KANPUR FLOWERCYCLING PRIVATE LIMITED vs M/S SARATHI INTERNATIONAL INC

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU


th
DATED THIS THE 04 DAY OF JUNE 2026
R

BEFORE

HON'BLE MS. JUSTICE TARA VITASTA GANJU

WRIT PETITION NO.30565 OF 2025 (IPR)

BETWEEN:

KANPUR FLOWERCYCLING PRIVATE LIMITED,
ANKIT AGARWAL, DIRECTOR,
ARAZI NO.428, 429, BHUANTI,
PRATAPPUR, KALYANPUR,
KANPUR - 209 305,
UTTAR PRADESH, INDIA.
REP. BY ITS AUTHORIZED SIGNATORY,
MR. APURV MISAL.
… PETITIONER

(BY SRI. C.K. NANDAKUMAR, SENIOR COUNSEL FOR
SRI. SIVARAMAKRISHNAN.M.SIVASANKARAN., ADVOCATE)

AND:

M/S. SARATHI INTERNATIONAL INC.,
A PARTNERSHIP FIRM INCORPORATED BY
PARTNERSHIP DEED DATE 29 DECEMBER 2008,
HAVING ITS REGISTERED OFFICE AT
TH TH
NO.MP 459/30, 30 CROSS, 4 BLOCK,
JAYANAGAR, BANGALORE-560 011.
AND AT 13 3-D MAIN I PHASE,
J.P.NAGAR, BENGALULRU-560 078.
REP. BY PARTNER.
SRI. SAPTHAGIRI.S.BOGGARAM.
… RESPONDENT

(BY SRI. DHANANJAY V. JOSHI, SENIOR COUNSEL FOR
SRI. PUSHKAR, ADVOCATE)

(MS. NAYANA TARA B.G, AMICUS CURIAE)
















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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF
THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF
CERTIORARI OR ANY OTHER WRIT, ORDER, RULE OR
DIRECTION TO QUASH AND SET ASIDE THE ORDER DATED 2
AUGUST 2025 (ANNEXURE A ) IN IA NO 7 IN COMM. O.S NO.
1093/2024 PASSED BY THE LXXXVIII ADDITIONAL CITY CIVIL
AND SESSIONS JUDGE. COMMERCIAL DIVISION. BENGALURU
(CCH-89), AND RESTORE THE PROCEEDINGS PENDING IN
COMM OS NO. 1093/2024 AND ETC.

THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED FOR
ORDERS ON 02.03.2026, COMING ON FOR PRONOUNCEMENT OF
ORDERS, THIS DAY, ORDER WAS DELIVERED THEREIN AS
UNDER:
CORAM: HON'BLE MS. JUSTICE TARA VITASTA GANJU
CAV ORDER


Table of Contents
I. Preface: ...................................................................... 3
II. Brief Facts : ................................................................. 4
III. Contentions of the Petitioner/Defendant: ......................... 8
IV. Contentions of the Respondent/Plaintiff: ........................ 12
V. Contentions of the Amicus Curiae: ................................ 14
VI. Issues for Consideration: ............................................. 16
VII. Analysis and Findings : ............................................... 17
A.Scope of Interference under Article 227 of the
Constitution: .............................................................. 17
(i) Scope and limits of High Court’s supervisory jurisdiction
under Article 227: ……………………………………………………… 17
(ii) Maintainability: ..................................................... 22
(iii) Supervisory jurisdiction under Article 227 to be exercised
sparingly, not as an appellate remedy: ......................... 26
(iv) Article 227 confined to jurisdictional errors causing grave
injustice, not for correcting trivial errors: ...................... 30
(v) Article 227 jurisdiction not barred by Section 8 of the CC
Act. Interference to be limited to errors causing manifest
injustice: ................................................................... 31


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vi) As in the A & C Act, the remedy to be exercised where
the party is remediless: .............................................. 38
B. Article 227 and Commercial Disputes: ........................... 45
C. Availability of Alternate Remedy of Appeal provided for under
the CC Act: ................................................................ 53
D. Valuation of Intangible Rights and Bona Fides of Valuation
under Section 12(1)(d) of the CCA: .............................. 56
VIII. Conclusion : ............................................................. 73

I. Preface:

1. The present writ petition is directed against the order
dated 02.08.2025, passed by the LXXXVIII Additional City
Civil & Sessions Judge, Commercial Court, Bengaluru in
Comm.O.S.No.1093/2024 [hereinafter referred to as the
“Impugned Order”], whereby the plaint filed by the
respondent/plaintiff seeking the relief of permanent
injunction in a trademark infringement action has been
returned for presentation before the Civil Court on the
ground of lack of pecuniary jurisdiction.



2. The parties are referred to as petitioner/defendant and
respondent/plaintiff, the petitioner being the defendant and
the respondent being the plaintiff in Comm.O.S.No.
1093/2024.



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II. Brief Facts :

3. The brief facts are that the respondent/plaintiff
instituted a suit in O.S. No.3909/2024 before the Civil Court
seeking the relief of permanent injunction in respect of
alleged infringement of its trademark “TULASI”. An ex parte
order of temporary injunction was granted by the learned
Civil Court on 07.06.2024.

3.1 Upon appearance of the petitioner/defendant before
the learned Civil Court, objections to the maintainability of
the suit before the Civil Court were filed which led to a
direction by the learned Civil Court on 02.07.2024 to the
respondent/plaintiff to disclose the specified value of the
suit under Section 12 of the Commercial Courts Act, 2015
[hereinafter referred to as the “CC Act”]. Pursuant thereto,
the respondent/plaintiff filed a memo stating that the
specified value exceeds Rs.3,00,000/-, on the basis of
which the plaint came to be returned for presentation before
the learned Commercial Court.

3.2 The plaint was thereafter re-presented and registered
as Comm.O.S.No.1093/2024 before the learned
Commercial Court, wherein the respondent/plaintiff also


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sought to justify the pecuniary jurisdiction of the said Court
on the basis of the aforesaid valuation.

3.3 Subsequently, the respondent/plaintiff filed an
application under Order VII, Rule 10 of the Code of Civil
Procedure, 1908 [hereinafter referred to as the “CPC”], in
I.A. No. 7 contending that the specified value of the suit is
below Rs.3,00,000/- and sought return of the plaint to the
Civil Court, placing reliance on an order passed in another
suit in Comm.O.S.No.1197/2024.

3.4 The petitioner/defendant filed objections opposing the
said application. The learned Commercial Court, by the
Impugned Order dated 02.08.2025, allowed the said
application and directed return of the plaint for presentation
before the Civil Court.


4. The learned Commercial Court primarily placed
reliance on an order dated 16.10.2024, passed in
Comm.O.S.No.1197/2024, wherein, in a suit instituted by
the respondent/plaintiff in respect of the same trademark,
it was observed that the specified value of the
respondent/plaintiff’s right is below Rs.3,00,000/-. The


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learned Commercial Court proceeded on this basis to hold
that the valuation of the present suit also falls below the
pecuniary threshold prescribed for a Commercial Court and
consequently the learned Commercial Court lacks
jurisdiction to entertain the suit.



4.1 The learned Commercial Court further observed that
in suits pertaining to intangible rights, the valuation as
estimated by the respondent/plaintiff is relevant for
determining jurisdiction and that the respondent/plaintiff,
being dominus litis , is entitled to determine the valuation of
the suit. On such reasoning, the Court concluded that the
plaint is liable to be returned for presentation before the
appropriate Civil Court.


5. The Impugned Order dated 02.08.2025 whereby the
learned Commercial Court allowed I.A.No.7 filed by the
respondent/plaintiff and directed return of the plaint for
presentation before the Civil Court having jurisdiction, has
been assailed before this Court.

6. The respondent/plaintiff then refiled the plaint before
the Civil Court, which was listed as O.S.No.6026/2025.


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7. At the time the matter was initially examined, a stay
of all further proceedings in the suit in Comm.
O.S.No.1093/2024 and O.S.No.6026/2025 was directed.

1
7.1 Subsequently, while examining a batch of petitions
on the question of interplay between the CC Act and Article
227 of the Constitution of India, 1950 [hereinafter referred
to as “the Constitution”], this Court had by its order dated

30.01.2026, directed as under:

“1. One of the issues that arise in the present petition
is whether the interim orders passed by a Commercial
Court are amenable to the jurisdiction of this Court
under Article 227 of the Constitution of India.

2. This Court is hearing a batch of matters on the same
issue which is now listed for hearing on 04.02.2026
including WP No.3571 of 2023 and connected matters.

3. Since the issue that arises is similar, list this petition
along with WP No.3571/2023 and connected matters
on 04.02.2026.”

7.2 Arguments on the issue of challenge to the orders
passed by the Commercial Court were addressed by the
learned Senior Counsel appearing for the parties in this
matter along with their contentions on the merits of this
case.

1
W.P.Nos.30565/2025,28142/2025, 33094/2025, 11023/2021 & 789/2022



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7.3. Ms. Nayana Tara B G, was appointed as Amicus Curiae
[in the connected matter in W.P.No.28142/2025], on this
issue of interplay of the CC Act and Article 227 of the
Constitution, who also addressed the Court on the scope of
intervention by the High Court under Article 227 in matters
relating to the CC Act.

III. Contentions of the Petitioner/Defendant:
8. Mr. C.K. Nandakumar, the learned Senior Counsel for
the petitioner/defendant contends that the Impugned Order
is wholly erroneous and unsustainable. It is contended that
the respondent/plaintiff had initially, filed a memo dated
08.07.2024 expressly estimating the specified value of the
suit to be in excess of Rs.3,00,000/- on the basis of which
the plaint was returned and presented before the learned
Commercial Court. Thereafter, the respondent/plaintiff,
sought amendment of the plaint to justify its pecuniary
jurisdiction on the ground that the specified value exceeds
Rs.3,00,000/-. Thus, it is contended that the respondent/
plaintiff is now estopped from subsequently taking a
contrary stand.




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8.1 The learned Senior Counsel submits that the filing of
I.A.No.7 by the respondent/plaintiff seeking return of the
plaint on the basis that the specified value is below
Rs.3,00,000/- constitutes a clear volte-face and amounts to
forum shopping and abuse of process of the Court. Such
inconsistent stands would result in grave prejudice to the
petitioner/defendant by compelling it to wander from one
forum to another, thereby defeating the very object of the
CC Act.


8.2 It is further contended that the learned Commercial
Court has erred in placing reliance on an order passed in
Comm.O.S.No.1197/2024, which involved a different
defendant, and that the petitioner/defendant was not a
party to the said proceedings, and therefore, the said order
is neither binding nor relevant to the present case. The
learned Senior Counsel further submits that the learned
Commercial Court has failed to appreciate that the valuation
of intangible rights under Section 12 of the CC Act is to be
determined based on the respondent/plaintiff’s own
estimation of market value, which in the present case was


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stated to be above Rs.3,00,000/-, and there is no “proof” of
such valuation, that was erroneously assumed.


8.3 The learned Senior Counsel for the petitioner/
defendant has relied upon the judgment of a Co-ordinate
Bench of this Court in Kirloskar AAF Limited vs.
2
M/s.American Air Filters , to contend that in a suit for
injunction involving the infringement of a trademark, would
exceed Rs.3,00,000/- and hence the jurisdiction would lie
with the Commercial Court.

8.4 The learned Senior Counsel for the petitioner/
defendant has further placed reliance on the judgment of
High Court of Karnataka in Bangalore Blues
Entertainment India Pvt. Ltd. v. One Ikigai Edutech
3
Pvt. Ltd , Gangadharappa Munindra Kumar v. M/s
4
Eaglesight Media Pvt. Ltd. & Ors. , and judgment of High
Court of Delhi in Pankaj Ravjibhai Patel trading as
Rakesh Pharmaceuticals v. SSS Pharmachem Pvt.
5

Ltd. , to contend that the Court is duty-bound to scrutinize

2
RFA 1/2015 - Order dated 25.09.2018
3
2023 SCC OnLine Kar 177
4
2022 SCC OnLine Kar 1859
5
2023 SCC Online Del 7013


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the valuation of the suit to ensure that it is bona fide and
not deliberately understated, and that any attempt by the
respondent/plaintiff to undervalue the suit with a view to
choose a particular forum or engage in forum shopping is
impermissible in law.

8.5 The learned Senior Counsel for the petitioner/
defendant has also placed reliance on the judgment of a
Division Bench of the Delhi High Court in M/s. C.P. Rama
Rao Sole Proprietor v. National Highways Authority of
6
India , judgment of High Court of Karnataka in
Obulapuram Mining Company Pvt. Ltd. v. R.K. Mining
7
Pvt. Ltd. (Dharwad Bench), and M/s Sanchaya Land
8
and Estates Pvt. Ltd. v. HDFC Bank Ltd. & Ors. , to
contend that a writ petition under Article 227 of the
Constitution is maintainable against orders passed by
Commercial Courts, particularly where the order suffers
from jurisdictional error or results in manifest injustice.


