Gujarat High Court
Maheshbhai Hajibhai Sojitra ... vs Babu Lime Private Limited on 1 May, 2025
NEUTRAL CITATION
C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025
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Reserved On : 25/04/2025
Pronounced On : 01/05/2025
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CIVIL REVISION APPLICATION NO. 447 of 2023
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2023
In R/CIVIL REVISION APPLICATION NO. 447 of 2023
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE SANJEEV J.THAKER Sd/-
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Approved for Reporting Yes No
Yes
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MAHESHBHAI HAJIBHAI SOJITRA PROPRIETOR OF SIDDHI LIME
Versus
BABU LIME PRIVATE LIMITED
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Appearance:
MR GAURAV K MEHTA(5227) for the Applicant(s) No. 1
MR ZK SHAIKH(5804) for the Opponent(s) No. 1
MS RUSHVI N SHAH(5881) for the Opponent(s) No. 1
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CORAM:HONOURABLE MR.JUSTICE SANJEEV J.THAKER
CAV JUDGMENT
1. The present Revision Application has been filed challenging the Order passed by the 7th Additional District Judge, Rajkot in Trade Mark Suit No. 8 of 2022 whereby the Application below Exh. 12 filed under the provisions of Order VII Rule 11 of the Code of Civil Procedure, 1908 ("CPC") has been rejected. Page 1 of 24 Uploaded by MISHRA AMIT V.(HC00187) on Fri May 02 2025 Downloaded on : Sat May 03 16:50:11 IST 2025
NEUTRAL CITATION C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025 undefined BRIEF FACTS RELEVANT TO THE DISPUTE
2. The brief factual conspectus resulting in the present Revision Application are that the Plaintiff had a filed suit for permanent injunction for infringement of trade mark, passing off and infringement of Copyright. The reliefs that were sought for in the suit are as under:
"A. The defendants, its partners, its successors, servants, agents assignees, dealers, sellers, stockiest and / or distributors and / or anybody claiming through the defendant be restrained permanently and perpetually from manufacturing, marketing and selling of the edible lime using the Trademark in label SIDDHI along with the placement of feature, layout, get-up, colour combination and trade dress which is identical and/or deceptively similar to the trade mark in label along with the trade dress as of the plaintiff and be further restrained for the infringement of the registered trademark of the plaintiff.
B. The defendants, its partners, its successors, servants, agents, assignees, dealers, sellers, stockiest and/or distributors and/or anybody claiming through the defendant be restrained permanently and perpetually from manufacturing, marketing and selling of the edible lime by reproduction of artistic work in product bearing SIDDHI and such other artistic work which is blatant imitation of the plaintiff registered copyright under the BABU and be further restrained from committing an act of infringement of copyright by selling the said goods by imitating artistic work in product under the trademark SIDDHI.
C. The defendants, its partners, its successors, servants, agents, assignees, dealers, sellers, stockiest and/or distributors and/or anybody claiming through Page 2 of 24 Uploaded by MISHRA AMIT V.(HC00187) on Fri May 02 2025 Downloaded on : Sat May 03 16:50:11 IST 2025 NEUTRAL CITATION C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025 undefined the defendant be restrained permanently and perpetually from manufacturing, marketing, selling and advertising of the edible lime under the trademark in label and getup layout colour combination and trade dress having identical and deceptively similar trademark in label and be further restrained from committing the act of pass off goods by selling the said goods under the trademark in label in SIDDHI along with the placement of feature font style layout getup packaging and colour combination in its packing as that of the plaintiff trademarks.
D. The defendants, its partners, its successors, servants, agents, assignees, dealers, sellers, stockiest and / or distributors and / or anybody claiming through the defendant be restrained permanently and perpetually from using and advertising media, social media, newspaper or any other internet portal.
E. A decree may be pleased passed against the defendant and their proprietaries, which can be executed against the defendant and in favour of the plaintiff for the declaration that the plaintiff is only entitled to use of the Trademark in label "BABU" and "DELUXE" and its copyright work and declare that only the plaintiff is entitled to sell product under the Trademark in label "BABU" and "DELUXE" and its artwork.
