Delhi High Court: Sanjeev Narula, J., while addressing the present matter held that 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 and in case the same brings out the ingredients for establishing the jurisdiction of the court, that would be sufficient for the court to assume jurisdiction.

Instant suit was filed to seek a permanent injunction restraining infringement of trademark and passing off; infringement of copyright, trade dress, breach of confidentiality; misappropriation of trade secrets, etc.

Further, it was noted that defendant 1 was based in Ahmedabad, defendant 2 in Chandigarh and defendants 3 and 4 in Punjab, whereas the plaintiff was based in Chandigarh.

Defendant 1 sought the return of the plaint on the following grounds:

  • Defendant 1 has its registered office in Ahmedabad and has been operating its business from the said jurisdiction. The plaintiffs have also admitted that they have been operating in Ahmedabad and other cities of Gujarat.
  • 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. Plaintiffs deliberately chose to file the present proceedings before the Court to cause hardship and inconvenience to defendant 1, even though proper jurisdiction to file the present suit would have been Ahmedabad, Gujarat.
  • Address reflected on the trademark applications/registrations on which the plaintiffs have based their claims and grounds are also of Chandigarh.
  • Further, it was stated that it is settled that jurisdiction can only be invoked on the basis of online presence if the allegedly infringing article can be purchased online within the said jurisdiction.

Plaintiff submitted that since the defendants have been contacting the parties at Delhi for establishing their franchisees, including plaintiffs’ Master Franchisee in Delhi for converting them to the Defendants Master Franchiseee. Therefore, the cause of action arose in Delhi. Further, he added that in case the defendants do not intend to expand their operation in Delhi, they should make a statement to that effect.

Analysis, Law and Decision

Bench held that the question of territorial jurisdiction in matters relating to infringement of trademarks is well-settled.

Stating that Section 134(2) of the Trade Marks Act, 1999 and also Section 62(2) of the Copyrights Act, 1957 are in addition to Section 20 of the CPC, Court opined that, the plaintiff was entitled to file the suit for infringement of trademark where the cause of action arose under Section 20(c) of CPC.

High Court found that the averments made in the plaint disclose a cause of action in Delhi.

Further, it was stated that the plaintiffs contended that the defendant were openly and publicly expressing their intention to expand all across the country and were entertaining franchisee queries within the territory of Delhi.

Bench found the contention of defendants that mere alleged apprehension in the pleadings, unsubstantiated by documentary evidence, can never be a basis to seek jurisdiction – incorrect.

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.

In view of the above, the occurrence of the cause of action, jurisdiction, which was the determinative factor under Section 20 of the CPC, clearly vests in this Court and defendant would have to prove their contentions during the trial.

Matter to be listed for arguments on remaining applications on 21-9-2021. [Copenhagen Hospitality and Retail v. A.R. Impex,    2021 SCC OnLine Del 3899, decided on 29-7-2021]

Advocates before the Court:

For the Plaintiffs:

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.

For the Defendants:

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.

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