2010 (9) TMI 1227 - HC - Companies Law

Summary

Issues Involved:
1. Jurisdiction of the Delhi High Court to entertain the suit.
2. Rejection of the plaint under Order 7 Rule 11 CPC.
3. Amendment of the plaint under Order 6 Rule 17 CPC.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Delhi High Court to entertain the suit:
The primary issue was whether the Delhi High Court had jurisdiction to entertain the suit filed by the Appellant. The Appellant claimed jurisdiction under Section 134(2) of the Trade Marks Act, 1999, asserting that part of the cause of action arose within the territorial jurisdiction of the Delhi High Court because the Respondent's trademark was advertised in the Trade Marks Journal circulated in Delhi. The court examined whether the Appellant carried on business in Delhi. The Appellant, a New York-based company, did not have an office in Delhi but claimed that its business was conducted through a distributor, Variety Book Depot, in Delhi. The court held that merely selling goods through a distributor does not constitute "carrying on business" in Delhi. The court referenced the Supreme Court's decision in Dhodha House v. S.K. Maingi, which clarified that selling goods in a place does not equate to carrying on business there. Therefore, the court concluded that the Appellant did not carry on business in Delhi and thus, the Delhi High Court lacked jurisdiction.

2. Rejection of the plaint under Order 7 Rule 11 CPC:
The Respondents filed an application under Order 7 Rule 11 CPC for rejection of the plaint, arguing that the Delhi High Court did not have jurisdiction. The court reiterated that jurisdiction is determined based on the averments made in the plaint. Since the Appellant did not have a place of business in Delhi and the cause of action did not arise there, the court found that it lacked territorial jurisdiction. The court cited the Supreme Court's ruling in Oil and Natural Gas Commission v. Utpal Kumar Basu, which held that an advertisement in a journal or a paper does not confer jurisdiction. Consequently, the court allowed the Respondent's application and rejected the plaint.

3. Amendment of the plaint under Order 6 Rule 17 CPC:
The Appellant sought to amend the plaint to include additional facts that might establish the Delhi High Court's jurisdiction. The court examined whether it could entertain an amendment application when it lacked jurisdiction based on the original plaint. The court referred to previous judgments, including Wasudhir Foundation v. C. Lal and Sons, which allowed amendments to prevent rejection of the plaint. However, the court distinguished between cases where jurisdictional facts were unclear and those where no jurisdictional facts were present. In the present case, the court found that the original plaint did not disclose any jurisdictional facts. Therefore, it held that it could not entertain the amendment application as it did not have jurisdiction to begin with. The court emphasized that procedural laws should facilitate justice, but they cannot confer jurisdiction where none exists.

Conclusion:
The Delhi High Court dismissed the appeal, upholding the rejection of the plaint and denying the amendment application. The court concluded that it lacked territorial jurisdiction as the Appellant did not carry on business in Delhi, and the cause of action did not arise there. The decision reinforced the principle that jurisdictional facts must be present in the original plaint, and amendments cannot cure a complete absence of jurisdictional facts.