The Supreme Court of India, in the landmark judgment of Novenco Building & Industry A/S v. Xero Energy Engineering Solutions (P) Ltd1., decisively answered this question by clarifying when a commercial suit can bypass the mandatory pre-institution mediation (PIM) requirement under Section 12A of the Commercial Courts Act, 2015. This ruling is particularly vital for cases of Intellectual Property (IP) infringement, establishing that the urgency inherent in a continuing wrong justifies the immediate institution of a suit without mediation. The Court emphasized that for recurring wrongs, the urgency “does not lie in the age of the cause but in the persistence of the peril,” ensuring that the procedural requirement of mediation does not aggravate the harm caused by ongoing infringement.
The case stemmed from a dispute between Novenco Building and Industry A/S, a Danish manufacturer of industrial fans, and its former distributor, Xero Energy Engineering Solutions. Novenco, holding patents and design registrations for its ‘Novenco ZerAx‘ fans, alleged that the distributor started manufacturing and selling nearly identical, competing fans under a deceptively similar name and appearance, in direct violation of their agreement. Novenco filed a suit for injunction, but the Himachal Pradesh High Court rejected it, citing a lack of urgency due to a delay in filing, thus mandating compliance with Section 12A mediation.
The Supreme Court, however, reversed the High Court’s stance. It definitively held that in cases of alleged continuing infringement, the element of urgency is inherent. The Court explained that the urgency in such cases “does not lie in the age of the cause but in the persistence of the peril.”
The Five-Point Test for Bypassing Mediation
To strike a balance between the procedural mandate of mediation and the necessity of substantive justice, the Supreme Court established a clear five-point legal test for determining the exemption from Section 12A:
Mediation is the Rule: Section 12A makes pre-institution mediation mandatory for commercial suits, and non-compliance will ordinarily make the plaint defective.
Urgency Must be Evident: Exemption is granted only if the plaint and supporting documents clearly demonstrate a real need for urgent interim intervention.
Genuineness of Urgency: The court must assess the genuineness of the claimed urgency based on the pleadings and documents, considering factors like immediacy of peril, irreparable harm, or statutory timelines.
Tactical Pleas Disregarded: Any proforma or anticipatory prayers meant merely to bypass mediation, which are essentially unfounded excuses, must be disregarded by the court.
Plausibility, Not Merits, of Urgency: Crucially, the court is not concerned with the ultimate merits of the urgent relief sought. If the relief appears plausibly urgent from the plaintiff’s standpoint, the court can dispense with the Section 12A requirement.
Rationale for Inherent Urgency in IP Infringement
The Supreme Court’s definitive judgment not only carved out a specific exception for Intellectual Property (IP) disputes under Section 12A but also provided a robust judicial consolidation of the principles governing the “urgent interim relief” clause. This ruling, therefore, represents a crucial moment where the need for swift substantive justice was harmonized with procedural discipline.
The Court anchored its rationale in the inherent nature of continuous infringement, emphasizing that the urgency in IP cases is not diminished by the passage of time. This is because the legal “peril” is persistent: every act—be it manufacturing, selling, or offering—of the infringing product constitutes a fresh, recurring cause of action. Adhering to the well-settled principle of IP law, as affirmed in precedents like Midas Hygiene, the Court established that mere delay in filing the suit is not fatal; it neither legalises the ongoing infringement nor defeats the proprietor’s right to an injunction against a dishonest user.
Crucially, the judgment underscored the public interest element that elevates IP infringement beyond a private dispute. Continuous infringement actively erodes market standing, aggravates injury, and severely harms the public by causing widespread consumer confusion and deception. This public dimension, the Court stated, “imparts a colour of immediacy” to the reliefs sought, collectively ensuring that mandatory procedural steps like pre-institution mediation cannot be weaponized to prolong the harm caused by a persistent wrong.
Consolidating the Judicial Approach to Urgency
To lend clarity and uniformity to the legal landscape, the Novenco decision effectively consolidated the governing judicial approach to Section 12A by affirming and building upon recent Supreme Court rulings:
It reiterated the foundational principle established in Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd2. (2022), confirming that Section 12A is mandatory for all commercial suits where the plaintiff does not genuinely contemplate urgent interim relief.
The judgment then incorporated the perspective articulated in Yamini Manohar v. T.K.D. Keerthi (2024)3, reinforcing that the criteria for judging urgency must be viewed holistically from the standpoint of the plaintiff, examining the subject matter, cause of action, and the prayer for interim relief.
Finally, it cemented the test laid down in Dhanbad Fuels (P) Ltd. V. Uoi (2025)4, where the ultimate determining factor is whether the urgent interim relief is “contemplable” from the plaintiff’s perspective, not whether that relief is ultimately granted by the court.
Conclusion
By applying this consolidated, three-pronged test, the Supreme Court definitively resolved the existing divergence in lower court opinions. The clear directive is that IP cases involving recurrent and continuous infringement inherently present a case of urgency, thereby permitting the suit to proceed directly to court, notwithstanding any prior delay in its institution. The present judgment is a definitive ruling that clarifies the scope of the “urgent interim relief” exception in Section 12A. It ensures that the procedural discipline of mandatory mediation does not inadvertently become a tool to aggravate the harm caused by an ongoing, recurring wrong, especially in the context of Intellectual Property rights. The suit was ultimately restored to the High Court for consideration on its merits.
Citations
- Novenco Building & Industry A/S v. Xero Energy Engineering Solutions (P) Ltd. 2025 INSC 1256
- Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd. 2022 SCC OnLine SC 1028
- Yamini Manohar v. T.K.D. Keerthi (2024) (2024) 5 SCC 815
- Dhanbad Fuels (P) Ltd. V. Uoi (2025) 2025 Insc 696
Expositor(s): Adv. Archana Shukla
