Supreme Court rules on jurisdiction in case of composite suits

In Paragon Rubber Industries v Pragathi Rubber Mills the Supreme Court recently clarified the parameters lfor deciding jurisdiction in composite suits involving the Copyright Act 1957 and the Trade and Merchandise Marks Act 1958.

Territorial jurisdiction and additional forum
Under the Code of Civil Procedure 1908, all civil suits - including suits for infringement under the Copyright Act or the Trade and Merchandise Marks Act 1958 (repealed by the Trade and Merchandise Marks Act 1999) - should be instituted before a court local to where the defendant resides, carries on business or works for gain, or where the cause of action was said to arise.

However, the Copyright Act and the 1999 act provide an additional forum for rights holders, stating that a suit for infringement of copyright or trademarks under the acts may be instituted at a place where the plaintiff resides, carries on business or works for gain. Although the Copyright Act contained this ‘additional forum’ provision, it was excluded from the Trade and Merchandise Marks Act 1958, but was introduced in the 1999 act (which came into force in 2003).

In the case at hand, Paragon Rubber Industries instituted a suit for infringement of copyright and trademarks under the Copyright Act and the Trade and Merchandise Marks Act 1958 against Pragathi Rubber Mills before the Kottayam District Court, Kerala. While the proceedings were pending, Pragathi (based in Punjab) filed an interim application for rejection of the plaint on the grounds of a lack of territorial jurisdiction, which was dismissed. Pragathi appealed to the Kerala High Court, which allowed the appeal and remanded the matter to the district court to redetermine the issue of jurisdiction. Subsequently, the district court held that the composite suit was maintainable, and Pragathi again petitioned the High Court. The High Court set aside the district court's order, ruling that the composite suit was not valid under Section 62(1) of the Copyright Act. However, it gave Paragon permission to amend the plaint in order to bring it within the jurisdiction of the district court.

Both Paragon and Pragathi filed special leave petitions before the Supreme Court. The key issue before the Supreme Court was whether a composite suit for the infringement of copyright and trademark, under the Copyright Act and the Trade and Merchandise Marks Act 1958, could be maintained for two different causes of action, even though the court had territorial jurisdiction over only one of the causes of action under one of the statutes.

Principles applied
This was not the first time that the Supreme Court was asked to answer this question - it also considered the issue  in Dhodha House v SK Maingi ((2006) 9 SCC 41) and Dabur India Ltd v KR Industries ((2008) 10 SCC 595).

In Dhodha House the court had held that merely because the law permits two causes of action to be joined, this in no way implies that jurisdiction for a suit for both causes of action could be conferred on a court which has jurisdiction with respect to only one cause. The court further clarified that recourse to an additional forum may be adopted where jurisdiction can be established with respect to both causes of action, unlike in the case at hand. 

In Dabur India the Supreme Court categorically stated that a composite suit does not entitle a court to entertain a suit over which it has no jurisdiction, territorial or otherwise. The court further stated that an incidental provision could be invoked granting an interim order in case of an impediment. However, this could not be extended to a cause of action founded on separate set of facts and rights and liabilities of a party under a different statute altogether. 

Therefore, the cause of action with respect to infringement under the Copyright Act and the Trade and Merchandise Marks Act 1958 would be different and, in view of the applicable principles, jurisdiction (territorial or otherwise) over both must be established in order to maintain a composite suit. 

Dismissing the petitions filed by both parties, the court held that the High Court had correctly set aside the trial court’s order, since the case at hand was a composite suit which was invalid due to lack of territorial jurisdiction for the cause of action arising from the Trade and Merchandise Marks Act 1958. The court further held that the ‘additional forum’ provision contained in the Trade and Merchandise Marks Act 1999 would not help Paragon, since it came into force after institution of the case.

The court also declined to interfere with the High Court's decision regarding amendment of the plaint, which had been passed after it had exercised its discretionary power to avoid multiplicity of proceedings.

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