Through Its Prop. Shri Shyam Sundar Chugani vs Abhinav Jain, Owner/proprietor Of M/s. Aagam Oils, Government

Order

: 09/05/2025 15/05/2025 Reserved on Pronounced on Reportable

1. For the sake of convenience, the parties will be referred to as their status before the Trial Court.

2. By way of filing this revision petition, a challenge has been led to the impugned order dated 13.10.2023 passed by the Additional District Judge, Malpura, District Tonk by which the

application filed by the defendant under Order VII Rule 11 CPC read with Section 151 CPC has been rejected. [2025:RJ-JP:19619] (2 of 13) [CR-38/2024]

3. Learned counsel for the petitioner submits that the plaintiff has filed a suit for injunction against the defendant with various prayers including the prayer for restraining the defendant to use the trade mark “Shahi Sikka”. Counsel submits that the aforesaid suit is barred by law, as per the provisions contained under Section 142 (2) of the Trade Marks Act, 1999 (for short, “the Act of 1999”) and the provisions contained under Section 2(c)(17) and Section 12(b) of the Commercial Courts Act, 2015 (for short, “the Act of 2015”). Counsel submits that as per the provisions contained under Section 2(c)(17) of the Act of 2015, any dispute arising out of the intellectual property rights relating to registered and unregistered trademarks, copyright, patent design domain names, geographical indication, and semiconductor Integrated Circuits would mean a ‘commercial dispute’ and as per Section 6 of the said Act, a Commercial Court shall have jurisdiction to try all the suits and the applications relating to a commercial dispute. Counsel submits that this issue came up before the Delhi High Court in the case of Vishal Pipes Limited Vs. Bhavya Pipe Industry reported in 2022:DHC:2252 wherein the Delhi High Court has issued various directions in Para 66 of the judgment, which read as follows:- “66. In light of the above discussion, the following directions are issued: (i) Usually, in all IPR cases, the valuation ought to be Rs. 3 lakhs and above and proper Court fee would have to be paid accordingly. All IPR suits to be instituted before District Courts, would therefore, first be instituted before the District Judge (Commercial). [2025:RJ-JP:19619] (3 of 13) [CR-38/2024] (ii) In case of any IPR suits valued below Rs. 3 lakhs, the Commercial Court shall examine the specified value and suit valuation to ensure it is not arbitrary or unreasonable and the suit is not undervalued. (iii) Upon such examination, the concerned Commercial Court would pass appropriate orders in accordance with law either directing the plaintiff to amend the plaint and pay the requisite Court fee or to proceed with the suit as a non-commercial suit. (iv) In order to however maintain consistency and clarity in adjudication, even such suits which may be valued below Rs. 3 lakhs and continue as non-commercial suits, shall also continue to be listed before the District Judge (Commercial), but may not be subjected to the provisions of the CCA. (v) All pending IPR suits before the different District Judges (non-Commercial) in Delhi shall be placed before the concerned District Judges (Commercial) for following the procedure specified above. plaintiffs who wish to amend the Plaint would be permitted to do so in accordance with law.”

4. Counsel submits that later on, the aforesaid judgment, which was passed by the Single Bench of the Delhi High Court, was overruled, with certain modifications by the Division Bench of the Delhi High Court in the case of Pankaj Ravjibhai Patel Vs. SSS Pharmachem Pvt. Ltd. reported in 305 (2023) DLT 462, but while deciding the appeal preferred against the judgment passed in the case of Vishal Pipes Ltd. (supra), the Division Bench of the Delhi High Court concluded that while it would be open for the competent Court to examine the declared specified value and the value ascribed to the reliefs, claimed in an IPR suit, if it is below three lakhs, the issue of under-valuation has to be evaluated [2025:RJ-JP:19619] (4 of 13) [CR-38/2024] based on the facts of each case. Counsel further submits that the suit is also barred by law pursuant to the provisions contained under Section 142(2) of the Act of 1999 and the provisions contained under Section 60 of the Copyright Act, 1957 (for short, “the Act of 1957”) which are pari materia.

5. While interpreting the provisions contained under Section 60 of the Act of 1957, the Karnataka High Court in the case of Chancery Pavilion Vs. Indian Performing Rights society Ltd. & Ors. while deciding Regular First Appeal No.145/2015 vide order dated 27.09.2023 has taken a precise view about the non- maintainability of the suit before the Civil Court. Counsel submits that under these circumstances, the application submitted by the petitioner under Order VII Rule 11 CPC is liable to be allowed and the suit filed by the plaintiff before the Court below is liable to be rejected being barred by law.

