Full Judgment Text
$~3
* IN THE HIGH COURT OF DELHI AT NEW DELHI
th
Date of Decision: 24 May, 2022
+ CRP-IPD 2/2022 & CM APPL. 20304/2022
SHAKTHI FASHION & ANR. ..... PETITIONERS
Through: Mr. Vijay Kasana & Mr. Nishant
Maidasani, Advocates (M-
9910352622)
versus
BURBERRY LIMITED ..... RESPONDENT
Through: Mr. Sudarshan Kumar Bansal, Mr.
Rishi Bansal & Mr. Nikhil Sonker,
Advocates (M-77260211940)
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J.(Oral)
1. This hearing has been done through hybrid mode.
2. The present revision petition has been filed challenging the impugned
order dated 21st December, 2021 passed by the ld. Commercial Court
concerning the application filed by the Petitioners/Defendants (hereinafter,
“Defendant”) under Order VII Rule 11 CPC seeking rejection of the plaint
on the ground of territorial jurisdiction. The application was dismissed by
the ld. Commercial Court.
3. The case of the Respondent/Plaintiff (hereinafter, “Plaintiff” ) is that
the Plaintiff is the owner of the mark ‘BURBERRY’ and is in the business
of selling luxury garments across the world and in India. The mark is
registered in India under trademark application no. 905511.
4. The Plaintiff is involved in manufacture, distribution, sale of ready to
wear apparels, clothing, shoes, handbags, cosmetics, fragrances, sunglasses,
footwear, bags, leather goods, belts, etc. The Plaintiff is the owner and
Signature Not Verified
Digitally Signed
By:DEVANSHU
JOSHI
CRP-IPD 2/2022 Page 1 of 12
proprietor of the marks ‘BURBERRY’, ‘BURBERRY EQUESTRIAN
KNIGHT LOGO’, ‘CHECK’ device and various ‘BURBERRY’ formative
trademarks/labels.
5. The Plaintiff preferred a suit CS(COMM) 526/20 , before the
Commercial Court against M/s Shakthi Fashion and APB Designs for
infringement of copyright, trademark, passing off, damages, delivery up, etc.
The case of the Plaintiff is that the Defendants are indulging in selling
counterfeit ‘BURBERRY’ branded goods. The said goods are also promoted
by the Defendants on the website, including on IndiaMart.
6. Prior to the filing of the suit before the Commercial Court, the
Plaintiff lodged a complaint leading to a First Information Report
(hereinafter, “FIR”) in Bangalore for investigating the Defendants’
activities. As per the FIR, a large volume of goods bearing the mark
‘BURBERRY’, as well as thousands of labels and tags, shirts, etc. were
seized.
7. Following the said seizure, the Plaintiff filed the present suit seeking
permanent injunction to protect the mark ‘BURBERRY’. In the plaint, the
jurisdiction paragraph reads as under:
“42 .That the cause of action for filing the present suit
has been set out in preceding paras of the Plaint. The
cause of action earlier arose in August, 2019 when
upon receiving credible information, the Plaintiff
learnt that the Defendants are manufacturing,
soliciting, selling, marketing and trading the impugned
goods under the Plaintiff’s said trademark/label in the
City of Bangalore, Kamataka. The cause of action
arose again on 24.08.2019, whena Criminal
Complaints under Section 63 of the Copyright Act,
1957 were filed against Defendant No. 1 & 2 through
Signature Not Verified
Digitally Signed
By:DEVANSHU
JOSHI
CRP-IPD 2/2022 Page 2 of 12
the representatives of the Plaintiff and subsequently the
same culminated into FIR no. 0199/2019. The FIR No.
