Delhi HC: IP Disputes to be Adjudicated by Designated Commercial Courts

In an appeal against the order of the Additional District Judge (“ADJ”) (non-commercial) refusing ex parte injunction against an alleged act of trademark infringement, the High Court of Delhi noticed the mass practice of undervaluation of IP suits to escape the rigours of the provisions of the Commercial Courts Act, 2015 (“CCA”). The Court, in this case, was called upon to decide if the valuation of the ‘specified value’ of such IPR disputes has any role to play in determining whether the District Court has jurisdiction.

The Court observed that it is clear in the IPR-related enactments that IPR disputes are a set of disputes which lie only before the District Court. But with the enactment of the CCA, the subject-matter jurisdiction over IPR disputes now vests with the Commercial Courts, at the District Court Level. The court held that although Plaintiff is free to value the suit in the manner it so chooses, it cannot be whimsical, arbitrary, or unreasonable. In case of undervaluation, Plaintiff must give definite reasons for such valuation. 

In light of the same, the court has issued the following direction:

  1. IPR suits have to be instituted before District Judge who have been notified as commercial courts, by valuing it at Rs. 3 lakhs or above.
  2. Even the suits valued below the prescribed valuation shall be heard by the commercial District Judge to determine if such valuation is whimsical, inadequate or has been deliberately undervalued.
  3. Upon examination, if the suit is found to be undervalued, the Court shall direct the Plaintiff to either amend the suit or pay additional court fees.
  4. Even if the suits valued below the prescribed valuation are found to be adequate, they shall continue to be heard by Commercial Courts, to maintain consistency.




Litigants who want to institute IP suits  must mandatorily file the same in the district court which has been designated as commercial court, irrespective of the value of the suit. If the value of the suit is below Rs 3 Lakhs, the court will examine whether the valuation is made arbitrarily. If the court accepts the valuation below Rs 3 Lakhs, the suit shall still be adjudicated by the same court but the provisions of the Commercial Courts Act will not apply.


GST Relief for the Real Estate

In Munjaal Manishbhai Bhatt vs. UOI, the Appellant had entered into an agreement for the purchase of land from a developer and the construction of a building on the same land. Separate consideration was agreed upon for both the elements of the transaction. The Appellant filed a writ application before the Gujarat High Court on the grounds that Paragraph 2 of Notification No.11/2017 – Central Tax dated 28th June 2017 was ultra vires the provisions of the Goods and Services Tax Act, 2017. Paragraph 2 of Notification No.11/2017 states that the value of supply, in case of transfer of property in land or an undivided share in the land, would be the total amount charged for such supply reduced by the value of the land. The value of land is deemed to be one-third of the total amount of supply. 
The Appellant contended that the deeming provision of the value of land to be calculated as one-third of the total amount of supply was ultra vires the statutory provisions of the law when the actual value of land was ascertainable. The High Court held that the application of such a mandatory uniform rate of deduction was discriminatory, arbitrary, and violative of Article 14 of the Constitution of India which stated that all of the rights and freedoms set out in the Act must be protected and applied without discrimination.  Where the value of land was clearly ascertainable or where the value of construction can be derived with the prescribed valuation rules, such deduction can be permitted at the option of a taxable person. The High Court held that the deeming fiction prescribed under the said notification was ultra vires and not mandatory.


Let’s assume that the value of land is Rs.5,00,000/- and after construction, the apartment constructed on top of the land is Rs.10,00,000/-. Applying the provisions of Notification No.11/2017, the value of supply for the transfer of the apartment would be Rs.6,66,667/- (Rs.10,00,000 – 1/3rd of 10,00,00).
However, if the said notification was not applied and the value of land which was ascertainable was used for the calculation of the value of supply then the value of supply would be Rs. 5,00,000 /-(Rs.10,00,000 – Rs.5,00,000).
The aforesaid judgement by the High Court has held that deeming fiction of reducing 1/3rd of the value of land was unnecessary and arbitrary. The High Court held that “when the value of land was ascertainable then the same could be used for calculating the value of supply.


Delhi HC Restores Patents Filed by EU

The Delhi High Court restored two patents filed by the European Union which were subsequently abandoned due to non-filing of the Reply to First Examination report. The High Court noted that while the deadline is non-extendable in nature, the same can be condoned on a case-to-case basis.

While highlighting the importance of Patent Agents and analysing the facts and circumstances of this case, the Court opined that the Applicant had every intention of pursuing the application and that the Applicant’s erstwhile agent acted against the intent of the Applicant. 

