07 June 2022

IPR suits, even those valued below INR 0.3 million, to be instituted before District Judge (Commercial)

The Delhi High Court has directed that all IPR suits are to be instituted before the District Judge (Commercial) and if IPR suit is valued below INR 0.3 million (INR 3 lakh), the Commercial Court shall examine the specified value and suit valuation to ensure it is not arbitrary or unreasonable and the suit is not undervalued.

The Court has further directed that upon such examination, the concerned Commercial Court would pass appropriate orders in accordance with law either directing the plaintiff to amend the plaint and pay the requisite Court fee or to proceed with the suit as a non-commercial suit. The High Court in this regard however clarified that the Commercial Court is not expected to value the specific IP on the basis of any mathematical formulae but to broadly take into consideration whether the said IP would be worth more than INR 3 lakh, which is the threshold for the Commercial Court to exercise jurisdiction.

It may be noted that as per Court’s decision dated 3 June 2022, even such suits which may be valued below INR 0.3 million and continue as non-commercial suits, shall also continue to be listed before the District Judge (Commercial), but may not be subjected to the provisions of the Commercial Courts Act, 2015. According to the High Court, this will maintain consistency and clarity in adjudication.

All pending IPR suits before the different District Judges (non-Commercial) in Delhi are now to be placed before the concerned District Judges (Commercial) for following the new procedure. The Judgement also clarifies that plaintiffs who wish to amend the Plaint would be permitted to do so in accordance with law.

While passing the above directions, the High Court in the case Vishal Pipes Limited v. Bhavya Pipe Industry, noted that the only reason for which IPR disputes may be valued below INR 0.3 million by litigants or lawyers would be to indulge in forum shopping, bench hunting and also be to escape the rigors of the provisions of the Commercial Courts Act, 2015.


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