Source: https://indianipr.in/2018/05/30/territorial-jurisdiction-while-this-court-concludes-that-the-pleadings-in-the-plaint-do-not-make-out-a-case-of-cause-of-action-having-arisen-even-in-part-in-delhi-it-must-be-added-that-the-plaint/
Timestamp: 2019-04-22 07:08:02+00:00

Document:
Through: Mr. J.V. Abhay & Mr. Ronil Goger, Advs.
Through: Mr. Sanjeev Sindhwani, Sr. Adv. with Ms. Arzu Chimni, Adv.
The civil suit in the course of proceedings arising whereof the defendants have come up with the prayer for return of the plaint by application (IA No. 18137/2014) invoking Rule 10 of Order VII of the Code of Civil Procedure, 1908 (CPC), on the ground of want of territorial jurisdiction, was instituted in July, 2014 by Federal Express Corporation (the plaintiff), a company incorporated under the laws of State of Delaware, United States of America (USA), its principal registered office being located in Memphis, Tennessee (USA). Three defendants have been impleaded as parties they being Fedex Securities Ltd. (first defendant), Fedex Stock Broking Ltd. (second defendant) and Fedex Finance Pvt. Ltd. (third defendant), each of the said companies being incorporated under the Companies Acttheir respective registered offices concededly being located in Mumbai (State of Maharashtra).
The plaintiff company claims to be the world’s largest express transportation company popularly known as FEDEX, it providing transportation, e-commerce and business services under the trademark – name FEDEX worldwide, having forayed into the Indian market in 1984, statedly in the wake of acquisition of Gelco Express International (“Gelco”) and through its global service participant- licensee Blue Dart for express delivery of packages in this country, prior to entering into the Indian market independently in 1997 by its regional (or branch) office, also carrying on business in Delhi, it being its principal hub.
In the plaint, the first defendant is described as a company engaged in providing financial services catering to various Indian corporates in matters such as management of initial public offering of equity, structuring and issue – both public offer and private placement – of debt instruments, assisting in listing of securities in recognized stock exchanges in India, resource planning and securitization of debts/receivables. The second and third defendants are described in the plaint as group or associate companies of the first defendant, the second defendant being a sub-broker engaged in stock broking activities while the third defendant being a non- banking finance company engaged in extending term and working capital or short term finance, investments etc. using, inter alia, websites with domain names as www.mca.gov.in, www.fedsec.in and www.fedexindia.in.
“(a). Pass and pronounce a decree of permanent injunction against infringement of plaintiff’s registered FEDEX trade mark (s) by restraining defendants, their directors, promoters, shareholders, officers, managers, assigns, successors-in-interest, licensees, franchisees, subsidiary/associate/group companies, sister concerns, representatives, servants, distributors, agents, family members, employees etc. and/or any person or entity acting for them from using plaintiff’s trade mark FEDEX or any other word(s) deceptively similar thereto singularly or in conjunction with any other words or monogram/logo, as a trade mark, service mark, corporate name, trade name, trading style, domain name, website address, electronic mail identity or in any other manner whatsoever, on or in relation to or any services/business including advertising, business papers, etc.
interest, licensees, franchisees, subsidiary/associate/group companies, sister concerns, representatives, servants, distributors, agents, family members, employees etc., and/or any person or entity acting for them from passing off their services/business as or for the services/business of plaintiff by restraining them from using plaintiff’s FEDEX trade mark(s) name or any other word (s) deceptively similar thereto singularly or in conjunction with any other words or monogram/logo, as a trade mark, service mark, corporate name, trade name, trading style, domain name, website address, electronic mail identity or in any other manner whatsoever; on or in relation to or any services/business including advertising, business papers, etc.
(j) Pass and pronounce any further or other order or directions, as this Hon’ble Court may deem fit or appropriate in the facts and circumstances of the case in favour of the plaintiff and against defendants.
“56. Plaintiff first became aware of the domain name/website address www.fedex.india.in being used by defendants on or around October 26, 2011 and brought this cause of action to them by addressing notice to them. The cause of action further arose when counsel for plaintiff directed the legal notice dated March 19, 2012 and reminder letter dated April 9, 2012 to defendants, calling upon them to give up the trade mark/name FEDEX and thereafter on February 1, 2013, when defendants refused to comply with the requisitions of plaintiff. It is humbly submitted that the cause of action is a continuous and recurring one and will continue to subsist and arise afresh on day-to-day basis till such time defendants cease all use of the trade mark/name FEDEX and/or are restrained by this Hon’ble Court‖.
