Dhodha House Vs. S.K. Maingi & Patel Field Marshal Industries and Ors. Vs. P.M. Diesel Limited

Dhodha House Vs. S.K. Maingi & Patel Field Marshal Industries and Ors. Vs. P.M. Diesel Limited

(2006) 9 SCC 41

In this matter, there were two civil appeals before the Hon’ble Supreme Court.

Facts: 1st Civil Appeal

Appellant filed a suit against the Respondent to protect his copyright, trade marks and common law rights as regard his art work/ trade mark.

As per the Appellant, the said art work/trade mark/ infringes the Appellant’s trade mark ‘Dhodha House’ under the 1958 Act, as also copyright registered under the Copyright Act, 1957. Appellant carried business of sweet meats in Ghaziabad. Respondent carried similar business in the name and style of M/s. V.R.K. Todha Sweet House at Kotkapura in the district of Faridkot.

Appellant filed a suit before the District Judge, Ghaziabad. The Addl. District Judge passed an order of injunction. Respondent filed an appeal before the High Court of Allahabad. High Court held that the Ghaziabad Court had no territorial jurisdiction to try the suit. Against the said order, the Appellant approached the Supreme Court.

Facts: 2nd Civil Appeal

Respondent and Appellants carry on business in diesel engines at Rajkot. Respondent filed a suit before the Delhi High Court towards infringement of trade mark, copyright, passing off by Respondent. In the suit it was alleged that goods manufactured by the Appellants with the plaintiff’s trade marks are being sold in Delhi and the jurisdiction of this Hon’ble Court is also attracted in view of Section 62(2) of the Copyright Act.

Single Judge held that the Court does not have territorial to try the matter. Respondent preferred an appeal before the Division Bench. The said appeal was allowed. Against the order of the Division Bench Respondent preferred an appeal before the Supreme Court.

Thus, in both the impugned orders there were contradictory views.

Issue:

Whether causes of action in terms of both the 1957 Act and the 1958 Act although may be different, would a suit be maintainable in a court only because it has the jurisdiction to entertain the same in terms of Section 62(2) of the 1957 Act?

Court’s Observations:

The said question was answered in negative citing the following reasons:

• Jurisdiction of the Court to determine a lis under Copyright Act, 1957 as also the Trade and Merchandise Marks Act, 1958 Act must, thus, be instituted where the whole or a part of cause of action arises.

• Sub-section (2) of Section 62 of the 1957 Act provides for an additional forum. Admittedly, no such additional forum had been created in terms of the provisions of the 1958 Act. The Parliament while enacting the Trade and Merchandise Marks Act in the year 1958 was aware of the provisions of the 1957 Act. It still did not choose to make a similar provision therein. However, the Parliament while enacting the Trade Marks Act, 1999 provided for such an additional forum by enacting sub-section (2) of Section 134 of the Trade Marks Act.

• The court shall not, it is well well-settled, readily presume the existence of jurisdiction of a court which was not conferred by the statute.

• We are not concerned in this case with the maintainability of a composite suit both under the 1957 Act and the 1958 Act. Indisputably, if such a situation arises, the same would be permissible; but the same may not be relevant for the purpose of determining the question of a forum where such suit can be instituted.

• Section 62 (2) of the Copyright Act, 1957 Act does not confer jurisdiction upon a court where the plaintiff resides, if a cause of action arises under the 1958 Act.

• Order II Rule 3 of the Code provides that the plaintiff may unite in the same suit several causes of action. By necessary implication, a cause of action for infringement of Copyright and a cause of action for infringement of Trade Mark or a cause of action of passing off would be different. Even if one cause of action has no nexus with another, indisputably Order II Rule 3 may apply. However, by reason of application of Order II Rule 3 of the Code ipso facto would not confer jurisdiction upon a court which had none so as to enable it to consider infringement of trade mark under the Copyright Act, 1957 as also the Trade and Merchandise Marks Act, 1958.

• 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.

• 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.

• In the event, the averments in the plaint disclose a cause of action under the Copyright Act, indisputably, the same would survive but if the cause of action disclosed is confined only to infringement of Trade and Merchandise Act, or of passing off an action, the suit would not be maintainable.

• For our purpose, the question as to whether the defendant had been selling its products in Delhi or not is wholly irrelevant. It is possible that the goods manufactured by the plaintiff are available in the market of Delhi or they are sold in Delhi but that by itself would not mean that the plaintiff carries on any business in Delhi.

• For the purpose of attracting the jurisdiction of a court in terms of Section 62 (2) of the Copyright Act, 1957, the conditions precedent specified therein must be fulfilled, the requisites wherefor are that the plaintiff must actually and voluntarily reside to carry on business or personally work for gain.

• 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.

The Supreme Court went ahead and also explained the scope of the expression ‘carries on business’ as provided in Section 62(2) of the Copyright Act, 1957 in the following words:

“The expression ‘carries on business’ and the expression ‘personally works for gain’ connotes two different meanings. For the purpose of carrying on business only presence of a man at a place is not necessary. Such business may be carried at a place through an agent or a manager or through a servant. The owner may not event visit that place. The phrase ‘carries on business” at a certain place would, therefore, mean having an interest in a business at that place, a voice in what is done, a share in the gain or loss and some control there over. The expression is much wider than what the expression in normal parlance connotes, because of the ambit of a civil action within the meaning of section 9 of the Code. But it is necessary that the following three conditions should be satisfied, namely:-

“(1) The agent must be a special agent who attends exclusively to the business of the principal and carries it on in the name of the principal and not a general agent who does business for any one that pays him. Thus, a trader in the mufassil who habitually sends grain to Madras for sale by a firm of commission agents who have an independent business of selling goods for others on commission, cannot be said to “carry on business” in Madras. So a firm in England, carrying on business in the name of A.B. & Co., which employs upon the usual terms a Bombay firm carrying on business in the name of C.D. & Co., to act as the English firm’s commission agents in Bombay, does not “carry on business” in Bombay so as to render itself liable to be sued in Bombay.

