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29 Mar

High court of judicature of Bombay: “The Company’s Principal Place of Business and Registered Office is significant”

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Case Title:- Prince Pipes and Fittings Ltd. Versus Shree Sai Plast Pvt.Ltd

Case No:- Interim application (L) No.2548 of 2024 in Commercial IP suit (L) No.27330 of 2023

Decided on:- 14th March,2024.

Quorum:- Bharati Dangre, J

Facts of the case:-

In the Commercial Suit filed by the plaintiff against the defendant for infringement of trademark, copyright and passing off the defendant, Shree Sai Pvt. Ltd., filed the interim application claiming that the defendant is involved in infringing activities and is trying to capitalize on the goodwill and reputation of the plaintiff and that as a result of its act, the plaintiff has suffered irreversible loss, injury, damage and harm. In the meantime the defendant has filed an interim application in accordance with Order VII Rule 10 of the Code of Civil Procedure requesting the return of the lawsuit that the plaintiff filed. Submitted to the court, where it ought to have been filed. Following the objection raised by the plaintiff’s learned counsel, Mr. Khandekar, that the Bombay High Court (Original Side) Rules, 1980 did not allow the provision under Order VII Rule 10 to be invoked and that instead the provision to be invoked is in the form of Rule 283 the learned counsel Mr. Kirpekar, requested that this application be treated as one under Rule 283. The application is handled as if it were filed under Rule 283 because I believe the authority to be used under Section 283 is similar to that which is available under Order VII Rule 10. The relief of return to the plaint is based on the claim that the plaintiff registered office at the time of the suit which was filed in Goa, as shown by the plaintiff’s incorporation certificate and even by the ROC record. It is argued that the company’s registered office serves as its major place of business and as a result, the registered owner of the trademark may initiate a lawsuit for infringement at that location. The plaintiff in the event is in a company which was officially recognized under the Companies Act, as long as the company maintains its registered office. Therefore, the suit is requested to be returned on the grounds that this court lacks the authority to try consider and decide the current status.

Plaintiff Contentions :-

The Plaintiff/Appellant, filed a suit seeking relief against Defendant No.1 so as to prevent infringement of its rights, without obtaining the license. The Defendant owned Cinema Halls in Mumbai, Maharashtra where infringement is alleged and the entire cause of action as alleged in plaint arose in Mumbai, Maharashtra. The Civil Suit was filed in the High court of Delhi by virtue of the fact that the branch office of the Plaintiff is situated at Delhi and the Plaintiff is carrying on business at Delhi, though its head office is situated at Mumbai. The objection was raised by the Defendant with regard to the territorial jurisdiction of the Court at Delhi and the Single Bench and Division Bench of the High Court upheld the objection and held that the suit should have been filed, in the facts of the case, in the court at Mumbai. Mr. Kirpekar’s submission that the susceptible misuse by creation of additional forum must be adverted by him, specifically in the facts of the case he heard the learned counsel Mr. Alankar Kirpekar for the Applicant, who would place reliance upon the decision of the Apex Court in the case of Indian Performing Rights Society Ltd. Vs. Sanjay Dalia & Ors. (citation) as well as decision of this Court (G.S. Patel,J)Dated 15.06.2016 on Notice of motion in the case of Manugraph India Limited vs. Simarq Technologies Pvt. Ltd. & Ors., where a comparisons drawn between Section 134(2) of the Trade Marks Act, 1999 and Section 62(2) of the Copyright Act, 1957 as against Section 20 of the CPC and it Is the submission of Mr. Kirpekar that the Plaintiff has registered office in Goa though it may carry its business in Mumbai and the Defendant is situated in Patna as it is a company incorporated in Bihar and, therefore, the suit ought to have been filed either at Goa i.e. At the place where registered office of the company is located or the place where the Defendant is carrying business. Drawing inference from the decisions on which he has placed reliance, Mr.Kirpekar would submit that the company of the Plaintiff can exercise three choices, while it decides to institute the proceedings for infringement of Trade marks/Copyright and the choices available according to him are ; the suit can be filed at the place where registered office of the Company is situated, or at the place where the Defendant is situated and the third choice which is available according to Mr. Kirpekar as per Section 134(2) of the Trade Marks Act, 1999, that the place where the company carried on business. According to him, an additional forum is created by virtue of the said provision, but it is Likely to be misused by the companies, like that the Plaintiff, which are conglomerates and have their branch offices or sub offices at difference places, leaving it open to file suit at any of his places where the business is transacted and taking the Defendant for a right.

