TaxTMI 
TaxTMI 
2020 (11) TMI 1074
X X X X Extracts X X X X
X X X X Extracts X X X X
....o.410 of 2019. 3. By the impugned common order, the learned Single Judge has allowed Application Nos.4916, 4920 and 4923 of 2019 in C.S.No.410 of 2019 filed by the 1st to 3rd respondents (1st to 3rd defendants) and has revoked the leave granted to the appellant/plaintiff to sue them. Aggrieved by the same, these appeals have been filed by the plaintiff. 4. The above suit was filed by the appellant/plaintiff for the alleged violation of appellant's Patent No.282429 by the 1st to 3rd respondents/1st to 3rd defendants along with 4th respondent/4th defendant. 5. Earlier, an ex-parte order dated 03.07.2019 was passed in A.No.4512 of 2019 and a leave to sue the 1st to 3rd respondents/1st to 3rd defendants was granted under Clause 12 of the Letters Patent by a learned Single Judge of this Court. Pursuant to the said order, the above suit was numbered. In the above suit, the appellant/plaintiff had also filed O.A.No.647 of 2019 to injunct these respondents (i.e, the 1st to 3rd defendants) from infringing the aforesaid patent of the appellant herein. An ex-parte order was also passed on 05.07.2019. 6. Under these circumstances, the 1st to 3rd respondents/1st to 3rd defendants fi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uments with the aid of the cases cited, this Court is of the opinion that, the leave to sue granted has to be revoked for lack of jurisdiction. The part of cause of action stated in the plaint to bring the suit within the territorial jurisdiction is insignificant. The proof required to decide the lis does not depend on those facts relating to 4th defendant, who is carrying on business at Chennai which only constitute an infinitesimally small part of cause of action. As a result, the Application Nos.4916, 4920 & 4923 of 2019, to revoke leave are allowed. The plaintiff is at liberty to present the suit before the appropriate Court having jurisdiction. 11. Though lengthy arguments were advanced on behalf of the appellant/plaintiff and respondents/defendants on merits, it would suffice to state that the suit was filed against the respondents/defendants based on three trap orders placed on the 4th respondent/4th defendant by the appellant on 10.06.2019, 11.06.2019 and 12.06.2019. 12. In the plaint, it was alleged that the 4th respondent/4th defendant sold the infringing products manufactured and marketed by the 1st to 3rd respondents/1st to 3rd defendants within the jurisdiction o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....#39;ble Court has the jurisdiction to entertain and try the present suit under Section 20 of the Code of Civil Procedure, 1908 since the Defendants are distributing and selling its products in the city of Chennai within the jurisdiction of this Hon'ble Court. Also, the Defendant No.4 is the dealer and distributor based in the city of Chennai selling the Defendant No.1, Defendant No.2 & Defendant No.3's products on a commercial scale. Thus, the cause of action for institution of the present suit has arisen within the jurisdiction of this Hon'ble Court. Furthermore, the Plaintiff submits that a part of cause of action has arisen in Chennai as the Defendant No.1, Defendant No.2 & Defendant No.3 have their commercial operations in the city of Chennai within the jurisdiction of this Hon'ble Court. This Hon'ble Court therefore has jurisdiction to try and entertain the suit as the Defendants are selling the impugned product under the mark Nano Sulf-W.G. at Chennai. In the circumstances, this Hon'ble Court has jurisdiction to entertain and try the suit. However, as a matter of abundant caution, the plaintiff has applied for leave to sue the Defendants." (Emphasis....