Allahabad High Court
M/S Sah Agencies Private Limited And 6 ... vs Cinni Foundation Trust And 6 Others on 21 May, 2025
HIGH COURT OF JUDICATURE AT ALLAHABAD
Neutral Citation No. - 2025:AHC:85226-DB
Reserved
A.F.R.
Chief Justice's Court
Case :- COMMERCIAL APPEAL No. - 8 of 2025
Appellant :- M/s Sah Agencies Private Limited and 6 others
Respondent :- Cinni Foundation Trust and 6 others
Counsel for Appellant :- Mr.Anupam Kulshreshtha, Mr.Arpit Agarwal
Counsel for Respondent :- Mr.Anand Kumar Singh, Mr.Ashish Kumar Singh
Hon'ble Arun Bhansali,Chief Justice
Hon'ble Kshitij Shailendra,J.
(Per Kshitij Shailendra, J.)
1. Heard Shri Anupam Kulshreshtha, learned counsel for the defendant-appellants, Shri Ashish Kumar Singh, learned counsel for plaintiff-respondents and perused the record.
THE CHALLENGE
2. The present appeal has been filed by the defendants of Original Suit No.10 of 2025 challenging the order dated 05.04.2025 passed by the Presiding Officer, Commercial Court, Varanasi. The order impugned is in three parts; the first part dispenses with the statutory requirement of pre-institution mediation contemplated under Section 12-A of the Commercial Courts Act, 2015 (in short 'the Act'); the second part grants ex-parte interim injunction in favour of the plaintiff-respondents and the third part relates to appointment of Amin Commissioner and Advocate Commissioner to conduct some investigation.
FACTS IN BRIEF
3. The aforesaid suit was instituted praying for a decree for permanent prohibitory injunction restraining the defendants, their assigns, agents, representatives, distributors, heirs, successors, stockiests and others acting for and on their behalf from using, selling, soliciting, exporting, displaying, advertising etc. or, in any other manner, dealing or using the trademark 'CINNI' forming similar words/marks thereto and also restraining them from disposing of or dealing with the assets and stock in trade. A decree for mandatory injunction was also claimed directing the defendants to deliver all the finished and unfinished materials bearing the impugned and violative trademark including its blocks, labels, display boards, signboards, trade literature and goods etc. to the plaintiffs. Further decree for accounting was also claimed.
4. Alongwith the suit, an application seeking temporary injunction on the lines of permanent prohibitory injunction was moved under Order XXXIX Rules 1 and 2 readwith Section 151 of Civil Procedure Code, 1908 (in short 'C.P.C.'). Since the Act contemplates pre-institution mediation and settlement, the plaintiffs, citing urgency, also filed an application under Section 12-A thereof requesting dispensation/exemption from the said requirement.
SUBMISSIONS ADVANCED ON BEHALF OF THE APPELLANTS
5. Learned counsel for the appellants submits that dispensation of the requirements under Section 12-A of the Act was not justified in the facts of the case and grant of ex-parte injunction is also seriously prejudicial to the interest of the defendants-appellants, particularly, in view of the fact that they are running their business pursuant to valid licenses issued in their favour from time to time. Reliance has been placed on Annexures 6 and 7 to the affidavit and it is urged that license was granted on 27.07.2011 which was effective upto 26.07.2014, and further licenses issued in their name indicated periods of their validity upto 01.12.2015, 30.10.2017 and, lastly, upto 27.07.2034. Submission, therefore, is that before passing any order on injunction application, notice should have been issued to the defendants-appellants and it was not a matter where urgency stood reflected from the record.
6. Further submissions have been made as regards various proceedings pending and decided in relation to the same trademark and business at New Delhi, some before the District Judge and some before Delhi High Court and another before Civil Judge, Varanasi, the record pertaining whereto has been annexed and it has been argued that as the said proceedings and their results having been concealed by the plaintiffs-respondents while obtaining injunction in the present proceedings, impugned order should be set aside. Various other submissions on merits qua injunction matter have also been advanced by Shri Kulshreshtha and in support of his submissions, reliance has been placed on the judgment of Hon'ble Supreme Court in Patil Automation Private Limited and others vs. Rakheja Engineers Private Limited: AIR 2022 Supreme Court 3848. Argument is that if mandate of Section 12-A of the Act is violated, the same would result in rejection of plaint and such a power can also be exercised by the Court suo moto.