6. Per contra, learned counsel for the plaintiff opposes the arguments raised by the counsel for the defendant and submits that the suit filed by the plaintiff is not barred by law and the same is plain and simple, wherein a prayer for permanent injunction has been made against the defendant for restraining him to use the trade mark “Shahi Sikka”. Counsel submits that at the time of submitting the application before the trial Court under Order VII Rule 11 CPC, the defendant has not disclosed about his trade mark or registered trade mark. Counsel submits that while deciding the application under Order VII Rule 11 CPC, only the averment and contents made in the plaint are required to be seen and after perusing the aforesaid, the trial Court has passed a reasoned and cogent order dated 13.10.2023 by which the [2025:RJ-JP:19619] (5 of 13) [CR-38/2024] application filed by the defendant under Order VII Rule 11 CPC has been rightly rejected, hence, under these circumstances, interference of this Court is not warranted.

7. Heard and considered the submissions made at the Bar and perused the material available on record.

8. Perusal of record indicates that a suit for permanent injunction has been filed by the plaintiff seeking relief against the defendant that he may be restrained from manufacturing, marketing & selling the edible oil with the trade mark label “Sona Sikka”.

9. As per the defendant, the suit is barred by the provisions contained under Section 2 (1)(c) (xvii) and Section 12(b) of the Act of 2015. Perusal of the entire application, filed under Order VII Rule 11 CPC, indicates that this specific ground has not been taken by the defendant. Though, the contents of their application indicates that the same has been filed on the basis of the judgment passed by the Single Bench of Delhi High Court in the case of Vishal Pipes Limited (supra), but the aforesaid judgment has been overruled by the Division Bench of the Delhi High Court in the case of Pankaj Ravjibhai Patel (supra). Hence, it automatically rules out the ground that the suit will be maintainable only before the Commercial Court and not before the District Court. It has been held in Para 24, 25, 32, 33, 34 as under:- “24. However, in our considered opinion, it would be wholly incorrect to proceed on the premise that the dispute forming the subject matter of IPR suits would necessarily and invariably be liable to be valued at Rs. [2025:RJ-JP:19619] (6 of 13) [CR-38/2024] 3 lakhs or above. While we do not intend to convey a position of a deliberate undervaluation being accorded a judicial imprimatur, we are of the firm opinion that it would be wholly incorrect for courts to proceed on the presumption that an IPR suit when valued at below Rs. 3 lakhs is necessarily based on ulterior motives or a mala fide intent to avoid application of the CCA. We note that the issue of whether a particular suit has been deliberately undervalued is one which can always be examined and scrutinized by a competent court. Ultimately the issue of a deliberate suppression of valuation would have to be considered and answered based on the facts obtaining in an individual case. All that we deem apposite to note and observe in this respect is that Vishal Pipes clearly appears to have been incorrectly decided when it formulated a direction mandating that normally in all IPR cases, the valuation ought to be Rs. 3 lakhs and above.

25. We also find merit in the submission of Ms. Sukumar who alluded to the disruptive outcome of the directions contained in Para 66 (iv) and (v) of Vishal Pipes. As would be evident from a reading of the various provisions of the CCA, a suit is liable to be placed before the notified commercial court only if it relates to a commercial dispute and crosses the threshold of Rs. 3 lakhs as the specified value when determined in accordance with Section 12. Undisputedly, unless the twin factors of "commercial dispute" and "specified value" are met, a matter cannot be placed before or be taken cognizance of by a commercial court. It is in the aforesaid backdrop that we find ourselves unable to appreciate or sustain the directions contained in sub-paragraphs (iv) and (v) of Para 66 of Vishal Pipes.

32. Our inability to subscribe or accede to the directions framed in Vishal Pipes is further fortified [2025:RJ-JP:19619] (7 of 13) [CR-38/2024] when those directives are tested in the backdrop of a quia timet action. It would clearly be impossible to accord an imprimatur to those directions in situations where loss cannot be quantified or where the infringement is apprehended. Learned counsel for the appellant thus clearly appears to be correct when he contended that the directions framed by the Court in Vishal Pipes would be rendered unworkable in such contingencies.

