Jurisdictional Conundrum: Can a Civil Judge (Senior Division) Acting as a Commercial Court Hear Trademark Passing Off Suits?

Introduction

The intersection of commercial law and intellectual property rights in India has created a complex landscape that continues to evolve through judicial interpretation. A recent Jharkhand High Court decision addressed the jurisdiction of Commercial Courts in India, particularly in cases involving trademark disputes and passing off claims. The case examined whether a Civil Judge (Senior Division), when acting as a Commercial Court, could hear such matters under the Trademarks Act, 1999. The ruling has important implications for businesses and trademark owners seeking timely and efficient resolution of commercial conflicts across the country.

The issue arises from an apparent conflict between two statutory provisions. On one hand, the Trademarks Act, 1999, through its provision dealing with jurisdiction, mandates that suits for trademark infringement and passing off must be instituted in courts not inferior to a District Court [1]. On the other hand, the Commercial Courts Act, 2015, as amended in 2018, empowers state governments to constitute Commercial Courts at various judicial levels, including below the District Judge level, to handle commercial disputes of specified value [2]. This conflict raises fundamental questions about statutory interpretation, legislative intent, and the practical administration of justice in intellectual property matters.

Understanding the Legislative Framework

The Trademarks Act, 1999 and Jurisdictional Mandates

The Trademarks Act, 1999, provides comprehensive protection for registered and unregistered trademarks in India. A critical provision governing jurisdiction in trademark disputes appears in the statute, which provides that no suit for infringement of a registered trademark, for passing off arising out of the use by the defendant of any trademark which is identical with or deceptively similar to the plaintiff’s trademark, whether registered or unregistered, shall be instituted in any court inferior to a District Court having jurisdiction to try the suit [1]. This provision establishes a clear jurisdictional floor, ensuring that trademark disputes are heard only in courts of a certain status and judicial competence.

The provision further clarifies that for purposes of trademark suits, a District Court having jurisdiction includes a District Court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or proceeding, or where there are more than one such person, any of them, actually and voluntarily resides or carries on business or personally works for gain [1]. This expanded definition of territorial jurisdiction was designed to provide trademark owners with flexibility in choosing a convenient forum, recognizing the nationwide nature of many trademark disputes. The Supreme Court of India has consistently held that this provision is not in exclusion of the general territorial jurisdiction provisions under the Code of Civil Procedure, 1908, but operates in addition to them [3].

The term District Court in Indian legal parlance has traditionally been understood to mean the principal civil court of original jurisdiction in a district, typically presided over by a District Judge. However, the Code of Civil Procedure, 1908, defines District Court to include the High Court in exercise of its ordinary original civil jurisdiction. This definition becomes particularly relevant when analyzing whether courts below the District Judge level can hear trademark matters.

The Commercial Courts Act, 2015: A Paradigm Shift

The Commercial Courts Act, 2015, represents a significant legislative intervention aimed at expediting the resolution of commercial disputes in India. The Act was enacted with the specific objective of providing for the constitution of Commercial Courts, Commercial Divisions, and Commercial Appellate Divisions in High Courts for adjudicating commercial disputes of specified value and connected matters [2]. The legislation emerged from a recognition that India’s business climate was being adversely affected by prolonged commercial litigation, with cases taking years to resolve through the regular court system.

Originally, the Act set the pecuniary jurisdiction threshold at disputes valued at one crore rupees or more. However, recognizing that this high threshold excluded a substantial volume of commercial disputes, the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Act, 2018, significantly reduced this threshold to three lakh rupees. This amendment was intended to make the specialized commercial court system accessible to a much broader range of commercial litigants, including small and medium enterprises.

The Act specifically includes intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications, and semiconductor integrated circuits within the definition of commercial disputes [2]. This inclusion was deliberate, recognizing that intellectual property disputes constitute a significant portion of commercial litigation and require expedited resolution to protect business interests effectively.

