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Case Number

O.S.A No. 130 of 2005 and C.M.P Nos. 10227, 11366 to 11368 OF 2005

Attorney(S)

Mr. Sathish Parasaran & Mr. Madhan Babu
Mr. A.A Mohan

Judges

P.K Misra
N. Kannadasan, JJ.

Acts

Order IV Rule 1 of Madras High Court Original Side Rules and Order VII Rule 1 of C.P.C read with Sections 27, 28, 29, 134 & 135 of the Trade Marks Act, 1999 and Sections 51, 55 & 62 of the Copyright Act, 1957,
Code of Civil Procedure, the provisions in Section 134(2) of the Trade Marks Act, 1999 and Section 62(2) of the Copyright Act, 1957
Act, 1957. The provision contained in Section 134(2) of the Trade Marks Act, 1999, and Section 62(2) of the Copyright Act, 1957,
provisions contained in Section 62 of the Copyright Act and Section 134 of the Trade Marks Act, 1999
provisions contained in Sections 592 to 597 of the Companies Act,
SECTION 18 TRADE MARKS ACT 1999
SECTION 105 TRADE AND MERCHANDISE MARKS ACT 1958
SECTION 134 TRADE MARKS ACT 1999
SECTION 62 COPYRIGHT ACT 1957
Section 134(1) of the Trade Marks Act, 1999
Section 134(2) of the Trade Marks Act, 1999,
SECTION 599 COMPANIES ACT
clauses (a) and (b) of sub-section (1),
Merchandise Marks Act, 1958.
TRADE MARKS ACT 1999

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Smart Summary

Structured Summary of the Opinion (P.K. Misra, J.)

Factual and Procedural Background

This appeal challenges the order dated 1.4.2005 of the learned single Judge in Applications Nos. 2306 and 3352 of 2004 arising out of Civil Suit No. 512 of 2004.

The respondent (plaintiff) filed C.S. No. 512 of 2004 under Order IV Rule 1 of the Madras High Court Original Side Rules and Order VII Rule 1 of the Code of Civil Procedure read with Sections 27, 28, 29, 134 & 135 of the Trade Marks Act, 1999 and Sections 51, 55 & 62 of the Copyright Act, 1957, seeking reliefs including permanent injunction for alleged infringement of its registered trade mark.

The plaintiff applied (Appln. No. 2306 of 2004) under Clause 12 of the Letters Patent for leave to file the suit; leave was granted on 23.6.2004. The defendants (present appellants) then filed Appln. No. 3352 of 2004 seeking revocation of the leave on grounds including lack of territorial jurisdiction (plaintiff allegedly outside territorial jurisdiction, goods not sold within jurisdiction, plaintiff not residing or carrying on business or personally working for gain within jurisdiction) and that the plaintiff, being a foreign company, had not complied with Sections 592–597 of the Companies Act, which, they contended, disabled the plaintiff from instituting suit under Section 599 of the Companies Act. The plaintiff filed a counter to that application.

The learned single Judge dismissed the defendants' application to revoke leave, holding that the situs of the trade mark (being in the Trade Marks Registry's appropriate office at Chennai) meant a cause of action arose within the jurisdiction and also rejecting the defendants' contention regarding Section 599 of the Companies Act. The defendants challenged that order by way of the present appeal.

Legal Issues Presented

Whether the learned single Judge erred in refusing to revoke the leave to sue (granted under Clause 12 of the Letters Patent) on the ground that the suit was instituted without territorial jurisdiction.
Whether, for jurisdictional purposes under Section 134 of the Trade Marks Act, 1999 and Section 62 of the Copyright Act, 1957, the situs of the trade mark can be regarded as located at the branch office of the Trade Marks Registry (Chennai) such that part of the cause of action arose within the jurisdiction of the Madras High Court.
Whether a foreign plaintiff with only a liaison office in Chennai can be said to "actually and voluntarily reside or carry on business or personally work for gain" within the jurisdiction for purposes of Sections 134(2) and 62(2).
Whether non-compliance with Sections 592–597 of the Companies Act (and the incapacity under Section 599) precludes the plaintiff from filing the suit.
Whether convenience of forum (defendant's business and witnesses being in another place such as Delhi) warranted revocation of leave on forum non conveniens grounds.

