I.S.D.S. Private Limited & Anr. Vs Khemka Food Products Pvt. Ltd. & Anr. (Supreme Court of India)
Can a Civil Judge Try Trademark Infringement Suits Despite Section 134 Bar? Supreme Court Refers Conflict to Larger Bench
The Supreme Court has referred to a larger Bench an important jurisdictional question concerning the interplay between section 134 of the Trade Marks Act, 1999 and the Commercial Courts Act, 2015.
Section 134 expressly prohibits the institution of specified trademark suits before any court inferior to a District Court having jurisdiction. However, several High Courts, exercising powers under the Commercial Courts Act, have notified Courts of Civil Judge (Senior Division) as Commercial Courts for disputes falling within particular pecuniary limits.
The issue is whether such a notification can confer jurisdiction upon a Civil Judge (Senior Division) to entertain a trademark infringement suit despite the express statutory restriction contained in section 134 of the Trade Marks Act.
The Supreme Court observed that the legislative command contained in a Parliamentary enactment cannot ordinarily be diluted through notifications issued by different High Courts. However, noticing apparently conflicting precedents, the matter was directed to be placed before the Chief Justice of India for constitution of an appropriate larger Bench.
Dispute Before the Supreme Court
A commercial suit concerning trademark rights was pending before the Civil Judge (Senior Division)-I, Jamshedpur. The State of Jharkhand had notified Civil Judges (Senior Division) as Commercial Courts under the Commercial Courts Act.
The appellants contended that section 134 of the Trade Marks Act specifically requires trademark infringement, passing off and related suits to be instituted before a District Court having jurisdiction. Therefore, a notification under the Commercial Courts Act could not confer jurisdiction upon a court inferior to the District Court.
According to the appellants, permitting such suits to be instituted before the Civil Judge (Senior Division) would defeat the deliberate legislative protection incorporated in section 134.
A further consequence was highlighted. Where the suit is decided by a Civil Judge (Senior Division), the statutory appeal would lie to the District Court under the Commercial Courts Act. The litigant would consequently lose the opportunity of a regular first appeal before the High Court. The High Court’s jurisdiction would then ordinarily be confined to revision or supervisory proceedings under Article 227, where reappreciation of evidence is significantly restricted.
The intervener supported this submission and contended that the words “having jurisdiction to try the suit” in section 134 refer to the territorial jurisdiction of the District Court. They do not authorise conferment of jurisdiction upon an inferior civil court.
Respondents Rely on Commercial Courts Act
The respondents relied upon section 2(1)(c)(xvii) of the Commercial Courts Act, which expressly includes disputes concerning registered and unregistered trademarks and other intellectual property rights within the definition of “commercial dispute”.
It was contended that the Commercial Courts Act is a later special legislation enacted for speedy disposal of commercial disputes. Section 21 gives the Act overriding effect over anything inconsistent in any other law. Consequently, where a Civil Judge (Senior Division) has been validly notified as a Commercial Court, trademark disputes of the specified value must be instituted before that court.
The dispute thus raised the familiar but complex issue of reconciling two special enactments operating in overlapping fields.
Conflicting Supreme Court Decisions
The Supreme Court examined its earlier decisions in Kandla Export Corporation v. OCI Corporation and Jaycee Housing Private Limited v. Registrar (General), Orissa High Court.
In Kandla Export Corporation, the Court dealt with the relationship between the Arbitration and Conciliation Act, 1996 and the Commercial Courts Act. It held that the Arbitration Act was a self-contained code and a special legislation concerning arbitration. Therefore, a right of appeal unavailable under the Arbitration Act could not be created by invoking the general appellate provision under the Commercial Courts Act.
The decision effectively treated the Commercial Courts Act as a general enactment when compared with the specialised regime governing arbitration.
However, in Jaycee Housing, while considering a notification constituting Civil Judges (Senior Division) as Commercial Courts, the Court held that the Commercial Courts Act, being later in point of time and containing overriding provisions, governed the forum for applications u/ss 9, 14 & 34 of the Arbitration Act.
Thus, one decision emphasised the self-contained and special nature of the Arbitration Act, while the other gave precedence to the later Commercial Courts Act in determining the appropriate forum.
The present Bench considered that this apparent conflict required authoritative resolution by a larger Bench.
