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Hc Rules That A Suit May Be Filed Not Only At The Place Of Its Registered Office But Also At The Place Of A Company’s Principal Business, Ushering Strategic Maneuvering In Trademark Infringement Litigations

Ifrah Murtaza ,
  02 April 2024       Share Bookmark

Court :
Hon’ble High Court of Bombay
Brief :

Citation :
Interim Application (L) No. 2548 of 2024

Case title:

Shree Sai Plast Pvt Ltd v. Prince Pipes and Fittings Ltd

Date of Order:

14th March 2024

Bench:

Hon’ble Mrs. Justice Bharati Dangre 

Parties:

Plaintiff: Prince Pipes and Fittings Ltd

Respondent/Applicant: Shree Sai Plast Pvt Ltd

SUBJECT:

The instant case being heard by the Hon’ble High Court of Bombay (hereinafter referred to as ‘the High Court’ or ‘the Court’), revolves around trademark infringement allegations against the applicant. The plaintiff accused the applicant of imitating his company’s trademarks creating confusion in the market and causing harm to his business. The applicant, on the other hand, has contested the jurisdictional considerations of the Court, asserting that the suit against him should be filed at the place of the plaintiff’s registered office in Goa, and not Mumbai. The plaintiff argues he conducts his principal business in Mumbai and therefore has filed the suit in Mumbai. The High Court opined that a suit may be filed at the place of the plaintiff’s principal business. 

IMPORTANT PROVISIONS:

The Code of Civil Procedure, 1908 (CPC):

  • Order VII Rule 10
  • Rule 283
  • Section 20: A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place.

The Trade Marks Act, 1999 (TMA): 

  • Section 134(2): offers an additional forum for filing a lawsuit. This forum is based on the Plaintiff's residence or place of gainful work. In the case of a corporation, it refers to the principal office or registered office where the corporation operates.

The Copyright Act, 1947

  • Section 62(2)

OVERVIEW:

  • The plaintiff had filed a commercial intellectual property suit (Commercial IP Suit (L) No. 27330 of 2023) against the respondent alleging infringement of trademark, copyright, and passing off under section 134 of TMA.
  • He alleged that the respondent had engaged in infringement of activities, capitalization on the plaintiff’s reputation and goodwill, causing the plaintiff irreparable loss, injury, damage, and harm.
  • While the suit was ongoing in Bombay (his principal place of business), the respondent filed an interim application seeking the return of the suit filed by the plaintiff to be presented at the plaintiff’s registered office in Goa or the respondent’s place of business in Patna as the current court did not have the jurisdiction. 
  • This matter was heard by the High Court.

ISSUES RAISED:

  • Whether the High Court of Bombay has jurisdiction to adjudicate the instant matter?

ARGUMENTS ADVANCED BY THE PLAINTIFF:

  • Although the plaintiff’s registered office is in Goa, his principal place of business is Mumbai. 
  • Clause 67 of the plaint specifically describes itself as a company incorporated under the Companies Act 1956, which conducts its principal business in Mumbai even though its registered office is in Goa. The principal place of business does not have to be synonymous with the registered office and the two are, in fact, distinct concepts. 
  •  As per provision of section 134(2) of TMA, Mumbai qualifies as a place of business. 
  • Relying on the case of Manaugraph India Ltd v. Simarq Technologies Pvt Ltd & Ors, the plaintiff argued that the principal place of business should be based on where the company conducts its business activities and exercises control, instead of simply relying on the location of the principal office. 

ARGUMENTS ADVANCED BY THE RESPONDENT/APPLICANT:

  • The suit should be filed at the place of the registered office of the plaintiff, i.e., Goa according to section 134(2) of TMA.
  • The ruling in Manaugraph India Ltd (supra) asserts that the place of the registered office is synonymous with the place of the principal business of the company.
  • The suit should have either been filed in Goa or Patna, the respondent’s place of business. 
  • The disputed suit should be returned to the court with appropriate jurisdiction. 

JUDGEMENT ANALYSIS:

  •  The Court observed that there was no delay on the plaintiff’s part in filing the suit as opposed to the applicant’s usage of impugned marks upon being aware of them.
  • Section 134 of TMA governs the jurisdiction of the court for infringement of registered trademarks or passing off. Mumbai was a valid jurisdiction for filing the suit, in accordance with Section 134(2) and Section 62(2) of the Copyright Act.
  • Section 134 of TMA provides that any legal action regarding trademark infringement or related rights must be initiated before a district court, prohibiting any such suit in a lower court, and allowing the plaintiff to file a suit in Mumbai.
  • Additionally, the High Court ruled that said provision defined a district court as having jurisdiction “within whose local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or proceeding, or, where there are more than one such persons any of them, actually and voluntarily resides or carries on business or personally works for gain”
  •  The ruling of India Glycols Ltd & Ant. vs. Commissioner of Income Tax and Another further supported the plaintiff’s argument, acknowledging that the place of the registration office of a company did not have to be synonymous with the place of its principal business.  
  •  Section 20(c) of CPC states that a suit should be filed in a court within the local limits of whose jurisdiction the cause of action, wholly or in part, arises.   
  • The cause of action arises from daily activities and judicial restraint orders are warranted to protect the public interest.
  • The Court opined that the explanation of section 20 of CPC indicated the legislative intent that that the place of filing the suit may not necessarily be the principal place of business. 
  •  The ruling in the case of New Moga Transport Co. v. United India Insurance Co. Ltd. held that if a company has its principal business at a particular place, the court within the jurisdiction of this office will have jurisdiction even if the company does not actively conduct business there. 
  •  However, referring to the Manaugraph India Ltd (supra), the Court held that when the plaintiff has multiple offices, they can invoke section 20 of CPC to file a suit where the defendant resides, works for gain, or where the cause of action arose.
  •  The Court noted that although the plaintiff’s registered office was in Goa, he conducted his principal business in Mumbai as substantiated by clause 67 of the plaint, while the applicant’s business was located in Patna.
  • The applicant was wrong to assume and imply that the plaintiff cannot initiate suit from a place of his principal business. While in certain cases the principal place of business may coincide with the location of the registered office, it is not a universal rule. 
  •  The application was accordingly dismissed. 

CONCLUSION

The High Court dismissed the application filed by the applicant Shri Sai Plast Pvt Ltd finding no merit in the case. The Court recognized that the principal place of business may not always align with the registered office, paving way for a more nuanced and context-specific approach to legal recourse in such matters. Resultantly, this judgment allows companies to initiate legal actions in jurisdictions where they conduct substantial business operations, even if their registered office is located elsewhere. No orders were given as to costs. 

 
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