Copyright infringement through online disclosure can create territorial jurisdiction, but insolvency-linked rights disputes may still bar civil suit

Online dissemination of copyrighted drawings through a procurement portal can found territorial jurisdiction where the alleged infringing acts of storage, communication to the public, and availability for download occur in the forum. However, where the copyright and use-rights dispute is inseparably linked to contractual entitlements traced through an insolvency resolution process and resolution plan, the controversy falls within the insolvency forum and civil court jurisdiction is barred. The suit was also vulnerable for non-impleadment of necessary parties, because the original contracting entity and the special purpose vehicle were essential to determine whether rights were lawfully transferred, modified, or extinguished.

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Issues: (i) Whether the Delhi High Court had territorial jurisdiction in a copyright infringement action based on uploading and dissemination of drawings through an online procurement portal. (ii) Whether the civil suit was barred because the dispute arose out of, or was in relation to, the insolvency resolution process and resolution plan concerning the corporate debtor. (iii) Whether the suit was not maintainable for want of necessary parties, namely the original contracting entity and the special purpose vehicle through which the project rights were traced.

Issue (i): Whether the Delhi High Court had territorial jurisdiction in a copyright infringement action based on uploading and dissemination of drawings through an online procurement portal.

Analysis: The pleadings asserted that the drawings were stored electronically, uploaded on the public procurement portal, and made available for viewing and download in Delhi. In a copyright claim, the cause of action was held to arise where the infringing acts of storage, communication to the public, and issuance of copies occur. Mere accessibility of a website is not enough in all cases, but here the alleged infringing dissemination of copyrighted material into the public domain, including in Delhi, constituted part of the cause of action. The defendant's reliance on the tender being accessible online was distinguished because the grievance was not confined to tender publication but to copyright infringement by online disclosure of the drawings.

Conclusion: The objection to territorial jurisdiction was rejected and the Court held that it had territorial jurisdiction.

Issue (ii): Whether the civil suit was barred because the dispute arose out of, or was in relation to, the insolvency resolution process and resolution plan concerning the corporate debtor.

Analysis: The contract documents showed that the copyright in drawings remained with the contractor, while the client was permitted limited use for the contract and operation and maintenance. The termination clause, the insolvency-related provisions, and the resolution plan were examined together. The controversy was found to be inseparably connected with the rights, entitlements, benefits, and contractual privileges said to have passed through the insolvency resolution process. Sections conferring wide jurisdiction on the National Company Law Tribunal, together with the express bar on civil court jurisdiction and the overriding effect of the Insolvency and Bankruptcy Code, were held to apply. The Court also noted that the issues concerning transfer of use-rights and the effect of the resolution plan could not be effectively adjudicated in the absence of the entities through which those rights allegedly travelled.

Conclusion: The dispute was held to fall within the jurisdiction of the National Company Law Tribunal and the civil suit was barred.

Issue (iii): Whether the suit was not maintainable for want of necessary parties, namely the original contracting entity and the special purpose vehicle through which the project rights were traced.

Analysis: The plaintiff's own pleadings traced the project and the alleged transfer of rights through the original client and its special purpose vehicle, yet those entities were not impleaded. In their absence, the Court could not determine whether any copyright-use rights or contractual permissions had been lawfully transferred, modified, or extinguished. This omission reinforced the conclusion that the controversy could not be properly decided in the suit as framed.

Conclusion: The suit was held to be not maintainable for non-impleadment of necessary parties.

Final Conclusion: The suit could not proceed before the civil court because the controversy was bound up with insolvency-related contractual rights and could only be agitated in the insolvency forum, even though territorial jurisdiction in Delhi was otherwise made out.

Ratio Decidendi: Where a copyright dispute is intertwined with rights claimed under an insolvency resolution plan and with contractual entitlements of a corporate debtor, the civil court's jurisdiction is barred and the dispute must be pursued before the insolvency tribunal; online dissemination of copyrighted material can nevertheless furnish territorial jurisdiction where the infringing acts occur within the forum.

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