The Indian Performing Rights Society Ltd. Vs. Sanjay Dalia (“IPRS Judgment”) has settled the law relating to the said provisions but the interpretation of the same now poses a problem...Territorial jurisdiction, i.e., courts in which city/state in India should be approached for infringement of trademark and copyright, has confused most intellectual property lawyers. While S.134 of...
The Indian Performing Rights Society Ltd. Vs. Sanjay Dalia (“IPRS Judgment”) has settled the law relating to the said provisions but the interpretation of the same now poses a problem...
Territorial jurisdiction, i.e., courts in which city/state in India should be approached for infringement of trademark and copyright, has confused most intellectual property lawyers. While S.134 of the Trademarks Act, 1999 (“the Trademarks Act”) and S.62 of the Copyright Act, 1957 (“the Copyright Act”)—collectively, “the said provisions”—seem plain and simple, i.e., wherever the Plaintiff resides or works for gain, the Plaintiff is entitled to approach the appropriate court in that city/state, the legal position is not that simple. The aim is to ensure that the Plaintiff is not deterred from instituting infringement proceedings because the court in which proceedings are to be instituted is at a considerable distance from the place of the Plaintiff’s ordinary residence/business.
Thus, clearly, the said provisions are a departure from the general rule contained in S. 20 of the Civil Procedure Code, 1908 (“the CPC”).
Many attempts have been made to clarify the concept of territorial jurisdiction by the Supreme Court of India, interpreting the said provisions, the first of the few earlier judgments is Dodha House Vs. S.K. Maingi1 (“Dodha House Case”). In this judgment, the Supreme Court was concerned with the maintainability of a composite suit under the Trademarks Act and Copyright Act, and it was held that merely by combining two separate and distinct causes of action, jurisdiction cannot be conferred. However, the question before the Supreme Court was different than the question of jurisdiction, though the Dodha House Case delved upon this issue stating that the said provisions created an additional forum.
IPRS Judgment
The question of jurisdiction directly arose in Indian Performing Rights Society Ltd. Vs. Sanjay Dalia2 (“IPRS Judgment”). The Dodha House Case was discussed in detail by the Supreme Court, and since the question involved in the Dodha House Case was not the same as that in the IPRS Judgment, the Supreme Court in the IPRS Judgment did not consider the same to be binding on it and hence proceeded to decide this question afresh.
The Supreme Court interpreted the said provisions and read the general provision of S. 20 of the CPC into the said provisions and held that S. 20 does not violate the said provisions. In penultimate para no. 52, the IPRS Judgment holds as follows:
“In our opinion, the provisions of Section 62 of the Copyright Act and Section 134 of the Trade Marks Act have to be interpreted in the purposive manner. No doubt about it that a suit can be filed by the Plaintiff at a place where he is residing or carrying on business or personally works for gain. He need not travel to file a suit to a place where defendant is residing or cause of action wholly or in part arises. However, if the Plaintiff is residing or carrying on business etc. at a place where cause of action, wholly or in part, has also arisen, he has to file a suit at that place, as discussed above.”
The Supreme Court in para nos. 18-20 clarifies the abovementioned paragraph as follows:
“18. On a due and anxious consideration of the provisions contained in Section 20 of the CPC, Section 62 of the Copyright Act, and Section 134 of the Trade Marks Act and the object with which the latter provisions have been enacted, it is clear that if a cause of action has arisen wholly or in part, where the Plaintiff is residing or having its principal office/carries on business or personally works for gain, the suit can be filed at such place/s. Plaintiff(s) can also institute a suit at a place where he is residing, carrying on business, or personally works for gain dehors the fact that the cause of action has not arisen at a place where he/they are residing or any one of them is residing, carries on business, or personally works for gain. However, this right to institute suit at such a place has to be read 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. The very intendment of the insertion of provision in the Copyright Act and Trade Marks Act is the convenience of the Plaintiff. The rule of convenience of the parties has been given a statutory expression in Section 20 of the CPC as well. The interpretation of provisions has to be such which prevents the mischief of causing inconvenience to parties.