―57. It is submitted that this Hon’ble Court has the jurisdiction to entertain and try the present suit inasmuch as defendants claim to assist large and medium-sized Indian corporates in project planning, financial structuring, sourcing of debt from banks/financial institutions, arranging working capital assistance and private placement of debt instruments such as debentures, assisting in listing of securities in recognized stock exchanges in India. Defendants offer and advertise their services all over India including in Delhi through their website www.fedsec.in. Therefore, the cause of action has arisen within the territorial jurisdiction of this Hon’ble Court. As per the documents publicly accessible and issued to the public at large inter alia on defendants’ website www.fedsec.in and www.sebi.gov.in of the Securities and Exchange Board of India, defendants are acting as the manager/merchant bankers to and/or market intermediaries for various entities/companies and servicing clients in Delhi, and thus carrying on business and personally working for gain in Delhi. Further, according to defendants’ letter dated February 1, 2013, defendants have been appearing in prominent national dailies in their capacity as merchant bankers. Further, offers made by defendants to public in the capacity of merchant bankers or manager of offer for their clients have been published inter alia in Delhi edition of national dailies with wide circulation such as Business Standard in August 2012. Documents evincing such averments/statements of defendants’ services being propagated in Delhi have been filed as documents with the plaint. The right of plaintiff to exclusively use the trade mark/name FEDEX is inter alia infracted by such advertisements/activities in Delhi, and therefore, thisHon’ble Court has the jurisdiction to entertain and try the present suit.
In addition to the above, it is further submitted that plaintiff has branch and other officers and various centers, stations and locations all over Delhi for provision of its services under the trade mark/name FEDEX; widely promotes the said services and caters to customers in Delhi; and thus carries on business and personally works for gain in Delhi. Plaintiff’s FEDEX trade marks, which are the subject matter of the suit, are also registered and have their situs in Delhi. Further, the plaintiff’s services are widely availed of by customers in Delhi and transactions made through its website www.fedex.com. It is thus submitted that this Hon’ble Court has the jurisdiction to entertain and try the present suit‖.
―2.1 The plaintiff has additional claimed passing off and has sought to invoke the territorial jurisdiction of this Hon’ble Court on the basis that the defendants offer and advertise their services through their website www.fedsec.in. It is further claimed that the cause of action has arisen within the territorial jurisdiction of this Hon’ble Court as the documents publically accessible and issued to public at large on the defendants website show that they are acting as the manager/merchant bankers to various entities/companies in Delhi. It is settled law that a mere posting of an advertisement by the defendant depicting its mark on a passive website which does not enable the defendant to enter into any commercial transaction with the viewer in the forum state cannot satisfy the requirement of giving rise to a cause of action in the forum state. Even an interactive website, which is not shown to be specifically targeted at viewers in the forum stage for commercial transactions, will not result in the Court of the forum state having jurisdiction.
The plaintiff has filed a large number of documents with the plaint and defendants refer particularly to document appearing at page 810 (in Vol. IV) of the said documents it indicating the principal place of business of the plaintiff Corporation (USA being its country of incorporation) in India, as registered with the Registrar of Companies in India to be Boomerang, Unit No. 801, Wings A & B1, 8th Floor, Chandivali Farm Road, Andheri East Mumbai, Maharashtra -400072, India.
By their application (IA No. 18137/2014) seeking return of the plaint, the defendants submit that none of them carry on business in Delhi nor any cause of action or part thereof has arisen within the jurisdiction of this Court. The defendants submit that mere posting of advertisements depicting their market on passive website would not enable them (the defendants) to enter into any commercial transaction with any viewer here and even if there were an interactive website, the Court in the forum State would not have jurisdiction till it is shown that the defendants specifically targeting viewers located here. Needles to add the application is resisted by the plaintiff reiterating the case made out in the plaint.