8.6 Accordingly, it is prayed that the Impugned Order be
set aside and the proceedings be restored to the file of the

6
2024 SCC OnLine Del 7342
7
W.A. Nos. 100031/2019 c/w 100010/2019, order dated 15.02.2019
8
C.R.P. No. 679/2025, order dated 25.11.2025


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learned Commercial Court, and consequentially, the
proceedings initiated before the Civil Court in O.S. No.
6026/2025 be quashed.

IV. Contentions of the Respondent/Plaintiff:
9. Mr. Dhananjay V. Joshi, the learned Senior Counsel for
the respondent/plaintiff on the other hand contends that the
present writ petition is liable to be dismissed as being
devoid of merit. The learned Senior Counsel submits that
supervisory jurisdiction under Article 227 is exercised only
to keep subordinate courts within the bounds of their
jurisdiction and cannot be invoked to correct mere errors of
fact or law, especially where two views are possible and the
subordinate court has adopted one such view. It is
contended that though a petition under Article 227 of the
Constitution is maintainable even against interlocutory
orders passed by learned Commercial Court, the scope of
such jurisdiction is extremely limited.


9.1 The learned Senior Counsel for the respondent/
plaintiff further contends that the Impugned Order does not
warrant any interference. It is submitted that the learned
Commercial Court has rightly taken note of the order dated


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16.10.2024 passed by another Commercial Court in
Comm.O.S.No.1197/2024, involving the same plaintiff and
pertaining to the same trademark, wherein it was held that
the specified value is below Rs.3,00,000/-, and
consequently directed return of the plaint for presentation
before the Civil Court.


9.2 It is further contended that the learned Commercial
Court has correctly observed that the respondent/plaintiff,
being dominus litis , is entitled to assert its claim and
determine the valuation of the suit. In this regard, reliance
is placed on Section 12(1)(d) of the CC Act, to submit that
in suits relating to intangible rights, the specified value is
the market value as estimated by the respondent/plaintiff
and not the actual market value.
9.3. The learned Senior Counsel further submits that Civil
Courts have, in other proceedings relating to the same
trademark “TULASI”, already accepted that the specified
value is below Rs.3,00,000/-, including in O.S. No.
5928/2015 and O.S. No.3911/2024, thereby supporting the
stand taken by the respondent/plaintiff.


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9.4 The learned Senior Counsel also relies on the
judgment of Karnataka High Court in Bangalore Blues
Entertainment India case, Gangadharappa Munindra
Kumar , and judgment of Delhi High Court in Pankaj
Ravjibhai Patel to contend that the valuation as estimated
by the respondent/plaintiff is determinative for the purpose
of jurisdiction and that such estimation, unless shown to be
arbitrary, ought not to be interfered with.
V. Contentions of the Amicus Curiae:
10. The learned Amicus has averred that the supervisory
jurisdiction of the High Court under Article 227 is a
constitutional power that cannot be curtailed. The scope of
interference by the Courts have been clarified by the
Supreme Court in several judgments. In this regard,
reliance is placed on L. Chandra Kumar v. Union of
9 10
India , and Surya Dev Rai v. Ram Chander Rai ,
Shalini Shyam Shetty and another v. Rajendra
11
Shankar Patil , to submit that while the power under
Article 227 forms part of the basic structure and cannot be

9
(1997) 3 SCC 261
10
(2003) 6 SCC 675
11
(2010) 8 SCC 329


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excluded, the same is to be exercised sparingly and only in
cases of patent lack of jurisdiction or grave injustice.
10.1 The learned Amicus has emphasized that the scope of
interference by the High Court under Article 227 of the
Constitution, particularly in respect of interlocutory orders
passed by Commercial Courts, is extremely limited. In
support of the said contention, reliance is placed on the
judgment of the High Court of Gujarat in State of Gujarat
12
v. Union of India , the judgment of the High Court of
Calcutta in Deepak Polymers Private Limited v. Anchor
13
Investments Private Limited , the judgment of the High
Court of Delhi in M/s. Black Diamond Trackparts Pvt.
14
Ltd. & Ors. v. Black Diamond Motors Pvt. Ltd . , and
the judgment of the High Court of Madras in Ramanan
Balagangatharan v. Rise East Entertainment Private
15
Limited , to submit that supervisory jurisdiction is to be
exercised sparingly and only in cases of patent lack of

12
2018 SCC OnLine Guj 1515
13
2021 SCC Online Cal 4323
14
2021 SCC OnLine Del 3946
15
2022 SCC OnLine Mad 1300


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jurisdiction or manifest injustice, and not to correct mere
errors or substitute the view taken by a subordinate court.

VI. Issues for Consideration:
11. In view of the contentions of the parties, the following
issues arise for consideration:
(i) Whether the Impugned Order passed by the
Commercial Court warrants interference in exercise
of jurisdiction under Article 227 of the Constitution
of India?
(ii) In what circumstances should this jurisdiction be
exercised by the Court in a dispute under the CC
Act?
(iii) Whether the respondent/plaintiff, having earlier
asserted that the specified value of the suit exceeds
Rs.3,00,000/- and invoked the jurisdiction of the
learned Commercial Court, can subsequently seek
the return of the plaint by contending that the value
is below Rs.3,00,000/-?
(iv) Whether the learned Commercial Court was
justified in relying upon the order passed in Comm.
O.S. No. 1197/2024 to hold that it lacks pecuniary
jurisdiction to try and entertain the present suit
without ascertaining specified value?



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VII. Analysis and Findings :
A. Scope of Interference under Article 227 of the
Constitution:

(i) Scope and limits of High Court’s supervisory
jurisdiction under Article 227:
12. The power under Article 227 of the Constitution of
India is an extension of the jurisdiction of the Courts to
exercise judicial review. It is a basic feature of the
Constitution to exercise its constitutional authority of
superintendence and supervision to adjudge the validity of
orders passed by the District Courts. The Supreme Court in
L. Chandra Kumar case held that the power of judicial
review vested in the High Courts under Articles 226 and 227
of the Constitution, including the power of superintendence
over subordinate courts and tribunals, forms part of the
basic structure of the Constitution and cannot be ousted or
excluded by legislative enactments. It was further held that
the High Courts must retain the power to exercise
supervisory jurisdiction to ensure that decisions of
subordinate courts and tribunals conform to constitutional
and legal standards. The relevant extract of the L. Chandra



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Kumar case is set out below:
“78. The legitimacy of the power of courts within
constitutional democracies to review legislative action has
been questioned since the time it was first conceived. The
Constitution of India, being alive to such criticism, has,
while conferring such power upon the higher judiciary,
incorporated important safeguards. An analysis of the
manner in which the Framers of our Constitution
incorporated provisions relating to the judiciary would
indicate that they were very greatly concerned with
securing the independence of the judiciary. [ See Chapter
VII, “The Judiciary and the Social Revolution” in Granville
Austin, The Indian Constitution : Cornerstone of a Nation,
Oxford University Press, 1972; the chapter includes
exhaustive references to the relevant preparatory works
and debates in the Constituent Assembly.] These attempts
were directed at ensuring that the judiciary would be
capable of effectively discharging its wide powers of
judicial review. While the Constitution confers the power
to strike down laws upon the High Courts and the Supreme
Court, it also contains elaborate provisions dealing with
the tenure, salaries, allowances, retirement age of Judges
as well as the mechanism for selecting Judges to the
superior courts. The inclusion of such elaborate provisions
appears to have been occasioned by the belief that, armed
by such provisions, the superior courts would be insulated
from any executive or legislative attempts to interfere with
the making of their decisions. The Judges of the
superior courts have been entrusted with the task
of upholding the Constitution and to this end, have
been conferred the power to interpret it. It is they
who have to ensure that the balance of power envisaged
by the Constitution is maintained and that the legislature
and the executive do not, in the discharge of their
functions, transgress constitutional limitations. It is
equally their duty to oversee that the judicial
decisions rendered by those who man the
subordinate courts and tribunals do not fall foul of
strict standards of legal correctness and judicial
independence. The constitutional safeguards which
ensure the independence of the Judges of the superior
judiciary, are not available to the Judges of the
subordinate judiciary or to those who man tribunals
created by ordinary legislations. Consequently, Judges
of the latter category can never be considered full
and effective substitutes for the superior judiciary
in discharging the function of constitutional
interpretation. We, therefore, hold that the power of
judicial review over legislative action vested in the


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High Courts under Article 226 and in this Court
under Article 32 of the Constitution is an integral
and essential feature of the Constitution,
constituting part of its basic structure. Ordinarily,
therefore, the power of High Courts and the
Supreme Court to test the constitutional validity of
legislations can never be ousted or excluded.
79. We also hold that the power vested in the High
Courts to exercise judicial superintendence over the
decisions of all courts and tribunals within their
respective jurisdictions is also part of the basic
structure of the Constitution. This is because a
situation where the High Courts are divested of all
other judicial functions apart from that of
constitutional interpretation, is equally to be
avoided.
[Emphasis Supplied]
12.1 The Supreme Court in Surya Dev Rai case held that
the supervisory jurisdiction of the High Court under Article
227 of the Constitution remains unaffected by statutory
limitations on revisional jurisdiction and extends even to
interlocutory orders passed by subordinate courts. It was
further held that such jurisdiction is to be exercised
sparingly and only in cases where the subordinate court has
acted without jurisdiction, in excess of jurisdiction, or in a
manner resulting in grave injustice. The Court clarified that
Article 227 of the Constitution cannot be invoked to correct
mere errors of fact or law, and the High Court cannot act as
an appellate court to reappreciate evidence or substitute its


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own view. The relevant extract of the Surya Dev Rai case
is set out below:
“38. Such like matters frequently arise before the High
Courts. We sum up our conclusions in a nutshell, even at
the risk of repetition and state the same as hereunder:
(1) Amendment by Act 46 of 1999 with effect from
1-7-2002 in Section 115 of the Code of Civil Procedure
cannot and does not affect in any manner the
jurisdiction of the High Court under Articles 226 and
227 of the Constitution.
(2) Interlocutory orders, passed by the courts
subordinate to the High Court, against which
remedy of revision has been excluded by CPC
Amendment Act 46 of 1999 are nevertheless
open to challenge in, and continue to be subject
to, certiorari and supervisory jurisdiction of the
High Court.
(3) Certiorari, under Article 226 of the Constitution, is
issued for correcting gross errors of jurisdiction i.e.
when a subordinate court is found to have acted (i)
without jurisdiction — by assuming jurisdiction where
there exists none, or (ii) in excess of its jurisdiction —
by overstepping or crossing the limits of jurisdiction,
or (iii) acting in flagrant disregard of law or the rules
of procedure or acting in violation of principles of
natural justice where there is no procedure specified,
and thereby occasioning failure of justice.
(4) Supervisory jurisdiction under Article 227 of
the Constitution is exercised for keeping the
subordinate courts within the bounds of their
jurisdiction. When a subordinate court has
assumed a jurisdiction which it does not have or
has failed to exercise a jurisdiction which it does
have or the jurisdiction though available is being
exercised by the court in a manner not permitted
by law and failure of justice or grave injustice
has occasioned thereby, the High Court may step
in to exercise its supervisory jurisdiction.
(5) Be it a writ of certiorari or the exercise of
supervisory jurisdiction, none is available to
correct mere errors of fact or of law unless the
following requirements are satisfied : (i) the error
is manifest and apparent on the face of the
proceedings such as when it is based on clear


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ignorance or utter disregard of the provisions of law,
and (ii) a grave injustice or gross failure of justice has
occasioned thereby.
(6) A patent error is an error which is self-evident i.e.
which can be perceived or demonstrated without
involving into any lengthy or complicated argument or
a long-drawn process of reasoning. Where two
inferences are reasonably possible and the
subordinate court has chosen to take one view,
the error cannot be called gross or patent.
(7) The power to issue a writ of certiorari and
the supervisory jurisdiction are to be exercised
sparingly and only in appropriate cases where
the judicial conscience of the High Court dictates
it to act lest a gross failure of justice or grave
injustice should occasion. Care, caution and
circumspection need to be exercised, when any
of the abovesaid two jurisdictions is sought to
be invoked during the pendency of any suit or
proceedings in a subordinate court and the error
though calling for correction is yet capable of
being corrected at the conclusion of the
proceedings in an appeal or revision preferred
there against and entertaining a petition
invoking certiorari or supervisory jurisdiction of
the High Court would obstruct the smooth flow
and/or early disposal of the suit or proceedings.
The High Court may feel inclined to intervene
where the error is such, as, if not corrected at
that very moment, may become incapable of
correction at a later stage and refusal to
intervene would result in travesty of justice or
where such refusal itself would result in
prolonging of the lis.
(8) The High Court in exercise of certiorari or
supervisory jurisdiction will not convert itself
into a court of appeal and indulge in
reappreciation or evaluation of evidence or
correct errors in drawing inferences or correct
errors of mere formal or technical character.
(9) In practice, the parameters for exercising
jurisdiction to issue a writ of certiorari and those
calling for exercise of supervisory jurisdiction are
almost similar and the width of jurisdiction exercised
by the High Courts in India unlike English courts has
almost obliterated the distinction between the two
jurisdictions. While exercising jurisdiction to issue a


