Delhi High Court

United Phosphorus Limited vs Ajay Garg And Another on 28 May, 2015

Author: G. S. Sistani

$~ 49
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(OS) 2405/2013
% Judgment pronounced on 28th May, 2015
UNITED PHOSPHORUS LIMITED ..... Plaintiff
Through: Mr.C.M. Lal, Ms.Nancy,
Ms.Rajeshwari H. and Ms.Aparna, Advs

versus

AJAY GARG AND ANOTHER ..... Defendant
Through: Ms.Pratibha M. Singh, Sr. Adv.
with Mr.Sushant Singh, Ms.Subha Shiny
and Mr.P.C. Arya, Advocates for defendant
no.2.
CORAM:
HON'BLE MR. JUSTICE G.S.SISTANI
G.S.SISTANI, J

I.A.13409/2014 & I.A.1372/2014

1. Plaintiff has filed the present suit for permanent injunction restraining
infringement of Indian Patent Nos.190476 and 202013 unfair competition,
delivery up, rendition of accounts, damages, etc.
2. While issuing summons in the suit, the defendants were restrained from
marketing, selling, distributing, advertising export offering for sale and in
any other manner, directly or indirectly, dealing in any product that
infringes the claims of the aforesaid Patents.
3. Two applications are being taken up for hearing, being I.A.13409/2014
under Order I Rule 10(2) of the Code of Civil Procedure, which has been
filed by the plaintiff, and I.A.1372/2014, which has been filed by
defendant no.2 under Order VII Rules 10 and 11 CPC. Arguments in these
CS(OS) 2405/2013 Page 1 of 36
applications have been heard together and are being disposed of by a
common order.
4. By I.A.13409/2014 the plaintiff seeks to implead Coramandel
International Limited as defendant no.3 (hereinafter referred to as
"Coramandel"). Coramandel is stated to have its office at Sansad Marg,
Connaught Place, New Delhi. The plaintiff also wishes to implead DVA
Agro Paraguay SRL (hereinafter referred to as "Paraguay") as defendant
no.4, who is stated to have its office at Paraguay.
5. Mr.Lall, learned counsel for the plaintiff, submits that Coramandel has
acquired the shares of defendant no.2 and also markets all the products of
defendant no.2 in the Northern part of India and defendant no.2, thus, is a
subsidiary of Coramandel and hence, would be a proper and necessary
party. Paraguay is sought to be impleaded being the purchaser of the
goods. Counsel further submits that Coramandel is also the parent
company of defendant no.2 and thus the aforesaid two proposed
defendants are sought to be impleaded.
6. In support of this submission, learned counsel for the plaintiff has relied
upon para 15 of the plaint wherein it has been averred that ".....it is
believed that many products of defendant no.2 are being marketed by
Coramandel International Limited who also has an office at Delhi", to
show the close relationship between defendant no.2 and Coramandel.
7. Reliance is also placed by Mr.Lall, learned counsel for the plaintiff, on the
copy of the annual report for the year 2012-2013 of Coramandel wherein
it has been stated that the company has completed acquisition of 42.22%
equity shares of Sabero, defendant no.2, has become a subsidiary of the
company. Reliance is also placed on the audit report to show that an audit
has been conducted of Coramandel along with its subsidiaries and jointly
CS(OS) 2405/2013 Page 2 of 36
controlled entities. Reliance is also placed on the annual report wherein it
has been stated that business of Sabero was connected with Coramandel,
which resulted in more footprints in markets, which had limited access
earlier. Reliance is also placed on the copy of consolidated statement of
profit and loss for the year ended 31.3.2013 wherein in the consolidated
notice it has been stated that Sabero Organic Gujarat Limited was
acquired during the year ended 31.3.2012.
8. It is also the case of the plaintiff that defendant no.2 has now
amalgamated with Coramandel and Coramandel is a proper and necessary
party. Moreover, Coramandel, admittedly, has an office in Delhi and
alternatively once Coramandel is impleaded as a party the objection with
regard to territorial jurisdiction would fail.
9. Ms.Pratibha M. Singh, learned senior counsel appearing on behalf of the
defendants, submits that neither Coramandel nor Paraguay is a proper and
necessary party. A purchaser of goods, Paraguay, cannot be considered a
proper and necessary party. As far as Coramandel is concerned it is
disputed that Coramandel has acquired defendant no.2 or that it markets
all the products of defendant on.2 in Northern Part of India.
10. In reply to the submissions made by Mr.Lal, learned senior counsel for
defendant no.2 further submits that the Plaintiff cannot invoke the
jurisdiction of this Hon'ble Court based on Coromandel‟s presence in
Delhi. The 2nd Defendant is not using the office of Coromandel.
Coromandel is manufacturing and marketing Acephate 75% based on its
own license. On the date of filing of the suit, Coromandel was only a
holding company of the 2nd Defendant and till date continues to be only
the holding company. The petition for sanctioning the scheme of
amalgamation of the 2nd Defendant with Coromandel was filed
CS(OS) 2405/2013 Page 3 of 36
subsequent to filing of the present suit and the petitions are pending till
date and the scheme of amalgamation has not been sanctioned. Thus, both
the 2nd Defendant and Coromandel are two separate entities in the eyes of
law and jurisdiction of this Hon'ble Court cannot be invoked based on the
presence of the holding company. Moreso, in the present case, the
products manufactured by the 2nd Defendant are not marketed through
Coromandel, its holding company. Ms.Singh has also contended that it is
a well settled principle of law that while considering the issue of
jurisdiction the plaint should be read as on the date of filing and not based
on the subsequent events. It is also submitted that it is also not the case of
the Plaintiff that all the products of the 2nd Defendant are being marketed
by Coromandel. The Plaintiff has stated in para 15 of the plaint that "it is
believed that many products of the 2nd Defendant are being marketed by
Coromandel". Even going by the assumption of the Plaintiff, the 2nd
Defendant may or may not market its Acephate 97 % SG through
Coromandel besides there is no reasonable apprehension or threat that has
arisen within the jurisdiction of this Hon'ble Court.
11. In I.A.1372/2014 (under Order VII Rule 10 & 11) defendant no.2 has
prayed for rejection of the plaint on the ground that this Court lacks
territorial jurisdiction. It has been vehemently argued before this Court
that neither plaintiff nor defendant no.2 carry on their business at Delhi
within the jurisdiction of this Court. Plaintiff has its registered office at
Mumbai, defendant no.2 is based in Gujarat and does not own, manage or
run any office or place of business at Delhi. The averments made in the
plaint are factually incorrect and misleading.
12. It is also submitted that the 2nd defendant has its manufacturing unit and
its registered office only at Gujarat. The 2nd defendant is based in Gujarat
CS(OS) 2405/2013 Page 4 of 36
and does not have any place of business at Delhi as alleged in the plaint.
13. Another argument raised by Ms.Singh is that infringement of product
patent cannot lie at Delhi as the 2nd Defendant is not selling Acephate at
Delhi or anywhere in India as admittedly the license granted to the 2 nd
defendant itself is only in respect of EXPORT and not for sale in India.
14. The plaintiff is also based in Mumbai and has its registered/corporate
office at Mumbai.
15. Furthermore, the process used by the 2nd Defendant for the manufacture of
Acephate 97% SG is completely different from that of the alleged
patented technology of the Plaintiff.
16. Ms.Singh, next submits that it is the case of the plaintiff that the present
suit is a quia timet action. Even the same is not maintainable as no cause
of action can arise at Delhi as the 2nd defendant does not export its product
from Delhi as the 2nd defendant has its manufacturing facility at Gujarat.
Furthermore, the 2nd Defendant has license only to export Acephate 97%
SG and not for selling the same in India. It is not the case of the Plaintiff
that the defendant no.2 has made an application for granting license for
manufacture and sale of Acephate 97% SG for the local market. Hence
there is no reasonable or credible apprehension of the Plaintiff stated in
the plaint to invoke the jurisdiction if this Hon'ble Court.
17. It is further stated by counsel for the defendant no.2 that the 2nd defendant
is not aware about Mr.Ajay Garg, who has been arrayed as 1st defendant
herein. The Plaintiff has unnecessarily and intentionally impleaded the 1st
defendant herein only to invoke the jurisdiction of this Hon‟ble Court and
obtain an ex parte injunction by misleading the Court. The Plaintiff has
blatantly failed to substantiate the averments made in the plaint with
documentary proof as to whether the 1st defendant has been employed by
CS(OS) 2405/2013 Page 5 of 36
the 2nd defendant herein. It has been categorically stated in the written
statement that the defendant no.1 is neither an employee of the defendant
no.2 nor defendant no.2 has any dealings whatsoever with the defendant
no.1.
18. Ms.Singh also clarifies that the plaintiff‟s patent nos. 190746 and 202013
were applied, granted and sealed in Bombay outside the jurisdiction of
this Hon'ble Court.
19. It is next contended by Ms.Singh that Section 20(c) of the Code of Civil
Procedure is not applicable as defendant no.2 does not have any branch
office at Delhi. A bare reading of the plaint together with documents filed
along with the plaint completely belies the bald assertion made that the
defendant no.2 has an office and works for gain at Delhi. It is also stated
that Coramandel does not sell the impugned product i.e. Acephate 97% or
even Acephate 75% through its office at Delhi. To link the plaintiff with
Coramandel is misconceived as defendant no.2 is not using the office of
Coramandel. Cormandel is manufacturing and marketing Acephate 75%
based on its own license. It is also clarified that on the date of filing of the
suit Coramandel was only a holding company of the second defendant and
till date continues to remain a holding company. The scheme of
amalgamation has not been sanctioned and defendant no.2 and
Coramendel are two separate entities in the eyes of law.
20. It is also the case of defendant no.2 that the suit has been filed purely on
the basis of surmises and conjectures. The pleadings with respect to
jurisdiction are vague. According to the plaintiff the first defendant is the
Regional Manager of defendant no.2 and is incharge of North Zone
business. In support of this submission reliance is placed by the plaintiff
based on an information provided by an investigator over phone, however,
CS(OS) 2405/2013 Page 6 of 36
no supporting documents have been filed.
21. It is submitted that the plaintiff has made incorrect averments in the plaint
that the defendants are intending to sell its Acephate 97% dry flow soluble
granules knowing fully well that the license obtained by defendant no.2 to
manufacture Acephate 97% SG is only for export purpose alone and not
in respect of sale and marketing the said product in India including the
city of Delhi.
22. It is also the case of defendant no.2 that defendant no.2 does not advertise
its products Acephate DVA 97 DF through internet. The plaintiff has
invoked jurisdiction of this Court based on a third party website viz.
www.tradeindia.com. Furthermore, the defendants‟ website is not
interactive. Reliance is placed on Banyan Tree Holding (P) Ltd -Vs- A.
Murali Krishna Reddy & Anr, reported at 2010 (42) PTC 361, more
particularly paras 27, 36 to 45, 57, 58:

