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Sap Aktiengesellschaft v. Parginsys

Delhi High Court

Feb 11, 2009

Judgment

Subsequent
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CaseIQ

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Judgment Summary — Return of Plaint for Want of Jurisdiction

Factual and Procedural Background

The suit was filed by a German company (the plaintiff) which has an Indian subsidiary with a registered office in Bangalore. The plaintiffs sued defendants located in Nagpur, Maharashtra, for alleged copyright infringement, seeking damages, delivery and rendition of accounts.

The plaintiff discovered the alleged infringement after learning that the defendants offered training in the plaintiff's software. The plaintiff conducted discreet inquiries, sent a decoy student who obtained a fee receipt at the defendants' Nagpur office, and found training being conducted on a pirated copy of the software. The plaintiff's agent lodged an FIR (No. 303 dated 19 November 2008) at Nagpur alleging offences under provisions of the Copyright Act and Section 420 of the Indian Penal Code.

The plaintiff invoked the jurisdiction of the Delhi court by asserting that plaintiff No. 2 carried on business in Delhi through a branch office at Gesco Centre, 70 Nehru Place, New Delhi-110019, and that training services were offered by authorized partners in New Delhi.

The Court examined the plaint and supporting documents and found no documentary proof (for example, lease deed or other records) establishing the existence of a Delhi branch office. The Court ultimately ordered the plaint to be returned to the plaintiff for filing in the appropriate jurisdiction at Nagpur.

Legal Issues Presented

Whether the Delhi court had jurisdiction to entertain the suit based on the plaintiff's assertion of carrying on business in Delhi (i.e., existence of a branch office at Nehru Place).
Whether the plaintiff's contractual arrangement with training partners (under which partners provide training venues and paraphernalia while the plaintiff supplies software) created a "place of business" in Delhi sufficient to confer jurisdiction.
Whether the suit filed in Delhi amounted to an impermissible use of the forum (harassment or forum-shopping) when the alleged infringement and criminal prosecution were at Nagpur.
Whether the plaint should be returned for presentation in the court of appropriate jurisdiction (Nagpur) absent a clear grounding under Section 62(2) of the Copyright Act.

Arguments of the Parties

Plaintiff's Arguments

The plaintiff asserted jurisdiction in Delhi on the basis that plaintiff No. 2 carried on business in Delhi through a branch office located at 2nd Floor, Gesco Centre, 70, Nehru Place, New Delhi-110019.
The plaintiff also relied on the fact that training in its software was offered by authorized partners in New Delhi, implying a sufficient connection to the forum.

Defendants' Arguments

The opinion does not contain a detailed account of the defendants' legal arguments.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court proceeded by examining the plaint and the documents annexed to it to determine whether jurisdiction in Delhi was properly founded:

Absence of documentary proof for the alleged Delhi branch: The Court noted that the plaintiff did not file any lease deed or other document demonstrating that a branch office actually existed at the Nehru Place address. Mere notation of a Delhi address under the Bangalore address in the plaint was insufficient.
Character of the plaintiff's business arrangement with partners: The Court analysed the "Partners Cooperation Agreement" on record and found that partners provided the training locations, apparatus and paraphernalia while the plaintiff supplied the software. The Court treated this as a licence/arrangement under which partners used the plaintiff's software; this arrangement, the Court held, did not establish that the plaintiff had a place of business at the training locations.
Proper forum for relief sought: The Court observed that all reliefs claimed were directed at securing the defendants' personal obedience and that the defendants had no presence in Delhi. The alleged acts of infringement occurred in Nagpur, where the criminal FIR was registered.
Forum-shopping and fairness: The Court expressed concern that filing the suit in Delhi — distant from where the defendants carried on activity — appeared to be a device to force the defendants to litigate in Delhi, incurring greater expense and difficulty. The Court emphasised a litigant's right to a fair trial and indicated that jurisdiction should not be used to make that right illusory.
Section 62(2) caveat: The Court noted that the defendant should be dealt with at the place of infringement unless the suit was squarely covered by Section 62(2) of the Copyright Act. The opinion does not record any factual foundation establishing that Section 62(2) conferred jurisdiction in Delhi in this case.
Conclusion from analysis: Given the lack of documentary proof of a Delhi branch, the licensing-like nature of the partner arrangements, the location of alleged infringement and criminal prosecution in Nagpur, and the absence of a clear statutory basis to proceed in Delhi, the Court concluded the plaint should be returned for presentation at Nagpur.

Holding and Implications

The plaint is to be returned to the plaintiff for filing in the appropriate forum at Nagpur.

Implications:

The immediate effect is that the Delhi court will not proceed with the suit; the plaintiff must re-present the plaint in the Nagpur forum where the alleged infringement and criminal FIR are located.
The decision rejects the plaintiff's claim of a Delhi place of business on the materials before the Court and treats partner-provided training locations as not creating a place of business for the plaintiff in those locations.
The opinion addresses only the forum/jurisdiction question and does not decide the substantive merits of the infringement claim. The Court did not cite or create any new binding precedent; it applied the existing principle that suits should be brought in an appropriate forum and cautioned against forum-shopping and harassment via misplaced venue choices.

