Introduction
When a business approaches a court seeking protection of its trademark, one of the first hurdles it must cross is establishing that the court has the authority to hear the case. This authority, known as jurisdiction, often depends on something as seemingly mundane as the monetary value assigned to the dispute. Yet, as this judgement from the Karnataka High Court demonstrates, valuation disputes can become surprisingly complex, especially when a litigant changes its position midway through proceedings.
This case is significant for multiple reasons. First, it addresses a long-debated question about whether the High Court can intervene under its supervisory powers when a Commercial Court passes an interlocutory order, particularly given the restrictions imposed by the Commercial Courts Act, 2015.
Second, it deals with the practical problem of how courts should value “intangible rights” such as trademarks for the purpose of deciding whether a case belongs before a commercial court or an ordinary civil court.
Third, and perhaps most importantly for litigants and practitioners, it cautions against parties taking inconsistent positions on valuation to suit their convenience, a practice sometimes described as forum shopping.
Key Issues Addressed in the Judgment
| Issue | Importance |
|---|---|
| Supervisory Jurisdiction of High Court | Examines whether the High Court can interfere with interlocutory orders passed by commercial courts despite statutory restrictions. |
| Valuation of Trademark Rights | Clarifies how intangible intellectual property rights should be valued for jurisdictional purposes. |
| Commercial Court vs Civil Court Jurisdiction | Determines the appropriate forum for adjudication based on the value of the dispute. |
| Forum Shopping Concerns | Addresses the consequences of litigants adopting inconsistent valuation positions during litigation. |
Why This Case Matters
- Provides guidance on jurisdictional challenges in trademark and intellectual property disputes.
- Explains the valuation principles applicable to intangible rights.
- Clarifies the relationship between commercial courts and ordinary civil courts.
- Highlights judicial disapproval of inconsistent litigation strategies and forum shopping.
- Offers practical insights for businesses, litigants, lawyers, and courts handling commercial disputes.
Practical Significance for Stakeholders
For businesses engaged in intellectual property disputes, lawyers handling commercial litigation, and even courts grappling with similar valuation questions, this judgement offers valuable clarity on how such issues ought to be approached.
Factual and Procedural Background
The dispute traces back to a suit filed by the respondent, a partnership firm, against the petitioner company, alleging infringement of its registered trademark “TULASI”. The respondent had approached the Civil Court seeking a permanent injunction and managed to obtain an ex parte temporary injunction in its favour shortly after filing the suit.
Once the petitioner appeared before the Civil Court and raised objections regarding maintainability, the Civil Court directed the respondent to disclose the specified value of the suit as required under Section 12 of the Commercial Courts Act, 2015. In response, the respondent filed a memo stating that the specified value of the suit exceeded Rs.300,000. Based on this declaration, the Civil Court returned the plaint for presentation before the Commercial Court, since disputes involving registered trademarks valued above this threshold fall within the domain of Commercial Courts under the Act.
The plaint was, accordingly, re-registered before the Commercial Court. The respondent then went a step further and sought an amendment to its plaint, adding a fresh paragraph specifically asserting that the market value of the “TULASI” trademark, as estimated by the plaintiff, exceeded Rs.300,000, thereby justifying the Commercial Court’s jurisdiction.
However, the story took an unexpected turn. The respondent subsequently filed an application under Order VII Rule 10 of the Code of Civil Procedure, this time contending that the specified value of the suit was actually below Rs.300,000, and therefore the matter should be sent back to the ordinary Civil Court. This reversal was based on an order passed in a separate suit filed by the same respondent against a different defendant, where another Commercial Court had observed that the value of the respondent’s rights in the same trademark was below the threshold.
The petitioner opposed this application, arguing that the respondent could not be allowed to take such a contradictory stand after having earlier invoked the Commercial Court’s jurisdiction on its own assertion. Despite this objection, the Commercial Court allowed the respondent’s application and directed that the plaint be returned to the Civil Court. This order, passed on a date corresponding to August 2025, became the subject matter of challenge before the High Court.
