Delhi High Court
Shree Nath Heritage Liquor Pvt Ltd ... vs Octaga Green Power & Sugar Co Ltd. & ... on 17 July, 2017
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Decided on: 17.07.2017
+ CS(COMM) 681/2016 & CCP (O) 102/2015, CCP (O) 13/2016,
I.A. 5909/2015, I.A 17404/2015
SHREE NATH HERITAGE LIQUOR PVT LTD & ANR.....Plaintiffs
Through: Mr. Kirti Uppal, Sr. Advocate with
Mr. Sumit Rajput and Mr. Sidharth
Chopra, Advocates.
versus
OCTAGA GREEN POWER & SUGAR CO LTD. & ORS
..... Defendants
Through: Mr. Pradeep Dewan, Sr. Advocate
with Mr. Anupam Dhingra, Mr. Sunil
Goyal, Mr. Deepak, Mr. Adbhut
Pathak and Mr. Rohit Khurana,
Advocates.
CORAM:
HON'BLE MS. JUSTICE DEEPA SHARMA
JUDGMENT
1. The present suit has been filed by the plaintiffs for permanent
injunction restraining the defendants from the infringement of the design
and from passing off their goods as that of the plaintiffs and for damages.
On the basis of pleadings of the parties, the issues were framed on
19.07.2016. Issue no. 2 relates to the territorial jurisdiction of this Court.
Issue no. 2 is reproduced as under:-
CS(COMM) No.681/2016 Page 1
"2. Whether this Court is not vested with the territorial jurisdiction to
try and entertain the present suit instituted against the defendants?
(OPD)
2. Subsequently, this issue was treated as a preliminary issue and the
arguments of the parties were heard on this issue.
3. In brief the contentions of the plaintiffs are that the cause of action
had arisen in their favour when they came across to an article on the internet
wherein the defendants have clearly reflected their intention to enter the
Delhi market with its "GRENADE XXX RESERVE BOTTLE" rum product
and also arisen on search of the website of the defendants' and their
brochure wherein the defendants product is clearly visible. The plaintiffs
alleged that the said product is fraudulent imitation of the plaintiff's product.
As regards the jurisdiction of this Court, the plaintiffs have contended in
their plaint that defendants are offering to supply and sell the infringing
goods within the jurisdiction of this Court. The website of the defendants as
well as information in the newspaper reveals that the defendants are about to
launch their product in Delhi and so the plaintiffs have a reasonable
apprehension that the defendants are likely to sell their product within the
jurisdiction of this Court.
CS(COMM) No.681/2016 Page 2
4. It is averred that the plaintiff no. 1 is the registered company having
its registered office at Rajasthan and that the plaintiff no. 1 is the licensee of
plaintiff no. 2 which is settled in British West Indies. It is a bottling
company running its industry in Rajasthan and one of the most reputed
products of the plaintiffs is "GRENADE DARK RUM BOTTLE" which is
marketed under the trade mark "GRENADE DARK RUM" and has its
novelty in every feature as detailed in the plaint. It is further submitted that
the plaintiffs and the licensee have been selling the said product in the State
of Rajasthan where it is very popular and that the plaintiffs as part of their
expansion plan, will soon launch its product in all major cities including
Delhi. It is contended that the defendant no. 1 is having its registered office
in Mumbai. The defendant no. 2 appears to be a partnership firm also
having its office in Mumbai. They run their websites. The defendant no. 3
is also having its corporate office in Mumbai. While the defendant nos. 1
and 2 appear to be engaged in the business of manufacturing and selling
alcoholic beverages, the defendant no. 3 is engaged in printing and
packaging products. The plaintiffs have the belief that they are engaged in
manufacturing and selling alcoholic beverages under the identical and
deceptively same trade mark as those of the plaintiffs and thereby the
CS(COMM) No.681/2016 Page 3
defendants are infringing its trademark. No samples, however, are found in
the market for verification but their websites clearly show their products.
