Safex Chemicals Private Limited Vs SML Limited & Anr., decided on 4 June 2026 in COMAP No. 2 of 2025, was adjudicated by the High Court of Himachal Pradesh at Shimla by a Division Bench comprising Chief Justice Gurmeet Singh Sandhawalia and Justice Bipin Chander Negi. The appeal arose from an order confirming an ex parte ad-interim injunction in a patent infringement suit relating to the fertilizer product “Aladdin.” The core dispute before the Division Bench was limited to whether the High Court had territorial jurisdiction to grant and continue interim injunctive relief against Safex Chemicals, the appellant. The plaintiff alleged that infringing goods were sold within Himachal Pradesh, while the appellant contended that it neither carried on business nor authorised sales of the product in the State and that the alleged sales were isolated trap transactions by an unauthorised retailer. The Court closely examined pleadings, invoices, regulatory permissions under the Fertilizer Control Order, and the law laid down by the Supreme Court in Asma Lateef v. Shabbir, holding that jurisdiction must be prima facie established even at the interim stage. It found that there were no pleadings or credible material to show that the appellant manufactured or authorised sale of the product within Himachal Pradesh and that the alleged sales could not confer jurisdiction. Allowing the appeal, the Court vacated the interim injunction insofar as it applied to Safex Chemicals, clarifying that its observations were confined to the issue of interim relief and would not prejudice the trial on merits.
[Disclaimer: Readers are advised not treat this as a substitute for legal advise as it may contain errors in perception,interpretation and presentation of facts and law.]
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**Safex Chemicals Private Limited v. SML Limited & Another**
**Court:** High Court of Himachal Pradesh, Shimla | **Case No.:** COMAP No. 2 of 2025 | **Date of Judgment:** 4th June, 2026 | **Bench:** Hon'ble Chief Justice G.S. Sandhawalia & Hon'ble Justice Bipin Chander Negi (judgment authored by Justice Bipin Chander Negi)
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When Trap Purchases Are Not Enough: Territorial Jurisdiction in Patent Infringement Suits
Territorial Jurisdiction at Interim Injunction Stage to Be Decided on the Basis of Plaint, written statement and documents on record.
Introduction
One of the most fundamental questions in any civil lawsuit is whether the court where the suit is filed actually has the authority to hear it. This authority, known as territorial jurisdiction, determines which court can entertain a dispute based on geography , where the defendant resides, where the alleged wrong occurred, or where business is carried on. In intellectual property disputes, particularly those involving patents, plaintiffs sometimes file suits in distant courts by relying on small, strategically arranged purchases of the allegedly infringing product within that court's territory. These are commonly called "trap purchases" or "trap transactions." The question of whether such purchases alone are sufficient to drag a defendant into litigation before a court far removed from where it actually operates is one that courts across India have grappled with repeatedly.
The Himachal Pradesh High Court, in its decision dated 4th June 2026 in COMAP No. 2 of 2025, addressed this precise question in a patent infringement dispute between SML Limited as the plaintiff and Safex Chemicals Private Limited as one of the defendants. The Division Bench, comprising the Chief Justice and another learned Judge, examined whether the Himachal Pradesh High Court had the territorial jurisdiction to entertain a suit and, more immediately, whether the interim injunction granted against Safex Chemicals Private Limited should be sustained. The court's conclusion was a clear and firm answer: four invoices generated by a third party who was neither an authorized dealer nor agent of the defendant, combined with an unsubstantiated claim about a manufacturing unit, did not create a prima facie basis for the court's jurisdiction. The interim injunction was accordingly set aside.
Factual and Procedural Background
SML Limited, the plaintiff in the underlying suit, claimed to be the owner of a patent and filed a commercial suit before the learned Single Judge of the Himachal Pradesh High Court, alleging that two defendants had infringed its patent by manufacturing, marketing, and selling a product under the brand name "Aladdin." The product in question is a fertilizer-based commodity regulated under the Fertilizer (Control) Order, 1985, which itself is issued under the Essential Commodities Act, 1955.
The first defendant in the suit was a local entity with its principal place of business within Himachal Pradesh. The second defendant was Safex Chemicals Private Limited, which became the appellant before the Division Bench. Safex Chemicals had addresses in New Delhi and Jaipur, Rajasthan, and did not have any business establishment within the territorial limits of the Himachal Pradesh High Court.
