Calcutta High Court
Ane Industries Private Limited vs J.K. Engineering Private Limited on 8 September, 2023
IN THE HIGH COURT AT CALCUTTA
(Ordinary Original Civil Jurisdiction)
ORIGINAL SIDE
Present:
The Hon'ble Justice Krishna Rao
RVWO 10 of 2023
With
IA No: GA 1 of 2023
&
RVWO 13 of 2023
With
IA No: GA 1 of 2023
ANE Industries Private Limited
Versus
J.K. Engineering Private Limited
Arising Out Of
IA No: GA 4 of 2022
With
IA No: GA 5 of 2023
In CS 213 of 2016
J.K. Engineering Private Limited
Versus
ANE Industries Private Limited
Mr. Jayanta Kumar Mitra, Sr. Adv.
Mr. Sabyasachi Choudhury
Mr. Partha Sarathi Bhattacharya
Mr. Soujya Roy
... For the petitioner/defendant.
2
Mr. Ishaan Saha
Mr. Tanuj Kakrania
Mr. Shiv Ratan Kakrania
Mr. Karanjeet Sharma
Mr. N. Das
... For the respondent/plaintiff.
Hearing Concluded On : 18.08.2023
Judgment on : 08.09.2023
Krishna Rao, J.:
1. The defendant has filed an application for review of the order passed by
this Court dated 2nd March, 2023. The application for review was filed
on the ground that this Court while disposing of GA 4 of 2022 in CS
No. 213 of 2016 dated 2nd March, 2023 held that the Commercial
Courts Act, 2015 came into force with effect from 31st December, 2015
but the Commercial Court were established at Calcutta on 20th March,
2020 and thus in terms of Section 15 of the Commercial Courts Act,
2015, the suit filed by the plaintiff is required to be transferred to the
Commercial Division.
2. Mr. Jayanta Kumar Mitra, Learned Senior Advocate representing the
defendant submitted that as per Section 1 (3) of the Commercial Courts
Act, 2015 is deemed to have been come into force on 23rd October, 2015
but the plaintiff has filed this suit on 18th August, 2016 and thus it
could not be regarded that the suit was pending at the time when the
Commercial Courts Act, 2015 came into force.
3. Mr. Mitra, Learned Senior Advocate submitted that by a Notification
dated 16th July, 2016, the Commercial Division of this Court was
constituted and the suit was filed on 18th August, 2016 i.e. subsequent
to the Constitution of Commercial Division of this Court and thus, it
could not be said that the suit filed by the plaintiff was pending at the
time when the Commercial Courts Act, 2015 came into force.
4. Mr. Mitra, Learned Senior Advocate submitted that the Notification
dated 20th March, 2020 has nothing to do with the establishment of
Commercial Division of this Court and was notified under Section 3
(1A) of the Commercial Courts Act, 2015 and not an order of the Chief
Justice of Calcutta High Court establishing Commercial Court under
Section 4 of the Commercial Courts Act, 2015. He submits that the
Notification dated 20th March, 2020 issued by the State Government
under Section 3 (1A) of the Commercial Courts Act, 2015, after the said
Act was amended in 2018, which was not available at the time when
the Act came into force on 23rd October, 2015.
5. Mr. Mitra, Learned Senior Advocate submitted that by the Notification
dated 20th March, 2020, the pecuniary jurisdiction of the Commercial
Court, including Commercial Division of Calcutta High Court was fixed
but the same has nothing to do with the establishment of Commercial
Division of Calcutta High Court.
6. Mr. Mitra, Learned Senior Advocate submitted that this Court while
passing the order dated 2nd March, 2023 has not considered the
paragraphs 7, 8 and 9 of GA 4 of 2022, the reasons for which the
defendant has prayed for rejection/dismissal of the suit filed by the
plaintiff. Mr. Mitra submitted that in GA 4 of 2022, the defendant has
sought for the withdrawal of the counter claim for filing at the
appropriate forum but no reason is stated in the order dated 2nd March,
2023 while the prayer made by the plaintiff was not allowed.
7. Mr. Mitra, Learned Senior Advocate submitted that there is a mistake
or error apparent on the face of record as the order under review has
not considered the relevant order/notification issued under the
Commercial Courts Act, 2015.
8. Per contra, Mr. Ishaan Saha, Learned Advocate representing the
plaintiff submitted that Section 2 (1) (i) of the Commercial Courts Act,
2015 does not provide the Specified Value itself and it merely
prescribes a lower limit below which the Specified Value to be notified
by the Central Government cannot fall. He submits that Section 3 (1A)
empowers the Government to issue a notification specifying the
pecuniary value, which shall be less than Rs. 3,00,000/- or such
higher value for the whole or part of the State, as it may consider
necessary.
