As per case facts, an execution petition was filed in a civil court to enforce an arbitral award, leading to a challenge before the High Court's Division Bench regarding the ...
1
IN THE HIGH COURT OF ANDHRA PRADESH: AT AMARAVATI
*****
Civil Revision Petition Nos.1847/2024, 1172/2022
and 1685, 1686, 1688 and 1689 of 2024
Between
3F INDUSTRIES LIMITED,, REP. BY ITS AUTHORISED
SIGNATORY, MR. G. SRINIVASA RAO AND OTHERS
...PETITIONERS
and
TRANSPARENT TECHNOLOGIES SOLUTIONS PRIVATE LIMITED,
Rep. by its Director, Sri Ajit Apte, Pushpa Heights, 1st Floor,
Bibwewadi Comer, Pune-411 037, Maharashtra and others
...RESPONDENTS
Date of Reserve : 12-02-2026
Date of Judgment pronounced : 18-5-2026
Date of Upload : 20-5-2026
HON’BLE SRI JUSTICE CHEEKATI MANAVENDRANATH ROY
HON’BLE SRI JUSTICE RAVI NATH TILHARI
AND
HON’BLE SRI JUSTICE BATTU DEVANAND
1 Whether Reporters of Local
newspapers may be allowed to see
the Judgments?
Yes/No
2 Whether the copies of judgment may
be marked to Law Reports/Journals
Yes/No
3 Whether Their Ladyship/Lordship
wish to see the fair copy of the
Judgment?
Yes/No
___________________________________
CHEEKATI MANAVENDRANATH ROY, J.
2
* HON’BLE SRI JUSTICE CHEEKATI MANAVENDRANATH ROY
HON’BLE SRI JUSTICE RAVI NATH TILHARI
AND
HON’BLE SRI JUSTICE BATTU DEVANAND
+ Civil Revision Petition Nos.1847/2024, 1172/2022
and 1685, 1686, 1688 and 1689 of 2024
% 18-5-2026
# 3F INDUSTRIES LIMITED,, REP. BY ITS AUTHO RISED
SIGNATORY, MR. G. SRINIVASA RAO AND OTHERS
...PETITIONERS
vs.
$ TRANSPARENT TECHNOLOGIES SOLUTIONS PRIVATE
LIMITED, Rep. by its Director, Sri Ajit Apte, Pushpa Heights, 1st
Floor, Bibwewadi Comer, Pune-411 037, Maharashtra and others
...RESPONDENTS
! Counsel for the Petitioners: Sri Venkat Challa, Sri G.V.S. Kishore
Kumar
and Sri S.V.S.S. Siva Ram
Counsel for Respondents: Sri V. Yatendra Kumar and
Sri Somu Krishna Murthy
< Gist:
> Head Note:
? Cases referred:
1. CRP No.2183/2022, dt.12-9-2023
2. CRP No.1749/2023, dt.28-8-2023
3. CRP No.740/2024, dt.04-7-2024
4. CRP No.1932/2025, dt.22-9-2025
5. (2002) 2 SCC 542
3
APHC010335012024
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI
(Special Original Jurisdiction)
[3571]
MONDAY, THE EIGHTEENTH DAY OF MAY
TWO THOUSAND AND TWENTY SIX
PRESENT
THE HONOURABLE SRI JUSTICE CHEEKATI MANAVENDRANATH
ROY
THE HONOURABLE SRI JUSTICE RAVI NATH TILHARI
AND
THE HONOURABLE SRI JUSTICE BATTU DEVANAND
CIVIL REVISION PETITION NOS: 1847 OF 2024, 1172 OF 2022
AND 1685, 1686, 1688 AND 1689 OF 2024
CIVIL REVISION PETITION NO: 1847 OF 2024
Between:
1. 3F INDUSTRIES LIMITED,, REP. BY ITS AUTHORISED
SIGNATORY, MR. G. SRINIVASA RAO, S/O RAMADASU, AGED
ABOUT 64 YEARS, R/O PLOT NO. 43, MOTHE RAJKUMAR
NAGAR, PATHEB AD, ELURU, ANDHRA PRADESH. HAVING
REGISTRED OFFICE AT P.O. BOX NO 15, TANUKU ROAD,
TADEPALLIGUDEM, WEST GODAVARI DISTRICT, ANDHRA
PRADESH-534 101.
...PETITIONER
AND
1. TRANSPARENT TECHNOLOGIES SOLUTIONS PRIVATE
LIMITED, Rep. by its Director, Sri Ajit Apte, Pushpa Heights, 1st
Floor, Bibwewadi Comer, Pune-411 037, Maharashtra.
...RESPONDENT
4
Petition under Article 227 of the Constitution of India,praying that in
the circumstances stated in the grounds filed herein,the High Court may
be pleased toprays this Hon'ble Court to allow the instant Revision
Petition by setting aside the order dated 26.07.2024 in E.P.No. 20 of 2024
passed by the Hon'ble XI AddI District Judge, Tadepalligudem and pass
IA NO: 1 OF 2024
Petition under Section 151 CPC praying that in the circumstances
stated in the affidavit filed in support of the petition, the High Court may
be pleased prayed that this Hon'ble Court may suspend the operation of
the order dated 26.07.2024 (“Impugned Order”) passed by the Hon’ble XI
AddI District Judge. Tadepalligudem in E.P.No. 20 of 2024 and set aside
the consequential actions pursuant to the said impugned order and pass
IA NO: 2 OF 2024
Petition under Section 151 CPC praying that in the circumstances
stated in the affidavit filed in support of the petition, the High Court may
be pleased pleased to permit the Petitioner/ Respondent/DHR to
withdraw the amount of Rs: 15,75,000/- deposited by
theRespondent/Petitioner/JDR on 11.09.2024 before the Hon'ble XI
Addl.District Court at Tadepalligudem and pass
Counsel for the Petitioner:
1. VENKAT CHALLA
Counsel for the Respondent:
1. V YATENDRA KUMAR
CIVIL REVISION PETITION NO: 1172 OF 2022
Between:
1. M/S. SURESH SURGICALS,, BEING REPRESENTED BY ITS
PROPRIETOR, MR.MUPPARAJU SURESH,
S/O.VENKATESWARLU, HINDU, AGED ABOUT 49 YEARS, WITH
ITS OFFICE AT FLAT NO.202, 1ST FLOOR, SRINIVASA
CHAMBERS, OPP KGH OUT GATE, VISAKHAPATNAM- 53002.