Arguments of the Parties

Appellants' Arguments

The defendants are situated outside the territorial jurisdiction of the Madras High Court; the goods alleged to infringe are not sold within the Court's jurisdiction; the plaintiff does not reside, carry on business, or personally work for gain within the jurisdiction, so leave to file should not have been granted.
The plaintiff is a foreign company with merely a Liaison Office at Chennai and therefore cannot be said to actually and voluntarily reside or carry on business in Chennai for jurisdictional purposes under Sections 134(2) and 62(2).
By reason of Sections 592–597 of the Companies Act and the prohibition in Section 599, the foreign plaintiff is disabled from bringing the action unless statutory compliance is shown.
On convenience grounds (defendants carry on business in Delhi and witnesses would come from Delhi), it would be more appropriate to try the suit in Delhi or elsewhere and therefore leave should have been revoked (relying on precedents where leave was revoked in similar convenience contexts).
The precedents relied upon by the respondent were decided under the earlier Trade and Merchandise Marks Act, 1958, and cannot be applied under the re-enacted provisions of the Trade Marks Act, 1999; commentary also supports that jurisdiction should not be linked to head/branch office operative jurisdiction.

Respondent's / Plaintiff's Position (as reflected in the opinion)

The situs of the registered trade mark can be treated as located at the appropriate office of the Trade Marks Registry (Chennai branch), so that part of the cause of action arose within the jurisdiction of the Madras High Court.
The plaintiff relied upon prior decisions (including S.B.S Jayam & Co. v. Krishnamoorthi) supporting the proposition that where a trade mark is registered in a branch office, the situs of that proprietary right is at that place and infringement can be said to have occurred where the plaintiff's property (the mark) is situated.
The plaintiff filed a counter to the defendants' revocation application (the opinion records that a counter was filed, but does not detail other specific points raised by the plaintiff beyond reliance on situs and precedent).

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
1977 1 M.L.J 286 (S.B.S. Jayam & Co. v. Krishnamoorthi)	The principle that a registered trade mark is a proprietary right (property) and that where a trade mark is registered at a branch office (e.g., Madras), the situs of the property in the mark is at that place; therefore alleged infringement may be said to occur where the plaintiff's property (the mark) itself is situated.	The learned single Judge relied upon this decision to conclude that the situs of the trade mark in the present case was Chennai (Trade Marks Registry branch) and thus part of the cause of action arose within the jurisdiction. The Division Bench accepted and applied this ratio as still applicable under the Trade Marks Act, 1999.
A.I.R. 1991 Madras 277 = 1991 1 L.W. 341 (Amrutanjan Limited v. Ashwin Fine Chemicals & Pharmaceuticals)	Support for construing the situs of a trade mark (in infringement suits) as a place where a cause of action has arisen.	The single Judge had referred to this decision; the Bench noted it as part of authorities indicating that in trademark suits the situs of the mark can be construed as the place where cause of action arose and accepted its relevance to the jurisdictional question.
1999 P.T.C. (19) 183 (Ramu Hosieries v. Ramu Hosieries)	Authority indicating that in trademark infringement suits the situs of the trade mark can be taken as a place where cause of action has arisen.	The single Judge relied on this decision alongside Amrutanjan to support the conclusion that the situs of the mark may supply territorial jurisdiction; the Bench treated it as supportive authority.
2002 (1) CTC 134 (Parameswari Veluchamy & others v. T.R. Jayaraman & others)	Example where leave was revoked on forum/convenience grounds (partition suit) because the properties and witnesses were largely outside the Court's jurisdiction.	The appellants relied on this decision as an example supporting revocation of leave on convenience grounds. The Bench examined it but held that its factual matrix (partition, properties largely outside jurisdiction) was distinguishable and not applicable to the present case.

Court's Reasoning and Analysis

The court's analysis proceeded from statutory text and existing authorities cited to determine territorial jurisdiction for trademark and copyright suits.

