Larger Bench to decide whether Civil Judges can hear trademark suits despite Section 134’s District Court requirement

The appeal concerned the maintainability and proper forum of a suit under Section 134 of the Trade Marks Act, 1999 in the State of Jharkhand, where a Civil Judge (Senior Division) had been notified as a Commercial Court under the Commercial Courts Act, 2015.

The appellants contended that Section 134, which prohibits institution of a trade-mark infringement suit before a court inferior to a District Court, required such suits to be filed before the District Court notwithstanding the notification.

The respondents relied upon the Commercial Courts Act, particularly its coverage of intellectual-property disputes and its overriding clause under Section 21, to contend that the notified Civil Judge (Senior Division) had jurisdiction.

The appeal also raised concerns regarding the appellate remedy available against an order of the Civil Judge (Senior Division).

Leave was granted, and the Supreme Court considered whether the apparent conflict in the statutory schemes required authoritative resolution.

1. Whether the restriction under Section 134 of the Trade Marks Act, 1999, prohibiting institution of a suit before a court inferior to a District Court, is rendered inapplicable or otiose when a Civil Judge (Senior Division) is notified as a Commercial Court under the Commercial Courts Act, 2015.

2. Whether the Commercial Courts Act, 2015, by virtue of Sections 3, 15 and 21 and its treatment of intellectual-property disputes as commercial disputes, prevails over the forum restriction contained in Section 134 of the Trade Marks Act.

3. Whether the conflicting approaches in the precedents concerning the interaction between the Commercial Courts Act and special statutes require determination by a larger Bench.

Section 134(1) of the Trade Marks Act, 1999 restricts institution of suits for specified trade-mark reliefs before any court inferior to a District Court having jurisdiction to try the suit.

Section 2(1)(c)(xvii) of the Commercial Courts Act, 2015 includes disputes relating to intellectual-property rights, including registered and unregistered trade marks, within “commercial disputes”.

Sections 3 and 3(1A) empower constitution and notification of Commercial Courts at the District level and prescribe their pecuniary jurisdiction, while Section 15 provides for transfer of pending suits and applications relating to commercial disputes of specified value; Section 21 gives the Act overriding effect only where inconsistency with another law exists.

In Kandla Export Corporation v. OCI Corporation, the Court treated the Arbitration and Conciliation Act, 1996 as a self-contained special code prevailing over the general appellate provision in the Commercial Courts Act.

Conversely, Jaycee Housing Pvt. Ltd. v. Registrar (General), Orissa High Court held that the later-enacted Commercial Courts Act could prevail over the forum provisions of the Arbitration Act in specified circumstances by virtue of Sections 3, 10, 15 and 21.

The Gujarat High Court in Fun N. Fud v. GLK Associates held that an application under Section 9 of the Arbitration Act was maintainable only before the District Court having principal civil jurisdiction.

The Court identified the governing interpretive question as whether the Commercial Courts Act was inconsistent with, and therefore capable of overriding, Section 134 of the Trade Marks Act, or whether Section 134 continued to require adjudication by a District Court.

The Court observed that the Commercial Courts Act deals with the broad genus of commercial disputes, while trade-mark disputes constitute only one species within that genus under Section 2(1)(c)(xvii).

However, Section 134 of the Trade Marks Act specifically mandates that the relevant suit must be instituted before a District Court and prohibits filing before an inferior court.

According to the Court, the Commercial Courts Act is not inherently inconsistent with this restriction because it permits High Courts to notify District Courts as Commercial Courts.

The difficulty arises when a Civil Judge (Senior Division), who is hierarchically inferior to a District Judge, is notified as a Commercial Court and is thereby given jurisdiction over trade-mark suits.

This creates practical and statutory anomalies: in Jharkhand, suits below the specified value would be filed before the District Court, whereas higher-value suits could be filed before the Civil Judge (Senior Division), despite Section 134’s apparently uniform District Court requirement.

It also raises concerns regarding the appellate hierarchy, since an appeal from the Civil Judge (Senior Division) would lie to the District Court rather than directly to the High Court.

The Court further noted divergent approaches in Kandla Export Corporation and Jaycee Housing, and observed that differing State notifications had produced non-uniform jurisdictional consequences.

Because the question involved the interaction of two statutory schemes and required uniform resolution, the Court declined to finally determine the issue in the present order and considered reference to a larger Bench necessary.

It held that the apparent conflict between the relevant precedents and the differing State-level notifications required consideration by a larger Bench, particularly to ensure uniformity and to determine whether the legislative mandate of Section 134 could be diluted by a notification issued under the Commercial Courts Act.

The matter was directed to be placed before the Chief Justice of India for appropriate orders.

Commercial Suit No. 11 of 2023 pending before the Civil Judge (Senior Division)-I, Jamshedpur, was stayed.