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2016 (1) TMI 952 - DELHI HIGH COURT

2016 (1) TMI 952 - DELHI HIGH COURT - TMI - Territorial jurisdiction - Seeking permanent injunction restraining the infringement of trade mark, passing off and damages etc. - Held that:- no doubt law entitles a plaintiff to file a suit where a cause of action arises in whole or in part in Delhi and even if neither the plaintiff nor the defendant resides or carries on business at Delhi, however, I find it very peculiar for the plaintiff/Company in the present suit which has its office at Mumbai i .....

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a court having territorial jurisdiction where a suit is instituted, yet, if the court where the suit is filed finds that the suit can be well tried more conveniently at other place which also has the territorial jurisdiction, then in such cases the appropriate High Court is entitled to transfer the suit to other convenient place which otherwise has jurisdiction and where the suit would be more appropriately tried i.e the principle of forum conveniens so far as the parties to the suit are concer .....

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, passing off and damages etc. (ii) In both the suits i.e CS(COMM) Nos.53/2015 and 54/2015, the plaintiff is a company registered under the Companies Act, 1956 and it has no office in Delhi be it a principal office or a head office or a registered office or even a branch office. Plaintiff s address as per the memo of parties is at Mumbai. (iii) Defendants in CS(COMM) No.53/2015 as per the address given in the memo of parties in the plaint are situated outside Delhi i.e at Gurgaon and the defenda .....

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is para 34 of the plaint and this para 34 reads as under:- 34. This Hon ble Court also has jurisdiction to entertain and try the present suit under section 134(2) of the Trade Marks Act, 1999 on account of the fact that the Plaintiff carries on business within the jurisdiction of the Hon ble Court. The Plaintiff s ticketing services are availed by consumers in Delhi, for events, performances and shows held in Delhi. Contracts and/or transactions are entered into between the Plaintiff and its cu .....

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Division and Commercial Appellate Division of High Court Ordinance, 2015. The plaintiff has not filed any other similar suit or any other proceedings against the Defendants either before this Hon ble Court or any other Court. 3. Before the commencement of dictation of this judgment, and even right at the inception, I put it to the counsel for the plaintiff that it is advisable, of course subject to discretion of the plaintiff, that plaintiff can amend the suit so that the territorial jurisdictio .....

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tion with reference to the cause of action of the activities of the defendants and not because of the plaintiff s carrying on business in Delhi as per Section 134 of the Trade Marks Act, 1999. Learned counsel for the plaintiff however states that plaintiff does not seek to so amend the suit plaint and this Court can proceed ahead to decide the issue of territorial jurisdiction and places reliance upon the judgment passed by a Division Bench of this Court in the case of World Wrestling Entertainm .....

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. As pointed out above, it is also not the appellant/ plaintiff s case that it has an office in Delhi. The question then arises as to whether the third condition specified in Dhodha House (supra) is satisfied or not. If we recall, in Dhodha House (supra), the Supreme Court had observed that the expression carries on business , as appearing in the above two provisions, is much wider than what the expression in normal parlance connotes because of the ambit of a civil action within the meaning of S .....

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in Delhi directly inasmuch as its goods and services are sold to consumers in Delhi through its website which is accessed in Delhi. It is on this basis that the learned counsel for the appellant/ plaintiff submitted that the decision in Dhodha House (supra) as also in Archie Comic (supra) would really not be applicable in the present case as in those decisions web-based business models, which have been referred to as the new media , were not considered. The question which then arises is whether .....

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But, we are not concerned with the question of cause of action between the appellant/ plaintiff and its customers in Delhi because the defendants are not such customers and they are, in any event, all residents of Mumbai. What we are examining is whether the third condition specified in Dhodha House (supra) is satisfied or not. In other words, if the contracts and/ or transactions entered into between the appellant/ plaintiff on the one hand and its customers are being concluded in Delhi, can it .....

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e so. Because of the advancements in technology and the rapid growth of new models of conducting business over the internet, it is possible for an entity to have a virtual presence in a place which is located at a distance from the place where it has a physical presence. The availability of transactions through the website at a particular place is virtually the same thing as a seller having shops in that place in the physical world. Let us assume for the sake of argument that the appellant/ plai .....

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No doubt, the judgment of the Division Bench holds that where internet transactions take place, there would be territorial jurisdiction at the place where internet transaction is done by accessing the website, however, the Division Bench in the judgment in the case of World Wrestling Entertainment (supra) does not deal with the situation qua internet transactions as to when the plaintiff is a corporation viz a company registered under the Companies Act, 1956 and whether there is carrying on bus .....

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ed by the Division Bench in the judgment in the case of World Wrestling Entertainment (supra). 5. In a suit which is filed, the plaintiff in such a suit may be either a natural person or a legal entity. If the plaintiff is a natural person, then, the position of carrying on of a business by such a natural person will not be similar to the position which would emerge when the plaintiff would not be a natural person but would be a legal entity such as a company. In law, and as discussed below, dis .....