F. The defendant be ordered to produce accounts for selling product to his customer under the mark SIDDHI and be directed to pay the profit whatsoever derived from selling product under the illegal use of mark SIDDHI to the plaintiff with interest @ 18% from the date of filing of this suit till realisation. The Hon'ble Court be pleased to direct the defendant to pay the damages for the loss of reputation and goodwill, which may deem fit and proper to this Hon'ble Court in the interest of justice.Page 3 of 24 Uploaded by MISHRA AMIT V.(HC00187) on Fri May 02 2025 Downloaded on : Sat May 03 16:50:11 IST 2025
NEUTRAL CITATION C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025 undefined G. Any other and further relief as may be deemed just and proper looking to the facts and circumstances of the case be granted in the interest of justice.
H. A heavy exemplary cost of the suit may be awarded to the plaintiff."
3. The Plaintiff valued the said suit and paid the court fee stamp of Rs. 1500. Since the valuation of the said suit was less than Rs. 3,00,000, the suit was filed before the competent District Court instead of the Commercial Court established under the Commercial Court's Act, 2015 ('the 2015 Act').
4. The Defendant entered its appearance in the said suit and filed an Application vide Exhibit 12 under the provisions of Order VII Rule 11 (a) and (d) of the CPC. In the said Application, inter alia, the defendant alleged that the suit is barred under Section 6 of the 2015 Act since the dispute in question is a 'Commercial Dispute' as defined under Section 2 of the said Act.
5. Therefore, the contention raised was that though the dispute in question is purely commercial in nature, the Commercial Court alone will have the required jurisdiction to adjudicate the matter and hence, the Plaint is required to be rejected.
6. After hearing the parties, the trial Court vide order dated 10 th Page 4 of 24 Uploaded by MISHRA AMIT V.(HC00187) on Fri May 02 2025 Downloaded on : Sat May 03 16:50:11 IST 2025 NEUTRAL CITATION C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025 undefined March 2023 rejected the said Application under Order VII Rule
11. Hence, the present Civil Revision Application. SUBMISSIONS OF LD. ADVOCATE FOR THE PETITIONER:
7. Learned Advocate for the Petitioner has argued that the main contention raised by the Petitioner is that the present dispute falls under Section 2(1)(xvii) of the Act and, therefore, the District Court did not have jurisdiction to hear and decide the said suit. By operation of the provisions of the Act, the commercial court would have jurisdiction to entertain and decide the said dispute.
8. It has also been argued by learned Advocate for the Petitioner that the Respondent / Plaintiff has under-valued the said suit and therefore also the suit is barred by law as the ordinary District Court will not have jurisdiction to decide the said issue.
Learned Advocate for the Petitioner has relied upon the judgment reported in:
a. 2022 (0) AIJEL - 7000 and
b. Unreported Judgment passed by the Hon'ble Karnataka
High Court in Civil Revision Application No.426 of 2023. Page 5 of 24 Uploaded by MISHRA AMIT V.(HC00187) on Fri May 02 2025 Downloaded on : Sat May 03 16:50:11 IST 2025
NEUTRAL CITATION C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025 undefined SUBMISSIONS OF LD. ADVOCATE FOR THE RESPONDENT:
9. Learned Advocate for the Respondent has argued that looking to the facts of the present case the relief that has been sought is for perpetual injunction and a declaration, the Plaintiff has not sought for any adjudicated damages and has argued that commercial court shall only have jurisdiction if the dispute falls under the definition of commercial dispute and also when the suit is for a specified value which is also Rs. 3 Lacs.
10. Further, the Ld. Advocate has argued that the suit does not meet with the threshold specified under Section 12 of the Act and, therefore, the suit cannot be considered as barred by law.
Moreover, it has been argued that while deciding the application under the provisions of Order VII Rule 11 of the CPC, the Court will have to consider the Plaint and the documents filed along with the Plaint and in the said Plaint, the Plaintiff has stated the cause of action and the Plaintiff has also valued the said suit which is less than Rs. 3,00,000 and therefore, the Commercial cannot entertain the said suit and, therefore, from the plain reading of the Plaint, the Plaint cannot be said to be barred by law.
