The Commercial Courts, Act, 2015 – A broad framework
In order to ensure speedy disposal of disputes which arises from commercial transactions involving high value, the Parliament of India has come out with a unique legislation namely, The Commercial Courts, Act, 2015; wherein Commercial Courts / Divisions are to be constituted in the existing district Courts and in High Courts; and wherein disputes arising from specified commercial dealings involving claim of Rs.1.00 Crore or above would be adjudicated by these newly constituted commercial Courts / Divisions. By virtue of recent Amendments, the limit of Rs.1.00 crore has been reduced to Rs.3.00 Lakhs; and accordingly claims relating to commercial disputes involving Rs.3.00 Lakhs could now be maintainable under this special regime.
And accordingly, the Code of Civil Procedure, 1908, is substantially amended, wherein new Order XIII-A and XV-A are inserted, apart from new Order XI, Sections 35 for costs, Verification of Pleadings as contained in Order VI Rule 15A, Order VIII which prescribes the time limit within which the Written Statement must be filed, failing which the Defendant loses his right to file his Defense.
Among other things, the outstanding feature of adjudication by these newly constituted Commercial Courts / Division is that, the powers of these Courts to adjudicate commercial disputes before them in a Summary fashion, without formal leading of evidences, and also provides for the time bound disposal of these cases.
The other outstanding feature of this new law is, the manner in which the pleadings are to be filed by both the litigating parties; and thereby Order VI Rule 15A of CPC, 1908, inter alia, provides the strict manner in which the Verification of pleading is to be done by both the litigating parties. The profound object of Verification of Pleading is to prevent or cease frivolous claims and meritless defenses, and thus this newly inserted Order VI Rule 15A makes a solid ground to discourage frivolous claims and meritless defenses.
A quick look at the Procedure
1. Compulsory Mediation u/s 12A of the Commercial Courts Act, 2015.
2. Institution / Filing of Suit
3. Applying for Ad-Interim / Interim Relief, if any, by filing Notice of Motion, followed by Hearing of the Notice of Motion
4. Tendering Draft Summons before Court
5. Service of Summons
6. Application by Defendant, if any, for Rejection of Plaint, challenging jurisdiction, etc.
7. Filing of Written Statement by Defendants
8. Applying for Ex-parte decree
9. Inspection of Documents
10. Admission / denial , Production of documents, etc
11. Administering Interrogatories
12. Judgment on Admission / Notice to admit documents and / or facts /
13. Applying for Summary Judgment
14. Hearing of the Suit according to “Case Management Hearing”
15. Framing of Issues
16. Filing of Evidence
17. Final arguments
18. Judgment
What commercial disputes would be adjudicated under this newly constituted jurisdiction is defined u/s 2(1)(c) of the said Act of 2015. They are –
i. A dispute arising out of ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents;
ii. A dispute arising out of export or import of merchandise or services;
iii. A dispute arising out of issues relating to admiralty and maritime law;
iv. A dispute arising out of transactions relating to aircraft, aircraft engines, aircraft equipment and helicopters, including sales, leasing and financing of the same;
v. A dispute arising out of carriage of goods;
vi. A dispute arising out of construction and infrastructure contracts, including tenders;
vii. A dispute arising out of agreements relating to immovable property used exclusively in trade or commerce;
viii. A dispute arising out of franchising agreements;
ix. A dispute arising out of distribution and licensing agreements;
x. A dispute arising out of management and consultancy agreements;
xi. A dispute arising out of joint venture agreements;
xii. A dispute arising out of shareholders agreements;
xiii. A dispute arising out of subscription and investment agreements pertaining to the services industry including outsourcing services and financial services;
xiv. A dispute arising out of mercantile agency and mercantile usage;
xv. A dispute arising out of partnership agreements;
xvi. A dispute arising out of technology development agreements;
xvii. A dispute arising out of intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits;
xviii. A dispute arising out of agreements for sale of goods or provision of services;
xix. A dispute arising out of exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum;
xx. A dispute arising out of insurance and re-insurance;
xxi. A dispute arising out of contracts of agency relating to any of the above; and
xxii. Such other commercial disputes as may be notified by the Central Government.
The broad framework of this newly constituted jurisdiction may thus be summarized to say that, certain disputes of commercial nature, involving claim of Rs.3.00 Lakhs or above, would be adjudicated under this jurisdiction. The commercial disputes with the State Govts / Central Govts / any other instrumentality of the State are also included in this regime.
Further, a commercial dispute (a) involving the recovery of immovable property; or (b) involving the realization of Monies out of immovable property which were given as security; or (c) involving any other relief pertaining to immovable property, may still be considered as a “commercial dispute”, and may be adjudicated under this special jurisdiction.