The Applicant was conscious of the fact that the patent may be maturing for examination and took the initiative to keep in touch with the patent agent from the very inception. Further, while placing reliance on the judicial opinion in respect of responses to FER or other deadlines, it was evident that if the Applicant did not have an intention to abandon the application and if the Court is convinced that there was a mistake of the patent agent and the Applicant is able to establish full diligence, the court ought to be liberal in its approach. 

Among other things, the Court also took into consideration, the recommendation of the 161st Parliamentary Standing Committee’s Report which called for flexibilities in the Indian Patent Regime concerning deadlines and timeframes in patent prosecution before the Patent Office.


Comments on Draft Amendments to IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 Invited

The Government of India notified the IT Rules in 2021 with an aim to address concerns regarding the lack of transparency and accountability among the intermediaries, who are exempted from liability for the acts of third parties under section 79 of the Information Technology Act, 2000. The Rules require the intermediaries to follow the procedures laid down in order to claim exemption.  


  • Introduction of Grievance Appellate Committee to hear appeals against the decision of the Grievance Officer- Sub-clause 3 to Rule 3 has been proposed, which provides for the establishment of the Grievance Appellate Committee. The Central Government shall constitute one or more Grievance Appellate Committees which consists of members as provided in the rule. Persons aggrieved by the order of the Grievance Officer may appeal to this Committee within 30 days of receipt of communication from the Grievance Officer. The Committee must dispose off the appeal within 30 days from the date of receipt of the appeal.
  • Under Rule 3(1)(a), intermediaries are required to not only publish the rules regarding their privacy policy and user agreements, they are also required to ensure compliance with the same.
  • Under Rule 3(1)(b), the intermediary was previously required to only inform the user of its computer resource not to host, display, upload, modify, publish, transmit, store, update or share the information listed under the rule. The amendment  requires that the intermediary causes the user not to share such information, without notifying the user about it.
  • Two clauses have been proposed to be added to sub-clause 1 of Rule 3 wherein the intermediary is required to take measures to allow access of their services to the users with a reasonable expectation of due diligence, privacy and transparency; and that the intermediaries are required to respect the rights of the citizens accorded to them by the Constitution of India.
  • Rule 3(2) provides that the Grievance Officer has to acknowledge the complaints sent to him within 24 hours and dispose them off within 15 days of receiving the complaint. The proposed amendment describes what is considered as a complaint and states that it includes suspension, removal or blocking of user or user accounts or any complaint or request for the removal of the information listed under Rule 3(1)(b). The proviso to this clause provides that complaints in the nature of the request for the removal of information or communication link must be redressed within 72 hours of reporting. Another proviso has been proposed that provides that the intermediary should adopt safeguards to prevent the misuse of the provision by the users.
  • An amendment has been proposed to Rule 4 which provides for rules for significant social media intermediaries. Under Rule 4(8)(b), when an action taken by an intermediary is disputed by the user who has created or uploaded the information, such complaints are to be decided by the Resident Grievance Officer within 15 days. The amendment proposed provides that the complaints under this rule shall be dealt as per Rule 3(2) which provides for redressal mechanisms to be followed by the intermediaries.


A vital provision that has been proposed to be inserted is the constitution of the Grievance Appellate Committee, which allows the aggrieved persons to approach the committee, instead of filing an appeal in a court of law. It provides an alternative forum to regular courts to file appeals. Other proposed amendments are mostly clarificatory in nature and address gaps identified in the Rules.


AAAR-Gujarat Clarifies GST Exemption to ‘Healthcare Services.’

The Gujarat Appellate Authority for Advance Ruling (AAAR) in reference to ‘Healthcare Services’ has confirmed that a health-related service supplied by a clinical establishment irrespective of whether provided inside or outside a clinical institution is exempt from GST; also, when provided to its organization staff.

BMPL a speciality hospital running under the brand name “Sunshine Global Hospitals” approached the Gujarat Authority for Advance Ruling (AAR) to obtain clarity on whether the supply of medicines, surgical items, implants, consumables, and other allied services & items provided by its hospital through their in-house pharmacy, as well as food, room rent, other services to the in-patients, is part of composite supply of healthcare treatment exempted from levy of GST.