5
2. M/S. SURESH CRYOGENIC GASES,, BEING REPRESENTED BY
MR.MUPPARAJU SURESH, S/O.VENKATESWARLU, HINDU,
AGED ABOUT 49 YEARS, WITH ITS OFFICE AT FLAT NO.202, 1
FLOOR, SRINIVASA CHAMBERS, OPP KGH OUT GATE,
VISAKHAPATNAM-53002.
...PETITIONER(S)
AND
1. ELLENBARIE INDUSTRIAL GASES LTD EIGL, BEING
REPRESENTED BY ITS AUTHORIZED SIGNATORY,
SANTAMAYA MOHAPATRA, S/O.RAMESH CHA NDRA
MOHAPATRA, HINDU, AGED 47 YEARS, OFFICE SITUATED AT
3A, RIPON STREET, 2ND FLOOR, KOLKATA- 700016 WITH ONE
OF ITS BRANCHES/UNITS SITUATED AT PLOT NO.57A, JN
PHARMA CITY, PARAWADA MANDAL, VISAKHAPATNAM- 531
021, ANDHRA PRADESH. .. RESPONDENT/PLAINTIFF
2. M/S CHAITRA MULTI SPECIALTY HOSPITAL, REPRESENTED
BY ITS DIRECTOR, ASHOK NAGAR ROAD, OPP KPDT HIGH
SCHOOL, ASHOK NAGAR, ELURU, WEST GODAVARI
DISTRICT- 534002.
3. M/S SEVEN HILLS HOSPITAL, REPRESENTED BY ITS
DIRECTOR, SITUATED AT D.NO.114-4/A, WALTAIR MAIN ROAD,
RAMNAGAR, ROCKDALE LAYOUT, VISAKHAPATNAM-53 0002.
4. ALLURI SITARAMA RAJU ACADEMY OF MEDICAL SCIENCES,
REPRESENTED BY ITS DIRECTOR, SITUATED AT NH- 5,
MALKAPURAM, ELURU, WEST GODAVARI DISTRICT-534005.
5. M/S PINNACLE HOSPITAL, REPRESENTED BY ITS DIRECTOR,
SITUATED AT D.NO.10- 1112, APIIC HEALTH CITY,
MUDASARLOVA ROAD, CHINAGADHILI, ARILOVA,
VISAKHAPATNAM- 530040.
6. M/S SUNRISE MULTI SPECIALTY HOSPITAL, REPRESENTED
BY ITS DIRECTOR, SITUATED AT D.NO.2-27- 15, GOKUL
STREET, NEAR SAFE HOSPITAL, SRI NAGAR, KAKINADA,
EAST GODAVARI DISTRICT-53001.
6
...RESPONDENT(S):
Petition under Article 227 of the Constitution of India,praying that in
the circumstances stated in the grounds filed herein,the High Court may
be pleased tobegs to present this Memorandum of Civil Revision Petition
aggrieved by the order in I.A.no. 82 of 2022 in O.S.No. 253 of 2021 dt.
30.03.2022 passed by the learned Addl. Sessions Judge, Visakhapatnam
IA NO: 1 OF 2022
Petition under Section 151 CPC praying that in the circumstances
stated in the affidavit filed in support of the petition, the High Court may
be pleased pleased to grant stay of all further proceedings in OS.No. 253
of 2021 on the file of the court of the Honourable Special Sessions'Judge
for the trail of cases under SC's and ST's (POA)-Cum XIth Additgional
District and Sessions Judge at Visakhapatnam, pending disposal of the
main CRP and pass
Counsel for the Petitioner(S):
1. G V S KISHORE KUMAR
Counsel for the Respondent(S):
1. S.V.S.S.SIVA RAM
2. THE ADVOCATE GENERAL
CIVIL REVISION PETITION NO: 1685 OF 2024
Between:
1. ATIURI VENKATA SATYA VARA PRASAD,,
S/O.A.V.S.R.ANJANEYULU, AGED ABOUT 54 YEARS, HINDU,
R/O.11-62-112 AND 115, KODURU CASITA CANAL ROAD,
VIJAYAWADA, KRISHNA DISTRICT-520001
...PETITIONER
AND
1. REDDIMI GANESH, S/o.Veerraju, Aged about 50 years, Hindu,
Flat No.FF-2, Koduru Residency, Vishunuvardhana Rao Street,
Labbipet, Vijayawada-520010, Krishna District. Presently residing
7
at Abu Dhabi, United Arab Emirates. Represented by his GPA
Holder, Sri Y.S.V.V.R.K.S.R. Naidu, S/o.Y.U.Bhaskara Rao Naidu,
39-2-17, FF-2, Koduru Residency, Vishnuvardhana Rao Street,
Labbipet, Vijayawada-520010, Krishna District,
...RESPONDENT
Petition under Article 227 of the Constitution of India,praying that in
the circumstances stated in the grounds filed herein,the High Court may
be pleased topleased to set aside the Impugned Order dated 01.07.2024
passed in I.A. No.719 of 2023 in O.S. No. 526 of 2021 on the file of the
Court of the Hon'ble Principal Civil Judge (Junior Division), Vijayawada
and pass
IA NO: 1 OF 2024
Petition under Section 151 CPC praying that in the circumstances
stated in the affidavit filed in support of the petition, the High Court may
be pleased pleased to stay all further proceedings in O.S. No. 526 of
2021 on the file of the Court of the Hon'ble Principal Civil Judge (Junior
Division), Vijayawada, pending the present Civil Revision Petition and
pass
Counsel for the Petitioner:
1. N SAI PHANINDRA KUMAR
Counsel for the Respondent:
1. SOMU KRISHNA MURTHY
CIVIL REVISION PETITION NO: 1686 OF 2024
Between:
1. ATLURI VENKATA SATYA VARA PRASAD,,
S/O.A.V.S.R.ANJANEYULU, AGED ABOUT 54 YEARS, HINDU,
R/O.11-62-112 AND 115, KODURU CASITA, CANAL ROAD,
VIJAYAWADA, KRISHNA DISTRICT-520001
...PETITIONER
AND
8
1. GALLA PRAVEEN, , S/o.Bhaskara Rao, Aged about 36 years,
Hindu, R/o.9-113, Ashok Nagar, Bundar Road, Penamaluru
Mandal, Krishna District. Represented by his GPA Holder, Sri
Bhaskara Rao Galla, S/o.Veera Raghavaulu, aged about 68 years,
Hindu, 9-113, Mahatma Gandhi Road, Ashok Nagar, Auto Nagar,
Vijayawada-520007, Krishna District,
...RESPONDENT
Petition under Article 227 of the Constitution of India,praying that in
the circumstances stated in the grounds filed herein,the High Court may
be pleased topleased to set aside the Impugned Order dated 01.07.2024
passed in I.A. No.718 of 2023 in O.S. No. 525 of 2021 on the file of the
Court of the Hon'ble Principal Junior Civil Judge, Vijayawada
IA NO: 1 OF 2024
Petition under Section 151 CPC praying that in the circumstances