Computation of Value of subject matter of commercial dispute which are to be filed before Commercial Courts / Divisions
Section 12 of the Act deals with the valuation of the subject matter of dispute. It says that value of the subject-matter of the commercial dispute in a suit, Appeal or Application would be determined in the following manner –
1. Where the relief sought in a suit or application is for recovery of money, the money sought to be recovered in the suit or application inclusive of interest, if any, computed up to the date of filing of the suit or application, as the case may be, shall be taken into account for determining value of the subject matter;
2. Where the relief sought in a suit, appeal or application relates to movable property or to a right therein, the market value of the movable property as on the date of filing of the suit, appeal or application, as the case may be, shall be taken into account for determining value of the subject matter;
3. Where the relief sought in a suit, appeal or application relates to immovable property or to a right therein, the market value of the immovable property, as on the date of filing of the suit, appeal or application, as the case may be, shall be taken into account for determining value of the subject matter;
4. Where the relief sought in a suit, appeal or application relates to any other intangible right, the market value of the said rights as estimated by the plaintiff shall be taken into account for determining value of the subject matter;
5. Where the counterclaim is raised in any suit, appeal or application, the value of the subject-matter of the commercial dispute in such counterclaim as on the date of the counterclaim shall be taken into account.
6. The aggregate value of the claim and counterclaim, if any as set out in the statement of claim and the counterclaim, if any, in an arbitration of a commercial dispute shall be the basis for determining whether such arbitration is subject to the jurisdiction of a Commercial Division, Commercial Appellate Division or Commercial Court, as the case may be.
Pleadings in respect of Suit to be filed before “Commercial Court / division”
As may be applicable to the facts of the case:
1. The Plaintiffs state that Plaintiffs claim interest in respect of a commercial transaction within the meaning of section 34 of the Code of Civil Procedure, 1908, and such interest is claimed under the terms of the contract / under an _____Act, / ______ (if there is some other basis, state the basis). The Plaintiffs further say that interest is claimed @ ___ per annum; and is claimed for the period starting from (date) to (date); and the interest amount claimed is Rs._____. The Plaintiffs further state that thereafter Rs.____ accrues everyday towards the interest.
2. The Plaintiffs state that all the documents in the power, possession, control or custody of the plaintiffs, pertaining to the facts and circumstances of the proceedings initiated by the Plaintiffs, are disclosed herein and copies thereof are annexed with the plaint, and the plaintiffs does not have any other documents in its power, possession, control or custody. The Plaintiffs further state that _____ (these) documents are in the power, possession, control or custody of the defendant, and crave leave to produce the same by the defendant herein.
3. In case of urgent filings, it may be stated The Plaintiffs crave leave to rely on additional documents. (And subject to grant of such leave by Court, the plaintiff shall file such additional documents in Court, within thirty days of filing the suit, along with a declaration on oath stated hereinabove.
4. The Plaintiffs / Defendants rely on Electronic Record (Email / SMSs / Tape Recorded conversation / CCTV footage / Whats app chat / any other Electronic Record) and the same are reproduced in the form of printouts / CD / DVD / any other storage device.
5. The Plaintiffs / Defendants further state that –
(a) the parties to such Electronic Record;
(b) the manner in which such electronic record was produced and by whom;
(c) the dates and time of preparation or storage or issuance or receipt of each such electronic record;
(d) the source of such electronic record and date and time when the electronic record was printed;
(e) in case of email ids, details of ownership, custody and access to such email ids;
(f) in case of documents stored on a computer or computer resource (including on external servers or cloud), details of ownership, custody and access to such data on the computer or computer resource;
(g) deponent's knowledge of contents and correctness of contents;
(h) whether the computer or computer resource used for preparing or receiving or storing such document or data was functioning properly or in case of malfunction that such malfunction did not affect the contents of the document stored;
(i) that the printout or copy furnished was taken from the original computer or computer resource.
6. Jurisdiction Clause: The Plaintiffs state that present dispute is a Commercial dispute within the meaning of definition of Commercial dispute provided u/s 2(1)(c) of The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015.
The mandatory nature of contents in Written Statement of the Defendant
O.8 R.3A:
3A. Denial by the defendant in suits before the Commercial Division of the High Court or the Commercial Court
(1) Denial shall be in the manner provided in sub-rules (2), (3), (4) and (5) of this Rule.
(2) The defendant in his written statement shall state which of the allegations in the particulars of plaint he denies, which allegations he is unable to admit or deny, but which he requires the plaintiff to prove, and which allegations he admits.
(3) Where the defendant denies an allegation of fact in a plaint, he must state his reasons for doing so and if he intends to put forward a different version of events from that given by the plaintiff, he must state his own version.
(4) If the defendant disputes the jurisdiction of the Court he must state the reasons for doing so, and if he is able, give his own statement as to which Court ought to have jurisdiction.
(5) If the defendant disputes the plaintiff’s valuation of the suit, he must state his reasons for doing so, and if he is able, give his own statement of the value of the suit.
O.8 R.5 proviso:
Provided further that every allegation of fact in the plaint, if not denied in the manner provided under Rule 3A of this Order, shall be taken to be admitted except as against a person under disability.
O.8 R.10 proviso:
Provided further that no Court shall make an order to extend the time provided under Rule 1 of this Order for filing of the written statement.
O.11 R.1(7)(8)(9)(10)(11)(12)
1.(7) The defendant shall file a list of all documents and photocopies of all documents, in its power, possession, control or custody, pertaining to the suit, along with the written statement or with its counterclaim if any, including
(a) the documents referred to and relied on by the defendant in the written statement;
(b) the documents relating to any matter in question in the proceeding in the power, possession, control or custody of the defendant, irrespective of whether the same is in support of or adverse to the defendant’s defence;
(c) nothing in this Rule shall apply to documents produced by the defendants and relevant only
(i) for the cross-examination of the plaintiff’s witnesses,
(ii) in answer to any case set up by the plaintiff subsequent to the filing of the plaint, or
(iii) handed over to a witness merely to refresh his memory.