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writ of certiorari, the High Court may annul or set
aside the act, order or proceedings of the subordinate
courts but cannot substitute its own decision in place
thereof. In exercise of supervisory jurisdiction the
High Court may not only give suitable directions so as
to guide the subordinate court as to the manner in
which it would act or proceed thereafter or afresh, the
High Court may in appropriate cases itself make an
order in supersession or substitution of the order of
the subordinate court as the court should have made
in the facts and circumstances of the case.”
[Emphasis Supplied]
(ii) Maintainability:
13. A Division Bench of the Delhi High Court in M/s. C.P.
Rama Rao case has held that a petition under Article 227
of the Constitution is maintainable against orders passed by
Commercial Court, and that the jurisdiction of the High
Court under Article 227 of the Constitution, being a
constitutional power forming part of the basic structure,
cannot be curtailed or excluded. While discussing the
judgments in M/s. Estralia Rubber v. Dass Estate [Pvt.]
16
Ltd. case of the Supreme Court, the Black Diamond
Trackparts case and the judgment of a Coordinate Bench
of Bombay High Court in Pravinchandra v. Hemant
17
Kumar , it was held that the expression “petition” under
Section 8 does not include a petition under Article 227 of

16
(2001) 8 SCC 97
17
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the Constitution, and therefore, the bar against revision or
petition does not operate to restrict the supervisory
jurisdiction of the High Court. The relevant extract of the
M/s. C.P. Rama Rao case is set out below:
“7. It is in the aforesaid backdrop that Dr. George, the
learned amicus submitted that in the absence of the
petitioner having a remedy under Section 37 read along
with Section 13 of the Commercial Courts Act, 2015 , it
would be justified in seeking to invoke this Court's power
of superintendence conferred by Article 227 of the
Constitution.
8. As the learned amicus rightly points out, not only is the
Article 227 power an extension of our jurisdiction to
exercise judicial review and the same being a basic
feature of the Constitution, it falls upon this Court in
exercise of its constitutional authority of
superintendence and supervision to adjudge the
validity of orders passed by the District Courts.
Dr.George in this regard also invited our attention to the
decision in Black Diamond Trackparts Pvt. Ltd. v. Black
Diamond Motors Pvt. Ltd. and where while dealing with the
power of the High Court to correct orders made by a
commercial court, we had enunciated the following
principles which would guide:
xxx xxx xxx
12. Thus, the question no. (i) aforesaid is
answered by holding that the petition under
Article 227 of the Constitution of India to the
High Court with respect to orders of the
Commercial Courts at the level of the District
Judge is maintainable and the jurisdiction and
powers of the High Court has not been and could
not have been affected in any manner
whatsoever by Section 8 of the Commercial
Courts Act. The use of the word “petition” in
Section 8 is not and could not have been with
reference to a petition under Article 227 of
the Constitution and is with reference to a
revision application/revision petition only. ”
9. The aspects noticed by us in Black Diamond also find
resonance in a judgment rendered by the High Court


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of Bombay in Pravinchandra v. Hemant Kumar and
where it was held:
“15. Though Section 8 of the Commercial Courts Act,
2015, creates a bar against revision or petition against
an interlocutory order, that however by itself would
not interdict the intervention by the High Court, when
it finds that the facts merit judicial intervention and in
the instant matter specifically so, in light of the order
in Commercial Appeal No. 2/2019 by the learned
Division Bench, granting liberty to the
petitioners/plaintiffs to move an application for
amendment considering the subsequent events.
Section 8 of the Commercial Courts Act, has
been considered by the learned Division Bench
of the Delhi High Court in Black Diamond
Trackparts Pvt. Ltd. (supra), wherein it has been
held that word ‘petition’ in Section 8 of the
Commercial Courts Act, is not and could not have been
with reference to a petition under Article 227 of the
Constitution and is with reference to a revision
application/revision petition only and therefore would
not bar the exercise of the jurisdiction of this Court
under Article 227 of the Constitution of India. I, am
in complete agreement with what has been said
in Black Diamond Trackparts Pvt. Ltd. (supra),
for holding otherwise, would amount to a
statutory provision creating an embargo upon
the constitutional provisions, which position
cannot be countenanced in law.”
10. We also bear in mind the well settled contours of the
power which the Constitution confers upon a High Court by
virtue of Article 227. While it is true that the said power of
superintendence does not amount to an unrestricted
prerogative or one intended to be wielded to correct every
erroneous decision rendered by a subordinate court or
tribunal, the salutary power so enshrined in that Article
has been consciously placed as being liable to be
exercised where a failure to correct may result in
grave injustice. Although the scope of the power vested
in a High Court by virtue of Article 227 is well settled, we
deem it apposite to notice the decision in Estralla
Rubber v. Dass Estate [Pvt.] Ltd. and where the
Supreme Court had explained the power of
superintendence in the following words:—

“6. The scope and ambit of exercise of power and
jurisdiction by a High Court under Article 227 of
the Constitution of India is examined and explained in
a number of decisions of this Court. The exercise of


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power under this article involves a duty on the
High Court to keep inferior courts and tribunals
within the bounds of their authority and to see
that they do the duty expected or required of
them in a legal manner. The High Court is not
vested with any unlimited prerogative to correct
all kinds of hardship or wrong decisions made
within the limits of the jurisdiction of the
subordinate courts or tribunals. Exercise of this
power and interfering with the orders of the
courts or tribunals is restricted to cases of
serious dereliction of duty and flagrant violation
of fundamental principles of law or justice,
where if the High Court does not interfere, a
grave injustice remains uncorrected. It is also
well settled that the High Court while acting
under this article cannot exercise its power as
an appellate court or substitute its own
judgment in place of that of the subordinate
court to correct an error, which is not apparent
on the face of the record. The High Court can set
aside or ignore the findings of facts of an inferior court
or tribunal, if there is no evidence at all to justify or
the finding is so perverse, that no reasonable person
can possibly come to such a conclusion, which the
court or tribunal has come to.

7. This Court in Ahmedabad Mfg. & Calico Ptg.
Co. Ltd. v. Ram Tahel Ramnand [(1972) 1 SCC
898 : AIR 1972 SC 1598] in AIR para 12 has
stated that the power under Article 227 of the
Constitution is intended to be used sparingly and
only in appropriate cases, for the purpose of
keeping the subordinate courts and tribunals
within the bounds of their authority and, not for
correcting mere errors. Reference also has been
made in this regard to the case Waryam Singh v.
Amarnath [(1954) 1 SCC 51 : AIR 1954 SC 215 : 1954
SCR 565]. This Court in Bathutmal Raichand Oswal v.
Laxmibai R. Tarte [(1975) 1 SCC 858 : AIR 1975 SC
1297] has observed that the power of
superintendence under Article 227 cannot be invoked
to correct an error of fact which only a superior court
can do in exercise of its statutory power as a court of
appeal and that the High Court in exercising its
jurisdiction under Article 227 cannot convert itself into
a court of appeal when the legislature has not
conferred a right of appeal. Judged by these
pronounced principles, the High Court clearly


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exceeded its jurisdiction under Article 227 in passing
the impugned order.”
[Emphasis Supplied]
(iii) Supervisory jurisdiction under Article 227 to be
exercised sparingly, not as an appellate remedy:
14. The Supreme Court in Shalini Shyam Shetty case
cautioned that the jurisdiction of the High Court under
Article 227 is supervisory in nature and must be exercised
sparingly to keep subordinate courts within the bounds of
their authority. It was further held that such jurisdiction
cannot be invoked to act as an appellate forum or to correct
mere errors of fact or law, and interference is warranted
only in cases of patent perversity, gross failure of justice,
or violation of fundamental principles of law. The Court also
reiterated that the power under Article 227, being part of
the basic structure although cannot be curtailed by statute,
but its exercise is subject to strict judicial discipline. The
relevant extract of the Shalini Shyam Shetty case is set
out below:
“49. On an analysis of the aforesaid decisions of this Court,
the following principles on the exercise of High Court's
jurisdiction under Article 227 of the Constitution may be
formulated:
(a) A petition under Article 226 of the Constitution is
different from a petition under Article 227. The mode


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of exercise of power by the High Court under these
two articles is also different.
(b) In any event, a petition under Article 227
cannot be called a writ petition. The history of the
conferment of writ jurisdiction on High Courts is
substantially different from the history of conferment
of the power of superintendence on the High Courts
under Article 227 and have been discussed above.
(c) High Courts cannot, at the drop of a hat, in
exercise of its power of superintendence under
Article 227 of the Constitution, interfere with the
orders of tribunals or courts inferior to it. Nor
can it, in exercise of this power, act as a court of
appeal over the orders of the court or tribunal
subordinate to it. In cases where an alternative
statutory mode of redressal has been provided,
that would also operate as a restrain on the
exercise of this power by the High Court.
(d) The parameters of interference by High
Courts in exercise of their power of
superintendence have been repeatedly laid
down by this Court. In this regard the High Court
must be guided by the principles laid down by the
Constitution Bench of this Court in Waryam Singh [AIR
1954 SC 215] and the principles in Waryam Singh
[AIR 1954 SC 215] have been repeatedly followed by
subsequent Constitution Benches and various other
decisions of this Court.
(e) According to the ratio in Waryam Singh [AIR
1954 SC 215] , followed in subsequent cases,
the High Court in exercise of its jurisdiction of
superintendence can interfere in order only to
keep the tribunals and courts subordinate to it,
“within the bounds of their authority”.
(f) In order to ensure that law is followed by such
tribunals and courts by exercising jurisdiction which is
vested in them and by not declining to exercise the
jurisdiction which is vested in them.
(g) Apart from the situations pointed in (e) and (f),
High Court can interfere in exercise of its power of
superintendence when there has been a patent
perversity in the orders of the tribunals and
courts subordinate to it or where there has been
a gross and manifest failure of justice or the


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basic principles of natural justice have been
flouted.
(h) In exercise of its power of superintendence High
Court cannot interfere to correct mere errors of law or
fact or just because another view than the one taken
by the tribunals or courts subordinate to it, is a
possible view. In other words the jurisdiction has
to be very sparingly exercised.
(i) The High Court's power of superintendence
under Article 227 cannot be curtailed by any
statute . It has been declared a part of the basic
structure of the Constitution by the Constitution Bench
of this Court in L. Chandra Kumar v. Union of India
[(1997) 3 SCC 261 : 1997 SCC (L&S) 577] and
therefore abridgment by a constitutional amendment
is also very doubtful.
(j) It may be true that a statutory amendment of a
rather cognate provision, like Section 115 of the Civil
Procedure Code by the Civil Procedure Code
(Amendment) Act, 1999 does not and cannot cut
down the ambit of High Court's power under Article
227. At the same time, it must be remembered
that such statutory amendment does not
correspondingly expand the High Court's
jurisdiction of superintendence under Article
227.
(k) The power is discretionary and has to be exercised
on equitable principle. In an appropriate case, the
power can be exercised suo motu.
(l) On a proper appreciation of the wide and
unfettered power of the High Court under Article 227,
it transpires that the main object of this article is to
keep strict administrative and judicial control by the
High Court on the administration of justice within its
territory.
(m) The object of superintendence, both
administrative and judicial, is to maintain
efficiency, smooth and orderly functioning of the
entire machinery of justice in such a way as it
does not bring it into any disrepute. The power
of interference under this article is to be kept to
the minimum to ensure that the wheel of justice
does not come to a halt and the fountain of
justice remains pure and unpolluted in order to
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the tribunals and courts subordinate to the High
Court.
(n) This reserve and exceptional power of
judicial intervention is not to be exercised just
for grant of relief in individual cases but should
be directed for promotion of public confidence in
the administration of justice in the larger public
interest whereas Article 226 is meant for
protection of individual grievance. Therefore,
the power under Article 227 may be unfettered
but its exercise is subject to high degree of
judicial discipline pointed out above .
(o) An improper and a frequent exercise of this power
will be counterproductive and will divest this
extraordinary power of its strength and vitality.
xxx xxx xxx
66. We may also observe that in some High Courts
there is a tendency of entertaining petitions under
Article 227 of the Constitution by terming them as
writ petitions. This is sought to be justified on an
erroneous appreciation of the ratio in Surya
Dev [(2003) 6 SCC 675 ] and in view of the recent
amendment to Section 115 of the Civil Procedure Code by
the Civil Procedure Code (Amendment) Act, 1999. It is
urged that as a result of the amendment, scope of
Section 115 CPC has been curtailed. In our view,
even if the scope of Section 115 CPC is curtailed that
has not resulted in expanding the High Court's
power of superintendence. It is too well known to
be reiterated that in exercising its jurisdiction, High
Court must follow the regime of law.
67. As a result of frequent interference by the
Hon'ble High Court either under Article 226 or 227
of the Constitution with pending civil and at times
criminal cases, the disposal of cases by the civil and
criminal courts gets further impeded and thus
causing serious problems in the administration of
justice. This Court hopes and trusts that in
exercising its power either under Article 226 or 227,
the Hon'ble High Court will follow the time honoured
principles discussed above. Those principles have been
formulated by this Court for ends of justice and the
High Courts as the highest courts of justice within
their jurisdiction will adhere to them strictly.”
[Emphasis Supplied]