stated in the affidavit filed in support of the petition, the High Court may
be pleased pleased to stay all further proceedings in O.S. No. 525 of
2021 on the file of the Court of the Hon’ble Principal Civil Judge (Junior
Division), Vijayawada, pending the present Civil Revision Petition and
pass
Counsel for the Petitioner:
1. N SAI PHANINDRA KUMAR
Counsel for the Respondent:
1. SOMU KRISHNA MURTHY
CIVIL REVISION PETITION NO: 1688 OF 2024
Between:
1. ATLURI VENKATA SATYA VARA PRASAD,
S/O.A.V.S.R.ANJANEYULU, AGED ABOUT 54 YEARS, HINDU,
R/O 11-62-112 AND 115, KODURU CASITA, CANAL ROAD,
VIJAYAWADA, KRISHNA DISTRICT-520001
...PETITIONER
9
AND
1. MARRI SRIDHAR, S/o.Raghava Rao, Aged about 45 years, Hindu,
House No.2/12, Beside Panchayat Office, Ramavarappadu,
Vijayawada Rural Mandal, Vijayawada, Presently residing at 306 B
Punggol Place, 03-29, Singapore-822306. Represented by his
GPA Holder, Sri Bhaskara Rao Galla, S/o.Veera Raghavaulu aged
about 68 years, Hindu, 9-113, Mahatma Gandhi Road, Ashok
Nagar, Auto Nagar, Vijayawada-520007, Krishna District
...RESPONDENT
Petition under Article 227 of the Constitution of India,praying that in
the circumstances stated in the grounds filed herein,the High Court may
be pleased tomay be pleased to set aside the Impugned Order dated
01.07.2024 passed in I.A. No.716 of 2023 in O.S. No. 501 of 2021 on the
file of the Court of the Honble Principal Civil Judge (Junior Division),
Vijayawada and pass such
IA NO: 1 OF 2024
Petition under Section 151 CPC praying that in the circumstances
stated in the affidavit filed in support of the petition, the High Court may
be pleased may be pleased to stay all further proceedings in O S. No.
501 of 2021 on the file of the Court of the Hon’ble Principal Civil Judge
(Junior Division), Vijayawada, pending the present Civil Revision Petition
and pass such
Counsel for the Petitioner:
1. N SAI PHANINDRA KUMAR
Counsel for the Respondent:
1. SOMU KRISHNA MURTHY
CIVIL REVISION PETITION NO: 1689 OF 2024
Between:
1. ATIURI VENKATA SATYA VARA PRASAD,,
S/O.A.V.S.R.ANJANEYULU, AGED ABOUT 54 YEARS, HINDU,
R/O.11-62-112 AND 115, KODURU CASITA, CANAL ROAD,
10
VIJAYAWADA, KRISHNA DISTRICT-520001
...PETITIONER
AND
1. JUTURU CHANDRA MOHAN, S/O.LATE RAMA SUBBAIAH,
AGED ABOUT 56 YEARS, HINDU, FLAT.NO.61, GREEN PARK
ENCLAVE, KAPRA, HYDERABAD-500062.
2. JUTURU BHARATHA LAKSHMI, W/O.JUTURU CHANDRA
MOHAN, AGED ABOUT 53 YEARS, HINDU, FLAT.NO.61,
GREEN PARK ENCLAVE, KAPRA, HYDERABAD-500062.
...RESPONDENT(S):
Petition under Article 227 of the Constitution of India,praying that in
the circumstances stated in the grounds filed herein,the High Court may
be pleased topleased to set aside the Impugned Order dated 01.07.2024
passed in I.A. No.717 of 2023 in O.S. No. 500 of 2021 on the file of the
Court of the Hon'ble Principal Civil Judge (Junior Division), Vijayawada
and pass
IA NO: 1 OF 2024
Petition under Section 151 CPC praying that in the circumstances
stated in the affidavit filed in support of the petition, the High Court may
be pleased pleased to stay all further proceedings in O.S. No. 500 of
2021 on the file of the Court of the Hon’ble Principal Civil Judge (Junior
Division), Vijayawada, pending the present Civil Revision Petition and
pass
Counsel for the Petitioner:
1. N SAI PHANINDRA KUMAR
Counsel for the Respondent(S):
1. SOMU KRISHNA MURTHY
The Court made the following:
11
Common Order: (per Cheekati Manavendranath Roy, J.)
Pursuant to the order dated 23-8-2024 of a Division Bench of this
Court passed in C.R.P.No.1847 of 2024 referring the following questions
to a Larger Bench, this Full Bench is constituted to answer the questions
formulated by the Division Bench for reference:
A. Whether the Amendment Act No.28 of 2018, in respect of
Sections 2(1)(i) & 3(1A) of the Commercial Courts Act, 2015, by
itself amends the ‘specified value’ as ‘not less than three lakhs
rupees’, for the jurisdiction of the Commercial Court or it only
enables the Central Government & the State Government(s) to
do so, by notification specifying any amount, which shall not be
less than three lakhs, as ‘specified value’, and it is only after
such notification, the specified value shall stand amended ?
B. Whether the ‘specified value’ in Section 2(1)(i) in Commercial
Courts Act, 2015, as substituted by Act 28 of 2018 to the effect
“which shall not be less than Rupees three lakhs” in the place of
“which shall not be less than Rupees One Crore” shall be
operative and effective from
i) the date of amendment i.e., w.e.f. 03.05.2018; or
ii) on the date notified in the notification being issued by the
Central Government under Section 2(1)(i) of the Act; or
iii) on the date notified in the notification being issued by the
Andhra Pradesh State Government in consultation with
the High Court of Andhra Pradesh, as provided under
Section 3(1A) of the Commercial Courts Act ?
C. Which judgment, U.V. Satyanarayana or Bellam Balakrishna,
lays down the law correctly ?
