Delhi High Court reinforces jurisdictional importance of cause of action; lambasts Single Judge for dissenting with division bench in Ultrahome

In Ultrahome Constructions v. Purushottam, a division bench of the Delhi High Court interpreted IPRS v. Sanjay Dalia to hold that the plaintiff will be constrained to sue at the place of its subordinate office if the cause of action arises there and not at the place of its principal office. The Delhi HC has essentially upheld the importance of the existence of the cause of action while determining jurisdiction in copyright and trademark litigation. Now, the Delhi HC has further fortified this position in Allied Blenders & Distilleries v. R. K. Distilleries [“Allied Blenders”] and in RSPL v. Mukesh Sharma [“RSPL”]. In RSPL, which was presided over by the same coram as Ultrahome, the DB has lambasted the single judge for having dissented with and for not having followed Ultrahome in the impugned order. I have covered Allied Blenders in my previous post here.

I have analyzed the current jurisdictional position in IP litigation after the Supreme Court’s decision in IPRS v. Sanjay Dalia here and here. I have covered here the Bombay HC’s decision in Manugraph v. Simarq Technologies which has taken a contrary stand from the Delhi HC’s interpretation of Dalia in Ultrahome.

Factual Matrix

RSPL, having its corporate office at Delhi, was the registered proprietor of “GHARI/GHADI” in various classes; including Class 30. Mukesh Sharma, a lawyer, was using “GHARI TRADEMARK COMPANY” in relation to his law firm in Bulandshahar, Uttar Pradesh. When RSPL brought a suit for infringement before the Delhi HC, the Single Judge in his order accepted the defendant’s jurisdictional objection under Order 7 rule 10 of the Civil Procedure Code, 1908 [the O7R10 Objection] and dismissed the suit for lack of territorial jurisdiction.  The Single Judge also observed that RSPL’s averments in the plaint about the cause of action were too vague, bereft of any particulars and consequently did not amount to a disclosure of material facts as is required under Order 6, rule 2 of the CPC [O6R2]. Most importantly, the Single Judge expressly dissented with the DB’s earlier decision in Ultrahome Constructions. In particular, the Single Judge interpreted Dalia and said that:

[Para 57] “The Supreme Court, in my opinion, did not interpret Section 62 of the Copyright Act and Section 134 of the Trade Marks Act to mean that the plaintiff could not file the suit where its principal place of business was situated, if it had a subordinate office where the cause of action had arisen. To my understanding, the sentence in the judgment of the Supreme Court in para 14, which has been emphasized by the Division Bench, does not in any way impinge on the right of the plaintiff to file the suit-by resort to Section 62 of the Copyright Act and Section 134 of the Trade Marks Act, at the principal place/ head office/ place of residence of the plaintiff, under any circumstances, as the said extract itself recognizes that an additional forum has been provided to the plaintiff so as to file a suit where he is residing or carrying on business, as the case may be.”

Material Facts vs. Particulars

First, the DB clarified that the O7R10 Objection is by way of demurrer, i.e. only in relation to the contents of the plaint. In Exphar SA v. Eupharma Laboratories, the SC observed that when an objection is raised by way of demurrer not at the trial, the objection must proceed on the basis that the facts, as pleaded in the plaint are true. Accordingly, the DB said that this requirement has been satisfied by RSPL as it has specifically averred that Mr. Sharma is inter alia soliciting business and transacting under the impugned mark in the state of UP.

Second, the DB also observed that the single judge erred in his formulation of a distinction between ‘material facts’ and ‘particulars’; and found that RSPL‘s averments were not bereft of material facts. This is because material facts are basic and preliminary in nature. On the other hand, particulars are details in support of the material facts; thereby making the latter a more elaborate requirement. The DB said that RSPL adequately revealed the basic facts and relied upon the SC’s decision in Virendra Kashinath Ravat v. Vinayak N. Joshi to show that RSPL had also fulfilled the statutory objective behind O6R2 of providing an adequate intimation to the opposing party and of enabling the court to determine the real issue between the parties.

Wrath of the DB

The DB was highly dissatisfied by the dissent employed by the single judge and stated that judicial propriety and discipline required the single judge to follow the DB decision. Relying upon the SC’s decision in Pradip Chandra Parija v. Pramod Chandra Patnaik the DB discussed the process of referring for reconsideration of a judgment by a division bench [the DB Judgment]:

1. If the single judge wishes to dissent with the DB Judgment, s/he should refer the matter to a division bench.
2. If the division bench also considers the DB Judgment as erroneous, it must further refer the matter to a three-judge bench.
3. Only such a three-judge bench, sitting in review over the DB judgment, has the authority to decide the precedential fate of such judgment.

Lastly, the DB said that: “…It is not open to a Single Judge (and more particularly a trial court) to differ from or critically appraise a decision of a Division Bench (and more particularly of an appellate court). Once it is recognized that the decision of the Division Bench is binding on the Single Judge, there is no need to express any difference of opinion or disagreement or purport to give reasons for the said difference of opinion or to even suggest that the decision of the Division Bench may need re-consideration.”