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(iv) Article 227 confined to jurisdictional errors
causing grave injustice, not for correcting trivial
errors:

15. A Division Bench of the High Court of Madras in
Ramanan Balagangatharan case while examining an
order of a Single Judge exercising original jurisdiction, held
that the supervisory jurisdiction under Article 227 of the
Constitution is to be exercised only to keep subordinate
courts within the bounds of their jurisdiction, and
interference is warranted only where the subordinate court
has acted without jurisdiction, in excess of jurisdiction, or
in a manner resulting in grave injustice. It was reiterated
that such jurisdiction cannot be invoked to correct mere
errors of fact or law and is confined to cases where the error
is manifest on the face of the record and has resulted in
gross failure of justice. The relevant extract of the
Ramanan Balagangatharan case is set out below:
“4. It is settled law that the supervisory jurisdiction
under Article 227 of the Constitution is exercised for
keeping the Subordinate Courts within the bounds
of their jurisdiction. When the Subordinate Court
has assumed a jurisdiction which it does not have or
has failed to exercise a jurisdiction which it does
have or the jurisdiction though available is being
exercised by the Court in a manner not permitted by


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law and failure of justice or grave injustice has
occasioned thereby, the High Court may step in to
exercise its supervisory jurisdiction. It is also
settled law that the supervisory jurisdiction under
Article 227 of the Constitution may not be exercised
to correct mere errors of fact or of law and may be
exercised only when the following requirements are
satisfied:
(i) the error is manifest and apparent on the
face of the proceedings such as when it is based on
clear ignorance or utter disregard of the provisions
of law, and
(ii) a grave injustice or gross failure of justice
has occasioned thereby.
5. The supervisory jurisdiction under Article 227 can
be exercised by the High Court only in the case of
Subordinate Courts. The learned Single Judge of this
Court cannot be termed as a subordinate to High
Court. When the order passed by the learned Single Judge
cannot be termed as an order passed by the Court
Subordinate to High Court , Article 227 has no
application. In such view of the matter, the ratio laid
down by the Gujarat High Court is not applicable to the
facts and circumstances of the present case.”
(v) Article 227 jurisdiction not barred by Section 8 of
the CC Act. Interference to be limited to errors
causing manifest injustice:

16. A Division Bench of the Delhi High Court has examined
the issue of interference by the High Court in the context of
18*
the CC Act. In the Black Diamond Track parts case
while examining Section 8 of the CC Act. It was held that

18
*A challenge to the Black Diamond Track parts was repelled by the
Supreme Court in the case of M/S. BLACK DIAMOND TRACKPARTS PVT. LTD.
& ORS. Vs. M/S. BLACK DIAMOND MOTORS PVT. LTD in SLP(c) Nos.17030-
17031/2021, by its order dtd. 13.11.2021.



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the bar contained in Section 8 of the CC Act against revision
or petition does not extend to proceedings under Article 227
of the Constitution, as such jurisdiction is constitutional in
nature and cannot be curtailed by statute. It was further
held that the expression “petition” in Section 8 refers only
to revision petitions and not to petitions under Article 227,
and therefore, a petition under Article 227 challenging
orders of Commercial Courts is maintainable. The relevant
extract is set out below:
“9. The question of maintainability of a petition under
Article 227 of the Constitution of India, with respect
to proceedings in a commercial suit before the District
Judge (Commercial) arose, because Section 8 of the
Commercial Courts Act as under:

“8. Bar against revision application or petition against an
interlocutory order.—Notwithstanding anything contained
in any other law for the time being in force, no civil revision
application or petition shall be entertained against any
interlocutory order of a Commercial Court, including an
order on the issue of jurisdiction, and any such challenge,
subject to the provisions of section 13, shall be raised only
in an appeal against the decree of the Commercial Court.”

10. Expressly bars the remedy of “civil revision application
or petition”. It was deemed apposite to hear the counsels
on, whether by use of the word “petition” in addition to the
words “civil revision application”, though with a “or”
between them, the purport of Section 8 supra was to also
bar the remedy of Article 227 petition with respect to
proceedings in a commercial suit at the level of the District
Judge. The remedy under Article 227 of the
Constitution of India, it was felt, was
similar/identical/at par with the remedy of a civil
revision application under Section 115 of the CPC
and it was thus deemed appropriate to frame the
question no. (i) aforesaid and hear the counsels thereon.
Similarly, it was deemed apposite to hear the counsels on


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the reasoning which prevail with the Single Judge, that
since appeals against orders in a commercial suit at the
level of the District Judge are to be heard by the
Commercial Appellate Division, petitions under Article 227,
if maintainable, emanating from proceedings in such suits
should also be heard by the Commercial Appellate Division.
Accordingly, question no. (ii) aforesaid was framed.
11. The senior counsel for the respondent in CM (M) No.
132/2021, in our view, has rightly contended and none of
the other counsels have controverted, that the remedy
under Article 227 being a constitutional remedy
could not be affected by a statute framed by a
legislature which was itself a creature of
constitution. A creature of the Constitution of India
cannot act in negation of the provisions of the
Constitution of India. We are reminded of Surya Dev
Rai v. Ram Chander Rai (2003) 6 SCC 675, concerned
with the impact of the amendment in Section 115 of
the CPC brought about by the amendment of the CPC
with effect from 1st July, 2002. In the wake of the said
amendment, a question arose, whether on such
amendment restricting/limiting the orders of the
subordinate courts with respect to which a revision
application under Section 115 of the CPC could be preferred
to the High Court, an aggrieved person was completely
deprived of the remedy of judicial review under Article 227
also. It was held, that curtailment of revisional jurisdiction
of the High Court did not take away and could not have
taken away the constitutional jurisdiction of the High Court
to issue a writ of certiorari to a civil court, nor was the
power of superintendence conferred on the High Court
under Article 227 of the Constitution taken away or whittled
down. It was further held that the said power
continued to exists, untrammelled by the
amendment in Section 115 CPC and remained
available to be exercised, subject to the rules of self-
discipline and practice, which were well settled.
Similarly, in State of Gujarat v. Vakhatsinghji
Vajesinghji, Vaghela AIR 1968 SC 1481, Jetha Bai
and Sons, Jew Town, Cochin v. Sunderbas Rathenai
(1988) 1 SCC 722, State of H.P. v. Dhanwant Singh
(2004) 13 SCC 331 and Union of India v. Major
General Shri Kant Sharma (2015) 6 SCC 773 it was
held that the legislature cannot take away the power
of superintendence of the High Court under Article
227 of the Constitution over all Courts and Tribunals
which are within the territories in relation to which
the High Court exercises its jurisdiction. Rather, in L.
Chandra Kumar v. Union of India (1997) 3 SCC 261,


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judicial review including under Article 227, was held
to be a basic feature of the Constitution, even beyond
the realm of amendability and Clause 2(d) of Article
323A and Clause 3(d) of Article 323B, to the extent
excluded the jurisdiction of the High Court and
Supreme Court under Articles 226/227 and 32 of the
Constitution with respect to matters falling within
the jurisdiction of the Courts and Administrative
Tribunals referred to therein, were held to be
unconstitutional.
12. Thus, the question no. (i) aforesaid is answered
by holding that the petition under Article 227 of the
Constitution of India to the High Court with respect
to orders of the Commercial Courts at the level of the
District Judge is maintainable and the jurisdiction
and powers of the High Court has not been and could
not have been affected in any manner whatsoever by
Section 8 of the Commercial Courts Act. The use of the
word “petition” in Section 8 is not and could not have been
with reference to a petition under Article 227 of the
Constitution and is with reference to a revision
application/revision petition only.”

[Emphasis Supplied]

16.1 A Division Bench of the High Court of Gujarat in the
State of Gujarat case held that the bar contained under
Section 8 of the CC Act against entertaining revision or
petition against interlocutory orders does not extend to
petitions under Article 227 of the Constitution, and
therefore, the supervisory jurisdiction of the High Court
remains unaffected. It was further held that while such
jurisdiction is maintainable even against interlocutory
orders passed by Commercial Courts, it is to be exercised
sparingly and only in cases of patent jurisdictional error or


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manifest injustice, and not to correct mere errors of fact or
law or to substitute the view taken by the subordinate court.
The relevant extract of the State of Gujarat case is set out
below:
“40. Similarly, the decision of Delhi High Court in the case
of HPL (India) Limited v. QRG Enterprises (supra), shall
not be applicable to the facts of the case on hand and/or
the issue involved in the present petition. Even before the
Delhi High Court, the dispute was with respect to the
exercise of powers under Section 13 of the Commercial
Courts Act.
41. In view of the above and for reasons stated above and
considering the decisions of Hon'ble Supreme Court
referred to hereinabove, our conclusions in nutshell are as
under:—
(1) The bar contained under Section 8 of the Commercial
Courts Act against entertainability of “civil revision
application or petition” against the interlocutory orders
passed by the subordinate/Commercial Courts, shall not
be applicable to the writ petitions under Article 227 of
the Constitution of India.
(2) The bar contained in Section 8 of the
Commercial Courts Act shall not affect the
supervisory jurisdiction of the High Courts under
Article 227 of the Constitution of India in respect of the
orders, including interlocutory orders, passed by the
Commercial Court and writ petitions under Article 227 of
the Constitution of India may be entertainable,
however, subject to the following observations
and restrictions:—
(a) Supervisory jurisdiction under Article 227
of the Constitution is exercised for keeping
the subordinate Courts within the bounds of
their jurisdiction. When the subordinate Court
has assumed a jurisdiction which it does not
have or has failed to exercise a jurisdiction
which it does have or the jurisdiction though
available is being exercised by the Court in a
manner not permitted by law and failure of
justice or grave injustice has occasioned


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thereby, the High Court may step in to
exercise its supervisory jurisdiction.
(b) The supervisory jurisdiction under Article
227 of the Constitution of India may not be
exercised to correct mere errors of fact or of
law and may be exercised only when the
following requirements are satisfied:—
(i) the error is manifest and apparent on
the face of the proceedings such as
when it is based on clear ignorance or
utter disregard of the provisions of law,
and
(ii) a grave injustice or gross failure of
justice has occasioned thereby
(c) A patent error is an error which is self-
evident, i.e., which can be perceived or
demonstrated without involving into any
lengthy or complicated argument or a long-
drawn process of reasoning. Where two
inferences are reasonably possible and the
subordinate court has chosen to take one view
the error cannot be called gross or patent.
(d) The power to issue a writ of certiorari and
the supervisory jurisdiction are to be
exercised sparingly and only in appropriate
cases where the judicial conscience of the
High Court dictates it to act lest a gross failure
of justice or grave injustice should occasion.
Care, caution and circumspection need to be
exercised, when any of the above said two
jurisdictions is sought to be invoked during the
pendency of any suit or proceedings in a
subordinate court and error though calling for
correction is yet capable of being corrected at the
conclusion of the proceedings in an appeal or
revision preferred there against and entertaining a
petition invoking certiorari or supervisory
jurisdiction of High Court would obstruct the
smooth flow and/or early disposal of the suit or
proceedings. The High Court may feel inclined to
intervene where the error is such, as, if not
corrected at that very moment, may become
incapable of correction at a later stage and refusal
to intervene would result in travesty of justice or
where such refusal itself would result in prolonging
of the lis.


