The Jurisdiction Saga on the interplay of the Design Act, 2000 and the Commercial Courts Act, 2015

In a very lucid judgment in the case of S.D. Containers vs. Mold-tek Packaging Limited (Civil Appeal No. 3695 of 2020), the Supreme Court of India decided the matter clearing the air of doubt on the interplay of the Design Act, 2000 and the Commercial Courts Act, 2015.

Relevant facts on background of the case - 

Mold-tek Packaging Limited (hereinafter Plaintiff/Respondent), a manufacturer and seller of plastic packaging material who obtained design registration for its container's lids, jars etc. in 2015 and 2017.

In late 2019, the Plaintiff/Respondent came to know about S.D. Containers (hereinafter Defendant/Appellant) who allegedly infringed design of the Plaintiff/Respondent.

The Plaintiff/Respondent filed a civil suit before the Commercial Court at Indore seeking permanent injunction against the Defendant/Appellant from copying and using the design of the Plaintiff/Respondent as described in Design Application No. 299039 and 299041 for the containers and lids, respectively.

The Defendant/Appellant took the defences available in Section 19 of the Design Act, 2000 and stated that the Plaintiff/Respondent's designs lack originality and are commonly available in the market and hence their registration is liable to be canceled. The said defence combined with the provision of Section 22(4) of the Design Act, 2000 and sought transfer of the case to High Court of Madhya Pradesh. It is pertinent to note that the Defendant/Appellant had sought cancellation of design of the Plaintiff/Respondent by way of counterclaim and no petition under Section 19 of the Design Act, 2000 was filed before CGPDTM for cancellation of said design.

Interestingly, the Commercial Court through its order dated 23rd March, 2020 transferred the matter to High Court of Calcutta. The Plaintiff/Respondent contended the order of the Commercial Court stating that the matter can be transferred to High Court only when an appeal against the order passed by CGPDTM is pending. Further the Plaintiff/Respondent stated that the issue of piracy arose within Indore's territorial jurisdiction and thus cannot be transferred to High Court of Calcutta and that the application for temporary injunction ought to have been decided by the Commercial Court before deciding the Defendant's application for the transfer of case.

Defendant/Appellant maintained their denial of piracy and stated that the appellate Court should be High Court of Madhya Pradesh and not that of Calcutta.

Decision of the Madhya Pradesh High Court

The High Court examined the question as to whether the proceedings of the said suit was liable to be transferred to the High Court or if the Commercial Court at Indore was competent to decide the matter. High Court of Madhya Pradesh upon hearing the appeal held that the Commercial Courts Act, 2015 overrides other provisions contained in other laws and that the Commercial Court was competent to decide the matter itself. Moreover, the Court held that the High Court will be entitled to hear the case only in case of appeal against the decision of CGPDTM. 

Appeal in Supreme Court and Decision

Against this order of the High Court of Madhya Pradesh, the Defendant/Appellant filed the Civil Appeal in Supreme Court.

Supreme Court referred to some of the decisions given by High Courts viz., M/s Astral Polytechnic Limited v. M/s Ashirwad Pipes Private Ltd.4, R. N. Gupta and Co. Ltd. Jasola New Delhi v. M/s Action Construction Equipments Ltd which held that -

"once a defence or ground under Section 19 is availed of, nothing further is to be seen by the District court and he has no option but to transfer the case to the High Court for decision including the interim injunction application.”

Supreme Court held that the order of the High Court of Madhya Pradesh is not sustainable and the same has been set aside and matter has been remitted back to the High Court of Madhya Pradesh saying that the cause of action arose in its jurisdiction and therefore, the High Court of Madhya Pradesh has the jurisdiction to hear it and that the Commercial Court erred in transferring the case to High Court of Calcutta.

Actually, as rightly held by various High Courts and as stated above, the understanding or the interpretation of the said provisions seems so obvious. This decision by the Supreme Court of India settles much of air of doubt surrounding the interplay of Design Act, 2000 and the Commercial Courts Act, 2015. 

Happy Advocates Day!

~until next time~

Cheers!