Lyft, Inc. vs Goer Techno Infra Private Limited
2020 Latest Caselaw 536 Del

$~7

*      IN THE HIGH COURT OF DELHI AT NEW DELHI
                                          Decided on: 28th January, 2020

+      I.A. 13970/2019 in CS(COMM) 461/2019
       LYFT, INC.                                              ..... Plaintiff
                            Through:      Ms. Shwetasree Majumder &
                                          Ms.Vasundhara Majithia,
                                          Advocates.
                                   versus

       GOER TECHNO INFRA PRIVATE LIMITED        ..... Defendant
                    Through: Mr. Ashutosh Thakur &
                             Mr.Heyshiv Parashar,
                             Advocates.

CORAM:
HON'BLE MR. JUSTICE PRATEEK JALAN

PRATEEK JALAN, J. (ORAL)

% I.A. 13970/2019 (Application on behalf of the defendant under Order VII Rule 10 & 11(a) of the CPC seeking return of plaint)

1. This is an application filed by the defendant under Order VII Rule 10 of the Code of Civil Procedure, 1908 ["CPC"]. The contention of the defendant is that this Court does not have the territorial jurisdiction to entertain the present suit.

2. Mr. Ashutosh Thakur, learned counsel for the defendant, drew my attention to paragraph 37 of the plaint wherein the jurisdiction of this Court has been invoked in the following terms:

"37. This Hon‟ble Court has the jurisdiction to try and entertain the present suit under Section 20 of the Code of Civil Procedure as the Plaintiff has a strong and credible

apprehension that the Defendant will expand its operations under the impugned trading style/trade mark in New Delhi, and the threat that the Defendant will use the impugned trade mark/ trading style within the jurisdiction is credible and imminent, thus giving rise to a substantial and integral part of the cause of action within the jurisdiction of this Hon‟ble Court.

The Plaintiff further submits that there is no pending litigation between the parties herein in any forum prior to the institution of the present suit."

3. Mr.Thakur further submitted that neither the plaintiff nor the defendant has an office within the jurisdiction of this Court and also that the plaint does not disclose any cause of action arising within the jurisdiction. Mr.Thakur cited the judgment of a Division Bench in the case of P.K.Sen vs. EXXON Mobile Corporation & Anr 2017 (69) PTC 271 (Del) in support of his contention. Mr.Thakur stated that the plaintiff's apprehension regarding the entry of defendant into the Delhi market is fanciful and categorically stated that the defendant has no intention to offer its services in Delhi at present.

4. Ms. Shwetasree Majumder, learned counsel for the plaintiff, on the other hand, submitted that in a quia timet action, the jurisdiction of the Court can be attracted by a strong and credible apprehension that the defendant will seek to carry on the impugned activity within the jurisdiction of the Court. For this purpose, she argued that in an application under Order VII Rule 10 of the CPC, the averments contained in the plaint alone are required to be examined. Ms.Majumder referred to three Division Bench decisions of this Court in support of her arguments viz. Teva Pharmaceutical Industries Ltd. and Ors. vs. Natco Pharma Limited 210 (2014) DLT 591, M/s Allied

Blenders & Distillers Pvt. Ltd. vs. R.K.Distilleries Pvt. Ltd. 2017 [FAO (OS) 251/2016, decided on 28.02.2017] and Shilpa Medicare Limited vs. Bristol-Myers Squibb Company and Ors. 2015 SCC OnLine Del 11164 [FAO(OS) 96/2014, decided on 30.07.2015]. Ms.Majumder also supported her argument that the apprehension of the plaintiff in the present case is strong and credible by reference to three documents placed on record which, according to her, prima facie demonstrate the defendant's intention to launch its services in Delhi.

5. The judgments cited by Ms.Majumder, in my view, support her argument that the facts of the present case would not justify rejection of the plaint under Order VII Rule 10 of the CPC.

In Teva Pharmaceuticals (supra) the Division Bench reversed the rejection of the plaint on the ground of lack of territorial jurisdiction. It was specifically held that a statement by the defendant that it did not intend to carry out the infringing activity within the jurisdiction of the Court would not be sufficient to reject a plaint, if the necessary ingredients for attracting the jurisdiction of the Court were pleaded. The relevant observations in paragraph 20 of the judgment are reproduced below:

"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."

