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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