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Zenner International Gmbh & Co Kg v. Anand Zenner Company Pvt. Ltd.
Factual and Procedural Background
This suit was filed by the plaintiffs, Zenner International GmbH, a German company and its licensee Zenner Aquamet India Pvt. Ltd., against the defendant Anand Zenner Company Pvt Ltd. The plaintiffs sought permanent injunction restraining trademark infringement and passing off, along with ancillary reliefs. The defendant, after issues were framed including one on territorial jurisdiction, filed an application under Order VII Rule 10 CPC seeking return of the plaint. The defendant’s plea included denial of territorial jurisdiction of the Delhi High Court and challenged the plaintiffs’ entitlement to invoke Section 134 of the Trade Marks Act, 1999. Procedural history shows multiple adjournments and opportunities granted to the plaintiffs to file affidavits by way of examination-in-chief, which they failed to do, leading to dismissal of the suit.
Legal Issues Presented
- Whether the Delhi High Court has territorial jurisdiction to entertain and try the suit filed by the plaintiffs.
- Whether the plaintiffs, particularly the licensee plaintiff no.2 who is not the registered user of the trademark, is entitled to invoke Section 134 of the Trade Marks Act, 1999.
- Whether the defendant’s application under Order VII Rule 10 CPC for return of plaint is maintainable.
- Whether the plaintiffs’ failure to lead evidence justifies dismissal of the suit.
Arguments of the Parties
Defendant's Arguments
- The Delhi High Court lacks territorial jurisdiction to try the suit, as the defendant denies having a local office in Delhi.
- The suit is liable to be stayed under Section 10 CPC due to jurisdictional issues.
- The plaintiffs are not entitled to invoke Section 134 of the Trade Marks Act because plaintiff no.2, the licensee, is not the registered user of the trademark.
- The plaintiffs’ claims of loss and injury are denied, and the defendant alleges that plaintiffs themselves are deceiving consumers by unauthorized use of the trademark.
Plaintiffs' Arguments
- The Delhi High Court has jurisdiction as plaintiff no.2 has a registered office in Delhi and the defendant also has an office in Delhi.
- Plaintiff no.1, a foreign company, carries on business in India through its licensee plaintiff no.2, justifying jurisdiction.
- The licensee plaintiff no.2 is entitled to sue under Section 134 of the Trade Marks Act as a registered user.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Ultra Home Construction Pvt. Ltd. Vs. Purushottam Kumar Chaubey (2016 (65) PTC 469 Delhi (DB)) | Jurisdictional principles relating to corporations registered in India. | Noted that this precedent deals only with Indian corporations and does not address foreign corporations carrying on business through licensees. |
| Indian Performing Right Society Limited Vs. Sanjay Dalia ((2015) 10 SCC 161) | Interpretation of territorial jurisdiction in trademark suits under Section 134 of the Trade Marks Act. | Used to emphasize that jurisdiction includes the place where the plaintiff resides, has head office, or otherwise carries on business. |
| The Foundry Visionmongers Ltd. Vs. Satyanarayana Reddy S. (Manupatra IPR 2015/3/0068) | Whether a foreign company with no registered office in India can be said to carry on business in India through a commission agent. | Distinguished on facts as the commission agent's business was not considered the foreign company’s business. |
| Exxon Mobil Corporation Vs. P.K. Sen (2016 SCC OnLine Del 4814) and P.K. Sen Vs. Exxon Mobil Corporation (2017) 236 DLT 333 | Jurisdiction of foreign proprietors of trademarks invoking Section 134 at the place where their permitted user carries on business. | Initial view supporting plaintiff’s claim was reversed by Division Bench, limiting availability of Section 134 to plaintiffs. |
| Harman Overseas Vs. Dongguan TR Bearing Company Limited (2017 SCC OnLine Bom 7327) | Jurisdiction of courts in trademark infringement suits involving foreign companies and their agents in India. | Contrary view to Delhi Division Bench; noted but not followed. |
| Guardian Assurance Company Vs. Shiva Mangal Singh (ILR 1937 Allahabad 234) | Foreign company carrying on business in India through an agent is deemed to carry business at agent’s location for jurisdictional purposes. | Supported the proposition that carrying on business through an agent confers territorial jurisdiction. |
| Pratap Singh Vs. Bank of America (1976 SCC OnLine Bom 111) | Distinction between "carrying on business" and "personally working for gain" under Section 20 of CPC. | Held that carrying on business includes doing so through an agent, and no distinction between Indian and foreign corporations for jurisdiction. |
| Wipro Ltd. Vs. Oushadha Chandrika Ayurvedic India (P) Ltd. (AIR 2008 Mad 165) | Interpretation of "actually and voluntarily resides" versus "carries on business" in jurisdictional context. | Confirmed that "carries on business" is not limited to principal place of business and broadens territorial jurisdiction. |
Court's Reasoning and Analysis
The Court first noted that the defendant did not deny having a local office in Delhi, which undermines the defendant's challenge to territorial jurisdiction. Therefore, the application under Order VII Rule 10 CPC for return of plaint was not maintainable on this ground alone.
