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Case Title: Scotch Whisky Association v. J.K. Enterprises and ors.

Case No: Misc. Petition No. 4543 of 2021

Decided on: 18th December, 2023

CORAM: THE HON’BLE MR. JUSTICE SUSHRUT ARVIND DHARMADHIKARI AND THE HON’BLE MR. JUSTICE HIRDESH

Facts of the Case

The petitioner by filing the present petition under Article 227 of the Constitution of India, pleads that being a “Registered Proprietor” (hereinafter ‘RP’) of the Scotch Whisky Geographical Indication (hereinafter ‘GI’) has an independent right and entitlement to maintain the suit for infringement of the GI in his own independent capacity. It mentions itself to be a company incorporated under laws of the United Kingdom with its registered office at Scotland, UK and legal representatives in India, Mr. Sunil MB Dutta has been authorized to carry out all functions on behalf of petitioner. It had filed a GI Application no. 151 as the RP applicant for a grant of GI for Scotch Whisky on 05.01. 2009 and it was granted the status of GI to Scotch Whisky on 23.09.2010 by the Central Government. being the original applicant as RP, on whose application the GI tag was granted by the Central Government to Scotch Whisky, the suit for infringement of GI at their instance under Section 21 of the Geographical Indications of Goods (Registration and Protection) Act, 1999 (hereinafter ‘GI Act’) is clearly maintainable and the petitioner has been incorrectly directed to be impleaded or proceed with the suit only after the impleadment of registered “Authorised User” (hereinafter ‘AU’) of the Scotch Whisky under the GI Act.

J.K. Enterprises (hereinafter ‘JKE’) is a partnership firm, with Defendant No. 2 & 3 as its partners, having its Head Office in Indore and having its manufacturing and packaging unit in District Dhar and Indore are marketing and selling ‘London Pride’ whisky, which gives rise to the cause of action in the plaint.

The petitioner contends that it is a registered association in the UK and has significant interest in protecting the GI tag associated with Scotch Whisky. As RP, the suit is maintainable in the instance case. There were no pleadings or grounds presented by the respondent (JKE) in their O7/R11 application, suggesting that the suit is not maintainable due to the non-impleadment of AU as a necessary plaintiff along with RP. The petitioner asserts that under an O7/R11 application, the Trial Court did not have the authority to direct the impleadment of AU as a necessary party. The petitioner argues that the direction for impleadment of any party as a necessary or proper party is not a ground specified under O7/R11, and the Court’s consideration should be limited to the factors explicitly outlined in that rule.

The respondent, JKE, contends that while referring to Sections 17, 20, 22 of the GI Act and Rule 56 of the GI Rules, 2013, it is the only the AU which can institute the suit or the GI for itself and no other entity under the GI Act is authorised to use the GI tag. In light of Section 21, if a suit for infringement is to be instituted as without AU, the RP would have no independent entitlement or ‘right to sue’ for infringement of GI tag. The word ‘and’ occurring under Section 21 (1) (a) of the GI Act must be read ‘conjunctively’ and not ‘disjunctively’, mandating the requirement of both AU and RP to be impleaded as necessary party plaintiff in a suit for infringement of GI.

Legal Provisions

1. Section 21 (1) (a) of GI Act provides the rights conferred by registration. It sates that subject to the other provisions of this Act, the registration of a geographical indication shall, if valid, give to the registered proprietor of the geographical indication and the authorised user or users thereof the right to obtain relief in respect of infringement of the geographical indication in the manner provided by this Act.
2. Order VII Rule 11 of Code of Civil Procedure,1908 lays down the grounds on which a plaint is liable to be rejected by the court.
3. Order VII Rule 11 (a) of Code of Civil Procedure,1908 essentially lays down that a plaint is liable to be rejected by the court if such a cause of action, upon which the whole suit is founded is not specified therein.