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(3) Though while exercising supervisory
jurisdiction under Article 227 of the Constitution of
India, the High Court may annul or set aside the
act, order or proceedings of the subordinate
courts, it may not substitute its own decision in
place thereof.
(4) In exercise of supervisory jurisdiction, the
High Court may not only give suitable directions so
as to guide the subordinate Court as to the manner
in which it would act or proceed thereafter or
afresh, the High Court may in appropriate cases,
itself make an order in supersession or
substitution of the order of the subordinate Court
as the Court should have made in the facts and
circumstances of the case.
(5) That while exercising powers under Article 227 of the
Constitution of India, the High Court would have to
consider the observations made by the Hon'ble Supreme
Court in Paragraph-39 in the case of Surya Dev
Rai v. Ram Chander Rai (supra), which are as under:
“39. Though we have tried to lay down broad
principles and working rules the fact remains that the
parameters for exercise of jurisdiction under Article-
226 or 227 of the Constitution cannot be tied down in
a straitjacket formula or rigid rules. Not less than
often the High Court would be faced with dilemma. If
it intervenes in pending proceedings there is bound to
be delay in termination of proceedings. If it does not
intervene, the error of the moment may earn
immunity from correction. The facts and
circumstances of a given case may make it more
appropriate for the High Court to exercise self-
restraint and not to intervene because the error
of jurisdiction though committed is yet capable
of being taken care of and corrected at a later
stage and the wrong done, if any, would be set
right and rights and equities adjusted in appeal or
revision preferred at the conclusion of the
proceedings. But there may be cases where a stitch in
time would save nine’. At the end, we may sum up by
saying that the power is there but the exercise is
discretionary which will be governed solely by the
dictates of judicial conscience enriched by judicial
experience and practical wisdom of the Judge”.
[Emphasis Supplied]





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vi) As in the A & C Act, the remedy to be exercised
where the party is remediless:
17. The learned Amicus Curiae has in addition to
submitting on the aspects referred to above, has contended
that the scheme of the Arbitration and Conciliation Act,
1996 (hereinafter referred to as the “A&C Act”)
contemplates expeditious resolution of disputes with
minimal judicial intervention, the Act being a self-contained
and exhaustive code. It was submitted that supervisory
jurisdiction under Articles 226 and 227 ought not to be
routinely invoked such as is the case in arbitral matters and
may be exercised only in exceptional situations, such as
where a party is rendered remediless or where manifest bad
faith is demonstrated. In this regard, reliance was placed
on the judgment in the case of Deep Industries Ltd. v.
19
ONGC. The relevant extract is below:
“15. Given the aforesaid statutory provision and
given the fact that the 1996 Act repealed three
previous enactments in order that there be speedy
disposal of all matters covered by it, it is clear that
the statutory policy of the Act is that not only are
time-limits set down for disposal of the arbitral
proceedings themselves but time-limits have also
been set down for Section 34 references to be
decided . Equally, in Union of India v. Varindera
Constructions Ltd. [Union of India v. Varindera
Constructions Ltd., (2020) 2 SCC 111 : (2020) 1 SCC (Civ)
277] , dated 17-9-2018, disposing of SLP (C) No. 23155

19
(2020) 15 SCC 706


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of 2013, this Court has imposed the self same limitation
on first appeals under Section 37 so that there be a timely
resolution of all matters which are covered by arbitration
awards.
xxx xxx xxx
17.This being the case, there is no doubt whatsoever that
if petitions were to be filed under Articles 226/227 of the
Constitution against orders passed in appeals under
Section 37, the entire arbitral process would be derailed
and would not come to fruition for many years. At the
same time, we cannot forget that Article 227 is a
constitutional provision which remains untouched
by the non obstante clause of Section 5 of the Act.
In these circumstances, what is important to note is
that though petitions can be filed under Article 227
against judgments allowing or dismissing first
appeals under Section 37 of the Act, yet the High
Court would be extremely circumspect in interfering
with the same, taking into account the statutory
policy as adumbrated by us hereinabove so that
interference is restricted to orders that are passed
which are patently lacking in inherent jurisdiction.
xxx xxx xxx
23. We reiterate that the policy of the Act is speedy
disposal of arbitration cases. The Arbitration Act is
a special Act and a self-contained code dealing with
arbitration. This Court in Fuerst Day Lawson Ltd.
[Fuerst Day Lawson Ltd. v. Jindal Exports Ltd.,
(2011) 8 SCC 333: (2011) 4 SCC (Civ) 178], has
specifically held as follows: (SCC p. 371, para 89)
“89. It is, thus, to be seen that Arbitration Act, 1940,
from its inception and right through to 2004 (in P.S.
Sathappan [P.S. Sathappan v. Andhra Bank Ltd.,
(2004) 11 SCC 672] ) was held to be a self-contained
code. Now, if the Arbitration Act, 1940 was held
to be a self-contained code, on matters
pertaining to arbitration, the Arbitration and
Conciliation Act, 1996, which consolidates,
amends and designs the law relating to
arbitration to bring it, as much as possible, in
harmony with the UNCITRAL Model must be held
only to be more so. Once it is held that the
Arbitration Act is a self-contained code and
exhaustive, then it must also be held, using the
lucid expression [S.N. Srikantia & Co. v. Union of


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India, 1965 SCC OnLine Bom 133 : AIR 1967 Bom
347] of Tulzapurkar, J., that it carries with it
‘19. ... a negative import that only such acts as are
mentioned in the Act are permissible to be done and
acts or things not mentioned therein are not
permissible to be done. ...’ (S.N., Srikantia & Co.
case [S.N. Srikantia & Co. v. Union of India, 1965
SCC OnLine Bom 133 : AIR 1967 Bom 347] , SCC
OnLine Bom para 19)
In other words, a letters patent appeal would be
excluded by the application of one of the general
principles that where the special Act sets out a self-
contained code the applicability of the general law
procedure would be impliedly excluded.”
What becomes clear is that had the High Court itself
disposed of the first appeal in the present case, no
Article 227 petition could possibly lie — all that
could perhaps have been done was to file an LPA
before a Division Bench of the same High Court. This,
as we have seen, has specifically been interdicted by
Fuerst Day Lawson Ltd. [Fuerst Day Lawson Ltd. v. Jindal
Exports Ltd., (2011) 8 SCC 333 : (2011) 4 SCC (Civ) 178]
Merely because, on the facts of this case, the first appeal
was disposed of by a court subordinate to the High Court,
an Article 227 petition ought not to have been
entertained.
24. Mr Rohatgi is also correct in pointing out that the
legislative policy qua the general revisional
jurisdiction that is contained by the amendments
made to Section 115 CPC should also be kept in mind
when the High Courts dispose of petitions filed
under Article 227. The legislative policy is that no
revision lies if an alternative remedy of appeal is
available. Further, even when a revision does lie, it lies
only against a final disposal of the entire matter and not
against interlocutory orders. These amendments were
considered in Tek Singh v. Shashi Verma [Tek Singh v.
Shashi Verma, (2019) 16 SCC 678 : (2020) 2 SCC (Civ)
753] in which this Court adverted to these amendments
and then stated: (SCC p. 681, paras 5-6)
“5.… A reading of this proviso will show that, after 1999,
revision petitions filed under Section 115 CPC are not
maintainable against interlocutory orders.
6.… Even otherwise, it is well settled that the revisional
jurisdiction under Section 115 CPC is to be exercised to
correct jurisdictional errors only. This is well settled. In


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DLF Housing & Construction Co. (P) Ltd. v. Sarup Singh
[DLF Housing & Construction Co. (P) Ltd. v. Sarup Singh,
(1969) 3 SCC 807] this Court held: (SCC pp. 811-12,
para 5)
‘5.… The position thus seems to be firmly
established that while exercising the jurisdiction
under Section 115, it is not competent to the High
Court to correct errors of fact however gross or
even errors of law unless the said errors have
relation to the jurisdiction of the Court to try the
dispute itself. Clauses (a) and (b) of this section on
their plain reading quite clearly do not cover the
present case. It was not contended, as indeed it
was not possible to contend, that the learned
Additional District Judge had either exercised a
jurisdiction not vested in him by law or had failed
to exercise a jurisdiction so vested in him, in
recording the order that the proceedings under
reference be stayed till the decision of the appeal
by the High Court in the proceedings for specific
performance of the agreement in question. Clause
(c) also does not seem to apply to the case in hand.
The words “illegally” and “with material irregularity”
as used in this clause do not cover either errors of
fact or of law; they do not refer to the decision
arrived at but merely to the manner in which it is
reached. The errors contemplated by this clause
may, in our view, relate either to breach of some
provision of law or to material defects of procedure
affecting the ultimate decision, and not to errors
either of fact or of law, after the prescribed
formalities have been complied with. The High
Court does not seem to have adverted to the
limitation imposed on its power under Section
115 of the Code. Merely because the High
Court would have felt inclined, had it dealt
with the matter initially, to come to a different
conclusion on the question of continuing stay
of the reference proceedings pending decision
of the appeal, could hardly justify interference
on revision under Section 115 of the Code
when there was no illegality or material
irregularity committed by the learned
Additional District Judge in his manner of
dealing with this question. It seems to us that
in this matter the High Court treated the
revision virtually as if it was an appeal.’ (SCR
at p. 373)….”
[Emphasis Supplied]


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17.1 A similar view has been taken by the Supreme Court
in the case of Bhaven Construction v. Sardar Sarovar
20
Narmada Nigam Ltd. While examining the A&C Act, the
Supreme Court has also cautioned against judicial
interference beyond as is prescribed under the statute. It
was held as follows:
“12. We need to note that the Arbitration Act is a
code in itself. This phrase is not merely perfunctory,
but has definite legal consequences. One such
consequence is spelled out under Section 5 of the
Arbitration Act, which reads as under:

“5. Extent of judicial intervention.—Notwithstanding
anything contained in any other law for the time being
in force, in matters governed by this Part, no judicial
authority shall intervene except where so provided in
this Part.”
(Emphasis Supplied)

The non obstante clause is provided to uphold the
intention of the legislature as provided in the Preamble to
adopt UNCITRAL Model Law and Rules, to reduce
excessive judicial interference which is not contemplated
under the Arbitration Act.
13. The Arbitration Act itself gives various
procedures and forums to challenge the
appointment of an arbitrator. The framework clearly
portrays an intention to address most of the issues
within the ambit of the Act itself, without there
being scope for any extra statutory mechanism to
provide just and fair solutions.
xxx xxx xxx
17. Thereafter, Respondent 1 chose to impugn the order
passed by the arbitrator under Section 16(2) of the
Arbitration Act through a petition under Articles
226/227 of the Indian Constitution. In the usual
course, the Arbitration Act provides for a mechanism of

20
(2022) 1 SCC 75


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challenge under Section 34. The opening phase of Section
34 reads as
“ 34. Application for setting aside arbitral
award .—(1) Recourse to a Court against an arbitral
award may be made only by an application for setting
aside such award in accordance with sub-section (2)
and sub-section (3)”.
(Emphasis Supplied)
The use of term “only” as occurring under the
provision serves two purposes of making the
enactment a complete code and lay down the
procedure.
xxx xxx xxx
18. In any case, the hierarchy in our legal
framework, mandates that a legislative enactment
cannot curtail a constitutional right. In Nivedita
Sharma v. COAI [Nivedita Sharma v. COAI, (2011) 14 SCC
337 : (2012) 4 SCC (Civ) 947] , this Court referred to
several judgments and held : (SCC p. 343, para 11)
“11. We have considered the respective arguments/
submissions. There cannot be any dispute that the
power of the High Courts to issue directions, orders or
writs including writs in the nature of habeas corpus,
certiorari, mandamus, quo warranto and prohibition
under Article 226 of the Constitution is a basic feature
of the Constitution and cannot be curtailed by
parliamentary legislation — L. Chandra Kumar v.
Union of India [L. Chandra Kumar v. Union of India,
(1997) 3 SCC 261 : 1997 SCC (L&S) 577] . However,
it is one thing to say that in exercise of the
power vested in it under Article 226 of the
Constitution, the High Court can entertain a writ
petition against any order passed by or action
taken by the State and/or its agency
/instrumentality or any public authority or order
passed by a quasi-judicial body/authority, and it
is an altogether different thing to say that each
and every petition filed under Article 226 of the
Constitution must be entertained by the High
Court as a matter of course ignoring the fact that
the aggrieved person has an effective
alternative remedy. Rather, it is settled law that
when a statutory forum is created by law for
redressal of grievances, a writ petition should
not be entertained ignoring the statutory
dispensation. ”


