Girdhari Lal Gupta Vs K. Gian Chand Jain

Effect of Dynamic Effect Part 1 Design cancellation can be filed at Delhi High Court because of its dynamic effect

Introduction:

This case, decided by the Delhi High Court on December 22, 1977, addressed the jurisdictional question of whether the High Court of Delhi had the authority to entertain applications under Section 51-A of the Designs Act, 1911, for cancellation of registered designs. 

The judgment analyzed the static and dynamic effects of design registration, emphasizing the impact of jurisdiction in intellectual property disputes.

Factual Background:

The appellant, Girdhari Lal Gupta, obtained registration for two designs (131357 and 131364) under the Designs Act, 1911, for laces. The respondents, K. Gian Chand Jain & Co., were also engaged in the same trade in Delhi. They contested the validity of these registered designs, claiming that the designs had been published in India before registration and that their business was being unfairly restricted by the appellant's monopoly over the designs. Consequently, they sought cancellation of these registrations under Section 51-A of the Act.

Procedural Background:

Filing of Petitions under Section 51-A of the Designs Act, 1911:

The respondents, K. Gian Chand Jain & Co., filed applications under Section 51-A before the Delhi High Court, seeking cancellation of the appellant’s registered designs (Nos. 131357 and 131364).Their contention was that these designs had been published in India before registration and that their business was being unfairly restricted by the appellant's monopoly over the designs.

Opposition by the Appellant:

The appellant, Girdhari Lal Gupta, contested the petitions, arguing that the High Court of Delhi lacked jurisdiction.He asserted that only the Calcutta High Court had the authority to entertain such applications since the Register of Designs was maintained in the Patent Office at Calcutta.

Amendment Application by the Appellant:

The appellant moved an application under Order VI, Rule 17 of the Civil Procedure Code, seeking amendment of his written statement to formally raise the jurisdictional plea.He argued that the jurisdiction for cancellation of design registrations was exclusively vested in the High Court of Calcutta, as the Controller of Designs was based there.

Rejection of the Amendment Application:

A learned single judge of the Delhi High Court rejected the appellant’s amendment application, reasoning that it was meritless and unnecessary.The judge held that jurisdiction under Section 51-A was not limited to Calcutta and that any High Court in India could entertain such applications.

Appeal to the Full Bench:

Dissatisfied with the single judge's ruling, the appellant filed an appeal before a Full Bench of the Delhi High Court for a more detailed consideration of the jurisdictional issue.The Full Bench was tasked with examining whether the Delhi High Court had jurisdiction over applications for cancellation of designs registered under the Designs Act.

Decision by the Full Bench:

The Full Bench concluded that an application under Section 51-A could be filed not only in the High Court of Calcutta but also in any other High Court where the dynamic effect of the design registration caused injury to a business.It ruled that the amendment sought by the appellant should have been allowed, but ultimately upheld the jurisdiction of the Delhi High Court to entertain the cancellation petitions.

Issues Involved:

Whether the Delhi High Court had jurisdiction to entertain applications under Section 51-A of the Designs Act, 1911, for cancellation of design registrations?

Whether the jurisdiction was confined to the Calcutta High Court, given that the Register of Designs was maintained at the Patent Office in Calcutta?

Whether the dynamic effect of registration, impacting businesses in various locations, could justify jurisdiction in multiple High Courts?

Submissions of the Parties

The appellant argued that:The High Court of Calcutta had exclusive jurisdiction to entertain applications under Section 51-A since the Register of Designs and the Controller of Designs were located in Calcutta.The cause of action arose only at the place of registration, which was Calcutta, and thus, any application for cancellation of registration should be made before the Calcutta High Court.

The respondents countered that:The registration of the design had a dynamic effect beyond Calcutta, affecting businesses across India, including Delhi.Since their business was suffering due to the wrongful monopoly granted by the registration, they had the right to seek cancellation in the jurisdiction where they conducted their business.Section 2(7) of the Designs Act defined ‘High Court’ in a broad manner, which did not restrict jurisdiction exclusively to Calcutta.

How the Court Reached the Conclusion that the Dynamic Effect of Design Was Felt at Delhi:

The Full Bench observed that the impact of a design registration extends beyond the place where it is registered. The registered proprietor enjoys an exclusive monopoly over the design, which prevents competitors from using it across the country. 

The court noted that:The respondents were conducting business in Delhi and alleged that their commercial activities were adversely affected by the appellant’s registered designs.The appellant had filed suits for infringement against the respondents in Delhi, which demonstrated that he was enforcing his monopoly rights in this jurisdiction.The effect of registration was not merely static (i.e., limited to the Register of Designs in Calcutta), but also dynamic—it restricted competitors in other locations, including Delhi.

Citing the Supreme Court judgment in Workmen of Shri Rangavilas Motors (P) Ltd. v. Shri Rangavilas Motors (P) Ltd. (AIR 1967 SC 1040), the Full Bench emphasized that jurisdiction must be determined based on where the legal injury occurs, rather than the mere location of the administrative authority.The injury to the respondents' trade occurred in Delhi, as they were unable to sell or manufacture laces with similar designs due to the appellant’s design registration.

Therefore, the court concluded that the dynamic effect of the design’s monopoly was directly felt in Delhi, thereby establishing jurisdiction for the Delhi High Court to entertain the cancellation petition under Section 51-A of the Designs Act.

Final Decision:

The Delhi High Court held that:The application for amendment made by the appellant should have been allowed since the jurisdictional plea was a substantial legal issue.

The Delhi High Court had jurisdiction to entertain the applications under Section 51-A because the respondents' business was affected by the design registration.

An application under Section 51-A could be filed either in the High Court of Calcutta (where the Register of Designs was maintained) or in a High Court where the dynamic effect of the registration caused legal injury.

The case was remanded for further proceedings before the learned single judge.

Law Settled in this Case:

A High Court other than Calcutta can entertain applications for cancellation of a design under Section 51-A if the applicant's business interests are affected within its territorial jurisdiction.

The dynamic effect of registration, which extends beyond the place of registration and impacts businesses nationwide, is a valid consideration for determining jurisdiction.

Case Title: Girdhari Lal Gupta Vs K. Gian Chand Jain & Co.

Date of Order: 22 December 1977

Neutral Citation: AIR 1978 DELHI 146, ILR (1978) 1 DELHI 472, 14(1978) DLT 132

Court: Delhi High Court

Judge(s): Hon'ble Justice V.S. Deshpande, H.L. Anand, S. Chadha

Disclaimer:The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman,IP Adjutor [Patent and Trademark Attorney] ,High Court of Delhi