Practical Guide On Commercial Court Act Final New 1

PRACTICAL GUIDE ON COMMERCIAL COURT ACT 1
(For Academy Purpose Only)
PRACTICAL
GUIDE
ON
COMMERCIAL COURT
ACT
Respectfully Submitted To
Hon'ble Gujarat State Judicial Academy
PREPARED BY
A .P. RANDHIR
PRINCIPAL SR. CIVIL JUDGE
& ACJM, BORSAD
DISTRICT : ANAND
A P RANDHIR, PR.SR.CIVIL JUDGE BORSAD, DISTRICT: ANAND
SUBJECT INDEX
SR INDEX PAGE
1 The Commercial Court Act, 2015 321
2 PreInstitution Mediation And 2252
Settlement Section 12A Of The

Commercial Court Act.
3 Case Managment Hearing 5372
4 Important Amendments To Cpc And 7376
Projected Timeline Of Litigation

5 Judgment On Commericial Court Act 77138
1. The Commercial Court Act, 2015
“Improving The Ease Of Doing Business Ranking Of
India.”
Law Minister Sri. Ravi Sankar Prasad
1. Introduction
India is infamous for having an overburdened legal system

that leads to indefinite delays in the disposal of cases. Inefficiencies
in its legal infrastructure have made it all the more difficult for
foreign as well as domestic investors to protect their investments in
India. In fact, as seen in the famous case of White Industries
Australia Ltd. vs Union of India, inordinate delays in the legal
process was viewed as breach of investment treaty obligation by

India.
For a government that likes report cards, the World Bank’s
ease of doing business rankings has been a crucial grade.
India’s recent spike in rankings has been attributed to business

reforms introduced by this government since it took over. One such
reform was the constitution of the designated commercial courts for
dealing with commercial disputes of a specified value. Thus, there
has always been a long standing requirement for a stable and
efficient dispute resolution system ensuring quick enforcement of
contracts, easy recovery of monetary claims and award of just
compensation for damages suffered, all of which are critical in
encouraging investment and economic activity.
BACKGROUND TO THE REPORT
The 188 th Report of the Law Commission
In the year 2003, the Law Commission suo motu took up the issue
of proposing the constitution of Commercial Divisions in High
Courts, in view of the vast changes in the economic policies of the
country post1991; the perception that the Indian judicial system
had “collapsed” due to inordinate delays; and the need to ensure the
fast disposal of high value commercial disputes to provide
assurance to domestic and foreign investors.
In its 188 th Report titled “Proposals for Constitution of
Hitech FastTrack Commercial Divisions in High Courts”,
the Commission examined the international practice of setting up
commercial courts to deal with high value or complex commercial
cases, and the need for such commercial courts in India. Its aim was
to give a clear assurance to investors that high value commercial
suits would directly go before the Commercial Division to be
constituted in all High Courts, which would follow fast track
procedures similar to those recommended in the 176 th Report on
“Arbitration and Conciliation (Amendment) Bill, 2002”. These
Commercial Divisions would also be equipped with hightech video
conferencing facilities along the lines used in commercial courts
abroad.
The Law Commission carried out an indepth study of the
commercial courts in the United Kingdom (hereinafter “UK”); the
United States of America, specifically the States of New York and
Maryland; Singapore; Ireland; France; Kenya and nine other
countries to examine the procedures followed and the kinds of cases
handled by the commercial courts in such countries
Scheme of the Provisions of the Commercial Division of
High Courts Bill, 2009
The Law Commission’s proposal on the constitution of a

dedicated Bench of the High Court (the Commercial Division) to
decide commercial cases above a certain monetary limit on a fast
track basis was considered, and accepted, by the ‘Conference of
Chief Ministers of the States and Chief Justices of the High Courts’
on 16 th August 2009 in New Delhi. On the basis of the above
recommendations of the Commission, the Lok Sabha introduced the
Bill as “Bill No. 139 of 2009” on 16 th December 2009, and passed it
on 18 thDecember 2009. Report of the Select Committee on the
Commercial Division of High Courts Bill, 2009 The Bill was passed
in the Lok Sabha without being referred to Standing Committee.
After its passage in the Lok Sabha, the Rajya Sabha took up the
Bill for consideration on 22 nd December 2009, pursuant to which
the Bill was referred to the Select Committee on the Commercial
Division of High Courts Bill, 2009 (hereinafter “the Select
Committee”). The Select Committee presented its Report on 29 th
July 2010 and suggested certain changes to the Bill. Based on the
above recommendations of the Select Committee, the Bill was
redrafted, accepting all the Select Committee’s recommendations,
and placed before the Rajya Sabha for its consideration. During the
course of the debate on 13 th December 2011.
Mandate of the Present Law Commission
In view of the concerns raised by the Members of the Rajya
Sabha, the Government withdrew the Bill. Subsequently, the
Ministry for Law and Justice vide letter dated 7 th March 2013
referred the Bill to the Law Commission in light of the various
shortcomings observed in its provisions. The Ministry’s letter
expressed the view that certain provisions, especially those
regarding the scope of the definition of “commercial dispute”,
needed reconsideration and a fresh study. Accordingly, a reference
was made to the 20 th Law Commission for its views on the
proposed Bill. The present Report seeks to reexamine and suggest
changes to the 2009 Bill, which empowers the Chief Justice of a
High Court to set up a dedicated Bench in the High Court for
deciding commercial cases above a certain monetary limit. Certain
defects have been pointed out in the structure of the Bill, which has
prompted the present rethink.
After more than a decade of extended deliberations, and given
a fresh impetus by the current Government’s mission to improve
India’s image as an investment destination, the Commercial Courts,
Commercial Division and Commercial Appellate Division of High
Courts Ordinance, 2015 (“Ordinance”) was recently cleared by the
Cabinet and received Presidential assent on October 23, 2015. The
Ordinance is in line with international trends, aided by the indepth
study of Commercial Courts of the United Kingdom, the United
States of America, Singapore, France etc. carried out by the Law
Commission of India (“Commission”) in their 188th report and
253rd report.
The government on May 3, 2018 promulgated the
Commercial Courts, Commercial Division and Commercial
Appellate Division of High Courts (Amendment) Ordinance,
2018, amending the Commercial Courts Act. A small but very
significant change made by the government is in the appointment of
judges to commercial courts. The Commercial Courts Act was based
on the recommendations made in the 253rd Report of the Law
Commission of India. The Law Commission had suggested that
the judges of commercial courts be appointed by the high courts.
The Commercial Courts Act as passed by Parliament diluted
the suggestion of the Law Commission. It provided for appointment
of judges by the state governments but with the mandatory
concurrence of the chief justice of the high court. However, pursuant
to the new ordinance, this has been further diluted. Now even the
concurrence of the chief justice of the high court is not mandatory.
Thus, the government is now the sole authority for appointing

judges to commercial courts.
Coupled with such change is the reduction in the pecuniary
threshold for invoking the jurisdiction of commercial courts. Earlier,
commercial courts exercised jurisdiction in relation to claims of
Rs 10 million or above. Now, any commercial dispute
exceeding Rs 3,00,000 in value will be heard by the
commercial courts. This figure of Rs 300,000 has been chosen
as the World Bank, while evaluating the enforcement of contracts
in India, takes the sample claim value as $5,000.
This sample claim value led to the World Bank evaluating city
civil courts for their efficiency in dealing with commercial claims, as
opposed to commercial courts specifically constituted under the
Commercial Courts Act. Therefore, the government has now
reduced the pecuniary jurisdiction of commercial courts to Rs
300,000. However, the effect of this is that a wide array of disputes
will now be decided by courts where the judges are appointed by the
government itself.
Now in Gujarat and other States has notified commericial

Court as Prinicipal Sr. Civil Judges and Small cause Judges in
Metro Cities, and Additional District Judges ( For arbitration and
IPR Related Matters).
1.1 Salient Features of the Act
1. Constitution of commercial court
2. Jurisdiction
3. Fast Track procedure
4. Amended CPC for commercial suit
5. Transfer of pending cases
6. Revision and Appeal
1.2 Salient Features of 2018 Amendments
1. Change of title of Act
2. Reduction of specified value
3. Establishment of commercial appellate court
4. Preinstitution Mediation and Settlement
5. Amendment the Schedule
1.3 Commercial Division Jurisdiction Clarified
• All commercial disputes stipulated by an Act to lie in a court
not inferior to a District Court and filed or pending on the
original side of the High Court
a) Shall be heard by the Commercial Division;
b) Shall be heard irrespective of its pecuniary value;
• Intellectual Property Right matters which are filed or pending
on the original side of the High Court, shall be heard by the
Commercial Division irrespective of the pecuniary value.
It now remains to be seen whether this amendment will withstand
a challenge in court. The ordinance requires the appointment of
persons at or below the level of district judge as the judge of a
commercial court. The Constitution of India provides that the

appointment and posting of district judges shall be made by the
governor in consultation with the high court. This consultative
process has been held by the Supreme Court to be mandatory (See
Registrar (Admn.), High Court of Orissa, Cuttack v. Sisir
Kanta Satapathy, (1999) 7 SCC 725).
Further, the high court determines the posting and promotion
of judges below the level of district judges. The control of the high
court over the subordinate judiciary is supposed to be
comprehensive, exclusive and effective, and it is to subserve a basic
feature of the Constitution — independence of the judiciary
( Prakash Singh Badal v. State of Punjab, (2007) 1 SCC 1). It
seems that the position of the high court and the independence of
the judiciary is being undermined through the constitution of
commercial courts and appointment of judges thereof.
1.4 End of Endless Litigation.
• Establishment of specialized commercial courts for speedy and
effective dispute resolution
• Total time from filing of Suit till final decree prescribed to be
approximately 16 months.
• ‘Cost to follow event’ concept introduced
• Arbitration matters to go before specialized commercial courts.
• Compulsary PriMediation Rules apply,
II. Constitution of Commercial Courts, Commercial Division
and Commercial Appellate Division (“Special Courts”):
The Ordinance provides that the Commercial Courts are to be
established by notification by the State Government, in consultation
with the concerned High Court. For territories where the High
Court itself is vested with the original jurisdiction i.e. where
particular suits may directly be filed before the High Court, the
Chief Justice of such High Court may constitute a Commercial
Division within such High Court. Once the Commercial
Division/Commercial Court is established, the Chief Justice of the
High Court would be required to constitute the Commercial
Appellate Division. In order to ensure that commercial matters are
dealt with by persons with the requisite skillsets, the Ordinance
specifically requires that judges of such courts/divisions be
experienced in dealing with Commercial Disputes.
1.4 The Need for the Act
The Indian judicial system today is burdened with lakhs of
pending cases, most of which are pending since long periods of time.
This high amount of pendency is ascribable to cumbersome
procedures, adjournments and attempts by parties to stall
proceedings. There are thousands of instances where justice delayed
has meant justice denied. Given that many of the pending civil
cases are of a commercial nature, the Indian legislature hopes to
rectify the slow disposal of rates of ‘commercial disputes’ of a

‘specified value’ by enacting the Commercial Courts, Commercial
Division and Commercial Appellate Division of High Courts Act,
2015 (Act). Additionally through the Act, which provides for speedy
disposal of commercial disputes the Government of India hopes to
create a positive image of the Indian judiciary in the minds of
foreign investors and aims at increasing the ease of doing business
in India.
1.5 Commercial Disputes and Specified Value
The Ordinance provides that the Commercial Courts shall

have the jurisdiction to try all suits and applications relating to a
Commercial Dispute of a Specified Value. Suits and applications
filed in the High Court having original civil jurisdiction would be
brought before the Commercial Division of the said High Court.
The definition of “Commercial Disputes” as defined in section
2(c) of the Ordinance is very wide and essentially covers every
commercial transaction including general commercial contracts,
shareholder & joint venture agreements, intellectual property
rights, contracts relating to movable and immovable property,
natural resources etc..
“Specified Value” as defined in section 2(j) the Ordinance

pertains to the value of the subject matter in respect of the suit
which shall not be less than ten (10) million rupees [about USD
150,000] or such higher value, Now Specified value revised not
less than 3,00,000/ ( Three Lac) notified by the Central

Government. The purpose of such segregation of Commercial
Disputes of the given Specified Value from other disputes is to
ensure that the selected disputes are speedily and efficiently
resolved by the Special Courts.
Limited right to appeal/revision
The Ordinance in section 13 provides that appeals against

decisions of the Commercial Courts/Commercial Division can only
be brought before the Commercial Appellate Division of the
concerned High Court within sixty (60) days from the date of
decision and that Commercial Appellate Division should endeavor
to dispose it within six (6) months.
A number of interlocutory/interim orders of a court are currently
subject to an appeal or revision petition leading to delay in
adjudication of principal dispute. The Ordinance has reduced the
ability of defaulting parties to use such appeal/revision provisions
as delaying tactics. It is now specifically provided that:
1. An appeal would lie against only certain identified orders of
the Commercial Court/Division and that no other appeal
under any law including the Letters Patent of a High Court
could be preferred against the orders of Commercial
Court/Division.
2. No civil revision application/petition shall lie against any
interlocutory order of a Commercial Court and any such

grievance against the order may only be raised in appeal
against the final decree.
The Act governs the manner in which ‘Commercial Disputes’ of
a ‘Specified Value’ are to be tried and disposed of. The term
‘Commercial Disputes’ has been defined under Section 2(c) of the
Act by providing an exhaustive list of subjects which includes all
disputes arising out of commercial transactions. It also includes
disputes arising out of transactions of merchants, bankers,
financiers, construction and infrastructure contracts, immovable
property used in trade or commerce, joint venture agreements,
shareholders’ agreements, intellectual property rights, among

others. ‘Specified Value’as per Section 2 (i) read with Section 12 of
the Act relates to the value of the subject matter of the commercial
dispute which shall not be less than one crore rupees or such higher
value as may be notified by the central government.
1.6. Structure of Courts
The Act, at its very essence, changes the structure of forums
that will hear ‘Commercial Disputes’. It provides for the
establishment of Commercial Courts/ Commercial Division and
Commercial Appellate Division.
Commercial Courts are to be established by the State Government
at the district level where High Courts do not exercise an ordinary
original civil jurisdiction. Where there are High Courts that
exercise an ordinary original civil jurisdiction, Commercial
Divisions are to be established in the said High Courts by the Chief
Justice of such High Courts. The Chief Justices of High Courts are
also required to constitute a Commercial Appellate division and
appoint judges of the High Court to be judges of the Commercial
Appellate Division.
Under Section 13 of the Act, all appeals from the Commercial

Courts and Commercial Division will lie with the Commercial
Appellate Division provided they are filed within a period of 60 days
from the date of judgment or order. This is inconsistent with Article
116 of the Limitation Act, 1963, which provides a limitation period
of 90 days to file a first appeal to a High Court from any decree or
order. However, Section 21 of the Act provides that the provisions of
this Act shall have effect notwithstanding anything inconsistent
contained in any other law for the time being in force.
The Commercial Appellate Division is required to dispose of appeals
filed before it within a period of 6 months from date of filing. The
Act also provides that all suits and applications relating to
‘Commercial Disputes’ which are of the ‘Specified Value’ and are
pending in a High Court must be transferred to the Commercial
Division of such a court and which are pending in any civil court in
any district in which a commercial court has been set up should be
transferred to such court unless the final judgment in such a matter
has been reserved before the constitution of such Commercial
Division or Commercial Court as the case may be. This may lead to
practical and logistical difficulties initially as the Courts will have
to deal with transferring a substantial number of cases, which in
turn may lead to cases being delayed until the correct courts receive
the proceedings in suits that now would fall within the definitions
of ‘Commercial Courts’ being above the ‘Specified Value’.
1.7 Applicability of the Act to Arbitrations
The Act is also applicable to all applications and appeals

under the Arbitration and Conciliation Act, 1996 (Arbitration Act)
arising out of arbitrations where the subject matter of the
arbitration is a ‘Commercial Dispute’ of a ‘Specified Value’.
By virtue of an amendment to the Arbitration Act (effective
from 23 October, 2015) all international commercial arbitrations
can only be heard by High Courts. If these international commercial
arbitrations fall within the definition of ‘Commercial Disputes’ and
are of a ‘Specified Value’, then the same have to be heard by the
Commercial Division of such High Courts. Further, all domestic
commercial arbitrations, provided they are ‘Commercial Disputes’ of
a ‘Specified Value’ which have been filed in the High Court shall be
heard by the Commercial Division of such court, whereas all
domestic commercial arbitrations which would ordinarily lie before
a civil court shall be filed before a Commercial Court of the district,
provided they are ‘Commercial Disputes’ of a ‘Specified Value’.
1.8 Definitions.—
(1) In this Act, unless the context otherwise requires,—
2 (c) “commercial dispute” dispute arising out of means a
(i) ordinary transactions of merchants, bankers, financiers and

traders such as those relating to mercantile documents, including
enforcement and interpretation of such documents;
(ii) export or import of merchandise or services;
(iii) issues relating to admiralty and maritime law;
(iv) transactions relating to aircraft, aircraft engines, aircraft
equipment and helicopters, including sales, leasing and financing of
the same;
(v) carriage of goods;
(vi) construction and infrastructure
contracts, including tenders;
(vii) agreements relating to immovable property used exclusively in
trade or commerce;
(viii) franchising agreements;
(ix) distribution agreements; and licensing
(x) management and consultancy agreements;
(xi) joint venture agreements;
(xii) shareholders agreements;
(xiii) subscription and investment agreements pertaining to the
services industry including outsourcing services and financial
services;
(xiv) mercantile mercantile usage; agency and
(xv) partnership agreements;
(xvi) technology agreements; development
(xvii) intellectual property rights relating to registered and
unregistered trademarks, copyright,patent, design, domain names,
geographical indications and semiconductor integrated circuits;
(xviii) agreements for sale of goods or provision of services;
(xix) exploitation of oil and gas reserves or other natural resources
including electromagnetic spectrum;
(xx) insurance and reinsurance;
(xxi) contracts of agency relating to any of the above; and
(xxii) such other commercial disputes as may be notified by the
Central Government.
Explanation.—
A commercial dispute shall not cease to be a commercial

dispute merely because— (a) it also involves action for recovery of
immovable property or for realisation of monies out of immovable
property given as security or involves any other relief pertaining to
immovable property; (b) one of the contracting parties is the State
or any of its agencies or instrumentalities, or a private body
carrying out public functions;
(i) “Specified Value”, in relation to a commercial dispute, shall mean
the value of the subjectmatter in respect of a suit as determined in
accordance with Section which shall not be less than three lakh
rupees rupees or such higher value, as may be notified by the
Central Government.”
(2) The words and expressions used and not defined in this Act but
defined in the Code of Civil Procedure, 1908 (5 of 1908) and the
Indian Evidence Act, 1872 (1 of 1872), shall have the same
meanings respectively assigned to them in that Code and the Act.
1.9 Section 12. Determination of Specified Value.—
(1) The Specified Value of the subjectmatter of the commercial

dispute in a suit, appeal or application shall be determined in the
following manner—
(a) where the relief sought in a suit or application is for recovery of
money, the money sought to be recovered in the suit or application
inclusive of interest, if any, computed up to the date of filing of the
suit or application, as the case may be, shall be taken into account
for determining such specified value;
(b) where the relief sought in a suit, appeal or application relates to
movable property or to a right therein,the market value of the
movable property as on the date of filing of the suit, appeal or
application, as the case may be, shall be taken into account for
determining such specified value;
(c) where the relief sought in a suit,appeal or application relates to
immovable property or to a right therein, the market value of the
immovable property, as on the date of filing of the suit, appeal or
application, as the case may be, shall be taken into account for
determining specified value; and
(d) where the relief sought in a suit, appeal or application relates to
any other intangible right, the market value of the said rights as
estimated by the plaintiff shall be taken into account for
determining specified value;
(2) The aggregate value of the claim and counterclaim, if any, as
set out in the statement of claim and the counterclaim, if any, in an
arbitration of a commercial dispute shall be the basis for
determining whether such arbitration is subject to the jurisdiction
of a Commercial Division,Commercial Appellate Division or
Commercial Court, as the case may be.
(3) No appeal or civil revision application under Section 115 of the
Code of Civil Procedure, 1908 (5 of 1908), as the case may be, shall
lie from an order of a Commercial Division or Commercial Court
finding that it has jurisdiction to hear a commercial dispute under
this Act.
2. PreInstitution Mediation and Settlement Section
12A of the Commercial Court Act.
By way of an Amendment to the Commercial Courts,
Commercial Division and Commercial Appellate Division of High
Courts Act, 2015, Chapter IIIA titled PreInstitution Mediation
and Settlement (PIMS) was introduced and was made
retrospectively applicable from 03.05.2018. Section 12A of the
the Commercial Court Act (for short the Act) reads as under:
2.1 PreInstitution Mediation in Commercial Matters
The Commercial Courts, Commercial Division, Commercial