SUBMISSIONS ADVANCED ON BEHALF OF THE RESPONDENTS
7. Per contra, Shri Ashish Kumar Singh submits that the appellants have already filed an application under Order XXXIX Rule 4 C.P.C. for vacating the interim injunction order and substantial hearing has been done by the Commercial Court but final order could not be passed as some of the defendants are seeking adjournment in the proceedings and, now, 20.05.2025 has been fixed for passing further orders. Shri Singh further submits that as far as proceedings pending or decided by the courts at Varanasi or New Delhi including the Hon'ble High Court of Delhi, are concerned, some of them were not interse parties and, even otherwise, the issues involved therein were different from these proceedings. Dispute regarding trusteeship, change in position of trustees, validity of licenses issued in favour of the defendants-appellants and many other issues were sought to be raised before us so as to justify grant of injunction.
8. When confronted with the cryptic nature of the injunction order, submission has been made that though the order granting injunction does not deal much with the material on record, nevertheless, the appellants having no case and finding on existence of prima facie case based upon documents filed alongwith injunction application, having been recorded in favour of the plaintiff-respondents, the order impugned may not be set aside only on this ground. It is further urged that when the appellants, claiming themselves to be licensees, started issuing licences to other persons qua which they had no factual or legal authority, the suit was filed and injunction was claimed which has rightly been granted. In support of his submissions, reliance has been placed on the following judgments:-
(a). Smt. Chitra Agrawal vs. Jagdish Saran Goel: 1995 (1) ARC 80;
(b). Gujarat Bottling Co. Ltd. and others vs. Coca Cola Co. and others: (1995) 5 SCC 545.
DISCUSSION AND FINDINGS
9. Having heard learned counsel for the parties, first of all, we deem it appropriate to refer to relevant portion of Section 12-A of the Act, which reads as under:-
"12A. Pre-Institution Mediation and Settlement.-- (1) A suit, which does not contemplate any urgent interim relief under this Act, shall not be instituted unless the plaintiff exhausts the remedy of pre-institution mediation in accordance with such manner and procedure as may be prescribed by rules made by the Central Government.
......................"
10. A bare perusal of the afore-quoted provision indicates that no commercial suit shall be instituted unless the plaintiff exhausts the remedy of pre-institution mediation as per the procedure prescribed by rules; however, there is an inherent exception to the said bar in the provision itself, i.e. to say that, in case, any urgent interim relief is contemplated in the suit, the plaintiff would not be obliged to exhaust the remedy of pre-institution mediation.
11. Since the order granting exemption from the requirements of pre-institution mediation is under challenge before us, we deem it appropriate to first deal with this aspect of the matter.
12. The record reflects that the suit in question, alongwith application under section 12-A, was instituted on 05.04.2025. In 3rd, 4th, 5th and 6th paragraphs of the application under Section 12-A, following assertions were made:-
"3- That the Plaintiffs have discovered on 27-03-2025 that infringing goods worth several crores have already been manufactured and are in the process of being sold, distributed or passed off in the market. Such unauthorized and deceptive use is not only causing huge monetary loss but is also damaging the goodwill and reputation associated with the Plaintiffs' Trade mark/ Trade Name CINNI.
4- That there is an urgent and immediate need to prevent the further circulation and sale of these counterfeit goods to avoid irreparable loss and injury to the Plaintiffs. Any delay in the grant of relief may result in the dissipation of infringing stock and render the plaintiffs remediless.
5. That as per the proviso to Section 12A(1) of the Commercial Courts Act, 2015, the requirement of pre-institution mediation does not apply where the suit contemplates urgent interim relief. The present case clearly qualifies for such exemption, as the Plaintiffs are simultaneously filing applications for ad Interim injunction, appointment of court Amin, and Advocate Commissioner to seize and seal the infringing goods.
6 That in view of the above, the Plaintiffs most respectfully seek exemption from the mandatory requirement of pre-litigation mediation in terms of Section 12A of the Commercial Courts Act, 2015."
