Bare denial by the defendant does not invite framing of issue in a commercial suit - The Delhi High Court 

The Delhi High Court has held that the bare denial of assertion in plaint does not constitute a substantial ground in inviting the framing of issue on subject in a commercial suit.

Observing that the commercial courts act aim to expertise the disposal of commercial suits, the court has remarked as "expeditious disposal would not be possible if each and every denial were invite the framing of an issue"

visit:http://delhihighcourt.nic.in/

 

 COMMERCIAL COURTS OR E-COMMERCIAL COURTS?? 

As part of improving the Ease of Doing Business (EoDB) in India, the Government approved for setting up of commercial benches in select High Courts to deal with high value business disputes. All pending suits and applications relating to commercial disputes involving a claim of Rs One Crore and above in the high courts and civil courts [now reduced to Rs. Three Lakhs] would be transferred to the relevant Commercial Division or Commercial Court as the case may be.

Commercial Divisions are set up in those High Courts which are already exercising ordinary original civil jurisdiction such as Delhi, Bombay, Calcutta, Madras, and Himachal Pradesh high courts. Commercial Divisions will exercise jurisdiction over all cases and applications relating to commercial disputes. The Commercial Division shall have territorial jurisdiction over such area on which it has original jurisdiction.

According to the Law Ministry proposal, Commercial Courts which will be equivalent to district courts are to be set up in states and UTs where the High Courts do not have ordinary original civil jurisdiction, and in states where the High Court has original jurisdiction, in respect of those regions to which the original jurisdiction of a High Court does not extend. But Commercial Divisions or Commercial Courts will not have jurisdiction in matters relating to commercial dispute, where the jurisdiction of the civil court has been either expressly or impliedly barred under law. Commercial dispute has been defined broadly to mean dispute arising out of ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents; joint venture and partnership agreements; intellectual property rights; insurance and other areas.

As part of further improving the Ease of Doing Business (EoDB) e-Commercial Courts have been set up in the states of Andra Pradesh and Telangana. The entire process of filing of the Petition and uploading of documents, registering and payment of court fee upto the issuance of summons have been made possible through web portal and online. The process of e-filing is as enumerated:

• e-Filing of petitions in the Commercial Court fulfils the requirements of a paperless court where supportive documents along with the petition filed in digitized manner. The litigant need not to personally visit the court just to a file a case in the commercial court.
• Court fee is calculated automatically based on Case types associated Acts and related sections chosen in the e-filed petition and can be paid through online and offline mode. 
• Online service of petition to concerned respondents by petitioner.
• A petition can be e-filed 24*7 basis anywhere in India and abroad.
• The web-based software module provided with self-explanatory templates where data related to petition could be filled in and a petition could be prepared in number of rounds.
• User specific dash board is provided where the use can track latest status of petitions filed by him/her in a commercial court.
• Online messages and e-mails provision when status of petition is updated in the Registry of the Court.
• Online Service of Digitally Signed Court Summons to Respondents/Petitioners through secured e-mails

Useful Links: http://e-commcourt.gov.in/

https://ts.e-commcourt.gov.in/mainPage.drt

https://ap.e-commcourt.gov.in/mainPage.drt

Delhi to get twenty-two new Commercial Courts soon

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Pursuant to an order passed by the Delhi High Court in May, the AAP [Aam Aadmi Party] Government is likely to set up 22 commercial courts in New Delhi. According to a report published in The Times Of India, the matter has been placed before the Delhi cabinet and a decision is awaited.

A Division Bench of then Chief Justice Rajendra Menon and Justice Anup J Bhambhani had directed the Delhi Government to process its demand to establish 22 commercial courts in various Districts in Delhi. The order was passed in a plea seeking a direction to the Delhi Government to make Fast Track Courts a permanent feature.

The public interest litigation filed through Advocate Sumit Chander had contended that the Delhi Government failed to discharge its constitutional obligation to provide speedy justice by failing to create Fast Track Courts on a permanent basis. The petitioner, Parag Chawla also brought on record letters written by the High Court to the Delhi Government, requesting it to make the FTC scheme a permanent feature by establishing such courts. Subsequently, ad-hoc fast track courts were sanctioned by the Delhi Government on a yearly basis.

While passing the order, the Court had observed that currently over 6,000 cases were pending under the Protection of Children from Sexual Offences Act, 2012 and over 2,000 cases were pending under Section 376 of the Indian Penal Code. With the current number of courts, it was "humanly impossible" to deal with and dispose of such a large number of cases in terms of Section 309 Cr.P.C. the Court had further observed.

Further referring to its continued demands to the Delhi Government to establish fast track courts and commercial courts for enhanced disposal rate, the Court had remarked,

"..once the High Court has sought for certain courts for speedy disposal of cases, the State Government cannot sit on it and has no option but to sanction the posts as demanded by the High Court...the State is bound to create commercial courts in an endeavour to dispose of commercial disputes..Once the High Court has made a demand, the State is duty bound to sanction the posts.."

