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Marico Industries Ltd. And Another v. Sarfaraj Trading Co. And Others

Bombay High Court
Mar 15, 2002
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Structured Summary of the Opinion

Factual and Procedural Background

The appellant filed a suit alleging violation of copyright under the Copyright Act, 1957, and infringement of trademark and passing off. The appellants carry on business in Mumbai; Respondent Nos. 1 to 3 carry on business in Hyderabad and Respondent No. 4 (a printer) carries on business in Secunderabad. It was not disputed that this Court has jurisdiction to entertain the copyright cause of action under Section 62(2) of the Copyright Act, which permits a plaintiff to institute suit within the local limits of the court in whose jurisdiction, at the time of institution, the plaintiff carries on business or personally works for gain.

The appellants applied under Clause 14 of the Letters Patent for leave to combine the copyright cause of action with causes of action for trademark infringement and passing off. The learned single Judge refused that leave on the ground that granting it would cause undue hardship to the respondents. The appellants appealed the refusal.

Legal Issues Presented

  1. Whether the order of the learned single Judge refusing leave under Clause 14 of the Letters Patent is a "judgment" within the meaning of Clause 15 and therefore whether the appeal against that order is maintainable.
  2. On the merits, whether leave under Clause 14 should be granted to permit joinder of the trademark infringement and passing off causes of action with the copyright cause of action, having regard to the risk of multiplicity of litigation and any alleged hardship to the respondents.

Arguments of the Parties

Respondents' Arguments (as presented by Mr. Divekar)

  • The impugned order refusing leave is not a "judgment" within the meaning of Clause 15 of the Letters Patent, and therefore the appeal is not maintainable. Reliance was placed on the Supreme Court decision in Asrumati Debi v. Kumar Rupendra Deb Rajkot, AIR 1953 SC 198.
  • Refusal to grant leave under Clause 14 does not involve a determination of any right or liability because the plaintiff's right to file the suit is not taken away by refusal of leave.
  • The power to grant leave under Clause 14 is discretionary; an order based on discretion is not appealable.

Appellants' Arguments (as presented by Mr. Shah)

  • The appellants relied on several decisions of this Court and other courts where appeals were entertained against orders refusing leave under Clause 14, including Tukajirao Holkar v. Sowkabai, Arte Indiana v. P. Mittulaul Lalah & Sons (AIR 1999 Bombay 369), and an unreported Division Bench decision in Gold Seal Engineering Products Pvt. Ltd. v. Hindustan Manufacturers (Appeal No. 505 of 1992).
  • Reliance was also placed on the Full Bench decision of the Madras High Court in T.V. Tuljaram Row v. M.K.R.V. Alagappa Chettiar, which sets out tests for what constitutes a "judgment" under the Letters Patent, and on Shah Babulal Khimji v. Jayaben D. Kania (AIR 1981 SC 1786) in which the Supreme Court approved those tests.
  • On the merits, the appellants relied on Burroughs Welcome (India) Ltd. v. G.K. Sharma and King Scientific Research Centre (1990 IPLR 60) and subsequent Division Bench decisions (including Gold Seal and Arte Indiana) to argue that where the court has jurisdiction over one cause of action (copyright), it should permit joinder of related causes of action (trademark and passing off) to avoid multiplicity of litigation.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Asrumati Debi v. Kumar Rupendra Deb Rajkot, AIR 1953 SC 198 Held that an order of transfer under Clause 13 of the Letters Patent did not satisfy tests of a "judgment" under Clause 15; such an order did not affect merits nor terminate or dispose of the suit. Respondents relied on this case to argue non-appealability; the Court considered the decision but distinguished it on the basis of the test adopted from Tuljaram Row and found Asrumati Debi did not bar appealability in the present context.
Tukajirao Holkar v. Sowkabai, AIR 1929 Bombay 100 Cited as an instance where appeal was entertained against an order refusing leave under Clause 14. Appellants relied on it to support the proposition that orders refusing leave under Clause 14 have been treated as appealable in this Court.
Arte Indiana v. P. Mittulaul Lalah & Sons, AIR 1999 Bombay 369 (1999) 4 Bom CR 239 Division Bench decision permitting joinder/leave under Clause 14 to avoid multiplicity of proceedings; followed Gold Seal reasoning. Appellants relied on this as a recent authority of the Bombay High Court granting leave to join causes of action.
Gold Seal Engineering Products Pvt. Ltd. v. Hindustan Manufacturers (Appeal No. 505 of 1992) (unreported, decided 10-6-1994) Division Bench reversed Single Judge and granted leave, noting desirability of avoiding multiplicity and taking a practical view rather than driving parties court to court on technicalities. Cited for the principle that Clause 14 serves to avoid multiplicity of proceedings and that leave should not be refused on technicalities or on assumptions as to bona fides.
T.V. Tuljaram Row v. M.K.R.V. Alagappa Chettiar, ILR (1912) 35 Mad 1 Full Bench test for what constitutes a "judgment" under the Letters Patent: the proper test is the effect of the adjudication on the suit or proceeding (whether it puts an end to the suit or proceeding before that Court). The Court adopted and applied the Tuljaram Row test to hold that refusal of leave under Clause 14, because it has the effect of putting an end to proceedings before that Court, is a "judgment" within Clause 15 and is therefore appealable.
Shah Babulal Khimji v. Jayaben D. Kania, AIR 1981 SC 1786 Supreme Court approval of the tests laid down by Sir White, C.J in Tuljaram Row's case regarding what constitutes a "judgment". The Court noted that the Supreme Court had adopted the Tuljaram Row tests and relied on that approval to reject the preliminary objection to maintainability.
Burroughs Welcome (India) Ltd. v. G.K. Sharma and King Scientific Research Centre, 1990 IPLR 60 Held that when the Bombay High Court has jurisdiction to entertain a copyright cause of action, causes of action in respect of trademark infringement and passing off should be permitted to be joined in the suit; leave under Clause 14 was granted. Appellants relied on this decision to support the substantive grant of leave; the Court considered it in allowing the appeal and granting leave to avoid multiplicity of proceedings.

