Rajasthan High Court - Jodhpur
M/S Rajasthan Art Emporium Limited vs M/S Shiva Enterprises ... on 24 May, 2024
Bench: Dinesh Mehta, Rajendra Prakash Soni
[2024:RJ-JD:23686-DB]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
D.B. Civil Misc. Appeal No. 1990/2023
1. M/s Rajasthan Art Emporium Limited, Heritage House
Umaid Bhawan Palace Road, Raika Bagh, Jodhpur (Raj.).
2. R.k. Singhal, 73 Years, Director, M/s Rajasthan Art
Emporium Ltd., Heritage House Umaid Bhawan Palace
Road, Raika Bagh, Jodhpur (Raj.).
3. Smt. Mithlesh Singhal, 68 Years, Director, M/s Rajasthan
Art Emporium Ltd., Heritage House Umaid Bhawan Palace
Road, Raika Bagh, Jodhpur (Raj.).
4. Mudit Singhal, 43 Years, Director, M/s Rajasthan Art
Emporium Ltd., Heritage House Umaid Bhawan Palace
Road, Raika Bagh, Jodhpur (Raj.).
5. Yogik Singhal, 38 Years, Ex. Director, M/s Rajasthan Art
Emporium Ltd., Heritage House Umaid Bhawan Palace
Road, Raika Bagh, Jodhpur (Raj.).
----Appellants
Versus
1. M/s Shiva Enterprises, Through Proprietor Shiv Narayan
Bishnoi S/o G.r. Bishnoi R/o House No. 40, Central School
Scheme, Jodhpur (Raj.).
2. Regional Manager, Rajasthan State Industrial
Development And Investment Corporation, Riico Limited,
Boranada, Corporation, Boranada, Jodhpur (Raj.).
(Proforma Party)
3. M/s Vikas W.S.P. Ltd., Sri Ganganagar, through Power Of
Attorney Shilpi Rajvansi R/o 4 G 8, Jawahar Nagar, Shri
Ganganagar (Raj.)
----Respondents
For Appellant(s) : Mr. D.N. Yadav
Mr. Mohit Singh Choudhary
For Respondent(s) : Mr. R.S. Mankad
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[2024:RJ-JD:23686-DB] (2 of 8) [CMA-1990/2023]
HON'BLE MR. JUSTICE DINESH MEHTA
HON'BLE MR. JUSTICE RAJENDRA PRAKASH SONI
Order
24/05/2024
I.A. No.01/2024:-
1. For the reasons stated, the application seeking early listing
of the matter is allowed.
2. At the request of the learned counsel for the parties, the
matter is taken up today itself.
D.B. Civil Misc. Appeal No. 1990/2023:-
1. By way of present appeal preferred under Section 13 of the
Commercial Courts Act, 2015 (hereinafter referred to as "the Act
of 2015"), the appellants have laid challenge to the order dated
31.10.2023, whereby the application under Order VII Rule 11 of
Civil Procedure Code (hereinafter referred to as 'C.P.C.' or 'the
Code') preferred by the present appellants (defendants in the
original suit) on 19.10.2023 has been rejected by the Commercial
Court, Jodhpur.
2. Mr. Yadav, learned counsel for the appellants argued that the
Commercial Court has rejected the appellants' application dated
19.10.2023 cursorily, being swayed by the fact that earlier
application under Order VII Rule 11 of C.P.C of the appellants was
already rejected by it on 24.08.2022.
3. Learned counsel for the appellants submitted that the issue
which was raised by way of the subject application dated
19.10.2023, was not at all raised in the earlier application that
[2024:RJ-JD:23686-DB] (3 of 8) [CMA-1990/2023]
was filed by the appellants under Order VII Rule 11 of the Code
and therefore, the Commercial Court ought not to have rejected
appellants' application.
4. Learned counsel pointed out that the Commercial Court has
not only rejected appellants' application as barred by res-judicata,
but also on merit and held that provisions of section 12A of the
Act of 2015 will not be applicable to the suit in question.
