Introduction
One of the most fundamental questions in any civil lawsuit is whether the court where the suit is filed actually has the authority to hear it. This authority, known as territorial jurisdiction, determines which court can entertain a dispute based on geography, where the defendant resides, where the alleged wrong occurred, or where business is carried on.
In intellectual property disputes, particularly those involving patents, plaintiffs sometimes file suits in distant courts by relying on small, strategically arranged purchases of the allegedly infringing product within that court’s territory. These are commonly called “trap purchases” or “trap transactions”. The question of whether such purchases alone are sufficient to drag a defendant into litigation before a court far removed from where it actually operates is one that courts across India have grappled with repeatedly.
Key Issues in Territorial Jurisdiction
- Whether a court can assume jurisdiction based on a single or limited transaction.
- The legal effect of trap purchases in intellectual property litigation.
- Whether the defendant has a genuine business presence within the court’s territory.
- The need for credible evidence before granting interim relief.
The Himachal Pradesh High Court, in its decision dated 4th June 2026 in COMAP No. 2 of 2025, addressed this precise question in a patent infringement dispute between SML Limited as the plaintiff and Safex Chemicals Private Limited as one of the defendants.
The Division Bench, comprising the Chief Justice and another learned judge, examined whether the Himachal Pradesh High Court had the territorial jurisdiction to entertain a suit and, more immediately, whether the interim injunction granted against Safex Chemicals Private Limited should be sustained.
Court Findings on Jurisdiction and Interim Injunction
| Issue | Court’s Observation |
|---|---|
| Territorial Jurisdiction | The court examined whether sufficient material existed to establish jurisdiction within Himachal Pradesh. |
| Trap Transactions | Four invoices generated by a third party were relied upon by the plaintiff. |
| Dealer/Agency Relationship | The third party was neither an authorised dealer nor an agent of the defendant. |
| Manufacturing Unit Claim | The allegation regarding a manufacturing unit was found to be unsubstantiated. |
| Interim Injunction | The injunction granted against Safex Chemicals Private Limited was set aside. |
The court’s conclusion was a clear and firm answer: four invoices generated by a third party who was neither an authorised dealer nor agent of the defendant, combined with an unsubstantiated claim about a manufacturing unit, did not create a prima facie basis for the court’s jurisdiction. The interim injunction was accordingly set aside.
Factual And Procedural Background
SML Limited, the plaintiff in the underlying suit, claimed to be the owner of a patent and filed a commercial suit before the learned Single Judge of the Himachal Pradesh High Court, alleging that two defendants had infringed its patent by manufacturing, marketing, and selling a product under the brand name “Aladdin”. The product in question is a fertiliser-based commodity regulated under the Fertiliser (Control) Order, 1985, which itself is issued under the Essential Commodities Act, 1955.
Parties To The Dispute
| Party | Description |
|---|---|
| SML Limited | The plaintiff is claiming ownership of the patent. |
| First Defendant | Local entity having its principal place of business within Himachal Pradesh. |
| Safex Chemicals Private Limited | The second defendant and appellant before the Division Bench, having addresses in New Delhi and Jaipur, Rajasthan. |
The first defendant in the suit was a local entity with its principal place of business within Himachal Pradesh. The second defendant was Safex Chemicals Private Limited, which became the appellant before the Division Bench. Safex Chemicals had addresses in New Delhi and Jaipur, Rajasthan, and did not have any business establishment within the territorial limits of the Himachal Pradesh High Court.
Injunction Orders And Appeal
On 24th July 2023, the learned single judge granted an ex-parte ad interim injunction against both defendants. This order was later confirmed by the learned Single Judge on 6th June 2025 in OMP No. 320/23 in COMS No. 6/2026. It was this confirmed order that Safex Chemicals challenged before the Division Bench in COMAP No. 2 of 2025.
By agreement between the parties, the Division Bench confined its hearing only to the preliminary issue of territorial jurisdiction.
Plaintiff’s Case On Territorial Jurisdiction
The plaintiff’s case for jurisdiction rested on two broad planks:
- It was averred in paragraph 8 of the plaint that Safex Chemicals carries on business for gain within the territorial jurisdiction of the court, and relevant downloaded documents were annexed as Annexure “D”.
