Continuing IP Infringement May Constitute Urgency Under Section 12A; SC Restored Suit and Quashed HC Orders

A Bench comprising Justices Sanjay Kumar and Alok Aradhe heard an appeal that raised the scope of the expression "contemplates any urgent interim relief" in Section 12A of the Commercial Courts Act, 2015, in its application to actions for infringement of intellectual property rights. The appeal challenged orders of the Himachal Pradesh High Court which had rejected a plaint for non-compliance with the pre-institution mediation mandate.

The Supreme Court held that where a suit alleged continuing infringement of intellectual property rights, urgency had to be assessed in the context of ongoing injury and the public interest in preventing deception, and that mere delay in instituting the suit did not, by itself, negate urgency. The Court observed that Section 12A mandated pre-institution mediation except where interim relief was genuinely contemplated, but that a plaintiff could be exempted if the plaint and annexed material showed "a real need for urgent interim intervention." The Court, in its reasoning, observed: “For the reasons stated above, we hold that (i) In actions alleging continuing infringement of intellectual property rights, urgency must be assessed in the context of the ongoing injury and the public interest in preventing deception, (ii) Mere delay in institution of a suit by itself, does not negate urgency when the infringement is continuing.” The Court further noted that the test under Section 12A was whether, from the standpoint of the plaintiff, the prayer for interim relief could be said to be "contemplable" and that a pro forma prayer could not be used as a device to bypass mediation.

Background The dispute arose between a Danish manufacturer of industrial fans marketed under the brand "Novenco ZerAx" and its former Indian distributor, Xero Energy Engineering Solutions Pvt. Ltd., alongside Aeronaut Fans Industry Pvt. Ltd., which the appellant alleged had manufactured and sold substantially identical fans in breach of patents and registered designs. The appellant pleaded investment in development, registration of patents and designs, a dealership agreement dated 01.09.2017, alleged misuse of confidential design information by the distributor to set up the respondent manufacturer, and discovery of competing products in July 2022. The appellant issued communications and a cease-and-desist notice in December 2022, conducted an expert inspection in December 2023, obtained expert affidavit and later secured patent and design certificates in March–May 2024.

The appellant filed a commercial suit (COMS No. 13 of 2024) in the Himachal Pradesh High Court on 04.06.2024 alleging infringement and sought ad interim injunctions while applying for exemption from pre-institution mediation under Section 12A. The respondents contended that the plaint did not "contemplate any urgent interim relief," relied on delay between inspection and institution of suit, and sought rejection under Order VII Rule 11 CPC for non-compliance with Section 12A. A Single Judge rejected the plaint for want of urgency; a Division Bench affirmed on 13.11.2024 but clarified that the appellant could initiate proceedings after complying with Section 12A and mediation outcomes. The Special Leave Petition reached this Court, which directed a mediation attempt; mediation later failed.

The Supreme Court analysed statutory objectives of the Act and precedents including Patil Automation, Yamini Manohar and Dhanbad Fuels on the meaning of "contemplates any urgent interim relief." The Court emphasised that Section 12A was ordinarily mandatory but allowed exemption where pleadings and annexures, read wholesomely, disclosed immediate peril, risk of irreparable harm, or where delay would render relief ineffective. The Court found the High Court had erred by treating delay alone as negating urgency and by effectively adjudicating merits rather than assessing urgency from the plaintiff’s standpoint. The result was that the impugned Single Judge and Division Bench orders were quashed and set aside; Commercial Suit No. 13 of 2024 was restored to the High Court to be proceeded with on merits in accordance with law. The appeal was allowed. The Court recorded that mediation between the parties had failed on 23.06.2025; no further interim directions were imposed in this judgment.

Case Details: Case No.: 2025 INSC 1256 Case Title: Novenco Building and Industry A/S v. Xero Energy Engineering Solutions Private Ltd. & Anr. Appearances: For the Petitioner(s): [Not indicated in the judgment] For the Respondent(s): [Not indicated in the judgment]