The plaintiffs rely on Exfar SA and Ors. vs. Eupharma Laboratories & Ors. (2004) 3 SCC 688 and Pfizer Enterprises Sarl v. Cipla Ltd. 2008 Indlaw Del 1428 (Del.) (DB) to submit that for adjudication on the question of territorial jurisdiction, the averments in the plaint are to be assumed to be correct in entirety, the plaint to be accepted as true, on demurrer. The plaintiff refers to Anant Construction (P) Ltd. v. Ram Niwas(1994) 31 DRJ 205 also to submit that the pleadings in written statement, particularly if they are bald denials cannot be given credence at this stage. Reliance is placed on Govardhan Motels & Restaurants. I. Subramanyam & Anr. 2008 (36) PTC 513 (Del) to argue that if the defendants are alleged to be soliciting customers or trade in Delhi permitting their business here, catering to customers who are local residents, the cause of action has to be entertained by the local courts. Reference is made to Rajendran Chingaravelu v. Additional Commissioner of Income Tax & Ors. (2010) 1 SCC 810 and Intas Pharmaceuticals Ltd. vs. Allergan Inc. 2006 (32) PTC 272 (Del) (DB) to submit that the court would have territorial jurisdiction even if a part of the cause of action has arisen within its domain.
(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.
“26. From the above it is clear that the question of ―cause of action‖ continues to have a co-relation with the issue of territorial jurisdiction. If the cause of action has arisen, wholly or in part, in passing off actions under the Trade Marks Act, the place of institution of the suit for appropriate relief continues to be regulated by the provisions of Section 20 CPC which includes the place where the cause of action, wholly or in part, arises. For infringement suits, by virtue of Section 62 of the Copyright Act and Section 134 of the Trade Marks Act, the plaintiff may bring the case in terms of Section 20 (a) and (b) of CPC at the place where the defendant actually and voluntarily resides or carries on business or personally works for gain which, in the context of a company, or corporation, is the place where it has its sole or principal office in India.
27.Section 134 of the Trade Marks Act and Section 62 of Copyright Act only add to the remedy permitting the plaintiff to bring an action at a place other than that of the defendant. Since the objective of these provisions is to sub-serve the convenience of the plaintiff, if the cause of action has arisen, wholly or in part, at the same place where the plaintiff resides or carries on business, having its head office, it is not permissible for it to ignore such a place on the pretext that it carries on business at other places as well. In such factual background, it is incumbent that the plaintiff institutes the suit at the place of its ordinary residence, or principal place of business, which is also the place where the cause of action has arisen and ―not at other places‖. In fact, the jurisdiction of the courts at other places (i.e., the places where the plaintiff may have subordinate/branch office so as to be carrying on business or personally working for gain there) stands ―ousted‖.
As noted earlier, plaintiff is a corporation incorporated in USA. Whilst it may possibly have some branch office in Delhi, as already noted, the documents filed by the plaintiff show that its principal place of business in India is in Mumbai (State of Maharashtra. Since the plaintiff also relies on Section 20 CPC to contend that cause of action has arisen in Delhi, the moot question begs for consideration and answer is as to whether a case to such effect has been properly set out for invoking the jurisdiction of this Court under Section 20(c) CPC in which context, as indeed for purposes of Section 134 of the Trademarks Act, 1999, the fact that the principal place of office of the plaintiff is in Mumbai would remain germane.
“40. Having regard to the past precedents, particularly the decision of the Supreme Court in Patel Roadways Limited Bombay (supra), the view taken by the learned single judge in Sri Ganesh Research Institute (supra) commends itself to be adopted and followed. By virtue of the explanation appended to Section 20 CPC, the defendant company would be deemed to be carrying on business at a place where cause of action arises if it has a subordinate office there even if the principal office were situated elsewhere. For showing cause of action to have arisen at a particular place, the plaintiff must plead and prove some act done by the defendant necessary for accrual of such cause of action.
“(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” inBombay 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.
“42.One is conscious of the settled law that the doctrine of forum convenience would not strictly apply to ordinary civil litigation governed by the Code of Civil Procedure. But then, as the settled law guides, insignificant or trivial part of the cause of action – which the plaintiff impliedly argued to be emanating from the fact of service of legal notice on principal office of BHEL located in Delhi – cannot be the decisive factor on the question of jurisdiction. As noted in the context of facts concerning the case at hand, the contract documents, as culled out from the tender notice, clearly show that for purpose of adjudication upon dispute arising out of the NTPC- Tender, the jurisdiction of the Courts in Vindhyachal and Unchahar had been specifically provided for. Similar clauses exist in the context of the BHEL-Tender wherein the jurisdiction is intended to be vested in the courts at Hyderabad in the State of Telangana‖.
