Bombay High Court

Ferring Pharmaceuticals Pvt. Ltd vs Ltd. on 19 October, 2010

Bench: R. M. Borde

                                          1

      
           IN THE HIGH COURT OF JUDICATURE OF BOMBAY




                                                                            
                           BENCH AT AURANGABAD
                    WRIT PETITION NO.6007 OF 2010    




                                                    
      
     Ferring Pharmaceuticals Pvt. Ltd.,
     through its Authorized Signatory,
     Dr.Ashok Dattatray Alate,




                                                   
     Managing Director of the petitioner
     Company, having its Registered 
     Office at 403, Sigma Technology 
     Street, Hiranandani Garden, 




                                       
     Powai, Mumbai - 400 076.                                 Petitioner

                  Versus
                       
     Sun Pharmaceuticals Industries
                      
     Ltd., having its Registered office
     at Tandalja Akota Road, 
     Vadodara-390020, Gujarat and
     its Administrative Office at 17-B,
      


     Mahal Industrial Estate,
   



     Mahakali Caves Road, Chakla,
     Andheri (East), Mumbai - 400 093.                        Respondents
      





     Mr.S.G.Ladda,   advocate for petitioner.
     Mr.H.W.Kane, advocate with Mr.S.B.Deshpande, Mr.Swapnil Joshi 
     and   Mr.S.S.Patunkar,   advocates   i/by   J.P.Legal   Associates       for 
     Respondent.
      





                                CORAM:            R.M.BORDE, J. 
                                Reserved on:     20th September, 2010. 
                                Pronounced on: 19th October, 2010.


     JUDGMENT:

1 Heard Shri S.G.Ladda, learned Counsel for the

petitioner and Shri H.W.Kane, learned Counsel appearing with

S/Shri S.B.Deshpande, Swapnil Joshi and S.S.Patunkar,

advocates for Respondent.

Rule. Rule made returnable forthwith and heard

finally by consent of learned Counsel for respective parties.

2 Petitioner herein - original defendant is raising

exception to the order dated 05.03.2010, passed by District

Judge-3, Ahmednagar, below Exhibit-13 in Trade Mark Suit No.02

of 2009.

3 Respondent herein - original plaintiff instituted suit

under the provisions of Sections 27(2), 28 and 29 read with

Sections 134 and 135 of the Trade Marks Act, 1999, claiming

decree of perpetual injunction against the defendant restraining it

from infringing plaintiff's Trade Mark "Aerotide" and further

restraining it from passing off deceptively similar goods in the

name of "Ferotide" and further relief of damages as well as for

rendition of accounts.

4 Plaintiff as well as defendant are the Companies

registered under the provisions of Companies Act. Plaintiff

Company is having its registered office at Wadodara in Gujarat,

whereas, it has its administrative office at Mumbai. Defendant

Company has its registered office at Mumbai. Defendant tendered

an application at Exhibit-13 under the provisions of Order 7 Rule

11 and Section 151 of the Code of Civil Procedure requesting the

Court to reject the plaint. According to defendant, suit has been

filed in the Court having no jurisdiction to entertain the suit and

secondly, the entire suit is liable to be dismissed on the ground

that there is suppression of material facts with a view to mislead

the Court. Defendant, in the application, contends that the suit is

required to be presented within the local limits of whose

jurisdiction the defendant actually and voluntarily resides, or

carries on business or personally works for gain, or where the

cause of action wholly or in part arises and that the suit is to be

instituted in a Court within whose jurisdiction the defendant, or

each of the defendants where there are more than one, at the time

of commencement of the suit, actually and voluntarily resides, or

carries on business, or personally works for gain; or that the suit

is to be instituted in a Court within whose jurisdiction any of the

defendants, where there is more than one, at the time of

commencement of the suit, actually and voluntarily resides, or

carries on business, or personally works for gain; or that the suit

is to be instituted in a Court within whose jurisdiction the cause of

action, wholly or in part, arises. The objection is based on the

provisions of Section 20 of the Code of Civil Procedure. It is

contended that there is no averment in the plaint that defendant

resides or carries on business or personally works for gain at

Ahmednagar and as such, question of applicability of provisions of

Section 20(a) or 20(b) does not arise. It is further contended that

there is no averment in the plaint that cause of action has taken

place within the territorial limits of Ahmednagar district.

According to the defendant, provisions of Section 134(2) of Trade

Marks Act also will have no applicability for the reason that 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 at

Ahmednagar. It is further contended that so far as the Company is

concerned, it actually resides where its registered office is situated.

The registered office of Plaintiff Company is at Vadodara, Gujarat.