Following the impugned order, the respondent refiled the suit before the Civil Court, where it was registered as a fresh proceeding. The High Court, while examining this petition, also stayed further proceedings in both the Commercial Court suit and the subsequently filed Civil Court suit.
Interestingly, this petition was heard alongside a batch of other petitions raising a common question: whether interim or interlocutory orders passed by commercial courts are amenable to challenge under Article 227 of the Constitution, given the restrictions contained in Section 8 of the Commercial Courts Act. An amicus curiae was appointed to assist the court on this larger question, and arguments on both the maintainability issue and the merits of the present case were heard together.
Procedural Timeline
| Stage | Key Development |
|---|---|
| Suit Filed | The respondent filed a trademark infringement suit concerning “TULASI”. |
| Interim Relief | Ex parte temporary injunction granted by the Civil Court. |
| Valuation Disclosure | The respondent stated that the specified value exceeded Rs.300,000. |
| Transfer to Commercial Court | The plaint was returned and presented before the Commercial Court. |
| Plaint Amendment | The respondent asserted that the trademark value exceeded Rs.300,000. |
| Order VII Rule 10 Application | The respondent later claimed the value was below Rs.300,000. |
| Commercial Court Order | Plaint directed to be returned to the Civil Court. |
| High Court Challenge | Petitioner challenged the order before the High Court. |
| Stay granted. | Further proceedings in both courts were stayed. |
Dispute Before the Court
At its core, this case presented two intertwined questions, one procedural and one substantive.
Procedural Question: Maintainability of Article 227 Petition
The procedural question was whether a petition filed under Article 227 of the Constitution challenging an order of a commercial court is maintainable at all, given that Section 8 of the Commercial Courts Act bars civil revision applications or petitions against interlocutory orders of such courts. If maintainable, the court also had to determine the extent to which it should interfere with such orders, particularly keeping in mind the legislative intent behind the Commercial Courts Act to ensure speedy resolution of commercial disputes.
Substantive Question: Change in Valuation of the Suit
The substantive question revolved around the conduct of the respondent in changing its stance on the valuation of the suit. The petitioner argued that having once asserted, through a formal memo and an amendment application, that the value of its trademark rights exceeded Rs.300,000 (and having obtained the benefit of this assertion by getting the matter transferred to the Commercial Court), the respondent could not be permitted to reverse this position simply because it suited a different litigation strategy. According to the petitioner, this amounted to forum shopping and an abuse of the legal process, forcing the petitioner to chase the case across different courts.
The respondent, on the other hand, contended that as the “dominus litis” (master of the suit), it had the right to value its own claim and that this valuation could be revised based on subsequent developments, particularly the observations made by another Commercial Court in a separate suit involving the same trademark. The respondent also pointed to earlier proceedings involving the same mark where courts had accepted a lower valuation.
The amicus curiae, appointed specifically to address the broader question of Article 227’s applicability to commercial court orders, argued that while this supervisory power is a constitutional safeguard that cannot be taken away by any statute, it must be exercised with extreme caution, particularly in commercial matters where speed of disposal is a legislative priority.
Key Issues for Determination
- Whether an Article 227 petition challenging a Commercial Court order is maintainable despite Section 8 of the Commercial Courts Act.
- Whether the High Court should exercise supervisory jurisdiction over interlocutory orders passed by commercial courts.
- Whether the respondent could legally alter its stand regarding the valuation of the suit after invoking Commercial Court jurisdiction.
- Whether such conduct amounted to forum shopping or abuse of the judicial process.
- Whether the plaint should remain before the Commercial Court or be returned to the ordinary Civil Court.
Core Contentions of the Parties
| Petitioner | Respondent |
|---|---|
| Respondent previously asserted that the suit value exceeded Rs.3,00,000. | As dominus litis, the plaintiff has the right to value the suit. |
| Commercial Court jurisdiction was invoked based on the respondent’s own declaration. | Valuation can be revised based on subsequent developments. |
| Changing the valuation amounts to forum shopping. | Another Commercial Court had observed a lower valuation for the same trademark rights. |
| The respondent should not be allowed to approbate and reprobate. | Earlier proceedings involving the same mark had accepted lower valuation figures. |
Reasoning and Analysis of the Court
The court’s analysis proceeded in a structured manner, first addressing the question of maintainability and the scope of Article 227 before turning to the specific facts of the valuation dispute.
