A single judge bench of the Madras High Court comprising Justice V. Bhavani Subbaroyan, while deciding the jurisdiction of the Commercial Appellate Division to entertain certain appeals observed that no Appeal shall lie from any order or decree of a Commercial Division or Commercial Court otherwise than in accordance with the provisions of this Act.
The court cleared that the Parliament introduced Subsection 2 of Section 13 and Subsection 3 of Section 16 of the Commercial Courts Act with the intent to dispose of the cases/appeals speedily.
Brief Facts:
The first respondent in all these Appeals instituted a suit against the appellants, four in number, seeking a monetary decree. The said suit was filed during June 2018 along with an application seeking leave to file the suit in this Court under Clause 12 of the Letters Patent. Leave was granted by this Court on 02.07.2018. Upon service, the defendants in the suit/the appellants herein filed independent Applications seeking revocation of the leave on various grounds. The Commercial Division which heard the Revocation Applications, dismissed the Applications by a common order. Aggrieved, defendants 1 to 4 filed independent Appeals in OSA Nos.26 to 29 of 2020.
The Appeals came up for hearing before the Commercial Appellate Division of this Court where doubt was raised regarding the jurisdiction of the Commercial Appellate Division to hear these Appeals. Since the Commercial Appellate Division, prima facie felt that the Appeals may have to go before the Court having the roaster since it did not consider it to be a Commercial Court matter at present, a direction was issued on 25.11.2021 directing the Appeals to be listed before the Bench having the roaster for hearing Appeals against orders on the original side of this Court. Pursuant to the said direction, the Appeals were listed before the Bench which had made the reference as aforesaid.
Contentions of the Appellants:
The appellants contended that at the stage of granting leave, the Judge sitting on the Original Side of this Court does not exercise powers under the Commercial Courts Act and therefore, the orders passed refusing to revoke the leave cannot be termed as once passed by the Commercial Division in the exercise of the powers under the Commercial Courts Act. According to them in order to enable the respondent to contend that the Appeals are barred in view of the proviso to Section 13 read with Subsection 2 of Section 13 of the Commercial Courts Act, it should be shown that the order granting leave and the order refusing to revoke it should be shown to have been passed in exercise of the jurisdiction conferred on the Commercial Division under Section 7 of the Commercial Courts Act 2015.
The learned counsel further attempted to make a distinction based on the stage of the suit and according to them, a suit could become a commercial suit only upon its numbering and the cognizance of it is taken by the Commercial Court and not before that.
Contentions of the Respondent:
The respondents argued that the stage at which the order is passed does not really matter. It is the subject matter of the suit that has to be looked into. If it is found that the subject matter of the suit could be termed as a commercial dispute within any one of the Sub Clauses (i) to (xxi) of Sub Section (c) of Section 2 of the Commercial Courts Act, then the same would qualify as a commercial dispute which is to be dealt with by the Commercial Division.
Further, they submitted that the provisions of the enactment must be interpreted in such a manner that they would further the objects of the enactment and not otherwise. The very object being one to fast track the litigation by curtailing unnecessary appeals at the interlocutory stages, the provisions of the Act must be read in such a manner to further the said intention, viz. quick disposal.
Observations of the Court:
At the outset, the bench observed that the Commercial Courts Act is an enactment that aims at speedy disposal and the legislature, with the said object in mind, had tinkered with certain provisions of the CPC to enable fast tracking of commercial litigations by curtailing Appeals at the interlocutory stages and by providing mandatory timelines for the performance of certain acts. The failure to adhere to the timelines would lead to orders being passed against the party who fails to adhere to such timelines.
Further, the court observed that Subsection 2 of Section 13 which contains a non-obstante clause provides that notwithstanding anything contained in the Letters Patent of the High Court, no Appeal shall lie from any order or decree of a Commercial Division or Commercial Court otherwise than in accordance with the provisions of this Act. Reliance was placed on three Supreme Court judgments to show that the Parliament introduced Subsection 2 of Section 13 and by Subsection 3 of Section 16 of the Commercial Courts Act to nullify the judgment given in these:
- Shah Babulal Khimji vs Jayaben D. Kania and another 1981 (4) SCC 8: Order XLIII Rule (1) of the CPC does not override or control Clause 15 of the Letters Patent, thereby enabling Appeals against orders which are not specifically made appealable under Order XLIII Rule (1) invoking Clause 15 of the Letters Patent (The effect of this judgment was sought to be nullified).
- P.S. Sathappan (dead) by LRs. vs Andhra Bank Ltd and others 2004(11) SCC 672: Despite the bar under Section 104 (2) of the CPC, Clause 15 could be invoked for appeals against the judgments of Single Judges of the High Court made in the exercise of original jurisdiction (The effect of this judgment was nullified).
- Iridium India Telecom Ltd v. Motorola Inc 2005 (2) SCC 145: The provisions of Rule 1 of Order VIII would be subject to the Rules framed under the Letters Patent which are protected under Section 129 of the Code of Civil Procedure, thereby concluding that the longer period of limitation of six weeks provided under the Original Side Rules framed under Section 129 of the Code of Civil Procedure would apply to suits in the original side of the High Court (The effect of this judgment was undone).
Summing up the discussion, the court held that the Parliament has taken care to undo the effect of at least three judgments of the Hon'ble Supreme Court by introducing the non-obstante clause in Subsection 2 of Section 13 and by Subsection 3 of Section 16 of the Commercial Courts Act. This points out the importance of speedy disposal of commercial litigation, by the Parliament. Thus, the court rejected the arguments of the appellants that a suit does not become a commercial cause unless it is numbered and any order passed prior to the stage of numbering would not be an order passed by the Commercial Division in the exercise of the powers conferred under the Act.
The court further remarked that the provisions of the Commercial Courts Act are wide enough to cover even stages prior to the numbering of the suit. The court pointed out that Section 7 confers the jurisdiction to hear and dispose of all suits and applications relating to commercial disputes to the Commercial Division of the High Court.
Decision of the Court:
The appeal stood dismissed as not maintainable.
Case Title: Surajlal vs Pradeep Stainless India Pvt. Ltd. and others
Coram: Justice V. Bhavani Subbaroyan
Case No.: Original Side Appeal Nos.26 to 29 of 2020 and C.M.P.Nos.1090, 1116, 1138, 1139, 1141 and 1143 of 2020
Advocate for the Appellant: Mr. N. Vijayaraghavan and Mr. Sharath Chandran; Mr. Arun Karthik Mohan
Advocate for the Respondent: Mr. K. Sukumaran and Mr. S. Patrick
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