Appellate Division of High Courts Act, 2015, was enacted in the
year 2015 with the objective of achieving speedy adjudication of
Commercial Disputes. Moreover, the Commercial Courts (Pre
Institution Mediation and Settlement) Rules, 2018 were also framed
in line with the aforesaid act for the purpose of resolving the
matters relating to commercial disputes in an efficacious and
expeditious manner.
As per the said enactments, all disputes falling within the

definition of “Commercial Dispute” under Section 2(1)(c) of the
Commercial Courts Act, which are valued Rupees 3 Lakhs or more,
shall not be instituted unless the plaintiff mandatorily exhausts the
remedy of PreInstitution Mediation, to be conducted by the Legal
Services Institutions. Accordingly, the Legal Services Institutions
are conducting Pre Institution Mediation in respect of Commercial
Disputes across the country.
2.2. Mandatory PreInstitution Commercial Mediation In
India: Premature Step In The Right Direction?
The Indian parliament passed the Commercial Courts,
Commercial Division and Commercial Appellate Division of
High Courts (Amendment) Bill, 2018 (“Bill”) on 10 August,
2018. In a potentially significant development, section 12A of the
Bill stipulates mandatory preinstitution mediation i.e. the plaintiff
is mandatorily required to exhaust the remedy of mediation prior to
filing a suit in accordance with the Commercial Courts (Pre
Institution Mediation and Settlement) Rules, 2018 (“Rules”), unless
the suit contemplates any urgent interim relief under the parent
Commercial Courts Act, 2015 (“Act”)
2.3 Why is this Bill potentially significant?
Mediation has long been considered the poorer cousin to litigation
and arbitration in India. In particular, commercial disputes
constitute only a fraction of mediations conducted by existing
institutions, which largely mediate family, matrimonial and
property disputes. Given that commercial disputes constitute a
significant proportion of disputes involving Indian parties, urgent
legislative, institutional and attitudinal reforms are required to
promote commercial mediation. In light of this, the introduction of
mandatory preinstitution mediation could provide muchneeded
impetus to promote commercial mediation, enhance the acceptance
of mediation as a viable and preferred dispute resolution

mechanism in India and further larger objectives of improving
India’s Ease of Doing Business ranking (currently 100) and
facilitating quicker resolution of commercial disputes.
2.4 Key features
The Bill envisages the optout model of mediation, which has

enjoyed considerable success in countries like Italy and Turkey in
the recent past. In this model, parties are required to attend an
initial information session with a mediator. The session provides
them an opportunity to learn more about mediation and make an
informed decision about whether to attempt it or initiate litigation.
Voluntariness of the process is protected as parties are not
obligated to participate in an actual mediation session. Any
mediated settlement assumes the status of a deemed arbitral award
under section 30(4) of the Arbitration and Conciliation Act, 1996
and can accordingly be enforced as an arbitral award.
The Rules appear to prescribe the facilitative model of
mediation as they expressly refer to the principles of self
determination and voluntariness. Further, confidentiality of the
mediation as well as the principal ethics to be abided by the
mediator are also prescribed. The mediation is required to be
completed within three months from the date of the plaintiff’s
application to initiate mediation, which can be extended by two
months upon both parties’ consent.
2.4 Premature step?
Although a step in the right direction, there is no denying that the
implementation and success of the envisaged mechanism remain
highly questionable. Perhaps the biggest hindrance could prove to
be the authorisation of the State Authorities and District
Authorities (constituted under the Legal Services Authorities Act,
1987) as the relevant authorities to conduct the preinstitution
mediation.The object of the Legal Services Authorities Act is to
“provide free and competent legal services to the weaker sections of
the society to ensure that opportunities for securing justice are not
denied to any citizen by reason of economic or other disabilities”. To
this end, State Authorities and District Authorities (“LSA
Authorities”) provide legal services to eligible persons and
periodically conduct Lok Adalats (“people’s courts”), among other
functions and services. While an analysis of the Legal Services
Authorities Act is beyond the scope of this post, it suffices to state
that the LSA Authorities are already immensely overburdened.
This problem only amplifies when you consider (1) the fact that the
Bill lowers the required pecuniary threshold of a suit from one crore
Indian rupees (approximately USD 142,000) to three lakh Indian
rupees (approximately USD 4,285); and (2) the broad definition of
“commercial dispute” under section 2(1)(c) of the Act. While a lower
pecuniary threshold is an arguably wellintentioned amendment to
allow more people to access commercial courts and facilitate
resolution of more commercial disputes, it is likely to adversely
impact the preinstitution mediation. A broad definition of
“commercial dispute” combined with a lower pecuniary threshold is
more likely than not to result in more suits filed under the Act,
which in turn means more preinstitution mediations – the LSA
Authorities are simply not equipped with the appropriate capacity
currently to effectively deal with this, especially without
compromising on the justice administered to the weaker sections of
society, which is of course an undesirable outcome.
Moreover, it is likely that the LSA Authorities lack adequate
and relevant experience and expertise to mediate commercial
disputes as the disputes they typically address pertain to labour,
family and insurance matters. Experience and training in
commercial mediation is always preferable as the issues involved
can be fairly technical and a skilled mediator in this regard can
ensure effective dialogue and a workable settlement. Even if one
were to legitimately reason that facilitative mediation does not
necessarily require a mediator to be trained in the area of dispute,
there is no guarantee that the officers and members of the LSA
Authorities have any experience at all in any sort of facilitative
mediation, let alone any training. Efficient, useful and effective
mediation of commercial disputes requires, at the very least, some
basic minimum training in and exposure to mediation. This is all
the more essential in a country like India where awareness of
mediation is minimal and, therefore, parties rely on the mediator to
effectively guide the process. In my opinion, in this respect, the Bill
reflects a widelyheld perception in India that anyone can mediate
and that mediation is not a distinct discipline which requires its

own skillsset. Ideally, the successful implementation of any reform,
such as preinstitution mediation in this case, requires adequate
infrastructure and resources to be established and available prior to
its introduction. Italy and Turkey invested in resourcebuilding
prior to their respective preinstitution mediation reforms, which
have played a pivotal role in the success of the reforms. India’s
mediation machinery is minimal – there is no pool of certified
accredited mediators, no central statute governing mediation and
opportunities to be trained are limited. The legislature should have
taken into account these constraints and designated external
institutions and centres dedicated to ADR and mediation as well as
mediation centres attached to courts as the
responsible authorities. Such institutions and centres have
empanelled mediators who are certified and have undergone certain
minimum training. In addition, they are likely to have more
experience and skills in commercial mediation than the LSA
Authorities.
Further, section 12A creates a carveout from
mandatory mediation for “urgent interim relief” – neither the
Act nor the Bill clarifies what constitutes an “urgent” interim relief.
This could potentially be misused by parties and/or counsel to
wriggle out of participating in mediation or delaying the same,
which in turn would defeat the overall objective of the statute. In
addition, it is not clear if pursuit of the urgent interim relief
temporarily delays the mediation or eliminates the mandatory

requirement to mediate altogether.
Lastly, there are two important questions to consider –
(1)should there be any monetary sanction if either party does not
appear for mediation or participate in the mediation
seriously?; and
(2) is the threemonth time period (extendable by two months)
for completion of the mediation too long?
Mediators and practitioners in India agree that these are
relevant issues, however these are complex issues to which there
are no easy/straightforward answers and merit detailed analysis.
This is all the more so in India where mediation is nascent, and
resources and awareness limited.
For instance, who would determine whether or not a party
participated seriously and on what basis? And would a penalty
actually guarantee serious participation or only encourage parties
to pretend to be participating seriously?
Likewise, would a shorter time period actually be feasible given the
capacity crunch highlighted above and instead have an adverse
impact on the quality of mediation? While a detailed analysis of
these issues is beyond the scope of the post, they are definitely
worth deliberating and examining in the context of the Bill.
2.5 Concluding thoughts
While urgent reforms are required to promote mediation in India,
and in particular commercial mediation, any such reform requires
an enabling environment to succeed, which India currently lacks.
Allocation of the responsibility to the LSA Authorities reflects
shortsightedness and lack of careful thought on the part of the
legislature. Now that only the President’s assent is required to
make the Bill into law (which will almost certainly be given), it
remains to be seen how this reform will work in practice. A silver
lining, perhaps, is that this Bill may hopefully generate discussion
and awareness about commercial mediation, which could lead to
more sensible initiatives and reforms in the future.
2.6 Section 12A of the aforesaid Act states as follows:
NOTE: NOTIFICATION : Noti. No. S.O. 3232(E), dated July 3,
2018.—In exercise of the powers conferred by subsection (2) of
Section 12A of the Commercial Courts Act, 2015, the Central

Government hereby authorises the State Authority and District
Authority constituted under the Legal Services Authorities Act,
1987 (39 of 1987), for the purposes of pre institution mediation and
settlement under Chapter IIIA of the Commercial Courts Act, 2015.
12A. PreInstitution Mediation and Settlement—
(1) A suit, which does not contemplate any urgent interim relief
under this Act, shall not be instituted unless the plaintiff exhausts
the remedy of preinstitution mediation in accordance with such
manner and procedure as may be prescribed by rules made by the
Central Government.
(2) The Central Government may, by notification, authorise the

Authorities constituted under the Legal Services Authorities Act,
1987 (39 of 1987), for the purposes of preinstitution mediation.
(3) Notwithstanding anything contained in the Legal Services

Authorities Act, 1987 (39 of 1987), the Authority authorised by the
Central Government under subsection (2) shall complete the
process of mediation within a period of three months from the date
of application made by the plaintiff under subsection (1):
Provided that the period of mediation may be extended for a further
period of two months with the consent of the parties:
Provided further that, the period during which the parties remained
occupied with the preinstitution mediation, such period shall not
be computed for the purpose of limitation under the Limitation Act,
1963 (36 of 1963).
(4) If the parties to the commercial dispute arrive at a settlement,
the same shall be reduced into writing and shall be signed by the
parties to the dispute and the mediator.
(5) The settlement arrived at under this section shall have the same
status and effect as if it is an arbitral award on agreed terms under
subsection (4) of section 30 of the Arbitration and Conciliation Act,
1996 (26 of 1996).
1. Short title and commencement. (1) These rules may be
called the Commercial Courts (PreInstitution Mediation and
Settlement) Rules, 2018.
(2) They shall come into force on the date of their publication
in the Official Gazette.
2. Definitions. (1) In these rules unless the context otherwise
requires,
(a)"Act"means the Commercial Courts Act, 2015 (4 of 2016);
(b)"applicant"means a person who approaches the Authority

under rule 3 for the initiation of mediation process;
(c) "Authority" means the Authority notified by the Central

Government under subsection (2) of section 12A of the Act;
(d) "commercial dispute" means the commercial dispute as

defined in clause (c) of subsection (1) of section 2 of the Act;
(e) "Form" means the Form specified in the Schedule to these

rules;
(f) "mediation" means a process undertaken by a Mediator to

resolve, reconcile and settle a commercial dispute between the
parties thereto.
(g) "Mediator" means a person empanelled by the Authority for

conducting the mediation;
(h) "opposite party" means a party against whom relief is sought
in a commercial dispute;
(i) "Schedule means the Schedule appended to these rules; and
(j) "settlement" means the settlement of commercial dispute
arrived at by the parties to the mediation;
(2) The words and expressions used and not defined in these rules,
shall have the same meanings respectively as assigned to them in
the Act or the Legal Services Authorities Act, 1987 (39 of 1987) or in
any other law for the time being in force.
3. Initiation of mediation process.
(1) A party to a commercial dispute may make an application to the
Authority as per Form1 specified in ScheduleI, either online or by
post or by hand, for initiation of mediation process under the Act
along with a fee of one thousand rupees payable to the Authority
either by way of demand draft or through online;
(2) The Authority shall, having regard to the territorial and

pecuniary jurisdiction and the nature of commercial dispute, issue a
notice, as per Form2 specified in ScheduleI through a registered or
speed post and electronic means including email and the like to the
opposite party to appear and give consent to participate in the
mediation process on such date not beyond a period of ten days from
the date of issue of the said notice.
(3) Where no response is received from the opposite party either by
post or by email, the Authority shall issue a final notice to it in the
manner as specified in subrule (2).
(4) Where the notice issued under subrule (3) remains

unacknowledged or where the opposite party refuses to participate
in the mediation process, the Authority shall treat the mediation
process to be a nonstarter and make a report as per Form 3

specified in the ScheduleI and endorse the same to the applicant
and the opposite party.
(5) Where the opposite party, after receiving the notice under sub
rule (2) or (3) seeks further time for his appearance, the Authority
may, if it thinks fit, fix an alternate date not later than ten days
from the date of receipt of such request from the opposite party.
(6) Where the opposite party fails to appear on the date fixed under
subrule (5), the Authority shall treat the mediation process to be a
nonstarter and make a report in this behalf as per Form 3 specified
in ScheduleI and endorse the same to the applicant and the
opposite party.
(7) Where both the parties to the commercial dispute appear before
the Authority and give consent to participate in the mediation
process, the Authority shall assign the commercial dispute to a
Mediator and fix a date for their appearance before the said
Mediator.
(8) The Authority shall ensure that the mediation process is

completed within a period of three months from the date of receipt
of application for preinstitution mediation unless the period is
extended for further two months with the consent of the applicant
and the opposite party.
4. Venue for conducting mediation. The venue for conducting
of the mediation shall be the premises of the Authority.
5. Role of Mediator. The Mediator shall, on receipt of the
assignment under subrule (7) of rule 3, facilitate the voluntary

resolution of the commercial dispute between the parties and assist
them in reaching a settlement.
6. Representation of parties. A party to a commercial dispute
shall appear before the Authority or Mediator, as the case may be,
either personally or through his duly authorised representative or
Counsel.
7. Procedure of mediation. (1) The mediation shall be
conducted as per the following procedure
(i) At the commencement of mediation, the Mediator shall

explain to the parties the mediation process;
(ii) The date and time of each mediation sitting shall be fixed by
the Mediator in consultation with the parties to the
commercial dispute.
(iii) The Mediator may, during the course of mediation, hold

meetings with the parties jointly or separately, as he thinks fit;
(iv) The applicant or opposite party may share their settlement
proposals with the Mediator in separate sittings with specific
instruction as to what part thereof can be shared with the
other party;
(v) The parties to the mediation can exchange settlement

proposals with each other during mediation sitting either
orally or in writing;
(vi) During the process of mediation, the Mediator shall maintain
confidentiality of discussions made in the separate sittings
with each party and only those facts which a party permits can
be shared with the other party;
(vii) Once both the parties reach to a mutually agreed

settlement, the same shall be reduced in writing by the
Mediator and shall be signed by the parties to the commercial
dispute and the Mediator as per Form4 specified in the
ScheduleI;
(viii) The Mediator shall provide the settlement agreement, in

original, to all the parties to a commercial dispute and shall
also forward a signed copy of the same to the Authority; and
(ix) Where no settlement is arrived at between the parties within
the time specified in the subsection (3) of section 12A of the
Act or where the Mediator is of the opinion that the settlement
is not possible, the Mediator shall submit a report to the
Authority, with reasons in writing, as per Form5 specified in
ScheduleI.
(2) The Authority or the Mediator, as the case may be, shall not
retain the hard or soft copies of the documents exchanged between
the parties or submitted to the Mediator or notes prepared by the
Mediator beyond a period of six months other than the application
for mediation under subrule (1) of rule 3, notice issued under sub
rule (2) or (3) of rule 3, settlement agreement under clause (vii) of
subrule (1) of rule 7 and the Failure report under clause (ix) of sub
rule (1) of rule 7.
8. Parties to act in good faith. All the parties to a commercial
dispute shall participate in the mediation process in good faith with
an intention to settle the dispute.
9. Confidentiality of mediation. The Mediator, parties or their
authorized representatives or Counsel shall maintain

confidentiality about the mediation and the Mediator shall not
allow stenographic or audio or video recording of the mediation
sittings.
10. Maintenance and publication of mediation data. (1) The
District Legal Services Authority shall forward the detailed data of
the mediation dealt by it under the Act to the State Legal Services
Authority.
(2) The State Legal Services Authority shall, maintain the data of
all mediations carried out by it or under its jurisdiction and publish
the same, on quarterly basis, on its website as per Form6 specified
in the ScheduleI.
11. Mediation Fee. Before the commencement of the mediation,
the parties to the commercial dispute shall pay to the Authority a
onetime mediation fee, to be shared equally, as per the quantum of
claim as specified in ScheduleII.
12. Ethics to be followed by Mediator. The Mediator shall
(i) uphold the integrity and fairness of the mediation process;
(ii) ensure that the parties involved in the mediation are fairly
informed and have an adequate understanding of the
procedural aspects of the mediation process;
(iii) disclose any financial interest or other interest in the

subjectmatter of the commercial dispute;
(iv) avoid any impropriety, while communicating with the parties
to the commercial dispute;
(v) be faithful to the relationship of trust and confidentiality

reposed in him;
(vi) conduct mediation related to the resolution of a commercial
dispute, in accordance with the applicable laws for the time
being in force;
(vii) recognise that the mediation is based on the principles of
selfdetermination by the parties and that mediation process
relies upon the ability of parties to reach a voluntary
agreement;
(viii) refrain from promises or guarantees of results;
(ix) not meet the parties, their representatives, or their counsels
or communicate with them, privately except during the
mediation sittings in the premises of the Authority;
(x) not interact with the media or make public the details of
commercial dispute case, being mediated by him or any other
allied activity carried out by him as a Mediator, which may
prejudice the interests of the parties to the commercial dispute.
ScheduleI
Form1: Mediation Application Form
[See Rule 3(1)]
Name of the Authority and address
Details of Parties:
1. Name of applicant :
2. Address and contact details of applicant:
Address: Telephone. No.__________

