Telangana High Court

M/S. Panchajanya Features vs Bommareddy Ashok Reddy on 2 May, 2025

Author: P.Sam Koshy

Bench: P.Sam Koshy

         THE HONOURABLE SRI JUSTICE P.SAM KOSHY

           CIVIL REVISION PETITION No.2323 of 2024

ORDER:

The present Civil Revision Petition has been filed under Article

227 of the Constitution of India. The challenge is to the order dated

15.07.2024, in I.A.No.486 of 2024 in O.S.No.268 of 2024, passed

by the IV Additional District, Ranga Reddy Distric at L.B. Nagar.

2. Heard Mr. Srinivasa Rao Pachwa, learned counsel for the

petitioners, and Mr. Pasham Mohith Reddy, learned counsel for the

respondent.

3. Vide the impugned order, the Trial Court has rejected a

petition filed by the petitioners herein under Order VII Rule 11(d)

read with Section 151 of Civil Procedure Code, 1908 (for short,

'CPC') seeking for return of the plaint and filing the same before the

Commercial Court established by the Government.

4. The present Revision arises from a copyright dispute

concerning a Telugu movie titled "Vinnapalu Vinavale Vintha

Vinthalu". The respondent herein instituted O.S.No.268 of 2024

praying the trial Court for grant of permanent injunction, alleging

the movie-making business, contends that the respondent was

specifically employed for developing the script for a remuneration of

Rs.5,00,000/-, of which partial payment has already been made. As

the movie approached its completion stage, the respondent filed the

suit seeking injunction. Upon appearance, the petitioner, after

reviewing the material papers, filed an application under Order VII

Rule 11(d)read with Section 151 of CPC challenging the Trial Court's

jurisdiction on the ground that the matter falls within the purview of

the Commercial Courts Act, 2015.

5. The procedural trajectory of the caseis initially, the Trial Court

granted a status quo order on 03.07.2024 in I.A.No.408 of 2024

which was challenged by the petitioner through C.R.P.258 of 2024

before the High Court. Subsequently, the High Court disposed of

the matter directing the Trial Court to decide the petition filed by

the petitioners under Order VII Rule 11(d)read with Section 151 of

CPC for rejection of the suit within 20 days from the date of receipt

of a copy of the order. The Trial Court, vide its impugned order

dated 15.07.2024, dismissed the said petition, which according to

the petitioners is without adequate consideration of the legal

propositions regarding jurisdictional aspects under the recently

amended Commercial Courts Act, 2015. The petitioner received the

copy of the said order on 19.07.2024.

6. It is this order passed by the Trial Court which is under

challenge in the instant Revision.

7. Learned counsel for the petitioner contended that the Trial

Court gravely erred in dismissing the petition for rejection of suit

under Order VII Rule 11(d) read with Section 151 of CPC as the

matter inherently involves a commercial dispute concerning

intellectual property rights as defined under Section 2(1)(c)(xvii) of

the Commercial Courts Act, 2015. Further,the learned counsel

contended that since the dispute relates to intellectual property with

a suit value of Rs.50,00,000/- which exceeds the specified value of

Rs.3,00,000/- under the Commercial Courts Act, 2015 (as amended

in 2018). Thus, the jurisdiction exclusively vests with the concerned

Commercial Court.

8. Learned counsel for the petitioner further contended that the

Trial Court's reliance on the memo of the Registrar (Judicial-II)

dated 14.07.2022 is misplaced and contradicts established judicial

precedents, including the principleslaid down by this High Court

itself in the case of K. Sriman Narayana Murthy and Ors. vs. V.

Agastya Sagar and Ors 1. However, the Trial Court also failed to

provide adequate reasons for its order and overlooked the

mandatory requirement that commercial disputes, particularly those

involving intellectual property rights under Section 2(1)(c)(xvii) of

the Commercial Courts Act, 2015 (as amended in 2018) must be

tried only by the Commercial Courts.

9. Per contra, the learned counsel for the respondent contended

that the Trial Court correctly exercised its jurisdiction in dismissing

the petition for rejection of suit, as the matter primarily concerns

enforcement of contractual obligations and copyright infringement

which falls within the purview of regular Civil Court. Further, the

learned counsel for the respondent contended that the Commercial

Courts Act, 2015 does not divest regular Civil Courts of their

inherent jurisdiction to hear copyright matters and the specified

value threshold alone cannot be the determining factor for

jurisdiction.

