Ultratech Cement Limited and Others Vs. Dalmia Cement Bharat Limited - Court Judgment

Excerpt:

Judgment:

1. The Defendant has filed the present Notice of Motion asserting that the Plaint is liable to be rejected as “barred by law under Order VII Rule 11 (2) of the Code of Civil Procedure, 1908 (‘Code).

2. It is submitted on behalf of the Defendant that the present Suit is for infringement and passing off. Leave under Clause XIV of the Letters Patent has not been granted till date. Hence, in law, there is presently no action for passing off. The action before this Court is for infringement alone. It is submitted that jurisdiction for the action for infringement has not been invoked with reference to the ‘cause of action. In fact, it is an admitted position that no part of the cause of action (infringement or passing off) has arisen within the jurisdiction of this Court. The Plaintiffs have sought to sustain jurisdiction, in so far as the plea of infringement is concerned, solely by relying upon Section 134 of the Trademarks Act, 1999 (“the Act”). If this requirement is not met, the action must forthwith fail.

3. It is further submitted on behalf of the Defendant that admittedly it is the Plaintiff No. 2 who is the owner of the marks which are allegedly infringed by the Defendant and that the Plaintiff No.1 is a licensee/licensed user of the marks. Relying on Sections 28, 52 and 53 of the Act, it is submitted that the said Sections make it absolutely clear that only a registered proprietor or a registered user can institute/maintain an action for infringement. It is submitted that Section 53 of the Act in fact prohibits a permitted user (example Licensee) from instituting a suit for infringement. It is submitted that therefore the expression ‘person instituting the suit means and must mean “a person, who under the Act, is entitled to institute a suit”. The person instituting the suit must either be a registered proprietor or a registered user. It cannot include a permitted user (licensee). The Plaintiff No.1 therefore cannot be joined in this Suit. The joinder of Plaintiff No.1 is barred/prohibited in law. The present Suit could therefore have been maintained by Plaintiff No.2 alone. There was no legal necessity to join Plaintiff No.1. The Plaint therefore is an attempt to artificially provide jurisdiction by joining Plaintiff No. 1 to the action. The endeavor clearly appears to be an attempt to form what can be described as a “jurisdictional joint venture”.

4. It is next submitted on behalf of the Defendant that the only question therefore which falls/remains for consideration is whether this Suit, by Plaintiff No.2, satisfies the test of Section 134 (2) of the Act, when no part of the cause of action has arisen within the jurisdiction of this Court. It is submitted that the Defendant sells its products only in the State of Karnataka. Assuming that Plaintiff No.2s allegations (on merits) are correct, the cause of action for infringement arises in Karnataka. Significantly both the Plaintiffs and in particular Plaintiff No.2 have a subordinate office within the jurisdiction of the Courts in Karnataka. Hence, in Karnataka not only has the cause of action (allegedly) arisen but both the second Plaintiff and the Defendant have a physical presence (situs) in the said State. However, the Plaintiffs purely by reason of the artful pleading in paragraph 44 of the Plaint that, “The 1st Plaintiff has its Registered Office in Mumbai and Plaintiff No.2 has its Corporate Office in Mumbai from where the Plaintiffs are carrying on business in Mumbai, have wrongly contended that the Suit as framed, attracts Section 134 of the Act. Relying on Section 20 of the Code, it is submitted on behalf of the Defendant that assuming that paragraph 44 can be read as stating that Plaintiff No.2 carries on business from its Corporate Office and thus within the jurisdiction of this Court, this still does not attract Section 134 of the Act. It is submitted that the scope of the words ‘carry on business in explanation to Section 20 of the Code in relation to Corporations having multiple offices fell for consideration before the Honble Supreme Court of India in the case of M/s. Patel Roadways vs. M/s. Prasad Trading Company (1991 (4) SCC 270). In that case, the Honble Supreme Court interpreted the words ‘carry on business (in relation to Corporations having multiple offices at different locations) to mean either the registered office or such subordinate office where the cause of action arises. It is submitted that this judgment is an authority for the proposition (ratio) that (for the purposes of invoking the jurisdiction of Courts) a Corporation having multiple offices ‘carries on business only at (i) its registered office; or (ii) such subordinate office (s) where the cause of action arises and at no other place.

