P.M. Diesel Ltd. vs Patel Field Marshall Industries

S. Ravindra Bhat, J.—This order will dispose of the defendant'' application, under Order VII, Rule 11, Code of Civil Procedure, 1908 (hereinafter `CPC'').

The facts of the present dispute, necessary for the purpose of this order, are as follows. In this suit for perpetual injunction, the plaintiff seeks to restrain the defendant from using the trading style to read as PATEL FIELD MARSHAL AGENCIES as well as PATEL FIELD MARSHAL INDUSTRIES containing the whole trade mark FIELD MARSHAL of the plaintiff for marketing their goods of the same kind and description, as those of the plaintiffs, and for rendition of accounts of profit earned by the defendants.

The plaintiff is a duly incorporated company having its registered office at Rajkot, Gujarat. It has been engaged in the manufacture, export and marketing of diesel oil engines, centrifugal pumps, electric motors and their component parts. From the year 1963, the plaintiff and its predecessors in title, it is averred, have been using the trademark ''Field Marshal'' for the aforesaid goods and that the mark is also registered (No. 224879/Class 7 for the word mark; No. 252070/Class 7 for the stylized word mark and No. 252071/ Class 7 for the logo) under the Trade and Merchandise Marks Act, 1958 (hereafter ''the Act''). The plaintiff also avers as to its registration under the Copyright Act, 1957 for its label under No. A-42681/1983. It is claimed that the aforesaid artistic work has been extensively used in all the trade literature of the plaintiff including bill books, pamphlets, stickers etc. The plaintiff also avers about its turnover and the expenditure incurred on the publicity of the mark and has filed documents in this regard. Due to the wide publicity given by the plaintiffs, the superior quality of its goods, the reputation and goodwill built over these years and the continuous and extensive use of the mark, it is claimed that the mark has come to be distinctly associated with the plaintiff''s goods.

The first defendant is a manufacturer of diesel oil engines and its component parts. The second defendant markets and sells the goods manufactured by the former. Both the entities it is claimed are managed and controlled by one Mr. GD Patel and his son Mr. RG Patel. It is alleged that the defendants are conducting their business from the same premises and have common partners. The plaintiff alleges that the second defendant was a distributor of its goods between 1965 and 1970, when the latter only sold goods manufactured by the plaintiff, during which time it had adopted the mark ''Patel Field Marshal Agencies''.

The plaintiff avers that in 1982, and subsequently in 1983 it learnt that the defendants had applied for the registration of the mark ''Patel Field Marshal Industries'' and ''Patel Field Marshal Agencies''. The suit avers how the the plaintiff wrote to the defendants asking them to desist using the aforesaid mark and withdraw the applications, which was not complied with. The Registrar, on opposition proceedings taken up by the plaintiff rejected the applications of the second defendant on the ground that the latter has dishonestly sought to appropriate the mark of the plaintiff. The opposition proceedings against the applications of the first defendant in relation to the mark ''Patel Field Marshal Industries'', it is claimed are pending at the time of filing the suit.

It is averred that in June 1989, the plaintiff learnt that the partners of the defendants were planning to incorporate a company, whose trading style contained the phrase ''Field Marshall'', which company was to carry on business in relation to similar goods as that of the plaintiff. Therefore, the plaintiff published caution notices in newspapers and also wrote to the Registrar of Companies, Ahmedabad objecting to the incorporation of the company. That proceeding was pending at the time of filing the suit. The plaintiff claims that the defendants are fully aware of the fact that the plaintiff has been the proprietor of the ''Field Marshall'' mark and that were, through the aforesaid acts, dishonestly and unlawfully attempting to appropriate the goodwill of the plaintiff associated with the mark.

The plaintiff invokes the jurisdiction of this Court in the following terms:

The case of action for the present suit in favour of the plaintiffs and against the defendants arose first of all in the year 1982 when the defendant No. 1 applied for the registration of the trade mark MARSHAL and the plaintiffs served a notice on the defendant No. 1 dated 23.7.82. The cause of action again arose when the plaintiffs came to know from the Trade marks journal No. 823 dated 16.09.83 that defendant No. 2 had applied for the registration of the trade mark (logo) PFMA in respect of the goods of the same type and the plaintiffs filed notice a opposition against the same. The plaintiffs did not think it proper to take any legal action at the Court against the defendants in the matter and thought it before to wait till the decision of their opposition applications and hence the cause of action then arose on 30.04.1988 when the said applications of defendant No. 2 were refused for registration by the registrar of Trade marks, Bombay. The cause of action lastly arose in the month of June, 1989 when the plaintiff came to know from trade that the partners of the defendants were going to form a company under the companies Act with the proposed name of the Company containing the word FIELD MARSHAL in their trading style of the Company. Thus the cause of action is continuous from day to day till the defendants are restrained from dealing in any way in the said goods under the impugned trade mark MARSHAL, using the logo PFMA and PFMI and the trading style PATEl FIELD MARSHAL AGENCIES and PATEL FIELD MARSHAL INDUSTRIES.