- It was averred in paragraphs 29, 55, and 56 of the plaint that infringing products manufactured and marketed by Safex Chemicals were being offered for sale within the territorial limits of the court.
To support this, four sales invoices were placed on record as Annexure “M”, showing that the product “Aladdin” had been sold by the first defendant within Himachal Pradesh.
Defence Raised By Safex Chemicals
Safex Chemicals filed a detailed written statement contesting jurisdiction. It asserted:
- It had no authorised dealers or retailers within Himachal Pradesh.
- “Aladdin” was a regulated commodity.
- It had obtained permission to market the product only in certain specific states.
- Himachal Pradesh was not among those authorised states.
- The first defendant had purchased the product from Haryana, where Safex Chemicals was authorised to sell.
- The product was subsequently brought into Himachal Pradesh for resale by the first defendant.
- There was no business relationship between Safex Chemicals and the first defendant.
Safex Chemicals categorically denied being in any business relationship with the first defendant.
Division Bench Proceedings
At a significant hearing on 29th December 2025, the Division Bench noted procedural infirmities in the counter-affidavit filed by the first defendant before the Single Judge and directed that the proprietor of the first defendant, one Mr Mohan Lal Sharma, appear in person.
On 8th January 2026, Mr Mohan Lal Sharma appeared before the Division Bench and produced original documents.
His authorisation letter showed that he was licensed only to sell the following:
- Straight fertilizers
- NPK complex fertilizers
- Biofertilisers
The authorisation was limited to specified sources, none of which included “Aladdin” or Safex Chemicals as a source.
He himself acknowledged that he had no authority to sell “Aladdin”, which he had purchased from a shop called Jangra Khad Beej Bhandar, Sarmathla, not directly from Safex Chemicals or its authorised dealers.
The Dispute Before The Division Bench
The core dispute before the Division Bench was whether the Himachal Pradesh High Court had the territorial jurisdiction to entertain the suit and grant an injunction against Safex Chemicals, a company based entirely outside Himachal Pradesh.
The specific grievance of Safex Chemicals was directed at the finding in paragraph 55 of the Single Judge’s order dated 6th June 2025, which held that jurisdiction existed primarily on the basis of two factors:
- The sale invoices generated by the first defendant.
- An alleged manufacturing unit of Safex Chemicals located at Una, Himachal Pradesh.
Arguments Advanced By Safex Chemicals
Safex Chemicals argued:
- The finding regarding a manufacturing unit at Una was unsupported by any pleading in the plaint or replication.
- The invoices were not issued to the plaintiff but to unrelated third parties.
- There was no explanation regarding how the plaintiff obtained those invoices.
- The first defendant was demonstrably not an authorised dealer of Safex Chemicals.
- The court must record at least a prima facie satisfaction regarding its own jurisdiction before granting an interim injunction.
Safex Chemicals further relied upon the Supreme Court’s ruling in Asma Lateef and Another vs Shabbir and Others, reported as (2024) 4 SCC 696, to contend that even at the interim stage, jurisdiction cannot be assumed without a prima facie finding.
Arguments Advanced By The Plaintiff
The plaintiff countered that even a single act of selling, making, offering for sale, or importing a patented product within a court’s territory violates the rights of the patentee under Section 48 of the Patents Act, 1970.
According to the plaintiff, such a single infringing act is sufficient to invoke territorial jurisdiction.
The plaintiff further argued that since damages were also claimed, Section 19 of the Code of Civil Procedure would apply. This provision states that where a wrong is committed within the limits of one court and the defendant resides or carries on business within another court, the plaintiff may choose either forum.
The plaintiff also sought to distinguish the judgements cited by Safex Chemicals on the ground that those cases involved the Trademarks Act and not the Patents Act, under which the nature of rights and violations is different.
Key Jurisdictional Issues For Determination
| Issue | Question Before The Court |
|---|---|
| Territorial Jurisdiction | Whether the Himachal Pradesh High Court could exercise jurisdiction over Safex Chemicals. |
| Sale Invoices | Whether invoices produced by the plaintiff were sufficient to establish jurisdiction. |
| Business Presence | Whether Safex Chemicals carried on business within Himachal Pradesh. |
| Unauthorized Dealer | Whether sales by the first defendant could be attributed to Safex Chemicals. |
| Patent Infringement Jurisdiction | Whether a single alleged act of sale or offer for sale was enough to confer jurisdiction under patent law. |
| Applicability of Section 19 CPC | Whether the plaintiff could invoke Section 19 of the Code of Civil Procedure to maintain the suit. |
Reasoning and Analysis of the Court
The court began its analysis by firmly endorsing the principle laid down in Asma Lateef and Another vs Shabbir and Others, (2024) 4 SCC 696, where the Supreme Court of India had clarified that the question of jurisdiction is not merely a question to be deferred to trial.
