Karnataka High Court
United Breweries Ltd vs M/S Som Distilleries & Breweries Ltd on 20 April, 2018
Author: L.Narayana Swamy
Bench: L. Narayana Swamy
1
IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 20th DAY OF APRIL, 2018
BEFORE
THE HON'BLE MR. JUSTICE L. NARAYANA SWAMY
MISCELLANEOUS FIRST APPEAL NO.1941
OF 2016
BETWEEN:
United Breweries Ltd.,
UB Tower, UB City,
Level-3, 4, 5
No.24, Vittal Mallya Road,
Bengaluru - 560 001.
Represented by its
Senior Manager - Legal
Sri. Vishwas .S ... Appellant
(By Sri. Gururaj D.M., Advocate)
AND:
M/s. Som Distilleries & Breweries Ltd.,
Having its registered Office at I-A,
Zee Plaza, Arjun Nagar,
Safdarjung Enclave,
Kamala Cinema Road,
New Delhi - 110 029.
Having its Corporate Off at
No.23, Zone-II, Maharana Pratap Nagar,
Bhopal - 462 011.
... Respondent
2
(By Sri. Keerti Kumar D. Naik, Advocate)
This appeal is filed under U/O 43 Rule 1(a) of CPC,
against the order dated 04.03.2016 passed on IA No.II in
O.S. No.25327/2015 on the file of the IV Additional City
Civil and Sessions Judge, at Mayohall Unit, Bengaluru
allowing IA No.II filed U/O VII Rule 10 of CPC.
This appeal coming up for Hearing this day, the
court delivered the following:
ORDER
Appellant/plaintiff instituted a suit in O.S. No.25327/2015 on the file of 4th Additional City Civil and Sessions Judge at Mayohall Unit, Bengaluru (CCH-21) and suit was for injunction and accounts.
2. The appellant submitted that respondent/defendant had filed I.A. No.II under Order VII Rule 10 read with Section 151 of CPC for return of plaint to the plaintiff to file before the jurisdictional court. The Court below by its order dated 04.03.2016 allowed I.A. No.II filed by defendant and directed the office to return plaint to the plaintiff with a direction to present the same 3 before the proper jurisdictional District court of Madhya Pradesh State. Hence, appellant challenged the said order by filing this Miscellaneous First Appeal.
3. Learned counsel for the appellant submitted that the order passed by the learned trial judge is contrary to law and facts of the case and hence, the same is liable to be set aside. It is submitted that appellant entered into agreement with respondent in the year 2003 and it was extended upto 31.03.2013. After expiry date, the agreement between the parties ceased. The terms of the agreement is that upon expiry of the agreement, the respondent was to abstain from making any use of the trade mark, labels or advertisement material belonging to the appellant and also to remove and efface all reference to the appellant's name and trademark from the business premises, plant and equipment of the respondent. Learned counsel further submitted that after expiry of agreement, the respondent is fraudulently marketing the 4 appellant's products. One of the appellant's representatives purchased a bottle of beer bearing the brand name of appellants and obtained the bill. Hence, appellant filed a suit for perpetual injunction and accounts.
4. Learned counsel for the appellant submitted that as per Section 134 of Indian Trade Mark Act 1999 (hereinafter referred to as 'TM Act' for short). The plaintiff is permitted to file the suit at the place where he got registered. The agreement has taken place at Bengaluru and Registered Office is also situated at Bengaluru and when such being the position, the order passed by the learned trial judge in allowing the application filed by the defendant is illegal and in contravention to Section 134 of TM Act.
5. In support of his submission, learned counsel referred the judgment of Hon'ble Supreme Court reported in (2015) 10 SCC 161 in the case of Indian Performing 5 Rights Society Limited Vs. Sanjay Dalia and another and referred paragraph Nos.14, 18 and 52.
"14. The explanation to Section 20 CPC has been added to the effect that corporation shall be deemed to carry on business at its sole or principal office in India or in respect of any cause of action arising at any place where it has subordinate office at such place. Thus, "corporation" can be sued at a place having its sole or principal office and where cause of action wholly or in part, arises at a place where it has also a subordinate office at such place.
18. However, this right to institute suit at such a place has to be read subject to certain restrictions, such as in case the plaintiff is residing or carrying on business at a particular place/having its head office and at such place cause of action has also arisen wholly or in part, the plaintiff cannot ignore such a place under the guise that he is carrying on business at other far-flung places also. The very intendment of the insertion of provision in the Copyright Act and the Trade 6 Marks Act is the convenience of the plaintiff. The rule of convenience of the parties has been given a statutory expression in Section 20 CPC as well. The interpretation of provisions has to be such which prevents the mischief of causing inconvenience to the parties.
52. In our opinion, the provisions of Section 62 of the Copyright Act and Section 134 of the Trade Marks Act have to be interpreted in the purposive manner. No doubt about it that a suit can be filed by the plaintiff at a place where he is residing or carrying on business or personally works for gain. He need not travel to file a suit to a place where the defendant is residing or cause of action wholly or in part arises. However, if the plaintiff is residing or carrying on business, etc., at a place where the cause of action, wholly or in part, has also arisen, he has to file a suit at that place, as discussed above.
