"Pay up" says the Delhi High Court-Microsoft hauled up for Forum Shopping

In a path breaking ruling by the Delhi High Court to curb the menace of forum shopping, Justice S.N.Dhingra ordered software giant Microsoft Corporation to pay about Rs.8,00, 000 for having chosen to initiate the proceedings against an alleged copyright infringement at the Delhi High Court, despite the cause of action having arisen in four different cities, thereby shedding light on the unsettled law on choice of proper forum. Justice Dhingra very rightfully observed that “one cannot be given the liberty to choose a court of his liking because of the money power.”
The fact situation of the present civil suit (CS (OS) No.2027 of 2009 with CS (OS) 2132, 2024 & 2026 of 2009, order available here) are as follows:
Microsoft filed four suits of copyright infringement against four different defendants on the ground that the defendants were using illegally copied software of Microsoft at workplace. The main prayer of Microsoft was to move the

Hon’ble Court

to grant an ex parte interim injunction to restrain the defendants from using the pirated software programmes of the plaintiff in order to safeguard their copyrights. At this juncture, it is also to be noted that none of the four defendants in the suit has an office at New Delhi whereas Microsoft, having an extensive business in India has offices in cities where the defendants are located (which are at Ahmedabad, Mumbai, Pune, Bangalore, Chandigarh and Derabassi). Microsoft filed these suits as per section 62(2) of the Copyright Act, 1957.Microsoft chose New Delhi since it has an office in the national capital.

To choose or not to choose:

The Court observed that the objective of enacting section 62(2) of the Act was to ensure protection to the authors of original work from unnecessary harassment of necessarily initiating the proceedings against infringement at a forum where it arises. The object was thus to provide a convenience in the rule of choosing the appropriate forum. However, the Court also noted that due to differing opinion on the rule of forum non convenience (primarily distinguishing the judgments of Division Bench of the Delhi High Court in Indian Performing Right Society Limited v. Sanjay Dali 2009 (39) PTC (Delhi) and Horlicks Limited and Another v. Heinz India (Pvt.)Limited),the law on the same is unsettled which leads to a situation of choosing the forum as per the convenience of the plaintiff or the advocates which is mostly guided by the forces of monetary power giving rise to the problem of ‘forum hiring’. This also leads to the problem of ‘creation’ of a jurisdiction in the High Court of Delhi by means of a uniform valuation of the original jurisdiction in all cases of infringement without there being any relationship between the valuation and the relief prayed for.
In the strongly worded Order, Justice Dhingra expressed his deepest concerns about the problem of ‘forum hiring’ by noting that now the settled law in the respect of deciding the jurisdiction is upon the discretion of the plaintiff to value their suit and this has totally ousted the right of the Court to question the valuation done. Initially, all cases regarding intellectual property rights were filed at the Delhi High Court when the jurisdiction of the Court was Rs.5 lakhs and above. When the same was raised to Rs.20 lakhs, the cases were transferred to the District Courts but by way of amending the court fee and valuation para of the IPR suit, the cases were reverted to the High Court, thereby suggesting beyond doubt that it is the plaintiff who called the shots, as far as the question of deciding the jurisdiction is concerned. It made the financial capacity of the plaintiff the sole determinant in matters of deciding the jurisdiction-in the words of Justice Dhingra:
“If   he can   pay   the Court    fee of   the  High    Court,   he   can   value   his  suit accordingly (wherever there is original jurisdiction with the High Court) and choose the High Court as the court of original jurisdiction and if one cannot afford to pay the court fee as well as the fee of the High Court advocate, he can value the suit accordingly and choose either Civil Judge or a District Judge as the forum.”
He noted that in the present suit, Microsoft due to sheer monetary power could choose the court of their liking which certainly was inconvenient and was harassment for the defendants to contest the suit itself. Justice Dhingra in para 20 of the Order eloquently noted that :  “when  the   Constitution   of   India   provides  equality  before  law   this equality has to be  all pervasive and cannot be allowed to be diluted because of money power  or lobbying power. One cannot be given liberty to   choose   a court of his liking because of his money power.” This indeed is a real eye opener for the custodians of the judicial system in the country.
As a remedy, Justice Dhingra suggested that there should only be one Court where the suit can be filed by everybody to curb the menace of forum shopping. He also opined that there should be an amendment to Section 62(2) of the Act to decide as to why the original jurisdiction should not be only with District Courts and the High Courts should be exonerated to deal with the appeals. High Courts having overburdened themselves, should take up the onus of granting relief only in those cases where appropriate. But the mechanism of doing so should definitely be made independent of the ability of the plaintiff to pay to choose a more “experienced Judge”.
As a result, it was ordered that Microsoft is to deposit the costs for the defendants which should be commensurate with the expenses the defendants will have to incur to come to Delhi engage a counsel and pay the fees etc. The Court observed that since the suit is of investigative nature where the basis was a mere suspicion arising from the report of a hired investigator of the plaintiffs, the need to deposit Rs.2 Lakhs per suit as the costs security in the Court for the defendants was onerous upon the plaintiff. The amount is to be deposited to the Registrar General of the Court and shall be paid to the defendants in the event of the suit being of a speculative nature and the allegations by plaintiffs found to be false. The expenditure incurred for the appointment of a Local Commissioner to probe into the matter is also to be borne by the plaintiff. The fee of the Local Commissioner has been set at Rs.25, 000/- by the Court!
The matter has been listed next on January 18, 2010. We sincerely hope that the New Year brings in a new ray of hope in the murky waters of forum shopping.


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8 thoughts on “"Pay up" says the Delhi High Court-Microsoft hauled up for Forum Shopping”

  1. Although the intention of the court is benign and justice oriented yet whether it is fully correct or not is still debatable. This is because the relevant section of the Indian Copyright Act, 1957 has received a different and contrary interpretation not only by the Delhi High Court itself but also by the Supreme Court of India. However, every case depends upon its own facts and circumstances and the facts of the present case only would decide the fate of this case.

    See for instance http://cyberlawsinindia.blogspot.com/2009/12/jurisdictional-issues-of-copyright-law.html in this regard.

  2. Dear Shayonee,
    The order is “path breaking” thanks to the sheer perversity and convoluted reasoning adopted by the judge who seemed driven more by his ideological proclivities than by the merits of the case at hand. Fundamental principles of appreciation of evidence were flouted, not to forget blatant disregard of guidelines set forth by the DB of the Delhi High Court in cases involving software piracy. The good news however is that the order of the judge has been stayed by the DB and the plaintiffs have been granted the reliefs originally.

  3. Dear Anonymous 1:

    Yeah- we shall be up with a post on that shortly 🙂

    Dear Anonymous 2:

    I totally agree.Still,I found the Order trying to address the central problem of forum shopping,which has been hitherto neglected on many occasions.

  4. Hey Aditya

    I tried looking for it on the DHC website,I couldn’t locate it.It was stayed by Justices Madan Lokur and Mukta Gupta on Dec 15,2009.

    I am so sorry-can’t give you the link to the order.But we are looking for the same.Will put it up on the blog as soon as I can locate it.


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