Courts Can Transfer Commercial Cases Under Section 24 Of Code Of Civil Procedure, Denies Exclusivity Of Section 15 Of The Commercial Courts Act- Namita Gupta vs Suraj Holdings Limited

CM(M) 457/2023 & CM APPL. 13615/2023

Decided on 9^th January 2024

Summary:

The Delhi High Court held that the Commercial Courts Act of 2015 does not preclude the application of Section 24 of the Civil Procedure Code to commercial disputes rejecting the argument that Section 15(2) of the Commercial Courts Act is the exclusive provision for transferring suits to Commercial Courts. Further, it is essential to note that a Commercial Court even at the level below of a District Judge, is not subordinate to the District Judge. Furthermore, the authority conferred by Section 24 of the Civil Procedure Code to transfer a suit is not vested in the District and Session Judge.

Facts of the Case:

This petition is filed by Namita Gupta (Defendant) in a suit titled M/s Suraj Holdings Ltd. v. Namita Gupta, challenging two orders: one dated 06.03.2023 by the Additional District Judge and the other dated 14.03.2023 by the Principal District and Sessions Judge. The respondent (plaintiff) filed a suit on 19.08.2019, seeking recovery of a specified sum under Order XXXVII of the CPC. The petitioner raised a counterclaim and contended, via an application under Order VII Rule 11 of the CPC, that the suit should be rejected being a commercial dispute and not undergoing pre-institution mediation, as mandated by the Commercial Courts Act, 2015. The Additional District Judge, considering the dispute commercial, directed the file to the Principal District and Sessions Judge, leading to a subsequent transfer to the District Judge, Commercial Court-06. The petitioner challenges these orders in the present petition.

Issues:

The court is faced with the following two legal proposition that it has to adjudicate upon:

1. First, whether the Commercial Courts Act excludes the application of Section 24 of the CPC to commercial disputes with a specified value? 
2. Second, if the answer to the first issue is negative, whether the power under Section 24 of the CPC to transfer the Suit is also available to the District and Sessions Judge in the context of commercial disputes?

Judgement:

The judgment in this case emphasizes the applicability of Section 24 of the CPC to suits involving commercial disputes, even under the Commercial Courts Act. The court rejects the argument that Section 15(2) of the Commercial Courts Act is the exclusive provision for transferring suits to Commercial Courts. It clarifies that Section 24 allows the court to transfer cases, ensuring justice and procedural fairness.

The court dismisses the notion that the Commercial Courts Act supersedes Section 24, emphasizing that the latter’s power remains intact. It refutes claims that non-compliance with Act requirements affects Section 24, stating that necessary amendments can be made post-transfer. The court also rejects the idea that Commercial Courts below a District Judge are subordinate for Section 24 purposes. Ultimately, the court set aside orders returning the plaint and transferring the case, asserting that the Additional District Judge lacked the authority to transfer. It affirms the court’s power under Section 24 to transfer the suit to the appropriate Commercial Court for continued proceedings in the interest of justice.

Analysis:

The analysis of the presented judgment delves into the intricate relationship between the Commercial Courts Act and procedural provisions outlined in the Code of Civil Procedure (CPC), particularly focusing on Section 24 and Order VII Rule 10. The petitioner’s counsel argued for the exclusive application of Section 15 of the Commercial Courts Act, contending that it pertains solely to suits pending on the date of the constitution of Commercial Courts, emphasizing its limited scope beyond suits filed post-enactment. The counsel emphasized the primacy of Order VII Rule 10 of the CPC, asserting that if a suit related to a commercial dispute is filed as an ordinary suit, the court’s authority is confined to returning the plaint for presentation before the Commercial Court. This underscores the necessity of adhering to procedural protocols specific to commercial suits. In conclusion, the court’s decision reinforces the compatibility of Section 24 of the CPC with the Commercial Courts Act, asserting the court’s authority to transfer commercial suits to the appropriate forum for continued proceedings. The emphasis lies on procedural fairness and strict adherence to specialized protocols outlined by the Commercial Courts Act.