SC: S.7 of Commercial Courts Act only applies where HC has ordinary original civil jurisdiction

The Hon’ble Supreme Court, on 1st December 2020, in the matter of S.D. Containers Indore v. M/s. Mold Tek Packaging Ltd. held that Section 7 of the Commercial Courts Act, 2015 only deals with the situation where the High Courts have ordinary original civil jurisdiction. There is no provision in the Commercial Courts Act, 2015, either prohibiting or permitting the transfer of the proceedings under the Design Act, 2000 to the High Courts which do not have ordinary original civil jurisdiction.

The Hon’ble Supreme Court observed that:

The Commercial Courts Act, 2015 deals with two situations i.e. the High Courts which have ordinary original civil jurisdiction and the High Courts which do not have such jurisdiction. In areas where the High Courts do not have ordinary original civil jurisdiction, the Commercial Courts at the District Level are to be constituted under Section 3 of the 2015 Act. The State Government is also empowered to fix the pecuniary limit of the Commercial Courts at the District Level in consultation with the concerned High Court. “Commercial Dispute” within the meaning of Section 2(c)(xvii) of the Act, 2015 includes the dispute pertaining to “intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits.” Therefore, disputes related to design are required to be instituted before a Commercial Court constituted under Section 3 of the said Act. (Para 8)

On the other hand, Section 4 of the Commercial Courts Act, 2015 provides that where the High Courts have ordinary original civil jurisdiction, a Commercial Division is required to be constituted. Further, in terms of Section 5 of the Act, a Commercial Appellate Division is required to be constituted. Section 7 of the Act deals with the suits and applications relating to the commercial disputes of a specified value filed in the High Court having ordinary original jurisdiction, whereas, the second proviso contemplates that all suits and the applications transferred to the High Court by virtue of sub-section (4) of Section 22 of Design Act, 2000 shall be heard and disposed of by the Commercial Division of the High Court in all the areas over which the High Court exercises ordinary original civil jurisdiction. (Para 9)

Section 7 of the Commercial Courts Act, 2015 only deals with the situation where the High Courts have ordinary original civil jurisdiction. There is no provision in the 2015 Act either prohibiting or permitting the transfer of the proceedings under the Design Act, 2000 to the High Courts which do not have ordinary original civil jurisdiction. Further, Section 21 of the 2015 Act gives an overriding effect, only if the provisions of the Act have anything inconsistent with any other law for the time being in force or any instrument having effect by virtue of law other than this Act. Since the 2015 Act has no provision either prohibiting or permitting the transfer of proceedings under the Design Act, 2000, Section 21 of the 2015 Act cannot be said to be inconsistent with the provisions of the 2000 Act. It is only the inconsistent provisions of any other law which will give way to the provisions of the 2015 Act. In terms of Section 22(4) of the 2000 Act, the defendant has a right to seek cancellation of the design which necessarily mandates the Courts to transfer the suit. (Para 11)

Furthermore, in the Design Act, 2000, there are two options available to seek revocation of registration. One of them is before the Controller, appeal against which would lie before the High Court. Second, in a suit for infringement in a proceeding before the civil court on the basis of registration certificate, the defendant has been given the right to seek revocation of registration. In that eventuality, the suit is to be transferred to the High Court in terms of sub-section (4) of Section 22 of the 2000 Act. Both are independent provisions giving rise to different and distinct causes of action. (Para 14)

Copy of judgement:Judgement_01-Dec-2020

-Adv. Tushar Kaushik

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