Background

The main purpose of the Act was to ensure speedy disposal of high stake commercial matters. The Act came into force
on 23.10.2015. Wherein the Act had limited the specific value of the suit to not less than Rupees One crore and the
commercial courts were established at all the District levels. However, there were no commercial courts established in
the District level where the High court had original civil jurisdiction such as Delhi, Mumbai, Madrass, Kolkatta and
Himachal Pradesh.

However, many amendments were bought to this Act and one of the important ones are in respect to specific value and
the jurisdiction which came into effect from 03.05.2018. Thereby, the specific value of the suit was reduced to not less
than Rupees Three lakhs as under section 2 (i) and proviso was added to section 3 (1) which states that the
commercial courts at District level shall be established even where the High court had its original civil jurisdiction,
having pecuniary jurisdiction not less than Rupees three lakhs and not exceeding the pecuniary limit of the said District
courts.
 AMENDMENTS OVERVIEW

The Commercial Courts, Commercial Division

Existing 2015 Act and Commercial Appellate Division of High
Courts (Amendment) , 2018

Minimum value of 
At least one crore rupees (amount to 
commercial At least three lakh rupees (amount to be
be notified by the central
disputes notified by the central government).
government).

 Establishes commercial divisions in 

Commercial 5 high courts which have ordinary
division in high original civil jurisdiction, i.e., the
No change.
courts High Courts of Delhi, Bombay,
Calcutta, Madras and Himachal
Pradesh.
Commercial courts  State governments may set up  Allows commercial courts at the district
at district level commercial courts at the district level to be set up, in areas where all 24 high
level, in areas where high courts do courts have jurisdiction.
not have original jurisdiction.
 In areas where high courts have original
jurisdiction, state governments may specify
the pecuniary jurisdiction of commercial
courts which is not lower than three lakh
 rupees and more than the pecuniary
jurisdiction of district courts in those areas.

 State governments may constitute

commercial courts below the level of a
district judge, in areas where high courts do
not have original jurisdiction.
 Establishes commercial appellate 
Commercial divisions in all 24 high courts to
appellate division hear appeals against orders from: (i)
No change.
in all high courts commercial divisions of high
courts, and (ii) commercial courts at
the district level.
  State governments may set up commercial
appellate courts at the district level in areas
Commercial where high courts do not have original
appellate courts at No provision. jurisdiction.
district level  These courts will hear appeals against
orders of commercial courts below the level
of a district judge.
 State governments, with the  State governments may with the
Appointment of concurrence of the Chief Justice of concurrence of the Chief Justice of the High
judges of the High Court will appoint judges Court, appoint judges of commercial courts
commercial courts of commercial courts from the either at the level of a district judge or
higher judicial service of the state. below the level of a district judge.
Pre institution  No provision.  Introduces mandatory mediation before the
mediation filing of a suit, in cases where no urgent
relief is sought by the parties.

 To be completed within three months

(extendable by two months).
 If a counterclaim was filed in a 
commercial dispute of at least one
Counterclaims crore rupees in a civil court, the
Provision removed.
civil court could transfer the suit to
a commercial court or commercial
division of high court.

DISPUTE

The commercial dispute means:

(i) Ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents,
including enforcement and interpretation of such documents;

(ii) Export or import of merchandise or services;

(iii) Issues relating to admiralty and maritime law;

(iv) Transactions relating to aircraft, aircraft engines, aircraft equipment and helicopters, including sales, leasing and
financing of the same;

(v) Carriage of goods;

(vi) Construction and infrastructure contracts, including tenders;

(vii) Agreements relating to immovable property used exclusively in trade or commerce;

(viii) Franchising agreements;

(ix) Distribution and licensing agreements;

(x) Management and consultancy agreements;

(xi) Joint venture agreements;

(xii) Shareholders agreements;

(xiii) Subscription and investment agreements pertaining to the services industry including outsourcing services and
financial services;

(xiv) Mercantile agency and mercantile usage;

(xv) Partnership agreements;

(xvi) Technology development agreements;

(xvii) Intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain
names, geographical indications and semiconductor integrated circuits;

(xviii) Agreements for sale of goods or provision of services;

(xix) Exploitation of oil and gas reserves or other natural resource;

(xx) Insurance and re-insurance;

(xxi) Contracts of agency relating to any of the above; and

(xxii) Such other commercial disputes as may be notified by the Central Government. Explanation – A commercial
dispute shall not cease to be a commercial dispute merely because:

(a) it also involves action for recovery of immovable property or for realization of monies out of immovable property
given as security or involves any other relief pertaining to immovable property;

(b) one of the contracting parties is the State or any of its agencies or instrumentalities, or a private body carrying out
public functions.