The defendants have also violated the statutory right of plaintiff by imitating the label registered under copyright No. A-42691/1983.

That the goods of the parties bearing the impugned trade marks are also sold in the Union Territory of Delhi. The Trade marks journal No. 823 dated 16.09.83 and No. 876 dated 1.12.85 and Journal No. 913 dated 16.4.88 were published in India by the Trade marks Registrary in respect of applications of the defendants for registration of the impugned trade marks, including the Union Territory of Delhi. Therefore, this Hon''ble Court has jurisdiction to entertain and try the present suit. Moreover, the jurisdiction of this Hon''ble Courts is also attracted in view of Section 62(2) of the Copyright Act.

Thus the plaintiff seeks to invoke the jurisdiction of the court on three counts; One, that the goods are sold in Delhi; Two, the defendant''s applications were published in the trade mark journal circulated in Delhi; and three, by virtue of the Section 62(2) of the Copyright Act.

This Court had, by its order dated 9-7-92, disposed of an application (IA 11145-46/92) under Order VII Rule 10 CPC, stating that since the question of territorial jurisdiction had been raised in the written statement, it would be decided later on the merits. Later, in the course of an order on the plaintiff''s application (I.A. 4465/89) under Order 39, Rules 1 and 2, the court concluded that the plaintiff had been unable to establish that the Delhi courts had territorial jurisdiction, and accordingly returned the plaint. That order, dated 29th September, 1995 was carried in an appeal, decided on 10-3-1998. The Division Bench''s judgment allowed the plaintiff''s appeal, holding that the publication of an advertisement in the trademark journal constituted sufficient cause of action to enable this Court to entertain the suit. The court also rendered findings on the question of maintainability of the suit, on the ground of Section 62(2) of the Copyright Act, 1957. The Division Bench''s order is reported as P.M. Diesels Ltd. Vs. M/s. Patel Field Marshal, . The Defendant carried the matter in further appeal, by special leave, to the Supreme Court. That appeal was partly allowed, and the matter, remanded to the Division Bench for consideration.

The judgment of the Supreme Court is reported as Dhodha House Vs. S.K. Maingi, . Relevant portions of the Supreme Court''s judgment are extracted below:

Before the Division Bench of the High Court, three contentions as regard the jurisdiction of the Delhi High Court were raised; firstly, u/s 62 of the Copyright Act, 1957, secondly, in view of the fact that the defendants had sought for registration of trade mark at Delhi, and thirdly, the defendants are selling goods under the impugned trade mark at Delhi and, thus, plaintiff''s right there over had been violated at Delhi.

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16.The Division Bench did not go into the third question.

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The Delhi High Court, as noticed hereinbefore, however, did not advert to the third contention raised therein saying that the question as to whether the defendants had been selling its product on a commercial scale at Delhi was a question of fact and, thus, was required to be properly determined in case evidence is led by the parties.

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In Patel Field Marshal (supra) again the thrust was on the sale of products and/or advertisement by the Appellant for registration of trade marks in the Trade Marks Journal and other local papers. The Division Bench of the High Court, as has been noticed hereinbefore, did not advert to the issue as to whether the defendant had been selling its product in Delhi on commercial scale or not. It is, therefore, not necessary for us also to dilate further on the said question. We have furthermore noticed hereinbefore that the advertisement appearing in a journal or newspapers by itself would not confer any jurisdiction on the court, if it otherwise did not have any.

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For the purpose of invoking the jurisdiction of a court only because two causes of action joined in terms of the provisions of the Code of Civil Procedure, the same would not mean that thereby the jurisdiction can be conferred upon a court which had jurisdiction to try only the suit in respect of one cause of action and not the other. Recourse to the additional forum, however, in a given case, may be taken if both the causes of action arise within the jurisdiction of the court which otherwise had the necessary jurisdiction to decide all the issues.