9. Mr. Saha submitted that while empowering the State Government to
notify the Specified Value, and prescribing the minimum limit, thereof
Section 3 (1A) also does not proceed to prescribe the Specified Value,
itself, which is left to be fixed at the discretion of the State Government
upon consultation with the High Court.
10. Mr. Saha submitted that a combined reading of Section 2 (1) (i) and
Section 3 (1A) of the Commercial Courts Act, 2015, it is apparent that
no specified value is prescribed in the Act itself. The Specified Value is
left to be fixed by the State Government at its discretion, by way of
delegated legislation. He submitted that the Notification 20th March,
2020 is issued in supersession of an earlier Notification 15th November,
2018. He further submitted that the Commercial Courts Act, 2015 itself
did not prescribe a Specified Value but only prescribed the floor or
lower limit, below, which is the Specified Value to be notified, could not
fall, no Specified Value existed for the State of West Bengal prior to 15th
November, 2018. He submitted that the suit was filed on 18th August,
2016, prior to the notification of any Specified Value for the State of
West Bengal and remained pending at the time when Specified Value
was notified on 20th March, 2020.
11. Mr. Saha relied upon the judgment passed by the Coordinate Bench of
this Court reported in AIR 2021 Cal 190 (Laxmi Polyfab Private
Limited -vs- Eden Realty Ventures Private Limited) and submitted
that Section 15 has a terminus by reason of the user of the word
"pending". The terminus is the date when the Specified Value is
notified. The terminus shifts with the re-working of the Specified Value
or in the other words, in the present case, if the authorities issue a
notification stipulating that Specified Value under the Act of 2015
would be Rs. 3,00,000/- then all suits and applications relating to a
commercial dispute of such Specified Value pending in High Court
where there is a Commercial Division and in any Civil Court in respect
of which a Commercial Court has been constituted and shall be
transferred to the Commercial Division or the Commercial Court as the
case may be.
12. Mr. Saha submitted that from a reading of the scheme of the Act as a
whole it is apparent that though the Commercial Courts Act, 2015
deemed to have been come into force on 23rd October, 2015, the
Commercial Courts and the Commercial Division of the High Court
cannot begin to exercise its jurisdiction until the Specified Value is
notified. He submitted that the Specified Value was notified on 20th
March, 2020 and the suit was filed on 18th August, 2016 which is prior
to the notification of the Specified Value and thus the suit filed by the
plaintiff is deemed to be a pending suit and thus eligible for transfer
under Section 15 of the Commercial Courts Act, 2015.
13. Considered the submissions made by the respective parties, perused
the materials available on record and the judgment relied by the
plaintiff. Admittedly, the plaintiff had filed the suit before the Ordinarily
Original Civil Jurisdiction on 18th August, 2016 and the suit is of
commercial in nature. In the suit, the defendant had filed an
application being GA 4 of 2022 praying for rejection of the plaint and
for dismissal of the suit. On the other hand, the plaintiff had filed an
application being GA 5 of 2023 for transfer of CS No. 213 of 2016 to the
Commercial Division under Section 15 of the Commercial Courts Act,
2015.
14. This Court has disposed of both the applications by a common order
dated 2nd March, 2023 by passing the following order :
"It is admitted that the suit filed by the
plaintiff is commercial in nature and the suit is
required to be decided by the Commercial Court.
As per record, the plaintiff has filed the suit on
August 18, 2016. The Commercial Courts Act,
2015 came into force with effect from 31st
December, 2015 but the Commercial Courts were
established at Calcutta only on 20th March, 2020
and thus in terms Section 15 of the Commercial
Courts Act, 2015, the suit filed by the plaintiff is
required to be transferred to the Commercial
Division."
15. The main contention of the Learned Counsel for the defendant that this
Court while passing the order dated 2nd March, 2023 has committed an
error by taking into consideration that the Commercial Courts Act,
2015 came into force with effect from 31st December, 2015 and the
Commercial Court was established at Calcutta only on 20th March,
2020 and thus this Court was of the view that the suit was pending
before this Court when the Commercial Court was established at
Calcutta as the plaintiff had filed the suit on 18th August, 2016.
