2009 (1) TMI 913 - HC - Companies Law

Summary

Issues Involved:
1. Jurisdiction of the court and the principle of 'forum non-convenience'.
2. Previous litigations between the parties in different High Courts.
3. Allegations of disparaging advertisements.
4. Applicability of Section 20 and Section 151 of the Code of Civil Procedure, 1908.
5. The principle of 'forum non-convenience' as part of common law or private international law.

Issue-wise Detailed Analysis:

1. Jurisdiction of the court and the principle of 'forum non-convenience':

The jurisdiction of the Delhi High Court to entertain the present suits was not disputed. However, the defendant argued that the court should not entertain the suits on the principle of 'forum non-convenience'. The court examined whether Section 20 of the Code of Civil Procedure (CPC) prohibits the application of this principle. It was concluded that Section 20 of the CPC does not bar the principle of 'forum non-convenience'. The court has inherent powers under Section 151 of the CPC to pass a suitable order in the interest of justice and prevent abuse of process. The principle of 'forum non-convenience' can be applied when a court has jurisdiction but for valid reasons does not wish to entertain a suit.

2. Previous litigations between the parties in different High Courts:

The judgment detailed previous litigations between the parties in Calcutta, Madras, and Bombay High Courts. In Calcutta, the plaintiffs obtained an injunction against the defendant's advertisement depicting two cups. In Madras, the court allowed comparative advertisement with certain restrictions. In Bombay, the defendant filed a suit against the plaintiffs' advertisement, and the court rejected the defendant's prayer for interim injunction. The Delhi High Court noted that the present suits were the fourth and fifth suits between the parties on the issue of disparaging advertisements.

3. Allegations of disparaging advertisements:

The plaintiffs alleged that the defendant's advertisements made disparaging remarks about their product by using terms like 'cheap/cheaper' and misleading comparisons regarding nutritional value. The court observed that the advertisements subject to the present suits were distinct from those in previous suits but acknowledged the interconnected nature of the litigations.

4. Applicability of Section 20 and Section 151 of the Code of Civil Procedure, 1908:

Section 20 of the CPC allows a suit to be filed where the defendant resides or where the cause of action arises. The court noted that while Section 20 provides plaintiffs with the choice of forum, it does not prohibit the application of the 'forum non-convenience' principle. Section 151 of the CPC protects the court's inherent powers to pass orders in the interest of justice, provided such orders do not conflict with express provisions of the CPC.

5. The principle of 'forum non-convenience' as part of common law or private international law:

The court examined whether the principle of 'forum non-convenience' could be applied under Indian law. It cited several cases, including Kusum Ingots and Alloys v. Union of India, Mosaraf Hossain Khan v. Bhagheeratha Engg. Ltd., and Ambica Industries v. Commissioner of Central Excise, to establish that the principle is recognized and can be applied in appropriate cases. The principle requires a two-stage inquiry: identifying an alternative competent forum and determining whether it is in the interest of justice to relegate the parties to that forum.

Findings:

The court found that the present case involved interconnected and interrelated advertisements, making it appropriate to apply the principle of 'forum non-convenience'. It was noted that the advertisements of both parties should be judged by the same parameters and legal standards. The court concluded that the plaintiffs had deliberately invoked the jurisdiction of the Delhi High Court despite ongoing litigation in the Bombay High Court. To prevent conflicting judgments and in the interest of justice, the court directed the plaints to be returned and rejected, allowing the plaintiffs to file fresh suits in the Bombay High Court if advised.

Conclusion:

The Delhi High Court applied the principle of 'forum non-convenience' and directed the return and rejection of the plaints, emphasizing the need to avoid conflicting judgments and the interconnected nature of the litigations between the parties. The court exercised its inherent powers under Section 151 of the CPC to ensure justice and prevent abuse of process.