Shree Rajmoti Industries vs Rajmoti Oil Mill Pvt. Ltd. And Anr.
2004 Latest Caselaw 1231 Del

JUDGMENT

Mukul Mudgal, J.

1. This application on behalf of defendant under Order VII Rule 11 CPC seeks rejection of the plaint on the plea of want of territorial jurisdiction of this Court.

2. The learned counsel for the defendant has raised objections based on territorial jurisdiction by submitting that Section 62(2) of the Copyright Act, 1957 read with Section 134(2) of the Trade Marks Act and Section 20(2) of the Civil Procedure Code(hereinafter referred to as the `Cr. Act', `T.M. Act' and the `Code') indicate the place where the plaintiff 'carries on business' which is the common determinative factor in all these Sections. He has further submitted that the expression "carries on business" is a sine qua non for attracting the territorial jurisdiction of this Court under Section 62(2) of Cr Act and Section 134(2) of the T.M. Act which proposition the learned counsel for the plaintiff does not dispute at all.

3. The principal submission, advanced by the defendant's counsel is based upon the judgment of the Hon'ble Supreme Court in Exphar SA and Another v. Eupharma Laboratories Ltd. and Another . The relevant portions of the said judgment which dealt with the effect of the Section 62(2) of the Cr. Act reads as follows:-

"9. Besides, when an objection to jurisdiction is raised by way of demurrer and not at the trial, the objection must proceed on the basis that the facts as pleaded by the initiator of the impugned proceedings are true. The submission in order to succeed must show that granted those facts the court does not have jurisdiction as a matter of law. In rejecting on the ground of jurisdiction, the Division Bench should have taken the allegations contained in the plaint to be correct. However, the Divisio Bench examined the written statement filed by the respondents in which it was claimed that the goods were not at all sold within the territorial jurisdiction of the Delhi High Court and also that Respondent 2 did not carry on business within the objections to these factual statements by the respondents, surprisingly the Division Bench said:

"Admittedly, the goods are being traded outside India and not being traded in India and as such there is no question of infringement of trade mark within the territorial limits of any court in India what to say of Delhi."

10. Apart from the ex facie contradiction of this statement in the judgment itself, the Division Bench erred in going beyond the statements contained in the plaint.

11. The Division Bench has also erred in its construction of Section 62 of the Copyright Act, 1957. Section 62 reads:

"62. Jurisdiction of court over matters arising under this Chapter.__(1) Every suit or other civil proceedings arising under this Chapter in respect of the infringement of copyright in any work or the infringement of any other right conferred by this Acshall be instituted in the District Court having jurisdiction.

(2) For the purpose of Sub-section (1), a `District Court having jurisdiction' shall, notwithstanding anything contained 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 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."

12. We would like to emphasise "the word include". This shows that the jurisdiction for the purposes of Section 62 is wider than that of the court as prescribed under the Code of Civil Procedure, 1908. The relevant extract of the report of the Joint Committee published in the Gazette of India dated 23-11-1056 which preceded and laid the foundation for Section 62(2) said:

"In the opinion of the Committee many authors are deterred from instituting infringement proceedings because the court in which such proceedings are to be instituted is situated at a considerable distance from the place of their ordinary residence. The Committee feels that this impediment should be removed and the new sub-clause (2) accordingly provides that infringement proceedings may be instituted in the District Court within the local limits of whose jurisdiction the person instituting the proceedings ordinarily resides, carries on business etc."

4. Mr. Seth, the learned counsel for the defendant has strenuously urged that the above judgment clearly supports his plea as ''carries on business'' must be construed to mean as ''carries on business in a place where the plaintiff has the office''. For this purpose, he has relied upon the following judgments:-

(1) In Union of India and Another v. Sri Ladulal Jain where the Hon'ble Supreme Court held that the Government carries on business at a place of its headquarters where it can be sued.

(2) In Gupta Sanitary Stores v. Union of India and Another Full Bench, wherein it was held that the Government can be sued at the place of central management and control of business.

(3) In Sh. Kuldeep Singh v. Union of India and Others Full Bench, wherein it was held that the headquarters of Northern Railways being in Delhi is the place where it `carries on business'.