They are producing, manufacturing their product in Kolhapur and the
websites show that it will soon be available in all parts of India. There was
also a publication in the newspaper dated 16.12.2014 wherein the
spokesperson of defendants disclosed the plans of defendants to launch the
product on PAN India basis. It is submitted that the defendants are thus
copying their design and thereby infringing their trademark and it is going to
create confusion in the mind of purchasing public. In para 33 of the plaint,
the plaintiffs have disclosed that this Court has the jurisdiction.
5. Defendants, however, in their written statement, had taken the
preliminary objection as regards the jurisdiction of the Court stating that no
part of cause of action has arisen in Delhi. It is contended that plaintiffs are
indulging in the forum shopping. It is submitted that admittedly the business
operations of the plaintiffs are confined to Rajasthan and those of the
defendants in the State of Maharashtra and also in Goa. It is submitted that
the plaintiffs have suppressed the fact that the defendant no. 2 is the owner
of the registered design bearing registration certificate No. 260116 dated
21.07.2014. The defendant no. 2 is, therefore, prima facie proprietor of the
CS(COMM) No.681/2016 Page 4
said design and is therefore entitled to use the same. Also, the plaintiffs do
not enjoy any goodwill in Delhi since its offices are confined to Rajasthan.
6. It is submitted that the defendants are neither having its registered
office in Delhi nor they are doing their business in Delhi or indulging into
commercial activities in Delhi. It is submitted that the defendants are just
talking about the plans to explore other parts of the country. The plaintiffs
also do not have any persons/business in Delhi and hence, this Court has no
jurisdiction.
7. The case of the plaintiffs is premised upon their contention that
defendants are likely to sell its products in Delhi. It is argued by learned
counsel of the plaintiffs that it gives rise to a cause of action in their favour
and the plaintiffs have filed this suit to take a quia timet action in order to
prevent the injury which they are likely to suffer. Learned counsel for the
plaintiffs has relied on the findings in the case of Pfizer Products, Inc. vs.
Rajesh Chopra & Others, 2006 (1) R.A.J. 536 (Del) more particularly on
para 12 of the judgment and argued that mere threat to sell the product
which would infringe its trade mark in Delhi is sufficient to confer
jurisdiction to this Court.
CS(COMM) No.681/2016 Page 5
"12. The other aspect of the matter is that a threat of selling
the offending goods in Delhi would in itself confer jurisdiction in
the courts in Delhi to entertain a suit claiming an injunction in
respect thereof. Whether the threat perception is justified or not
is another matter which has to be considered and decided upon
in the application filed by the plaintiff under Order 39 Rules 1
and 2 or on merits when the suit is taken up for disposal. Insofar
as Order 7 Rule 10 is concerned, assuming that whatever is
stated in the plaint is correct, one would have to also assume that
the threat or the intention of the defendants to sell and offer for
sale the offending goods in Delhi is also correct. Therefore, if the
threat exists then this court would certainly have jurisdiction to
entertain the present suit.
In these circumstances, this application is dismissed. No order as
to costs."
8. Learned counsel for the plaintiffs has also placed reliance on the
findings in para 23 onwards in the case of Bristol Myers Squibb Company
and Anr. Vs. V.C. Bhatuda & Ors, 2014 (1) R.A.J. 274 (Del) from para 23
onwards. Reliance is also placed on the case laws discussed in para 24 and
para 25 of the Bristol Myers Squibb Company (supra), which are M/s
Jawahar Engineering Company vs. Jawahar Engineers Pvt. Ltd., (1983)
PTC 207 and Mars Incorporated vs. Kumar Krishna Mukherjee, 2003 (26)
PTC 60; 2003 (2) R.A.J. 321 (Del). It is argued that in M/s Jawahar
Engineering Company (supra), this Court has clearly held that "when an
injunction is sought, it is not necessary that the threat should have become a
reality before the injunction and it can even be sought for a threat that is
CS(COMM) No.681/2016 Page 6
still to materialize. An injunction being prohibitive in nature is intended to
prevent something that is likely to happen." It is further argued that in Mars
Incorporated (supra), this Court has also held in para 21 of the said
judgment that the plaintiff need not wait and watch for opening of the
business etc by the defendant and take recourse under the principle of Quia
Timet Action. It is also argued that in State Trading Corporation of India
Limited vs. Government of the Peoples Republic of Bangladesh, 63 (1996)
DLT 971, the Court has clearly observed that "If the determination of
jurisdiction of the Court is a question of fact or mixed question of fact and
law requiring evidence to be adduced before recording a finding, the
determination of the question may in appropriate, cases be liable to be
postponed till after the determination of all or several other issues if the
evidence to be adduced by the parties may be common on the issue of
jurisdiction and such other issues."