Crucially, the Act empowers state governments, after consultation with the concerned High Court, to constitute Commercial Courts at the district level or even below the level of a District Judge. The amended provision allows state governments to specify the pecuniary value for such courts, which shall not be less than three lakh rupees and can vary for different parts of the state [2]. This flexibility was designed to enable states to create a tiered system of commercial courts appropriate to their local needs and judicial infrastructure.

The Jharkhand High Court Decision: Resolving the Conflict

The jurisdictional conflict came to a head in the case involving M/s Khemka Food Products Pvt. Ltd., a company engaged in the production and sale of wheat flour under the trademark Grihasti Bhog. The company had been using this mark since the early 2000s and had filed multiple applications for trademark registration, though these applications were subsequently abandoned. In February 2023, the company discovered that another entity was selling wheat flour under an identical mark, leading to the issuance of a cease and desist notice.

Following the failure of pre-institution mediation as required under the Commercial Courts Act, the company filed a commercial suit before the Civil Judge (Senior Division)-I-cum-Commercial Court at Jamshedpur in August 2023. The suit, involving a trademark passing off claim, was valued at five lakh five thousand rupees, falling within the pecuniary limits specified for Commercial Courts in Jharkhand. However, the respondents challenged the jurisdiction of the court, arguing that the Trademarks Act requires such suits to be filed before a District Court, which they interpreted as meaning courts presided over by District Judges or higher judicial officers, thereby excluding Civil Judges (Senior Division).

The trial court initially accepted this argument and ordered the return of the plaint for presentation before a court with proper jurisdiction. This order prompted an appeal to the Jharkhand High Court, where a bench comprising Chief Justice Tarlok Singh Chauhan and Justice Sujit Narayan Prasad examined the intricate interplay between the two statutes [4].

The High Court’s analysis began with a fundamental principle of statutory interpretation: when two statutes operate in the same field, they must be read harmoniously to give effect to both unless there is an irreconcilable conflict. The Court examined the legislative framework established by both the Trademarks Act and the Commercial Courts Act, paying particular attention to the legislative intent behind each statute.

The Court emphasized that the Commercial Courts Act, 2015, contains a non-obstante clause indicating its overriding effect over other laws in matters of commercial disputes. This clause is significant in statutory interpretation, as it indicates the legislature’s intention that the provisions of the Commercial Courts Act should prevail over conflicting provisions in other statutes when dealing with commercial disputes. The Court noted that trademark infringement and passing off suits clearly fall within the definition of commercial disputes under the Act.

Significantly, the Court examined the notifications issued by the State of Jharkhand pursuant to the powers conferred by the Commercial Courts Act. Notification No. 206/J dated February 8, 2021, specifically designated Civil Judges (Senior Division) as Commercial Courts for disputes valued between three lakh rupees and one crore rupees. The Court held that when a state government exercises its power to constitute Commercial Courts at the Civil Judge (Senior Division) level, such courts become competent to hear all commercial disputes within their pecuniary jurisdiction, including trademark matters [4].

The Court further clarified the meaning of District Court in the context of the Trademarks Act. Drawing upon the definition provided in the Code of Civil Procedure, 1908, the Court held that the term District Court includes not only the court of the District Judge but also courts within the district hierarchy when they are specifically designated for particular purposes. When a Civil Judge (Senior Division) is designated as a Commercial Court, that court becomes part of the district court system for purposes of commercial disputes, including trademark litigation.

The High Court’s reasoning rested on several key pillars. First, it recognized the legislative intent behind the Commercial Courts Act to provide speedy and efficient resolution of commercial disputes, including intellectual property matters. Restricting trademark suits only to District Judges would defeat this purpose by creating bottlenecks and delays. Second, the Court acknowledged that the 2018 amendments to the Commercial Courts Act, which reduced the pecuniary threshold and allowed for constitution of Commercial Courts below District Judge level, represented a conscious legislative choice to expand access to specialized commercial adjudication.

Third, the Court applied the principle that later legislation, when it specifically addresses a subject and contains provisions indicating an intention to override earlier law, should be given effect. The Commercial Courts Act, being a later enactment with specific provisions for intellectual property disputes and containing an overriding clause, should prevail over the jurisdictional requirement in the Trademarks Act when both statutes are applicable to the same dispute. Consequently, the Jharkhand High Court allowed the appeal and restored the suit to its original number, directing the trial court to proceed in accordance with law [4].