Thus the commercial court take up the matters which are commercial in nature falling under the above mentioned 22
grounds and having specific value of not less than Three Lakhs Rupees. When the suit does not fall under
commercial dispute under section 2(1)(c), the case was transferred to the appropriate court having jurisdiction to try the
case.

Procedure
So far as the procedure is concern, the amended Code of Civil Procedure (CPC) is applicable.
The Procedure as per the amended CPC are:

 The commercial court has jurisdiction as per the section 6 of the Act. However, if the subject matter of
arbitration is a commercial dispute of specified value falling under section 10 of Commercial Court Act 2015,
even then the commercial court has jurisdiction to try the suit.

 The Plaint shall be made under order 7 followed by statement of truth as prescribed under Order 6 Rule 15 A
of amended CPC. If the statement of truth is not filed, the court may strike out a Pleading. Along with the Plaint
the list of documents are to be filed as per Order 11 Rule 1.

 mThe prerequisite of commercial suit is that, every matter has to undergo the mandatory provision under
Section 12 A – Pre institution Mediation and Settlement (inserted by amendment in 2018) of the Act which
states that unless there is any interim urgency, all the commercial matters shall undergo Pre institution of
mediation and settlement process for 5 months (3 months + may be extended by 2 months with the consent of
parties). If the suit get settled in Pre institution mediation, and the settlement shall be reduced in writing, signed
by the parties and the mediator. The settlement so arrived shall have the same status as that of arbitral award
passed by the Arbitrator as per section 30 of Arbitration and Conciliation Act.
If the matter is not settled in Pre institution mediation or when there is urgency contemplated in the suit, then the matter
will come before the commercial court.
 After the Plaint is filed, if any additional documents need to be filed, the same can be made within 30 days of
filing the suit as per Order 11 Rule 1 (4) of amended CPC else the Plaintiff cannot rely on such documents
which are not produced . If in case the documents are not in possession of the Plaintiff and is in possession of
the Defendant or third person, only on such reasons stated in the affidavit as mandated under Order 11 Rule
1(6) of amended CPC, the court may grant leave to file such documents.

 After the summons being served on Defendant. The Defendant shall file the written statement within 30 days
from the date of service of summons. However, which shall not be later than 120 days from the date of service
of summons to Defendant. The Defendant shall be forfeited from the right to file written statement and the
court shall not take the written statement on record. The Defendant shall deny the averments in the Plaint in
manner prescribed under Order 8 Rule 5 A. The procedure as mentioned in Order 11 Rule 1(7) and Order 11
Rule 1(10) above shall apply to Defendant while filing Written statement under Order 8 Rule 1 of CPC.

 After both the parties have filed the Plaint and written statement, next stage is Disclosure, discovery and
inspection of documents in suits – Order 11. Further, the Order 11 Rule 1 deals with disclosure and discovery
of documents which has been mentioned in the above paras.

 However, the Order 11 Rule 2 deals with discovery by interrogatories. Wherein Under Order 11 Rule 2(1) the
Plaintiff or Defendant by leave of the court may deliver interrogatories in writing for examination of opposite
parties in the Form No.2 as prescribed Appendix C of CPC. Provided not more than one set of interrogatories
 shall be given to same person except by the order of the court and the interrogatories which are not related to
the suit are deemed to be irrelevant.

Under Order 11 Rule 2 (2) the application for leave of the court to deliver interrogatories (interrogatories in respect to
delivery of particulars, or to make admissions of to produce documents relating to the matters in question or any of
them) are made, the court shall decide within 7 days of filing of such application.

Interrogatories shall be answered within 10 days by way of affidavit as mentioned in the Form No. 3 in Appendix C or
such other time as the court may allow application to set aside the interrogatories can be made within 7 days after the
service of the interrogatories as mentioned Under Order 11 Rule 2 (7).

Under Order 11 Rule 2 (11) Where any person who is supposed to answer the interrogatories omits to answer or
answers insufficiently, the party interrogating may apply to the court for order directing him to answer or answer
further and the court may pass such order, either affidavit or by voce examination.