2. Brief overview of the facts leading to the lis in C.R.P.No.1847 of
2024 before the learned Division Bench may be delineated as follows:
12
(a) An execution petition seeking attachment of property under
Order XXI, Rule 54 of CPC was filed in E.P.No.20 of 2024 on the file of
the XI Additional District Judge, Tadepalligudem, to execute an arbitral
award passed by the Arbitral Tribunal. The executing Court by an order
dated 26-7-2024 ordered to post the said matter on 23-8-2024 to issue
notice and attachment under Order XXI, Rule 54 of CPC on payment of
process. The said execution proceedings initiated before the executing
Court which is the XI Additional District Judge’s Court, Tadepalligudem,
are questioned before a Division Bench of this Court in the aforesaid civil
revision petition on the ground that the XI Additional District Judge,
Tadepalligudem, which is a civil court and not a commercial court, has no
jurisdiction to execute the award as it lacks inherent jurisdiction to
entertain the said execution petition. It is contended before the Division
Bench that only the Commercial Court at Visakhapatnam alone is
competent to entertain the execution petition and not by the Civil Court in
view Sections 10 and 15 read with Section 2(1)(i) of the Commercial
Courts Act, 2015 (hereinafter referred to as “the Act”). In support of the
said contention, the petitioner has placed reliance on a judgment of
another Division Bench of this Court rendered in the case of M/s.
Obulapuram Mining Company Pvt. Ltd. v. R.K. Mining Private
Limited
1
. In the case of Obulapuram Mining Company Pvt. Ltd.
(1 supra), the Division Bench of this Court held that application for
execution is also an application within the meaning of Sections 10 and 15
of the Act and after the Commercial Courts are constituted in the State of
Andhra Pradesh, only the said Commercial Courts have jurisdiction over
the commercial disputes of Specified Value even for execution and not
the Civil Courts. It is further held that all the orders passed by the Civil
Courts in a commercial dispute after 16-5-2019 were by a coram
non-judice and were bad in law.
1
CRP No.2183/2022, dt.12-9-2023
13
(b) While addressing arguments in the said civil revision petition
before the Division Bench of this Court, the learned counsel for the
respondent therein relied on a judgment of another Division Bench of this
Court rendered in the case of Bellam Balakrishna v. Greenmount
Developers
2
and contended that until the State Government issues a
notification in consultation with the High Court, the pecuniary value of
three lakh rupees as fixed in Section 2(1)(i) of the Act will not come into
operation. Another judgment of other Division Bench of this Court
rendered in the case of U.V. Satyanarayana v. M/s. Shriram City Union
Finance Ltd.
3
was also cited before the Division Bench in the above civil
revision petition wherein it is held that the execution petition to execute an
order passed by the Commercial Court is to be filed only in the
Commercial Court and not in the Civil Court. Considering the said two
judgments rendered by two coordinate Division Benches of this Court
both in the cases of Bellam Balakrishna and U.V. Satyanarayana
(2 and 3 supra), the Division Bench in the above civil revision petition was
of the opinion that there is an apparent conflict between the two
judgments inasmuch as in the case of Bellam Balakrishna (2 supra) the
Court held that without notification, the Commercial Courts, Commercial
Division and Commercial Appellate Division of High Courts (Amendment)
Act, 2018 (No. 28 of 2018) (hereinafter referred to as “the Amendment
Act”) was held not to be operative so as to make the specified value not
less than three lakh rupees whereas in the case of U.V. Satyanarayana
(3 supra), the Specified Value has been taken as amended by Act 28 of
2018 itself to be not less than three lakh rupees. The Court after
considering the Amendment Act 28 of 2018 amending the Specified
Value in Section 2(1)(i) of the Act and inserting a new provision under
Section 3(1A) of the Act relating to pecuniary value and the aforesaid two
2
CRP No.1749/2023, dt.28-8-2023
3
CRP No.740/2024, dt.04-7-2024
14
judgments rendered in the cases of Bellam Balakrishna and
U.V. Satyanarayana (2 and 3 supra) formulated the above questions for
reference to the Larger Bench on the ground that the Court found that
there is an apparent conflict between the aforesaid two judgments of
coordinate Division Benches of this Court in the cases of Bellam
Balakrishna and U.V. Satyanarayana (2 and 3 supra).
(c) After the Division Bench in the above C.R.P.No.1847 of 2024
has referred the matter after formulating the above questions to a Larger
Bench as per the order passed on 23-8-2024, a similar issue came up for
consideration before a learned single Judge of this Court in
C.R.P.No.1172 of 2022. The learned counsel for the petitioner in the said
C.R.P.No.1172 of 2022 has taken to the notice of the learned single
Judge that the issue involved in the said case is also an issue involved in
batch of other cases pending before the Division Bench and cited the
judgment of the Division Bench dated 23-8-2024 in C.R.P.No.1847 of
2024 before the learned single Judge. The learned single Judge after
considering the decision of the Division Bench formulating the aforesaid
questions to refer the same to a Larger Bench, ordered to place the said
matter also pending before the learned single Judge before the Hon’ble
Chief Justice to pass necessary orders to post the matter before the
Division Bench. Accordingly, the said matter is also placed before the
Division Bench. Thereafter, a batch of civil revision petitions in
C.R.P.Nos.1685, 1686, 1688 and 1689 of 2024 involving the same
question and issue came up for consideration before another Division
Bench of this Court. The learned counsel for both the parties in the said
batch of civil revision petitions have taken to the notice of the said
Division Bench that similar matters are directed to be placed before the
Hon’ble Chief Justice by a coordinate Bench of this Court for constitution
of a Larger Bench in C.R.P.No.1847 of 2024 as per order dated
23-8-2024. Therefore, the said Division Bench also as per order dated
15
03-4-2025 directed the Registry to post the above batch of civil revision
petitions along with C.R.P.No.1847 of 2024 before the appropriate Bench
after obtaining necessary orders from the Hon’ble the Chief Justice.
(d) The above batch of civil revision petitions were initially heard by
a learned single Judge of this Court. The learned single Judge found that
the judgment of the Division Bench in Bellam Balakrishna’s case
appears to be contrary to the provisions of Section 3 of the Commercial
Courts Act, 2015 and directed the Registry to place the said batch of civil
revision petitions before the Hon’ble Chief Justice for placing those
matters before the Division Bench to consider the issue. Thereafter, the
said batch of civil revision petitions are placed before the Division Bench
and the Division Bench after noticing that another Division Bench has
referred the matter to a Larger Bench, ordered to place those matters
also before the appropriate Bench. Thus, all these batch of civil revision
petitions are referred to the Full Bench to answer the reference.
