Delhi High Court

Mip Metro vs Westfield Retail Pvt. Ltd on 2 August, 2016

$~10
*    IN THE HIGH COURT OF DELHI AT NEW DELHI

+      CS(OS) 1394/2006, IA No.7581/2006 (u/O 39 R-1&2 CPC) &
       6293/2010 (u/O VII R-11 CPC)

       MIP METRO                                              ..... Plaintiff
                           Through:      Mr. Praveen Anand with Ms. Tusha
                                         Malhotra & Mr. Kshitij Parashar,
                                         Advs.

                                      Versus

    WESTFIELD RETAIL PVT. LTD.                   ..... Defendant
                  Through: Mr. Ajay Sahni with Ms. Kritika
                            Sahni, Ms. Sucheta, Mr. Ankit Sahni
                            & Ms. Kanika Bajaj, Advs.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
                          ORDER

% 02.08.2016

1. The plaintiff has sued for permanent injunction restraining the

defendant from use of the trademark / name "METRO", thereby infringing

the registered trademark of the plaintiff and passing off the goods / services

of the defendant as that of the plaintiff.

2. Though the suit as originally filed was against Mr. Amit Jetia and

Westfield Retail Pvt. Ltd. (WRPL) but the counsels inform that the

defendant no.1 Amit Jetia has since been deleted and WRPL is now the only

defendant in the suit.

3. There is no interim injunction as sought by the plaintiff till now.

4. The defendant has filed IA No.6293/2010 under Order VII Rule 11 of

the CPC for rejection of the plaint on the ground of the averments in the

plaint not disclosing this Court to be having any territorial jurisdiction to try

the suit for the relief claimed therein of injunction restraining infringement

of trademark and restraining the defendant WRPL from passing off its goods

/ services as that of the plaintiff. The counsel for the defendant / applicant

has been heard on the IA No.6293/2010 under Order VII Rule 11 of the

CPC.

5. Paras no.1,2 and 24 of the plaint, relevant in this respect are as under:

"1. The Plaintiff, MIP METRO Group Intellectual Property GMbH & Co. KG is a corporation organised and existing under the laws of Germany having its registered office at Metro-Strasse 1, 40235 Dusseldrof, Germany. The plaintiff is a company set up to consolidate the complete intellectual property rights including trademarks of the various affiliated and related companies forming the well-known METRO GROUP. Mr. Harsh Bahadur is the lawfully constituted attorney and is authorized to sign, verify and institute the present suit on behalf of the Plaintiff. A copy of the Power of Attorney in his favour is being filed herewith.

2. The Plaintiff, and its various group companies, comprising inter alia, METRO AG, METRO Cash & Carry International GmbH, METRO Cash & Carry India Pvt. Ltd., MGS METRO Group Services Holdings GmbH (earlier known as METRO

Dienstleistungs-Holding GmbH), and METRO Group Buying Hong Kong Limited, are group companies associated as a single economic entity and are well-known internationally as the METRO Group. METRO Group Buying Hong Kong Limited has had a liaison office in India since the year 1997, situated in New Delhi, while METRO Cash & Carry International GmbH, has set up a wholly owned subsidiary, namely, METRO Cash & Carry India Pvt. Ltd., in India, since 18th January, 2001.

24. This Hon‟ble Court has territorial jurisdiction to entertain the present suit under Section 134(2) of the Trade Marks Act, 1999 as the Plaintiff carries on business in Delhi, though its METRO Group company within the territorial jurisdiction of this Hon‟ble Court, as already stated above."

6. The counsel for the defendant WRPL has argued that the defendant

has its registered office at Mumbai and the plaintiff has instituted the present

suit owing to the defendant having applied for registration of the trademark

METRO JUNCTION and as a quia timet action on the ground that the

defendant had commenced construction of a mall in the name and style of

METRO JUNCTION at Mumbai. It is argued that the plaintiff in the present

suit has combined the relief of infringement with the relief of passing off but

in the territorial jurisdiction paragraph there is nothing pleaded to show that

this Court has territorial jurisdiction to entertain the suit insofar as the relief

claimed of passing off is claimed.

7. The counsel for the plaintiff on enquiry has fairly stated that the

plaintiff is not opposing the application insofar as concerning the relief of

passing off and the plaint to the extent of claiming relief on the basis of the

defendant passing off its goods / services as that of the plaintiff can be

rejected.

