Don’t hear all high value pleas: Supreme Court to CC

New Delhi: The Supreme Court has cautioned the commercial courts (CC) from entertaining all the pleas, involving high value, coming before it as it is fraught with the consequences of clogging them and defeating the very purpose for which they were created — a speedy and early disposal of cases involving commercial disputes.

“We feel that the very purpose for which the CC Act of 2015 has been enacted would be defeated if every other suit merely because it is filed before the commercial court is entertained” said Justice A.S. Bopanna in a recent judgment pointing out that such an approach could eventually clog the system.

Speaking for himself, Justice Bopanna said that the Commercial courts should refrain from entertaining the suits which are not actually relating to commercial dispute but being filed merely because of the “high value and with the intention of seeking early disposal”. Such an approach would only “clog the system and block the way for the genuine commercial disputes” which may have to be entertained by the Commercial courts as intended by the law makers, said Justice Bopanna cautioning the commercial courts walking the course of the other court choked with huge pendency of cases.

In a concurring but separate judgment, Justice R. Banumathi said that the  object and purpose of the establishing the commercial courts, commercial divisions and commercial appellate divisions of the high court is to ensure that the cases involved in commercial disputes are disposed of “expeditiously, fairly and at reasonable cost” to the litigants.

Advocating meaningful interpretation of the provisions of the Commercial Courts Act, 2015, Justice Banumathi said that would benefit the “litigants especially those who are engaged in trade and commerce which in turn will further economic growth of the country.”

Allaying the apprehensions that the strict adherence to the procedures laid down under the Commercial Court Act for dealing a class of litigations would exclude the other high value cases, Justice Bopanna said, “If the same is strictly interpreted it is not as if those excluded will be non-suited without any remedy. The excluded class of litigation will in any event be entertained in the ordinary Civil Courts wherein the remedy has always existed.”

The court said this while rejecting an appeal against Gujarat High Court’s March 1, 2019, order holding that a dispute between two parties for enforcing the execution of a mortgage deed over a plot of land did not come under the ambit of the Commercial Courts.

The plot in question measuring 9207 square meters is located at Vadodra in Gujarat. One Ambalal Sarabhai Enterprises had moved the Commercial Court for execution of mortgage deed. However respondent K.S. Infraspace LLP contested this contending that it was not a commercial dispute.
 
The Commercial Court by its October 17, 2018 order rejected K.S. Infraspace LLP plea that the issue being raised by Ambalal Sarabhai Enterprises was not commercial.  

K.S. Infraspace LLP challenged the Commercial Court’s order before Gujarat High court which by its March 1, 2019, order reversed the Commercial Court’s order.
 
The only relief sought in the case, the top court noted was for the execution of the Mortgage Deed which is in the nature of specific performance of the terms of Memorandum of Understanding without any reference to the nature of use of the land.

Having referred to the facts of the case, the top court held that “if all these aspects are kept in view, “We are of the opinion that in the present facts the High Court was justified in its conclusion” arrived at through its order of March 1, 2019.