Mobile.________Email ID:______________
3. Name of opposite party:
4. Address and contact details of opposite party:
Address:
Telephone.No. __________ Mobile. ________Email ID:

______________
Details of Dispute:
1. Nature of dispute as per section 2 (1)(c) of the Commercial

Courts Act 2015 (4 of 2016):
2. Quantum of claim:
3. Territorial jurisdiction of the competent court:
4. Brief synopsis of commercial dispute (not to exceed 5000

words):
5. Additional points of relevance:
Details of Fee Paid:
Fee paid by DD No. _________ dated ________ Name of Bank and
branch ____________.
Online transaction No. _______ dated _________.
Date:
Signature of Authority
Note:Form shall be submitted to the Authority with a fee of one
thousand rupees.
For Office Use:
Form received on :
File No. allotted:
Mode of sending notice to the opposite party:
Notice to opposite party sent on:
Whether Notice acknowledged by opposite party or not:
Date of Nonstarter report/ Assignment of commercial dispute to
Mediator:
Form2: Notice/Final Notice to the Opposite party for
PreInstitution Mediation
[See Rule 3(2) and Rule 3(3)]
1. Whereas a commercial dispute has been submitted to (name of
Authority) by (name of applicant) against (name of opposite
party) requesting for preinstitution mediation in terms of
section 12A of Chapter IIIA of Commercial Courts Act, 2015. A
copy of the mediation application Form is attached herewith.
2. The opposite party is hereby directed to appear in person or
through his duly authorised representative or Counsel
on ...............................(Date) ............................(Time) at the
(Authority address) and convey his consent to participate in
mediation process.
3. Failure to appear before the Authority by opposite party would
be deemed as his refusal to participate in mediation process
initiated by the applicant.
4. In case, the date and time mentioned in para 2 is sought to be
rescheduled the same can be done by the opposite party either
on its own or through its authorised representative or counsel
by making a request in writing atleast two days prior to the
scheduled date of appearance.
Signature of the Authority Date:
Form 3:NonStarter Report
[See Rule 3 (4) and (6)]
1. Name of the applicant:
2. Date of application for PreInstitution mediation:
3. Name of the opposite party:
4. Date scheduled for appearance of opposite party:
5. Report made under rule 3(4) or 3(6):
6. Non Starter Report

reason:___________________________________________________
__________________________________________________________
_________________________________________________________
Date:
Signature of the Authority
Copy to:
Applicant.
Opposite Party.
Form 4: Settlement
[See Rule 7 (1) (vii)]
1. Name of the Mediator:
5. Venue of mediation:
6. Date(s) of mediation:
7. No. of sittings and duration of sittings:
8. sTerms of settlement:
Date:
Signature of Applicant
Signature of Opposite Party
Signature of Mediator
Form 5: Failure Report
[See Rule 7 (1) (ix)]
1. Name of the Mediator:
5. Venue of mediation:
6. Date(s) of mediation:
7. No. of sittings and duration of sittings:
8. Reasons for failure:
Date:
Signature of Applicant
Signature of Opposite Party
Signature of Mediator
Simple reading of the Section 12A(1) of the Act makes it clear
that, a suit, which does not contemplate any Urgent Interim Relief
under the Act, shall not be instituted, unless the plaintiff exhausts
the remedy of the preinstitution mediation.Under the wrong notion
that, once an application for an interim relief/injunction is filed,
plaintiff will be in a position to obliterate the process of exhausting
the remedy of preinstitution mediation and agitate the suit prayers
before the Competent Commercial Court.
2.7 Whether such notion is legally sustainable or not that
has to be checked up.
To decide this, the difference between Urgent Interim Relief
and Interim Relief needs to be understood.At this stage reference is
required to be made to the famous observations made by Lord
Granworth in Grundy v/s. Pinniger – 1852(1) LJ Ch 405. This
is referred to in LIC v/s. Shree Meena, 2019 (4) SCC 479 (FB)
and Dr. K. Babapai v/s. Dr. K.V.R. Murthy, 2016 SCC Online
Guj 4702.“...to adhere as closely as possible to the literal meaning
of the words used, is a cardinal rule from which if we depart we
launch into a sea of difficulties which it is not easy to fathom.”
2.8 What does the phrase “URGENT INTERIM RELIEF”
means?
The phrase “URGENT INTERIM RELIEF” has not been

defined anywhere. But is just similar to the cases where court
passes order u/O 39 R.3 of the CPC. Guidelines with respect to, in
which circumstances an order u/O 39 R.3 of the CPC can be passed,
is seen in the ratios laid down in the cases of
(1) Desk to Desk Courier & Cargo v/s. Union of India, 2005 (7)
SCC 491
(2) Shiv Kumar Chadha v/s. Municipal Coprpotation of
Delhi, 1993 (3) SCC 161.
The next question which comes up for consideration is, as to

whether a plaint can be rejected u/O. VII Rule 11 of the CPC, on the
count that though plaintiff has not sought Urgent Interim Relief he
has not exhaust remedy of the preinstitution mediation?
The answer is in affirmative. And the reason is mandatory bar
contained u/s 12A of the Act.The ‘Doctrine of Exhaustion of
Statutory Remedies’, needs to be bear in mind. the ‘Doctrine of
Exhaustion of Statutory Remedies’, would squarely apply in the
case where without exhausting the remedy of preinstitution
mediation, the Commercial Suit is filed.Reference is required to be
made to the ratio laid down in the case of Anant Shankar Bhave
v/s. Kalyan Dombivali Municipal Corpn., reported in 2019(4)
SCC 348, wherein it has been observed that when plaintiff has filed
misconceived suit and sought improper and ameliorative reliefs,

liberty may granted to file fresh suit seeking proper reliefs and with
the clarification that present proceedings would not operate as res
judicataDuty of the the judge does not end here. Ld. Judge while
passing and order of rejection of the plaint u/O. VII Rule 11 of the
CPC is also required to pass an order directing the plaintiff to the
exhaust remedy of the pre institution mediation. And, subject to
the final out come of the said mediation process, another suit may
be filed, subject to the second proviso of Section 12A (3) of the Act
.In pursuant to Section 12A(2) of the Act, Central Government has
framed the Commercial Courts (Pre institution Mediation and
Settlement) Rules, 2018.If during the court proceedings Ld.
Commercial Court Judge comes to the conclusion that there exist an
element of settlement, in such a case scenario, case may be
transferred to the Mediation Centre and Civil Procedure
Appropriate Dispute Resolution (Gujarat) Draft Rules, 2007 along
with Mediation Rules, 2015 shall apply.
2.9 PreInstitution Mediation Defined
Section 12A of the Commercial Courts Act provides parties

with an alternative means to resolve disputes through discussions
and negotiations with the help of a mediator. The provision states
that a plaintiff must initiate mediation before filing a suit, with a
limited carve out for suits filed with applications for urgent interim
relief. Courts in India frequently refer ongoing patent infringement
suits to mediation when there exists a possibility for the parties to
arrive at a settlement. However, in the absence of a law imposing a
time limit for completion of such courtreferred mediations, in many
cases, mediations of patent infringement suits go on for months
with no resolution. Mediation under the Commercial Courts Act
bridges this gap by making mediation a timebound process. In
India, most IP infringement suits are filed with an application
seeking a preliminary injunction. This would qualify as "urgent
interim relief" under Section 12A and initiation of mediation prior
to filing of the suit would not be mandatory. However, in disputes
where a patentee is not seeking a preliminary injunction and wants
to use litigation as a tool to negotiate terms for granting limited
rights to their IP, preinitiation mediation is a viable option.
2.10 rocedure for Initiating PreInstitution Mediation
The procedure to be followed in such mediation proceedings is set
out in the Commercial Courts (PreInstitution Mediation and
Settlement) Rules, 2018 ("Rules").
1. As per the Rules, the plaintiff must file an application with
the State Legal Services Authority or the District Legal
Services Authority constituted under the Legal Services
Authorities Act, 1987 ("Authority") to initiate mediation. O
2. Once an application is received, the Authority will issue notice
to the opposing party to appear within 10 days of receipt of
notice and give consent to participate in the mediation

proceedings.
3. The Rules provide for issuance of a final notice if the

Authority does not receive a response within 10 days of the
initial notice.
4. If the opposing party fails to appear following the final notice
or refuses to participate in the mediation proceedings, the
Authority will treat the mediation process as a nonstarter
and prepare a report to that effect.
5. If the opposing party agrees to participate, then the mediation
process begins. Following negotiations and meetings with the
mediator, if the parties arrive at a settlement, it will be
recorded in a settlement agreement.
2.11 The Pros
Instituting preinitiation mediation holds many advantages
over outofcourt interparty negotiations:
1. Time and costeffective. Preinstitution mediation initiated
under the Commercial Courts Act must be completed within a
period of three months from the date of application made by
the plaintiff, with a possible extension of two months with the
consent of the parties. The time bound process saves time and
costs incurred by the parties involved.
2. Patent litigations in India are known to be lengthy. Exploring
the possibility of a settlement before filing a suit could avoid
such lengthy litigation.
3. Confidentiality. Confidentiality of negotiations with a
potential licensee is key to prevent disclosure of important

business strategies to competitors. The Rules ensure
confidentiality by providing that the mediator, the parties,
and their counsels must maintain confidentiality about the
mediation. Stenographic or audio or video recording of the
mediation proceedings is prohibited under the Rules.
4. No threat of a validity challenge. A patentee must always
assess the strength of their patent before filing a suit since a
defendant can challenge the validity of a patent. Even at the
interim stage, a defendant can avoid an injunction being
granted against them by raising a credible challenge to the
validity of a patent. When the patent is susceptible to a
challenge, preinitiation mediation can be a good choice to
negotiate a license without the threat of a validity challenge.
5. Assessing the strength of the opponent's case. Through
negotiations in a mediation proceeding, a patentee can get a
sense of the opponent's strengths and weaknesses and prepare
for the possibility of contesting a suit. The opponent might
reveal that their product is covered by another patent or is
based on technology available in the public domain. The
patentee then has time to assess the likelihood of its success in
a suit. There is no bar on seeking interim relief if a suit is filed
in the event of a failure of mediation proceedings. Depending
on the patentee's assessment of its case, a patentee may still
seek an interim injunction even after trying mediation.
6. Negotiating in good faith. Licensee negotiations between
parties can often go on for months. During this time, a

potential licensee may at time engage in infringing acts. The
threat of possible litigation that could result due to an
unsuccessful mediation under the Commercial Courts Act
would possibly motivate a potential infringer/ licensee to
negotiate license terms in good faith. The Rules also provide
that parties shall participate in the mediation process in good
faith with an intention to settle the dispute.
2.12 The Cons
Section 12A imposes a mandatory obligation upon the plaintiff to
initiate mediation. However, the Rules give the opposing party the
right to refuse to participate in the mediation proceedings. If the
opposing party does not appear, it will also result in the mediation
proceedings being deemed a nonstarter. This optional approach
arguably results in the provision lacking teeth.
2.12. Powers of the Court in a Case Management Hearing.
4 July,
The Supreme Court in Rameshwari Devi v Nirmala Devi
2011 CIVIL APPEAL NOS. 4912 4913 OF 2011 had observed
that at the time of filing of a suit the trial court should finalize a
timeline for all filings and pleadings and all parties should adhere
to these timelines.
The observations of the Supreme Court follow the best practices

from different jurisdictions like United States and Australia where
Case Management is an essential and integral part of the legal
system. The Ordinance has in Section 7 of its Schedule inserted
Order XV in the CPC, providing for the concept of Case
Management whereby the Court would mandatorily have to hold a
meeting between the parties where the Court will decide upon a
timeline for most important stages in a proceeding like recording of
evidence, filing of written arguments, commencement and
conclusion of oral arguments. The Court is further empowered to
dismiss a petition, foreclose the right to make certain pleadings or
submissions or order payment of costs in the event of non
compliance of the orders passed in a Case Management Hearing.
1. In any Case Management Hearing held under this Order, the
Court shall have the power to—
a. prior to the framing of issues, hear and decide any pending
application filed by the parties under Order XIIIA;
b. direct parties to file compilations of documents or pleadings
relevant and necessary for framing issues;
c. extend or shorten the time for compliance with any practice,
direction or Court order if it finds sufficient reason to do so;
d. adjourn or bring forward a hearing if it finds sufficient

reason to do so;
e. direct a party to attend the Court for the purposes of

examination under Rule 2 of Order X;
f. consolidate proceedings;
g. strike off the name of any witness or evidence that it deems
irrelevant to the issues framed;
h. direct a separate trial of any issue;
i. decide the order in which issues are to be tried;
j. exclude an issue from consideration;
k. dismiss or give judgment on a claim after a decision on a
preliminary issue;
l. direct that evidence be recorded by a Commission where
necessary in accordance with Order XXVI;
m. reject any affidavit of evidence filed by the parties for

containing irrelevant, inadmissible or argumentative
material;
n. strike off any parts of the affidavit of evidence filed by the
parties containing irrelevant, inadmissible or
argumentative material;
o. delegate the recording of evidence to such authority

appointed by the Court for this purpose;
p. pass any order relating to the monitoring of recording the
evidence by a commission or any other authority;
q. order any party to file and exchange a costs budget;
r. issue directions or pass any order for the purpose of

managing the case and furthering the overriding objective
of ensuring the efficient disposal of the suit.
2. When the Court passes an order in exercise of its powers

under this Order, it may—
a. make it subject to conditions, including a condition to pay a
sum of money into Court; and
b. specify the consequence of failure to comply with the order
or a condition.
3. While fixing the date for a Case Management Hearing, the

Court may direct that the parties also be present for such
Case Management Hearing, if it is of the view that there is a
possibility of settlement between the parties.
3. Order XVA Case Management Hearing
3.1. First Case Management Hearing.
The Court shall hold the first Case Management Hearing, not later
than four weeks from the date of filing of affidavit of admission or
denial of documents by all parties to the suit.
“Rules of procedure are not by themselves an end, but are a means to
achieve the ends of justice, and the tools forged are not intended as
hurdles to obstruct the pathway to justice…Procedure is meant to
subserve and not rule the cause of justice.” –Justice, Courts and
Delays by Arun Mohan, Senior Advocate.
The Commercial Courts, Commercial Division and Commercial

Appellate Division of High Courts Act, 2015 was widely hailed as a
seminal legislation and a significant step towards enhancing
India’s stature in the Ease of Doing Business index.
The said Act was recently rechristened as ‘The Commercial Courts
Act, 2015’ (“the Act”) by way an ordinance which ushered in certain
significant amendments to the statute as it was originally enacted.
The Act, amongst others, provides for the constitution of

Commercial Courts, Commercial Appellate Courts and Commercial
Divisions of High Courts to adjudicate commercial disputes having
a value, originally of at least one crore rupees, which has since been
reduced to three lakh rupees by the Ordinance.
The Commercial Courts are to be constituted at the district level by
the state government, after consultation with the concerned High
Court.
As far as the High Courts having ordinary civil jurisdiction are

concerned, the Chief Justice is required to constitute a Commercial
Division having one or more Benches consisting of a Single Judge
for exercising jurisdiction under the Act. The Chief Justice is also
required to constitute Commercial Appellate Divisions having one
or more Division Benches for purposes of exercising the jurisdiction
and powers conferred on it under the Act.
The term ‘Commercial Dispute’ is defined in the widest possible

terms so as to cover within its ambit almost all kinds of disputes in
relation to a ‘commercial transaction’, including disputes relating to
transactions between merchants, bankers, financiers, traders,
etc. and in relation to shareholders agreements, mercantile
documents, and partnership agreements, amongst others.
The Act further provides that the provisions of the Code of Civil

Procedure, 1908 (“CPC”)shall, in its application to any suit in
respect of a commercial dispute of a specified value, stand amended
in the manner specified in the Schedule.
It is worthwhile to note that the Act contemplates certain

significant departures from the CPC, which appear to be aimed at
expediting the procedure of resolution of suits involving commercial
disputes. Some of these provisions are as under:
3.2 Order XI (introduced in substitution of Order XI of the
CPC)
A plaintiff or a defendant is required to file a list of all documents
(and copies) in its power, possession, control and custody pertaining
to the suit, including not only documents relied upon in the plaint
or the written statement, but also documents relating to any
matters in question in the proceedings, irrespective of whether they
are in support of or adverse to the plaintiff or defendant’s case
[Rules 1(1) and 7 of Order XI].
Further, the plaint and written statement should contain a

mandatory declaration on oath from the plaintiff or defendant, as
the case may be, that all such documents in its power, possession,
control and custody have been disclosed and that the plaintiff or
defendant does not have any other documents [Rules 1(3) and 1(9)
of Order XI].
It is also provided that the duty to disclose documents which come
to the notice of a party shall continue till the disposal of a suit [Rule
12 of Order XI].
3.3. Order XIII A
The Court is entitled to decide a claim (or part thereof) pertaining
to any Commercial Dispute without recording oral evidence [Rules
1(1) and 1(2) of Order XIII A].
Such summary judgment may be granted where,on an application
filed in that regard, the Court considers that: (a) the plaintiff or
defendant has no real prospect of succeeding or successfully
defending a claim; and (b) there is no other compelling reason why
the claim should not be disposed of before recording of oral evidence
[Rule 3 of Order XIII A].
The Court also has the power and discretion to do any of the
following:
 pass orders directing judgment on the claim;
 pass a conditional order;
 dismiss the application;
 dismiss part of the claim and pass a judgment on the

remaining part of the claim;
 strike out the pleadings;
 pass further directions to proceed for a Case Management

Hearing.
3.4 Order XV A
The Court shall hold the first Case Management Hearing not later
than four weeks from the date of filing of affidavits of admission or
denial of documents by the parties [Rule 1 of Order XV A].
In a Case Management Hearing, the Court, after hearing the

parties and once it finds that there are issues of fact and law that
require to be tried, may pass an order [Rule 2 of Order XV A]:
 framing issues between the parties after examining pleadings,
documents and documents produced before it, and on
examination conducted by the Court under Rule 2 of Order X,
if required;
 listing witnesses to be examined by the parties;
 fixing the date by which affidavits of evidence are to be filed
by the parties;
 fixing the dates on which evidence of the witnesses of the

parties are to be recorded;
 fixing the date by which written arguments are to be filed

before the Court by the parties;
 fixing the date on which oral arguments are to be heard by the
Court; and
 setting time limits for parties and their advocates to address
oral arguments.
3.5 Order XVIII
Parties are required to file succinct written submissions within four
weeks prior to commencing oral arguments. No adjournments are to
be ordinarily allowed for purposes of filing the written submissions
unless the Court, for reasons recorded in writing considers it
necessary. The Court also has the power to limit the time for oral
submissions having regard to the nature and complexity of the
matter.
3.6. Order XIX
The Court has the power to regulate the evidence as to the issues on
which it requires evidence and the manner in which such evidence
may be placed before the Court. Further, the affidavit of evidence
has to comply with certain requirements, as prescribed.
3.7 Order XX
The Commercial Court, Commercial Division, or Commercial