(a) and (b) of Section 20 are to be interpreted disjunctively from sub-section (c), as the use of the word ‗or’ appears to permit the Plaintiff to file the suit at any of the places where the cause of action may have arisen regardless of whether the Defendant has even a subordinate office at that place. However, if the Defendants’ location is to form the fulcrum of jurisdiction, and it has an office also at the place where the cause of action has occurred, it has been held that the Plaintiff is precluded from instituting the suit anywhere else. Obviously, this is also because every other place would constitute a forum non conveniens. This Court has harmonised the various hues of the conundrum of the place of suing in several cases and has gone to the extent of laying down that it should be courts endeavour to locate the place where the cause of action has substantially arisen and reject others where it may have incidentally arisen. Patel Roadways Limited, Bombay v. Prasad Trading Company, (1991) 4 SCC 270 prescribes that if the Defendant-corporation has a subordinate office in the place where the cause of action arises, litigation must be instituted at that place alone, regardless of the amplitude of options postulated in Section 20 of the CPC. We need not dilate on this point beyond making a reference to ONGC v. Utpal Kumar Basu (1994) 4 SCC 711 and South East Asia Shipping Co. Ltd. v. Nav Bharat Enterprises Pvt. Ltd. (1996) 3 SCC 443‖.
When this Court observed in afore-quoted part of the decision in AIA Engineering Ltd.(supra) that the doctrine of forum convenience would not strictly apply to ordinary civil litigation governed by the Code of Civil Procedure, it felt bound by the decision in Horlicks Limited vs. Henz India Private Limited, 164 (2009) DLT 539 (DB). Though it was argued in the matter at hand with relevance of Dashrath Rupsingh Rathod (supra) that the doctrine of forum non-conveniens may be applied even to civil suits, it only need to be noted that the Supreme Court had referred to the said principle only to find justification for the explanation appended to Section 20 CPC, the location of the defendant at a particular place where the cause of action also has arisen rendering the plaintiff ―precluded from instituting the suit anywhere else‖.
Be that as it may, the view taken in AIA Engineering Ltd.(supra) that ―insignificant or trivial part‖ of the cause of action cannot be the decisive factor on the question of jurisdiction is strengthened by the view of the Supreme Court in Dashrath Rupsingh Rathod (supra) that the jurisdiction cannot be invoked at a place where cause of action has “incidentally arisen”.
Question (i): For the purposes of a passing off action, or an infringement action where the Plaintiff is not carrying on business within the jurisdiction of a court, in what circumstances can it be said that the hosting of a universally accessible website by the Defendants lends jurisdiction to such Court where such suit is filed (“the forum court”)?
Answer: For the purposes of a passing off action, or an infringement action where the Plaintiff is not carrying on business within the jurisdiction of a court, and in the absence of a long-arm statute, in order to satisfy the forum court that it has jurisdiction to entertain the suit, the Plaintiff would have to show that the Defendant “purposefully availed” itself of the jurisdiction of the forum court. For this it would have to be prima facie shown that the nature of the activity indulged in by the Defendant by the use of the website was with an intention to conclude a commercial transaction with the website user and that the specific targeting of the forum state by the Defendant resulted in an injury or harm to the Plaintiff within the forum state.
Question (ii): In a passing off or infringement action, where the defendant is sought to be sued on the basis that its website is accessible in the forum state, what is the extent of the burden on the Plaintiff to prima facie establish that the forum court has jurisdiction to entertain the suit?
Answer: For the purposes of Section 20 (c) CPC, in order to show that some part of the cause of action has arisen in the forum state by the use of the internet by the Defendant the Plaintiff will have to show prima facie that the said website, whether euphemistically termed as “passive plus” or “interactive”, was specifically targeted at viewers in the forum state for commercial transactions. The Plaintiff would have to plead this and produce material to prima facie show that some commercial transaction using the website was entered into by the Defendant with a user of its website within the forum state resulting in an injury or harm to the Plaintiff within the forum state.
Question (iii): Is it permissible for the Plaintiff to establish such prima facie case through “trap orders” or “trap transactions”?
Answer: The commercial transaction entered into by the Defendant with an internet user located within the jurisdiction of the forum court cannot possibly be a solitary trap transaction since that would not be an instance of “purposeful” availment by the Defendant. It would have to be a real commercial transaction that the Defendant has with someone not set up by the Plaintiff itself. If the only evidence is in the form of a series of trap transactions, they have to be shown as having been obtained using fair means. The Plaintiff seeking to establish jurisdiction on the basis of such trap transactions would have to aver unambiguously in the plaint, and also place along with it supporting material, to prima facie show that the trap transactions relied upon satisfy the above test‖.