Issues

1. Whether in an application under Order VII Rule 11 of Code of Civil Procedure,1908, can the Civil Court hold non-joinder of a party to be fatal to the suit or direct for impleadment of any party as a necessary/proper party to the suit?
2. Whether under Section 21(1) of the GI Act, RP can bring the suit for infringement in its own capacity or must join AU to make the suit maintainable? How should the word ‘and’ occurring under Section 21(1) be read and; conjunctively or disjunctively, as specifying two classes simpliciter, who can institute the suit for infringement of GI?
3. Whether the complaint disclose a cause of action under Order VII Rule 11 of Code of Civil Procedure,1908 for it to be maintainable?

Court’s analysis and decision

The Hon’ble High Court of Madhya Pradesh has dealt with the first issue by referring to the judgement of other High Courts. In Babu Lal & Ors. Vs. Smt. Unati & Ors.- CR no. 30/14, Order dated 26.08.2014, it was held that t Non-Joinder/Joinder of necessary parties, not being one of the grounds specified under O7/R11, can’t be devised as a ground for rejection or return of plaint by the Trial Court. It cannot lead to immediate rejection of the plaint, if the plaintiff fails to do so. It can be examined by the Trial Court at the stage of framing of issues later during the trial about the necessity of joinder of any necessary party or implication of non-joinder of any such party on the maintainability of the suit. However, the impugned order dated 28.10.2021 passed by Commercial Court in District Indore becomes assailable.

The Court addressed the second issue that the application for grant of GI status can be filed by an applicant, who has to be a producer or any person entrusted as the RP. It is on the application of the RP or any other applicant that GI tag comes into existence. The RP can alternatively, even in the absence of AU can institute an action or proceeding in his own right, one of them being a renewal of GI or for grant of additional protection. Thus, the RP can be treated as an entity independent of AU for the purposes of obtaining or continuing with the GI tag of any good concerned. As is clear from Section 17, AU has a right to get himself registered separately and claim protection of GI independently. However, the mere existence or registration of AU cannot operate to the complete exclusion of the RP so as to dislodge and displace him from claiming the protection of any GI or standing against infringement thereof.

Section 21 has also to be viewed in the larger scheme of the GI Act, titled ‘Rights conferred by registration’. It thus is enacted to protect the registered GI, the unregistered version of which has no protection or identity available under the Act. Clearly, when registration can be applied for by both RP or AU, then both entities shall equally be entitled to the rights flowing out of the same as its consequence thereof. It cannot be contended that without an application preferred under Section 11, a GI tag can come into existence on its own and that the application under Section 11 has to necessarily be either by the RP, AU or both. Thus, the registration of GI gives equal recognition & rights to the RP as well as AU of obtaining the ‘right to obtain relief’ in the event of infringement of GI by any person.

Section 21(1)(a) is different from Section 21(1)(b). Section 21(1)(a) accords RP and AU the ‘right to obtain relief’ for any infringement and Section 21(1)(b) accords the ‘exclusive right’ to the use of goods whose GI is registered. Therefore, the legislature could not have been presumed to have conferred exclusive rights on the AU to the exclusion of RP itself. RP would also have a right to file a restraint suit for grant of injunction against any unauthorised user of GI tag. The word ‘and’ used under Section 21(1)(a) must be inferred and read as ‘or’, giving ‘equal rights’ to sue to both the RP as well as AU in the event of a registered GI.

The Court addressed the third issue. Scotch Whiskey is registered in a large number of other countries across the globe whilst referring to the registration certificates of GI issued in multiple other countries including the country of origin, viz. UK. Whether the infringement has actually happened or not; whether the loss of business or damages as averaged in the suit by the petitioner is all a matter of trial, yet to be tested through evidence, exchange of pleadings and examination of witnesses. It can’t be inferred that plaint of petitioner fails to disclose a ‘cause of action’ miserably and thus liable to be dismissed summarily. Therefore, the contention as agitated in the O7/R11(a) application on behalf of the JKE (Respondent) about the plaint failing to disclose any cause of action is also without merit and liable to be rejected.

The Impugned Order dated 28.10.2021 deserves to be and is hereby set aside.

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Written by- Afshan Ahmad

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