Statutory framework: The court examined Section 134 of the Trade Marks Act, 1999 (suit for infringement to be instituted before a District Court; and Section 134(2) which treats a "district court having jurisdiction" to include a district where the person instituting the suit actually and voluntarily resides or carries on business or personally works for gain). The court noted the close parallel in Section 62(2) of the Copyright Act, 1957.
Relationship to prior law: The court observed that Section 134(1) corresponds to Section 105 of the Trade and Merchandise Marks Act, 1958, and that many provisions were re-enacted in the 1999 Act. It acknowledged that Section 134(2) is a new provision bringing the Trade Marks Act in line with the Copyright Act provisions on jurisdiction.
Scope of jurisdictional provisions: The court read the statutory provisions together with the Code of Civil Procedure and concluded these provisions supplement rather than supplant ordinary jurisdictional rules — hence a suit can be instituted where cause (or part of cause) of action arises, where defendant resides, or, as the special provisions contemplate, where the plaintiff actually and voluntarily resides or carries on business or personally works for gain.
Situs of the trade mark as part of the cause of action: The learned single Judge had found that the situs of the trade mark (as recorded in the Trade Marks Registry's relevant office) is a part of the cause of action. The court accepted this approach, noting that even though registration may reflect the head office (Mumbai), registration and operative jurisdiction of branch offices (Chennai) under Section 18 of the Trade Marks Act make it permissible to treat the mark's situs as Chennai.
Reliance on precedents: The court relied on S.B.S Jayam & Co. v. Krishnamoorthi (1977) and additional Madras decisions (Amrutanjan; Ramu Hosieries) to support the proposition that where a trade mark is registered at a branch office, the property in the mark has its situs at that place and that such situs may supply territorial jurisdiction because part of the cause of action arises there.
Rejection of appellants' statutory-capacity objection at leave stage: The appellants' submission that Sections 592–597 and Section 599 of the Companies Act barred the plaintiff from suing was considered and repelled by the single Judge on the ground that the suit was not based on contract. The Division Bench observed that whether the plaintiff is disabled under the Companies Act is not relevant to the limited question of revocation of leave; the correctness of that plea can be dealt with in the written statement and at final determination. The Bench expressly left the question open for final adjudication and made no final determination on that point.
Forum convenience argument: The court reviewed authorities relied upon by the appellants about convenience of trial (including the 2002 CTC decision) but found those decisions factually distinguishable and not applicable to the peculiar facts of the present case.

Holding and Implications

Disposition: The appeal was dismissed.

Direct Effect on Parties:

The order of the learned single Judge dated 1.4.2005 dismissing the application to revoke the leave granted to the plaintiff (Appln. No. 2306 of 2004) is affirmed; the leave previously granted to the plaintiff to file C.S. No. 512 of 2004 stands confirmed.
The appellants remain at liberty to raise contentions (including those based on the Companies Act) in their written statement for consideration at the appropriate stage; the court expressly left such questions open and made no final determination on them in this interlocutory context.
There is no order as to costs.

Broader implications: The opinion affirms that the situs of a registered trade mark at a Trade Marks Registry branch office can supply territorial jurisdiction because such situs may constitute part of the cause of action, and it treats Section 134(2) of the Trade Marks Act and Section 62(2) of the Copyright Act as supplemental to ordinary jurisdictional rules under the CPC. The Court did not hold that it was announcing a new principle beyond applying existing statutory text and precedent; no new binding precedent beyond the decision in this case is expressly declared.

(This summary is prepared strictly from the content of the provided opinion and does not add or infer facts beyond that text.)

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Ajay Kumar Aggarwal Trading As S.A Engineers, Old Ghas Mandi, Ambala City, Haryana v. Ajay Bansal Trading As Eco Gas Equipments 3827 A/7, Kanhaiya Nagar, Tri Nagar, Near Baba Balgh Mandir, Delhi 110 035

Judgment — P.K Misra, J.

The present appeal is directed against the order dated 1.4.2005 passed by the learned single Judge in Appln. Nos. 2306 and 3352 of 2004 arising out of C.S No. 512 of 2004.

2. The respondent filed C.S No. 512 of 2004 under Order IV Rule 1 of Madras High Court Original Side Rules and Order VII Rule 1 of C.P.C read with Sections 27, 28, 29, 134 & 135 of the Trade Marks Act, 1999 and Sections 51, 55 & 62 of the Copyright Act, 1957, against the present appellants for the alleged infringement of the plaintiff's registered trademark and for other consequential reliefs, including permanent injunction. At that stage, the plaintiff filed Appln. No. 2306 of 2004 under Clause 12 of the Letters Patent seeking leave to file the suit. Such leave was granted by order dated 23.6.2004 Thereafter, the defendants (present appellants) filed Appln. No. 3352 of 2004 seeking to revoke the leave granted. In such application, the main contention of the defendants was to the effect that they are situated outside the territorial jurisdiction of this court; the goods in respect of which there is violation of trademark are not sold within the jurisdiction of this Court and the plaintiff does not reside or carry on business or personally works for gain within the jurisdiction of this Court, and, therefore, in the absence of any territorial jurisdiction, the leave should not have been granted. It is further stated that the plaintiff being a foreign company has to comply with the provisions contained in Sections 592 to 597 of the Companies Act and without complying with such provisions, the plaintiff is disabled from bringing any action in a court of law as contemplated under Section 599 of the Companies Act.