5. Advancing the argument, learned counsel submitted that a
fundamental question of law and jurisdiction was raised by the
appellants which revolved around the provisions of section 12A of
the Act of 2015, according to which, since prior to filing of the suit
in question, the appellant had not applied for and undertaken the
exercise of pre-institution mediation and settlement, as is
mandatory under section 12A of the Act of 2015, the suit was
liable to be rejected.
6. Taking the Court through section 15 of the Act of 2015,
learned counsel argued that as per sub-section (3) of the section
15 of the Act of 2015, the provisions of the Act of 2015 have been
made applicable to all the pending suits and accordingly all the
proceedings which remained pending or were to be undertaken on
the date of transfer of a suit to the Commercial Court will be
undertaken.
7. In sum and substance, the argument of Mr. Yadav has been
that when the suit came to be transfer to the Commercial Court by
virtue of section 15 of the Act of 2015, it was incumbent upon the
[2024:RJ-JD:23686-DB] (4 of 8) [CMA-1990/2023]
Commercial Court to first examine as to whether mandate of
section 12A of the Act of 2015 has been complied or not?
8. In relation to argument aforesaid, learned counsel apprised
the Court about the relevant dates, which are reproduced
hereunder:-
Date of Institution of Suit 05.06.2012
Transfer to ADJ 23.05.2016
Transfer to Commercial Court, Jaipur 18.10.2017
Transfer to the Commercial Court, 17.02.2020
Jodhpur
9. Learned counsel argued that since the suit in question came
to be transferred to the Commercial Court, Jodhpur on
17.02.2020, by virtue of sub-section (3) of section 15 of the Act of
2015, the provisions of section 12A of the Act of 2015 became
applicable and therefore, the suit became non-maintainable per-
force Section 12A of the Act of 2015, which mandates a party to
go for pre-institution mediation and settlement before instituting a
suit.
10. Mr. Mankad, learned counsel for the respondents submitted
that application under Order VII Rule 11 of C.P.C. filed by the
appellants was rejected by the Commercial Court, whereafter,
again a fresh application under Order VII Rule 11 of C.P.C., raising
almost similar ground (except one relating to section 12A of the
Act of 2015) was filed and hence, the same was rightly rejected.
He highlighted that the earlier order passed by the Commercial
[2024:RJ-JD:23686-DB] (5 of 8) [CMA-1990/2023]
Court has been affirmed by the Division Bench of this Court vide
its judgment and order dated 09.12.2022 in D.B. Civil Misc.
Appeal No.1947/2022 (M/s. Rajasthan Art Emporium Ltd. And Ors.
vs. M/s. Shiva Enterprises and Ors.) and therefore, instant appeal
is liable to be dismissed.
11. Heard learned counsel for the parties and perused the
record.
12. Indisputably, the appellants had filed another application
under under Order VII Rule 11 of C.P.C. before the Commercial
Court on 11.03.2022, which was rejected by the Commercial Court
per-viam order dated 24.08.2022.
13. In our opinion, the appellants' subsequent application
preferred under Order VII Rule 11 of C.P.C. dated 19.10.2023 was
barred by the provisions of Order II Rule 2 of C.P.C., which bars a
party to make a claim with respect to a cause of action, which was
otherwise available to him in previous suit. The same principle
applies to ground or law point as well. The first application under
Order VII Rule 11 of C.P.C. was filed in the year 2022, by which
time the provisions of section 12A of the Act of 2015 had already
been introduced in the Act of 2015 and thus, the plea or ground
which the appellants have taken by the contentious application in
the year 2023, was available to the appellants, at the time of filing
first application.
14. Be that as it may, as the question of very maintainability of
application and the issue in hand is purely a question of law, we
deem it expedient to pronounce upon the issue of applicability of
[2024:RJ-JD:23686-DB] (6 of 8) [CMA-1990/2023]
section 12A of the Act of 2015 in the proceedings in question, so
zealously harped upon by learned counsel for the appellants.