 The next stage is inspection of documents under Order 11 Rule 3. Wherein all parties shall complete
inspection of all documents disclosed within 30 days of filing written statement. The court may extend the time
limit upon an application but not beyond 30 days as mentioned Under Order 11 Rule 3(1).
Under Order 11 Rule 3(2) – Any party to the proceeding can seek the direction of the court at any stage for inspection
of documents by the other party wherein the inspection is refused by such party or documents have not been produced
even after notice to produce is issued.

Order in such application as mentioned above shall be disposed off within 30 days of filing such application including
filing of replies and rejoinder.

Under Order 11 Rule 3(4) – If the application Under Order 11 Rule 3(2) is allowed, the inspection and copies shall be
furnished to the party seeking it within 5 days of such order under Order 11 Rule 3(3).

No party shall be allowed to rely on any documents which are not inspected or disclosed except by the leave of
the court and court may impose cost on such party who refused to give for inspection or failed to disclose Under
Order 11 Rule 3(6).

 The next stage is admission and denial of documents under Order 11 Rule 4. Wherein under Order 11 Rule 4
(1) each party shall submit a statement of admission or denial of all documents disclosed and of which the
inspection is completed. This statement has to be submitted within 15 days of the completion of inspection or
any later date fixed by the court.
Order 11 Rule 4(2) states the statement of admission and denial shall contain:
a) Correctness of contents of a document,

b) Existence of a document,

c) Execution of a document,

d) Issuance or receipt of a document,

e) Custody of a document.

The statement of admission and denial shall be in support of affidavit – Under Order 11 Rule 4(5).

If any party refused to admit the document as per Order 11 Rule 4(2), the court shall impose cost on such party . The
court shall pass order with respect to admitted documents including wavier of further proof or rejection of any
documents – Order 11 Rule 4(7).

 After the stage of statement of admission and denial of documents, the next stage is Production of documents
– Order 11 Rule 5 (1). Wherein the court may order at any time during the pendency of the any suit,
production by any party or person, who is having possession of such documents or power of such party or
person. For this purpose, the court shall issue notice to such person. Such notice shall be given not less than 7
 days but not more than 15 days to produce such documents or to answer to their inability to produce such
documents.
Order 11 Rule 5(4)- The court may draw adverse inference against a party refusing to produce such document and
where sufficient reasons are not given, the court may order cost.

o The documents can be in electronic form as mentioned in Order 11 Rule 6.

Case management hearing – Order 15 A.

The concept of case management hearing has been for the first time introduced in India. However this concept was
earlier followed in countries such as United States of America, Australia and other countries. Wherein the first case
management hearing shall be held by court after 4 weeks from the date of filing affidavit of admission or denial of
documents – under Order 15 A(1).

After the hearing, if the court finds out there are issues of fact and law that needs to be tried, then the court may pass an
order under Order 15 A Rule 2, in which the court shall frame issues, examination of list of witnesses, fix the date for
recording of evidence, fix date for filing written arguments, fix the date for hearing oral arguments and setting time
limit for parties and advocate to address oral arguments.

Order 15 A Rule 3 – the arguments shall be made within 6 months from the date of first case management hearing.
Order 15 A Rule 4 – the evidence shall be carried on day to day basis until cross examination of all the witnesses are
completed.

Order 15 A Rule 5 – if it is necessary the court may hold case management hearing at any time during the trial to issue
appropriate orders and ensure speedy disposal of suit.

Order 15 A Rule 6 – this provision provides list of powers of the court in a case management hearing.

Order 15 A Rule 7 – the court shall not adjourn the case management hearing for the sole reason that the advocate is
absent. However the adjournment can be given upon an application and payment of such cost as court deems fit.

Order 15 A Rule 7(2) – if the court is satisfied that there is a justified reason for absence of the advocate, it may adjourn
the hearing to another date on such terms and conditions.

Order 15 A Rule 8 – if the order passed in case management hearing has not complied, the court shall impose cost or
pass such other order.

 The judgment shall be pronounced within 90 days of conclusion of arguments as mentioned in Order 20 Rule
1.
  If in case aggrieved by the judgment of commercial court and Commercial division, one can prefer an
appeal to commercial Appellate court and to commercial Appellate division respectively.

 Section 8 of Commercial Court Act, 2015 – No civil revision petition or application shall be entertained
against any interlocutory order of commercial court, including an order on issue of jurisdiction, subject
to provision of section 13, shall be raised only in an appeal against the decree of the commercial court
respectively.