(e) This is how the matter has come up before this Full Bench to
consider the reference and to answer the questions formulated by the
Division Bench.
3. Heard Sri Venkat Challa, Sri G.V.S. Kishore Kumar and
Sri S.V.S.S. Siva Ram, learned counsel for the petitioners and
Sri V. Yatendra Kumar and Sri Somu Krishna Murthy, learned counsel for
the respondents.
4. Before deciding the controversy involved in the lis, it is expedient
to consider the legislative history of the Act and the object of the
enactment i.e., the Commercial Courts Act, 2015. The proposal to
provide for speedy disposal and high value commercial disputes has
been under consideration of the Central Government for quite a long time.
As high value commercial disputes involve complex facts and question of
16
law, it is felt that there is a need to provide for
an independent mechanism for early resolution of the commercial
disputes. The Government was of the view that the early resolution of
commercial disputes shall create a positive image to the investor world
about the independent and responsive Indian Legal System. Considering
the said proposal of the Central Government, the Law Commission of
India in its 188
th
Report had recommended for constitution of commercial
division in each High Court. Accordingly, the Commercial Division of High
Courts Bill, 2009 was introduced and passed by the Rajya Sabha.
However, during the discussion of the said Bill in the Rajya Sabha, some
members raised certain issues. Therefore, the matter was again referred
to the Law Commission of India for its examination. The Law
Commission of India in its 253
rd
Report has recommended for
establishment of the Commercial Courts, the Commercial Division and
the Commercial Appellate Division in the High Courts for disposal of
commercial disputes of a Specified Value. Based on the said
recommendation of the Law Commission of India, a Bill viz., the
Commercial Courts, Commercial Division and Commercial Appellate
Division of High Courts Bill, 2015 was introduced in the Rajya Sabha.
It was referred to the Standing Committee. As per the said Bill, all suits,
appeals or applications related to commercial disputes of Specified Value
i.e., one crore rupees or above are to be dealt with by the Commercial
Courts or Commercial Division of the High Court. As the Parliament was
not in session at that time and as urgent steps were needed to be taken,
the Commercial Courts, Commercial Division and Commercial Appellate
Division in High Courts Ordinance, 2015 was promulgated on
23-10-2015. Thereafter, the Bill has been passed by both the Houses of
the Parliament and received the assent of the President of India on
31-12-2015. Thus, it came on to the Statute Book as the Commercial
Courts, Commercial Division and Commercial Appellate Division of High
17
Courts Act, 2015 (4 of 2016). By Section 3 of the said Act, the
nomenclature of the said Act was changed as “The Commercial Courts
Act, 2015”.
5. Thus, from the object of the enactment, it is very much clear that
for the purpose of speedy disposal of commercial disputes which involve
complex facts and questions of law, as an independent mechanism for
the early resolution of such commercial disputes is needed to create
a positive image to the investor world about the independent and
responsive Indian Legal System, the Act came to be enacted with the
above laudable objective. It is to be noticed here that as independent
mechanism for early resolution of such commercial disputes is required,
appropriate provisions are incorporated in the Act constituting special
courts for resolution of the said commercial disputes of Specified Value.
Initially, the Specified Value of commercial disputes is fixed at not less
than one crore rupees in the year 2015 when the Act was introduced.
Subsequently, by the Amendment Act 28 of 2018, the definition of
“Specified Value” as defined under Section 2(1)(i) of the Act was
amended with effect from 03-5-2018 fixing the Specified Value as not less
than three lakh rupees or such higher value as may be notified by the
Central Government. So, at present, the Specified Value as amended by
the Statute is not less than three lakh rupees or such higher value as may
be notified by the Central Government.
6. Bearing in mind the statement of object and reasons of the
enactment as detailed above and the purpose of introducing the Act,
interpretation to any section in the Act is required to be given to achieve
the object of the enactment. It is settled law that while interpreting any
provision or section in the Act, no attempt should be made to dilute the
18
legislative intent and a purposive interpretation to achieve the object of
the enactment is to be given.
7. We have meticulously gone through the judgment of the Division
Bench which referred the matter to the Full Bench with the aforesaid
questions formulated by it. At the outset, it is to be noticed that the
Division Bench obviously did not notice and consider the difference and
distinction between the “Specified Value” as defined under Section 2(1)(i)
of the Act and the “pecuniary value” as contemplated under Section 3(1A)
of the Act. From the tenor of the judgment and the questions that are
formulated, it is very much clear and apparent that the Division Bench
proceeded on the premise that both the Sections 2(1)(i) and 3(1A) of the
Act deals with and speaks of the Specified Value, which in fact is not
correct. Both the terms “Specified Value” as defined under Section 2(1)(i)
in Chapter I of the Act and the “pecuniary value” as contemplated in
Section 3(1A) in Chapter II of the Act are two different and distinct terms
which operate in two different fields. They are not one and the same.
So, the whole problem arose in formulating the above questions for
reference as the said difference and distinction between the two terms
“Specified Value” and “pecuniary value” is not noticed and as they are
taken as one and the same.
8. Therefore, in order to answer the questions formulated by the
Division Bench which are under reference, few relevant provisions in the
scheme of the Commercial Courts Act, 2015 are required to be noticed.
Chapter I of the Act deals with definitions of various terms and
expressions used in various sections of the Act. Section 2(1)(i) is part of
Chapter I of the Act. Section 2(1)(i) of the Act defines “Specified Value”,
whereas Chapter II of the Act deals with constitution of Commercial
Courts and Section 3(1A) of the Act was newly incorporated in the
19
Chapter by the Amendment Act 28 of 2018 with effect from 03-5-2018 in
Section 3 of Chapter II of the Act. In fact, Section 2(1)(i) of the Act
defining “Specified Value” was also amended by the same Amendment
Act 28 of 2018 deleting the words “which shall not be less than one crore
rupees” and substituting the same with the words “which shall not be less
than three lakh rupees”. “Commercial dispute” is defined in Section
2(1)(c) of the Act and all disputes arising out of the transactions
enumerated in Section 2(1)(c)(i) to (xxii) of the Act fall within the definition
of “commercial dispute”. A dispute, in order to be qualified as
a commercial dispute to be tried by a Commercial Court, it must satisfy
the definition of “Specified Value” as defined in Section 2(1)(i) of the Act
which reads thus:
“2. Definitions.—(1) In this Act, unless the context otherwise requires,--
(a) to (c)(i) to (xxii) …………………………………
Explanation.—A commercial dispute shall not cease to be a commercial dispute
merely because—
(a) to (h) ……………………………………………...