Trademark Law Is a Species of Commercial Dispute
The Court observed that the Commercial Courts Act deals with the broad genus of commercial disputes enumerated in section 2(1)(c). Intellectual property disputes, including trademark disputes, are merely one species within that larger genus.
The Trade Marks Act, on the other hand, is a specialised enactment governing trademark rights and remedies. Section 134 specifically provides that certain suits cannot be instituted in any court inferior to a District Court having jurisdiction.
The Commercial Courts Act permits High Courts to notify Commercial Courts at the district level, including District Courts. Therefore, no inconsistency arises where the District Court or Additional District Court is designated as the Commercial Court.
The real conflict arises only when a Civil Judge (Senior Division), a court inferior to the District Court, is notified as the Commercial Court for trademark disputes.
Pecuniary Anomaly Highlighted
The Court also noticed an anomalous consequence arising from the pecuniary structure.
Under the Commercial Courts Act, a commercial dispute must ordinarily have a specified value of at least ₹3 lakh. In Jharkhand, the Civil Judge (Senior Division) exercises commercial jurisdiction for suits valued between ₹3 lakh and ₹1 crore.
Consequently, a trademark suit valued below ₹3 lakh would have to be instituted before the District Court under section 134 of the Trade Marks Act. Paradoxically, a suit of a higher value between ₹3 lakh and ₹1 crore would be instituted before the inferior Court of Civil Judge (Senior Division).
The Court considered this inversion of the jurisdictional hierarchy an issue requiring authoritative clarification.
It also noticed the approach followed in Kerala, where subsequent notifications designated District Courts and Additional District Courts as Commercial Courts for disputes arising under statutes such as the Arbitration Act, Copyright Act, Trade Marks Act and Patents Act, where the concerned legislation vested original jurisdiction in the principal civil court.
Matter Referred to Larger Bench
The Supreme Court refrained from finally deciding the jurisdictional issue. It directed that the matter be placed before the Chief Justice of India for constitution of an appropriate larger Bench to resolve the conflicting precedents and ensure uniformity across States.
Pending that determination, proceedings in Commercial Suit No. 11 of 2023 before the Civil Judge (Senior Division)-I, Jamshedpur, were stayed.
Author’s Comments
The referral raises an issue extending beyond trademark litigation. Several special statutes deliberately confer original jurisdiction upon the District Court because of the complexity, commercial consequences and appellate structure of the disputes involved.
The Commercial Courts Act reorganises forums for speedy adjudication, but a notification under that Act cannot easily be assumed to amend an express jurisdictional command enacted by Parliament. The crucial question is whether section 21 of the Commercial Courts Act overrides section 134 of the Trade Marks Act or whether both can be harmonised by designating only District Courts as Commercial Courts for trademark disputes.
Until the larger Bench decides the issue, the jurisdiction of Civil Judges notified as Commercial Courts to entertain trademark suits remains legally unsettled. The final ruling will also determine whether forum allocation under special Central enactments can vary from State to State merely because different High Courts have issued different notifications.
Cases Discussed
- Kandla Export Corporation and Anr. v. OCI Corporation and Anr., (2018) 14 SCC 715
- Fun N. Fud v. GLK Associates, 2019 SCC Online Guj 4236
- Jaycee Housing Private Limited and Ors. v. Registrar (General), Orissa High Court and Ors., (2023) 1 SCC 549
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
2. The only question arising in the above appeal is as to whether the restriction contained under Section 134 of the Trade Marks Act, 1999 to institute a suit for infringement etc. before any Court inferior to a District Court having jurisdiction to try the suit would be rendered otiose by the notification issued under the Commercial Courts Act, 2015, by certain States notifying the Civil Judge (Senior Division) as a Commercial Court; herein the State of Jharkhand.
3. The learned Counsel for the appellants submits that the very intention of Section 134 was to ensure that infringement and like issues arising under the Trade Marks Act is dealt with by a District Court, which is diluted by a notification issued under the Commercial Courts Act. As of now, in the State of Jharkhand, any suit under Section 134 of the Trade Marks Act would have to be instituted before the Civil Judge (Senior Division) from which an appeal would lie to the District Court as provided under the Commercial Courts Act. This would prejudice the litigant insofar as there being no remedy provided for an appeal to the High Court and the High Courts’ jurisdiction will be confined to a revision or a challenge under Article 227; which inherently is restrictive in its scope, since no re-appreciation of evidence would be possible. The appellant has placed reliance on a number of judgments.