The Court had then directed that all the records pertaining to the pending demands for fast track courts and commercial courts would be placed before the Delhi Government's cabinet. It had also directed the Registrar General to "personally" provide all requisite information/details that are sought by the Delhi Government for the process.

  Original Source: https://barandbench.com/delhi-to-get-twenty-two-new-commercial-courts-soon/

The Commercial Courts Act, 2015: Bridging the gap between Promise and Reality

“Rules of procedure are not by themselves an end, but are a means to achieve the ends of justice, and the tools forged are not intended as hurdles to obstruct the pathway to justice…Procedure is meant to subserve and not rule the cause of justice.” – Justice, Courts and Delays.

The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 was widely hailed as a seminal legislation and a significant step towards enhancing India’s stature in the Ease of Doing Business index.

The said Act was recently re-christened as ‘The Commercial Courts Act, 2015’ (“the Act”) by way of an Ordinance, which ushered in certain significant amendments to the statute as it was originally enacted.

The  Act, amongst others, provides for the constitution of Commercial Courts, Commercial Appellate Courts and Commercial Divisions of High Courts to adjudicate commercial disputes having a value, originally of at least one crore rupees, which has since been reduced to three lakh rupees by the Ordinance.

The Commercial Courts are to be constituted at the district level by the state government, after consultation with the concerned High Court.

As far as the High Courts having ordinary civil jurisdiction are concerned, the Chief Justice is required to constitute a Commercial Division having one or more Benches consisting of a Single Judge for exercising jurisdiction under the Act. The Chief Justice is also required to constitute Commercial Appellate Divisions having one or more Division Benches for purposes of exercising the jurisdiction and powers conferred on it under the Act.

The term ‘Commercial Dispute’ is defined in the widest possible terms so as to cover within its ambit almost all kinds of disputes in relation to a ‘commercial transaction’, including disputes relating to transactions between merchants, bankers, financiers, traders, etc. and in relation to shareholders agreements, mercantile documents, and partnership agreements, amongst others.

The Act further provides that the provisions of the Code of Civil Procedure, 1908 (“CPC”) shall, in its application to any suit in respect of a commercial dispute of a specified value, stand amended in the manner specified in the Schedule.

It is worthwhile to note that the Act contemplates certain significant departures from the CPC, which appear to be aimed at expediting the procedure of resolution of suits involving commercial disputes.

Some of these provisions are as under:

1. Order XI (introduced in substitution of Order XI of the CPC)

A plaintiff or a defendant is required to file a list of all documents (and copies) in its power, possession, control and custody pertaining to the suit, including not only documents relied upon in the plaint or the written statement, but also documents relating to any matters in question in the proceedings, irrespective of whether they are in support of or adverse to the plaintiff or defendant’s case [Rules 1(1) and 7 of Order XI]. Further, the plaint and written statement should contain a mandatory declaration on oath from the plaintiff or defendant, as the case may be, that all such documents in its power, possession, control and custody have been disclosed and that the plaintiff or defendant does not have any other documents [Rules 1(3) and 1(9) of Order XI]. It is also provided that the duty to disclose documents which come to the notice of a party shall continue till the disposal of a suit [Rule 12 of Order XI].

2. Order XIII A

The Court is entitled to decide a claim (or part thereof) pertaining to any Commercial Dispute without recording oral evidence [Rules 1(1) and 1(2) of Order XIII A]. Such summary judgment may be granted where, on an application filed in that regard, the Court considers that: (a) the plaintiff or defendant has no real prospect of succeeding or successfully defending a claim; and (b) there is no other compelling reason why the claim should not be disposed of before recording of oral evidence [Rule 3 of Order XIII A].

The Court also has the power and discretion to do any of the following:

·        pass orders directing judgment on the claim;

·        pass a conditional order;

·        dismiss the application;

·        dismiss part of the claim and pass a judgment on the remaining part of the claim;

·        strike out the pleadings;

·        pass further directions to proceed for a Case Management Hearing.

3. Order XV A

The Court shall hold the first Case Management Hearing not later than four weeks from the date of filing of affidavits of admission or denial of documents by the parties [Rule 1 of Order XV A].

In a Case Management Hearing, the Court, after hearing the parties and once it finds that there are issues of fact and law that require to be tried, may pass an order [Rule 2 of Order XV A]:

·      framing issues between the parties after examining pleadings, documents and documents produced  before it, and on examination conducted by the Court under Rule 2 of Order X, if required;

·        listing witnesses to be examined by the parties;

·        fixing the date by which affidavits of evidence are to be filed by the parties;

·        fixing the dates on which evidence of the witnesses of the parties are to be recorded;

·        fixing the date by which written arguments are to be filed before the Court by the parties;

·        fixing the date on which oral arguments are to be heard by the Court; and

·        setting time limits for parties and their advocates to address oral arguments.

4. Order XVIII

Parties are required to file succinct written submissions within four weeks prior to commencing oral arguments. No adjournments are to be ordinarily allowed for purposes of filing the written submissions unless the Court, for reasons recorded in writing considers it necessary. The Court also has the power to limit the time for oral submissions having regard to the nature and complexity of the matter.