8. Further arguments have as such been confined to, whether the plaintiff

is entitled to invoke the jurisdiction under Section 134(2) of the Trade Marks

Act, 1999.

9. The contention, in a nutshell of the counsel for the defendant /

applicant in this respect is that to invoke Section 134(2) of the Act, the

plaintiff should have been carrying on business in Delhi and which it is not;

merely having a liaison office in Delhi would not tantamount to the plaintiff

carrying on business in Delhi. Reference in this regard is made to the Master

Circular No.7/2012-13 dated 2nd July, 2012 of the Reserve Bank of India on

"Establishment of Liaison / Branch / Project Offices in India by Foreign

Entities" and whereunder the permissible activities which a liaison office can

undertake have been described as under:

"a Liaison Office can undertake the following activities in India:

i. Representing In India the parent company / group companies.

ii. Promoting export / import from / to India.

iii. Promoting technical / financial collaborations between parent / group companies and companies in India.

iv. Acting as a communication channel between the parent company and Indian companies."

10. It is argued that the plaintiff in the present case, as per averments in

para no.2 supra of the plaint, is carrying on business at Bangalore where the

plaintiff claims to have set up a wholly owned subsidiary viz. METRO Cash

& Carry India Pvt. Ltd. since 18th January, 2001. It is contended that Section

134(2) of the Act could have been invoked by the plaintiff only if suing at

Bangalore; else as per Section 20 of the CPC, even a suit for infringement

should have been filed at Bombay where the cause of action has accrued.

11. In an attempt to explore the possible of settlement, I have enquired

from the counsel for the defendant whether the defendant has any intention

to establish any malls other than the one at Bombay in the name of METRO

JUNCTION at other places in the country.

12. The counsel for the defendant states that he has no instructions in this

regard but can say that the defendant would not like to give any statement in

this respect or to suffer an injunction in this respect.

13. The counsel for the defendant during the hearing has emphasised on

the fact that the plaintiff as per averments in para 1 of the plaint itself is

merely a company holding the trademark and which itself is not carrying on

any business in any goods or services under the said trademark.

14. I have in this respect enquired from the counsel for the defendant

whether the use of the trademark owned by the plaintiff, by persons/entities

to which the plaintiff permits use thereof, is use by the plaintiff itself.

15. The counsel for the defendant has not controverted the said aspect for

the present purpose.

16. I have further enquired from the counsel for the defendant as to how a

mall or a supermarket set up / established by a group of company of the

plaintiff, through a subsidiary, at Bangalore, can amount to the plaintiff

carrying on business at Bangalore, for it to be said that the plaintiff could

have invoked Section 134(2) vis-a-vis the Courts at Bangalore.

17. The counsel for the defendant has contended that since the mode in

which the plaintiff carries on business is though group companies and the

plaintiff has approached this Court on the averments in paras no.1&2 of the

plaint, the business at Bangalore would be deemed to be the business of the

plaintiff.

18. The counsel for the defendant/applicant has referred to:

(I) Paragon Rubber Industries Vs. Pragati Rubber Mills (2014)

14 SCC 762 laying down that merely because CPC permits joinder of

causes of action would not mean that thereby jurisdiction can be

conferred upon a Court which has jurisdiction to try a suit in respect of

one cause of action and not the other, to try the suit with respect to the

other cause of action also (however in view of the counsel for the

plaintiff having conceded that the present suit be confined only to the

relief on basis of infringement, this question no longer arises for

adjudication);

(II) Ultra Home Construction Pvt. Ltd. Vs. Purushottam Kumar

Chaubey (2016) 227 DLT 320 (DB), where a Division Bench of this

Court followed Indian Performing Rights Society Ltd. Vs. Sanjay

Dalia (2015) 10 SCC 161 and explained the judgment with the help of

illustrations;

(III) Dhodha House & Patel Field Marshal Industries Vs. S.K.

Maingi & P.M. Diesel Ltd. (2006) 9 SCC 41 laying down that 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 and that he cannot be said to carry on

business in Bombay unless his agent made sales there on his behalf;

and further holding that 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.

19. I am however unable to agree with the contention of the counsel for

the defendant / applicant and am unable to hold a case for rejection of the

plaint to have been made out. I also do not find the judgments cited by the

counsel for the defendant / applicant to be advancing the case argued; rather,

applying the said judgments, particularly Dhodha House & Patel Field

Marshal Industries supra, it is found that this Court, as per averments in the

plaint would have territorial jurisdiction.

