Banyan Tree Holding (P) Limited vs A. Murali Krishna Reddy & Anr. on 23 November, 2009 – Case Summary

In the case of Banyan Tree Holding (P) Limited vs A. Murali Krishna Reddy & Anr. on 23 November, 2009, the Delhi High Court was confronted with a complex issue of jurisdiction in the context of internet-related disputes. The case was presided over by Hon’ble Chief Justice and Hon’ble Dr. Justice S. Muralidhar. The dispute arose between Banyan Tree Holding (P) Limited, a Singapore-based company, and A. Murali Krishna Reddy & Anr., based in Hyderabad, India. The crux of the matter revolved around the use of the word mark ‘Banyan Tree’ and the banyan tree device by the defendants, which the plaintiff claimed was deceptively similar to their own and was an attempt to encash on their reputation and goodwill.

Facts of the Case

The plaintiff, Banyan Tree Holding (P) Limited, is a company involved in the hospitality business and has been using the word mark ‘Banyan Tree’ and the banyan tree device since 1994. The plaintiff maintains the websites www.banyantree.com and www.banayantreespa.com, which are accessible in India. The defendants, A. Murali Krishna Reddy & Anr., initiated work on a project under the name ‘Banyan Tree Retreat’. The plaintiff alleged that the defendants’ use of the word mark and the device was dishonest and was an attempt to encash on their reputation and goodwill.

Issues Raised

The primary issue raised in this case was whether the Delhi High Court had the jurisdiction to entertain the suit. The plaintiff claimed that the defendants solicit business through the use of the impugned mark “BANYAN TREE RETREAT” and the Banyan device in Delhi. The plaintiff also contended that the defendants’ website, which is accessible in Delhi, is not a passive website and seeks feedback and inputs from its customers through an interactive web-page.

Court’s Observations

The court observed that the present suit was not one for infringement by the defendants of the plaintiff’s trademark and the plaintiff carries on business within the jurisdiction of the court. The court also noted that the plaintiff sought to find the territorial jurisdiction of the Delhi High Court in terms of Section 20(c) CPC, which states that a court has jurisdiction if the cause of action, wholly or in part, arises within its jurisdiction.

The court also examined the accessibility of the defendants’ website in Delhi and noted that the nature of the website, the intention of the website’s host to market its products in Delhi, and the effect of such action by the defendants in Delhi are the three factors that have to be accounted for in determining whether the court has territorial jurisdiction.

The court also referred to the development of the law in common law jurisdictions, particularly the U.S.A., the U.K., Canada, Australia, and India, to examine the jurisdiction of a forum court in suits involving internet-related disputes. The court referred to the “sliding scale” test for determining the level of interactivity of the website, for the purposes of ascertaining jurisdiction of the forum state, which was laid down in Zippo Mfg. Co. v. Zippo Dot Com, Inc.

Conclusion

The case of Banyan Tree Holding (P) Limited vs A. Murali Krishna Reddy & Anr. is a significant one as it delves into the complex issue of jurisdiction in internet-related disputes. The court’s observations and references to the development of the law in other jurisdictions provide a comprehensive understanding of how jurisdiction is determined in such cases. The case also highlights the importance of the nature of a website, the intention of the website’s host,

and the effect of the website’s actions in determining whether a court has territorial jurisdiction.

The court reframed the questions referred to it for its opinion as follows:

1. For the purposes of a passing off action, or an infringement action where the Plaintiff is not carrying on business within the jurisdiction of a court, in what circumstances can it be said that the hosting of a universally accessible website by the Defendants lends jurisdiction to such Court where such suit is filed (“the forum court”)?
2. In a passing off or infringement action, where the defendant is sought to be sued on the basis that its website is accessible in the forum state, what is the extent of the burden on the Plaintiff to prima facie establish that the forum court has jurisdiction to entertain the suit?
3. Is it permissible for the Plaintiff to establish such prima facie case through “trap orders” or “trap transactions”?

The court noted that the present suit was not one for infringement by the Defendants of the Plaintiff’s trademark and the Plaintiff carries on business within the jurisdiction of the court. If it were, then in terms of Section 134 (2) of the Trademarks Act 1999 (TM Act) this court would have jurisdiction to entertain the suit although the defendants do not reside or carry on business within its jurisdiction.

The court also observed that the Plaintiff seeks to find the territorial jurisdiction of this Court in terms of Section 20(c) CPC. In other words, according to the Plaintiff the cause of action, wholly or in part, arises within the jurisdiction of this Court. This, according to the Plaintiff is on account of two factors. One, that the website of the Defendants is accessible in Delhi; it is not a passive website but used for soliciting business in Delhi. Second, that there was at least one instance of the Defendants’ brochure being sent to a Delhi resident for the purposes of sale of property.

The court also examined the accessibility of the Defendants’ website in Delhi, and noted that the nature of the website, the intention of the website’s host to market its products in Delhi, and the effect of such action by the Defendants in Delhi, are the three factors that have to be accounted for in determining whether this court has territorial jurisdiction.

The court also referred to the development of the law in common law jurisdictions, particularly the U.S.A., the U.K., Canada, Australia, and India, to examine the jurisdiction of a forum court in suits involving internet-related disputes. The court referred to the “sliding scale” test for determining the level of interactivity of the website, for the purposes of ascertaining jurisdiction of the forum state, which was laid down in Zippo Mfg. Co. v. Zippo Dot Com, Inc.

In conclusion, the case of Banyan Tree Holding (P) Limited vs A. Murali Krishna Reddy & Anr. is a significant one as it delves into the complex issue of jurisdiction in internet-related disputes. The court’s observations and references to the development of the law in other jurisdictions provide a comprehensive understanding of how jurisdiction is determined in such cases. The case also highlights the importance of the nature of a website, the intention of the website’s host, and the effect of the website’s actions in determining whether a court has territorial jurisdiction.