New Delhi: The Delhi High Court has returned the plaints in 17 commercial intellectual-property suits after holding that the litigants had failed to establish sufficient territorial jurisdiction in the national capital. The cases involved multiple companies including Marico, Zydus Wellness Products, JSW MG Motor India and Beiersdorf.
A bench led by Justice Purushaindra Kumar Kaurav held on 3 November that jurisdiction cannot be manufactured merely because the allegedly infringing goods are available online, an investigator places an order for delivery in Delhi, or an incidental part of the cause of action can be linked to the city.
The court said jurisdiction cannot be “created” through artificial transactions or minimal connections with Delhi. It stressed that courts must respect territorial limits and guard against forum shopping—strategically choosing a court believed to be more favourable to one’s case.
The plaintiffs remain free to present their suits before courts with appropriate territorial jurisdiction.
The bench acknowledged that it may now be difficult to “draw a Lakshman Rekha and restrain itself from stepping outside its bounds”, but emphasised that territorial limits must nevertheless be respected.
The ruling has divided opinion within the legal fraternity. While some see it as a necessary check on manufactured jurisdiction and forum shopping, others question whether the court has narrowed the jurisdiction available to litigants under the Code of Civil Procedure (CPC) and intellectual-property statutes.
Senior Advocate Vaibhav Keni told ThePrint that the ruling had been expected. “Frankly, we saw this coming. Delhi has been the unsaid go-to court for IP for over a decade, partly because the IP Division works well, but also because a test purchase or a website that opened in Delhi was usually enough to get through the door. Justice Kaurav has now said that isn’t good enough.”
For brand owners, Keni said, the ruling would have practical consequences. “You can’t treat jurisdiction as a formality and argue it later.”
He said seeking an ex parte injunction (an interim court order passed without first hearing the opposing party) before a court with no substantial connection to the dispute could prove risky. A defendant could challenge the court’s jurisdiction, potentially resulting in the plaint being returned. This could cost the plaintiff valuable time and jeopardise an injunction already operating in its favour.
The cases: Why Delhi’s jurisdiction was questioned
The 17 cases involved trademark, copyright and passing-off claims where a business is accused of misrepresenting its goods or services as those of another. The Delhi High Court was called upon to determine whether the disputes had sufficient territorial links to the capital.
Justice Kaurav noted that in more than half the cases, neither party was based in Delhi, and that courts in the places where the parties were located were competent to hear the disputes.
The plaintiffs nevertheless sought to invoke Delhi’s jurisdiction on several grounds. These included the availability of allegedly infringing products on e-commerce platforms, the accessibility of websites and social-media accounts in Delhi, delivery of products to Delhi addresses, the presence of branch or subordinate offices, and purchases made through investigators.
Some plaintiffs also argued that the alleged infringement had a “dynamic effect” on their business or goodwill in Delhi.
The issue is significant because Section 20 of the CPC (which governs where civil suits may be instituted) allows a suit to be filed where the defendant resides or carries on business, or where the cause of action arises.
The Trade Marks Act and the Copyright Act provide rights-holders with additional forums under Section 134(2) and Section 62(2), respectively. These provisions allow certain infringement suits to be filed where the plaintiff resides, carries on business or personally works for gain.
Court’s reasoning: Online accessibility cannot determine jurisdiction
The Court’s central concern was that territorial jurisdiction in intellectual-property disputes could become meaningless simply because commerce had moved online.
Websites are accessible across India, and products ordered online can be delivered to most parts of the country. If accessibility, the possibility of delivery or a transaction deliberately arranged by the plaintiff were sufficient to establish jurisdiction, a litigant could effectively choose almost any court in the country.
This, the Court said, would make a “mockery” of territoriality and the “local limits” of a court’s jurisdiction.
A plaintiff, it added, cannot have an “unbridled, unguided and uncanalised” ability to create jurisdiction through its own actions.
Keni said the ruling would make some cases harder to pursue, “but not the right ones”. He said the Court had rejected the practice of making a “trap purchase”, in which an online order is deliberately placed and delivered to an address merely to claim that part of the cause of action arose within that jurisdiction.