19. The intendment of the aforesaid provisions inserted in the Copyright Act and the Trade Marks Act is to provide a forum to the Plaintiff where he is residing, carrying on business, or personally works for gain. The object is to ensure that the Plaintiff is not deterred from instituting infringement proceedings “because the court in which proceedings are to be instituted is at a considerable distance from the place of their ordinary residence.” The impediment created to the Plaintiff by Section 20 of the CPC of going to a place where it was not having ordinary residence or principal place of business was sought to be removed by virtue of the aforesaid provisions of the Copyright Act and the Trade Marks Act. Where the Corporation is having ordinary residence/ principal place of business and cause of action has also arisen at that place, it has to institute a suit at the said place and not at other places. The provisions of Section 62 of the Copyright Act and Section 134 of the Trade Marks Act never intended to operate in the field where the Plaintiff is having its principal place of business at a particular place and the cause of action has also arisen at that place so as to enable it to file a suit at a distant place where its subordinate office is situated, though at such a place, no cause of action has arisen. Such interpretation would cause great harm and would be juxtaposed to the very legislative intendment of the provisions so enacted.
20. In our opinion, in a case where cause of action has arisen at a place where the Plaintiff is residing or where there are more than one such persons, any of them actually or voluntarily resides or carries on business or personally works for gain would oust the jurisdiction of the other place where the cause of action has not arisen, though at such a place, by virtue of having subordinate office, the Plaintiff instituting a suit or other proceedings might be carrying on business or personally works for gain.”
The reasoning given by the Supreme Court in the IPRS Judgment is as under:
- Accrual of cause of action is a sine qua non for a suit to be filed. S. 20 of the CPC recognizes the territorial jurisdiction of the courts inter-alia, where the cause of action has arisen. Cause of action is such a bundle of facts which is required to be proved for grant of relief to the Plaintiff.3
- The expression “notwithstanding anything contained in the code of civil procedure” does not oust the applicability of the provisions of S. 20 of the CPC.4
- The Supreme Court followed the Heydon’s Rule of the principle of statutory interpretation that is to interpret a provision in such a manner so as to prevent any mischief.5
Interpretation of IPRS Judgment by High Courts in India
The High Court of Delhi was posed with the question of interpreting the IPRS Judgment in Ultra Home Construction Pvt. Ltd. Vs. Purushottam Kumar Chaubey and Ors6 (“The Ultra Home Judgment”). The Division Bench dealt with the IPRS Judgment and the Dodha House Case. Simply put, the Plaintiff complained of infringement at place A, while owning a hotel at place A, and sued at place B where the registered office of the Plaintiff was located. Relying on the Dodha House Case, it was contended that merely owning a hotel in joint venture with a third party did not mean that the Plaintiff carried on business at place A. The Division Bench of the Delhi High Court, relying on the IPRS Judgment, held that the deeming provision contained in the explanation in Section 20 of the CPC has been read into S. 134 of the Trademarks Act, and S. 62 of the Copyright Act laid down the following explanation to the IPRS Judgment in para nos. 13 and 14, rejecting the conflict between the Dodha House Case and the IPRS Judgment, as follows:
| Sl. No. | Place of Plaintiff’s principal office (Sole office in S.No.1) | Place of Plaintiff’s subordinate office/ branch office | Place where cause of action arose | Place where Plaintiff can additionally sue under Sections 134(2) and 62(2) |
|---|---|---|---|---|
| 1. | A | -- | C | A |
| 2. | A | B | A | A |
| 3. | A | B | B | B |
| 4. | A | B | C | A |
14. The present case falls under S. No. 3 in the above table. The appellant/Plaintiff has its principal office in Delhi (place A). Its subordinate office is at Deogarh, Jharkhand (place B), where it runs one of its hotels (Amrapali Clarks Inn), albeit in collaboration with Clarks Inn hotels. The alleged cause of action has accrued at Deogarh, Jharkhand (place B). Therefore, the appellant/Plaintiff could, in respect of the alleged cause of action in this suit, institute a suit against the defendants at Deogarh, Jharkhand (place B) but not in Delhi. Thus, the conclusion arrived at by the learned single judge that this court did not have the territorial jurisdiction to entertain the suit cannot be faulted.”