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In Patel Field Marshal (supra), however, we may notice that a subsequent development has taken place, namely, after the remand, a learned Single Judge of the Delhi High Court is said to have granted an order of injunction in favour of the plaintiff-respondent and the matter is pending before the Division Bench. As we have not expressed our views on the merit of the matter, it is needless to mention that the Division Bench shall proceed to determine the questions raised before it on their own merits.

After the matter was remanded to the Division Bench, the Defendant moved an application. The Division Bench, which heard it, passed this order, on 11-8-2006, allowing the application to be withdrawn with liberty to approach this Court:

CM 838/06 in FAO (OS)250/1999.

Patel Field Marshal Indust. and Anr. ....Petitioner Through : Mr. Shallen Bhatia, Adv.

Vs.

PM Disels Ltd. ....Respondent

Through : Mr. R.K. Aggarawal, Adv.

CORAM Hon''ble Justice Dr. Mukundakam Sharma Hon''ble Ms. Justice Hima Kohli, ORDER

11.08.2006

After some arguments learned Counsel appearing for the appellant seeks permission to withdraw this application with liberty to approach the learned single judge. Permission is granted. The application stands disposed of as withdrawn with liberty as prayed.

Records of the learned single judge shall be returned forthwith. The same shall be made available as and when the appeal is taken up for hearing. Dr. Mukundakam Sharma, J

Hima Kohli, J.

August, 11, 2006.

The defendant thereafter moved the present application, IA No. 13850/2006. The Division Bench made the following order, on 31-1-2008, (on an application of the plaintiff, for modification of its previous order, permitting the defendant to approach this Court):

31.01.2008

Present : Mr. Abhay Nath, Proxy Counsel for the appellant

Mr. Shailen Bhatia with Ms. Amita Kapur for the Respondent.

FAO (OS) No. 232/1999.

Counsel appearing for the parties state that the application, which is filed by the respondent seeking for a direction for return of the plaint, is coming up for consideration on 5th March, 2008. They state that this matter may be taken up for consideration after the said date. In terms of their prayer, this matter shall not be taken up till 7th March, 2008. Chief Justice

Reva Khetrapal Judge.

January 31,2008

The plaintiff''s application was thereafter rejected, on 18-3-2008, by the Division Bench, in the following terms:

P.M. Diesels Ltd., ....Appellant Through : None

Vs.

Patel Field Marshal Industries and Anr. ....Respondents

Through : Mr. Shailen Bhatia and Ms. Jaya Verma, Advocates,

CORAM Hon''ble The Chief Justice Hon''ble Ms. Justice Reva Khetrapal ORDER

18.03.2008

Counsel appearing for the appellant is not present presumably because of the settled position of law in the light of the decision of Dhodha House Vs. S.K. Maingi, . On consideration of the records, we find that this case is fully covered and governed by the decision of Dhodha House Vs. S.K. Maingi, .

Appeal stands disposed of in accordance with the observations made in the said judgment, leaving the parties to bear their own costs. It is, however, made clear that while passing the aforesaid order, we have considered the ratio of the decision of Dhodha House Vs. S.K. Maingi, . So far the other issues are concerned, we have not considered the merit of the same and the said issues are left open.

Chief Justice

Reva Khetrapal, J.

March 18, 2008

Initially, when IA 13850/2006 under Order VII Rule 11 was taken up for hearing, the plaintiff''s senior counsel sought to object to its maintainability, urging that the question of jurisdiction could not be gone into under that provision. However, during the course of hearing, it was agreed on behalf of the defendant, on 13-3-2008, that the application could be treated as one under Order VII Rule 10, and arguments of parties, heard on that basis. The application, and other applications were, accordingly heard on that date, and later, again on 2nd April, 2008, after which the court reserved orders.

Mr. Shailen Bhatia, learned Counsel urged that the plaint does not disclose that any part of the cause of action arose or accrued in favour of the plaintiff within the territorial limits of this Court''s jurisdiction. It was submitted that the defendant has always carried on business entirely outside the jurisdiction of the court. Mr. Bhatia relied heavily on the observations of the Supreme Court in the judgment inter parties and submitted that both on the issue pertaining to jurisdiction concerning Copyright violation and publication of advertisements by the plaintiff in the trademarks journal, the court had found against the plaintiff. Therefore, the suit and list of documents filed along with it had to disclose that some part of the cause of action, i.e commercial sales, of the defendant''s alleged infringing products, took place in Delhi, or within the jurisdiction of the court. Counsel submitted that despite voluminous documentary evidence, there was no material to connect any sale of the defendant''s product. In these circumstances, there was nothing to support the plaintiff''s assertion about the cause of action having accrued in Delhi.