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... It was submitted on behalf of the 1st to 3rd respondents/1st to 3rd defendants that since two High Courts had earlier declined to grant any interim order to the appellant/plaintiff in those cases, the appellant/plaintiff resorted to forum shopping by filing C.S.No.410 of 2019 before the Original Side of this High Court. 20. According to the contesting respondents, i.e, 1st to 3rd respondents/1st to 3rd defendants, the 4th respondent/4th defendant was a stranger who had been set up as is evident from the fact that a similar purchase order placed on the 4th respondent/4th defendant and was used by the appellant/plaintiff in C.S.No 396 of 2019 and after obtaining ex-parte order, the appellant/plaintiff managed to settle the dispute by entering into a compromise by arm-twisting the defendants therein. 21. It was further submitted that pesticides was a regulated commodity under the provisions of the Essential Commodities Act, 1955 and its sale is governed by the provisions of the Fertiliser (Control) Order, 1985 as amended from time to time. It is submitted that, the 4th respondent/4th defendant, the alleged seller on whom the trapped orders were placed by the appellant/plaintiff....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 3rd respondents/1st to 3rd defendants in O.S.A.No.40 of 2020 and Mr.Madhan Babu for Mr.Madhan Babu in O.S.A.No.42 of 2020 and Mr.Ramesh Ganapathy, the learned counsel for the 4th respondent/4th defendant in all these O.S.As. 28. On behalf of the appellant/plaintiff, Mr.Arun C.Mohan placed reliance on the following decisions:- i. Wipro Limited and Others Vs. Oushadha Chandrika Ayurvedic India (P) Limited and Others, reported in 2008 SCC OnLine Mad 172. ii. Parle Products Private Limited Vs. Surya Food and Agro Limited, reported in2009 (40) PTC 638 (Mad). iii. Micro Labs Limited Vs. Eris Life Sciences Pvt. Ltd., reported in 2015 (64) PTC 9 (Mad). iv. Lalli Enterprises Vs. Dharam Chand and Sons, reported in 2003 (26) PTC 239 (DB). v. Delight Chemicals Private Limited and Others Vs. Ganga Yallappa, reported in 2012 SCC OnLine Mad 5434. vi. MCD Vs.Jegannath Ashok Kumar, reported in AIR 1987 SC 2316. vii. M.K.Shah Engineers Vs. State of M.P, reported in (1999) 2 SCC 594. viii. National Highways Authority Vs.Bumihiway DDB Limited, reported in (2006) 10 SCC 763. ix. MrutunjayPani and Another Vs. Narmada BalaSasmal ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s/defendants. We have also perused the plaint, the application filed for grant of leave and the respective applications filed for revoking leave which has culminated in the impugned common order of the learned Single Judge. 31. Within the city of Madras, both the City Civil Court presided by District Judges has additional courts which is also and the High Court have jurisdiction to entertain civil suits relating to violation of Patent. Under Clause12 of the Letters Patent, a plaintiff may file a suit in the High Court before the Original Side when the cause of action has wholly or partly arisen within its territorial limits, notwithstanding the fact that the defendant may not be carrying on business within its territorial limits. 32. Chartered High Courts governed by the Letters Patent have been given discretion to grant a leave to sue to the plaintiff/plaintiff under Clause 12 of the Letters Patent. Where either a part of cause of action arises within its jurisdiction or where the defendant(s) reside(s) outside its jurisdiction, the High Court exercises this discretion at the threshold even before the plaint is received for being numbered as a suit. 33. Under Article 226(....