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registered or head office or a branch office is also and necessarily situated at the place where cause of action arises inasmuch as because of Section 20(a) CPC with its Explanation carrying on business is inextricably linked to the plaintiff/company also having an office where it carries on business. In law unless a company has an office at a place, it cannot be said to be carrying on business at that particular place. This peculiarity takes place because of the Explanation to Section 20 CPC an .....

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es 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 .....

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bove, 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 .....

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ose 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". 12. 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 .....

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e 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 .....

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rdinate 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 .....

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given by the Supreme Court itself, shows that the Supreme Court has held that where the suit is filed against a company, carrying on business by a company can only be alongwith existence of a head office or a registered office or a principal office or a branch office at the place where the cause of action arises. Putting it in other words, arising of cause of action, when a plaintiff or a defendant (as discussed below) is a company, has to be taken not independently of arising of cause of action .....

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ds the aspect of carrying on of a business when a plaintiff is a company has been considered by the Supreme Court in the recent judgment in the case of Indian Performing Rights Society Limited Vs. Sanjay Dalia and Another (2015) 10 SCC 161 and in which judgment the Supreme Court in the relevant paras, wherever it uses the expression carries on business has used this expression with a slash(/) i.e the expression slash is used so as to distinguish those cases where carrying on business so far as a .....

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s Act, an additional forum has been provided by including a District Court within whose limits the Plaintiff actually and voluntarily resides or carries on business or personally works for gain. The object of the provisions was to enable the Plaintiff to institute a suit at a place where he or they resided or carried on business, not to enable them to drag Defendant further away from such a place also as is being done in the instant cases. In our opinion, the expression "notwithstanding any .....

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the venue where the Defendant or any of them resides, carries on business or personally works for gain. Section 20(c) of the Code of Civil Procedure enables a Plaintiff to institute a suit where the cause of action wholly or in part, arises. The Explanation to Section 20 Code of Civil Procedure has been added to the effect that 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 subordina .....

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nce the corporation has a subordinate office in the place where the cause of action arises wholly or in part, it cannot be heard to say that it cannot be sued there because it did not carry on business at that place. The linking of the place with the cause of action in the Explanation where subordinate office of the corporation is situated is reflective of the intention of the Legislature and such a place has to be the place of the filing of the suit and not the principal place of business. Ordi .....

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ance Co. Ltd. In the case of companies registered under the Companies Act, the controlling power is, as a fact, generally exercised at the registered office, and that office is therefore not only for the purposes of the Act, but for other purposes, the principal place of business, as held in Watkins v. Scottish Imperial Insurance Co. A company may have subordinate or branch offices in fifty different jurisdictions and it may be sued in any one of such jurisdictions in respect of a cause of actio .....

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as arisen wholly or in part, where the Plaintiff is residing or having its principal office/carries on business or personally works for gain, the suit can be filed at such place/s. Plaintiff (s) can also institute a suit at a place where he is residing, carrying on business or personally works for gain de hors the fact that the cause of action has not arisen at a place where he/they are residing or any one of them is residing, carries on business or personally works for gain. However, this right .....

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ff. The rule of convenience of the parties has been given a statutory expression in Section 20 of the Code of Civil Procedure as well. The interpretation of provisions has to be such which prevents the mischief of causing inconvenience to parties. 19. The intendment of the aforesaid provisions inserted in the Copyright Act and the Trade Marks Act is to provide a forum to the Plaintiff where he is residing, carrying on business or personally works for gain. The object is to ensure that the Plaint .....

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orporation is having ordinary residence/principal place of business and cause of action has also arisen at that place, it has to institute a suit at the said place and not at other places. The provisions of Section 62 of the Copyright Act and Section 134 of the Trade Marks Act never intended to operate in the field where the Plaintiff is having its principal place of business at a particular place and the cause of action has also arisen at that place so as to enable it to file a suit at a distan .....

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to a plaintiff as held in the judgment in the case of Sanjay Dalia and Another (supra). 8. A conjoint reading of the ratios of the judgments of the Supreme Court in the cases of Patel Roadways Limited, Bombay (supra) and Sanjay Dalia and Another (supra) shows that wherever a plaintiff or a defendant is a corporation, carrying on business by such a corporation or a company necessarily has to be taken alongwith existence of a branch office or a principal office or a registered office, with the pl .....

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ld have territorial jurisdiction, but, as stated above by the counsel for the plaintiff, plaintiff only wants to place reliance upon the ratio of the judgment in the case of World Wrestling Entertainment (supra) with respect to arising of cause of action qua internet transactions qua the plaintiff carrying on business and not impugned activities of the defendants, and hence, the judgment in the case of World Wrestling Entertainment (supra) relied upon does not apply because this judgment does no .....

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