Court's Reasoning and Analysis

The Court's analysis proceeded in two main stages: first, the threshold question of maintainability of the appeal; and second, the substantive entitlement to leave under Clause 14.

1. Maintainability of the Appeal

  • The Court considered the respondents' preliminary objection that the impugned order was not a "judgment" within Clause 15 of the Letters Patent and thus not appealable, relying on Asrumati Debi (AIR 1953 SC 198).
  • The Court reviewed the Full Bench test in T.V. Tuljaram Row, as approved by the Supreme Court in Shah Babulal Khimji, which focuses on the practical effect of the adjudication: if an adjudication's effect is to put an end to the suit or proceeding before that Court (or if non-compliance would put an end), it is a "judgment" for the purposes of the Letters Patent.
  • Applying that test, the Court found that an order refusing leave under Clause 14, although not a decision on the merits, has the effect of putting an end to the suit or proceeding so far as that Court is concerned. Therefore such an adjudication qualifies as a "judgment" within Clause 15.
  • Accordingly, the Court rejected the preliminary objection and held the appeal to be maintainable.

2. Merits — Whether Leave Under Clause 14 Should Be Granted

  • The Court examined the learned single Judge's reasoning and found that leave was refused solely on the ground that respondents carried on business in Hyderabad/Secunderabad and that granting leave would cause them hardship.
  • The Court observed established considerations in earlier decisions (including Burroughs Welcome, Gold Seal and Arte Indiana) that Clause 14 is intended to avoid multiplicity of proceedings and that Courts should adopt a practical approach so as not to force parties to litigate piecemeal in multiple fora.
  • Relying on those authorities, the Court held that the single Judge erred in refusing leave merely on the basis of potential hardship without being satisfied that undue hardship would, in fact, be caused. The Court was not satisfied that the respondents would suffer undue hardship if the appellants were allowed to combine trademark and passing off claims with the copyright claim.
  • Given that granting leave would avoid multiplicity of litigation and serve the ends of justice, the Court concluded that leave should be granted.

Holding and Implications

Holding: The appeal is allowed; the impugned order of the learned single Judge refusing leave under Clause 14 of the Letters Patent is set aside; the miscellaneous petition filed by the petitioner is made absolute in terms of prayer clause (a); and there is no order as to costs. The Court expedited the certified copy and rejected the respondents' application for a stay of this order. (Final statement in the opinion: "Appeal allowed.")

Implications:

  • The Court reaffirmed that an order refusing leave under Clause 14 is appealable when, by its effect, it puts an end to proceedings before that Court (following the Tuljaram Row tests as approved by the Supreme Court).
  • The direct effect of the decision is that the appellants are permitted to combine and pursue their trademark infringement and passing off causes of action along with their copyright cause of action in this Court; the earlier refusal by the single Judge is set aside.
  • No new precedent was explicitly declared; the Court applied and followed existing tests and authorities (including Tuljaram Row, Shah Babulal Khimji, Burroughs Welcome, and Division Bench decisions such as Gold Seal and Arte Indiana) in reaching its conclusion. The decision emphasizes avoidance of multiplicity of proceedings and a practical approach to Clause 14 applications.
Show all summary ...