On 24th July 2023, the learned Single Judge granted an ex-parte ad-interim injunction against both defendants. This order was later confirmed by the learned Single Judge on 6th June 2025 in OMP No. 320/23 in COMS No. 6/2026. It was this confirmed order that Safex Chemicals challenged before the Division Bench in COMAP No. 2 of 2025. By agreement between the parties, the Division Bench confined its hearing only to the preliminary issue of territorial jurisdiction.
The plaintiff's case for jurisdiction rested on two broad planks. First, it was averred in paragraph 8 of the plaint that Safex Chemicals carries on business for gain within the territorial jurisdiction of the court, and relevant downloaded documents were annexed as Annexure "D." Second, it was averred in paragraphs 29, 55, and 56 of the plaint that infringing products manufactured and marketed by Safex Chemicals were being offered for sale within the territorial limits of the court. To support this, four sale invoices were placed on record as Annexure "M," showing that the product "Aladdin" had been sold by the first defendant within Himachal Pradesh.
Safex Chemicals filed a detailed written statement contesting jurisdiction. It asserted that it had no authorized dealers or retailers within Himachal Pradesh, that "Aladdin" was a regulated commodity and it had obtained permission to market it only in certain specific states, that Himachal Pradesh was not among those states, and that the first defendant had purchased the product from Haryana, where Safex Chemicals was authorized to sell, and had then brought it into Himachal Pradesh for resale. Safex Chemicals categorically denied being in any business relationship with the first defendant.
At a significant hearing on 29th December 2025, the Division Bench noted procedural infirmities in the counter-affidavit filed by the first defendant before the Single Judge and directed that the proprietor of the first defendant, one Mr. Mohan Lal Sharma, appear in person. On 8th January 2026, Mr. Mohan Lal Sharma appeared before the Division Bench and produced original documents. His authorization letter showed that he was licensed only to sell straight fertilizers, NPK complex fertilizers, and bio fertilizers from specified sources none of which included "Aladdin" or Safex Chemicals as a source. He himself acknowledged that he had no authority to sell "Aladdin," which he had purchased from a shop called Jangra Khad Beej Bhandar, Sarmathla, not directly from Safex Chemicals or its authorized dealers.
The Dispute Before the Division Bench
The core dispute before the Division Bench was whether the Himachal Pradesh High Court had the territorial jurisdiction to entertain the suit and grant injunction against Safex Chemicals, a company based entirely outside Himachal Pradesh. The specific grievance of Safex Chemicals was directed at the finding in paragraph 55 of the Single Judge's order dated 6th June 2025, which held that jurisdiction existed primarily on the basis of two factors: the sale invoices generated by the first defendant, and an alleged manufacturing unit of Safex Chemicals located at Una, Himachal Pradesh.
Safex Chemicals argued that the manufacturing unit finding was unsupported by any pleading in the plaint or replication, that the invoices were not issued to the plaintiff but to unconnected third parties, that there was no explanation for how the plaintiff obtained those invoices, and that the first defendant was demonstrably not an authorized dealer of Safex Chemicals. It further argued, drawing on the Supreme Court's ruling in Asma Lateef and Another vs. Shabbir and Others, reported as (2024) 4 SCC 696, that even for the purpose of granting interim injunction, the court must record at least a prima facie satisfaction regarding its own jurisdiction.
The plaintiff countered that even a single act of selling, making, offering for sale, or importing a patented product within a court's territory violates the rights of the patentee under Section 48 of the Patents Act, 1970, and that this single act is sufficient to invoke jurisdiction. The plaintiff also argued that since damages were also claimed, Section 19 of the Code of Civil Procedure would apply, which provides that where a wrong is committed within the limits of one court and the defendant resides or carries on business within another court, the plaintiff may choose either forum. It also sought to distinguish the judgments cited by Safex Chemicals on the ground that those cases involved the Trademarks Act, not the Patents Act, under which the nature of rights and violations is different.