10. Lastly, the learned counsel for the respondent highlighted that

the Trial Court's reliance on the memo of the Registrar (Judicial-II)

was appropriate and in line with established judicial practice. The

learned counsel also submitted that the petition for rejection of

2022 (1) ALT 706

plaint was rightly dismissed as it was merely a dilatory tactic

employed by the petitioners to delay the proceedings and continue

with the unauthorized use of the copyrighted material.

11. Having heard the learned counsel for the parties, and on

perusal of records, the question of law that requires consideration is

'whether in the light of the amended provision of the Commercial

Courts Act w.e.f. 03.05.2018 whether a pecuniary jurisdiction for a

Commercial Court in the State of Telangana would continue to be

Rs.1,00,00,000/- in terms of the notification under the pre-

amended provision of law or whether it has to be Rs.3,00,000/- in

terms of the amended provision so far as the Specified Value under

Section 2(1)(i)'?

12. For better understanding of the dispute, it would be relevant

at this juncture to take note of the definition of 'intellectual

property' as is provided under the Section 2(1)(c)(xvii) of the

Commercial Courts Act, 2015. For ready reference, the same is

reproduced hereunder:

"2. Definitions.-(1) In this Act, unless the context otherwise requires,-

...........

(c) "commercial dispute" means a dispute arising out of--

...........

(xvii) intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits;"

13. Recently, this very Court itself had an occasion of dealing with

a similar dispute in the case of M/s. Sri Srinivasa Construction

vs. D. Muralidhar Rao 2 wherein in paragraph Nos.16 to 18; un-

amended provisions of the Commercial Courts Act, 2015 were

discussed in detail which for ready reference are reproduced

hereunder, viz.,

"16. So also the definition of 'specific value' as is defined under Section 2(1)(i) which reads as under:

"2. Definitions.-(1) In this Act, unless the context otherwise requires,-

...........

(i) "Specified Value", in relation to a commercial dispute, shall mean the value of the subject-matter in respect of a suit as determined in accordance with section 12 which shall not be less than one crore rupees or such higher value, as may be notified by the Central Government.

17.Section 3 also lays down the constitution of the Commercial Courts within the State, which reads thus:

"3. Constitution of Commercial Courts.-(1) The State Government, may after consultation with the concerned High Court, by notification, constitute such number of Commercial Courts at District level, as it may deem necessary for the purpose of exercising the jurisdiction and powers conferred on those Courts under this Act: Provided that no Commercial Court shall be constituted for the territory over which the High Court has ordinary original civil jurisdiction.

Order dated 21.03.2025 in C.R.P.No.297 of 2025

(2) The State Government shall, after consultation with the concerned High Court specify, by notification, the local limits of the area to which the jurisdiction of a Commercial Court shall extend and may, from time to time, increase, reduce or alter such limits.

(3) The State Government shall, with the concurrence of the Chief Justice of the High Court appoint one or more persons having experience in dealing with commercial disputes to be the Judge or Judges, of a Commercial Court, from amongst the cadre of Higher Judicial Service in the State."

18. Another aspect of law which needs to be considered is the provision of Section 12 dealing with 'Specified Value' and Section 15 dealing with 'transfer of pending Suits'. For ready reference, Section 12 & Section 15 are being reproduced hereunder:

"Section 12: Determination of Specified Value.-(1) The Specified Value of the subject-matter of the commercial dispute in a suit, appeal or application shall be determined in the following manner:-

(a) where the relief sought in a suit or application is for recovery of money, the money sought to be recovered in the suit or application inclusive of interest, if any, computed up to the dateof filing of the suit or application, as the case may be, shall be taken into account for determining such Specified Value;

(b) where the relief sought in a suit, appeal or application relates to movable property or to a right therein, the market value of the movable property as on the date of filing of the suit, appeal or application, as the case may be, shall be taken into account for determining such Specified Value;

(c) where the relief sought in a suit, appeal or application relates to immovable property or to a right therein, the market value of the immovable property, as on the date of filing of the suit, appeal or application, as the case may be, shall be taken into account for determining Specified Value; 1[and]

(d) where the relief sought in a suit, appeal or application relates to any other intangible right, the market value of the said rights as estimated by the plaintiff shall be taken into account for determining Specified Value; and

(e) where the counter-claim is raised in any suit, appeal or

application, the value of the subject matter of the commercial dispute in such counter-claim as on the date of the counter-claim shall be taken into account.

(2) The aggregate value of the claim and counterclaim, if any as set out in the statement of claim and the counterclaim, if any, in an arbitration of a commercial dispute shall be the basis for determining whether such arbitration is subject to thejurisdiction of a Commercial Division, Commercial Appellate Division or Commercial Court, as the case may be.

