The Commercial Courts, Commercial
Division and Commercial Appellate Division of High Courts Ordinance, 2015
came into force on October 23, 2015 and the Delhi
High Court (Amendment) Act, 2015 came into force on October 26, 2015. Vide notification
dated November 24, 2015, the following directions were issued by the Delhi High
Court:
1.
All suits or other proceedings pending in the Delhi High Court on
the Original Side up to the value of rupees one crore, excepting those cases in
which final judgments have been reserved, shall be transferred to the
jurisdictional subordinate courts.
2.
All suits or other proceedings the value of which exceeds rupees one
crore but does not exceed rupees two crores, other than those relating to
commercial disputes the specified value of which is not less than rupees one
crore (as defined in The Commercial Courts, Commercial Division and Commercial
Appellate Division of High Courts Ordinance, 2015), pending in the Delhi High
Court on the Original Side, excepting those cases in which final judgments have
been reserved, shall be transferred to the jurisdictional subordinate courts.
While the effect
of this notification on pending suits relating to Intellectual Property depends
on the interpretation of the First Proviso to Section 7 of the Ordinance (which
is pending in a writ petition filed before the High Court of Delhi), the
position with respect to certain patent and design suits appears to be
relatively clear thanks to the Second Proviso. Section 7 reads as under:
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 applications relating to
commercial disputes, stipulated by an Act to lie in a court not inferior to a
District Court, and filed on the original side of the High Court, shall be
heard and disposed of by the Commercial Division of the High Court.
Provided further that all suits and applications
transferred to the High Court by virtue of sub-section (4) of Section 22 of the
Designs Act, 2000 or section 104 of the Patents Act, 1970 shall be heard and
disposed of by the Commercial Division of the High Court in all the areas over
which the High Court exercises ordinary original civil jurisdiction.
The reference in
the Second Proviso is to suits and applications which have been “transferred”
to the High Court by virtue of Section 104 of the Patents Act and Section 22(4)
of the Designs Act, both of which relate to situations where the validity of
the patent and design have been challenged respectively. Simply put, suits which
have been transferred to a High Court by virtue of the said provisions will be
transferred to the Commercial Division of the High Court regardless of the
valuation of the Suit and counter-claim.
This position
was recently taken by a Single Judge of the Delhi High Court in Novartis
v. Cipla wherein it was held as under:
“22. It is an undisputed fact that the
present High Court exercises Ordinary Original Civil Jurisdiction. Before
passing of the Ordinance, the suit for infringement of patent and designs which
were being filed before the District Judge(s) of District Courts have been
transferred to this Court, once the patent is challenged in the written
statement by the defendants as a defence or by filing of the counter-claim
under the Patents Act, 1970 and under Section 22(4) of the Designs Act, 2000.
Various matters had been transferred by the District Courts from time to time
to the High Court, who had received the same after pleading the defence in the
written statement or a separate counter-claim filed by the defendants. Under
these circumstances, it is quite clear that under any circumstances, such
matters have to be heard and disposed of by the Commercial Division of the High
Court which has the Ordinary Original Civil Jurisdiction irrespective of their
pecuniary value.”
Although the law
appears to have been correctly applied in the facts of the decision, the
question that remains is this- the reference in the Second Proviso is to High
Courts which exercise ordinary original civil jurisdiction. Does this mean that
the Second Proviso does not apply to Courts which do not exercise such a
jurisdiction? What would be the consequence of such a reading? Would it mean
that in High Courts which do not exercise such jurisdiction, there will not be
a transfer of such suits to the commercial divisions of the High Courts? Then
what happens to such suits? Would they remain unaffected by the Commercial
Courts Ordinance and continue to be prosecuted the way they currently are?
It is important
to address this issue because according to Section 21 of the Ordinance, the
Ordinance shall prevail over any other law in force. Comments and corrections
are welcome!