"27. .......................... A mere hosting of an interactive web-
page without any commercial activity being shown as having been
conducted within the forum state, would not enable the forum court
to assume jurisdiction. Even if one were to apply the "effects" test,
it would have to be shown that the Defendant specifically directed
its activities towards the forum state and intended to produce the
injurious effects on the Plaintiff within the forum state. We now
take a brief look at the decisions in other common law
jurisdictions."

36. It was argued before the court that in order to attain personal
jurisdiction i.e. the jurisdiction over the person of a Defendant in
contrast to the jurisdiction of a court over a Defendant's property or
his interest therein, there should be a long-arm statute on the basis
of which the court could exercise jurisdiction over any individual
located outside the state. As regards the Internet, it was argued that
it was not enough to establish that there was a passive website. The
court referred to the "purposeful availment test" and the three
CS(OS) 2405/2013 Page 7 of 36
factors highlighted in Cybersell. The learned single Judge then
noticed that India did not have a long arm statute which dealt with
the jurisdiction as regards nonresident Defendants. Therefore it had
to be examined whether the Defendant's activities "have a sufficient
connection with the forum state (India); whether the cause of action
arises out of the Defendant's activities within the forum and
whether the exercise of jurisdiction would be reasonable." In paras
46 and 47, it was observed as under:

"46. I am in agreement with the proposition that the mere fact
that a website is accessible in a particular place may not itself
be sufficient for the courts of that place to exercise personal
jurisdiction over the owners of the website. However, where
the website is not merely `passive' but is interactive
permitting the browsers to not only access the contents
thereof but also subscribe to the services provided by the
owners/operators, the position would be different. However,
as noticed in the judgment in CyberSell Inc. case (supra),
even where a website is interactive, the level of interactivity
would be relevant and limited interactivity may also not be
sufficient for a court to exercise jurisdiction. In Panavision
International LP case (supra), it was found that the
registration of the Plaintiff's mark as a domain name by the
Defendant had the effect of injuring the Plaintiff in
California and therefore the court had jurisdiction. In
Compuserve case (supra) again it was found that the
Defendant had contacted Ohio to sell his computer software's
on the Plaintiffs Ohio based systems and sent his goods to
Ohio further for their ultimate sale and thus those courts had
jurisdiction.

47. In the present case, the website "indiatvlive.com" of
Defendant No. 1 is not wholly of a `passive' character. It has
a specific section for subscription to its services and the
options (provided on the website itself) for the countries
whose residents can subscribe to the services include India.
The services provided by Defendant No. 1 can thus be
subscribed to and availed of in Delhi (India) i.e. within the
jurisdiction of this court."

CS(OS) 2405/2013 Page 8 of 36
37. After referring to the articles posted on the net the learned
Single Judge concluded in India TV that the "Defendant No. 1
intended to target expatriate Indians as well as Indians within the
country." Further the stand taken by Defendant No. 1 in its written
statement was that it had a global presence including in India. It
claimed to be the first IPTV delivery system of Indian content from
India. The website of Defendant No. 1 was launched in India as
well as in Los Angeles. It was accordingly held that "Defendant
No. 1 company has sufficient connection with India." As regards
the effects test, it was held that since the Plaintiff channel was an
Indian news channel intended for Indian audiences, any damage
alleged to have been caused or alleged to be likely to arise to the
goodwill, reputation etc of the Plaintiff would be in India.
However, the alleged damage that may have arisen or may be likely
to arise to the Plaintiff would be as a consequence of the fact that
the impugned website is accessible in India and the services
provided can be availed of in India. Consequently, it was held that
"the Defendant is carrying on activities within the jurisdiction of
this court; has a sufficient contacts with the jurisdiction of the court
and the claim of the Plaintiff has arisen as a consequence of the
activities of Defendant No. 1 within the jurisdiction of this court".

