The Commercial Divisions will exercise jurisdiction over all cases and applications relating to commercial disputes
In a move aimed to speed up the disposal of commercial suits and take into consideration the Law Commission's recommendations on the matter, the union cabinet on Wednesday okayed the introduction of a bill to set up exclusive commercial divisions in courts.
The cabinet, chaired by Prime Minister Narendra Modi, approved to introduce in the current session of parliament a bill called "The Commercial Division and Commercial Appellate Division of High Courts and Commercial Courts Bill, 2015", the government said in a statement.
The commercial divisions would deal with 'commercial disputes', which are defined to mean disputes arising out of ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, joint venture and partnership agreements, intellectual property rights, insurance and other areas.
Commercial Divisions are to be set up in those high courts which are already exercising ordinary original civil jurisdiction such as the Delhi, Bombay, Calcutta, Madras, and Himachal Pradesh High Court.
The Commercial Divisions will exercise jurisdiction over all cases and applications relating to commercial disputes.
The Commercial Division shall have territorial jurisdiction over such area on which it has original jurisdiction.
The Commercial Courts which will be equivalent to District Courts are to be set up in states and union territories where the high courts do not have ordinary original civil jurisdiction, and in the states where the high court has original jurisdiction in respect of those regions to which the original jurisdiction of a high court does not extend.
The minimum pecuniary jurisdiction of such Commercial Courts and Commercial Division is proposed as Rs.1 crore, the statement said.
"Commercial Appellate Division" shall be set up in all the high courts to hear appeal against (i) Orders of Commercial Division of High Court; and (ii) Orders of Commercial Courts.
Commercial Divisions or Commercial Courts shall not have jurisdiction in matters relating to commercial dispute, where the jurisdiction of the civil court has been either expressly or impliedly barred under law.
It is proposed to have a streamlined procedure which is to be adopted for the conduct of cases in the Commercial Division and in the Commercial Court by amending the Code of Civil Procedure, 1908, so as to improve the efficiency and reduce delays in disposal of commercial cases.
The amended CCP as applicable to the Commercial Divisions and Commercial Courts will prevail over the existing High Court Rules and other provisions of the CPC to the contrary, it said.
The Law Commission in its 253rd Report recommended establishment of Commercial Courts, Commercial Divisions and Commercial Appellate Divisions in the High Courts.
The finance minister in his budget speech of 2015 made a statement that for the quick resolution of commercial disputes, the government proposes to set up exclusive commercial divisions in various courts in India based on the recommendations of the 253rd report of the Law Commission.
The establishment of commercial courts in India is a stepping stone to bring about reform in the civil justice system, it said.