Appeals

Chapter 4 of the Act : Appeals from commercial court below the level of District judge or at the level of District judge
exercising original civil jurisdiction, commercial division of high court, shall lie within 60 days from the date of
judgment or order before the Commercial Appellate court or Commercial Appellate Division of High Court
respectively. The appeal shall include even the appeal under section 37 of Arbitration and Conciliation Act, 1996.

The Commercial Appellate court and Commercial Appellate Division shall dispose such matter within 6 months from
the date of filing such appeal.

Summary judgment
Order 13 A: wherein the order is passed without recording oral evidence. That is to say the claim is decided in the
absence of the oral evidence. However, the application for summary judgment cannot be made when the suit itself is
filed as a summary suit under Order 37.

Application for summary judgment shall be made at any time after the summons is served to the Defendant. However
the application cannot be made after the issues are framed by the court.

The court can grant summary judgment on the following grounds as set forth in Order 13 A Rule 3 which is as follows:

a) The Plaintiff has no real prospect of succeeding on the claim or the Defendant has no real prospect of successfully
defending the claim, as the case may be.

However in case where the Defendant have not entered appearance or filed written statement, the court have passed
summary judgment instead of leading Plaintiff evidence exparte. Similarly in the case of exparte, where the Plaintiff’s
documents were examined to come to conclusion on whether there is any real prospect of success of Defendant. In
another cases relating to refund of money wrongfully paid or, conversely, non-payment of a contractually agreed
amount, summary judgment has been awarded where the said receipt or non-payment has been admitted by the
Defendant or is clearly evidenced from documents. In, Campus Eai India Pvt. Ltd. v. Neeraj Tiwari, wherein the
alleged plagiarism of software where the case primarily depended on the report of a third-party expert comparing the
codes for the two software, court allowed the Defendant’s application for summary judgment when the expert found no
evidence of plagiarism.

There are few instances where the court has not allowed the application for summary judgment. One of such
case, Rockwool International A/S v. Thermocare Rockwool (India) Pvt. Ltd., where triable issues were found in
which a mark alleged to have been infringed was a valid registered trademark or was generic in nature. In this case it
was also the opinion of the court that the court can take suo moto in passing summary judgment, only if the summons is
served to Defendant and before framing of issues.

b) There is no other compelling reason why the claim should not be disposed of before recording of oral evidence.

The procedure to carry out the summary judgment shall be followed as mentioned in the Order 13 A Rule 4 and 5. The
order shall be passed under Order 13 A Rule 6 upon an application as mentioned in Order 13 A Rule 1 and the reasons
to be recorded for the same. The court can pass such orders as follows:

a) Judgment on claim;

b) Conditional order in accordance with Rule 7;

c) Dismissing the application;

d) Dismissing part of the claim and a judgment on part of the claim that is not dismissed;

e) Striking out the Pleadings (whether in whole or in part); or

f) Further directions to proceed for case management under Order 15 A.

Transfer of cases

Section 15: wherein all suit and applications from commercial division of High Court or from any civil court in any
district, including application under Arbitration and Conciliation Act, relating to commercial dispute of specified value
shall be transferred to commercial court. Except the suit or application where the final judgment has been reserved by
the court prior to the constitution of commercial division or the commercial court cannot be transferred to commercial
court.

In such transferred cases, the commercial court shall apply those procedures that were not complete at the time of
transfer. However such courts may hold case management hearings in respect of such transferred suit or application in
order to prescribe new timelines or issue directions as necessary for speedy disposal. Provided, the proviso to order 5
rule 1 (1) of Amended CPC does not apply to such transferred suit or application and the court at its discretion may
prescribe new time period within which the written statement shall be filed.
In case where the suit or application is not transferred as it is prescribed above, the commercial Appellate Division of
High court may upon the application of the parties withdraw such suit or application from the court below and transfer
it for trial or disposal to commercial division or commercial court having territorial jurisdiction and such order of
transfer is final and binding.

Advantages and Disadvantages

Advantages

 The Commercial Court Act provides for expeditious disposal of the suit.

 The Act provides for imposing cost unlike in the regular CPC, which ensure that the suit is decided faster and
avoids lack of due diligence.

 Summary judgment, Pre institution mediation, case management hearing are aids to speedy trial of the suit.

 The Act provide for systematic way of leading the case.

 There is less scope for taking unnecessary adjournments and thereby judicious use of the court time.

Disadvantages
 Since the Act has trying to incorporate the new system of disposing the cases like that of case management
hearing which was earlier followed in foreign countries. This takes time to get acquainted in India.

