Scope of APPEALS UNDER Section
13 (1A) OF COMMERCIAL COURTS ACT APPEAL
The Commercial Courts Act (CCA)
2015 is enacted with a view to accord expediency in cases related to commercial
transactions. The need of a separate and comprehensive Act was felt in view of
delay in disposal of ordinary suits and hence, in the Commercial Act, the tiers
related to appeals impugning judgments on adjudication on interlocutory
application are dispensed with. The commercial courts are constituted at the
District level for a specified sum and Commercial Divisions are also
constituted in High Courts. The High Court also has appellate Commercial
Division qua the appeals that could be filed against the judgment/decree of a
single bench of high Court. Similarly, the judgment/decree passed by District
Judge could be challenged before the High Court under the said Act. It is
worthwhile in the context to refer that Section 115 of Code of Civil Procedure
relating to revisionary jurisdiction appears to have been completely dispensed
with in the Commercial Courts Act and thereby a substantive rights of parties
to the lis is absent as per the CCA. For instance, in cases which is not of
commercial nature under the CCA, once, application under Order VII Rule 11 (a)
(b) (c) or (d) of Code of Civil Procedure are dismissed by a District Court,
the revisionary jurisdiction of High Court could be invoked u/s 115 of Code of
Civil Procedure. Similarly, if application under Order 12 Rule 6 of Code of
Civil Procedure is dismissed by a District Court, , in a general suit, the
revisionary jurisdiction of High Court shall continue to exist. However, if
such orders are passed by a District Court under CCA, then, revisionary
jurisdiction of high court cannot be invoked. Gracefully, though, it is now
settled that one can, nevertheless, approach high court under Article 226 under
the supervisory jurisdiction of the high court and therefore, those who wished
to challenge such orders passed by Commercial District Courts are not rendered
remediless, irrespective of fetter of Order XLIII of CPC. However, what is not
understood is the fact that if a High Court has Commercial Division and
Commercial Appellate Division, then, why the orders rejecting the application
under Order 7 Rule 11 of CPC or order for refusing to return the plaint under Order VII Rule 10 of CPC or decisions Order XXXVII
when leave to defend was allowed conditionally or unconditionally, and/or other
such interlocutory application by a single judge bench of high court cannot be
impugned before the appellate division of high court? If commercial appellate
division of high court can adjudicate in appeal from orders passed by a single
judge bench of high court which finds mention under Order XLIII of CPC, then, why
no substantive orders such as above should be heard by the appellate division
of a high court. The object of expediency cannot be allowed to circumvent the
basic rights of parties. The Section 13 (1A) of CCA no doubt, clearly carved
out details as regards appeals against orders could be impugned before
commercial division or commercial appellate division of high court as the case
may be , provided, the appeals are provided for under Order 43 of Code of Civil
Procedure and in no other cases. The additions however are made as regards the
appeals that could be filed under Section 37 of Arbitration & Conciliation
Act 1996 ( as amended and up to date).
SECTION 13 &
SECTION 13 (1A) of CCA
In the light of above, it is
therefore, endeavored herein to discuss Chapter IV and provisions for appeal
under Section of CCA Section 13 (1A) of CCA and while so doing judicial
precedents shall also be analysed. Before doing so, the provision of Section 13
(1A) may be reproduced:
13.
Appeals from decrees of Commercial Courts and Commercial Divisions—
(1)
[Any person aggrieved by the judgment or order of a Commercial Court below the
level of a District Judge may appeal to the Commercial Appellate Court within a
period of sixty days from the date of judgment or order.
(1A)
Any person aggrieved by the judgment or order of a Commercial Court at the
level of District Judge exercising original civil jurisdiction or, as the case
may be, Commercial Division of a High Court may appeal to the Commercial
Appellate Division of that High Court within a period of sixty days from the
date of the judgment or order:
Provided
that an appeal shall lie from such orders passed by a Commercial Division or a
Commercial Court that are specifically enumerated under Order XLIII of the Code
of Civil Procedure, 1908 (5 of 1908) as amended by this Act and section 37 of
the Arbitration and Conciliation Act, 1996
(2)
Notwithstanding
anything contained in any other law for the time being in force or Letters
Patent of a High Court, no appeal shall lie from any order or decree of a
Commercial Division or Commercial Court otherwise than in accordance with the
provisions of this Act.
The perusal of above recitations
makes it clear that no appeals are contemplated under CCA from any
interlocutory or intermediate orders, before high court, unless, stipulated
under Order XLIII of Code of Civil Procedure. However, the difficulty is
removed in a great deal since, it is now settled that under CCA, through,
revisionary power under Section 115 of CPC is no longer available to high
court, but, still, aggrieved party may approach high court under article 226 of
Constitution of India. However, if orders are passed by a high court on
applications in respect whereof appeals are not provided for under Order 43 of
CPC and unless, the appeal is preferred under section 37 of Arbitration &
Conciliation Act. It is therefore not understood as to, if appellate division
is provided for even in the high court against the orders of single judge, then
why should that be circumvented by putting fetter that appeals against order
could be filed only as per Order XLIII or not otherwise?