6. Per contra, learned counsel for the respondent on the other hand submitted that Madhya Pradesh has got 7 jurisdiction as per pleadings at para No.19 of the plaint, in which he has pleaded that defendant is located and carrying on business in the State of Madhya Pradesh. In view of the same, Madhya Pradesh had jurisdiction for filing of the suit.
7. Secondly, respondent has got registered office at Bengaluru and the cause of action arises in Rajpur District, Barwani, Madhya Pradesh. It is submitted that respondent having Head Office at New Delhi and working place at Bhopal and plaintiff also got office at Bhopal and cause of action arises at Barwani district of Madhya Pradesh, hence, appropriate jurisdiction for filing of the suit is Madhya Pradesh and not at the court of Bengaluru.
8. In respect of the submission, learned counsel also referred the judgment in the case of INDIAN PERFORMING RIGHTS SOCIETY LIMITED (supra) and referred paragraph Nos.14, 20 and 52.
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14. The explanation to Section 20 CPC has been added to the effect that corporation shall be deemed to carry on business at its sole or principal office in India or in respect of any cause of action arising at any place where it has subordinate office at such place. Thus, "corporation" can be sued at a place having its sole or principle office and where cause of action wholly or in part, arises at a place where it has also a subordinate office at such place.
20. In our opinion, in a case where the cause of action has arisen at ah place where the plaintiff is residing or where there are more than one such persons, any of them actually or voluntarily resides or carries on business or personally works for gain would oust the jurisdiction of other place where the cause of action has not arisen though at such a place, by virtue of having subordinate office, the plaintiff instituting a suit or other proceedings might be carrying on business or personally works for gain.
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52. In our opinion, the provisions of Section 62 of the Copyright Act and Section 134 of the Trade Marks Act have to be interpreted in the purposive manner. No doubt about it that a suit can be filed by the plaintiff at a place where he is residing or carrying on business or personally works for gain. He need not travel to file a suit to a place where the defendant is residing or cause of action wholly or in part arises. However, if the plaintiff is residing or carrying on business, etc., at a place where the cause of action, wholly or in part, has also arisen, he has to file a suit at that place, as discussed above.
9. Learned counsel also referred the judgment of the Delhi High Court in FAO (OS) 494/2015 & CM 17816/2016 in the case of Ultra Home Construction Pvt. Ltd., Vs. Purushottam Kumar Chaubey and others and referred para No.13.
13. Under these provisions four situations can be contemplated in the context of the plaintiff being a corporation (which 10 includes a company). First of all, is the case where the plaintiff has a sole office. In such a case, even if the cause of action has arisen at a different place, the plaintiff can institute a suit at the place of the sole office. Next is the case where the plaintiff has principal office at one place and a subordinate or branch office at another place and the cause of action has arisen at the place of the principal office. In such a case, the plaintiff may sue at the place of the principal office. In such a case, the plaintiff may sue at the place of the principal office but cannot sue at the place of the subordinate office. The third case is where the plaintiff has a principal office at one place and the cause of action has arisen at the place where its subordinate office is located. In this eventuality, the plaintiff would be deemed to carry on business at the place of his subordinate office and not at the place of the principal office. Thus, the plaintiff could sue at the place of the subordinate office and cannot sue (under the scheme of the provisions of Section 134(2) and 62(2) at the place of the principal office.
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10. Learned counsel submitted that "in case where the plaintiff has a principal office at one place and the cause of action has arisen at the place where its subordinate office is located, then the cause of action arisen in the subordinate office and not at the place of the principal office. Accordingly, the suit should have been filed in such a place where the subordinate office is located.
11. He also referred one more judgment reported in 2017 SCC Online Delhi 7682 and referred para No.18.
18. Reference to the word "place" in the judgments, in my opinion has to be construed as the "State". The judiciary of the State is one and the division of the territorial jurisdiction into districts is a matter of administrative convenience and exigency. All the State districts would come under the supervision of the High Court of the State and thus the words "place" has to be read as the "State" within which cause of action has arisen, even if cause of action 12 may have been arisen in any particular district of the State and not in the district or the city where the subordinate office of the plaintiff is situated.
12. Heard the learned counsel appearing for both the parties.
13. The fact that there is an agreement between the parties and also its date of expiration are not in dispute. It is the case of the appellant that despite of the expiration, the respondent carries on business which is contrary to agreement entered into between the parties. It is pleaded by the appellant that when he had been to Barwani District of Madhya Pradesh, he found that respondent was fraudulently marketing the appellant's products and one of the appellant's representative even purchased a bottle of Beer bearing the brand name of appellant and obtained bill for having purchased the same. The agreement between the parties has taken place at Bengaluru and also Head Office of the plaintiff situated 13 at Bengaluru. Under these circumstances, the Court committed an error by allowing the application for retuning the plaint. No doubt, agreement between the parties had taken place at Bengaluru and Head Office of the plaintiff is at Bengaluru but the cause of action has arisen at Bharwani District of Madhya Pradesh. When that is the case, as per Section 20 of CPC, plaintiff has got cause to file suit either at Bengaluru or where the cause of action has arisen.