(3) No appeal or civil revision application under section 115 of the Code of Civil Procedure, 1908 (5 of 1908), as the case may be, shall lie from an order of a Commercial Division or Commercial Court finding that it has jurisdiction to hear a commercialdispute under this Act."

15. Transfer of pending cases.-(1) All suits and applications, including applications under the Arbitration and Conciliation Act, 1996 (26 of 1996), relating to a commercial dispute of a Specified Value pending in a High Court where a Commercial Division has been constituted, shall be transferred to the Commercial Division.

(2) All suits and applications, including applications under the Arbitration and Conciliation Act, 1996 (26 of 1996), relating to a commercial dispute of a Specified Value pending in any civil court in any district or area in respect of which a Commercial Court has been constituted, shall be transferred to such Commercial Court:

Provided that no suit or application where the final judgment hasbeen reserved by the Court prior to the constitution of the Commercial Division or the Commercial Court shall be transferred either under sub-section (1) or sub-section (2).

(3) Where any suit or application, including an application under the Arbitration and Conciliation Act, 1996 (26 of 1996), relating to a commercial dispute of Specified Value shall stand transferred to the Commercial Division or Commercial Court under sub-section (1) or sub-section (2), the provisions of this Act shall apply to those procedures that were not complete at the time of transfer.

(4) The Commercial Division or Commercial Court, as the case may be, may hold case management hearings in respect of such transferred suit or application in order to prescribe new timelines

or issue such further directions as may be necessary for a speedy and efficacious disposal of such suit or application in accordance1[with Order XV-A] of the Code of Civil Procedure, 1908 (5 of 1908):

Provided that the proviso to sub-rule (1) of Rule 1 of Order V of the Code of Civil Procedure, 1908 (5 of 1908) shall not apply to such transferred suit or application and the court may, in its discretion, prescribe a new time period within which the written statement shall be filed.

(2) In the event that such suit or application is not transferred in the manner specified in sub-section (1), sub-section (2) or sub-

section (3), the Commercial Appellate Division of the High Court may, on the application of any of the parties to the suit, withdraw such suit or application from the court before which it is pending and transfer the same for trial or disposal to the Commercial Division or Commercial Court, as the case may be, having territorial jurisdiction over such suit, and such order of transfer shall be final and binding."

A plain reading of Section 12 clearly gives an indication of the said provision providing the method and guidelines for determining the Specified Value involved in the commercial dispute. The provision of law does not prescribe a minimum Specified Value, or for that matter the maximum Specified Value. The Section outlines the procedure to be followed for determining the value of a suit based on its nature. Likewise, Section 15 is a crucial provision that lays down the jurisdiction of Commercial Courts, specifying the appropriate court for filing commercial disputes."

14. Further, in the same judgment, dealing with amended

provisions of Commercial Courts Act,in paragraph Nos.19 to 25 it

was held as under, viz.,

"19. Admittedly, when the Suit was filed it was the un-amended Commercial Courts Act, 2015 which was in force. However, the Act itself was substantially amended w.e.f. 03.05.2018 and it was known as Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Act, 2018. Some of the

amendments that have been brought into by way of amendment of 2018 is the 'Specified Value' in Section 2(1)(i) which was amended as under:

"for the words "which shall not be less than one crore rupees, the words "which shall not be less than three lakh rupees"

shall be substituted."

20. Likewise, so far as Section 3, the constitution of the Commercial Court is concerned the following amendments in Sub- Section (1) of Section 3 whereby two provisos were substituted for the existing proviso clause. It reads as under:

"Provided that with respect to the High Courts having ordinary original civil jurisdiction, the State Government may, after consultation with the concerned High Court, by notification, constitute Commercial Courts at the District Judge level:

Provided further that with respect to a territory over which the High Courts have ordinary original civil jurisdiction, the State Government may, by notification, specify such pecuniary value which shall not be less than three lakh rupees and not more than the pecuniary jurisdiction exercisable by the District Courts, as it may consider necessary."

21. So also there was further additional Sub-Section incorporated as Section (1A) after Sub-Section (1) which also reads as under:

"(1A) Notwithstanding anything contained in this Act, the State Government may, after consultation with concerned High Court, by notification, specify, such pecuniary value which shall not be less than three lakh rupees or such higher value, for whole or part of the State, as it may consider necessary."

22. In addition, the amendment was brought to Sub-Section (3) wherein in the un-amended Sub-Section (3) the word 'shall' has been substituted with 'may' and in Sub-Section (3) for the words in the un- amended portion i.e. the Commercial Court Act 'from amongst the cadre of Higher Judicial Service in the State' was amended to be substituted and read as thus:

"Commercial Court either at the level of District Judge or a court below the level of a District Judge."