LAW
Earlier, there were conflicting
views in this regard from Delhi High Court , but now, it appears to have been
settled to the effect that no appeal by the commercial court or commercial
appellate division could be heard, unless, it is provided for under Order XLIII
of CPC or under Section 37 of Arbitration & Conciliation act. The mandate
emanates from Section 13 (1A) of CCA.
DELHI
HIGH COURT
(Division
Bench)
(1) D &
H INDIA LTD Vs Superon Schweisstechnik India Ltd FA (OS) (COMM) 237/2019
reported as AIR Online 2020 Del 463
Para 21 of the above judgment is
reproduced as:
21:
On a plain reading, the proviso to section 13 (1A) of the Commercial Courts Act
is an enabling, rather than a disabling, provision. There is nothing, in the
said proviso, which would seem to indicate that it dilutes the effect of sub-section 13(1A) of section 13. If we
were to read the said proviso as excluding, from the jurisdiction of the
appellate court, all orders , passed by a Commercial Court, save and except
those which finds specific enumeration in Order XLIII of the Code of Civil
Procedure,1908, as amended by this Act under section 37 of the Arbitration
& Conciliation act 1996. “ we are not convinced that the province of our
jurisdiction, in the present case, allows us to legislate. To our mind,
therefore, sub- section (1A) of section 13 of the Commercial Courts Act allows
appeals to be preferred against all judgments and orders of Commercial Division
of the High Court, to the Commercial Appellate Division thereof, and the
proviso, to the said sub-section merely clarifies that, in the case of orders
specifically enumerated in Order XLIII of CPC, such appeals shall lie.”
(2) Arindam Chaudhuri Vs Zest Systems
Pvt Ltd & Anr AIR ONLINE 2021 DEL1677
Para 8 of the above judgment
reads as:
“8. We had doubts about the
correctness of the view taken in D & H India Ltd (Supra). We felt that the
said view went against the very purpose for which the Commercial Courts Act was
enacted i.e to provide for speedy disposal of high value commercial disputes,
as is evident from the statement of objects and reasons for the said Act. The
effect of judgment ion D & H India Ltd (Supra) was that all orders passed
by the Commercial Courts or the Commercial Divisions of the High Court, would
be appealable when, before the enactment of the Commercial Courts Act, only
such orders were appealable, which were either specifically made appealable,
such as, under section 104, or within XLIII of CPC, or qualified as “judgments”
within the meaning of that expression, as explained by the Supreme Court in Shah Babulal Khimji Vs jayaben D.Kania
& Anr AIR 1981 SC1786.. Thus, right to prefer an appeal-if D& H
India Ltd (Supra) were to be accepted as the correct view, stood expanded by
the Section 13 of the Commercial Courts Act, when compared to the rights of
appeal available prior to its enactment. We were of the prima facie view that
this would go contrary to the purpose and object of the Commercial Courts Act,
as creation of rights and appeal against all and sundry orders passed in
original commercial cases would impede the progress of the causes. Every appeal
at the interlocutory stage of the proceedings acts as a speed breaker in the
progress of the cause. Moreover, if the proviso to Section 13 (1A) were to be
read as not limiting or qualifying the rights of appeal contained in section 13
(1) and the first part of section 13 (1A), then, there was no need to enact the
proviso.The view taken in D&H India Ltd (Supra) rendered the proviso to
section 13 (1A) a surplusage-which is not to be presumed in respect of any part
of a legislation. Thirdly, the view taken by the division bench in D & H
India ltd (Supra) neither took into account Section 13 (2), nor the
interpretation adopted by the division bench could be reconciled with the clear
plain meaning of Section 13 (2). A party aggrieved by an order passed at an
interlocutory stage of the proceedings is not entirely remediless, in as much
as section 105 CPC entitles the party aggrieved by any such interlocutory
order, to assail the same which appealing against the decree by raising a
ground in Memorandum of Appeal. Moreover, the option to assail the
interlocutory order before the Supreme Court, by preferring a Special Leave
Petition, is also available. Since, we were finding it difficult to persuade
ourselves to accept the view expressed in D & H India Ltd (Supra), we
decided to hear the submissions of learned counsels, and directed them to place
on record copies of the judgments that they wished to rely upon”.