38. Having surveyed the law as it has developed in different
jurisdictions, this Court is of the view that the essential principles
developed as part of the common law can be adopted without
difficulty by our courts in determining whether the forum court has
jurisdiction where the alleged breach is related to an activity on the
internet. At the outset, this court does not subscribe to the view that
the mere accessibility of the Defendants' website in Delhi would
enable this Court to exercise jurisdiction. A passive website, with
no intention to specifically target audiences outside the State where
the host of the website is located, cannot vest the forum court with
jurisdiction. This court is therefore unable to agree with the
proposition laid down in Casio. The said decision cannot be held to
be good law and to that extent is overruled.

39. India TV appears to be somewhat closer to the development of
law in this regard since the decision in Casio. In India TV, the
learned single Judge impliedly doubted the correctness of the
decision in Casio. The learned single Judge in India TV
CS(OS) 2405/2013 Page 9 of 36
acknowledged that a mere accessibility of website may not be
sufficient to attract jurisdiction of the forum court. This, in the
considered view of this Court, is the correct position in law.

40. There was no occasion for this court even in India TV to
examine the finer aspects of the question of jurisdiction based on
the nature of the website, the intention of the host of the website to
specifically target viewers outside its jurisdiction, and the effect of
hosting such website on audiences outside such state. It appears to
this court that for the purposes of a passing off action or an action
for infringement where the Plaintiff is not carrying on business
within the jurisdiction of the forum court, and where there is no
long arm statute, the Plaintiff would have to show that the
Defendant purposefully availed itself of the jurisdiction of the
forum court. It is not enough merely to show that the website
hosted by the Defendant is an interactive one. It would have to be
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.

41. This court is not able to accept the submission of the learned
counsel for the Plaintiff that the test of "purposeful availment" must
be replaced by the test of "purposeful avoidance". While the
Defendant may in his defence show how he avoided the forum
state, the initial burden is on the Plaintiff to show that the
Defendant "purposefully availed" itself of the jurisdiction of the
forum court. The issue of incorporating filters to block access to the
website by viewers located outside the forum state will have to be
considered while deciding if the Defendant had "purposefully
avoided" the forum state. However, that question will arise only if
the Plaintiff has been able to show that the website of the
Defendant is interactive and permits commercial transactions to be
concluded by the Defendant with a user of the website.

42. This Court holds that jurisdiction of the forum court does not
get attracted merely on the basis of interactivity of the website
which is accessible in the forum state. The degree of the
interactivity apart, the nature of the activity permissible and
whether it results in a commercial transaction has to be examined.
For the "effects" test to apply, the Plaintiff must necessarily plead
CS(OS) 2405/2013 Page 10 of 36
and show prima facie that the specific targeting of the forum state
by the Defendant resulted in an injury or harm to the Plaintiff
within the forum state. For the purposes of a passing off or an
infringement action (where the plaintiff is not located within the
jurisdiction of the court), the injurious effect on the Plaintiff's
business, goodwill or reputation within the forum state as a result of
the Defendant's website being accessed in the forum state would
have to be shown. Naturally therefore, this would require the
presence of the Plaintiff in the forum state and not merely the
possibility of such presence in the future. Secondly, to show that an
injurious effect has been felt by the Plaintiff it would have to be
shown that viewers in the forum state were specifically targeted.
Therefore the "effects" test would have to be applied in conjunction
with the "sliding scale" test to determine if the forum court has
jurisdiction to try a suit concerning internet based disputes.

43. The question No. (i) is accordingly answered. 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?

44. This brings us to the question as to the extent of burden of proof
on the Plaintiff to prima facie show that the Defendant has
purposefully availed of the jurisdiction of this court. In the present
case, it is argued that by enabling customers to go on the website
and get a copy of its brochure and make enquiries, the Defendant
must be held to have purposefully availed of the jurisdiction of this
court. The question that arises is for the purposes of Section 20 (c)
CPC, in such circumstances, is what is the extent of the burden on
the Plaintiff to show prima facie that a part of the cause of action
arose within the jurisdiction of the forum court.

45. This court holds that in order to prima facie establish that the
Defendant purposefully availed of the jurisdiction of this court, the
Plaintiff would have to show that the Defendant engaged in some
commercial activity in the forum State by targeting its website
specifically at customers within that State. This is consistent with
the law laid down in Cybersell and reiterated later in Toys R Us. It
is also consistent with the application of the "tighter" version of the
CS(OS) 2405/2013 Page 11 of 36
"effects" test which is "targeting". In any action for passing off or
infringement, it would have to be shown that the Defendant by
using its mark intended to pass off its goods as that of the
Plaintiff's. A mere hosting of a website which can be accessible
from anyone from within the jurisdiction of the court is not
sufficient for this purpose. Also 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 state for commercial transactions,
will not result in the court of the forum state having jurisdiction. In
sum, 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 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 No. (ii) is answered accordingly. Question
(iii) Is it permissible for the Plaintiff to establish such prima facie
case through "trap orders" or "trap transactions"?"

23. It is also contended by Ms.Singh that license to manufacture insecticides
is applied for and granted only by the State Governments wherein the
manufacturing facility is located. Defendant no.2 has obtained a license to
manufacture insecticides from the Government of Gujarat and not from
the Government of Delhi.
24. Another ground urged by counsel for defendant no.2 is the ground of
Forum Non-convenience. It is contended that both the 2nd defendant and
the plaintiff are not based in Delhi within the jurisdiction of this Court;
CS(OS) 2405/2013 Page 12 of 36
the 2nd defendant is based in Gujarat, the manufacturing facility,
concerned authorities/executives, documents, and other witnesses for the
instant suit are at Gujarat; and since none of the documents or the officers
who are concerned with the day to day affairs of the 2nd defendant are in
Delhi and will have to travel from Gujarat to Delhi for the purpose of this
suit, the same would cause untold hardship to the defendant to prosecute
the suit.
25. As far as the merger of Coromandel is concerned, learned counsel submits
that present suit was filed by the plaintiff herein against the defendant on
27.11.2013. As on date of filing of the plaint and even till the date of
hearing, the 2nd Defendant is only a subsidiary of Coromandel
International Limited and is a separate legal entity in the eyes of law. It is
further pointed out that in April 2014, a scheme for amalgamation of the
2nd defendant with Coromandel International Ltd formulated by the Board
of Directors was approved by the Stock Exchange. The scheme of
amalgamation was approved by the share holders of Coromandel
International Ltd on 16th June 2014 and share holders of 2nd defendant
on 20th June 2014. In accordance with the same company petitions
seeking approval of scheme of amalgamation was filed before Hon‟ble
High Court of Andhra Pradesh on 27th June 2014 and before Hon‟ble
Gujarat High Court on 14th July 2014. Both the High Courts have
ordered notice in both the Company Petitions.
26. Per contra, Mr.Lall, learned counsel for the plaintiff submits that the
plaintiff has extensively asserted in the plaint and filed documents to
establish that the defendant is carrying on business in Delhi and for the
purposes of deciding the present application only allegations made in the
plaint are to be considered and jurisdiction being a mixed question of fact
CS(OS) 2405/2013 Page 13 of 36
and law should be decided at trial.
27. Relying on Section 20(c) CPC, Mr.Lall contends that the defendants sell
Acephate 75% and Acephate 97% powder through their office in Delhi.
Thus, there is reasonable apprehension that they will sell the patented
infringing product in Delhi as well, which they are currently exporting. It
is also contended that the defendants had offered to supply samples at
Delhi.
28. Mr.Lal, contends that while deciding the present application under Order
7 Rule 10 & 11 CPC filed by the defendants only the assertion made in
the plaint are to be looked into. He has drawn the attention of the court to
paragraphs 15, 16, 17, 18, 20, 28, 31 and 32 of the plaint, wherein it has
been asserted as under:

