for infringement and / or passing off and for ancillary reliefs. The matter having been discussed in detail in the cited judgment, it is
not deemed necessary to elaborate.
No merit is thus found in the application of the defendant for return / rejection of the plaint.
Though I have not found any merit in the application but the contentions of the counsel for the plaintiff made also be noticed.
The counsel for the plaintiff argues, that (i) the plaintiff has nowhere in the plaint admitted to the applicant / defendant having subordinate office or
branch office at Haryana; (ii) plea, of the applicant / defendant having a distillery at Sonipat in Haryana is not a plea of the applicant / defendant
having a subordinate / branch office at Haryana; (iii) Blackâ€s Law Dictionary defines a “branch bank†as an office of a bank physically
separated from its main office, with common service and functions, and corporately part of the bank and a branch office of a bank includes office,
unit, station, facility, terminal, space or receptacle at a fixed location other than a principal office; (iv) that a distillery does not qualify as a branch
office; (v) that the present suit is in the nature of a quia timet action and the Division Bench of this Court in Allied Blenders & Distillers Pvt. Ltd. Vs.
R.K. Distilleries Pvt. Ltd. 2017 SCC OnLine Del 7224 has held that if there is a reasonable and credible apprehension that the impugned product
would also be launched and sold in New Delhi, it constitutes a cause of action for instituting a suit in the nature of a quia timet action and the cause of
action would accrue at Delhi;
(v) that the Division Bench in Allied Blenders & Distillers Pvt. Ltd. supra has further held that considerations with regard to territorial jurisdiction in
the context of Order VII Rule 10 are entirely different from those in the context of an application under Order XXXIX Rules 1 and 2 of the CPC; (vi)
in the backdrop of Order VII Rule 10 of the CPC, it is only the averments contained in the plaint that have to be seen; (vii) the averments contained in
the plaint in the present suit disclose this Court to be having territorial jurisdiction and the plaint cannot be ordered to be returned on the ground of this
Court not having territorial jurisdiction at this stage; (viii) mere denial by the applicant / defendant of not intending to launch its product in Delhi cannot
defeat a quia timet action; reliance in this regard is placed on the dicta of the Division Bench of this Court in Teva Pharmaceutical Industries Ltd. Vs.
Natco Pharma Ltd. (2014) 210 DLT 591.
The senior counsel for the applicant / defendant in rejoinder has contended that there can be no distillery without a branch office.
Merit is found in the contentions aforesaid of the counsel for the plaintiff also, to defeat this application for return / rejection of the plaint.
I may add, that while the pleading in the application is of the distillery of the defendant at Sonipat, Haryana, the pleading in the plaint is of the
distillery of the plaintiff at Ambala, Haryana.
The senior counsel for the applicant / defendant has not clarified whether according to the applicant / defendant, the applicant / defendant can be
sued under Section 20 of the CPC only at Sonipat, Haryana. Applying Section 134 of the Trade Marks Act and in accordance with the dicta of the
Division Bench of this Court in Ultra Home Construction Pvt. Ltd. Vs. Purushottam Kumar Chaubey (2016) 227 DLT 320, the plaintiff, having its
registered office at Delhi and distillery at Ambala (if treated to be a subordinate office), would be entitled to sue the defendant at Ambala also and the
defendant cannot compel the plaintiff to sue the defendant in the Courts at Sonipat, Haryana only.
I am, therefore, of the view that no ground for return / rejection of the plaint is made out.
The application is dismissed.