Precedents and Judicial Interpretation

The jurisdictional framework for trademark disputes has been shaped by several landmark decisions of Indian courts. The Supreme Court of India, in a seminal judgment, interpreted the provisions relating to territorial jurisdiction in copyright and trademark suits. The Court held that the special jurisdiction provisions in intellectual property statutes are not in exclusion of the general territorial jurisdiction rules under the Code of Civil Procedure but operate in addition to them [3]. This principle recognizes that intellectual property owners should have multiple options for choosing a convenient forum, given the often nationwide scope of infringement.

The Delhi High Court has also contributed significantly to the jurisprudence on territorial jurisdiction in trademark matters. In cases involving allegations of trademark infringement and passing off, the Court has held that jurisdiction can be invoked not only where the plaintiff or defendant resides or carries on business, but also where the cause of action arises. The Court has adopted a broad interpretation of what constitutes use of a trademark within a jurisdiction, holding that activities such as advertising, promoting business under the mark, inviting franchisee queries, and even open declarations of intention to expand business constitute use sufficient to establish territorial jurisdiction [5].

Several High Courts have clarified that Commercial Courts have jurisdiction over trademark passing off matters, ensuring that intellectual property disputes can be resolved efficiently within the specialized commercial dispute framework. Courts have consistently recognized that Commercial Courts were enacted as a special mechanism to expedite commercial disputes, and that intellectual property rights disputes, being commercial in nature, fall squarely within their ambit. The decisions have emphasized that the objective of Commercial Courts — to provide time-bound resolution of commercial disputes — should not be frustrated by overly restrictive interpretations of jurisdictional provisions.

However, the jurisprudence has also recognized certain limitations and safeguards. Courts have been vigilant against potential abuse of the flexible jurisdiction provisions in trademark statutes. The Supreme Court has cautioned that while trademark owners have the benefit of choosing a convenient forum, this right should not be exercised to harass defendants by dragging them to distant and inconvenient jurisdictions. The legislative intent behind providing additional forums was to facilitate access to justice for trademark owners, not to create opportunities for forum shopping or harassment.

Regulatory Framework and Procedural Considerations

The Commercial Courts Act establishes a comprehensive regulatory framework that significantly differs from ordinary civil procedure. The Act mandates strict timelines for various stages of litigation, with the objective of ensuring expedited resolution. A written statement must be filed within thirty days of service of summons, extendable by the court for sufficient cause up to a maximum of one hundred twenty days from the date of service, but not beyond [6]. This provision represents a significant departure from the more flexible timelines under the general Code of Civil Procedure.

The Act requires that all documents on which a party relies must be filed along with the plaint or written statement. This front-loading of documents is designed to prevent the delays associated with progressive filing of documents throughout the trial. Additionally, parties are required to file an affidavit of admission or denial of documents filed by the other side, ensuring that only genuinely disputed documents require formal proof.

One of the most significant procedural innovations is the case management hearing system. The Commercial Courts Act mandates that after completion of pleadings, the court must hold a case management hearing to identify the real issues in dispute, streamline the evidence to be led, and set a strict timeline for trial. The Act provides that the trial and arguments must be concluded within six months from the date of the first case management hearing, and judgment must be pronounced within ninety days thereafter [6].

The Act also provides for the imposition of costs on parties who fail to adhere to the prescribed timelines or engage in dilatory tactics. Courts are empowered to award actual costs, including legal fees and expenses incurred in connection with the proceedings. This cost mechanism serves as both a deterrent against delay and a compensation mechanism for the aggrieved party.

For suits involving intellectual property rights, including trademark disputes, the Act incorporates the specific jurisdictional provisions of the respective intellectual property statutes. This means that while the procedural framework is governed by the Commercial Courts Act, the substantive rights and the basic jurisdictional framework continue to be determined by the Trademarks Act. However, the overriding effect of the Commercial Courts Act ensures that when a Civil Judge (Senior Division) is designated as a Commercial Court, that court has jurisdiction over trademark suits falling within its specified value.