Regarding the entitlement to invoke Section 134 of the Trade Marks Act, the Court analyzed the statutory provisions, particularly Sections 52 and 134, and relevant case law. It held that a foreign company carrying on business in India through a licensee or other arrangements is deemed to carry on business in India at the place where such business is conducted. Thus, the foreign plaintiff no.1’s business through plaintiff no.2 in Delhi suffices to confer jurisdiction.
The Court considered precedents and noted that the principle of territorial jurisdiction under Section 134 is not limited to Indian companies but extends to foreign proprietors carrying on business in India. The Court distinguished cases where agents or commission agents do not amount to carrying on business, emphasizing that here the licensee’s office in Delhi is a substantive business presence.
On the merits of the defendant’s application, the Court found the application to be filed late, after the suit had been pending for nearly six years and set down for trial, further weakening the defendant's position.
Separately, the Court addressed the plaintiffs’ failure to lead evidence despite multiple opportunities and adjournments. The plaintiffs’ failure to file affidavits by way of examination-in-chief was held to disentitle them from interim relief and ultimately led to dismissal of the suit.
Holding and Implications
The defendant’s application under Order VII Rule 10 CPC for return of plaint is dismissed.
The suit filed by the plaintiffs is dismissed for failure to lead evidence.
The Court clarified that dismissal of the defendant’s application does not prejudice the issue of territorial jurisdiction already framed and to be decided on evidence. The decision directly affects the parties by ending the suit due to plaintiffs’ non-prosecution and denies the defendant’s preliminary challenge to jurisdiction. No new precedent beyond the application of existing principles was established.
* IN THE HIGH COURT OF DELHI AT NEW DELHI
%rdDate of decision: 23 January, 2018
+ CS(COMM) 156/2017& IA No.10131/2012 (u/O XXXIX Rules 1&2 CPC).
ZENNER INTERNATIONAL GMBH &
CO KG AND ANR ..... Plaintiffs
Through: Mr. Arjun Singh, Adv. versus
ANAND ZENNER COMPANY PVT LTD ..... Defendant
Through: Mr. Suhail Dutt, Sr. Adv. with Mr. Sujoy Kumar and Mr. Sankalp
Goswami, Advs.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW IA No.1078/2018 (of the defendant under Order VII Rule 10 CPC).
1. The defendant, in this suit for permanent injunction restraining infringement of the trade mark and passing off and for ancillary reliefs, after the issues were framed in this suit on 23rdFebruary, 2017 including an issue as to the territorial jurisdiction of this Court, seeks return of the plaint under Order VII Rule 10 of the Code of Civil Procedure, 1908 (CPC).
2. The counsel for the plaintiffs appearing on advance notice seeks adjournment to file reply.
3. An application under Order VII Rule 10 of the CPC is to be decided on the basis of averments contained in the plaint and for this reason it is felt that there is no need for a reply and the plaintiffs who have already received advance copy of the application ought to have come prepared to address on the application. Adjournment sought is thus refused.
