When is delay in filing IP suit not a bar to urgent interim relief under Commercial Courts Act? Supreme Court answers

The Supreme Court has held that delay in filing a suit does not take away the element of urgency under Section 12A of the Commercial Courts Act, 2015, when the case involves continuing infringement of intellectual-property rights. [Novenco Building and Industry A/S v. Xero Energy Engineering Solutions Pvt Ltd & Anr]

A Bench of Justices PV Sanjay Kumar and Alok Aradhe ruled that the expression “contemplates any urgent interim relief” must be examined from the standpoint of the plaintiff and in the context of the ongoing injury and public interest involved in preventing deception in the market.

“The urgency is inherent in the nature of the wrong and does not lie in the age of the cause but in the persistence of the peril,” the Court said.

The Court was deciding an appeal by Danish company Novenco Building and Industry against Xero Energy Engineering Solutions and Aeronaut Fans Industry. Novenco alleged that its former Indian distributor, Xero Energy, had violated a dealership agreement by forming a competing company that manufactured identical industrial fans under a deceptively similar name.

After discovering the alleged infringement in July 2022, Novenco terminated the dealership, issued cease-and-desist notices and filed a commercial suit in June 2024 before the Himachal Pradesh High Court. Alongside its plaint, it sought an ad-interim injunction and an exemption from mandatory pre-institution mediation under Section 12A of the Commercial Courts Act.

The High Court had dismissed the suit for non-compliance with Section 12A, holding that the six-month delay between inspection and filing showed lack of urgency and that mediation was mandatory. A Division Bench affirmed the Single Judge’s view, noting that continuous infringement alone could not override statutory mediation requirements.

Reversing both orders, the apex court held that the High Court had misapplied the test of urgency, as it had examined the merits rather than whether the plaint disclosed an immediate need for protection.

“Each act of manufacture, sale, or offer for sale of the infringing product constitutes a fresh wrong and recurring cause of action,” the Bench observed, adding that mere delay in bringing an action does not legalise an infringement or defeat the right to injunctive relief.

The Court clarified that urgency in such cases stems from the continuing nature of the harm and from the broader public interest in maintaining consumer trust.

“When imitation masquerades as innovation, it sows confusion among consumers, taints the marketplace and diminishes faith in the sanctity of the trade,” Justice Aradhe wrote. He held that preventing deception in the market imparts a colour of immediacy to the relief sought.

The Bench emphasised that Section 12A’s purpose is to promote early settlement through mediation, but not at the cost of depriving a plaintiff of meaningful relief where the infringement is ongoing.

“The insistence of pre-institution mediation in a situation of ongoing infringement, in effect, would render the plaintiff remediless allowing the infringer to continue to profit under the protection of procedural formality,” the Court held

The Court distilled the following legal principles:

1. Pre-institution mediation is compulsory in all commercial suits unless the plaint and annexures show a real need for urgent interim relief.

2. The assessment of urgency must focus on the plaintiff’s perspective and the immediacy of the harm, not on the merits of the injunction.

3. Delay alone does not eliminate urgency where the infringement is continuing and causes ongoing injury.

4. Pro forma or anticipatory prayers for interim relief meant to evade mediation will not suffice.

The appellant was represented by Senior Advocate Gaurav Pachnanda along with Advocates Pankaj Soni, Vineet Rohilla, Shradha Karol, Rohit Rangi, Debashish Banerjee, Ankush Verma, Tanveer Malhotra, Vaishali Joshi, Gurneet Kaur, Udbhau Gady, Rohit Lochav and Vikrant Narayan Vasudeva.

The respondents were represented by Senior Advocate Shadan Farasat, along with Advocates Abhishek Babbar, Harshit Anand, Shikhar Aggarwal and Yash S Vijay.

[Read Judgment]