Even at the stage of considering an application for interim relief, the court must record at least a prima facie satisfaction that it has the jurisdiction. If a party raises a specific objection that the suit is not maintainable or is barred before the court, the grant of interim relief must be preceded by the court’s prima facie finding on this jurisdictional question.
The court cannot simply proceed to grant protection on the assumption that jurisdiction will be determined later as a preliminary issue under Order XIV Rule 2 of the Code of Civil Procedure. To do so would amount to an improper exercise of judicial power.
Jurisdiction Based on the Alleged Manufacturing Unit
Turning to the first basis of jurisdiction—the finding about the manufacturing unit at Una, Himachal Pradesh—the court subjected it to close scrutiny.
The court observed that paragraph 8 of the plaint averred that Safex Chemicals “carries on business for gain within the territorial jurisdiction” of the court, with reference to documents annexed as Annexure “D”. However, on an examination of Annexure “D”, the court found that nothing in those documents indicated that Safex Chemicals had a manufacturing facility within the territorial jurisdiction of the court.
The plaint and the replication were both silent on the question of any manufacturing unit in Himachal Pradesh.
The court then examined a document placed on record by Safex Chemicals itself—an authorisation letter issued by the State of Madhya Pradesh, authorising Safex Chemicals to carry on business for a period of five years from 29th June 2021 to 28th June 2026 within Madhya Pradesh.
Annexed to this authorisation letter was Annexure-I, which detailed the products and their sources. The court found that the product “Aladdin” appeared at serial numbers 5 and 8 of this annexure.
- Serial No. 5: Manufactured by Safex Chemicals itself in Delhi.
- Serial No. 8: Manufactured by M/s Him Bio Agro at Village Bala, Bathari, Tehsil Haroli, District Una, Himachal Pradesh.
The court drew a critical conclusion from this document. The manufacturing unit at Una belonged not to Safex Chemicals but to M/s Him Bio Agro, a completely separate and distinct entity.
Therefore, the finding in paragraph 55 of the learned Single Judge’s impugned order—that Safex Chemicals had a manufacturing unit within the territorial jurisdiction—was factually incorrect and unsupported by the record.
The learned single judge appeared to have relied on a brochure from Safex Chemicals’ website, which, on closer examination, did not support the conclusion that Safex Chemicals itself manufactured the product in Himachal Pradesh.
Furthermore, if “Aladdin” was being manufactured at Una and was available locally in Himachal Pradesh, there would have been no reason for the first defendant to have procured it from Haryana, which is what actually happened.
Jurisdiction Based on Sale Invoices
Turning to the second basis of jurisdiction—the sale invoices—the court carefully examined their character and provenance.
The court noted that Safex Chemicals had obtained permission to market “Aladdin” in only five states, as stated in paragraph 12 of its written statement, though paragraph 83(b) of the same written statement disclosed that the product was actually being sold in eleven states.
Himachal Pradesh was conspicuous by its absence from either list. There was no permission granted to Safex Chemicals to sell “Aladdin” within the State of Himachal Pradesh, and the plaint itself contained no averment that “Aladdin” was being sold in Himachal Pradesh through unauthorised channels in breach of the regulatory framework.
The written statement of Safex Chemicals specifically averred that “Aladdin”, being a regulated product under the Fertiliser (Control) Order, 1985, was sold only through authorised dealers and that the first defendant was not its authorised dealer.
When Mr Mohan Lal Sharma appeared before the Division Bench on 8th January 2026, this was confirmed beyond doubt. He acknowledged that he had no authority to sell “Aladdin” and had procured it from Jangra Khad Beej Bhandar, Sarmathla, not from Safex Chemicals or any of its authorised dealers.
He had purchased it from Haryana, where Safex Chemicals had authorisation to sell, and then resold it locally.