33. We thus come to conclude that while it would be open for the competent court to examine the declared specified value and the value ascribed to the reliefs claimed in an IPR suit if it be pegged at below Rs. 3 lakhs, the issue of undervaluation would have to be evaluated based on the facts of each case. The aforesaid exercise can be legally undertaken by the competent court itself and such matters need not be transferred to commercial courts for the aforesaid purpose.

34. The Court further finds merit in the suggestion mooted by Ms. Sukumar of an additional declaration being made by plaintiffs in IPR suits where valuation is placed at below Rs. 3 lakhs. We thus direct that in all such cases, the plaintiff would have to declare that it has not taken an inconsistent position with respect to specified value in any other litigation pending or instituted in the past.”

10. This Court concurs with the view expressed by the Division Bench of the Delhi High Court, in the aforementioned matter. It cannot be presumed, as a rule of thumb, that a dispute involving intellectual property must necessarily be valued above Rs.3 Lakhs, particularly in the absence of any prescribed minimum or objective [2025:RJ-JP:19619] (8 of 13) [CR-38/2024] valuation for such category of assets, as clarified in Pankaj Ravjibhai Patel (supra).

11. At this juncture, it is worthy to take note of the Preamble of the Commercial Courts Act, 2015 which reads as follows: An Act to provide for the constitution of Commercial Courts, [Commercial Appellate Courts,] Commercial Division and Commercial Appellate Division in the High Courts for adjudicating commercial disputes of specified value and matters connected therewith or incidental thereto.

12. Therefore, the Parliament had always intended commercial disputes of only a specified value to be adjudicated by the Commercial Courts and none other. Hence, there cannot be any presumption with regard to a particular class or head of commercial dispute that it’s specified value will inevitably be above 3 lacs. Had this been the intention of the legislature, it would have been so indicated in the statute. In absence thereof, Courts cannot read into a provision a meaning which will render other sections or other parts of the enactment otiose.

13. Naturally, if merely on the ground that the dispute pertains to an intellectual property the suit is adjudicated as a commercial suit, it will tantamount to giving a go-by to the other sections of the 2015 Act including Sections 2(1)(i), 6 and 12. Hence, this cannot be countenanced in law.

14. Even, the Karnataka High Court in Fine Footwear Pvt. Ltd. v. Skechers USA Inc. & Ors., reported in 2019 SCC Online Kar 1024 has held as under: [2025:RJ-JP:19619] (9 of 13) [CR-38/2024] “10. It has been a well settled position of law that the plaintiff being the dominus litis has the prerogative of choosing the Court and determine the valuation of the suit for the purpose of pecuniary jurisdiction, special jurisdiction or for computation of court fees; the opposing party cannot insist that the suit be tried before some other Court without establishing the lack of jurisdiction of the Court in which the cause is brought; the suit involves a commercial dispute, is true; but, there is no material placed on record to prima facie show that its specified value is Rupees Three Lakh or above, in terms of Section 2(1)(i) r/ w Section 12 of the 2015 Act … In other words, the Commercial Courts have jurisdiction only in such matters which pass the Twin Test i.e., existence of a “Commercial Dispute” as defined under Section 2(1)(c)(xvii) and the “Specified Value” as defined under Section 2(c) (i) r/w Section 12 of the 2015 Act. In the present writ petition, although the suit involves a Commercial Dispute, the subject matter of the suit is apparently less than the Specified Value. To put it succinctly, the commercial courts shall have exclusive jurisdiction if both the commercial dispute and specified value concur to exist and not just one of them, as rightly contended by learned Sr. Counsel for the respondent.”

15. Therefore, it is settled that unless the specified value of the commercial dispute exceeds the threshold limit of 3 lacs, no commercial suit/application can lie.