(i) “Specified Value”, in relation to a commercial dispute, shall mean the
value of the subject-matter in respect of a suit as determined in
accordance with section 12 which shall not be less than three lakh
rupees or such higher value, as may be notified by the Central
Government.
(2) ………………………………………………. “
9. Therefore, when a dispute falls within the definition of
a “commercial dispute” as defined in Section 2(1)(c) of the Act, it must
further pass the test of falling within the definition of “Specified Value” as
defined in Section 2(1)(i) of the Act for the purpose of resolving the said
dispute by the Commercial Court. As “Specified Value” in relation to
commercial dispute means, the value of the subject-matter in respect of
a suit as determined in accordance with Section 12 of the Act, which shall
not be less than three lakh rupees or such higher value, as may be
20
notified by the Central Government, Section 2(1)(i) of the Act defining the
“Specified Value” is to be read along with Section 12(1) of the Act in
Chapter III of the Act which deals with the determination of Specified
Value. Section 12 of the Act contains clauses (a) to (d). As per clause
(a), if the suit is for recovery of money, then if the money sought to be
recovered is not less than three lakh rupees and in other words, if it is
above three lakh rupees and if the dispute is a “commercial dispute” as
defined in Section 2(1)(c) of the Act, then it would be a commercial
dispute which is to be tried only by a Commercial Court constituted under
Section 3 of the Act. As per clause (b), if the suit relates to movable
property or to a right therein, if the market value of the movable property
is not less than three lakh rupees or if it is above three lakh rupees, then
again it would be a commercial dispute which is to be tried only by
a Commercial Court. As per clause (c), if the suit relates to immovable
property or to a right therein, then if the market value of the immovable
property is not less than three lakh rupees or if it is above three lakh
rupees, then it would be a commercial dispute to be tried only by the
Commercial Court. As per clause (d), if the relief sought in a suit relates
to any other intangible right, then the market value of the said right as
estimated by the plaintiff shall be taken into account for determining the
Specified Value. Therefore, the test to determine whether a particular
dispute is a commercial dispute and whether it is to be tried by
a Commercial Court is to first see whether the transaction relating to the
dispute falls within the definition of Section 2(1)(c)(i) to (xxii) of the Act
and if the dispute satisfies the definition of “commercial dispute” as
defined in the said section, it has to be considered as a commercial
dispute. Then, the Specified Value in relation to the said “commercial
dispute” as defined under Section 2(1)(i) of the Act is to be considered
and if the value of the subject-matter in respect of a suit as determined in
accordance with Section 12 of the Act is found to be not less than three
21
lakh rupees or in other words, if it is more than three lakh rupees, then the
said commercial dispute has to be tried only by a Commercial Court
constituted under Section 3 of the Act. Section 2(1)(i) of the Act
envisages that if the value of the subject-matter is not less than three lakh
rupees or such higher value as may be notified by the Central
Government, then it is qualified to be considered as a commercial
dispute. As noticed supra, earlier when the Act came into force in the
year 2015, for the first time, the base level limit is fixed at not less than
one crore rupees and it was amended by substituting the same with the
wording “which shall not be less than three lakh rupees”. Therefore,
Specified Value in relation to a commercial dispute is determined by the
Act itself by clearly stating that if the value of the subject-matter is not less
than three lakh rupees that the said Specified Value of the said
commercial dispute is to be taken into consideration to decide whether it
is to be tried by the Commercial Court or not. So, no separate notification
is required to be issued fixing the Specified Value at not less than three
lakh rupees. The Statute itself has fixed the value as not less than three
lakh rupees. Therefore, no separate notification is required to be issued
for the said purpose. However, a right has been conferred on the Central
Government by the Parliament under the Statute by way of delegated
legislation to fix such higher value i.e. more than the base limit prescribed
in the Act as not less than three lakh rupees by way of issuing notification.
Therefore, if the Central Government intends to fix the higher value than
the value fixed in the Statute, then a notification is required to be given
fixing the said higher value. The disjunctive word “or” has been used
after the wording “which shall not be less than three lakh rupees”, which
clearly separates the first part of the section with the second part of the
section which conferred power on the Central Government to fix such
higher value by way of issuing notification. Therefore, we have absolutely
no hesitation to hold that notification again for fixing the Specified Value
22
at not less than three lakh rupees is not required as the Statute itself has
prescribed the said base limit. We emphatically hold that it is only when
the Central Government intends to fix such higher value, then a separate
notification is required to be given in terms of the second part of Section
2(1)(i) of the Act.
10. Legislative power is the exclusive function vested with the
Parliament. To amend the Act or even a section in the Act is the
exclusive function of the Parliament. So, when the Parliament in exercise
of the said legislative power has amended Section 2(1)(i) of the Act
reducing the Specified Value from not less than one Crore rupees to not
less than three lakh rupees, it is really beyond our comprehension as to
why again a separate notification by the Central Government is required
to bring the amendment into force and to make it operative. It is only
when the Central Government in exercise of the power delegated to it by
the Parliament specifies higher value then only issuance of notification to
that effect is required to bring such higher value into force.
11. A power is conferred by the Statute itself under Section 2(1)(i)
of the Act on the Central Government to issue notification to fix such
higher value than not less than three lakh rupees to determine the
Specified Value of a commercial dispute. If any such notification is issued
by the Central Government in exercise of its power conferred on it by the
Statute, it amounts to law under Article 13(3)(a) of the Constitution of
India. Article 13(3)(a) of the Constitution of India reads thus:
“13. Laws inconsistent with or in derogation of the fundamental
rights.—
(1) …………………………………………
(2) …………………………………………….
(3) In this article, unless the context otherwise requires,--
23
(a) “law” includes any Ordinance, order, bye-law, rule, regulation,
notification, custom or usage having in the territory of India the force of
law;
(b) ……………………………………………..”
12. Since a notification is to be issued in terms of the power
conferred on the Central Government by the Statute itself, it has to be
termed as a statutory notification which amounts to a delegated
legislation. The Parliament itself has delegated its legislative power to the
Central Government to fix higher value by way of issuing notification.
