Sml LTD vs. Mohan And Company And Another

Held

The High Court held that it lacked territorial jurisdiction to entertain the suit and grant an interim injunction against Defendant No. 2. The Court found that the plaintiff had failed to make out a prima facie case for the grant of an interim injunction on the parameter of territorial jurisdiction. The reasoning was that the alleged cause of action or wrong done by Defendant No. 2 was a triable issue, and prima facie, it was evident that the alleged wrong had not been committed by Defendant No. 2 in a manner that would invoke the territorial jurisdiction of the Himachal Pradesh High Court. The Court noted that while Section 19 of the CPC might be relevant for suits for compensation for wrongs to movables, the plaintiff had not sufficiently demonstrated that the alleged wrong had occurred within its jurisdiction concerning Defendant No. 2. Consequently, the impugned interim order dated 06.06.2025, insofar as it pertained to Defendant No. 2, was vacated. The Court explicitly stated that its observations were confined to deciding the issue of injunction at that stage and would not influence the learned Single Judge on the merits of the case.

Facts

SML Limited (the applicant/plaintiff) filed a suit seeking to restrain Mohan & Company and another (the respondents/defendants) from infringing its patent rights for an agricultural composition, Indian Patent No. 282092, granted on March 30, 2017. The plaintiff alleged that Defendant No. 2, an agrochemical company, was infringing its patent by manufacturing and selling a product under the brand name "ZeekaSulfTM". The plaintiff sought a permanent injunction, damages of Rs. 1.02 Crores, and other reliefs. Along with the suit, the plaintiff filed an application for an interim injunction. Defendant No. 1, a retail store, tendered an unconditional apology and undertook not to sell the impugned product. Defendant No. 2 opposed the application, raising issues including territorial jurisdiction. The High Court had previously granted an ex-parte ad-interim injunction.

Key Issues

1. Whether the High Court has territorial jurisdiction to entertain the suit and grant an interim injunction against Defendant No. 2, considering the alleged infringement and the provisions of Section 19 of the Code of Civil Procedure, 1908? Petitioner/Appellant's Arguments: The petitioner/plaintiff argued that by virtue of Section 48 of the Patents Act, 1970, it holds exclusive rights to make, use, offer for sale, sell, or import the patented product in India. It contended that the defendants' actions constituted infringement, causing substantial financial loss and irreparable injury. The plaintiff also argued that Section 19 of the CPC, pertaining to suits for compensation for wrongs to movables, would be applicable, allowing the suit to be instituted where the wrong was done (infringement within the court's jurisdiction) or where the defendant resides or carries on business. Revenue/State's Arguments: Defendant No. 2 argued that the High Court lacked territorial jurisdiction as the alleged wrong or cause of action did not occur within its territorial limits. It contended that the plaintiff had failed to establish a prima facie case for the grant of an interim injunction on the ground of territorial jurisdiction, citing precedents like Asma Lateef (supra).