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(Emphasis Supplied)
It is therefore, prudent for a Judge to not exercise
discretion to allow judicial interference beyond the
procedure established under the enactment. This
power needs to be exercised in exceptional rarity,
wherein one party is left remediless under the
statute or a clear “bad faith” shown by one of the
parties. This high standard set by this Court is in terms
of the legislative intention to make the arbitration fair and
efficient.
19. In this context we may observe Deep Industries
Ltd. v. ONGC [Deep Industries Ltd. v. ONGC, (2020) 15
SCC 706] , wherein interplay of Section 5 of the
Arbitration Act and Article 227 of the Constitution
was analysed as under : (SCC p. 714, paras 16-17)
“16. Most significant of all is the non obstante clause
contained in Section 5 which states that
notwithstanding anything contained in any other law,
in matters that arise under Part I of the Arbitration
Act, no judicial authority shall intervene except
where so provided in this Part. Section 37 grants a
constricted right of first appeal against certain
judgments and orders and no others. Further, the
statutory mandate also provides for one bite at the
cherry, and interdicts a second appeal being filed
[see Section 37(2) of the Act].
17. This being the case, there is no doubt whatsoever
that if petitions were to be filed under Articles
226/227 of the Constitution against orders passed in
appeals under Section 37, the entire arbitral process
would be derailed and would not come to fruition for
many years. At the same time, we cannot forget that
Article 227 is a constitutional provision which
remains untouched by the non obstante clause of
Section 5 of the Act. In these circumstances, what is
important to note is that though petitions can be filed
under Article 227 against judgments allowing or
dismissing first appeals under Section 37 of the Act,
yet the High Court would be extremely circumspect
in interfering with the same, taking into account the
statutory policy as adumbrated by us hereinabove so
that interference is restricted to orders that are
passed which are patently lacking in inherent
jurisdiction.”
(Emphasis Supplied)


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20. In the instant case, Respondent 1 has not been
able to show exceptional circumstance or “bad
faith” on the part of the appellant, to invoke the
remedy under Article 227 of the Constitution. No
doubt the ambit of Article 227 is broad and
pervasive, however, the High Court should not have
used its inherent power to interject the arbitral
process at this stage. It is brought to our notice that
subsequent to the impugned order of the sole arbitrator,
a final award was rendered by him on merits, which is
challenged by Respondent 1 in a separate Section 34
application, which is pending.”
[Emphasis Supplied]


B. Article 227 and Commercial Disputes:

18. The CC Act was enacted in view of the increasing
pendency of commercial cases. It was observed in the
Statement of objects and reasons of the CC Act, that there
was required an effective mechanism for speedy and
efficient disposal of commercial disputes, including by
amendments to the CPC, Arbitration and Conciliation Act,
1996 and other statute. When this writ petition was initially
considered, a doubt was expressed as to whether a petition
under Article 227 of the Constitution would be maintainable
and the extent of interference to be exercised by the Court,
since challenges to interlocutory orders passed by the
Commercial Court were curtailed under the CC Act.


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19. The reservation of the Court was also based on the
fact that the CC Act has inbuilt provisions and restrictions
on challenges under the Act, such as Section 8 and Section
13, and given the legislative intent, permitting frequent
recourse to Article 227 would not have been envisaged.

19.1 Section 8 of the CC Act is a non-obstante provision
which states that no civil revision petition/application will be
filed against an interlocutory order passed under the CC Act.
It further states that any challenge shall only be raised in
an appeal under Section 13 of the CC Act. Thus, the remedy
provided for under Section 115 CPC has been done away
with, in the following terms:

“8. Bar against revision application or petition
against an interlocutory order .— Notwithstanding
anything contained in any other law for the time
being in force, no civil revision application or
petition shall be entertained against any
interlocutory order of a Commercial Court,
including an order on the issue of jurisdiction, and
any such challenge, subject to the provisions of
section 13, shall be raised only in an appeal
against the decree of the Commercial Court.”

[Emphasis Supplied]


19.2 Section 13 of the CC Act provides for challenges to the
orders of the Commercial Courts and Commercial Division
by providing for the remedy for challenge only to final


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orders and judgment. It also restricts all such challenges to
a limitation of sixty days. While sub-section 1A of Section
13 limits challenges under the CC Act to only those
interlocutory orders which are amenable to challenge under
Order 43 of the CPC and Section 37 of the A&C Act, sub-
section (2) of Section 13 of the CC Act provides that no
appeal shall lie from any order or judgment other than is
set out in the CC Act. Section 13 of the CC Act is set out
below:
“13. Appeals from decrees of Commercial Courts and
Commercial Divisions — (1) Any person aggrieved by the
judgment or order of a Commercial Court below the
level of a District Judge may appeal to the
Commercial Appellate Court within a period of sixty
days from the date of judgment or order.

(1A) Any person aggrieved by the judgment or order of
a Commercial Court at the level of District Judge
exercising original civil jurisdiction or, as the case
may be, Commercial Division of a High Court may appeal
to the Commercial Appellate Division of that High Court
within a period of sixty days from the date of the
judgment or order:

Provided that an appeal shall lie from such orders
passed by a Commercial Division or a Commercial Court
that are specifically enumerated under Order XLIII
of the Code of Civil Procedure, 1908 (5 of 1908) as
amended by this Act and section 37 of the Arbitration
and Conciliation Act, 1996 (26 of 1996).

(2) Notwithstanding anything contained in any other
law for the time being in force or Letters Patent of a High
Court, no appeal shall lie from any order or decree of


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a Commercial Division or Commercial Court
otherwise than in accordance with the provisions of
this Act.”
[Emphasis Supplied]

+
19.3 It is apposite to refer to a judgment of the Division
Bench of this Court in Trinetramilan Product Protection
21
Solutions Private Limited vs. A.S. Narayanan . While
examining an issue as to the maintainability of an appeal
under the CC Act, it was held as under:
“9. In our view, the question of whether an appeal lies
against a commercial court's order that is not enumerated
in Order XLIII of the CPC is no longer res integra. The
same is covered by the decision of the Supreme Court in
Kandla Export Corporation & Anr. v. M/s. OCI Corporation
& Anr.¹, whereby the Supreme Court has held that the
scope of an appeal under Section 13(1) of the
Commercial Courts Act is controlled by the proviso
to the said Sub-section. It is material to note that the
proviso to Subsection(1A) of Section 13 of the CC Act is
identically worded as the proviso of Sub-section (1) of
Section 13 as in force prior to the amendment in the year
2018. The relevant extract of the said decision is set out
below:
13. Section 13(1) of the Commercial Courts Act, with
which we are immediately concerned in these appeals,
is in two parts. The main provision is, as has been
correctly submitted by Shri Giri, a provision which
provides for appeals from judgments, orders and
decrees of the Commercial Division of the High Court.
To this main provision, an exception is carved out by
the proviso. The primary purpose of a proviso is to
qualify the generality of the main part by providing an
exception, which has been set out with great felicity
in CIT v. Indo-Mercantile Bank Ltd. [CIT v. Indo-
Mercantile Bank Ltd., 1959 Supp (2) SCR 256 : AIR
1959 SC 713] , thus: (SCR pp. 266-67 : AIR pp. 717-
18, paras 9-10)

21
NC:2026:KHC:5050-DB


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“9. … The proper function of a proviso is that it
qualifies the generality of the main enactment by
providing an exception and taking out as it were,
from the main enactment, a portion which, but for
the proviso would fall within the main enactment.
Ordinarily it is foreign to the proper function of a
proviso to read it as providing something by way of
an addendum or dealing with a subject which is
foreign to the main enactment.
‘8. … it is a fundamental rule of construction that a
proviso must be considered with relation to the
principal matter to which it stands as a proviso.’
Therefore, it is to be construed harmoniously with
the main enactment. (Per Das, C.J. in Abdul Jabar
Butt v. State of J&K [Abdul Jabar Butt v. State of
J&K, 1957 SCR 51 : AIR 1957 SC 281 : 1957 Cri LJ
404] , SCR p. 59 : AIR p. 284, para 8). Bhagwati,
J., in Ram Narain Sons Ltd. v. CST [Ram Narain
Sons Ltd. v. CST, (1955) 2 SCR 483 : AIR 1955 SC
765] , said: (SCR p. 493 : AIR p. 769, para 10)
‘10. It is a cardinal rule of interpretation that a proviso
to a particular provision of a statute only embraces the
field which is covered by the main provision. It carves
out an exception to the main provision to which it has
been enacted as a proviso and to no other.’
10. Lord Macmillan in Madras & Southern Mahratta
Railway Co. Ltd. v. Bezwada Municipality [Madras &
Southern Mahratta Railway Co. Ltd. v. Bezwada
Municipality, 1944 SCC OnLine PC 7 : (1943-44) 71
IA 113] laid down the sphere of a proviso as
follows: (IA p. 122 : SCC OnLine PC)
‘… The proper function of a proviso is to except
and deal with a case which would otherwise
fall within the general language of the main
enactment, and its effect is confined to that
case. Where, as in the present case, the
language of the main enactment is clear and
unambiguous, a proviso can have no
repercussion on the interpretation of the main
enactment, so as to exclude, from it by
implication what clearly falls within its express
terms.’
The territory of a proviso therefore is to carve out
an exception to the main enactment and exclude
something which otherwise would have been within


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the section. It has to operate in the same field and
if the language of the main enactment is clear it
cannot be used for the purpose of interpreting the
main enactment or to exclude by implication what
the enactment clearly says unless the words of the
proviso are such that that is its necessary effect.
(Vide also Toronto Corpn. v. Attorney-General of
Canada [Toronto Corpn. v. Attorney-General of
Canada, 1946 AC 32 (PC)] , AC p. 37.)”
14. The proviso goes on to state that an appeal shall
lie from such orders passed by the Commercial
Division of the High Court that are specifically
enumerated under Order 43 of the Code of Civil
Procedure Code, 1908, and Section 37 of the
Arbitration Act . It will at once be noticed that
orders that are not specifically enumerated
under Order 43 CPC would, therefore, not be
appealable, and appeals that are mentioned in
Section 37 of the Arbitration Act alone are
appeals that can be made to the Commercial
Appellate Division of a High Court.
15. Thus, an order which refers parties to
arbitration under Section 8, not being appealable
under Section 37(1)(a), would not be appealable
under Section 13(1) of the Commercial Courts Act.
Similarly, an appeal rejecting a plea referred to in
sub-sections (2) and (3) of Section 16 of the
Arbitration Act would equally not be appealable
under Section 37(2)(a) and, therefore, under
Section 13(1) of the Commercial Courts Act.”
10. It is also relevant to refer to the provisions of
subsection (2) of Section 13 of the CC Act. The said
subsection contains a non obstante clause that
clearly indicates that its provisions would have an
overriding effect. It expressly provides that,
notwithstanding anything contained in any other law for
the time being in force or the Letters Patent of a High
Court, no appeal would lie from any order or decree of a
Commercial Division or a Commercial Court otherwise
than in accordance with the provisions of the CC Act.
The Supreme Court had examined the import of the
proviso to Section 13 of the CC Act, which is now set
out as the proviso to Sub-section (1A) of Section 13
of the CC Act.”
[Emphasis Supplied]



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19.4 As set out in paragraph 16 and 16.1 above, the
Division Bench of Delhi High Court in Black Diamond
Trackparts case and the Gujarat High Court in the State
of Gujarat case has also cautioned that such jurisdiction is
to be exercised sparingly, particularly in commercial
matters, and only in cases of patent jurisdictional error or
manifest injustice, so as not to defeat the object of
expeditious disposal under the CC Act.

20. Clearly the intention of the legislature was not to have
an all-pervasive access to the challenges made to the CC
Act. Thus, the question that would arise is whether parties
should be able to circumvent these statutory provisions by
making frequent recourse to Article 227 of the Constitution,
to challenges under the CC Act.
21. An examination of the law as set out hereinabove
reflects that:
(i) It is important for the Courts to ensure that the power
under Article 227 be exercised to ensure compliance
with the objectives of the enactment of the CC Act
remains intact.


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(ii) The powers of superintendence under Article 227 are
circumscribed and supervisory jurisdiction is to be
exercised sparingly and cannot be used to substitute
the judgment of a Subordinate Court or Tribunal to
correct trivial errors.
(iii) Article 227 of the Constitution should be used for
jurisdictional errors causing grave injustice. The power
should be exercised where a party is left remediless.
(iv) What has been barred by Section 115 of the CPC
through Section 8 of the Commercial Courts Act,
cannot be subsequently revived by use of powers
under Article 227 of the Constitution.
(v) Decrees and judgments are amenable to challenge
within the period of limitation as is prescribed under
Section 13 of the CC Act.
(vi) Interlocutory Orders passed which are amenable to
challenge under Order 43 of the CPC and Section 37
of the CC Act, may be challenged by way of an appeal
under Section 13 of the CC Act as well.