X X X X Extracts X X X X
X X X X Extracts X X X X
....loys Ltd Vs. Union of India and Other AIR 2004 SC 2321 appears to be erroneous. The said decision was rendered in the context of Article 226 (2) of the Constitution of India and Clause (c) to Section 20 of the Code of Civil Procedure. 36. In "Kusum Ingots and Alloys Ltd Vs. Union of India and Other AIR 2004 SC 2321, the Court held that a writ petition, questioning the constitutionality of a parliamentary Act was not be maintainable in the High Court of Delhi merely because the seat of the Union of India was in Delhi. On forum convenience, the Hon'ble Supreme Court held as follows:- "We must, however, remind ourselves that even if a small part of cause of action arises within the territorial jurisdiction of the High Court, the same by itself may not be considered to be a determinative factor compelling the High Court to decide the matter on merit. In appropriate cases, the Court may refuse to exercise its discretionary jurisdiction by invoking the doctrine of forum conveniens. [See Bhagat Singh Bugga v. Dewan Jagbir Sawhney [AIR 1941 Cal 670 : ILR (1941) 1 Cal 490] , Madanlal Jalan v. Madanlal [(1945) 49 CWN 357 : AIR 1949 Cal 495] , Bharat Coking Coal Ltd. v. Jharia....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e contrary has been made by the patentee or the licensee, if it is shown- (a) that the plaintiff has applied in writing to the patentee or exclusive licensee for a written acknowledgements to the effect of the declaration claimed and has furnished him with full particulars in writing of the process or article in question; and (b) that the patentee or licensee has refused or neglected to give such an acknowledgement. (2) The costs of all parties in a suit for a declaration brought by virtue of this section shall, unless for special reasons the court thinks fit to order otherwise, be paid by the plaintiff. (3) The validity of a claim of the specification of a patent shall not be called in question in a suit for a declaration brought by virtue of this section, and accordingly the making or refusal of such a declaration in the case of a patent shall not be deemed to imply that the patent is valid or invalid. (4) A suit for a declaration may be brought by virtue of this section at any time [after the publication of grant of a patent], and references in this section to the patentee shall be construed accordingly. 41. Section 104A of the Pat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....was the view in "Parameswari Veluchamy and two others Vs. T.R.Jayaraman and seven others, 2002 (1) CTC 134". 46. The Court have also ruled that the issue of jurisdictional dispute requiring evidence must be decided along with the other issues in the suit only at the time of trial. 47. While revoking leave already granted, the Court is essentially reviewing its exparte decision granting leave to sue the defendants. Review is permissible only under Section 114 of the CPC read with Order 47 of CPC. However, the scope of review is very limited. It is perhaps for this reason, applications are filed under Clause 12 of Letter Patent and it has become the practice of the Court to entertain such application even though Clause 12 does not contemplate the revocation of leave. 48. In fact, the Calcutta High Court in Madanlal Jalan Vs. Madanlal, AIR 1949 Cal 495, which was cited by the learned counsel for the respondent, summarised the position of law based on the practice of other Charted High Courts including that of this High Court. In paragraph No.25, it has summarised as follows: "25. On a consideration of the legal principles established by the judicial decisions mention....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as to merely look the averments in the plaint pertaining to cause of action. The Court has to see whether indeed a cause of action has arisen in part or not within its jurisdiction. Evidence has to be assessed only after written statement is filed and in case the defendant(s) desire to demonstrate no cause of action arises within the jurisdiction of the Court, it has to be decided as a preliminary issue. This was the view of this Court in "Delight Chemicals Private Limited and Others Vs. Ganga Yallappa, 2012 SCC OnLine Mad 5434" which was authored by one of us (Hon'ble Mr.Justice R.Subbiah). In para 14, this Court has held as follows: 14. In view of the dictum laid down in the above judgment, I am of the opinion that the submission made by the learned counsel for the applicant with regard to the territorial jurisdiction cannot be entertained. Further, I am of the opinion that the invoice dated 24.5.2006 (available at page No. 40 of the second additional typed set of documents) filed on the side of the respondents would show that they are marketing their product within the jurisdiction of this Court. Though it was contended by the learned counsel for the applicant that the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at the pesticide is a restricted commodity and that the 4th respondent/4th defendant has colluded with the appellant/plaintiff, is not sufficient to conclude that the Court has no or has negligible jurisdiction to non-suit the appellant/plaintiff. 52. Therefore, whether the respondents/defendants were offloading their offending product within the jurisdiction of this Court or not is to be decided only at the time of Trial based on the evidence and not based on the averments in the application filed in support of the application for revoking leave. Therefore, a suit cannot be short circuited if the plaint otherwise discloses a part of cause of action had arisen within its jurisdiction. 53. Volume of Sale of offending products within the jurisdiction of this Court also cannot be decided in a summary manner based on the averments of the respondents/defendants as it is a matter of evidence. Facts further indicate that the 1st respondent/1st defendant undertook to furnish Bank Guarantee for Rs.50,00,000/- and had practically acquiesced into the jurisdiction of this Court, even though 1st respondent/1st defendant had already filed application to revoke the leave vide A.No.4916 of 2....