The query further sought clarification as to whether the supply of operational health checkup (OHC) services by the hospital i.e., nursing staff, Doctors, Paramedical staff on the hospital’s payroll, providing health check-up services, ambulance facilities, and allied medical services to hospital employees and also the camps conducted for health check-ups outside the hospitals, will qualify for exemption under the scope of Health Care service.

The AAR on examining the relevant sections and rules pronounced that the supply of services to in-patients was part of the healthcare services defined in the exemption notification. Hence exempted from the levy of GST. Regarding the applicability of taxes for OHC services, the AAR classified it as ‘Human Health and Social Care Services and confirmed a tax rate @ 18% (CGST+SGST).

Consequently, BMPL preferred an appeal before the Gujarat Appellate Authority for Advance Ruling (AAAR).


Submission made by the Applicant


BMPL submitted that OHC services are offered by their Nursing staff, Doctors and Paramedical staff by way of health check-ups in cases of medical emergencies and medical treatment required by its employees. It was further submitted that the major goal of service was to provide timely health check-ups, medical treatments, and other allied medical services to the organization’s employees as and when needed.

BMPL referred to the scheme of tax under the erstwhile Service Tax regime and places reliance on Notification No.30/2011 – Service Tax dated 25/04/2011, which fully exempted the services provided or to be provided by any hospital, nursing home or multi-speciality clinic to an employee of a business entity or to a person covered by a health insurance scheme subject to certain conditions.


Observations by AAAR


The AAAR observed that the definition of “health care services” as given under the exemption notification included diagnosis or treatment or care for illness, injury, deformity, abnormality, or pregnancy in any recognized system of medicines in India and admitted that the lower authority had erred in holding that Health Care Services do not include the services of Occupational Health Check-ups or preventive care.




AAAR confirmed that the activity of providing operational health checkup services by BMPL to its employees and also the camps conducted for health check-ups outside the hospitals qualifies as Health Care services and are exempted from the levy of GST.


FM Comment


The above ruling clarifies the services which come under the purview of healthcare services. The Ruling will have persuasive value on Clinical establishments supporting rural healthcare by way of medical camps and will encourage employers in the Health Care sector to take steps to improve worker health and safety.


Guidelines for Small Business Cluster Development Programme Approved

On 27th May 2022 the government approved the revised guidelines of its key scheme for cluster development, “Micro and Small Enterprises-Cluster Development Programme (MSE-CDP)”. The guidelines shall be implemented during the 15th Finance Commission cycle (FY22-FY26). 

The scheme aims at enhancing the competitiveness and productivity of micro and small enterprises by undertaking specific interventions.

These guidelines of MSE-CDP encompass, inter-alia, the procedure and funding pattern for the following admissible components:

  1. Common Facility Centers (CFCs)
  2. Infrastructure Development
  3. Marketing Hubs/Exhibition Centres by Associations
  4. Thematic Interventions
  5. Support to State Innovative Cluster Development Programme 

Additionally, the central government’s grant for the development of Common Facility Centres (CFCs) shall be restricted to 70 per cent of the cost of the project from Rs 5 crore to 10 crores and 60 per cent of the cost of the project from Rs 10 crore to Rs 30 crore.

Further, in the case of north-east and hill states, island territories and aspirational districts, the government’s grant will be 80 per cent of the cost of the project from Rs 5 crore to Rs 10 crore and 70 per cent of the cost of the project from Rs 10 crore to Rs 30 crore. 

It has also been envisaged that the central government grant will be restricted to 60 per cent of the cost of the project from Rs 5 crore to Rs 15 crore for the setting up of new industrial estate/flatted factory complex. The grant will be 50 per cent of the cost of the project from Rs 5 crore to Rs 10 crore for the upgradation of the existing industrial estate/ flatted factory complex.


CERT-In Issues FAQs to Address Queries on Cyber Security Directions

On 18th May 2022, the Indian Computer Emergency Response Team (CERT-In) released FAQs to address queries on Cyber Security Directions of 28.04.2022. 

The FAQs, consist of 44 questions that endeavour to clarify queries on the Cyber Security Directions to fast track operationalisation of these directions in the country. 

The FAQ consists of the following three primary sections: 

  • Section I: Basic Terminology and Scope of the Directions.
  • Section II: Directions under subsection (6) of section 70B of the IT Act, 2000.
  • Annexure-I: Explanation for Types of Cyber Security Incidents to be Reported to CERT-In.

