Where there arise issues of territorial jurisdiction, then Trial Courts, before grant of injunction, must satisfy itself that, it has territorial jurisdiction vide Shree Siilhlaxmi Fabrics (P) Ltd. v. Clmnd Mai Baradia and Ors. As held in judgment, it is not permissible to decide existence of territorial jurisdiction on ground that there is an arguable case

MIPR 2018 (1) 0092   =     MANU/DE/3803/2017

 

IN THE HIGH COURT OF DELHI

Munish Kumar Singla Trading as Chakhu Foods Products

Jollibee Foods Corporation

FAO NO. 458/2017 DECIDED ON: 20.11.2017

Judge

Valmiki J. Mehta, J.

Counsel

For Appellant/Petitioner/Plaintiff: S.K. Bansal, Pankaj Kumar and Kapil Kumar

Giri, Advs. For Respondents/Defendant: Neeraj Grover, Nageeb Nawab and Himanshu Deora,

Advs.

Cases referred

  1. Venkatasubbiah Naidu v. S. Chellappan and Ors. MANU/SC/0581/2000: (2000) 7
    SCC 695: AIR 2000 SC 3032: 2000 (5) ALT 44 (SC): 2001 (1) BLJR 663: 2000 (4) CTC
    358: (2001) 1 GLR 687: JT 2000 (10) SC 599: 2001-1-LW 429: (2001) 1 MLJ 75 (SC):
    (2001) 127 (1) PLR 96: RLW 2001 (1) SC 84:2000 (6) SCALE 398: (2000) Supp 3 SCR
    303: 2001 (1) UC 55: 2000 (2) UJ 1300

Milmet Oftho Industries and Ors. v. Allergan Inc. MANU/SC/0512/2004: (2004) 12
SCC 624: 2004 (5) ALLMR (SC) 722: (2005) 1 CALLT 1 (SC): (2004) 121 CompCas
486 (SC): 2004 (75) DRJ 109: 2004 (115) ECR 738 (SC): 2004 (170) ELT 260 (S.C.):
(2004 (3) JCR 175 (SC)): 2005-2-LW 29: 2004 (28) PTC 585 (SC): 2004 (5) SCALE
772: (2004) Supp (2) SCR 586

Shree Subhlaxmi Fabrics (P) Ltd. v. Chand Mai Baradia and Ors. MANU/SC/0231/
2005: (2005) 10 SCC 704: AIR 2005 SC 2161: 2005 (3) ALD 93 (SC): 2005 (5) ALLMR
(SC) 640: 2005 (4) ALT 18 (SC): 2005 (1) ArbLR 623 (SC): 2005 (2) AWC 1420 (SC):
2005 (2) BLJR 1237: (SC Suppl) 2005 (3) CRN 123: (2005) 124 CompCas 811 (SC):
(2005) 4 CompLJ 549 (SC): JT 2005 (11) SC 155: 2005 (2) RCR (Civil) 363: (2005) 2
SCR 1138: 2005 (2) UC 807: 2005 (1) UJ 654

 

Code of Civil Procedure, 1098

Order XLIII(l)(r)                                                                                     

Order XXXIX Rule 3

Order XXXIX Rule 3A
Order XXXIX Rule 4                                                                      

 

HEAD NOTE

Trade mark – Infringement – Territorial jurisdiction-  ex-parte order of, in a suit for infringement of a Trade mark, infringement of Copyright, passing off, damages. Law laid for passing such orders

Held, where an ex-parte order is granted in favour of Plaintiff, in cases such as present, same has effect of decreeing suit on very first date and meaning thereby that ex-parte injunction order when passed proceeds on basis that Defendant in suit can never have any defence at all, whether of fact or law, for seeking dismissal of suit. Where there arise issues of territorial jurisdiction, then Trial Courts, before grant of injunction, must satisfy itself that, it has territorial jurisdiction vide Shree Siilhlaxmi Fabrics (P) Ltd. v. Clmnd Mai Baradia and Ors. As held in judgment, it is not permissible to decide existence of territorial jurisdiction on ground that there is an arguable case. In present case, there was really no jurisdiction in Trial Court to grant ex-parte order in terms of impugned order dated 22nd August, 2017 once Respondent/Plaintiff had not commenced business in India inspite of registration of its Trade mark in India since year 2005. Supreme Court in case of Milmet Oftho Industries and Ors. v. Allergan Inc. has held that, multinational companies have no right to claim exclusivity of Trade mark if they do not enter or intend in a reasonable time to enter into business in India and which observations squarely apply in facts of this case where inspite of registration since year 2005 till today in year 2017 Respondent/Plaintiff has not commenced his business in India. Prima facie therefore ratio of judgment of Supreme Court in case of Milmet Oftlio Industries would apply. Also, present is not a case where by non-grant of an ex-parte order suit would have become infructuous or products being sold by Appellant/Defendant were such which were sold to children or other vulnerable sections of society or were pharmaceutical products etc, that, a reasonable period notice should not have been issued and instead a drastic ex-parte injunction order should have been passed. Impugned order is set aside. Appeal is allowed.

