CS(OS) No. 643/2006 Page 1 of 27 * IN THE HIGH COURT OF DELHI AT NEW DELHI + CS(OS) No.643/2006 Date of Decision: March 12, 2010 M/S MATRUMAL DHANNALAL OIL MILL …..Plaintiff Through: Mr. S.K. Bansal Advocate with Mr. Ajay Amitabh Suman, Advocate VERSUS M/S. ABHISHEK ENTERPRISES …..Defendant Through: Mr. Shailen Bhatia Advocate with Mrs. Amita Kapur, Advocate, Mr. Amit Jain, Advocate. % CORAM: HON'BLE MS. JUSTICE ARUNA SURESH (1) Whether reporters of local paper may be allowed to see the judgment? (2) To be referred to the reporter or not? Yes (3) Whether the judgment should be reported in the Digest? Yes J U D G M E N T ARUNA SURESH, J. I.A. No.9871/2006 (Order 7 Rule 11 CPC) in CS(OS) No.643/2006 1. By way of this order, I shall dispose of an application filed by the defendant under Order 7 Rule 11 read with Section 151 of Code of CS(OS) No. 643/2006 Page 2 of 27 Civil Procedure (hereinafter referred to as „CPC‟) seeking dismissal of the suit on the ground that this Court has no territorial jurisdiction to entertain the present suit. 2. Plaintiff firm is engaged in the business of manufacturing, marketing and selling of edible oil and oil cakes etc. under the trade mark „RADHA KRISHNA’ with device of Radha Krishna Label. Said trade mark is registered under Class 29 of the Trade Marks Act, 1999 (hereinafter referred to as „Act‟) having registration No.130471. Plaintiff is also the holder of Copy Right vide Registration Nos. A-66428/04 and A-67738/04 respectively for the said trade mark. Defendant is engaged in the similar business of edible oil and oil cakes, etc. and is supplying his goods under the name and style of „RADHA MOHAN’ WITH DEVICE OF RADHA KRISHNA LABEL. Plaintiff claims that user of trade mark „RADHA MOHAN‟ by the defendant is infringement of his trade mark „RADHA KRISHNA‟ and also infringement of his copy right in the said trade mark. Defendant is passing off his goods to the public as if the said goods are manufactured and sold in the market by the plaintiff. 3. Defendant contested the suit denying any violation of plaintiff‟s trade mark and copy right by him by selling his goods in the name CS(OS) No. 643/2006 Page 3 of 27 of „RADHA MOHAN‟, for which he has already applied to the Registrar of Trade Marks for registration, for the goods to be supplied by him in various States except Delhi. Defendant has also disputed the territorial jurisdiction of this Court to entertain the suit alleging that both the parties to the petition are residing and working for gain outside the jurisdiction of this court; the trade mark and copy right is registered by the plaintiff at Bombay and he is not supplying his goods at Delhi. 4. Mr. Shailen Bhatia, learned counsel for the defendant has argued that both the parties are residing and working for gain in U.P. as plaintiff is residing and working for gain at Hathras, whereas defendant is carrying on his business at Agra. Suit has been filed under Sections 134 and 135 of the Trade Marks Act, 1999. However, provisions of Section 134 of the Act are not applicable to the facts and circumstances of the case. He further argued that relief claimed in the suit for infringement or for passing off is governed under Section 135 of the Act and the suit therefore, cannot be entertained by this Court. He has relied on the following judgments :- (i) Surendra Kumar Maingi vs. M/s. Dodha House, AIR 1998 Allahabad 43; (ii) Haryana Milk Foods Ltd. vs. Chambel Dairy Products, 2002 CS(OS) No. 643/2006 Page 4 of 27 (25) PTC 156 (Del); (iii) Gupta Brothers Conduit Pipe Manufacturing Co. Pvt. Ltd. vs. Anil Gupta & Anr., 2001 (24) PTC 159 (Del); (iv) Dabur India Limited vs. K.R. Industries, 2006 (33) PTC 348 (Del.) (DB); (v) Dabur India Limited vs. K.R. Industries, 2006 (33) PTC 107 (Del.); (vi) Dharampal Premchand Ltd. vs. Golden Tobacco Products, 2007 (34) PTC 633 (Del.) (DB); (vii) The Indian Performing Right Society Ltd. vs. Sanjay Dalai & Anr., CS(OS) No.527/2007 decided by Badar Durrez Ahmed on 31.08.2007; (viii) The Jay Engineering Works Ltd. vs. Ramesh Aggarwal, 2006 (33) PTC 561 (Del.); (ix) M/s. Dhodha House vs. S.K. Maingi WITH M/s. Patel Field Marshal Industries & Ors. vs. M/s. P.M. Diesel Ltd., AIR 2006 SC 730. 