Article 227 and the Commercial Courts Act

The power of superintendence conferred on the High Courts of India by Article 227 of the Constitution of India occupies a unique and inviolable position in the legal fabric of the nation.

Article 227 represents a constitutional mandate vesting in every High Court the plenary power of judicial supervision, thereby ensuring that every judicial body be kept within the bounds of its authority. The breadth of the provision is as notable as its simplicity: it covers all courts and tribunals within the High Court's territory, with the only exception of armed forces tribunals.

The enactment of the Commercial Courts Act, 2015 ("CC Act") introduced a specialised regime for the resolution of commercial disputes, investing Commercial Courts with exclusive pecuniary jurisdiction over matters valued above the statutory "specified value" threshold [exceeding ₹3 lakhs], as calculated in accordance with Section 12 of the CC Act. Further, in the interest of expeditious disposal the CC Act contains a non-obstante clause in Section 8 barring "civil revision applications or petitions" against interlocutory orders of Commercial Courts.

In the aforesaid backdrop, the question that has repeatedly arisen before multiple High Courts, and one which has now been comprehensively addressed by Justice Tara Vitasta Ganju of the Karnataka High Court in Kanpur Flowercycling Private Limited v. M/s. Sarathi International Inc., WP No. 30565 of 2025, decided June 4, 2026, is whether Section 8 of the CC Act, as a bar on "petitions" also encompasses and excludes a petition invoking the High Court's constitutional supervisory jurisdiction under Article 227?

The Karnataka High Court's judgment in Kanpur Flowercycling is one of the most comprehensive pronouncements on the relationship between the CC Act and the High Courts' constitutional powers under Article 227 of the Constitution of India.

The judgment also addresses forum shopping in intellectual property litigation by holding that litigants cannot manipulate the valuation of intangible rights under Section 12 of the CC Act to oscillate between the jurisdiction of the Commercial Court and the Civil Court.

The dispute before the Karnataka High Court arose from a trademark infringement action concerning the mark "TULASI". The respondent/ plaintiff had initially represented that the “specified value” of the commercial dispute exceeded the statutory threshold under Section 12 of the CC Act, resulting in the matter being transferred to the Commercial Court. Subsequently, however, the respondent adopted the contrary position by contending that the specified value fell below the threshold and sought the return of the plaint to the Civil Court. The Commercial Court accepted this contention, relying principally on an earlier order passed in another suit involving the same trademark but different parties. It was this order that came to be challenged before the Hon’ble Karnataka High Court under Article 227.

The Karnataka High Court ultimately held that such inconsistent positions on valuation were impermissible. Before examining those merits, however, the Court was first required to determine whether the petition itself was maintainable under Article 227 despite the bar contained in Section 8 of the CC Act.

The ratio decidendi of the aforesaid judgement is this: the power of superintendence vested in High Courts by Article 227 of the Constitution forms part of the basic structure of the Constitution itself, and cannot be legislated away, no matter how specialist or purposively drafted the legislation in question is. The CC Act's Section 8 is no exception to this constitutional imperative.

The Karnataka High Court, surveying a consistent body of High Court authority, held definitively that the expression "petition" in Section 8 of the CC Act does not encompass, and could not legally encompass, a petition under Article 227 of the Constitution.

The doctrinal basis for this holding is unassailable: the CC Act is a statute enacted by the legislature, which is itself a creature of the Constitution of India.

The Karnataka High Court relied upon and reaffirmed the decisions of Delhi High Court's decision in Black Diamond Trackparts Pvt. Ltd. v. Black Diamond Motors Pvt. Ltd. 2021 SCC OnLine Del 3946 and M/s. C.P. Rama Rao Sole Proprietor v. National Highways Authority of India 2024 SCC OnLine Del 734, the Bombay High Court in Pravinchandra v. Hemant Kumar 2023:BHC-NAG:16159, the Gujarat High Court in State of Gujarat v. Union of India, 2018 SCC OnLine Guj 1515, and the Madras High Court in Ramanan Balagangatharan v. Rise East Entertainment Private Limited, 2022 SCC OnLine Mad 1300 which reinforced the supervisory jurisdiction under Article 227.