Respondent Contentions:-

Learned counsel for respondents drew the attention of the Court by Mr. Kirpeka to the conclusion derived by G.S. Patel, J in the case of Manugraph India Limited (supra) and in particular Para 36 (d), which reads to the following effect :-“The Section 134(2) and Section 62(2) privilege or advantage attaches to the registered office or principal place of work. It is a privilege not to be used by abandoning the registered office sites abandoning the Section 20 sites options and travelling to some remote location where there is neither defendant nor cause of action. That is the mischief addressed in Sanjay Dalia. To illustrate : The defendant is in Delhi. The cause of action arose in Delhi. The plaintiff also has another branch office in Port Blair. A plaintiff can sue in Mumbai or in Delhi, but not in Port Blair.” Opposing him, Mr. Khandekar, would invite his attention to Clause 67 of the Plaint and it is his specific submission that the Plaintiff has specifically described itself as a company incorporated under the Companies Act, 1956, having its principal place of business at, the Ruby, 8th Floor, 29, Senapati Bapat Marg, Dadar (W), Mumbai, Maharashtra and by inviting his attention to the plaint, he would submit that the Plaintiff has pleaded that its principal place of business is in Mumbai, whilst it is interlaid engaged in manufacturing and export of pipes in India, it being incorporated in the year 1987. Mr.Khandekar would submit that the Defendant is proceeding on a premise that the principal place of business is synonym to the registered office and that is why the Defendant is relying upon the decision in the case of Manugraph India Limited (supra) and attempting to draw a parlance with a registered office of the company. According to Mr. Khandekar, a registered office of the Petitioner is in Goa, but its principal place of business is in Mumbai and the Plaint has specifically set out the details of the business activity carried out by the Plaintiff from Mumbai. He would place reliance upon the decision of Calcutta High Court in the case of India Glycols Ltd & Ant. Vs. Commissioner of Income Tax and Another, (citation) to buttress his submission that the principal place of business may or may not be a registered place of business.

Court Analysis and Judgement

The court said that registered office of the Company must necessarily be the principal place of its business and this misconception must be cleared. The principal place of business need not be equated, every time With registered office, as the principal place of business of the company is the place wherefrom the company controls its business activities i.e. Where the center of power of corporate body is located. It is quite possible that principal place of business is also its registered office, but it may not be true in every scenario. The principal place of business at times may not be the registered place of business, as the principal place may be distinct from its registered place as the former is the place from where the entire company business is controlled. On this misconception being removed, I do not think that there is any reason for addressing the grievance by Mr. Kirpekar. Admittedly, since the Plaintiff has Mumbai as its place of business, the application filed by the Defendant is without merit and is dismissed.

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Judgement Analysis Written by – K.Immey Grace

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13 Sep

Madras High Court Says the Civil Court has no jurisdiction over a company case as per Sections 242(2)(i) and Section 430 of the Companies Act, 2013.

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TITLE: K. Prabhu Vs. G. Reghukumaran.

Decided On: September 11, 2023.

C.R.P.(MD)No.535 of 2014 and M.P.(MD)Nos.1 and 2 of 2014.

CORAM: Hon’ble Mr. Justice R. Vijayakumar.

Facts:

The present Civil Revision Petition has been filed to strike off the plaint on the ground that the Civil Court has no jurisdiction to entertain a suit for recovery of money from a Managing Director on the allegation of misappropriation of funds. According to the O.S.No.32 of 2014 the plaintiff is a Public Limited Company incorporated under the provisions of the Companies Act, 2013. As per the allegations in the plaint, the first defendant, namely, K.Prabhu, had officiated as a Managing Director of the plaintiff Company between 20.09.2010 and 13.09.2011. The plaintiff has contended that the first defendant, while officiating as the Managing Director of the Company, has misappropriated the funds of the Company and helped the third defendant to get rid of the financial constraints under the guise of entertaining a fake transaction of running a mineral water plant.

Legal Analysis and Decision:

The plaintiff has contended that the Managing Director had caused a huge financial loss to the plaintiff Company, while he was dealing with the funds generated from the general public. The plaintiff Company had relied upon the auditor’s report relating to the misappropriation alleged to have been done by the first defendant. According to the plaintiff, the first defendant was actively assisted by other defendants in the misappropriation. A careful perusal of the plaint allegations would reveal that a sum of Rs.89,02,461/- is sought to be recovered only on the basis that the first defendant, while officiating as the Managing Director of the plaintiff Company, has misappropriated the Company’s funds, for which, the other defendants have assisted.

Section 242(2)(i) of the Companies Act, 2013 Company Law Tribunal has got jurisdiction to recover any undue gains made by any Managing Director during the period of appointment.

Section 430 of Companies Act, 2013 to impress upon the Court that the Civil Court shall not have any jurisdiction to entertain any matter which the Tribunal or the Appellate Tribunal is empowered to determine by or under this Act.