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NEUTRAL CITATION C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025 undefined FINDINGS AND ANALYSIS
11. Having heard learned Advocates for the parties and having considered the Plaint and the documents produced with the Plaint, it can be clearly established that the reliefs that have been sought by the Plaintiff are for permanent injunction restraining the defendant from manufacturing, marketing and selling of the edible lime using trade mark in label SIDDHI and / or along with the placement of feature, layout, get-up, color combination and trade code which is identical and / or deceptively similar to the trade mark in label and to further restrain the defendants from manufacturing, marketing and selling of the edible lime by reproduction of artistic work in product bearing SIDDHI which is blatant imitation of the Plaintiff registered copyright of Plaintiff and also to restrain the defendants from manufacturing, marketing, selling and advertising of the edible lime under the trademark in label and for declaration that Plaintiff alone is entitled to use trademark in label "BABU" and "DELUXE" and further relief has been sought directing the defendant to produce accounts for selling product to his customer under the mark "SIDDHI" and to pay profit with interest at the rate of 18%. Therefore, though the dispute that is there in Trademark Suit Page 7 of 24 Uploaded by MISHRA AMIT V.(HC00187) on Fri May 02 2025 Downloaded on : Sat May 03 16:50:11 IST 2025 NEUTRAL CITATION C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025 undefined No.8 of 2022 is a dispute which falls under the provisions of Section 2(1) (c) (xvii).
12. Having gone through the present case, I am of the opinion that a neat question of law which arises for consideration in the present Revision Application is that whether a suit can be rejected under the provisions of Order VII Rule 11 of the CPC on an allegation of undervaluation of the "specified value" of the subject matter of the commercial dispute.
13. For answering the aforesaid question of law, it is required that the following two aspects are considered:
i. Triple test of Section 6 of the Act read with Sections 12 and 2(1)(i) of the said Act.
ii. Permissible scope of enquiry and interference under Order VII Rule 11 of the CPC.
Triple test of Section 6 of the 2015 Act
14. Section 6 of the 2015 Act lays down the conditions for conferment of jurisdiction on the Commercial Court. The same is reproduced hereinunder:
6. Jurisdiction of Commercial Court.-- The Commercial Court shall have jurisdiction to try all suits and applications relating to a commercial Page 8 of 24 Uploaded by MISHRA AMIT V.(HC00187) on Fri May 02 2025 Downloaded on : Sat May 03 16:50:11 IST 2025 NEUTRAL CITATION C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025 undefined dispute of a Specified Value arising out of the entire territory of the State over which it has been vested territorial jurisdiction.
Explanation.--For the purposes of this section, a commercial dispute shall be considered to arise out of the entire territory of the State over which a Commercial Court has been vested jurisdiction, if the suit or application relating to such commercial dispute has been instituted as per the provisions of sections 16 to 20 of the Code of Civil Procedure, 1908 (5 of 1908).
15. From a bare reading of the aforesaid section, it becomes clear that three basic ingredients are required for a Commercial Court established under the said Act to exercise its jurisdiction.
1) The suits/applications must relate to a commercial dispute (as defined under Section 2(1)(c) of the Act).
2) The said commercial dispute must be of a specified value and meet the minimum threshold as of the said value (as defined under Section 2(1)(i) of the Act).
3) Such commercial dispute of specified value must be arising out of the territory of the State over which it has been vested territorial jurisdiction.
16. Therefore, unless these three conditions are met, it cannot be said that a Commercial Court will have jurisdiction over the dispute in question. It is hardly required to be stated that unless the conditions of the mandatory applicability provision are met with, an enactment cannot be pressed into service. Page 9 of 24 Uploaded by MISHRA AMIT V.(HC00187) on Fri May 02 2025 Downloaded on : Sat May 03 16:50:11 IST 2025
NEUTRAL CITATION C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025 undefined
17. It is also important to note that all these ingredients are not mutually exclusive. All three ingredients must be met with simultaneously in order to invoked jurisdiction of the Commercial Court and to apply rigours of the said Act to the dispute in question.
18. In Kirloskar Aaf Limited v. American Air Filters Company Inc., Regular First Appeal 1 of 2015 [Order dated 25 th September 2018], the Karnataka High Court held as follows:
"8. The twin requirements of this Act are that a dispute has to be a commercial dispute, and secondly, it must be of certain pecuniary limit, namely Rs. 3,00,000/- or above. The term commercial dispute has been defined in Section 2(c) of the Act. Section 2(1)(c) (xvii) clearly deals with the intellectual property rights relating to registered, and unregistered trademarks. Undoubtedly, the present case deals with a trademark the usage of trademark by the appellant, which according to the respondent plaintiff is illegal usage. Thus, the subject matter of the dispute does relate to intellectual property rights. Hence, the dispute is a commercial dispute as defined by Section 2(1)
(c)(xvi) of the Act.
