[Commercial Courts Act] Plaint Can't Be Rejected For Bypassing Pre-Institution Mediation If It Genuinely Seeks Urgent Reliefs: Bombay High Court

The court observed that the suit is not barred under section 12A of the Commercial Courts Act (mandatory mediation) as it contemplates urgent interim reliefs.

“this Court finds that on the basis of the pleadings in the plaint, the documents filed therewith, as also on the basis of the pleadings in the application for interim reliefs, the plaintiff has indeed made out enough grounds to demonstrate that it does contemplate urgent interim reliefs, thereby showing that the plaint in the present case cannot be rejected as being barred by section 12-A of the aforesaid Act”, the court observed.

Justice Manish Pitale remarked –

“There is substance in the contention raised on behalf of the plaintiff that in such cases concerning intellectual property rights, not only are the proprietary rights of the plaintiff of concern to the Court, but interests of consumers in the products in question are also relevant. Consumers are likely to be duped if marks are misused and therefore, while considering such interim reliefs, the Court is not merely protecting the statutory and common law rights of the plaintiff, but the Court is also protecting the interests of the consumers”, the court remarked.

The plaintiff, in its suit, sought permanent and mandatory injunctions restraining the defendant from infringing its registered trademark "CHEMCO" and from passing off its goods under a similar mark. Additionally, the plaintiff had also applied for interim reliefs both within the plaint and separately.

The plaintiff issued cease and desist notices to the defendant in September and October 2015, alleging infringement of its intellectual property rights. Despite the defendant's denial of these allegations, the plaintiff did not initiate any legal action until May 2018, when it filed a police complaint. The plaintiff approached the court in August 2023, approximately eight years after the cause of action initially arose.

Chemco Plast sought rejection of the suit on grounds of non-compliance of compulsory mediation provision under Section 12-A of the Commercial Courts Act, 2015.

The defendant contented that the plaintiff failed to exhaust the mandatory pre-institution mediation process under Section 12-A of the Commercial Courts Act before initiating the suit. The defendant argued that since the plaintiff's suit did not contemplate urgent interim relief.

Advocate Rashmin Khandekar for defendant Chemco Plast emphasized that the plaintiff's delay in filing the suit, approximately eight years after the initial cause of action in September 2015, indicated that urgent interim reliefs were not genuinely contemplated. He further argued that the plaintiff's decision to pursue criminal proceedings against the defendant in 2018, followed by the civil suit in 2023, demonstrated a lack of urgency warranting pre-institution mediation.

Senior Advocate Veerendra Tulzapurkar for plaintiff Chemco Plastic Industries Pvt. Ltd, contended that the determination of whether urgent interim relief was contemplated should be assessed from the plaintiff's perspective. He argued that the plaintiff's claims regarding the dilution of its trademark and potential harm to its goodwill necessitated urgent judicial intervention.

He highlighted the plaintiff's efforts since 2015 to protect its trademark rights through cease-and-desist notices and oppositions to the defendant's trademark applications. He argued that these actions demonstrated the plaintiff's genuine contemplation of urgent interim relief.

Section 12-A of the Commercial Courts Act stipulates mandatory pre-institution mediation unless urgent interim relief is sought.

The court relied on various precedents such as the Supreme Court's rulings in Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd. and Yamini Manohar v. T.K.D. Keerthi, underscoring the mandatory nature of Section 12-A. These judgments highlighted the need for courts to holistically scrutinize the plaint, documents, and facts to ascertain if urgent interim relief is genuinely contemplated, cautioning against using this as a pretext to evade pre-institution mediation.

Upon examining the plaint and accompanying documents, the court found that Chemco Plast had diligently detailed the sequence of events from September 2015 onwards, including the cease-and-desist notices, opposition proceedings before the trademark registry, and ongoing criminal complaints against Chemco Plast.

The Court found no evidence of deception or falsity in the plaintiff's claims, stating that the details provided in the pleadings were coherent and consistent. The court concluded that the plaintiff had not engaged in deceptive practices to avoid mediation under Section 12-A.

The court held that the delay between the events and the filing of the suit did not automatically disqualify Chemco Plastic from claiming urgent interim relief, given the nature of the alleged trademark infringement and passing off actions.

Accordingly, the court dismissed defendant Chemco Plast's application, thereby allowing Chemco Plastic suit to proceed, including consideration of its application for interim reliefs already on record.

Advocates Rashmin Khandekar, Anand Mohan, Maitri Asher and Ishaan K Paranjape represented the defendant.

Senior Advocate Veerendra Tulzapurkar, a/w. advocates Hiren Kamod, Pratik Pawar, Siddhesh Pradhan, Meher Misri and Anees Patel represented the plaintiff Chemco Plastic.

Case no. – Interim Application (Lodging) No. 23077 of 2023

Case Title – Chemco Plast Applicant/Defendant In the matter between: Chemco Plastic Industries Pvt. Ltd. v. Chemco Plast