Appellate Division shall pronounce judgments and issue copies to
all parties within ninety days of conclusion of arguments.
Unfortunately, the construct and manner of implementation of the
Act has, figuratively speaking, turned out to be a case of old wine in
a new bottle.
Firstly, the ‘constitution’ of a new hierarchy of Courts under the Act
is a misnomer, since all that the Act does is to entrust this
specialized jurisdiction of Commercial Disputes to the existing
hierarchy of High Courts exercising ordinary original civil
jurisdiction and district courts in other States.
Secondly, although the Act provides that the CPC will, in its
applicability thereto, stand amended in several respects, the fact
that the same hierarchy of Courts has been entrusted with both
commercial and noncommercial matters (often appearing in a

common cause list on a given day), has seriously whittled down the
efficacy of the Act.
Further, on a practical level, it is generally observed that these

Courts even deploy a common diary of dates while deciding upon
the scheduling of a commercial matter.
Given the said practical challenges, it is indeed doubtful whether
the salutary objectives of the Act can be achieved. Our past
experience with similarly progressive statutes (the curious case of
the Arbitration and Conciliation Act, 1996 immediately comes to
mind) cautions us not to be overly optimistic on that front.
In the author’s view, it is of utmost importance that a database of
Judges who have ‘real’ experience in dealing with commercial
disputes is prepared and maintained. On a pedantic and perhaps
more expedient view of this essential prerequisite, judges of the
High Court and district judges are often presumed to possess such
experience by dint of their seniority alone.
However, that may appear to be a rather simplistic view of the

matter. In fact, experienced litigators would attest that one of the
most prevalent and oftrepeated comments heard in Court, when a
plaintiff embroiled in commercial disputes seeks to expedite his/its
matter, is on the lines of ‘there is no urgency in your matter; you
can always be compensated by interest and costs’.
Therefore, the need of the hour is to man the Courts constituted
under the Act with judges who have proven specialized experience,
knowledge and expertise of handling commercial disputes in an
adjudicatory capacity or as legal practitioners, coupled with
‘training and continuous education’ of the judges so selected in
terms of Section 20 of the Act.
If implemented in right earnest, this could become the impetus for
the Act to become a game changer as it would not only ensure that
the Courts constituted under the Act would be better equipped to
approach its implementation in an organized and concerted manner
but would also allow for formulation of a consensus on the ‘best
practices’ to be adopted by such Courts.
Further, the conventional view of the Court as being a ‘passive’

arbiter of commercial disputes will have to give way to a ‘proactive’
approach if the provisions of the Act are to be given full amplitude
and play in their implementation.
The Court will have to be cognizant of the trade practices,

transactional models and structures, customs and usages typical to
particular categories of commercial disputes and in many cases, the
approach taken by Courts in foreign jurisdictions on similar

disputes/issues.
The Court will also have to subject every case to a rigorous and

critical scrutiny at every stage and employ the ‘tools’ provided by
the statute, even suo motu (wherever permissible), with the over
riding objective being speedy and just resolution.
Lastly, and perhaps, most importantly, since every hearing in a

matter means expending of valuable public time by the Court and
cost by the exchequer and the parties concerned, it is necessary,
nay imperative, that any adoption of deleterious and timewasting
tactics be curbed with an iron hand and that the time lines
prescribed in the statute are uncompromisingly treated as
sacrosanct.
In his celebrated treatise Justice, Courts and Delays, Mr Arun
Mohan argues that in addition to costs which are compensatory in
nature, and often only notional, actual reform requires “removal of
incentives for delay or the advantages gained thereby”. This
requires the Court to strike an equitable balance between the
relative disadvantage that a plaintiff is already burdened with
while approaching the Court and the natural tendency of a
defendant to stall an effectual adjudication of a matter by resorting
to hypertechnical and dilatory tactics.
3.8 Some important changes arising out of this Ordinance
are listed below:
 Section 35 of the CPC is amended to add wider powers with
respect to ordering costs in relation to proceedings. While
deciding costs, the court can consider the conduct of the
parties, result of the proceeding, whether the claim or
counterclaim was frivolous, whether settlement procedure was
unreasonably refused, whether the frivolous claim resulted in
wasting time of the court, and such other matters. This will
definitely bring a welcome change in terms of litigation
strategies and tactics, with frivolous and delay tactics being
penalized.
 New forms introduced for submission of pleading and

verification of pleading.
 Order 8 Rule 1 is amended whereby on expiry of 120 days

after receipt of service of summons, written statement shall
not be taken on record.
 If Defendant disputes jurisdiction of the commercial court,

s/he should narrate the reasons for doing so and shall state
which court ought to have jurisdiction. If the Defendant
disputes Plaintiff’s valuation, he should give his own
statement of value.
 Any allegations in Plaint that are not denied as stipulated in
Rule 3A shall be considered as admitted. If any facts are
denied, defendant should state reasons for denial and if he
intends to put forth a different version, s/he must state his/her
own reason.
 Order 11 of CPC has been extensively amended. All

documents relating to the case shall be filed along with the
Plaint. Plaintiff is even mandated to produce documents
relating to the matter in question irrespective of whether the
same is in support of or adverse to the Plaintiff’s case. In case
of urgent filings, the court can grant leave to file documents.
Plaintiff shall not be allowed to rely on any documents which
are not produced along with the Plaint. Similarly, Defendants
are allowed to produce all documents along with the written
statement and not thereafter. Parties are allowed to deliver
interrogatories to the other. Court may impose exemplary cost
if anyone willfully or negligently fails to disclose documents.
Parties should make a statement of admissions and denials
explicitly with respect to correctness and contents of
documents, existence and execution of documents, issuance
and custody of document. Each party shall set out reasons for
denying the document. Bare and unsupported denials shall
not be deemed to be denials of the document.
 With respect to electronic records, specific provisions have

been made stating that furnishing of printouts, supported
with an oath, shall be sufficient compliance.
 Many sections of CPC have been made not applicable to

commercial courts. A new Order 13A has been inserted
whereby court can decide a claim even without having oral
evidence.
 A new Order 15A has been added whereby courts shall hold a
“case management” hearing within 4 weeks immediately after
admission or denial of documents by all the parties. “Case
management” is a new approach in India. The intent of “case
management” hearings is for the court to come up with a
timetable after consulting all parties. (In the current scenario,
each party operates independently of the others). After
hearing the parties, the court will pass an order for framing of
issues, listing witnesses to be examined by the parties, fixing
date of submitting evidence, fixing date of oral arguments,
setting time limit for lawyers to make oral submissions etc. In
every “case”, arguments must be closed not later than 6
months from the first “case management” hearing. If
successful, this is a significant step towards streamlining the
process of justice delivery in India, specifically by reducing the
scope for timewasting tactics that often drag litigations for
years.
 Nonappearance of an advocate on the case management

hearing shall not be a reason for adjourning the hearing. Only
time will tell how successful this laudable step will be in
curbing a commonlyused tactic.India is infamous for having
an overburdened legal system that leads to indefinite delays
in the disposal of cases. Inefficiencies in its legal
infrastructure have made it all the more difficult for foreign as
well as domestic investors to protect their investments in
India. In fact, as seen in the famous case of White Industries
Australia Ltd. vs Union of India, inordinate delays in the legal
process was viewed as breach of investment treaty obligation
by India.Thus, there has always been a long standing
requirement for a stable and efficient dispute resolution
system ensuring quick enforcement of contracts, easy recovery
of monetary claims and award of just compensation for
damages suffered, all of which are critical in encouraging
investment and economic activity.
3.9 Fresh procedure for hearing suits
The Code of Civil Procedure, 1908 (“CPC”) has been amended by
the Ordinance, with a view to streamline the processes and
completely alter the prevalent litigation culture. Global practices

such as holding of case management hearing have been introduced.
Indicative timelines have been prescribed such as a six (6) month
period for completion of trial post first case management hearing to
bring about efficient and faster dispute resolution.
The amendments to the CPC are a welcome change. However, the
government may need to provide clarifications on various practical
difficulties which may arise in its application to ongoing
proceedings. Further, based on section 16(1) of the Ordinance,
arguments may be raised to apply such amended provisions to
ongoing suits before various courts till such time the Commercial
Court/Division are constituted and the suits are transferred.
3.10. Strict Timelines
3.11. Summary Judgment
On many occasions certain disputes linger on in courts without

there being any substance in them as the entire process envisaged
in the CPC has to be followed by the Court and all stages need to be
completed before a judgment can be passed. Courts are duty bound
to follow the principles of natural justice and afford to the
defendants all kinds of statutory remedies available. The process
envisaged by the Ordinance for a summary judgment is akin to the
existing procedure of Summary Suits15 in the CPC. Principal
difference being the ability of parties to request for summary
judgments in all commercial disputes of Specified Value irrespective
of the nature of relief sought and ability to request for such
summary judgment at any stage prior to framing of issues.
Ordinance has inserted Order XIIIA in the CPC according to

which, if a party approaches the Court before the issues have been
framed, then the Court would consider the other party’s real
prospect of succeeding. On this basis, it has the discretion to pass a
summary judgment. There are various considerations which are to
be taken into account by the Court to decide as to whether a
summary judgment can be passed. However the Ordinance has
struck a balance in providing equal opportunity and protection for
litigants. The Ordinance has ensured that all facets of natural
justice are met with, wherein both litigants are asked to provide
their individual explanations including documentary evidence as to
why a summary judgment should or should not be passed. The
Ordinance has also empowered Courts to pass conditional orders
which are akin to interim measures. When a Court believes that a
particular entity may succeed but it is improbable for it to do so, it
can pass a conditional order against that litigant including but not
limited to deposit of a sum of money. Practically, putting a party to
such terms will work to bring about an amicable resolution of many
disputes.
3.12 Arbitration v/s Commercial Courts
A crucial question arises in context of whether parties should select
Commercial Courts over arbitration.
The Arbitration and Conciliation (Amendment) Ordinance, 2015

(“Arbitration Ordinance”) has brought in changes such as a
twelve (12) month deadline for completion of arbitration, deeming
interim orders passed by arbitral tribunals as orders of court,
ability to involve third parties in arbitrations seated in India, which
have in fact taken India beyond the global standards.
Further, Section 10 of the Ordinance prescribes that applications
and appeals arising out of arbitration are to be heard by
Commercial Court/Commercial Appellate Division. Thus, the intent
is to look at the two regimes as complementing each other.
Section 10(1) and 10 (2), provide that applications and appeals

arising out an International Commercial Arbitration and any other
arbitration proceedings which would have been filed in the original
side of the High Court shall be heard by the Commercial Appellate
Division i.e. a division bench (2 judge bench) of the High Court.

Appeals under Section 37 of the Arbitration and Conciliation Act,
1996 against an order passed by the Commercial Appellate Division
may then directly lie before the Supreme Court. Further, Section 15
of the Ordinance provides that applications under the Act that are
pending before the High Court where a Commercial Division has
been constituted shall be transferred to the Commercial Division
and not the Commercial Appellate Division.
However, in scenarios where party may not have preferred opting
for arbitration such as in case of back to back transactions, but still
opted to do so, deterred by delays prevalent in the Indian courts,
would now be bolstered to adopt a pure court process over
arbitration.
3.13 Summary Judgments And Case Management Hearings
The Act by amending the Code critically for the first time
introduces Summary Judgements (Order XIIIA) and Case
Management Hearings (Order XVA).
1. A Summary Judgement is one which is pronounced by the

Court without recording oral evidence. However it does not
apply to disputes originally filed as summary suits, the Act
and consequentially the amendments to the Code came into
force. For the purposes of Order XVA, the word claim includes
a part of a claim or even a counter claim.
2. An application for a Summary Judgement can be filed any

time after summons has been served on the defendant but
before the issues have been framed. A court can give a
Summary Judgement against the plaintiff or defendant if it
believes that plaintiff has no real prospect of succeeding on
the claim or if the defendant has no real prospect of
successfully defending the claim, or if there is no compelling
reason why the claim should not be disposed of before
recording oral evidence. Summary Judgement helps with the
quick disposal of cases.
3. The Court is required to hold the first Case Management

Hearing not later than 4 weeks from the date of filing of
affidavit of admission or denial of documents.
4. The orders which are to be passed in such a hearing include
framing of issues, listing witnesses to be examined by the
parties, fixing the dates by which affidavit of evidence and
written arguments are to be filed, fixing the date on which
evidence of the witnesses should be recorded and oral
arguments are to be heard and setting time limits for parties
to address oral arguments.
5. The courts must ensure that the arguments are closed not
later than 6 months from the date of the first case
management hearing. It must also ensure that the oral
evidence is recorded on a daytoday basis.
The amendments to the Code provide a planned approach to the

litigation process making it quick and efficient. In fact it is
theoretically possible to have a ‘Commercial Dispute’ heard and
disposed of in the regular course within 1 year and 15 days from its
institution, as more particularly explained by the following table:
4. IMPORTANT AMENDMENTS TO CPC AND PROJECTED
TIMELINE OF LITIGATION : SALIENT FEATURES
1. Creation of a specialized forum for disposal of commercial

disputes of a
specified value.
2. Suitable amendments to the provisions of CPC providing
timelines for completion of various processes thereby ensuring that
the whole process of adjudication is time bound.
3. In terms of the amended provisions of Section 35(2) of CPC as a
general rule the unsuccessful party will be ordered to pay costs to
the successful party and in case the court seeks to deviate from the
general rule than it has to record the reasons for the same in
writing.
4. Written Statement has to be filed within a period of 30 days and
can be extended by the court to a maximum of 120 days from the
date of service of the summons.
5. The provisions regarding making denial of submissions in the
Written Statement have been made more stringent by inserting
rule 3A to the provisions of Order VIII Rule 3 of the CPC.
6. Stringent provisions pertaining to disclosure, discovery and
inspection of documents in suits before commercial division of a
High Court or a commercial court (Order XI CPC) introduced in
order to ensure that all documents in the power, possession, control
or custody of the parties is filed along with the Plaint/Written
Statement respectively with specific provisions disallowing the

Plaintiff/Defendant from relying on documents which were in their
power, possession, control and custody but not disclosed along with
the Plaint/Written Statement or within the extended period
provided with the leave of the court.
7. Inspection of documents (Order XI Rule 3(1)) disclosed by the
parties to be completed within 30 days of filing the Written
Statement to the Counter Claim whichever is later. The court may
extend this time limit by a maximum of 30 days but not beyond.
8. Each party to submit a statement of admission or denial of
documents within 15 days of completion of inspection or any later
date as fixed by the court (Order XI Rule 4(1)).
9. Provisions of Order VIII Rule 1, Order VII Rule 14 and Order
VIII Rule 1A CPC shall not apply to suits or application before
commercial divisions of High Court or commercial courts.
10 The court may decide a claim without recording oral evidence
(Order VIII – A Rule 1(1)).
11. A party may apply for summary judgment at any time after the
summon has been served upon the Defendant taking into account
the amendment made to Order XIIIA Rule 2 CPC.
12 Amendment to CPC to bring in fresh procedure for dispute
resolution by holding management hearings.
13. Courts to hold first case management hearing not later than 4
weeks from date of filing of affidavit of admission or denial by all
parties to the suit (Order XV – A Rule 1).
14 Courts to ensure that all arguments are closed not later than 6
months from the date of the first case management hearing (Order
XV – A Rule 3).
15. Recording of evidence to be carried out on a day to day basis
until cross examination of all the witnesses is complete (Order XV –
A Rule 4).
16. Stringent provision to the effect that case management hearing
shall not be adjourned for the sole reason that advocate appearing
on behalf of a party is not present (Order XV – A Rule 7) subject to
application for adjournment of hearing being moved in advance and
the court adjourning the matter on such an application upon
payment of such cost as the court deems fit.
17. Party to file written arguments four weeks prior to commencing
oral arguments (Order XVIII SubRule 3A).
18. Commercial Court, Commercial Division or Commercial
Appellate Division shall within 90 days of conclusion of arguments
pronounce judgment (Order XX (Substitution for Rule 1)).
19. Provisions of Section 8 of the Act provide that no Civil Revision
Application or Petition shall be entertained against any
interlocutory order passed by the commercial court including an
order on the issue of jurisdiction and any such challenge shall be
raised only in an appeal against the decree of the commercial court.
20. An appeal against any decision of the commercial court or
commercial division is to be filed before the Commercial Appellate
Division of the High Court within 60 days from the date of
judgment of order.
21. The Commercial Appellate Division shall endeavour to dispose
of the appeals filed before it within a period of 6 months from the
date of filing of such an appeal.
22. No suit where the final judgment has been reserved shall be
transferred to the commercial court/ commercial division.
5. RECENT JUDICIAL TREND IN COMMERICIAL COURT
ACT.
5.1 2018 3 AllMR 10; 2018 4 MhLJ 457; 2018 0 Supreme(Mah)
378; M/s. D.M. Corporation Pvt. Ltd. Versus The State of
Maharashtra,
Admittedly, in the present case, the dispute pertains to arbitration
matter. The Petitioner is seeking the relief of injunction not under
any other law but under Section 9 of the Arbitration Act, the subject
matter of the arbitration is admittedly not less than Rs.1 crore and
therefore, the subject matter of arbitration being a 'commercial
dispute' of a 'specified value', it has to be held that, Commercial
Court will alone have the jurisdiction to entertain this arbitration
application. If the submissions advanced by learned counsel for the
Petitioner that this being an application simpliciter for injunction,
Civil Court alone will have the jurisdiction to entertain it, is to be
accepted, then the very object of enacting Section 10(3) and of
establishing the Commercial Courts will be frustrated. As a matter
of fact the ingenuity of the legal profession is such that any dispute
can be brought under the wide umbrella of the injunction suit with
the claim that the relief claimed is not susceptible to monetary
value.
However, the Court has to see the real nature of the relief,
which is sought and decide the jurisdiction of the Court accordingly.
Here, in the case, the real nature of the dispute is the arbitration
agreement, the subject matter of which is above Rs.1 crore; it is a
dispute of commercial nature. Hence, even if, the relief claimed is
simpliciter for injunction, as the subject matter of dispute falls
within the jurisdiction of Commercial Court, in view of provisions of
Section 10(3) of the Commercial Courts Act, the learned Principal
District Judge, Satara, has rightly transferred the arbitration
application to the Commercial Court.
5.2 Ascot Estates Pvt. Ltd. vs Bon Vivant Life Style Pvt. Ltd.
on 10 December, 2015 Date of Decision : December 10, 2015
OMP (I) (Comm.) 16/2015
Para 36. A simple analysis of the above extracted provision lends
support to the conclusion that all applications under the Arbitration
and Conciliation Act , 1996 relating to a Commercial dispute of the
specified value has to be adjudicated by a Commercial Division and
not the Commercial Appellate Division. The said provision, unlike
Section 10 of the Ordinance, does not mandate adjudication of
applications under the Arbitration and Conciliation Act , 1996 by
Commercial Appellate Division and thus, the valuable remedy of
appeal as envisaged under Section 37 of the Arbitration and
Conciliation Act , 1996 does not stand immutably foreclosed.
Para 37. We may also take cognizance of amendments effected in
the Arbitration and Conciliation Act , 1996 vide 'The Arbitration
and Conciliation (Amendment) Ordinance, 2015' promulgated on
October 23, 2015. Section 2 of the said Amendment Ordinance has
retained Section 37 of the Arbitration and Conciliation Act , making
minor amendments as under:
"20. In Section 37 of the principal Act, in subsection (1),

for clauses (a) and (b), the following clauses shall be
substituted, namely:
(a) refusing to refer the parties to arbitration under Section
8 ;
(b) granting or refusing to grant any measure under

