Under Section 20(c) CPC, the sale of allegedly infringing goods within a court’s territory constitutes a part of the cause of action
Introduction:In the intricate world of trademark litigation, the case of LG Corporation and Anr. Vs. Intermarket Electroplasters (P) Ltd. stands as a testament to the complexities of territorial jurisdiction in India. Decided on February 13, 2006, by the Delhi High Court, this dispute pits a global electronics giant against an Indian company, revolving around the pivotal question of where a legal battle over trademark infringement should be fought. With allegations of passing off and a skirmish over the court’s right to hear the case, this judgment illuminates the interplay between statutory provisions, judicial precedents, and the practical realities of commerce, offering a nuanced exploration of jurisdiction in civil suits.
Detailed Factual Background:LG Corporation, a renowned South Korean multinational, along with its co-plaintiff, initiated a lawsuit against Intermarket Electroplasters (P) Ltd., an Indian company, and other defendants. The crux of LG’s grievance was that Intermarket was allegedly passing off its goods as those of LG by using a deceptively similar trademark.
LG asserted that this infringement violated its intellectual property rights, prompting a suit for relief in the Delhi High Court.LG’s plaint rested on three jurisdictional anchors: The filing and advertisement of its trademark registration application at the Trade Mark Registry in Delhi, The applicability of Section 134 of the Trade Marks Act, 1999, and the sale of Intermarket’s allegedly infringing goods within Delhi. Specifically, LG pointed to invoices evidencing sales of these goods to parties in Delhi, asserting that this commercial activity within the city triggered a cause of action sufficient to vest jurisdiction in the Delhi High Court. Intermarket, a company incorporated under the Indian Companies Act with no branch office or agent in Delhi, contested the court’s jurisdiction. It argued that its operations were not based in Delhi, and thus, it neither resided nor carried on business there, challenging LG’s claim to anchor the suit in the capital.
Detailed Procedural Background:The legal proceedings commenced when LG filed its suit in the Delhi High Court, invoking the court’s jurisdiction based on the aforementioned grounds. Intermarket responded by filing an application (IA No. 258/06) under Order 7, Rule 11 of the Code of Civil Procedure (CPC), effectively seeking the return or rejection of the plaint under Order 7, Rule 10, arguing that the court lacked territorial jurisdiction. This application, also invoking the court’s inherent powers under Section 151 CPC, set the stage for a preliminary skirmish over venue.
Issues Involved in the Case:The central issue was whether the Delhi High Court possessed territorial jurisdiction to entertain LG’s suit? This hinged on interpreting Section 20 of the CPC, specifically whether the sale of allegedly infringing goods in Delhi constituted a part of the cause of action sufficient to anchor Jurisdiction under Section 20(c), given Intermarket’s lack of physical presence in the city.
Detailed Submission of Parties:LG’s counsel argued that the court’s jurisdiction was secured by the sale of Intermarket’s infringing goods in Delhi, as averred in paragraph 30 of the plaint: "the impugned goods of the defendants are also selling in Delhi, though without issuance of supporting invoices." They bolstered this with Intermarket’s own documents—invoices showing sales to Delhi parties—asserting that this commercial activity gave rise to a cause of action within the court’s territorial ambit. LG emphasized that jurisdiction under Section 20(c) CPC extends to where any part of the cause of action arises, and the sale of goods directly tied to the passing-off claim satisfied this criterion.
Intermarket’s counsel countered that the company, lacking a branch office or agent in Delhi, neither resided nor carried on business there, as required under Section 20(a) CPC. They relied on the Supreme Court’s ruling in Kusum Ingots & Alloys Ltd. vs. Union of India to argue that mere sales did not equate to carrying on business, drawing parallels to Section 20(c)’s interpretation in writ jurisdiction. They further contended that even if a cause of action arose, the court could discretionarily decline jurisdiction under the doctrine of forum conveniens, urging the suit’s dismissal or transfer.