5. It is submitted on behalf of the Defendant that the Legislature intended to give the expression ‘carries on business in Section 134 of the Act, the same meaning attributed to them in Section 20 of the Code. It is submitted that similarly, in so far as the expression ‘carries on business is concerned, there is no radical departure in the scheme of Clause XII of the Letters Patent from Section 20 of the Code. In support of its contentions, the Defendant has relied on the decisions in the case of Indian Performing Rights Society vs. Sanjay Dalia and another (2009 (39) PTC 1); World Wide Wrestling Entertainment vs. M/s. Reshma Collections and others (CS (OS) 1801/2014 and I.A. Nos. 14958-59/2013); Archie Comic Publications Inc vs. Purple Creations Pvt. Ltd. (2009) 39 PTC 1 (Del) DB). It is submitted that assuming that the order dated 27^th January, 2009 in SLP No. 980 and 981/2009, filed before the Honble Supreme Court in the matter of Indian Performing Rights Society (supra) amounts to a stay of the said judgment, it does not mean that the Supreme Court has set aside the same. This Court is therefore entitled to take the same view. It is submitted that paragraphs 7, 8 and 11 of the said decision be treated as submissions advanced by the Defendant before this Court.

6. It is further submitted on behalf of the Defendant that the construction put forth by the Plaintiffs will turn Section 134 of the Act into an instrument of oppression and/or abuse. Any registered proprietor will become entitled to pick and choose a Court of its choice anywhere across the length and breadth of this Country by the simple expedient of either joining to the action, a co-Plaintiff who has a presence within the jurisdiction of the chosen Court or at a place where the registered proprietor has a subordinate office (though the Defendant is not selling his goods and/or no part of the cause of action has arisen). It is submitted that the words ‘a person instituting the suit” must therefore be given an informed construction and/or meaning. They cannot be made an instrument of oppression in the hands of the Corporations with multiple subordinate offices. Referring to the statement of objects and reasons of the Copyright Act, 1957, regarding Section 62 (2) of the Copyrights Act, it is submitted on behalf of the Defendant that clearly these provisions were inserted with a view to protect authors unable to file actions in far away places where the cause accrued and not for corporations or persons with considerable resources to drag defendants to far off forums. The ameliorative provisions of Section 134 of the Act cannot be misused to drag the defendants to a forum that is completely alien to the actual place where the cause of action, if any, has accrued. The Defendant has further submitted that each of the judgments cited by the Plaintiffs are either ex facie inapplicable or distinguishable or do not, when properly read and understood, support the case of the Plaintiffs. Some of the cases relied upon by the Plaintiff in fact support the case of the Defendant.

7. The Defendant has submitted that from their submissions the clear position that emerges is as under:

(i) Firstly, Plaintiff No.1 cannot be a Plaintiff in an infringement suit. The joinder of Plaintiff No.1 is not only not necessary to found/maintain an infringement action, but is expressly barred under Section 53 of the Act;

(ii) Secondly, independently thereof, the Suit as framed is barred under Section 134 of the Act. Plaintiff No.2 does not answer the description of ‘carries on business within jurisdiction;

(iii) Thirdly, were the two Plaintiffs to independently institute individual suits, these suits would be barred by law, for the submissions advanced on behalf of the Defendant;

(iv) Fourthly, the bar cannot be unlawfully evaded by the expedient of artfully joining to one suit two Plaintiffs (each of whom cannot maintain an independent action); and

(v) Fifthly, the Plaintiffs are not remediless. They can, if they so desire, sue the Defendant in Courts where the cause of action has arisen and where they (the Plaintiffs) have a presence (situs).

It is therefore submitted on behalf of the Defendant that the present Suit is liable to be dismissed as ‘barred by law' under Order VII Rule 11 (d) of the Code. It is therefore submitted that the Notice of Motion be made absolute with costs.