Section 9;
(c) setting aside or refusing to set aside an arbitral award
under Section 34 ."
Para 38. The inescapable conclusion is that the law makers

consciously chose to retain Section 37 of the Arbitration and
Conciliation Act , 1996 despite affecting numerous amendments in
the said Act recently goes a long way to negate the hypothesis of its
implied repeal.
Para 39. Furthermore, there exists a strong presumption against

ouster of jurisdiction of superior Courts.
ORDER 8 RULE 1 AND 10
5.3 State of Bihar and others vs Bihar rajya Bhumi vikas
bank samiti, (2018) 9 SCC 472 as well as Canara bank Vs N G
Subbaraya setty and anr. AIR 2018 SC 3395 for the proposition
that the amendments so made now provide for the consequence of
nonfiling of written statement, and as this is so, the provisions of
Order VIII Rules 1 and 10 can no longer be said to be directory but
can only be said to be mandatory. In this view of the matter, since a
statutory prohibition now exists, the doctrine of res judicata cannot
be availed.
5.4 Latin Media Corporation Vs Zee Entertainment
Enterprises ... On 27 February, 2019 Commercial Division
No. 196 Of 2018
QUESTION OF LAW:
1. The present Order deals inter alia with the interpretation of an
amendment to Order VIII of the CPC introduced by the Commercial
Courts Act, 2015 ("Commercial Courts Act"). The amended Order
VIII Rule 1 is in respect of taking on record a written statement of
the Defendant in a Commercial Suit after the expiry of 120 days
from the date of service of summons.
Para 80. In so far as Order VIII Rule 9 is concerned, the leading
authority in this respect is the Apex Court's decision in Nankhu. At
this stage, it is pertinent to note that the Apex Court in
paragraph no. 9 of M/s SCG Contracts India Pvt. Ltd. Vs. K.S.
Chamankar Infrastructure Pvt. Ltd. & Ors. (supra), has noted
that Nankhu was passed in context of the provisions of the CPC
prior to their substitution by the Commercial Courts Act. Nankhu
was based on findings that the proviso to Order VIII Rule 1 prior to
its substitution by the Commercial Courts Acts did not (i) provide
for any consequences on not filing the written statement within the
stipulated period; and (ii) specifically take away the power of the
court to take on record the written statement.
I would find that my decision would be directly in the teeth of the
legislative mandate of the Commercial Courts Act, its provisions
and legislative intent. I would have to agree with Mr. Kohli that
what has been prohibited from being done directly, cannot be
allowed to be done indirectly. If this Court has been expressly
divested of its powers to take on record ' the' written statement
after the expiry of 120 days, allowing the same to be taken on
record in another way i.e. under the cover of it being ' a'
written statement would be a travesty of procedure as well as
a mockery of the legislative mandate.
Clearly, the clear, definite and mandatory provisions of Order V

read with Order VIII Rule 1 and 10 cannot be circumvented by
recourse to the inherent power under Section 151 to do the opposite
of what is stated therein."
Para 81. As can be seen from the aforesaid decision of the Apex

Court, legislative mandate of the Commercial Courts Act cannot be
circumvented by resorting to this Court's inherent powers much
less another procedural rule within the same order and/or another
procedural provision such as Order XVA. This would violate all
settled principles of statutory interpretation and would render the
provisions of the Commercial Courts Act as well as the legislative
intent otiose.
Para 84. The question which has arisen before me is that, if the
CPC, as it stood prior to its amendment and as applicable to non
commercial suits, provided for stringent measures on a Defendant
visàvis filing of a written statement, then what purpose does it
serve for the legislature to introduce a further time limit of 120
days by way of 3 amendments to the CPC viz. to Order V Rule 1,
Order VIII Rule 1 and Order VIII Rule 10. I am afraid that if the
courts hold in even one instance that a written statement can
be taken on record after the period of 120 days, this would
lead to a slippery slope and would eventually result in a
situation where written statements will be taken on record
on frivolous and ingenious grounds and that to only in the
Commercial Division of Chartered High Courts. It is also pertinent
to note that Justice Bhosale (as he then was), in Shailaja, has held
that powers under Rule 9 of Order VIII should be used only in
exceptional cases and that too for reasons to be recorded in writing
and cannot be exercised by a Defendant as a matter of right. Today,
I am being asked to render the same finding to the CPC as amended
by the Commercial Courts Act and if I were to do so, I would render
the promulgation of the Commercial Courts Act completely otiose as
there would remain no difference between noncommercial suits
and commercial suits.
CPC as applicable to Commercial Suits has been brought
about by a special act, a general rule under Order VIII Rule
9 would have to yield to it. Whilst on this argument, I also note
that as argued by Mr. Kohli; Shailaja, Chintaman and Nankhu

were delivered on a holistic reading of Order VIII as it stood prior to
its amendment by the Commercial Courts Act. In so far as these
judgements are concerned, the same are admittedly in respect of a
period prior to the coming in force of the Commercial Courts Act
and would still be applicable to noncommercial suits. In so far as
the submissions of Mr. Pooniwalla are concerned, I am unable to
agree with the submissions that the provisions of Order VIII Rule 1
subsequent to its amendment by the Commercial Courts Act, are
still discretionary, for the reasons set out hereinabove, I am of the
considered opinion that the newly introduced provisions are indeed
mandatory in nature and cannot be extended. In this respect, I am
bound by the decision of the Apex Court in M/s SCG Contracts India
Pvt. Ltd. Vs. K.S. Chamankar Infrastructure Pvt. Ltd. & Ors.
(supra).
86. However, I must clarify that Order VIII Rules 9 and 10 would
continue to be discretionary powers in noncommercial suits to
condone the delay in filing of a belated written statement as the
provisions introduced by the Commercial Courts Act will not apply
to noncommercial suits.
99. I find that ever since its introduction, the Commercial Courts
Act has already instilled a sense of urgency amongst the legal
fraternity. Litigants alike, are now conscious that they are required
to move in an expeditious and vigilant manner as their earlier

available remedy of filing applications for condonation of delay, has
now been taken away. In light of the aforesaid and in view of the
stand currently being taken by the Apex Court and Delhi High
Court, I see no reason as to why our Court should fall behind
merely because it is a Chartered High Court. Our Court must also
commence all necessary steps to ensure that Commercial Suits are
disposed of expeditiously in line with the statutory mandate of the
Commercial Courts Act. To begin with, furthering the intent and
object of the Commercial Courts Act viz. expeditious disposal of
commercial cases would be the need of the hour. I believe that
whilst on this, there is another aspect that requires consideration.
This Court has seen innumerable instances where a Plaintiff has
filed a suit in this Court and the same continues to remain under
objections for several months. Obviously, the office of the Ld.
Prothonotary & Senior Master of this Court does not proceed to
issue the summons unless and until the Plaintiff removes all office
objections. This conduct is deplorable and will only increase the
pendency of Commercial Suits in this Court.
Keeping in view the scheme, object and purpose of the

Commercial Courts Act, I am of the considered opinion that the
provisions of the Commercial Courts Act will be given full credence,
only in the event strict timelines are imposed not only on
Defendants but also on Plaintiffs invoking the Commercial Courts
Act. If a Defendant's right to file its Written Statement stands
forfeited after the expiry of 120 days, the Plaintiff too ought to
adhere to strict timelines. Hence, it is recommended that such
provisions and rules are introduced so as to ensure that in a
Commercial Suit filed before a Commercial Court / Commercial
Division, the Plaintiffs are directed to remove all office objections
and have the Commercial Plaint numbered within the time limit so
prescribed. Further, the office of every Commercial Court /
Commercial Division ought to be directed to render all possible
assistance to the Plaintiffs' advocates to ensure that all office
objections are removed and intimated to the advocates for the
Plaintiffs'. Thereafter, upon due registration of the Plaint, it ought
to be necessary for the Plaintiff to forthwith take steps to serve
upon the Defendant(s) the writ of summons. In the event the
Plaintiff is unable to serve the summons within the time limit so
prescribed, all steps should be taken including those of substituted
service etc. so as to effect due service expeditiously. In the event the
Plaintiff and its Advocates fail to adhere to these timelines, the
Commercial Suits so filed and belatedly numbered/served ought to
be dismissed without any further reference to the Commercial
Court / Commercial Division.
Para 100. Having answered the question of law as above, I also

clarify that there may be instances wherein the Plaintiff is ready
and willing for a belated written statement to be taken on record
subject to payment of costs. However, it is important to note that
parties cannot by consent, vest the court with discretion/
jurisdiction/ powers which it otherwise is barred from exercising

under statute. Jurisdiction can be vested only by statute and not by
consent and acquiescence. It is well settled that jurisdiction cannot
be conferred on a court by consent, acquiescence or waiver where
there is none, nor can it be ousted where there is.
Para 102. In view of the above notification, it may be argued that in
Commercial Suits before this Court, where the Defendant enters its
appearance prior to receipt of the summons, the period of 120 days
ought to commence from such earlier date viz. the date a Defendant
enters its appearance. However, as has been recorded above, this
Court is mandated to follow the provisions of the CPC as amended
by the Commercial Courts Act whilst adjudicating Commercial
Disputes. Hence, as the amendments to Order V Rule 1 and Order
VIII Rule 1 now state "...but which shall not be later than one
hundred twenty days from the date of service of summons..." the
period of 120 days ought to be calculated from the date of service of
summons and not the date on which a Defendant enters its
appearance as provided for in the above notification.
This will not only ensure that the provisions of the Commercial
Courts Act are implemented uniformly but also that a Defendant
will be made aware of the case it has to meet after being served
with the Plaint duly registered with this Court after the removal of
all office objections etc. In fact, the Writ of Summons now being
served by our Court have the following endorsement:
"And you are hereby summoned to file a written statement
within 30 days of the service of the present summons and
in case you fail to file the written statement within the said
period of 30 days, you shall be allowed to file the written
statement on such other day, as may be specified by the
court for reasons to be recorded in writing and on payment
of such costs as the court may deem fit, but which shall not
be later than 120 days from the date of service of
summons. On expiry of one hundred and twenty days from
the date of service of summons, you shall forfeit the right
to file the written statement and the court shall not allow
the written statement to be taken on record."
"Summary Suit" and "Summary Judgment"
5.5 Hubtown Limited Vs Idbi Trusteeship Service Limited
On 24 October, 2016 Commercial Appeal No. 7 Of 2016 In
Summons For Judgment No. 111 Of 2014
In the summary suit, though it is an interlocutory order of

granting Defendants conditional leave to defend such summary
suit, as it directly affects and loses the valuable rights of the
Defendant without giving full opportunity and as transferred and
as heard by the learned Commercial Division Bench/Judge, the
Commercial Appeal against such "Judgment" is maintainable.
Therefore, we are of the view that there is no reason to hold that
the Commercial Appeal as filed is not maintainable.
"Summary Suit" and "Summary Judgment"
Para 24 The conceptual position of "summary suit" as contemplated
under Order XXXVII of CPC and its specific provisions are governed
as per the original provisions of CPC.
The amended CPC, in view of Section 16 of the Commercial Courts
Act inserted the provision for a "summary judgment", through
Order XIIIA which is made applicable to the classes of Suits
(commercial suits) which required to be decided by the Commercial
Division/Court. It prescribes the procedure and stages for
application for summary judgment. This also includes and provides
the powers of a Commercial Judge to pass conditional order
including for evidence for hearing of summary judgment. We are
concerned with Order XIIIA, Rule 1(3) of CPC, whereby it is
specifically provided "notwithstanding anything to the contrary, "an
application" for summary judgment under this Order shall not be
made in a Suit in respect of any commercial disputes that is
originally filed as a summary suit under Order XXXVII.". Therefore,
once the summary suit as originally filed, prior to the
commencement of the and as now transferred, being commercial
dispute matter, the original procedure as provided under Order
XXXVII shall be applicable to such summary suits. The parties are
not entitled to prayer for summary judgment under XIIIA in view
of the specific ssm/dgm 28 comap716judgment241016final.sxw
provision so referred above. This also means that the judgments
and the issues so decided in summary suit shall for all purposes be
governed by the CPC, even after such suits are transferred as

commercial suits. The Commercial Division Judge is required to
follow the original C.P.C. and is required to keep in mind the
position in law revolving around all the facets of summary suits.
The provisions of Section 13 , therefore, is required to be interpreted
and/or considered accordingly, when any decision is given by the
Commercial Division/Court in such summary suit. The proviso to
Secion 13 (1), will not affect the maintainability of such Appeal so
filed against such order/judgment passed by the Commercial
Division/Court in such summary suit.
25 The submission that Section 13 proviso has extinguished,

expressly and/or by necessary intentment the Appeal against the
order passed by the Commercial Judge in summary suit granting
the Defendant conditional leave to defend a summary suit is
unacceptable. Section 13 itself contemplates that an Appeal is
maintainable against the decision/judgment or order which has
effect of "judgment", though it falls outside the purview of Order
XLIII as observed above.
The right of appeal is creation of statute
26 It is settled that a right of Appeal is not a matter of procedure,
but it is a matter of a substantive right which accrues to the litigant
and as exists on the date of suit being instituted (see The
Constitutional Bench decision in Garikapati Veeraya Vs. N.
Subbiah Choudhry & Ors 4., para 23) Such right of Appeal is
governed by the law prevailing at the date of the institution of the
suit or proceedings and not by the law that prevails at the date of
its decision or at the date of filing of the Appeal. It is equally settled
that a vested right of Appeal is not absolute; and that it can in fact
be abrogated either explicitly or by implicit intendment. [ Kamal
Kumar Dutta vs Ruby General Hospital ]. The Commercial Courts
Act provides for an Appeal against the decision, judgment and order
so referred above. An Appeal is available if the commercial
suit/dispute is dealt with by the Commercial Division/Commercial
Court and passes order/judgment and/or take decision. This
statutory Appeal as provided, therefore, cannot be taken away
notwithstanding anything contained in any other law for the time
being in force or Letters Patent of a High Court [ section 13(2)]. The
Commercial Courts Act or special Statute, if empowers, the
Appellate Division Court to deal with the Appeal against the
Judgment/order passed by the Commercial Division or the
Commercial Court, the bar so submitted of proviso to section 13(1)
is not applicable in each and every matter specifically when the
subject matters are commercial disputes as defined under the
Commercial Courts Act and are also governed by the Special
Act/Statute other than the CPC. The specific provisions/ Statute/
Act will prevail as substantial rights, if are created over the
provisions of Order XLIII CPC, as provided in proviso to Section
13(1) of the Commercial Courts Act.
Para 29 There is no scope to any authority, not to transfer the
commercial suits, having one crore and above valuation, for the
purpose of pecuniary jurisdiction under the Commercial Courts Act,
in case of a commercial dispute. The State Government needs to
take steps as contemplated under Sections 19 and 20 of the
Commercial Courts Act. All and every concerned authority are
bound to aid and assist to give effect to these provisions to all the
pending Suits/Applications, to achieve the object of the Commercial
Courts Act. All are bound by the provisions, including amended
CPC to expedite the pending Suits filed prior or post the
Commercial Courts Act. The Appeals are also expedited by the
provisions so also pending Arbitration Petitions/Appeals as
specified, though filed prior to the enforcement of the Commercial
Courts Act. Section 10,13, and 15 deal with the pending Arbitration
matters, including Appeal under Section 37 of the Arbitration and
Comcilation Act. The Supreme Court in a recent decision in Arun
Dev Upadhyaya Vs. Integrated Sales Service Ltd. & Anr., now has
expanded and included even the Appeal under Section 50 of the
Arbitral Act in the facts of the case. It needs to be subject to
valuation of the Suit/Appeal.
30 We are also inclined to observe that the vested right of Appeal is
not taken away by the Commercial Courts Act. However, it is
subject to Section 13 so recorded above and/or Section in no manner
takes away and/or extinguishes right of Appeal in pending
summary suits which are transferred and dealt with by the
Commercial Division/Court.
Conditional Or Unconditional Leave?
46 The law with regard to Order XXXVII, Rule 2 and 3 of CPC to
grant or not to grant conditional and/or unconditional leave is
elaborated as under, by the Apex Court in M/s. Mechelec Engineers
& Manufacturers Vs. M/s. Basic Equipment Corporation.
"8. (a) If the defendant satisfies the Court that he has a
good defence to the claim on its merits the plaintiff is not
entitled to leave to sign judgment and the defendant is
entitled to unconditional leave to defend.
(b) If the defendant raises a triable issue indicating that he
has a fair or bona fide or reasonable defence although not a
positively good defence the plaintiff is not entitled to sign
judgment and the Defendant is entitled to unconditional
leave to defend.
(c) If the defendant discloses such facts as may be deemed
sufficient to entitle him to defend, that is to say, although
the affidavit does not positively and immediately make it
clear that he has a defence, yet, shows such a state of facts
as leads to the inference that at the trial of the action he
may be able to establish a defence to the plaintiff's claim
the Plaintiff is not entitled to judgment and the defendant
is entitled to leave to defend but in such a case the court
may in its discretion impose conditions as to the time or
mode of trial but not as to payment into court or furnishing
security.
(d) If the defendant has no defence or the defence set up is
illusory or sham or practically moonshine then ordinarily
the plaintiff is entitled to leave to sign judgment and the
defendant is not entitled to leave to defend.
(e) If the defendant has no defence or the defence is illusory
or sham or practically moonshine then although ordinarily
the plaintiff is entitled to leave to sign judgment, the court
may protect the plaintiff by only allowing the defence to
proceed if the amount claimed is paid into court or
otherwise secured and give leave to the defendant on such
condition, and thereby show mercy to the defendant by
enabling him to try to prove a defence."
"9. The case before us certainly does not fall within the
class (e) set out above. It is only in that class of case that
an imposition of the condition to deposit an amount in
Court before proceeding further is justifiable."
47 The Apex Court in this regard has further reiterated above

principle and on facts as case was made out granted an
unconditional leave. This makes the position of law clear, which
need to be kept in mind while granting and/or refusing leave to
defend. The case in hand, in our opinion, falls within the ambit of
clauses (a) and (b) as expressed in Mechelec Engineers &
Manufacturers (supra). [Sunil Enterprises and Anr. Vs. SBI
Commercial & International Bank Ltd. 16 and State Bank of
Saurashtra Vs. Ashit Shipping Services (P) Ltd. 17, R. ,
Savarna Prabhu and Anr. Vs. Videocon Leasing and
Industrial Finance Limited & Anr.18] 48 The learned Single
Judge, S.G. Kathawalla, as recorded in 16 (1998) 5 SCC 354
17 (2002) 4 SCC 736 18 (2013)14 SCC 606 earlier Suit filed by the
IDBI, dealt with the same documents and transactions between the
parties and has granted the conditional leave. Therefore, taking
note of the reasons so given and recorded, we see there is no case to
discard these reasons by overlooking the above basic principles of
law. We have to keep in mind the basic principles so laid down,
while considering the present case/Appeal also. We have taken note
of the facts and circumstances, as well as the reasons given by the
learned Single Judge, S.G.Kathawalla, and the Supreme Court
Judgments so referred above, interpreting the transactions and the
documents between the same parties and we are inclined to observe
that a sufficient case is made out by the Appellant that they have a
good defence to claim on its merits. This itself means, in the trial,
they may be able to establish the defence to the Plaintiff's claim
therefore, the AppellantDefendant, at this stage, is entitled for the
unconditional leave. The discretion so exercised and order so passed
by imposing condition while granting leave, is unsustainable in the
facts and the law and is liable to be interfered with.
49 Therefore, taking overall view of the matter, we are of the