4. The intervener also supports the appellant with the further submission that the expression ‘having jurisdiction to try the suit’ under sub-section (1) of Section 134 of the Trade Marks Act is with reference to territorial jurisdiction and does not digress from the jurisdiction exclusively conferred to a District Court. It cannot at all be said that by the enactment of the Commercial Courts Act enabling suits of a commercial nature to be filed before the Courts conferred with jurisdiction by a notification issued by the High Court, to directly interfere with the specific jurisdiction conferred under the Trade Marks Act. It is the submission of the appellant and the intervener that the Trade Marks Act is a special legislation and with reference to the said Act, the Commercial Courts Act, which brings within its ambit many aspects under the definition of commercial disputes under Section 2(1)(c) is a general legislation.
5. The learned Counsel for the respondent on the other hand, specifically points to Section 2(1)(c)(xvii), which deals with Intellectual Property Rights related to registered and unregistered trade marks and other such rights. It is pointed out that the Commercial Courts Act, being a subsequent legislation, which also is a special legislation enacted for expeditious adjudication of commercial disputes, the provisions therein prevail. Section 21 is a non-obstante provision conferring overriding effect on the Commercial Courts Act, which is enacted when the Trade Marks Act was in force. The provisions in the earlier enactment, if inconsistent with the subsequent enactment, pales into insignificance by virtue of the non obstante provision. The respondents also rely on the decisions of this Court.
6. Kandla Export Corporation and Anr. v. OCI Corporation and Anr.1 was concerned with the question as to whether an appeal not maintainable under Section 50 of the Arbitration and Conciliation Act,1996 (Arbitration Act), would nonetheless be maintainable under Section 13(1) of the Commercial Courts Act. This Court specifically noticed that the amendment to the Arbitration Act and the Commercial Courts Act were brought into force on the same day. Section 13(1) by its proviso, specifically noticed Section 37 of the Arbitration Act but had not noticed Section 50 of the same enactment. Part II of the Arbitration Act is concerned with enforcement of Foreign Awards and Section 50 enables appeals only from orders; (a) refusing to refer to arbitration under Section 45 and (b) refusing to enforce an award under Section 48. In the present case, the objection against the execution petition was rejected and the execution petition itself was allowed. This Court found that this is in consonance with the speedy resolution of disputes, which motivated both the enactments, the Arbitration Act and the Commercial Courts Act.
7. We also have to notice a decision of the Gujarat High Court in Fun N. Fud v. GLK Associates2 authored by one of us (J.B.Pardiwala, J. as he then was). The question arising in that case was as to whether by virtue of a notification issued under the Commercial Courts Act, the Civil Judge (Senior Division) is notified as a Commercial Court, an application under Section 9 of the Arbitration Act should be filed before the CJ(SD) or the Principal District Court having jurisdiction. The Division Bench categorically held that the narrowing down of the definition of the Court as evident from the Arbitration Act makes it clear that an application under Section 9 of the Arbitration Act would be entertained only by the District Court having principal civil jurisdiction.
8. In Jaycee Housing Private Limited and Ors. v. Registrar (General), Orissa High Court and Ors.3 the challenge was to the notification issued by the State of Orissa, which constituted the Court of Civil Judge (Senior Division) as Commercial Courts for the purpose of exercising jurisdiction and powers under the Commercial Courts Act. The writ petitioners who initiated proceedings under Section 34 of the Arbitration Act challenged the notification on the ground that it rendered negatory the provisions of Section 2(1)(e) of the Arbitration Act. It was held so in paragraph 24 and 25, which is extracted hereunder:
“24. Thus, the Objects and Reasons of the Commercial Courts Act, 2015 is to provide for speedy disposal of the commercial disputes which includes the arbitration proceedings. To achieve the said Objects, the legislature in its wisdom has specifically conferred the jurisdiction in respect of arbitration matters as per Section 10 of the 2015 Act. At this stage, it is required to be noted that the 2015 Act is the Act later in time and therefore when the 2015 Act has been enacted, more particularly Sections 3 & 10, there was already a provision contained in Section 2(1)(e) of the 1996 Act. As per settled position of law, it is to be presumed that while enacting the subsequent law, the legislature is conscious of the provisions of the Act prior in time and therefore the later Act shall prevail.