"15. Defendant no.2. is a company ..... having an office at Delhi ....
Defendant No.1 conducts all the marketing and other business
activities for and on behalf of Defendant No. 2 from the office at
Delhi and products of the Defendant No.2 are sold across the north
zone .... It is believed that many products of Defendant No. 2 are
being marketed by Coramandel International Ltd. who also has an
office at Delhi.

16. ... Defendant No. 2 is in the process of manufacturing and
launching/exporting and/or selling acephate 97% soluble granules
in India and elsewhere .... Defendant no.2 is almost on the verge of
launching the product and towards this end, has started all
preparatory activities including preparation of the package and has
initiated discussions with various distributors in India and
abroad.....

17. .....It may be noted that hitherto the product made by the
Defendant No.2 and available in the market is acephate 75% and
97% free flow power ... However, now after noting the success
achieved by the Plaintiff through its innovative product and the fact
that the Plaintiff through its efforts has already developed a market
CS(OS) 2405/2013 Page 14 of 36
and demand for the product, defendant has decided to launch the
same.....

18. .......Defendant No.2 clearly advertise and offer for sale on
their website and other pages on internet acephate 97% dry flow
(DF) soluble granules (SG)

"20..... it appears that the Defendants have recently started
manufacture and marketing of acephate 97% dry flow (DF) soluble
granules (SG). Hitherto, the defendant was manufacturing and
selling acephate 97% power and /or acephate 75%, a free flow
powder.....

"28..... The Defendants in utter breach and violation of these of the
plaintiff are actively marketing and offering for sale acephate 97%
dry flow granules, including at Delhi.

31. This Hon‟ble Court has the necessary jurisdiction to try and
entertain the present suit since the defendants have an office at
Connaught Place, Delhi and Defendant no.2 through Defendant
no.1 conducts business of sale of various agro-chemical products
including acephate 75% at Delhi and other parts of North India.
Thus, the Defendants are located and/or are carrying on business
within the jurisdiction of this Hon‟ble Court.

32. Further, the defendants are carrying on business through
internet offering for sale various agro-chemical products including
acephate 97% dry soluble granules ; the advertisement issued by
the defendants are conducted for example through the website
www.tradeindia.com, which is an interactive website and permits
users from all over including Delhi to communicate directly and
send enquiries to the Defendants, which are eventually treated as
marketing enquiries and attended to by the Defendants. In addition,
when the Defendants were approached for the supply of acephate
97% dry flow soluble granules, they had readily agreed to supply
the same at Delhi. These factors indicate that the defendants have
and are purposefully availing the jurisdiction of this Hon‟ble Court.
Given the vast demand for the said product in countries like China,
the plaintiff apprehends that the defendants shall and are likely to
export such infringing product of acephate 97% DF soluble
CS(OS) 2405/2013 Page 15 of 36
granules from Delhi....."

29. Mr.Lal also refutes the arguments of counsel for the defendant no.2 that
the allegations made in the plaint are bald assertions. Mr.Lal submits that
initially the licence of defendant no.2 was to manufacture Acephate 75%
and 97%; packaging showing that Acephate 75% is marketed by
Coromandel and an affidavit of an investigator that he met the North Zone
Sales and Marketing, incharge, Mr.Ajay Garg, at their Connaught Place
office, New Delhi, who had agreed to supply samples, has been filed
along with the plaint.
30. Mr.Lal submits that subsequently on 7.8.2014 he had also filed documents
in support of his submission that Coromandel has its office at Delhi and
copies of the scheme of amalgamation and other financial statements were
filed. Reliance is placed by Mr.Lal on Exphar v. Eupharma Lab,
reported at (2004) 3 SCC 688, para 19, which is reproduced below:

"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 a plaint on the ground of jurisdiction,
the Division Bench should have taken the allegations contained in
the plaint to be correct. However, the Division 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 the respondent No. 2 did not carry on business within the jurisdiction of the Delhi High Court. Having recorded the appellants' 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 trademark within the territorial limits of any Court in India what to of Delhi".

31. In the case of Dhodha House v. S.K. Maingi, reported at (AIR 2006 SC

730), the Apex Court has held as under:

"carrying on business" including business through an agent or a manager or through a servant. A corporation would be deemed to carry on business where it has a subordinate office."

32. Counsel submits that in the facts of the present case, the principal (Coromandel) of the Defendant has an office in Delhi. Counsel has also placed reliance on Teva v Natco - Delhi High Court (DB)

- The court held that once the plaintiffs have pleaded apprehension of sale / marketing in Delhi, the courts in Delhi would have jurisdiction to entertain the suit and such jurisdiction cannot be ousted by the defendant by making a statement not to do any such act in Delhi ....

33. Counsel has also placed reliance on in the case of Bristol Myers Squibb v V.C. Bhutada, wherein it has been held as under:

"....when the court seized of such a matter is under doubt as to whether there is a possibility of threat becoming reality though the possibility of the same not becoming the reality is also not ruled out. In such cases, the question of jurisdiction on the basis of apprehension becomes a mixed question of fact and law and the same is thus deferred until the establishment of further facts in the trial."

34. Reliance has also been placed on L.G. Electronics v. Bharat Bhog Lal Patel - DHC - SJ (2012 Indlaw DEL 2566), wherein it has been held:

"Cases involving apprehensions are to be treated as mixed question of fact and law. The correct course in such cases would be to postpone the determination of such question till the conclusion of trial as it requires determination of some facts alongside the application of law. Thus it cannot be said at this stage that as a matter of law, this court has no territorial jurisdiction to entertain and try the present proceedings."

