In a brief but significant order, the Allahabad High Court on Thursday set aside a Commercial Court direction returning a trademark infringement plaint for not following the mandatory pre-litigation mediation requirement under Section 12-A of the Commercial Courts Act. The High Court clarified that the Supreme Court’s ruling making such mediation mandatory would only apply to suits filed after August 20, 2022 - not earlier cases.
The matter concerned M/s Jay Chemical Works (the appellant) and M/s Sai Chemicals (respondent), in a dispute over alleged trademark misuse.
Background
The original suit was filed in 2020 before the Commercial Court in Kanpur Nagar. The plaintiff sought a permanent injunction to stop the defendant from allegedly using a deceptively similar trademark on chemical products. For nearly four years, the case moved slowly. Then, in 2024, the defendant raised an objection: the plaintiff had not attempted pre-institution mediation, which the Commercial Courts Act now requires before filing commercial suits.
Relying on the Supreme Court’s 2022 judgment in Patil Automation Pvt Ltd v. Rakheja Engineers Pvt Ltd, the Commercial Court returned the plaint under Order VII Rule 10 of the Civil Procedure Code. Returning a plaint means the plaintiff must file it again after curing defects, essentially restarting the case.
The appellant argued that this was unfair, given that their suit began in 2020, much earlier than the Supreme Court's clarification on the mandatory nature of Section 12-A.
Court’s Observations
The Division Bench of Chief Justice Arun Bhansali and Justice Kshitij Shailendra heard the matter. The respondent’s counsel first argued that the appeal itself was not maintainable. But the Bench rejected that objection and stated:
“The Commercial Court has exercised powers under Order VII Rule 10 CPC, which is appealable under Order XLIII Rule 1(a). Therefore, the appeal is maintainable.”
The High Court carefully reviewed the Supreme Court’s ruling in Patil Automation. Importantly, in that judgment, the Supreme Court had declared that the requirement of pre-institution mediation is mandatory, but the enforcement of this requirement was made prospective-effective from August 20, 2022.
The bench observed:
“As the present suit was filed prior to the date indicated by the Supreme Court, the said judgment has no application to the facts of the present case.”
This line of reasoning meant that the Commercial Court had incorrectly applied the Patil Automation verdict to a case filed before the effective date.
Decision
Setting aside the Commercial Court’s September 2024 order, the High Court allowed the appeal. The plaint will now be restored to the stage at which it was returned. The judges further directed:
The Commercial Court should now proceed “with adequate expedition,” noting that the matter has already been pending since 2020.
The order stops here - the merits of the trademark claim remain to be decided at the trial stage.
Case: M/s Jay Chemical Works vs. M/s Sai Chemicals (2025, Allahabad High Court)
Court: High Court of Judicature at Allahabad, Chief Justice’s Court
Bench: Chief Justice Arun Bhansali and Justice Kshitij Shailendra
Case Type: Commercial Appeal No. 27 of 2025
Original Suit Filed: 12 August 2020, Commercial Court, Kanpur Nagar
Issue: Trademark infringement and request for permanent injunction
Appellant’s Argument: Supreme Court judgment (Patil Automation, 2022) applies prospectively, so mediation was not mandatory in 2020
Respondent’s Objection: Appeal is not maintainable under Section 13(1A) of Commercial Courts Act