BRIEF ON COMMERCIAL COURTS ACT
BRIEF ON COMMERCIAL COURTS ACT
SHUBHAM BUDHIRAJA[1]
BACKGROUND
India is the largest
country by landmass and is the most populous country after China having a
population of approximately 1.3 billion. Government has also given the freedom
to do any type of business (some exceptions) in India. At the same time, it is
also important to solve the issue raised in the business field. The government
has created a sound business environment throughout the country to attract both
domestic as well as foreign investors. One of the steps, which the government had
taken, is by bringing clarity to the legal regime governing the conduct of
business in the country and also at the same time ensuring that the litigation
process is smooth, fair and bound
The establishment of commercial
courts in India is widely seen as a stepping stone to bring about reform in the
civil justice system in India. Its aim was to give a clear assurance to
investors that high value commercial suits would directly go before the
Commercial Division to be constituted in all High Courts, which would follow
fast track procedures. The
legislation was also intended to improve the international image of the Indian
justice delivery system and to improve the faith of investors in the legal
culture of the nation.
INTRODUCTION
Commerce’ refers to
business matters such as contract, export or import, financing agreements,
trade etc. and Dispute means some type of disagreement. If it is related to the
commercial matter, then we will say that it is a disagreement arising in the
business where one party is not able to fulfill his promise for which he was
legally bound and other parties suffer loss. Thus, Commercial Courts are made
to resolve business issues such as fraud, breach of contract, unfair trade
practices etc. Commercial Courts have jurisdiction to solve the issues arising
in businesses. In simple words, we can say that when any business suffers a
loss due to injustice in a transaction, then he can knock the door of a
commercial court.
WHAT IS COMMERCIAL
DISPUTE?
A Commercial dispute is a business
dispute. It means a dispute between two businesses or dispute between business
and customer/clients. A dispute is some disagreement such as infringement of
contract, not deliver expected things which are mentioned in clauses of the contract,
delivery of bad quality of products, invalid price, parties not filing
obligation in some way etc. The
act placed within its jurisdiction, a wide variety of disputes, including
ordinary transactions of merchants, bankers, financers and traders, to exploitation
of oil and natural gas reserves and electromagnetic spectrums. These matters
were brought under the umbrella of what constitute as “commercial dispute”
WHAT ARE COMMERCIAL
COURTS?
The Commercial courts are made to resolve all suits and
applications relating to the commercial dispute arising out of the entire
territory of the State over which it has been vested territorial jurisdiction. The act provides that in five High courts such as Delhi, Madras,
Bombay, Calcutta & Himachal Pradesh, there will be a commercial division of
a High court where commercial suit will be filed for a specified value notified
by concerned state government and there will be a commercial court at a
district level where commercial suit would be filed where minimum value to be
R.s. three lakhs and maximum to be as specified by the concerned state government.
The appeal from decision of commercial division of High Court and commercial
court at district level lies to commercial appellate division of concerned High
Court. For remaining nineteen High
courts, there will be an additional commercial court at below the district
judge level and there will also be a commercial appellate division at a
district court level. This act also
require High courts to publish statistical data on cases adjured, disposed on
their websites.
PRE MEDIATION MECHANISM
This act also provides for Concept of “Mediation and Settlement- “Pre-institution
Mediation and Settlement”. Mediation means resolving the dispute outside the
commercial court with the help of specific authorities appointed by the Central
Government under the Legal Services Authorities Act 1987. As per amendment of
this Act in 2018, pre-institution mediation and settlement are essential for
knocking the door of the commercial court. It means, it is mandatory to involve
in mediation before knocking on the door of Commercial court.
SPEEDY DISPOSALOF DISPUTE
This act also provides “fast
track procedure” for the disposal of suits in the Commercial Division,
providing timelines for the filing of pleadings; recording of evidence; and
delivery of judgment by the Bench. Elaborate procedures for case management
hearing, including consequences for non-compliance with orders also provided.
This act further provides a Time bound delivery of judgment, within ninety days
from the conclusion of arguments.
The Act further directed that commercial disputes be
heard in a summary manner wherein the court may pass judgment on the claim (or
part of the claim), dismiss the application or dismiss the claim (or part of
the claim). If such summary procedure was unsuccessful, the Act contemplated a
system of Case Management Hearing- setting a fixed timeline for every
subsequent stage of the matter, from filing of affidavits to presentation of
final arguments.
CONCLUSION
Commercial Courts
are courts for resolving commercial disputes arising in the business field.
Government has introduced the Commercial Courts Act 2015 to establish a special
type of court for business issues on the district level. Considering the intention of the government and its prominent
approach, business community hoping for more reforms to the tune of best of
International commercial practice so that India’s rating to ease of doing
business be achieved and India become hub for the commercial relationships in
all fields of economic activity.
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