Reasoning and Analysis of the Court
The court began its analysis by firmly endorsing the principle laid down in Asma Lateef and Another vs. Shabbir and Others, (2024) 4 SCC 696, where the Supreme Court of India had clarified that the question of jurisdiction is not merely a question to be deferred to trial. Even at the stage of considering an application for interim relief, the court must record at least a prima facie satisfaction that it has the jurisdiction. If a party raises a specific objection that the suit is not maintainable or is barred before the court, the grant of interim relief must be preceded by the court's prima facie finding on this jurisdictional question. The court cannot simply proceed to grant protection on the assumption that jurisdiction will be determined later as a preliminary issue under Order XIV Rule 2 of the Code of Civil Procedure. To do so would amount to an improper exercise of judicial power.
Turning to the first basis of jurisdiction the finding about the manufacturing unit at Una, Himachal Pradesh the court subjected it to close scrutiny. The court observed that paragraph 8 of the plaint averred that Safex Chemicals "carries on business for gain within the territorial jurisdiction" of the court, with reference to documents annexed as Annexure "D." However, on an examination of Annexure "D," the court found that nothing in those documents indicated that Safex Chemicals had a manufacturing facility within the territorial jurisdiction of the court. The plaint and the replication were both silent on the question of any manufacturing unit in Himachal Pradesh.
The court then examined a document placed on record by Safex Chemicals itself an authorization letter issued by the State of Madhya Pradesh, authorizing Safex Chemicals to carry on business for a period of five years from 29th June 2021 to 28th June 2026 within Madhya Pradesh. Annexed to this authorization letter was Annexure-I, which detailed the products and their sources. The court found that the product "Aladdin" appeared at serial numbers 5 and 8 of this annexure. Insofar as serial number 5 was concerned, the product was manufactured by Safex Chemicals itself at Delhi. Insofar as serial number 8 was concerned, the same product was manufactured by an entirely separate entity, M/s Him Bio Agro, at Village Bala, Bathari, Tehsil Haroli, District Una, Himachal Pradesh.
The court drew a critical conclusion from this document. The manufacturing unit at Una belonged not to Safex Chemicals but to M/s Him Bio Agro, a completely separate and distinct entity. Therefore, the finding in paragraph 55 of the learned Single Judge's impugned order that Safex Chemicals had a manufacturing unit within the territorial jurisdiction was factually incorrect and unsupported by the record. The learned Single Judge appeared to have relied on a brochure from Safex Chemicals' website, which, on closer examination, did not support the conclusion that Safex Chemicals itself manufactured the product in Himachal Pradesh. Furthermore, if "Aladdin" was being manufactured at Una and was available locally in Himachal Pradesh, there would have been no reason for the first defendant to have procured it from Haryana, which is what actually happened.
Turning to the second basis of jurisdiction the sale invoices the court carefully examined their character and provenance. The court noted that Safex Chemicals had obtained permission to market "Aladdin" in only five states, as stated in paragraph 12 of its written statement, though paragraph 83(b) of the same written statement disclosed that the product was actually being sold in eleven states. Himachal Pradesh was conspicuous by its absence from either list. There was no permission granted to Safex Chemicals to sell "Aladdin" within the State of Himachal Pradesh, and the plaint itself contained no averment that "Aladdin" was being sold in Himachal Pradesh through unauthorized channels in breach of the regulatory framework.
The written statement of Safex Chemicals specifically averred that "Aladdin," being a regulated product under the Fertilizer (Control) Order, 1985, was sold only through authorized dealers, and that the first defendant was not its authorized dealer. When Mr. Mohan Lal Sharma appeared before the Division Bench on 8th January 2026, this was confirmed beyond doubt. He acknowledged that he had no authority to sell "Aladdin" and had procured it from Jangra Khad Beej Bhandar, Sarmathla, not from Safex Chemicals or any of its authorized dealers. He had purchased it from Haryana, where Safex Chemicals had authorization to sell, and then resold it locally.
The court then analyzed the four invoices that formed the plaintiff's primary evidentiary basis for invoking jurisdiction. These invoices were issued by the first defendant, not to the plaintiff itself, but to unconnected third parties. The plaintiff provided no explanation as to how it came to obtain these invoices. The plaint contained no averments establishing any connection between Safex Chemicals and the first defendant as principal and agent, or as manufacturer and authorized dealer. In this light, the court had to assess whether these transactions could prima facie be said to have been obtained by fair means.
