The Commercial Courts Act, 2015, is an attempt to fast track the process of hearing and disposal of commercial suits. But to the students and the practitioners, who are not familiar with the trial court’s work, the procedural changes brought about by the Act may not be all that apparent, and to whom this ready-reckoner may be useful. This ready reckoner sets out the relevant stages in the filing and conduct of commercial suits. This is not intended to be a commentary on the entire Act and is only to serve as a guide to the procedures and stages to be followed in the filing and conduct of commercial suits.
1. Commercial Dispute
1.1 Ascertain whether the dispute is a commercial dispute to be filed in a commercial court[1].
2. Pre-institution Mediation
2.1 If there is a need for some urgent interim relief, skip this stage and go to next stage – Filing the commercial suit.
2.2 Where there is no need for any urgent interim relief, the plaintiff should submit an application to the District Legal Services Authority (DLSA) for pre-institution mediation[2].
2.3 In cases where the opposite party cannot be served with the notice for giving consent to participate in the mediation or in cases where, in spite of the service of such notice, the opposite party refuses to participate in the mediation, the DLSA shall treat the mediation process to be a non-starter and make a report accordingly to the applicant and the opposite party[3].
2.4 The DLSA must complete the mediation process within three months from the date of the application submitted by the plaintiff, which period may be extended by two months with the consent of the parties[4].
2.5 In cases where the opposite party participates in the mediation process, but there is no settlement possible, the mediator shall submit a failure report to the DLSA[5].
2.6 In cases where the opposite party participates in the mediation process and the parties reach a mutually agreed settlement, the mediator will draw up the terms of settlement in writing[6].
2.7 Such a settlement has the same status and effect an as arbitral award on agreed terms under Section 30 (4) of the Arbitration and Conciliation Act, 1996[7].
2.8 The period spent by the plaintiff in pre-institution mediation process shall not be computed for the purpose of ascertaining the limitation under the Limitation Act, 1963, for filing the commercial suit[8].
3. Filing the Commercial Suit
3.1 The conduct of a commercial suit is governed by the provisions of Civil Procedure Code, 1908 as amended by the Commercial Courts Act, 2015[9].
3.2 In cases where there is need for some urgent interim relief and the pre-institution mediation process has been skipped and in cases where the Mediator has submitted a failure report, the commercial suit has to be filed along with a Statement of Truth[10].
In cases where interest is sought in the commercial suit, the pleadings must contain the prescribed details[11].
4. Filing the Written Statement
4.1 The written statement must be filed within one hundred and twenty days from the date of service of summons, failing which the defendant shall forfeit the right to file it[12].
4.2 Mere denials shall not be sufficient. The defendant shall have to furnish reasons for denying any of the pleadings in the plaint[13].
4.3 If any allegation of fact in the plaint is not denied in the manner prescribed in Rule 3-A, such allegation of fact shall be taken to be admitted[14].
5. Disclosure, Discovery and Inspection of Documents
Disclosure
5.1 Along with the plaint, the plaintiff must file a list and photocopies of all documents in its power, possession, control or custody, pertaining to the suit[15].
5.2 The plaint must contain a declaration on oath from the plaintiff that all documents in its power, possession, control or custody pertaining to the case have been disclosed and copies thereof annexed with the plaint and that the plaintiff does not have any other documents in its power, possession, control or custody[16].
5.3 Along with the written statement, the defendant must file a list and photocopies of all documents in its power, possession, control or custody, pertaining to the suit[17].
5.4 The written statement must contain a declaration on oath from the defendant that all documents in its power, possession, control or custody pertaining to the case have been disclosed and copies thereof annexed with the written statement and that the defendant does not have any other documents in its power, possession, control or custody[18].
Discovery
5.5 Either the plaintiff or the defendant may, by leave of the court, deliver interrogatories in writing for the examination of the opposite party and the court should decide the application for leave to deliver interrogatories within seven days of its filing. The application will be dealt with in the manner prescribed in Order XI Rule 2 of the Code of Civil Procedure, 1908.
Inspection
5.6 Within thirty days of the filing of the written statement, extendable by the court by a further thirty days, the parties must complete inspection of all documents disclosed in the proceedings. If a party refuses to provide inspection of any documents, the other party may apply to the court for a direction to furnish such documents for inspection. The court should dispose of the application within thirty days of filing and if it is allowed, the inspection of the documents must be furnished within five days of the order allowing the application. A party will not be permitted to rely on a document, which it failed to disclose or of which inspection has not been given, except with the leave of the court[19].
Admission and denial of documents
5.7 Within fifteen days of completion of the inspection of documents, each party must submit a statement of admission or denial of all documents disclosed and of which inspection has been given[20].
