Point of Law: An order permitting withdrawal with liberty to institute a fresh suit on the same subject matter cannot be made mechanically or without application of judicial mind.

JUDGMENT :

1. This Appeal, filed under Section 13 of the Commercial Courts Act, 2015 (“the Act”) challenges an Order of the Learned Single Judge dated 22nd October 2021. By that Order, the Respondent (Plaintiff in the proceedings before the Learned Single Judge) was given leave to withdraw its suit with liberty to file a fresh suit on the same cause of action. The leave to withdraw with such liberty was granted by the Learned Single Judge by seeking to exercise powers under Order 23 Rule 1(3) of the Code of Civil Procedure, 1908 (“the CPC”). The Appellant-Defendant before the Learned Single Judge, has filed this appeal taking exception to the grant of liberty to file a fresh suit on the same cause of action.

2. Briefly stated, the Appellant contends that no ground for granting such liberty was either made out by the Respondent or noted in the Impugned Order to justify the grant of such liberty under Order 23 Rule 1(3). The grievance is that without the requirements for grant of such liberty under the said provision being satisfied, the Learned Single Judge was in error in exercising such power. It was contended that the grant of such liberty without the requirements of the provisions being satisfied amount to a jurisdictional error in the Impugned Order.

3. Before referring to the nature of proceedings before the Learned Single Judge and the Impugned Order, it is to be noted at the outset that the Respondent has raised an issue of the very maintainability of this Appeal under Section 13 of the Act. Both parties have made extensive submissions on this aspect and also on the merits of the Appeal on the assumption that it is maintainable. In fact, the order in which submissions were made by the Appellant was to address the aspect of merits and the substantive law under Order 23 Rule 1(3), and thereafter argue how an Order of such nature is appealable under Section 13 of the Act. The Respondents submissions also proceed in a similar manner of addressing the substantive issue of exercise of power under Order 23 Rule 1(3) first and then the issue of maintainability.

4. However, since our jurisdiction to decide the Appeal depends upon it being maintainable, we have addressed that issue first in our discussions and findings below.

BRIEF FACTS AND PROCEEDINGS IN THE APPEAL

5. The Respondent/Plaintiff filed Commercial IP Suit (L) No. 24136 of 2021 (“the First Suit” or “the Withdrawn Suit”) against the Appellant/Defendant in this Court. The First Suit was based on a cause of action of infringement of trade mark and passing off of the Respondents mark ‘Phonepe’ and its variants. Since we are not at all considering the merits of the intellectual property rights disputes between the parties we are not setting out the rival marks. It would suffice to note that the rival marks have been reproduced by the Respondent/Plaintiff in paragraph 1 of the plaint in the First Suit and in paragraph 2 of the one of the written submissions on behalf of Respondent tendered on 29th November, 2021.

6. The First Suit was filed 20th October, 2021 In the First Suit the Respondent filed Interim Application (L) No. 24138 of 2021 (“the Interim Application”) for ad interim and interim injunctions against the Appellant/Defendant from infringing the registered trademarks of the Respondent/Plaintiff.

7. The Interim Application in the First Suit was moved for urgent ad-interim reliefs by the Respondent/Plaintiff before the Learned Single Judge. It is at this first hearing of the application for ad-interim reliefs that the Impugned Order came to be passed. This Appeal preferred against the Impugned Order was heard by us on 28th October, 2021 shortly before the commencement of the Diwali Court vacations. Thereafter, and in pursuance of the liberty so granted by the Impugned Order, the Respondent/Original Plaintiff filed another suit, being Commercial IP Suit No. 25032 of 2021 (“the Second Suit”). The Second Suit was moved before one of us (S.J. Kathawalla, J.) then presiding as