Section I: comprises the basic terminology and scope of the directions. For instance, the objective for issuing the  Cyber Security Directions, the scope and applicability of the direction, the functions of CERT-In in the area of cyber security, the method of reporting and format for incident reporting, etc.

Section II comprises the nuances and explanations of the Cyber Security Directions, namely, areas the Cyber Security Directions cover, the benefit of the directions to the users in the country, the effect of the direction on the Right to Privacy of individuals, the time frame for reporting and information to be shared while reporting incidents, various applicability aspects of these Cyber Security Directions; and clarifications related to logging requirements, time synchronisation, and maintenance of specific information by entities, etc.

Annexure-I of the FAQs consists of an illustrative list of explanations of the types of incidents required to be reported to CERT-In.


DoT Launches ‘GatiShakti Sanchar’ Portal for Centralised RoW Approvals

On 14th May 2022 the Department of Telecommunication launched the “GatiShakti Sanchar” portal for Centralised Right of Way (RoW) approvals (

Telecom minister Ashwini Vaishnaw  said that “The portal shall act as an enabler to the objective of “Ease of doing business” for telecommunications infrastructure works in accordance with the vision of Hon’ble Prime Minister” 

The portal will enable applicants from various Telecom Service providers (TSPs) as well as Infrastructure providers (IPs) to apply at a single common portal for Right of Way permissions to lay down Optical Fibre Cable and for erecting mobile towers to State/UT Governments and local bodies. Since it smoothens the process of RoW permissions as well as faster approvals; it is believed to facilitate the easy rollout of 5G services, in which a Base Transceiver Station (BTS) is installed at very short intervals. For effective monitoring of RoW applications across the country, the portal even comes fitted with a potent dashboard showing State and District wise pendency status.

The portal will also bring an array of advantages to the Government Bodies- both Central and State/UT. It will smoothen the RoW approval process, which will lead to:

  • Fast laying of more Optical Fiber Cable and thus will accelerate fiberization.
  • Increased tower density will enhance connectivity and improve the quality of various telecom services.
  •  Increased fiberization of telecom towers, thus ensuring better Broadband speed, across the country.


SEBI (Infrastructure Investment Trusts) (Amendment) Regulations, 2022 Notified

On 10th May 2022, the Securities Exchange Board of India notified SEBI (Infrastructure Investment Trusts) (Amendment) Regulations, 2022 which are set to come into force on the date of their publication in the Official Gazette.

In the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014, the following amendment has been notified:

“In Schedule II, paragraph 4 shall be substituted with the following: “

With respect to privately placed InvIT, the InvIT shall pay non-refundable filing fees of: 

i. 0.1% in case of initial offer.

ii. 0.05% in case of the rights issue, of the total issue size including greenshoe option, if any, at the time of filing of the draft placement memorandum or letter of offer, as applicable, with the Board.”




CBDT Notifies Income Tax Amendment (Thirteenth Amendment) Rules, 2022

On 6th May 2022, The Central Board of Direct Taxes notified Income Tax Amendment (Thirteenth Amendment) Rules, 2022, set to come into force on the date of their publication in the Official Gazette.

The amendment Rules lay down the formula for computing infrastructure investments of sovereign wealth funds (SWFs) and pension funds that are eligible for income tax incentives, and the scheme of computation of tax-exempt income attributable to these investments. Rule 2DCA has been inserted to this effect. 

Further, the Rules also state that, for the purpose of valuation, Section 10 of the Income Tax Act, 1961 identifies incomes that are exempted from such valuation. Where any income is not included in the specified person’s (Section 10(23FE) income, and where after any previous year if a person fails to meet any of the listed provisions for the valuation of that income that has to be excluded, it will be taxed as personal income.

The Rules also place the following responsibilities on The Principal Director General of Income-tax (Systems) or the Director-General of Income-tax (Systems) to: 

(i) specify the procedure, formats and standards for ensuring secure capture and transmission of the data in Form No. 10BBD. 

(ii) Specify the procedure, format, data structure, standards and manner of generation of electronic
verification code, referred to in sub-rule (9), for verification of the person furnishing the said Form. 

(ii) Be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the Form No 10BBD so furnished. 

The following modifications have also been introduced vide amendments to Rule 3: 

  1. Intimation Form (10BBB) has been substituted by the Pension Fund of investment under Section 10(23FE).
  2. Form 10BBC- Certificate of accountant in respect of compliance to the provisions is substituted by the notified Pension Fund.
  3. New Form 10BBD- Statement of eligible investment received has been inserted.