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IN THE HIGH COURT OF CALCUTTA
Debangsu Basak, J.
Laxmi Polyfab Pvt Ltd - Appellant
Versus
Eden Realty Ventures Pvt Ltd & Anr - Respondent
I.A. No. 3 of 2019, 1179 of 2019, 213 of 2018, 4 of 2019, 1490 of 2019, 116 of 2019, 2 of 2020, 1013 of 2020, 25 of 2016, 243 of 2017, 2 of 2021, 136 of 2020, 223 of 2020, 1 of 2020, 1064 of 2020
Decided On : 07-04-2021
The Court addressed several applications in suits pending before the Commercial Division as well as in suits pending before the Ordinary Original Civil Jurisdiction of a High Court subsequent to the date of notification of the Specified Value. The Court considered the interplay of Section 12A and Section 15 of the Commercial Courts Act, 2015 in a suit involving a commercial dispute within the meaning of the Act of 2015 filed in the Ordinary Original Civil Jurisdiction of a High Court subsequent to the date of notification of the Specified Value. Key legal provisions, their interpretations, and how they influenced the court's decision were analyzed.
Fact of the Case:
Numerous applications in suits pending before the Commercial Division and in suits pending before the Ordinary Original Civil Jurisdiction of this Hon'ble Court along with petitions under the Arbitration and Conciliation Act, 1996 pending in the Commercial Division of this Hon'ble Court as well as in the Ordinary Original Civil Jurisdiction of this Hon'ble Court were heard analogously as they involved issues relating Section 12A and Section 15 of the Arbitration and Conciliation Act, 1996.
Finding of the Court:
1. Section 12A of the Act of 2015 is mandatory. In respect of suits filed upto December 11, 2020 the plaintiff cannot be non-suited as the requisite infrastructure under Section 12A was not notified. 2. Suits involving a commercial dispute filed in the Ordinary Original Civil Jurisdiction subsequent to the date of the notification of the Specified Value are not maintainable in such jurisdiction in view of provisions of section 7 of the Act of 2015. 3. In the event, in a suit governed by scenario (A) above, the plaintiff applies for transfer, the same can be granted under Order VII Rule 10 of the Code of Civil Procedure, 1908 4. On an order under Order VII Rule 10 of the Code of Civil Procedure, 1908 being passed, the plaint has to be returned to the plaintiff to be filed before the appropriate forum. 5. The rigors of Section 12 A of the Act of 2015 will apply to the suit returned under Order VII Rule 10 of the Code of Civil Procedure, 1908 for it to be instituted before the Commercial Division on its presentation. 6. So far as proceedings governed by the Arbitration and Conciliation Act, 1996 involving a commercial dispute within the meaning of the Act of 2015 are concerned they would be guided by Section 15 of the Act of 2015 for filing upto the notification of the Specified Value.
Issues: 1. Is Section 12A of the Commercial Courts Act, 2015 mandatory or directory? 2. What is the interplay of Section 12A and Section 15 of the Commercial Courts Act, 2015 in a suit involving a commercial dispute within the meaning of the Act of 2015 filed in the Ordinary Original Civil Jurisdiction of a High Court subsequent to the date of notification of the Specified Value? 3. In view of the provisions of Section 12A of the Commercial Courts Act, 2015 can a suit of the Specified Value involving a commercial dispute within the meaning of the Act of 2015 be transferred to the Commercial Division of the Ordinary Original Civil Jurisdiction of this Hon'ble Court? 4. If the answer to the preceding issue is in the affirmative then what are the procedure and modalities for the transfer? 5. Can a suit filed in the Commercial Division of the High Court be transferred to the Ordinary Original Civil Jurisdiction of the High Court on finding that the suit does not involve a commercial dispute within the meaning of the Act of 2015? 6. If the answer to the preceding issue is in the affirmative then what would be the procedure and modality for the same. 7. How should proceedings under the Arbitration and Conciliation Act, 1996 be dealt with in respect of the previous issues?
Ratio Decidendi: 1. The word 'shall' used in Section 12A(1) of the Act of 2015 has to be considered in light of the Act of 2015 and the authorities cited at the bar. 2. Whether a provision of any statute is mandatory or not depends upon various factors. Existence or user of the word 'shall' is not the sole determinative factor. 3. Section 12A of the Act of 2015 has a prohibition on institution of a suit in the sate parameters. The prohibition or institution of a suit under Section 12A of the Act of 2015 is of similar nature as that of the prohibition under Section 69 of the Indian Partnership Act, 1932 and Section 80 of the Code of Civil Procedure 1908. 4. Ambalal Sarabhai Enterprises (supra) has laid down that, the provisions of the Act of 2015 has to be strictly construed. The construction and interpretation of the Act of 2015 has to be such that it fulfills the object of expeditious disposal of a commercial dispute.
