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Carry On Business Under Section 20 (B) CPC And Cause Of Action Under Section 20 (C) CPC In The Context Of Defendant's Activity Through Website

In a recent case before the Hon'ble High Court of Delhi, the provisions of Section 20 (b) and Section 20 (c) of the Civil Procedure Code (CPC) were examined in the context of online activities carried out by the defendant through a website. The court's ruling shed light on the distinct treatment of online activities concerning the "carry on business" clause of Section 20 (b) CPC and the "cause of action" provision under Section 20 (c) CPC.

Background of the Case:
The case revolved around a plaintiff who had been established in 1980 for the purpose of operating a news channel in English under the renowned brand CNN, complete with the distinctive CNN logo. The defendant, located in Calcutta, was also involved in the operation of a news channel and had adopted and commenced using a CN Logo that, according to the plaintiff, infringed upon their trademark rights associated with the CNN Logo. Subsequently, a lawsuit was filed by the plaintiff against the defendant on the grounds of trademark infringement.

One of the central questions that arose in this case was whether the defendant's online services, accessible in Delhi through their website, satisfied the requirements of Section 20 (c) CPC or Section 20 (b) CPC. Section 20 (c) CPC deals with the jurisdiction of the court in cases where a part of the cause of action has arisen. Section 20 (b) CPC, on the other hand, pertains to the jurisdiction of the court when the defendant carries on business within its territorial limits.

Distinct Treatment of Section 20 (c) and Section 20 (b) CPC:
The court, in its ruling, emphasized a crucial distinction between online activities in the context of Section 20 (b) CPC and Section 20 (c) CPC.
  1. Cause of Action under Section 20 (c) CPC:
    The court made it clear that "mere accessibility of a website, without the possibility of concluding a commercial transaction through it, does not constitute part of the cause of action within the meaning of Section 20 (c) CPC."

    In other words, the mere fact that a website can be accessed in a particular jurisdiction is insufficient to establish that a part of the cause of action has arisen in that jurisdiction.

    This interpretation aligns with the principle that a cause of action is typically related to the specific events or circumstances that give rise to a lawsuit. In the context of online activities, the mere availability of a website to users in a particular jurisdiction is not, in itself, indicative of the cause of action originating in that jurisdiction.

    A plaintiff must demonstrate that the essential elements of the cause of action, such as trademark infringement in this case, have occurred within the territorial limits of the court's jurisdiction and for this commercial transaction has to happen through the defendants' website , which was missing in this case.
  2. Carry on Business under Section 20 (b) CPC:
    In contrast, the court observed that Section 20 (b) of the CPC would be applicable to the case. This is because the defendant, in addition to their website, also conducted business through various online channels, including a Facebook page, Instagram page, Twitter account, and YouTube channel. These channels were accessible to consumers in Delhi and, through these channels, the defendant was deemed to be carrying on business within the meaning of Section 20 (b) CPC.
The court's rationale for this differentiation was that "when a defendant operates through multiple online platforms and engages with consumers in a particular jurisdiction, they can be considered as carrying on business in that jurisdiction. This is because such online presence, when aimed at attracting and interacting with consumers, can be seen as actively participating in the commercial activities of that region."

The Concluding Note:
The Hon'ble High Court of Delhi's ruling in this case provides essential guidance on the interpretation of the terms "carry on business" under Section 20 (b) CPC and "cause of action" under Section 20 (c) CPC in the context of online activities conducted through a website. The ruling emphasizes that the mere accessibility of a website, sans any commercial activity, does not establish a part of the cause of action, and the actual business operations conducted through various online channels determine the applicability of Section 20 (b) CPC.

The Case Law Discussed:
Case Title: Cable News Network Inc Vs Ctvn Calcutta Television Network Pvt. Ltd.
Date of Judgement/Order:28/04/2023
Case No. CS (COMM) 309/2021
Neutral Citation No: 2023:DHC:2862
Name of Hon'ble Court: High Court of Delhi
Name of Hon'ble Judge:C Hari Shankar, H.J.

Information and discussion contained herein is being shared in the public Interest. The same should not be treated as substitute for expert advice as it is subject to my subjectivity and may contain human errors in perception, interpretation and presentation of the fact and issue involved herein.

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

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