4. The senior counsel for the defendant/applicant has been heard.
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5. The plaintiff no.1, a Company incorporated in Germany and the plaintiff no.2 Zenner Aquamet India Pvt. Ltd., a licensee of the plaintiff no.1 and having its registered office at Delhi, have sued the defendant/applicant having its registered office at Ernakulam and local office at 2, Community Centre, Saket, New Delhi - 110 017, for the reliefs as aforesaid. Para 35 of the plaint with respect to territorial jurisdiction is as under:-
"35. This Hon'ble Court has jurisdiction to entertain and try present suit as Plaintiff No.1 carries on business in India through its subsidiary Plaintiff No.2 which has a registered office in Delhi as mentioned in paragraph 2 hereinabove. The defendant is also having its office in the city of Delhi. Hence this Hon'ble Court has jurisdiction to entertain and try the present suit."
6. The suit was entertained and summons and notice of the application for interim relief issued to the defendant/applicant, though no ex parte or interim relief granted till now.
7. The defendant/applicant, in its written statement, with respect to the paragraph of the plaint qua territorial jurisdiction has pleaded as under:-
"It is denied that this Hon'ble Court has any jurisdiction. In any event Section 10 CPC is attracted and therefore, the present suit is liable to be stayed. It is denied that the plaintiff shall suffer any loss, damage and injury. It is the plaintiffs who by their unauthorised adoption and use of the trade mark Zenner are deceiving the consumers and public at large. The allegations to the contrary are wrong and are denied."
8. I have enquired from the senior counsel for the defendant/applicant, whether the defendant/applicant, elsewhere in its written statement has
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denied having its local office at 2, Community Centre, Saket, New Delhi as pleaded by the plaintiffs.
9. The senior counsel for the defendant/applicant, on instructions states that there is no denial thereof.
10. On 23rdFebruary, 2017, while framing issues, issue no.8 framed is as under:-
"8. Whether this court has territorial jurisdiction to entertain and agitate the present suit?"
11. Though in my view, the defendant having not denied having local office at the address pleaded in the plaint, at Delhi, the parties were not at issue on the aspect of territorial jurisdiction and the issue aforesaid ought not to have been framed, be that as it may, the defendant is in any case not entitled to maintain this application under Order VII Rule 10 of the CPC.
12. Though the application is liable to be dismissed merely on the grounds of (i) the defendant/applicant having not denied office at Saket, New Delhi; and, (ii) the application having been filed after the suit has been pending for nearly six years and is set down for trial but since the senior counsel for the defendant/applicant has also contended that the plaintiffs are not entitled to invoke Section 134 of the Trade Marks Act, 1999 and an issue has been framed, it is deemed appropriate to deal with the said aspect as well.
13. The contention of the senior counsel for the defendant/applicant is that it is only the registered proprietor or the registered user who can invoke Section 134 of the Trade Marks Act and the plaintiff no.2 who though claims to be a licensee for India of the plaintiff no.1, is not the registered user of the trade mark with respect to which the suit is filed is thus not entitled to invoke
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Section 134. Attention is drawn to Section 52 and Section 134 which are reproduced hereinbelow:-
"52. Right of registered user to take proceedings against infringement.- (1) Subject to any agreement subsisting between the parties, a registered user may institute proceedings for infringement in his own name as if he were the registered proprietor, making the registered proprietor a defendant and the rights and obligations of such registered user in such case being concurrent with those of the registered proprietor.
(2) Notwithstanding anything contained in any other law, a registered proprietor so added as defendant shall not be liable for any costs unless he enters an appearance and takes part in the proceedings."
"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 plaintiff's 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
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carries on business or personally works for gain.
Explanation.- For the purpose of sub-section (2),
"person" includes the registered proprietor and the registered user."
14. In the present case, it is the plaintiff no.1 who, claiming to be the registered proprietor, has filed this suit for infringement. It is the plea in the plaint that the plaintiff no.2 is a licensee for use of the trade mark of the plaintiff no.1 in India and a Licence Agreement between the plaintiff no.1 and the plaintiff no.2 is produced before this Court.