16. By a Notification dated 16th July, 2016 in exercise of power conferred
under Section 5 of the Commercial Courts, Commercial Division and
Commercial Appellate Division of High Court Act, 2015, the Hon'ble
Chief Justice has constituted the Commercial Appellate Division of
Calcutta High Court consisting of two Hon'ble Judges for the purpose of
exercising the jurisdiction and powers conferred on Commercial
Appellate Division by the Act and in the same notification, in exercise of
power conferred under Section 4 of the Commercial Courts,
Commercial Division and Commercial Appellate Division of High Court
Act, 2015, the Hon'ble Chief Justice constituted the Commercial
Division of Calcutta High Court consisting of one Hon'ble Judge for the
purpose of exercising the jurisdiction and power conferred on the
Commercial Division by the Act.
17. After the Notification dated 16th July, 2016, the Commercial Division of
this Court was inaugurated on 18th September, 2017 and Commercial
Division has started functioning from the 12th March, 2018. On 20th
March, 2020, the Government of West Bengal had issued three
Notifications in exercise of power conferred by sub Section (1) of Section
3, under sub Section (1A) of Section 3 and under sub Section (2) of
Section 3 of the Commercial Courts Act, 2015. In the Notification under
Sub Section (1A) of Section 3, the pecuniary jurisdiction of the
Commercial Division of the High Court is fixed at an amount exceeding
rupees Rs. 10,00,000/-.
18. Section 2 (i) of the Act of 2015 describes Specified Value which reads
as follows :
"(i) "Specified Value", in relation to a commercial
dispute, shall mean the value of the subject-matter in
respect of a suit as determined in accordance with
Section 12 [which shall not be less than three lakh
rupees] rupees or such higher value, as may be notified
by the Central Government.".
Before the amendment dated 3rd May, 2018, the Specified Value
was not less than one crore Rupees.
19. The transfer provisions of pending suits and applications as has been
incorporated in Section 15 of the Act of 2015, allows two methods of
transfer of the pending suits and applications. One method of transfer
is a transfer contemplated under Sub-section (1), (2) and (3) of Section
15 which, the Court in seisin of the suit or application transfers such
suit or application on a finding that, the dispute involved is a
commercial dispute within the meaning of the Act of 2015 and is of
Specified Value. The other mode of transfer is on an application of a
party to the Commercial Appellate Division of the High Court.
20. Section 15 of the Act of 2015 has to be read along with Sections 6 and
7 of the Act of 2015.
21. Sections 6 and 7 of the Act of 2015 are as follows:-
"6. Jurisdiction of Commercial Court.--The
Commercial Court shall have jurisdiction to try all suits
and applications relating to a commercial dispute of a
Specified Value arising out of the entire territory of the
State over which it has been vested territorial
jurisdiction. Explanation.--For the purposes of this
section, a commercial dispute shall be considered to
arise out of the entire territory of the State over which a
Commercial Court has been vested jurisdiction, if the
suit or application relating to such commercial dispute
has been instituted as per the provisions of sections 16
to 20 of the Code of Civil Procedure, 1908 (5 of 1908).
7. Jurisdiction of Commercial Divisions of High
Courts.--All suits and applications relating to
commercial disputes of a Specified Value filed in a High
Court having ordinary original civil jurisdiction shall be
heard and disposed of by the Commercial 45 Division of
that High Court: Provided that all suits and applications
relating to 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, shall be
heard and disposed of by the Commercial Division of
the High Court: Provided further that all suits and
applications transferred to the High Court by virtue of
sub-section (4) of section 22 of the Designs Act, 2000
(16 of 2000) or section 104 of the Patents Act, 1970 (39
of 1970) shall be heard and disposed of by the
Commercial Division of the High Court in all the areas
over which the High Court exercises ordinary original
civil jurisdiction."
22. Sections 6 and 7 of the Act of 2015 have vested the Commercial Court
and the Commercial Division of a High Court with jurisdiction to try all
suits and applications relating to a commercial dispute of Specified
Value. Under Section 7 of the Act of 2015, all suits and applications
relating to commercial disputes of a Specified Value filed in a High
Court having Ordinary Original Civil Jurisdiction shall be heard and
disposed of by the Commercial Division of the High Court. The two
provisos to Section 7 of the Act of 2015 are not material in the instant
matters.