23.The aforesaid amendment in the said Commercial Courts Act cameintow.e.f.03.05.2028.The effect of the aforesaid amendment to

Section 2(1)(i) deals with the definition of 'Specified Value' and where it has been held that all matters where the value in relationto the commercial dispute is Rs.3,00,000/- and above would be one which would be heard by the Commercial Courts. The limit of Rs.3,00,000/- is substituted with the earlier limit of Rs.1,00,00,000/-. As a consequence of the said amendment w.e.f. 03.05.2018, in the entire country where the Commercial Courts Act is applicable, the value in relation to the commercial dispute to decide whether it has to be heard by the Commercial Court or not, stands replaced with the amount of Rs.3,00,000/- in place of Rs.1,00,00,000/- and the State of Telangana is no exception to this.

24. Hence, this Court has no hesitation in reaching to the conclusion that beyond 03.05.2018 every Suit which falls within the purview of a commercial dispute and the value of the dispute is more than Rs.3,00,000/- has to be transferred to the Commercial Court under Section 15. The contention of the learned counsel for the respondents / plaintiffs that a special notification in this regard by the State in consultation with the High Court is separately required is not tenable, as clause(i) of Sub-Section (1) of Section 2 does not require a further notification by the Government in consultation with the High Court for making the said amended provision to be applicable in the States. The said contention so faras a separate notification by the State Government in consultation with the High Court is one which is required under Section 3. The amended Section 3 reads as under:

"3. Constitution of Commercial Courts.-(1) The State Government, may after consultation with the concerned High Court, by notification, constitute such number of Commercial Courtsat District level, as it may deem necessary for the purpose of exercising the jurisdiction and powers conferred on those Courts under this Act:

[Provided that with respect to the High Courts having ordinary original civil jurisdiction, the State Government may, after consultation with the concerned High Court, by notification, constitute Commercial Courts at the District Judge level:

Provided further that with respect to a territory over which the High Courts have ordinary original civil jurisdiction, the State Government may, by notification, specify such pecuniary value which shall not be less than three lakh rupees and not more than the pecuniary jurisdiction exercisable by the District Courts, as it may consider necessary.]

[(1-A) Notwithstanding anything contained in this Act, the State Government may, after consultation with concerned High Court, by notification, specify such pecuniary value which shall not be less than three lakh rupess or such higher value, for whole or part of the State, as it may consider necessary.] (2) The State Government shall, after consultation with the concerned High Court specify, by notification, the local limits of the area to which the jurisdiction of a Commercial Court shall extend and may, from time to time, increase, reduce or alter such limits.

(3) The [State Government may], with the concurrence of the Chief Justice of the High Court appoint one or more persons having experience in dealing with commercial disputes to be the Judge or Judges, of a [Commercial Court either at the level of District Judge or a Court below the level of a District Judge.]"

25.Chapter 2 of aforesaid amended Section 3 deals specifically so far as constitution or establishment of Commercial Courts within the State and the notification that is required is for the establishment of a Commercial Court within the State and also in deciding to constitute such number of Commercial Courts at the District level as it may deem necessary for the purpose of exercising the jurisdiction and powers conferred on the Commercial Courts. The notification of the Government in consultation with the High Court is also required to decide the pecuniary jurisdiction of the Commercial Courts ifthere are more than one in a District or in a State."

15. It would also be relevant at this juncture to take note of

detailed reasoning given in paragraph Nos.26and 27 with regard to

"Specified Value". For ready reference, paragraph Nos.26 and 27

are again reproduced hereunder:

"26. In order to better understand the same, what is necessary to be appreciated is that so far as the Specified Value in respect of the value involved in a Suit which is otherwise commercial dispute, has been brought down from Rs.1,00,00,000/- to Rs.3,00,000/-. In the process, if in a given District the number of Commercial Courts happens to be more than one, in the said circumstances a notification is required deciding pecuniary jurisdiction in respect of each such Court. Such an

issuance of notification is not contemplated under Section 2(1)(i) for variance to be brought to the specific value of Rs.3,00,000/- by notification by any of the State Governments. The issuance of notification by the Government is strictly required under Section 3 for establishment of Commercial Courts and for deciding pecuniary value of each of the Courts so established in a District and also where the High Courts have original civil jurisdiction to decide the pecuniary value of original Suits filed in the High Courts and the Specified Value which have to be filed at the District Courts.