Production of documents
5.8 Any party may issue a notice seeking production by the other party of such documents in the power, possession, control or custody of such other party which the party had omitted to disclose along with its pleadings. The other party must, within a maximum period of fifteen days of receipt of the notice, either produce such documents or justify its refusal or inability to do so. The court may draw an adverse inference against a party refusing to produce documents in cases where the court finds that the reasons for non-production of the documents are insufficient[21].
6. Case Management Hearing
6.1 Within four weeks of the filing of the affidavits of admission or denial of documents by all the parties to the commercial suit, the court must hold the first case management hearing and pass an Order framing the Issues, listing witnesses to be examined by the parties, fixing dates for filing of affidavits of evidence, recording of evidence, cross-examination of witnesses, filing of written arguments, submission of oral arguments and setting time-limits for parties and their advocates to address oral arguments. The court must ensure that the dates are fixed in such a manner as to ensure that the arguments are closed within six months from the first case management hearing, and must, as far as possible, ensure that the recording of evidence, including cross-examination of all the witnesses, is carried on a day-to-day basis. The court has wide powers in a case management hearing[22].
6.2 There are a few additional provisions for recording of evidence and submission or arguments.
7. Judgment
7.1 The court must pronounce judgment within ninety days of conclusion of arguments[23].
8. General
Costs
8.1 In relation to commercial suits, the court has the discretion to determine whether costs are payable by one party to another, the quantum of such costs and when they are to be paid, such costs to include costs of witnesses, legal fees and expenses, and any other expenses incurred in connection with the proceedings[24].
Summary Judgment
8.2 A commercial suit may be filed as a summary suit under the provisions of Order XXXVII of the Code of Civil Procedure, 1908[25].
8.3 Even in regular commercial suits, at any stage after service of summons on the defendant but prior to the framing of issues, either party may file an application for summary judgment and the court may give a summary judgment against the plaintiff if it considers that the plaintiff has no real prospect of succeeding on the claim or against the defendant if it considers that the defendant has no real prospect of successfully defending the claim[26].
8.4 Apart from either allowing or dismissing the application, the court may partly allow it or may pass a conditional order requiring a party to deposit a sum of money or provide some security[27].
Appeals
8.5 No civil revision application or petition is maintainable against any interlocutory order of a commercial court[28].
8.6 Any person aggrieved by the judgment or order of a commercial court may file an appeal within a period of sixty days from the date of such judgment or order to the commercial appellate court or to the Commercial Appellate Division of the High Court as the case may be[29].
† Practising advocate, Dhananjay Joshi Associates, Bengaluru
[1] Section 2 (1) (c) read with Section 2 (1) (i), Commercial Courts Act, 2015
[2] Section 12-A (1), Commercial Courts Act, 2015 read with the Commercial Courts (Pre-institution Mediation and Settlement) Rules, 2018
[3] Rule 3 (4) or Rule 3 (6), Commercial Courts (Pre-institution Mediation and Settlement) Rules, 2018.
[4] Section 12-A (3), Commercial Courts Act, 2015
[5] Rule 7 (1) (ix), Commercial Courts (Pre-institution Mediation and Settlement) Rules, 2018
[6] Section 12-A (4), Commercial Courts Act, 2015 read with Rule 7 (1) (vii), Commercial Courts (Pre-institution Mediation and Settlement) Rules, 2018.
[7] Section 12-A (5), Commercial Courts Act, 2015
[8] Second Proviso to Section 12-A (3), Commercial Courts Act, 2015
[9] Section 16, Commercial Courts Act, 2015
[10] Proviso to Section 26 of the Code of Civil Procedure, 1908
[11] Order VII Rule 2-A of the Code of Civil Procedure, 1908
[12] Second Proviso to Rule 1 of Order VIII of the Code of Civil Procedure, 1908
[13] Order VIII Rule 3-A (3) of the Code of Civil Procedure, 1908
[14] Second Proviso to Rule 5 (1) of Order VIII of the Code of Civil Procedure, 1908
[15] Order XI Rule 1 of the Code of Civil Procedure, 1908
[16] Order XI Rule 3 of the Code of Civil Procedure, 1908
[17] Order XI Rule 7 of the Code of Civil Procedure, 1908
[18] Order XI Rule 9 of the Code of Civil Procedure, 1908
[19] Order XI Rule 3 of the Code of Civil Procedure, 1908
[20] Order XI Rule 4 of the Code of Civil Procedure, 1908
[21] Order XI Rule 5 of the Code of Civil Procedure, 1908
[22] Order XV-A of the Code of Civil Procedure, 1908
[23] Order XX Rule 1 of the Code of Civil Procedure, 1908
[24] Section 35 of the Code of Civil Procedure, 1908
[25] Order XIII-A Rule 1 (3) of the Code of Civil Procedure, 1908
[26] Order XIII-A Rule 3 of the Code of Civil Procedure, 1908
[27] Order XIII-A Rules 6 and 7 of the Code of Civil Procedure, 1908
Whether order xxxvii rule 2 averment is necessary