Jurisdiction in a composite suit: A case study

Introduction

I intend to examine the law on ‘jurisdiction’ in a composite suit involving Copyright Act, 1957 (“1957 Act”) and the Trade and Merchandise Marks Act, 1958 (“1958 Act”). The contours of the discussion are limited to the recent Supreme Court judgment in M/s. Paragon Rubber Industries (“Plaintiff”) v. M/s. Pragathi Rubber Mills & Ors (“Defendants”) WITH M/s. Pragathi Rubber Mills & Ors v.   M/s. Paragon Rubber Industries (“Instant Judgment”), which was decided on appeals challenging the judgment of the Kerala High Court. Though the 1958 Act is no longer in force, the discussion is still relevant for the following reasons: a) implications on pending disputes involving 1957 Act and 1958 Act and b) the general principles which are applicable across the board. The Instant Judgment reiterates the principles laid down in Dhodha House v. S.K. Maingi (AIR 2006 SC 730) (“Dhodha”) and Dabur India Ltd. v. K.R. Industries (AIR 2008 SC 3123) (“Dabur”).

Background

Cause of action is a bundle of facts which are necessary to be proved in a given case. If a cause of action arises within the jurisdiction of the court concerned, it empowers the court to entertain the matter. Determination of territorial jurisdiction of a civil court is governed by the provisions of the the Code of Civil Procedure (“the Code”). [See Sections 16-20 of the Code.] Broadly speaking, Section 20 of the Code, which is the concerned provision for us, provides that the suits which do not come within the purview of Sections 16 to 19 of the Code are to be instituted where the defendants reside or cause of action arises.

The Code applies to both 1957 Act and 1958 Act. Section 62 (2) of the 1957 Act provides for an additional forum i.e  jurisdiction on a court where the plaintiff resides – “(2) For the purpose of sub-section (1), a “district court having jurisdiction” shall, notwithstanding anything contained in the Code of civil Procedure, 1908 (5 of 1908), or any other law for the time being in force, include a district court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or other 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 1958 Act does not have a similar provision i.e it doesn’t confer jurisdiction on a court where the plaintiff resides.

Facts

The Plaintiff, who is based in Kerala, filed a suit against the Defendants at District Court, Kottayam, Kerala in 2001, claiming relief under the 1957 Act and the 1958 Act. The Defendant, who is based in Punjab, filed I.A under Order VII, Rule XI of the Code with a prayer for rejection of plaint for want of territorial jurisdiction. The District Court dismissed the I.A and held that it enjoyed the jurisdiction to entertain the suit in view of Section 62(2) of the 1957 Act. The Defendant challenged the aforesaid Order in the High Court.

On concluding that the instant composite suit encompassing the 1957 Act and 1958 Act would not be maintainable for lack of jurisdiction under the 1958 Act (in spite of jurisdiction under the 1957 Act), the High Court set aside the aforesaid Order of the trial court. The Plaintiff was, however, given the liberty to amend the plaint. Both the Plaintiff and the Defendants appealed against the Order of the High Court.

Issue

Although causes of action under the 1957 Act and the 1958 Act are different, can a suit encompassing the same be ipso facto maintained on the ground that the Court enjoys jurisdiction under Section 62(2) of the 1957 Act (in spite of lack of jurisdiction under the 1958 Act)?

Or

Is a composite suit maintainable when a court enjoys jurisdiction over only one among the ‘n’ causes of action under ‘m’ distinct statutes? In other words, will jurisdiction over one cause of action negate the effect of lack of jurisdiction over the other ‘(n-1)’ causes of action?

Judgment

a) 1957 Act, 1958 Act and the Code

While enacting the 1958 Act, the Parliament was aware of the provisions of the 1957 Act. The Parliament did not choose to provide a similar provision in 1958 Act. Such an omission was a conscious omission and was, therefore, clear and explicit. On the other hand, while enacting the Trade Marks Act, 1999 (“1999 Act”), the Parliament provided for an additional forum by enacting Section 134 (2) of the Trade Marks Act.  It is a settled position that the Court shall not readily presume the existence of jurisdiction of a court which is not conferred by the statute. The Instant Judgment held that the Plaintiff could not take advantage of Section 134(2) of the 1999 Act. [Although, the 1999 Act was enacted on 30^th December, 1999, it came into force on 15^th September, 2003.  Since the suit in this case was filed on 19^th March, 2001, it would be adjudicated under the 1958 Act.]

