Delhi High Court - Orders
M/S. Copenhagen Hospitality And ... vs M/S. A.R. Impex & Ors on 29 July, 2021
Author: Sanjeev Narula
Bench: Sanjeev Narula
$~7
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(COMM) 262/2021
M/S. COPENHAGEN HOSPITALITY AND RETAILS & ORS.
..... Plaintiffs
Through: Mr. Chander M. Lall, Senior
Advocate with Mrs. Bindra Rana, Mr.
Vikrant Rana, Mr. Priya Adlakha, Ms.
Tanvi Bhatnagar, Ms. Rima
Majumdar, Ms. Nancy Roy and Ms.
Ananya Chug, Advocates.
versus
M/S. A.R. IMPEX & ORS. ..... Defendants
Through: Mr. Neeraj Grover, Advocate with,
Mr. K.C. Patel, Mr. Naqeeb Nawab,
Mr. Himanshu Deora, Mr. Shashwat
Rakshit & Mr. Raghav Vig,
Advocates for D-1.
Mr. Gautam Singh, Advocate for D-2.
CORAM:
HON'BLE MR. JUSTICE SANJEEV NARULA
ORDER
% 29.07.2021 [VIA VIDEO CONFERENCING]
I.A. 8371/2021 (u/O VII Rule 10 r/w Section 151 of the Code of Civil Procedure, 1908 for return of plaint)
1. By way of the instant application, Defendant No. 1 seeks return of the plaint on the ground of lack of territorial jurisdiction.
2. The Plaintiff has filed the present suit seeking permanent injunction, restraining infringement of trademark and passing off; infringement of CS(COMM) 262/2021 Page 1 of 9 copyright, trade dress, breach of confidentiality; misappropriation of trade secrets, etc.
3. At the outset, it is noted that Defendant No. 1 is based in Ahmedabad, Defendant No. 2 in Chandigarh, and Defendant Nos. 3 and 4 in Punjab. The Plaintiff is based in Chandigarh.
4. The relevant paragraphs in the plaint delineating how Courts in Delhi are seized of territorial jurisdiction to try the matter, read as under:
"CAUSE OF ACTION:
61. The cause of action accrued in favour of the Plaintiffs and against the Defendant Nos. 1 and 2 on April 15, 2021, when the Plaintiffs learnt that the Defendant No. 1 illegally adopted a similar name and look-alike logo for its self-owned and franchised outlets in Ahmedabad with the assistance and connivance of the Defendant No. 2 and the Defendant No. 2 joined the business of Defendant No. 1. (...) It again arose in the second week of May, 2021 when the Defendant Nos. 1 and 2 approached Plaintiff No. 1's existing franchise partners in Delhi, Maharashtra and Bangalore seeking collaboration with them to operate the Master Franchise of LA MILANO PIZZERIA outlets in their respective territories also to persuade their sub-franchise owners to convert their existing LA PINO'Z PIZZA franchise to LA MILANO PIZZERIA. (...) JURISDICTION:
62. (...) The cause of action for filing the present suit has partly arisen in Delhi, as the Defendant Nos. 1 and 2 have approached the Plaintiffs' Master Franchise in Delhi for converting them to the Defendant No. 1's Master Franchise. Plaintiffs have great apprehension that the Defendant Nos. 1 and 2 will expand its infringing activities in Delhi by operating self-owned/franchised outlets of LA MILANO PIZZERIA /LA MILANO PIZZA, which will cause extreme harm to the Plaintiffs' business and goodwill and reputation as the Plaintiff Nos. 1 and 3 operates almost 12 outlets in Delhi itself. Defendant Nos. 1 and 2 are promoting and advertising their restaurant services on social media platform Facebook, Instagram, Google, Zomato etc. misusing the Plaintiffs' official accounts, which are accessible all over the country including in Delhi. The Plaintiffs are carrying on their business under the brand name LA PINO'Z PIZZA in Delhi through their Master Franchise and various sub-franchise outlets.CS(COMM) 262/2021 Page 2 of 9
Hence, this Hon'ble Court has jurisdiction to try, entertain and adjudicate the present suit under Section 20 (c) of Code of Civil Procedure as the cause of action has arisen in Delhi. The present suit is a commercial suit, within the meaning of Section 2 (1) (c) of the Commercial Courts Act, 2015." [emphasis added] Contentions of the parties:
5. The Applicant/Defendant No. 1 seeks the return of the plaint on the following grounds:
a. The Defendant No. 1 has its registered office in Ahmedabad and is operating its business from the said jurisdiction. The Plaintiffs have also admitted that they have been operating in Ahmedabad and other cities of Gujarat as per Para 31 and 32 of the Plaint.
