Jurisdictional Dispute with regards to section 22(4) of Design Act, 2000 and Commercial Court Act, 2015

16th December, 2020 - 6:02 am Categories: Legal Issues 0 Comments

The Supreme Court case of S. D. Containers vs. M/s Mold Tek Packing [1] was a matter of jurisdictional issue due to the conflict between section 22(4) of the Design Act, 2000 (hereinafter referred to as Act 2000), and Commercial Courts Act, 2015. To understand how Supreme Court addressed the issue, it is important to understand the facts of the case and what was held by High Court of Madhya Pradesh. The facts of the case are as follows.

The Plaintiff manufactures and sales rigid plastic packaging material including manufacturing of injection moulded container for lubes, paints food, etc., The Plaintiff company also manufactures containers made out of rigid plastic of various sizes and shapes the paint industry, food industry, dairy industry, and lubricant industry. The Plaintiff is claiming the status of pioneers by way of their in-house research and developmental activities in the area of their inventive and creative efforts for developing the variety of tamper-proof lids of Pails/Container. The plaintiff submitted applications in the year 2015 and 2017 for registration of design of the lids of the containers, containers, lids with the spout, jar or container with the Controller General of Patents, Designs and Trademarks, Kolkata. On the other hand, the Defendant was accused of using exactly similar design which were sold to edible oil manufacturing companies, some of which were also the customers of the Plaintiff. Therein, the cause of action arose between the two parties which lead to the filing of suit by the Plaintiff in District Court of Indore claiming injunction against such use by the Defendant stating that they have no right to manufacture such design.The Defendant filed a written statement and counter claim in the Commercial Court to that effect for temporary injunction and cancellation of the registered design of the Plaintiff, claiming it to not be original or new. which was further rejected under Order 7 Rule 11 of CPC by the Plaintiff. Therefore, an application was filed under section 22(4) of Act 2000, seeking transfer of case to High Court of Madhya Pradesh to challenge registration of the design under section 19(1) of Act 2000 claiming that there is no originality or novelty in the use of the design. The Commercial Court thereafter transferred the case to High Court of Calcutta as High Court of Madhya Pradesh does not have a Commercial Division to deal with the subject matter as required by section 22(4). Aggrieved by this, a petition was filed under Article 227 of the Constitution in High Court of Madhya Pradesh by the Plaintiff.[2]

The important question here is whether the pending matter is liable to be transferred to High Court of Madhya Pradesh. As per section 22(4) of the 2000 Act, the case ought to be transferred to High Court, although, as the matter is essential to be decided by a commercial bench, which, due to lack of ordinary original jurisdiction of High Court of Madhya Pradesh, is absent.[3]Therefore, in such a case, section 6 of the Commercial Court Act, 2015 will be applied and Commercial Court shall have the jurisdiction over such pending cases.

By virtue of section 21 of the Commercial Courts Act, 2015, the said Act has an overriding effect and therefore, given the circumstance where a High Court may not possess ordinary original jurisdiction, the case may thereby be transferred to Commercial Court that has been constituted on a District level, since the Commercial Court itself is competent.[4] This decision was taken by High Court of Madhya Pradesh in the petition filed before it.[5]

The case was further appealed before the Supreme Court. After taking into account the subject matter of the said case, the Supreme Court was of the opinion that the overriding effect by virtue of section 21 of 2015 Act was only in situations where there is an inconsistency that has occurred with any other law. Where the subject matter of a case is with respect to the cancellation of registration under section 19 of 2000 Act, which is to be filed before the Controller, on the other hand, when a case is with respect to the infringement of a design, the case shall a civil proceeding is to be given an effect. Therein, the suit is to be transferred to High Court as an appeal under section 22(4) of the 2000 Act. Reliance was made on 5 cases namely, Standard Glass Beads vs. Shri Dhar and ors [6], R. N. Gupta and co ltd Jasola new vs. M/S Action Construction [7], M/s Astral Polytechnic vs. Ashirvad Pipes pvt ltd [8], M/s Escorts ConstructionEquipment ltd vs. Action Const. Equipment pvt ltd [9], Whirlpool of India vs. Videocon Industries [10]. The Supreme Court held that the Commercial Court erred in its order as there being no cause of action in Kolkata, the case cannot be transferred to High Court of Kolkata and is rather liable to be transferred to High Court of Madhya Pradesh.

Author: Saniya Alavani, a student of  NMIMS Kirit P. Mehta School of Law (Mumbai), intern at Khurana & Khurana, Advocates and IP Attorneys.  In case of any queries please contact/write back to us at aishani@khuranaandkhurana.com.

References:

[1] SLP © no. 11488 of 2020

[2] MP no. 2156/2020

[3] Section 7 of Commercial Courts Act 2015

[4] Section 3 & 3A of the Commercial Courts Act, 2015

[5]MISC. PETITION No.2156/2020

[6] AIR 1960 ALL 692

[7]636 of 2016

[8] Writ Petition no. 2642/2008 (GM/ IPR)

[9] IA no. 2460 & 4638/98

[10] 2269 of 2012