5. Order XIX

The Court has the power to regulate the evidence as to the issues on which it requires evidence and the manner in which such evidence may be placed before the Court. Further, the affidavit of evidence has to comply with certain requirements, as prescribed.

6. Order XX

The Commercial Court, Commercial Division, or Commercial Appellate Division shall pronounce judgments and issue copies to all parties within ninety days of conclusion of arguments. Unfortunately, the construct and manner of implementation of the Act has, figuratively speaking, turned out to be a case of old wine in a new bottle.

Firstly, the ‘constitution’ of a new hierarchy of Courts under the Act is a misnomer, since all that the Act does is to entrust this specialized jurisdiction of Commercial Disputes to the existing hierarchy of High Courts exercising ordinary original civil jurisdiction and district courts in other States.

Secondly, although the Act provides that the CPC will, in its applicability thereto, stand amended in several respects, the fact that the same hierarchy of Courts has been entrusted with both commercial and non-commercial matters (often appearing in a common cause list on a given day), has seriously whittled down the efficacy of the Act.

Further, on a practical level, it is generally observed that these Courts even deploy a common diary of dates while deciding upon the scheduling of a commercial matter.

Given the said practical challenges, it is indeed doubtful whether the salutary objectives of the Act can be achieved. Our past experience with similarly progressive statutes (the curious case of the Arbitration and Conciliation Act, 1996 immediately comes to mind) cautions us not to be overly optimistic on that front.

In the author’s view, it is of utmost importance that a database of Judges who have ‘real’ experience in dealing with commercial disputes is prepared and maintained. On a pedantic and perhaps more expedient view of this essential pre-requisite, judges of the High Court and district judges are often presumed to possess such experience by dint of their seniority alone.

However, that may appear to be a rather simplistic view of the matter. In fact, experienced litigators would attest that one of the most prevalent and oft-repeated comments heard in Court, when a plaintiff embroiled in commercial disputes seeks to expedite his/its matter, is on the lines of ‘there is no urgency in your matter; you can always be compensated by interest and costs’.

Therefore, the need of the hour is to man the Courts constituted under the Act with judges who have proven specialized experience, knowledge and expertise of handling commercial disputes in an adjudicatory capacity or as legal practitioners, coupled with ‘training and continuous education’ of the judges so selected in terms of Section 20 of the Act.

If implemented in right earnest, this could become the impetus for the Act to become a game changer as it would not only ensure that the Courts constituted under the Act would be better equipped to approach its implementation in an organized and concerted manner but would also allow for formulation of a consensus on the ‘best practices’ to be adopted by such Courts.

Further, the conventional view of the Court as being a ‘passive’ arbiter of commercial disputes will have to give way to a ‘pro-active’ approach if the provisions of the Act are to be given full amplitude and play in their implementation.

The Court will have to be cognizant of the trade practices, transactional models and structures, customs and usages typical to particular categories of commercial disputes and in many cases, the approach taken by Courts in foreign jurisdictions on similar disputes/issues. The Court will also have to subject every case to a rigorous and critical scrutiny at every stage and employ the ‘tools’ provided by the statute, even suo motu (wherever permissible), with the over-riding objective being speedy and just resolution.

Lastly, and perhaps, most importantly, since every hearing in a matter means expending of valuable public time by the Court and cost by the exchequer and the parties concerned, it is necessary, nayimperative, that any adoption of deleterious and time-wasting tactics be curbed with an iron hand and that the time lines prescribed in the statute are uncompromisingly treated as sacrosanct.

In his celebrated treatise Justice, Courts and Delays, Mr Arun Mohan argues that in addition to costs which are compensatory in nature, and often only notional, actual reform requires “removal of incentives for delay or the advantages gained thereby”. This requires the Court to strike an equitable balance between the relative disadvantage that a plaintiff is already burdened with while approaching the Court and the natural tendency of a defendant to stall an effectual adjudication of a matter by resorting to hyper-technical and dilatory tactics.

Recently, Chief Justice of India Dipak Misra suggested that the High Courts form think tanks of judges, lawyers and academicians to consider and explore  innovative modes and initiatives to reduce delays and pendency of cases. Undoubtedly, such a consultative process amongst the stakeholders is the need of the hour.

In the context of the Commercial Courts Act, introspection on some, if not all, of the issues raised above will help advance the spirit behind the Chief Justice’s clarion call.

Original Article by By Ajit Warrier - Partner at Shardul Amarchand Mangaldas & Co.

Link:https://barandbench.com/commercial-courts-act-promise-reality/

India: Pre - Institution Mediation Under The Indian Commercial Courts Act: A Strategic Advantage

A 2018 amendment to the Indian Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 ("Commercial Courts Act") makes it mandatory for a party to exhaust the remedy of mediation before initiating court proceedings under the Commercial Courts Act, with the limited exception of cases where urgent relief is being sought. Patent infringement disputes, being disputes of a commercial nature, are governed by the Commercial Courts Act and, therefore, the mandatory pre-institution mediation provision applies to such disputes. 