 Dissemination of the know-how of the Act is necessary to ensure effective utilization of the Act which is very
rarely found.

 Lack of precedence in the Act to rely on.

 The Act is still at infant stage. Hence time consuming to grow.

Case Law:
1. CIVIL APPEAL NO. 7843 OF 2019 (Arising out of SLP (Civil) No.9391 of 2019)
Ambalal Sarabhai Enterprises Ltd. Versus K.S. Infraspace LLP & Anr.
The Hon’ble Supreme Court held “it is also necessary to carefully examine and entertain only disputes which actually
answers the definition “commercial disputes” as provided under the Act. In the instant case, as already taken note
neither the agreement between the parties refers to the nature of the immovable property being exclusively used for
trade or commerce as on the date of the agreement nor is there any pleading to that effect in the plaint.”

“A dispute relating to immovable property per se may not be a commercial dispute. But it becomes a commercial
dispute, if it falls under sub-clause (vii) of Section 2(1)(c) of the Act viz. “the agreements relating to immovable
property used exclusively in trade or commerce”. The words “used exclusively in trade or commerce” are to be
interpreted purposefully. The word “used” denotes “actually used” and it cannot be either “ready for use” or “likely to
be used” or “to be used”. It should be “actually used”. Such a wide interpretation would defeat the objects of the Act
and the fast tracking procedure discussed above.”

2. CIVIL APPEAL NO. 9307 OF 2019(ARISING OUT OF SLP (CIVIL) NO.25618 OF 2018)
In BGS SGS SOMA JV Versus NHPC LTD., Hon’ble Supreme Court held:
The interplay between Section 37 of the Arbitration Act, 1996 and Section 13 of the Commercial Courts Act, 2015, has
been laid down in some detail in the judgment in Kandla Export Corporation (supra). The precise question that arose in
Kandla Export Corporation (supra) was as to whether an appeal, which was not maintainable under Section 50 of the
Arbitration Act,1996, is nonetheless maintainable under Section 13(1) of the Commercial Courts Act, 2015. In this
context, after setting out various provisions of the Commercial Courts Act, 2015 and the Arbitration Act, 1996, this
Court held:

“13. Section 13(1) of the Commercial Courts Act, with which we are immediately concerned in these appeals, is in two
parts. The main provision is, as has been correctly submitted by Shri Giri, a provision which provides for appeals from
judgments, orders and decrees of the Commercial Division of the High Court. To this main provision, an exception is
carved out by the proviso…”

The proviso goes on to state that an appeal shall lie from such orders passed by the Commercial Division of the High
Court that are specifically enumerated under Order 43 of the Code of Civil Procedure Code, 1908, and Section 37 of the
Arbitration Act. It will at once be noticed that orders that are not specifically enumerated under Order 43 CPC would,
there- fore, not be appealable, and appeals that are mentioned in Section 37 of the Arbitration Act alone are appeals that
can be made to the Commercial Appel- late Division of a High Court.

Thus, an order which refers parties to arbitration under Section 8, not being appealable under Section 37(1)(a), would
not be appealable under Section 13(1) of the Commercial Courts Act. Similarly, an appeal rejecting a plea referred to in
sub-sections (2) and (3) of Section 16 of the Arbitration Act would equally not be appealable under Section 37(2)(a)
and, therefore, under Section 13(1) of the Commercial Courts Act.

3. Leitz Tooling Systems India Pvt. … vs Bharat Bhogilal Patel

REVIEW PETITION (L) NO. 15 OF 2019 IN COMMERCIAL SUIT NO. 316 OF 2018
Hon’ble Bombay High Court answered the following question:

“Whether in view of the amendment to the Code of Civil Procedure, 1908 by a Commercial Court, Commercial
Division and Commercial Appellate Division of High Court’s Act, 2015 (4 of 2016), the Defendant can be allowed to
file the Written Statement after 120 days from the date of service of Summons in a Commercial Suit”.

“30. I therefore hold that the amendments introduced to the CPC by the Commercial Courts Act are only applicable to
Commercial Disputes of a Specified Value and not Commercial Disputes not of a Specified Value such as the present
suit. Consequently, amongst other amendments introduced to the CPC by the Commercial Courts Act, the amendment
to the CPC mandating that a Written Statement in a Commercial Suit has to be filed within 120 days, will not apply to
Commercial Disputes not of a Specified Value.”