14. Further, Section 20 of CPC explains that a corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place. As per this explanation the plaintiff could have filed a suit at the subordinate office or place where the cause of action has arisen or place where the defendant is carrying on business. 14
15. Under Section 134 of TM Act, enables the appellant to file a suit in District courts within the local limits of whose jurisdiction, at the time of institution of the suit or other proceedings and Section 134(2) of ITM Act contemplates that where there are more than one such persons any of them, actually and voluntarily resides or carries on business or personally works for gain." A suit that could be instituted at Bengaluru under Section 134 of ITM Act was discussed by the Hon'ble Supreme Court in the case of INDIAN PERFORMING RIGHTS SOCIETY LIMITED (supra) at paragraph Nos. 14 and 18 (extracted herein above). The explanation to Section 20 of the Code of Civil Procedure has been added to the effect that Corporation shall be deemed to carry on business at its sole or principal office in India or in respect of any cause of action arising at any place where it has subordinate office at such place. Thus, "corporation" can be sued at a place having its sole or principal office and where cause of action wholly or in part, arises at a place 15 where it has also a subordinate office at such place. As per the said judgment, one can be sued where the corporate office or sole office or head office or the subordinate office is carrying on its business. The four instances of filing the suit is explained by the Delhi High Court in the case of Ultra Home Construction Pvt., Ltd. Vs. Pursuhottam Kumar Chaubey and others and it has been discussed at Para No.13 which is extracted hereinabove.
16. In the decision made by Delhi High Court in 2017 SCC Online 7682 in para No.18 is held as under:
18. Reference to the word "place" in the judgments, in my opinion has to be construed as the "State". The judiciary of the State is one and the division of the territorial jurisdiction into districts is a matter of administrative convenience and exigency. All the State districts would come under the supervision of the High Court of the State and thus the words "place" has to be read as the "State" within 16 which cause of action has arisen, even if cause of action may have been arisen in any particular district of the State and not in the district or the city where the subordinate office of the plaintiff is situated.
17. In the light of the judgments referred above, case of the appellant is to be considered for the purpose of filing a suit, it is the State in which the appellant carries on business. It is to be taken into account, though the appellant states that he has got subordinate office at Bhopal at Madhya Pradesh that itself is sufficient for the purrpose of jurisdiction in Madhya Pradesh. In addition to that, at Para No.19 of the plaint he has specifically pleaded that "defendant is located and carrying on business in the State of Madhya Pradesh." This is sufficient to believe that appellant is carrying on business in the State of Madhya Pradesh though he has stated that he has got subordinate office at Bhopal that is sufficient for the purpose of jurisdiction. In the light of the judgment of Delhi High Court in the case of Radico 17 Khaitan Ltd., Vs. Nakshatra Distrilleries and Breweries Limited and Another, it has been held by Hon'ble Delhi High Court, the judiciary of the State is one and the division of the territorial jurisdiction into districts is the matter of administrative convenience. That means having office at Bhopal, the cause of action has taken place there and secondly the parties have entered into agreement at Bengaluru and the principal office is also situated at Bengaluru that is not a deciding factor under Section 134 of TM Act.
18. Section 134 of the TM Act has been discussed by the Hon'ble Supreme Court in the case of INDIAN PERFORMING RIGHTS SOCIETY LIMITED (supra). In paragraph No.52 of the judgment it is stated that in case, a suit can be filed by the plaintiff where he is residing or carrying on business or personally works for gain. He need not travel to file a suit to a place where the defendant is residing or cause of action wholly or in part arises. 18 However, if the plaintiff is residing or carrying on business, etc., at a place where the cause of action, wholly or in part, has also arisen, he has to file a suit at that place.
19. The Delhi High Court further in the case of Ultra Home Construction Pvt., Ltd., Vs. Purushottam Kumar Chaubey and others has given four instances. The 3rd one is very important which means "the 3rd case is where the plaintiff has a principal office at one place and the cause of action arisen at the place where its subordinate office is located. In this eventuality, the plaintiff would be deemed to carry on the business at the place of his subordinate office and not at the place of the principal office. This judgment is also applicable to the appellant.
20. It is open for the appellant to take up the ground the location of the head office for its jurisdiction of filing a suit is no more a deciding factor, it is the place 19 where the plaintiff carries on business and the cause of action has arisen is the place to file suit at that place.
21. The submission of the appellant that cause of action has arisen in Bharwani District, where the appellant having subordinate office at Bhopal, but principal office at Bengaluru is not a ground to file a suit in Bengaluru as per the judgment of the Delhi High Court in the case of Radico Khaitan Ltd. Vs. Nakshatra Distilleries and Brewries Ltd., and another.
22. In the light of the above, the order passed by the Trial Court in allowing the application filed by the defendant is just and proper.
Accordingly, appeal stands dismissed.
Sd/-
JUDGE MBM