5. Mr. S.K. Bansal, learned counsel for the plaintiff has submitted that this court has the territorial jurisdiction to entertain the suit. In para CS(OS) No. 643/2006 Page 5 of 27 23 of the plaint, plaintiff has specifically pleaded that this court has territorial jurisdiction to entertain the suit. To determine territorial jurisdiction of a Civil Court, the court has to see averments contained in the Plaint and not defence raised by the defendant in the written statement. He has submitted that as per the averments contained in the Plaint, prima facie, jurisdiction of this court to entertain the suit is clearly made out. 6. He has further argued that trade mark of the plaintiff is registered in Delhi, plaintiff has applied for registration of trade mark for his other products in Delhi and the defendant has also applied for registration of his trade mark at Delhi. Therefore, Delhi Court has territorial jurisdiction to entertain the suit. He has referred to the following judgments :- (i) Amrutanjan Limited vs. Ashwin Fine Chemicals & Pharmaceuticals, Kashi Mira District, PTC (Suppl) (1) 27 (Mad); (ii) S. Oliver Bernd Freier GmbH & Co. KG vs. Karni Enterprises & Anr., 2006 (33) PTC 574 (Del.); (iii) M/s. Govardhan Motels & Restaurants vs. I. Subramanyam & Anr., 2008 (36) PTC 513 (Del); CS(OS) No. 643/2006 Page 6 of 27 (iv) Intas Pharmaceuticals Limited vs. Allergan Inc., 2006 (32) PTC 272 (Del.) (DB); (v) Pfizer Products, Inc. vs. Rajesh Chopra & Ors., 2006 (32) PTC 301 (Del.); (vi) L.G. Corporation & Anr. vs. Intermarket Electroplasters (P) Ltd. & Anr., 2006 (32) PTC 429 (Del.) and (vii) Jagdamba Oil Agency vs. K.S. Oils Limited & Anr., 2006 (33) PTC 447 (MP). 7. To appreciate respective submissions of the parties, I feel the necessity of reproducing para 23 of the plaint which speaks of territorial jurisdiction of this court to entertain the suit. It reads:- “23. This Hon‟ble Court has the territorial jurisdiction to try and adjudicate upon the present suit. The defendant is infringing and passing off their goods as that of the plaintiff in Delhi in a clandestine and surreptitious manner i.e. without issuing formal invoices against sales. The plaintiff registered trade mark No.130471 in Class 29 is registered with the Registrar of Trade Marks at New Delhi. The plaintiff filed application for registration of trade mark in Delhi. The defendant has also sought registration of impugned trade mark under the aforesaid impugned application on all India basis including Delhi by applying for its registration with Registrar of Trade Marks, Delhi. CS(OS) No. 643/2006 Page 7 of 27 The plaintiff has tremendous goodwill and reputation in its said trade mark in Delhi which is being tarnished by defendant‟s impugned activities in Delhi. Further this Hon‟ble Court has jurisdiction in the light of Section 134 of the Trade Marks Act, 1999 and Section 62 of the Copyright Act, 1957. This Hon‟ble Court has the jurisdiction to entertain and adjudicate upon the present suit. 8. Section 134 of the Act is a special forum available to the plaintiff which permits it to file a suit for infringement of its registered trade mark within the local limits of jurisdiction of the Competent Court where plaintiff is carrying on its business for gain. This provision is an additional forum available to the plaintiff, besides, Section 20 of CPC. 9. Admittedly, plaintiff firm is engaged in the business of manufacturing, marketing, selling, etc. of edible oil and oil cakes at Hathras, U.P. Address given by the plaintiff in the memo of parties is that of Hathras. It is not the case of the plaintiff that it has got any office at Delhi or that he is engaged in his business in Delhi or that he is supplying his goods in Delhi. Some of the bills placed on record by the plaintiff are issued by Yash Traders, Grain Merchants & Commission Agent, Naya Bazar, Delhi. Perusal of these credit bills make it very clear that Yash Traders had supplied raw material to the plaintiff from Delhi to Hathras and these goods were sent CS(OS) No. 643/2006 Page 8 of 27 through trucks, details of which are found in these credit bills. Therefore, these credit bills in no manner indicate that goods of the plaintiff firm were being marketed by it at Delhi. Plaintiff has also placed on record number of bills indicating supply of its products to various places. Goods as per these bills were supplied in U.P. and Bihar. True that, in few bills, name of the broker company/Agent is given as M/s. Laxmi Narayan and in few of the bills name of Kishan Gupta and Mahender Pal Gupta, Delhi finds mention but, from these bills it is not clear if above named agents were of the plaintiff or were of the defendant. The fact remains that goods against all these bills/invoices were sent from Hathras to different places of U.P. and Bihar, but not to Delhi. 10. A person may be said to be carrying on his business at a place through an agent or a manager or through a servant. The owner may not even visit that place. However, the person acting as an agent must be an agent in strict sense of the term. 