Case Note & Summary
The dispute arose in a commercial suit where the Plaintiff had determined the Specified Value at Rs. 20,000, which was below the threshold of Rs. 3 lakhs prescribed under the Commercial Courts Act, 2015. The Original Defendant filed a Review Petition seeking to challenge the earlier judgment in Axis Bank Limited v. Mira Gehani that had held that a written statement in a commercial suit cannot be taken on record after the expiry of 120 days from service of summons. The Defendant contended that its contention regarding the non‑applicability of the CPC amendments to commercial disputes not of a Specified Value had not been decided. Liberty was granted to file the Review. The core legal issue was whether the amendments to the Code of Civil Procedure, 1908 introduced by the Commercial Courts Act – particularly the time limit for filing written statement – apply to commercial disputes that do not meet the Specified Value but are nonetheless placed before the Commercial Division by virtue of the proviso to Section 7. The Petitioner argued that Section 16(1) of the Commercial Courts Act expressly states that the CPC stands amended only in respect of a commercial dispute of a Specified Value, and that a literal interpretation must be given effect. The Petitioner relied on several decisions to support a plain reading of the statute. The Court, after examining the legislative scheme and noting that Section 7 first proviso only extends jurisdiction without altering the definition of ‘commercial dispute’, answered the question in the negative, holding that the CPC amendments are confined to disputes of a Specified Value. The Review Petition was accordingly disposed of, and the Notice of Motion (L) No. 2118 of 2018 was also disposed of, with a direction that other applications for condonation of delay would be heard on their own merits.
Headnote
A) Civil Procedure – Commercial Courts Act, 2015 – Applicability of CPC Amendments – Code of Civil Procedure, 1908, Order VIII Rule 1; Commercial Courts Act, 2015, Sections 2(i), 4, 7, 16, Schedule – The question was whether the mandatory 120‑day limit for filing written statement, introduced by the Commercial Courts Act, applies to commercial disputes not of a Specified Value but heard by the Commercial Division under the proviso to Section 7. The Petitioner argued that Section 16(1) plainly restricts amendments to suits involving a Specified Value. The Court held that the language of Section 16 is unambiguous and limits the application of CPC amendments to disputes of a Specified Value only; the proviso to Section 7 confers jurisdiction but does not extend the amendments to sub‑Specified Value matters. (Paras 6, 8.9, 9, 10)
Issue of Consideration
whether the amendments introduced to the CPC by the Commercial Courts Act apply to Commercial Disputes not of a Specified Value but nonetheless heard by a Commercial Division in view of the proviso to Section 7 of the Commercial Courts Act ?
Law Points
- Amendments to CPC by Commercial Courts Act apply only to commercial disputes of a Specified Value
- not to commercial disputes not of a Specified Value
- even if heard by Commercial Division under proviso to Section 7
Case Details
2019 LawText (BOM) (06) 100
Review Petition (L) No. 15 of 2019 in Commercial Suit No. 316 of 2018 along with Notice of Motion Commercial Division (L) No. 2118 of 2018
Mr. Rashmin Khandekar, Mr. Shashwat Rai, Mr. Nausher Kohli, Mr. K.R. Parekh
Leitz Tooling Systems India Private Limited
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Nature of Litigation
Review petition seeking review of an earlier judgment on the question of law regarding applicability of CPC amendments in commercial suits where specified value is below the threshold
Remedy Sought
Petitioner sought review of order dated 27 February 2019, contending that the amendments to CPC introduced by Commercial Courts Act do not apply to commercial disputes not of a Specified Value, and that the written statement should not be restricted to 120 days in the present suit where Specified Value is Rs.20,000
Filing Reason
The petitioner's contention that the amendments to CPC are not applicable to commercial disputes below Specified Value was not decided in the earlier judgment, and liberty was granted to file review
Previous Decisions
Earlier judgment in Axis Bank Limited vs. Mira Gehani held that in commercial suits, written statement cannot be taken on record after 120 days, but did not address the specific contention regarding disputes not of Specified Value
Issues
Whether the amendments introduced to the CPC by the Commercial Courts Act apply to Commercial Disputes not of a Specified Value but nonetheless heard by a Commercial Division in view of the proviso to Section 7 of the Commercial Courts Act?
Submissions/Arguments
Petitioner argued that Section 16(1) of the Commercial Courts Act plainly states that the CPC stands amended only in respect of a commercial dispute of a Specified Value; since the suit's Specified Value is Rs.20,000, the 120‑day limit for written statement does not apply.
Petitioner contended that the whole scheme of the Act links commercial disputes with Specified Value and a literal interpretation must be followed.
Petitioner relied on the decisions in Indian Overseas Bank v. Jason Deckor P. Ltd., Nagarjuna Fertilizers & Chemicals Limited v. Tecnimont SpA & Ors., Invoke Medical System Pvt. Ltd. v. Kunal Structure (India) Pvt. Ltd., Samsung Leasing Ltd. & Ors. v. Samsung Electronic Co. Ltd. & Anr., and OCI Corporation v. Kandla Export Corporation & Ors.
Judgment Excerpts
the question of law being decided by this Order is whether the amendments introduced to the CPC by the Commercial Courts Act apply to Commercial Disputes not of a Specified Value but nonetheless heard by a Commercial Division in view of the proviso to Section 7 of the Commercial Courts Act ?
Amongst other amendments introduced to the CPC by the Commercial Courts Act, an amendment was introduced mandating that a Written Statement in a Commercial Courts Act cannot be filed after 120 days from the service of writ of summons.
Appearing for the Petitioner, Advocate Mr. Rashmin Khandekar submitted that Section 16 (1) of the Commercial Courts Act makes it clear that the provisions of the CPC stood amended only in respect of Commercial Disputes of a Specified Value. He submitted that this Court ought to literally interpret Section 16 for its language is plain and unambiguous.
Procedural History
The Original Defendant filed a Praecipe on 7 March 2019 seeking to speak to the minutes of the order dated 27 February 2019 in Axis Bank Limited v. Mira Gehani. The Court on 8 March 2019 noted that the Defendant’s contention about applicability of CPC amendments to disputes not of a Specified Value was not argued, and directed that a Review Petition may be filed. The present Review Petition (L) No. 15 of 2019 was then filed, and the Court restricted the order to answering the legal question and disposing of Notice of Motion (L) No. 2118 of 2018.
Acts & Sections
- Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015: 2(i), 4, 7, 16, Schedule
- Code of Civil Procedure, 1908: Order VIII Rule 1
- Trade Marks Act, 1999: 134
- Copyright Act, 1957: 62
- Designs Act, 2000: 22(4)
- Patents Act, 1970: 104