After a combined reading of Sections 242(2)(i) and Section 430 of the Companies Act, 2013 it clearly reveals that the present suit for recovery of money is solely based upon the allegations that the first defendant has misappropriated the funds of the plaintiff/Public Limited Company, while he was officiating as the Managing Director. Therefore, the Civil Court has no jurisdiction to entertain the said suit. In view of the said deliberations, the plaint in O.S.No.32 of 2014 on the file of the VI Additional District Court, Madurai, is hereby struck off. However, the plaintiff/Public Limited Company is at liberty to approach the appropriate forum for appropriate relief, if they are so advised.

Conclusion:

The court concludes that after looking carefully into Sections 242(2)(i) and Section 430 of the Companies Act, 2013 says that the suit is solely related to recovery of money and the Civil Court has no jurisdiction over the issue and the company may approach the appropriate forum.

JUDGEMENT REVIEWED BY JANGAM SHASHIDHAR.

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18 Aug

The Designs Act of 2000 does not extend protection beyond what is required to create a mandatory incentive for design activity: Delhi High Court

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Title: HERO MOTOCORP LIMITED Vs SHREE AMBA INDUSTRIES

Decided on: 16th August, 2023

+ CS(COMM) 1078/2018 & I.A. 11007/2018 (O-XXVI R-9 of CPC)

CORAM: HON’BLE MR. JUSTICE AMIT BANSAL

Introduction

The Delhi High Court recently addressed a case involving a trademark dispute between Mankind Pharma Limited and Novakind Bio Sciences Private Limited. The key contention revolved around the use of the common suffix “KIND” in their respective trademarks. The Court’s decision emphasized the significance of maintaining clear distinction between pharmaceutical products to prevent confusion among healthcare professionals and consumers.

Facts

Mankind Pharma Limited, a prominent participant in the Indian pharmaceutical industry, adopted the trademark “MANKIND” as part of its trading style in 1986. The company incorporated the suffix “KIND” in the names of several pharmaceutical preparations it manufactured and sold. Mankind Pharma expressed concerns regarding Novakind Bio Sciences Private Limited’s utilization of the mark “NOVAKIND” for its pharmaceutical products. Mankind Pharma contended that the inclusion of “KIND” in Novakind’s mark infringed upon its registered trademark. Mankind Pharma issued a cease-and-desist notice to Novakind, urging it to desist from using the contested mark.

Analysis and Held

In the matter, a Single Judge Bench presided over by Justice C. Hari Shankar handled the case. The Court acknowledged that while physicians and chemists might prefer Mankind Pharma’s products due to their efficacy, the shared “KIND” suffix could lead to confusion. The Court stressed that even the slightest possibility of confusion is unacceptable when it comes to medicines, especially prescription drugs.

The Court pointed out that the use of the “KIND” suffix is not exclusive to pharmaceutical preparations. Consequently, individuals with average intelligence and imperfect memory could associate Novakind’s “NOVAKIND” product with the KIND family of marks owned by Mankind Pharma. This likelihood of association satisfied the legal requirement for infringement under Section 29(2)(b)10 of the Trade Marks Act. Both marks were found to be deceptively similar and used for identical goods, supporting the finding of trademark infringement.

The Court further emphasized that individuals with limited means, who rely on less expensive medical services, might be particularly prone to associating medicines with their manufacturers. Due to the varying effectiveness of the same drug produced by different companies, the Court highlighted the need for distinct trademarks to prevent confusion and potential health risks.

In conclusion, the Delhi High Court upheld that the trademarks of Mankind Pharma and Novakind Bio Sciences were deceptively similar. The Court endorsed Mankind Pharma’s concerns regarding potential confusion among healthcare professionals and consumers, leading to its decision against Novakind’s use of the contested mark.

Written by- Ankit Kaushik

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18 Aug

Delhi High Court’s Jurisdictional Ruling: Venue vs Seat of Arbitration and Time Extension for Arbitral Proceedings

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Title: Reliance Infrastructure Limited v. Madhyanchal Vidyut Vitran Nigam Limited

Decided on: 14th August, 2023

+ O.M.P.(MISC.)(COMM.) 161/2020 and IA No. 9377/2020

CORAM: HON’BLE MR. JUSTICE SACHIN DATTA

Introduction

The Delhi High Court recently rendered a significant decision regarding the distinction between the ‘venue’ and ‘seat’ of arbitration, as well as the extension of time for completing arbitral proceedings. The case involved a petition seeking an extension of time for issuing an arbitral award under Section 29A(4) and (5) of the Arbitration and Conciliation Act, 1996.