1.(8) The list of documents filed with the written statement or counterclaim shall specify whether the documents, in the power, possession, control or custody of the defendant, are originals, office copies or photocopies and the list shall also set out in brief, details of parties to each document being produced by the defendant, mode of execution, issuance or receipt and line of custody of each document.
1.(9) The written statement or counterclaim shall contain a declaration on oath made by the deponent that all documents in the power, possession, control or custody of the defendant, save and except for those set out in sub-rule (7) (c) (iii) pertaining to the facts and circumstances of the proceedings initiated by the plaintiff or in the counterclaim, have been disclosed and copies thereof annexed with the written statement or counterclaim and that the defendant does not have in its power, possession, control or custody, any other documents.
1.(10) Save and except for sub-rule (7) (c) (iii), defendant shall not be allowed to rely on documents, which were in the defendant’s power, possession, control or custody and not disclosed along with the written statement or counterclaim, save and except by leave of Court and such leave shall be granted only upon the defendant establishing reasonable cause for non-disclosure along with the written statement or counterclaim.
1.(11) The written statement or counterclaim shall set out details of documents in the power, possession, control or custody of the plaintiffs, which the defendant wishes to rely upon and which have not been disclosed with the plaint, and call upon the plaintiff to produce the same.
1.(12) Duty to disclose documents, which have come to the notice of a party, shall continue till disposal of the suit.
O.8 R.1 proviso:
Provided that where the defendant fails to file the written statement within the said period of thirty days, he shall be allowed to file the written statement on such other day, as may be specified by the Court, for reasons to be recorded in writing and on payment of such costs as the Court deems fit, but which shall not be later than one hundred twenty days from the date of service of summons and on expiry of one hundred twenty days from the date of service of summons, the defendant shall forfeit the right to file the written statement and the Court shall not allow the written statement to be taken on record.
LIST OF DOCUMENTS RELIED UPON (applicable both to the Plaintiffs and the defendants)
In cases of Suits involving "Commercial disputes" and which are filed before Commercial Court / Division, the nature of contents for each of the document herein would be -
1. Exhibit "A": The document, which is in the possession / custody of the Plaintiffs and relied herein, is original / office copy / photocopy; and the parties to such document are ____________; and the said document (mode of execution of the document); issuance or receipt of the document; the custody of document.
2. Exhibit "B":
3. Exhibit "C":
4. Exhibit "D":
5. Exhibit "E":
6. The documents referred to and relied upon in the Plaint.
7. The documents in the possession of the Defendants.
Any other document, with the leave of the Hon'ble Court.
AFFIDAVIT IN SUPPORT OF THE PLAINT / WRITTEN STATEMENT
The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 provides for a different manner in which pleadings in Commercial dispute Suits are to be verified. The text of Order VI R.15A is reproduced hereinbelow –
R.15A: Verification of pleadings in a commercial dispute:
(1) Notwithstanding anything contained in Rule 15, every pleading in a commercial dispute shall be verified by an affidavit in the manner and form prescribed in the Appendix to this Schedule.
(2) An affidavit under sub-rule (1) above shall be signed by the party or by one of the parties to the proceedings, or by any other person on behalf of such party or parties who is proved to the satisfaction of the Court to be acquainted with the facts of the case and who is duly authorized by such party or parties.
(3) Where a pleading is amended, the amendments must be verified in the form and manner referred to in sub-rule (1) unless the Court orders otherwise.
(4) Where a pleading is not verified in the manner provided under sub-rule (1), the party shall not be permitted to rely on such pleading as evidence or any of the matters set out therein.
(5) The Court may strike out a pleading which is not verified by a Statement of Truth, namely, the affidavit set out in the Appendix to this Schedule.
STATEMENT OF TRUTH [O.6 R.15A(5)]
I, __________ the deponent do hereby solemnly affirm and declare as under:
1. I am the party in the above suit and competent to swear this affidavit.
2. I am sufficiently conversant with the facts of the case and have also examined all relevant documents and records in relation thereto.
3. I say that the statements made in -----paragraphs are true to my knowledge and statements made in -----paragraphs are based on information received which I believe to be correct and statements made in ---paragraphs are based on legal advice.
4. I say that there is no false statement or concealment of any material fact, document or record and I have included information that is according to me, relevant for the present suit.
5. I say that all documents in my power, possession, control or custody, pertaining to the facts and circumstances of the proceedings initiated by me have been disclosed and copies thereof annexed with the plaint, and that I do not have any other documents in my power, possession, control or custody.
6. I say that the above-mentioned pleading comprises of a total of ---- pages, each of which has been duly signed by me.
7. I state that the Annexures hereto are true copies of the documents referred to and relied upon by me.
8. I say that I am aware that for any false statement or concealment, I shall be liable for action taken against me under the law for the time being in force.
