Bombay High court imposes costs of five lakhs on defendant who made application for sending summary suit to Commercial courts to delay the proceeding

  Keeping in mind the objectives of the summary procedure under Order XXXVII of the CPC, so that cases falling in the specific classes of suits as specified in Rule 2 of Order XXXVII of the CPC, are disposed of expeditiously by following a summary procedure, I am of the view that the whole endeavour by the Defendants is to delay the progress of the Summary Suit. The very fact that this Application is filed after the Interim Application seeking dismissal of the Suit on the purported ground of breach of Section 12A of the said Act, itself is a pointer to the conduct of the Defendants in proceeding in the suit. Therefore, I also propose to impose exemplary costs of Rs. 5 lacs to be paid by the Defendants to the High Court Non Gazetted Ministerial Staff Association, Mumbai within a period of two weeks. {Para 30}

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

INTERIM APPLICATION (L) NO. 6341 OF 2024

IN

SUMMARY SUIT NO. 18 OF 2023

VARANIUM CLOUD LIMITED …APPLICANT

IN THE MATTER BETWEEN

ROLTA PRIVATE LIMITED AND ANR. …PLAINTIFFS

VS

VARANIUM CLOUD LIMITED AND ANR. …DEFENDANTS

CORAM :ABHAY AHUJA, J.

PRONOUNCED ON: 11 TH NOVEMBER, 2024.

Read full Judgment here : Click here.

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What is difference in procedure for trial of civil suit before civil court and commercial courts?

 In India, the procedures for trial of civil suits before a regular civil court and those under the Commercial Courts Act, 2015, are distinct. The differences are mainly due to the nature of the disputes they handle and the procedural requirements aimed at expediting commercial litigation. Here’s a detailed comparison:

Civil Court Procedures (under the Code of Civil Procedure, 1908):

1. Nature of Disputes:

   • Civil courts handle a wide array of civil disputes, including property disputes, family matters, contract disputes, tort claims, etc.

2. Pleadings:

   • The plaint and written statement are filed with general requirements. There is some flexibility regarding amendments to pleadings.

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Whether the Commercial court can call record from arbitral tribunal for deciding an application U/S 34 of Arbitration Act?

Perusal of Section 34 (2) (a) of the Act reveals that Court may

set aside the award if the party making the application establishes on

the basis of record of arbitral tribunal, meaning thereby that Court

can certainly go for perusal of the record and therefore, requisition of

record from arbitral tribunal is not akin to remanding the matter to

arbitral tribunal but to ascertain the exact nature of dispute through

record of case. Therefore, case of the petitioner is not supported by

relevant provision itself. {Para 19}

20. Since it is not a case of remand per se, therefore, judgments

relied upon by the petitioner are not applicable in the present set of

facts. The Commercial Court is within a domain to call for the record

from arbitral tribulnal for deciding the application under Section 34

(1) and (4) of the Act.

HIGH COURT OF MADHYA PRADESH

BENCH AT GWALIOR

:SINGLE BENCH:

{HON'BLE SHRI JUSTICE ANAND PATHAK}

Writ Petition No.4895/2022

Anil Kumar Tripathi Through its proprietor Vs. Doorsanchar Nigam Ltd. (BSNL)

(Passed on 8th day of April, 2022)

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Bombay HC: S 12-A Commercial Courts Act on Pre-Institution Mediation and Settlement Is A Mandatory Provision

 Thus, we hold that section 12A of the Act of 2015 is mandatory, and a commercial suit of specified value which does not contemplate any urgent interim relief under the Act of 2015, cannot not be instituted unless the plaintiff exhausts the remedy of pre-institution mediation in accordance with such manner and procedure as may be prescribed by rules made by the Central Government. Considering the object and purpose of Section 12A of being rooted in the public interest, there is no question of it being waived by a party. The findings in the impugned order to the contrary are set aside. {Para 34}

Bombay High Court

JUSTICE C. V. BHADANG JUSTICE NITIN JAMDAR

Deepak Raheja Vs. Ganga Taro Vazirani

COMMERCIAL APPEAL (L) NO. 11950 OF 2021

1st October 2021

Author: Nitin Jamdar, J.