16. There is one more angle from which this issue can be looked at. If there is no objective value or minimum threshold of valuation which has been prescribed for a valuation, the Courts [2025:RJ-JP:19619] (10 of 13) [CR-38/2024] must prima facie, accept the valuation given by the Plaintiff. This principle has been laid down by the Hon’ble Apex Court in M/s. Commercial Aviation and Travel Company and ors. v. Vimla Pannalal, reported in (1988) 3 SCC 423 in the following manner: “It is manifestly clear from the provision of Order VII Rule 11 (b) that a Court has to come to a finding that the relief claimed has been undervalued, which necessarily means the that Court is able to decide and specify proper and correct valuation of relief and, after determination of the correct value of the relief, requires the Plaintiff to correct his valuation of the relief within a time to be fixed by the Court. If the plaintiff does not correct the valuation within the time allowed, the plaint is liable to be rejected. The question is whether in a suit for accounts simpliciter, the Court can come to a finding as to the proper and correct value of the relief until the final determination is made. In our opinion, ordinarily it is not possible for the Court at a preliminary stage to determining the value of the relief in a suit for accounts simpliciter. If the Court is itself unable to say what the correct valuation of the relief is, it cannot require the plaintiff to correct the valuation that has been made by him. Indeed, in a suit for accounts it is also difficult for the Court to come to a finding even as to the approximate correct valuation of the relief. In such a case, the Court has no other alternative than to accept plaintiff's valuation tentatively.”

17. Further, even in the instant case, no positive statement has been put forth as to how the specified value, if at all, has been undervalued. Hence, if the Court is not in a position to undertake [2025:RJ-JP:19619] (11 of 13) [CR-38/2024] such exercise of valuation without looking into the disputed question of facts and deciding the same, tentatively, the valuation offered by the Plaintiff has to be accepted to be true.

18. It is trite law that in an Application under Order VII Rule 11 CPC, the Court can only look into the Plaint and the averments made in the Plaint and nothing beyond.

19. Further, as laid down by the Hon’ble Apex Court in M/s. Commercial Aviation (supra), in regard to the question of undervaluation, if the Court cannot come to its exact valuation, it must tentatively accept the valuation as arrived at by the Plaintiff. The valuation of the Plaint has to be prima facie seen on basis of the averments of the Plaint only and nothing else. Therefore, the test is, if on a perusal of the Plaint and its averments, if it ex facie appears that the suit is either undervalued, or does not disclose a cause of action or is barred by any law, it is liable to be rejected and not otherwise.

20. It is true and settled law that though Court is required to be extremely careful regarding frivolous and vexatious litigations creeping in the judicial system and consequently abusing the process of law. This requires Courts to exercise their power under Order VII Rule 11 CPC to nip such litigation in the bud.

21. However, equally important and well settled is the law that Order VII Rule 11 CPC amounts to rejection of a case at the threshold. Therefore, it is a drastic power, which must be exercised with extreme cautiousness. Hon’ble Supreme Court has laid down the following proposition of law in the case of P.V. Guru Raj Reddy v. P. Neeradha Reddy, reported in (2015) 8 SCC 331: [2025:RJ-JP:19619] (12 of 13) [CR-38/2024] “5. Rejection of the plaint under Order 7 Rule 11 of CPC is a drastic power conferred in the court to terminate a civil action at the threshold. The conditions precedent to the exercise of power under Order 7 Rule 11, therefore, are stringent and have been consistently held to be so by the Court. It is the averments in the plaint that have to be read as a whole to find out whether it discloses a cause of action or whether the suit is barred under any law. At the stage of exercise of power under Order 7 Rule 11, the stand of the Defendants in the written statement or in the application for rejection of the plaint is wholly immaterial. It is only if the averments in the plaint ex facie do not disclose a cause of action or on a reading thereof the suit appears to be barred under any law the plaint can be rejected. In all other situations, the claims will have to be adjudicated in the course of the trial.”

22. It is therefore settled law that such a drastic step cannot be taken, when upon a holistic reading of the Plaint, it does not appear to be barred by any law or discloses a cause of action (along with the other grounds of the said Rule). In such situations, the Plaint must go to trial and the Trial Court in accordance with law may allow or reject the same, as deemed appropriate.

23. The judgments relied upon by counsel for the defendants are not applicable on the facts involved in this writ petition. This Court finds no merit and substance in this writ petition. [2025:RJ-JP:19619] (13 of 13) [CR-38/2024]

24. Up shot of the aforesaid discussions is that this petition lacks merit and this Court does not deem it fit to take recourse of the drastic powers, conferred under Order VII Rule 11 CPC for rejection of the Plaint and accordingly, the present revision petition is dismissed.

25. Stay application as well as all applications (pending, if any) also stand disposed of. Aayush Sharma /20 (ANOOP KUMAR DHAND),J