Place:
Date:
DEPONENT
VERIFICATION
I, ………………………. do hereby declare that the statements made above are true to my knowledge. Verified at [place] on this [date]
DEPONENT
Inspection of documents by respective parties
O.11 R.3:
3.(1) All parties shall complete inspection of all documents disclosed within thirty days of the date of filing of the written statement or written statement to the counterclaim, whichever is later. The Court may extend this time limit upon application at its discretion, but not beyond thirty days in any event.
3.(2) Any party to the proceedings may seek directions from the Court, at any stage of the proceedings, for inspection or production of documents by the other party, of which inspection has been refused by such party or documents have not been produced despite issuance of a notice to produce.
3.(3) Order in such application shall be disposed of within thirty days of filing such application, including filing replies and rejoinders (if permitted by Court) and hearing.
3.(4) If the above application is allowed, inspection and copies thereof shall be furnished to the party seeking it, within five days of such order.
3.(5) No party shall be permitted to rely on a document, which it had failed to disclose or of which inspection has not been given, save and except with leave of Court.
3.(6) The Court may impose exemplary costs against a defaulting party, who wilfully or negligently failed to disclose all documents pertaining to a suit or essential for a decision therein and which are in their power, possession, control or custody or where a Court holds that inspection or copies of any documents had been wrongfully or unreasonably withheld or refused.
Admission and denial of documents by respective parties
O.11 R.4:
4.(1) Each party shall submit a statement of admissions or denials of all documents disclosed and of which inspection has been completed, within fifteen days of the completion of inspection or any later date as fixed by the Court.
4.(2) The statement of admissions and denials shall set out explicitly, whether such party was admitting or denying
(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.
Explanation: A statement of admission or denial of the existence of a document made in accordance with sub-rule (2)(b) shall include the admission or denial of the contents of a document.
4.(3) Each party shall set out reasons for denying a document under any of the above grounds and bare and unsupported denials shall not be deemed to be denials of a document and proof of such documents may then be dispensed with at the discretion of the Court.
4.(4) Any party may however submit bare denials for third party documents of which the party denying does not have any personal knowledge of, and to which the party denying is not a party to in any manner whatsoever.
4.(5) An Affidavit in support of the statement of admissions and denials shall be filed confirming the correctness of the contents of the statement.
4.(6) In the event that the Court holds that any party has unduly refused to admit a document under any of the above criteria,– costs (including exemplary costs) for deciding on admissibility of a document may be imposed by the Court on such party.
4.(7) The Court may pass orders with respect to admitted documents including for waiver of further proof thereon or rejection of any documents.
Seeking production of documents by any of the respective parties:
O.11 R.5:
5.(1) Any party to a proceeding may seek or the Court may order, at any time during the pendency of any suit, production by any party or person, of such documents in the possession or power of such party or person, relating to any matter in question in such suit.
5.(2) Notice to produce such document shall be issued in the Form provided in Form No. 7 in Appendix C to the Code of Civil Procedure, 1908.
5.(3) Any party or person to whom such notice to produce is issued shall be given not less than seven days and not more than fifteen days to produce such document or to answer to their inability to produce such document.
5.(4) The Court may draw an adverse inference against a party refusing to produce such document after issuance of a notice to produce and where sufficient reasons for such non–production are not given and order costs.
Discovery of any fact by administering Interrogatories by any of the Parties
O.11 R.2:
2.(1) In any suit the plaintiff or defendant by leave of the court may deliver interrogatories in writing for the examination of the opposite parties or any one or more of such parties, and such interrogatories when delivered shall have a note at the foot thereof stating which of such interrogatories each of such persons is required to answer:
Provided that no party shall deliver more than one set of interrogatories to the same party without an order for that purpose: Provided further that interrogatories which do not relate to any matters in question in the suit shall be deemed irrelevant, notwithstanding that they might be admissible on the oral cross-examination of a witness.
2.(2) On an application for leave to deliver interrogatories, the particular interrogatories proposed to be delivered shall be submitted to the court, and that court shall decide within seven days from the day of filing of the said application, in deciding upon such application, the court shall take into account any offer, which may be made by the party sought to be interrogated to deliver particulars, or to make admissions, or to produce documents relating to the matters in question, or any of them, and leave shall be given as to such only of the interrogatories submitted as the court shall consider necessary either for disposing fairly of the suit or for saving costs.
2.(3) In adjusting the costs of the suit inquiry shall at the instance of any party be made into the propriety of exhibiting such interrogatories, and if it is the opinion of the taxing officer or of the court, either with or without an application for inquiry, that such interrogatories have been exhibited unreasonably, vexatiously, or at improper length, the costs occasioned by the said interrogatories and the answers thereto shall be paid in any event by the party in fault.
2.(4) Interrogatories shall be in the form provided in Form No. 2 in Appendix C to the Code of Civil Procedure, 1908, with such variations as circumstances may require.
2.(5) Where any party to a suit is a corporation or a body of persons, whether incorporated or not, empowered by law to sue or be sued, whether in its own name or in the name of any officer of other person, any opposite party may apply for an order allowing him to deliver interrogatories to any member or officer of such corporation or body, and an order may be made accordingly.
2.(6) Any objection to answering any interrogatory on the ground that it is scandalous or irrelevant or not exhibited bona fide for the purpose of the suit, or that the matters inquired into are not sufficiently material at that stage, or on the ground of privilege or any other ground may be taken in the affidavit in answer.