27.The contention of the learned counsel for the respondents / plaintiffs so far as requirement of a special notification to decide whether 'Specified Value' can be enhanced by the State Government contrary to the amendment brought into the Commercial Courts Act in the year 2018, particularly under Section 2(1)(i); even otherwise plain reading of the provisos to Section 2 and Section 3 would also clearly show that any notification that has to be issued must be fora value of more than Rs.3,00,000/-, which in other words means that anything above Rs.3,00,000/- and is a commercial dispute under the definition of Section 2(1)(c) the matter is one which has to be dealt with or referred to the concerned Commercial Court. With all due respect, this Court would like to defer with the view taken by a Co-ordinate Bench of this High Court in the case of M/s. Satyam Process Pvt. Ltd vs. Purushottam Modani 3."

16. In the case of Ambalal Sarabhai Enterprises Limited vs.

K.S. Infraspace LLP and Another5, the Hon'ble Supreme Court

had an occasion of dealing with the definition of Section 2(1)(c) in

respect of an agreement relating to an immovable property. In

paragraph No. 37 of the said judgment, it has been held as under:

"37. A dispute relating to immovable property per se may not be a commercial dispute. But it becomes a commercial dispute, if it falls under sub-clause (vii) of Section 2(1)(c) of the Act viz. "the agreements relating to immovable property used exclusively in trade or commerce". The words "used exclusively in trade or commerce"are to be interpreted purposefully. The word "used" denotes "actually

Order dated 22.01.2024 in C.R.P.No.44 of 2023

used" and it cannot be either "ready for use" or "likely to be used" or "to be used". It should be "actually used". Such a wide interpretation would defeat the objects of the Act and the fast tracking procedure discussed above."

17. A dispute of similar nature has come up before this High Court

in the case of Life Shine Medical Services Pvt. Ltd.vs. Alety

Jeevan Reddy and Ors 4, wherein in paragraph Nos.10 and 11, it

has been held as under:

10. In terms of the explanation to Section 2(1)(c) of the Act, 2015, a commercial dispute does not cease to be so, merely because it involves action for recovery of immovable property or for realisation of monies out of immovable property given as security or involvesany other relief pertaining to immovable property. Thus, so long as the disputes arise out of a property which is being used in trade or business, the dispute remains commercial. In the present case the petitioner claims to have cleared the debts of the respondents herein, such payments majorly relate to payment of salaries of staff members, Dialysis Payment, Pharmacy balances, Ambulance services etc., These payments admittedly relate to the hospital leased to the respondents, which is an immovable property exclusively used in trade or commerce.

11. Further the act of the petitioner in paying the debts of the respondents in relation to hospital equipment and machinery indicates that such payment was made to avoid attachment of said equipment which would in-turn affect the running of the hospital.

Thus, the contention that the relief of recovery of money paidtowards the respondents debts is not a commercial dispute within the meaning of Section 2(1)(c)(vii) of the Act, 2015 does not find force with this Court, as the payment made by the petitioner herein is squarely covered by the explanation to Section 2(1)(c) of the Act, 2015. Therefore, in the view of this Court the disputes in the present case are commercial in nature. The observations of the High Court of Andhra Pradesh in Blue Nile Developers Private Limited Vs. Movva Chandra Sekhar and Ors 5, while discussing the definition of

2023 Law Suit (TS) 492

2021 SCC OnLine AP 3964

'commercial dispute' are relevant as under:

'20. Hence from the above, it is clear that the "legislature" has included the various types of commercial transactions to bring under the fold of "commercial dispute" in case of any dispute arises from any of those transactions. On a careful reading of the above said provision of the Act, it is obvious that the legislature has taken due care while incorporating the above said clauses from (i) to (xxii) in Section 2(1)(c) of the Act by avoiding the repetition of words and sentences without effecting the full fledged meaning of the same even on expansion of the said each clause. Therefore, either giving any restrictive meaning or reading of a clause in isolation and expansion of one word only in the said clause would hamper and frustrate the meaningful definition of the said clause on it's expansion by abrogating certain category of transactions from the purview of the benefit of the above said Act which is not otherwise the intendment of the legislature in bringing out the said enactment.'"

18. In light of the above interpretation regarding Commercial

Court's jurisdiction, it is pertinent to note that the present case

involves intellectual property rights with a specified value exceeding

Rs.3,00,000/-. The subject matter and the pecuniary jurisdiction

clearly establish that this suit falls within the ambit of the

Commercial Court's jurisdiction. Thus, the Commercial Courts Act,

2015, which specifically includes intellectual property matters under

Section 2(1)(c)(xvii) as commercial disputes, meets both in terms

of the commercial dispute and also on the basis of the specified

pecuniary threshold in the present case.

19. In the given factual circumstances of the case and the

amended provision of the Commercial Courts Act, this Court is of