Detailed Discussion on Judgments :Cited by Parties and Their ContextThe parties leaned on key judicial precedents to fortify their positions:
Dhodha House vs. S.K. Maingi, (2006) 9 SCC 41: Cited by both sides, this Supreme Court ruling was pivotal. LG conceded it negated jurisdiction based on the Trade Mark Registry’s location and Section 134(2) of the Trade Marks Act, 1999, which provides an additional forum only where the plaintiff resides or works for gain. Intermarket used it to argue that statutory jurisdiction must be explicitly conferred, reinforcing their stance that Delhi lacked a basis absent their business presence. The court clarified that Section 20 CPC governs trademark suits unless overridden by specific provisions, setting the stage for a cause-of-action analysis.
Kusum Ingots & Alloys Ltd. vs. Union of India, (2004) 6 SCC 254: Intermarket relied on this Supreme Court decision, which interpreted jurisdiction under Article 226 of the Constitution by reference to Section 20(c) CPC. The court held that a small part of the cause of action within a High Court’s territory does not compel adjudication, allowing discretionary refusal under forum conveniens. Intermarket argued this principle applied to suits, suggesting Delhi could decline jurisdiction despite sales.
Morgan Stanley Mutual Fund vs. Kartick Das, (1994) 4 SCC 225: Supreme Court case established that a corporation’s residence is typically its registered office, supporting Intermarket’s claim of non-residence in Delhi absent a local office.
Pfizer Products, Inc. vs. Rajesh Chopra and Ors., CS (OS) No. 311/2005 (Delhi High Court, decided February 8, 2006): LG’s counsel noted this recent Delhi High Court ruling which diverged from Dhodha House by suggesting that a trademark application in Delhi could confer jurisdiction. Though LG conceded this point, the citation highlighted evolving judicial thought, though not decisive here.
Detailed Reasoning and Analysis of Judge:
The court affirmed that Section 20 CPC governs territorial jurisdiction in trademark suits, absent overriding statutory provisions. Under Section 20(a), the agreed with Intermarket that it neither resided nor carried on business in Delhi, as it lacked a local office or agent, aligning with Morgan Stanley and Dhodha House. The explanation to Section 20 deems a corporation’s business location as its principal or subordinate office, neither of which Intermarket had in Delhi.
Turning to Section 20(c), the court focused on whether part of the cause of action arose in Delhi due to the sale of infringing goods. The court upheld LG’s averment in the plaint, supported by invoices, as sufficient at the preliminary stage, noting that jurisdiction hinges on pleadings, not their truth, per established law. The sale, he reasoned, was not incidental but central to the passing-off claim, giving LG a legal right to sue in Delhi. This nexus distinguished the case from mere peripheral activity, grounding jurisdiction firmly in the city.Addressing Intermarket’s reliance on Kusum Ingots, the court distinguished writ jurisdiction’s discretionary nature under Article 226 from a suit’s mandatory adjudication under CPC. In suits, he held, jurisdiction is not discretionary once a cause of action is established—there’s no room for forum conveniens to override a plaintiff’s choice of a competent court. The court dismissed the discretionary refusal argument as inapplicable, reinforcing that sales in Delhi sufficed. The court also acknowledged the Pfizer ruling but sidestepped it, given LG’s concession on registry-based jurisdiction, focusing solely on the sales ground.
Final Decision:The Delhi High Court rejected Intermarket’s application under Order 7, Rule 11 CPC, affirming its territorial jurisdiction to hear the suit.
Law Settled in This Case:The judgment clarified that: (1) Under Section 20(c) CPC, the sale of allegedly infringing goods within a court’s territory constitutes a part of the cause of action, conferring jurisdiction in trademark passing-off suits, irrespective of the defendant’s residence or business presence; (2) Unlike writ jurisdiction, courts in civil suits cannot discretionarily refuse jurisdiction based on forum conveniens when a cause of action is established; (3) Post-Dhodha House, trademark registry location or Section 134(2) does not automatically grant jurisdiction unless the plaintiff resides or works there.
Case Title: LG Corporation Vs Intermarket Electroplasters (P) Ltd.
Date of Order: February 13, 2006
Case No.:CS (OS) 1359 of 2004
Name of Court: Delhi High Court
Name of Judge: Hon'ble Justice Shri A.K. Sikri
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
No comments:
Post a Comment