Tata Consumer Products Limited vs. ITC Limited

Facts

ITC Limited (plaintiff) filed a commercial suit against Tata Consumer Products Limited (defendant) alleging infringement of its 'AASHIRVAAD salt' trade dress. The plaintiff claimed the defendant's 'Shuddh by TATA salt' packaging, launched in December 2022, was a colourable and slavish imitation designed to trade upon the plaintiff's goodwill. The suit sought to restrain infringement of trademark, passing off, and damages. The plaintiff also filed an affidavit seeking to dispense with pre-institution mediation, citing urgency and irreparable loss. The Commercial Court entertained the suit without mediation and granted an interim order. Tata Consumer Products Limited appealed this order.

Held

The High Court held that Section 12A of the Commercial Courts Act, 2015, is mandatory and cannot be waived by a party. The Court found that the Commercial Court failed to consider the mandatory nature of Section 12A and did not properly assess whether the plaintiff had made out a case for dispensing with pre-institution mediation. The judgment emphasized that dispensing with mediation is not a matter of course, especially when urgent interim relief is sought. The Court reasoned that Section 12A segregates commercial disputes based on urgency, with a different scheme for those requiring urgent interim relief. The Commercial Court's order was set aside for failing to apply its mind to the statutory mandate. The matter was remitted back to the Commercial Court to consider the maintainability of the suit without availing mediation as required by Section 12A.

Key Issues

1. Whether Section 12A of the Commercial Courts Act, 2015, which mandates pre-institution mediation for specified commercial disputes, is mandatory and cannot be waived by a party, especially when urgent interim relief is sought? Petitioner (ITC Limited) argued that the Commercial Court correctly entertained the suit without mediation, as the case involved urgent interim relief and the defendant's actions were causing irreparable harm. They contended that Section 12A allows for dispensing with mediation in such urgent circumstances. Respondent (Tata Consumer Products Limited) contended that Section 12A is a mandatory provision and that the Commercial Court erred by not considering its mandatory nature and by not properly evaluating whether the plaintiff had made out a case for dispensing with mediation. They argued that the Commercial Court's order was an error of jurisdiction.