1. This appeal is directed against the order of the learned single Judge refusing to grant leave under Clause 14 of the Letters Patent. The suit, out of which this appeal has arisen, was filed by the appellant complaining of violation of copyright under Copyright Act, 1957 as also infringement of trademark and passing of. The appellant have their office at Mumbai and they carry on business within the jurisdiction of this Court. Respondent Nos. 1 to 3 are carrying business at Hyderabad and respondent No. 4 who is a printer is carrying business at Secundarabad. It is not in dispute that in regard to violation of copyright which the appellants/plaintiffs have alleged in the plaint, this Court has the jurisdiction in view of the provisions of Section 62(2) of the Copyright Act which, unlike other enactments, gives right to a plaintiff to institute the suit within the local limits of whose jurisdiction, at the time of the institution of the suit, the plaintiff carries on business or personally works for gain.

2. In view of the claims in the plaint about the infringement of trademark and passing off the appellant filed an application under clause 14 of the Letters Patent seeking leave from the Court to combine the cause of action relating to copyright and the cause of action relating to infringement and passing off. The leave has been declined by the learned single Judge on the ground that if the leave is granted it would cause undue hardship to the respondents.

3. Mr. Divekar, learned counsel appearing for respondents has raised a preliminary objection to the maintainability of the appeal on the ground that the impugned order cannot be said to be a judgment within the meaning of clause 15 and therefore the appeal is not maintainable. He has relied upon the decision of the supreme Court in Asrumati Debi v. Kumar Rupendra Deb Rajkot, AIR 1953 SC 198. In that case only question involved was whether the order of transfer under clause 13 of the Letters Patent satisfies the tests of a judgment as mentioned in clause 15 of the Letters Patent. The Supreme Court while referring to Calcutta and Madras judgments refrained from giving any particular decision except that the Court held that the mere order of transfer under clause 13 of the Letters Patent could not be said to be a judgment and was therefore not appealable. The Court pointed out that the order neither affected the merits of the controversy nor did it terminate or dispose of the suit. In this connection the Court observed as follows (at p. 200):

“The judgment must be the final pronouncement which puts an end to the proceeding so far as the Court dealing with it is concerned. It certainly involves the determination of some right or liability, though it may not be necessary that there must be a decision on the merits……

We have indicated what the essential features of a “judgment” are according to both the Calcutta and Madras High Courts and all that we need say is that in our opinion, an order under clause 13 of the Letters Patent does not satisfy the tests of a “judgment” as formulated by either of these High Courts.”

4. Relying upon the above decision Mr. Divekar contended that refusal to grant leave under clause 14 does not involve determination of any right or liability inasmuch as the plaintiff's right to file suit is not taken away. It is also contended that the power to grant leave under clause 14 is discretionary power and no appeal would lie against such discretionary order.

5. Mr. Shah, learned counsel appearing for the appellants on the other hand, brought to our notice a number of judgments of this Court wherein appeal was entertained against the order refusing to grant leave under clause 14. First judgment is in the case of Tukajirao Holkar v. Sowkabai, AIR 1929 Bombay 100. He also referred to the judgments in the case of Arte Indiana v. P. Mittulaul Lalah & Sons (1999) 4 Bom CR 239 : (AIR 1999 Bombay 369) and an unreported judgment in Gold Seal Engineering Products Pvt. Ltd. v. Hindustan Manufacturers (Appeal No. 505 of 1992 decided on 10-6-1994).

6. Mr. Shah next drew our attention to the Full Bench judgment of the Madras High Court in the case of T.V Tuljaram Row v. M.K.R.V Alagappa Chettiar, ILR (1912) 35 Mad 1, which lays down the test of a “judgment” and which seems to have found favour with most of the High Courts in India and also the Supreme Court wherein Sir Arnold White, C.J pointedly spelt out various tests and observed as thus:

“……The test seems to me to be not what is the form of the adjudication but what is its effect in the suit or proceeding in which it is made. If its effect, whatever its form may be, and whatever may be the nature of the application on which it is made, is to put an end to the suit or proceeding so far as the Court before which the suit or proceeding is pending is concerned, or if its effect, if it is not complied with, is to put an end to the suit or proceeding. I think the adjudication is a judgment within the meaning of the clause. An adjudication on an application which is nothing more than a step towards obtaining a final adjudication in the suit is not, in my opinion, a judgment within the meaning of the Letters Patent.