In cases where a patentee is not seeking a preliminary injunction and wants to use litigation as a tool to negotiate terms for granting limited rights to their IP, pre-initiation mediation is a viable option. negotiation table under the threat of future litigation but also allow patentees to resolve disputes in a timely manner by avoiding long-drawn litigation in Indian courts. Patentees can now consider a different strategy when considering steps for enforcement of patent rights in India in view of the possible advantages of such mediation proceedings discussed in this article.

The Commercial Courts Act: Scope and Objectives

The Commercial Courts Act was introduced in 2015 to establish commercial courts in India for adjudication of "Commercial Disputes". The statute lays down a streamlined procedure for quick resolution of high stake disputes of a commercial nature with strict timelines for filing of pleadings, discovery and procedure for grant of summary judgments. The definition of "Commercial Disputes" under the Act is broad and generally covers commercial transactions and includes disputes arising out of intellectual property rights. In 2018, the Act was amended to bring in some clarity of procedure and also to introduce the mandatory pre-institution mediation provision. As per the amendments in 2018, any Commercial Dispute valued at more than INR 3,00,000 (about USD 4,338) is governed by the provisions of the Act.

Pre-Institution Mediation Defined

Section 12A of the Commercial Courts Act provides parties with an alternative means to resolve disputes through discussions and negotiations with the help of a mediator. The provision states that a plaintiff must initiate mediation before filing a suit, with a limited carve out for suits filed with applications for urgent interim relief.

Courts in India frequently refer ongoing patent infringement suits to mediation when there exists a possibility for the parties to arrive at a settlement. However, in the absence of a law imposing a time limit for completion of such court-referred mediations, in many cases, mediations of patent infringement suits go on for months with no resolution. Mediation under the Commercial Courts Act bridges this gap by making mediation a time-bound process. In India, most IP infringement suits are filed with an application seeking a preliminary injunction. This would qualify as "urgent interim relief" under Section 12A and initiation of mediation prior to filing of the suit would not be mandatory. However, in disputes where a patentee is not seeking a preliminary injunction and wants to use litigation as a tool to negotiate terms for granting limited rights to their IP, pre-initiation mediation is a viable option.

Procedure for Initiating Pre-Institution Mediation

The procedure to be followed in such mediation proceedings is set out in the Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018 ("Rules"). As per the Rules, the plaintiff must file an application with the State Legal Services Authority or the District Legal Services Authority constituted under the Legal Services Authorities Act, 1987 ("Authority") to initiate mediation. Once an application is received, the Authority will issue notice to the opposing party to appear within 10 days of receipt of notice and give consent to participate in the mediation proceedings. The Rules provide for issuance of a final notice if the Authority does not receive a response within 10 days of the initial notice. If the opposing party fails to appear following the final notice or refuses to participate in the mediation proceedings, the Authority will treat the mediation process as a non-starter and prepare a report to that effect. If the opposing party agrees to participate, then the mediation process begins. Following negotiations and meetings with the mediator, if the parties arrive at a settlement, it will be recorded in a settlement agreement.

The Pros

Instituting pre-initiation mediation holds many advantages over out-of-court interparty negotiations:

1. Time and cost-effective. Pre-institution mediation initiated under the Commercial Courts Act must be completed within a period of three months from the date of application made by the plaintiff, with a possible extension of two months with the consent of the parties. The time bound process saves time and costs incurred by the parties involved. A recent example of effective use of this mechanism is the mediation instituted by Nokia to negotiate licenses for its standard-essential patents relating to technology used in handsets. The mediation procedure was reportedly completed within a time span of 8 months and Nokia was able to resolve the dispute without filing a suit.

2. Patent litigations in India are known to be lengthy. According to one report from 2017, a total of 143 patent infringement suits were filed between 2005 and 2015 in the Delhi High Court, Bombay High Court, Madras High Court and Calcutta High Court out of which judgments were delivered in only five cases after completion of trial proceedings. Exploring the possibility of a settlement before filing a suit could avoid such lengthy litigation.

3. Confidentiality. Confidentiality of negotiations with a potential licensee is key to prevent disclosure of important business strategies to competitors. The Rules ensure confidentiality by providing that the mediator, the parties, and their counsels must maintain confidentiality about the mediation. Stenographic or audio or video recording of the mediation proceedings is prohibited under the Rules.

4. No threat of a validity challenge. A patentee must always assess the strength of their patent before filing a suit since a defendant can challenge the validity of a patent. Even at the interim stage, a defendant can avoid an injunction being granted against them by raising a credible challenge to the validity of a patent. When the patent is susceptible to a challenge, pre-initiation mediation can be a good choice to negotiate a license without the threat of a validity challenge.

