Mere Sale Of Goods At A Particular Place, Without Substantial Connection To Cause Of Action, Can’t Be The Sole Basis For Invoking Territorial Jurisdiction: Gujarat High Court

Hasmukhbhai Bhagwanbhai Patel V/S Husenali Anwarali Charaniya [R/First Appeal No. 2172 Of 2023]

The Gujarat High Court ruled that mere sale of goods at a particular place, without substantial connection to cause of action, can’t be the sole basis for invoking territorial jurisdiction.

The single Judge bench of Justice J. C. Doshi adhered to a well-established legal principle when analyzing the jurisdictional aspect of the case. It stated that the defendant’s plea, whether in their written statement or an application under Order 7 Rule 11 of the CPC, is irrelevant in determining jurisdiction. 

The recent case in question involves a plaintiff seeking to stop the use of the trademark “KRANTI KAKA” in connection with betel nuts, filed under the Trademarks Act of 1999 and the Copyright Act of 1957. The territorial jurisdiction of the court was invoked on the basis of sale. The defendant, on the other hand, contested the jurisdiction of the court based on the location of their businesses and the alleged infringement within the district. This article provides an analytical overview of the case and discusses the principles surrounding territorial jurisdiction in trademark suits.

The crux of the matter revolves around the rejection of the plaintiff’s complaint by the Additional District Judge (ADJ) in Dahod, citing a lack of jurisdiction under Order 7 Rule 11 of the Code of Civil Procedure (CPC). The lawsuit primarily sought a permanent injunction, profit accounts, and damages against the unauthorized use of the trademark “KRANTI KAKA” in connection with betel nuts.

The central dispute in the case arose from the geographical locations of both the plaintiff and the defendant. Neither party was a resident of Dahod, where the case was filed. The plaintiff conducted their business operations for profit in Surat, while the defendant claimed that submitting invoices from either party did not establish the cause of action.

Despite the plaintiff residing in Surat and owning a factory in the Surat district, and the defendant conducting business in Moraiya and Ahmedabad while residing in Wadhwan, the suit was filed in Dahod. The plaintiff argued that part of the cause of action arose within the territorial jurisdiction of the Dahod District Court on the basis of sale of product at Dahod. 

However, the court found that the defendant did not produce, market, or process betel nuts within the boundaries of the Dahod District Court. The plaintiff relied on invoices allegedly extracted from the Trademark Registry website to establish territorial jurisdiction, but the court dismissed this interpretation, deeming it an abuse of the law.

The case at hand underscores that the mere sale of goods at a particular place, without a substantial connection to the cause of action, cannot be the sole basis for invoking territorial jurisdiction.