9. It is also argued that there is no doubt that the burden to prove its case
upon the plaintiff is more severe wherein there is a threat to the infringement
of its trade mark than where the trademarks are actually infringed and since
it is a mixed question of law and fact, the plaint cannot be rejected at this
stage and has relied on the findings of Single Judge of this Court in L.G.
CS(COMM) No.681/2016 Page 7
Electronics India Pvt. Ltd. vs. Bharat Bhogilal Patel, 2012(6) R.A.J. 234.
It is argued that learned Single Judge has also relied on the decision in the
case M/s Jawahar Engineering Company (supra) and, thereafter, held as
under:-
"43. The said threat perception per se also cannot also be said
to be acting as an escape route to invoke the jurisdiction of the
courts by just averring so in the plaint. The judgments rendered
in the Jawahar (supra) and Pfizer (supra) as well as the
observations made herein have to be read in the context. The
threats are accepted by the courts for the purposes of
invocation of jurisdiction as a mixed question of fact and law
when there are some facts indicating towards likelihood of the
perfection of the said threats or furtherance of the threats
becoming reality. The said nexus of the initial facts will allow
the court to determine the likelihood aspect in such threat and
will lead to the court drawing the inference treating it as a
mixed question of fact and law.
44. Thus, the real test would be 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."
10. It is also argued by learned counsel for the plaintiffs that at this stage,
the plaintiffs are not required to elaborately disclose the extent of the
business the defendants are likely to carry on or name its customers to whom
the product be sold especially when the plaintiff's case is based on quia
CS(COMM) No.681/2016 Page 8
timet action. It is argued that the averments in the plaint which shows quia
timet action are prima facie sufficient to show that the defendants are
planning to carry out their business within the jurisdiction of this Court and
so the cause of action has arisen within the jurisdiction of this Court. The
plaintiffs have also relied on the findings of this Court para 31 in Bristol
Myers Squibb Company (supra) wherein this Court has held as under:-
"31. It is not necessary at this stage, for the Plaintiff to name
the particular customers of Defendants 1 and 2 to whom the
product is to be sold since what is expressed is only an
apprehension of "offer for sale". At this stage, the Plaintiff can
at best refer to the fact that Defendant 2 supplies oncology APIs
to various generic companies and that the said APIs are sold in
Delhi. The apprehension that such oncology APIs may in the
near future include the infringing product which is also an
oncology API cannot, in the circumstances, be characterised as
lacking credibility and having been asserted merely to attract
the jurisdiction of the Court. The above averments in the
present plaint, which is in a quia timet action, are prima facie
sufficient to show that Defendant No.2 "carries on business" in
Delhi and that the prima facie the cause of action arises within
the jurisdiction of this Court."
11. It is submitted that since regarding the existence of a territorial
jurisdiction in respect of quia timet action is a mixed question of law and
fact, the plaint cannot be rejected at this stage, and therefore, this issue be
decided only after the evidences are being led in the case.
CS(COMM) No.681/2016 Page 9
12. It is however argued by learned counsel for the defendants that the
pleadings are misconceived and the plaint has been cleverly drafted in order
to take recourse to quia timet action by the plaintiffs. It is argued that such
action is preventive in nature and is an example of precautionary justice
intended to prevent apprehended wrong before the wrong is being done, if
proved. So, it is argued that even in the case of quia timet action, the
plaintiff is required to show the actual extended threat which needs
protection. It is also required to show a strong case of probability that the
apprehended mischief will in fact arise, inducing the Court to intervene to
prevent such an injury. It is submitted that a mere possibility of injury does
not give rise to cause of action unless the threat be certain or imminent and
has relied on para 6 and para 8 of Kuldip Singh vs. Subhash Chander Jain
and Ors, (2000) 4 SCC 50.
