Madhya Pradesh High Court
M/S Suman Infrastructure Private ... vs The State Of Madhya Pradesh on 6 August, 2024
Author: Sushrut Arvind Dharmadhikari
Bench: Sushrut Arvind Dharmadhikari
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI
&
HON'BLE SHRI JUSTICE GAJENDRA SINGH
MISC. PETITION No. 3923 of 2023
M/S SUMAN INFRASTRUCTURE PRIVATE LIMITED
GOVERNMENT CONTRACTOR THROUGH ITS PARTNER SHRI
ARUN AWASTHI
Versus
THE STATE OF MADHYA PRADESH AND OTHERS
&
MISC. PETITION No. 3925 of 2023
M/S SUMAN INFRASTRUCTURE PRIVATE LIMITED GOVERNMENT
CONTRACTOR THROUGH ITS DIRECTOR SHRI ARUN AWASTH
Versus
THE STATE OF MADHYA PRADESH AND OTHERS
Appearance:
(SHRI SHEKHAR SHARMA, LEARNED COUNSEL FOR THE PETITIONER) .
( SHRI ANIKET NAIK, LEARNED ADVOCATE GENERAL)
(BY SHRI HIMANSHU JOSHI, DEPUTY SOLICITOR GENERAL[ON ADVANCE
COPY].)
Heard and reserved on : 10.07.2024
Order delivered on : 06.08.2024
ORDER
Per: Gajendra Singh J.
Since the issue involved in these Misc. Petition is similar thus they are
being decided by this common order. For the sake of convenience the facts of
the Misc. Petition No.3923/2023 are being taken to decide the controversy
involved herein.
This Misc. Petition under Article 227 of the Constitution of India is
preferred challenging the order dated 24.06.2023 in Commercial Case
No.7/2021 of Commercial Court (District Judge Level), Indore whereby
the case instituted on the plaint of the petitioner has been returned to the
Court of XIth Additional District Judge, Ujjain for disposal on the ground
that the subject matter of the Suit is not a commercial dispute of specified
value.
Facts of the case in short are as under;-
[2]. The petitioner filed a plaint (Annexure P/2) before the Court of
District Judge, Ujjain on 10.11.2017 seeking relief of declaration that the
order of termination of the work of construction of Kiloli Lakhesra Road
on 14.02.2013 be declared null and void and permanent injunction in
favour of the plaintiff and against the defendant be issued directing the
defendants to determine the contract agreement under clause 14 of the
condition of the contract and release of the amount and prohibit the
defendants to recover any amount on account of termination of the
contract agreement and the cost of the proceedings making valuation for
declaration as Rs.50,00,000/- and permanent injunction as Rs.1,00,000/-
and affixing the Court fees of 14,500/- (2000+12,500/-).
[3] The Suit was registered as Civil Suit No.RCS-A/410/2017 and
the petitioner filed an application before the XIth Additional District
Judge, Ujjain seeking transfer of the case to the Commercial Court, Indore
and XIth District Judge vide order dated 18.12.2020 sent the record of the
Civil Suit to the Commercial Court, Indore that the Suit relates to the
commercial dispute and value of the work is more than 3 (three) crore.
[4] Upon receiving the case in Commercial Court (District Judge
Level), Indore it was registered as Commercial Case No.7/2021 and the
Commercial Court made query regarding the jurisdiction of the
Commercial Court to hear the Suit on the basis that at the time of filing of
the Suit pecuniary jurisdiction of the Commercial Court was 1 (one) crore
and the Suit dispute relates to the contract value amounting of Rs.318.36
lacs.
[5] The petitioner/plaintiff filed an application under Section 151
of C.P.C.,1908 submitting that the disputes relates to the contract value
amount Rs.318.36 Lacs i.e. more than 3 (three) crores and the dispute
between the parties wherein the defendants have forfeited the amount of
earnest money and security deposit and performance security amounting to
Rs.18,36,227/-. Accordingly, risk and cost amount was assessed and
further the plaintiff is also claiming damages of which gross valuation
comes to around more than 1 (one) Crore. It was also also stated that the
defendants have not raised any objection with respect of pecuniary
jurisdiction.