8. The Learned Senior Advocate appearing for the Plaintiffs has submitted that in an application taken out under Order VII Rule 11, the Court has to proceed only on the basis that the averments made in the Plaint are true and correct. The Court cannot look into the defence of the Defendant. It is submitted that therefore in the present case, the Defendant is not entitled to resort to the provisions of Order VII Rule 11 (d) of the Code on a specious plea that the entire Plaint is liable to be rejected because Plaintiff No.1 as a licensee is not entitled to file a suit for infringement. Relying on the decision of the Honble Supreme Court in Sopan Sukhdeo Sable and others vs. Assistant Charity Commissioner and others (2004) 3 SCC 137 (Paragraph 10)it is submitted that whilst considering an application under Order VII Rule 11 of the Code the averments in the Plaint are germane, and the pleas taken by the Defendant in the Written Statement would be wholly irrelevant at that stage. It is submitted that the use of the marks by the first Plaintiff is for and on behalf of the second Plaintiff and the goodwill and reputation of the marks by such use is owned by the second Plaintiff. Any use made by Plaintiff No. 1 enures to the benefit of Plaintiff No.2. In any case the Plaint cannot be rejected because the Suit for infringement is maintainable, inasmuch as the Plaintiff No. 2 is the registered proprietor and is entitled to file a suit for the relief for infringement. In any case the first Plaintiff is a proper and necessary party for the causes of action in the present Suit. Relying on the decision of the Honble Supreme Court in the case of Exphar SA and Anr. Vs. Eupharma Laboratories Ltd. 6, it is submitted that the question that is required to be considered under Section 134 of the Act is whether any of the Plaintiffs, who is one of the parties having instituted the Suit, carries on business within the jurisdiction of this Court. The question whether one of such persons is not entitled to the reliefs claimed in the Suit is irrelevant in view of the categorical statement of law laid down in the said case namely that a party 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 Act. The Plaintiff No.1 deals as a licensee only in respect of goods manufactured by Plaintiff No.2 and none other. In view thereof the decision of the Honble Supreme Court in the case of Dhodha House vs. S.K. Maingi (2006) 9 SCC 41)has no application to the facts of this case. It is further submitted that reference to the provisions of the Act requiring only a registered proprietor or a registered user being entitled to file a suit for infringement is irrelevant. It is submitted that the contentions raised by the Defendant that under sub-Section (2) of Section 134 of the Act, the word ‘person includes the registered proprietor or the registered user only, is irrelevant. The word used in the explanation is ‘includes and therefore the definition is inclusive. The Legislature has purposely not restricted the meaning of the word ‘person only to registered proprietor and the registered user, otherwise the Legislature would have used the word ‘means. It is therefore submitted that the allegation of the Defendant that the Plaintiff is attempting to form a ‘jurisdictional joint venture is totally unsustainable.

9. It is next submitted on behalf of the Plaintiffs that the Defendants argument that this Court has no jurisdiction to entertain the Suit for infringement on the ground that no cause of action has arisen within the jurisdiction of this Court is also inapplicable. It is submitted that the submission of the Defendant that the explanation to Section 20 of the Code is required to be read into Section 134 of the Act is totally untenable, firstly on interpretation of Section 134 of the Act and secondly on the decisions of this Court. In view of the clear provisions of Section 134 of the Act, there is no question of interpreting the provisions of / considerations under Section 20 of the Code or even Clause XII of the Letters Patent while considering jurisdiction under Section 134 (2) of the Act. Section 134 creates/confers jurisdiction in addition to and independent of Section 20 of the Code and Clause XII of the Letters Patent. Therefore even if the requirement of Clause XII of the Letters Patent are not satisfied, or in a given case Section 20 of the Code is not satisfied, Section 134 (2) of the Act will still confer jurisdiction in its own turn. If the Plaintiff resides and/or carries on business within the jurisdiction of this Court, there is no further requirement in the said Section. The provisions of Section 20 of the Code are not applicable to this Court. Even if the said provisions were applicable, there is no question of the issue being decided by making reference to Section 20 of the Code, since there is no ambiguity in Section 134 of the Act. Relying on the decision of the Honble Supreme Court in the case of State of Kerala vs. Mathai Verghese (AIR 1987 SC 33), it is submitted that it is impermissible to read any additional requirement in Section 134 of the Act.

10. It is submitted on behalf of the Plaintiffs that if the interpretation placed by the Defendant is accepted viz. to read the requirement of explanation (ii) to Section 20 of the Code into Section 134 of the Act, such interpretation will result in a hostile discrimination. The Defendants interpretation will make a distinction between an individual carrying on business and a Corporation carrying on business, because in the case of a Corporation, according to Defendants interpretation, the Corporation as plaintiff will be required to file a suit only at a place where the cause of action has arisen. This will be discriminatory, unreasonable, and arbitrary as two similarly situated Plaintiffs are being treated differently.