JUDGMENT

Valmiki J. Mehta, J.

  1. This First Appeal is filed by the Defendant in the suit under Order XLIII(l)(r)
    Code of Civil Procedure impugning the ex-parte order of the Trial Court dated
    22nd August, 2017, by which the Trial Court in a suit for infringement of a Trade
    mark, infringement of Copyright, passing off, damages restrained the
    Appellant/Defendant from carrying on its business of sale of spices under the
    Trade mark ‘Chakshu’ with an image of a bee. Respondent/Plaintiff claimed
    ownership of the Trade mark ‘Jollibee’ with the same image of bee as also
    independent Trade mark rights in the image of the bee itself. Respondent/Plaintiff
    also claimed Copyright in the image of the bee for being the owner and for exclusive
    use of the image.
  2. At the outset, I would like to state that an appeal lies against not only an ex-parte
    order originally passed but also when the ex-parte order is continued for each next
    date of hearing and each next date of hearing gives a fresh cause of action for an
    aggrieved Defendant to challenge the grant of an ex-parte order against him. This is

 

the law as per the judgment of the Supreme Court in the case of A. Venkatasubbiah Naidu v. S. Chellappan and Ors.1 (2000) 7 SCC 695 = MANU/SC/0581/2000: AIR 2000 SC 3032: 2000 (5) ALT 44 (SC): 2001 (1) BLJR 663: 2000 (4) CTC 358: (2001) 1 GLR 687: JT 2000 (10) SC 599: 2001-1-LW 429: (2001) 1 MLJ 75 (SC): (2001) 127 (1) PLR 96: RLW 2001 (1) SC 84: 2000 (6) SCALE 398: (2000) Supp 3 SCR 303: 2001 (1) UC 55: 2000 (2) UJ 1300 . It is noted in this case that Appellant/Defendant after being served of the impugned order dated 22nd August, 2017 in Local Commissioner’s proceedings had immediately thereafter, filed his written statement along with an application under Order XXXIX Rule 4 Code of Civil Procedure. The next date of hearing in the suit as also the injunction application filed by the Respondent/Plaintiff was 26th September, 2017 but the Trial Court inspite of urgency expressed on behalf of the Appellant/Defendant did not hear the application under Order XXXIX Rule 4 Code of Civil Procedure but instead simply adjourned the matter to 7th November, 2017. On 7th November, 2017 again inspite of requests of the Appellant/Defendant for hearing the matter, the matter stood adjourned to 11th December, 2017. Hence the Appellant/Defendant had no option but to file this appeal as it was suffering an ex-parte order against it from 22nd August, 2017 effectively closing down its business because carrying on business is inextricably linked with the Trade mark under which the business is being carried on.

  1. The case of the Respondent/Plaintiff as per the plaint was that the
    Respondent/Plaintiff was based in Philippines and it was having a fast food brand
    under the Trade mark ‘Jollibee’. The word mark ‘Jollibee’ was along with an image
    mark of a bee. The Respondent/Plain tiff as per the plaint admits that though the
    Trade mark ‘Jollibee’ with the image of a bee was Registered in India in favour of the
    Respondent/Plaintiff way back in the year 2005, and also independently and
    additionally the image of its own being Registered thereafter, in the year 2014, the
    Respondent/Plaintiff has from the year 2005 till today in the year 2017 not yet
    commenced its business in India. In fact, the registrations of the Trade mark of the
    Respondent/Plaintiff in India is on the basis of “proposed to be used basis” i.e. the
    Respondent/Plaintiff had not commenced or done any business under the Trade
    mark at the time of registration of the Trade mark.
  2. In my opinion, the impugned order dated 22nd August, 2017, and thereafter, the
    orders dated 26* September, 2017 and 7th November, 2017 simply adjourning the
    matter without considering the injunction application of the Respondent/Plaintiff
    and the application for vacation of injunction filed by the Appellant/Defendant
    under Order XXXIX Rule 4 Code of Civil Procedure, flies against all canons of law,
    equity and justice.

5.(i) One object of grant of ex-parte injunction in all cases is if as to whether by the non-grant of the injunction the relief prayed in the suit would become infructuous. In such cases, and other cases for grant of interim injunction under Order XXXIX Code of Civil Procedure, once the triple factors exist of prima facie case, balance of convenience and irreparable injuries, Courts do grant interim orders/ex-parte orders to protect the Plaintiff.