[6] After hearing the parties, the Commercial Court (District
Judge Level), Indore concluded that the valuation of subject matter is
Rs.51 Lacs and the case was instituted in the Court of XIth District Judge,
Ujjain on 24.11.2017 i.e. much before 3rd, May, 2018, the day when the
Commercial Courts, Commercial Division and Commercial Appellate
Division of High Courts (Amendment) Act, 2018 come into force. The
Court has concluded that the subject matter of Rs.51 Lacs is value much
less than Rs. 1 (one) crore, even the amount of Rs.91.40 Lacs is less than
Rs. 1 (one) crore, the specified value as applicable at the time of institution
of the present Suit before the Court of XIth District Judge, Ujjain,
therefore the subject matter in the present case is not a commercial dispute
of a specified value and ordered to send back the Case file to the Court of
XIth District Judge, Ujjain.
[7] Challenging the aforesaid, this Misc. Petition has been
preferred on the ground that Presiding Officer of the Commercial Court,
Indore has taken objection on the maintainability of the said proceedings
without any application from the respondents. No written order raising any
objection in the order sheet of the Court proceedings has been mentioned.
The Court of XIth District Judge was competent to pass the order and
Commercial Court has no power to raise such objection. There is no
provision under the Commercial Court Act, 2015 to Suo Moto review of
its earlier order. Overall valuation of the suit amount claimed and quashing
of the recovery comes to more than Rs.1 (one) crore even before
amendment of 2018 in the Commercial Court Act and consequently,
proceedings is maintainable in the Commercial Court, Indore. The
Commercial Court, Indore passed the order without dealing with the
contention of the petitioner objectively and without proper examining the
record of the case and reviewed the order dated 18.12.2020 of XIth
Additional District Judge, Ujjain without any statutory power of Suo Moto
Review. The amendment in the Act, 2018 is procedural and clarificatory in
the nature retrospective operation.
[8] The respondents supported the impugned order by filing reply
through document No.8170/2024 with affidavit of Gautam Ahirwar,
Executive Engineer, Public Works Department (B&R), Ujjain District
Ujjain and submits that Misc. Petition is devoid of merits and deserves to
be dismissed because Amendment Act, 2018 would not apply
retrospectively.
We have heard learned counsel for the parties and perused the
record.
[9] Firstly, this Court address the submission of the
petitioner/plaintiff in which he claimed that the gross valuation comes
around more than 1 Cr. (one Crore).
[10] Counsel for the respondents has contended that the dispute
between the parties is that the defendants have forfeited the amount of
earnest money and security deposit and performance security total
amounting to Rs.18,36,227/-. On that valuation Rs.51 Lakhs Rupees of the
suit, the suit was not commercial dispute at the time of filing of the suit.
[11] The Commercial Court, Indore has dealt the issue aptly
recording the finding that to bring the suit under the ambit of commercial
dispute the valuation of suit at the time of institution of suit is to be seen
for the purpose of specified value. In the present case, the suit was filed
before the Court of District Judge, Ujjain on 10.11.2017 making valuation
of the relief sought to be Rs.51 lakhs. Accordingly, there is no force in the
contention of the counsel for the plaintiff that after calculation of interest
the amount has become more than 1 Crore as of now. The findings of the
Trial Court are proper and plaintiff /petitioner's argument on this count
does not succeed.
[12] Now this Court is dealing with the objection regarding the
applicability of Amendment Act, 2018. Section 19 of the Commercial
Courts, Commercial Division and Commercial Appellate Division of High
Courts (Amendment), Act, 2018 specifically provide provision of
Amendment Act, 2018 to be applicable only to cases relating to
commercial disputes filed on or after the date of commencement of this
Act. Section 19 of the of the Commercial Courts, Commercial Division
and Commercial Appellate Division of High Courts (Amendment), Act,
2018 is reproduced below;-
19. Save as otherwise provided, the provisions of this
Act shall apply only to cases relating to commercial
disputes filed on or after the date of commencement of
this Act.
[13] Argument on behalf of the petitioner/plaintiff is that Section
19 of the of the Commercial Courts, Commercial Division and
Commercial Appellate Division of High Courts (Amendment), Act, 2018
will render otiose and redundant to Section 15 (2) of Commercial Court
Act, 2015 which mandates that all suits and application 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. Section 15 (2)
of the Commercial Courts, Act 2015 is reproduced below;-
"15. Transfer of pending cases.-- (2) All suits and
applications, including applications under the
Arbitration and Conciliation Act, 1996 (26 of 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).
[14] Counsel for the petitioner/plaintiff has argued that the Trial Court
has not taken into consideration the view taken in case of P.C. Chandra
Gems Private Limited Vs. Godrej Consumer Products Limited & Anr.
