BRIEF ON COMMERCIAL COURTS ACT

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                                     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.

 

 


[1] Associate Company Secretary & Final year law student from Faculty of law, University of Delhi

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