14 November, 2015
Supreme Court Clarifies the Law with regard to Place of Suing where the Plaintiff Company has Multiple Offices
The Supreme Court by its judgment dated July 1, 2015, dismissed two civil appeals13 filed by the Indian Performing Rights Society (‘IPRS’) and Advance Magazine Publishers Inc. against Sanjay Dalia and Just Lifestyle Pvt. Ltd., respectively.14 The main issue considered by the Su- preme Court in both the appeals was the need to reconcile the interpretation of Section 62(2) of the Copyright Act, 1957 (‘Copyright Act’) and Section 134(2) of the Trade Marks Act, 1999 (‘Trade Marks Act’) with that of section 20 of the Civil Procedure Code, 1908 (‘CPC’), in relation to the place where a suit can be instituted by a plaintiff in a trademark or copyright case.
These appeals were filed in cases where the copyright/trademark owners attempted to in- stitute suits solely on the grounds of the defendant having subordinate offices in the place of filing of the suit, irrespective of whether or not the cause of action arose in such places. For instance, both IPRS and Advance Magazine Publishers Inc. instituted copyright and trademark infringement suits respectively, before the Delhi High Court, solely on the grounds of having a subordinate office in Delhi. This was despite the fact that their principal offices were located in Mumbai and the cause of action also arose in Mumbai. Both these cases were dismissed for lack of jurisdiction and, hence, the current appeals were filed before Supreme Court.
The appellants argued that Section 62(2) of the Copyright Act and Section 134(2) of the Trade Marks Act confers jurisdiction on the District Courts within whose territory the plain- tiff resides, carries on business or personally works for gain. Moreover, it was contended that since the Copyright Act and Trade Marks Act are special legislations and contain a non obstante clause in relation to the CPC, the jurisdiction clauses of Section 62(2) and Section 134(2) should override Section 20 of the CPC. Therefore, plaintiffs should be allowed to file a suit even in ju- risdictions where no cause of action may have arisen as long as the plaintiff resides or carries on business or works for gain in such a place. Since the relevant provisions of these Acts were unambiguous, it was contended that a literal and plain interpretation should be given to these provisions.
Supreme Court, however, held that Section 62(2) of the Copyright Act and Section 134(2) of the Trade Marks Act only create an additional forum over and above the forums already speci- fied under section 20 of the CPC. Section 20 of the CPC confers jurisdiction upon district courts where the defendant(s) reside or carry on business or where the cause of action arises (wholly or in part). Section 20 also contains an explanation that explains the meaning of ‘carry on busi- ness’, –which is defined as ‘A corporation will be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place’. Supreme Court has held that Sections 62(2) and 134(2) of the Copyright Act and Trade Marks Act, respectively, do not oust the applicability of section 20 of the CPC.
Supreme Court has further held, while analyzing the legislative intent behind the above- mentioned sections, that the main intention for enacting these provisions was to ensure that authors were not deterred and did not suffer financially on account of enforcing their rights at places away from their residence or the place of their business. Therefore, these provisions were enacted only to cure the inconvenience that was being caused to owners of copyrights or trademarks in enforcing their rights. Supreme Court has held that such a provision was never intended to enable plaintiffs to inconvenience the defendants by instituting suits in far flung places where no cause of action had arisen merely on the ground of having a subordinate office in such place.
Therefore, the principle of law created by this case is that if a cause of action arises entirely where the principal office of the plaintiff is situated, the plaintiff cannot file a suit at a place where the defendant has a subordinate office. Similarly, if the entire cause of action arises where a subordinate office is located, the jurisdiction of the places where the other subordinate offices are located is ousted.
13 Civil Appeal Nos. 10643-44/2010 (arising out of Civil Suit FAO (OS) No. 359/2007)and Civil Appeal arising out of SLP
[C] No. 8253/2013.
14 Indian Performing Rights Society Ltd v. Sanjay Dalia & Anr., (Civil Appeal Nos. 10643-44/2010 with C.A. No.4912/2015 @ SLP [C] No.8253/2013), Supreme Court of India, July 1, 2015.
For further information, please contact:
Zia Mody, Partner, AZB & Partners
zia.mody@azbpartners.com