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... this case with the maintainability of a composite suit both under the 1957 Act and the 1958 Act. In paragraph No.43, the Court set the contours of the dispute as under:- "The short question which arises for consideration is as to whether causes of action in terms of both the 1957 Act* and the 1958** Act although may be different, would a suit be maintainable in a court only because it has the jurisdiction to entertain the same in terms of Section 62(2) of the 1957 Act?" * The Copyright Act, 1957 ** The Trade and Merchandise Marks Act, 1958. 58. In paragraph No.44, the Court answered the question as follows: "A cause of action in a given case both under the 1957 Act as also under the 1958 Act may be overlapping to some extent. The territorial jurisdiction conferred upon the court in terms of the provisions of the Code of Civil Procedure indisputably shall apply to a suit or proceeding under the 1957 Act as also the 1958 Act. Sub-section (2) of Section 62 of the 1957 Act provides for an additional forum. Such additional forum was provided so as to enable the author to file a suit who may not otherwise be in a position to file a suit at differen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....abel, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof. It may be so that in a given case if such label is registered, a violation thereof may give rise to cause of action under the said Act; but only because in a given case, the activities on the part of the defendant may give rise to a cause of action both under the 1958 Act as also under the 1957 Act, the same would not mean, irrespective of the nature of violation, the plaintiff would be entitled to invoke the jurisdiction of the court in terms of sub-section (2) of Section 62 of the 1957 Act. 54. For the purpose of invoking the jurisdiction of a court only because two causes of action joined in terms of the provisions of the Code of Civil Procedure, the same would not mean that thereby the jurisdiction can be conferred upon a court which had jurisdiction to try only the suit in respect of one cause of action and not the other. Recourse to the additional forum, however, in a given case, may be taken if both the causes of action arise within the jurisdiction of the court which otherwise had the necessary jurisdiction to decide all the issues. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ne into the doctrine of Forum Conveniens. This case was decided by a Full Bench of the Delhi High Court and was presided over by Five Judges of the said Court. The Court held as follows: "The concept of forum conveniens fundamentally means that it is obligatory on the part of the Court to see the convenience of all the parties before it. The convenience in its ambit and sweep would include the existence of more appropriate forum, expenses involved, the law relating to the lis, verification of certain facts which are necessitous for just adjudication of the controversy and such other ancillary aspects. The balance of convenience is also to be taken note of. The principle of forum conveniens in its ambit and sweep encapsulates the concept that a cause of action arising within the jurisdiction of the Court would not itself constitute Court to entertain the matter. While exercising jurisdiction under Articles 226 and 227 of the Constitution of India, the Court cannot be totally oblivious of the concept of forum conveniens." 63. The Full Bench of this Court referred to the above passage in M/s.Duro Flex Pvt. Limited Vs. M/s.Duroflex Sittings System, in 2014 (5) L.W. 673 and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... operative after the institution of the suit are to be applied only in case of abuse does not appear to me to be any reason why the Court should ignore or limit the additional safeguard provided under cl. 12. If I am right in thinking as I do that the discretion given under cl. 12 is in the nature of an initial safeguard I must hold that this discretion must be based on circumstances then available. It is not limited to a mere consideration of the extent of the part of the cause of action that arose within jurisdiction and questions of convenience, so far as they are apparent from the plaint, the only material which is, at this stage, available to the Court, must be taken into consideration. If this is so when leave is granted ex parte, should the position be different when the Defendant, after service of the Writ of Summons, makes a substantive application complaining of inconvenience and hardship and prays for revocation of the leave? If our practice had been to give leave under cl. 12 on an application by the Plaintiff on notice to the Defendant, as it is or was in Madras, the Defendant would have had a chance, before the suit was received and admitted, to make out a case of inc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s in Indian companies on behalf of the shareholders from Dubai. The Division Bench of this Court felt that the Courts in Dubai were better equipped to deal with the dispute. The Hon'ble Supreme Court upheld the said decision of the Division Bench of this Court. 66. Therefore, for granting leave, the Court should consider the grant of leave from the angle of Forum non conveniens/Forum conveniens. They are the relevant factor for the Court while either granting or revoking leave under Clause 12 of the Letters Patent. What exactly is the purport of Forum non conveniens/Forum conveniens and how it has been decided and considered have not been clearly spelled out by the domestic Courts in India. 67. The object of the doctrine of Forum Non Conveniens is "to find that forum which is the more suitable for trying the suit to meet the ends of justice, and is preferable because pursuit of the litigation in that forum is more likely to secure those ends. The onus lies on the defendant to show that there exists another forum which is more appropriate to try the action. The doctrine of Forum Non Conveniens was recognized in English law in the case of "The Atlantic Star Vs. Bona Specs, (197....