b. That various claims of the Plaintiffs regarding the alleged violation of the impugned rights as well as alleged confusion caused in the market relate to Ahmedabad and other cities of Gujarat and therefore, if at all there was any cause of action in favour of the Plaintiffs, the same would have accrued in Ahmedabad, Gujarat and certainly not in Delhi. Given the aforesaid, it is stated that the Plaintiffs have deliberately chosen to file the present proceedings before this Hon'ble Court to cause hardship and inconvenience to the Defendant No. 1, even though the proper jurisdiction to file the present suit would have been Ahmedabad, Gujarat, assuming (though denied) that there was any cause of action in favour of the Plaintiffs.
c. That the address reflected on the trademark applications/ registrations on which the Plaintiffs have based their claims and grounds are also of Chandigarh."CS(COMM) 262/2021 Page 3 of 9
6. Further, Mr. Neeraj Grover, learned counsel for the Defendant No. 1 counters the Plaintiff's submissions regarding territorial jurisdiction lying in Delhi, on the basis of the following contentions:
a. Jurisdiction cannot be claimed on the basis of the location of the Trade Marks Office in which the registration of a mark has been sought. b. Admittedly the Plaintiff No. 1, who is owner of the copyright in the artistic work of the logo, has its place of business in Chandigarh. However, this aspect cannot afford jurisdiction under Section 20(c) of the Code of Civil Procedure, 1908 (in short, 'CPC'). Also, if at all there is any cause of action in favour of the Plaintiffs, the same would have arisen in Ahmedabad, Gujarat.
c. The Plaintiffs have failed to produce any document/e-mail to showing any alleged communication between Defendant No. 1 and its alleged Master Franchisee in Delhi. It was further stated that mere alleging apprehension in the pleadings, without any documentary evidence to substantiate the same, can never be a basis to seek jurisdiction of this Court. With the plaint, the Plaintiffs have not filed any evidence to support or show the basis of such apprehension to seek jurisdiction of this Court in the matter.
d. The presentation placed on record by the Plaintiffs, allegedly showing that the proposal was shared for Delhi, in no manner indicates any proposal for Delhi and the Plaintiffs are making absolutely false claims to indulge in forum shopping.
e. Regarding the claim of accessibility of social media platforms all over the country including Delhi, it is settled that jurisdiction can only be CS(COMM) 262/2021 Page 4 of 9 invoked on the basis of online presence if the allegedly infringing article can be purchased online within the said jurisdiction i.e. a contract can be concluded within the jurisdiction of the court. The jurisdiction of a court in the case of online presence, particularly in respect of restaurant services, cannot be conferred on a particular court merely on the basis of listing on social media, if the products/ services of the Defendant are not purchased/ available for sale/ delivered in the forum state because there is no possibility of a concluded contract. f. In support of his submissions, he relies upon the judgments in Impresario Entertainment & Hospitality Pvt. Ltd. v. S&D Hospitality, 1 News Nation Networks Private Limited v. News Nation Gujarat, 2 Ultra Home Construction v. Purushottam Kumar Chaubey,3 Indian Performing Rights Society Ltd. v. Sanjay Dalia.4
7. Mr. Chander M. Lall, learned Senior Counsel for the Plaintiff, controverts the contentions of Mr. Grover and contends that the cause of action has arisen in Delhi. By referring to the cause of action averments in para 61 in the plaint (extracted above), he submits that since the Defendants have been contacting parties at Delhi for establishing their franchisees, including Plaintiffs' Master Franchisee in Delhi for converting them to the Defendants No.1's Master Franchisee. Therefore, the cause of action has arisen in Delhi. He further submits that in case the Defendants do not intend to expand their operations in Delhi, they should make a statement to that effect. The averments made in the plaint meet the requirement of law for 1 246 (2018) DLT.
2Order dated 22.12.2017 in C.S. (Comm.) 334/2016.
3(2016) 227 DLT 320.