35. I have heard counsel for the parties and considered their rival submissions. The defendant no.2 applicant seeks rejection of the plaint under Order 7 Rule 10 & 11 of the CPC on the ground that no cause of action has arisen within the territorial jurisdiction of this court and there is no commercial sale whatsoever of the Acephate 97% in India or Delhi; neither the defendant no.2 has any licence nor the defendant no.2 has applied for any such licence to sell its products within India or Delhi. The applicant has not advertised this product through the internet, the internet site is not of the defendant no.2 nor it is an interactive site; and the applicant does not intend to export Acephate 97% through Delhi as defendant no.2 is based in Gujarat; manufacturing facilities are in Gujarat; and the goods are exported through port at Mumbai. The plea of forum non-convenience has also been urged. A categorical assertion has also been made that the defendant no.2 has not employed Mr.Ajay Garg (defendant no.1) nor defendant no.2 has any concern with defendant no.1 and nor defendant no.2 has any office at Delhi much less the address mentioned in the plaint.

36. Mr.Lal, has contended that while considering the application under Order 7 Rule 10 CPC, only averments made in the plaint are to be considered. The defendant no.2 carries on his business through defendant no.1.

Defendant no.2 carries on business through Coromandel International Limited and the defendant no.2 has amalgamated with Coromandel. In case of quia timet action an apprehension is sufficient to maintain the suit. It is only a matter of time that defendant would apply and be granted licence to sell the products in India. Reliance is placed on the affidavit of the investigator.

37. It has been argued before this Court by counsel for defendant no.2 that the present suit has been instituted at Delhi knowing fully well that Courts at Delhi does not have jurisdiction. It is also the case of the defendant no.2 that as per the own showing of the plaintiff they had taken the services of an investigator and an affidavit of the investigator has been filed. It is also submitted that the documents were filed along with the plaint which do not support the averments made in the plaint. It is also the case of the applicant/defendant no.2 that the plaintiff knowing fully well that firstly the defendant is not carrying out any business in Delhi, nor the defendant no.2 has any branch office or sales office in Delhi, have filed the present suit. The plaintiff has simpliciter invoked the jurisdiction of this court, filed three supporting documents along with the plaint, which do not support the assertions made in the plaint that defendant no.2 is carrying on business at Delhi.

38. It is in this backdrop, the averments made in the plant and the judgment sought to be relied upon by the plaintiff are to be examined.

39. At the outset, it may be noticed that it is trite law that while considering an application under Order VII rule 10 of the Code of Civil Procedure only averments made in the plaint and documents filed along with the plaint are to be considered. It is also the trite law that the question of jurisdiction is a mixed question of fact and law.

40. It is the case of the defendant no.2 that a dishonest plaintiff cannot derive the benefit of an equitable relief of injunction as in this case reliance is placed by the plaintiff on an affidavit of the investigator, to show that defendant no.2 is carrying on business through defendant no.1, which is factually incorrect. Paragraph 31 of the plaint reads as under:

"31. This Court has the necessary jurisdiction to try and entertain the present suit once the defendants have an office at Connaught Place, Delhi and defendant no.2 through defendant no.1 conducts business of sale of various agro- chemical products including acephate 75% at Delhi and other parts of North India. Thus, the defendants are located and/or are carrying on business within the jurisdiction of this Court."

41. The complaint of the applicant is two fold: firstly the defendant no.2 has no connection whatsoever with defendant no.1; and defendant no.1 is not employed by defendant no.2. Defendant no.2 does not have an office at Delhi. The defendant no.2 has no business dealing with defendant no.1 in any manner. This assertion of the applicant has been stated on affidavit and also stated at Bar by learned senior counsel appearing for the defendant no.2 to support the plea that the court does not have jurisdiction to hear this matter.

42. Together with the plaint what is annexed at page 143 of the documents is the packaging to show Acephate 75% is marketed by Coromandel, but on the date of filing of the suit Coromandel was neither a party nor it has been explained as to why packaging of Coromandel of selling Acephate 75% was filed, when in fact the subject matter of the suit is Acephate 97%. Packaging material nowhere shows that there is any connection between Coromandel and defendant no.2, so I am of the view that this

packaging showing Acephate 75% marketed by Coromandel filed by the defendant was to mislead the court and to give an impression that the defendant no.2 was already marketing the product through Coromandel and/ or the product was the same.

43. Another document filed along with the plaint is the licence dated 18.2.1998 in favour of Sabero Organics Gujarat Ltd. (defendant no.2 herein). The licence shows the factory address at Gujarat and office at Mumbai. The licence is for Acephate 97% and the licence specifies export only, which in my view is again a document filed with a view to mislead the court. The plaintiff was aware that this licence pertains to a product of Acephate 97% and only for the purposes of export, which means that the product cannot be sold anywhere within the country.

44. One Mr.Ajay Garg has been impleaded as defendant no.1. In paragraphs 28 and 29, it has been averred:

"28. The plaintiff, being the patentee and innovator of the composition comprising acephate 97% dry flow granules alone has the exclusive right to manufacture and sell the said product and prevent all third parties from making, using, offering for sale, selling or otherwise dealing with the said product on account of Section 48 of the Patents Act. The defendants in utter breach and violation of these rights of the plaintiff are actively marketing and offering for sale acephate 97% dry flow soluble granules, including at Delhi.

29. In the light of the above, it is submitted that the cause of action first arose in around early November 2013 when the plaintiff learnt that the defendants are manufacturing and will be launching acephate 97% dry flow soluble granules, in utter breach of the patent No.202013 and 190476 and other intellectual property rights of the plaintiff."

45. Reading of the paragraph 28, more particularly the underlined portion, would show that a positive assertion has been made that the defendants are actively marketing and offering for sale of Acephate 97% dry flow soluble granules including at Delhi. This assertion is contradictory and misleading. Once the plaintiff was in possession of the licence of the defendant no.2, a copy of which was filed, it would show that this assertion in paragraph 28 is false for the reason that the licence is only for export and, thus, to say that the defendants are actively marketing and offering for sale of Acephate 97% is a false statement.

46. It has been averred that defendants have an office at Connaught Place.

Having used the words „defendants‟ by the plaintiff, a duty is cast upon the plaintiff even at the initial stage to place a document on record or some material to make good such an averment especially when they have hired the services of an investigator. The defendant no.2 has taken a categorical stand that they do not have any office at Connaught Place and neither any business has been conducted by them through defendant no.1 in respect to Acephate 97%.

47. Another aspect which cannot go unnoticed is that while issuing summons in the suit the plaintiff had prayed for ex parte ad interim injunction and also for appointment of a Local Commissioner.

48. The order dated 3.12.2013 reads as under:

                   "                       ORDER
                   %                       03.12.2013

                   IA No. 19630 of 2013 (for exemption)

1. Exemption allowed subject to all just exceptions subject to the filing of the original documents and fair typed copies within ten weeks.

2. The application is disposed of.

CS (OS) No. 2405 of 2013 & IA No. 19628 of 2013 (filed by the Plaintiff u/Order 39 Rules 1 & 2 read with Section 151 CPC)

3. The plaint be registered.

4. Issue summons in the suit and notice in the application to the Defendants by all modes including registered speed post and/or approved courier on filing process fee within one week, returnable on 8th May 2014. Dasti in addition. The affidavit of service, enclosing the tracking report of the postal authority and/or courier agency be filed by the Plaintiff at least one week prior to the next date of hearing.