X X X X Extracts X X X X
X X X X Extracts X X X X
....has to be held that the plaintiff has commenced proceedings in a forum which is convenient. 73. In Spiliada Maritime Corporation Vs. Cansulex Ltd., (1987) 1 AC 460 (which also popularly referred to as "The Spiliada case"), Lord Goff of Chieveley delivering the principal judgment of the House of Lords said ".... it can now be said that English law has adopted the Scottish principle of forum non conveniens ....". 74. Lord Goff of Chieveley in "The Spiliada", observed that "the burden resting on the defendant is not just to show that [the jurisdiction in which action has been commenced by the plaintiff] is not the natural or appropriate forum for the trial, but to establish that there is another available forum which is clearly or distinctly more appropriate than the [forum in which the plaintiff commenced proceedings]". 75. In De Dampierre Vs. Dampierre, [1988] A.C.92, the English Courts have effectively checked the evil, of "forum-shopping". It held that the proper approach is to take into account the content of the foreign law which would be applied in the more appropriate forum and measure it against the acceptable standards of civilised countries and thereby come to a co....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (c) the burden is on the defendant to show both that the jurisdiction wherein the action has been commenced is not the natural or appropriate forum, and also that there is another available forum which is clearly or distinctly more appropriate than the forum in which action had been commenced; (d) the court will look to see what factors there are which point to the direction of another forum, as being the forum with which the action has the most real and substantial connection, for example factors affecting convenience or expense (such as the availability of witnesses), the law governing the transaction, and the places where the parties reside or carry on business; (e) if at that stage the court concludes that there is no other available forum which is clearly more appropriate, the court will ordinarily refuse a stay; (f) if there is another forum which prima facie is more appropriate the court will ordinarily grant a stay unless there are circumstances by reason of which justice requires that a stay should not be granted, and in this inquiry the court will consider all the circumstances of the case. But the mere fact that the plaintiff has a legiti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iction of this court is an altogether different matter. It is matter concerned with appreciation of evidence during the course of trail. It cannot be decided in a summary manner based on the averment of the respondents/ defendants in the affidavit filed in support of the applications for rejection of plaint and/or for revocation of the leave. 82. Leave granted by the Court can be revoked by applying doctrine of Forum Conveniens/Forum non Conveniens. In our view, courts have to be cautious of clever drafting and quell vexatious suits and proceedings at the threshold if a plaintiff is either resorting to forum shopping or where leave can be rejected at the threshold by applying the doctrine. We would like to underscore that while granting leave, it is incumbent on the court to examine Forum non Conveniens/Forum Conveniens whether exparte or after notice to the defendants. In this case, we are of the view that this Court has jurisdiction to decide the lis between the parties in an action for infrigement of pattent. 83. The 1st to 3rd respondents/1st to 3rd defendants have not shown how other Courts are more appropriate to try the suit. Lengthy common counter filed by each of the....