Saurabh Agrotech Private Limited vs Radhey Shyam Agencies & Ors
2016 Latest Caselaw 7078 Del

$~27
*    IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                                    Decided on: 24.11.2016

+     CS(COMM) 1153/2016
      SAURABH AGROTECH PRIVATE LIMITED                    ..... Plaintiff
                           Through: Mr Harshit Tolia, Mr Rajendra H.
                           Bhansali and Mr Sitesh Narayan Singh, Mr Shiv
                           Mangal Sharma and Ms Abhinandni Sharma,
                           Advs.


                           versus


      RADHEY SHYAM AGENCIES & ORS                ..... Defendants
                    Through: Mr Narender Mohan Sharma and
                    Ms Sakshi and Mr Ankul Singh, Advs for D-1 and
                    2
      CORAM:
      HON'BLE MS. JUSTICE DEEPA SHARMA

MS. JUSTICE DEEPA SHARMA

IA No. 25496/2015 (by defendant No.2 and 3 under Order VI Rule 15A,
Order XI Rule 1, Order 7 Rule 11 CPC)

1.

Vide the present application, the defendant Nos.2 and 3 has sought

rejection of the plaint and the documents. The plea of the

applicant/defendant Nos. 2 and 3 is that after the Commercial Courts,

Commercial Division and Commercial Appellate Division of High Court

CS(COMM) 1153/2016 Page 1 Ordinance, 2015, (hereinafter referred to as "the Ordinance, 2015") came

into force with effect from 23.10.2015, all the civil disputes falling in the

category of commercial disputes are to be filed following the procedure set

out therein. This Ordinance became an Act after the President accorded his

assent on 31.12.2015 (hereinafter called „the Act‟). It is submitted that the

provisions of this Act were also incorporated in Civil Procedure Code (CPC)

pursuant to Chapter VI of the Act. Chapter VI of Section 16(1) of the Act

reads as under:-

CHAPTER VI AMENDMENTS TO THE PROVISIONS OF THE CODE OF CIVIL PROCEDURE, 1908

"16.(1) The provisions of the Code of Civil Procedure, 1908 shall, in their application to any suit in respect of a commercial dispute of a Specified Value, stand amended in the manner as specified in the Schedule.

It is submitted that the suit of the plaintiff which was registered on

06.11.2015 undisputedly relates to a commercial dispute. When it was filed,

it was not verified as per provision of Order VI Rule 15A (1), which requires

that the commercial dispute shall be verified by an affidavit in the manner

and form prescribed in Appendix-I of the Schedule. Since the suit is not

verified as per order VI Rule 15A (1), the plaintiff cannot rely on his

CS(COMM) 1153/2016 Page 2 pleadings and the suit, therefore, is liable to be rejected under Order VI Rule

15A (3) & (4) and Order VII Rule 11 along with all the documents filed with

it. It is further alleged that the plaintiff had handed over certain additional

documents without complying with the provisions of Order XI Rule 1 as

amended by the Act and, therefore, the additional documents are also liable

to be rejected.

2. The reply to the application is not filed by the plaintiff, but the

arguments have been addressed.

3. It is argued on behalf of the plaintiff that the defect is procedural in

nature, for the reason that though the expression used in Order VI Rule 15A,

sub-rule (4) is "shall", but the expression used in sub-rule (5) of the said

Rule is "may" and thus it is the discretion of the Court to reject the plaint on

non-compliance of this rule. Reliance is also placed on the order of this

Court titled as Hindustan Cleanenergy Limited v. Urja Associates & Ors,

ARB.P. 666/2016, decided on 03.10.2016. It is also submitted that the plaintiff is

ready and willing to cure the procedural defect. It is further submitted that at the

time when the plaint was filed, the Commercial Division were not functioning in

the High Court of Delhi and the suit was filed and registered as ordinary civil suit

and it was registered as commercial suit only on 22.08.2016. On these contentions,

it is submitted that he be permitted to cure the defects and application be rejected.

CS(COMM) 1153/2016 Page 3

4. I have heard the contentions of the parties.

5. It is an admitted fact that the dispute is of a commercial nature. It is

also an admitted fact that the suit was registered as a civil suit on 06.11.2015

and was assigned to the Court of Civil Jurisdiction. It is also an admitted fact

that on that date, pursuant to Section 4 of the Act, the Commercial Divisions

were not established in Delhi. It is also an admitted fact that after the

Commercial Divisions started functioning in the High Court of Delhi, the

said suit was transferred to the Commercial Division and was re-registered

as such on 22.08.2016. It is also an admitted fact that at the time when the

suit was filed, it was not filed in conformity with Order VI Rule 15A, CPC.