(ii) In Intellectual Property Rights (IPR) matters, besides grant of ex-parte injunction in cases where the relief prayed for in the suit would otherwise become infructuous, Courts rightly consider grant of ex-parte orders where the Trade mark used by the

 

 

Defendant is identical or nearly identical to the Trade mark being used by the Plaintiff, and the goods also being the same, resulting in the impugned goods being effectively counterfeit goods.

(iii) On the triple factors existing as required under Order XXXIX Code of Civil Procedure, grant of ex-parte injunction is favourably considered by the Courts in IPR matters where vulnerable sections of the society would be affected or consumers at large would be affected such as in the case of products for children or illiterate people, or disadvantaged consumers or in cases of pharmaceutical products and similar type of cases.

6,(i) It may be noted that where an ex-parte order is granted in favour of the Plaintiff, in cases such as the present, the same has the effect of decreeing the suit on the very first date and meaning thereby that ex-parte injunction order when passed proceeds on the basis that the Defendant in the suit can never have any defence at all, whether of fact or law, for seeking dismissal of the suit.

(ii) Where there arise issues of territorial jurisdiction, then Trial Courts, before grant of injunction, must satisfy itself that it has territorial jurisdiction vide Shree Subhlaxmi Fabrics (P) Ltd. v. Chand Mai Baradia and Ors.  (2005) 10 SCC 704 =  . As held in this judgment it is not permissible to decide existence of territorial jurisdiction on the ground that there is an arguable case.

7.(i) In the present case, it is seen that admittedly, Respondent/Plaintiff inspite of registration of its Trade mark since the year 2005 is not doing business in India. In such admitted facts of a case as per the plaint itself where the Respondent/Plaintiff has not commenced business in India, I have failed to understand as to how can an ex-parte order be granted decreeing the suit on the first date i.e. effectively by granting the injunction to prevent the Appellant/Defendant from carrying on its business and that too a business which was not similar to the business of the Respondent/Plaintiff. As already stated above, business of the Respondent/Plaintiff is of a fast food chain and food products and the business of the Appellant/Defendant is selling of packaged spices.

(ii) Also, the Respondent/Plaintiff knew of the existence of the Appellant/Defendant since November 2016 when the Trade mark of the Appellant/Defendant was sought registration of i.e. of wordmark ‘Chakshu’ with an image of bee. Therefore, on filing of the suit many months later in August, 2017, Respondent/Plaintiff was in fact hit by the principle of delay for not seeking an ex-parte injunction. In facts of the case such as the present the Trial Court in the admitted facts of the case, and as already stated above, should/could have well issued a reasonable period notice on the injunction application as also for the summons in the suit.

  1. No doubt, the Respondent/Plaintiff may seem to have a prima facie case with respect to the image bee, and which image bee of the Respondent/Plaintiff is almost identical to the image of bee being used by the Appellant/Defendant, however, such claim of an image of bee if it is used as a Trade mark, then it is noted that the

Appellant/Defendant besides using the bee is also using its word mark ‘Chakshu’ which is completely different from the word mark ‘Jollibee’ of the Respondent/Plaintiff and that too with respect to a totally separate line of business. If the issue is looked from the point of view of the Copyright of the Respondent/Plaintiff in the image of bee, then, surely the Appellant/Defendant would be entitled to show if the image of bee was otherwise available in public domain and such image was not created for the first time by the Respondent/Plaintiff, and these observations are made by this Court only limited to the issue of grant of ex-parte orders, because surely it was not as if the suit of the Respondent/Plaintiff would have become infructuous by non-grant of ex-parte order, and even assuming that there was violation of Copyright in the creation of an image of bee which the Respondent/Plaintiff alleges it has created, then Respondent/Plaintiff could always have been compensated by way of damages, and all the more so because Respondent/Plaintiff was aware from November, 2016 of the user of image of the bee by the Appellant/Defendant.