Plaintiff Company also does not have any manufacturing activity at

Ahmednagar. It is contended that manufacturing activity of the

product was being carried out at Dadra Nagar Haveli up to April

2006 and since thereafter the manufacturing activity has come to

a stand still, as per the averments made in the plaint itself. Thus,

according to the defendant, the Court at Ahmednagar cannot

entertain the suit as the person instituting the suit cannot be said

to be actually or voluntarily residing in Ahmednagar or carrying

out any business or working for personal gain at Ahmednagar.

Thus, it is contended that none of the provisions of Section 134(2)

has any applicability.

5 The application tendered by the defendant was

opposed by plaintiff contending that the plaint discloses accrual

cause of action. Plaintiff has presented on record that it possesses

the factory license and as such the Court at Ahmednagar has

jurisdiction to try and decide the suit.

6 The application was heard and disposed of by District

Judge-3, Ahmednagar, who was pleased to reject the application in

view of the order passed on 5th March, 2010.

7 Shri Ladda, learned Counsel appearing for the

petitioner - original defendant, vehemently contended that in view

of provisions of Section 134 of the Trade Marks Act read with

Section 20 of the Code of Civil Procedure, the Court at

Ahmednagar can have no jurisdiction to entertain the suit. It is

contended that on perusal of the plaint, it does not disclose

accrual of cause of action and as such, the plaint is liable to be

rejected. Section 20 of the Code of Civil Procedure reads thus:

20 Other suits to be instituted where defendants reside or cause of action arises -

Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction -

(a) the defendant, or each of the defendants

where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or

(b) any of the defendants, where there are more than one, at the time of the

commencement of the suit, actually and voluntarily resides, or carries on business, or

personally works for gain, provided that in such case either the leave of the Court is given, or the

defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or the cause of action, wholly or in part, arises.

8 Provisions of Section 134 of the Trade Marks Act are

quoted as below:

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.

9 It is the contention of petitioner - original defendant

that the registered office of Plaintiff-Company is situate at

Vadodara, Gujarat. The Company used to manufacture the

product "Aerotide" at its plant situate at Silvassa. The Company

neither has any manufacturing activity at Ahmednagar in relation

to the product in question nor has its registered office at

Ahednagar. Thus, it cannot be said that the Company is carrying

on any business activity at Ahmednagar. Inviting my attention to

the provisions of Section 20(c) of the Code of Civil Procedure, it is

contended that the cause of action, either in whole or in part, does

not arise within the jurisdiction of Court at Ahmednagar.

Explanation to Section 20 of the Code provides that, "a

Corporation shall be deemed to carry on business at its sole or

principal office in India or, in respect of any cause of action arising

at any place where it has also a subordinate office, at such place."

Plaintiff Company neither has principal office or subordinate office

at Ahmednagar nor carries on any manufacturing activity in

respect of product in question at Ahmednagar. As such, the

District Court at Ahmednagar shall have no jurisdiction to

entertain the suit.

10 In order to advance further arguments, petitioner has

placed reliance on the judgment in the matter of M/s Dhodha

House Vs. S.K.Maingi with M/s Patel Field Marshal Industries

& others Vs. M/s P.M. Diesel Ltd., reported in AIR 2006 SC 730.

The expression "carries on business" and the expression

"personally works for gain" appearing in Section 134 of the Trade

Marks Act as well as Section 62(2) of the Copyright Act, is dealt

with in para 45 of the judgment, which is as follows:

ig 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 even 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 Engligh 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."

11 Relying on the judgment in the matter of Haryana

Milk Foods Ltd. Vs. Chambel Dairy Products, reported in 98

(2002) DLT 359, it is contended that, Order 7 Rule 1 enjoins that a

plaint shall contain the particulars as to the facts constituting the

cause of action and the facts showing that the Court has

jurisdiction. It is, therefore, mandatory that a plaintiff must give

such particulars as will enable the Court to ascertain from the

plaint whether in fact and in law a cause of action did arise as

alleged or not. Similarly, if a plaintiff relies on defendant's place of

business as giving jurisdiction, the facts showing this must be

stated in the body of the plaint. It is imperative that the plaint

must contain the facts showing how the Court has jurisdiction. It

also cannot be controverted that the question of jurisdiction has to

be decided, prima facie, by looking into the averments made in the

plaint and not by the defence which may be set up by the

defendant. It also does not depend upon the character of the relief

prayed for by the plaintiff. It is equally true that to determine the

question of jurisdiction of the Court on the basis of bundle of

facts, it is not necessary to look at the paragraphs of the plaint but

the entire plaint must be taken into consideration to ascertain the

bundle of facts which give rise to the cause of action and to

determine whether any one or more of such acts occurred within

the territorial jurisdiction of the Court.