3. A counter had been filed by the plaintiff/respondent to the aforesaid application.

4. The learned single Judge after hearing the counsels for both sides, came to the conclusion that the situs of the trademark allegedly infringed being situated in the appropriate office of the Trade Marks Registry at Chennai, the cause of action can be stated to have arisen within the jurisdiction of this Court. Learned single Judge has also negatived the contention of the defendants regarding applicability of Section 599 of the Companies Act. On the basis of the aforesaid conclusion, the application for revoking the leave granted to the plaintiff/respondent to file the suit has been dismissed and the leave already granted in Appln. No. 2306 of 2004 has been confirmed. The said order is challenged under the present appeal.

5. We have heard the learned counsel appearing for the appellants as well as the learned counsel appearing for the respondent/plaintiff, who has entered appearance by filing a caveat.

6. Section 134 of the Trade Marks Act, 1999 provides for the forum for institution of the suit for infringement. Such provision is to the following effect: —

“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 proceeding, 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 on business or personally works for gain.

Explanation.- For the purposes of subsection (2), “person” includes the registered proprietor and the registered user.”

7. Section 62 of the Copyright Act, 1957 is to the following effect: —

“62. Jurisdiction of court over matters arising under this Chapter

(1) Every suit or other civil proceeding arising under this Chapter in respect of the infringement of copyright in any work or the infringement of any other right conferred by this Act shall be instituted in the district court having jurisdiction.

(2) For the purpose 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 proceeding, the person instituting the suit or other proceeding or, where there are more than one such persons, any of them actually and voluntarily resides or carries on business or personally works for gain.”

8. Referring to the aforesaid provisions, the learned counsel for the appellants has submitted that in the present case, the plaintiff, which is a foreign company, has merely a Liaison Office at Chennai and it cannot be said that such plaintiff actually or voluntarily resides within the jurisdiction of this Court. Similarly it has been submitted that in view of the provisions contained in Sections 592 to 597 of the Companies Act, it cannot be said that the plaintiff voluntarily carries on any business and, since the plaintiff is not a natural person, it cannot be said that the plaintiff works for personal gain within that jurisdiction. It is further contended that since no part of the cause of action has arisen within the jurisdiction of this Court, the suit should not have been filed in this Court.

9. A mere comparison of the provisions contained in Section 62 of the Copyright Act and Section 134 of the Trade Marks Act, 1999 makes it clear that the provisions are very similar to each other. Section 134(1) of the Trade Marks Act, 1999 is similar to Section 105 of the Trade and Merchandise Marks Act, 1958, which was to the following effect: —

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

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.”

10. The above Act has been repealed by the Trade Marks Act, 1999 and most of the provisions have been re-enacted in the present Act. So far as Section 134(2) is concerned, there was no such corresponding provision under the Trade and Merchandise Marks Act, 1958. The object of incorporating Section 134(2) of the Trade Marks Act, 1999, is to bring such provision in line with the similar provisions contained in the Copyright Act, 1957. The provision contained in Section 134(2) of the Trade Marks Act, 1999, and Section 62(2) of the Copyright Act, 1957, contain additional provision relating to jurisdiction regarding filing of suit. These provisions supplement the ordinary provisions relating to filing of suit and do not supplant such provisions. Reading together all these provisions along with the provisions contained in the Code of Civil Procedure makes it clear that the suit can be filed in a place where the cause of action or part of cause of action has arisen or even where the defendant resides. In addition to the normal provisions contained in the Code of Civil Procedure, the provisions in Section 134(2) of the Trade Marks Act, 1999 and Section 62(2) of the Copyright Act, 1957 contemplate that the suits can also be filed where the person instituting the suit actually and voluntarily resides or carries on business or personally works for gain.

