India: Delhi High Court on the link between cause of Action and Jurisdiction

Source: WWW.delhihighcourt.nic.in

In the case of Microsoft Corporation & Anr vs Rajesh Kumar & Ors the Hon’ble Delhi High Court dismissed the application filed by Rajesh Kumar and others (hereinafter referred as the Defendant) under Order 7 Rule 10 of CPC holding that the Hon’ble Delhi High Court had jurisdiction to decide the case filed by Microsoft Corporation and another (hereinafter referred as the Plaintiff).

BRIEF FACTS

• The Plaintiff is a subsidiary of American software company Microsoft Corporation, headquartered in Hyderabad, India. It has offices in the 9 cities of Ahmedabad, Bangalore, Chennai, Hyderabad, Kochi, Kolkata, Mumbai, the NCR (New Delhi and Gurgaon) and Pune.
• Defendant is a global software services company headquartered at New Jersey, USA and having other offices in DC Metro area and a state of the art outsourced software development based out of New Delhi, India.  
• It was alleged that the Defendant used unlicensed versions of the Plaintiff’s software for servicing its clients, on the Defendant’s employees’ laptops, during presentations, etc. Cause of action arose in Gurugram, Haryana and Hyderabad, Telangana where Plaintiff have their offices and carrying on their business.
• An application under Order 7 Rule 10 of CPC was filed by the Defendant alleging that in the entire plaint there is no allegation from the Plaintiff for copyright violation in Delhi, but only in Gurugram, Haryana and Hyderabad.
• Therefore, it was alleged this Court has no territorial jurisdiction to entertain this suit and the plaint be returned.

PLAINTIFF’S CONTENTIONS

• It was contended that since the Defendant was using the unlicensed software to service the clients in Delhi, the Court had jurisdiction.
• It was also stated that since the Plaintiff carries on business from Delhi, the Court had territorial jurisdiction. Thus, the Defendant’s own documents or its websites gave hints of its operative office in New Delhi.

Referring to page 24 of the Defendants’ website that the Defendant admitted that they are using the Plaintiff’s technology. It was further pointed out that page 46 of the website states that ‘the Courts in New Delhi, India shall have the exclusive jurisdiction on any dispute that may arise out of the use of this site.’

DEFENDANT’S CONTENTIONS

• It was alleged that this Court had no territorial jurisdiction as the Plaintiff had business and its subordinate offices at Gurugram and at Hyderabad and at which places the cause of action had also arisen.
• The allegations made in para 28 of the plaint that ‘Defendant would be servicing their clients, using the unlicensed software programs of the Plaintiffs, on the Defendants' employee’s laptops, during presentations etc., in Delhi’, were denied calling it a speculation.
• It was alleged that in the entire plaint there is no averment of Plaintiff's copyright violation within the territorial jurisdiction of this Court and rather per averments made in the plaint, the cause of action has arisen only at Gurugram, Haryana and in Hyderabad, Telangana at which places the Plaintiffs have their offices and are also carrying its business.
• The locus standi of the Plaintiff no. 2 was also challenged alleging that they were neither the owner of the copyright of this software nor an assignee.

COURT’S DECISION

• The Court referring to the rule laid down in Pfizer case and The LT Foods Ltd. case held that the Defendant had to specifically deny each, and every assertion made by the Plaintiff other than the jurisdiction, if they do not then it can be seen as an admission.
• The Court also considered that on their website the Defendant had admitted that one of its offices is in New Delhi, they have also mentioned that being a global company and as per that company’s governing laws, the Courts in New Delhi were given an exclusive jurisdiction. Also, as no denial of the allegations made by the Plaintiff was done, it cannot be said that the Court had no jurisdiction.

In view of the above, the Hon’ble Court held that the application under Order 7 Rule 10 for return of the Plaint filed by defendant, was devoid of any merits and dismissed the same.