Facts

The petitioner, a participant in Rural Electrification works in Uttar Pradesh, initiated arbitration proceedings due to disputes arising from contracts. The General Conditions of Contract (GCC) mentioned that disputes would be resolved through arbitration, with Delhi having exclusive jurisdiction. Subsequently, the petitioner sought an extension for the Sole Arbitrator to issue the arbitral award.

Analysis

The central issue before the Court was the distinction between the ‘venue’ and ‘seat’ of arbitration and the significance of an exclusive jurisdiction clause. The Court underscored that when an arbitration clause designates a specific ‘venue,’ it essentially anchors the arbitral proceedings to that location, making it the ‘seat’ of arbitration. Thus, the Court exercising supervisory jurisdiction over the designated ‘venue’ becomes the supervisory authority for the arbitral process, even if a general exclusive jurisdiction clause exists for a different court. The Court examined various judgments and legal precedents to establish this principle.

The Court highlighted the fact that the LOA’s ‘exclusive jurisdiction’ clause was general and did not specifically pertain to arbitration, while the GCC Clause 48.1.2 designating Delhi as the ‘venue’ of arbitration took precedence. This reinforced Delhi as the ‘seat’ of arbitration. The Court clarified that the Arbitration Act empowers courts to extend the Arbitrator’s mandate even after the award’s deadline, upon sufficient cause shown.

Held

The Court declared its territorial jurisdiction over the arbitration proceedings and the petition’s maintainability. It granted the petition, allowing an extension of one year from the date of the judgment for completing the arbitration proceedings and issuing the arbitral award. The Court emphasized that the Sole Arbitrator had not shown any lack of expedition in the proceedings.

Conclusion

The Delhi High Court’s ruling highlights the significance of accurately designating the ‘seat’ of arbitration based on the specified ‘venue’ and clarifies that exclusive jurisdiction clauses do not undermine the seat’s authority. The Court’s decision also underscores the flexibility of the Arbitration Act to grant extensions for arbitral proceedings.

Written by- Ankit Kaushik

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9 Aug

In a trademark infringement suit, the Delhi High Court awarded Sun Pharma a five-lakh-rupee penalty for its 2001 “Oxiplat” trademark.

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Title: Sun Parma Laboratories Ltd. v. Mylan Laboratories Limited & Anr.
Decided on: 2nd August, 2023

+ CS(COMM) 1098/2016 & I.A.1395/2023

CORAM: JUSTICE PRATHIBA M. SINGH

Introduction

The Delhi High Court, presided over by Justice Pratibha M Singh, has awarded costs of Rs. 5 lakhs in a trademark infringement suit to Sun Pharmaceutical Industries Limited. The case was brought forth by Sun Pharmaceuticals against two pharmaceutical companies over their registered mark “Soxplat”, which was alleged to infringe upon Sun Pharmaceuticals’ registered mark “Oxiplat”. The court’s decision was based on the substantial sales and investments made by Sun Pharmaceuticals in promoting and using the “Oxiplat” mark.

Facts

Sun Pharmaceutical Industries Limited filed a trademark infringement suit in 2016 against two pharmaceutical companies that had registered the mark “Soxplat” in 2014. Sun Pharmaceuticals had coined the mark “Oxiplat” back in 2001, which was used for medicinal preparations containing Oxaliplatin. The company sought a permanent injunction against the use of the “Soxplat” mark.

The Court noted that Sun Pharmaceuticals’ sales of medicinal formulations under the “Oxiplat” mark were substantial, with a sales turnover of approximately Rs. 26.5 crore at the time of filing the suit. The company had also invested significantly in advertising and promoting the mark.

During the course of the proceedings, the defendants’ trademark “Soxplat” was canceled, rendering them no longer registered for the mark.

Analysis

The Court took note of the substantial sales and investments made by Sun Pharmaceuticals in relation to the “Oxiplat” mark. It observed that the defendants had canceled their trademark “Soxplat” during the proceedings, indicating that there was no longer any dispute between the parties concerning the use of the mark. The Court refrained from expressing an opinion on the similarity of the two marks “Oxiplat” and “Soxplat,” as the defendants had abandoned the latter mark.

Held

The Delhi High Court awarded costs of Rs. 5 lakhs to Sun Pharmaceutical Industries Limited in the trademark infringement suit. The Court’s decision was influenced by the substantial sales and investments made by the plaintiff in relation to the “Oxiplat” mark and the subsequent cancellation of the defendants’ “Soxplat” mark. The defendants’ decision to abandon the mark led the Court to conclude that there was no longer any dispute regarding the marks’ similarity.

Written by- Ankit Kaushik

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