Exxon Mobil Corporation & Anr vs P.K. Sen
2016 Latest Caselaw 4737 Del

            *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                          Date of decision: 22nd July, 2016

+       CS(OS) No.2375/2015 & IA No.16263/2015 (u/O 39 R-1&2 CPC).
        EXXON MOBIL CORPORATION & ANR                ..... Plaintiffs
                     Through: Ms. Anuradha Salhotra, Mr. Sumit
                             Wadhwa and Mr. Yatin Grover,
                               Advs.
                                      Versus
        P.K. SEN                                              ..... Defendant
                         Through:      Mr. S. Chakraborty and Ms. Sonia
                                        Dutt, Advs.
CORAM:-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

IA No.20626/2015 (of the defendant under Order 7 Rules 10 & 11 of the
CPC).
1.

The defendant seeks rejection of the plaint on the ground of the

averments in the plaint not disclosing this Court to be having territorial

jurisdiction to try the suit and in the alternative return of the plaint to the

plaintiffs for filing in the Court of appropriate territorial jurisdiction.

2. Pleadings in the application were completed and the counsels have

been heard on 20th July, 2016 and today.

3. It is the contention of the counsel for the defendant/applicant (i) that

the two plaintiffs Exxon Mobil Corporation, United States of America

(USA) and Exxonmobil Lubricants Private Limited have instituted this suit

for permanent injunction to restrain the defendant from infringing the

registered trademark ‗EXXON' of the plaintiffs and for ancillary reliefs; (ii)

that as per the averments in the plaint the plaintiff no.1 Exxon Mobil

Corporation is a Corporation existing under the laws of the State of New

Jersey, USA and is the proprietor of the trademark of which infringement is

alleged and the plaintiff no.2 Exxonmobil Lubricants Private Limited is the

permitted user of the said trademark; (iii) the defendant carries on business

at Kolkata and has never and does not carry on any business in New Delhi or

for that matter in Northern part of India and it is not the plea of the plaintiffs

also; (iv) that the plaintiffs have invoked the jurisdiction of this Court by

invoking Section 134(2) of the Trade Marks Act, 1999; (iv) in view of

Section 53 of the Trade Marks Act, a permitted user has no right to institute

any proceedings for infringement and thus the plaintiff no.2 cannot avail of

Section 134(2) supra; and, (v) the plaintiff no.1 who is claimed to be the

registered proprietor of the trademark does not have any place of business in

India.

4. The plaintiffs in their reply to the application have pleaded (i) that at

the stage of Order 7 Rules 10 & 11 of the Code of Civil Procedure, 1908

(CPC) only the averments in the plaint are to be seen and as per which this

Court has territorial jurisdiction; (ii) that Section 53 has to be read in

continuation of Section 52 of the Trade Marks Act which allows a registered

user of trademark to institute a suit for infringement without making the

registered proprietor a plaintiff though in such a suit the registered proprietor

has to be impleaded as a defendant; (iii) even if the plaintiff no.2 has no

right to file a suit for infringement, the joining of the plaintiff no.2 can at

best be a case of misjoinder of the parties and not a case for return of the

plaint; (iv) that though the first plaintiff being the registered proprietor of the

trademark is based in USA but the second plaintiff is a subsidiary as well as

the permitted user of the trademark in India and is based in New Delhi and

the first plaintiff is doing business in India through the second plaintiff; (v)

as per Section 48(2) of the Trade Marks Act, the permitted use of a

trademark is deemed to be used by the proprietor - thus all use of the

trademark ‗EXXON' by the second plaintiff is deemed to be use of the same

by the first plaintiff for the purposes of infringement of the trademark under

the Act.

5. The defendant in its rejoinder (i) has denied that the plaintiff no.2 is

the subsidiary of the plaintiff no.1 or is carrying on business in India or the

plaintiff no.1 is carrying on business through the plaintiff no.2; and, (ii) has

pleaded that Section 48(2) of the Trade Marks Act has no relevance to the

question.

6. I may in the aforesaid context notice that the plaintiffs in the plaint

have pleaded (i) that the second plaintiff is an Indian subsidiary of the first

plaintiff and is a licensee/permitted user of the first plaintiff's trademark in

India; (ii) that the word ‗EXXON' is registered as a trademark in at least 160

jurisdictions of the world and in India there are over 39 registrations of the

word ‗EXXON' for a wide variety of goods with the earliest registration for

‗EXXON' trademark in India dating back to 28th October, 1967; (iii) that

the first plaintiff owns and maintains the website www.exxonmobil.com,

accessible from India; (iv) that the defendant has a website

www.exonengineering.com; and, (v) this Court has jurisdiction to entertain

and try the suit as the second plaintiff which is a subsidiary of the first

plaintiff and permitted user of the mark has its office in New Delhi and by

virtue of Section 134(2) of the Trade Marks Act.