Genuine transactions would still be relevant, he said. An investigator purchasing goods from a dealer, distributor or stockist already operating within the jurisdiction could provide valid evidence. Similarly, where a website deliberately targets consumers in a particular territory and completed commercial transactions can be demonstrated, the Banyan Tree principle (which governs territorial jurisdiction in trademark infringement and passing-off suits) would continue to apply.
The Court also acknowledged the Delhi High Court’s prominent role in developing intellectual-property jurisprudence, citing its specialised Intellectual Property Division, procedural framework and experienced IP Bar.
However, it said other High Courts were equally capable of developing specialised mechanisms for IP litigation. The Delhi High Court, it cautioned, should not become the default forum for disputes with only a “minuscule” connection to the capital.
In a striking metaphor, the Court observed that India’s IP landscape had “grown under the Banyan Tree, which is the Delhi High Court”. But while a banyan provides “shelter and comfort”, it can also “stunt the growth of other trees below it”.
The issue, it stressed, was “not one of losing territory but of institutional discipline”. Entertaining disputes substantially connected to another state, but “almost forcibly” brought to Delhi, would deprive the more natural and appropriate forum of an opportunity to adjudicate them.
Relying on previous Supreme Court judgments, the Court also held that “carrying on business” requires something more substantial than the mere sale or availability of goods in a particular place. The fact that products reach consumers in a market does not automatically mean that the company carries on business there, it said.
Court draws limits on jurisdictional doctrines
The Court rejected the “dynamic effect” theory, under which plaintiffs argued that infringement occurring outside Delhi could confer jurisdiction on the capital merely because its impact was felt on their business or goodwill there.
It held that such an expansive interpretation would allow jurisdiction to follow the plaintiff’s commercial presence, undermining the specific jurisdictional framework under trademark and copyright law.
Justice Kaurav also placed considerable emphasis on the doctrine of forum non conveniens—the principle that a court may decline to hear a case when another competent court is a more appropriate forum for resolving the dispute.
The Court held that the existence of a small or incidental part of the cause of action in Delhi does not automatically make it the appropriate forum. Courts must examine where the “work for gain, material, integral and essential” part of the dispute arose and may decline to entertain a suit if another competent court has a substantially stronger connection with the controversy.
This aspect of the ruling has drawn a sharply different legal interpretation.
Advocate Nancy Roy questioned whether applying forum non conveniens in this manner introduced a degree of judicial discretion not contemplated by Section 20(c) of the CPC. “Section 20(c) lets a suit be filed wherever the cause of action arises ‘wholly or in part’. Nothing in it requires a substantial or essential part,” Roy told ThePrint.
She argued that the judgment effectively introduces a test of the “material, integral and essential part” of the dispute, allowing a court to send a plaintiff elsewhere even after finding that the suit is maintainable.
“That discretion does not find mention in the CPC,” Roy said. She also cited a ruling in the 2009 Horlicks case, which, according to her, held that the doctrine of forum non conveniens does not apply to civil suits governed by the CPC.
Roy further questioned the implications of the ruling for the additional forums available to rights-holders under Section 134(2) of the Trade Marks Act and Section 62(2) of the Copyright Act.
In her view, applying forum non conveniens even when a suit is maintainable under these provisions effectively means that “jurisdiction which is given by the statute can now be taken away by discretion”.
“Given this, the judgement curtails the jurisdiction provided by legislation,” she said.
Court rejects unsubstantiated claims of jurisdiction
The Court also held that the doctrine of demurrer (the principle that a court generally examines the legal sufficiency of a plaint by assuming its pleaded facts to be true) cannot be used to compel judges to accept every jurisdictional assertion at face value.
It clarified that this does not require courts to accept bald or unsupported claims, particularly where clever drafting is used to create an illusion of territorial jurisdiction.
The Court thus drew a firm line against artificial or manufactured jurisdiction. Online bookings, social-media traffic from Delhi, Delhi-based intermediaries, GST registration and bare assertions that allegedly infringing goods are sold in the capital would not, by themselves, confer jurisdiction.
“Jurisdiction rules can never be interpreted in a manner that allows a plaintiff to engage in such a mischief,” it said.
(Edited by Chingkheinganbi Mayengbam)
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