Citation: 2021 NearLaw (BombayHC) Online 1747

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Whether Bar U/s 9(3) Arbitration Act is Applicable If Application Was Taken Up By Court Before Constitution Of Arbitration Tribunal?

The short question of law raised in this appeal is, whether the Court has the power to entertain an application under Section 9(1) of the Arbitration and Conciliation Act, 1996, hereinafter referred to as “the Arbitration Act”, once an Arbitral Tribunal has been constituted and if so, what is the true meaning and purport of the expression “entertain” in Section 9(3) of the Arbitration Act. The next question is, whether the Court is obliged to examine the efficacy of the remedy under Section 17, before passing an order under Section 9(1) of the Arbitration Act, once an Arbitral Tribunal is constituted.

107. It is reiterated that Section 9(1) enables the parties to an arbitration agreement to approach the appropriate Court for interim measures before the commencement of arbitral proceedings, during arbitral proceedings or at any time after the making of an arbitral award but before it is enforced and in accordance with Section 36 of the Arbitration Act. The bar of Section 9(3) operates where the application under Section 9(1) had not been entertained till the constitution of the Arbitral Tribunal. Of course it hardly need be mentioned that even if an application under Section 9 had been entertained before the constitution of the Tribunal, the Court always has the discretion to direct the parties to approach the Arbitral Tribunal, if necessary by passing a limited order of interim protection, particularly when there has been a long time gap between hearings and the application has for all practical purposes, to be heard afresh, or the hearing has just commenced and is likely to consume a lot of time. In this case, the High Court has rightly directed the Commercial Court to proceed to complete the adjudication.

In the Supreme Court of India

(Before Indira Banerjee and J.K. Maheshwari, JJ.)

Arcelor Mittal Nippon Steel India Ltd. Vs Essar Bulk Terminal Ltd

Civil Appeal No. 5700 of 2021 

Decided on September 14, 2021

Citation: 2021 SCC OnLine SC 718

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Whether S 12-A Commercial Courts Act on Pre-Institution Mediation and Settlement Is A Mandatory Provision?

Though, the word 'shall' in Section 12-A of the Act, sounds Prelitigation mediation is mandatory on the part of the plaintiff to explore Settlement before filing suit under Commercial Court Act, the Rule framed use the word 'Shall' and makes it an optional. Also even if one party go for pre-litigation mediation the other party may conveniently abstain from participating in the mediation and make it a non-starter. Even otherwise, mediator can proceed only if the both the parties appear and give consent to participate in the mediation process. Thus, it is very clear that on combined reading of the Commercial Courts

Act and the Rules framed thereunder, pre-litigation mediation is subject to urgency for any interim relief and the consent of the sparing parties.

25. In such circumstances, the Harmonious Interpretation takes us to the irresistible conclusion that Section 12-A of the Commercial Courts Act, is not a mandatory provision. The right to access justice which is a Constitutional Right cannot be denied or deprived for not resorting to mediation. The Court is not

substitute to Alternative Dispute Redressal, it is otherwise. The litigant cannot be denied the doors of justice for directly approaching the Court without exploring the possibility of mediation. There can be no prejudice to the defendant, if the defendant is ready for mediation, even after Institution of the suit. Also there is no impediment either for the party or for the Court to refer the pending matter to be resolved through mediation or any other Alternative Dispute Redressal mechanism. This provision is meant for the parties to work out an amicably settlement without involving in the adversary system of litigation. The intention of this Section is not to prevent access to justice or to aid anyone who refuse to subject himself to the judicial process. The intention is to avoid the procedural rigor and to arrive an amicable win-win settlement. Any other interpretation to Section 12-A of the Act contrary to the intention will amount to miscarriage of Justice. Therefore, this Court holds that there is no ground to entertain this Application seeking rejection of plaint. Hence, Application is dismissed with costs of Rs.10,000/-.