0199/2019 was lodged at Bomanhalli Police Station,
Bangalore. The cause of action further arose when the
search and seizure action was conducted on
24.08.2019 which saw the huge seizure of impugned
counterfeit goods under the impugned trade Mark/label
from the premises of Defendants. The cause of action
has now arisen again in the second week of October
2020, when the Plaintiff was informed through the
sources of markets and the trade that the
representatives/concerned persons of the Defendants
have started soliciting, networking about the impugned
goods under the impugned trademark/label in markets
of New Delhi. The cause of action also accrued when
the Plaintiff caused an inquiry in the market, which
revealed that the Defendants have not only started
networking and soliciting but also procured orders
from some dealers in New Delhi for supplying
counterfeit goods under the impugned Trade
Mark/Label. The cause of action further accrued when
the Plaintiff learnt that there has been meticulous
planning to sell the counterfeit goods in the markets of
New Delhi under the impugned trademark/label in a
clandestine and surreptitious manner The cause of
action is still continuing and is accruing day-by-day
and shall continue to so accrue till the Defendants
ceases with their impugned adoption and user the
impugned Trade Mark in relation to impugned goods.
43.That this Hon'ble Court has the territorial
jurisdiction to try and adjudicate the present suit. The
Defendants are soliciting, networking, has intention to
sell their impugned goods and business under the
impugned trademarks/labels in the markets of New
Delhi viz. Connaught Place, Sarojini Nagar, Naraina,
South Extension and adjoining areas. The Defendants
are soliciting the impugned goods
Signature Not Verified
Digitally Signed
By:DEVANSHU
JOSHI
CRP-IPD 2/2022 Page 3 of 12
manufactured by it through third party websites on the
internet such as www.indiamart.com. which are
interactive in nature and can be accessed by general
consumers in New Delhi. The Plaintiff has a strong
and credible apprehension that the Defendant will
expand their operations under the impugned trading
style/ trade mark in New Delhi and the threat that the
Defendant will use the impugned trademarks/ labels
within the jurisdiction of this Hon'ble Court is credible
and imminent, thus, giving rise to a substantial and
integral part of the cause of action within the
jurisdiction of this Hon'ble Court. Further the above
apprehended activities of the Defendants will be within
the jurisdiction of this Hon'ble Court. In addition the
Defendant's infringing activities are likely to have a
dynamic effect on the Plaintiffs business, both current
and forthcoming, within the
territory of New Delhi. It is evident that the dynamic
effect of the Defendant’s activities are being felt in
New Delhi and there exists an undeniable nexus
between the cause of action in the present suit and the
territory of New Delhi. Thus whole or part of cause of
action for filing the suit has arisen within the
territorial jurisdiction of this Hon’ble Court within the
meaning of Section 20 of Code of Civil Procedure,
1908. Further the Plaintiff is also carrying on its said
goods and business under its said trade mark in New
Delhi through its exclusive store located at Emporio
Mall, Nelson Mandela Marg, Vasant Kunj II, Vasant
Kunj, New Delhi, Delhi 110070 and other dealers and
distributors within the jurisdiction of this Hon’ble
Court. The Plaintiff has extensive goodwill and
reputation under the said trademark on account of
voluminous sales and advertisement within the
jurisdiction of this Hon’ble Court. The Plaintiff’s
goods are also available, sold, purchased and
delivered through its interactive websites
www.burberry.com as well as through big online
Signature Not Verified
Digitally Signed
By:DEVANSHU
JOSHI
CRP-IPD 2/2022 Page 4 of 12
marketplaces like Flipkart, Amazon, Snapdeal etc.