5. Mr. Rajiv Nayar, learned Senior counsel appearing for the Plaintiff states that this is a quia timet action. He refers to the affidavit dated 25th November 2013 of Mr. Zulfikar Khan Rana, an independent Investigator. Mr. Rana states that he had spoken to Defendant No. 1 who stated that he was the Northern Zone sales and marketing incharge of Defendant No. 2, Sabero Organic Gujarat Limited. Mr. Garg stated that he was operating from the Delhi office of Defendant No. 2 at Connaught Place. The affidavit further states that Mr. Ajay Garg confirmed that they are currently selling the product ORTAIN 75a% SP which is ACEPHATE 75% in powder form and that a sample of the product could be supplied in Delhi if required. Mr. Nayar states that there is a reasonable apprehension that the Defendants will sell and export the infringing products from Delhi.

6. The Court is satisfied that the Plaintiff has made out a prima facie case for grant of an ad interim ex parte injunction in its favour. The balance of convenience is also in its favour. In the absence of the interim order, the Plaintiff will suffer irreparable loss and injury.

7. Accordingly, till the next date of hearing, the Defendants are restrained from making, selling, distributing, advertising, exporting, offering for sale, and in any other manner, directly or indirectly, dealing in any product that infringes the claims of Indian Patent No.

190476 and 202013 of the Plaintiff.

8. The requirements of Order XXXIX Rule 3 be complied within ten days.

IA No. 19629 of 2013 (u/O XXVI rule 9 CPC)

9. The Plaintiff seeks the appointment of a Local Commissioner („LC‟) and has explained in this application the circumstances in which such prayer is made.

10. The Court is of the considered view that unless an LC is appointed and the infringing goods seized, the Defendants may render the suit infructuous. Accordingly, Mr. Tushar Kanti Pandey, Court Officer of this Court (Mob. No. 9968265007) is appointed as LC to, within ten days, visit the premises of Sabero Organics Gujarat Limited, Plot No. 2012, GIDC, Sarigam 396155, District Valsad Gujarat, India, make an inventory, take in custody the infringing acephate 97% SG products and hand them over to the Defendants on superdari. The LC shall record details of the process being followed by the Defendants in manufacturing the product acephate 97% soluable granules. The LC shall inspect and sign the books of account and stock registered maintained by the Defendants and take photographs of all the infringing goods and materials.

11. The LC shall be entitled to seek Police assistance in advance and the SHO of the concerned Police Station is directed to, upon being so approached by the LC, render the necessary police assistance for execution of the order of this Court.

12. The fee of the LC, besides out of pocket expenses, is fixed at Rs.1,00,000 and shall be borne by the plaintiff. The LC shall submit his report within four weeks after execution of the commission.

13. The application is disposed of.

14. Order be given dasti."

49. While a Local Commissioner was appointed, the plaintiff did not pray that

the Local Commissioner should visit the Delhi office of the defendants. It may also be noticed that the process fee was filed to serve defendant no.1. The service report was that the address is incomplete. No steps have been taken by the plaintiff either to serve defendant no.1 dasti or to provide fresh and correct address of defendant no.1, which would show that the plaintiff was not confident either of the address of defendant no.1 or his relationship with defendant no.2.

50. Another disturbing aspect is that after the injunction was granted vide order dated 3.12.2013 although the process fee was filed on the same date vide diary no.186334 yet it was returned under objection for want of six copies and three Registered AD covers, which would show that in fact the plaintiff did not intend to serve the defendants, more particularly defendant no.1, as defendant no.2 would have automatically been served when the Local Commissioner would have visited Gujarat. As if this was not enough, there is no compliance of the provisions of Order XXXIX Rule 3 of the Code of Civil Procedure and an affidavit of service was filed on 21.1.2014. The index of the affidavit dated 21.1.2014 reads as under:

INDEX SL.No. PARTICULARS Page Nos.

                   1.       Affidavit for proof of service               1-10
                            alongwith annexures.

  51. Para 2 of the affidavit reads as under:

"2. This Hon‟ble Court passed an order of ex-parte injunction on 03.12.2013. Accordingly, in compliance of the said order we have served a copy of the dasti order dated 03.12.2013 with complete paper book comprising of plaint, all the applications and documents to Mr.Subodh Nam Joshi, Vice President (Marketing) of Defendant No.2 company on 06.12.2013 at Defendant‟s premises situated at Gujarat. Also the same was served by us to Defendants Delhi office

at 10, IInd Floor, Jeevandeep Building, Sansad Marg, Connaught Place, New Delhi, on 09.12.2013. We have also served Defendants‟ counsel on the same day i.e. on 09.12.2013. The Defendants received the paper book and same has been noted by the Local Commissioner in his report."

52. The supporting document filed along with this affidavit is a covering letter addressed to Mr.Anil Garg at the addresses i.e. (i) II Floor, Jeevandeep Building, Connaught Place, New Delhi; and (ii) Sabero Organics Gujarat Ltd., Plot No.2012, GIDC, Sarigam, District Valsad Gujarat, India, and Also at: II Floor, Jeevandeep Building, Connaught Place, New Delhi. The stamp affixed on this covering letter is of E.I.D. Parry India Limited, New Delhi. While affidavit of service shows that the defendants were served at Delhi Office but the rubber stamp is of E.I.D. Parry India Limited, New Delhi, which would show that a wrong entity has been served or the defendants do not have any office at the said address.

53. In paragraph 32 an averment has been made that the business has been carried out through an interactive website www.tradeindia.com. It is contended that defendant no.2 does not carry out any advertisement regarding the Acephate 97% dry flow soluble granules. The website www.tradeindia.com is a third party website and defendant no.2 has no concern with the same. No print out from the interactive website has been placed on record to support the plea.

54. In para 44 of the judgment in the case of Banyan Tree Holding (P) Ltd (supra) it has been held that in order to prima facie establish that the defendant peacefully availed of the jurisdiction of this Court the plaintiff would have to show that the defendant is engaged in some commercial activity in the forum state by tracking its website specifically at customers

within that State. It has also been held that mere hosting of a website, which can be accessible from anyone from within the jurisdiction of the Court is not sufficient and 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. It has also been held that for the purposes of invoking Section 20(C) CPC to show that some part of cause of action has arisen in the forum state by the use of 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 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. The plaintiff has failed to comply with any of the requirements as stated hereinabove. This apart, the plaintiff has failed to show that the website belongs to the defendant no.2 or that it is an interactive website.

55. Mr.Lal has placed strong reliance on a judgment of a Division Bench of this court in the case of Teva Pharmaceuticals Industries Ltd. & Ors. Vs. Natco Pharma limited [FAO(OS)No.144/2014] (hereinafter referred as „TEVA‟).

56. I have carefully examined the judgment of the Division Bench in the case of TEVA. In paragraph 17 of the judgment the Division Bench has observed as under:

"17. So the only question to be considered is, whether the suit of the appellants / plaintiffs as per averments therein is limited to prohibiting export to US."