Even before this interpretation, a rather interesting issue of jurisdiction arose in the Delhi High Court, which was referred to the Division Bench headed by the Chief Justice of the Delhi High Court7, in the conspectus, that for the purposes of passing off action or 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 interpretation of the IPRS JUDGMENT
will also have to be put at rest by the Supreme Court of India
The Division Bench dealt with the law relating to the issue in the United States of America, Canada, United Kingdom, and India, thereby applying the “effects test” in conjunction with the “sliding scale” test to determine if the forum court has the jurisdiction to try a suit concerning Internet-based disputes. The court further held that the jurisdiction does not get attracted merely on the basis of the interactivity of the website which is accessible but the nature of the activity permissible and resultant real commercial transaction (and not a trap transaction) resulting in harm or injury to the Plaintiff has to be pleaded and prima facie established by the Plaintiff, burden of proof of which lies on the Plaintiff.
Soon after the Ultra Home Judgment, matters involving similar issues came up before the Single Judges of the Delhi and Bombay High Courts, who chose to distinguish the interpretation given to the IPRS Judgment in the Ultra Home Judgment.
The Delhi High Court in RSPL Limited Vs. Mukesh Sharma8, stating that it holds a different view from the Division Bench in Ultra Home, interpreted IPRS case (in para no. 64) as follows
“There is nothing in the judgment of the Supreme Court in Indian Performing Rights Society Limited (supra) to suggest that the Plaintiff is precluded from filing a suit where its head office/principal office is situated, even though it has a subordinate office at a place where the cause of action arises by resort to Section 62 of the Copyright Act and Section 134 of the Trade Marks Act. In such a situation, the Plaintiff, in my view, could maintain a suit at either of the two places, namely, where its head office/ principal place of business is situated and where he resides or works for gain and also at the place where the Plaintiff may have subordinate office and a part of cause of action has arisen. In fact, even if the Plaintiff does not have a subordinate office at the place where cause of action has arisen, by resort to Section 20(c) of the CPC, the Plaintiff would be entitled to file a suit within the jurisdiction of the Court where the cause of action has arisen, wholly or partly.”
This view was seconded by the Bombay High Court in Manugraph India Limited Vs. Simraq Technologies Pvt. Ltd. & Ors.9, and it was held in para no. 36 sub para (b) that
“(b) Where the Plaintiff has only one office, it presents no difficulty. Where the Plaintiff has multiple offices, however, he has a limited choice. He may either bring a suit under Section 134(2) or Section 62(2), i.e., within the jurisdiction where he resides, or he may invoke Section 20 and file a suit where the Defendants reside or work for gain or where the cause of action arose wholly or in part. The fact that the Plaintiff has the choice of bringing a suit based on Section 20 of the CPC does not mean that his rights under Section 134(2) or Section 62(2) are in any way eroded, curtailed, or restricted.”
Importance of Pleadings to Establish Jurisdiction
Considering the aforesaid position of law as it exists today, pleadings in a matter assume importance. Pleadings as to the existence of an office (whether registered or otherwise), details of the nature of cause of action arisen in a particular fact situation, pleadings in respect of Internet-based disputes must be pleaded depending upon jurisdictional facts that arise in a particular matter to ensure that jurisdiction of the proper and appropriate court is maintained. What is a material fact (including documents) depends on a case-tocase basis, and no straight-jacket formula can be laid down.
Conclusion
The above discussion leads us to only one conclusion that although the IPRS Judgment has settled the law relating to the said provisions, the interpretation of the same now poses a problem, and the interpretation of the IPRS Judgment will also have to be put at rest by the Supreme Court of India. For the present, we tend to agree with the view taken in RSPL Limited supra that in the event the Plaintiff has two offices and cause of action arises at a place where one of the offices is situated, the Plaintiff may choose either of the two courts to file a suit. This is in furtherance of the object of the said provisions that the Plaintiff should not be deterred from filing an infringement action.
2. (2015) 10 SCC 161.
3. Refer para 17 of the IPRS Case.
4. Refer para 14, and 22 of the IPRS Case.
5 Refer para 24 and 26 of the IPRS Case.
6 FAO(OS) 494 of 2015; Judgment delivered on 20.01.2016.
7 Banyan Tree Holding Pvt. Ltd. Versus R. Murli Krishna 2009 SCConline Del 3780.
8 I.A. No.11034/2015 in C.S. (OS) No.124/2015 dated 05.04.2016.
9 AIR 2016 Bom 217.
Disclaimer – The views expressed in this article are the personal views of the author and are purely informative in nature.