6. The judgment in Teva Pharmaceuticals (supra) was noticed in Shilpa Medicare (supra). In that judgment, with particular reference to quia timet actions, the Division Bench held as follows:

"14. The suit filed by the respondents is by way of a quia timet action, which visualizes apprehended inuury. No 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. It has been held in Saleem Bhai & Ors. v. State of Maharashtra and Ors. (2003) 1 SCC 557 that a plaint must be read as a whole to find out if it discloses cause of action. What is a cause of

action, is a question of fact, which has to be decided on the basis of averments made in the plaint in its entirety, taking them as correct. It is also settled that the court cannot exercise the power to return, or reject the plaint where the averments made in plaint do disclose cause of action. (Ref. Mayar (H. K.) Ltd. & Ors. v. Owners and Parties, Vessel M.V. Fortune Express & Ors. (2006) 3 SCC 100). As to what constitutes a „cause of action;, has been described as "every fact, which if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the Court." (Ref. A.B.C. Laminart Pvt. Ltd. & Anr. v. A.P. Agencies, Salem (1989) 2 SCC 163 and Blook Dekor Ltd. v. Subhash Himatlal Desai & Ors. (1994) 6 SCC 322)."

7. In Allied Blenders (supra), the Court has considered the issue in some detail. The judgment [in paragraph 12] clearly holds that the threat of infringing activity would confer jurisdiction on this Court, and for the purposes of Order VII Rule 10 of the CPC, the statements contained in the plaint would be presumed to be correct, including as to threat perception or apprehension. However, the Court has emphasised that the considerations, even on the question of jurisdiction, would be different while considering an application for injunction under Order XXXIX Rules 1 & 2 of the CPC. It is evident from the judgment that the perceived threat would have to be justified prima facie at the stage of consideration of an injunction application, and thereafter at the final hearing of the suit. The analysis of the Court, as relevant for the present purposes, is as follows:

"12. ...What is important is that the threat of selling the goods under the impugned trade mark in Delhi would by itself confer jurisdiction on the courts in Delhi. It is another matter that the threat perception would have to be justified, prima facie, when the application filed by the

plaintiff under Order XXXIX Rules 1 & 2, CPC would be considered or later, on merits, when the suit itself is taken up for disposal. However, in a consideration under Order VII Rule 10 CPC, the court must proceed on the assumption that whatever is stated in the plaint is correct and, therefore, it would also have to assume that the threat perception or the apprehension on the part of the plaintiff as stated in the plaint is also correct. That in itself would amount to a part of the cause of action.

xxxx xxxx xxxx

20. In paragraph 27, the purported cause of action is with regard to the sale of the respondent‟s product in the State of Andhra Pradesh. In paragraph 28, however, while making the averments with regard to territorial jurisdiction, the plea of Section 134(2) and Section 62(2) of the Trade Marks Act and the Copyrights Act, respectively, has also been taken. It is, however, stated that the scale of the business activity of the defendant is not known and that "it is apprehended as being highly likely that the product sold under the impugned mark „Regular Choice‟ will be made available in New Delhi". It is further alleged that there is a strong apprehension that the respondents will launch the impugned product in New Delhi and would be available within the jurisdiction of this court. Furthermore, it is averred that the threat that the respondent / defendant would sell and or offer for sale the impugned product within the jurisdiction of this court is both credible and imminent. It is clearly stated that this apprehension on the part of the plaintiff constituted a substantial and integral part of the cause of action which, according to the appellant / plaintiff, accrued within the jurisdiction of this court. And, therefore, it was pleaded that this court would have territorial jurisdiction by virtue of Section 20 CPC also.

21. Now, if all these averments in the plaint are taken to be correct, it would mean that there is a reasonable and credible apprehension that the impugned product would be launched and sold in New Delhi. These are the ingredients for a quia timet action. In other words, they constitute the cause of action for instituting a suit in the nature of a quia timet action. It is in this backdrop that we feel that the learned single Judge has fallen into error when he has prima facie taken the view that no part of the cause of action has occurred in Delhi. Just because the respondent / defendant had been selling the product under the impugned mark in Andhra Pradesh does not mean that when there is an imminent threat of the respondent / defendant launching and selling the same product under the same mark in Delhi, no cause of action, based on such apprehension, could arise. Clearly, the apprehension of the respondent launching its product under the impugned trade mark in Delhi, on a demurrer, would constitute cause of action or at least a part of the cause of action. Therefore, independent of the fact that as to where the appellant‟s / plaintiff‟s registered office or subordinate office was located, under section 20(c) of the CPC itself, this court would have territorial jurisdiction because part of the cause of action had arisen in Delhi as per the plaint.