The Karnataka High Court in Kanpur Flowercycling also discussed at length the relationship of Article 227 to Section 5 of the Arbitration and Conciliation Act, 1996. Section 5 of the Arbitration Act, like Section 8 of the CC Act, is a non-obstante provision barring judicial intervention in arbitral proceedings. In Deep Industries Ltd. v. Oil and Natural Gas Corporation Ltd. (2020) 15 SCC 706, the Supreme Court held that Article 227 "is a constitutional provision which remains untouched by the non obstante clause of Section 5 of the Act," however it was further held that the "interference is restricted to orders that are passed which are patently lacking in inherent jurisdiction."

This parallel is significant: whether the non-obstante provision appears in the CC Act or the Arbitration Act, its effect on Article 227 jurisdiction is identical. The constitutional power remains, untouched; what changes is the degree of judicial circumspection with which it is exercised.

Having affirmed the maintainability of Article 227 petitions, the Court was equally careful to emphasise that the jurisdiction is not unbounded. To prevent routine interference with Commercial Court proceedings, it formulated a seven-point framework governing the exercise of supervisory jurisdiction. The framework holds:

1. Article 227 jurisdiction must be exercised consistently with the objectives of the CC Act i.e. expeditious disposal of commercial disputes;

2. Supervisory jurisdiction is circumscribed and must be exercised sparingly; it cannot substitute the judgment of a subordinate court or correct trivial errors;

3. Article 227 is available for jurisdictional errors causing grave injustice or where a party is left remediless;

4. What has been barred by Section 115 CPC (via Section 8 of the CC Act) cannot be revived by Article 227;

5. Decrees and judgments are amenable to challenge through Section 13 of the CC Act;

6. Interlocutory orders amenable to challenge under Order 43 CPC and Section 37 of the Arbitration Act may be challenged under Section 13 of the CC Act;

7. Interference in Commercial Court matters is limited to instances where non-correction leads to manifest injustice, specifically where errors are incapable of correction at a later stage and rise to the level of patent perversity or jurisdictional failure.

Applying this framework to the facts, the Karnataka High Court found that the respondent/ plaintiff in Kanpur Flowercycling had taken contradictory positions on valuation of its trademark; the Commercial Court had applied an incorrect statutory provision (Section 12(1)(c) instead of Section 12(1)(d)) as the basis for its reliance on a co-ordinate bench order; and the Commercial Court had failed to examine the specific, documented plea of mala fides raised by the petitioner/defendant. These were jurisdictional errors of precisely the kind warranting Article 227 intervention.

The most significant practical risk of an Article 227 petition in the Commercial Courts context is the very delay that the CC Act was designed to prevent. The volume of Article 227 challenges to Commercial Court interlocutory orders has itself become a systemic concern, one recognised by the Hon’ble Karnataka High Court in its suo motu institutional suggestion in Kanpur Flowercycling that a separate High Court roster be created for Article 227 petitions arising from Commercial Court proceedings. Practitioners must therefore weigh the benefit of immediate High Court intervention against the cost of invoking the constitutional remedy.

Section 8 of the CC Act bars the statutory remedy of revision under Section 115 of the CPC, however, it does not alter the rights under Article 227 as rooted in the principle declared by the Supreme Court's seven-judge Constitution Bench in L. Chandra Kumar v. Union of India, (1997) 3 SCC 261 and Surya Dev Rai v. Ram Chander Rai, (2003) 6 SCC 675 and Shalini Shyam Shetty and another v. Rajendra Shankar Patil, (2010) 8 SCC 329 that the supervisory jurisdiction of the High Court over all courts and tribunals within its territory forms part of the basic structure of the Constitution itself.

Read together with its findings on valuation and forum shopping, the judgment establishes a coherent framework for commercial litigation. It confirms, first, that litigants cannot manipulate the valuation of intellectual property rights to engineer jurisdiction under the CC Act, and secondly, that while Article 227 remains constitutionally available to correct jurisdictional errors committed by Commercial Courts, its exercise is confined to exceptional cases involving manifest injustice. In doing so, the Karnataka High Court has strengthened both procedural discipline under the CC Act and the constitutional role of the High Courts as supervisory courts.

About the author: Palak Sharma is a Senior Associate at Bahuguna Law Associates.

Disclaimer: The opinions expressed in this article are those of the author(s). The opinions presented do not necessarily reflect the views of Bar & Bench.

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