5. Assessing the strength of the opponent's case. Through negotiations in a mediation proceeding, a patentee can get a sense of the opponent's strengths and weaknesses and prepare for the possibility of contesting a suit. The opponent might reveal that their product is covered by another patent or is based on technology available in the public domain. The patentee then has time to assess the likelihood of its success in a suit. There is no bar on seeking interim relief if a suit is filed in the event of a failure of mediation proceedings. Depending on the patentee's assessment of its case, a patentee may still seek an interim injunction even after trying mediation.

6. Negotiating in good faith. Licensee negotiations between parties can often go on for months. During this time, a potential licensee may at time engage in infringing acts. The threat of possible litigation that could result due to an unsuccessful mediation under the Commercial Courts Act would possibly motivate a potential infringer / licensee to negotiate license terms in good faith. The Rules also provide that parties shall participate in the mediation process in good faith with an intention to settle the dispute.

The Cons

Section 12A imposes a mandatory obligation upon the plaintiff to initiate mediation. However, the Rules give the opposing party the right to refuse to participate in the mediation proceedings. If the opposing party does not appear, it will also result in the mediation proceedings being deemed a non-starter. This optional approach arguably results in the provision lacking teeth.

The Way Forward

With the option of time-bound pre-institution mediation, it is now possible for patentees to target infringers in India and prevent infringement without spending years in litigation. Weighing the pros and cons of the situation, patent holders can decide to press for immediate relief in a suit or settle the matter using pre-institution mediation.

Courtesy:http://www.mondaq.com/india/x/808790/Arbitration+Dispute+Resolution/PreInstitution+Mediation+Under+The+Indian+Commercial+Courts+Act+A+Strategic+Advantage

Original Article Published by Aparna Gaur and Aarushi Jain - Nishith Desai Associates.
Link:http://www.nishithdesai.com/fileadmin/user_upload/pdfs/NDA%20In%20The%20Media/News%20Articles/190506_A_Pre_Institution_Mediation_Under_the_Indian_Commercial_Courts_Act.pdf

                     

The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 is a seminal legislation in India aimed at enhancing India’s stature in the ease of doing business index. The Act was enacted and enforced with effective from 23-10-2015. The said Act was recently renamed as the Commercial Court’s Act, 2015 by way of ordinance and was implemented on 03-05-2018 bringing in certain significant amendments to the Act. The Act, amongst others, provides for the constitution of commercial courts, commercial divisions and commercial appellate courts of High Courts to adjudicate commercial disputes having a value, originally of at least 1 Crore rupees which has since been reduced to 3 Lakhs rupees by the amendment to the Act. 

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COMMERCIAL COURTS ACT 2015 - OBJECTIVES 

The Act was enacted to fast track the disposal of commercial disputes by establishing commercial courts at the district level and commercial divisions and commercial appellate divisions in High Courts with a view to provide for enforcement mechanism of commercial contracts in consonance with the policy of ease of doing business in India.

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LAWS & PROCEDURES

THE COMMERCIAL COURTS, COMMERCIAL DIVISION AND COMMERCIAL APPELLATE DIVISION OF HIGH COURTS ACT, 2015

http://www.legislative.gov.in/sites/default/files/A2016-04_0.pdf

THE COMMERCIAL COURTS, COMMERCIAL DIVISION AND COMMERCIAL APPELLATE DIVISION OF HIGH COURTS (AMENDMENT) ACT, 2018

http://legalaffairs.gov.in/sites/default/files/The%20Commercial%20Courts%2C%20Commercial%20Division%20and%20Commercial%20Appellate%20Division%20of%20High%20Courts%20%28Amendment%29%20Act%2C%202018.pdf 

THE CODE OF CIVIL PROCEDURE, 1908

https://www.wipo.int/edocs/lexdocs/laws/en/in/in056en.pdf

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HIGHLIGHTS OF THE ACT

1. Wide definition of commercial dispute. 
2. Judges of the commercial courts, commercial division and commercial appellate  division to be presided over by the judges having experience in dealing with commercial dispute.
3. Applications and appeals related to international commercial arbitration to be heard by the commercial division of the concerned High Court.
4. Determination of specified value of the subject matter of commercial dispute.
5. Timely disposal of commercial disputes and appeals.
6. Amendments to the Civil Procedure Code, 1908,  as applicable to commercial disputes.
7. Application for summary judgment in respect of certain claim of commercial dispute. 

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ESTABLISHMENT AND PRESENT FUNCTIONING OF COMMERCIAL COURTS IN KARNATAKA

In Exercise of the powers conferred under Section 5(2) of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, the Hon'ble Chief Justice of the High Court of Karnataka has constituted the Commercial Appellate Division headed by the Hon'ble Chief Justice to deal with the Commercial Appeals at Principal Bench, Bengaluru which would eventually arise from the judgments and orders of the Commercial Courts listed herebelow which are constituted by the Government of Karnataka in exercise of the powers conferred by sub-section (1) and (2) of Section 3 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015. 