2.(7) Any interrogatories may be set aside on the ground that they have been exhibited unreasonably or vexatiously, or struck out on the ground that they are prolix, oppressive, unnecessary or scandalous and any application for this purpose may be made within seven days after service of the interrogatories.
2.(8) Interrogatories shall be answered by affidavit to be filed within ten days, or within such other time as the court may allow.
2.(9) An affidavit in answer to interrogatories shall be in the form provided in Form No. 3 in Appendix C to the Code of Civil Procedure, 1908, with such variations as circumstances may require.
2.(10) No exceptions shall be taken to any affidavit in answer, but the sufficiency or otherwise of any such affidavit objected to as insufficient shall be determined by the court.
2.(11) Where any person interrogated omits to answer, or answers insufficiently, the party interrogating may apply to the court for an order requiring him to answer, or to answer further, as the case may be, and an order may be made requiring him to answer, or to answer further, either affidavit or by viva voce examination, as the court may direct.
O.11 R.7 says that the provisions of O.13 R.1, O.7 R.14 and O.8 R.1A of CPC are not applicable to Suits filed under this jurisdiction.
Applying for Summary judgment
O.XIII-A
1.(1) This Order sets out the procedure by which Courts may decide a claim pertaining to any Commercial Dispute without recording oral evidence.
1.(2) For the purposes of this Order, the word “claim” shall include— (a) part of a claim; (b) any particular question on which the claim (whether in whole or in part) depends; or (c) a counterclaim, as the case may be.
1.(3) Notwithstanding anything to the contrary, an application for summary judgment under this Order shall not be made in a suit in respect of any Commercial Dispute that is originally filed as a summary suit under Order XXXVII.
2. An applicant may apply for summary judgment at any time after summons has been served on the defendant: Provided that, no application for summary judgment may be made by such applicant after the Court has framed the issues in respect of the suit.
3. The Court may give a summary judgment against a plaintiff or defendant on a claim if it considers that
(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; and
(b) there is no other compelling reason why the claim should not be disposed of before recording of oral evidence.
4. (1) An application for summary judgment to a Court shall, in addition to any other matters the applicant may deem relevant, include the matters set forth in sub-clauses (a) to (f) mentioned hereunder
(a) the application must contain a statement that it is an application for summary judgment made under this Order;
(b) the application must precisely disclose all material facts and identify the point of law, if any;
(c) in the event the applicant seeks to rely upon any documentary evidence, the applicant must,
(i) include such documentary evidence in its application, and
(ii) identify the relevant content of such documentary evidence on which the applicant relies;
(d) the application must state the reason why there are no real prospects of succeeding on the claim or defending the claim, as the case may be; (e) the application must state what relief the applicant is seeking and briefly state the grounds for seeking such relief.
4.(2) Where a hearing for summary judgment is fixed, the respondent must be given at least thirty days’ notice of:
(a) the date fixed for the hearing; and
(b) the claim that is proposed to be decided by the Court at such hearing.
4.(3) The respondent may, within thirty days of the receipt of notice of application of summary judgment or notice of hearing (whichever is earlier), file a reply addressing the matters set forth in clauses (a) to (f) mentioned hereunder in addition to any other matters that the respondent may deem relevant:
(a) the reply must precisely
(i) disclose all material facts;
(ii) identify the point of law, if any; and
(iii) state the reasons why the relief sought by the applicant should not be granted;
(b) in the event the respondent seeks to rely upon any documentary evidence in its reply, the respondent must
(i) include such documentary evidence in its reply; and
(ii) identify the relevant content of such documentary evidence on which the respondent relies;
(c) the reply must state the reason why there are real prospects of succeeding on the claim or defending the claim, as the case may be;
(d) the reply must concisely state the issues that should be framed for trial;
(e) the reply must identify what further evidence shall be brought on record at trial that could not be brought on record at the stage of summary judgment; and
(f) the reply must state why, in light of the evidence or material on record if any, the Court should not proceed to summary judgment.
5.(1) Notwithstanding anything in this Order, if the respondent in an application for summary judgment wishes to rely on additional documentary evidence during the hearing, the respondent must:
(a) file such documentary evidence; and
(b) serve copies of such documentary evidence on every other party to the application at least fifteen days prior to the date of the hearing.
5.(2) Notwithstanding anything in this Order, if the applicant for summary judgment wishes to rely on documentary evidence in reply to the defendant’s documentary evidence, the applicant must:
(a) file such documentary evidence in reply; and
(b) serve a copy of such documentary evidence on the respondent at least five days prior to the date of the hearing.
5.(3) Notwithstanding anything to the contrary, sub-rules (1) and (2) shall not require documentary evidence to be:
(a) filed if such documentary evidence has already been filed; or
(b) served on a party on whom it has already been served.
6.(1) On an application made under this Order, the Court may make such orders that it may deem fit in its discretion including the following:
(a) judgment on the claim;
(b) conditional order in accordance with Rule 7 mentioned hereunder; (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 XV-A.
6.(2) Where the Court makes any of the orders as set forth in sub-rule (1) (a) to (f), the Court shall record its reasons for making such order.