I think, too, an order on an independent proceeding which is ancillary to the suit (not instituted as a step towards judgment, but with a view to rendering the judgment effective if obtained) e.g, an order on an application for an interim injunction, or for the appointment of a receiver is a ‘judgment’ within the meaning of the clause”.

7. In Tuljaram Row's case it was also held that making of the order was a matter of discretion does not affect the appealability of the order. The learned C.J observed that “this fact may be good reason for refusing to exercise the appellate jurisdiction, but, as it seems to me, it is no reason for holding that the appellate jurisdiction does not exist”.

8. In Shah Babulal Khimji v. Jayaben D. Kania, AIR 1981 SC 1786 the Supreme Court upon a careful analysis of the decision of Sir White, C.J in Tuljaram Row's case observed “We would like to adopt and approve of generally the tests laid down by Sir White. C.J in Tuljaram Row's case which seems to have been followed by most of the High Courts”.

9. It is clearly seen from the observation of white, C.J that it is not the form of adjudication which is to be seen but its actual effect on the suit or proceeding. If, irrespective of the form of the suit or proceedings, the order impugned puts an end to the suit or proceeding it doubtless amounts to a judgment. It is needless to say that the order refusing leave under clause 14 though not an order on merits but effect of such order is to put an end to the suit or proceedings so far as the Court before which the suit or proceedings is concerned. In our opinion such adjudication would be a judgment within the meaning of the clause. Therefore, we have no hesitation in rejecting the preliminary objection to the maintainability of the present appeal.

10. Next, the question is whether on facts, the appellants are entitled to grant of leave as sought or not. The learned counsel Mr. Shah referred to the decision in Burroughs Welcome (India) Ltd. v. G.K Sharma and King Scientific Research Centre 1990 IPLR 60 where it has been held that as the Bombay High Court has jurisdiction to entertain the suit in respect of cause of action relating to infringement of copyright, cause of action in respect of infringement of trade mark and passing off should be permitted to be joined in the suit and under these circumstances, leave under clause 14 of the Letters Patent was granted.

11. In the next decisions relied upon by Mr. Shah in Gold Seal Engineering Products Pvt. Ltd. v. Hindustan Manufacturers (supra) while reversing the decision of single Judge of this Court and proceedings on the assumption that this Court has no jurisdiction to entertain the suit in respect of in-fringement of trademark and passing off, the division bench held that once it is found that the plaintiffs are entitled to maintain the suit in this Court in respect of grievance of breach of copyright, there was no reason to refuse the leave so as to drive the parties to file litigation in several Courts. It was held that it is necessary to grant leave with a view to avoid multiplicity of litigations. The bench noticed that it is desirable that a prectical view is taken and parties are not driven from Court to Court on technicalities. It was held that clause 14 of the Letters Patent was enacted to subserve the purpose of avoidance of multiplicity of proceedings and the trial Court was entirely in error in refusing to grant leave on assumption that the conduct of the appellant was not bone fide. Leave was accordingly granted. The decision in Gold Seal Ehgineering Products Pvt. Ltd.'s case (supra) was followed by the division bench in the case of Arte Indiana (AIR 1999 Bombay 369) (supra).

12. In the light of the decided cases, we will examine whether the order passed by the learned single Judge refusing to grant leave under clause 14 is correct. It is apparent from the order of the learned single Judge that the leave was refused solely on the ground, that the respondents are carrying on business at Hyderabad/Secundarabad and grant of leave would cause hardship to them. In our opinion the learned single Judge was in error in refusing leave under clause 14. The Court should endeavour to avoid multiplicity of litigation and the parties should not be driven from Court to Court on technicalities. In the present case the parties involved are businessman and we are not satisfied that no undue hardship is likely to be caused to the respondents if the appellants are allowed to combine the action of trademark and passing off along with the action of infringement of copyright. In our opinion grant of leave would definitely avoid multiplicity of proceedings and serve the ends of justice.

13. In the result in view of the foregoing discussion appeal is allowed. The impugned order of the learned single Judge is set aside. Misc petition filed by the petitioner is made absolute in terms of prayer clause (a). No order as to costs.

14. Certified copy expedited.

15. At this stage Mr. Divekar seeks stay of this order. Application is rejected.

Appeal allowed.