7. Section 134(2) of the Trade Marks Act vests the Court within the local

limits of whose jurisdiction, at the time of the institution of the suit or other

proceeding for infringement of a registered trademark or relating to any right

in a registered trademark, the person instituting the suit or proceeding, or,

where there are more than one such persons, any of them actually and

voluntarily resides or carries on business or personally works for gain. The

explanation thereto provides that for the purposes of Sub Section (2),

―person‖ includes the registered proprietor and the registered user.

8. Section 48(1) of the Act provides for registration of a person other

than the registered proprietor of the trademark as a registered user thereof in

respect of any or all of the goods or services in respect of which the

trademark is registered. Sub Section (2) thereof provides that the permitted

use of a trademark shall be deemed to be use by the proprietor thereof.

9. Section 48 uses the expression ―registered user‖ and ―permitted use‖

in Sub Sections (1) and (2) thereof respectively. Thus the Act envisages

permitted use of the trademark without the person to whom such permission

has been given being a registered user of the trademark. The distinction

becomes further evident from Section 2(1)(r) of the Act which while

defining permitted use, in Clause (i) thereof provides for permitted use by a

registered user and in Clause (ii) thereof provides for permitted use by a

person other than registered proprietor and registered user. Such permitted

use can be by a person with whom the registered proprietor or the registered

user is connected in the course of trade in respect of which the trademark

remains registered and by consent of the registered proprietor contained in a

written agreement and which person complies with any conditions or

limitations to such use or registration of the mark is subject.

10. The plaintiff no.2 thus, as per the averments in the plaint, is a

permitted user of the trademark for infringement of which the suit has been

filed and of which the plaintiff no.1 is the registered proprietor.

11. Section 52 of the Act entitles a registered user of the trademark to in

his name institute proceedings for infringement of the trademark on the

condition that the registered proprietor shall be impleaded as defendant to

such suit. Section 53 provides that a permitted user within the meaning of

Section 2(1)(r)(ii) shall have no right to institute any proceedings for any

infringement.

12. The questions which arise for consideration in the aforesaid legal

scenario are (i) whether the plaintiff no.1 as the registered proprietor of the

trademark instituting this suit for infringement of registered trademark can

be said to actually and voluntarily reside or carry on business or personally

work for gain within the local limits of jurisdiction of this Court within the

meaning of Section 134(2) by the reason of its subsidiary and permitted user

plaintiff no.2 having its registered office and carrying on business within the

territorial jurisdiction of this Court; (ii) whether the plaintiff no.2, a

permitted user a distinct from registered user and though not entitled by

virtue of Section 53 to institute any proceeding for infringement can be

added as plaintiff no.2 to a proceeding for infringement by the plaintiff no.1

and whether the factum of the plaintiff no.2 having its registered office

within the local limits of jurisdiction of this Court also vests jurisdiction in

this Court within the meaning of Section 134(2) of the Act; and, (iii) what is

the effect if any of the definition of ‗person' in the explanation to Section

134(2) of the Act being an inclusive one.

13. The counsel for the plaintiffs relied upon Venkateswaran on Trade

Marks & Passing Off, Sixth Edition to contend that permitted use is use by

the proprietor of the trademark. No text book or authority is required for the

said purpose as it is so expressly provided by Section 48(2) also. However

the question as aforesaid is, whether permitted use of the trademark within

the jurisdiction of the Court amounts to the registered proprietor of the

trademark carrying on business or personally working for gain within that

jurisdiction.

14. The counsel for the plaintiffs also referred to (i) WWF International

Vs. Mahavir Spinning Mills Ltd. 56 (1994) DLT 271; (ii) Caprihans

(India) Private Ltd. Vs. Registrar of Trade Marks 1973 SCC OnLine Cal

134; (iii) Heinz Italia S.R.I. Vs. D. Koteswara Rao MANU/DE/2560/2008;

and, (iv) Ultratech Cement Limited Vs. Dalmia Cement Bharat Limited

2014 SCC OnLine Bom 1179.

15. The counsel for the defendant referred to Indian Performing Rights

Society Ltd. Vs. Sanjay Dalia (2015) 10 SCC 161.

16. In my view the question is no longer res integra and is fully covered

by Exphar Sa Vs. Eupharma Laboratories Ltd. (2004) 3 SCC 688 though

in the context of Section 62(2) of the Copyright Act, 1957, which is pari

materia to Section 134(2) supra. There, the suit for infringement of

copyright was filed by the owner of the copyright and the person with whom

the owner of the copyright had entered into a agency/manufacturing

agreement to restrain the defendant situated beyond the territorial

jurisdiction of the Court from infringing the copyright. The Division Bench

of this Court held that this Court had no territorial jurisdiction to entertain

the suit and ordered the plaint to be returned. Setting aside the judgment of

the Division Bench, the Supreme Court held (i) that the object and reason for

introduction of Section 62(2) was not to restrict the owners of copyright to

exercise their rights but to remove any impediment from their doing so; (ii)

Section 62(2) cannot be read as limiting the jurisdiction of the Court only to

cases where the person instituting the suit or other proceedings or where

there are more than one such persons, any of them actually and voluntarily

resides or carries on business; (iii) Section 62(2) 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 CPC; (iv) that the person with

whom the owner of the copyright had an agency/manufacturing agreement

carried out business within the jurisdiction of the Delhi High Court and the

said person was certainly ―a person instituting the suit‖ within the meaning

of Section 62(2) of the Copyright Act; the Division Bench went beyond the

express words of the Statute and negatived the jurisdiction of the Court

because it found that such person had not claimed ownership of the

copyright of the trademark infringement of which was claimed in the suit;

and, (v) such person may not be entitled to the relief claimed in the suit but

that is no reason for holding that it was not a person who had instituted the

suit, within the meaning of Section 62(2) of the Copyright Act.