Learned Counsel submitted that for deciding whether this Court has jurisdiction not only averments in the plaint, but also the list of documents have to be prima facie considered. He relied on the judgment of the Supreme Court, reported as Liverpool and London S.P. and I Asson. Ltd. Vs. M.V. Sea Success I and Another, . Learned Counsel also relied on the judgment reported as Dabur India Ltd. v. K.R. Industries 2006 (33) PTC 107.

Mr. Sudhir Chandra, learned senior counsel for the plaintiff, urged, on the other hand, that the court should not, in deciding the present application, go into the merits, or consider the effect of various documents filed by the parties. It was submitted that the court should limit the scope of inquiry to whether the plaint discloses any cause of action, which occasions the filing of the suit, and whether such cause of action, in terms of the averment, are prima facie, within jurisdiction of this Court. Any other approach would, in the submission of the counsel, be contrary to well established principles, and amount to prejudging the merits of the case, which is impermissible at this stage. Learned Counsel relied on the judgments of this Court reported as Eureka Forbes Ltd. v. Hindustan Unilever Ltd. 2008(PTC) 210 and In LG Corporation and Anr. v. Intermarket Electroplasters (P) Ltd. 2006 (32) PTC 429. Counsel also urged that in such cases, where sales of infringing products are hard to come by, if cash memos or proof of actual sales are not easily forthcoming, the court would factor in the aspect of clandestine sales, and draw a presumption, in favour of the plaintiff. Reliance was placed on the judgment of this Court, in Lalli Enterprisesv. Dharam Chand and Sons 2003 (26) PTC 239 (DB).

It was argued that after decision of the Division Bench, an order of ad-interim injunction was made, which subsists. That order has been appealed against. These facts were noticed by the Supreme Court, which consciously did not express itself on the effect of subsequent events. It was therefore, urged that these developments therefore, are fatal to the present application for rejection or return of the plaint.

It is next urged that since the defendants sought for registration of the trademark for the whole of the country, they also sought it for Delhi, and caused an advertisement to be issued. This was sufficient to clothe this Court with jurisdiction. Reliance was placed on the judgments reported as Jawahar Engineering Co. and Others Vs. Javahar Engineering Private Ltd., and Pfizer Products Inc. v. Rajesh Chopra 2006 (32) PTC 301.

In Dabur India Limited (supra) it was held that since the defendant was from Andhra Pradesh and since there was no documentary evidence to show that the respondent was selling its goods in Delhi, this Court did not have territorial jurisdiction. The Supreme Court, in Dhodha House (a common judgment also rendered inter parties, the present suit, arising out of these proceedings), after noticing the decision in Oil and Natural Gas Commission Vs. Utpal Kumar Basu and Others, , had categorically held that a mere advertisement in a journal or paper by itself, will not confer territorial jurisdiction on the Court. In that context it also observed that cause of action will arise only when the infringing goods are used not when an application for registration is made or pending. This is apparent from the following observations of the Supreme Court:

A cause of action will arise only when a registered trade mark is used and not when an application is filed for registration of the trade mark. In a given case, an application for grant of registration certificate may or may not be allowed. The person in whose favour, a registration certificate has already been granted indisputably will have an opportunity to oppose the same by filing an application before the Registrar, who has the requisite jurisdiction to determine the said question. In other words, a suit may lie where an infringement of trade mark or copyright takes place but a cause of action for filing the suit would not arise within the jurisdiction of the court only because an advertisement has been issued in the Trade Marks Journal or any other journal, notifying the factum of filing of such an application.

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In Patel Field Marshal (supra) again the thrust was on the sale of products and/or advertisement by the Appellant for registration of trade marks in the Trade Marks Journal and other local papers. The Division Bench of the High Court, as has been noticed hereinbefore, did not advert to the issue as to whether the defendant had been selling its product in Delhi on commercial scale or not. It is, therefore, not necessary for us also to dilate further on the said question. We have furthermore noticed hereinbefore that the advertisement appearing in a journal or newspapers by itself would not confer any jurisdiction on the court, if it otherwise did not have any

It is, therefore, clear that the plaintiff''s argument about this Court''s jurisdiction, based on the defendant''s publishing an advertisement in a trademark journal, is insubstantial. The reliance on Pfizer is of no avail; the above extracts from Dhodha House were not noticed in that judgment. The plaintiff, at least, in the light of the determination inter parties, is precluded from making such submissions.