15. I have enquired from the senior counsel for the defendant/applicant, whether not in the case of a foreign corporation having neither registered office nor any branch office in India but carrying on business in India through an Indian entity, the latter part of Section 134(2) of the Act providing for institution of the suit at the place where the registered proprietor actually and voluntarily resides or carries on business or personally works for gain, applies. In my view, a foreign corporation carrying on business in India through another entity even if not the registered user within the meaning of the Trade Marks Act, would definitely be carrying on business in India at the place where it is so carrying on business through its licensee or some other arrangement.
16. The senior counsel for the defendant/applicant has drawn attention to para 13 of Ultra Home Construction Pvt. Ltd. Vs. Purushottam Kumar Chaubey 2016 (65) PTC 469 Delhi (DB) but agrees that the same deals with corporations registered in India only and does not deal with a case of a foreign corporation as the plaintiff no.1. Though reliance is also placed on para 25 of Indian Performing Right Society Limited Vs. Sanjay Dalia
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(2015) 10 SCC 161 but the same also is found to be using the words "where he originally resides or at its head office or registered office or where he otherwise carries on business or personally works for gain.........". The use of the words "at its head office or registered office or otherwise carries on business" in alternative shows that the place where business is being carried on, also has territorial jurisdiction.
17. Though the senior counsel for the defendant/applicant has sought to suggest that Section 134 of the Act is for Indian companies only but admits that the trade mark of which infringement is claimed by the plaintiff no.1 is registered in favour of the plaintiff no.1 in India and once it is so, to my mind, no distinction can be made between a foreign owner of a trade mark and the Indian owner of a trade mark.
18. The senior counsel or the defendant/applicant at this stage has drawn attention to The Foundry Visionmongers Ltd. Vs. Satyanarayana Reddy S.
Manupatra Intellectual Property Reports/2015/3/0068 in para 12 whereof a Co-ordinate Bench of this Court has held that a company which is not registered in India and has no subordinate office in India cannot be said to be carrying on business at New Delhi owing to the existence of a Commission Agent i.e. exclusive reseller at New Delhi.
19. However a perusal of the judgment shows the Court to have as a matter of fact found that the business of the Commission Agent was not the business of the foreign company.
20. The counsel for the plaintiffs though given an opportunity has not argued anything.
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21. I may however state that I had in Exxon Mobil Corporation Vs. P.K. Sen 2016 SCC OnLine Del 4814 taken the same view as expressed above, that a foreign proprietor of a trade mark is entitled to invoke Section 134 at the place where its permitted user is carrying on business. The said view was reversed by the Division Bench in P.K. Sen Vs. Exxon Mobi Corporation
(2017) 236 DLT 333 and SLP (C) No.7223/2017 preferred whereagainst was dismissed in limine on 12thDecember, 2017. Thus, Section 134 cannot be said to be available to the plaintiff.
22. I may however add that the Division Bench of the High Court of Bombay in Harman Overseas Vs. Dongguan TR Bearing Company Limited 2017 SCC OnLine Bom 7327 has taken a view contrary to the view taken by Division Bench of this Court and SLP (C) No.28607/2017 preferred thereagainst is also found to have been dismissed in limine on 6thNovember, 2017. I may also add that a Division Bench of the High Court of Allahabad, as far back as in Guardian Assurance Company Vs. Shiva Mangal Singh
ILR (1937) Allahabad 234 held that a foreign company which had an agent in India, carries on business in India at the place where its agent is situated, within the meaning of Section 20 of the CPC. Mention may also be made of dicta of Division Bench of Bombay High Court in Pratap Singh Vs. Bank of America 1976 SCC OnLine Bom 111 holding, though in the context of clause 12 of Letters Patent of that Court but at par with Section 20(c) of CPC, that a clear distinction is made between "carrying on business" and
"personally working for gain"; while in latter, the legislative requirement is that the defendant should personally work for gain, no such requirement is postulated in "carrying on business" - it means that the defendant may carry on business himself or through an agent. It was further held that the word
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"defendant" in clause 12 of Letters Patent as well as in Section 20 of CPC includes both natural and artificial persons and no distinction in law can be made between corporations as are incorporated in India and corporations as are incorporated outside India. Similarly, the Division Bench of the High Court of Madras also, in Wipro Ltd. Vs. Oushadha Chandrika Ayurvedic India (P) Ltd. AIR 2008 Mad 165 held that the contrast between the words
"actually and voluntary resides" and "carries on business", in Section 62 of Copyright Act, 1957 and Section 134 of Trade Mark Act, if correctly perceived, reveal that while there is limitation regarding residence, there is no such restriction with reference to "carrying on business" - this is a clear indication that the term "carries on business" is not confined to only principal place of business - if the legislature intended to mean the principal place only, it would have suitably qualified the expression "carries on business".
