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2024 Supreme(Cal) 11

IN THE HIGH COURT AT CALCUTTA
I.P. MUKERJI, BISWAROOP CHOWDHURY, JJ.
Prasad Ecostructure L.L.P. - Appellant
Versus
City Devcon Private Ltd. & Others
- Respondent
FMAT. No. 390 of 2023 with CAN 1 of 2023
Decided On : 19-01-2024

Advocates appeared:
For the Appellant:Ashok Kumar Banerjee, Sr. Advocate, Ashim Kumar Routh, Manishka Dhar, Ananya Mondal, Advocates. For the Opposite Parties:Saptangsu Basu, Sr. Advocate, Ayan Banerjee, Rajesh Upadhyay, Debasree Dhamali, Riya Ghosh, Debjani Ghosh, Advocates.

The main legal point established in the judgment is the appealability of orders under Section 13 and Section 15 of the Commercial Courts Act, 2015, and the interpretation of the relevant provisions of the Code of Civil Procedure in determining the appealability of the impugned order of transfer to the Commercial Court.

Headnote:

Transfer - Order of Transfer to Commercial Court - Section 15 of the Commercial Courts Act, 2015 - Order VII Rule 10 of the Code of Civil Procedure

Fact of the Case:

The appeal concerned an order of transfer made by a civil court to the Commercial Court in a district. The respondent argued that the order of transfer was not appealable under Section 13 or 15 of the Commercial Courts Act, 2015, while the appellant contended that the order was appealable under Order XLIII Rule (1)(a) read with Section 104 of the Code of Civil Procedure.

Finding of the Court:

The court analyzed a division bench judgment and held that under Section 15 of the Commercial Courts Act, 2015, the Appellate Division of the commercial court would adjudicate on an application made before it by a party to determine whether the suit is commercial in nature and should be transferred to the commercial court. The court also clarified the appealability of orders under Section 13 and Section 15, ultimately ruling that the impugned order was appealable as an ordinary civil appeal under Order 43(1)(a) read with Section 104 of the Civil Procedure Code.

Issues: The main issue was the appealability of the order of transfer made by the civil court to the Commercial Court, and the interpretation of the relevant provisions of the Commercial Courts Act, 2015 and the Code of Civil Procedure.

Ratio Decidendi: The court held that under Section 15 of the Commercial Courts Act, 2015, the Appellate Division of the commercial court would adjudicate on an application made before it by a party to determine whether the suit is commercial in nature and should be transferred to the commercial court. The court also clarified the appealability of orders under Section 13 and Section 15, ultimately ruling that the impugned order was appealable as an ordinary civil appeal under Order 43(1)(a) read with Section 104 of the Civil Procedure Code.

Final Decision: The court held that the impugned order was appealable as an ordinary civil appeal under Order 43(1)(a) read with Section 104 of the Civil Procedure Code, and referred the appeal to the bench having determination to hear first appeals from orders under the aforesaid provision of the Code passed by a regular court of civil jurisdiction and not by a special court or a commercial court. The existing interim order was extended till 29th February, 2024 or further order, whichever is earlier.

JUDGMENT

I.P. Mukerji, J.

Section 15 of the Commercial Courts Act, 2015 deals with transfer of pending suits. Section 15(2) provides that all suits and applications including applications under the Arbitration and Conciliation Act, 1996 relating to a commercial dispute and pending in any civil court in an area where a commercial court has been constituted shall be transferred to the commercial court. Sub-Section 5 of that section is very important. It lays down that where such suit or application is not transferred, the Commercial Appellate Division of the High Court may be approached with an application. In such an application the Appellate Division of the High Court may order transfer.

The subject matter of this appeal is an order of transfer made by a learned Civil Court to the Commercial Court in a district.

This appeal was heard on a point of maintainability raised by Mr. Saptangsu Basu, learned senior advocate appearing for the respondent. His short and simple argument was that such an order of transfer was not appealable under Section 13 or 15 of the Commercial Courts Act, 2015. Only when the order of transfer was refused by the civil court an application lay under Section 15(5) of the said Act to the High Court. No appeal was contemplated either under Section 15 or under Section 13 from either of these orders.

Learned counsel cited a division bench judgment of this court in FMAT 154 of 2023 with CAN 1 of 2023 (Sarit Kumar Ghosh & Anr. vs. Biswanath Banik & Ors.) decided on 20th April, 2023.

Mr. Ashok Kumar Banerjee, learned senior advocate appearing for the appellant contended that the impugned order of the learned civil judge was under Rule 10 of Order VII of the Code of Civil Procedure returning a plaint to be presented to the proper court and was appealable under Order XLIII Rule (1)(a) read with Section 104 of the Code.

At this point of time it is necessary to analyse the above judgment of the division bench. It was against an order of the learned civil court refusing to transfer a suit to the commercial court.

An appeal was sought to be filed in the High Court which was not entertained with the remark or observation that under Section 15(5) only an application lay to the division bench of this Court in case the civil court refused to transfer a proceeding to the Commercial Court. This is the ratio of that judgment.

We are in perfect agreement with their lordships that under the scheme provided by Section 15 of the Commercial Court Act, 2015 in the event a civil court does not transfer a matter to the commercial court, the Appellate Division of the commercial court would adjudicate on an application made before it by a party whether the suit is commercial in nature and ought to be transferred to the commercial court.

To my mind, Section 15 has got two parts. Section 15(1) to 15(4) is an administrative and judicial function which a civil court performs to give effect to the Commercial Courts Act, 2015 by transferring pending commercial matters before it to the commercial court. When there is no dispute with regard to the nature of the suit that it is commercial and should be transferred to the commercial court, the court performs an administrative function. It is quite likely that there may be a dispute as to whether the matter is commercial or not. In that event the civil court is to take a decision. If it decides not to transfer the case holding that it is not commercial then the Commercial Appellate Division of the High Court can be moved with an application under Section 15(5) to adjudge whether the matter is commercial or not and take a decision.

There is another possibility which has arisen in this case. The civil court decides that the case is commercial and should be transferred. One of the parties thinks that it is not so and ought not to have been transferred.

When the court is exercising this function it is doing so as a civil court and not as a commercial court.

Now, let us consider the appealability of orders under

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