11. It is further submitted on behalf of the Plaintiff that the submission of the Defendant viz. to read the requirement of Section 20 of the Code into Section 134 of the Act, also goes contrary to the clear intention of the Legislature. If the Legislature wanted to put any limitation in case of a Corporation, which wanted to file a suit as in Section 20 of the Code, then Section 134 of the Act would have been worded accordingly whilst repealing the Trade and Merchandise Act, 1958 by the Trade Marks Act, 1999. It is submitted that therefore the decision of the Honble Supreme Court in Patel Roadways vs. Prasad Trading Co. (1991) 4 SCC 270)will not assist the Defendants contention raised herein since the observations made in that case are required to be confined to a case under Section 20 of the Code which is not applicable to this Court. It is therefore submitted on behalf of the Plaintiffs that the Defendants interpretation of Section 134 of the Act that the cause of action must arise at the corporate office of the Plaintiffs is liable to be rejected.

12. It is further submitted on behalf of the Plaintiffs that the law on this aspect has been settled by two decisions of the Division Bench of this Court in M/s. Arte Indiana vs. M/s. P. Mittulaul Lalah and Sons (AIR 1999 Bom. 369)and Pratap Singh vs. The Bank of America (78 BLR 549). It is submitted that the decisions of the Honble Delhi High Court relied upon by the Defendant are contrary to the said binding decisions of this Court. It is further submitted that the Madras High Court in the case of Wipro Limited vs. Oushadha Chandrika Ayurvedic India (P) Ltd. and others (2008 (37) PTC 269 (Mad.) (DB) has clearly held that by virtue of Section 120 of the Code, the provisions of Section 20 of the Code are not applicable as far as the Chartered High Court is concerned and the scope of Section 134 of the Act cannot be curtailed by reference to Section 20 of the Code or Clause XII of the Letters Patent. The Plaintiffs have also relied upon the decision of this Court in Petition No. 369 of 2013 in Suit No. 37 of 2014 – Ultra-Tech Cement Ltd. vs. Shree Balaji Cement Industries in its judgment dated 18th January, 2014, wherein this Court has held that there is no requirement in Clause XIV of the Letters Patent that the cause of action must have arisen within the jurisdiction of this Court.

13. In conclusion, it is submitted on behalf of the Plaintiffs as follows:

(i) Once the Court has jurisdiction to try a suit for one of the causes of action, Clause XIV of the Letters Patent allows the joinder of another cause of action in that suit;

(ii) For the Court to have jurisdiction under Section 134 (2) of the Act, only the place of the Plaintiffs residence/business is sufficient, and it is not necessary that the cause of action should also have arisen at that place.

(iii) In this case, this Court has jurisdiction to try the Suit for infringement under Section 134 (2) of the Act as the Plaintiff carries on business within the territorial jurisdiction of this Court, and thus the requirements of Section 134 (2) of the Act are fully satisfied.

(iv) Cause of action or the place where it arose, it is not relevant under Section 134 (2) to determine the jurisdiction of this Court under Section 134 (2) of the Act.

(v) Even if the Plaintiff is a Corporation and even if the cause of action for infringement arose wholly outside the territorial jurisdiction of this Court, this Court would still have jurisdiction under Section 134 (2) of the Act, since the Plaintiffs carry on business within the local limits of this Court.

14. I have considered the submissions advanced on behalf of the Plaintiffs as well as the Defendant. I have also considered the decisions relied upon by the Learned Advocates for the parties.

15. Section 134 of the Act is reproduced hereunder:

“134. Suit for infringement, etc. to be instituted before District Court.

(1) No suit –

(a) for the infringement of a registered trade mark; or

(b) relating to any right in a registered trade mark; or

(c) for passing off arising out of the use by the Defendant of any trade mark which is identical with or deceptively similar to the Plaintiffs trade mark, whether registered or unregistered,

shall be instituted in any court inferior to a District Court having jurisdiction to try the suit.

(2) For the purpose of clauses (a) and (b) of sub-section (1) a ‘District court having jurisdiction shall notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908) or any other law for the time being in force, include a district Court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceedings, 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 or personally works for gain on business.

Explanation – For the purposes of sub-section (2) ‘person includes the registered proprietor and the registered user.