  1. In the present case, what is really surprising is that the Trial Court has, inspite of
    the Appellant/Defendant rushing to the Court by fling its written statement and
    simultaneously filing the application under Order XXXIX Rule 4 Code of Civil
    Procedure for vacating of the injunction, however not only not granted any relief
    when the application under Order XXXIX Rule 4 Code of Civil Procedure first came
    up for hearing, the relief for vacation of injunction was not even considered by the
    Trial Court and even on the date fixed being 26lh September, 2017, and the matter
    was simply adjourned to 7th November, 2017 and thereafter, the matter again stands
    adjourned to 11th December, 2017.
  2. There is also a very strange aspect in the impugned order dated 22nd August, 2017
    that the injunction application filed by the Respondent/Plaintiff has in fact been
    allowed and disposed of, and this is seen from para 32 at internal page 19 of the
    impugned order dated 22nd August, 2017. I really fail to understand as to how an
    injunction application can be allowed on the very first date when the suit has come
    up for admission, in favour of the Respondent/Plaintiff, and when the
    Appellant/Defendant is not even represented because as yet no summons or notices
    have been issued to the Defendant(s). Surely, a judicial officer of a level of an
    Additional District Judge must know that when an ex-parte injunction is granted on
    an injunction application filed by the Plaintiff, taking that the ex-parte order has to
    be granted, yet, notice has yet to be issued on the injunction application and this
    application cannot be allowed and disposed of on the very first date, and which has
    been done in terms of the impugned order dated 22nd August, 2017.
  3. Though it is not an issue at large in this Court, this Court is receiving various
    orders where the Trial Courts are at the time of granting of ex-parte injunction orders,
    appointing Local Commissioners by paying huge fees. By the impugned order dated
    22nd August, 2017 two Local Commissioners have been appointed, one at a payment
    of Rs. 70,000 and second at a payment of Rs. 1.5 lacs. In my opinion, these charges
    are astronomical to say the least and in fact such orders convey wrong impressions
    to the litigants as also the lawyers. This Court obviously will not issue any directions
    as to what should be the fees of the Local Commissioners, however, surely it is seen
    that exorbitant fees are being paid to the Local Commissioners by the Trial Courts
    and which have no co-relation to the amount and type of work which is required to be done by the Local Commissioners. This undesirable practice of directing payments of huge fees, in the opinion of this Court, must forthwith stop.

12.1 may note that the Supreme Court in the judgment in the case of A. Venkatasubbiah Naidu (supra) had in fact observed that if after grant of an ex-parte injunction if the Trial Court does not dispose of the injunction application within 30 days then the same should be recorded in the ACR of the concerned officer, and which of course would be very difficult when every Court has thousands of matters, however, the spirit of the observations of the Supreme Court in A. Venkatasubbiah Naidu (supra) has to be read with the provisions of Order XXXIX Rules 3 and 3A Code of Civil Procedure. Order XXXIX Rule 3A Code of Civil Procedure requires that once an ex-parte injunction is granted, Trial Court must endeavour to expeditiously dispose of the injunction application, and which period is provided by the Statute at 30 days, and these requirements apply strongly in the facts of the present case where an ex-parte injunction order is granted to effectively stop the business of the Appellant/Defendant. Trial Courts must endeavour either to expeditiously dispose of the injunction application or at least should consider, as per facts of each individual case, some sort of other interim arrangements or possible change of form or content of the order, if for some reasons an ex-parte injunction has to be continued for some dates of hearings.

  1. In sum and substance, it is seen that in the present case, there was really no
    jurisdiction in the Trial Court to grant ex-parte order in terms of the impugned order
    dated 22nd August, 2017 once the Respondent/Plaintiff had not commenced business
    in India inspite of registration of its Trade mark in India since the year 2005. Supreme
    Court in the case of Milmet Oftho Industries and Ors. Allergan Inc? (2004) 12 SCC 624
    has held that multinational companies have no right to claim exclusivity of the
    Trade mark if they do not enter or intend in a reasonable time to enter into business
    in India and which observations squarely apply in the facts of this case where
    inspite of registration since the year 2005 till today in the year 2017 the
    Respondent/Plaintiff has not commenced his business in India. Prima facie therefore
    the ratio of the judgment of the Supreme Court in the case of Milmet Oftho Industries
    (supra) would apply. Also, the present is not a case where by non-grant of an ex-parte
    order the suit would have become infructuous or the products being sold by the
    Appellant/Defendant were such which were sold to children or other vulnerable
    sections of the society or were pharmaceutical products etc, that, a reasonable period
    notice should not have been issued and instead a drastic ex-parte injunction order
    should have been passed.
  2. In view of the aforesaid discussion, this appeal is allowed. The impugned order
    dated 22nd August, 2017 is set aside. Nothing contained in this order is a reflection
    on merits of the cases of the respective parties, whether with respect to decision of
    the injunction application filed by the Respondent/Plaintiff and which decision
    will now be taken or of the merits in the suit, and these aspects would be decided by
    the Trial Court at the respective stages in the suit or at the time of disposal of the
    injunction application filed by the Respondent/Plaintiff. Observations made in this
    order are with respect to grant or non-grant of ex-parte interim orders.

 

 

  1. I am informed that the concerned judicial officer, who passed the impugned order dated 22nd August, 2017, is no longer presiding in the same Court, and therefore the matter is likely to come up before another judicial officer in the Trial Court. The concerned judicial officer is requested to make an endeavour, of course depending on the roster and board of the judicial officer, for reasonably early disposal of the injunction applications filed by the parties.

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