20. As per the averments in the plaint, the plaintiff company has been set

up to consolidate the complete intellectual property rights including

trademarks of the various affiliated and related companies forming the

METRO GROUP. The only business of the plaintiff thus is to hold the

trademarks and to allow user thereof.

21. The test of whether the plaintiff can be said to actually and voluntarily

reside or carry on business or personally work for gain at Delhi has to be

applied in the context of the aforesaid business of the plaintiff.

22. Supreme Court in Dhodha House & Patel Field Marshal Industries

supra held that to constitute carrying on business at a certain place, the

essential part of the business must take place in that place. The essential part

of the business of the plaintiff is owning and allowing use of its trademark

and not of setting up of a mall or of carrying on business from such mall.

23. It is the pleaded case of the plaintiff that it is carrying on business in

Delhi through its group company METRO Group Buying Hong Kong

Limited which has a liaison office in India.

24. Dhodha House & Patel Field Marshal Industries supra also holds

that for the purpose of carrying on business, presence of a man at a place is

not necessary; such business may be carried on 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. It was further held that the

expression "carries on business" is much wider than what the expression in

normal parlance connotes. It has not been argued by the counsel for the

defendant / applicant that the three conditions laid down by the Supreme

Court in Dhodha House & Patel Field Marshal Industries supra to

constitute carrying on business are not satisfied in the present case.

25. The argument of the counsel for the defendant / applicant of the

Courts at Bangalore having jurisdiction within the meaning of Section

134(2) of the Trade Marks Act, for the reason of a group company METRO

Cash & Carry International GmbH having set up a wholly owned subsidiary

namely METRO Cash & Carry India Pvt. Ltd. at Bangalore in India, is

misconceived because as per the pleaded case of the plaintiff, the business of

the plaintiff is not of setting up of a mall or of carrying on business from the

said mall but is of holding the trademarks and allowing use thereof to group

companies. The business of establishment of a mall at Bangalore or of

carrying of the activity of sale therein cannot be said to be the business of the

plaintiff or an essential part of the business of the plaintiff for it to be said

that the business at Bangalore is of the plaintiff. Thus, the argument of the

counsel for the defendant / applicant on the basis of the third of the three

conditions laid down in Dhodha House & Patel Field Marshal Industries

supra goes against the defendant / applicant rather than in its favour.

26. As far as the contention of the counsel for the defendant / applicant

relating to the Reserve Bank of India Guidelines pertaining to a liaison office

is concerned, the same also, considering the essential part or essential nature

of the pleaded business of the plaintiff, would not make any dent on the

invocation by the plaintiff of Section 134(2) supra. As per the said

Guidelines also a liaison office can undertake representing the parent

company in India promoting import export from India, promoting

collaborations in India and acting as a communication channel between the

parent company and the Indian company. Once the case as pleaded of the

plaintiff is found to be only of holding trademarks and allowing use thereof,

certainly the actions of the plaintiff through METRO Group Buying Hong

Kong Limited at New Delhi amounts to the plaintiff carrying on business at

New Delhi i.e. within the jurisdiction of this Court, within the meaning of

Section 134(2) supra. The mistake in the contention of the counsel for the

defendant / applicant is in construing the business of the plaintiff as that of

setting up of malls and transiting business therein, when that is not the

pleaded case of the plaintiff.

27. The counsel for the plaintiff contends that though at the time of

institution of the suit, it was quia timet action but is no longer so.

28. IA No.6293/2010 under Order VII Rule 11 of CPC is thus partly

allowed. The claim of the plaintiff in the plaint on the basis of the defendant

passing off its goods / services as that of the plaintiff is rejected. However

the relief in the application for rejection of the plaint for the relief on the

basis of infringement of trademark is declined.

29. The counsel for the plaintiff stats that subject to the trial being

expedited, he is not pressing the application for interim relief.

30. IA No.7581/2006 is accordingly disposed of.

31. On the pleadings of the parties, the following issues are framed in the

suit, as now confined for the relief on the basis of infringement:

(I) Whether this Court has territorial jurisdiction? OPP

(II) Whether the plaintiff has a locus standi to sue for infringement

of the trademark „METRO‟? OPP

(III) Whether the defendant has infringed the trademark „METRO‟?