Sl.No.	Name	Commercial Court
1	Sri. D.V.Patil	LXXXII Addl. City Civil and Sessions Judge, Bengaluru City. (Commercial Court) (Newly Created Court vide G.O.No.LAW35 LCE 2018, dated 31.07.2018)
2	Sri. S.A.Hidayathulla Shariff	LXXXIII Addl. City Civil and Sessions Judge, Bengaluru City. (Commercial Court) (Newly Created Court - vide G.O.No.LAW35 LCE 2018, dated 31.07.2018)
3	Smt. K.Kathyayani	IV Addl. District and Sessions Judge, Ballari. (CommercialCourt) (Newly Created Court- Vide G.O.No.LAW 35LCE 2018, dated 11.09.2018)

NOTIFICATIONS: 

GOVERNMENT OF KARNATAKA

No. LAW 39 LCE 2016                                        Karnataka Government Secretariat 

                                                                Vidhana Soudha

                                                                Bengaluru, dated: 21.09.2017

NOTIFICATION

In exercise of the powers conferred by sub-section (1), (2) and (3) of section 3 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 the Government of Karnataka, with the concurrence of the Hon’ble High Court of Karnataka, hereby designate the following Courts as Commercial Courts in their respective jurisdiction of the District mentioned in the column against the Court:-

Courts designated as Commercial Courts	District
Principal District and Sessions Judge, Chamarajanagar	Chamarajanagar
Principal District and Sessions Judge, Koppal	Koppal
Principal District and Sessions Judge, Udupi	Udupi
Principal District and Sessions Judge, U.K., Karwar	U.K., Karwar
Principal District and Sessions Judge, Yadgir	Yadgir
First Additional District and Sessions Judge or any other Additional District and Sessions Judge functioning as District Headquarters	In their respective jurisdiction of the District in other remaining Districts in the State of Karnataka

                                                            By order and in the name of the

                                                                   Governor of Karnataka.

                                                                         (S. UMESHA)

                                                   Under Secretary to Government (Admn.-1),

                                                                      Law Department

To:

The compiler, Karnataka Gazette, Bengaluru for publication in the next issue of Gazette and supply 10 copies to Law Department (Admn.-1) Section, Room No. 013-D, Ground Floor, Vidhana Soudha, Bengaluru – 560 001.

Copy to:

1. The Principal Accountant General (A. & E.) / (Audit-1) / (Audit-2). Karnataka, Bengaluru –1. 
2. The Registrar General, High Court of Karnataka, Bengaluru-1.
3. The Principal City Civil & Sessions Judge, Bengaluru.
4. All the Principal District and Sessions Judges of the Districts.
5. All the Deputy Commissioners of the Districts.
6. The Director of Prosecutions and Government Litigation, Cauvery Bhavan, Kempe Gowda Road, Bengaluru-9.
7. The Private Secretary to Hon’ble Minister for Law, Parliamentary Affairs and Minor Litigation, Vidhana Soudha, Bengaluru-1.
8. The Personal Secretary to Principal Secretary to Government, Law Department, Vidhana Soudha, Bengaluru-1.
9. Section Guard File/Extra copies.

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HIGH COURT OF KARNATAKA, BENGALURU

DATED:12^TH FEBRUARY 2018

NOTIFICATION

In exercise of the powers conferred under section 5(2) of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015, and in supersession of the earlier circular dated 31-10-2017, Hon’ble The Chief Justice is pleased to constitute the Commercial Appellate Division headed by Hon’ble The Chief Justice Bench to deal with Commercial Appeals (COMAP) at Principal Bench, Bengaluru.

By order of Hon’ble The Chief Justice,

                   

Sd/ -

 (P.N. Desai)

     Registrar (Judicial)

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GOVERNMENT OF KARNATAKA

No. LAW 35 LCE 2018                                     Karnataka Government Secretariat                                                                             Vidhana Soudha

                                                                Bengaluru, dated: 31.07.2018

NOTIFICATION

In exercise of the powers conferred by sub-section (1) and (2) of section 3 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (Central Act No. 4 of 2016), and in suppressions of previous Notifications No. LAW 39 LCE 2016, dated 21-09-2017, 08-11-2017 and 30-01-2018, the Government of Karnataka in consultation with the High Court of Karnataka, hereby establish the Commercial Courts  mentioned in Column No. 1 of the table below to try the Commercial Disputes having jurisdiction over the Districts noted in Column No. 2 against each, with effect from the date of Presiding Officers assume charge of the courts:-

	Court Name (Column No. 1)	Jurisdiction (Column No. 2)
1.	One Additional City Civil & Sessions Court at Bengaluru	Bengaluru City (Urban) and Bengaluru Rural Districts
2.	One Additional City Civil & Sessions Court at Bengaluru	Chamarajanagar, Chikkaballapura, Chikkamagaluru, Chitradurga, D.K. Mangaluru, Hassan, Kodagu, Madikeri, Kolar, Shivamogga, Tumakuru and Udupi Districts.

By order and in the name of the

                                                                   Governor of Karnataka.

                                                                   (H.B. PRAFULLAVATHI)

                                                             Under Secretary to Government

                (Admn.-1), Law Department

To:

The compiler, Karnataka Gazette, Bengaluru for publication in the next issue of Gazette and supply 10 copies to Law Department (Admn.-1) Section, Room No. 013-D, Ground Floor, Vidhana Soudha, Bengaluru – 560 001.