Having regard to the averments in the plaint, it is clear that the defendants invoke jurisdiction of this Court primarily on three grounds (i) that the defendants advertise their offer all over India including in Delhi through their website www.fedsec.in; (ii) that the defendants are acting as the manager/merchant bankers to and/or market intermediaries for various entities/companies and servicing clients in Delhi and thus carrying on business and working for gain in Delhi; and (iii) that the defendants have been appearing in prominent national dailies in their capacity as merchant bankers; offers made by the defendants to public in the capacity of merchant bankers or manager of offer for their clients have been published inter alia in Delhi edition of national dailies with wide circulation such as Business Standard in August, 2012.
The last two mentioned averments are sought to be substantiated by documents (appearing at pages 959-1019 of Vol. V) of plaintiff’s documents. A perusal of the said documents, however, shows that they pertain only to the first defendant and not to the other two, the place of target companies being in Mumbai, documents in the nature of public announcements to equity shareholders listing the address of the first defendant in Mumbai, the article in Business Standard making no reference whatsoever to Delhi, it even otherwise having no nexus with the defendants, having been sourced from Bombay Stock Exchange (BSE). As regards the first mentioned averment concerning the advertisement of service on website, as pointed out by the defendants, there is no averment that the websites are specifically targeting customers in Delhi or that the website is an interactive one from which it would be or has been possible to conclude commercial transactions.
It is well settled that for adjudication on the question of territorial jurisdiction in the context of prayer for rejection or return of the plaint, the pleadings in the plaint are to be assumed to be correct and for this purpose, the defences taken in the written statement are not to be looked into and further that even if part of cause of action is shown to have arisen within the jurisdiction of the forum court, the case is bound to be entertained by it. The pleadings in the case at hand, however, fail to make out a case that would fall within the jurisdiction of this court. The averments made by the plaintiff, based primarily on the material referred to above, do not show that the defendants are working for gain in Delhi. The advertisements published of the offers made by them to the public at large in the capacity of merchant bankers or merchant intermediaries have come with clear declarations of their location inMumbai, which is the place where they have their registered offices. The reference to the website whereby commercial transactions are statedly offered do not pass the muster of Banyan Tree Holding P. Ltd. (supra), also because there is not even a single illustration given of any such commercial transaction having been entered into by the defendants with any user of their website within the territorial jurisdiction of this court.
While this court concludes that the pleadings in the plaint do not make out a case of cause of action having arisen, even in part, in Delhi, it must be added that the plaintiff is also the guilty of suppression of relevant and material facts. As noted earlier, the pleadings in the plaint are silent as to the fact, but one of the documents filed in the voluminous material submitted in support reveals, that the registered office of the plaintiff corporation in India is located in Mumbai. The plaintiff could not expect the court to go through the voluminous documents to find out the facts, particularly such facts as deserve to be mentioned upfront in clear terms in the plaint. [See order dated 13.01.2010 in FAO (OS) 28/2010, Aero Club Vs. Timberland]. For invoking the jurisdiction of the court in Delhi under Section 134 of the Trademarks Act, 1999, it was incumbent upon the plaintiff to plead and show that it actually and voluntarily resides or carries on business or personally work for gain within its territorial limits. This obviously could have been shown with reference to the location of the registered office of the plaintiff in Delhi. The fact that the registered office of the plaintiff is in Mumbai, omission to make a pleading in this regard in the plaint appears to be deliberate. Needless to add, such conduct would disentitle the plaintiff to equitable relief from the court. [Section 41(i) of Specific Reliefs Act, 1963].
Be that as it may, it is clear from the above that the plaint has been wrongly presented in this court. Since the defendants are located in Mumbai, the High Court of Judicature at Bombay would have been the appropriate court of jurisdiction, as was conceded at the hearing on 27.03.2017 when it was submitted that in the event of application under Order VII Rule 10 CPC (IA 18137/2014) being allowed, the plaintiff would seek appropriate direction in terms of order VII Rule 10A CPC, opting to present the plaint for further proceedings in the High Court of Judicature at Bombay.
For the foregoing reasons, the application for return of plaint (under Order VII Rule 10 CPC) is allowed. The plaint of the suit at hand stands returned. On the oral application made, the plaintiff is granted the liberty to have the plaint returned in terms of Order VII Rule 10A CPC for it to be presented before the High Court of Judicature at Bombay (in the State of Maharashtra) on 01.05.2017. The Registry shall take necessary steps accordingly.
The suit and the applications filed therewith, as presented before this court, stand disposed of in above terms.

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