Maintainability and Scope of Article 227
On the question of maintainability, the Court extensively relied on the foundational principle laid down by the Supreme Court in L. Chandra Kumar v. Union of India, (1997) 3 SCC 261, which held that the power of judicial review and superintendence vested in High Courts under Articles 226 and 227 forms part of the basic structure of the Constitution and cannot be excluded by any legislative enactment. This meant that no matter what restrictions the Commercial Courts Act imposes through Section 8, the constitutional power under Article 227 remains intact.
The Court then turned to Surya Dev Rai v. Ram Chander Rai, (2003) 6 SCC 675, where the Supreme Court clarified that even interlocutory orders, against which statutory revision has been barred, remain open to challenge under the High Court’s supervisory jurisdiction. However, this jurisdiction is to be exercised only where the subordinate court has acted without jurisdiction, in excess of jurisdiction, or in a manner causing grave injustice, and not merely to correct errors of fact or law where two views are reasonably possible.
The Court further discussed Shalini Shyam Shetty v. Rajendra Shankar Patil, (2010) 8 SCC 329, which reiterated that the power under Article 227 is meant to keep subordinate courts within the bounds of their authority and is not to be exercised as an appellate remedy. The Supreme Court in that case had cautioned that this power, though unfettered, is subject to a high degree of judicial discipline and should be used sparingly.
Interaction Between Article 227 and the Commercial Courts Act
On the specific question of how Article 227 interacts with the Commercial Courts Act, the court examined the Delhi High Court’s Division Bench ruling in M/s. C.P. Rama Rao Sole Proprietor v. National Highways Authority of India, 2024 SCC OnLine Del 7342, and the earlier decision in Black Diamond Trackparts Pvt. Ltd. v. Black Diamond Motors Pvt. Ltd., 2021 SCC OnLine Del 3946 (a decision whose correctness was later affirmed by the Supreme Court when a challenge to it was dismissed).
These cases held that the word “petition” in Section 8 of the Commercial Courts Act refers only to revision petitions and not to petitions under Article 227, and therefore the statutory bar does not extend to constitutional remedies. Similar reasoning was found in:
- State of Gujarat v. Union of India, 2018 SCC OnLine Guj 1515
- Pravinchandra v. Hemant Kumar, 2023:BHC-NAG:16159
At the same time, the Court drew guidance from how the Supreme Court has approached similar tensions in the context of the Arbitration and Conciliation Act 1996.
In Deep Industries Ltd v. ONGC, (2020) 15 SCC 706, and Bhaven Construction v. Sardar Sarovar Narmada Nigam Ltd, (2022) 1 SCC 75, the Supreme Court held that while Article 227 remains available even against orders passed under self-contained statutory codes, High Courts should be extremely circumspect in interfering, restricting intervention to situations where a party is left remediless or where bad faith is clearly demonstrated.
The Karnataka High Court found this reasoning equally applicable to the Commercial Courts Act, which similarly aims at speedy and efficient disposal of commercial disputes through Sections 8 and 13.
Valuation Under Section 12 of the Commercial Courts Act
Turning to the substantive valuation issue, the Court examined Section 12 of the Commercial Courts Act in detail.
| Provision | Subject Matter |
|---|---|
| Section 12(1)(a) | Money claims |
| Section 12(1)(b) | Movable property |
| Section 12(1)(c) | Immovable property |
| Section 12(1)(d) | Any other intangible right |
While Sections 12(1)(a) to (c) deal with valuation for money claims, movable property, and immovable property, respectively, Section 12(1)(d) specifically governs “any other intangible right” and states that the market value as estimated by the plaintiff shall be taken into account.
The Court also noted:
- Section 2(1)(c)(xvii), which classifies disputes relating to registered and unregistered trademarks as commercial disputes.
- Section 2(1)(i), which defines “specified value” as the value determined under Section 12, which cannot be less than Rs.300,000.