CS(COMM) 262/2021 Page 5 of 9claiming jurisdiction in Delhi. Defendants' contention regrading the Plaintiff's averments being false would have to be examined during the course of the trial. In support of his submissions, he relied upon the judgments in RSPL Limited v. Mukesh Sharma,5 Burger King Corporation v. Techchand Shewakramani, 6 Exxon Mobile Corporation v. Exoncorp Private Limited,7 and Teva Pharmaceutical Industries v. NATCO Pharma Limited.8 Analysis:
8. The question of territorial jurisdiction in matters relating to infringement of trademarks is now well-settled. The judgments relied upon by the Defendants in Sanjay Dalia (supra) and Ultra Homes (supra) deal with the situation where the jurisdiction is clearly determinable on the basis of Section 134(2) of the Trade Marks Act, 1999 and also under Section 62(2) of the Copyright Act, 1957. Therein it has been has observed that the aforesaid provisions of the Trade Marks and the Copyright Acts are in addition to Section 20 of the CPC. Thus, the Plaintiff is entitled to file the suit for infringement of trademark where the cause of action arose under Section 20(c) of CPC.
9. In Teva Pharmaceutical (supra), a coordinate bench of this Court has held as under:
"20. We have also wondered whether owing to the statement aforesaid of 4 (AIR 2015 SC 3479).5
2016 SCC Online Del 4285.6
2018 SCC Online Del 10881 7 2019 SCC Online Del 9193.8
2014 SCC Online Del 3373.CS(COMM) 262/2021 Page 6 of 9
the respondent / defendant, of not intending to market the product in India, the territorial jurisdiction of this Court, otherwise invoked in accordance with law, can be ousted. We are unable to find any basis for holding that though on the basis of averments in the plaint, this Court will have territorial jurisdiction, the same can be ousted on the statement of the respondent / defendant of not doing / intending to do act, to prevent which suit is filed, within the territorial jurisdiction of this Court. We are of the opinion that once the appellants / plaintiffs have pleaded apprehension of sale / marketing in Delhi, the Courts in Delhi would have jurisdiction to entertain the suit and such jurisdiction cannot be ousted by the defendant by making a statement not to do any such act in Delhi, though the defendant would be entitled to prove that there is no basis for such apprehension. If such a course of action were to be permitted, it would enable a defendant to avoid action in a particular Court by making such a statement and indulge in forum shopping. We also find that the same was not permitted by this Court in Rana Steels Vs. Ran India Steels Pvt. Ltd. (2008) 37 PTC 24 (Del); there, though the counsel for the defendant stated that the defendant had no intention to sell its products in Delhi, it was held that the plaint could not be ordered to be returned on the basis of the said statement. Though the matter was taken in appeal by way of FAO(OS) 212/2008 but was compromised."
10. At this stage, court's enquiry for forming a prima facie view on territorial jurisdiction has to be on the basis of averments made in the plaint, and the documents relied upon by the Plaintiff. If the same bring out the ingredients for establishing the jurisdiction of the court, that would be sufficient for the court to assume jurisdiction. The contentions raised in the application as defence to the suit cannot be probed for the purpose of deciding the preliminary objection raised in the instant application. Keeping the aforesaid view in mind, the court finds that the averments made in the plaint disclose a cause of action in Delhi. Plaintiffs contend that the Defendants are openly and publicly expressing their intention to expand all across the country, and are entertaining franchisee queries within the territory of Delhi. The contention of the Defendants - that mere alleged apprehension in the pleadings, unsubstantiated by documentary evidence, CS(COMM) 262/2021 Page 7 of 9 can never be a basis to seek jurisdiction - is not correct. The objection to territorial jurisdiction has to be construed by assuming that the averments in the plaint are correct, and, the objection must be decided on that basis alone. Considering the nature of business, the prior relationship of the parties, and the business format of establishing franchisees, it cannot be assumed that the Plaintiffs' allegations are mis-founded or could be construed as false, in absence of any documentary proof. For the above-stated reasons, the occurrence of cause of action jurisdiction, which is the determinative factor under Section 20 of the CPC, clearly vests in this Court. Defendants would have to prove their contentions during trial.
11. In view of the above, there is no merit in the Defendant's contentions, and accordingly, the present application is dismissed.
12. Needless to say, the observations made hereinabove are only a prima facie view of the court and shall not prejudice the contentions of either of the parties during trial.
CS(COMM) 262/2021, I.A. 7085/2021, I.A. 8372/2021 & I.A. 9140/2021
13. Mr. Grover, counsel for Defendant No. 1, pressed for decision on their application u/O VII Rule 10 prioritizing the same over applications u/O 39 Rules 1 & 2 and u/O 39 Rule 4. The same has been decided and disposed of as aforesaid.
14. It is already 04:25 PM.
CS(COMM) 262/2021 Page 8 of 915. List for arguments on the remaining applications on 21st September, 2021.
SANJEEV NARULA, J JULY 29, 2021 nd CS(COMM) 262/2021 Page 9 of 9