(F.M.A.734/2022 CAN 1 of 2022) dated 12.07.2022 by High Court of
Culcutta Civil Appellate Jurisdiction Commercial Division in which it has
held that;-
"It is apparent and clear from the meaningful reading of the
said provision that it has its applicability to the provisions of
the amending Act and does not abridge or override the
substantive provision contained in the parent Act and,
therefore, the learned Judge of the Commercial Court has
misdirected himself in passing the impugned order.
[15] In the P.C. Chandra (supra) the suit was filed way back in the year
2012 and Court expressed the view that Section 19 of the said Act does not
in expressed term says that the suit which was filed prior to coming in
force of the Commercial Courts Act shall not be transferred to the
Commercial Court; rather the said amending Act has restricted its
applicability to the provisions of the said amended Act to apply
prospectively and not from retrospective operation.
[16] The issue raised by the petitioner/plaintiff is being analyzed
with reference to difference in procedure applicable to the commercial suit
as compared to the civil suit. The amendment of Commercial Courts Act,
2015 in 2018 with effect from 03.05.2018 introduced Chapter IIIA and
Section 12A provides for the pre-institution mediation and settlement.
Aside from this, the Commercial Court Act, 2015 provides for different
specification and requirements for filing of the commercial suits. It should
not be only of the specific value but also provide specific formality for
filing of the commercial suits. The plaint has to be supported with a
statement of truth. In addition, Section 12A Commercial Courts Act, 2015
amends the provisions of the CPC, 1908 to be made applicable to the
commercial suits. There is therefore, a distinct and a much more stringent
procedure applicable to the Commercial Suits as compared to the Civil
Suits. This implies that Section 15(2) of the Commercial Courts Act, 2015
was not to be effective in future but was an enabling provision for transfer
of all the pending suits of commercial nature from the regular Civil Courts
to the Commercial Courts, same view has been taken in the case of
Narendra Kumar Vs. M.S. Om Daily Needs Retailing Pvt. Ltd. & Anr.
(2023) 08 DEL CK0 492.
[17] Thus applicability of the Section 19 of the Commercial Courts,
Commercial Division and Commercial Appellate Division of High Courts
(Amendment) Act, 2018 only to cases relating to commercial disputes filed
on or after the date of commencement of this Act i.e. 3 rd May, 2018 does
not render otiose or redundant, the provision of Section 15(2) of the
Commercial Courts Act, 2015 and the view taken in P.C. Chandra Gems
Private Limited (supra) cannot be relied upon.
[18] Now this Court is examining the issue raised on behalf of
petitioner/plaintiff that the Commercial Court has taken objection on the
maintainability of the said proceedings without any application from the
respondents. The Commercial Court has no power to raise such objection.
There is no power under Commercial Act, 2015 to suo moto review its
earlier order and Commercial Court reviewed the order dated 18.12.2020
of 11th Additional District Judge, Ujjain without any statutory power of sou
moto review.
[19] The Order 7 Rule 10 of C.P.C. provides that subject to the provisions
of rule 10A, the plaint shall at any stage of the suit be returned to be
presented to the Court in which the suit should have been instituted and
this provision prescribed the procedure on returning a plaint that the Judge
shall endorese thereon the date of its presentation and return, the name of
the party presenting it and a brief statement of the reasons for returning it.
[20] Accordingly, this is not a case that Presiding Officer of the
Commercial Court, Indore has exercised the power without any provision
or impugned order amounts to review of order dated 18.12.2020 of
Additional District Judge, Ujjain or its own earlier order. In the present
case, the suit was filed before the Court of District Judge, Ujjain on
10.11.2017 making valuation of the relief sought to be Rs.51 lakhs and on
the date of presentation of the plaint the specified value of the subject
matter of the Commercial dispute was 1 Cr. (One Crore Rupees). Plaintiffs
himself has filed the suit before the Additional District Judge and reduction
of value of subject matter of dispute from 1 Cr (One Crore Rupees) to 3
lakh (Three Lakh Rupees) is applicable only to case relating to commercial
dispute filed on or after 3rd May, 2018.
[21] In view of above, we find no merit in the arguments as well as Misc.
Petition against the impugned order dated 24.06.2023, thus same is
affirmed and Misc. Petition is hereby dismissed.
Certified copy as per rules.
In light of order passed in Misc. Petition No.3923/2023, the Misc.
Petition No.3925/2023 is also dismissed.
Copy of order passed in Misc. Petition No.3923/2023 be placed in
the file of Misc. Petition No.3925/2023.
(S. A. DHARMADHIKARI) (GAJENDRA SINGH)
JUDGE JUDGE
praveen