Petitioner’s Reliance on the Kirloskar AAF Case
The court examined the petitioner’s reliance on Kirloskar AAF Limited v. M/s. American Air Filters, RFA 1/2015, where a coordinate bench had observed that the value of a trademark infringement dispute involving a company could “safely” be taken as exceeding Rs.300,000, even without specific evidence.
However, the Court distinguished this case on facts, noting that the present matter was at a different procedural stage where the respondent had already made specific assertions about valuation, which were later contradicted.
Bangalore Blues and Gangadharappa Decisions
The court also discussed the following:
- Bangalore Blues Entertainment India Pvt. Ltd. v. One Ikigai Edutech Pvt. Ltd., 2023 SCC OnLine Kar 177
- Gangadharappa Munindra Kumar v. M/s Eaglesight Media Pvt. Ltd., 2022 SCC OnLine Kar 1859
The Court observed that these dealt with situations where the specified value had not been mentioned in the plaint at all, a stage already crossed in the present case.
The court noted that the reasoning in Bangalore Blues had relied on a Delhi High Court single-judge decision in Vishal Pipes Limited v. Bhavya Pipe Industry, which had since been substantially overruled by a Division Bench in Pankaj Ravjibhai Patel trading as Rakesh Pharmaceuticals v. SSS Pharmachem Pvt. Ltd., 2023 SCC Online Del 7013.
Significance of the Pankaj Ravjibhai Patel Ruling
The discussion of the Pankaj Ravjibhai Patel case proved particularly significant.
The Delhi High Court Division Bench had clarified the following:
- It would be incorrect to assume that intellectual property disputes are necessarily valued above Rs.300,000.
- It would also be incorrect to assume that valuations below this threshold are automatically the result of bad faith.
- Where a dispute arises about whether a valuation has been deliberately understated, the competent court hearing the matter itself can examine the issue.
- If satisfied that the valuation was incorrect or actuated by ulterior motives, the court may direct amendment of the plaint and payment of additional court fees.
- Such examination need not be transferred to a separate commercial court merely for this purpose.
Application of Law to the Facts
Applying this framework to the facts, the Court observed that the respondent had indeed asserted contradictory valuations for the same intangible right, the trademark “TULASI”, at different points in the litigation.
However:
- No material had actually been placed before the Commercial Court to support either valuation.
- The Commercial Court itself had not undertaken any independent examination of the specified value.
- The Commercial Court had simply relied on an order passed in a different suit involving a different defendant.
- The earlier Commercial Court had relied on Section 12(1)(c), dealing with immovable property, instead of Section 12(1)(d), the provision applicable to intangible rights such as trademarks.
The Court found this approach problematic.
Given that the petitioner had specifically raised an allegation of mala fide conduct and forum shopping against the respondent, the Commercial Court was obligated to examine this allegation and independently determine the specified value in accordance with Section 12(1)(d), rather than mechanically adopting a determination made in an unrelated proceeding based on an incorrect statutory provision.
Availability of Alternative Remedy
On the question of whether an alternative remedy of appeal was available, the Court examined Order XLIII Rule 1(a) of the Code of Civil Procedure, which provides for an appeal against orders returning a plaint under Order VII Rule 10, except where the procedure under Order VII Rule 10A has been followed.
The Court noted the following legal position:
| Provision | Effect |
|---|---|
| Order XLIII Rule 1(a) CPC | An appeal lies against return of plaint under Order VII Rule 10 |
| Order VII Rule 10A CPC | Procedure for return of plaint with appearance before transferee court |
| Order VII Rule 10A(5) CPC | Bars appeal where plaintiff’s application for return of plaint has been allowed |
Since the Commercial Court had followed the Order VII Rule 10A procedure (fixing a date for appearance before the transferee court), and since Order VII Rule 10A(5) expressly bars an appeal where the plaintiff’s own application for return of the plaint has been allowed, the Court found that no appellate remedy was available to the petitioner.
This made the case an appropriate one for invoking Article 227.
Final Decision of the Court
The High Court allowed the writ petition and set aside the order of the Commercial Court that had directed the return of the plaint to the Civil Court.