The Broader Context: High Courts with Original Jurisdiction

The jurisdictional analysis becomes more complex when considering High Courts that exercise ordinary original civil jurisdiction. In India, five High Courts – Delhi, Bombay, Calcutta, Madras, and Himachal Pradesh – have been vested with original jurisdiction to hear civil suits as courts of first instance. For these High Courts, the Commercial Courts Act mandates the constitution of Commercial Divisions to hear commercial disputes of specified value filed on their original side.

A critical provision of the Act specifically addresses trademark and other intellectual property suits in these jurisdictions. The Act provides that all suits and applications relating to commercial disputes, stipulated by any Act to lie in a court not inferior to a District Court, and filed or pending on the original side of the High Court, shall be heard and disposed of by the Commercial Division of the High Court [2]. This provision has been interpreted to mean that in territories where a High Court exercises original jurisdiction, trademark suits must be filed before the Commercial Division of that High Court, rather than before subordinate Commercial Courts.

The Madras High Court has specifically held that when the cause of action for a trademark infringement suit arises within the territorial jurisdiction of the High Court’s original jurisdiction, the suit must be filed before the Commercial Division of the High Court and cannot be filed before any other court, including Commercial Courts at the district level [7]. This interpretation is based on the understanding that the term District Court in the Trademarks Act includes the High Court when it exercises original civil jurisdiction, and the first proviso to the Commercial Courts Act mandates that such suits on the original side must be heard by the Commercial Division.

This distinction creates a bifurcated system where the jurisdictional rules differ based on whether the High Court in that territory exercises original jurisdiction. In territories with original jurisdiction, trademark owners must approach the High Court’s Commercial Division, while in other territories, they have the option of approaching Commercial Courts at the district or Civil Judge (Senior Division) level, depending on the pecuniary value and state notifications.

Practical Implications and Access to Justice

The Jharkhand High Court’s decision has significant practical implications for trademark litigation across India. By affirming that Civil Judges (Senior Division) designated as Commercial Courts can hear trademark suits within their pecuniary jurisdiction, the decision expands access to specialized adjudication for a broader range of trademark disputes. Small and medium enterprises, which often have trademark disputes valued below one crore rupees but above three lakh rupees, can now approach Commercial Courts at the Civil Judge (Senior Division) level, where such courts have been constituted.

This expanded access is particularly important in tier-two and tier-three cities where businesses may not have easy access to District Courts located in district headquarters. The ability to approach a Commercial Court at the Civil Judge (Senior Division) level in their own locality can significantly reduce the cost and inconvenience of litigation. It also alleviates the burden on District Courts, which are often overwhelmed with cases, allowing for more efficient case management and potentially faster resolution.

However, the decision also creates certain complexities. The jurisdictional landscape now varies significantly across different states and even within states, depending on how each state has exercised its power to constitute Commercial Courts. Some states may have designated Commercial Courts at the Civil Judge (Senior Division) level for certain pecuniary values, while others may have limited Commercial Courts to the District Judge level. This variation can create confusion and may lead to jurisdictional challenges at the threshold of cases.

The decision also raises questions about the uniformity of judicial expertise in trademark matters. District Courts have traditionally handled trademark litigation and have developed specialized knowledge in this area. When trademark suits are distributed across courts at various levels, there is a risk of inconsistent application of trademark law principles. This concern is partly addressed by the fact that Commercial Courts, even at lower levels, are supposed to be presided over by judges with experience in dealing with commercial disputes, and by the fact that appellate review provides a mechanism for ensuring consistency.

From a policy perspective, the decision aligns with the broader objective of judicial reforms aimed at expediting commercial dispute resolution. The establishment of Commercial Courts at multiple levels creates a specialized track for commercial litigation, potentially leading to faster disposal of cases. The strict timelines and procedural requirements under the Commercial Courts Act, when effectively implemented, can significantly reduce the time taken to resolve trademark disputes.