19. Therefore, the twin test (apart from territorial jurisdiction) has to be complied with in order to confer jurisdiction on the Commercial Court. It cannot be countenanced in law that merely the factum of 'commercial dispute' will have to be considered divorced from the requirement of 'specified value'. Page 10 of 24 Uploaded by MISHRA AMIT V.(HC00187) on Fri May 02 2025 Downloaded on : Sat May 03 16:50:11 IST 2025
NEUTRAL CITATION C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025 undefined "Specified Value"
20. At the outset, it must be understood that the phrase "Specified Value" used in the 2015 Act has a defined meaning. The same is reproduced hereinunder:
2(1)(i) "Specified Value", in relation to a commercial dispute, shall mean the value of the subject- matter in respect of a suit as determined in accordance with section 12 [which shall not be less than three lakh rupees] or such higher value, as may be notified by the Central Government.
21. Therefore, the value of the subject matter of the Commercial Dispute is the "specified value" as defined under the Act. This is further explained in Section 12 of the Act as follows:
12. Determination of Specified Value.-- (1) The Specified Value of the subject-matter of the commercial dispute in a suit, appeal or application shall be determined in the following manner:--
(a) where the relief sought in a suit or application is for recovery of money, the money sought to be recovered in the suit or application inclusive of interest, if any, computed up to the date of filing of the suit or application, as the case may be, shall be taken into account for determining such Specified Value;
(b) where the relief sought in a suit, appeal or application relates to movable property or to a right therein, the market value of the movable property as on the date of filing of the suit, appeal or application, as the case may be, shall be taken into account for determining such Specified Value;Page 11 of 24 Uploaded by MISHRA AMIT V.(HC00187) on Fri May 02 2025 Downloaded on : Sat May 03 16:50:11 IST 2025
NEUTRAL CITATION C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025 undefined
(c) where the relief sought in a suit, appeal or application relates to immovable property or to a right therein, the market value of the immovable property, as on the date of filing of the suit, appeal or application, as the case may be, shall be taken into account for determining Specified Value; 1[and]
(d) where the relief sought in a suit, appeal or application relates to any other intangible right, the market value of the said rights as estimated by the plaintiff shall be taken into account for determining Specified Value;
22. Therefore, the Plaintiff is required to value the subject matter of the commercial dispute, and if such valuation is higher than the threshold of the specified limit, only then, the Commercial Court will have the required jurisdiction.
23. In the cases of trademarks, copyright and other intangible assets, in accordance with Section 12(1)(d) of the method, the Plaintiff shall have to ascertain the market value of the said assets and arrive at the specified value of the subject matter asset in the said manner.
24. It is pertinent to note at this juncture that valuation of a trademark, copyright or other intangible asset is a complicated and nuanced subject in itself. There are several methods and approaches in the field of valuation for arriving at the value of a trademark. This could include income approach, cost approach Page 12 of 24 Uploaded by MISHRA AMIT V.(HC00187) on Fri May 02 2025 Downloaded on : Sat May 03 16:50:11 IST 2025 NEUTRAL CITATION C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025 undefined or market approach. Hence, there cannot be any minimum objective value that is associated with every mark/copyright.
25. In fact, Hon'ble Delhi High Court in Pankaj Ravjibhai Patel Trading as Rakesh Pharmaceuticals v. SSS Pharmacem Pvt. Ltd., 2023 SCC Online Del 7013] has specifically dealt with this issue of specified value in trademarks. The Court has, while overruling the earlier principle in Vishal Pipes Ltd. v. Bhavya Pipe Industry 2022 SCC Online Del 1730 held as follows:
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. 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.Page 13 of 24 Uploaded by MISHRA AMIT V.(HC00187) on Fri May 02 2025 Downloaded on : Sat May 03 16:50:11 IST 2025
NEUTRAL CITATION C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025 undefined
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. ...
26. I respectfully agree with the proposition laid down by the Hon'ble Delhi High Court. There cannot be an assumption in law that since the subject matter of the dispute is an intellectual property, the same cannot be valued under Rs. 3 lacs. Especially when there is no minimum objective value associated with the said class of assets.
27. It is pertinent to note at this juncture that the Preamble of the Commercial Courts Act, 2015 reads as follows:
An Act to provide for the constitution of Commercial Courts, 1[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.
28. Therefore, the Parliament had always intended commercial disputes of only a specified value to be adjudicated by the Page 14 of 24 Uploaded by MISHRA AMIT V.(HC00187) on Fri May 02 2025 Downloaded on : Sat May 03 16:50:11 IST 2025 NEUTRAL CITATION C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025 undefined 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.
