Introduction

In the case of Chandra Kishore Chaurasia v. R.A. Perfumery Works Private Limited (2022 DHC 4454), the Delhi High Court addressed two pivotal legal issues concerning commercial litigation:

• Territorial Jurisdiction: Whether the District Court lacked jurisdiction over the plaintiff’s suit.
• Pre-Institution Mediation: Whether the plaintiff failed to comply with mandatory pre-institution mediation under Section 12A of the Commercial Courts Act, 2015.

The plaintiff, Mr. Chandra Kishore Chaurasia, alleged trademark and copyright infringements by the defendant, R.A. Perfumery Works Private Limited, leading to the filing of a suit seeking permanent injunctions and other reliefs.

Summary of the Judgment

The appellant contested an order from the Commercial Court that directed the return of his plaint due to lack of territorial jurisdiction. Additionally, the respondent sought the dismissal of the suit citing non-compliance with pre-institution mediation under Section 12A of the Commercial Courts Act, 2015. The High Court analyzed both contentions and set aside the Commercial Court's order, thereby allowing the plaint to proceed. The Court held that:

• The plaintiff adequately asserted territorial jurisdiction through allegations of the defendant’s infringing activities within the jurisdiction.
• The suit sought urgent interim reliefs, exempting it from the mandatory pre-institution mediation requirement under Section 12A.

Analysis

Precedents Cited

The judgment extensively referenced several Supreme Court decisions to elucidate the legal principles governing territorial jurisdiction and pre-institution mediation:

• D. Ramachandran v. R.V. Janakiraman (1999): Affirmed that in preliminary objections, the court assumes the plaintiff’s allegations to be true.
• Liverpool & London S.P. & I Association Ltd. v. M.V. Sea Success I & Anr. (2004): Reinforced that the entire plaint is to be considered true for determining cause of action.
• Exphar Sa and Anr. v. Eupharma Laboratories Ltd. and Anr. (2004): Emphasized that jurisdictional objections via demurrer must assume plaintiff's facts are correct.
• M/S. Rspl Limited v. Mukesh Sharma & Anr. S. (2016): Applied Supreme Court principles in territorial jurisdiction disputes.
• M/s Allied Blenders and Distillers Pvt. Ltd. v. Prag Distillery Pvt. Ltd. & Anr. (2017): Highlighted the necessity to accept plaint allegations as true in jurisdictional assessments.
• Patil Automation Private Limited and Ors. v. Rakheja Engineers Private Limited (2022): Clarified the mandatory nature of Section 12A mediation unless urgent interim reliefs are sought.

Legal Reasoning

The High Court meticulously dissected the plaintiff’s assertions regarding territorial jurisdiction and the applicability of Section 12A:

• Territorial Jurisdiction: The plaintiff invoked territorial jurisdiction by alleging that the defendant’s infringing activities occurred within the jurisdiction of the Delhi High Court. The High Court held that such allegations, even if clandestine, suffice to establish territorial jurisdiction provisionally, as required under Order VII Rule 10 of the CPC.
• Pre-Institution Mediation (Section 12A): The Court examined whether the plaintiff was obligated to undergo pre-institution mediation. It concluded that since the plaintiff sought urgent interim reliefs, the requirement under Section 12A was inapplicable. The Court dismissed the respondent’s argument that an application for exemption was necessary, affirming that the right to seek urgent relief negates the need for prior mediation.

Impact

This judgment reinforces the procedural framework surrounding territorial jurisdiction and the mandatory nature of pre-institution mediation in commercial litigation. Key implications include:

• Affirmation that plaintiffs can establish territorial jurisdiction through credible allegations, even without concrete evidence of clandestine activities.
• Clarification that the pursuit of urgent interim reliefs exempts plaintiffs from complying with Section 12A’s pre-institution mediation, thereby streamlining urgent commercial disputes.
• Guidance for courts to adhere strictly to procedural rules without overstepping into discretionary territories, ensuring consistency and predictability in commercial litigation.

Complex Concepts Simplified

Order VII Rule 10 of the Code of Civil Procedure (CPC)

This rule pertains to objections regarding a court's jurisdiction. When a defendant alleges that the court does not have territorial jurisdiction, the court assesses the claim without disputing the factual allegations made by the plaintiff.

Section 12A of the Commercial Courts Act, 2015

This section mandates pre-institution mediation for commercial disputes that do not seek urgent interim reliefs. Plaintiffs must attempt mediation before filing a lawsuit, promoting amicable settlements and reducing court burdens.

Demurrer

A demurrer is a legal response where a party challenges the legal sufficiency of the opponent’s pleadings, without delving into factual disputes. In context, it refers to objections raised solely on legal grounds, such as jurisdiction.

Prima Facie

A Latin term meaning "on its face" or "at first glance." A prima facie case is one that is sufficiently established by evidence, such that the court can proceed to examine it further.

Pre-Institution Mediation

A mandatory mediation process that parties must undergo before initiating litigation in certain cases, aimed at facilitating settlements without the need for court intervention.

Conclusion

The Delhi High Court's judgment in Chandra Kishore Chaurasia v. R.A. Perfumery Works Private Limited underscores the importance of adhering to procedural norms in commercial litigation. By affirming that plaintiffs can establish territorial jurisdiction through credible claims and exempting suits seeking urgent interim reliefs from mandatory pre-institution mediation, the Court has provided clear guidelines for future cases. This decision not only streamlines commercial disputes but also reinforces the necessity for courts to meticulously apply statutory provisions without overstepping. Legal practitioners must carefully consider these principles when advising clients on litigation strategies within the commercial domain.