The matter was remanded back to the Commercial Court with a specific direction to conduct a proper examination of the “specified value” as claimed by the respondent, taking into account the allegations of inconsistent positions and mala fides raised by the petitioner, and to pass a fresh order in accordance with the law.
The rights and contentions of both parties on this aspect were left open for consideration by the Commercial Court.
Given that the matter had already been pending for a considerable period, the court requested the Commercial Court to conduct this examination at the earliest opportunity.
The Court also directed that the matter be placed before the Chief Justice for appropriate administrative directions, particularly regarding the suggestion that a separate roster or procedural mechanism be considered for handling Article 227 petitions arising from commercial disputes, so as to further the speedy disposal objectives of the Commercial Courts Act.
Point of Law Settled
This judgement makes several important contributions to the law surrounding commercial litigation and supervisory jurisdiction.
Maintainability of Article 227 Petitions Against Commercial Court Orders
First, it reaffirms that a petition under Article 227 of the Constitution remains maintainable against orders, including interlocutory orders, passed by commercial courts, notwithstanding the bar contained in Section 8 of the Commercial Courts Act, 2015.
This is because the word “petition” in that section refers only to revision petitions under the Code of Civil Procedure and not to constitutional remedies, which cannot be curtailed by ordinary legislation.
Limited Exercise of Supervisory Jurisdiction in Commercial Matters
Second, and equally important, the judgement emphasises that this constitutional remedy must be exercised with considerable restraint in commercial matters.
Drawing parallels with how courts approach the Arbitration and Conciliation Act, the judgement suggests that interference should be limited to situations involving:
- Patent jurisdictional errors;
- Manifest injustice; or
- Cases where a party would otherwise be left without any remedy.
This approach ensures that the legislative goal of speedy disposal of commercial disputes is not defeated by routine recourse to writ jurisdiction.
Valuation of Intangible Rights and Specified Value
Third, on the substantive question of valuation, the judgement clarifies that for disputes involving intangible rights such as trademarks, Section 12(1)(d) of the Commercial Courts Act is the governing provision, requiring the court to consider the market value as estimated by the plaintiff.
However, this does not mean such estimation is beyond scrutiny.
Where a party raises a specific allegation that the valuation has been manipulated for forum shopping or is otherwise actuated by mala fides, particularly where the same litigant has taken inconsistent positions on the value of the same intellectual property right in different proceedings, the court hearing the matter must independently examine this question rather than mechanically relying on determinations made in unrelated proceedings, especially where those determinations were themselves based on an incorrect statutory provision.
Independent Verification of Valuation Findings
Finally, the judgement also serves as a reminder that courts cannot simply transplant findings on valuation from one suit to another involving different parties without independent verification, particularly when the correctness of the underlying reasoning itself is in question.
Key Legal Principles Emerging from the Judgment
| Legal Issue | Principle Settled by the Court |
|---|---|
| Article 227 Jurisdiction | Article 227 petitions remain maintainable against Commercial Court orders despite Section 8 of the Commercial Courts Act. |
| Scope of Interference | Supervisory jurisdiction should be exercised sparingly and only in exceptional circumstances. |
| Trademark Valuation | Section 12(1)(d) governs valuation of intangible rights such as trademarks. |
| Forum Shopping Allegations | Courts must independently examine allegations of manipulated valuation and mala fides. |
| Reliance on Prior Findings | Valuation findings from separate proceedings cannot be adopted mechanically without verification. |
Case Details
| Case Title | Kanpur Flowercycling Private Limited Vs Sarathi International Inc. |
|---|---|
| Date of Judgment/Order | 04.06.2026 |
| Case Number | Writ Petition No. 30565 of 2025 (IPR) |
| Neutral Citation | 2026:KHC:26391 |
| Name of Court | High Court of Karnataka at Bengaluru |
| Name of the Honourable Judge | Justice Tara Vitasta Ganju |
Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi.
Disclaimer: Images used herein do not reflect actual images used in the judgement, and the same are for illustrative purposes only. Readers are advised not to treat this as a substitute for legal advice, as it may contain errors in perception, interpretation, and presentation.
