Full Judgment Text
Neutral Citation Number : 2023/DHC/001435
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on : 28.02.2023
+ FAO(OS) (COMM) 286/2019 and C.M. No. 18896/2017
RADICO KHAITAN LTD. ..... APPELLANT
Versus
NAKSHATRA DISTILLERIES & BREWERIES
LTD. & ANR. ..... RESPONDENTS
Advocates who appeared in this case:
For the Appellants: Mr. Sagar Chandra, Ms. Srijan Uppal, Mr.
Abhishek Bhati and Ms. Natasha, K., Advocates
For the Respondents: Mr. Sachin Gupta, Mr. Rohish Arora, Ms. Jasleen
Kaur, Ms. Swati Meena, Ms. Yashi Agrawal and
Ms. Kanika Marwaha, Advocates
CORAM:-
HON’BLE MR. JUSTICE SANJEEV SACHDEVA
HON’BLE MR. JUSTICE TUSHAR RAO GEDELA
JUDGMENT
SANJEEV SACHDEVA, J.
1. Appellant impugns order dated 28.03.2017 whereby the
application under Order VII Rule 11 Code of Civil Procedure (CPC
for short) filed by the respondent has been allowed holding that the
Court does not have the territorial jurisdiction to entertain the suit.
2. Subject Suit for permanent injunction, for restraining the
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respondents from infringing the trademark of the appellant/plaintiff,
passing off, delivery of, rendition of accounts, etc., was filed by the
appellant alleging that the respondents had adopted the trademark
“GOA” and “GO4” of the appellant and that the respondent had also
applied for excise approvals of the labels of alcoholic products.
3. It is contended that the excise application was objected to by
the Appellants, however on 28.04.2015 the office of the
Commissioner State Excise, Maharashtra, Mumbai approved the
labels of respondent of no. 1. Thereafter the subject suit for injunction
has been filed.
4. Respondents filed an application under Order VII Rule 11 CPC
seeking dismissal of the Suit for lack of territorial jurisdiction. It is
contended in the application that the Courts at Delhi do not have the
territorial jurisdiction as neither the respondents are residing in Delhi
nor carrying on their business within the territorial jurisdiction of
Delhi and further that no cause of action has arisen within the
territorial jurisdiction of the Courts at Delhi.
5. It was contended that the registered office of respondent no. 1
and respondent no. 2 was at Mumbai and Pune, respectively and the
manufacturing by respondent no. 1 and the marketing by respondent
no. 2 was in the State of Maharashtra.
6. It was further contended that the mark in issue was in respect of
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alcoholic beverages which is a State excisable product and could not
be sold/marketed unless necessary label approvals are obtained from
the respective State Excise Departments. It is contended that the
approvals were sought from the Maharashtra State Excise Department
and no approval has been sought from the Delhi State Excise
Department.
7. It is further contended that the appellant/plaintiff had an office
at Mumbai and a bottling unit at Aurangabad; both within the State of
Maharashtra and as such the Courts at Delhi had no territorial
jurisdiction.
8. In response to the application, appellant contended that the
registered office of respondent no. 1 was at Solapur, Maharashtra and
that plaintiff had no office in Aurangabad and the bottling unit at
Aurangabad was that of a separate legal entity i.e. a private limited
company in which appellant had a 36% shareholding.
9. It was further contended that the Mumbai office of the appellant
was a subordinate sale office and not the principal place of business.
Further the principal place of business was stated to be at the
corporate office at Delhi though the registered office of the
appellant/plaintiff was at Rampur, Uttar Pradesh.
10. It was further contended that the dynamic effects of
respondents’ action in obtaining an excise clearance was felt in Delhi
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as there was likelihood that the respondent could launch their products
in Delhi. Consequently the Courts at Delhi would have the territorial
jurisdiction to entertain the suit.
11. Learned Single Judge by the impugned order, referring to the
decision of a Division Bench of this Court in Ultra Home
Construction Pvt. Ltd. vs. Purushottam Kumar Chaubey; 2016 (65)
PTC 469 (Del) (DB) (of which one of us, Sanjeev Sachdeva J., was
also a member), held that as part of the cause of action had arisen at a
place where the plaintiff had a subordinate branch office, the suit
would lie only at the subordinate office and not at the principal office.