(3) Delhi Chemical and Pharmaceutical
Works Pvt Ltd Vs Himgiri Realtors Pvt Ltd & Anr
2021 SCC Online Del 3603
Para 25:
“Though,
we, with due deference to the members of the Division bench in D & H India
Ltd (Supra) entertain doubts as to the correctness of the view taken in D &
H India Ltd, but do not in the facts of the present case, feel the need to make
a reference of the question to a larger bench; the reason is that Bhandari
Engineers & Builders Pvt Ltd (supra) on which the impugned orders are
based, while laying down law therein, also directs all Courts to abide thereby,
resulting in plethora of similar challenges as made herein and it is deemed
expedient to settle the law in that regard and which would remain pending if
the question of maintainability of the appeal were to be referred to a larger bench”.
BOMBAY HIGH COURT
(Division Bench)
(1).
Bank of India Vs M/s Maruti Civil Works & Ors (Appeal from Order no. 362 of
2021 in Commercial Suit No. 6 of 2019
The
Bombay High Court has observed in para no. 15 as under:
“15.
If we compare the unamended provision with the amended provision of section 13
of the act of 2015, what we find is that earlier an appeal was provided against
a “decision” of a Commercial Courts or Commercial Divisions of a High Court to
Commercial division of that high court, whereas after the amendment the
expression “decision” has been substituted by the expression “:judgment or
order”. It is also noticeable that the proviso appended to sub-section 1 of
section 13 which earlier existed has been retained in the amended provision as
well. To determine as to whether the instant appeal is maintainable, we may
also refer to sub section (2) of section 13 of the Commercial Courts Act which
begins with a non obstante clause and provides that notwithstanding anything
contained in any other law for the tine being in force or Letters Patent of a
High Court, no appeal shall lie from any order or decree under section 13
otherwise than in accordance with the provisions of the said Act.”
In
the aforesaid case, the hon’ble Division Bench of Bombay High Court had
dismissed the appeal that was preferred against the order passed by District
Commercial Judge under Order VII Rule 10 and Rule 11 (d) of CPC, since that was
not enumerated under Order XLIII of CPC.
The
Bombay High Court has also held that in Delhi Chemical and Pharmaceutical Works
Pvt Ltd Vs Himgiiri Realtors Pvt Ltd & Anr 2021 SCC Online Del 3603, that
the division bench of Delhi High Court had itself expressed doubts about correctness of the
decision of D& H India Ltd(Supra).
(2)
Skil
Himachal Infrastructure & Toursim Ltd & Ors Vs FS Financial Services
Ltd 2022 SCC Online Bom3152
(3)
Shailendra
Bhaduria Vs matrix partners India Investment Holdings LIC 2018 SCC Online
Bom 13804
“44.Now
the Commercial Courts (Amendment) Act 2018 amends the Act 4 of 2016 and deletes
the word “decision” from section 13…..After the judgment of hon’ble Supreme
Court delivered in the in the case of Fuerest day Lawson Limited Vs Jindal
Exports Limited (2011) 8 SCC 33 and authoritative and binding pronouncements in
the case of Kandla
Export Corporation Vs OCI Corporation (2018) 14 SCC 715, the statute has to confer a
right of appeal, that has to be conferred in clear words. We cannot as
suggested by Mr Andhyaarjuna, by an interpretative process carve out a right of
appeal, when the law is not creating it.
In para 27 of Bank
of India (Supra) it is held by Bombay High Court that:
27.
referring to the order which was under appeal in Skil Himachal (Supra), the
Division bench in this case held that an order under Order XXXVII of CPC is not
enumerated in Order XLIII and that it is only and order and not decree and
therefore in view of law laid down in kandla Export (Supra) and Shailendra
bhaudaria 9Supra), such an order is not appealable under the Act of 2015.”
The above discussion based on judicial
precedents therefore makes it amply clear that the appeal in the Commercial
Courts of High Court or Appellate Division of High Court shall not lie against
such orders which are not featured under Order XLIII of CPC. Resultantly, any
appeal against orders not rejecting plaint under Order VII Rule 11 of CPC or
order of not returning of plaint under Order VII Rule 10 of CPC or, order
passed under Order XXXVII of CPC thereby granting leave to defend either
conditionally or unconditionally or order rejecting application under Order XII
Rule 6 of CPC for instance shall not be appealable. In commercial division,
clearly there is no provision for revision either. However, the order passed by
the District Commercial Court can be entertained by high Court under Article
227 of Constitution of India under supervisory jurisdiction, but no
corresponding remedy shall be available, if such orders are passed by the
single bench of commercial division of High Court. Therefore, the only remedy,
if a party is aggrieved by such orders passed by a single bench of commercial
division of high court shall be to prefer Special leave Petition before the
Supreme Court.
--------
Anil
K Khaware
Founder & Senior
Associate
Soicietylawandjustice.com
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