Commercial Courts in Delhi: Do We Need Them?

Yesterday, the President promulgated ordinance pertaining to constitution of the Commercial Courts. The text of the ordinance can be accessed here:

Commercial Court

Interestingly, just recently, President gave assent to the Delhi High Court Amendment Bill enhancing jurisdiction of the District Courts. This wasn’t an easy development. Parliament passed the Bill after much protest from the lawyers who were awaiting this Bill to be cleared since long. After recent enactment of the Amendment, many were awaiting the implementation and to see the cases of valuation up-to Rs. 2 Crore getting transferred from the High Court to various District Courts.

Wrote a 2012 Blog myself three years ago about this Amendment Bill. The Standing Committee, while clearing the Amendment Bill had advised that District Courts should have unlimited jurisdiction, while also noting that out of 24 High Courts in entire India, only 4, Delhi included, have Original Jurisdiction.

The Commercial Court Ordinance changes things. What the Ordinance does is create Commercial Courts at the District Court level and Commercial Division at the High Court level. Catch is that the Commercial Courts are not for States like Delhi where High Court already has Original Jurisdiction. So we in Delhi are left with Commercial Division in the High Court.

Now the dichotomy is that the High Court Amendment Bill enhanced pecuniary jurisdiction of the District Courts to Rs. 2 Crore. Commercial Division overrides the Act and gives itself a starting jurisdiction of Rs. 1 Crore! Meaning thereby, for any dispute pertaining to Rs. 1 crore, the case will go to Commercial Division and not District Court.

Although laws are meant for evolution but the Commercial Division does the opposite. A Judge of the High Court will preside over Commercial Division. Status Quo. Already the High Court, which has countless suits pending disposal will continue to hear the matters. This does no help to the litigants. None can argue that the disposal rate of the District Courts is far better than the High Court. There is no rationale why the High Court should hear matters despite having limited number of Judges who are already hard-pressed.

Now the Commercial Division does bring some pragmatic things. It provides for appeals to be decided in 6 months, speedy disposal of cases and amends the Civil Procedure Code to the extent that the pleadings are now refurbished.However, all these are more of guidelines and action is to be seen.

It is, at the outset, a mystery why there was an urgency to promulgate the Ordinance? Why, also, there is no clarity and transparency of suits not getting transferred already to the District Courts post the President assenting the Amendment Bill and it got notified.

What, however, is interesting to see is the definition of a commercial dispute under the Bill. Nearly everything under the Sun is a commercial dispute. Let is see what happens.

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