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 anyone who pays him. 11. The person named as commission agent, agent in various invoices/bills, prepared by the plaintiff for supply of goods to other CS(OS) No. 643/2006 Page 9 of 27 traders on commission basis cannot be said to be an agent in strict sense of the term. Neither M/s. Laxmi Narayan nor Kishan Gupta or any other agent named in the bills was exclusively attending the business of the plaintiff. There is nothing on record to suggest that they or any of them was carrying on his business in the name of the plaintiff at Delhi or any other place. Therefore, in no circumstance it can be implied that plaintiff firm is carrying on its business at Delhi. Since plaintiff has not been able to show prima facie, from the averments contained in the plaint, that it is carrying on its business within the local limits of territorial jurisdiction of Delhi, provisions of Section 134 of the Act do not come to his rescue. 12. In „M/s. Dhodha House vs. S.K. Maingi WITH M/s. Patel Field Marshal Industries & Ors. vs. M/s. P.M. Diesel Ltd.’, AIR 2006 SC 730, the expression „carries on business‟ and the expression „personally works for gain‟ appearing in Section 134 of the Act as well as Section 62 (2) of the Copy Right Act is defined in para 45 of the judgment in the following manner:- “45. 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 CS(OS) No. 643/2006 Page 10 of 27 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 thereover. 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 CS(OS) No. 643/2006 Page 11 of 27 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, CS(OS) No. 643/2006 Page 12 of 27 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." 13. I have already pointed out above that none of the invoices, sales bills, etc. placed by the plaintiff on record prima facie show that the goods of the plaintiff were being sold in Delhi. True that, names of Delhi brokers are mentioned in some of the invoices, but none of these bills indicate that they were appointed by the Plaintiff as its special Agents to exclusively attend to its business. 14. The other documents placed on record by the plaintiff are Authority Deed, Partnership Deed, Certificate of Authorization from Ministry of Agriculture and Irrigation dated 10.07.1980 issued at Nagpur, copy of Audit Report from 2002-2005, besides, invoices, sales bills, etc. Authority Deed and Partnership Deed were executed at Hathras where plaintiff is residing and carrying on its business for gain. Letter of authorization issued by the Ministry of Agriculture & Irrigation pertains to some other brand label ‘Makhan Chor‟ and has no direct or indirect bearing to the facts and circumstances of the case. Audit reports of the plaintiff firm, prepared by Chartered Accountant of the plaintiff, were submitted to the concerned Income Tax Authority at Hathras. 15. Plaintiff has invoked the jurisdiction of this Court by alleging that his CS(OS) No. 643/2006 Page 13 of 27 trademark is registered with the Registrar of Trademarks at New Delhi under Class 29 and he has also filed an application for registration of Trademark for other goods manufactured by it in Delhi. Plaintiff‟s trademark was initially registered on 9th August, 1947 with Registrar of Trademark at Mumbai for seven years. This trademark was renewed on 29.11.2002 for another period of seven years vide RLC-3783, from 9th August, 1990 and thereafter for another period of seven years vide RLC-3784 dated 29.11.2002 by Registrar of Trademark Mumbai. Thus, it is clear that trademark of the plaintiff was never registered at Delhi. 16. There is one application dated 3rd June, 2002 which probably was filed by the plaintiff for registration of its trademark at Delhi in Class 29, which was already registered at Mumbai. On this document there is a stamp of Trade Mark Registry. This endorsement in clear terms state that number given to the application in no manner is to be considered as acceptance of registration. 17. A cause of action will not arise when an application is filed for registration of the trademark in a given case. The reason being, in a given case, an application for grant of registration certificate may or may not be allowed. A person in whose favour a certificate has CS(OS) No. 643/2006 Page 14 of 27 already been issued has the right and opportunity to oppose an application filed by a person in a given case by filing an objection application and the Registrar, in that circumstance, is required to determine the said question. Therefore, cause of action would arise only when a registered trademark is used. Simply because plaintiff has applied for registration of his trademark at Delhi vide its application dated 3rd June 2002 would not confer territorial jurisdiction on this court. 