opinion that this is a case where on merit, unconditional leave
required to be granted to the Appellant on similar line as granted
by the learned Single Judge dated 8 May 2015.
Order Vii Rule 14 Read With Section 151 Of The Code Of
Civil Procedure, 1908
5.6 State Of Gujarat Vs Union Of India On 7 May, 2018 Cav
Judgment, High Court Of Gujarat At Ahmedabad R/Special
Civil Application No. 737 Of 2018
Plaintiffs which was preferred under Order VII Rule 14 read
with Section 151 of the Code of Civil Procedure, 1908 ("CPC"
for short) for seeking permission to place certain documents on

record and further to seek permission to exhibit those documents,
which were produced vide list at Ex.72.
Ultimately, the Court will have to ensure that all documents
which assist it to resolve the controversy before it in an efficient
manner are available for perusal. Unless the Court comes to a
conclusion that the facts are so gross that the only inference that
can be drawn from the conduct of the party is that the documents
which are sought to be produced are manufactured, the Court
should not generally deny leave to produce documents because
ultimately, it is always open to the other side to crossexamine the
party who produces the documents to establish that the said
documents are not relevant or that the case based on the said
documents is not true.
In our opinion and more particularly, considering the

documents which are sought to be produced which are Government
documents, at this stage, it is not possible to come to a conclusion
that the documents sought to be produced are manufactures.
However, that does not preclude the defendants, if they so desire, to
cross examine the plaintiffs and persuade the Court to hold so.
Therefore, in the facts and circumstances of the case, we are of the
opinion that if the plaintiffs are not permitted to produce the
aforesaid documents, grave injustice is likely to be caused to the
plaintiffs. Therefore, we are of the opinion that in the facts and
circumstances of the case, the learned Commercial Court has failed
to exercise jurisdiction vested in it, more particularly, contained in
Order XII Rule 1(5) of the CPC (applicable to the Commercial
Courts Act and the commercial disputes). On imposition of
reasonable cost and subject to proving the same in accordance with
law, the learned Commercial Court ought to have permitted the
plaintiffs to produce the documents sought to be produced vide list
Ex.72 and ought not to have allowed the application Ex.71.
5.7 Madhuram Properties Versus Tata Consultancy Services
Ltd Appeal From Order No. 210 Of 2017 10 July, 2017
Hon'ble High Court of Gujarat.
The agreement / indenture between the plaintiff and the

defendant in respect of aforesaid 216 residential flats cannot be said
to be an agreement relating to immovable property used

exclusively in trade or commerce. Considering the subsection(vii) of
Section 2(c) of the Commercial Courts Act, the "commercial dispute"
means a dispute arising out of agreements relating to immovable
property used exclusively in trade or commerce. As observed herein
above, the agreements are relating to immovable property
exclusively for residential purpose and same cannot be said to be
agreement relating to immovable property used exclusively in trade
or commerce. The immovable property in question 216 residential
flats are used exclusively for residential purpose and same cannot
be said to be used exclusively in trade or commerce. Under the
circumstances, considering Section 2(c)(vii) of the Commercial
Courts Act, the dispute arising out of the indenture / agreement in
question cannot be said to be relating to immovable property used
exclusively in trade or commerce and therefore, said cannot be said
to be commercial dispute as defined under Section 2(c) of the
Commercial Courts Act.
5.8 Kandla Container Terminal Pvt. ... vs Doosan Heavy
Industries And ... on 18 July, 2018 R/FIRST APPEAL NO.
2180 of 2018
Preliminary objection raised by the judgmentdebtor that the said
execution petition before the Commercial Court shall not be
maintainable and/or that the Commercial Court, Rajkot, shall not
have any jurisdiction to adjudicate the said execution petition and
the objection that only the Commercial Division of the High Court
shall have the jurisdiction to adjudicate the execution petition and
consequently holding that the Commercial Court, Rajkot, shall have
the jurisdiction to adjudicate the said commercial execution
petition,
We are of the opinion that against the final judgment and/or

decision of the Commercial Court or the Commercial Division of the
High Court only, appeal shall be maintainable before the
Commercial Appellate Division of the High Court. However, an
appeal shall also lie from such orders passed by the Commercial
Division or a Commercial Court that are specifically enumerated
under Order XLIII of the Code as amended by the Commercial
Courts Act, 2015 and Section 37 of the Arbitration and Conciliation,
1996. Therefore, the submission on behalf of Shri Kamal Trivedi,
learned Senior Advocate on behalf of the respondent that an appeal
under Section 13 of the Commercial Courts Act, 2015, shall lie only
from such orders passed by a Commercial Division or a Commercial
Court that are specifically enumerated under Order XLIII of the
Code, as amended by the Commercial Courts Act, 2015 and Section
37 of the Arbitration and Concilitaiton Act, 1996, is not acceptable.
As observed and held by the Hon'ble Supreme Court, Section 13(1)
of the Commercial Courts Act, 2015, is in two parts, one is with
respect to providing appeal to the Commercial Appellate Division of
the High Court against the final decision / judgment or order of the
Commercial Court or the Commercial Division of the High Court
and the second part is with respect to providing appeal from such
orders passed by Commercial Division or a Commercial Court that
are specifically enumerated under Order XLIII of the Code as
amended by the Commercial Courts Act, 2015 and Section 37 of the
Arbitration and Conciliation Act 1996. However, at the same time,
Shri Trivedi, learned Senior Advocate appearing on behalf of the
respondent is justified in raising the objection on the
maintainability of the present appeal under Section 13 of the
Commercial Courts Act, 2015 against the impugned order passed by
the learned Commercial Court, Rajkot, overruling and /or setting
aside the objection raised by the appellant herein on the jurisdiction
of the Commercial Court, Rajkot, to entertain and adjudicate the
execution petition.
10. In view of the above discussion, it is observed and held that the
present appeal under Section 13 of the Commercial Courts Act,
2015, against the impugned order passed by the learned
Commercial Court, Rajkot, shall not be maintainable. However,
considering the request made by Shri Modh, learned advocate
appearing on behalf of the appellant and considering the fact that
the issue with respect to the jurisdiction of the Commercial Court,
Rajkot, would be a pure question of law and it is with respect to the
jurisdiction, as held by the Division Bench of this Court in State of
Gujarat V Union Of India (supra), a petition under Article 227 of
the Constitution of India shall be maintainable and therefore,
learned advocate appearing on behalf of the appellant is permitted
to convert the present First Appeal into a Writ Petition under
Article 227 of the Constitution of India. Registry is directed to

register the present First Appeal as Special Civil Application under
Article 227 of the Constitution of India by giving a separate, new
number accordingly.
11. Now so far as the challenge to the impugned order on merits is
concerned, at the outset, it is required to be noted that as such, the
issue involved in the present petition with respect to the
jurisdiction of the Commercial Court, Rajkot, to decide and
adjudicate the said execution petition is now no more resintegra in
view of the decision of the Division Bench of this Court in the case
of M/s.OCI Corporation I (supra). In the aforesaid decision, in
Paragraph63, the Division Bench of this Court has specifically
observed and held as under:"63. The sum and substance
of the above discussion would be,
(1) Where the subject matter of an arbitration is commercial dispute
of a specified value and if such arbitration is international
commercial arbitration, all the applications or appeals arising out of
such arbitration under the provisions of the Arbitration and
Concilication Act, 1996 shall be heard, decided and disposed of by
the Commercial division where such Commercial Division has been
constituted in the High Court i.e. in the present case High Court of
Gujarat.
(2) Where the subject matter of an arbitration is a commercial

dispute but not of a specified value and if such arbitration is
international commercial arbitration, considering the provisions of
Arbitration and Conciliation (Amendment) Act, 2015 the same shall
be heard, decided and disposed of by the concerned High Court.
(3) Where the subject matter of an arbitration is a commercial

dispute of a specified value and if such arbitration is other than
international arbitration, all the applications or appeals arising out
of such arbitration under the provisions of the Arbitration and
Conciliation Act, 1996 shall be filed in and heard, decided and
disposed of by the Commercial Court exercising territorial
jurisdiction over such arbitration where such commercial Court has
been constituted."
Therefore, the learned Judge, Commercial Court, Rajkot, has

unnecessarily distinguished the decision of this Court in the case of
M/s.OCI Corporation I (supra) and thereby has erred in not
following the said binding decision of this Court. The decision of this
Court in M/s.OCI Corporation
I (supra) which is reported to be confirmed by the Hon'ble Supreme
Court, specifically lays down that if the award is in connection with
the international arbitration, execution petition shall be
maintainable before the Commercial Division of the High Court
alone. At this stage, it is required to be noted that as such, the
applicability of the Commercial Courts Act, 2015 and/or
applicability of the Arbitration and Conciliation (Amendment) Act,
2015, cannot be disputed as the respondent herein original
applicant itself has preferred the execution petition before the

Commercial Court under the Commercial Courts Act, 2015. In the
aforesaid decision in M/s.OCI Corporation I (supra), after
considering the Scheme of the Commercial Courts Act, 2015, and
the object and purpose of the enactment of the Commercial Courts
Act, 2015, and the Scheme of the Arbitration and Conciliation
(Amendment) Act, 2015, it is specifically observed and held that
against any decision and/or order where the subjectmatter of an
arbitration is a commercial dispute of a specified value and if such
arbitration is international commercial arbitration, all the
applications or appeals arising out of such arbitration under the
provisions of the Arbitration and Conciliation Act, 1996, shall be
heard, decided and disposed of by the Commercial Division where
such Commercial Division has been constituted in the High Court
i.e. in the present case High Court of Gujarat. It is not in dispute
that in the present case, the subjectmatter of arbitration is a
commercial dispute of a specified value and the arbitration is an
international commercial arbitration. Even when the award is a
domestic award as the venue might have been in India, the
arbitration would still be an international commercial arbitration.
Under the circumstances, the impugned order passed by the
learned Judge, Commercial Court, Rajkot, overruling / setting aside
the objections raised by the appellant herein on the jurisdiction of
the Commercial Court, Rajkot, to entertain and adjudicate the
execution petition with respect to the international commercial
arbitration and the order passed by the learned Commercial Court
that the said execution petition shall be maintainable before the
Commercial Court, Rajkot, cannot be sustained and the same
deserves to be quashed and set aside. It is, accordingly quashed and
set aside. The Commercial Court, Rajkot, is hereby directed to
return the said execution petition to the original applicant original
claimant to present it before the Commercial Division of this Court
immediately and thereafter, the original claimant original
applicant to file the execution petition before the Commercial
Division of this Court and if filed within a period of four weeks from
the return of the execution petition to present it before the
Commercial Division of this Court, the same be considered in
accordance with law and on merits at the earliest.
5.9 Indian Overseas Bank Vs Jason Deckor P Ltd On 5
September, 2018 Special Civil Application No. 11710 Of 2018,
Hon'ble High Court Of Gujarat
As noted, the Act of 2015 has been enacted providing separate

Commercial Courts and Commercial Divisions for dealing with
commercial disputes of specified value in order to achieve timely
disposal thereof. In furtherance of such objective, various provisions
have been made in the Act of 2015; including making some
significant amendments in the CPC.
We may recall, the CPC was amended extensively by the Act of

2002 which included imposition of time limit for filing the written
statement. As per the amended Rule 1 of Order VIII, a defendant
would have thirty days' time from the date of service of summons to
present the written statement. As per the proviso, if the defendant
failed to file written statement within such period, he would be
allowed to file the written statement on some other day, as may be
specified by the Court, for the reasons to be recorded in writing, but
which shall not be later than ninety days from the date of service of
summons. This proviso thus envisages time of thirty days which
could be further extended by ninety days for filing the written
statement. This and several other provisions amending the CPC
came up for consideration before the Supreme Court in the case of
Salem Advocate Bar Association Tamil Nadu v Union of India,
reported in [2005] 6 SCC 344, wherein, a threeJudge Bench of
the Apex Court held that the use of word "shall" in Rule 1 of
Order VIII CPC by itself is not conclusive to determine
whether the provision is mandatory or directory. A reference
was made to Rule 10 of Order VIII, which as noted, provides that
where any party from whom a written statement is required under
Rule 1 or Rule 9 fails to present the same within the time permitted
or fixed by the Court; as the case may be, the Court shall pronounce
the judgment against him or make such order in relation to the suit,
as it thinks fit. The Court was of the opinion that by virtue of the
said proviso, on failure of the defendant to file written statement,
the Civil Court had been given discretion either to pronounce the
judgment against the defendant or make such order in relation to
the suit, as it thinks fit. Therefore, in the context of the proviso,
despite use of the word "shall", the Court has been given discretion
either to pronounce or not to pronounce the judgment against the
defendant, even if the written statement is not filed and instead
pass such an order; as it thinks fit, in relation to the suit.
Consequently, the time limit envisaged in Rule 1 of Order
VIII CPC for filing the written statement was held to be
directory and not mandatory in nature.
In the present case, however, we are concerned with entirely
different scheme of statutory provisions. Significantly, the
legislature was conscious of decision of the Supreme Court in case of
Salem Advocate Bar Association [Supra] and interpretative process
adopted therein. In the context of time limit for filing written
statement under schedule to the Act of 2015, the legislature has
therefore made two significant amendments in the CPC. Firstly, the
proviso to Rule 1 of Order VIII is substituted. In the substituted
form, this proviso provides that where the defendant fails to file the
written statement within a period of thirty days, he would be
allowed to file the written statement on such other day as
may be specified by the court, for the reasons to be recorded
in writing and on payment of such cost as the Court deems
fit, but which shall not be later than 120 days from the date of
service of summons. The proviso further provides that on expiry of
120 days from the date of service of summons, the defendant
shall forfeit their right to file written statement and the
court shall not allow the written statement to be taken on
record. Simultaneously, the schedule also amends Rule 10 of Order
VIII CPC by inserting a proviso which; as noted above, provides
further that no court shall make an order to extend the time limit
provided under Rule 1 of Order VIII CPC for filing the written
statement.
Combined effect of these amendments is clear and precise. All
the powers of a Court dealing with the commercial disputes of a
specified value for extending time for filing the written statement
beyond the period of 120 days of service of summons are taken
away. The language of the proviso to Rule 1 of Order VIII CPC has
been materially altered. In addition to providing for extension
beyond 30 days [but not beyond 120 days from service of summons]
on payment of cost; as may be specified by the Court, two more
significant changes have been made namely, that on expiry of 120
days from the date of service of summons, the defendant shall
forfeit the right to file written statement and that the Court shall
not allow the written statement to be taken on record. In addition to
providing with the maximum time permissible for filing written
statement upto 120 days from the date of service of summons, these
two additional elements inserted in the proviso to Rule 1 make the
legislative intent abundantly clear. There is no escape from the
position that the legislature desired to put a ceiling on the
maximum time that a Court can grant to the defendant in a suit
involving commercial dispute of a specified value to file the written
statement. The legislature has mandated both in a positive
as well as negative terms. Positively, by providing that on
completion of 120 days, the defendant shall forfeit their
right to file the written statement and negative, by
providing that the Court shall not allow the written
statement to be taken on record after such period. For good
measure, the legislature has also amended Rule 10 of Order VIII by
providing that in exercise of such rule, no Court shall make an
order to extend the time for filing the written statement. This
proviso is in the nature of an explanation, putting limitation on the
powers of a Court to make such an order in relation to the suit; as it
thinks fit. By virtue of this proviso, such power would not include
power to extend the time provided under Rule 1 for filing the
written statement.
The golden rule of statutory interpretation is that the statute must
be read in its plain grammatical manner and be applied
accordingly. In the case of Afcons Infrastructure Limited v/s.
Cherian Varkey Construction Company Private Ltd.,
reported in 2010 (8) SCC 24, it was observed that the principles
of statutory interpretation are well settled. Where the words of the
statute are clear and unambiguous, the provision must be given its
plain and normal meaning, without adding or rejecting any words.
Departure from this literal rule, by making structural changes or
substituting words in a clear statutory provision, under the guise of
interpretation would pose a great risk, as the changes may not be
what the legislature intended or desired. It was further observed
that an exception to the general rule is where the words used in
the statutory provision are vague and ambiguous or where the plain
and normal meaning of the words or grammatical construction
thereof would lead to confusion, absurdity, repugnancy with other
provisions, the Courts may use the interpretative tools to set right
the situation.
In the present case, we find the words used in the statute have
no ambiguity or possibility of even two interpretations. We are
conscious that the use of word 'shall' in a statute is not always
conclusive of the legislative intention. Often times, the courts have
even in face of the use of such expression held a proviso to be
directory instead of mandatory. However, in the present case, from
all angles, the legislative intent which emerges is that the
prescription of time limit for filing the written statement applicable
to a Commercial Court is mandatory. Such an interpretation would
also be in consonance with the scheme of the Act of 2015 and the
objects for enactment of the said act.
We may now refer to the judgments cited by learned counsel for the
petitioner.
In case of Kalpesh R. Jain [Supra], the Bombay High Court
was dealing with different situation. It was a case in which an
appeal was filed before the Commercial Appellate Court set up

under the Act of 2015. Such appeal was filed beyond the period of
limitation prescribed. The Court held that applicability of section 5
of the Limitation Act, 1963 is not ruled out and delay can be
condoned on sufficient ground being made out.
The Rajasthan High Court in case of Shri Balaji Industrial
Products Ltd [Supra] has not dealt with the question of powers of
a Commercial Court to extend the time limit for filing written

statement in face of amended provisions of Rule 1 Order VIII CPC.
This judgment therefore does not lay down any proposition contrary
to what we have discussed.
The learned Judge of Delhi High Court in case of Sunil Alagh
[Supra] came to a conclusion that the service of summons on the
defendant cannot be said to be complete unless complete paper book
of the suit is supplied. In this context, it was held that period of 120
days for filing written statement will not commence, when the
defendant has not been supplied complete paper book of the suit.
5.9 Vishal Exports Overseas Limited Vs State Bank Of India
On 10 July, High