29. 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.
30. Moreover, the Karnataka High Court in Fine Footwear Pvt. Ltd.
v. Skechers USA Inc. and ors., 2019 SCC Online Kar 1024 has held as follows:
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 Page 15 of 24 Uploaded by MISHRA AMIT V.(HC00187) on Fri May 02 2025 Downloaded on : Sat May 03 16:50:11 IST 2025 NEUTRAL CITATION C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025 undefined 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.
31. 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.
32. 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 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, (1988) 3 SCC 423 in the following manner: Page 16 of 24 Uploaded by MISHRA AMIT V.(HC00187) on Fri May 02 2025 Downloaded on : Sat May 03 16:50:11 IST 2025
NEUTRAL CITATION C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025 undefined 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.
33. Further, even in the present case, no positive statement has been put forth in the present case regarding how the specified value, if at all, has been undervalued. Hence, if the Court is not in a position to undertake 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.
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NEUTRAL CITATION C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025 undefined Scope of interference under Order VII Rule 11
34. It is trite law that in an Application under Order VII Rule 11, the Court can only look into the Plaint and the averments made in the Plaint and nothing beyond. [see: P.V. Guru Raj Reddy v. P. Neeradha Reddy, (2015) 8 SCC 331, Nussli Neville Wadia v. Ivory Properties (2020) 6 SCC 557, Madanuri Sri Rama Chandra Murthy v. Syed Jalal, (2017) 13 SCC 174 and several others]
35. Therefore, under Order VII Rule 11, the Court derives its jurisdiction limited to scrutiny of the Plaint and its averments and nothing further thereof. Hence, taking the Plaint on demurrer, if the grounds as mentioned in clause (a) to (e) of Order VII Rule 11 are made out, only then can a Plaint be rejected without more.
36. 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 Page 18 of 24 Uploaded by MISHRA AMIT V.(HC00187) on Fri May 02 2025 Downloaded on : Sat May 03 16:50:11 IST 2025 NEUTRAL CITATION C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025 undefined 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. Order VII Rule 10 vs. Order VII Rule 11.
37. One more aspect is required to be examined in the present situation. An Application for rejection of Plaint on the ground of want of jurisdiction cannot lie. The remedy available in case of want of jurisdiction is return of the Plaint and not rejection thereof.
38. In similar facts, the Karnataka High Court in Saavn Media Ltd.
v. Hamsalekha and Ors.,XXXXXXXXX has held as follows:
It is worth to note that filing of the suit in the Court which does not have jurisdiction does not attract the provisions of Order VII Rule 11 of CPC. In fact, Rule 10 of Order VII speaks of 'Return of the plaint' when the plaint is filed in a Court which does not have the jurisdiction. Therefore, filing of the suit in a Court having no jurisdiction cannot be a ground to invoke the provisions of Order VII Rule 11 of CPC. Hence, defendant No. 3 under the guise of improper valuation of suit or not mentioning the specified value (under CCA) cannot seek that the suit of the plaintiff is barred for non-filing the same in the Commercial Court.
42. The next contention as stated supra is regarding the valuation of the suit. As stated Page 19 of 24 Uploaded by MISHRA AMIT V.(HC00187) on Fri May 02 2025 Downloaded on : Sat May 03 16:50:11 IST 2025 NEUTRAL CITATION C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025 undefined above, the valuation of the suit cannot be objected since the petitioner has not raised the contention of the valuation of the suits before the trial Court.
The valuation is also the mixed question of law and fact. Therefore, if the trial Court comes to the conclusion that the valuation of the suit is not proper, it may direct the plaintiff to pay the necessary Court fee and then only, it would proceed to pass decree. Therefore, this ground is not available. The valuation of the suit has to be on the bases of the averments of the plaint and nothing else. This view is fortified by the judgment of the Apex Court in the case of Bharat Bhushan Gupta Vs Pratap Narain Varma and another MANU/SC/0783/2022.
