2022 (10) TMI 1233 - HC - Indian Laws

Delhi HC allows suit to proceed after finding territorial jurisdiction through defendant's online business activities and advertisements

Delhi HC set aside trial court's order directing return of plaint for lack of territorial jurisdiction. Court held that territorial jurisdiction ... Territorial Jurisdiction - respondent's application under Order VII Rule 11 of the Code of Civil Procedure, 1908 was allowed and the plaint filed by the appellant was directed to be returned - seeking dismissal of the suit under Order VII Rule 11(d) of the CPC on the ground that the appellant had instituted the said suit without complying with the mandatory provisions of pre-institution mediation under Section 12A of the Commercial Courts Act, 2015. Whether the impugned order directing return of the plaint for want of territorial jurisdiction is erroneous? - HELD THAT:- It is trite law that an objection regarding territorial jurisdiction of a court, raised by way of an application under Order VII Rule 10 of the CPC, is to be decided on a demurrer, that is, by accepting all statements made in the plaint to be true. Thus, the examination for the purpose of an application under Order VII Rule 10 of the CPC is limited to the averments made in the plaint and the documents filed by the plaintiff. In D. RAMACHANDRAN VERSUS R.V. JANAKIRAMAN & ORS. [1999 (3) TMI 656 - SUPREME COURT], the Supreme Court observed It is well settled that in all cases of preliminary objection, the test is to see whether any of the reliefs prayed for could be granted to the appellant if the averments made in the petition are proved to be true. For the purpose of considering a preliminary objection, the averments in the petition should be assumed to be true and the court has to find out whether those averments disclose a cause of action or a triable issue as such. The court cannot probe into the facts on the basis of the controversy raised in the counter. The appellant claims that the respondent is clandestinely selling its infringing goods within the territorial jurisdiction of the Court. The appellant also alleges that defendant has been advertising, soliciting and selling its goods within the jurisdiction of the Court through interactive websites. In addition, it is claimed that the defendant is carrying on business activity in Delhi by advertising its products in a trade magazine, which is circulated within the jurisdiction of the Court. In addition, the appellant claims that the respondent is also carrying on its business within the territorial jurisdiction of this Court - Plainly, if the aforesaid averments are accepted as correct, the respondent's application under Order VII Rule 10 of the CPC is liable to be rejected. In a given case, it may be apparent that a plaintiff has no real prospect in succeeding in his claim. In such circumstances, it would be open for a Commercial Court to consider rendering a summary decision under Order XIII-A of the CPC, if an application seeking such judgment is filed. The court is also required to evaluate the averments made in the plaint while considering grant of interim relief in an application under Order XXXIX Rules 1 and 2 of the CPC. However, for the purpose of an application under Order VII Rule 10 of the CPC, the Court must proceed on the basis that the averments made in the plaint are correct - the impugned order, to the extent it allows the respondent's application under Order VII Rule 10 of the CPC and directs return of the plaint, cannot be sustained and is, accordingly, set aside. Whether the plaint is liable to be rejected on account of failure on part of the appellant to exhaust the remedy of pre-institution mediation as required under Section 12A of the Commercial Courts Act, 2015? - HELD THAT:- The question whether the provisions of Section 12A of the Commercial Courts Act, 2015 are mandatory, is no longer res integra. In Patil Automation Private Limited and Ors. v. Rakheja Engineers Private Limited [2022 (8) TMI 1494 - SUPREME COURT], the Supreme Court has authoritatively held that the provisions of Section 12A of the Commercial Courts Act, 2015 are mandatory and failure to comply with the same would entail rejection of the plaint. However, in the present case, the question whether the provisions under Section 12A of the Commercial Courts Act, 2015 are mandatory or not is not in issue; the point for consideration is whether the provisions of Section 12A of the Commercial Courts Act, 2015 are applicable to the suit instituted by the appellant. This Court is of the view that the question whether a suit involves any urgent interim relief is to be determined solely on the basis of the pleadings and the relief(s) sought by the plaintiff. If a plaintiff seeks any urgent interim relief, the suit cannot be dismissed on the ground that the plaintiff has not exhausted the pre-institution remedy of mediation as contemplated under Section 12A(1) of the Commercial Courts Act, 2015. This Court is unable