23. In the case of Laxmi Polypab Pvt. Ltd. (Supra), the Coordinate Bench
of this Court held that :
"A suit which has been filed subsequent to the
notification of the Specified Value in the Ordinary
Original Civil Jurisdiction of the High Court cannot be
transferred to the Commercial Division of the High Court
by virtue of Section 15(1) of the Act of 2015. A suit filed
subsequent to the notification of the Specified Value in
the Ordinary Civil Jurisdiction of a High Court having a
Commercial Division cannot be said to be a "pending"
suit within the meaning of Section 15(1) of the Act of
2015. The moment a suit is not "pending" in terms of
Section 15(1) of the Act of 2015, the same cannot be
transferred to the Commercial Division by virtue of
Section 15(1) of the Act of 2015. Whether or not such a
suit can be transferred under Section 15(5) of the Act of
2015 has not fallen for consideration and therefore,
such issue is not answered.
73. Despite the absence of power under Section
15(1) of the Act of 2015 to transfer a suit relating to a
commercial dispute of a Specified Value filed in the
Ordinary Original Civil Jurisdiction of the High Court,
having a Commercial Division, to the Commercial
Division of such High Court, after such suit being filed
subsequently to the specification of the Specified Value,
the Court has powers under Order VII Rule 10 of the
Code of Civil Procedure, 1908 to deal with the same.
Power under Order VII Rule 10 of the Code of Civil
Procedure 1908 stands regulated by Section 15(1) of the
Act of 2015 so far as pending suits relating to a
commercial dispute of the Specified Value in the
Ordinary Original Civil Jurisdiction of the High Court.
Once the suit has been filed beyond date of the
notification of the Specified Value, Order VII Rule 10 of
the Code of Civil Procedure, 1908, governs the field.
74. In exercise of powers under Order VII Rule 10
of the Code of Civil Procedure, 1908, the Court has to
return the plaint to be filed before the Court having
jurisdiction. In the case of a suit relating to a commercial
dispute of the Specified Value filed in the Ordinary
Original Civil Jurisdiction of the High Court having a
Commercial Division, filed beyond the date of
notification of the Specified Value, the plaint of such a
suit must be returned to the plaintiffs for presentation
before the appropriate Court, in exercise of powers
under Order VII Rule 10 of the Code of Civil Procedure,
1908. Once the same is done, the plaintiff in such a suit
has to file the plaint of such suit in the same High Court
but in the Commercial Division of such High Court. Once
the same is done, the question of operation of Section
12A of the Act of 2015 will arise.
76. A suit transferred under the provisions of
Section 15 of the Act of 2015 has to be considered as
the continuation of the old suit now to be tried either in
the Commercial Division or in the Commercial Court as
the case may be. However, a suit involving a
commercial dispute and of the Specified Value filed
subsequent to the notification of the Specified Value has
to be transferred to the Commercial Court or the
Commercial Division as the case may be under the
provisions of Order VII Rule 11 of the Code of Civil
Procedure, 1908. Such suit when presented before the
Commercial Court or the Commercial Division has to be
treated as a fresh suit in view of the ratio laid down in
Modern Construction and company (supra).
77. The second to the fourth issues that have
fallen for consideration can be answered in the manner
following: - (A) Suits involving a commercial dispute
filed in the Ordinary Original Civil Jurisdiction
subsequent to the date of the notification of the
Specified Value are not maintainable in such jurisdiction
in view of provisions of section 7 of the Act of 2015. 53
(B) In the event, in a suit governed by scenario (A)
above, the plaintiff applies for transfer, the same can be
granted under Order VII Rule 10 of the Code of Civil
Procedure, 1908 (C) On an order under Order VII Rule
10 of the Code of Civil Procedure, 1908 being passed,
the plaint has to be returned to the plaintiff to be filed
before the appropriate forum. (D) The rigors of Section
12 A of the Act of 2015 will apply to the suit returned
under Order VII Rule 10 of the Code of Civil Procedure,
1908 for it to be instituted before the Commercial
Division on its presentation."
24. In the present case, the plaintiff filed the suit on 18th August, 2016
and the claim of the plaintiff is more than one crore. At the time of filing
of the suit by a Notification dated 16th July, 2016, the Commercial
Division of the Calcutta High Court was established but the plaintiff
has filed the suit in the Ordinary Original Civil Jurisdiction instead of
Commercial Division.
25. The contents of the plaintiff that only by way of Notification dated 20th
March, 2020, the Government of West Bengal has notified the Specified
Value and thus it cannot be said that the suit is filed prior to the
establishment of the Commercial Division at Calcutta.