57. Thereafter the Division Bench has observed that the pleadings of the plaint are not very lucid and clear. In paragraphs 19 and 20 the Division Bench then observed:

"19. However we are still of the opinion that the principle, of not allowing a litigant to suffer for such defects in pleadings should still be upheld. From a reading of the plaint, it can undoubtedly be not said that the suit is confined to prohibiting exports. The suit is for using the patented process of the appellants / plaintiffs for manufacturing the product for sale in US and "elsewhere" and from the averments of the respondent / defendant of sale network of the respondent / defendant in Delhi, it has to be held that the averments pertain to Delhi also. We are also of the view that no prejudice is caused to the respondent / defendant from so giving benefit of doubt to the appellants/ plaintiffs inspite of defect in their pleadings, as the respondent / defendant is already contesting the first suit in this Court. We are further of the view that the second suit for the same relief i.e. of restraining the respondent / defendant from marketing the goods produced from infringing process in Delhi would be maintainable as the same is based on a subsequent cause of action i.e. threat by the respondent / defendant to commence marketing goods produced from infringing process, in Delhi, as pleaded, i.e. after having made a statement in the first suit of not using the infringing process."

"20. We have also wondered whether owing to the statement aforesaid of the respondent / defendant, of not intending to market the product in India, the territorial jurisdiction of this Court, otherwise invoked in accordance with law, can be ousted. We are unable to find any basis for holding that though on the basis of averments in the plaint, this Court will have territorial jurisdiction, the same can be ousted on the statement of the respondent /

defendant of not doing / intending to do act, to prevent which suit is filed, within the territorial jurisdiction of this Court. We are of the opinion that once the appellants / plaintiffs have pleaded apprehension of sale / marketing in Delhi, the Courts in Delhi would have jurisdiction to entertain the suit and such jurisdiction cannot be ousted by the defendant by making a statement not to do any such act in Delhi, though the defendant would be entitled to prove that there is no basis for such apprehension. If such a course of action were to be permitted, it would enable a defendant to avoid action in a particular Court by making such a statement and indulge in forum shopping. We also find that the same was not permitted by this Court in Rana Steels Vs. Ran India Steels Pvt. Ltd. (2008) 37 PTC 24 (Del); there, though the counsel for the defendant stated that the defendant had no intention to sell its products in Delhi, it was held that the plaint could not be ordered to be returned on the basis of the said statement. Though the matter was taken in appeal by way of FAO(OS) 212/2008 but was compromised."

58. I am of the view that the case of TEVA would not be applicable to the facts of the present case, as observed by the Division Bench that simply on the basis of a statement of defendants that they do not intend to do any such act in Delhi itself would not oust the jurisdiction of the plaintiff especially when as per the plaint courts at Delhi had jurisdiction. The Division Bench was also persuaded by the fact that another suit between the same parties was already being contested in Delhi.

59. It may also be noticed that in the plaint, Mr.Ajay Garg has been shown as plaintiff no.1 and his Delhi address has been mentioned, whereas in the entire plaint there is hardly any reference to the defendant no.1 in particular and it seems the sole purpose of impleading and showing Ajay Garg as defendant no.1 was again to mislead the court and it was done wilfully. The manner in which the relationship between the defendant no.1 and defendant no.2 is sought to be established is by means of an

affidavit of an investigator, which has been placed on record. As per the affidavit of investigator (Zulfikar Khan Rana), he was instructed by the plaintiff company to conduct an investigation and ascertain availability of the product Acephate 97% dry flow soluble granules manufactured and sold by the Sabero Organic Gujarat Limited (defendant no.2 herein) and abroad. In paragraph 3 of the affidavit, the investigator has deposed that he made certain enquiries with Sabero Organic Gujarat Limited and found that the Northern Zone Sales and Marketing Incharge is Mr.Ajay Garg, who operates with some of his assistance from Delhi office at Connaught Place. This deposition would imply that the investigator had made enquiries from Sabero Organic Gujarat Limited, Defendant no.2 and he learnt that the Northern Zone‟s sales and marketing incharge is Mr.Ajay Garg, who operates with his assistance from the Delhi office at Connaught Place. As per defencant no.2 they do not have any office at all much less at Delhi; and they have not employed any person in Delhi much less Mr.Ajay Garg for Northern Zone sales and marketing. The affidavit of Mr.Zulfikar Khan Rana reads as under:

AFFIDAVIT

I. Zulfikar Khan Rana, Aged about 35 years, S/o. Mr.Yamin Khan Rana, Resident of F5/264, Sector 16, Rohini, Delhi, do hereby solemnly affirm and state as follows:

1. I am an independent investigator having my office at Sector 16, Rohini.

2. That on or about the first week of November 2013, I was instructed by Plaintiff company to conduct an investigation and ascertain availability of the product ACEPHATE 97% dry flow soluble granules manufactured and sold by Sabero Organics Gujarat Ltd. in India or elsewhere.

3. I made certain enquiries with Sabero Organics and found that the Northern Zone sales and marketing incharge is Mr.Ajay Garg who operates with some of his assistants from the Delhi office at Connaught Place.

4. Thereafter, I have spoken to Mr.Ajay Garg and he confirmed that they are currently selling the product ORTAIN 75% SP which is ACEPHATE 75% in powder form. A sample of the product sold by the Defendant alongwith the package is attached.

5. That further Mr.Ajay confirmed that as of now the product ACEPHATE 97% dry flow soluble granules has not been launched. However, a sample could be supplied in Delhi if required. I have also approached (under the name Marilyn Simons) some marketing personnel of Sabero such as Suresh Nair who also confirmed that they do deal with the product acephate 97% dry flow soluble granules.

60. In the 4th paragraph of the affidavit it is has been stated that the investigator spoke to Ajay Jain and he confirmed that "they" are selling product ortain 75 SP, which is Acephate 75% in powder form and sample of the product sold by the defendant along with the package was attached. This package has been filed by the plaintiff along with the plaintiff. This paragraph of the affidavit would imply two things: firstly, that "they" which would mean and include defendant no.2 are selling Acephate 75%, which is not the subject matter of the present suit. It would also imply as if it is employed by the defendant no.2 or part of defendant no.2 which is also factually incorrect and thirdly "the packaging of the product has been attached" would mean packing of the goods of the defendant no.2 sold by defendant no.1 but the packaging of the product is neither of Acephate 97%, nor of defendant no.2. The concluding paragraph of this affidavit states that Ajay Jain has confirmed that the product Acephate 75% dry

flow soluble granules has not been launched, however, a sample could be supplied in Delhi, if required. The complete reading of this affidavit would show that it is a self-serving document. The affidavit gives an impression as if Ajay Garg is the North Zone Sales and Marketing Incharge of defendant no.2, which is factually incorrect. It is also factually incorrect that defendant no.2 has an office in Delhi much less at Connaught Place. It also turns out to be misleading that the packaging of the product sold is of defendant no.2. As far as Mr.Ajay Garg confirming that Acephate 97% dry flow soluble granules having been launched but a sample could be supplied in Delhi if required is of no benefit to the plaintiff.