(4) Halsbury Laws of England 4th Edition, Para 108 states the expression ''carries on business''refers to some place of permanent character for purposes of an action, a firm may also''carry on business''at its branch establishment.

5. In the three judgments in (i) Glaxo Operations UK Ltd. and Ors. V. Samrat Pharmaceuticals (ii) Tata Oil Mills Co. Ltd. v. Dr. Gajra's Monochem Industries reported as 1988 (1) All India Arb. L.R. (Delhi) Paras 4 and 6 and (iii) Lachhman Das Behari Lal v. Padam Trading Co. and Others reported as 2002 (25) PTC 508 (Delhi), it was upheld that the cases in Delhi were maintainable because their branch offices were situated in Delhi and, therefore, they were carrying in business in Delhi.

6. The learned counsel for the defendant has further relied upon the following judgments to contend that:-

(1) In Oil and Natural Gas Commission v. Utpal Kumar Basu and Others it was held by the Hon'ble Supreme Court that the mere reading of advertisement of ONGC in Calcutta would not bestow territorial jurisdiction on Calcutta High Court.

(2) In R.S.D.V. Finance Co. Pvt. Ltd. v. Shree Vallabh Glass Works Ltd. wherein the Hon'ble Supreme Court held that if the Court does not have jurisdiction it should return the plaint for presentation to the appropriate Court and.

(3) Finally in DLF Industries Limited v. ABN Amro Bank and Others reported as 2000 (3) Arb. L.R. 600 (Paras 18 and 19) wherein the Division Bench of this Court held that if the Court does not have the territorial jurisdiction, it cannot continue with the interim stay order and must vacate the stay order while returning the plant to plaintiff for presenting same to an appropriate Court.

7. Thus the thrust of the arguments of the learned counsel for the defendant/applicant is that unless and until there is an office of the defendant situated in Delhi, it cannot be said to have been carrying on business in Delhi, and therefore the provisions of Section 62(2) of the Cr.Act and Section 134(2) of the T.M.Act are not attracted.In my view there is no merit in the plea of the learned counsel for defendant/applicant on the plea of territorial jurisdiction. None of the judgments cited by him old that unless and until a party has a office/branch office in Delhi or place of business it cannot be held to be carrying out business at the place of suing which is Delhi. All that the said judgments cited hold are that the party can be sued and carries on business where its office is situated. This does not lead to a conclusion that the party cannot carry on business where it does not have an office. Accordingly, this plea of the defendant's counsel as to the territorial jurisdiction of this court is rejected.

8. A bare perusal of the judgment of the Hon'ble Supreme Court in Eupharma Laboratories's case (supra) which was cited by the learned counsel for the defendant shows that far from being in favor of the defendant, it is in favor of the plaintiff. In fact in para 9, the Hon'ble Supreme Court has held that when an objection to jurisdiction is raised, the Court can proceed on the basis that the facts as pleaded by the initiator of the impugned proceedings are correct. The plaintiff has averred in its plant that it carries on business in Delhi and has referred to its two distributors for this purpose. Whether or not such a plea has merit and is sustainable has no bearing on the issue of jurisdiction. In my view that is a sufficient compliance under Secion 62(2) of the Cr. Act and Section 134(2) of the T.M. Act. The observations of the Hon'ble Supreme Court in the aforesaid judgment in para 13 are instructive and reads as follows:-

"13. It is, therefore, clear that the object and reason for the introduction of sub-section (2) of Section 52 was not to restrict the owners 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 presently 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."

This paragraph clearly shows that the sub-section (2) of Section 62 of the Cr. Act has been construed to be much wider than normal grounds as laid down under Section 20 of the Civil Procedure Code.

9. In this view of the matter, there is no merit in the plea, raised by the learned counsel for the defendant/applicant qua territorial jurisdiction. Accordingly the prayer made in the application is rejected and the application stands dismissed.

CS(OS) No. 909/04 and IA 6779,7174/04

In spite of the Court repeatedly asking him, the learned counsel for the defendant has declined to make his submissions on the merits of the continuance of the interim order even proceeding on the assumption that the plaint was maintainable.

Accordingly, I am left with no option in the absence of any arguments on merits of the interim orders but to direct that the interim orders dated 29th September, 2004 will continue.

List the matter on 4th February, 2005.