Madhya Pradesh High Court: In a landmark case revolving around the interpretation of Sections 21 and 68 of the Geographical Indications of Goods (Registration and Protection) Act, 1999 (GI Act) and related rules, a division bench comprising of Sushrut Arvind Dharmadhikari* and Hirdesh, JJ., held that the impugned order, which directed the impleadment of necessary parties in the context of Order 7 Rule 11, is deemed untenable based on the consistent legal position that such an inquiry is impermissible at this stage and therefore, liable to be set aside. The Court rejected the contention that the plaint fails to disclose a cause of action and set aside the impugned order, directing the Trial Court to proceed in accordance with the law.
The Court also clarified the independent rights of the Registered Proprietor to sue for infringement under the GI Act, and impleadment of the Authorised User is not mandatory for proceeding in a suit. The court’s interpretation aligns with the protection of registered GIs and ensures the Registered Proprietor’s equal standing in enforcing these rights.
Factual Matrix
In the instant matter, the petitioner, a company incorporated in the United Kingdom, claims to be the “Registered Proprietor” of the Scotch Whisky GI, challenged the order dated 28-10-2021, issued by the Commercial Court in District Indore, partially allowing the application under Order VII Rule 11 CPC, asserting that the suit for the infringement of the Scotch Whisky Geographical Indication (GI) is maintainable only after impleadment of the “Authorised User” as per Section 21 of the GI Act.
The original suit was filed seeking a restraint order against defendants, including J.K. Enterprises, for manufacturing, selling, or marketing whisky not meeting the standards of Scotch Whisky under the mark ‘London Pride.’ The Commercial Court directed impleadment of the Authorised User for the suit to be maintainable.
Moot Point
-
Whether in an Order 7 Rule 11 application, the Civil Court can consider non-joinder of a party as fatal to the suit or direct impleadment?
-
Whether, under Section 21(1) of the GI Act, the Registered Proprietor can bring the suit for infringement independently or must join the Authorised User for maintainability?
-
Whether the complaint discloses a cause of action under Order 7 Rule 11 CPC?
Parties’ Contentions
The Petitioner, an association of 56 entities related to Scotch Whisky trade, argued that as the original Registered Proprietor, the petitioner has an independent right to maintain the suit for infringement without being compelled to implead the Authorised User. It was argued that Registered Proprietor and Authorised User are distinct entities under the GI Act, and the Registered Proprietor has the right to sue independently. It was asserted that the trial court erred in directing impleadment of Authorised User at the Order 7 Rule 11 stage when it was premature and not specified as a ground under Order 7 Rule 11 CPC.
On the other hand, the respondents contended that only the Authorised User can institute a suit for infringement, and the Registered Proprietor must join the Authorised User to have the right to sue. It was contended that the word ‘and’ in Section 21(1) should be read conjunctively, necessitating the impleadment of both Authorised User and Registered Proprietor in a suit for infringement. The respondents supported the trial court’s direction to join Authorised User as a necessary party, stating it is within the powers of the Civil Court under Order 7 Rule 11 CPC.
Court’s Assessment
The Court initially considered remanding the matter to the Trial Court but decided to hear all issues on merits due to the prolonged pendency of the petition and since, both parties request a decision on the interpretation of Section 21 of GI Act. The Court emphasized the importance of interpreting Section 21 and its lack of precedent in the country after the enactment of the GI Act.
Issue 1: Is impleadment of necessary/proper party by trial Court for continuation of suit under Order 7 Rule 11 CPC?
The Court observed that Order 7 Rule 11 CPC does not envision joinder/non-joinder as grounds for the immediate rejection or return of the plaint. Inquiry into such matters can occur during the trial, particularly during the framing of issues. However, during an application under Order 7 Rule 11 CPC, such inquiries are impermissible.
The Court, while referring to various precedents, opined that the impact of non-joinder of necessary parties on the overall maintainability of the suit cannot be examined under Order 7 Rule 11 CPC. The Court held that Order 7 Rule 11 CPC, does not empower the trial court to delve into matters of joinder/non-joinder of parties and that such considerations should be addressed during the trial proceedings.
Issue 2: Can Registered Proprietor bring the suit for infringement independently or must join the Authorised User for maintainability under Section 21?
Referring to National Legal Services Authority v. Union of India, (2014) 5 SCC 438 and Githa Hariharan v. RBI, (1999) 2 SCC 228, the Court emphasised interpreting laws in harmony with international conventions. The Court analysed the provisions of the GI Act and TRIPS Agreement to establish the legislative intent and commitments made by India at the international level and concluded that the Registered Proprietor is the originator of the GI tag, and both Registered Proprietor and Authorised User have equal rights flowing from the registration.
The Court rejected the respondent’s argument that Registered Proprietor has no existence without Authorised User and clarified that Registered Proprietor can independently claim protection of a GI. The Court interpreted the term “and” in Section 21(1)(a) as “or,” and emphasised that it protects registered GIs, and both Registered Proprietor and Authorised User are entitled to the rights flowing from registration.
The Court held that the Registered Proprietor has an independent legal status and entitlement to the GI tag under the GI Act and impleadment of the Authorised User along with the Registered Proprietor is not mandatory for proceeding in a suit under Sections 21 and 68 of GI Act.
Issue 3: Whether the plaint lacks a cause of action and is subject to rejection under Order 7 Rule 11(a) CPC?
The respondent contended that the plaint failed to disclose a cause of action, and ideally, this matter should have been remanded for further consideration. However, due to a joint request from both parties during the hearing, the Court decided to address this issue. The Court observed that Order 7 Rule 11(a) CPC allows for the rejection of a plaint if it lacks cause of action and this remedy serves as an independent mechanism to terminate the suit at the threshold.
Referring to Dahiben v. Arvind Bhai Kalyaniji Dhanusali, (2020) 7 SCC 366, the Court elucidated the nature of the inquiry under Order 7, Rule 11(a). The documents filed with the plaint, when forming its basis, are integral to the consideration. The court must determine if the averments in the plaint, in conjunction with the documents, would result in a decree. The court should not consider written statements or applications at this stage. The test is whether, assuming the averments in the plaint to be correct, a decree would be passed.
The Court emphasised that the plaint should be construed as it stands, without selective reading and if the prima facie allegations show a cause of action, the court should not inquire into their factual accuracy at this stage.
After examining the averments in the plaint, the Court found it difficult to infer a lack of cause of action. The Court stated that the petitioner, being a Registered Proprietor, has the right to institute a suit for infringement under the GI Act and the detailed assertions about Scotch Whiskey, its origin, special characteristics, and the potential harm caused by the respondent, establishes a prima facie cause of action.
Court’s Decision
The Court rejected the contention that the plaint fails to disclose a cause of action and set aside the impugned order, directing the trial court to proceed in accordance with the law. The respondent retains the right to raise contentions during the trial, and the observations made in this order do not affect the adjudication of various issues during the trial.
[Scotch Whisky Assn. v. J.K. Enterprises, 2023 SCC OnLine MP 5352, order dated 18-12-2023]
*Judgment by Justice Sushrut Arvind Dharmadhikari
Advocates who appeared in this case :
Shri Amit Agrawal, Senior Advocate with Shri Anuj Bhargava, Counsel for the Petitioner
Shri Ayush Jain, Counsel for the Respondents
