A Single Judge of the Delhi HC in Guinness World Record and Ors v. Sababbi and Ors, recently decided the issue of whether IPR cases below Rs. 1 crore can be transferred to jurisdictional district courts or whether they must be tried by Commercial Divisions of the High Court. The Court concluded that in light of the language used in the first proviso to Section 7 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (“Commercial Courts Act”), IPR matters covered under the Trade Marks Act, 1999, Copyright Act, 1957, Designs Act, 2000, Patents Act, 1970 and Geographical Indication of Goods (Registration And Protection) Act, 1999, that were pending as on the date of passing of the said Act will be heard and disposed of by the Commercial Division of the High Court, even if their valuation is below Rs.1 crore.
As we had previously written, the Delhi High Court had issued an order directing the transfer of IPR cases of value not more than Rs. 1 crore to jurisdictional district courts. This direction was in direct conflict with the Commercial Courts Ordinance which by way of the proviso to Section 7 provided that all suits and applications relating to a commercial dispute (IPR disputes fall within “commercial disputes”) stipulated by an Act to lie in a court not inferior to a District Court and where such suits or applications have been filed before a High Court with original jurisdiction are to be heard and disposed by the Commercial Division of the High Court.
This Ordinance was subsequently enacted into a legislation and the proviso to section 7 remained unchanged except for the addition of the words “or pending” i.e. “Section 7 – All suits and applications relating to commercial disputes of a Specified Value filed in a High Court having ordinary original civil jurisdiction shall be heard and disposed of by the Commercial Division of that High Court
Provided that all suits and application relating to commercial disputes, stipulated by an Act to lie in a court not inferior to a District Court, and filed or pending on the original side of the High Court, shall be heard and disposed of by the Commercial Division of the High Court”.
Prior to this change, the court notes that there were two conflicting interpretations with respect to this proviso – one, was that as long as an application or suit was filed in the High Court, irrespective of the pecuniary jurisdiction, the Commercial Division of the High Court would still continue to hear and dispose of the suit. On the other hand, as the court states, the words “and filed” could that if the suit was only “filed” in the High Court, the High Court could continue to hear and dispose of the suit only if the suit was of a specified value as stated in the Ordinance, 2015.
However, the court holds that by adding the words “filed or pending”, the legislature’s intention is clear in as much as a pending suit or application with respect to a IPR case would be heard by the Commercial Division of the High Court irrespective of jurisdiction meaning thereby these cases would not be transferred to district courts.
Therefore, the court directed the re-transfer of cases that had been transferred to the district courts and held “Keeping in mind the original intendment of Section 7, and the words as now found in the first proviso to Section 7 of the Act of 2015, one is left in no manner of doubt that with respect to IPR matters, whose statutes and the provisions are reproduced in the above chart, such matters once they are pending in the High Court as on the date of introducing of the Act of 2015 published in the Gazette Notification dated 1.1.2016, such matters will be heard and disposed of by the Commercial Divisions of the High Court even if the pecuniary jurisdiction of these matters are below Rs.1 crore.”