Analysis of the Four Invoices
The court then analysed the four invoices that formed the plaintiff’s primary evidentiary basis for invoking jurisdiction.
These invoices were issued by the first defendant, not to the plaintiff itself, but to unconnected third parties. The plaintiff provided no explanation as to how it came to obtain these invoices.
The plaint contained no averments establishing any connection between Safex Chemicals and the first defendant as principal and agent or as manufacturer and authorised dealer.
In this light, the court had to assess whether these transactions could prima facie be said to have been obtained by fair means.
Distinguishing Earlier Judicial Precedents
The court referred to the Delhi High Court’s judgement in Rieter AG and Another vs Kavassery Narayanaswamy Venkatasubramanian, 2025 SCC Online Del 4379, and the Delhi High Court’s judgement in Kubota Corporation and Godabari Agro Machinery and Services India Pvt. Ltd vs Great Galleon Venture Limited & Champa Prema Tandel, Sole Proprietor of Dharmesh Distiller and Another.
The court distinguished these cases on a crucial ground.
| Case | Relevant Finding | Why Distinguished |
|---|---|---|
| Rieter AG | Plaintiff’s investigator directly ordered infringing goods. | Direct and traceable transaction. |
| Kubota Corporation | Defendant directly offered infringing goods for sale. | Direct evidence of infringement within jurisdiction. |
| Present Case | Invoices involved third parties unrelated to plaintiff. | No direct, authentic, traceable transaction. |
The present case was entirely different. The invoices were transactions between the first defendant and unconnected third parties; the first defendant was not Safex Chemicals’ authorised representative, and the plaintiff could not explain how it obtained those invoices.
Consideration of the Sulphur Mills Decision
The court also addressed the Madras High Court’s judgement in Sulphur Mills Limited vs M/s Dayal Fertilisers Pvt. Ltd and Others, decided on 11th November 2020.
That decision had held that a suit could be maintained on the basis of a lone trap order and that whether the defendant was offloading its product within the court’s jurisdiction was a matter for trial.
The court noted that this ruling arose in the context of an application seeking revocation of leave and not an application for an interim injunction under Order 39 Rules 1 and 2 of the Code. The considerations applicable are materially different.
The Allied Blenders Principle
The court relied extensively on the Delhi High Court Division Bench judgement in M/s Allied Blenders and Distillers Pvt. Ltd vs Prag Distillery Pvt. Ltd and Another, 2017 SCC Online Del 7225.
The judgement clarified the distinction between:
| Provision | Standard Applied |
|---|---|
| Order VII Rule 10 CPC | Only plain averments examined and assumed true. |
| Order XXXIX Rules 1 & 2 CPC | The court examines the plaint, reply, written statement, and surrounding material. |
A mere averment in the plaint is not enough. The assumption that plaint averments are correct is unavailable while considering interim relief.
If the issue of jurisdiction is highly debatable and prima facie not tenable, the court can refuse an interim injunction on that ground even if it has previously declined to return the plaint.
Exphar SA vs. Eupharma Laboratories Ltd.
The court also cited the Supreme Court’s judgement in Exphar SA vs Eupharma Laboratories Ltd, (2004) 3 SCC 688.
That judgement held that when a jurisdictional objection is raised by demurrer without a full trial, the court proceeds on the assumption that pleaded facts are true.
However, as clarified in Allied Blenders, this principle is confined to the Order VII Rule 10 context and does not apply when interim relief is sought.
Analysis of Section 48 of the Patents Act, 1970
The court accepted the legal proposition that even a single act of selling, making, offering for sale, or importing a patented product without authorisation violates the patentee’s rights.
However, the real question was whether such an act had been committed by Safex Chemicals within the court’s territorial jurisdiction.
Given that:
- The first defendant had no authorisation from Safex Chemicals.
- The goods had been procured from Haryana.
- The procurement channels were unrelated to Safex Chemicals.
- Safex Chemicals had no authorised dealer in Himachal Pradesh.
The court concluded prima facie that no such act attributable to Safex Chemicals had taken place within its territorial limits.
Analysis of Section 19 CPC
The court was equally dismissive of the Section 19 CPC argument.
Section 19 provides that where a wrong is committed within the jurisdiction of one court and the defendant resides or carries on business within another jurisdiction, the plaintiff may sue in either forum.
