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IN THE HIGH COURT OF DELHI AT NEW DELHI
Navin Chawla, J.
Namita Gupta - Appellant
Versus
Suraj Holdings Limited - Respondent
CM(M) No. 457 of 2023 and CM APPL. No. 13615 of 2023
Decided On : 09-01-2024
JUDGMENT - Commercial Dispute - Code of Civil Procedure, 1908 - Section 24 - The court held that the Commercial Courts Act, 2015 does not exclude the application of Section 24 of the CPC to commercial disputes of a specified value. The court also concluded that the power under Section 24 of the CPC to transfer the suit is not available to the District and Session Judge. The court set aside the orders passed by the Additional District Judge and the Principal District and Sessions Judge and transferred the suit to the Court of the District Judge (Commercial), South-East District, Saket District Court.
Fact of the Case:
The respondent filed a suit seeking recovery of a sum from the petitioner. The petitioner contended that the suit raised a commercial dispute and should be filed before a Commercial Court. The Additional District Judge observed that the dispute was commercial in nature and directed the file of the suit to be placed before the Principal District and Sessions Judge for appropriate orders. The Principal District and Sessions Judge transferred the suit to the Court of the District Judge, Commercial Court-06, South-East District, Saket Courts, New Delhi.
Finding of the Court:
The court held that the orders passed by the Additional District Judge and the Principal District and Sessions Judge were erroneous. It further concluded that the suit should be transferred to the Court of the District Judge (Commercial), South-East District, Saket District Court.
Ratio Decidendi: The Commercial Courts Act does not exclude the application of Section 24 of the CPC to commercial disputes of a specified value. The power under Section 24 of the CPC to transfer the suit is not available to the District and Session Judge.
Final Decision: The court set aside the orders passed by the Additional District Judge and the Principal District and Sessions Judge and transferred the suit to the Court of the District Judge (Commercial), South-East District, Saket District Court.
Certainly. Based on the provided legal document, the key points are as follows:
The Commercial Courts Act does not explicitly exclude the application of Section 24 of the Civil Procedure Code (CPC) to commercial disputes of a specified value, meaning that the general power of courts under Section 24 remains applicable to such cases (!) (!) .
The power under Section 24 of the CPC to transfer a suit is not limited to the Court of the Principal District and Sessions Judge; it is available to the High Court or the District Court for transferring cases from one subordinate court to another, including Commercial Courts, which are subordinate to the High Court (!) (!) .
The Commercial Courts, including those at the district level, are considered courts subordinate to the High Court, and the power to transfer cases under Section 24 of the CPC can be exercised by these higher courts or the District Judge, but not by a Commercial Court below the level of a District Judge (!) (!) .
When a suit that raises a commercial dispute of a specified value is filed as an ordinary civil suit in a non-commercial court, the appropriate remedy is to return the plaint for presentation before the competent Commercial Court, typically under Order VII Rule 10 of the CPC (!) (!) .
The provisions of the Commercial Courts Act, including the special procedural requirements and the mandate for returning non-compliant suits, do not exclude or override the general powers conferred by Section 24 of the CPC. Therefore, even after a suit is returned to be filed in the proper Commercial Court, the Court or the parties can invoke Section 24 for transfer, provided the suit is related to a commercial dispute of a specified value (!) (!) (!) .
The power of the District Judge or the Principal District and Sessions Judge to transfer a suit is limited to cases where the suit is pending before courts subordinate to them, and they do not have the authority to transfer suits to Commercial Courts below the level of a District Judge, as these are courts established under the Act and are not subordinate courts in the traditional sense (!) .
The appropriate course of action when a suit is improperly filed or transferred is to either return the plaint or transfer the case to the proper jurisdiction, ensuring that procedural compliance with the Act is maintained, and the suit proceeds in the correct forum (!) (!) .
The Court has the authority under Section 24 of the CPC to transfer a suit from an improper or non-competent court to the correct jurisdiction, including transferring from a non-Commercial Court to a Commercial Court, even if the suit was initially filed as a non-commercial suit (!) .
Orders transferring suits or directing their return must be made within the limits of the courts’ powers, and courts below the level of a District Judge do not have the authority to transfer cases to Commercial Courts; such transfers are typically exercised by higher courts or the High Court (!) (!) .
