Recently, Dish TV under the Commercial Courts Act 2015 in Transferred suits was allowed by the Delhi High Court to proceed with the litigation under the appeal in the case of Dish TV India Ltd V Gulf DTH FZ LLC & Ors. FAO(OS) 26/2019 & CM APPL. 34384/2016. In pursuance of the same written statement was sought and allowed on record, which was refused to be taken on record vide order dated April 19, 2016, on account of delay of 120 days.

 

Background of the Case

Post issuance of summons the Appellant filed an application under Order VII Rule 10 and 11, seeking rejection of the plaint on the ground, lack of cause of action as well as lack of territorial jurisdiction. The Single Bench, vide order dated April 19, 2016, closed the right of the Appellant from filing its Written Statement under Order VIII Rule 1 beyond the period of 120 days mandated under the Code of Civil Procedure, 1908 (CPC), as amended by the Commercial Courts Act 2015 in Transferred suits.

The Appellant filed an application under Order XLVII Rule 1 r/w Section 114 of CPC seeking for review/recall of the order dated April 19, 2016 which was dismissed. Vide same impugned order, the Court also dismissed the application filed under Order VII Rule 10 & 11, thereby allowing the application under Order XXXIX Rules 1 and 2 filed by Respondent No.1/Plaintiff, and directed its Registry to renumber the said suit as a commercial suit. Hence the present appeal is sought to set aside the impugned order and recover the Appellant right to file written Statement.

 

Maintainability of Transferred suits 

The Delhi High Court clarified the position on application of Commercial Courts Act 2015 in Transferred suits. It held that the present suit constitutes an ordinary civil suit filed on November 5, 2015, whereas the Commercial Division of the High Court was constituted with effect from November 15, 2015.

The suit being filed in the capacity of an ordinary civil suit, is mandatorily required to be transferred to the Commercial Divisions of the Court under Section 15(1) of the Commercial Courts Act 2015 in Transferred suits relating to a commercial dispute of a specified value. Section 15(4) further provides that after such suits have been transferred to the Commercial Division of the High Court, the Commercial Division has the jurisdictional power to hold case management hearings in order to prescribe fresh timelines under the Commercial Courts Act 2015 in Transferred suits.

Pertinently, the court also shed light on the Application of Commercial Courts Act 2015 in transferred suits under Section 15. The provision indicates that the Rule 1(1) of Order V of the Code of Civil Procedure, 1908 shall not be applicable to such transferred suits, and the Court has the discretion to provide fresh timelines for filing of the written statement post the issuance of the summons. Pertinently, the suit was not filed in terms of the Commercial Courts Act, 2015, instead it was the impugned order which qualified the suit as a commercial suit.

By applying the Section 15(4) of the Commercial Courts Act 2015 in Transferred suits, the court held that the present suit, though filed as a civil suit, will qualify as a “commercial dispute” and thus, be allowed to be transferred to the Commercial Division of the High Court.

The Bench disagreed with the question on maintainability under Section 13(2) and stated that the same is not applicable as in the present suit, the impugned order was passed prior to the conversion of the suit into a commercial suit, and that the time period for filing the written statement will apply from the date on which the suit has been converted to a commercial suit.

The Court relied on the observation of the Apex Court in Shah Babulal Khimji (supra) and went on saying that the impugned order would qualify as a “judgement”, and if the Appellant’s written statement is not taken on record, crucial right of the Appellant in defending the suit would be affected. Thus, it held that the present appeal is maintainable under Section 10(1) of the Delhi High Court Act, 1966.

 

Conclusion

Subsequently, the Delhi High Court allowed the present appeal and thereby set aside the impugned order. The court upheld the application of the Commercial Courts Act 2015 in Transferred suits and initiated the proceedings afresh.

Expert Legal Support on the Commercial Courts Act 2015 in Transferred Suits 

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FAQs 

1. Will the proceedings start afresh once an ordinary civil suit has been converted to a commercial one?

Yes, as per the application of the Commercial Courts Act ,2015 in transferred suits, the proceedings will start afresh.

2. In cases of such transfers what will be the impact on the right to file written versions?

The right to file written version will renew provided the limitation to file the same should be within 120 days of such transfer.

3. Will section 13(2) apply in claiming non-maintainability?

This provision is not applicable in the cases where the impugned order was passed prior to the conversion of the suit into a commercial suit, and that the time period for filing the written statement will apply from the date on which the suit has been converted to a commercial suit.

4. Can the ordinary civil suit be transferred to commercial court?

 Yes, as per the application of the Commercial Courts Act 2015 in Transferred suits, any pending ordinary appeal if has a specified amount of a commercial dispute, then it shall be transferred to the commercial court.

5. Are such ordinary civil suits maintainable?

Yes such suits are maintainable once they have been transferred to the commercial court under the application of the Commercial Courts Act 2015 in transferred suits.

 

Author: Japneet Kau Kohli, Associate

Co-Author: Eylah Singh, Intern