to accept that it is necessary for a court to read in any procedure in Section 12A of the Commercial Courts Act, 2015, which makes it mandatory for a plaintiff to file an application to seek leave of the court for filing a suit without exhausting the remedy of pre-institution mediation, irrespective of whether the plaintiff seeks urgent interim relief or not. In Patil Automation Private Limited and Ors. v. Rakheja Engineers Private Limited, the Supreme Court had considered the import of Section 12A of the Commercial Courts Act, 2015 in the context of the suits, which did not contemplate any urgent interim relief - It is apparent from the above that the Supreme Court was also of the view that compulsory mediation is foisted only on a plaintiff who does not contemplate urgent interim relief. It is implicit that it is only the plaintiff, that can contemplate the relief that it seeks in a suit. And, pre-institution mediation is necessary only in cases where a plaintiff does not contemplate urgent interim relief. In the present case, indisputably, the plaintiff has sought urgent interim reliefs. Thus, it is not necessary for him to have exhausted the remedy of pre-institution mediation as contemplated under Section 12A(1) of the Commercial Courts Act, 2015. The cross-objections are unmerited and, accordingly, dismissed. Issues Involved:1. Return of plaint for lack of territorial jurisdiction under Order VII Rule 10 of the CPC.2. Rejection of plaint for non-compliance with Section 12A of the Commercial Courts Act, 2015.Issue-wise Detailed Analysis:Return of Plaint under Order VII Rule 10 CPC:1. Background: The appellant filed a suit seeking a decree of permanent injunction to restrain infringement of its copyright and trademark. The appellant claimed ownership of the trademarks '1192' and 'JAGMAG 1192' and alleged that the respondent was selling products under a deceptively similar trademark 'SIGNAL 1191'.2. Territorial Jurisdiction: The appellant argued that the respondent was clandestinely selling infringing products within the territorial jurisdiction of the court and advertising through interactive websites and trade magazines circulated within the court's jurisdiction. The Commercial Court, however, found no prima facie evidence to support these claims and directed the return of the plaint for lack of territorial jurisdiction.3. Legal Precedents: The court cited several Supreme Court rulings, emphasizing that objections to territorial jurisdiction must be decided on a demurrer basis, accepting all statements in the plaint as true. Notable cases included D. Ramachandran v. R.V. Janakiraman and Liverpool & London S.P. & I Association Ltd. v. M.V. Sea Success I & Anr., which established that the court must assume the averments in the plaint to be true when considering such objections.4. Court's Analysis: The court noted that the appellant's averments, if accepted as correct, would establish the court's jurisdiction. The Commercial Court erred by evaluating the merits of the appellant's claims rather than accepting the averments as true for the purpose of deciding the application under Order VII Rule 10 CPC.5. Conclusion: The impugned order directing the return of the plaint was set aside, as the court must proceed on the basis that the averments in the plaint are correct.Rejection of Plaint under Section 12A of the Commercial Courts Act, 2015:1. Background: The respondent contended that the plaint should be rejected for non-compliance with the mandatory pre-institution mediation requirement under Section 12A of the Commercial Courts Act, 2015. The Commercial Court rejected this contention, noting that the appellant sought urgent interim relief.2. Legal Framework: Section 12A(1) of the Commercial Courts Act, 2015 mandates pre-institution mediation for suits not contemplating urgent interim relief. The Supreme Court in Patil Automation Private Limited v. Rakheja Engineers Private Limited confirmed the mandatory nature of this provision but clarified that it does not apply to suits involving urgent interim relief.3. Court's Analysis: The court held that there is no requirement under Section 12A for a plaintiff to file an application seeking exemption from pre-institution mediation if the suit involves urgent interim relief. The determination of whether a suit involves urgent interim relief is based solely on the plaintiff's pleadings and relief sought.4. Conclusion: The court rejected the respondent's contention that an application for exemption is necessary and affirmed that the appellant was not required to undergo pre-institution mediation as the suit involved urgent interim reliefs. The cross-objections were dismissed as unmerited.Final Disposition: The appeal was allowed, setting aside the impugned order directing the return of the plaint for lack of territorial jurisdiction. The cross-objections regarding non-compliance with Section 12A of the Commercial Courts Act, 2015 were dismissed. The parties were left to bear their own costs.