Infringement of Copyright/Trade Mark : When cause of action arises at a place where plaintiff carries on business, suit cannot be filed at other places where plaintiff is having branch offices ; SC

Resolving the legal nodus arising out of the interpretation of Section 62 of the Copyright Act and Section 134 of the Trade Marks Act and answering the issue whether the restriction imposed by the Explanation to Section 20 of the Code of Civil Procedure dealing with cause of action in respect of a Corporation could be read into the said provisions-the non-obstante clause notwithstanding- the Supreme Court in Indian Performing Rights Society v Sanjay Dalia & Anr- a decision rendered last week- has held that the expression “notwithstanding anything contained in the Code of Civil Procedure” does not oust the applicability of the provisions of section 20 of the Code of Civil Procedure and that when the plaintiff resides or has its principal place of business/carries on business or personally works for gain at a place where cause of action has also arisen, suit should be filed at that place and not at other places where plaintiff is having branch offices.

The judgment dealt with two different matters considered together on appeal owing to the similarity in legal questions raised.

The first was a case where the plaintiffs/appellants (IPRS) sued in Delhi for infringement of their copyright by the defendants/respondents who owned theatres in Maharashtra. This was despite the fact that the head office of the plaintiffs was situated in Mumbai, and that the cause of action had ostensibly arisen in Maharashtra. The respondents had raised this contention before the High Court of Delhi, where both the Single Judge at the first instance and the Division Bench in the intra-court appeal, held that the suit should have been filed in Mumbai.

The other suit was filed for Trade Mark infringement where the registered office of the plaintiffs was in Mumbai. They sued the defendant in Delhi for infringement of their trade mark but did not clarify in their pleadings that the allegedly infringing magazine was being distributed in Delhi and therefore that a cause of action arose in Delhi. In denying their application to amend the pleadings, the Single Judge noted that even an amended pleading would not confer jurisdiction. This order was however reversed by the DB and subsequently was assailed in appeal before the Supreme Court.

In essence, the issue to be answered was when the cause of action arises in a place where the plaintiff has an office (head or subordinate), can they sue in another jurisdiction, merely because they happened to carry on business there, taking advantage of the provisions in the Copyright Act & Trade mark Act to the exclusion of the jurisdiction requirement mandated in the CPC?

The plaintiffs defended the filing of the suit in Delhi instead of Mumbai on the ground that both S.62 of the Copyright Act of 1957 and S.134 of the Trademarks Act, 1999 granted an additional remedy over and above the provisions of S.20 of the Code of Civil Procedure and that Section 62(2) of the Copyright Act and section 134 of the Trade Marks Act have no co-relation to the cause of action and suit can be filed where plaintiff resides or carries on his business or personally works for gain and that therefore the restrictions imposed by the Explanation in S.20 are not attracted in this case.

It was also contended that Heydon’s ‘rule of mischief’ is not attracted where the words of the statute are clear and unambiguous. There is no challenge to the vires of section 62 of the Copyright Act. Thus, the court cannot invoke the doctrine of reading down the provisions. Section 62 of the Copyright Act is a special legislation and confers a special right on the plaintiff where it carries on business or resides. Reading the Explanation to section 20 of the Code of Civil Procedure into section 62 will do violence to the Copyright Act. The requirement of cause of action or Explanation as to the corporation of Section 20 C.P.C. cannot be added to the aforesaid provisions.

On behalf of the respondents, it was submitted that abuse of provisions of section 62 of the Copyright Act and section 134 of the Trade Marks Act cannot be permitted at the hands of multi-national corporations to harass the defendant/s. With respect to the suit being filed by the Corporation, section 20 is not inapplicable. ‘Carrying on business’ cannot be defined subjectively.

A Bench of the Apex Court comprising of Justice J S Khehar and Justice Arun Mishra, on a consideration of the provisions contained in section 20 of the CPC, section 62 of the Copyright Act and section 134 of the Trade Marks Act, and the object with which the latter provisions have been enacted, held that where the Corporation is having ordinary residence/principal place of business and cause of action has also arisen at that place, it has to institute a suit at the said place and not at other places.

In reaching the said conclusion, the Court reasoned thus : “The provisions of section 62 of the Copyright Act and section 134 of the Trade Marks Act never intended to operate in the field where the plaintiff is having its principal place of business at a particular place and the cause of action has also arisen at that place so as to enable it to file a suit at a distant place where its subordinate office is situated though at such place no cause of action has arisen. Such interpretation would cause great harm and would be juxtaposed to the very legislative intendment of the provisions so enacted.

The Bench held that the right conferred under the Copyright Act and Trademarks Act is subject to the rider in case plaintiff resides or has its principal place of business/carries on business or personally works for gain at a place where cause of action has also arisen, suit should be filed at that place not at other places where plaintiff is having branch offices etc. “the words used in section 62 of the Copyright Act and section 134 of the Trade Marks Act, ‘notwithstanding anything contained in CPC or any other law for the time being in force’, emphasise that the requirement of section 20 of the CPC would not have to be complied with by the plaintiff if he resides or carries on business in the local limits of the court where he has filed the suit but, in our view, at the same time, as the provision providing for an additional forum, cannot be interpreted in the manner that it has authorised the plaintiff to institute a suit at a different place other than the place where he is ordinarily residing or having principal office and incidentally where the cause of action wholly or in part has also arisen”

The Bench said that it was never visualised by the law makers that both the parties would be made to travel to a distant place in spite of the fact that the plaintiff has a remedy of suing at the place where the cause of action has arisen where he is having head office/carrying on business etc. The provisions of the Copyright Act and the Trade Marks Act provide for the authors/trade marks holders to sue at their ordinary residence or where they carry on their business. The said provisions of law never intended to be oppressive to the defendant. “If the interpretation suggested by the appellant is accepted, several mischiefs may result, intention is that the plaintiff should not go to far flung places than that of residence or where he carries on business or works for gain in order to deprive defendant a remedy and harass him by dragging to distant place. It is settled proposition of law that the interpretation of the provisions has to be such which prevents mischief.”

Illustrating the point with an example, the Court said : “There may be a case where plaintiff is carrying on the business at Mumbai and cause of action has arisen in Mumbai. Plaintiff is having branch offices at Kanyakumari and also at Port Blair, if interpretation suggested by appellants is acceptable, mischief may be caused by such plaintiff to drag a defendant to Port Blair or Kanyakumari. The provisions cannot be interpreted in the said manner devoid of the object of the Act.”

The Apex Court therefore held : “In the instant cases, the principal place of business is, admittedly, in Mumbai and the cause of action has also arisen in Mumbai. Thus, the provisions of section 62 of the Copyright Act and section 134 of the Trade Marks Act cannot be interpreted in a manner so as to confer jurisdiction on the Delhi court in the aforesaid circumstances to entertain such suits. The Delhi court would have no territorial jurisdiction to entertain it.”

In conclusion, the Supreme Court said: “ In our opinion, the provisions of section 62 of the Copyright Act and section 134 of the Trade Marks Act have to be interpreted in the purposive manner. No doubt about it that a suit can be filed by the plaintiff at a place where he is residing or carrying on business or personally works for gain. He need not travel to file a suit to a place where defendant is residing or cause of action wholly or in part arises. However, if the plaintiff is residing or carrying on business etc. at a place where cause of action, wholly or in part, has also arisen, he has to file a suit at that place”

The Appeals were accordingly dismissed by the Apex Court.

Read the Judgment here.