16. The first submission raised by the Defendant in the present Notice of Motion is that the expression, ‘person instituting the suit used in Section 134 (2) of the Act means a person who, under the Act, is entitled to institute a suit. Sections 28, 52 and 53 of the Act make it absolutely clear that only a registered proprietor or a registered user can institute/maintain an action for infringement. Section 53 of the Act in fact prohibits a permitted user (e.g. a licensee) from instituting a suit for infringement. To put it differently, the person instituting the suit must be either a registered proprietor or a registered user. It cannot include a permitted user (licensee). The Plaintiff No. 1 who is therefore a licensee cannot be joined as a Party to the Suit. The joinder of Plaintiff No.1 is barred/prohibited in law.

17. The clause pertaining to jurisdiction in the Plaint filed in the above Suit, is paragraph 44 and the averments made by the Plaintiffs in the said paragraph are reproduced hereunder:

“44. The Plaintiffs carries on business in Mumbai. The 1^st Plaintiff has its registered office in Mumbai and the Plaintiff No.2 has its corporate office in Mumbai from where the Plaintiffs are carrying on business in Mumbai. The person who has instituted the suit is voluntarily residing in Mumbai and/or working for personal gain in Mumbai. Therefore, under Section 134 of the Trademarks Act, 1999 this Honble Court has jurisdiction to try, entertain and dispose off the present suit in respect of the cause of action of infringement of the trade mark. The Defendant is carrying on business outside Mumbai and selling goods under the mark ‘ULTRA” outside Mumbai therefore this Honble Court has no jurisdiction to try, entertain and dispose off the present suit in respect of the cause of action of passing off. Therefore, the Plaintiffs are seeking Leave under Clause XIV of the Letters Patent against Defendant to combine the cause of action of passing off along with the cause of action of infringement and submit that with such leave granted this Honble Court will have jurisdiction to try, entertain and dispose off the present suit in respect of the cause of action of passing off. A separate petition is being filed for obtaining Leave under Clause XIV of the Letters Patent.

18. It is a settled position in law that while considering the plea under Order VII Rule 11, the averments in the Plaint are required to be treated as true. While considering an application under Order VII Rule 11, the Court cannot look into the defence of the Defendant. The Court has to proceed on the footing that on the averments made in the Plaint, whether an order can be passed under Order VII Rule 11 of the Code. In Sopan Sukhdeo Sable and others vs. Assistant Charity Commissioner and others (supra) the Honble Supreme Court has held that for the purposes of deciding an application under clauses (a) and (d) of Order VII Rule 11 of the Code, the averments in the Plaint are germane, the pleas taken by the Defendant in the Written Statement would be wholly irrelevant at that stage. Therefore, the Plaintiffs are correct in its contention that the Defendant is not entitled to resort to the provisions of Order VII Rule 11 (d) on the ground that the entire Plaint is liable to be rejected, because Plaintiff No. 1 as a licensee is not entitled to file a suit for infringement. It is an admitted position that Plaintiff No.2 is the registered proprietor and has permitted Plaintiff No.1 to use the marks. The Plaintiffs have stated in the Plaint that the first Plaintiff is a licensee and the use of the marks by the first Plaintiff is for and on behalf of the second Plaintiff and the goodwill and reputation of the marks by such use is owned by the second Plaintiff. Any use made by Plaintiff No. 1 enures to the benefit of Plaintiff No.2. The Plaint cannot be rejected because the Suit for infringement is in any event maintainable, inasmuch as Plaintiff No.2 is the registered proprietor and is entitled to file the Suit for the relief for infringement. In any case, the first Plaintiff is a proper and necessary party for the causes of action in the present Suit. Further the Suit is a composite suit for the causes of action of infringement and passing off and therefore the presence of the first Plaintiff to the Suit is proper and necessary.

19. The Defendants contention that the Plaintiff No.1 has no right to file the suit is also incorrect in view of the decision of the Honble Supreme Court in Exphar SA and Anr. Vs. Eupharma Laboratories Ltd. (2004) 3 SCC 688)relied upon by the Defendant, wherein the Honble Supreme Court, while considering various alternate pleas in paragraph 14 clearly held that though Appellant No. 2 had not claimed ownership of copyright, or the trademark and that he will not be entitled to the relief claimed in the suit, but that was 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. Therefore, as correctly submitted by the Plaintiffs, the question that is required to be considered under Section 134 of the Act is whether any of the Plaintiffs who is one of the parties having instituted the Suit, carries on business within the jurisdiction of this Court. The question whether one of such persons is not entitled to the reliefs claimed in the Suit is irrelevant in view of the categorical statement of law laid down in the said case by the Honble Supreme Court in paragraph 14 which is reproduced h