13. It is submitted that in this case the plaintiffs have failed to show that
there was any imminent danger to any possible injury and thus no cause of
action has arisen in favour of the plaintiff. It is submitted that admittedly the
plaintiffs are not selling their products in Delhi and it thus has not attained
any good will in Delhi which is sine qua non to an act of passing off and has
relied on the findings in Jay Engineering Works Ltd. vs. Ramesh
CS(COMM) No.681/2016 Page 10
Aggarwal, 135 (2006) DLT 666. It is also argued that in fact the plaintiffs
have not earned any good will in Delhi. It is running its business in
Rajasthan since July 2013 as disclosed by plaintiffs in para 7 of the plaint,
and it is unlikely that in such a short period, its good will has travelled to
Delhi. Learned counsel for the defendants has relied on the findings in the
case of Goenka Institute of Education & Research vs. Anjani Kumar
Goenka & Anr, ILR (2009) VI Delhi 415. Learned counsel has also relied
on the findings in the case of T. Arivandandam vs. T.V. Satyapal, (1977) 4
SCC 467 and has argued that the Court has to examine the allegation made
in the plaint in a meaningful manner and also has to examine the documents
in similar manner in order to assess if any cause of action has really arisen in
favour of the plaintiff.
14. It is further argued that the findings in the case of Bristol Myers
Squibb Company and Anr. (supra) does not apply to the facts of this case as
in that case in para 16, the defendant no. 2 in its written statement had
admitted that it had customers located at Delhi. At the time when ex-parte
injunction order was obtained by the plaintiff from this Court on 28th March,
2000, the judgment in the case of Kuldeep Singh vs. Subhash Chander Jain
& Ors, (2000) 4 SCC 50 was not brought to its notice. It is submitted that
CS(COMM) No.681/2016 Page 11
findings in the case of Pfizer Products (supra) are also not applicable in the
present case since in that case, the plaintiff had alleged that the defendant
had applied for registration in Delhi while in the present case, there is no
such allegation. It is submitted that this Court has no territorial jurisdiction
and the suit is liable to be dismissed.
15. I have heard the arguments and perused the relevant records of both
the parties.
16. There is no dispute to the proposition of law that while deciding the
issue relating to the jurisdiction at the initial stage, the Court has to rely on
the averments in the plaint and the plaint is needed to be read as a whole to
find out whether it discloses such facts which shows that a part of cause of
action has arisen within the jurisdiction of this Court.
17. From the pleadings, it is apparent that this suit has been filed by the
plaintiffs on its threat perception arising from the website of the defendants
as well as an interview wherein the defendants disclosed and discussed its
plan to launch its product throughout India including Delhi. In Shilpa
Medicare Limited vs. Brystol Myers Squibb Company and Ors, FAO(OS)
96/2014, decided on 30.07.2015, this Court has held as under:-
" 14. The suit filed by the respondents is by way of a
quia timet action, which visualizes apprehended injury. No
CS(COMM) No.681/2016 Page 12
doubt, there are important constraints placed upon a
plaintiff who brings such an action, the most prominent
one being that the burden of proving such apprehension is
heavy. Yet, the fact remains that the suit is based to a large
extent on the threat. Now how does a court evaluate a
threat to adjudge if it is justified, in the context of a dispute
about its territorial jurisdiction? This is to be seen from the
requirements of what has to be pleaded in a plaint, and
what can legitimately be seen when a dispute (with regard
to the territorial jurisdiction) arises. The court necessarily
has to confine its gaze to the plaint and the documents filed
with it......."