Court Of Gujarat At Ahmedabad R/First
Appeal No. 1956 Of 2018
Para 33. Hence, the possibility of plaintiffs having not acquainted
with the remedies available to them and the knowledge thereof,

cannot be ruled out and the said fact seems to have been
substantiated from several orders passed by the DRT, DRAT and
also by the Hon'ble High Court of Gujarat and therefore, the very
conduct on the part of the plaintiffs disentitle the plaintiffs even to
continue with the proceedings of the present suit in the light of the
detailed discussion made hereinabove." However, as observed
hereinabove, it is not at all observed that independent suit shall not
be maintainable at all in view of the Scheme of the Finance Act,
1993. Merely because some remedy might have been available, in
the present case, may be by way of counterclaim, which the
plaintiff did not avail and instead, filed an independent suit, cannot
be a ground to reject the Plaint under Order VII Rule 11 of the
CPC, unless it is observed and found that the suit is clearly barred
by any law.
7.5 At this stage, it is required to be noted that in the present case,
now no fruitful purpose would be served in relegating the plaintiffs
to lodge the counterclaim and/or to transfer the suit to the DRT
(the issue which is now at large before the Hon'ble Supreme Court)
as the Original Applications filed by the Bank have already been
disposed of long back much before even the application under Order
VII Rule 11 of the CPC is decided and disposed of and no
applications are pending before the learned DRT. It is also required
to be noted that different Original Applications were filed by
different Banks against the plaintiffs borrowers and their
application for consolidation of the Original Applications were
rejected which came to be confirmed by the Division Bench of this
Court. The present suit is filed by the plaintiffs jointly against the
consortium of Bank/ Banks and therefore even if the plaintiffs could
have filed the counterclaim, it was not possible as decree is sought
against all the Banks jointly and severally and as such, a counter
claim in different Original Applications would be possible or not is
also a very serious question. One can understand if only one
Original Application was pending of the consortium Banks and the
suit is either transferred and/or one counterclaim is filed in only
one Original Application, which is not so in the present case.
8. In any case, in absence of any specific finding given by the

learned Judge, Commercial Court, that independent suit shall not
be maintainable and/or the same is specifically barred under the
provisions of the Finance Act, 1993, the learned Judge is not
justified in rejecting the Plaint under Order VII Rule 11 of the CPC.
There can be a very serious dispute whether the reliefs which are
sought in the Plaint by way of damages/ compensation from the
defendants for their various wrongful actions, including breach of
contract, actions in bad faith and acts of misfeasance and/or non
feasance and tortuous liability can be treated as counterclaim in an
application under Section 19 of the Finance Act, 1993. Be that as it
may, as observed hereinabove, there is no specific finding recorded
by the learned trial curt that the independent suit filed by the
plaintiffs is specifically barred by any law, more particularly, by the
provisions of the Finance Act , 1993 and therefore, the Plaint cannot
be rejected under Order VII Rule 11 of the CPC. Therefore, without
touching the questions which are referred to the Larger Bench of
the Hon'ble Supreme Court in Bank of Rajasthan Limited V VCK
Share and Stoke Broking Service Limited (supra), on the aforesaid
ground alone, the impugned order passed by the learned Judge,
Commercial Court, rejecting the Plaint under Order VII Rule 11 of
the CPC deserves to be quashed and set aside.
Case Laws With Respect To Commercial Disputes Of
Specified Value
5.10 2016 0 Supreme(Del) 581; Havells India Limited
Plaintiff Versus The Advertising Standards Council of India
– Defendant
15. Section 2(1)(c) of the Commercial Courts Act defines the

expression “commercial dispute” to mean “dispute arising out
of ... ... ...”. Therefore, for a dispute to be a “commercial dispute”, it
is essential first & foremost that there has to be a “dispute”. Unless
the plaint discloses a “dispute”, the mere fact that the plaintiff may
have sought the relief which may relate to a subject matter enlisted
as clauses (i) to (xxii) of Section 2(1)(c) of the Commercial Courts
Act, would not render the “dispute” arising in the suit as a
“commercial dispute”.
16. In the present case, as noticed hereinabove, the dispute raised
by the plaintiff is in relation to the impugned communication/
direction dated 15.09.2015 issued by the defendant/ASCI on the
premise that the advertisement of the defendant using the tagline
“Wires that don’t catch fire” is misleading and exaggerated. The
defendant has not sought to raise any challenge to the claim of
trade mark or copyright laid by the plaintiff either in “HAVELLS”
or in the tagline in question. Thus, no cause of action has arisen in
favour of the plaintiff to assert its claim for a declaration that its
mark/expression “Wires that don’t catch fire” is a wellknown trade
mark. As rightly argued by learned counsel for the defendant, since
the defendant has not questioned the plaintiff’s claim for a trade
mark in the said tagline, the plaintiff cannot seek the said relief in
the present suit, as the assertion of the said right would not have
any real opposition. It would eventually tantamount to grant of an
exparte decree if the said declaration is made in the present suit,
as is sought in relief (a) of the plaint.
21. The submission of Mr. Lall that this Court should construe the
expression “commercial dispute” widely to include all commercial
disputes, even if they do not strictly fall within clauses (i) to (xxii) of
Section 2(1)(c), cannot be accepted for the reason that the
Parliament has consciously given the precise definition as to what a
commercial dispute “means”. It is not an inclusive definition and
the specific matters which qualify as relating to “commercial
disputes” have been specifically set out in clauses (i) to (xxii)
aforesaid.
22. For all the aforesaid reasons, I am of the view that the present
suit does not raise a “commercial dispute” within the meaning of
Section 2(1)(c) of the Commercial Courts Act and since the
jurisdictional value of the suit is below Rs. 2 Crores, the same is
liable to be transferred to the Court of the competent
District Judge in view of the notification No.2718/DHC/Orgl. dated
25.11.2015, issued under Section 4 of the Delhi High Court
(Amendment) Act, 2015 (Act 23 of 2015). Section2(1)©(vi)
5.11 2018 3 GLR 2318; 2017 0 Supreme(Guj) 1872; Jayprakash
Associates Versus State of Gujarat and Ors.
3.2. Now, so far as the submission on behalf of the petitioner that as
dispute is arising out of the Public Works Contract and for which a
separate Tribunal has been constituted, and therefore, the dispute
arising out of such Public Works Contract cannot be said to be a
commercial dispute within the definition of Sec. 2(1)(c) of the
Commercial Courts Act, and therefore, even if the suit value is
above the specified value, the suit is not required to be transferred
to the Commercial Court, is concerned, the same has no substance.
There is no distinction in Sec. 2(1)(c) whether the contract is a
Public Works Contract or other contract. Section 2(1)(c) of the
Commercial Courts Act provides that "a dispute arising out of......
(vi) construction and infrastructure contracts, including tenders". It
is not in dispute that the contract between the plaintiff and the
defendants was for construction of Dam etc. Therefore, it can be
said to be a commercial dispute within the definition of Sec. 2(1)(c)
of the Act.
Section 2(C)(Vii), "commercial Dispute" Is Dispute Arising
Out Of Agreements Relating To Immovable Property Used
Exclusively In Trade Or Commerce
5.12 Vasu Healthcare Private Limited v. Gujarat Akruti TCG
Biotech. Limited and Anr AIR 2017 GUJARAT 153
Commercial Courts, Commercial Division and Commercial

Appellate Division of the High Courts Act (4 of 2016), S.2(c)
'Commercial dispute' Is dispute arising out of agreements
relating to immovable property used exclusively in trade or
commerce Plots given for developing and establishing Biotech
Park Though ultimate use might be for purpose of trade or

commerce S. 2(c)(vii) not applicable It cannot be said that
agreement relating to immovable property used exclusively in trade
or commerce Dispute between parties not commercial dispute
Suit before Commercial Court, not maintainable. (Paras 7.3 7.4 7.6)
Therefore, if the dispute falls within any of the clause 2(c) the
dispute can be said to be "commercial dispute" for which the
Commercial Court would have jurisdiction. It is required to be
noted that before the learned Commercial Court the original
plaintiff relied upon section 2(c)(i), 2(c)(ii) and 2(c)(xx) of the
Commercial Courts Act only. Learned Counsel appearing on behalf
of the original plaintiff has candidly admitted and/or conceded that
the case shall not fall within clause 2(c)(i); 2(c)(ii) or 2(c)(xx) of the
Commercial Courts Act. It is required to be noted that before the
learned Commercial Court it was never the case on behalf of the
original plaintiff that case would fall within section 2(c)(vii) of the
learned Commercial Court. Despite the above we have considered
on merits whether even considering section 2(c)(vii) of the
Commercial Courts Act, the dispute between the parties can be said
to be "commercial dispute" within the definition of section 2(c) of the
Commercial Courts Act or not? Considering section 2(c)(vii),
"commercial dispute" means a dispute arising out of the agreements
commerce. As observed hereinabove, at the time of filing of the suit
and even so pleaded in the plaint, the immovable property / plots
the agreements between the parties cannot be said to be
agreements relating to immovable property used exclusively in
trade or commerce. As per the agreement between the party after
getting the plots on lease from the GIDC, the same was required to
be thereafter developed by the original defendant No.1 and after
providing all infrastructural facilities and subplotting it, the same
is required to be given to other persons like the original plaintiff. It
is the case on behalf of the original plaintiff that as the original
defendant No.1 has failed to provide any infrastructural facilities
and develop the plots and therefore, a civil suit for specific
performance of the agreement has been filed. There are other
alternative prayers also. Therefore, it cannot be said that the
agreement is as such relating to immovable property used
exclusively in trade or commerce. It is the case on behalf of the
original plaintiff that as in clause (vii) of section 2(c), the
pharseology used is not "actually used" or "being used" and
therefore, even if at present the plot is not used and even if it is
likely to be used even in future, in that case also, section 2(c)(vii)
shall be applicable and therefore, the Commercial Court would have
jurisdiction. The aforesaid has no substance. As per the cardinal

principle of law while interpreting a particular statute or the
provision, the literal and strict interpretataion has to be applied. It
may be noted that important words used in the relevant provisions
are "immovable property used exclusively in trade or commerce ". If
the submission on behalf of the original plaintiff is accepted in that
case, it would be adding something in the statute which is not there
in the statute, which is not permissible. On plain reading of the
relevant clause it is clear that the expression "used" must mean
"actually used" or "being used". If the intention of the legislature
was to expand the scope, in that case the phraseology used would
have been different as for example, "likely to be used" or "to be
used". The word "used" denotes "actually used" and it cannot be said
to be either "ready for use" or "likely to be used"; or "to be used".
Similar view has been taken by the Bombay High Court (Nagpur
Bench) in the case of Dineshkumar Gulabchand Agrawal (supra)
and it is observed and held that the word "used" denotes "actually
used" and not merely "ready for use". It is reported that SLP
against the said decision has been dismissed by the Hon'ble
Supreme Court. Even the submission on behalf of the original
plaintiff that as the plots are given to original defendant No.1 for
developing and establishing Biotech Park which ultimately is to be
used for trade or commerce and therefore, section 2(c)(vii) shall be
applicable, the aforesaid has no substance and cannot be accepted.
Merely because the ultimate use might be for the purpose of trade
or commerce and that too after developing and establishing Biotech
Park after providing of infrastructural facilities, section 2(c)(vii)
shall not be applicable, more particularly with respect to the
agreement/contract between the original plaintiff and the original
defendant No.1. It cannot be said that the agreement between the
original plaintiff and the original defendant No.1 is the agreement
commerce. Identical question came to be considered by the Division
Bench of this Court and after considering the relevant provisions of
the Commercial Courts Act more particularly section 2(c) of the
Commercial Courts Act, in para 5.5 after considering section 2(c)
(vii) of the Commercial Courts Act, it is observed that merely
because the immovable property is going to be used exclusively in
trade or commerce, the dispute would not become commercial
dispute as defined under Section 2(c) of the Commercial Courts Act.
It is further observed and held in the said decision that if contention
on behalf of the applicant that as immovable property, which is the
subjectmatter of the suit, is going to be used exclusively for trade
and commerce, the same would become commercial dispute as per
section 2(c) and therefore the same is to be transferred to the
concerned Commercial Court having jurisdiction is accepted, in that
case, the object and purpose of establishment of Commercial Courts
under the Commercial Courts Act would be frustrated. That
thereafter in paras 5.6 to 5.8, the Division Bench has observed and
held as under: "5.6 The object and purpose of establishment of
Commercial Courts, Commercial Divisions and Commercial

Appellate Divisions of the High Court is to ensure that the cases
involved in commercial disputes are disposed of expeditiously, fairly
and at reasonable cost to the litigant. The Commercial Courts,
Commercial Divisions and Commercial Appellate divisions of the
High Courts are intended to serve as a pilot project in the larger
goal of reforming the civil justice system in India. As per the
recommendations made by the Law Commission on the basis of
which the Commercial Courts have been established, the
Commercial Courts more particularly will benefit the litigant, other
potential litigants (especially those engaged in trade and commerce)
shall also be advantaged by the reduction in backlog caused by the
quick disposal of the commercial disputes, which in turn, will
further economic growth, increase foreign investment, and make
India an attractive place to do business.
5.7 From the 188th report of the Law Commission it appears that
the constitution of Commercial Divisions Courts were necessitated
due to inordinate delays, and the need to ensure the fast disposal of
high value commercial disputes to provide assurance to domestic
and foreign investors.It has been aimed to give a clear assurance to
investors that high value commercial suits would directly go before
the Commercal Division/Commercial Courts / Commercial Appellate
Courts, which wouldfollow fast track procedures.
5.8 Thus, considering the aim, object and purpose of the enactment
of the Commercial Courts Act noted hereinabove, the submission on
behalf of the appellant that the dispute in the present suit, which as
observed hereinabove, cannot be said to be the commercial dispute
within the definition of Section 2(c) of the Commercial Courts Act, is
required to be transferred to the Commercial Division, Vadodara
cannot be accepted. If such a suit which is as such arising out of the
probate proceedings and/or is dispute with respect to the property
are transferred to the Commercial Division/Commercial Court,
there shall not be any difference between the Regular Civil Courts
and the Commercial Division / Commercial Courts and therefore, if
all such suits are transferred to the Commercial Division/
Commercial Courts, the object and purpose of the establishment of
the Commercial Division/Commercial Courts shall be frustrated."
5.13 2019 0 Supreme(Mah) 294; Kanchanganga Realtors Pvt
Ltd. Versus Monarch Infrastructure Developers Pvt Ltd.
Para 14. In this context, reliance placed on the judgment of the

Gujarat High Court in the case of Vasu Healthcare Private
Limited vs Gujarat Akruti TCG Biotech Limited and another
(supra) on behalf of respondent no.1,would not take its case any
further. A perusal of the said judgment of the Gujarat High Court
and another judgment of the said High Court in the case of Ujwala
Raje Gaekwar vs Hemaben Achyut Shah, reported at, 2017
SCCOnLine(Guj) 583, would show that the Gujarat High Court
has placed a narrow interpretation on the definition of commercial
dispute under Section 2(1)(c)(vii) of the Act of 2015 and there is no
reference made to Explanation (a) to the said provision. As noted
earlier, this Court is of the opinion that the expressions used in

Section 2(1)(c)(vii) read with Explanation (a) of the Act of 2015 have
to be given wide interpretation. Therefore, this Court respectfully
disagrees with the aforesaid judgment of the Gujarat High Court. It
is also pointed out by the learned Counsel appearing for the
petitioners that in a Special Leave Petition filed against the
aforesaid judgment of the Gujarat High Court in the case of Vasu
Healthcare Private Limited vs Gujarat Akruti TCG Biotech Limited
and another (supra), the Hon'ble Supreme Court has granted leave
and directed the parties therein to maintain status quo.
15. In view of the above, it becomes clear that the dispute raised by
respondent no.1 in the suit for specific performance against the
petitioners is covered under the definition of commercial dispute
under Section 2(1)(c)(vii) read with Explanation (a) of the Act of
2015. This is particularly so, when the said agreement is read with
the Memorandum of Understanding, also of the same date, executed
between the parties showing beyond any doubt that the agreement
relates to immovable property, which is to be used exclusively in
trade or commerce. The respondent no.1 has not denied and, in fact,
it has accepted before this Court about the existence of the said
Memorandum of Understanding executed between the parties. It is
evident that the parties entered into the agreement to develop the
property in question by undertaking construction activity or to
further sell the same for commercial gains, in terms of the very
objects of the two parties i.e. petitioner no.1 and respondent no.1.
There is no dispute about the fact that the "commercial dispute"

between the parties is beyond the amount of Rs. 1 Crore.
5.14 Kandla Export Corporation & Anr v M/s OCI
Corporation & Anor Civil Appeal No. 16611163 of 2018,
judgment dated 7 February 2018
What are the practical implications of this judgment?
Section 50 of the Arbitration and Conciliation Act 1996 (the Act)
allows parties to appeal against two types of orders only:
• an order refusing to refer parties to arbitration, and
• an order refusing to enforce a foreign award
Under the Commercial Courts, Commercial Division and

Commercial Appellate Division of High Courts Act 2015 (the
Commercial Courts Act), all applications arising out of arbitration
are to be heard by the Commercial Courts.
Section 13(1) of the Commercial Courts Act, if read in isolation,

could be interpreted to mean, and was contended by Kandla Export
in this case, that a decision of the Commercial Court, even in
matters not covered by section 50 of the Act, could be appealed
against.
The Supreme Court reaffirmed its commitment to the enforcement
of foreign awards by removing this confusion and reiterating that
an appeal in cases of foreign awards would only apply on the
grounds set out in section 50 of the Act and specifically no appeal
will proceed to the Commercial Appellate Division if it is against an
order rejecting the objections to enforcement.
An excerpt from the judgment speaks to a proenforcement stance
taken by the Indian judiciary this past decade: ‘Enforcement of
foreign awards should take place as soon as possible if India is to
remain as an equal partner, commercially speaking, in the
international community.’
The only remedy would be to approach the Supreme Court by virtue
of a special leave to appeal.
Conversely, parties seeking enforcement have access to a twostage
appeal process. If the court of first instance refuses to enforce a
foreign arbitral award for whatever reason, it can appeal first—
before Commercial Appellate Division and failing there it also has
the option to approach the Supreme Court.
What is the background to this decision?
The parties, M/s. OCI Corporation (OCI/Buyers) and Kandla Export
Corporation (Kandla Export/Sellers), had referred their disputes to
be resolved by way of arbitration under the Grain and Feed Trade
Association (GAFTA) Rules.
An arbitral award was made on 28 April 2014 directing Kandla

