M.Ramesh Vs v. Balu — Arbitration | Madras HC (2025)

M.Ramesh Vs v. Balu — Arbitration | Madras HC (2025)

What the court decided

AI extract

Outcome

Order and decreetal order dated 31.07.2023 of the Principal District Judge, Cuddalore in I.A.No.214 of 2023 (rejecting the plaint of Commercial O.S.No.1 of 2023) set aside, restoring the suit; appeal allowed without costs; commercial court directed to dispose of the suit as expeditiously as possible, parties being free to re-agitate the jurisdiction/valuation grounds before it.

Issue for consideration

Whether the plaint in Commercial O.S.No.1 of 2023 (trademark infringement/passing-off suit) could be maintained by the plaintiffs notwithstanding the Arbitration Agreement in Clause 15 of the Partnership Deed dated 01.04.2012, i.e., whether the plaint was liable to rejection under Order VII Rule 11 CPC on that sole ground. +1 more

Court's answer

In exercising the power of rejection under Order VII Rule 11 CPC, the civil court is to look only into the plaint and the documents filed in support of the plaint to determine whether they fall within the mischief of Order VII Rule 11.

Ratio / Principle

The Clause 15 arbitration clause of the Partnership Deed dated 01.04.2012 operates only in respect of disputes or differences between the partners of or relating to the Partnership Deed, and does not bind the defendants 4 to 7 in any manner.

Key takeaways

The dispute in the commercial suit is mainly between the plaintiffs and the defendants 4 to 7, whereas the Arbitration Agreement in Clause 15 subsists only between the plaintiffs and defendants 1 to 3, its scope being confined to inter-partner disputes concerning the Partnership Deed, accounts, and the rights and liabilities of the partners.ratio¶71
The trademark dispute raised in the suit does not fall within the scope and ambit of the Clause 15 arbitration clause; and even assuming that it did, defendants 4 to 7, not being parties to that Arbitration Agreement, cannot be proceeded against under it. The commercial court erred in failing to note these crucial aspects and in concluding that the suit was not maintainable.ratio¶82

Detailed headnote1 paragraphs

MADRAS HIGH COURT — Appeal (CAD) No.21 of 2023 (Dr.G.Jayachandran and Mummineni Sudheer Kumar, JJ.; judgment authored by Mummineni Sudheer Kumar, J.; pronounced 10.10.2025). The second plaintiff appealed the order dated 31.07.2023 of the Principal District Judge, Cuddalore (Commercial Court) allowing I.A.No.214 of 2023 — moved by defendants 1 to 3 under Order VII Rule 11 (a), (c) and (d) CPC r/w Section 151 CPC — and rejecting the plaint of Commercial O.S.No.1 of 2023, solely on the ground of the Clause 15 Arbitration Agreement in the Partnership Deed dated 01.04.2012 (framed on the lines of the Indian Arbitration Act, 1940). The suit, filed by co-partners of 'Sri Valli Vilas M.V.Pavadai Chettiar Sons' (registered trademark 'Sri Valli Vilas' under the Trade Marks Act, 1999), sought permanent injunction against the seventh defendant company 'Aum Valli Vilas Jewellery Private Limited' incorporated by defendants 4 to 6, for use of identical/deceptively or phonetically similar 'Aum Valli Vilas' marks and passing off. Held: under Order VII Rule 11 only the plaint and its supporting documents are examined; the Clause 15 arbitration clause operates only between the partners (plaintiffs 1 to 3 and defendants 1 to 3), does not bind defendants 4 to 7; the dispute is mainly with defendants 4 to 7 and lies outside the clause's scope — non-parties cannot be proceeded against under it; the commercial court's conclusion that the suit was not maintainable was erroneous, the order could not be sustained and was set aside. Appeal allowed, no costs. The Court declined to express any opinion on the commercial court's jurisdiction finding (suit valued below Rs.3,00,000/- vis-a-vis Sections 6 and 12(1)(d), Commercial Courts Act, 2015), leaving parties free to raise such grounds afresh before the commercial court, which remains obliged to examine them notwithstanding the earlier findings; expedited disposal of the suit directed.

Procedural history

How this case reached the court

AI extract

Order under challenge
Order and decreetal order dated 31.07.2023 of the learned Principal District Judge, Cuddalore allowing I.A.No.214 of 2023 in Commercial O.S.No.1 of 2023 (application by defendants 1 to 3 to reject the plaint) and ordering the plaint to be rejected, sought to be set aside with restoration of the suit.¶26
Principal District Judge, Cuddalore (Commercial Court) · 31.07.2023
Prior proceeding
Plaintiffs 1 to 3 and defendants 1 to 3 jointly constituted the partnership firm 'Sri Valli Vilas M.V.Pavadai Chettiar Sons' carrying on jewellery/bullion business under Partnership Deed dated 01.04.2012; the partners obtained registration of the trademark 'Sri Valli Vilas' under the provisions of the Trade Marks Act, 1999.¶40
Prior proceeding
Defendants 4 to 6 incorporated the seventh defendant company 'Aum Valli Vilas Jewellery Private Limited' and contemplated commencing business under the name 'Aum Valli Vilas'.¶44
Prior proceeding
Plaintiffs filed Commercial O.S.No.1 of 2023 seeking permanent injunction restraining manufacture, sale, advertisement and offering for sale under the same or similar trademark 'Aum Valli Vilas', deceptively/phonetically similar to the registered mark 'Sri Valli Vilas', and also sought injunction against passing off.¶44
Prior proceeding
Defendants 1 to 3 filed I.A.No.214 of 2023 in Commercial O.S.No.1 of 2023 under Order VII Rule 11 (a), (c) and (d) read with Section 151 of the Code of Civil Procedure to reject the plaint on various grounds, chiefly that an Arbitration Agreement existed under Clause 15 of the Partnership Deed dated 01.04.2012 making the suit unmaintainable.¶52
Prior proceeding
Defendants 1 to 3 also objected that the suit, valued less than Rs.3,00,000/-, fell outside the commercial court's jurisdiction under Section 6 read with Section 12(1)(d) of the Commercial Courts Act, 2015; the commercial court rejected this objection on the ground that the action concerned a trademark.¶52
Prior proceeding
The commercial court accepted the arbitration-agreement ground, allowed I.A.No.214 of 2023 and ordered the plaint to be rejected.¶56
Prior proceeding
Aggrieved by the said order, the second plaintiff alone filed the present appeal, arraying plaintiffs 1 and 3 as respondents 4 and 5; respondents 4 and 5 sailed with the plaintiffs.¶57
Prior proceeding
No appeal was filed against the commercial court's findings on the jurisdiction/valuation ground, and those findings attained finality.¶63