Delegated legislation is also a “law” under Article 13(3)(a) of the
Constitution of India. Issuance of a notification by the Central
Government or a State Government under the statutory authority have
force of law and they are legislative in character. The law is well settled
that a notification issued under the statutory authority is of a form of
delegated (subordinate) legislation and it has legislative character and
force of law once validly published. As no such notification is issued by
the Central Government, the Specified Value as determined by the
Parliament as not less than three lakh rupees would continue to prevail
and the same has to be taken into consideration.
13. A Division Bench of the High Court for the State of Telangana
at Hyderabad had an occasion to deal with the similar issue in the case of
M/s. Janset Labs Pvt. Ltd. v. Agilent Technologies India Pvt. Ltd.
4
.
After considering the definition of the “Specified Value” under Section
2(1)(i) of the Act, the Division Bench of the Telangana High Court has
also at para-12 of the judgment in no uncertain terms and in specific
terms clearly held that the section does not contain any requirement of
issuing a separate notification by the Government for giving effect to the
amendment to reduce the Specified Value from one crore rupees to three
4
CRP No.1932/2025, dt.22-9-2025
24
lakh rupees and further held that in fact, Section 2(1)(i) of the Act only
mentions notification by the Central Government for raising the base limit
level from three lakh rupees to a higher value with regard to Specified
Value of a commercial dispute. The Division Bench of the Telangana
High Court also referred the judgment rendered by a learned single Judge
of the said Court who has taken the same view in M/s. Srinivasa
Construction v. D. Muralidhar Rao (CRP No.297/2025, dated
21-3-2025). We fully concur with the said view taken by the Division
Bench of the Telangana High Court in view of our above discussion and
the said decision is quoted with approval to answer question No.’A’
formulated by the Division Bench of this Court under reference.
14. As regards the newly inserted provision of Section 3(1A) of the
Act is concerned, it was earlier not there when the Act came into force for
the first time in the year 2015. It was inserted by way of the Amendment
Act 28 of 2018 with effect from 03-5-2018. It was incorporated in Chapter
II of the Act. As noticed supra, Chapter II of the Act deals with
constitution of the Commercial Courts. As per Section 3(1) of the Act, the
State Government, in consultation with the concerned High Court may, by
notification, constitute such number of Commercial Courts at District level
for exercising the jurisdiction and powers conferred on those Courts
under the Act. The first proviso to Section 3(1) of the Act mandates that
the State Government, in consultation with the concerned High Court, by
notification, constitute Commercial Courts at the District Judge level
where the High Court is exercising ordinary original civil jurisdiction.
The second proviso to Section 3(1) of the Act deals with specifying the
pecuniary jurisdiction where the High Court is exercising ordinary original
civil jurisdiction, by the State Government by notification in respect of the
District Courts fixing it at not less than three lakh rupees and not more
than the pecuniary jurisdiction exercised by the District Courts. So, the
25
first proviso envisages that with respect to the High Courts having
ordinary original civil jurisdiction, the State Government may, after
consultation with the concerned High Court, constitute Commercial
Courts at the District Judge level by issuing notification to that effect.
Similarly, the second proviso envisages that with respect to a territory
over which the High Courts have ordinary original civil jurisdiction, the
State Government may specify such pecuniary value which shall not be
less than three lakh rupees and not more than the pecuniary jurisdiction
exercisable by the District Courts as it may consider necessary by way of
issuing notification to that effect. Therefore, both the first proviso and the
second proviso apply only when the concerned High Court of a State
exercises ordinary original civil jurisdiction. The High Court of Andhra
Pradesh has no ordinary original civil jurisdiction. Therefore, both the first
and the second provisos are not applicable insofar as they relate to
Commercial Courts established in the State of Andhra Pradesh.
15. The first proviso to Section 3(1) of the Act is also amended by
Act 28 of 2018 with effect from 03-5-2018. Earlier, the first proviso reads
thus:
“Provided that no Commercial Court shall be constituted in the territory over
which the High Court has ordinary original civil jurisdiction.”
Therefore, as per the original first proviso, when the concerned
High Court exercises ordinary original civil jurisdiction, the Statute
mandates that no Commercial Court shall be constituted in the said
territory. The first proviso is completely amended by Act 28 of 2018 and
now it reads thus:
“Provided that with respect to the High Court having ordinary original civil
jurisdiction, by notification, constitute Commercial Courts at the District
Judge level.”
Therefore, now the amended provision enables the State
Government by way of issuing notification to constitute Commercial
26
Courts at the District Judge level even when the concerned High Court is
exercising ordinary original civil jurisdiction in the said territory. As
already noticed supra, as the High Court of Andhra Pradesh is not
exercising any ordinary original civil jurisdiction in the State of Andhra
Pradesh, the first proviso has absolutely no application insofar as the
State of Andhra Pradesh is concerned. So, both the first proviso and the
second proviso are not applicable to the State of Andhra Pradesh.
16. This newly inserted Section 3(1A) of the Act was not there
earlier when the Act came into force in the year 2015. It was introduced
for the first time in the year 2018 with effect from 03-5-2018. In our
considered view, this new insertion of Section 3(1A) of the Act is made
consequent to the amendment of the definition of “Specified Value” under
Section 2(1)(i) of the Act reducing the value of the subject matter of a
commercial dispute to not less than three lakh rupees from not less than
one crore rupees. As the base limit is now drastically reduced to three
lakh rupees from one crore rupees, visualizing a situation that there may
be heavy increase in the pendency of commercial disputes in the special
courts and the special courts constituted at district level would be flooded
with thousands of cases and will be over burdened, to enable the State
Government in case of any necessity to constitute more special courts
even below the level of a District Judge to try and dispose of the
commercial suits of less value, the said Section 3(1A) of the Act was
incorporated in the Act. It is significant to note that Section 3(1)(3) of the
Act earlier prior to its amendment mandates that Commercial Courts are
to be presided over by officers from amongst the cadre of Higher Judicial
Service in the State. Therefore, as the Specified Value is not less than
one crore rupees as per the unamended provision when the Act came
into force, in Section 3(1)(3) of the Act, it was stated that the Commercial
Courts are to be presided over by the officers of the cadre of Higher
27
Judicial Service in the State i.e., the District Judges. Now, this Section
3(1)(3) of the Act is also amended by the same Amendment Act 28 of
2018 with effect from 03-5-2018. The wording “Commercial Court, from
amongst the cadre of Higher Judicial Service in the State” is deleted and
it is substituted by the wording “Commercial Court either at the level of
District Judge or a Court below the level of a District Judge”. Obviously to
enable the State Government to constitute Commercial Courts even at
the level below the Court of a District Judge, as the Specified Value is
now reduced to three lakh rupees, the said amendment is made.