12. The Division Bench of this Court in Ultra Home Construction
Pvt. Ltd. (Supra ), after considering the judgment of the Supreme
Court in Indian Performing Rights Society Ltd. vs. Sanjay Dalia
(2015) 10 SCC 161 held as under:
“13. It is evident from the above observations that the
interpretation given to the expression “carries on
business” in the context of a defendant under Section 20
of the Code has also been employed in the context of a
plaintiff under the said Sections 134(2) (Trade Marks
Act, 1999) and 62(2) (Copyright Act, 1957). Thus, in
addition to the places where suits could be filed under
Section 20 of the Code, the plaintiff can also institute a
suit under the Trade Marks Act, 1999 and the Copyright
Act, 1957, as the case may be, by taking advantage of the
provisions of Section 134(2) or Section 62(2),
respectively. Both the latter provisions are in pari
materia. Under these provisions four situations can be
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contemplated in the context of the plaintiff being a
corporation (which includes a company). First of all, is
the case where the plaintiff has a sole office. In such a
case, even if the cause of action has arisen at a different
place, the plaintiff can institute a suit at the place of the
sole office. Next is the case where the plaintiff has a
principal office at one place and a subordinate or branch
office at another place and the cause of action has arisen
at the place of the principal office. In such a case, the
plaintiff may sue at the place of the principal office but
cannot sue at the place of the subordinate office. The
third case is where the plaintiff has a principal office at
one place and the cause of action has arisen at the place
where its subordinate office is located. In this
eventuality, the plaintiff would be deemed to carry on
business at the place of his subordinate office and not at
the place of the principal office. Thus, the plaintiff could
sue at the place of the subordinate office and cannot sue
(under the scheme of the provisions of Section 134(2)
and 62(2)) at the place of the principal office. The fourth
case is where the cause of action neither arises at the
place of the principal office nor at the place of the
subordinate office but at some other place. In this case,
the plaintiff would be deemed to carry on business at the
place of its principal office and not at the place of the
subordinate office. And, consequently, it could institute a
suit at the place of its principal office but not at the place
of its subordinate office. All these four cases are set out
in the table below for greater clarity:
S.No. Place of
Plaintiff’s
Place of
Plaintiff’s
Subordinate/
Branch Office
Place where
cause of action
Place where
Plaintiff can
Principal
Office (Sole
arose
additionally
sue under
Section 134(2)
Office in
and section
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62(2)
S.No. 1)
1. A -- C A
2. A B A A
3. A B B B
4. A B C A
13. In the present case, the case of the Plaintiff falls in Category 3.
As per the Appellant/Plaintiff its principal place of business is in
Delhi. Plaintiff also has a subordinate office at Mumbai. The
Respondent applied for excise approval of its labels at Mumbai.
Appellant opposed the approvals at Mumbai, however the opposition
was rejected and approvals were granted at Mumbai.
14. Cause of action is a bundle of facts which the plaintiff needs to
prove in support of its case in order to succeed.
15. In this context reference may be had to the plaint particularly
the paragraph relating to jurisdiction and cause of action which read
as under:-
“CAUSE OF ACTION
The cause of action in the present suit first arose in the
month of February, 2015 when the Plaintiff first became
aware of the activities of Defendant No. 1. The cause of
action further arose in the month of May, 2015 against
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the Defendants when the Plaintiff addressed a cease and
desist notice to the Defendants. The cause of action
further arose in May, 2015, when the Defendant No. I
pleaded in their plaint before the Hon’ble District Court,
Solapur, Maharashtra that they propose to launch the
product in question in the present suit. The cause of
action further arose in June, 2015 when the Defendant
No. 1launched their products bearing the mark ‘GOA’.
The cause of action further arose in June, 2015 when the
Plaintiff got the information that Defendant No. 1 is also
in the process of launching ‘Gin’ bearing the mark
‘G04’. The cause of action in the present case is a
continuous and recurring one and continues till such
time the Defendants are restrained by an order of
injunction of this Hon’ble Court.
JURISDICTION
This Hon’ble Court has the necessary territorial
jurisdiction to entertain and try the present suit by virtue
of Section 134(2) of the Trade Marks Act, 1999, as the
Plaintiff carries on business, works for gain and has it’s
principal place of business within the territorial limits of
this Hon’ble Court. This Hon’ble Court also has the
necessary territorial jurisdiction under Section 20 (c) of
the Code of Civil Procedure, 1908 as a part of the cause
of action in the present suit has arisen within the
territorial limit of this Hon’ble Court as the dynamic
effects of the Defendants’ actions are being felt by the
Plaintiff at Delhi. This Hon’ble Court also has the
necessary territorial Jurisdiction under Section 20 (c) of
the Code of Civil Procedure, 1908 as the Defendants
have launched their product bearing the marks ‘GOA’ as
well as ‘G04’ in the market and therefore there is a
credible and imminent threat that the Defendants will
also launch the impugned products nationally, including
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within the territorial jurisdiction of this Hon’ble Court.