7.(1) Where it appears to the Court that it is possible that a claim or defence may succeed but it is improbable that it shall do so, the Court may make a conditional order as set forth in Rule 6 (1) (b).
7.(2) Where the Court makes a conditional order, it may:
(a) make it subject to all or any of the following conditions:
(i) require a party to deposit a sum of money in the Court;
(ii) require a party to take a specified step in relation to the claim or defence, as the case may be;
(iii) require a party, as the case may be, to give such security or provide such surety for restitution of costs as the Court deems fit and proper; (iv) impose such other conditions, including providing security for restitution of losses that any party is likely to suffer during the pendency of the suit, as the Court may deem fit in its discretion; and
(b) specify the consequences of the failure to comply with the conditional order, including passing a judgment against the party that have not complied with the conditional order.
8. The Court may make an order for payment of costs in an application for summary judgment in accordance with the provisions of sections 35 and 35A of the Code.
Hearing of the Suit according to “Case Management Hearing”
O.XV-A
CASE MANAGEMENT HEARING
1.The Court shall hold the first Case Management Hearing, not later than four weeks from the date of filing of affidavit of admission or denial of documents by all parties to the suit.
2. In a Case Management Hearing, after hearing the parties, and once it finds that there are issues of fact and law which require to be tried, the Court may pass an order–
(a) framing the issues between the parties in accordance with Order XIV of the Code of Civil Procedure, 1908 after examining pleadings, documents and documents produced before it, and on examination conducted by the Court under Rule 2 of Order X, if required;
(b) listing witnesses to be examined by the parties;
(c) fixing the date by which affidavit of evidence to be filed by parties;
(d) fixing the date on which evidence of the witnesses of the parties to be recorded;
(e) fixing the date by which written arguments are to be filed before the Court by the parties;
(f) fixing the date on which oral arguments are to be heard by the Court; and
(g) setting time limits for parties and their advocates to address oral arguments.
3. In fixing dates or setting time limits for the purposes of Rule 2 of this Order, the Court shall ensure that the arguments are closed not later than six months from the date of the first Case Management Hearing.
4. The Court shall, as far as possible, ensure that the recording of evidence shall be carried on, on a day-to-day basis until the cross-examination of all the witnesses is complete.
5. The Court may, if necessary, also hold Case Management Hearings anytime during the trial to issue appropriate orders so as to ensure adherence by the parties to the dates fixed under Rule 2 and facilitate speedy disposal of the suit.
6.(1) In any Case Management Hearing held under this Order, the Court shall have the power to
(a) prior to the framing of issues, hear and decide any pending application filed by the parties under Order XIII-A;
(b) direct parties to file compilations of documents or pleadings relevant and necessary for framing issues;
(c) extend or shorten the time for compliance with any practice, direction or Court order if it finds sufficient reason to do so;
(d) adjourn or bring forward a hearing if it finds sufficient reason to do so;
(e) direct a party to attend the Court for the purposes of examination under Rule 2 of Order X;
(f) consolidate proceedings;
(g) strike off the name of any witness or evidence that it deems irrelevant to the issues framed;
(h) direct a separate trial of any issue;
(i) decide the order in which issues are to be tried;
(j) exclude an issue from consideration;
(k) dismiss or give judgment on a claim after a decision on a preliminary issue;
(l) direct that evidence be recorded by a Commission where necessary in accordance with Order XXVI;
(m) reject any affidavit of evidence filed by the parties for containing irrelevant, inadmissible or argumentative material;
(n) strike off any parts of the affidavit of evidence filed by the parties containing irrelevant, inadmissible or argumentative material;
(o) delegate the recording of evidence to such authority appointed by the Court for this purpose;
(p) pass any order relating to the monitoring of recording the evidence by a commission or any other authority;
(q) order any party to file and exchange a costs budget;
(r) issue directions or pass any order for the purpose of managing the case and furthering the overriding objective of ensuring the efficient disposal of the suit.
6.(2) When the Court passes an order in exercise of its powers under this Order, it may
(a) make it subject to conditions, including a condition to pay a sum of money into Court; and
(b) specify the consequence of failure to comply with the order or a condition.
(3) While fixing the date for a Case Management Hearing, the Court may direct that the parties also be present for such Case Management Hearing, if it is of the view that there is a possibility of settlement between the parties.
7. (1) The Court shall not adjourn the Case Management Hearing for the sole reason that the advocate appearing on behalf of a party is not present: Provided that an adjournment of the hearing is sought in advance by moving an application, the Court may adjourn the hearing to another date upon the payment of such costs as the Court deems fit, by the party moving such application.
(2) Notwithstanding anything contained in this Rule, if the Court is satisfied that there is a justified reason for the absence of the advocate, it may adjourn the hearing to another date upon such terms and conditions it deems fit.
8. Where any party fails to comply with the order of the Court passed in a Case Management Hearing, the Court shall have the power to
(a) condone such non-compliance by payment of costs to the Court;
(b) foreclose the non-compliant party’s right to file affidavits, conduct cross-examination of witnesses, file written submissions, address oral arguments or make further arguments in the trial, as the case may be, or
(c) dismiss the plaint or allow the suit where such non-compliance is wilful, repeated and the imposition of costs is not adequate to ensure compliance.
