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CS (Comm.) 271/2019, I.A. 10290/2019, 10517-18/2019 and 11819/2023

Decided On: 04.07.2023

Appellants: Escorts Ltd. Vs. Respondent: Sudhir Kumar and Ors.

Hon'ble Judges/Coram:
Prathiba M. Singh


Prathiba M. Singh, J.

1. This hearing has been done through hybrid mode.

I.A. 10517/2019 (u/O VII Rule 11 CPC)

2. This is an application filed by the Defendants-Mr. Sudhir Kumar under Order VII Rule 11 of the Code of Civil Procedure ('CPC') seeking rejection of the Plaint.

3. Ld. Counsel for the Defendant submits that, though, the application has been styled as an application under Order VII Rule 11 CPC it may be treated as an application Order VII Rule 10 CPC for return of the plaint for lack of territorial jurisdiction.

4. The present suit by the Plaintiff-Escorts Ltd. is for a decree of permanent injunction restraining the Defendants from manufacturing, using or in any manner dealing with the Plaintiff's product namely 'AAR-H COUPLERS' for Passenger Coach and 'AAR-H COUPLERS' for Locomotive or carrying out any other action likely to infringe Plaintiff's registered Designs bearing no. '246851' & '251466' ('subject designs') under the Designs Act, 2000.

5. The suit was initially filed before the District Judge (Commercial), Patiala House Courts. However, since the Defendant took a plea of invalidity of the subject designs, the suit has been transferred to this Court under Section 22(4) of the Designs Act, 2000.

6. The Plaintiff asserts rights over its products, 'AAR-H COUPLERS' for passenger coach and 'AAR-H COUPLERS' for locomotives. The case of the Plaintiff is that it has two registered designs bearing Nos. '246851' and '251466' dated 31st July 2012 and 6th February 2013 respectively. The same are valid designs, and the Defendant No. 2-M/s Vasco Railway Enterprises which is a sole proprietary concern of Defendant No. 1-Mr. Sudhir Kumar, is infringing the Plaintiff's designs.

7. Vide order dated 05th July, 2018, an ad interim ex-parte injunction was granted by the District Judge (Commercial), Patiala House Courts, which is continuing till date.

8. Submissions have been heard on behalf of the parties in present application. The Defendant submits that as per the averments in the plaint, the ground on which the territorial jurisdiction is claimed is as under:

"33. That this Hon'ble Court has the territorial jurisdiction to try and adjudicate the present suit. The defendants are approaching the Head office of Indian Railways, Situated at Rail Bhavan, 1, Raisina Road, New Delhi and is soliciting the business. The defendants are also approaching various vendors situated within the territorial jurisdiction of this Hon'ble Court, i.e. Connaught Place, Gol Market, Parliament Streets, Barakhamba Road, Chankya Puri, Bengali Market, Mandir Marg, Tuglak Road, Tilak Marg, Naraina area for the purpose of manufacturing the various parts of the subject matter products. The defendants are having every intention to supply the impugned products to the Indian Railways within the territorial jurisdiction of this Hon'ble Court. The cause of action in whole and/or in part has arisen within the jurisdiction of this Hon'ble Court. This Hon'ble Court is having territorial jurisdiction to entertain the present suit."

9. According to the ld. Counsel for the Defendant-Mr. Mudit Sharma, the above averment is insufficient to vest territorial jurisdiction in this Court.

10. He further submits that the only customer who can purchase the Defendant's products is the Indian Railways. According to the Defendants, the Indian Railways is an organization which does not do direct purchases but by calling for tenders, and parties have to submit their bids. Thereafter, evaluation of the bids takes place and the orders are placed on the successful bidders.

11. According to Mr. Sharma, mere submission of bids in response to the tender documents floated by the Indian Railways, which has its headquarters in Delhi, cannot vest jurisdiction in this Court, as the Defendant is based only in Faridabad, Haryana. Furthermore, the Defendant submits that even the tender specifications are floated by the Research Designs and Standards Organisation ('RDSO'), which is based in Lucknow, Uttar Pradesh. Thus, the ld. Counsel submits that the Plaint is liable to be returned.

12. On the other hand, ld. Counsel for the Plaintiff-Ms. Prachi Agarwal submits that the averments in the Plaint are clear and categorical to the effect that the present action was a quia timet action, and that the Defendant is intended to supply the infringing products to the Indian Railways, having its headquarters in Delhi, which is sufficient to constitute cause of action for the Plaintiff to maintain the present suit.

13. Ld. Counsel for the Plaintiff has taken the Court through various bid documents that the Defendant submitted to the Indian Railways in response to certain advertisements issued by them, in order to argue that the EMD, other deposits, etc. and other formalities have to be carried out by the Defendant in Delhi, which is the headquarters of the Indian Railways. Thus, it cannot be said that the Defendant does not offer its goods and services in Delhi.