IN THE HIGH COURT OF JUDICATURE AT MADRAS

 A.No.35 of 2021 in C.S.No.669 of 2019

Shahi Exports Pvt Ltd. Vs  Gold Star Line Limited,

Coram:

 DR. JUSTICE G.JAYACHANDRAN

Pronounced on : 17.08.2021

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Whether Commercial court can set aside no written statement order by condoning the delay of 103 days in suit transferred from regular court to commercial court?

 The issue raised in this petition is, as to "whether a suit transferred from the regular Court to the Commercial Court, in view of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (hereinafter referred to as 'the Act'), would enable the Commercial Court to set aside the "No WS" Order by condoning delay of 103 days."

15. I find that, section 15(3) reproduced above would clearly indicate that the Commercial Court takes over the commercial suit after transfer and proceeds thereafter under the scheme of the Act. The very purpose and object of establishing the Commercial Courts, was to ensure that, the delay is eliminated and a speedy trial is achieved. There is no provision permitting the Commercial Court to move backwards and revert to an earlier stage for overcoming a legal impediment and then again leap forward. If the Commercial Court is to go backwards to set aside the "No WS" Order and then move forward by taking such a WS on record, it would defeat the very purpose for which the Act was introduced.

 In Mira Gehani, in paragraph No. 89, this Court has concluded that the Apex Court in catena of decisions has held that, considerations of equity cannot be ground/reason/justification not to follow the law, as is laid down by the legislature. In paragraph 91, this Court then concluded that, the aforesaid judgments merely indicate that, no matter, how harsh the result, if a statute stipulates that, an act must be performed within a certain period of time, and provides for no exceptions, then the Courts must not allow such an act to be performed after the expiry of the time mandated by the statute directly or indirectly.

31. In the backdrop of the law, as is settled, if the contentions of the petitioners is accepted, that even if the suit has been transferred, after the "no WS" order is passed and when no application is pending, would not preclude the Commercial Court to set aside the "no WS" order and permit filing of the written statement, this would completely nullify the intent and object of the legislature in introducing the commercial Courts Act. The Commercial Court would then be bestowed with the status of a "non-commercial Court", which is impermissible in law.

32. In view of the above, this Petition, being devoid of merit, is therefore, dismissed.

 IN THE HIGH COURT OF BOMBAY (AURANGABAD BENCH)

W.P. No. 7520 of 2019

Decided On: 01.08.2019

Raj Process Equipments and Systems Pvt. Ltd. and Ors. Vs.

Honest Derivatives Pvt. Ltd.

Hon'ble Judges/Coram:

R.V. Ghuge, J.

Citation: MANU/MH/3846/2019,2020(2) MHLJ 78.

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What is distinction between O 7 R 10 of CPC(Return of plaint) and S 10 of CPC(Stay of suit)?

At the outset, it is necessary to note a submission, of Mr. Sai Deepak, that Order VII Rule 10, and Section 10, of the CPC, were required to be read together. This submission deserves, in my opinion, to be rejected even at this stage. A bare reading of Section 10, and Order VII Rule 10, of the CPC, reveals that the submission of Mr. Sai Deepak is, in fact, contrary to the statutory scheme, as contemplated in the said provisions. Section 10 deals with stay of a pending suit, and reads thus:

"10. Stay of suit.-

No court shall proceed with the trial of any suit in which the matter in issue is also directly and substantially in issue in a previously instituted suit between the same parties, or between parties under whom they, or any of them claim litigating under the same title where such suit is pending in the same or any other Court in India having jurisdiction to grant the relief claimed, or in any Court beyond the limits of India established or continued by the Central Government and having like jurisdiction, or before the Supreme Court.

Explanation.-The pendency of the suit in a foreign Court does not preclude the Courts in India from trying the suit founded on the same cause of action."

Order VII Rule 10, per contra, deals with "return of plaint", and reads thus:

"10. Return of plaint.-

(1) 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.

Explanation.-For the removal of doubt, it is hereby declared that the Court of appeal or revision may direct, after setting aside the decree passed in the suit, the return of the plaint under this sub-rule.