Order II, Rule 3 of the Code contemplates uniting several causes of action in the same suit. As held in Dhodha, by necessary implication, the cause of action for infringement of copyright and the cause of action for infringement of trademark or a cause of action for passing off are different. Even if one cause of action has no nexus with another, indisputably Order II, Rule 3 of the Code will apply. However, the application of Order II, Rule 3 of the Code will not ipso facto confer jurisdiction upon a Court which it otherwise does not enjoy. In other words, Order II, Rule 3 will not confer a Court with jurisdiction under 1958 Act when the Court does not enjoy such a jurisdiction.

b) Can a remedy under 1958 Act be taken as an incidental remedy under Section 62(2) of 1957 Act?

The Supreme Court, in Dabur, categorically held as follows:“if the impediment is sought to be removed by inserting an incidental provision, there cannot be any doubt that the court could be entitled to pass an interim order, but the same by no stretch of imagination can be extended to a cause of action which is founded on separate set of facts as also rights and liabilities of a party under, a different Act.” (paragraph 28) Therefore, the remedy under 1958 cannot be legally perceived as an incidental remedy under Section 62(2) of 1957 Act.

c) Maintainability of a composite suit

A composite suit is not maintainable unless the court enjoys the jurisdiction to entertain the suit in relation to the entire cause of action and the entire relief. Considering Dodha and Dabur, the Instant Judgment held as follows in the instant case: “….for the purpose of invoking the jurisdiction of the court in a composite suit, both the causes of action must arise within the jurisdiction of the court which otherwise had the necessary jurisdiction to decide all the issues. However, the jurisdiction cannot be conferred by joining two causes of action in the same suit when the court has jurisdiction to try the suit only in respect of one cause of action and not the other.”(paragraph 19)

Considering a, b and c, the Instant Judgment upheld the High Court judgment. The Defendant, in the instant case, was based in Punjab. Therefore, the instant case, which was a composite suit, didn’t attract jurisdiction under the Code and 1958 Act. The existence of jurisdiction under the 1957 Act would not negate the lack of jurisdiction under the 1958 Act. The Supreme Court, however, refused to interfere with the Order passed by the High Court permitting the Plaintiff to amend the plaint.

Comments

The judgment reiterated the principle that a composite suit will not entitle a Court to entertain a suit in respect whereof it has no jurisdiction, territorial or otherwise. Also, the existence of jurisdiction over one cause of action in a composite suit will not annul the effect of lack of jurisdiction over the other ‘(n-1)’ causes of action. On a note of caution, the effect of defective jurisdiction is quite disastrous. [Kiran Singh and Ors. v. Chaman Paswan and Ors. [1955]1SCR117: “It is a fundamental principle well-established that a decree passed by a court without jurisdiction is a nullity, and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction, whether it is pecuniary or territorial, or whether it is in respect of the subject-matter of the action, strikes at the very authority of the court to pass any decree, and such a defect cannot be cured even by consent of parties.”]

I am of the view that the extant appeals were unnecessary in the light of Dabur and Dhodha. As held by the Supreme Court in Dabur, “a composite suit would not entitle a court to entertain a suit in respect whereof it has no jurisdiction, territorial or otherwise. Order II Rule 3 of the Code specifically states so and, thus, there is no reason as to why the same should be ignored. A composite suit within the provisions of the 1957 Act as considered in Dhoda House, therefore, would mean the suit which is founded on infringement of a copy right and wherein the incidental power of the Court is required to be invoked.” (Paragraph 29) In this context, the Appellant hardly had any case in going for an appeal as the lack of jurisdiction under the 1958 Act was self-evident.

The position of the Defendant was also weak. The SC rightly refused to interfere with the Order passed by the High Court permitting the Plaintiff to amend the plaint. The High Court enjoys certain discretionary powers. Unless the exercise of discretionary power is perverse or erroneous, the Supreme Court doesn’t normally interfere with it. It observes a certain degree of deference in this regard. The Defendant had virtually nothing to show that the discretion was exercised in a perverse or erroneous manner.