The court referred to the Delhi High Court's judgment in Rieter AG and Another vs. Kavassery Narayanaswamy Venkatasubramanian, reported as 2025 SCC Online Del 4379, and the Delhi High Court's judgment in Kubota Corporation and Godabari Agro Machinery and Services India Pvt. Ltd. (CS Comm 655 of 2023) and Others vs. Great Galleon Venture Limited vs. Champa Prema Tandel Sole Proprietor of Dharmesh Distiller and Another, CS (CoMM) No. 343/2023, decided on 1st May 2024 both of which the plaintiff had relied upon. The court distinguished these cases on a crucial ground. In Rieter AG, the plaintiff's investigator had directly placed an order with the defendant for the infringing goods. In Kubota Corporation, the defendant had directly made an offer for sale to the plaintiff's investigator. In both those cases, there was a direct, authentic, and traceable transaction between the plaintiff's representative and the defendant's representative, demonstrating infringement within the court's territory by fair means. The present case was entirely different: the invoices were transactions between the first defendant and unconnected third parties, the first defendant was not Safex Chemicals' authorized representative, and the plaintiff could not explain how it obtained those invoices.
The court also addressed the Madras High Court's judgment in OSA Nos. 38, 40 and 42 of 2020 and CMP Nos. 1518, 1538 and 1544 of 2020, titled Sulphur Mills Limited vs. M/s Dayal Fertilizers Pvt. Ltd. and Others, decided on 11th November 2020, where it had been held that a suit could be maintained on the basis of a lone "trap order" and that whether the defendant was offloading its product within the court's jurisdiction was a matter for trial. The court noted that this ruling arose in the context of an application seeking revocation of leave, not an application for interim injunction under Order 39 Rules 1 and 2 of the Code. The considerations applicable are materially different in the two contexts.
On this point, the court drew extensively from the Delhi High Court Division Bench judgment in M/s Allied Blenders and Distillers Pvt. Ltd. vs. Prag Distillery Pvt. Ltd. and Another, reported as 2017 SCC Online Del 7225, FAO (OS) No. 49/2017, decided on 1st March 2017. This judgment clarified that the standard of examination under Order VII Rule 10 of the Code (for return of plaint) is entirely different from the standard applicable under Order XXXIX Rules 1 and 2 (for interim injunction). Under Order VII Rule 10, the court examines only the averments in the plaint and assumes them to be correct. But when considering interim injunction, the court must look at not just the plaint but also the defendant's reply and written statement. A mere averment in the plaint is not enough. The assumption that plaint averments are correct is unavailable. If the issue of jurisdiction is highly debatable and prima facie not tenable, the court can refuse interim injunction on that ground even if it has previously declined to return the plaint. The earlier refusal to return the plaint does not foreclose the defendant's right to raise jurisdiction as an objection to interim relief.
The court also cited the Supreme Court's judgment in Exphar Sa vs. Eupharma Laboratories Ltd., (2004) 3 SCC 688, which had held that when a jurisdictional objection is raised by demurrer (without a full trial), the court must proceed on the assumption that the facts as pleaded are true. However, as clarified in Allied Blenders, this principle is confined to the Order VII Rule 10 context and does not apply when the court is considering interim relief.
On the plaintiff's argument based on Section 48 of the Patents Act, 1970, the court accepted the legal proposition that even a single act of selling, making, offering for sale, or importing a patented product without authorization violates the patentee's rights. However, the court held that the real question was whether such an act had been committed by Safex Chemicals within the court's territorial jurisdiction. Given that the first defendant had no authorization from Safex Chemicals, that the goods had been procured from Haryana through channels entirely unconnected to any agency of Safex Chemicals, and that Safex Chemicals had no authorized dealer in Himachal Pradesh, the court concluded prima facie that no such act attributable to Safex Chemicals had taken place within its territorial limits.
On the Section 19 CPC argument, the court was equally dismissive. Section 19 provides that where a wrong is committed within the jurisdiction of one court and the defendant resides or carries on business within the jurisdiction of another, the plaintiff may sue in either. However, the court held that for Section 19 to apply, the wrong must first be shown prima facie to have been committed by the defendant within the court's territory. Since the evidence indicated that no act attributable to Safex Chemicals had been committed within Himachal Pradesh, Section 19 was of no assistance to the plaintiff.