18. The Jurisdiction of Courts in cases of infringement of the trade mark
and passing off, has to be determined in view of Section 134 of Trade Mark
Act, 1999. In cases of infringement of the trade mark in addition to the
provisions of Section 20 of Civil Procedure Code (CPC), the plaintiffs have
the additional benefit of filing the suit within the jurisdiction of the Court
wherein it is actually residing or carrying on business or personally working
for gain. In this case, the plaintiffs in the plaint have not alleged anywhere
that it is carrying on its business within the jurisdiction of this Court. The
plaintiffs also do not have its registered office within the jurisdiction of this
Court so this Court has no territorial jurisdiction in terms of Section 134 of
the Trademark Act, 1999. As regards the jurisdiction of this Court under
Section 20 CPC is concerned, the plaintiffs are required to show that the
defendants are residing or carrying on its business within the jurisdiction of
CS(COMM) No.681/2016 Page 13
this Court or that a cause of action has arisen within the jurisdiction of this
Court. The plaintiffs in para 32 of the plaint have averred as under:-
"32. That the cause of action arose in favour of the
Plaintiffs and against the Defendants in Week of
January, 2015 when the Plaintiff's representative came
across to the articles on the internet wherein the
Defendants has clearly stated its intention to enter the
Delhi Market with its "GRENADE XXX RESERVE
BOTTLE" rum product. The cause of action further
arose when Plaintiff searched on the website of the
Defendants and found the impugned product was shown
and found to be an outright fraudulent imitation of the
Plaintiffs' GRENADE DARK RUM BOTTLE. The cause
of action further arose when the Plaintiff's
representative found the brochure, of the Defendants
and in the brochure the impugned product is clearly
visible and mentioned. The said cause of action is a
continuing one and continues to subsist till the
Defendants, their distributors, retailers, agents, assigns
in business etc. are restrained from carrying on their
illegal trade activities of selling impugned bottles.
19. As regards jurisdiction, it is averred in para 33 of the plaint
reproduced as under:-
"33. This Hon'ble Court has jurisdiction to entertain
and try the present suit since the Defendants are offering
to supply and sell the infringing goods within the
jurisdiction of this Hon'ble Court. This scale of business
and activity of the defendants are not known at present
and it is apprehended as being highly likely that the
product sold under the impugned mark and designs-
"GRENADE RESERVE BOTTLE" will be made available
in New Delhi. The website of the Defendants as well as
information in the newspaper publications reveal that the
CS(COMM) No.681/2016 Page 14
Defendants are about to launch their products under the
impugned designed bottle and mark in New Delhi. There
is a reasonable apprehension that the Defendants are
likely to sell their products bearing the impugned design
bottle within the jurisdiction of this Hon'ble Court. Thus
this Hon'ble Court has the necessary jurisdiction.
Therefore, the cause of action has arisen at Delhi.
(emphasis supplied)
20. In the case of T. Arivandandam vs. T.V. Satyapal and Anr, AIR 1977
SC 2421, the Supreme Court has held as under:-
"5. ....................... reading of the plaint it is manifestly
vexatious, and meritless, in the sense of not disclosing a
clear right to sue, he should exercise his power under
Order VII Rule 11, C.P.C. taking care to see that the
ground mentioned therein is fulfilled. And, if clear
drafting has created the illusion of a cause of action, nip
it in the bud at the first hearing by examining the party
searchingly under Order X, C.P.C. An activist Judge is
the answer to irresponsible law suits. The trial Courts
would insist imperatively on examining the party at the
first hearing so that bogus litigation can be shot down at
the earliest stage. The Penal Code is also resourceful
enough to meet such men, and must be triggered against
them......."
(emphasis supplied)
21. The Court therefore has to read the plaint in a meaningful manner and
see whether the cause of action has arisen within its jurisdiction or not.