26. In I.A G.A No. 4 of 2022, the defendant has made the following
averments in paragraphs 7, 8,10 and 11 which reads as follows:
"7. It is pertinent to mention that the Commercial
Courts Act, 2015 was promulgated on 23rd October,
2015 and the Commercial Division of this Hon'ble
Court was constituted by notification No. 2810G
dated 16th July 2016 by the then Hon'ble Chief
Justice of this Hon'ble Court. The present suit was
filed thereafter on 18.08.2016.
8. As per the provision of the Commercial Courts Act,
2015, the Commercial Division this Hon'ble Court
has the jurisdiction to hear and dispose of all suits
and applications relating to commercial disputes
the specified value. The valuation of the present
suit is over and above the specified value.
10. The petitioner in this case has filed its written
statement on December 21, 2018 wherein it has
made a counter claim against the plaintiff. The suit
being not maintainable and as such counter claim
is also being arising out of a Commercial Dispute
the petitioner may be permitted to withdraw such
counter claim and file its claims in appropriate
Forum.
11. In the suit, the plaintiff has obtained an
interlocutory decree dated 7th February 2019
passed on an interlocutory application being GA
No. 2522 of 2016. Copy of the judgment and order
dated 7th February, 2019 is annexed hereto and
marked with the letter "B". The said judgment and
decree dated 7th February, 2019 and all orders
passed in the present suit be recalled and/or set
aside, being without jurisdiction and pending
disposal of the present application be stayed."
27. By an order dated 7th February, 2019, this Court had passed judgment
on admission against the defendant. The defendant has preferred an
appeal against the said judgment and by an order dated 19th November,
2019, the Appellate Court had modified the Judgment dated 7th
February, 2019. The order passed by the Appellate Court was further
modified by an order dated 14th January, 2020.
28. This Court while disposing of G.A No. 4 of 2022 and G.A No. 5 of 2023
by an order dated 2nd March, 2023 inadvertently recorded that the
Commercial Courts Act, 2015 came into effect from 31st December,
2015 instead of 23rd October, 2015 and this Court also inadvertently
recorded that Commercial Courts were established at Calcutta on 20th
March, 2020 instead on 16th July, 2016 and due to the said
observation, this Court had transferred the suit filed by the plaintiff
from Ordinary Division to Commercial Division. This Court also finds
that the contentions made by the defendant in paragraphs 7, 8, 10 and
11 was not considered consequently no order was passed in terms of
prayer (b), (c) and (d) of the said application.
29. Considering the above circumstances, this Court finds that the order
passed by this Court dated 2nd March, 2023, was on account of some
mistake and the error apparent on the face of record as mention in
paragraph 28 (supra), accordingly, common order passed in G.A No. 4
of 2022 and G.A No. 5 of 2023 date 2nd March, 2023 in CS 213 of 2016
is recalled. RVWO 10 of 2023 with GA 1 of 2023 and RVWO 13 of
2023 with GA 1 of 2023 are allowed.
30. Commercial Court established by Notification dated 16th July, 2016
and the suit filed by the plaintiff on 18th August, 2016 that is after the
establishment of the commercial Court at Calcutta. As regard the
Notification dated 20th March, 2020 that is only with regard to the
Specified Value which the State Government has notified in terms of
Section 3(1A) of the Commercial Courts Act, 2015. As per Section 2(i) of
the Commercial Courts Act, 2015, the initial Specified Value was not
less than one crore and the suit filed by the plaintiff is more than one
crore and thus the notification dated 20th March, 2020 is no way
connected with the present case.
31. In view of the above, the suit filed by the plaintiff cannot be transferred
to the Commercial Division of this Court as the suit is filed after
establishment of Commercial Division and thus the plaint is returned
to the plaintiff to present before the appropriate Court in accordance
with law.
32. As regard to withdrawal of counter claim of the defendants, the
defendant have specifically stated that as the suit is not maintainable
before this Court and the counter claim filed by the defendant is arising
out of the plaint. In para 31 (supra), this Court has returned the plaint
and thus the defendant is allowed to withdraw the counter claim.
33. Plaintiff had obtained judgment on admission by an order dated 7th
February, 2019 and subsequently the said order was modified by the
Hon'ble Appellate Court. At the time of deciding the said issue, the
defendant has not raised the issue with regard to the maintainability of
the suit now, this Court has decided that the suit cannot be transferred
to the Commercial Division and the plaint is returned to the plaintiff
and thus the order dated 7th February, 2019 is recalled.
34. In view of the above prayers (a), (b) and (c) of G.A No. 4 of 2022 in CS
213 of 2016 is allowed and G.A No. 5 of 2023 in CS 213 of 2016 is
thus dismissed.
(Krishna Rao, J.)