Affidavit of Evidence
Section 26 of amended CPC provides that Affidavit of Evidence which is filed to prove any facts should be in accordance with O.6 R.15A r/w O.19 R.6
O.19 R.6
An affidavit must comply with the form and requirements set forth below:
(a) such affidavit should be confined to, and should follow the chronological sequence of, the dates and events that are relevant for proving any fact or any other matter dealt with;
(b) where the Court is of the view that an affidavit is a mere reproduction of the pleadings, or contains the legal grounds of any party’s case, the Court may, by order, strike out the affidavit or such parts of the affidavit, as it deems fit and proper;
(c) each paragraph of an affidavit should, as far as possible, be confined to a distinct portion of the subject;
(d) an affidavit shall state
(i) which of the statements in it are made from the deponent’s own knowledge and which are matters of information or belief; and
(ii) the source for any matters of information or belief;
(e) an affidavit should
(i) have the pages numbered consecutively as a separate document (or as one of several documents contained in a file);
(ii) be divided into numbered paragraphs;
(iii) have all numbers, including dates, expressed in figures; and
(iv) if any of the documents referred to in the body of the affidavit are annexed to the affidavit or any other pleadings, give the annexures and page numbers of such documents that are relied upon.”.
O.18 R.4(1A)(1B)(1C):
(1A) The affidavits of evidence of all witnesses whose evidence is proposed to be led by a party shall be filed simultaneously by that party at the time directed in the first Case Management Hearing.
(1B) A party shall not lead additional evidence by the affidavit of any witness (including of a witness who has already filed an affidavit) unless sufficient cause is made out in an application for that purpose and an order, giving reasons, permitting such additional affidavit is passed by the Court.
(1C) A party shall however have the right to withdraw any of the affidavits so filed at any time prior to commencement of cross-examination of that witness, without any adverse inference being drawn based on such withdrawal:
Provided that any other party shall be entitled to tender as evidence and rely upon any admission made in such withdrawn affidavit.
O.19 R.4, 5
4. (1) The Court may, by directions, regulate the evidence as to issues on which it requires evidence and the manner in which such evidence may be placed before the Court.
(2) The Court may, in its discretion and for reasons to be recorded in writing, exclude evidence that would otherwise be produced by the parties.”.
5. A Court may, in its discretion, for reasons to be recorded in writing: (i) redact or order the redaction of such portions of the affidavit of examination-in-chief as do not, in its view, constitute evidence; or
(ii) return or reject an affidavit of examination-in-chief as not constituting admissible evidence.
O.18 R.2(3A)(3B)(3C)(3D)(3E)(3F):
“(3A) A party shall, within four weeks prior to commencing the oral arguments, submit concisely and under distinct headings written arguments in support of his case to the Court and such written arguments shall form part of the record.
(3B) The written arguments shall clearly indicate the provisions of the laws being cited in support of the arguments and the citations of judgments being relied upon by the party and include copies of such judgments being relied upon by the party.
(3C) A copy of such written arguments shall be furnished simultaneously to the opposite party.
(3D) The Court may, if it deems fit, after the conclusion of arguments, permit the parties to file revised written arguments within a period of not more than one week after the date of conclusion of arguments.
(3E) No adjournment shall be granted for the purpose of filing the written arguments unless the Court, for reasons to be recorded in writing, considers it necessary to grant such adjournment.
(3F) It shall be open for the Court to limit the time for oral submissions having regard to the nature and complexity of the matter.
Pronouncement of judgment
O.20 R.1:
The Commercial Court, Commercial Division, or Commercial Appellate Division, as the case may be, shall, within ninety days of the conclusion of arguments, pronounce judgment and copies thereof shall be issued to all the parties to the dispute through electronic mail or otherwise.
Overriding effect of the provisions of this Act and provisions of CPC pertaining to adjudication of dispute by Commercial Courts / Divisions
Section 21: Save as otherwise provided, the provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law for the time being in force other than this Act.
Costs
Section 35 of CPC provides for costs under this jurisdiction:
35.(1) In relation to any commercial dispute, the Court, notwithstanding anything contained in any other law for the time being in force or Rule, has the discretion to determine:
(a) whether costs are payable by one party to another;
(b) the quantum of those costs; and
(c) when they are to be paid.
Explanation.—For the purpose of clause (a), the expression “costs” shall mean reasonable costs relating to—
(i) the fees and expenses of the witnesses incurred;
(ii) legal fees and expenses incurred;
(iii) any other expenses incurred in connection with the proceedings.
(2) If the Court decides to make an order for payment of costs, the general rule is that the unsuccessful party shall be ordered to pay the costs of the successful party: Provided that the Court may make an order deviating from the general rule for reasons to be recorded in writing. Illustration The Plaintiff, in his suit, seeks a money decree for breach of contract, and damages. The Court holds that the Plaintiff is entitled to the money decree. However, it returns a finding that the claim for damages is frivolous and vexatious. In such circumstances the Court may impose costs on the Plaintiff, despite the Plaintiff being the successful party, for having raised frivolous claims for damages.