43. As noted above, the question whether the suit has to be treated as a Commercial Suit or not is not of much importance. Though it is a fact that under Section 2(c) of the Commercial Courts Act, the intellectual property matters and company disputes are also to be termed as the Commercial disputes, it is clarified by the provisions of Section 12 of the Commercial Courts Act. If at all, the plaintiff wants to file the suit as a Commercial Suit, then the specified value of the suit has to be mentioned. In the case on hand, the plaintiff has not claimed that the suit is to be treated as a Commercial Suit. Therefore, defendant No. 3/revision petitioner herein cannot force the plaintiff to incorporate of the specified value in the plaint and then claim that the suit should have been filed before the Commercial Court and on that count, he cannot contend that the suit is not maintainable. If at all the trial Court finds that, it is a commercial dispute, then it is at liberty to return the plaint to file the same in the proper jurisdictional Court. Hence, this Court does not find any merit in the revision
39. Therefore, assuming if a Plaintiff undervalues its suit, it is a Page 20 of 24 Uploaded by MISHRA AMIT V.(HC00187) on Fri May 02 2025 Downloaded on : Sat May 03 16:50:11 IST 2025 NEUTRAL CITATION C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025 undefined chance that the Plaintiff takes and the suit can be returned to be presented before the appropriate forum when the Court ascertains the specified value. Pertinently, there is no question of granting any assent to the deliberate act of undervaluing the suit, if any. It is impermissible in the eyes of law. However, in an Application under Order VII Rule 11, the said question cannot be gone into, more particularly when such undervaluation is not made out from the averments of the Plaint and there is no objective or positive standard of valuation available with the Court.
40. Having noticed the legal position on the issue, it is important to note the following undisputed facts:
i. Suit has been filed seeking prayers in the nature of permanent injunction, production of accounts during use of the mark and consequential interest.
ii. There is no indication or pleading in the prayer which would ex facie, show that the specified value of the asset (the IPs in question) is more than three lacs.
iii. The Plaintiff has valued the market value of the subject matter of the dispute, i.e. the intangible asset below an Page 21 of 24 Uploaded by MISHRA AMIT V.(HC00187) on Fri May 02 2025 Downloaded on : Sat May 03 16:50:11 IST 2025 NEUTRAL CITATION C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025 undefined amount of 3 lacs and therefore has affixed the court fee stamp of Rs.1500.
41. Therefore, when there is no contra indication in the Plaint itself, the Ld. Trial Court, has correctly not gone beyond the averments made in the Plaint. Even otherwise, when the twin test as laid down in Section 6 of the 2015 Act has not been met with, it cannot be said that there is bar of Section 6 to the present suit or that no cause of action has been disclosed in the Plaint merely because the specified value is not above Rs. 3 lacs.
42. Therefore, in view of the aforesaid, the present Application under Section 115 of the CPC is required to be rejected. However, the Petitioner is at liberty to apply before the Ld. Trial Court to file an Application for ascertainment of specified value of the subject matter in dispute and if the Ld. Trial Court finds that the specified value has been undervalued, it may direct return of the plaint for presentation before the appropriate forum in accordance with law. It is made clear that this Court has not examined the matter from the angle of return of Plaint and the same shall have to be considered independently. However, while looking at the present matter from the limited scope of Order VII Rule 11, this Court cannot go in into the Page 22 of 24 Uploaded by MISHRA AMIT V.(HC00187) on Fri May 02 2025 Downloaded on : Sat May 03 16:50:11 IST 2025 NEUTRAL CITATION C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025 undefined issue since the Court can only examine the averments made in the Plaint on a demurrer.
43. 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 to nip such litigation in the bud.
44. However, equally important and well settled is the law that Order VII Rule 11 amounts to rejection of a case at the threshold. Therefore, it is a drastic power, which must exercised extremely cautiously. 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, (2015) 8 SCC 331:
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 Page 23 of 24 Uploaded by MISHRA AMIT V.(HC00187) on Fri May 02 2025 Downloaded on : Sat May 03 16:50:11 IST 2025 NEUTRAL CITATION C/CRA/447/2023 CAV JUDGMENT DATED: 01/05/2025 undefined of the trial. (emphasis supplied).
45. 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.
46. In view of the discussion of the present case in the foregoing paragraphs, this Court does not deem it fit to take recourse of the drastic powers conferred under Order VII Rule 11 for rejection of the Plaint and accordingly, the present Civil Revision Application is dismissed. The connected Civil Application, if any, shall also stand dismissed.
Sd/-
(SANJEEV J.THAKER,J) MISHRA AMIT V. Page 24 of 24 Uploaded by MISHRA AMIT V.(HC00187) on Fri May 02 2025 Downloaded on : Sat May 03 16:50:11 IST 2025