Final Decision: 1. IA No. G.A 4 of 2019 in CS No. 213 of 2018 is dismissed. 2. IA No. GA 4 of 2021 in CS No. 116 of 2019 is disposed of by directing the Department to return the plaint to the learned Advocate on Record for the plaintiff for presentation before the appropriate court. 3. IA No. GA 2 of 2020 in AP No. 25 of 2016 is disposed of by directing the learned Advocate on Record for the petitioner to incorporate the words 'Commercial Division' in the cause title of the petition and affidavits on record. 4. IA No. G A 2 of 2020 in E C 243 of 2017 is returned to the learned Advocate on Record for the petitioner for filing before the appropriate forum. 5. IA No. GA 2 of 2021 in CS No. 136 of 2020 is disposed of by directing the Department to return the plaint to the learned Advocate on Record of the plaintiff for presentation in the Commercial Division. 6. A P No. 223 of 2020 is returned to the learned Advocate on Record for the petitioner for filing before the appropriate forum.
JUDGMENT
Debangsu Basak, J. - Several applications in suits pending before the Commercial Division as well as in suits pending before the Ordinary Original Civil Jurisdiction of this Hon ble Court along with petitions under the Arbitration and Conciliation Act, 1996 pending in the Commercial Division of this Hon ble Court as well as in the Ordinary Original Civil Jurisdiction of this Hon ble Court have been heard analogously as they involved issues relating Section 12A and Section 15 of the Arbitration and Conciliation Act, 1996.
2. The Advocates appearing for the respective parties have advanced elaborate submissions in support of their respective contentions. For the sake of convenience, the respective submissions have been summarised in the paragraphs hereinafter.
3. The following issues have arisen for consideration :-
(1) Is Section 12A of the Commercial Courts Act, 2015 mandatory or directory?
(2) What is the interplay of Section 12A and Section 15 of the Commercial Courts Act, 2015 in a suit involving a commercial dispute within the meaning of Section 2(1)(c) of the Act of 2015 filed in the Ordinary Original Civil Jurisdiction of a High Court subsequent to the date of notification of the Specified Value ?
(3) In view of the provisions of Section 12A of the Commercial Courts Act, 2015 can a suit of the Specified Value involving a commercial dispute within the meaning of the Act of 2015 be transferred to the Commercial Division of the Ordinary Original Civil Jurisdiction of this Hon ble Court?
(4) If the answer to the preceding issue is in the affirmative then what are the procedure and the modalities for the transfer?
(5) Can a suit filed in the Commercial Division of the High Court be transferred to the Ordinary Original Civil Jurisdiction of the High Court on finding that the suit does not involve a commercial dispute within the meaning of the Act of 2015 ?
(6) If the answer to the preceding issue is in the affirmative then what would be the procedure and modality for the same.
(7) How should proceedings under the Arbitration and Conciliation Act, 1996 be dealt with in respect of the previous issues?
4. Learned Senior Advocate appearing for the first defendant in CS No. 213 of 2018 has submitted that, provisions of Section 12A of the Act of 2015 are mandatory. He has relied upon Section 12A of the Act of 2015 and submitted that, the plaintiff approaching the Commercial Division of a Court in respect of a commercial dispute is mandatorily required to undertake pre-institution mediation. Only in the event, the plaintiff has claimed that, the plaintiff requires urgent reliefs, the plaintiff need not undertake a pre-institution mediation. In such circumstances, the plaintiff has to obtain leave of the Court under Section 12A of the Act of 2015, so as not to undertake a pre-institution mediation and then the suit can be instituted. In the present case, there is no pleading in the plaint that there is any urgency. The plaintiff has not claimed in the plaint that, pre-institution mediation is not required. The plaintiff has not pleaded anything with regard to Section 12A of the Act of 2015 in the plaint.
5. Learned Senior Advocate appearing for the first defendant in CS No. 213 of 2018 has submitted that, the word shall used in Sub-Section (1) of Section 12(A) is mandatory in nature. According to him, the scheme by the Act of 2015 has a requirement for expeditious disposal of a commercial dispute. In order to attain expeditious disposal of a commercial dispute the legislature has thought it appropriate that, the plaintiff approaching a Commercial Division of a Court undertakes a pre- institution mediation in order to have expeditious resolution of the commercial dispute acceptable to all parties concerned. Therefore, the word shall as used in Sub-Section (1) of Section 12A of the Act of 2015 should not be read to mean that it is directory.
6. Learned Senior Advocate appearing for the first defendant in CS No. 213 of 2018 has s
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