However, for Section 19 to apply, the wrong must first be shown prima facie to have been committed by the defendant within the court’s territory.
Since the evidence indicated that no act attributable to Safex Chemicals had been committed within Himachal Pradesh, Section 19 offered no assistance.
Forum Shopping and Abuse of Jurisdiction
The court also took a broader view of the risks of allowing jurisdiction to be manufactured through unverified trap transactions.
It observed that if the mere existence of a few invoices issued by an entity that is not an authorised representative of the defendant to third parties is sufficient to confer jurisdiction, any company can easily be dragged into distant litigation regardless of whether it has any genuine connection to that forum.
This would amount to an open invitation to forum shopping and harassment.
The court was therefore of the view that such transactions must at least prima facie appear to have been obtained by fair and authentic means, a threshold that the plaintiff in this case could not meet.
Final Decision of the Court
The Division Bench allowed the appeal preferred by Safex Chemicals Private Limited. It held that prima facie there was no cause of action or wrong attributable to Safex Chemicals that could invoke the territorial jurisdiction of the Himachal Pradesh High Court.
The alleged cause of action or wrong, if any, was declared to be a triable issue, meaning the question could be examined at full trial on the basis of additional material if brought on record.
As a consequence, the impugned interim order dated 6th June 2025, passed in OMP No. 320/23 in COMS No. 6/2026, insofar as it operated against Safex Chemicals Private Limited (defendant No. 2), was vacated.
The court carefully added that these observations were confined only to the question of interim injunction at this stage and would not influence the learned single judge in arriving at a finding on the basis of any additional material that the parties may bring on record in the main suit.
The appeal was accordingly disposed of on 4th June 2026.
Points of Law Settled
This judgement makes a significant and clear contribution to the law on several fronts.
- It reaffirms that territorial jurisdiction is not a question to be deferred indefinitely; it must be addressed prima facie even at the stage of interim injunction, following the Supreme Court’s mandate in Asma Lateef, (2024) 4 SCC 696.
- It firmly distinguishes between the standard applicable under Order VII Rule 10 CPC (return of plaint) and Order XXXIX Rules 1 and 2 CPC (interim injunction), a distinction that significantly raises the bar for obtaining interim relief when jurisdiction is genuinely disputed.
- It establishes that in patent infringement cases, trap purchases or trap transactions must be shown prima facie to have been obtained by fair and authentic means before they can form the basis for invoking territorial jurisdiction.
- Where the alleged infringing product reaches the court’s territory not through the defendant’s own acts or through any authorised agent or dealer of the defendant, but through independent and unconnected intermediaries, no cause of action against the defendant can be said to have arisen within that territory.
- Finally, it clarifies that Section 48 of the Patents Act, 1970, while conferring rights against a single infringing act, still requires prima facie proof that the act was committed by the defendant within the court’s jurisdiction.
Key Legal Principles Emerging from the Judgment
| Legal Issue | Principle Laid Down by the Court |
|---|---|
| Territorial Jurisdiction | Must be examined prima facie even at the interim injunction stage. |
| Interim Injunction | Higher scrutiny applies where jurisdiction is seriously disputed. |
| Order VII Rule 10 CPC | Different considerations apply compared to interim injunction proceedings. |
| Trap Purchases | Must be fair, authentic, and prima facie reliable before jurisdiction can be founded upon them. |
| Cause of Action | No cause of action arises where products reach the territory through independent and unconnected intermediaries. |
| Section 48, Patents Act, 1970 | Requires prima facie proof that the infringing act was committed by the defendant within the court’s jurisdiction. |
Case Details
| Case Title | Safex Chemicals Private Limited Vs. SML Limited and Another |
|---|---|
| Date of Order | 4th June 2026 |
| Case Number | COMAP No. 2 of 2025 |
| Court | High Court of Himachal Pradesh, Shimla |
| Honourable Judges | Hon’ble Mr Gurmeet Singh Sandhawalia, Chief Justice, and Hon’ble Mr Justice Bipin Chander Negi |
Disclaimer: Images used herein do not reflect actual images used in the judgement, and the same are for illustrative purposes only. Readers are advised not to treat this as a substitute for legal advice, as it may contain errors in perception, interpretation, and presentation.
Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
