IMPORTANT ISSUE
In situations where a High Court does not exercise original civil jurisdiction and there is no Commercial Court notified at the District level, which Court can exercise original jurisdiction to hear a commercial dispute?
FACTUAL MATRIX
- A dispute regarding cancellation of registration of Design under the Designs Act, 2000 arose between the two parties.
- The dispute being a commercial dispute as defined under Section 2(C)(viii), was supposed to be tried by a commercial court in the State of Madhya Pradesh.
- Since there was no notification issued for the constitution of commercial courts and the Madhya Pradesh High Court (MPHC) did not exercise original civil jurisdiction, there was ambiguity as to which court should adjudicate the dispute. The High Court of Madhya Pradesh however, has a functioning Commercial Appellate Division, an appellate forum as constituted under The Commercial Courts Act, 2015. The Petitioner and the Respondent took diametrically opposite views regarding which would be an appropriate forum for trial of the dispute.
- It was directed by the Supreme Court of India, that the Indore Bench of the High Court of Madhya Pradesh decide on the question as to which court should adjudicate the dispute.
SUBMISSION BY THE PETITIONER
- The Petitioner submitted that a Division Bench of the Commercial Appellate Division of the MPHC should hear the suit. It was explained that the 2015 Act envisaged a 3 level hierarchical pyramid comprising Commercial Courts (Dist), Commercial Division of the High Court, Commercial Appellate Division.
- The State of Madhya Pradesh is yet to notify commercial courts and in their absence, as per the scheme of the Act, Commercial Division of the High Court can hear the dispute. However, this was in cases where the High Court exercised original civil jurisdiction, which the MPHC does not. Thus, jurisdiction passes onto the Commercial Appellate Division of the MPHC.
SUBMISSION BY THE RESPONDENT
- As per Section 22(4) of the Designs Act and Section 104 of the Patent Act, the suit needs to be tried by the High Court. Section 21 of the 2015 Act has an overriding effect on other enactments in force and therefore, the civil suit needs to be tried by the Commercial Division. In the absence of such a division the HC will have to try the suit, as this will also leave scope for an appeal to be filed before the Commercial Appellate Division. This is important as it ensures that the right to appeal is not frustrated.
HELD
- While it is true that the MPHC does not exercise original civil jurisdiction, it is also true that Section 13 of the 2015 Act prohibits the Commercial Appellate Division from exercising original jurisdiction.
- The 2015 Act however neither permits nor prohibits the transfer of proceedings from Commercial Courts to the High Court in cases where High Courts do not have original civil jurisdiction.
- The answer to this quagmire of a question lies in Clause 9 of the Letters of Patent which provides that the High Court can exercise extraordinary original civil jurisdiction either on agreement of parties or for justice, while recording reasons thereof.
- The MPHC had previously exercised such jurisdiction in Union Carbide c. Union of India ( 1988 MPLJ 438).
- Thus, invoking Clause 9 of the Letters Patent read with Rule 1(8) of Chapter IV of the High Court Rules 2008, this dispute shall be heard by an appropriate Single Bench of the MPHC.
Note: While the instant case related to a “design” in conflict, the same would extend to patents and hence, this case if of import to patent practitioners.
Citation: C.S. 1/2021