which are freely accessible including within the
jurisdiction of this Hon’ble Court. This Hon’ble Court
thus further has the territorial jurisdiction within the
meaning of Section 134(2) of the Trade Marks Act,
1999 and also under Section 62 (2) of the Copyright
Act, 1957. ”
8. The case of the Defendants in the written statement was that they had
not sold the products in Delhi and, therefore, the Court lacks territorial
jurisdiction. The Defendants claimed that no selling unit/ production unit of
the Defendants is working in Delhi. The Defendants also moved an
application under Order VII Rule 11 CPC with the prayer to reject the plaint
on the ground of territorial jurisdiction. The said application was rejected by
the Commercial Court on the ground that the Court has territorial
jurisdiction as the Defendants are offering their products for sale through
web-portal as also through dealers. It is also clear that the Defendants’ are
selling counterfeit goods in a clandestine manner. The finding of the
Commercial Court is as under:
“7. Ld. Counsel for the plaintiff / non-applicant
submitted that at the stage of application under order 7
rule 11 CPC court is required to consider only the
averments of the plaint and the documents annexed
with it at the time of institution of the suit on its face
value. It was also submitted that at this stage court
cannot consider the written statement or the documents
filed by the defendants. In the plaint, plaintiff has
clearly alleged that defendants are procuring the
orders from Delhi and offering to sell his goods
through web-portal. It is also alleged in plaint that the
defendants have met dealers in New Delhi for sale of
their counterfeit goods.
8. Though it has been stated in the plaint that plaintiff
Signature Not Verified
Digitally Signed
By:DEVANSHU
JOSHI
CRP-IPD 2/2022 Page 5 of 12
is selling its goods in a mall at New Delhi, the
territorial jurisdiction of this court has been invoked
mainly on the grounds of cause of action as per section
20 of the Code of Civil Procedure. It is established
principal of law that at this stage court is required to
look into the averments of the plaint and documents
filed by the plaintiff and cannot go into the written
statement and the pleas raised by the defendant in its
documents. In my opinion, plaintiff has sufficiently
stated in the plaint that defendants are offering their
goods for sale through a web-portal as well as through
dealers. It is clearly stated that defendants are
planning to sell counterfeit goods in the territorial
jurisdiction of this court in a clandestine manner. At
this stage, court cannot enter into the roving enquiry
into the merits or demerits of the respective contentions
based on disputed facts. Prima-facie, from the
averments of the plaint and the documents filed on
record by the plaintiff, the cause of action has been
established to be within the territorial jurisdiction of
this court to entertain the suit.”
9. Ld. counsel for the Plaintiff relies upon the following judgements of
this Court to argue that the Indiamart website where there is an alleged
listing of the Defendant’s product, firstly doesn’t belong to the Defendant
and the same is not even an interactive website and, therefore, the Court
would not have jurisdiction. He submits that there is not even a trap
transaction. Ld. Counsel relies upon the judgements listed hereinbelow:
i. Banyan Tree Holding (P) Limited Vs. A Murali Krishna Reddy and
Ors., 2010 (42) PTC 361 (Del)
ii. Indovax Pvt. Ltd. v. Merck Animal Health and Ors., 2017 (71) PTC
647 (Del)
10. Furthermore, the Ld. counsel for the Plaintiff states that the IndiaMart
Signature Not Verified
Digitally Signed
By:DEVANSHU
JOSHI
CRP-IPD 2/2022 Page 6 of 12
website has listed the Defendant’s products online on its own prerogative,
and that these products are not related to the Defendants products. It is
claimed that the Defendants are only carrying on their business exclusively
in Bangalore. Therefore, the submission is that since there is no purposeful
availment and the effects test has not been satisfied, the Commercial Court
has no territorial jurisdiction.
11. On the other hand, Mr. Bansal, ld. Counsel appearing for the Plaintiff
submits that this is a case of gross misuse of the Plaintiff’s mark. For the
purpose of an application under Order VII Rule 11 CPC, only the averments
in the prayer need to be seen. He relies upon the facts recorded in the
abovementioned FIR wherein the Police has recorded in detail the conduct
of the Defendants. Reliance is placed upon the website listing on IndiaMart
which is noted as, ‘Shakti Fashion, Bengaluru, Bommanahalli, Bengaluru,
Karnataka’. Furthermore, ld. Counsel refers to the seizure memo filed by the
Plaintiff to exhibit that the raid was conducted in Bommanahalli on the
Defendants, although the exact address may vary slightly. He submits that
the large volume of products found during the seizure shows that the
Defendants were undoubtedly involved in manufacturing counterfeit
garments with counterfeit labels, tags and with the device mark of
‘BURBERRY’. He further submits that the existence of the Defendant’s
products on the listing on IndiaMart has been admitted by the Defendants in
the written statement at pages 266 and 267. Since the existence of the listing
on the website is not disputed, even though IndiaMart may have picked the
listing of Defendant No.1 on their own prerogative, the case is not one for
return of the plaint.
