Introduction

The Supreme Court of India, in Novenco Building and Industry A/S v. Xero Energy Engineering Solutions Pvt. Ltd. & Anr. (Civil Appeal arising out of SLP (C) No. 2753 of 2025, decided on 27 October 2025), has rendered a significant judgment clarifying the interpretation of the expression “contemplates any urgent interim relief” under Section 12A of the Commercial Courts Act, 2015. The case arose from a dispute concerning alleged infringement of patents and design rights owned by Novenco, a Danish manufacturer of industrial fans.

The principal issue before the Court was whether Novenco could institute a commercial suit without first undertaking pre-institution mediation, on the grounds that its suit sought urgent interim relief in the form of an injunction to restrain continuing infringement. The Court’s decision not only clarifies the scope of Section 12A but also establishes important principles governing urgency in intellectual property matters. It emphasises that continuing infringement of intellectual property rights, by its very nature, constitutes ongoing injury and therefore justifies urgent judicial intervention.

This judgment carries considerable significance for commercial litigants and intellectual property owners. It emphasizes that procedural requirements such as mediation cannot defeat substantive rights, particularly where delay would result in harm to proprietary interests and to the consuming public.

Facts of the Case

The appellant, Novenco Building and Industry A/S, is a company incorporated under the laws of Denmark and engaged in the manufacture of highly efficient industrial fans under the brand name “Novenco ZerAx.” Between 2007 and 2015, the appellant invested substantial sums in developing the technology related to these fans and secured several patents and design registrations in India and abroad to protect its innovation. 

On 1 September 2017, a dealership agreement was executed between Novenco and the first respondent, Xero Energy Engineering Solutions Pvt. Ltd., authorising the latter to market and sell Novenco ZerAx fans in India. It was subsequently discovered that the director of Xero Energy had, in breach of this agreement, incorporated the second respondent, Aeronaut Fans Industry Pvt. Ltd., which began manufacturing and marketing industrial fans identical in design and appearance to Novenco’s patented products.

The appellant discovered this imitation around July 2022 and issued communications to Xero Energy seeking clarification. Having received no satisfactory response, it terminated the dealership agreement on 14 October 2022. Thereafter, a cease-and-desist notice was issued to Aeronaut Fans on 23 December 2022. Despite such notice, the infringing activities continued.

On 6 December 2023, a technical expert engaged by Novenco inspected the fans installed by Aeronaut Fans at certain industrial premises and confirmed, in an affidavit dated 6 February 2024, that the products infringed Novenco’s patents and designs. Relying on these findings, Novenco instituted a commercial suit (COMS No. 13 of 2024) before the High Court of Himachal Pradesh on 4 June 2024, alleging infringement of patent and design rights. Along with the plaint, Novenco filed an application under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure, 1908 (CPC) seeking an ad interim injunction, and another under Section 151 CPC seeking exemption from the requirement of pre-institution mediation mandated by Section 12A of the Commercial Courts Act, 2015 (CCA).

The respondents, however, filed applications under Order VII Rule 10 and Order VII Rule 11 CPC, praying for return or rejection of the plaint on the ground that the suit did not disclose any urgency and that non-compliance with Section 12A was fatal.

The learned Single Judge, by order dated 28 August 2024, rejected the plaint. The Court observed that there was a delay of six months between the inspection of the infringing products in December 2023 and the institution of the suit in June 2024. It further held that the appellant had adequate time to avail itself of pre-institution mediation since its cease-and-desist notice was issued in December 2022. The Court thus concluded that the plea of urgency was not genuine and that the plaint was liable to be rejected under Order VII Rule 11 CPC.

In appeal, the Division Bench of the High Court, by judgment dated 13 November 2024, affirmed the decision of the Single Judge. It held that delay in instituting the suit demonstrated lack of urgency and that continuous infringement of intellectual property could not override the statutory requirement of mediation. The Bench, however, observed that the rejection of the plaint would not preclude the appellant from instituting a fresh suit after complying with Section 12A. Aggrieved by these findings, Novenco preferred an appeal before the Supreme Court.

Argument in Favour

On behalf of the appellant, it was contended that the High Court had erred in its interpretation of Section 12A. It was submitted that the requirement of pre-institution mediation could be dispensed with where the suit genuinely contemplated urgent interim relief, and that the question of urgency must be assessed from the standpoint of the plaintiff.

It was further argued that infringement of intellectual property constitutes a continuing wrong, and therefore, delay in bringing the action cannot by itself negate urgency. The appellant emphasised that the relief sought was not an attempt to circumvent the statute but a bona fide effort to prevent further unlawful exploitation of its proprietary rights.