61. A reading of the aforesaid order would show that specific reliance has been placed on the affidavit of the independent investigator and it has been brought to the notice of the Court that the investigator had spoken to defendant no.1, who stated that he was North Zone sales and marketing incharge of defendant no.2 and he was operating from Delhi office of defendant no.2 at Connaught Place. Thereafter the plaintiff has prayed for appointment of a Local Commissioner but the Local Commissioner has been asked to visit the premises of defendant no.2 at Gujarat. The Local Commissioner was also directed to sign and inspect the books of accounts, stock register maintained by defendants and take photographs of the infringing goods and materials.

62. In my view, in case Delhi office of defendant no.2 was at Connaught Place the Local Commissioner should have been asked to visit the Delhi office. Reliance has been placed on the affidavit of the investigator who would be a trained person and in case Delhi office of defendant no.2 was situated within the jurisdiction of this Court the investigator would have

had no difficulty in providing some supporting documents in support thereof.

63. At this stage, it may be noticed that the plaintiff has not even bothered to serve defendant no.1 and in case the plaintiff was so sure of their stand then it would have taken immediate steps to serve defendant no.1, who would in turn have been forced to state on oath as to whether he is an employee of defendant no.2 or not.

64. In the case of F. Hoffman La Roche Vs Intas Biopharmaceuticals Ltd 2013 (4) MLJ 513, in paras 50 to 54, it has been held as under:

"50. It had been further contended that Vitman Pharma is a registered licencee of the respondent, within the meaning under the Drugs and Cosmetics Act, 1940. However, the appellants had not been in a position to substantiate the said claim, by way of documentary evidence. Further, the appellants have not been in a position to establish its claim that the invoice showing the purchase of the product in question, from J.F.Letoille, 830, Anna Salai, Chennai, would constitute `commercial sale.

51. It is a well settled position in law that a sporadic sale would not constitute `commercial sale in the normal course of business. Further, the appellants had not been in a position to show that Vitman Pharma is the authorized agent or stockist of the respondent. There is nothing on record to show that Vitman Pharma had sold the infringing product as an authorized agent of the respondent, showing the causal link.

52. It has also been noted that the appellants had filed a number of suits before the various courts of law in India alleging that their Indian Patent No.196774 had been infringed. One such suit had been filed on the file of the High Court of Delhi, in the suit, in C.S (OS) No.2465 of 2009, in which Natco Pharma Limited had been arrayed as a party. The respondent in the present writ appeals is alleged to be a marketer of the drug manufactured by Natco Pharma Limited. As such, it may not be open to the appellants to file the present case, for a similar relief as in the case pending on the file of

the High Court of Delhi. Further, the appellants had not been in a position to show that a part of the cause of action had arisen within the territorial jurisdiction of this court, for maintaining the suit, in C.S.No.408 of 2011, as per Clause 12 of the Letters Patent Act, 1940.

53. It is further noted that the appellants are based in Switzerland and the U.S.A. and the respondent is based in Ahmedabad, Gujarat. It is clear that this Court would not have the territorial jurisdiction to hear the suit filed by the appellants, in C.S.No.408 of 2011, only based on the claim of the appellants that a single sale of the infringing product had taken place, at Chennai. Thus, it could be seen that the reasons shown by the learned single Judge of this court, in his order, dated 12.12.2011, cannot be held to be erroneous in the eye of law. The learned single Judge had rightly revoked the right to sue granted in favour of the appellants, holding that no part of the cause of action had arisen within the territorial jurisdiction of this court for the filing of the suit, by the appellants."

65. It would also be useful to refer to Himachal Pradesh Horticulture Produce Marketing & Processing Corporation Ltd -Vs- Mohan Meakin Breweries Ltd. reported at 1981 (1) PTC 74, more particularly paras 7 and 9, which read as under:

"7. From the underlined observation, it is clear that the Court in that case had insisted upon two things; (i) that it is the defendants must have supplied the goods and that too not to the individual purchasers and, (ii) that such a supply should have been by the defendant at a commercial scale. It means that the plaintiff must prove that within certain jurisdiction, there has been a direct transaction of sale and purchase between the defendant and distributor or a wholesaler or retailer of goods of the impugned trade mark and such transactions be of commercial proportion.

9. In a case of present nature, the cause of action partly or wholly can arise in a given jurisdiction only if it is the defendant who is proved to have directly made sale of any goods under the impugned trade mark (within the jurisdiction of a given court) not to the

individual consumer but to a distributor or a wholesaler or a retailer and that such a sale should be at a commercial scale. If this much is not insisted upon, then the defendant can be dragged into litigation in any part of the country by only adducing flimsy kind of evidence that has been adduced in the present case by a company which has its head office at Solan in Himachal Pradesh were the defendant too have their head office and where it was convenient to the plaintiff to prosecute the suit and to the defendant to defend the suit. A big firm like Mohan Meakin Breweries Limited has its recmifications all over the country and it is easy for it to have dragged this public Corporation into litigation even at a far off place like Kanya Kumari if the only evidence necessary to give jurisdiction to that Court was of purchasing of a few bottles by any agent of Mohan Meakin Limited from some one locally there."

66. A copy of the license placed on record would show that the license was granted by the State Government and it is signed by the licensing authority and the Deputy Director of Agriculture (Pesticide), Gujarat State, Gandhi Nagar. The license has not been granted from Delhi and it is for a product Acephate 97% for the purposes of export only. As far as the the averment made in the plaint with regard to the website of defendant no.2 is concerned, it is seen that the aforesaid website is not the website of defendant no.2 nor it is an interactive website.

67. Para 45 of the case of Banyan Tree Holding (P) Ltd (supra) would not apply to the facts of the present case. The website is neither an interactive website nor documents have been placed on record by the plaintiff to show that any commercial transaction has been carried out.

68. In view of the fact that upon mere reading of the plaint and the documents filed along with the plaint would show that this Court has no territorial jurisdiction, the judgment sought to be relied upon by Mr.Lall, would also have no application to the facts of the present case. In my view, since no part of cause of action has arisen within the territorial jurisdiction of this

Court and the defendants do not carry out their business or work for gain within the territorial jurisdiction of this Court, thus, the plaint is returned to be filed in the appropriate court of jurisdiction.

69. As far as application under Order I Rule 10 of the Code of Civil Procedure is concerned I am of the view that no further orders are required to be passed in this application at this stage as the Court had recorded a finding that this Court has no territorial jurisdiction to try and entertain the present suit. It may also be noticed that while deciding an application under Order I Rule 10 of the Code of Civil Procedure the averments made in the plaint and the documents filed along with the plaint are required to be considered on the date of filing of the plaint. Amalgamation of defendant no.2 with Coromandel at a later stage would not cure the defect with regard to territorial jurisdiction. Accordingly, application under Order I Rule 10 CPC shall be decided by the appropriate Court of jurisdiction.

70. At this stage, learned counsel for the plaintiff prays that the interim order dated 3.12.2013 may not be vacated for a period of two weeks in view of the intervening holidays.

71. Accordingly, as prayed interim order dated 3.12.2013 shall remain in force for a period of two weeks from today.

G.S.SISTANI, J MAY 28th, 2015 msr