The case involves a commercial dispute between Novenco Building & Industry A/S (plaintiff) and Xero Energy Engineering Solutions Private Ltd. (defendants) concerning allegations of patent and design infringement. The primary issue was whether the plaintiff's failure to comply with the mandatory Pre-Institution Mediation under Section 12-A of the Commercial Courts Act, 2015, warranted the rejection of the plaint.
Background: The plaintiff, a manufacturer of axial fans, alleged that the defendants were infringing its patents and designs by manufacturing and selling similar products. The plaintiff issued a Cease-and-Desist notice in December 2022 but claimed that the defendants continued their infringing activities. The suit was filed in June 2024, seeking urgent interim relief without undergoing Pre-Institution Mediation.
 

• Brief Facts of the Case:
  • The plaintiff entered into a Distributor Agreement with the defendants in 2017.
  • In July/August 2022, the plaintiff became aware of alleged patent and design infringements by the defendants.
  • The plaintiff terminated the Distributor Agreement in October 2022 and issued a Cease-and-Desist notice in December 2022.
  • Despite the notice, the defendants continued to manufacture and sell the impugned products online and offline.
  • The plaintiff filed the suit in June 2024, citing urgency to prevent further loss of market share and reputation.
     
• Issues Involved:
  • Whether the plaintiff's failure to comply with the mandatory Pre-Institution Mediation under Section 12-A of the Commercial Courts Act rendered the plaint liable for rejection.
  • Whether the urgency claimed by the plaintiff justified bypassing Pre-Institution Mediation.
     
• Submissions of the Parties:
  • Defendants:
    • Argued that the plaint was barred by law due to non-compliance with Section 12-A of the Commercial Courts Act.
    • Contended that the plaintiff failed to demonstrate genuine urgency in the suit.
    • Claimed that the application for interim relief was merely a tactic to bypass Pre-Institution Mediation.
       
  • Plaintiff:
    • Asserted that the suit contemplated urgent interim relief, making Pre-Institution Mediation unnecessary.
    • Highlighted the defendants' ongoing commercial activities, including online sales, which infringed the plaintiff's patents and designs.
    • Argued that the delay in filing the suit was due to the time required for technical analysis and evaluation of the infringement.
       
• Reasoning and Analysis by the Judge:
  • Mandatory Nature of Section 12-A: The court referred to the Supreme Court's rulings in Patil Automation Pvt. Ltd. vs. Rakheja Engineers Pvt. Ltd. and Yamini Manohar vs. T.K.D. Keerthi, which held that Section 12-A of the Commercial Courts Act is mandatory. It emphasized that urgent interim relief must not be a pretext to bypass mandatory mediation.
  • Assessment of Urgency: The court scrutinized the timeline and found no compelling urgency to justify bypassing mediation. The plaintiff became aware of the infringement in 2022 but waited until June 2024 to file the suit. The plaintiff's claim of urgency was undermined by its own delay.
  • Application for Interim Relief: The court found the plaintiff's application under Order XXXIX, Rules 1 and 2 of the CPC lacked sufficient evidence of irreparable harm or immediate necessity.
  • Legislative Intent: The court highlighted that the intent behind Section 12-A is to reduce the burden on courts and promote alternative dispute resolution. Allowing the suit without mediation would defeat this objective.
     
• Decision: The court allowed the defendants' application under Order VII, Rule 11 of the CPC and rejected the plaint on the following grounds:
  • Non-compliance with Section 12-A of the Commercial Courts Act.
  • Lack of demonstrated urgency to bypass Pre-Institution Mediation.

Conclusion:
This judgment reinforces the mandatory nature of Pre-Institution Mediation under Section 12-A of the Commercial Courts Act. It underscores the importance of adhering to procedural requirements and the judiciary's commitment to promoting alternative dispute resolution mechanisms. The decision serves as a precedent for ensuring that claims of urgency are not misused to bypass statutory mandates.

Case Title: Novenco Building & Industry Vs. Xero Energy Engineering Solutions Private Ltd. & Another
Case No. and Neutral Citation:
OMP No. 540 of 2024 in COMS No. 13 of 2024
Neutral Citation: 2024:HHC:7518
Date of Order:28th August 2024
Court:High Court of Himachal Pradesh, Shimla
Judge:Hon'ble Justice Ajay Mohan Goel

Disclaimer:
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Written By: Advocate Ajay Amitabh Suman, IP Adjutor - Patent and Trademark Attorney
Email: [email protected], Ph no: 9990389539