The case of V Guard Industries Ltd. v. Sukan Raj Jain is a significant intellectual property dispute adjudicated by the High Court of Delhi, focusing on the issue of territorial jurisdiction in trademark infringement and passing off actions. The plaintiff, V Guard Industries Ltd., a company engaged in manufacturing and selling electrical goods under the registered trademark "V-GUARD," sought to restrain the defendants from using the mark "N-GUARD," alleging infringement and passing off. The primary contention arose from an application by Defendant No. 1 under Order VII Rule 10 of the Code of Civil Procedure (CPC), challenging the Delhi High Court's jurisdiction to entertain the suit. The judgment, delivered on July 5, 2021, by Justice Manoj Kumar Ohri, provides a comprehensive analysis of jurisdictional principles in the context of online commerce and trademark law, reinforcing the evolving judicial approach to virtual business presence.

Detailed Factual Background
V Guard Industries Ltd., the plaintiff, is a well-established company based in Kerala, engaged in the manufacture, distribution, and sale of electrical goods under its registered trademark "V-GUARD" and its variants. The plaintiff claimed a strong market presence across 29 states in India, including Delhi, where it maintained a supply office and a network of distributors and retailers. Defendant No. 1, Sukan Raj Jain, operates as the sole proprietor of M/s N-Guard Electronic Industries, with its registered office in Bengaluru, Karnataka. Defendant No. 2 provides web designing services to Defendant No. 1. The plaintiff alleged that the defendants were manufacturing and selling electrical products under the mark "N-GUARD" and through the domain name "www.nguard.in," which were deceptively similar to its "V-GUARD" trademark. The plaintiff further asserted that the defendants' products were available for sale in Delhi through third-party e-commerce platforms such as Amazon, Flipkart, Indiamart, Shopclues, and Snapdeal, and that a representative of the plaintiff had purchased an offending product via Amazon.in, which was delivered in Delhi.

The defendants, particularly Defendant No. 1, contested the plaintiff's claims, denying any business operations or product sales in Delhi. They argued that their website was not interactive, no products could be purchased directly from it, and the alleged sale relied upon by the plaintiff was a solitary, self-generated transaction from an unrelated vendor, insufficient to establish jurisdiction in Delhi.

Detailed Procedural Background
The suit, filed as CS(COMM) 25/2021, sought a permanent injunction to restrain the defendants from infringing and passing off the plaintiff's trademark and design, along with a prayer for rendition of accounts. On January 18, 2021, the Delhi High Court issued an ex-parte ad-interim injunction, restraining the defendants from manufacturing, selling, or advertising products under the "N-GUARD" mark or any similar mark/domain name. Defendant No. 1 subsequently filed an application (I.A. 3044/2021) under Order VII Rule 10 CPC, seeking the return of the plaint on the ground that the Delhi High Court lacked territorial jurisdiction, as no part of the cause of action arose in Delhi. The plaintiff opposed this application, relying on its pleadings and documents, including screenshots of the defendants' website and third-party e-commerce platforms, as well as a sale invoice evidencing the purchase of the defendants' product in Delhi.

Issues Involved in the Case
The central issue before the court was whether the Delhi High Court had territorial jurisdiction to entertain the suit under Section 20(c) CPC and Section 134 of the Trade Marks Act, 1999, given the defendants' contention that no part of the cause of action arose in Delhi. Sub-issues included:
Whether the availability of the defendants' products on third-party e-commerce websites accessible in Delhi constituted a cause of action within the court's jurisdiction.
Whether the plaintiff's purchase of the defendants' product in Delhi via Amazon.in was sufficient to establish jurisdiction, or whether it constituted an impermissible "trap sale."
Whether the plaintiff's supply office in Delhi and its business operations in the city provided additional grounds for jurisdiction under Section 134 of the Trade Marks Act.
The extent to which the defendants' website and online presence could be deemed as "purposeful availment" of the Delhi market to attract jurisdiction.
Detailed Submission of Parties