25. It is also required to be noted that even as per Section 15 of the 2015 Act, all suits and applications including applications under the 1996 Act, relating to a commercial dispute of specified value shall have to be transferred to the Commercial Court. Even as per Section 21 of the 2015 Act, the 2015 Act, shall have overriding effect. It provides that save as otherwise provided, the provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force.
9. We have to notice that Jaycee Hosing Private Limited and Ors.3 had categorically held that Section 9, 14 and 34 has to concede insofar as jurisdiction is concerned, to the Commercial Courts Act, finding it to be a special enactment as is the case with the Arbitration and Conciliation Act. Kandla Export Corporation and Anr.1 on the other hand found that the Arbitration Act is a code unto itself and vis-a-vis the Commercial Courts Act, the former is a special legislation, and the latter is a general legislation.
10. In our humble view too, the Commercial Courts Act deals with the genus of commercial disputes as delineated in clauses (i) to (xxii) of section 2(c) while arbitration is an alternate dispute resolution process, itself a special legislation regulating the procedure. Likewise, intellectual property rights including that of trade marks is only a species [2(c)(xvii)] of the larger genus of commercial disputes. Further the constitution of commercial courts as per Section 3 empowers the High Courts to notify the constitution of Commercial Courts at the District Level, which includes the Higher Judiciary, comprising of the District Courts. Section 21 gives overriding effect to that statute only when there is anything inconsistent in any other law for the time being in force. Hence when another special enactment like the Trade Marks Act confers jurisdiction on the District Court by prohibiting institution of suits for specified reliefs in any Court inferior to that of a District Judge, it is not inconsistent with the Commercial Courts Act, which permits the High Courts to notify as Commercial Courts the Courts of District Judges also. The problem occurs only when the notification, constitutes Civil Judges as Commercial Courts. The apparent conflict in the two decisions, according to us, needs to be looked into by a larger bench.
11. In this context we have to notice that the specified value as coming out from the Commercial Courts Act, which determines the pecuniary jurisdiction, should be not less than three lakh rupees as per Section 3, with the nominal heading ‘Constitution of Commercial Courts’. If that be so, in the State of Jharkhand, where the CJ(SD) is notified as a Commercial Court; conferred with pecuniary jurisdiction between Rs.3 lakhs and Rs.1 crore; a suit valued at less than Rs.3 lakhs will nevertheless have to be instituted before the District Court, going by Section 134 of the Trade Marks Act, while suits with higher value will have to be filed before the CJ(SD).
12. We also notice that in some States, like the State of Kerala, initially the CJ(SD) was notified as the Commercial Court for suits having valuation above Rs.3 lakhs. Later, under Section 3(1A) of the Commercial Courts Act the pecuniary value for suits before CJ(SD) (termed as Subordinate Judge’s Court in that State) notified as Commercial Courts, was enhanced to Rs.10 lakhs. Presumably reckoning the anomaly as coming out from the two enactments a subsequent notification was brought out under Section 3, designating all District Courts and the Additional District Courts as Commercial Courts at the District Judge level for the purpose of exercising jurisdiction and powers conferred under the Commercial Courts Act to deal with those commercial disputes arising under the Arbitration and Conciliation Act, 1996, the Copyright Act, 1957, the Trademarks Act, 1999, the Patents Act, 1970 and any other statute where the Principal Civil Court of original jurisdiction in a district has to adjudicate the disputes arising therefrom at the first instance.
13. We are of the opinion that the matter has to be referred to the Larger Bench for resolving the conflict and also settling the law to be uniform throughout the States and the jurisdiction not to be left to the different notifications issued in the various States. In our humble view the legislative imprimatur cannot be diluted by the notifications issued by the High Courts. The matter shall be placed before the Hon’ble the Chief Justice of India for appropriate orders.
14. The Commercial Suit No.11 of 2023 pending before the CJ (SD) – I, Jamshedpur shall stand stayed.
Notes:
1 (2018) 14 SCC 715
2 2019 SCC Online Guj 4236
3 (2023) 1 SCC 549