15. It is to be borne in mind that section 12A was introduced in
the Act of 2015 with effect from 03.05.2018. The suit in question
was instituted in the Civil Court on 05.06.2012 and after
promulgation of the Act of 2015, it stood transferred, firstly to the
Commercial Court at Jaipur on 18.10.2017, much before Section
12A was introduced in the Act of 2015. Thereafter, on account of
change of jurisdiction, the suit in question came to be transferred
to Commercial Court, Jodhpur on 17.02.2020.
16. In our considered opinion, transfer of the suit in question to
the Commercial Court, Jodhpur on 17.02.2020 is a fortuitous
circumstance, which cannot be considered as a transfer of suit to
the Commercial Court, as the transfer had already taken place to
Commercial Court, Jaipur on 18.10.2017, when section 12A had
not even seen the light of the day.
17. It is pertinent to note that by virtue of section 19 of the
Commercial Courts, Commercial Division and Commercial
Appellate Division of High Courts (Amendment) Act, 2018
(hereinafter referred to as "the amending Act of 2018", all the
provisions of the amending Act of 2018, including section 12A
which were inserted in the Act of 2015, have been made
applicable to cases relating to commercial dispute filed on or after
the date of commencement of the Act, i.e. 03.05.2018.
18. "Section 19 of the amendment Act of 2018 is reproduced
hereunder:-
[2024:RJ-JD:23686-DB] (7 of 8) [CMA-1990/2023]
"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."
19. Hence, the suit which stood transferred to the Commercial
Court under section 15(3) on 18.10.2017 prior to 03.05.2018 will
not be affected by introduction of section 12A by the amending
Act of 2018.
20. Even if for a moment, it is presumed that the suit stood
transferred to the Commercial Court on 17.02.2020, then also for
the same reasoning, the plea raised by the appellants turns out to
be misconceived. If the argument of Mr. Yadav is tested on the
anvil of statutory provision, the same appears fallacious.
21. A simple reading of provisions of section 12A of the Act of
2015 and considering the reasons for which it was introduced, it
cannot be said that the provisions of section 12A of the Act of
2015 would be applicable to pending suits. If that be so, after
introduction of section 12A of the Act of 2015 (with effect from
03.05.2018), all suits which were pending before the Commercial
Court would have to be dismissed, because the proceedings for
pre-institution mediation and settlement were not undertaken.
Such result can neither be conceived by any legislation while
promulgating the said amendment nor can any Court accept or
countenance such consequence.
22. During the course of submission, Mr. Yadav relied upon the
judgment of M/s. Patil Automation Private Limited and Ors.
[2024:RJ-JD:23686-DB] (8 of 8) [CMA-1990/2023]
vs. Rakheja Engineers Private Limited reported in AIR 2022
SC 3848.
23. A simple look at the factual backdrop of the case (M/s. Patil
Automation Private Limited supra) makes it abundantly clear that
the suit therein was laid on 12.10.2020, admittedly, after
introduction of section 12A of the Act of 2015. For this solitary
reason, the judgment of Hon'ble the Supreme Court is inapplicable
to the facts of the present case, as has rightly been dealt with by
the Commercial Court.
24. The application under Order VII Rule 11 of C.P.C. so also the
appeal is misconceived, which according to us was filed simply
with a view to protract the proceedings or buy time.
25. We dismiss the appeal with a cost of Rs.1,00,000/- which
shall be paid by the appellants to the respondents within a period
of two months from today. If the cost is not paid, it shall form part
of decree and recoverable in accordance with law. The cost
aforesaid being deposited/recovered, Rs.50,000/- shall be
remitted to the Rajasthan State Legal Services Authority
concerned and the remaining shall be paid to the
respondents/plaintiffs.
26. Stay application also stands dismissed accordingly.
(RAJENDRA PRAKASH SONI),J (DINESH MEHTA),J
7-raksha/-
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