Copy to:

1. The Principal Accountant General (A. & E.) / (Audit-1) / (Audit-2). Karnataka, Bengaluru – 1.
2. The Registrar General, High Court of Karnataka, Bengaluru-1.
3. All the Principal District & Sessions Judges.
4. The Deputy Commissioners, All Districts.
5. The Director of Prosecutions and Government Litigation, Cauvery Bhavan, Kempe Gowda Road, Bengaluru-9.
6. The Private Secretary to Hon’ble Minister for Law, Parliamentary Affairs and Minor Litigation, Vidhana Soudha, Bengaluru-1.
7. The Personal Secretary to Principal Secretary to Government, Law Department, Vidhana Soudha, Bengaluru-1.
8.  Section Guard File/Extra copies.

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COMMERCIAL DISPUTE 

The term commercial dispute has been given an inclusive definition to include almost all disputes that could entail with respect to a commercial transaction understood in the most generic way. Hence, the definition broadly includes disputes relating to transactions between merchants, bankers, financiers, traders etc. and also includes disputes in relation to shareholders agreements, mercantile documents, partnership agreements, joint venture agreements, intellectual property rights, insurance, etc. 

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IMPORTANT DEFINITIONS

Commercial Appellate Division means the Commercial Appellate Division in a High Court constituted under sub-section (1) of section 5;

Commercial Court means the Commercial Court constituted under sub-section (1) of section 3;

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;

(ii) export or import of merchandise or services;

(iii) issues relating to admiralty and maritime law;

(iv) transactions relating to aircraft, aircraft engines, aircraft equipment and helicopters, including sales, leasing and financing of the same;

(v) carriage of goods;

(vi) construction and infrastructure contracts, including tenders;

(vii) agreements relating to immovable property used exclusively in trade or commerce;

(viii) franchising agreements;

(ix) distribution and licensing agreements;

(x) management and consultancy agreements;

(xi) joint venture agreements;

(xii) shareholders agreements;

(xiii) subscription and investment agreements pertaining to the services industry including outsourcing services and financial services;

(xiv) mercantile agency and mercantile usage;

(xv) partnership agreements;

(xvi) technology development agreements;

(xvii) intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits;

(xviii) agreements for sale of goods or provision of services;

(xix) exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum;

(xx) insurance and re-insurance;

(xxi) contracts of agency relating to any of the above; and

(xxii) such other commercial disputes as may be notified by the Central Government.

Commercial Division means the Commercial Division in a High Court constituted under sub-section (1) of section 4;

District Judge shall have the same meaning as assigned to it in clause (a) of article 236 of the Constitution of India;

Document means any matter expressed or described upon any substance by means of letters, figures or marks, or electronic means, or by more than one of those means, intended to be used, or which may be used, for the purpose of recording that matter;

Notification means a notification published in the Official Gazette and the expression notify with its cognate meanings and grammatical variations shall be construed accordingly;

Schedule means the Schedule appended to the Act; and

Specified Value in relation to a commercial dispute, shall mean the value of the subject-matter in respect of a suit as determined in accordance with section 12 which shall not be less than one crore rupees or such higher value, as may be notified by the Central Government.

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IMPORTANT OBSERVATIONS AND JUDGMENTS OF THE SUPREME COURT  ON THE RIGHT TO ACCESS TO JUSTICE

While deciding the case of Anita Kushwaha Vs. Pushap Sudan, the Hon'ble Supreme Court of India speaking through the Lordship T.S. Thakur, the then Chief Justice of India has referred to the words of V. Krishna Iyer J as hereunder:

“Access to justice is basic to human rights and directive principles of State Policy become ropes of sand, teasing illusion and promise of unreality, unless there is effective means for the common people to reach the Court, seek remedy and enjoy the fruits of law and justice.”

                                                                   -V. Krishna Iyer J.

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The Hon'ble Supreme Court in the case of Tamilnad Mercantile Bank Shareholders Welfare Association Vs. S.C. Sekar and Others [Civil Appeal No.s 7129-7130 OF 2008] has held that "an aggrieved person cannot be left without the remedy and that access to justice is a human right and in certain situations even a fundamental right" 

- Justice S.B. Sinha and Justice Cyriac Joseph

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In Brij Mohan Lal Vs. Union of India and Ors [Transfer Case (civil) 22 of 2001] the Hon'ble Supreme Court of India has categorically held  that "Article 21 of the Constitution of India takes in its sweep the right to expeditious and fair trial. Even Article 39-A of the Constitution recognises the right of citizens to equal justice and free legal aid. To put it simply, it is the constitutional duty of the Government to provide the citizens of the country with such judicial infrastructure and means of access to justice so that every person is able to receive an expeditious, inexpensive and fair trial. The plea of financial limitations or constraints can hardly be justified as a valid excuse to avoid performance of the constitutional duty of the Government, more particularly, when such rights are accepted as basic and fundamental to the human rights of citizens.”