22. We must make it clear that the considerations with regard to territorial jurisdiction in the context of Order VII Rule 10, CPC are entirely different from those in the context of an application under Order XXXIX Rules 1 & 2, CPC or in the context of an issue framed in the suit with regard to territorial jurisdiction. While in the backdrop of Order VII Rule 10, it is only the averments contained in the plaint that have to be seen in the case of an application for the grant of interim relief under Order

XXXIX Rules 1 & 2, the contentions of the defendant in the reply to this application as also those contained in the written statement are required to be examined to arrive at a prima facie view. So, while in the case of an Order VII Rule 10 CPC application, the issue of jurisdiction is decided on the basis of what is stated in the plaint and, that too, after assuming the statements to be correct, an application under Order XXXIX Rules 1 & 2, CPC requires the examination of the contentions of the defendants that may be contained in the written statement and / or the reply to the application as also the other material which may be placed by the defendant before the court. Here, there is no question of considering the pleas of the plaintiff by way of a demurrer. Furthermore, the standards would be higher when an issue with regard to territorial jurisdiction is to be finally decided in the course of trial of the suit. Thus, while for the purposes of an examination under Order VII Rule 10, CPC, the court may come to the conclusion that it has territorial jurisdiction, this would not come in the way of the defendant in raising a question as to territorial jurisdiction, both when the issue of temporary injunction under Order XXXIX Rules 1 & 2, CPC is being considered and when an issue as to territorial jurisdiction is being decided in the course of trial of the suit. To put it differently, while a plaintiff may succeed in demonstrating, for the purposes of Order VII Rule 10 CPC that this court has territorial jurisdiction and that the plaint ought not to be returned, he may fail in obtaining an order of interim injunction on the ground that the plaintiff‟s entitlement is itself shaky because the issue of territorial jurisdiction is highly debatable and prima facie not tenable. Therefore, the decision of the court in putting down an objection of the defendant and in rejecting the defendant‟s prayer for return of the plaint

under Order VII Rule 10, CPC, would not come in the way of the defendant raising the question of territorial jurisdiction, both as an objection to the grant of an interim injunction as also at the time of decision of the issue of territorial jurisdiction, if framed, at the time of trial of the suit."

8. Following the aforementioned binding authorities, I am of the view that the averments contained in the plaint, as extracted above, are sufficient to negate the plea of the defendant under Order VII Rule 10 of the CPC. The judgment in P.K.Sen (supra) cited by Mr.Thakur, although it also refers to Section 20 of the CPC, is in the context of jurisdiction being invoked under Section 134 of the Trade Marks Act, 1999. The provisions of Section 20 are cited and discussed in light of the prevailing legal position that recourse to Section 134 would depend upon whether the cause of action arose at the places of the plaintiff's registered office and subordinate offices.

9. In the present case, Ms.Majumder has also justified the credibility of the perceived threat by reference to three documents, which have been filed on record by the plaintiff. The first of these is a newspaper report published in Patrika newspaper, Lucknow edition [which was also referred to in the order dated 28.07.2019, by which ex parte injunction was granted in favour of the plaintiff] to the effect that the defendant may enter the market in Delhi. In the documents subsequently filed, the plaintiff has included user reviews of the defendant's mobile application which are available on „Google Play‟. In response to a user comment that the defendant‟s service was not available at his location, the defendant has stated that although it is serving only Lucknow at present, it will serve other cities in the near

future. Lastly, Ms.Majumder has referred to the counter statement dated 19.10.2019 filed by the defendant in opposition to registration of the plaintiff‟s trademark. In the said counter statement, the defendant has stated that its trademark is being used "throughout the length and breadth of the country" and has gained reputation in social media and news [for which purpose it has cited the aforementioned article in Patrika]. The defendant has also claimed to have advertised widely online and in the print media.

10. In view of the aforesaid, I am of the view that the plaint in the present case cannot be returned for want of jurisdiction. The application is therefore dismissed. However, in terms of paragraph 22 of Allied Blenders (supra), it will nevertheless be open to the defendant to urge the ground relating to territorial jurisdiction, in relation to the applications filed by the parties under Order XXXIX Rules 1 & 2 and Order XXXIX Rule 4 of the CPC, which will be decided on their own merits.

PRATEEK JALAN, J.

JANUARY 28, 2020 „hkaur‟/s