18. It is submitted by learned counsel for the plaintiff that defendant has applied for registration of his trademark at Delhi. For that purpose, he has filed a copy of the advertisement appearing in the Trademark Journal. Again no cause of action for filing the suit would arise within the jurisdiction of this Court, only because advertisement has been issued in the Trademark Journal or in other journal notifying the factum of filing of such an application. The Registrar‟s Offices for registration of the Trademark have been divided by the Govt. in five different zones. The State of U.P. falls within the Registrar of Trademarks having its head office at Delhi. Naturally, therefore, both the parties being residents of U.P. where they are carrying on their business for gain and/or are working personally for gain had to apply for registration of their respective proposed Trademarks to the Registrar at Delhi. In „M/s. Dhodha House’s case (Supra) it CS(OS) No. 643/2006 Page 15 of 27 was observed:- “31. 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. In a given case, an application for grant of registration certificate may or may not be allowed. The person in whose favour, a registration certificate has already been granted indisputably will have an opportunity to oppose the same by filing an application before the Registrar, who has the requisite jurisdiction to determine the said question. In other words, 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. It was further observed in para 37:- 37. In Premier Distilleries Pvt. Ltd. v. Shashi Distilleries [2001 PTC 907 (Mad)], a Division Bench of the Madras High Court in a matter involving a passing off action, was of the view: "The cause of action in a suit for passing off, on the other hand and as already observed, has nothing at all to do with the location of the Registrar's office or the factum of applying or not applying for registration. It is wholly unnecessary for the plaintiff to prove that he had applied for registration. The fact that the plaintiff had not applied for registration will not improve the case of the defendant either. Filing of an application for registration of a trade mark, therefore, does not constitute a part of CS(OS) No. 643/2006 Page 16 of 27 cause of action where the suit is one for passing off." It was further observed: "The argument advanced that registration if granted would date back to the date of application and that the plaintiff would have the right to seek amendment of the plaint to seek relief on the ground of infringement as well, is wholly irrelevant so far as the cause of action for bringing a suit for passing off is concerned. While it may be convenient to the plaintiff to institute a suit in a court where he may later on be able to bring a suit for infringement of the trade mark, that convenience of the plaintiff is in no way relevant for deciding as to whether a cause of action for filing a suit for passing off can be said to have arisen in a place where, the deceit alleged to have been practised by the defendant had in fact, not been practised within the jurisdiction of the court in which the suit is brought." 19. It is pertinent that Mr. Pawan Kumar Mittal, Proprietor of the Defendant firm made a statement in the Court on 10.10.2007. The relevant part of his statement reads as under:- “I have applied for registration of trade mark „Radha Mohan Brand‟ for sale, distribution, etc. of my goods at Haryana, Uttar Pradesh, Rajasthan and Madhya Pradesh but I have not applied for any registration of the said trade mark for sale of goods at Delhi and I shall not apply for this trademark for sale of goods at Delhi.” 20. Thus, it is clear that defendant has applied for registration of CS(OS) No. 643/2006 Page 17 of 27 trademark „Radha Mohan‟ Brand for sale, distribution, etc. of his goods at Haryana, Uttar Pradesh, Rajasthan and Madhya Pradesh but has not applied for registration of the said Trademark for sale of goods at Delhi. Rather, he has given an undertaking that he has no intention to sell, manufacture or deal in any manner with its goods in Delhi under „Radha Mohan Brand‟ and that he would not apply for the said trademark for sale of goods at Delhi. 21. Under these circumstances, apprehension of the plaintiff that defendant would sell or pass off his goods as that of the plaintiff at Delhi is completely nullified. 22. In „St. Ives Laboratories Inc. vs. Arif Perfumers & Anr., MANU/DE/0151/2009’, in similar circumstances this court observed:- “5. Before entertaining a suit, the Court has to ensure whether any part of cause of action had arisen within the jurisdiction of this Court. The registration of a trademark in Delhi cannot be a ground to invoke jurisdiction of Delhi Courts. The Trade marks Act does not provide that registration of trademark at a particular office shall be a ground for filing a suit