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(vii) Interference in petitions arising from Commercial
Courts is limited to only instances where non-
correction under Article 227 will lead to manifest
injustice. Some circumstances would be when errors
(a) are incapable of correction at a later stage, and (b)
give rise to the level of patent perversity or
jurisdictional failure.
22. To facilitate the objective of the Commercial Courts
Act, that is, speedier disposal of commercial matters, it is
suggested that a separation of matters under Article 227 of
the Constitution be undertaken for petitions arising from
commercial cases. This could include the creation of a
separate roster to further implement the objectives of the
Act or by creation of a system for procedural constraints
including an examination as to whether interference is
requisite for fewer and shorter adjournments and timelines
for disposal.
C. Availability of Alternate Remedy of Appeal
provided for under the CC Act:
23. Although no submissions were made by either party
on this aspect, it was imperative to examine this issue as


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well. In the present case, the challenge by the
petitioner/defendant is to an application under Order 7,
Rule 10 and 10A of the CPC, that was allowed by the learned
Commercial Court, whereby it was directed that the plaint
be returned under Order 7, Rule 10 of the CPC and a date
was fixed for the parties to appear before the learned
Commercial Court.
24. Sub-rule (a) Order 43 Rule 1 CPC provides that an
Appeal is required to be filed to challenge an order passed
under Order 7 Rule 10 CPC, directing the return of the plaint
except where the procedure has been followed by the Court
under Order 7 Rule 10A CPC in the following terms:
“1. Appeal from orders. —An appeal shall lie from the
following orders under the provisions of section 104,
namely: —
(a) an order under rule 10 of Order VII returning a
plaint to be presented to the proper Court except
where the procedure specified in rule 10A of Order
VII has been followed”
[Emphasis Supplied]

25. It is thus apposite to extract Order 7 Rule 10 and 10A
of the CPC below:
“10. Return of plaint.-(1) Subject to the provisions of
rule 10A, the plaint shall at any stage of the suit be
returned to be presented to the Court in which the
suit should have been instituted.


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Explanation.- For the removal of doubts, it is hereby
declared that a Court of appeal or revision may direct after
setting aside the decree passed in a suit, the return of the
plaint under this sub-rule.
(2) Procedure on returning plaint. On returning a plaint,
the Judge shall endorse thereon the date of its
presentation and return, the name of the party presenting
it, and a brief statement of the reasons for returning it.

10A. Power of Court to fix a date of appearance in
the Court where plaint is to be filed after its return.
(1) Where, in any suit, after the defendant has
appeared, the Court is of opinion that the plaint
should be returned, it shall, before doing, so,
intimate its decision to the plaintiff.
(2) Where an intimation is given to the plaintiff
under sub-rule (1), the plaintiff may make an
application to the Court-
(a) specifying the Court in which he proposes
to present the plaint after its return,

(b) praying that the Court may fix a date for the
appearance of the parties in the said Court, and

(c) requesting that the notice of the date so fixed
may be given to him and to the defendant.
(3) Where an application is made by the plaintiff
under sub-rule (2), the Court shall, before returning the
plaint and notwithstanding that the order for return of
plaint was made by it on the ground that it has no
jurisdiction to try the suit,-
(a) fix a date for the appearance of the parties
in the Court in which the plaint is proposed to
be presented, and
(b) give to the plaintiff and to the defendant
notice of such date for appearance.
(4) Where the notice of the date for appearance is given
under sub-rule (3),-
(a) it shall not be necessary for the Court in which the
plaint is presented after its return, to serve the
defendant with a summons for appearance in the suit,
unless that Court, for reasons to be recorded,
otherwise directs, and


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(b) the said notice shall be deemed to be a summons
for the appearance of the defendant in the Court in
which the plaint is presented on the date so fixed by
the Court by which the plaint was returned.
(5) Where the application made by the plaintiff
under sub-rule (2) is allowed by the Court, the
plaintiff shall not be entitled to appeal against the
order returning the plaint.”
[Emphasis Supplied]


26. In the present case, an application under Order 7, Rule
10 and 10A of the CPC was filed by the respondent/plaintiff.
This Application was allowed by the learned Commercial
Court and the plaint was directed to be returned. Sub-
section (5) of Order 7 Rule 10A of the CPC bars the filing of
an appeal against such an order. In addition, since the
procedure under Order 7, Rule 10A of the CPC was followed
by the learned Commercial Court, this order is not an
appealable order.
D. Valuation of Intangible Rights and Bona Fides of
Valuation under Section 12(1)(d) of the CC Act:

27. It is apposite to now examine as to whether the
Impugned Order warrants interference, including whether
an alternate remedy of filing of an Appeal has been provided
for in the CC Act for such an order. The learned Senior
Counsel for the petitioner/defendant has contended that a


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jurisdictional error has been made by the learned
Commercial Court, which warrants interference, while
learned Senior counsel for the respondent/plaintiff contends
otherwise.
28. Section 2(1)(c)(xvii) of the CC Act, provides that all
intellectual property disputes would be commercial disputes
in the following terms:
“2. Definitions.:- (1) In this Act, unless the context
otherwise requires,
(a) xxx xxx xxx
(b) xxx xxx xxx
(c): “commercial dispute” means a dispute arising out
of—
[[[[[[[
xxx xxx xxx
(xvii) intellectual property rights relating to
registered and unregistered trademarks, copyright,
patent, design, domain names, geographical
indications and semiconductor integrated circuits;”

28.1 Section 2(i) of the CC Act defines Specified Value as:
“(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.”
[Emphasis Supplied]


29. Both these provisions are to be examined in light of
the provisions of Section 12 of the CC Act which provides


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for how specified value has to be determined. Section
12(1)(d) of the CC Act sets out that the specified value in
the case of an intangible right would be estimated by the
determination of the market value of the rights while Sub-
sections (a), (b) and (c) provide for determination of
specified value in the cases of recovery of money; interest
in movable property and interest in immovable property
respectively. The relevant provision is below:
“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;
(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;
[Emphasis Supplied]


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30. An examination of the plaint initially filed in OS No.
3909/2024 before the learned Civil Court was filed without
any specified value being set out even though the matter
related to a dispute covered by Section 2(1)(c)(xvii) of the
CC Act as a Commercial Dispute. Paragraph 37 of the plaint
dated 06.06.2024 is set out below:
“37. It is submitted that for the purpose of jurisdiction and
court fees, this Suit is valued and requisite fee has been
paid by the Plaintiff firm as per the valuation slip attached.
The Plaintiff firm undertakes to pay any additional
Court fees under prayer (c); if more amounts is
awarded by this Hon’ble Court by way of damages
after ascertaining the accounts. ”
[Emphasis Supplied]


30.1 In view thereof, the learned Trial Court directed the
respondent/plaintiff to file an estimation of the specified
value, by its order dated 02.07.2024. The respondent/
plaintiff subsequently filed a memo on 08.07.2024
estimating the market value as more than Rs.3 lakhs. The
relevant extract of the memo is below:
Memo
“
As per the directions of this Hon’ble Court, the
undersigned counsel hereby submits before this Hon’ble
Court that the Plaintiff’s estimate of the market
value of the present suit is more than Three Lakhs
Rupees. ”

[Emphasis Supplied]



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30.2 By its order dated 08.07.2024, the learned Civil Court
returned the plaint to be presented before the Commercial
Court since the suit was valued at more than Rs.3 lakhs.
The suit was then registered as Comm. O.S. No.1093/2024.
30.3 As a consequence thereof, the respondent/plaintiff
amended its plaint in Comm.O.S.No.1093/2024, to add
paragraph 36A by which it was stated that the value of the
plaint was more than Rs.3 lakhs. It was stated that the
valuation of the rights of the plaintiff was not stated therein
earlier, hence the requirement for the amendment. The
relevant extract of application, IA No.5 of 2024 filed for the
proposed amendment and its Affidavit in support thereof, is
set out below:
“ APPLICATION FILED ON BEHALF OF THE
PLAINTIFF UNDER ORDER VI RULE 17 WITH
SECTION 151 OF THE CODE OF CIVIL PROCEDURE
CODE, 1908
xxx xxx xxx
2. Add: after paragraph no. 36, the words:
36A. Plaintiff submits that the present suit is
commercial in nature as defined under the Section
2(c)(xvii) of the Commercial Courts Act, 2015, as
the said suit pertains to intellectual property rights
relating to registered trademark. It is submitted
that as per Section 12(d) of the Commercial Courts
Act, 2015, the market value of the trademark
“TULASI” as estimated by the Plaintiff for the
purpose of determining the specified value of


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the subject matter is above Rs.3,00,000/-
(Rupees Three Lakhs Only). Therefore, the
present suit is within the jurisdiction of the
Commercial Courts, Bangalore.”
AFFIDAVIT

xxx xxx xxx
2. I humbly submit that the averments made in the Plaint
may be read as a part and parcel of this application.
3. I submit that on 08.07.2024, the Hon’ble XVIII
Additional City Civil and Sessions Judge in Bengaluru
ordered for the return of the plaint numbered
O.S.No.3909/2024 noting that it does not have the
pecuniary jurisdiction to hear the matter and that it is to
be filed before this Court. It is pertinent to note that the
Plaint was returned on 07.08.2024 and on 08.08.2024,
the returned Plaint has been filed before this Hon’ble Court
in its original form without any modifications. However,
the development in the present suit that had taken
place before the Hon’ble XVIII Additional City Civil
and Sessions Judge at Bengaluru and the valuation
of the estimated rights of Plaintiff’s in this present
suit is not captured in the Plaint . Therefore, it has
become necessary for the Plaintiff to file the present
application seeking to amend the Plaint as prayed for in
the Application.
4. I submit that the above application is filed for the above
Bonafide reason and not with a view to protract the
proceedings. I submit that if the above application is not
allowed, the Plaintiff will be put to irreparable loss and
injury to their valuable and legitimate rights. On the other
hand, no loss or hardship will be caused to the Defendant
if the above application is allowed.”
[Emphasis Supplied]
31. However, thereafter, on 28.01.2025 the respondent/
plaintiff filed I.A.No.7 of 2025 under Order 7 Rule 10 and
Rule 10A of the CPC seeking return of plaint and fixing of a
date for appearance of the parties before the City Civil
Court, averring that the specified value is below Rs.3 lakhs.


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As set out above, reliance was placed on the order dated
16.10.2024 of a Co-ordinate Bench in Comm.
O.S.No.1197/2024. It was stated therein that based on the
Commercial Court’s order in Comm.O.S.No.1197/2024, the
value of the plaintiff’s intangible rights are less than Rs.3
lakhs. The relevant extract of I.A.No.7 is set out below:
”APPLICATION FILED ON BEHALF OF THE
PLAINTIFF UNDER ORDER VII RULE 10 AND 10A
READ WITH SECTION 151 OF THE CODE OF CIVIL
PROCEDURE CODE, 1908

For reasons stated in the accompanying affidavit, it is
respectfully prayed that this Hon’ble Commercial Court
may be pleased to return the plaint to be presented
before the Hon’ble City Civil Court, Bengaluru and
fix a date for appearance, to enable both the parties
to be present before the Hon’ble City Civil Court,
Bengaluru on the given date, and pass appropriate
orders in the interest of justice and equity.
AFFIDAVIT
xxx xxx xxx
2. It is pertinent to note that the Plaintiff had filed another
suit against a third-party trademark infringer (Shrinivas
Sugandhalaya (BNG) LLP) pertaining to the same
trademark ‘TULASI’ before the Hon’ble Commercial Court
(CCH-88) as Comm.O.S.No.1197/2024. On 16.10.2024,
the Hon’ble Commercial Court observed that the
specified value of the Plaintiff’s right is below
Rs.3,00,000/- (Rupees Three Lakhs Only) and as such,
returned the plaint to be presented before the Hon’ble City
Civil Court. A copy of the certified copy of the said Order
dated 16.10.2024 in Comm.O.S.No.1197/2024 is
produced herewith as 14.11.2024, the Plaintiff refiled the
returned plaint as O.S.No.804/2024 before the Hon’ble
City Civil Court, which is pending adjudication.
3. Subsequently, on 13.12.2024, based on the above
said order the Hon’ble City Civil Court in
O.S.No.5928/2015, which is also a suit pertaining to
infringing and passing off of the same trademark


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‘TULASI’, passed an Order finding the market value
of the Plaintiff’s right is below Rs.3,00,000/-
(Rupees Three Lakhs Only). A copy of the certified copy
of the Order dated 13.12.2024 in O.S.No.5928/2015 is
produced herewith as Document No.2.
4. Therefore, based on this Hon’ble Commercial
Court’s order in Comm.O.S.No.1197/2024
determining that the value of the Plaintiff’s
intangible right is less than Rs.3,00,000/-, the
appropriate Court to adjudicate the suit is the
Hon’ble City Civil Court, Bengaluru.”
[Emphasis Supplied]

32. Allowing this application, the learned Commercial
Court has by the interim order, directed the plaint be
returned to be filed before an ordinary Civil Court. The
learned Commercial Court relied on the order passed in
Comm.O.S.No.1197/2024 by another Commercial Court
while determining the value of the trademark of the plaintiff
‘TULSI’. It was also held that since the suit is filed for
injunction simplicitor, the plaintiff may value his suit as per
his own wish. The relevant extract is below:
“In the present case also, the contention of the plaintiff
that the valuation of his suit is less than Rs.3 lakhs
appears to be reasonable to consider. The learned counsel
for plaintiff vehemently argued and contended that the
order passed by co-ordinate bench has persuhetion [sic
persuasive] value and relied above referred to division
bench in support of his arguments. The contention of the
plaintiff though the denied by the defendant but he has
not denied by the fact of order passed by co-ordinating
bench returning the plaint of the plaintiff for want of
jurisdiction. On the other hand, the defendant has
contended that the plaint averments discloses that
plaintiff has declared his turnover more than
Rs.6,00,000/-. So also he has stated that he spent huge
amount for promotional activities of his products under