The procedural requirement for suits related to commercial disputes includes compliance with specific pleadings, statements of truth, affidavits, and pre-institution mediation under the Act. Non-compliance may lead to the suit being returned or rejected, but this does not affect the court’s power to transfer the suit once proper amendments are made (!) (!) .
In summary, the legal principles affirm that the general transfer powers under Section 24 of the CPC remain applicable to commercial disputes, and courts at higher levels have the authority to transfer suits to the appropriate commercial jurisdiction, regardless of whether the suit was initially filed as a non-commercial suit. The courts below the level of a District Judge do not possess the authority to transfer cases to Commercial Courts, which are established as courts subordinate to the High Court under the Act.
JUDGMENT
Navin Chawla, J. - This petition has been filed by the petitioner, who is the defendant in the Suit, being CS DJ No. 708/2019 titled M/s Suraj Holdings Ltd. v. Namita Gupta (hereinafter referred to as the 'Suit'), challenging the order dated 06.03.2023 (hereinafter referred to as the 'Impugned Order') passed by the learned Additional District Judge-06, South-East District, Saket Courts, New Delhi (hereinafter referred to as 'Additional District Judge'), and the order dated 14.03.2023 (hereinafter referred to as 'Impugned Order') passed by the learned Principal District and Sessions Judge, South-East District, Saket Courts, New Delhi (hereinafter referred to as 'Principal District and Sessions Judge').
2. By the Impugned Order dated 06.03.2023, the learned Additional District Judge, while observing that the dispute between the parties is commercial in nature, directed the file of the Suit to be placed before the Court of the learned Principal District and Sessions Judge, for passing appropriate orders.
3. By the Impugned Order dated 14.03.2023, the learned Principal District and Sessions Judge directed that the Suit be withdrawn from the Court of the learned Additional District Judge, and transferred the same to the Court of the learned District Judge, Commercial Court-06, South-East District, Saket Courts, New Delhi, for proceeding further in accordance with law.
Factual Matrix
4. The facts, in brief, giving rise to the present petition are that the respondent herein, who is the plaintiff in the Suit, filed the said Suit on 19.08.2019, seeking recovery of a sum of Rs. 1,07,37,545.07 along with interest from the petitioner herein. The said Suit was filed by the respondent under Order XXXVII read with Section 151 of the Code of Civil Procedure, 1908 (in short, 'CPC').
5. By the order dated 13.12.2019, the learned Additional District Judge treated the Suit as an Ordinary Civil Suit, and issued summons thereon to the petitioner.
6. The petitioner filed her written statement to the Suit, along with a Counter-Claim for seeking recovery of a sum of Rs. 40,62,882/-along with interest.
7. The petitioner, on 10.02.2022, also filed an application under Order VII Rule 11 of the CPC, contending therein that the Suit was raising a commercial dispute, as defined under Section 2(1)(c)(i) of the Commercial Courts Act, 2015 (hereinafter referred to as the 'Act'), of the specified value, and as it has been filed without resort to the Pre-Institution Mediation as mandated under Section 12-A of the Act, the plaint is liable to be rejected as being barred by law.
8. It is in the course of hearing of the said application, that the learned Additional District Judge, while observing that the dispute raised in the Suit is commercial in nature, passed the Impugned Order dated 06.03.2023, directing the file of the Suit to be placed before the learned Principal District and Sessions Judge for appropriate orders.
9. As noted hereinabove, by the Impugned Order dated 14.03.2023, the learned Principal District and Sessions Judge has been pleased to transfer the Suit to the learned District Judge, Commercial Court-06, South East District, Saket Courts, New Delhi.
10. The petitioner has filed the present petition being aggrieved of the above orders.
Submissions by the Learned Counsel for the Petitioner:
11. The learned counsel for the petitioner submits that the learned Additional District Judge, and even the learned Principal District and Sessions Judge, do not have the power to transfer the Suit, which is filed as an Ordinary Suit, to a Commercial Court. He submits that the only power available to the Court is to return the plaint for the plaintiff to file the same, if so advised, before the Court of appropriate jurisdiction.
12. The learned counsel for the petitioner submits that under the Act, there are special requirements for a Suit to be filed before a Commercial Court, which are in the form of a prescribed Statement of Truth and affidavit to be filed, as wel
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