M/s Godrej Sara Lee Ltd. v. Reckitt Benckiser Australia Pty. Ltd: Jurisdiction ‘Designed’ to err?

This case involves an appeal filed against an order of the Controller of Patents & Designs, Kolkata under Section 19(1) of the Designs Act, 2000, canceling registered designs for “Insecticide Coil” in Class 12 belonging to the Respondent Reckitt Benckiser. The Supreme Court had to decide whether the Delhi High Court, wherein the appeal had been filed, had the jurisdiction to entertain the same. The Appellant was a company against whom the Respondent had brought a charge of infringement of said designs and who had contended in reply that the Respondent’s registrations of said designs were liable to be canceled under Section 22(3) of the Designs Act, on the ground that registration of the same had been obtained by concealment of facts and infringement of already registered Designs.

Senior counsel Mr. Dushyant Dave, arguing on behalf of the Appellant, posited that the term “high court”, as mentioned in Sections 19(2) and 2(e) of the Designs Act, has to be read in relation to the cause of action. Since in the present case, the cause of action had arisen in Kolkata, it is the Calcutta High Court and not the Delhi High Court that has the necessary jurisdiction as per the principles enunciated in Section 20 of the Code of Civil Procedure.

According to Mr. Dave, the High Court had erred in comparing between Section 51A of the Designs Act, 1911 and Section 19 of the Designs Act, 2000. While the former provision allowed a person to move for cancellation directly before the High Court in its original jurisdiction, the latter provided that an application for cancellation could only be made to the Controller of Designs, Kolkata. Therefore the High Court’s conclusions following an analysis of the two provisions were erroneous as also was the reliance placed on the decision in the case of Girdharilal Gupta vs. M/s. K. Gian Chand Jain & Co. [(1978) 14 D.L.T. 132].

The counsel further argued that in the aforesaid case, not only were the facts different, but so the decision, which said that that the application for cancellation of a design under Section 51A of the 1911 Act could be filed either in the High Court having jurisdiction over the place at which the design is registered or in the High Court, the local jurisdiction of which has a nexus with the subject matter of the cause of action of the application. The High Court had, in the case of Girdharilal, further made it clear that an application for cancellation cannot be made in any High Court merely because the applicant chose to do so –he, on the contrary, would have to establish the jurisdiction of the High Court to which the application is made by establishing a live link between the territory in which the cause of action and the subject matter of the application. Therefore, the counsel contended that in the normal course both the Calcutta High Court and the High Court within whose territorial jurisdiction the cause of action arises, would have jurisdiction to entertain an appeal under Section 19, but in some cases such jurisdiction would also extend to any other High Court within the local limits of which a part of the cause of action and/or subject matter of the application may arise. Mr. Dave urged that the latter part of the findings was not in consonance with Section 19(2) of the 2000 Act.

The gist of Mr. Dave’s contention was that it was the Calcutta High Court and not the Delhi High Court that had the necessary territorial jurisdiction over the application and he relied on cases such as M/s. Scooters India Ltd. vs. M/s. Jaya Hind Industries Ltd. & Anr. [AIR 1988 Delhi 82], Ambika Industries vs. Commissioner of Central Excise [(2007) 6 SCC 769] and Canon Steels (P) Ltd. vs. Commissioner of Customs [(2007) 14 SCC 464].

The Respondent’s counsel said that Sections 19 and 22(2)(b) read with Section 22(3) of the Designs Act, 2000 contemplated cancellation of a Design by the Controller of Designs, and punishment for piracy of a Design in any suit in any Court not below that of a District Judge. He also contended that when such a suit was pending before the High Court and a defence as provided for under Section 19 of the Act was taken, the matter had to be decided by the High Court and the Controller ought not to be left to decide the said issue, as an appeal from the Controller’s order would also lie to the High Court under Section 19 which could result in conflict of decisions. The case of M/s Metro Plastic Industries (Regd.) vs. M/s Galaxy Footwear [AIR 2000 Delhi 117] was referred to in this context.

The Respondent then submitted that there were innumerable instances of appeals having to be filed at the place where the cause of action had arisen or the effect thereof was felt, referring to Stridewell Leathers (P) Ltd. vs. Bhankerpur Simbhaoli Beverages (P) Ltd. [(1994) 1 SCC 34]. Moreover, in the present case, full disclosures had not been made regarding the pendency of the suit filed by the Respondent, which is still pending decision, wherein the appellant had filed a counter affidavit and a defence had been taken against cancellation. Therefore, the Respondent argued, for the said reasons and also because the 2000 Act gives only the Controller of Designs the jurisdiction to cancel a design, the order of the Delhi High Court should not be tampered with.

The Appellant countered by saying that under the 2000 Act, it is only the Controller of Designs before whom an application can be made under Section 19 for cancellation of a Design, as opposed to Section 51A of the 1911 Act under which even the High Court had the necessary jurisdiction. It was further urged that in view of the amendments in Section 51-A of the 1911 Act, the question of jurisdiction of the Delhi High Court to entertain the appeals has become relevant.

The Court examined the interpretation of the term “High Court” used in Sections 19(2) and 22(4) of the 2000 Act and in Section 51A of 1911 Act. Section 51A(1)(a) clearly provides that at any time after registration of the design, an application for cancellation of the registration could be made to the High Court on the grounds indicated therein. Section 51A(1)(b) makes an exception and provides that within one year from the date of registration of the design, an application could be made for cancellation of the registration to the Controller on the grounds specified in Sub-clauses (i) and (ii) of Clause (a). Section 51A(2) provides that an appeal from the order of the Controller would lie to the High Court.

On the other hand, Section 19(1) of the 2000 Act, which also deals with cancellation of registration, provides for a petition for cancellation of registration of a design to be filed before the Controller and not to the High Court. Thus it is obvious, as per the Court, that under the 2000 Act the legislative intention was that an application for cancellation of a design would lie to the Controller exclusively and all the appeals from any such order of the Controller under Section 19 of the 2000 Act shall lie to the High Court.

In the aforesaid Girdharilal Gupta’s case, the question of jurisdiction of the High Court was in relation to an application made to the High Court directly, whereas the instant case was concerned with an order of the Controller against which an appeal was required to be filed before the High Court. While in Girdharilal Gupta’s case the Court was considering the expression “High Court” in the context of a fall-out in respect of the ground of registration and the cause of action arising on account of such fall-out, in the present case, The Supreme Court believed that there existed no question of any consequential impact, since the application for cancellation of registration was on the basis of fake documents created in order to perpetrate a fraud. In the instant case, the cause of action, being the cancellation of the registered design of the Appellant, took place in West Bengal and therefore, the Supreme Court held that the jurisdiction was with the Calcutta High Court and not the Delhi High Court, as per Section 20, CPC.

Thus the Court declared that the Delhi High Court had erroneously relied on Girdharilal’s Case, and it did not have the necessary jurisdiction to try the application for cancellation. The various decisions cited by the Appellant’s counsel had to be determined on the basis of the statutory provisions and not on the basis of dominus litus or the situs of the Appellate Tribunal or the cause of action. The Delhi High Court’s order was thus set aside and the Appellant was granted leave to move the Calcutta High Court against the order of cancellation of its designs.

The Spicy IP team thanks Mr. S.K. Mohanty, advocate and IP attorney from Legal Shebang for drawing attention to this insightful judgment.