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such circumstances contention of the plaintiff that his suit
value is less than Rs.3,00,000/- does not holds water.
That has already discussed above the present suit is
filed for the relief of bare injunction. So, the plaintiff
is entitled to value his suit in accordance to his wish,
therefore at this stage the contention of the plaintiff
is required to be considered arguments holds good
no reason to deny the same. In my view the plaintiff
has proved point No.1, accordingly I have answered it in
the 'affirmative' .
11. Point No.2: For the various reasons discussed in
point No.1 and findings given on it by me, I proceed to
pass the following;
ORDER
I.A. No.7 filed by the plaintiff under Order VII
Rule 10 & 10(a) read with Section 151 of CPC
is hereby allowed.
The plaint of the plaintiff is ordered to be return to
the plaintiff for presenting it before jurisdictional
court.
Both parties are directed to be present before
jurisdictional court on 22.08.2025 without
expecting further notices.”
[Emphasis Supplied]

33. No doubt a plaintiff is “ dominus litus” and can value
his relief at his own discretion. However, in the context of
the CC Act, it is imperative for the plaintiff to give some
clarity on how the ‘specified value’ has been fixed in
accordance with Section 12(1) of the CC Act. Instead, only
a statement has been made that it is more than Rs.3 Lakhs
in the application.
(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;”
[Emphasis Supplied]


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34. The Legislature has in its wisdom set out a procedure
for determination of the subject value of a commercial
dispute. Thus, in order for a dispute to be classified as a
commercial dispute, the value of the subject matter of the
dispute as is determined in accordance with Section 12 of
the CC Act has to be set out in the suit, appeal or
application. In addition, and since the subject matter in
issue is intellectual property rights, the provisions of Section
12(1)(d) of CC Act would be applicable to determine the
specified value.

35. An examination of the Impugned Order reflects that it
premises itself on the order passed by another learned
Commercial Court in Comm.O.S.No.1197/2024 wherein it is
stated that the value of the respondent’s intangible right in
the trademark “TULASI” has been determined less than
Rs.3,00,000/- (Rupees Three Lakhs). Hence, it has been
averred that the Civil Court has appropriate jurisdiction to
adjudicate the dispute and the application filed by the
respondent/plaintiff has been allowed. It has been
contended by the learned Senior Counsel for the


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petitioner/defendant that this order has been passed
without any determination of the specified value by the
learned Commercial Court. In addition, it has been passed
relying on the 16.10.2024 order which has wrongly relied
on the provision of Section 12(1)(c) where the relief sought
relates to immovable property, instead of Section 12(1)(d),
to determine the specified value of the subject matter in
dispute. Thus, a jurisdictional error has occurred.
36. The learned Senior Counsel appearing for the
petitioner/defendant has relied upon the order in the
Kirloskar AAF case, as well as the judgments in
Bangalore Blues case and Gangadharappa case of this
Court, to submit that such these judgments set out that the
Commercial Court must examine the specified value and
since no evaluation of any kind had been conducted to
ascertain the ‘specified value’, the Impugned Order suffers
from an infirmity.
37. An examination of the judgment in the Kirloskar AAF
case, reflects the order has been passed on 25.09.2018
pursuant to a memo filed in relation to whether the matter
should be heard by the Appellate Civil Court or by the


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Commercial Appellate Division. While deciding this issue, it
was held that since the dispute relates to the infringement
of a trademark filed by a Company, the value of the subject
matter can “safely” be taken as Rs.3 lakhs. However, in this
case, there was no evidence produced to show that the
value of the trademark is worth more than Rs.3 lakhs as
can be seen from the extract below:
“5. As a counter-argument, Mr. Dhananjay Vidyapati
Joshi, the learned counsel for the appellant, pleads that
there is no evidence to show that the value of the
subject-matter, except the statement made by the
respondent plaintiff that the value of the trademark
is worth more than Rs.3,00,000/-.
xxx xxx xxx
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 an 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)(xvii) of the Act.
9. The Karnataka Court Fees and Suits Valuation Act deals
with the calculation of Court Fees. Section 26 of the said
Act clearly states that in a suit for injunction, whether the
subject-matter of the suit has a market value, or not, the
fee shall be computed on the amount at which the relief
sought is valued in the plaint, or on rupees one thousand
whichever is higher. Therefore, a distinction has to be
made between the value of the subject-matter, and the
calculation of Court fees. According to Section 26(c), the
Court fee shall be based on the relief sought, and the value
of the relief mentioned in the plaint. Admittedly, in the


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present case, in the plaint, the relief sought was
valued as Rs.3,000/-. But nonetheless, the value of
the subject-matter, that is the infringement of the
trademark, has not been stated. But considering the
fact that the dispute relates to the infringement of
trademark that too by a company, the value of the
subject matter can safely be taken to be more than
Rs.3,00,000/-.”
[Emphasis Supplied]

37.1 The decision of the Co-ordinate Bench in the
Bangalore Blues case premises itself on the decision of a
Single Judge of the Delhi High Court in Vishal Pipes case.
The judgment in the Vishal Pipes case was however partly
overruled by the Division Bench in the Delhi High Court in
the Pankaj Ravjibhai Patel case.
37.2 In addition, the Co-ordinate Bench in the
Gangadharappa case was deciding a case where the
specified value was not mentioned in the plaint. That stage
has however, already passed in the present case. Hence,
these judgments may not assist the petitioner/defendant.

38. The Co-ordinate Bench in the Bangalore Blues
Entertainment case has however held that the
determination of the “specified value” of the subject matter
of a suit under Section 12 of the CC Act is essential for
deciding jurisdiction, and until such determination is made


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in accordance with the statutory framework, the suit cannot
be held to be not maintainable on the basis of other
considerations. It is apposite to extract the relevant
paragraph below:
“31. Until determination of specified value of
subject matter of suit as per Section 12 of CC Act,
suit cannot be held to be not maintainable by
referring to rental value etc. of suit premises, which
would not be as per method of assessment provided under
Section 12 of CC Act. Therefore, answer to point under
consideration would be subject to determination of
‘specified value’ by Trial Court.”
[Emphasis Supplied]

39. A Division Bench of the Delhi High Court in the Pankaj
Ravjibhai Patel case has discussed the issue of ‘specified
value’ and commercial disputes relating to intellectual
property matter in great detail. The Division Bench also
expressed its reservation with the view taken in the Vishal
Pipes case and ultimately set aside the directions
prescribed therein. It was held that it would be incorrect to
proceed on the premise that a dispute in a IPR matter would
necessarily be more than Rs.3 lakhs. It was further held
that where there is an issue on the valuation especially in
the case where mala fide intent is alleged, the issue has to


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be considered and scrutinized by a Competent Court in the
following terms:
“2. We find from the order dated 25 April 2023 passed on
this appeal that the Court while entertaining the challenge
had placed the impugned order in abeyance and restored
the ad interim ex parte injunction which had operated on
the suit. While considering the questions which were
canvassed for consideration, the Division Bench also
expressed reservation with respect to the
correctness of the view expressed by a learned
Single Judge of the Court in Vishal Pipes Limited v.
Bhavya Pipe Industry. It accordingly appointed Ms.
Swathi Sukumar, learned counsel, as the Amicus Curiae
to assist the Court in examining the questions which
arose.
xxx xxx xxx
23. Having considered the aforenoted submissions, we at
the outset find merit in the submissions addressed by
Ms. Sukumar and learned counsel for the appellant
when they contended that Vishal Pipes appears to
have confused the aspects of specified value and
valuation based on the reliefs claimed. The CCA
would inarguably be attracted to any action which
relates to a commercial dispute falling within the
ambit of section 2(1)(c) and where the specified
value of the subject matter goes beyond the
minimum Rs. 3 lakhs pecuniary limit as notified.
Undisputedly if the declared specified value be Rs. 3
lakhs or above and the suit relate to a commercial
dispute, it would necessarily have to be placed
before the notified commercial court.
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


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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 so
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.
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. It is in the aforesaid backdrop that we find
ourselves unable to appreciate or sustain the directions
contained in sub-paragraphs (iv) and (v) of Para 66 of
Vishal Pipes.”
[Emphasis Supplied]

39.1 It was further held that it is only once a competent
Court comes to the conclusion that in the facts of a
particular case, the valuation is incorrect or actuated by
mala fides , it could direct that the plaint be appropriately
amended. It has also held that an examination of the issue
of ‘under valuation’ can be undertaken by the Court hearing
the matter and there was no requirement for the


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Commercial Court only to decide this. The relevant extract
is below:
“29. Insofar as para 66 (ii) and (iii) are concerned
we find merit in the submission of Ms. Sukumar that
all IPR suits in which a valuation has been pegged
at below Rs. 3 lakhs may be duly examined by the
court before which those matters are presently laid.
We find no justification for the withdrawal of those matters
from the competent courts and their placement before a
commercial court for the purposes of ascertaining the
correctness of the valuation as declared. That exercise
can very well be undertaken by the competent court
itself. If the competent court, in the facts of a
particular case, ultimately comes to conclude that
the valuation of an IPR suit has been deliberately
suppressed, it could always frame appropriate
directions for the plaint being amended and
additional court fee being demanded. However,
those directions would be warranted only when the
concerned court comes to a definitive conclusion in
the facts of a particular case that the declared
valuation is patently incorrect or is actuated by
ulterior motives.
xxx xxx xxx
32. Our inability to subscribe or accede to the
directions framed in Vishal Pipes is further fortified
when those directives are tested in the backdrop of
a quia timet action. It would clearly be impossible
to accord an imprimatur to those directions in
situations where loss cannot be quantified or where
the infringement is apprehended. Learned counsel for
the appellant thus clearly appears to be correct when he
contended that the directions framed by the Court in
Vishal Pipes would be rendered unworkable in such
contingencies.
33. We thus come to conclude that while it would be
open for the competent court to examine the
declared specified value and the value ascribed to
the reliefs claimed in an IPR suit if it be pegged at
below Rs. 3 lakhs, the issue of undervaluation would
have to be evaluated based on the facts of each
case. The aforesaid exercise can be legally
undertaken by the competent court itself and such
matters need not be transferred to commercial
courts for the aforesaid purpose.


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34. The Court further finds merit in the suggestion
mooted by Ms. Sukumar of an additional declaration
being made by plaintiffs in IPR suits where
valuation is placed at below Rs. 3 lakhs. We thus
direct that in all such cases, the plaintiff would have
to declare that it has not taken an inconsistent
position with respect to specified value in any other
litigation pending or instituted in the past.”
[Emphasis Supplied]
VIII. Conclusion :
40. The record reflects, that the respondent/plaintiff has
asserted contradictory valuation for its intangible rights.
However, no material in this behalf was placed before the
learned Commercial Court. Thus, the learned Commercial
Court has not undertaken any kind of examination of the
specified value.
40.1 Given the fact that the petitioner/defendant has
undertaken a specific plea of malafides on the part of the
respondent/plaintiff, the learned Commercial Court ought to
have undertaken an examination of this aspect.
41. It was also to be considered as to whether the filing
qua the matter captioned M/s. Sarathi International
Inc. vs. M/s. Shrinivas Sugandhalaya (BNG) LLP in
Comm.O.S.No.1197/2024 in relation to specified value
could have been adopted. However, and in any event, as is


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set out in paragraph 35 above, the learned Commercial
Court in that matter has relied on Section 12(1)(c) and not
Section 12(1)(d) of the CC Act.
42. In view of the aforegoing discussions, the petition is
allowed. The Impugned Order is set aside, with directions
to the learned Commercial Court to undertake an
examination on the ‘specified value’ as has been claimed by
the respondent/plaintiff and pass an order in accordance
with the law. The rights and contentions of both parties are
kept open in this regard.

43. Given that this matter has been pending for some
time, the learned Commercial Court is requested to conduct
the enquiry/examination as early as is possible.

44. In view of what has been stated by this Court
hereinabove, including in paragraphs 21 and 22, the
Registry is directed to place this matter before the Hon’ble
the Chief Justice for appropriate directions, if deemed
requisite.


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45. This Court expresses its appreciation for the
assistance provided by the learned Amicus Curiae,
Ms. Nayana Tara B.G., in this matter.



Sd/-
(TARA VITASTA GANJU)
JUDGE
JJ/YN
Digitally signed by
TARA VITASTA GANJU
Location: HIGH COURT
OF KARNTAKA


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