Conclusion

The question of whether a Civil Judge (Senior Division), acting as a Commercial Court, can hear trademark passing off suits has been answered affirmatively by the Jharkhand High Court, representing a major development in commercial and intellectual property law in India. The ruling clarifies the jurisdiction of Commercial Courts in trademark matters, while recognizing the overriding effect of the Commercial Courts Act, 2015, and harmonizing it with the provisions of the Trademarks Act, 1999. This interpretation expands access to justice without compromising the integrity of the specialized court system for commercial disputes.

The ruling acknowledges that when state governments, in exercise of their statutory powers, designate Civil Judges (Senior Division) as Commercial Courts for specified pecuniary values, those courts become competent to hear all commercial disputes within their jurisdiction, including trademark infringement and passing off suits. This interpretation gives effect to the legislative intent behind the Commercial Courts Act to provide expedited resolution of commercial disputes across different levels of the judiciary.

However, the jurisdictional landscape remains complex, with variations across different states and special rules applicable to High Courts exercising original jurisdiction. The interpretation of the term District Court in the Trademarks Act as including courts within the district hierarchy when specifically designated for commercial disputes represents a flexible and purposive approach to statutory interpretation, one that balances the need for accessible justice with the requirement for judicial competence in specialized areas.

As India continues to strengthen its intellectual property regime and improve its ease of doing business rankings, the effective functioning of Commercial Courts at various levels will be crucial. The success of this multi-tiered system will depend not only on jurisdictional clarity but also on ensuring that judges at all levels of Commercial Courts receive adequate training in trademark law and commercial disputes, that the strict timelines mandated by the Commercial Courts Act are enforced, and that the quality of adjudication remains consistent across different levels of courts.

The legal community and business stakeholders must also adapt to this evolving jurisdictional framework. Trademark owners need to be aware of the options available to them in different jurisdictions and make informed choices about forum selection. At the same time, courts must remain vigilant against potential abuse of the flexible jurisdiction provisions and ensure that the expanded access to Commercial Courts serves the cause of justice rather than facilitating harassment through litigation.

Whether this decision will be examined by the Supreme Court of India remains to be seen. If an appeal is filed, the Supreme Court would have the opportunity to provide authoritative guidance on the jurisdictional interplay between the Commercial Courts Act and the Trademarks Act, potentially settling the law uniformly across the country. Until then, the Jharkhand High Court’s decision provides important guidance for trademark litigants in states that have constituted Commercial Courts at the Civil Judge (Senior Division) level, affirming that these courts are competent forums for adjudicating trademark disputes within their prescribed pecuniary limits.

References

[1] The Trade Marks Act, 1999, Section 134. Available at: https://indiankanoon.org/doc/969470/

[2] The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015. Available at: https://www.indiacode.nic.in/bitstream/123456789/2156/1/a2016-04.pdf

[3] Indian Performing Rights Society Ltd. v. Sanjay Dalia, (2015) 10 SCC 161. Available at: https://www.iiprd.com/jurisdiction-of-courts-under-section-62-of-the-copyright-act-and-section-134-of-the-trademarks-act/

[4] M/s Khemka Food Products Pvt. Ltd. v. I.S.D.S. Private Limited and others, Jharkhand High Court (August 2024). Available at: https://www.livelaw.in/high-court/jharkhand-high-court/jharkhand-high-court-civil-judge-sr-division-jurisdiction-try-trademark-infringement-suits-3-lakh-1-crore-301046

[5] Burger King Corporation v. Techchand Shewakramani, Delhi High Court (2018). Available at: https://www.barandbench.com/news/jurisdiction-trademark-infringement-cpc-tm-act-delhi-hc

[6] The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Act, 2018. Available at: https://prsindia.org/billtrack/the-commercial-courts-commercial-division-and-commercial-appellate-division-of-high-courts-amendment-bill-2018

[7] K.T.V. Health Food Private Limited v. Kalasakthi Agro Private Limited, MANU/TN/6676/2023, Madras High Court. Available at: https://cdnbbsr.s3waas.gov.in/s3ec029bd5ee6fe55aaeb673025dbcb8f9/uploads/2024/08/2024081942.pdf