(2) The person acting as agent must be an agent in the strict sense of the term. The manager of a joint Hindu family is not an “agent” within the meaning of this condition.

(3) To constitute “carrying on business” at a certain place, the essential part of the business must take place in that place. therefore, a retail dealer who sells goods in the mufassil cannot be said to “carry on business” in Bombay merely because he has an agent in Bombay to import and purchase his stock for him. He cannot be said to carry on business in Bombay unless his agent made sales there on his behalf. A Calcutta firm that employs an agent at Amritsar who has no power to receive money or to enter into contracts, but only collects orders which are forwarded to and dealt with in Calcutta, cannot be said to do business in Amritsar. But a Bombay firm that has a branch office at Amritsar, where orders are received subject to confirmation by the head office at Bombay, and where money is paid and disbursed, is carrying on business at Amritsar and is liable to be sued at Amritsar. Similarly a Life Assurance Company which carries on business in Bombay and employs an agent at Madras who acts merely as a Post Office forwarding proposals and sending moneys cannot be said to do business in Madras. Where a contract of insurance was made at place A and the insurance amount was also payable there, a suit filed at place B where the insurance Co. had a branch office was held not maintainable. Where the plaintiff instituted a suit at Kozhikode alleging that its account with the defendant Bank at its Calcutta branch had been wrongly debited and it was claimed that that court had jurisdiction as the defendant had a branch there, it was held that the existence of a branch was not part of the cause of action and that the Kozhikode Court therefore had no jurisdiction. But when a company through incorporated outside India gets itself registered in India and does business in a place in India through its agent authorized to accept insurance proposals, and to pay claims, and to do other business incidental to the work of agency, the company carries on business at the place of business in India.

41. A corporation in view of Explanation appended to Section 20 of the Code would be deemed to be carrying on business inter alia at a place where it has a subordinate office. Only because, its goods are being sold at a place would thus evidently not mean that it carries a business at that place.”

Author’s Comments – The present case dealt with the Section 62(2) of the Copyright Act, 1957 and the earlier Trade and Merchandise Marks Act, 1958 which did not had a similar provision conferring additional forum on the Plaintiff to file a suit in the place where Plaintiff resides, carries on business or personally works for gain. Therefore, the issue of jurisdiction towards infringement of trade mark in the Trade and Merchandise Marks Act, 1958 was governed by way of Section 20 of the Code of Civil Procedure, 1908. However, under the Trade Marks Act, 1999 which came into force in September, 2003, Section 134 (2) has been inserted which is analogous to Section 62(2) of the Copyright Act, 1957. Thus, the issue of jurisdiction for infringement of Trade Mark under the Trade Marks Act, 1999 will be governed by Section 20 of Code of Civil Procedure, 1908 as well as Section 134(2) of the Trade Marks Act, 1999. Therefore, presently if a Defendant is selling it’s goods or providing it’s services in Varanasi and the Plaintiff resides, carries on business or personally works for gain in Delhi, the plaintiff can file a suit for infringement of Trade Mark in Delhi. If Copyright is involved, the causes of action can be combined and the composite suit for infringement of Trade Mark and infringement of Copyright would be maintainable in Delhi. If Section 62(2) of the Copyright Act, 1957 and 134 (2) of the Trade Marks Act, 1999 would have been absent the suit would have been governed by Section 20 of Code of Civil Procedure, 1908 and would have been maintainable in Varanasi. As a practice, the suits for infringement of trade mark, infringement of Copyright are combined with the common law remedy of passing off. Above cited Sections, do not apply to a suit for passing off. A suit for passing off is governed only by Section 20 of the Code of Civil Procedure, 1908. Therefore, in a suit for passing off the Plaintiff cannot claim benefit of Section 134(2) of the Trade Marks Act, 1999. Therefore, a composite suit inclusive of relief of passing along with infringement of trade mark and copyright is not maintainable at a place where the Plaintiff resides, carries on business or personally works for gain. The plaint in the suit is liable to be returned. However, it is not an absolute rule. The jurisdiction for cause of action for a claim for passing off can be sought on a pleading of Quia Timet nature and the Plaintiff can claim jurisdiction on the basis of apprehension and possibility of availability of the goods/services within the territorial jurisdiction of the Hon’ble Court. In such a case Exphar Sa and Anr. V. Eupharma Laboratories Ltd. and Anr. would come into picture and it would be difficult to oust the suit on the basis of Jurisdiction. Further, the Court can entertain the part of the suits for which it has jurisdiction and can strike out the part which is beyond it’s jurisdiction as held in Dharampal Premchand Ltd. V. Golden Tobacco Products. In case, it’s a Chartered High Court, the Court can assume jurisdiction to avoid multiplicity of proceedings as recently done by the Bombay High Court in Ultra Tech Cement Ltd. & Anr. v. Shree Balaji Cement Industries & Anr.; 2014 (58) PTC 1 (Bombay).

The present case is very relevant as cause of action of passing off is combined with the cause of action for infringement of trade mark and/or infringement of Copyright and this case makes it clear that despite permissibility of joinder of causes of action allowed by Code of Civil Procedure, 1908, a Court will not have jurisdiction for a cause of action which has not arisen in it’s territorial jurisdiction. Further, the case explains the scope of ‘carries on business’ which not only forms part of Section 62(2) of the Copyright Act, 1957 but also Section 134 (2) of the Trade Marks Act, 1999.