16. In the cause of action paragraph of the plaint, it is alleged that
cause of action arose when a cease and desist notice was issued; when
Defendant No. 1 pleaded in its plaint before the District Court at
Solapur, Maharashtra, that they proposed to launch the product in
question; when the Defendant No. 1 launched their products bearing
the mark ‘GOA’; when the Plaintiff got the information that
Defendant No. 1 was also in the process of launching ‘Gin’ bearing
the mark ‘G04’.
17. Nowhere has it been stated that any part of cause of action arose
in Delhi. The Defendants do not have their office in Delhi; the Suit
was filed in Solapur, Maharashtra, the launch of the product and the
proposed launch was also in Maharashtra.
18. With regard to Delhi, it is alleged in the Jurisdiction paragraph
that “a part of the cause of action in the present suit has arisen within
the territorial limit of this Hon’ble Court as the dynamic effects of the
Defendants’ actions are being felt by the Plaintiff at Delhi.”
19. As per the appellants the dynamic effect of the approval of
labels by the Excise department was felt in Delhi and as such the
courts at Delhi would have jurisdiction. If the dynamic effect of an
approval of excise labels by the Excise Department at Mumbai is felt
at Delhi then its dynamic effect would also be felt at Mumbai, where
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admittedly the appellants have their branch office. If a part of cause of
action has arisen in Mumbai, then applying the ratio of the judgment
in Ultra Home Construction Pvt. Ltd. (Supra ), the jurisdiction would
only lie with the courts at Mumbai and the appellants/plaintiff would
be precluded from suing in Delhi.
20. It may further be noticed that the learned Single Judge has also
noticed that an application under Order VI Rule 17 CPC had been
filed by the plaintiff contending that the respondents had started its
commercial operation.
21. Learned Single Judge noticed that the Label of the product
which was relied on by the appellant specifically stated “for sale in
Maharashtra State only”, which established that the respondents were
affecting sales only in Mumbai and the cause of action would accrue
to the plaintiff at Mumbai and the Courts at Mumbai alone would
have jurisdiction to entertain the suit.
22. Learned Single Judge has rightly held that the averments of the
appellant that the dynamic effects of obtaining an excise clearance at
Mumbai was being felt at Delhi would imply that if dynamic effects is
felt in Delhi then it would also be felt in Mumbai as the sales are to be
effected in the State of Maharashtra.
23. Accordingly, there is no infirmity in the finding returned by the
learned single judge that the courts at Delhi would have no
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jurisdiction and the Suit would lie only in the courts at Mumbai.
24. While holding that the Courts at Delhi had no jurisdiction, the
learned single judge has gone on to consider, what he called as an
ancillary issue: “whether the subordinate office should be the exact
place of cause of action or it is sufficient if there is subordinate office
of the plaintiff in the State in which cause of action has accrued.”
25. Learned Single Judge has held as under:
“15. An ancillary issue also arises for consideration
whether the subordinate office should be the exact place
of cause of action or it is sufficient if there is subordinate
office of the plaintiff in the State in which cause of action
has accrued.
16. The said aspect does not appear to have been
considered in Indian Performing Rights Society Ltd. or in
Ultra Home Construction Pvt. Ltd. or in subsequent
judgment in RSPL Limited Vs. Mukesh Sharma 2016 SCC
OnLine Del 4285 (DB).
17. Having given consideration to the matter, I am of
the view that to read Indian Performing Rights Society
Ltd. supra and the other judgments as requiring the
subordinate office of the plaintiff to be exactly in the
same district in which the State may have been divided
for the purposes of territorial jurisdiction of the Court
would negate the purpose of the judgment. Supreme
Court, in Indian Performing Rights Society Ltd. supra
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held that the object of Section 134 of the Trade Marks
Act is 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. It was further held that the right under
Section 134 to institute suit at a place where plaintiff is
residing, carrying on business is subject to “certain
restrictions, such as in case plaintiff is residing or
carrying on business at a particular place/having its
head office and at such place cause of action has also
arisen wholly or in part, plaintiff cannot ignore such a
place under the guise that he is carrying on business at
other far flung places also.” It was further held “The
interpretation of provisions has to be such which
prevents mischief of causing inconvenience to parties”.