Plaintiff's Submissions: The plaintiff invoked Section 20(c) CPC, arguing that the cause of action arose in Delhi due to the defendants' business activities in the city. It relied on the following assertions:
The defendants were selling their products in Delhi through third-party e-commerce platforms like Amazon, Flipkart, Indiamart, Shopclues, and Snapdeal, which were accessible to Delhi customers.
The defendants' website, www.nguard.in, was interactive, allowing customers to place orders, including from Delhi.
A representative of the plaintiff had purchased an offending product via Amazon.in, which was delivered in Delhi, as evidenced by a sale invoice dated October 28, 2020.
The defendants likely had substantial customers in Delhi, given their online presence.
The plaintiff maintained a supply office in Delhi and conducted business through a network of distributors and retailers, reinforcing Delhi as a forum for the suit.
The plaintiff cited several judicial precedents to support its claim:
M/s RSPL Limited v. Mukesh Sharma & Anr., 2016 SCC OnLine Del 4285 (DB): Emphasized that averments in the plaint must be taken as true when deciding an application under Order VII Rule 10 CPC.
World Wrestling Entertainment, Inc. v. M/s Reshma Collection & Ors., 2014 SCC OnLine Del 2031 (DB): Equated virtual shops on the internet with physical shops, holding that online availability of products constitutes carrying on business in the forum state.
Marico Limited v. Mukesh Kumar & Ors., 253 (2018) DLT 8: Held that the availability of products on interactive websites like Indiamart satisfies the "purposeful availment" test.
Millennium & Copthorne International Limited v. Aryans Plaza Services Private Limited & Ors., 2018 SCC OnLine Del 8260: Stressed that jurisdiction can be invoked where injury or deception occurs due to the defendants' actions.
Burger King Corporation v. Techchand Shewakramani & Ors., 2018 SCC OnLine Del 10881: Clarified that "use" of a trademark includes advertising and promotion, not merely sales, for jurisdictional purposes.
Defendant's Submissions: Defendant No. 1 argued that the Delhi High Court lacked jurisdiction, as no part of the cause of action arose in Delhi. Key submissions included:
The defendant did not carry on business in Delhi, with its registered office located in Bengaluru, Karnataka.
The plaintiff admitted in the plaint that the defendant's registered office was in Karnataka, and the plaintiff's registered office was in Kerala, negating Delhi's relevance.
The defendant's website, www.nguard.in, was not interactive, and no products could be purchased directly from it.
The sale relied upon by the plaintiff was a solitary, self-generated transaction from an unrelated vendor on Amazon.in, not attributable to the defendant or its authorized agents.
A single sale was insufficient to establish jurisdiction, especially if engineered by the plaintiff.
The defendant relied on the following precedents:
Patel Roadways Limited, Bombay v. Prasad Trading Company, (1991) 4 SCC 270: Highlighted the need for the defendant's actual business presence in the forum state for jurisdiction under Section 20 CPC.
Dhodha House v. S.K. Maingi, (2006) 9 SCC 41: Emphasized that jurisdiction cannot be invoked without a substantial cause of action in the forum state.
Indian Performing Right Society Ltd. v. Sanjay Dalia and Anr., 2008 SCC OnLine Del 1238 (IPRS (Delhi)) and (2015) 10 SCC 161 (IPRS (SC)): Clarified that jurisdiction under Section 134 of the Trade Marks Act is subject to restrictions, such as the plaintiff's principal office location.
Banyan Tree Holding (P) Limited v. A. Murali Krishna Reddy & Anr., 2009 SCC OnLine Del 3780 (DB): Established the "purposeful availment" test for jurisdiction based on website activity, prohibiting reliance on solitary trap transactions.
Detailed Discussion on Judgments Cited by Parties
The court meticulously analyzed the precedents cited by both parties, applying their principles to the facts of the case. Below is a detailed discussion of each judgment and its context in the case:
M/s RSPL Limited v. Mukesh Sharma & Anr., 2016 SCC OnLine Del 4285 (DB): Cited by the plaintiff, this case reinforced the principle that an application under Order VII Rule 10 CPC is decided by treating the plaint's averments as true, without considering the defendant's written statement or documents. The court applied this principle to limit its inquiry to the plaintiff's pleadings and documents, disregarding the defendant's factual denials at this stage.
World Wrestling Entertainment, Inc. v. M/s Reshma Collection & Ors., 2014 SCC OnLine Del 2031 (DB): The plaintiff relied on this case to argue that the defendants' online presence equated to carrying on business in Delhi. The court found this precedent persuasive, noting that the availability of the defendants' products on e-commerce platforms constituted a "virtual shop" akin to a physical shop, thereby attracting jurisdiction in Delhi.
Marico Limited v. Mukesh Kumar & Ors., 253 (2018) DLT 8: Cited by the plaintiff, this case supported the argument that the defendants' products on Indiamart satisfied the "purposeful availment" test. The court agreed, observing that the defendants' listing as a verified supplier on Indiamart indicated targeted commercial activity in Delhi.
Millennium & Copthorne International Limited v. Aryans Plaza Services Private Limited & Ors., 2018 SCC OnLine Del 8260: The plaintiff used this case to emphasize that jurisdiction arises where injury or deception occurs. The court applied this principle, noting that the plaintiff's pleaded injury in Delhi, coupled with the defendants' online sales, supported jurisdiction.
Burger King Corporation v. Techchand Shewakramani & Ors., 2018 SCC OnLine Del 10881: Cited by the plaintiff, this case clarified that "use" of a trademark includes advertising and promotion, not just sales. The court found this relevant, as the defendants' products were promoted on e-commerce platforms accessible in Delhi, constituting "use" under the Trade Marks Act.
Patel Roadways Limited, Bombay v. Prasad Trading Company, (1991) 4 SCC 270: Cited by the defendant, this case emphasized the need for the defendant's physical business presence in the forum state. The court distinguished this case, noting that Section 134 of the Trade Marks Act and the virtual presence of the defendants' products provided additional jurisdictional grounds.
Dhodha House v. S.K. Maingi, (2006) 9 SCC 41: The defendant relied on this case to argue that a substantial cause of action was required. The court found this less applicable, as the plaintiff's pleadings and documents prima facie established a cause of action in Delhi.
Indian Performing Right Society Ltd. v. Sanjay Dalia and Anr., 2008 SCC OnLine Del 1238 (IPRS (Delhi)) and (2015) 10 SCC 161 (IPRS (SC)): Cited by the defendant, these cases clarified jurisdictional restrictions under Section 134. The court relied heavily on IPRS (SC), which held that Section 134 provides additional forums based on the plaintiff's residence or business, subject to the cause of action arising in that forum. This supported the plaintiff's reliance on its Delhi supply office and the cause of action in Delhi.
Banyan Tree Holding (P) Limited v. A. Murali Krishna Reddy & Anr., 2009 SCC OnLine Del 3780 (DB): The defendant cited this case to argue that a solitary trap sale could not establish jurisdiction. The court clarified that Banyan Tree prohibited only unfair trap sales, not legitimate purchases, and found that the plaintiff's purchase, combined with the defendants' online presence, satisfied the "purposeful availment" test.
Additional precedents referenced by the court included:

D. Ramachandran v. R.V. Janakiraman and Others, (1999) 3 SCC 267: Affirmed that only the plaint's averments are considered in preliminary objections.
Liverpool & London S.P. & I Association Ltd. v. M.V. Sea Success I and Another, (2004) 9 SCC 512: Reiterated that jurisdiction is determined by the plaint's averments.
ABN-AMRO Bank v. The Punjab Urban Planning and Development Authority, AIR 2000 P&H 44: Expanded the scope of inquiry to include documents filed by the plaintiff before the hearing.
Hari Gokal Jewellers v. Satish Kapur, 2006 SCC OnLine Del 482, and Rajiv Kumar (Deaf and Dumb) v. M/s Kewal Cargo Carriers (P) Ltd., 2006 SCC OnLine Del 496: Followed ABN-AMRO Bank, supporting the inclusion of additional documents.
Ultra Home Construction Pvt. Ltd. v. Purushottam Kumar Chaubey & Ors., 2016 SCC OnLine Del 376: Provided a framework for jurisdiction under Section 134, applied to the plaintiff's Delhi supply office.
Icon Health and Fitness, Inc. v. Sheriff Usman and Anr., 2017 SCC OnLine Del 10481: Supported the plaintiff's argument that online sales through e-commerce platforms constitute carrying on business.

Detailed Reasoning and Analysis of Judge
Court's reasoning was grounded in a careful application of statutory provisions (Section 20(c) CPC and Section 134 of the Trade Marks Act) and judicial precedents, tailored to the context of online commerce.

