Commercial Court Must Transfer Design Suit Once Validity Is Challenged: Kerala High Court

The Kerala High Court on 30 June held that a Commercial Court loses jurisdiction to proceed with a design infringement suit the moment the defendant raises a defence challenging the validity of the registered design and must immediately transfer the suit to the High Court under Section 22(4) of the Designs Act, 2000.

Justice T.R. Ravi allowed the petition filed by Aines Food & Beverages and its partners, set aside the III Additional Sub Court, Ernakulam's order dated 10 December 2025 as being without jurisdiction, and directed the Commercial Court to transfer the suit to the Kerala High Court. He noted:

"It was not open for the Commercial Court to deal with the case any further and the Court was bound to transfer the case to the High Court for its decision."

Abdulla Muhammed Sali, proprietor of B2B Traders, had instituted the suit alleging infringement and passing off of what he claimed was the original design of a bottle. In its written statement, Aines Food & Beverages contended that the design had already been disclosed to the public in India and abroad and therefore lacked exclusivity.

The defendants invoked Section 22(4) of the Designs Act and argued that the suit had to be transferred to the High Court once the validity of the registered design was challenged. They also filed a separate cancellation petition before the Controller.

Despite the validity challenge, the Commercial Court proceeded to pass an order in an interlocutory application without transferring the suit. Although Aines Food & Beverages initially challenged that order before the Commercial Appellate Court, it later withdrew the appeal and approached the High Court seeking transfer of the suit.

The High Court examined conflicting judicial precedents on Section 22(4). It noted that an earlier Kerala High Court decision in Kadambukattil Exports v. Nilkamal Ltd. had required the trial court to be prima facie satisfied about the validity challenge before ordering transfer.

However, it observed that the Allahabad High Court in R.N. Gupta & Co. Ltd. v. Action Construction Equipments Ltd., relying on the Division Bench decision in Standard Glass Beads Factory v. Dhar, had rejected that approach and held that a district court loses jurisdiction immediately upon the defendant raising such a defence.

Further, it noted that the Supreme Court in S.D. Containers approved the Allahabad High Court's interpretation and also took note of similar views expressed by the Karnataka, Jammu and Kashmir, and Bombay High Courts.

Justice Ravi also held that this interpretation flowed directly from the non-obstante clause in Section 22(4). Since Aines Food & Beverages had expressly challenged the validity of the registered design in its written statement, the Commercial Court lacked jurisdiction to pass any further orders.

Accordingly, the High Court set aside the order dated 10 December 2025 and directed the Commercial Court to transfer the suit to the Kerala High Court forthwith.