The Supreme Court thus, introduced an element of
‘forum conveniens’ in interpretation of Section 134.
18. Reference to the word “place” in the judgments, in
my opinion has to be construed as the “State”. The
judiciary of the State is one and the division of the
territorial jurisdiction into districts is a matter of
administrative convenience and exigency. All the State
districts would come under the supervision of the High
Court of the State and thus the words “place” has to be
read as the “State” within which cause of action has
arisen, even if cause of action may have been arisen in
any particular district of the State and not in the district
or the city where the subordinate office of the plaintiff is
situated.”
26. Learned Single Judge has held that a reference to the word
‘place’ in Indian Performing Rights Society Ltd. Vs. Sanjay Dalia;
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2015 (10) SCC 161; has to be construed as the “State”. Learned
Single Judge has held that the judiciary of the State is one and the
division of the territorial jurisdiction into districts is a matter of
administrative convenience and exigency and all the said districts
given under the supervision of the High Court of the State and within
the word ‘place’ has to be read as ‘State’ within which the cause of
action has arisen and even if cause of action may have arisen in any
particular district of the State and not in the district or the city where
the subordinate office of the plaintiff is situated.
27. We are of the view that after holding that the cause of action
had arisen in Mumbai and that the Appellant/Plaintiff had a
subordinate office in Mumbai, there was no necessity for the learned
single judge to have opined upon the so called ancillary issue.
28. We are also in respectful disagreement with the observations of
the learned single judge that ‘place’ has to be read as ‘State’ for the
reason that judiciary of a State is not divided into districts as a matter
of mere administrative convenience or exigency for the reason that
division of a State into Districts has a historical background and
statutory significance.
29. Such an interpretation would also fall foul of Section 134 of the
Trade marks Act, 1999, which reads as under:
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“134. Suit for infringement, etc., to be instituted before
District Court.—(1) No suit—
(a) for the infringement of a registered trade mark; or
(b) relating to any right in a registered trade mark; or
(c) for passing off arising out of the use by the
defendant of any trade mark which is identical with or
deceptively similar to the plaintiff’s trade mark, whether
registered or unregistered,
shall be instituted in any court inferior to a District
Court having jurisdiction to try the suit.
(2) For the purpose of clauses (a) and (b) of sub-
section (1), a ―District Court having jurisdiction shall,
notwithstanding anything contained in the Code of Civil
Procedure, 1908 (5 of 1908) or any other law for the
time being in force, include a District Court within the
local limits of whose jurisdiction, at the time of the
institution of the suit or other proceeding, the person
instituting the suit or proceeding, or, where there are
more than one such persons any of them, actually and
voluntarily resides or carries on business or personally
works for gain.
Explanation.—For the purposes of sub-section (2),
―person includes the registered proprietor and the
registered user.”
30. Further, we may note that jurisdiction is conferred on Districts
and District Judges not only by the Constitution of India, Code of
Civil Procedure, Criminal Procedure Code, but also several Statutes
inter alia , Arbitration and Conciliation Act, 1925, Commercial Courts
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Act, 2016, Companies Act, 2013, Consumer Protection Act, Patents
Act, 1970, Copyright Act, 1957, Trade Marks Act 1999, Indian
Succession Act, 1925 etc.
31. However, this discussion need not detain us any further for the
reason that in the facts of the present case, this ancillary issue does not
arise for consideration, Furthermore part of the cause of action has
admittedly arisen in Mumbai, where the Appellant/Plaintiff has its
branch office.
32. We accordingly hold that the observations of the learned single
judge in paragraphs 15 to 18 of the impugned judgment, extracted
hereinabove, in so far as they hold that ‘Place’ has to be read as
‘State’ are obiter dicta and not to be taken as a binding principle of
law.
33. In view of the above, we find no infirmity in the impugned
order holding that the Courts at Delhi have no jurisdiction. The appeal
in accordingly dismissed. There shall be no orders as to costs.
SANJEEV SACHDEVA, J
TUSHAR RAO GEDELA, J
FEBRUARY 28, 2023
‘ rs’
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