2008 (2) TMI 857 - HC - Companies Law

Madras HC Affirms Jurisdiction for Business-Based Suit Filing, Revives Injunction, Remits Case for Further Review.

The HC of Madras held that it had jurisdiction to entertain the suits under Section 62(2) of the Copyright Act and Section 134(2) of the Trade Marks Act, ... Original Jurisdiction of High Court - under Clause 12 of the Letters Patent - Permanent injunction - infringement of trade mark or copyright covered by Section 134(2) of the Trade Marks Act or Section 62(2) of the Copyright Act - cause of action or no part of the cause of action arose within the jurisdiction of this Court - head office is at Bangalore and Branch Office is located in Chennai alone - HELD THAT:- The jurisdiction based on the cause of action and the jurisdiction based on the person of the defendant are two independent categories and they have no relation with each other. A plain reading of Clause-12 of the Letters Patent would show that it is only in cases where a part of the cause of action has arisen within the jurisdiction of this Court that Clause-12 requires a leave to be obtained. The present case is not covered by Clause-12 of the Letters Patent, but a case covered by Section 62(2) of the Copyright Act and Section 134(2) of the Trade Marks Act. Therefore, the suit is maintainable in this Court. In the present case, when an objection to jurisdiction was raised by way of demurrer and not at the trial, the objection must proceed on the basis that the facts as pleaded by the initiator of the impugned proceedings are true. The submission in order to succeed must show that granted those facts the Court does not have jurisdiction as a matter of law. In rejecting a plaint on the ground of jurisdiction, the learned single Judge ought to have taken allegations contained in the plaint to be correct. However, the learned single Judge examined the counter affidavit filed by the defendants in which it was claimed that the first plaintiff did not carry on business within the jurisdiction of the Madras High Court. In our opinion, the learned single Judge is clearly in error in going beyond the statements contained in the plaint. It has been repeatedly held by the Supreme Court in Exphar SA vs. Eupharma Laboratories Ltd. [2004 (2) TMI 652 - SUPREME COURT] that for the purpose of deciding an application under clauses (a) and (b) of Order VII Rule 11 of the C.P.C, the averments made in the plaint are germane; the pleas taken by the defendant in the written statement would be wholly irrelevant at that stage. Therefore, the appeals are allowed. The suits are restored to file. Ad interim injunction granted stands revived. The matter is remitted back to the learned single Judge to consider the applications for interim injunction on merits. Consequently, respective appeals are closed. Issues Involved:1. Jurisdiction of the High Court of Madras under Section 134 of the Trade Marks Act, 1999, and Section 62(2) of the Copyright Act, 1957.2. Requirement of prior leave to sue under Clause 12 of the Letters Patent.3. Interpretation of 'carries on business' under the relevant statutes.Detailed Analysis:1. Jurisdiction of the High Court of Madras:The core issue was whether the High Court of Madras had jurisdiction to entertain the suits filed by the plaintiffs under Section 134 of the Trade Marks Act, 1999, and Section 62(2) of the Copyright Act, 1957. The learned single Judge initially rejected the suits on the grounds that no part of the cause of action arose within the jurisdiction of the Court, the defendants resided outside the jurisdiction, and prior leave to sue under Clause 12 of the Letters Patent was not obtained. The plaintiffs contended that the suits were maintainable as they carried on business within the jurisdiction of the Court, specifically at their branch office in Chennai.2. Requirement of Prior Leave to Sue under Clause 12 of the Letters Patent:The plaintiffs argued that Section 134 of the Trade Marks Act and Section 62 of the Copyright Act, which contain non-obstante clauses, supersede the requirement of obtaining prior leave under Clause 12 of the Letters Patent. The defendants countered that the principal place of business was in Bangalore, and the presence of a branch office in Chennai was insufficient to establish jurisdiction without prior leave under Clause 12.3. Interpretation of 'Carries on Business':The plaintiffs asserted that the expression 'carries on business' includes not only the principal place of business but also any branch offices. The defendants argued that only the principal place of business should be considered for jurisdictional purposes. The Court examined the provisions of Section 62 of the Copyright Act and Section 134 of the Trade Marks Act, noting that these sections provide an additional ground for jurisdiction beyond the general rule in Section 20 of the Code of Civil Procedure (CPC). The Court emphasized that the term 'carries on business' should be interpreted broadly to include branch offices, not just the principal place of business.Judgment:The Court concluded that the High Court of Madras had jurisdiction to entertain the suits. It held that Section 62(2) of the Copyright Act and Section 134(2) of the Trade Marks Act provide an additional ground for jurisdiction, allowing the plaintiffs to file suits in the district where they carry on business, including branch offices. The Court found that the learned single Judge erred in relying on the defendants' counter-affidavit and not solely on the plaint's averments. The Court also clarified that the requirement of obtaining prior leave under Clause 12 of the Letters Patent does not apply when the plaintiff carries on business within the jurisdiction of the Court, as provided by the relevant sections of the Trade Marks Act and Copyright Act.Outcome:The appeals were allowed, the suits were restored, and the ad interim injunction granted on 4.1.2007 was revived. The matter was remitted back to the learned single Judge to consider the applications for interim injunction on merits.