Here, the Court is not concerned whether any cause of action has arisen or
not in favour of the plaintiffs but it has to determine whether the cause of
action, if any, has arisen in favour of the plaintiffs within the jurisdiction of
CS(COMM) No.681/2016 Page 15
this Court or not. The plaintiff's case is based on the principle of quia timet
action and it states that the defendants are likely to expand its business and
also likely to start selling its products in Delhi. The courts, in the Bristol
Myers Squibb company and Anr (supra) and Pfizer Products (supra) and
other cases, has held that the quia timet action gives the cause of action. The
question is whether that the plaintiffs have been able to show that any part of
cause of action to sue the defendants on the basis of quia timet has arisen
within the jurisdiction of this Court. The findings in the Bristol Myers
Squibb company and anr. (supra) are not applicable on the facts of this case
because in that case, the defendant itself had admitted that it had its
customers in Delhi and also the plaintiff had pleaded that the defendant no. 3
was having its factory within the jurisdiction of this Court. In this case,
however, the plaintiffs have not pleaded anywhere that the defendants are
carrying on their business in Delhi or have their registered office in Delhi.
Admittedly, both the plaintiffs and the defendants had their registered office
as well as manufacturing units outside Delhi. It is also noteworthy that both
of them are dealing in the products which is controlled under the Excise Act
and they need the excise licences for doing their business in any State. It is
not the case of the plaintiffs that defendants have applied for obtaining any
CS(COMM) No.681/2016 Page 16
excise licence for sale of its products within the jurisdiction of Delhi. The
peculiar nature of the business of both the parties show that none of the
party has the liberty to start its business at any time in any part of the
country including Delhi as they need to first get a license for such sale.
Even if the defendants have plans to expand its business to Delhi, it cannot
do so because it need excise permission and in the absence of allegation or
contention that such an excise licence has been sought, it cannot be said that
there is imminent apprehension to the plaintiffs.
22. Although principle of quia timet action gives a cause of action yet in
the case of Kuldeep Singh (supra), the Supreme Court has held as under:-
"6. A quia timet action is a bill in equity. It is an action
preventive in nature and a specie of precautionary justice
intended to prevent apprehended wrong or anticipated mischief
and not to undo a wrong or mischief when it has already been
done. In such an action the Court, if convinced, may interfere
by appointment of receiver or by directing security to be
furnished or by issuing an injunction or any other remedial
process. In Fletcher v. Bealey, Mr. Justice Pearson explained
the law as to actions quia timet as follows :-
There are at least two necessary ingredients for a Quia timet
action. There must, if no actual damage is proved, be proof of
imminent danger, and there must also be proof that the
apprehended damage will, if it comes, be very substantial. I
should almost say it must be proved that it will be irreparable,
because, if the danger is not proved to be so imminent that no
one can doubt that, if the remedy is delayed the damage will be
suffered, I think it must be shown that, if the damage does occur
CS(COMM) No.681/2016 Page 17
at any time, it will come in such a way and under such
circumstances that it will be impossible for the plaintiff to
protect himself against it if relief is denied to him in a Quia
timet action.
7. xxx xxx xxx
8. In our opinion a nuisance actually in existence stands on
a different footing than a possibility of nuisance or a future
nuisance. An actually existing nuisance is capable of being
assessed in terms of its quantum and the relief which will
protect or compensate the plaintiff consistently with the injury
caused to his rights is also capable of being formulated. In case
of a future nuisance, a mere possibility of injury will not
provide the plaintiff with a cause of action unless the threat be
so certain or imminent that an injury actionable in law will
arise unless prevented by an injunction. The Court may not
require proof of absolute certainty or a proof beyond
reasonable doubt before it may interfere; but a strong case of
probability that the apprehended mischief will in fact arise must
be shown by the plaintiff. In other words, a future nuisance to
be actionable must be either imminent or likely to cause such
damage as would be irreparable once it is allowed to occur.
There may be yet another category of actionable future
nuisance when the likely act of the defendant is inherently
dangerous or injurious such as digging a ditch across a
highway or in the vicinity of a childrens school or opening a
shop dealing with highly inflammable products in the midst of a
residential locality." (emphasis supplied)
23. As discussed above in the present case, there is no certain or
imminent threat or injury in favour of the plaintiffs which needs
interference by the Court especially when no part of such cause of action
has arisen in Delhi. The plaintiffs are not running its business in Delhi and
the defendants also not having its registered office in Delhi or having
CS(COMM) No.681/2016 Page 18
manufacturing unit in Delhi or have applied for excise licence or for
registration of its trademark in Delhi. In the cases relied upon by the
plaintiffs, clearly the defendants had existence in Delhi and it was on that
fact that the Court had continued with the suit.