(2) Procedure on returning plaint.-On returning of plaint, the Judge shall endorse thereon the date of its presentation and returned, the name of the party presenting it, and a brief statement of the reasons for returning it."

33. The plain words of Section 10, and Order VII Rule 10, of the CPC, disclose that they contemplate distinct eventualities, and envisage distinct consequences. Section 10 does not, in any manner, impact the maintainability of the suit, which is required to be stayed thereunder. The Supreme Court has, in National Institute of Mental Health & Neuro Sciences v. C. Parameshwara MANU/SC/1063/2004 : AIR 2005 SCC 242, held that Section 10 applies only where "the whole of the subject matter in both the suits is identical". The fundamental test, which would determine the applicability, or otherwise, of Section 10 has, in the said decision, been identified as "whether on final decision being reached in the previous suit, such a decision would operate as res judicata in the subsequent suit". The guiding philosophy, behind the provision is, quite obviously, the inadvisability of two courts dealing with identical disputes, between the same parties, concurrently. The progress of the later suit has, therefore, statutorily been required to await the outcome of the suit preferred earlier in point of time. As against this, Order VII Rule 10A specifically contemplates a situation in which the suit, imperilled by the provision, should not have been instituted in the court in which it was instituted. The provision, therefore, relates to the point of time, and the stage, when the suit was instituted in the court, in stark contradistinction with Section 10, which impedes the trial of the suit, but does not, even indirectly, visualize any lacuna in the institution of the suit. The consequence, of Section 10 being applicable to a particular case, is stay of the trial in that case. The plaint is not returned to the plaintiff, for institution elsewhere. As against this, Order VII Rule 10 stipulates that, where the suit was instituted in a court, in which it ought not to have been instituted, the plaint shall be returned to the plaintiff, for being instituted in the proper court. Invocation of Order VII Rule 10, therefore, results in removal, completely, of the suit, from the records of the court, where it was erroneously instituted, whereas invocation of Section 10 merely places the trial of the suit in, as it were, a state of suspended animation.

34. The contention of Mr. Sai Deepak that Section 10 and Order VII Rule 10 of the CPC are required to be read together is, therefore, fundamentally misconceived, and is accordingly rejected.

IN THE HIGH COURT OF DELHI

I.As. 2594, 2595, 2596, 4274 and 5209/2020 in CS (COMM.) 611/2019

Decided On: 15.07.2020

FMC Corporation  Vs. NATCO Pharma Limited

Hon'ble Judges/Coram:

C. Hari Shankar, J.

Citation: MANU/DE/1380/2020

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Pre-Institution Mediation under commercial courts Act 2018

12-A. Pre-Institution Mediation and Settlement.—(1) A suit, which does not contemplate any urgent interim relief under this Act, shall not be instituted unless the plaintiff exhausts the remedy of pre-institution mediation in accordance with such manner and procedure as may be prescribed by rules made by the Central Government.

(2) The Central Government may, by notification, authorise the Authorities constituted under the Legal Services Authorities Act, 1987 (39 of 1987), for the purposes of pre-institution mediation.

NOTIFICATION

Noti. No. S.O. 3232(E), dated July 3, 2018.—In exercise of the powers conferred by sub-section (2) of Section 12-A of the Commercial Courts Act, 2015, the Central Government hereby authorises the State Authority and District Authority constituted under the Legal Services Authorities Act, 1987 (39 of 1987), for the purposes of pre-institution mediation and settlement under Chapter IIIA of the Commercial Courts Act, 2015.

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Whether commercial court has jurisdiction to grant injunction as per S 9 of arbitration Act?

Admittedly, in the present case, the dispute pertains to arbitration matter. The Petitioner is seeking the relief of injunction not under any other law but under Section 9 of the Arbitration Act, the subject matter of the arbitration is admittedly not less than Rs. 1 crore and therefore, the subject matter of arbitration being a 'commercial dispute' of a 'specified value', it has to be held that, Commercial Court will alone have the jurisdiction to entertain this arbitration application.