The court also took a broader view of the risks of allowing jurisdiction to be manufactured through the mechanism of unverified trap transactions. It observed that if the mere existence of a few invoices issued by an entity that is not an authorized representative of the defendant to some third parties is sufficient to confer jurisdiction, any company can easily be dragged into distant litigation, regardless of whether it has any genuine connection to that forum. This would be an open invitation to forum shopping and harassment. The court was therefore of the view that such transactions must at least prima facie appear to have been obtained by fair and authentic means, a threshold that the plaintiff in this case could not meet.
Final Decision of the Court
The Division Bench allowed the appeal preferred by Safex Chemicals Private Limited. It held that prima facie there was no cause of action or wrong attributable to Safex Chemicals that could invoke the territorial jurisdiction of the Himachal Pradesh High Court. The alleged cause of action or wrong, if any, was declared to be a triable issue meaning the question could be examined at full trial on the basis of additional material if brought on record. As a consequence, the impugned interim order dated 6th June 2025, passed in OMP No. 320/23 in COMS No. 6/2026, insofar as it operated against Safex Chemicals Private Limited (defendant No. 2), was vacated. The court carefully added that these observations were confined only to the question of interim injunction at this stage and would not influence the learned Single Judge in arriving at a finding on the basis of any additional material that the parties may bring on record in the main suit. The appeal was accordingly disposed of on 4th June 2026.
Points of Law Settled
This judgment makes a significant and clear contribution to the law on several fronts. It reaffirms that territorial jurisdiction is not a question to be deferred indefinitely it must be addressed prima facie even at the stage of interim injunction, following the Supreme Court's mandate in Asma Lateef, (2024) 4 SCC 696. It firmly distinguishes between the standard applicable under Order VII Rule 10 CPC (return of plaint) and Order XXXIX Rules 1 and 2 CPC (interim injunction) a distinction that significantly raises the bar for obtaining interim relief when jurisdiction is genuinely disputed. It establishes that in patent infringement cases, trap purchases or trap transactions must be shown prima facie to have been obtained by fair and authentic means before they can form the basis for invoking territorial jurisdiction. Where the alleged infringing product reaches the court's territory not through the defendant's own acts or through any authorized agent or dealer of the defendant, but through independent and unconnected intermediaries, no cause of action against the defendant can be said to have arisen within that territory. Finally, it clarifies that Section 48 of the Patents Act, 1970, while conferring rights against a single infringing act, still requires prima facie proof that the act was committed by the defendant within the court's jurisdiction.
Case Title: Safex Chemicals Private Limited Vs. SML Limited and Another
Date of Order: 4th June 2026
Case Number: COMAP No. 2 of 2025
Court: High Court of Himachal Pradesh, Shimla
Hon'ble Judges: Hon'ble Mr. Gurmeet Singh Sandhawalia, Chief Justice, and Hon'ble Mr. Justice Bipin Chander Negi
Disclaimer: Readers are advised not to treat this as a substitute for legal advice as it may contain errors in perception, interpretation, and presentation.
Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
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Brief Headnote
Facts: The plaintiff SML Limited sued two defendants for patent infringement relating to a fertilizer product sold under the brand name "Aladdin." The Himachal Pradesh High Court granted and confirmed an ex-parte ad-interim injunction against both defendants including Safex Chemicals Private Limited, whose addresses were in New Delhi and Jaipur. Safex Chemicals challenged jurisdiction on the ground that it had no business presence, authorized dealer, or manufacturing unit in Himachal Pradesh, and that the invoices relied upon by the plaintiff were issued by an unauthorized third party who had independently procured the product from Haryana.
Decision: The Division Bench allowed the appeal, held that no prima facie cause of action attributable to Safex Chemicals had arisen within the territorial jurisdiction of the court, vacated the interim injunction against Safex Chemicals, and ruled that trap transactions by unauthorized intermediaries, unsupported by any pleading or evidence of agency or authorization, are insufficient to invoke territorial jurisdiction for the purpose of granting interim relief in a patent suit.
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