12. The Court has perused the pleadings and documents. The first and the
Signature Not Verified
Digitally Signed
By:DEVANSHU
JOSHI
CRP-IPD 2/2022 Page 7 of 12
foremost feature in this case is the website of IndiaMart where the
Defendant No.1’s business is clearly advertised as ‘Shakti Fashion,
Bengaluru, Bommanahalli, Bengaluru, Karnataka’ . Furthermore, IndiaMart
clearly permits enquiries for the garments which are advertised on the said
website. It is possible to obtain information about the said products, such as
the price and details of garments, girls garments, ladies fashion garments
and ladies woven garments. Defendant No.1’s listing also has the feature of
‘get touch with us’, ‘about us’, ‘contact us’, ‘send e-mail’, ‘view mobile
number’, ‘submit requirements’ , etc.
13. The Court notes that the Defendants challenge the said listing on the
ground that the said listing has not been provided by them and that the
IndiaMart website has automatically uploaded the said listing. This would be
a question of fact which would require trial and evidence to be led. The ld.
Counsel for the Petitioners does not dispute that the said listing does not
belong to the said Defendant. Even if the Defendants’ plea is accepted, the
question as to how a name identical to the Defendant’s, with the same
address of Bommanahalli, Bengaluru appears on the IndiaMart website
would also be a question of evidence. The Court cannot give an opinion at
this stage.
14. Moreover, from the seizure memo which has been placed on record, it
is clear that the ‘BURBERRY’ labels, marks, tags and products are available
with the Defendant in the tune of thousands of products. The Defendants
also have a three story building wherein there are 22 tailoring machines on
the first floor, 40 tailoring machines on the second floor and duplicate shirts
were also found. Ld. counsel has handed over the photographs of Defendant
No.1’s premises which shows that the tags which are being used are
Signature Not Verified
Digitally Signed
By:DEVANSHU
JOSHI
CRP-IPD 2/2022 Page 8 of 12
identical to the ‘BURBERRY’ tags. The packaging material and the labels
also bear the ‘BURBERRY’ logo and name.
15. Considering the facts stated above, such as a huge quantum of goods
being seized by the Police, at this stage it cannot be held categorically that
the Defendants did not intend to sell or offer their products in Delhi. The
numerous piles of clothes bearing the ‘BURBERRY’ mark are extremely
revealing and show that a large operation was being conducted by the
Defendants. The unit appears to be a substantial manufacturing unit having
several tailoring machines. The submission of the Defendants that the said
products were imported from China and the labels were being removed at
this stage does not appear to be prima facie correct.
16. The Defendants’ business having been advertised in Delhi enables the
jurisdiction of this Court to be invoked, as was clarified in Burger King
Corporation vs. Techchand Shewakramani & Ors, 2018 , the operative
portion of which is set out below;
“21. Thus, jurisdiction of a Court in a trade mark action,
could be invoked where there is use upon or in relation to
goods. The phrase ‘in relation to’ has been interpreted to
include advertising, promotion, publicity, etc. Thus, in
addition to actual sale of goods and providing services, if
a person advertises his or her business under the mark in
a territory, promotes his or her business under the mark
in a territory or for example invites franchisee queries
from a particular territory, sources goods from a
particular territory, manufactures goods in a particular
territory, assembles goods in a particular territory,
undertakes printing of packaging in a particular
territory, exports goods from a particular territory, it
would constitute `use of a mark’.
