Case Note & Summary
The Commercial Appeal arose from an order passed by a learned Single Judge of the Commercial Division of the Bombay High Court in Summons for Judgment No. 111 of 2014 in Summary Suit No. 776 of 2014. The original plaintiff, IDBI Trusteeship Service Limited, had filed the summary suit seeking a decree exceeding Rs. 33 crores. The suit was filed on 11 September 2014 in the ordinary original civil jurisdiction before the Commercial Courts Act, 2015 came into force. During its pendency, the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Ordinance, 2015 was promulgated, followed by the Commercial Courts Act, 2015, which retrospectively came into effect from 23 October 2015. Acting on administrative orders, the Chief Justice of the Bombay High Court constituted the Commercial Division and assigned all summary suits, including the present one, to a nominated judge. Summons for Judgment was argued on 12 and 14 January 2016 before the Commercial Division judge and was reserved for orders. The suit was formally transferred to the Commercial Division by a notice dated 13 May 2016. The impugned order granting conditional leave to defend was passed on 6 June 2016. The appellant original defendant filed Commercial Appeal No. 7 of 2016 on 12 July 2016 under Section 13 of the Commercial Courts Act. The respondent raised a preliminary objection to the maintainability of the appeal, contending that the original suit was not filed as a commercial suit and the order was not by a Commercial Court. The court relisted the matter to decide the maintainability issue, examining the background, the Act's provisions, and the nature of the summary suit. The text of the judgment provided does not contain the court's final decision on the preliminary objection.
Headnote
A) Commercial Courts Act, 2015 - Section 2(c) - Commercial Dispute - Dispute arising out of ordinary transactions of merchants, bankers, financiers and traders relating to mercantile documents, including enforcement and interpretation, falls within definition of commercial dispute under Section 2(c)(i) - Recovery suit under Debenture Trust Deed and Subscription Agreement qualifies as commercial dispute (Paras 8, 11).
B) Commercial Courts Act, 2015 - Section 13(1A) - Appeal to Commercial Appellate Division - Maintainability of appeal from order of Commercial Division in summary suit - Order on Summons for Judgment under Order 37 Rule 3 CPC constitutes 'judgment' appealable under Section 13(1A) if passed by judge nominated as Commercial Division - Preliminary objection to maintainability raised due to confusion after transfer of pending suits to Commercial Division - Court examined constitution of Commercial Division, assignment orders, and whether suit met specified value (Para 2).
Issue of Consideration
Whether an appeal under Section 13(1A) of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 is maintainable against an order passed by the Commercial Division granting conditional leave to defend in a summary suit, when the suit was filed and the summons for judgment argued before the Act came into force, but the order was passed after transfer to the Commercial Division.
Law Points
- Commercial Courts Act
- 2015
- Section 2(c) definition of commercial dispute
- Section 13 appeal against judgment of Commercial Division
- maintainability of appeal against conditional leave to defend in summary suit
- specified value
- transfer of pending suits to Commercial Division
- administrative orders of Chief Justice
Case Details
2016 LawText (BOM) (10) 90
Commercial Appeal No. 7 of 2016 in Summons for Judgment No. 111 of 2014 in Summary Suit No. 776 of 2014
Anoop V. Mohta, G.S. Kulkarni
Janak Dwarkadas, Simil Purohit, Aditya Thakkar, Nishit Dhruva, Prakash Shinde, Chirag Bhavsar (for appellant); F. E. Devitre, Kunal Dwarkadas, Verghese Thomas, Aditi V. Deshpande, Yohana Lumathawalla (for respondent)
IDBI Trusteeship Service Limited
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Nature of Litigation
Commercial Appeal against order granting conditional leave to defend in a summary suit filed for recovery under a Debenture Trust Deed and Subscription Agreement.
Remedy Sought
Appellant (Original Defendant) sought to challenge the conditional leave to defend, praying for unconditional leave or modification of conditions.
Filing Reason
Dispute arose from alleged default in payment obligations under debenture trust deeds, leading the plaintiff to file a summary suit for recovery.
Previous Decisions
Summons for Judgment disposed of by Single Judge of Commercial Division on 6 June 2016, granting conditional leave to defend subject to deposit of a sum.
Issues
Whether an appeal under Section 13(1A) of the Commercial Courts Act, 2015 is maintainable against an order granting conditional leave to defend in a summary suit passed by a judge nominated as the Commercial Division.
Whether the suit qualifies as a commercial dispute under Section 2(c) of the Commercial Courts Act, 2015.
Whether the condition of specified value is satisfied for the appeal to lie.
Whether the transfer of the suit to the Commercial Division after the Act came into force affects the maintainability of the appeal.
Whether the appeal against such order requires separate leave under the Letters Patent.
Submissions/Arguments
Respondent raised preliminary objection that the Commercial Appeal is not maintainable because the suit was originally filed as an ordinary summary suit before the Act, and the order is not by a Commercial Court as the suit was transferred only later; thus, the appeal lies only under the Letters Patent and not under Section 13.
Appellant contended that the impugned order was passed by the Commercial Division judge, the suit involves a commercial dispute of specified value, and an order on Summons for Judgment is a 'judgment' appealable under Section 13(1A) without any requirement of separate leave.
Judgment Excerpts
This Commercial Appeal is filed by the Appellant-Original Defendant against the Judgment and order dated 6 June 2016, passed by the learned Single Judge of the Commercial Division in Summons for Judgment whereby, refused an unconditional leave to defend and has granted a leave to defend, but conditional.
Section 2(c) "commercial dispute" means a dispute arising out of (i) ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents;
On 13 May 2016, pending the final order in the Summons for Judgment, the captioned Summary Suit was formally transferred by a notice issued by the High Court (along with several other suits and proceedings) to the Commercial Divisions of this Court.
Procedural History
Summary Suit No. 776 of 2014 filed on 11 September 2014; Summons for Judgment argued on 12 and 14 January 2016 and reserved for orders; Suit formally transferred to Commercial Division on 13 May 2016; Impugned order granting conditional leave to defend passed on 6 June 2016; Commercial Appeal No. 7 of 2016 filed on 12 July 2016; Appeal listed for hearing on maintainability on 29 August 2016.
Acts & Sections
- Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015: 2(c), 3, 4, 5, 6, 8, 13, 21, 23
- Code of Civil Procedure, 1908: Order 37 Rule 3