(3) In making an order for the payment of costs, the Court shall have regard to the following circumstances, including—
(a) the conduct of the parties;
(b) whether a party has succeeded on part of its case, even if that party has not been wholly successful;
(c) whether the party had made a frivolous counterclaim leading to delay in the disposal of the case;
(d) whether any reasonable offer to settle is made by a party and unreasonably refused by the other party; and
(e) whether the party had made a frivolous claim and instituted a vexatious proceeding wasting the time of the Court.
(4) The orders which the Court may make under this provision include an order that a party must pay
(a) a proportion of another party’s costs;
(b) a stated amount in respect of another party’s costs;
(c) costs from or until a certain date;
(d) costs incurred before proceedings have begun;
(e) costs relating to particular steps taken in the proceedings;
(f) costs relating to a distinct part of the proceedings; and
(g) interest on costs from or until a certain date.
Transfer of pending Suits / Appeals involving commercial disputes having Claim of Rs.1.00 Crore and above, to Commercial Courts / Divisions
Section 15. (1) All suits and applications, including applications under the Arbitration and Conciliation Act, 1996, relating to a commercial dispute of a Specified Value pending in a High Court where a Commercial Division has been constituted, shall be transferred to the Commercial Division.
(2) All suits and applications, including applications under the Arbitration and Conciliation Act, 1996, relating to a commercial dispute of a Specified Value pending in any civil court in any district or area in respect of which a Commercial Court has been constituted, shall be transferred to such Commercial Court: Provided that no suit or application where the final judgment has been reserved by the Court prior to the constitution of the Commercial Division or the Commercial Court shall be transferred either under sub-section (1) or sub-section (2).
(3) Where any suit or application, including an application under the Arbitration and Conciliation Act, 1996, relating to a commercial dispute of Specified Value shall stand transferred to the Commercial Division or Commercial Court under sub-section (1) or sub-section (2), the provisions of this Act shall apply to those procedures that were not complete at the time of transfer.
(4) The Commercial Division or Commercial Court, as the case may be, may hold case management hearings in respect of such transferred suit or application in order to prescribe new timelines or issue such further directions as may be necessary for a speedy and efficacious disposal of such suit or application in accordance with Order XIV-A of the Code of Civil Procedure, 1908: Provided that the proviso to sub-rule (1) of Rule 1 of Order V of the Code of Civil Procedure, 1908 shall not apply to such transferred suit or application and the court may, in its discretion, prescribe a new time period within which the written statement shall be filed.
(5) In the event that such suit or application is not transferred in the manner specified in sub-section (1), sub-section (2) or sub-section (3), the Commercial Appellate Division of the High Court may, on the application of any of the parties to the suit, withdraw such suit or application from the court before which it is pending and transfer the same for trial or disposal to the Commercial Division or Commercial Court, as the case may be, having territorial jurisdiction over such suit, and such order of transfer shall be final and binding.
Section 9. (1) Notwithstanding anything contained in the Code of Civil Procedure, 1908, in the event that a counterclaim filed in a suit before a civil court relating to a commercial dispute is of Specified Value, such suit shall be transferred by the civil court to the Commercial Division or Commercial Court, as the case may be, having territorial jurisdiction over such suit. (2) In the event that such suit is not transferred in the manner contemplated in sub-section (1), the Commercial Appellate Division of the High Court exercising supervisory jurisdiction over the civil court in question may, on the application of any of the parties to the suit, withdraw such suit pending before the civil court and transfer the same for trial or disposal to the Commercial Court or Commercial Division or, as the case may be, having territorial jurisdiction over such suit, and such order of transfer shall be final and binding.
Bar of certain Applications under this jurisdiction
8. Notwithstanding anything contained in any other law for the time being in force, no civil revision application or petition shall be entertained against any interlocutory order of a Commercial Court, including an order on the issue of jurisdiction, and any such challenge, subject to the provisions of section 13, shall be raised only in an appeal against the decree of the Commercial Court.
Appeals from decrees passed by Commercial Courts / Divisions
Section 13. (1) Any person aggrieved by the decision of the Commercial Court or Commercial Division of a High Court may appeal to the Commercial Appellate Division of that High Court within a period of sixty days from the date of judgment or order, as the case may be: Provided that an appeal shall lie from such orders passed by a Commercial Division or a Commercial Court that are specifically enumerated under Order XLIII of the Code of Civil Procedure, 1908 as amended by this Act and section 37 of the Arbitration and Conciliation Act, 1996. (2) Notwithstanding anything contained in any other law for the time being in force or Letters Patent of a High Court, no appeal shall lie from any order or decree of a Commercial Division or Commercial Court otherwise than in accordance with the provisions of this Act.
Section 14. The Commercial Appellate Division shall endeavour to dispose of appeals filed before it within a period of six months from the date of filing of such appeal.
It is important to note that whereas certain provisions of CPC are amended, it must be realized that those amendments are applicable to Suits filed under Commercial Courts jurisdiction. It is observed that the judges are mistakenly applying these amendments to all the Suits, in the belief that there is a general amendment in the CPC. This belief is attributed due to misprint by the Law publishers. In the bare Act of CPC, the earlier provisions of CPC are replaced by amended provisions, thereby suggesting that there is a general amendment in the CPC. However, it is not true. The amendments which have been introduced are applicable only to Suits which are filed under Commercial Courts jurisdiction.
Sandeep
Jalan
Advocate
Law
Referencer: https://www.litigationplatform.com/
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