23. Be that as it may, for reasons earlier given, the application is dismissed
24. An issue on the aspect of territorial jurisdiction has already been framed and all that is required to be clarified is that the dismissal of this application will not affect the finding on the issue already framed in accordance with the evidence led. There is thus no merit in the application.
25. Dismissed.
IA No.10131/2012 (of the plaintiffs under Order XXXIX Rules 1&2
CPC).
26. There is no interim order in favour of the plaintiffs/applicants.
27. The senior counsel for the defendant has also contended that the
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plaintiffs/applicants have not filed even affidavits by way of examination-in- chief inspite of opportunity.
28. The counsel for the plaintiffs/applicants has today also not shown any keenness to argue this application.
29. The conduct of the plaintiffs/applicants disentitles the plaintiffs/applicants to any interim relief.
30. Dismissed.
CS(COMM) 156/2017.
31. After framing the issues on 23rdFebruary, 2017, the plaintiffs were directed to file affidavits by way of examination-in-chief within four weeks and the suit listed before the Joint Registrar on 18thApril, 2017.
32. The plaintiffs did not file any affidavits, not even list of witnesses by 18thApril, 2017 and further opportunity of three weeks was granted to the plaintiffs and the suit notified for plaintiffs" evidence on 21stAugust, 2017.
33. On 21stAugust, 2017, an adjournment slip was moved by the plaintiffs and no affidavits had been filed and the Joint Registrar adjourned the suit to 13thDecember, 2017 for plaintiffs" evidence, granting further eight weeks"
time to the plaintiffs to file affidavits.
34. The position remained the same on 13thDecember, 2017 and one more opportunity was granted and the plaintiffs directed to file list of witnesses and affidavits within four weeks with advance copy to the counsel for the defendant.
35. Though the evidence of the plaintiffs should have been closed much earlier, but the Joint Registrar granted time. However the said time of four
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weeks is also over and the plaintiffs have not filed any affidavits by way of examination-in-chief till now.
36. The counsel for the plaintiffs seeks further one week"s time to file affidavit by way of examination-in-chief.
37. The plaintiffs have already availed of four opportunities and this being a „Commercial Suit" and the plaintiffs being trade and business entities having not chosen to lead evidence, cannot be granted any further accommodation. Though four weeks" time granted on 13thDecember, 2017 expired on 12thJanuary, 2018 but till date neither any application has been filed nor is any cogent reason disclosed for the delay. All that is stated is that the attorney of the plaintiffs has changed and an affidavit was received from Germany but was not notarised.
38. These are no explanations and the plaintiffs cannot be permitted to, after filing the suit, endlessly keep the same pending. In fact, a perusal of the order sheet shows that the suit came up first before this Court on 25thMay, 2012 and the plaintiffs repeatedly sought adjournments on 25thMay, 2012, 23rdJuly, 2012, 31thJuly, 2012, 8thAugust, 2012, 9thOctober, 2012 and 13th December, 2012 and summons of the suit were finally issued on 17thMay, 2013. The process of the Court cannot be permitted to be so abused.
39. A perusal of the issues framed in the suit shows the onus of all the issues to be on the plaintiffs only. The plaintiffs having failed to lead any evidence, the senior counsel for the defendant on instructions states that the defendant is not required to lead any evidence.
40. The plaintiffs have failed to prove their case.
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41. Resultantly, the suit is dismissed.
42. Decree sheet be drawn up.
43. The date of 20thMarch, 2018 before the Joint Registrar is cancelled.
RAJIV SAHAI ENDLAW, J
JANUARY 23, 2018
„pp"..
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