17. Section 134(2) of the Trade Marks Act also, just like Section 62(2) of

the Copyright Act, uses the words ―person instituting the suit or proceeding,

or, where there are more than one such persons any of them‖. What has been

held by the Supreme Court in Exphar Sa supra relating to Section 62(2) of

the Copyright Act would apply to Section 134(2) of the Trade Marks Act

also and it has to be held that irrespective of the fact whether the plaintiff

no.2 being neither the registered proprietor nor the registered user of the

trademark, for infringement whereof the present suit has been instituted, the

plaintiff no.2 is the person instituting the suit and it is not in dispute that the

plaintiff no.2 carries on business within the jurisdiction of this Court.

18. I may notice that a Single Judge of the High Court of Bombay in

Ultratech Cement Limited supra, dealing with an identical situation as

subject matter of this adjudication also dismissed the application for

rejection of the plaint.

19. I may with respect add that the position in this respect under Section

134(2) is better than that under Section 62(2). The explanation to Section

134 as noted above is not to be found in Section 62. As per the said

explanation, for the purposes of Sub Section (2) ―person‖ includes the

registered proprietor and the registered user. The use of the word ―includes‖

in the explanation is indicative of the ―person‖ instituting the suit or other

proceeding referred to in Section 134(2) being not necessarily the registered

proprietor or registered user of the trademark. If it were to be held that since

a suit for infringement of trademark or relating to any rights in a registered

trademark can be filed only by a registered proprietor or a registered user,

none else can be a plaintiff in such suit, the explanation to Section 134

instead of using the word ―includes‖ would have used the word ―means‖.

20. I may further, with respect, add that in today's day and time when

boundaries are disappearing and trade barriers are evaporating and the

arrangements as between the plaintiffs herein are becoming the norm of

business, to deny the benefit of Section 134(2) on the ground of the

registered proprietor not having office at the place where the permitted user

is carrying on business would tantamount to negating expansion of the scope

of Section 20 of the CPC intended by Section 134 (2). Even otherwise, as

already observed above, once permitted use of the trademark is deemed to be

the use by the proprietor of the trademark, axiomatically the proprietor

would be deemed to be carrying on business where the trademark is being

used and on this basis also the plaintiff no.1 would be entitled to invoke the

territorial jurisdiction of this Court.

21. A Single Judge of this Court also, in Heinz Italia S.R.I. supra held

that the expression ―carries on business‖ does not mean that the person has

to be personally present within the jurisdiction of the Court and a business

can be carried on at place without even the presence of the Company at that

place and through an agent or subsidiary and it is not necessary for the

owner of the business to reside or have office within the jurisdiction of the

Court.

22. Supreme Court, in Dhodha House Vs. S.K. Maingi (2006) 9 SCC 41

also held that for the purpose of carrying on business, presence of a man at a

place is not necessary; such business may be carried on through an agent or

a manager or through a servant--the owner may not even visit that place; the

phrase ―carrying on business‖ at a certain place would 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. Three conditions were required to be

satisfied. Firstly, that the agent must be a special agent who attends

exclusively to the business of principal and carries it on in the name of

principal and not as a general agent. Secondly, the person acting as agent

must be an agent in the strict sense of the term and lastly, the essential part

of the business must take place in that place.

23. The plaintiff No.2 here, carrying on business in the name and style of

plaintiff No.1 satisfies all the three conditions.

24. I may in this regard also note that Section 134(2) of the Trade Marks

Act as also Section 62(2) of the Copyright Act use the words ―carries on

business‖ and not the words ―has a place of business‖.

25. The recent judgment of the Supreme Court in Sanjay Dalia supra

referred to by the counsel for the defendant is not found to be of any

relevance to the controversy in hand. The dicta of the Supreme Court in

Exphar Sa supra was noticed in para 38 thereof and it was observed that the

question for adjudication in Exphar Sa was different from what was for

adjudication in Sanjay Dalia.

26. There is thus no merit in the application which is dismissed.

CS(OS) No.2375/2015 and IA No.16263/2015 (of the plaintiffs under Order 39 Rules 1&2 CPC).

27. List for framing of issues if any and for hearing of the application on

24th, August, 2016.

RAJIV SAHAI ENDLAW, J.

JULY 22, 2016/‗pp'..

(Corrected and released on 19th August, 2016)