Export to pay a sum of $US 846,750 together with compound
interest at the rate of 4% calculated on a quarterly basis to OCI.
The award was appealed to the Appellate Tribunal, which directed
Kandla Exports to pay a sum of $US 815,000 at an interest rate of
4% on a quarterly basis to OCI by order dated 16 April 2015.
Subsequently, Kandla Export filed series of appeals challenging the
award passed by the Appellate Tribunal, before the Queen’s Bench
in the Queen’s Bench Division of the Commercial Court. Kandla
Export were faced with dismissal in both the appeals in 2015.
However, in their continuing urge to have the award set aside
Kandla Export filed another appeal before the English Court of
Appeal. Leave to appeal was not granted. Meanwhile in India, OCI
initiated execution proceedings on 29 June 2015, under section 48 of
the Act, before the District Court of Gandhidham, Kutch. Kandla
Export filed their objection to the petition. Thereafter, OCI filed an
application before the Gujarat High Court (Gujarat HC) seeking
transfer of the execution proceedings, with the Commercial Courts
Act and amendments to the Act coming into effect from October
2015. The Gujarat HC allowed the application and execution
proceedings that were transferred before the Commercial Division,
Gujarat HC on November 11, 2016. Kandla Export filed a special
leave petition (SLP) before the Supreme Court challenging the
order, which was also dismissed.
With the SLP being dismissed, Kandla Export filed their objections
in the execution proceedings. Dismissing their objections, the
Gujarat HC recognised the foreign award as enforceable. Kandla
Export challenged the decision of the Single Bench and filed an
appeal under section 13(1) of the Commercial Courts Act before the
Commercial Appellate Division. This appeal was dismissed by the
Commercial Appellate Division on the ground of maintainability,

ruling that against an order rejecting objections to enforcement,
there would be no appeal to the Commercial Appellate Division.
The decision of the Commercial Appellate Division was then

challenged before the Supreme Court of India—which is the subject
matter of this article.
The contentions of Kandla Export are the following:
• section 13(1) of the Commercial Courts Act provides a right to
file an appeal against any decision, judgment and order
passed by the Commercial Division of the High Court—and
thus an order rejecting the objections to enforcement would
also be appealable under section 13(1) of the Commercial
Court’s Act
• section 50 of the Act does not prohibit appeals which are not
expressly listed in section 50 of the Act. Since section 50
(which deals with enforcement of foreign awards in India) did
not have the restricting language of section 37 (which deals
with domestic arbitrations), appeals which were not expressly
provided for in section 50, should anyway be allowed under
section 13 of the Commercial Courts Act
On the other hand, OCI contended:
• the Act is a selfcontained code which provides a substantive
as well as procedural law regarding arbitrations and should
exclude the application of general law, including provisions of
section 13 of the Commercial Courts Act
• section 50 of the Act creates a specific bar against appeals
from any orders which are not mentioned under the said
provision. An appeal can only be made against an order
refusing to enforce an award under section 48 of the Act and
not against other orders
• section 13 of the Commercial Courts Act cannot be read in
isolation and must be read harmoniously with the provisions
of the Act to give effect to both the legislations
• the object of both legislations is to determine arbitration and
commercial matters speedily and allowing an extra appeal
under the Commercial Courts Act 2015 would defeat the
objective of both acts
What did the Supreme Court decide?
The Supreme Court affirmed the Commercial Appellate Division’s
findings and ruled that section 13(1) of the Commercial Courts Act
being a general provision visàvis arbitration relating to appeals
arising out of commercial disputes, would not apply to cases unless
they are expressly covered under section 50 of the Act.
The Supreme Court relied on its earlier decision in Fuerst Day

Lawson Limited v Jindal Exports Limited [2011] 8 SCC 333 which
dealt with the issue as to whether an order though not appealable
under section 50 of the Act would be subject to appeal under the
letters patent of the High Court. The Supreme Court in Fuerst Day
had laid down certain broad principles clarifying that in case a

special statute is a selfcontained code, the applicability of the
general law procedure would be impliedly excluded. Appeals only
under section 50 of the Act are maintainable in relation to foreign
awards and not under letters patent.
Section 13(1) of the Commercial Courts Act states that an appeal
will lie from orders passed by the Commercial Courts under section
37 (applicable only in case of India seated arbitration) of the Act. It
was silent with respect to any appeals under section 50 of the Act
(applicable in cases of enforcement of foreign awards).
The Supreme Court in its earlier decision in Arun Dev Upadhaya v
Integrated Sales Services (not reported by LexisNexis® UK) had
widened the scope of section 13 of the Commercial Courts Act to
include appeals under section 50 of the Act too.
5. 15 Followings Are Helds To Be Not Commercial Disputes
1 Suit for recovery of damages for loss suffered on account of
damage to the Aircraft. Qatar Airways V/s Airport Authority of
India 2016 SCC online Delhi 8088
2 Suit by landlord for recovery of possession of immovable property.
Soni Dave V/s Trance Asian Industries AIR 2016 Delhi 186
3. Suit for cancellation of power of attorney Hindpal Singh V/s
Jasbir Singh 2016 SCC online Delhi 4901 214
4. Simple loan transaction is not a commercial dispute. Rita
Agarwal V/s Udav Medicare pvt. Ltd. 2018 SCC online Delhi
8595
5. Suit for specific performance of an agreement of sale and for

permanent injunction restraining defendant from selling or
transferring property not use exclusively for trade or commerce
purpose. Laxmi Narayan V/s Navneet 2017 SCC online Delhi
7863 Jay Bhagwan V/s Rakesh 2018 SCC online Delhi 7744
6. Agreement/indenture of lease respect of residential flats in The
immovable property in question residential flats are used
exclusively for residential purpose and same cannot be said to be
used exclusively in trade or commerce. Under the circumstances,
considering Section 2(c)(vii) of the Commercial Courts Act, the
dispute arising out of the indenture/agreement in question cannot
be said to be relating to immovable property used exclusively in
trade or commerce and therefore, said cannot be said to be
commercial dispute as defined under Section 2(c) of the Commercial
Courts Act. Madhuram properties V/s Consultancy Services
Ltd. 2017 SCC online Guj 725, 2017 (4) GLR 3327 Tata 7
Shri. Chruparambil Methew V/s Shri. ERIC Eusebio 2017
SCC online Bom 8322
Para 2. The brief facts are that the petitioner (plaintiff) is having an
agreement of agency executed by the original defendant nos. 1 to 10,
which agreement is dated 23.09.2005. There is a Power of Attorney
executed by the defendant nos. 1 to 10 in favour of the petitioner on
the same date. As per the said contract of agency and the Power of
Attorney, the petitioner was entitled to sell the suit property
belonging to the defendant nos. 1 to 10 and out of the consideration,
an amount at the rate of Rs. 600/ per square metre was payable to
defendant nos. 1 to 10 and the petitioner was entitled to retain the
balance.
8. It can thus be seen that a commercial dispute, within the
meaning of Section 2(1)(c)(vii) of the Act, would be a dispute in
respect of the agreements relating to immovable property, used
exclusively in trade or commerce.
9. Section 2(1)(c)(xxi) of the Act stipulates that a contract of agency,
relating to ‘any of the above’ i.e. falling within Section 2(1)(c)(i) to
(xx) of the Act, would also be covered and would come within the
ambit of a commercial dispute. It can thus be seen that disputes
arising of all contracts of agency, although, in excess of value of Rs.
1 crore, cannot per se be termed as commercial disputes. The
subject property has not been used for trade or commerce. Thus, on
conjoint reading of Section 2(1)(c)(vii) and (xxi) of the Act, in the
context of the facts obtaining in the present case, it is clear that the
dispute is not a commercial dispute, requiring the suit to be
transferred to the Commercial Court.
5.16 FOLLOWINGS ARE HELD TO BE COMMERCIAL
DISPUTES
1 Jagmohan Behl V/s State Bank of Indore 2017 SCC online
Delhi 10706
The explanation in the present case has to be read as part and
parcel of clause (vii), for the language of the explanation shows the
purpose, and the construction consistent with the purpose which

should be placed on the main provision. The main provision,
therefore, has to be construed and read in the light of the
explanation and accordingly the scope and ambit of subclause (vii)
to clause(c), defining the expression “commercial dispute”, has to be
interpreted. The explanation harmonises and clears up any
ambiguity or doubt when it comes to interpretation of the main
provision.
2. S. Pillai v. V.R. Pattabiraman (1985) 1 SCC 591,
it was observed that explanation to a statutory provision can

explain the meaning and intendment of the provision itself and also
clear any obscurity and vagueness to clarify and make it consistent
with the dominant object which the explanation seems to sub
serve. It fills up the gap. However, such explanation should not be
construed so as to take away the statutory right with which any
person under a statute has been clothed or to set at naught the
working of the Act by becoming a hindrance in the interpretation of
the same. Clause (c) defines the “commercial dispute” in the Act to
mean a dispute arising out of different subclauses. The expression
“arising out of” in the context of clause (vii) refers to an agreement
in relation to an immoveable property. The expressions “arising out
of” and “in relation to immoveable property” have to be given their
natural and general contours. These are wide and expansive
expressions and are not to be given a narrow and restricted
meaning. The expressions would include all matters relating to all
agreements in connection with immoveable properties.
The immoveable property should form the dominant purpose of the
agreement out of which the dispute arises. There is another
significant stipulation in clause (vii) relating to immoveable
property, i.e., the property should be used exclusively in trade or
commerce. The natural and grammatical meaning of clause (vii) is
that all disputes arising out of agreements relating to immoveable
property when the immoveable property is exclusively used for
trade and commerce would qualify as a commercial dispute. The
immoveable
property must be used exclusively for trade or business and it is not
material whether renting of immoveable property was the trade or
business activity carried on by the landlord. Use of the property as
for trade and business is determinative. Properties which are not
exclusively used for trade or commerce would be excluded.
12. The explanation stipulates that a commercial dispute shall not
cease to be a commercial dispute merely because it involves
recovery of immoveable property, or is for realisation of money out
of immoveable property given as security or involves any other
relief pertaining to immoveable property, and would be a
commercial dispute as defined in subclause (vii) to clause (c). The
expression “shall not cease”, it could be asserted, has been used so
as to not unnecessarily expand the ambit and scope of subclause
(vii) to clause (c), albeit it is a clarificatory in nature. The

expression seeks to clarify that the immoveable property should be
exclusively used in trade or commerce, and when the said condition
is satisfied, disputes arising out of agreements relating to
immoveable property involving action for recovery of immoveable
property, realization
of money out of simmoveable property given as security or any other
relief pertaining to immoveable property would be a commercial
dispute. The expression “any other relief pertaining to immoveable
property” is significant and wide. The contours are broad and
should not be made otiose while reading the explanation and sub
clause (vii) to clause (c) which defines the expression “commercial
dispute”. Any other interpretation would make the expression “any
other relief pertaining to immoveable property” exclusively used in
trade or commerce as nugatory and redundant.
13. Harmonious reading of the explanation with subclause (vii) to
clause (c) would include all disputes arising out of agreements
relating to immoveable property when used exclusively for trade
and commerce, be it an action for recovery of immoveable property
or realization of money given in the form of security or any other
relief pertaining to immoveable property.
14. In the context of the present case, it is not disputed that the
immoveable property was being used exclusively in trade and
commerce. The said issue does not arise for consideration.
15. The next question, which arises for consideration, is whether a
suit involving action for recovery of mesne profits is a dispute

arising out of agreements relating to immoveable property. Answer
to our mind would be in favour of the appellant when we read Order
XX, Rule 12 of the Code and keep in mind the nature of the claim
for mesne profits.
16. The expression “mesne profit” has been defined in sub
section(12) to Section 2 to the Code to mean those profits which a
person in wrongful possession of such property actually received or
might with the ordinary diligence have received together with
interest on such profits but would not include profits due to
improvements made by the person in wrongful possession. Mesne
profits can be also claimed in suits for partition and possession from
other coowners and jointholders. However, in the present case, we
are dealing with a property given on rent, for being exclusively used
for trade and business.
18. Lease of immoveable property is dealt with under the Transfer
of Property Act in Chapter V thereof. The said enactment vide
section 105 defines what is lease, lessor, lessee and rent and vide
section 107 stipulates how leases are made and can be terminated.
Leases can be both oral or in writing. Noticeably, subclause (vii) to
clause (c) in Section 2 of the Act does not qualify the word
“agreements” as referring to only written agreements. It would
include oral agreements as well. The provisions of the Transfer of
Property Act deal with the effect of non payment of rent, effect of
holding over and most importantly the determination of the leases
or their termination. It cannot be disputed that action for recovery
of immoveable property would be covered under subclause (vii) to
clause (c) when the immoveable property is exclusively used in
trade or commerce. Read in this manner, we do not think that claim
for recovery of rent or mesne profit, security deposit etc., relating to
immoveable property which was used exclusively in trade or
commerce should not be treated as a commercial dispute in view of
the language, ambit and scope of subclause (vii) to clause (c) to
Section 2 of the Act. These would qualify and have to be regarded as
commercial disputes. The use of expression“any other relief
pertaining to immoveable property” would mean disputes relating
to breach of agreement and damages payable on account of breach
of agreement would be covered under subclause (vii) to clause (c) to
Section 2 of the Act when it is arising out of agreement relating to
immoveable property exclusively used in trade and commerce.
APPENDIX
STATEMENT OF TRUTH
(Under First Schedule, Order VI Rule 15A and Order X Rule 1)

STATEMENT OF TRUTH BY
[party position and name of party in full]
I, the deponent abovenamed, do hereby solemnly affirm and

declare as
under:
1. I am [name of party and relevant details] in the above suit and
competent to swear this affidavit.
2. I am sufficiently conversant with the facts of the case and have
also examined all relevant documents and records in relation
thereto.
3. I say that the statements made in [mention specific paragraph
numbers] paragraphs are true to my knowledge and statements
made in [mention specific paragraph numbers] paragraphs are
based on information received which I believe to be correct and
statements made in [mention specific paragraph numbers] are
based on legal advice.
4. I say that there is no false statement or concealment of any

material fact, document or record and I have included information
that is according to me, relevant for the present suit.
5. I say that that all documents in my power, possession, control or
custody, pertaining to the facts and circumstances of the
proceedings initiated by me have been disclosed and copies thereof
annexed with the plaint, and that I do not have any other
documents in my power, possession, control or custody.
6. I say that the abovementioned pleading comprises of a total of
[number of pages] pages, each of which has been signed by me.
7. I state that the Annexures hereto are true copies of the

documents referred to and relied upon by me.
8. I say that I am aware that for any false statement or
concealment, I shall be liable for action taken against me under the
law.
Place
Date
DEPONENT
VERIFICATION
The statements made above are true to my knowledge.
Verified at [place] on this [date]
DEPONENT
APPENDIX
STATEMENT OF TRUTH
(Under First Schedule, Order VI Rule 15A and Order X Rule 1)
STATEMENT OF TRUTH BY
[party position and name of party in full]
I, the deponent abovenamed, do hereby solemnly affirm and

declare as
under:
1. I am [name of party and relevant details] in the above suit and
competent to swear this affidavit.
2. I am sufficiently conversant with the facts of the case and have
also examined all relevant documents and records in relation
thereto.
3. I say that the statements made in [mention specific paragraph
numbers] paragraphs are true to my knowledge and statements
made in [mention specific paragraph numbers] paragraphs are
based on information received which I believe to be correct and
statements made in [mention specific paragraph numbers] are
based on legal advice.
4. I say that there is no false statement or concealment of any

material fact, document or record and I have included information
that is according to me, relevant for the present suit.
5. I say that that all documents in my power, possession, control or
custody, pertaining to the facts and circumstances of the
proceedings initiated by me have been disclosed and copies thereof
annexed with the plaint, and that I do not have any other
documents in my power, possession, control or custody.
6. I say that the abovementioned pleading comprises of a total of
[number of pages] pages, each of which has been signed by me.
7. I state that the Annexures hereto are true copies of the

documents referred to and relied upon by me.
8. I say that I am aware that for any false statement or
concealment, I shall be liable for action taken against me under the
law.
Place
Date
DEPONENT
VERIFICATION
The statements made above are true to my knowledge.
Verified at [place] on this [date]
DEPONENT
::::::::::::::::::::::::::::::::::::::::::::THE END:::::::::::::::::::::::::::::::::::::::::::

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PRACTICAL GUIDE ON COMMERCIAL COURT ACT 1

2 Pre­Institution Mediation And 22­52

Settlement Section 12­A Of The

4 Important Amendments To Cpc And 73­76

India is infamous for having an overburdened legal system

process was viewed as breach of investment treaty obligation by

ease of doing business rankings has been a crucial grade.

India’s recent spike in rankings has been attributed to business

Hi­tech Fast­Track Commercial Divisions in High Courts”,

Scheme of the Provisions of the Commercial Division of

The Law Commission’s proposal on the constitution of a

Commission of India (“Commission”) in their 188th report and

The government on May 3, 2018 promulgated the

Commercial Courts, Commercial Division and Commercial

2018, amending the Commercial Courts Act. A small but very

Thus, the government is now the sole authority for appointing

Rs 10 million or above. Now, any commercial dispute

exceeding Rs 3,00,000 in value will be heard by the

reduced the pecuniary jurisdiction of commercial courts to Rs

Now in Gujarat and other States has notified commericial

commercial court. The Constitution of India provides that the

Registrar (Admn.), High Court of Orissa, Cuttack v. Sisir

rectify the slow disposal of rates of ‘commercial disputes’ of a

The Ordinance provides that the Commercial Courts shall

“Specified Value” as defined in section 2(j) the Ordinance

less than 3,00,000/­ ( Three Lac) notified by the Central

The Ordinance in section 13 provides that appeals against

2. No civil revision application/petition shall lie against any

interlocutory order of a Commercial Court and any such

shareholders’ agreements, intellectual property rights, among

Under Section 13 of the Act, all appeals from the Commercial

The Act is also applicable to all applications and appeals

(i) ordinary transactions of merchants, bankers, financiers and

A commercial dispute shall not cease to be a commercial

(1) The Specified Value of the subject­matter of the commercial

The Commercial Courts, Commercial Division, Commercial

As per the said enactments, all disputes falling within the

2.2. Mandatory Pre­Institution Commercial Mediation In

High Courts (Amendment) Bill, 2018 (“Bill”) on 10 August,

of mediation as a viable and preferred dispute resolution

The Bill envisages the opt­out model of mediation, which has

and that mediation is not a distinct discipline which requires its

temporarily delays the mediation or eliminates the mandatory

2018.—In exercise of the powers conferred by sub­section (2) of

Section 12­A of the Commercial Courts Act, 2015, the Central

(2) The Central Government may, by notification, authorise the

(3) Notwithstanding anything contained in the Legal Services

1. Short title and commencement. (1) These rules may be

2. Definitions. ­ (1) In these rules unless the context otherwise

(b)"applicant"means a person who approaches the Authority

(c) "Authority" means the Authority notified by the Central

(d) "commercial dispute" means the commercial dispute as

(e) "Form" means the Form specified in the Schedule to these

(f) "mediation" means a process undertaken by a Mediator to

(g) "Mediator" means a person empanelled by the Authority for

(j) "settlement" means the settlement of commercial dispute

(2) The Authority shall, having regard to the territorial and

(4) Where the notice issued under sub­rule (3) remains

process to be a non­starter and make a report as per Form 3

(8) The Authority shall ensure that the mediation process is

5. Role of Mediator. ­ The Mediator shall, on receipt of the

assignment under sub­rule (7) of rule 3, facilitate the voluntary

7. Procedure of mediation. ­ (1) The mediation shall be

2 PreInstitution Mediation And 2252

Settlement Section 12A Of The

4 Important Amendments To Cpc And 7376

Hitech FastTrack Commercial Divisions in High Courts”,

less than 3,00,000/ ( Three Lac) notified by the Central

(1) The Specified Value of the subjectmatter of the commercial

2.2. Mandatory PreInstitution Commercial Mediation In

The Bill envisages the optout model of mediation, which has

2018.—In exercise of the powers conferred by subsection (2) of

Section 12A of the Commercial Courts Act, 2015, the Central

2. Definitions. (1) In these rules unless the context otherwise

(4) Where the notice issued under subrule (3) remains

process to be a nonstarter and make a report as per Form 3

5. Role of Mediator. The Mediator shall, on receipt of the

assignment under subrule (7) of rule 3, facilitate the voluntary

7. Procedure of mediation. (1) The mediation shall be

Address: Telephone. No.__________

Telephone.No. __ Mobile. Email ID:

2011 CIVIL APPEAL NOS. 4912 4913 OF 2011 had observed

commercial and noncommercial matters (often appearing in a

 Nonappearance of an advocate on the case management

Ordinance has inserted Order XIIIA in the CPC according to