14. Heard. The issue at this stage is whether the plaint is liable to be returned due to lack of territorial jurisdiction. The averment in the Plaint is to the effect that the Defendants supply their products to the Indian Railways, that have their headquarters in Delhi. In addition, the Defendants are alleged to be approaching vendors in Delhi which allegation is denied. Further the Plaint avers that there is likelihood that the Defendants would effect supplies to Delhi. The position that the Defendants are filing their Bids for supplies to the Railways is also established by the bid documents that have been submitted by the Defendant and are also placed on record. However, the question for consideration before the Court is whether the act of submitting bids to the Indian Railways and making supplies to the Railways would itself constitute carrying on business in Delhi or not, and therefore confer on this Court the jurisdiction to hear this matter.

15. The present case would be governed by Section 20 CPC, insofar as territorial jurisdiction is concerned, as the special provisions akin to Section 134 of the Trade Marks Act 1999 or Section 62 of the Copyright Act, 1957 are not present in the Designs Act, 2000. The jurisdiction of the Court has to be therefore determined on the basis of principles governing civil actions which determine jurisdiction on the basis of where the cause of action has arisen or where the Defendants are carrying on business. The legal position in respect of `cause of action' and `carrying on business' is well settled. If there is use of the design or supplies or advertising, within the jurisdiction of the Court, territorial jurisdiction cannot be disputed. Moreover, the Court is not to see merely the facts as they exist today but reasonable consideration is to be given to the prospect of the Defendants conducting business in Delhi as also bearing in mind the future expansion of a business. The Supreme Court in Laxmikant V. Patel v. Chetanbhai Shah, MANU/SC/0763/2001 : AIR 2002 SC 275 observed as follows:

"13. In an action for passing off it is usual, rather essential, to seek an injunction temporary or ad-interim. The principles for the grant of such injunction are the same as in the case of any other action against injury complained of. The plaintiff must prove a prima facie case, availability of balance of convenience in his favour and his suffering an irreparable injury in the absence of grant of injunction. According to Kerly (ibid, para 16.16) passing off cases are often cases of deliberate and intentional misrepresentation, but it is well-settled that fraud is not a necessary element of the right of action, and the absence of an intention to deceive is not a defence though proof of fraudulent intention may materially assist a plaintiff in establishing probability of deception. Christopher Wadlow in Law of Passing Off (1995 Edition, at p.3.06) states that the plaintiff does not have to prove actual damage in order to succeed in an action for passing off. Likelihood of damage is sufficient. The same learned author states that the defendant's state of mind is wholly irrelevant to the existence of the cause of action for passing off (ibid, paras 4.20 and 7.15). As to how the injunction granted by the Court would shape depends on the facts and circumstances of each case. Where a defendant has imitated or adopted the plaintiff's distinctive trade mark or business name, the order may be an absolute injunction that he would not use or carry on business under that name, (Kerly, ibid, para 16.97).


In such a situation, on the plaintiff succeeding in making out a prima facie case, the court shall have to concentrate on the likelihood of injury which would be caused to the plaintiff in future and simply because the business under the offending name had already commenced before the filling of the written statement or even shortly before the institution of the suit would not make any difference and certainly not disentitle the plaintiff to the grant of ad-interim injunction."

16. Though the above judgement is in the context of trade marks, the proposition that the likelihood of injury in future is to be borne in mind, is unexceptionable. It is clear from the above judgment of the Supreme Court that the concept of infringement is not fixed in time. In a suit where infringement is complained of, basing the jurisdiction, only as per the situation existing at the time of filing of the Plaint would also not be the correct approach.

17. Coming to the facts of the present case, the manner in which the bidding process of the Railways operates, the bids are submitted, the EMDs are submitted and other formalities are undertaken, would be a question of fact which may require evidence to be led by the parties. This is a classic case where, in the opinion of the court, the question of jurisdiction would become a mix question of fact and law, and at this stage, the Court is unable to categorically hold that this Court lacks territorial jurisdiction owing to the pleadings and the documents. Accordingly, an issue shall be framed to the following effect:

'Whether this Court does not lack territorial jurisdiction? OPD'.

18. The application is disposed of leaving the issue of territorial jurisdiction to be adjudicated at the final stage post time. I.A. 10517/2019 disposed of.

I.A. 11819/2023 (u/Order 7 Rule 1)

19. This is an application filed by the Plaintiff seeking change of name from 'Escorts Ltd.' to 'Escorts Kubota Limited'.

20. Considering the averments made in the application, and the fresh certificate of incorporation, the application is allowed. The amended memo is taken on record. The application is disposed of.

CS(COMM) 271/2019 & I.A. 10290/2019(for stay), I.A. 10518/2019

21. Ld. Counsel for the Defendant seeks a short accommodation.

22. List on 08th November, 2023.

23. On the said date, parties may bring their proposed issues as well.

24. Interim order to continue.

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