This Court''s decision in Dabur (supra) has been recently approved by the Supreme Court (See Dabur India Ltd. Vs. K.R. Industries, . In a previous decision, Sector Twenty-one owners Welfare Association (STOFWA) Vs. Air Force Naval Housing Board, it was held that a trivial or insignificant part of the cause of action arising at a particular place would not be enough to confer jurisdiction on the court to entertain the lis. Citing a number of precedents it observed that the emphasis had shifted from the residence or location of the person or authority sought to be proceeded against, to the situs of the accrual of the cause of action.

In Gold Seal Engineering Product Pvt. Ltd. and others Vs. Hindustan Manufacturers and others, , ( a decision noticed by the Supreme Court in Dhodha House, and not disapproved) it was held that a suit for passing off cannot be filed in Bombay if the defendants carry on business in Calcutta and that supply of goods to Delhi was on a commercial basis. In Gupta Brothers Conduit Pipe Manufacturing Co. v. Anil Gupta (2001) 24 PTC 159, this Court held that since neither plaintiff nor the defendants have offices in Delhi and are not carrying on business in Delhi, the suit had to be returned due to lack of jurisdiction. Similarly, this Court held, in Haryana Milk Foods v. Chambel Diary Products (2002) 25 PTC 156 that for the purposes of ascertaining territorial jurisdiction the entire plaint has to be taken into consideration. In the case since the plaintiff could not prove that defendant had a office in Delhi or carries on business in Delhi, the Court held that it did not have territorial jurisdiction to adjudicate the matter.

In A.B.C. Laminart Pvt. Ltd. and Another Vs. A.P. Agencies, Salem, , the Supreme Court held that cause of action means that set of facts, which taken with the law applicable to them, gives the plaintiff a right to claim relief against the defendant. If that were so, the cause of action in a case of passing off would arise only when the defendant uses the impugned trademark. The object of action for infringement and passing off is to protect the trademark owner''s goodwill. Goodwill is deemed affected or injured if the defendant markets his goods under the impugned mark. Therefore, the mere advertisement in the Trademarks Journal or preferring of application or even the registration of a trademark at a particular place, cannot confer jurisdiction, since it cannot amount to cause of action. There have to necessarily, be some objective facts and minimal material (termed as existence of ''commercial sales'' by the Supreme Court in Dhodha House) to enable a court to exercise jurisdiction.

As far as the contention that the court should only look at the plaint, while deciding an application under Order 7 Rule 11 (or Rule 10) is concerned, this Court is bound by the decision of the Supreme Court in Liverpool and London SP and I Association (supra) where it was held that the scrutiny can extend to documents filed along with the plaint, which are deemed to be part of the suit:

In the instant case the Club not only annexed certain documents with the plaint but also filed a large number of documents therewith. Those documents having regard to Order 7 Rule 14 of the CPC are required to be taken into consideration for the purpose of disposal of application under Order 7 Rule 11(a) of the Code of Civil Procedure.

In the plaint, no further facts or particulars are given to confer this Court with the territorial jurisdiction over the suit. As shown above a bland assertion, unsupported by any document, has been made in para 30 regarding the sale of goods bearing the impugned trade mark by the defendant in the city of Delhi. No material facts are disclosed, in the pleading, or in the documents, which are deemed part of the suit. The plaintiff reliance on the decision in Lalli Enterprises, is of no avail. With due respect, that order is unreasoned and stipulative, when it commends that the plaintiff need not produce any cash memos or other evidence of sales amounting to infringement, since clandestine sales take place. Such a broad assumption of jurisdiction, would be unfeasible, in view of Dhodha House, which clearly envisions some commercial sales by the defendant within territorial jurisdiction of a court, to constitute a part of cause of action, investing such court with jurisdiction.

For the above reasons, this Court is of opinion that the present application has to succeed, and the suit has to be returned, for presentation in the court of competent jurisdiction. IA 13850/2006 is therefore allowed; the suit and all pending applications are hereby returned. In the circumstances of this case, the plaintiff shall bear the costs, quantified at Rs. 30,000/- to be deposited with the Delhi High Court Legal Services Committee, within 2 weeks. A compliance affidavit shall be filed in court.