Report No. 188

Chapter IX

Fast Track in the Commercial Division in High Courts in India

Towards the end of Chapter VI which dealt with 'Fast Track procedure for Commercial Division in UK and USA', we stated that the 'fast-track' procedure for India would be dealt with in Chapter IX. We shall, accordingly, elaborate our proposals for 'fast track' procedure in the proposed Commercial Division in High Courts in our country in this Chapter. It is recommended that the Bench will be of two High Court Judges and there can be more than one such Bench in each High Court depending upon the need.

The purpose of the proposals in this Chapter is to expedite commercial cases of high pecuniary value and create confidence in the commercial circles, within India and outside, that our Courts are quite fast, if not faster than Courts elsewhere.

The proposed Commercial Division will deal with high value matters and shall be a Court of original jurisdiction. It shall also be an appellate Court but only in regard to appeals pending in the High Courts as on the date of the commencement of the proposed enactment. It shall also deal with the execution proceedings arising out of the above said classes of cases.

The 'fast track' procedure must, in our view, apply to all types of cases referred to above.

It must apply to new commercial cases of a minimum value of Rs.1 crore or above, as may be determined and ratified by the High Court. (This minimum may be fixed by a High Court, at a figure between Rs. 1 crore upto Rs. 5 crores). It will also apply to pending commercial suits of a minimum threshold value of Rs.1 crore or more (or such high pecuniary value as may be determined by the High Court). Some of these pending suits of this value may be suits filed in the Courts of unlimited jurisdiction being Courts subordinate to the High Court. These have to be transferred to the High Court and to be allocated to the Commercial Division. Some may be suits pending on the original side of the Delhi, Bombay, Calcutta and Madras High Courts or such other High Court having such original jurisdiction and these have to be allocated to the Commercial Division.

Other matters pending in the High Court which have to be allocated to the proposed Commercial Division of the High Court are the pending appeals from decree of courts subordinate to the High Court and pending appeals to Division Benches from judgments of learned single Judges on the original side of the High Court. Here too, the cases must be of the pecuniary value stated above.

There may also be appeals in the High Court against interlocutory orders filed under Order LXIII of the Code of Civil Procedure, 1908 or applications under section 115 of the Code of Civil Procedure, 1908 or filed under articles 226/227 of the Constitution questioning interlocutory orders passed by the courts subordinate to the High Court or there may be Letters Patent Appeals (or similar appeals permitted by High Court Acts) questioning the validity of interlocutory orders passed by learned single Judges of the High Court on the original side. We are referring to these types of matters arising out of suits of the above said pecuniary value which are pending. These have also to be allocated to the proposed Commercial Division.

The proposed enactment will contain a provision fixing the minimum pecuniary value at Rs.1 crore (or more as may be determined by the High Court) for purposes of transfer and/or allocation of the above cases to the Commercial Division. There will be a specific provision enabling the High Court to increase the minimum pecuniary value above Rs.1 crore.

This minimum cannot, in our view, be fixed at any amount in excess of Rs. 5 crores. We are proposing delegation of the power of fixing the pecuniary limit as stated above, inasmuch as in some States like Maharashtra, Delhi, West Bengal and Tamil Nadu, where property or contract values are high, it may be necessary to fix a higher threshold value so that the proposed Commercial Division may not be overburdened at the threshold itself. The High Court may fix a minimum value higher than Rs.1 crore (but not exceeding a minimum of Rs. 5 crores) and at a later point of time, may even bring it down but not below Rs.1 crore.

Counter claims filed along with written statements, even if they are not of the prescribed value, will have to go before the Commercial Division.

As stated above, the proposed Commercial Division shall, notwithstanding anything in the Code of Civil Procedure, 1908, be the executing Court not only for original matters filed before it or transferred to it but also in respect of suits where the regular appeals against decrees in suits of the prescribed high pecuniary value which are transferred to the Commercial Division as stated above.

Next, it becomes necessary to define what is meant by the words 'commercial cases'. In Chapter IV of this Report we have referred to the pattern of cases which are treated as 'commercial' in UK and USA. Incidentally, in that chapter, we have also referred to certain Rules framed by the Delhi High Court providing for certain class of cases being treated as 'commercial'.

As stated in Chapter IV, it is not merely sufficient to define what we mean by the word 'commercial' but we should also exclude a class of 'commercial cases' from the purview of the proposed Commercial Division if they are liable to be adjudicated by Courts or tribunals of exclusive jurisdiction - e.g. insolvency matters or winding up proceedings or such commercial cases falling within the domain of bodies/authorities constituted under the Telecom Regulatory Authority of India Act, 1997 or ; Securities Exchange Board of India Act, 1993, Debt Recovery Tribunals dealing with debts due to Banks and Financial Institutions, Rent Tribunals, Motor Accident Claims Tribunals and other Courts or Tribunals dealing with a specific subjects.

However, it may be noted that some Acts such as the Consumer (Protection) Act, 1986 provide that the said enactment is intended to provide remedies in addition to the normal remedies in civil courts. For example, section 3 of that Act states that the 'provisions shall in addition to and not in derogation of the provisions of any other law for the time being in force'. In fact, in several cases, the National Consumer Commission has refused to entertain cases for justifiable reasons such as for example, where serious issues of fraud, cheating or conspiracy are involved. Such cases can still be filed in the High Court and brought before the proposed Commercial Division.

So far as actions for which exclusive courts or tribunals have been constituted by statute, there can, as already stated, be a general provision in the above definition that the 'commercial disputes' which are of the minimum pecuniary value stated above and which may be decided by the Commercial Division, they will not include cases where the jurisdiction of the Civil Court is barred either expressly or by implication by any Central or State law.

Cases cognizable by a criminal court cannot obviously be filed in the proposed Commercial Division because the Court is proposed to deal with civil cases.