12 It is contended that on perusal of the plaint, it neither

gives details as regards accrual of cause of action nor it makes

reference to defendant's place of business for the purposes of

investing jurisdiction on the Court. It is also contended, placing

reliance on the judgment in the matter of Kusum Ingots and

Alloys Limited Vs. Union of India, reported in (2004) 6 SCC 254,

that, where it has been enunciated that if only a small part of the

cause of action has arisen within the territorial jurisdiction of a

particular High Court, it is not bound to entertain the petition. It

would be sufficiently empowered to refer the petition to the court

where substantially the cause of action has arisen as it would be

more convenient to adjudicate the matter in that Court. It is

contended that plaintiff's contention that it has a manufacturing

facility at Ahmednagar will not invest the Court at Ahmednagar

with the jurisdiction to try the suit, as, admittedly, the

manufacturing activity at Ahmednagar does not relate to the

product in question. Petitioner has also placed reliance on the

judgment in the matter of Indian Performing Rights Society Vs.

Sanjay Dalia, reported in 2009 (39) PTC (Del.) DB.

13 Learned Counsel appearing for the Respondent-

original plaintiff has supported the order passed by the trial Court

and contended that the objections raised by defendant do not bear

any substance and ought to be turned down summarily. It is

contended that provisions of Section 134 of the Trade Marks Act

have to be interpreted in the widest possible manner with a view to

invest jurisdiction with the Court and a restricted meaning cannot

be given by any reference to provisions of the Code of Civil

Procedure. It is pointed out that sub-section (2) of Section 134 of

the Trade Marks Act provides that investiture of jurisdiction on the

District Court is notwithstanding anything contained in the Code

of Civil Procedure or any other law for the time being in force and

that the suit is entertainable at District Court by a person or any

of them among several persons actually and voluntarily residing or

carrying on business or working for personal gain within the limits

of jurisdiction of District Court. It is contended that sphere

occupied by sub-section (2) of Section 134 is larger than Section

20 of the Code of Civil Procedure. It is contended that plaintiff-

Company is having its administrative office at Andheri, Mumbai

and has further established a production unit at Ahmednagar. In

order to invest jurisdiction with the Court at Ahmednagar, the

production activity at Ahmednagar plant need not relate to

production of the product in question, which is subject matter

before the District Court. The question, that has fallen for

consideration before the District Court, is as regards the violation

of trade mark by defendant-Company. It is contended that

plaintiff-Company does have manufacturing facility at

Ahmednagar employing more than 100 employees and as such,

suit instituted at Ahmednagar Court is maintainable.

14 Relying on the judgment in the matter of M/s

Dhodha House Vs. S.K.Maingi with M/s Patel Field Marshal

Industries & others Vs. M/s P.M. Diesel Ltd. (supra), petitioner

contends that to constitute "carrying on business" at a certain

place, essential part of business must take at that place. It is

principal place of business, which is within contemplation of term

"carrying on business" incorporated in sub-section (2) of Section

134 of the Trade Marks Act. It is contended that principal

business activity of plaintiff-Company is not confined to the

territorial limits of Ahmednagar Court. Moreover, plaintiff-

Company does not manufacture the products which are subject

matter of the suit at the manufacturing facility situate within the

territorial limits of Ahmednagar district. As such, suit at

Ahmednagar, shall not be maintainable.

15 To counter this argument, it is contended that such

restricted meaning cannot be attached to the term "carrying on

business" appearing in sub-section (2) of Section 134 of the Trade

Marks Act. Plaintiff-Company does have a manufacturing activity

at Ahmednagar employing more than 100 employees and

defendant-Company's contention that manufacturing of the article

in question does not have any impact on the question of

jurisdiction on the Court to entertain the suit at Ahmednagar.

16 That, in the matter of M/s Dhodha House Vs.

S.K.Maingi with M/s Patel Field Marshal Industries & others

Vs. M/s P.M. Diesel Ltd. (supra), before the Apex Court, the facts

were that plaintiff therein was carrying on business of sweet meats

in the district of Ghaziabad, whereas defendant was carrying on

business in district Faridkot. A suit was preferred by the plaintiff

- appellant before the Apex Court with a view to protect his

copyrights before the District Judge at Ghaziabad. An application

was preferred by the defendant contending that the Court has no

jurisdiction, which was allowed by the High Court holding that the

District Court has no territorial jurisdiction to try the suit. It was

a case before the Court wherein it was contended that the

business was being carried out through an agent in the name of

principal. The question, that was taken up for consideration and

was answered in paragraph 45 of the judgment, on which reliance

is placed by the petitioner, is in respect of carrying on business by

an agent who was representing the principal. The observations

made in para 45 of the judgment are essentially in reference to

carrying on business by an agent. In the instant matter, the

manufacturing activity at Ahmednagar is being carried out by the

plaintiff-Company itself.