13. From the aforesaid contents of the application under Section 12-A of the Act, it is reflected that the plaintiffs had stated discovery of alleged illegal acts of the defendants only on 27.03.2025, i.e. about one week prior to institution of the suit. The Commercial Court, while allowing the application under Section 12-A, did not refer even a single averment of the said application and the same was cryptically allowed on 05.04.2025 itself, in the following words:-
" मामले के तथ्यों व परिस्थितियों में प्रार्थना-पत्र स्वीकार किये जाने का आधार पर्याप्त है। अतः प्रार्थना-पत्र 8 ग अन्तर्गत धारा 12A वाणिज्यिक न्यायालय अधिनियम 2015 सपठित धारा 151 सिविल प्रक्रिया संहिता स्वीकार किया जाता है। वादी को अन्तर्गत धारा 12A वाणिज्यिक न्यायालय अधिनियम 2015 के अनुपालन से उनमुक्त किया जाता है तथा वाद अग्रसारित करने की अनुमति प्रदान की जाती है। पत्रावली लन्च बाद पेश हो।"
14. The law regarding requirement of pre-litigation mediation under Section 12-A of the Act in commercial suits which 'contemplate any urgent interim relief' has been laid down by Hon'ble Supreme Court in Yamini Manohar Vs. T.K.D. Keerthi: (2024) 5 SCC 815, wherein it has been laid down as under:-
"10. We are of the opinion that when a plaint is filed under the CC Act, with a prayer for an urgent interim relief, the commercial court should examine the nature and the subject-matter of the suit, the cause of action, and the prayer for interim relief. The prayer for urgent interim relief should not be a disguise or mask to wriggle out of and get over Section 12-A of the CC Act. The facts and circumstances of the case have to be considered holistically from the standpoint of the plaintiff. Non-grant of interim relief at the ad interim stage, when the plaint is taken up for registration/admission and examination, will not justify dismissal of the commercial suit under Order 7 Rule 11 of the Code; at times, interim relief is granted after issuance of notice. Nor can the suit be dismissed under Order 7 Rule 11 of the Code, because the interim relief, post the arguments, is denied on merits and on examination of the three principles, namely: (i) prima facie case, (ii) irreparable harm and injury, and (iii) balance of convenience. The fact that the court issued notice and/or granted interim stay may indicate that the court is inclined to entertain the plaint.
11. Having stated so, it is difficult to agree with the proposition that the plaintiff has the absolute choice and right to paralyse Section 12-A of the CC Act by making a prayer for urgent interim relief. Camouflage and guise to bypass the statutory mandate of pre-litigation mediation should be checked when deception and falsity is apparent or established. The proposition that the commercial courts do have a role, albeit a limited one, should be accepted, otherwise it would be up to the plaintiff alone to decide whether to resort to the procedure under Section 12-A of the CC Act. An "absolute and unfettered right" approach is not justified if the pre-institution mediation under Section 12-A of the CC Act is mandatory, as held by this Court in Patil Automation.
12. The words "contemplate any urgent interim relief" in Section 12-A(1) of the CC Act, with reference to the suit, should be read as conferring power on the court to be satisfied. They suggest that the suit must "contemplate", which means the plaint, documents and facts should show and indicate the need for an urgent interim relief. This is the precise and limited exercise that the commercial courts will undertake, the contours of which have been explained in the earlier paragraph(s). This will be sufficient to keep in check and ensure that the legislative object/intent behind the enactment of Section 12-A of the CC Act is not defeated."
15. In terms of the above law, the Commercial Court is required to undertake exercise to the extent that the plaint, documents and facts in the suit should show and indicate the need for an urgent interim relief which do have a role and the plaintiff does not have an absolute and unfettered right in this regard. The said observations have been approved by Hon'ble Supreme Court in Dhanbad Fuels Private Limited Vs. Union of India and Another: 2025 SCC OnLine SC 1129.
16. A bare look at the order passed on application under Section 12-A of the Act would reveal that the exercise as, required in terms of the above judgements, apparently has not been undertaken by the Commercial Court.
17. The Commercial Court, after granting exemption under Section 12-A, directed the matter to be posted after lunch same day and when the injunction application was taken up after lunch, following inter alia is the reason recorded for grant of injunction:-
"वादीगण के तरफ से जो अभिलेख दाखिल किये गये हैं उससे स्पष्ट होता है कि वादीगण flUuh फाउन्डेशन ट्रस्ट के ट्रस्टी हैं तथा उन्हे यह वाद दायर करने का अधिकार izkIr है। वादीगण की तरफ से प्रतिवादीगण को flUuh ट्रेडमार्क के अतिलंघन करने से रोकने हेतु कई पत्र पुलिस आयुक्त वाराणसी को प्रेषित किये गये हैं साथ ही साथ वर्ष 2021 में सुमीत अग्रवाल, श्रीमती मंजू अग्रवाल, प्रशान्त अग्रवाल, दीपक कुमार साह एवं शशी कुमार साह के विरूद्ध कापी राइट एक्ट 1957 की धारा 63 व 65 के तहत प्रथम सूचना रिपोर्ट पंजीकृत कराई गयी है।"
17. The afore-quoted portion of the impugned injunction order reflects that the Commercial Court itself had taken note of the plaintiffs' contention as regards moving of certain applications before the Police Authorities as well as lodging of First Information Report against the appellants and others in the year 2021. A bunch of papers forming part of the injunction application were also placed before us by the learned counsel for plaintiffs-respondents during the course of hearing. The said documents include a copy of the First Information Report dated 10.06.2021 lodged by the Trustee of plaintiff-respondent No.1-Trust against the appellants and others. The F.I.R. contains same allegations which have been levelled against the appellants in the present suit i.e. regarding alleged unauthorized use of the concerned trademark/label etc. and the business activities being carried by the appellants on that basis.