Reliance was placed on Midas Hygiene Industries Pvt. Ltd. & Anr. v. Sudhir Bhatia & Ors., (2004) 3 SCC 90, where the Supreme Court held that delay in taking action against infringement does not legalise the infringing activity or defeat the proprietor’s right to injunction. The appellant also referred to Yamini Manohar v. T.K.D. Keerthi, (2024) 5 SCC 815, where it was held that the existence of urgency must be gathered from a holistic reading of the plaint and accompanying documents from the plaintiff’s perspective, and that the prayer for urgent relief should not be viewed as a mere procedural device.

Accordingly, it was urged that the plaint disclosed a genuine and continuing urgency arising out of ongoing infringement, causing irreparable harm to the appellant’s goodwill, reputation, and intellectual property rights.

Argument Against

The respondents, on the other hand, maintained that the rejection of the plaint was justified. It was contended that Section 12A of the Commercial Courts Act, 2015, makes pre-institution mediation a mandatory requirement for all commercial disputes that do not contemplate urgent interim relief. The respondents submitted that the plaint contained no express statement of urgency and that the appellant had delayed filing the suit by nearly one and a half years after the cease-and-desist notice.

It was further argued that the inspection report confirming alleged infringement was received in February 2024, yet the suit was instituted four months later. Such conduct, it was submitted, demonstrated that the plea of urgency was an afterthought. The respondents also contended that the mere inclusion of an injunction application does not automatically establish urgency, and that the appellant was bound to comply with the statutory procedure under Section 12A before approaching the court.

Court’s Decision

The Supreme Court allowed the appeal, quashed the orders of both the Single Judge and the Division Bench, and restored the commercial suit to the file of the High Court to be proceeded with on merits.

The Court examined the object and scope of Section 12A of the Commercial Courts Act, 2015, which mandates pre-institution mediation for commercial suits unless they contemplate urgent interim relief. Section 12A(1) reads that a suit “which does not contemplate any urgent interim relief shall not be instituted unless the plaintiff exhausts the remedy of pre-institution mediation.” The legislative intent, the Court observed, is to encourage early settlement of commercial disputes through alternative dispute resolution mechanisms, thereby reducing judicial backlog. However, this object cannot be allowed to defeat substantive rights in situations where immediate relief is necessary to prevent irreparable harm.

The Court referred to Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd., (2022) 10 SCC 1, where Section 12A was held to be mandatory in nature, and to Dhanbad Fuels Pvt. Ltd. v. Union of India, (2025) SCC OnLine SC 1129, which clarified that the test for urgency is not whether interim relief would ultimately be granted, but whether, from the plaintiff’s standpoint, urgent relief is reasonably contemplated.

Applying these principles, the Supreme Court held that the infringement alleged by Novenco was of a continuing nature, as each act of manufacture and sale of the infringing product constituted a fresh wrong and recurring cause of action. The Court reiterated, relying on Midas Hygiene Industries, that delay does not legalise infringement or extinguish the right to injunctive protection.

The Court further observed that the urgency in such matters lies not in the age of the cause but in the persistence of the injury. The continuing infringement caused immediate and irreparable harm to the appellant’s business and goodwill and had broader implications for public interest by causing confusion in the marketplace. The insistence on pre-institution mediation in such a scenario would render the plaintiff remediless, allowing the infringer to continue its unlawful activities under the protection of procedural formality. Section 12A, the Court held, was never intended to produce such anomalous results.

Accordingly, the Court concluded that actions alleging continuing infringement of intellectual property rights inherently involve urgency, and mere delay in instituting the suit cannot, by itself, negate the existence of urgent interim relief.

Conclusion

The Judgment in Novenco Building and Industry A/S v. Xero Energy Engineering Solutions Pvt. Ltd. & Anr. marks an important development in the interpretation of Section 12A of the Commercial Courts Act, 2015. The Supreme Court has clarified that the concept of urgency must be appreciated in substance rather than in form, particularly in cases involving the continuing infringement of intellectual property rights. The decision states that where the violation of proprietary rights is ongoing, each infringing act gives rise to a fresh cause of action, and the requirement of immediacy is satisfied by the very nature of the wrong.

The Court has also reaffirmed that procedural provisions are intended to advance justice and not to obstruct it. Section 12A was enacted to promote settlement through mediation, but it cannot be interpreted so rigidly as to deny effective judicial protection in situations where delay would perpetuate the injury. By applying a pragmatic and purposive interpretation, the Court has ensured that the balance between procedural discipline and substantive justice is maintained.

In essence, the decision harmonises the objectives of the Commercial Courts Act with the need for prompt relief in intellectual property disputes. It provides clear guidance to both courts and litigants that urgency must be assessed from the standpoint of the rights holder and the nature of the harm alleged, rather than the mere passage of time between events.