Report No. 253

C. A Fresh Proposal for the Creation of Commercial Divisions and Commercial Courts

3.9 It is proposed to modify the Bill so to vest the power with the Central Government to:

(i) set up Commercial Divisions in High Courts having ordinary original civil jurisdiction, such as in Chennai;

(ii) Commercial Courts in those regions to which the original civil jurisdiction of such High Courts having ordinary original civil jurisdiction do not extend, such as Madurai; and

(iii) Commercial Courts in States and Union Territories where High Courts do not have original civil jurisdiction in the manner set forth below.

3.10 Given the changes that are being proposed below, it would be appropriate to re-title the Bill as "The Commercial Division and Commercial Appellate Division of High Courts and the Commercial Courts Bill, 2015" (hereinafter the "2015 Bill"). The proposed 2015 Bill has been re-drafted keeping in mind the judicial hierarchy and structure of courts in India, and the need to ensure continuity in such institutions.

The institutional changes are only going to be super-imposed on the existing structures without undermining them in anyway. To further clarify the scope and purpose of the commercial courts in India, the Statement of Objects and Reasons has also been re-drafted. A copy of the re-drafted bill is annexed to this Report.

3.11 Commercial Divisions will be set up only in those High Courts that have ordinary original civil jurisdiction and have a pecuniary jurisdiction of not less than Rupees One Crore. As discussed earlier, we suggest that the pecuniary jurisdiction should be Rupees One Crore uniformly across the five High Courts having ordinary original civil jurisdiction. In those States or Union Territories where a High Court does not exercise original civil jurisdiction, it is recommended that the Central Government, in consultation with the concerned State Government and Chief Justice of the concerned High Court, set up Commercial Courts.

For instance, Commercial Courts may be set up in cities such as Nagpur or Pune where the original civil jurisdiction of the Bombay High Court does not extend. The territorial jurisdiction of the Commercial Courts to be set up will be determined by the Central Government in consultation with the High Court and the concerned State Government, but the pecuniary jurisdiction of such Commercial Courts will be Rupees One Crore.

3.12 In addition, wherever a Commercial Division is being constituted or where a Commercial Court is being set up, the Central Government should simultaneously constitute a Commercial Appellate Division of the High Court composed of one or more Division Benches of the jurisdictional High Court to hear the appeals from the orders and decrees of the Commercial Division or the Commercial Court, as the case may be.