18. It is therefore apparent from record as well as the order passed by the Commercial Court that the dispute between the parties was, admittedly, in existence, at least, since 2021 and the same has been made basis for grant of interim injunction. In such fact situation, when we examine the order granting dispensation of mandatory statutory requirements contemplated under Section 12-A, we find absolute contradiction in the approach of Commercial Court, i.e. to say that once the Commercial Court observed about taking recourse to criminal action by the plaintiffs against the defendants in the year 2021 and took it as the basis for grant of injunction, there appears to be no justifiable reason as to why the Court was swayed with the assertion made in third paragraph of the application under Section 12-A of the Act wherein the plaintiffs had pleaded alleged discovery of alleged infringement of rights on 27.03.2025.
19. As far as appointment of Amit Commissioner/Advocate Commissioner under the order impugned is concerned, the said order also records strange observations. The Commercial Court has issued an absolutely vague direction to the Amin Commissioner asking him to submit a report about whatever production and parts in relation to 'CINNI' trademark are found by him with a further liberty granted to him to take police aid as per need. Further, without specifying the name of any particular Advocate, another vague direction has been issued to an Advocate Commissioner to submit identical report in relation to areas outside Varanasi.
20. Learned counsel for the respondents has invited attention of this Court towards a subsequent order dated 12.05.2025 wherein the Commercial Court has observed that the lawyer who earlier appointed as Advocate Commissioner, was not taking interest in the matter and, therefore, the parwana issued to him was withdrawn/called back directing issuance of such parwana to some other Advocate. The order dated 12.05.2025 being in furtherance of the initial order appointing Amin/Advocate Commissioner is of no significance and, therefore, the same would not come to the aid of the respondents to justify appointment/change of Advocate Commissioner.
21. The matter can also be viewed from a different angle. It is reflected from the impugned order that though urgency was assumed or found by the Commercial Court in pre-lunch session while granting exemption and without assigning any reason, a different reasoning contrary to the stand taken in application under Section 12-A was assigned in post-lunch session while granting interim injunction. Situation could have been different, had it been a case where disposal of the application under Section 12-A and the one seeking injunction had been made on different dates based upon material on record, however, decision on three applications on the very day of institution of the suit and in the manner as indicated above, reflects undue haste on the part of the Commercial Court.
22. Once this Court is satisfied that, in the instant case, the mandate of Section 12-A of the Act and the law laid down by Hon'ble Supreme Court has not been followed, the impugned order cryptically granting interim injunction as well as directions with regard to appointment of Amin Commissioner/Advocate Commissioner automatically become non-est.
23. The judgements cited by learned counsel for the respondents in the cases of Smt. Chitra Agrawal (supra) and Gujarat Bottling Co. Ltd. (supra) are on the point that merely because the injunction order is cryptic or does not assign detailed reasons, the same cannot be interfered with on this ground alone and that the appellate court is always empowered to examine the merits of the case independent of the nature of the order passed on interim injunction application.
24. The said judgements are not directly applicable in the present case, inasmuch as, at this stage, we are not much concerned about the merits of the temporary injunction matter, inasmuch as, both the parties are at hot contest qua the same. What we are concerned with is the aspect as to whether, in the facts of the case and even as per assertions made by the plaintiff-respondents, it was at all a fit case where dispensation of the statutory requirements contained under Section 12-A of the Act could be justified and as to when the order allowing application under Section 12-A does not follow the prescribed procedure, whether all consequential orders passed on that day, or later on, would sustain or not.
CONCLUSION:
25. Once we are satisfied that no reasoning was assigned by the Commercial Court while dispensing with the mandatory requirements of pre-institution mediation, rather the contents of application under Section 12-A are contrary to the reasoning assigned while granting temporary injunction, the situation leads us to only one conclusion that the matter should go back to the Commercial Court to the stage of considering dispensation of requirements of pre-institution mediation.
26. Since all the parties have appeared before the Commercial Court and are hotly contesting the matter of injunction as well as existence/non-existence of urgency, we deem it appropriate not to make any observation regarding merits of the claim for injunction, otherwise our observations made eitherway would affect further proceedings in the suit itself and the result thereof.
27. Consequently, the appeal is allowed. The order dated 05.04.2025 passed by the Presiding Officer, Commercial Court, Varanasi in Original Suit No.10 of 2025 is set aside in toto. The matter is remitted back to the Commercial Court, Varanasi to decide the application under Section 12-A of the Act after granting opportunity of hearing to both the parties and deal with the matter as per its determination.
Order Date :- 21.05.2025
Jyotsana
(Kshitij Shailendra, J) (Arun Bhansali, CJ)