- Justice B.N. Kirpal, Justice K.G. Balakrishnan and Justice Arijit Pasayat

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"Unduly long delay has the effect of bringing about blatant violation of the rule of law and adverse impact on the common man's access to justice. A person's access to justice is a guaranteed fundamental right under the Constitution and particularly Article 21.

Access to justice is, therefore, much more than improving an individual's access to courts, or guaranteeing representation. It must be defined in terms of ensuring that legal and judicial outcomes are just and equitable." 

                         

- Justice Ashok Kumar Ganguly & T.S. Thakur.  

in Imtiyaz Ahmad Vs. State of U.P. & Ors. [Criminal Appeal No. 254-262/2012]

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In Mumbai Grahak Panchayath Vs. State of Maharashtra [Civil Application No. 155&157/2015] it has been held that "It is the constitutional duty of the Government to provide to the citizens of the country with such judicial infrastructure and means of access to justice so that every citizen is able to receive an expeditious, inexpensive and fair trial."

- Justice A.S. Oka

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STATISTICS OF THE CASES - STATE OF KARNATAKA [As on 01-04-2019] 

[Source: https://www.karnataka.gov.in/law/Pages/Statistical-data.aspx]

STATISTICAL INFORMATION REGARDING COMMERCIAL CASES PENDING IN THE COMMERCIAL COURTS AS ON 01.04.2019
ANNEXURE-A
Sl.No.	Name of the Court	Opening Balance	INSTITUTION FOR THE MONTH OF MARCH		DISPOSAL FOR THE MONTH OF MARCH		PENDENCY AS ON 01.04.2019
			FRESH INSTITUTION	INSTITUITION THROUGH TRANSFER	ACTUAL DISPOSAL	TRANSFERRED OUT DUE TO CHANGE OF NOMENCLATURE
Bengaluru City
1	LXXXII Addl.City Civil and Sesions Judge, Bengaluru City.	691	95	627*	31	627*	755
2	LXXXIII Addl. City Civil and Sessions Judge, Bengaluru City.	30	1	25	0	0	56
Total		721	96	652	31	627	811
Ballari
1	IV Addl. District  and Sessions Judge, Ballari.	73	0	167	35	0	205
Total		73	0	167	35	0	205

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DEMAND FOR ESTABLISHMENT OF COMMERCIAL COURTS AT DISTRICT LEVEL 

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M/s. Popular Constructions Vs. Prasanna V Ghotage

View the Judgement from the website of the High Court of Karnataka by clicking the link below: 

http://judgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/260531/1/WP107184-18-27-02-2019.pdf

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PEOPLE'S MOVEMENT - ADVOCATE'S DEMAND - DISTRICT COMMERCIAL COURT AT THE DISTRICT CENTER 

"It is just and fair that the common man, especially small and medium businessmen are not deprived of the right to have easy access to justice near their place of business for meaningful exercise of their constitutional right" 

- Kumar Satyanarayana, Advocate 

"It is sad that the Government of Karnataka has cancelled the functioning of the commercial court in Mangalore and shifted to Bangalore. This is certainly not in the best interest of the practicing advocates and the people of this region."

-Majid Khan, Advocate 

"We earnestly request the Government of Karntaka and the Hon'ble High Court of Karnataka to re-establish the district commercial court in Mangalore to cater to the needs of the enterprenuer of the coastal region as Mangalore is a leading city with banking, trade and port activities."

- Isaac Vas, Vice-President, Canara Chamber of Commerce. 

"We fondly hope that the Government of Karnataka will look into the genuine concern of the business community of Mangalore to get redressal of their grievances through the commercial courts as recovery of monetary claims in an affordable manner is extremely critical in the current economic scenario."

- Gaurav Hegde, President, Canara Small Scale Industries. 

"Shifting the seat of the district commercial court from Mangalore to Bangalore defeats the very objective of the enactment of this landmark legislation which is not only a measure of legal reform but also a major step in the right direction in achieving the economic reform too."

- S.S. Nayak, Chartered Accountant. 

"It is the constitutional obligation of the State to provide necessary infrastructure and other facilities for setting up of commercial court in Mangalore." 

-Vedavyas Kamath, MLA, Mangalore Legislative Constituency. 

"We request the Government of Karnataka to consider setting up of district commercial court in Udupi as Udupi-Manipal are witnessing phenomenal commercial activities and the commercial disputes are on the rise. It is extremely difficult for the affected business community  to travel all the way to Bengaluru for handling their cases." 

- Surendra Nayak, Chartered Accountant, Udupi. 

"It is a fair and reasonable demand by the people of the State to have the commercial courts established in their respective district headquarters. Hence, the Government should consider setting up of commercial courts not only in Bengaluru and Bellari but also in all district headquarters. If all the litigation pertaining to commercial contracts and activities are instituted only in two courts, the existing commercial courts at Bengaluru will be chocked resulting in collapse of the system."

-Rampriyadas, Chartered Accountant, Bengaluru. 

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