The court's analysis proceeded as follows:
Scope of Inquiry under Order VII Rule 10 CPC: The court emphasized that its inquiry was limited to the plaintiff's pleadings and documents, treating all averments as true at this stage, as per D. Ramachandran (1999) and Liverpool & London (2004). The defendant's written statement and factual denials were irrelevant, aligning with M/s RSPL Limited (2016).
Plaintiff's Pleadings and Evidence: The plaintiff pleaded that the defendants' products were available on e-commerce platforms accessible in Delhi, supported by screenshots and a sale invoice dated October 28, 2020. Additional documents filed with an application under Order XXXIX Rule 2A CPC, including screenshots showing the defendant as a verified supplier on Indiamart and Shopclues, were considered permissible under ABN-AMRO Bank (2000). These documents prima facie established the defendants' commercial activity in Delhi.

Jurisdiction Based on Online Presence: The court relied on World Wrestling Entertainment (2014) to equate the defendants' online presence with a physical shop, noting that e-commerce platforms constituted "virtual shops" accessible in Delhi. Burger King Corporation (2018) was applied to hold that "use" of the trademark included advertising and promotion, not just sales, as the defendants' products were promoted on multiple platforms. Marico Limited (2018) supported the finding that the defendants' listing on Indiamart satisfied the "purposeful availment" test from Banyan Tree (2009).

Trap Sale Argument: The defendant's reliance on Banyan Tree (2009) to label the plaintiff's purchase as a trap sale was rejected. The court clarified that Banyan Tree prohibited only unfair trap sales, and the defendant's counsel conceded that the sale was not a trap but a solitary transaction. The court held that the sale, combined with the defendants' broader online presence, was sufficient to establish jurisdiction, with the fairness of the sale being a matter for trial.

Injury and Cause of Action in Delhi: Applying Millennium & Copthorne (2018), the court found that the plaintiff suffered injury in Delhi due to the defendants' deceptive use of the "N-GUARD" mark, as customers in Delhi could access and purchase the products. The cause of action thus arose in Delhi under Section 20(c) CPC.

Section 134 of the Trade Marks Act and Plaintiff's Supply Office: The court analyzed IPRS (SC) (2015) and Ultra Home Construction (2016) to hold that Section 134 provides additional jurisdictions based on the plaintiff's residence or business. The plaintiff's supply office in Delhi, coupled with the cause of action arising from the defendants' sales, placed the case within the "third situation" outlined in Ultra Home Construction, where jurisdiction lies at the place of the subordinate office (Delhi) where the cause of action arose.

Defendant's Contentions: The defendant's argument that its Karnataka office negated Delhi's jurisdiction was dismissed, as Section 134 and the online cause of action overrode the need for the defendant's physical presence in Delhi. The court found the defendant's cited cases (e.g., Patel Roadways, Dhodha House) distinguishable, as they did not account for the virtual business context or Section 134's provisions.

Prima Facie Conclusion: The court concluded that the plaintiff's pleadings and documents prima facie established jurisdiction under both Section 20(c) CPC and Section 134 of the Trade Marks Act. The observations were expressly limited to the jurisdictional issue and would not prejudice the trial.

Final Decision
The court dismissed the defendant's application under Order VII Rule 10 CPC, holding that the Delhi High Court had territorial jurisdiction to entertain the suit. The plaint was not returned, and the suit was directed to proceed before the Roster Bench on July 22, 2021, for further adjudication of pending applications. The court clarified that its observations were prima facie and would not affect the parties' contentions at trial.

Law Settled in this Case:The judgment clarified several key principles in trademark law and territorial jurisdiction:
Availability of a defendant's products on e-commerce platforms accessible in the forum state constitutes a cause of action under Section 20(c) CPC, as it equates to carrying on business in a "virtual shop" (World Wrestling Entertainment). The "purposeful availment" test from Banyan Tree is satisfied when a defendant's products are promoted or sold on interactive websites targeting the forum state, such as Indiamart or Amazon (Marico Limited). Jurisdiction can be invoked at the place of the plaintiff's subordinate office where the cause of action arises, as per Ultra Home Construction, even if the defendant has no physical presence in that forum (IPRS (SC)). "Use" of a trademark includes advertising and promotion, not just sales, for jurisdictional purposes (Burger King Corporation). A single sale by the plaintiff is not per se a trap sale under Banyan Tree unless proven to be unfair, and its validity is a matter for trial.

V Guard Industries Ltd. v. Sukan Raj Jain & Anr.:July 5, 2021:CS(COMM) 25/2021:High Court of Delhi at New Delhi:Name of Judge: Hon'ble Mr. Justice Manoj Kumar Ohri

Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor - Patent and Trademark Attorney
Email: [email protected], Ph no: 9990389539