24. In the case of United Phosphorus limited vs. Ajay Garg & Anr,
2015 (63) PTC 188 (Del) while placing reliance on Banyan Tree Holding
(P) Ltd vs A. Murali Krishna Reddy & Anr 2010 (42) PTC361, this Court
had held as under:-
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 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.
CS(COMM) No.681/2016 Page 19
43. xxx xxx xxx
44. xxx xxx xxx
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 "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. (emphasis supplied)
25. The settled law thus is that some connection needed to be shown
with forum state of the activities of the defendant. The Courts are not to
merely follow the averments of the pleadings. It can judge its correctness
relying on the various other averments in the plaint and the documents
supporting it.
26. Although in paragraph 33 of the plaint, the plaintiffs have stated that
defendants are 'offering to supply and selling the infringing goods within
the territorial jurisdiction of this Court', however, nowhere in the plaint,
CS(COMM) No.681/2016 Page 20
the plaintiffs have stated that defendants are selling its product in Delhi.
However, it is a fact that the product of the defendants which is liquor
cannot be sold without an excise licence and the plaintiffs have not pleaded
anywhere that the defendants hold an excise license for sale in Delhi. The
plaintiff's case is based on the contention that the defendants are planning to
sell its product in Delhi. The averments itself thus show that no products of
the defendants and the plaintiffs are sold in Delhi. The plaintiffs thus have
not been able to show prima facie that there is any infringement or passing
off his trade mark by the defendants in Delhi. Even for quia timet action, the
plaintiffs have to show that there is a strong possibility of the defendants
selling its product in Delhi which is likely to cause injury to its business and
trade mark. The plaintiffs have failed to prima facie show its presence in
Delhi or any goodwill in Delhi.
27. The Court observing the contradictions in the pleadings in the case of
United Phosphorus limited vs. Ajay Garg & Anr, 2015 (63) PTC 188 (Del),
reached to the conclusion that the plaintiff was doing the forum shopping
observed as under:-
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
CS(COMM) No.681/2016 Page 21
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%."
28. In the case of Jay Engineering Works ltd. vs. Ramesh Aggarwal,
135 (2006) DLT 666, this Court has also held that where the defendants are
not residing or carrying on its business within the jurisdiction of this Court,
this Court cannot be said to have any territorial jurisdiction under Section
20 of the CPC for entertaining any suit for infringement of the trade mark
or for passing off.
29. From the above discussions, it is apparent that the plaint does not
disclose that any part of the cause of action has arisen in Delhi. The
plaintiffs seem to be indulging in the forum shopping by resorting to a clever
drafting. From the averments in the plaint, it is clear that the plaintiff has no
existence in Delhi. Neither do they have their office in Delhi nor they are
CS(COMM) No.681/2016 Page 22
indulging into manufacturing of their product in Delhi. They are dealing
with the supply of excisable liquor and they do not also have any licence for
supply of their product in Delhi. The defendants are also not having their
office including the registered office within the jurisdiction of this Court nor
do they have a manufacturing unit in Delhi. They have also not applied for
the registration of their trade mark within the jurisdiction of this Court nor
have they applied for obtaining any excise licence for supply/sale of their
products within jurisdiction of this Court. No part of cause of action has
thus arisen within the jurisdiction of this Court. The Court, therefore, has no
territorial jurisdiction. The plaint is returned to the plaintiffs for filing in the
Court of appropriate jurisdiction. In view of the above, the interim order
dated 23.03.2015 stands vacated.
The Registrar is directed to do the needful.
The petition along with pending applications stands disposed of in
these terms.
DEEPA SHARMA
(JUDGE)
JULY 17, 2017
ss
CS(COMM) No.681/2016 Page 23