SHIV NARAYAN DHINGRA, J.

Show all summary ...

1. This suit has been filed by the plaintiff, a German Company/firm having an Indian subsidiary company with registered office at Bangalore, in respect of infringement of copyright and for damages and delivery and rendition of accounts against the defendants who are stated to have their office in Nagpur, Maharashtra and committed infringement in Maharashtra.

2. It is the case of the plaintiff that plaintiff learnt about the defendants' organization and came to know about the defendants offering to provide training services in the plaintiffs' software programme. The plaintiff made discreet inquiries and planted a decoy student to get the training who obtained a receipt of payment of fees at defendants' office in Nagpur and found out that the training was being imparted on a pirated software and the defendant was infringing copyright of plaintiff at Nagpur. The Plaintiff's agent got an FIR registered, being No. 303 on 19th November 2008 registered against the defendants under the provisions of Copyright Act and under Section 420 of Indian Penal Code at Nagpur.

3. The plaintiff has invoked jurisdiction of this Court on the ground that the plaintiff No. 2 was carrying on its business within the jurisdiction of this Court through its branch office situate at 2nd Floor, Gesco Centre, 70, Nehru Place, New Delhi-110019 and the training services of the plaintiff were being offered by the authorized partners in New Delhi.

4. I have perused all documents filed by the plaintiff but could not find a single document showing existence of a branch office in New Delhi. No lease deed showing that the plaintiff has taken on rent an office in New Delhi has been filed. There is no doubt that the plaintiff has a right to file a suit for infringement of its copyright at the place where it works for gain but the perusal of entire plaint and the documents annexed therewith would show that the plaintiff works for gain either in Germany or in Bangalore. The plaintiff No. 1 while has given its address of Germany, plaintiff No. 2 has given its address of Bangalore and below this address it is written also at a Delhi address. The expression ‘carrying on its business’ or personally works for gain, does not mean having business interest at a particular place. Plaintiff through its partners may be imparting training to students in Delhi. The documents filed show that the students were being imparting training of its software throughout India at different locations in different cities by different companies with whom plaintiff entered into a kind of agreement. The plaintiff is the supplier of the software and the training is being imparted by the partners. The plaintiff has placed on record a sample of Partners Cooperation Agreement being entered into. A perusal of this agreement would show that the training location and training apparatus and all paraphernalia was to be provided by the partners and the software was to be supplied by the plaintiff. Thus, it is in fact an arrangement of user of the plaintiff's software under a license. If somebody is using the plaintiff's software under license of the plaintiff or the plaintiff is providing software support that would not mean that the plaintiff was having place of business where the training was being imparted to the students by the partners.

5. In the present case, all the reliefs which have been sought by the plaintiffs were based only on personal obedience of the defendants. There is no relief which can be obtained without personal obedience of the defendants. The defendants do not have any presence or work in Delhi or at any other place except Nagpur, neither the plaintiff has mentioned an address of Delhi where the defendant was running training institute using plaintiff's pirated software. Despite the fact that the defendant was allegedly infringing the copyright in Nagpur, Maharashtra and the plaintiff was having its subscribers company registered at Bangalore, the suit seems to have been filed in Delhi as a device to force the defendants to come to Delhi to engage a counsel and spent exorbitant sums on litigation and contest litigation in Delhi to see that this litigation becomes a costly affairs for the defendants. Plaintiff is having its registered office in Bangalore and could have easily filed this suit at Nagpur where the plaintiff got an FIR registered against the defendant, but chose to file this suit in Delhi on basis of vague allegations that the plaintiff was having its branch office at New Delhi by giving an address of Delhi with no supporting document that this office was actually existing. If the plaintiff really had a branch office in Delhi, nobody stopped the plaintiff from placing on record the documents pertaining to his branch office at Delhi like lease deed of the office hired by the plaintiff in Delhi. This Court has no sympathy with those who infringe the copyright and trademark but simultaneously the Court has to see that the court is not used as a tool of harassment for the litigants like the one as in this case. The defendant is a person and not a big company who is indulging into the infringement of copyright and so he must be dealt at the place where he has committed infringement, unless the suit is squarely covered under Section 62(2) of Copyright Act. The criminal prosecution has been launched by the plaintiff against the defendants at the place of defendants' shop/business, which only shows that the jurisdiction of this Court has been invoked in order to see that the defendants are not able to defend their case, if they had any defence. Even in civil matter, a person has a right to fair trial and this right cannot be made illusory by entertaining a suit against him at a Court, thousand miles away, where no part of cause of action took place, on the basis of unfounded assertion of having a branch office by plaintiff.

6. In view of above position, I consider that this plaint is liable to be returned to the plaintiff for filing the same to the Court of appropriate jurisdiction i.e at Nagpur. Accordingly, let the plaint be returned to the plaintiff for filing the same at Nagpur.