17 That, so far as the objection raised by petitioner -

original defendant, that the manufacturing activity does not relate

to the product in question and as such, the contention of the

plaintiff that the Company carries on manufacturing activity at

Ahmednagar shall have to be overlooked, if accepted, would

tantamount to putting restrictive meaning to the provisions of

Section 134 (2) of the Trade Marks Act, which, according to me,

would be against the legislative intent.

18 It would not be out of context to refer to the similar

provisions of Section 62 of the Copyright Act, 1957. Sub-section

(2) of Section 62 thereof reads thus:

62 Jurisdiction of Court over matters arising

under this Chapter -

(1) Every suit or other civil proceeding arising under this Chapter in respect of the

infringement of copyright in any work or the infringement of any other right conferred by this Act shall be instituted in the district Court having jurisdiction.

(2) For the purpose of sub-section (1), a "district Court having jurisdiction" shall, notwithstanding anyting contained in the

Code of Civil Procedure, 1908 (5 of 1908), igor 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 other 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.

19 The provisions of Section 62(2) of the Copyright Act,

1957, are pari materia to Section 134 (2) of the Trade Marks Act,

1999. The provisions of Section 134 (2) are quoted in paragraph

no. 7 of this judgment. While interpreting provisions of Section

62(2) of the Copyright Act, 1957, the Apex Court, in the matter of

Exphar SA and another Vs. Eupharma Laboratories Ltd. &

another, reported in AIR 2004 SC 1682, has observed that:

                        "  The   word   "include"     appearing   in   in   S. 
                 62(2)   makes   the   jurisdiction     wider   than     as

prescribed under the Code of Civil Procedure,

1908."

Referring to the object of introduction of sub-section

(2) of Section 62, given in the report of Joint Committee published

in the Gazette of India dated 23.11.1956, it is observed in para 13

of the judgment, that:

"It is, therefore, clear that the object and reason for the introduction of sub-section (2) of

Section 62 was not to restrict the owner of the copyright to exercise their rights but to remove

any impediment from their doing so. Section 62(2) cannot be read as limiting the jurisdiction of the District Court only to cases where the

person instituting the suit or other 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.

It prescribes an additional ground for attracting the jurisdiction of a Court over and above the

`normal' grounds as laid down in Section 20 of the Code."

20 Thus, it cannot be controverted that the jurisdiction of

the Court, dealing with the matters arising out of Copyright Act,

would be wider than what has been restricted in Section 20 of the

Code of Civil Procedure. The provisions of Trade Marks Act, 1999,

are pari materia to the provisions of Section 62 of the Copyright

Act, 1957, and the interpretation put by the Apex Court to

provisions of Section 62(2) would squarely apply to the provisions

of Section 134(2) of the Trade Marks Act, 1999.

21 A Division Bench of Delhi High Court in the matter of

Wipro Limited and another Vs. Oushadha Chandrika Ayurvedic

India (P) Ltd. and others, reported in AIR 2008 Madras 165, has

proceeded to consider these aspects, that there is deliberate

departure from Section 20 of the Code of Civil Procedure so as to

liberally empower the plaintiff to institute the suit or other

proceedings in the Court within whose local limits he carries on

the business. It would be appropriate to refer to the observations

of the Court in para 14 of the judgment:

"It is, thus, seen that Section 62 of the Copyright Act and Section 134 of the Trade Marks Act prescribe an additional ground for attracting the jurisdiction of a Court over and

above the normal ground, as laid down in Section 20 of the C.P.C. In other words, a

special right is conferred on the proprietor of the registered trade mark to institute a suit for infringement of any trade mark or copyright in the district within whose jurisdiction he resides

or carries on business. The provisions contained in non-obstante clause by using the phrase "notwithstanding anything contained in the C.P.C, 1908 (5 of 1908) or any other law for

the time being in force" is made with a view to give a overriding effect to the said provision. It is equivalent to saying that the provision would hold the field notwithstanding anything contained in the C.P.C., or any other law for the time being in force."

22 Considering the interpretation of the provisions of

Section 134 (2) of the Trade Marks Act, 1999 by the Division Bench

of Delhi High Court in the matter of Wipro Ltd., (supra) and the

interpretation put to Section 62(2) of the Copyright Act, 1957, by

the Apex Court in the matter of Exphar SA (supra), and that

provisions of Section 62(2) of the Copyright Act, 1957 are pari

materia to Section 134(2) of the Trade Marks Act, I am of the view

that liberal approach is required to be adopted in favour of

investiture of the jurisdiction with the Courts, which would also

be in consonance with the object of the Enactment.

23 On perusal of the plaint, it appears that paragraph no.

22 gives details as regards accrual of cause of action. It is also