17. If the submissions advanced by learned counsel for the Petitioner that this being an application simpliciter for injunction, Civil Court alone will have the jurisdiction to entertain it, is to be accepted, then the very object of enacting Section 10(3) and of establishing the Commercial Courts will be frustrated. As a matter of fact the ingenuity of the legal profession is such that any dispute can be brought under the wide umbrella of the injunction suit with the claim that the relief claimed is not susceptible to monetary value. However, the Court has to see the real nature of the relief, which is sought and decide the jurisdiction of the Court accordingly.

18. Here, in the case, the real nature of the dispute is the arbitration agreement, the subject matter of which is above Rs. 1 crore; it is a dispute of commercial nature. Hence, even if, the relief claimed is simpliciter for injunction, as the subject matter of dispute falls within the jurisdiction of Commercial Court, in view of provisions of Section 10(3) of the Commercial Courts Act, the learned Principal District Judge, Satara, has rightly transferred the arbitration application to the Commercial Court.

IN THE HIGH COURT OF BOMBAY

Writ Petition No. 3119 of 2018

Decided On: 05.04.2018

 D.M. Corporation Pvt. Ltd. Vs. The State of Maharashtra and Ors.

Hon'ble Judges/Coram:

Dr. Shalini Phansalkar Joshi, J.

Citation: 2018(4) MHLJ 457

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Landmark Judgment of supreme court on interpretation of implied terms in contract

 We now proceed to apply the aforesaid principles which have evolved for interpreting the terms of a commercial contract in question. Parties indulging in commerce act in a commercial sense. It is this ground rule which is the basis of The Moorcock test of giving ‘business efficacy’ to the transaction, as must have been intended at all events by both business parties. The development of law saw the ‘five condition test’ for an implied condition to be read into the contract including the ‘business efficacy’ test. It also sought to incorporate ‘The Officious Bystander Test’ [Shirlaw v. Southern Foundries (supra)]. This test has been set out in B.P. Refinery (Westernport) Proprietary Limited v. The President Councillors and Ratepayers of the Shire of Hastings (supra) requiring the requisite conditions to be satisfied: (1) reasonable and equitable; (2) necessary to give business efficacy to the contract; (3) it goes without saying, i.e., The Officious Bystander Test; (4) capable of clear expression; and (5) must not contradict any express term of the contract. The same penta-principles find reference also in Investors Compensation Scheme Ltd. v. West Bromwich Building Society (supra) and Attorney General of Belize v. Belize Telecom Ltd. (supra). Needless to say that the application of these principles would not be to substitute this Court's own view of the presumed understanding of commercial terms by the parties if the terms are explicit in their expression. The explicit terms of a contract are always the final word with regards to the intention of the parties. The multi-clause contract inter se the parties has, thus, to be understood and interpreted in a manner that any view, on a particular clause of the contract, should not do violence to another part of the contract.

 We may, however, in the end, extend a word of caution. It should certainly not be an endeavour of commercial courts to look to implied terms of contract. In the current day and age, making of contracts is a matter of high technical expertise with legal brains from all sides involved in the process of drafting a contract. It is even preceded by opportunities of seeking clarifications and doubts so that the parties know what they are getting into. Thus, normally a contract should be read as it reads, as per its express terms. The implied terms is a concept, which is necessitated only when the Penta-test referred to aforesaid comes into play. There has to be a strict necessity for it. In the present case, we have really only read the contract in the manner it reads. We have not really read into it any ‘implied term’ but from the collection of clauses, come to a conclusion as to what the contract says. The formula for energy charges, to our mind, was quite clear. We have only expounded it in accordance to its natural grammatical contour, keeping in mind the nature of the contract.

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

(Before Rohinton Fali Nariman and Sanjay Kishan Kaul, JJ.)

Nabha Power Limited (NPL) .

v.

Punjab State Power Corporation Limited (PSPCL) & Anr. 

Civil Appeal No. 179 of 2017

Decided on October 5, 2017

Citation:2017 SCC OnLine SC 1239

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