11. In the present case, the learned single Judge has come to the conclusion that the situs of the trademark being a part of the cause of action, it can be said that the part of the cause of action arose within the jurisdiction of this Court. It has been concluded that though the trademark has been registered and reflected in the Head Office of the Trade Marks Registry at Mumbai, yet, the Trade Marks Registry's branch office being at Chennai, it can be said, keeping in view the provisions contained in Section 18 of the Trade Marks Act, 1999, that the situs of the trade mark involved in the present case is in Chennai. For the aforesaid purpose, the learned single Judge has relied upon the decision of this Court reported in 1977 1 M.L.J 286 (S.B.S Jayam & Co. v. Krishnamoorthi). In the said case, it has been observed: —

“… A registered trade mark is a proprietary right and therefore it is property; though the head office is at Bombay, the branch office, including the one at Madras have independent territorial jurisdiction regarding the powers conferred under the Act; therefore there can be no doubt that in respect of the trade mark registered at the Madras office, the situs of the property in the mark is at Madras and therefore there can be a little doubt that the alleged infringement is not only at a place where the defendant markets his goods but also where the plaintiff's property itself is situated.”

12. Apart from the aforesaid decision, which directly supports the contention of the plaintiff, the learned single Judge has also referred to the decisions reported in A.I.R 1991 Madras 277 = 1991 1 L.W 341 (Amrutanjan Limited v. Ashwin Fine Chemicals & Pharmaceuticals) and 1999 P.T.C (19) 183 (Ramu Hosieries v. Ramu Hosieries, rep. by Pandela Ramu and another). From the latter two decisions, it is apparent that in the suit relating to violation of trademark, the situs of the trademark can be construed as the place where cause of action has arisen.

13. Learned counsel appearing for the appellants has sought to distinguish the aforesaid decisions on the footing that those decisions were rendered under the Trade and Merchandise Marks Act, 1958, and that the provisions contained in Section 3 of the said Act, relating to jurisdiction of the High Court, are not re-enacted under the new Act, and, therefore, those decisions are of no consequence. In support of the aforesaid submission, the learned counsel has also placed reliance upon the commentary of “Law of Trade Marks & Geographical Indications” by K.C Kailasam/Ramu Vedaraman, wherein the authors have opined that the jurisdiction for filing a suit for infringement or passing off under Section 134 is not to be based on or linked with the operative jurisdiction of the head office or the branch offices.

14. We are unable to accept such submission made by the learned counsel for the appellants and, in our opinion, the ratio of the decision reported in 1977 1 M.L.J 288 (cited supra) is still applicable notwithstanding the slight change in the provisions contained in the Trade Marks Act, 1999.

15. Learned counsel appearing for the appellants has also submitted that in view of the provisions contained in Sections 592 to 597 of the Companies Act and the prohibition contained in Section 599, the respondent is not entitled to bring any suit. The learned single Judge has repelled such contention by observing that in the present case the suit was not based on any contract and therefore such provision was inapplicable. In our opinion, the question as to whether the plaintiff was disabled from filing any suit in view of the provisions contained in Sections 592 to 597 of the Companies Act was not a relevant factor for deciding the question as to whether the leave which was already granted should be revoked or not. In our opinion, this question need not have been considered at that stage. If any such contention is raised in the written statement, it can be considered at the stage of final decision. While considering the question of grant of leave or revocation of leave, the Court is not required to go into the question as to whether the plaintiff was disabled from filing of any suit and whether ultimately the plaintiff is likely to succeed in the suit or any defence taken or to be taken by the defendant is likely to be upheld. In such view of the matter, in our opinion, the observations made by the learned single Judge in the impugned order being unnecessary at that stage, would not stand in the way of such a question being considered ultimately if such a plea is taken in the written statement. It is made clear that no opinion has been expressed by us on this aspect and the question is left open.

16. Learned counsel appearing for the appellants by relying upon several decisions of this Court has submitted that since the defendants admittedly carry on business in Delhi and there is alleged violation of the trademark and the witnesses would have to come from Delhi for either side, it would be more convenient to try the suit in Delhi or any other place and because of this the leave should have been revoked.

17. We have carefully analysed the decisions cited by the learned counsel for the appellants, including the decision reported in 2002 (1) CTC 134, (Parameswari Veluchamy and 2 others v. T.R Jayaraman and 7 others). The said case related to a suit for partition where except three properties all other properties situated outside the jurisdiction of this Court. The parties were residing outside the jurisdiction and the witnesses also had to come from outside. In such view of the matter, the Division Bench upheld the order of the learned single Judge where under the leave had been revoked. We do not think in the peculiar facts and circumstances of the present case the aforesaid decision can be made applicable.

18. For the aforesaid reasons, we do not find any merit in this appeal, which is accordingly dismissed, subject to the observations made. There would be no order as to costs.

VCJ/VCS

Ajay Kumar Aggarwal ... v. Ajay Bansal Trading ...