It is also an admitted fact that even after the registration of the suit before

Commercial Division, the plaintiff did not take any steps to verify its suit in

terms of Order VI Rule 15A, CPC. It is also an admitted fact that Order VI

Rule 15A is a part of the procedure to be followed under the Act in a

commercial dispute matter. While Section 4 of the Act requires that

Commercial Divisions be established in every High Court, Chapter 5 and

Section 15 of the Act deals with the „transfer of pending suits‟ to the

Commercial Division. The relevant provision is reproduced as under:-

CS(COMM) 1153/2016                                                        Page 4
                             "CHAPTER V
                     TRANSFER OF PENDING SUITS

15.(1) All suits and applications, including applications under the Arbitration and Conciliation Act, 1996, relating to a commercial dispute of a Specified Value pending in a High Court where a Commercial Division has been constituted, shall be transferred to the Commercial Division.

(2) All suits and applications, including applications under the Arbitration and Conciliation Act, 1996, relating to a commercial dispute of a Specified Value pending in any civil court in any district or area in respect of which a Commercial Court has been constituted, shall be transferred to such Commercial Court:

Provided that no suit or application where the final judgment has been reserved by the Court prior to the constitution of the Commercial Division or the Commercial Court shall be transferred either under sub-section (1) or sub-section (2).

(3) Where any suit or application, including an application under the Arbitration and Conciliation Act, 1996, relating to a commercial dispute of Specified Value shall stand transferred to the Commercial Division or Commercial Court under sub- section (1) or sub-section (2), the provisions of this Act shall apply to those procedures that were not complete at the time of transfer.

(4) The Commercial Division or Commercial Court, as the case may be, may hold case management hearings in respect of such transferred suit or application in order to prescribe new timelines or issue such further directions as may be necessary for a speedy and efficacious disposal of such suit or application in accordance with Order XIV-A of the Code of Civil Procedure, 1908:

CS(COMM) 1153/2016 Page 5 Provided that the proviso to sub-rule (1) of Rule 1 of Order V of the Code of Civil Procedure, 1908 shall not apply to such transferred suit or application and the court may, in its discretion, prescribe a new time period within which the written statement shall be filed.

(5) In the event that such suit or application is not transferred in the manner specified in sub-section (1), sub-section (2) or sub- section (3), the Commercial Appellate Division of the High Court may, on the application of any of the parties to the suit, withdraw such suit or application from the court before which it is pending and transfer the same for trial or disposal to the Commercial Division or Commercial Court, as the case may be, having territorial jurisdiction over such suit, and such order of transfer shall be final and binding."

6. From the bare reading of Clause (3) of the above provision, it is

apparent that provisions of the Ordinance/Act are applicable only to those

procedures that were not completed at the time of transfer of suit or

application. Conversely, it means that the provisions of the Ordinance shall

not apply to those stages of trial of suit which were already completed at the

time of such transfer. Proviso to sub-section (4) of Section 15 of the Act

further reinforces that the procedure prescribed under the Act is applicable

to the commercial disputes only on its transfer to the Commercial Courts or

Commercial Division constituted under this Act. The proviso itself clearly

clarify that sub-rule (1) of Rule 1 of Order V of CPC shall not apply to such

transferred suit or application and the Court may in its discretion give a new

CS(COMM) 1153/2016 Page 6 time period to the defendants for filing their written statement, means that

even if the written statements were not filed by the defendants as per Order

V Rule 1 CPC, they can still take benefit of the time period under the

provision of this Act. Chapter VI, Section 16(2) of the Act also makes it

amply clear that the amendments made in CPC pursuant to Section 16 (1) of

the Act are to be followed only by Commercial Division and Commercial

Court. Section 16(2) of the Ordinance Act reads as under:-

"16 (2) The Commercial Division and Commercial Court shall follow the provisions of the Code of Civil Procedure, 1908, as amended by this Act, in the trial of a suit in respect of a commercial dispute of a Specified Value."

There is no provision in CPC which binds the Civil Courts to follow

the procedure incorporated in CPC pursuant to Section 16(1) of the Act

while dealing with commercial disputes.

7. The conjoint reading of Chapter V and VI of the Ordinance/Act

makes it amply clear that the procedure prescribed under the Act and

incorporated in the CPC by virtue of this Act is the procedure to be followed

by the Commercial Division and Commercial Courts either when the

commercial dispute is assigned to it or received on transfer and in case of

commercial dispute received on transfer from the relevant stage. Order 6

Rule 15A is not applicable in the present case since the pleadings were not

CS(COMM) 1153/2016 Page 7 filed in this Court, but the commercial dispute was received on transfer and

by that time, even the written statement was filed wherein the applicant

raised no such plea.

The application has no merit and is dismissed.

CS(COMM) 1153/2016 List for framing of issues on 03.03.2017.

                                                        DEEPA SHARMA
                                                           (JUDGE)




NOVEMBER 24, 2016
BG




CS(COMM) 1153/2016                                                     Page 8