22. This scheme of the TM Act is amply clear from a
Signature Not Verified
Digitally Signed
By:DEVANSHU
JOSHI
CRP-IPD 2/2022 Page 9 of 12
reading of Sections 28 and 29 as also Section 56. Under
Section 28, the rights conferred are the exclusive right to
use of a mark. Under Section 29, use of a mark could be
any form of use, including –
as part of a trade name or a corporate name or name
of a business concern [Section 29(5)]
use by affixing it to products/services [Section
29(6)(b)];
use by affixing it to packaging [Section 29(6)(b)];
use by offering goods/services for sale;
use for the purpose of import or export [Section
29(6)(c)];
use on business papers [Section 29(6)(d)];
use in comparative advertising which is detrimental to
distinctive character or repute of the mark [Section
29(4)]
use in advertising [Section 29(7)].
Applying a mark in a territory for purposes of export of
goods/services [Section 56(1)]
Use by which a trade connection is created between the
user and the proprietor [Section 56 (2)].
23. Thus, when Section 20 of the CPC provides that a suit
could be filed in any place where the cause of action
arises, in a suit involving rights in a trademark, cause of
action arises in each and every place where there is any
form of use of the said mark. Principles which apply to
infringement, actions to determine ‘use’ would equally
apply to passing off actions”
17. In addition, the quantum of seizure which has been made in the
seizure memo and the possibility of the Defendants clandestinely selling the
products in Delhi, cannot be ruled out at this stage. In RSPL Limited Vs.
Mukesh Sharma and Ors 2016 , the ld. Division Bench of this Court has
held that the question of jurisdiction in some cases could be a mixed
question of facts and law, as explained below;
Signature Not Verified
Digitally Signed
By:DEVANSHU
JOSHI
CRP-IPD 2/2022 Page 10 of 12
“8. For now, it is sufficient to record that
admittedly the appellant/plaintiffs registered office is
at Kanpur. The defendants also have their office at
Bulandshahar, U.P. It is also averred in the plaint
that the plaintiff has a corporate office in Delhi. The
plaint also avers that since the respondents were
conducting, soliciting, rendering services under the
impugned trade name-GHARI TRADEMARK
COMPANY-within the jurisdiction of this Court, this
Court would have the jurisdiction to entertain the
suit.
9. The learned Single Judge, in our view,
correctly focused on the issue of the location of the
cause of action. But, in our view, the learned Single
Judge erred in concluding that no part of the cause
action had arisen in Delhi.
XXX
17. XXX
It is important to note that merely quoting the words
of a provision like the chanting of a mantra does not
amount to stating material facts. As observed by the
Supreme Court, material facts would include a
positive statement of facts as also a positive
averment of a negative fact, if necessary. It has
further been elaborated that material facts are such
‘preliminary’ facts which must be proved at the trial
by a party to establish the existence of a cause of
action. It, therefore, follows that if a plaintiff were
merely to state that a court has territorial
jurisdiction to try and adjudicate a suit, that would
not be sufficient. The plaintiff would have to plead
as a fact as to how the court would have territorial
jurisdiction. But, at the same time, the plaintiff
would not have to give details of that material fact
or the evidence by which the material fact is to be
proved. ”
Signature Not Verified
Digitally Signed
By:DEVANSHU
JOSHI
CRP-IPD 2/2022 Page 11 of 12
17. In the present case, the said principle would be applicable inasmuch
as the IndiaMart listing and the clandestine sales as also the advertising of
the products and business of the Defendants in Delhi would require
evidence. Therefore, it cannot be held that the impugned order is incorrect at
this stage. Accordingly, the present revision petition is dismissed.
18. On the question of jurisdiction, an issue would be framed by the
Commercial Court and evidence would be led. The observations made in
this order as also in the impugned order dated 21st December, 2021 shall not
affect the adjudication of the issue of territorial jurisdiction post trial.
19. The petition is disposed of in these terms.
20. All pending applications are also disposed of.
PRATHIBA M. SINGH
JUDGE
MAY 24, 2022
Rahul/SS
Signature Not Verified
Digitally Signed
By:DEVANSHU
JOSHI
CRP-IPD 2/2022 Page 12 of 12