No Rule That All IP Cases Must Go to Commercial Courts: Rajasthan High Court Dismisses Plea to Reject Trademark Suit at Threshold

“Order VII Rule 11 CPC is a drastic power… not to be invoked unless the plaint ex facie discloses no cause of action or is barred by law” — Justice Anoop Kumar Dhand

In a significant decision Rajasthan High Court (Jaipur Bench) dismissed a plea seeking rejection of a trademark infringement suit on jurisdictional grounds. The petitioner argued that the suit was not maintainable before the district civil court since it related to an intellectual property dispute and should have been filed as a commercial suit under the Commercial Courts Act, 2015.

Rejecting this contention, Justice Anoop Kumar Dhand ruled that a suit concerning intellectual property rights does not automatically become a commercial suit unless its specified value exceeds ₹3,00,000, as required under Section 2(1)(i) of the Act. The Court emphasized, “Both ingredients i.e. the dispute being commercial and the specified value being more than ₹3,00,000 must coexist to vest jurisdiction in a commercial court.”

The dispute stemmed from a trademark suit filed by Abhinav Jain, proprietor of M/s Aagam Oils, seeking an injunction against M/s Shyam Oils for using the mark “Shahi Sikka”, which was alleged to be deceptively similar. The defendant filed an application under Order VII Rule 11 of the CPC, seeking rejection of the plaint, asserting that:

• The suit was barred under Section 142(2) of the Trade Marks Act, 1999;
• The matter qualified as a commercial dispute under Section 2(1)(c)(xvii) of the Commercial Courts Act;
• And since the valuation allegedly exceeded ₹3 lakhs, the jurisdiction lay with the commercial court, not the civil judge (senior division).

Relying on the Delhi High Court’s single-judge decision in Vishal Pipes Ltd. v. Bhavya Pipe Industry, the petitioner urged that all IPR disputes should be treated as commercial matters.

“Order VII Rule 11 Cannot Be a Sword to Cut Down Genuine Litigation at Threshold”

The Court refused to treat the valuation submitted by the plaintiff as artificial or fraudulent. Justice Dhand explained that unless the valuation was demonstrably incorrect or manipulative, courts must defer to the plaintiff’s estimate, especially in suits where the primary relief is injunctive.

“Where the Court cannot arrive at an objective valuation of the suit, it must tentatively accept the valuation made by the plaintiff,” the Court held, citing M/s Commercial Aviation and Travel Co. v. Vimla Pannalal.

On the limited scope of Order VII Rule 11, the Court reiterated: “Rejection of the plaint is a drastic power… the conditions precedent for the exercise of this power are stringent and must be clearly fulfilled.”

“It is the averments in the plaint that have to be read as a whole. At this stage, the stand of the defendants is wholly immaterial,” the Court said, quoting P.V. Guru Raj Reddy v. P. Neeradha Reddy.

Finding that the suit was not barred by any law and raised substantial issues requiring adjudication, the Court held that summary dismissal was unwarranted.

“Pankaj Patel Overrules Vishal Pipes”: Intellectual Property Suit Not Commercial Merely by Subject Matter

Critically, the Rajasthan High Court rejected the Vishal Pipes precedent and instead followed the authoritative Division Bench judgment of the Delhi High Court in Pankaj Ravjibhai Patel v. SSS Pharmachem Pvt. Ltd. [305 (2023) DLT 462].

In Pankaj Patel, the Delhi High Court held: “It would be wholly incorrect to proceed on the presumption that an IPR suit when valued below ₹3 lakhs is necessarily based on ulterior motives or a mala fide intent to avoid application of the CCA.”

Justice Dhand echoed this view: “It cannot be presumed, as a rule of thumb, that a dispute involving intellectual property must necessarily be valued above ₹3 Lakhs… such a presumption would be legally and factually erroneous.”

The Court clarified that unless both the subject matter qualifies as a commercial dispute and the specified value crosses the ₹3 lakh threshold, a suit cannot be ousted from the jurisdiction of a civil court.

The Rajasthan High Court’s decision affirms that not all IP-related suits are inherently commercial, and that Order VII Rule 11 CPC must be sparingly invoked. By reaffirming judicial discretion in evaluating jurisdiction and rejecting a mechanical transfer of IPR disputes to commercial courts, the ruling protects access to justice for claimants seeking injunctive reliefs with modest valuations.

“There is no legal bar under the Commercial Courts Act or the Trade Marks Act to file a suit for injunction simpliciter against infringement in the civil court, if the valuation is below ₹3 lakhs,” the Court concluded.

The revision petition was found devoid of merit and was dismissed.

Date of Decision: May 15, 2025