17. The newly inserted provision of Section 3(1A) of the Act
contains a non-obstante clause giving overriding effect over all provisions
of the Act and it mandates that the State Government, after consultation
with the concerned High Court, by notification, specify such pecuniary
value which shall not be less than three lakh rupees or such higher value
for whole or part of the State as it may consider necessary by way of
issuing notification in consultation with the High Court. This amended
provision Section 3(1A) of the Act is to be read along with
Section 3(3) of the Act which says that the State Government may, with
the concurrence of the Chief Justice of the High Court appoint one or
more persons having experience in dealing with commercial disputes to
be the Judge or Judges of a Commercial Court either at the level of
District Judge or a court below the level of a District Judge. Here, it is to
be noticed that it is stated in Section 3(1) of the Act that Commercial
Courts are to be constituted at District level which means at the District
Judge level. In Section 3(3) of the Act it was earlier stated to be presided
over by from amongst the cadre of Higher Judicial Service in the State.
Now, the amended provision Section 3(1A) read with Section 3(3) of the
Act makes it clear that a power is conferred on the State Government to
issue notification in consultation with the High Court specifying such
28
pecuniary value which shall not be less than three lakh rupees or such
higher value for whole or part of the State and to appoint a Judge for
a Commercial Court either at the level of District Judge or a Court below
the level of a District Judge. Obviously, the power to specify the
pecuniary value by way of notification on the State Government in
consultation with the High Court is conferred on the State Government to
confer jurisdiction on a Court below the level of a District Judge also.
Probably to reduce the burden on the Courts at District Judge level in
case of increase in pendency of commercial disputes then to enable the
State Government to confer jurisdiction on the Courts below the level of
District Judge the said power appears to have been conferred on the
State Government. The said intention of the Parliament to confer
jurisdiction of Commercial Courts on the courts below the level of District
Judge is clear and apparent from the object of the Amendment Act 28 of
2018 in incorporating the newly introduced Section 3(1A) in Chapter II of
the Act. It is clearly stated in the statement of objects and reasons of the
Amendment Act 28 of 2015 as follows:
“4. It is proposed to introduce the Commercial Courts, Commercial
Division and Commercial Appellate Division of High Courts (Amendment)
Bill, 2018 to replace the Commercial Courts, Commercial Division and
Commercial Appellate Division of High Courts (Amendment) Ordinance,
2018, which inter alia, provides for the following namely:--
(i) to reduce the specified value of commercial disputes from the existing one
crore rupees to three lakh rupees, and to enable the parties to approach
the lowest level of subordinate courts for speedy resolution of commercial
disputes;
(ii) to (v) …………………………………… .
18. Therefore, a careful perusal of the amended provision under
Section 3(1A) of the Act along with amended Section 3(3) of the Act
makes it very clear that for the purpose of fixing the pecuniary value at
more than three lakh rupees for whole or any part of the State
29
a notification is required to be given by the State Government in
consultation with the High Court. This Section 3(1A) of the Act inserted in
Chapter II of the Act dealing with “pecuniary value” of Commercial Courts
has absolutely nothing to do with the “Specified Value” as defined in
Section 2(1)(i) contained in Chapter I of the Act. Specified Value is
altogether different from the pecuniary value. They are two separate and
distinct expressions and terms which wholly operate in two different fields.
Specified Value deals with the value of the subject-matter in relation to
a commercial dispute, whereas the pecuniary value relates to the
pecuniary jurisdiction of the Court which tries the said commercial
dispute. Though the term “pecuniary value” used in Section 3(1A) of the
Act is not defined in the Act, Section 2(2) of the Act dealing with the
definitions clearly mandates that the words and expressions used and not
defined in the Act but defined in the Code of Civil Procedure, 1908 and
the Indian Evidence Act, 1872 shall have the same meanings respectively
assigned to them in that Code and the Act. For better appreciation,
Section 2(2) of the Act is extracted hereunder and it reads thus:
“2. Definitions.—(1) ……………………
(2) The words and expressions used and not defined in this
Act but defined in the Code of Civil Procedure, 1908 (5 of 1908) and
the Indian Evidence Act, 1872 (1 of 1872), shall have the same
meanings respectively assigned to them in that Code and the Act.”
19. Now, it is relevant to note that Section 6 of CPC deals with
“pecuniary jurisdiction”. It reads thus:
“6. Pecuniary jurisdiction.—Save in so far as is otherwise expressly
provided, nothing herein contained shall operate to give any Court
jurisdiction over suits the amount or value of the subject-matter of
which exceeds the pecuniary limits (if any) of its ordinary jurisdiction.”
A reading of Section 6 of CPC makes it clear that no Court would
have jurisdiction over suits when the amount or value of the subject-
30
matter exceeds the pecuniary limits of its ordinary jurisdiction. As Section
3(3) of the Act empowers the State Government to appoint a person
dealing with commercial disputes to be a Judge of a Commercial Court
with the concurrence of the Chief Justice of the High Court even to a
Court below the level of a District Judge, it is obvious that the power to
confer jurisdiction to try commercial dispute can also be conferred on a
Court below the level of a District Judge i.e. on a Civil Judge (Senior
Division) or a Civil Judge (Junior Division) when a need or necessity
arises to establish more courts at the level below the District Judge level.
So, if the State Government feels the necessity then a notification is to be
issued by the State Government in terms of Section 3(1A) of the Act
specifying the pecuniary value. Till such time even without such
notification, the present Commercial Courts can try the commercial suits
of a Specified Value irrespective of its pecuniary value. A careful and
conjoint reading of Section 3(1A) and 3(3) of the Act shows that the
above is the intention of the Parliament in introducing Section 3(1A) of the
Act by way of the Amendment Act 28 of 2018. Therefore, for the purpose
of specifying the pecuniary value which shall not be less than three lakh
rupees or such higher value for whole or any part of the State,
we have absolutely no hesitation to hold that notification by a State
Government is required to be given for the said purpose. No such
notification in terms of Section 3(1A) of the Act has been issued by the
State Government till now specifying the pecuniary value in consultation
with the High Court. Probably as jurisdiction to try commercial dispute is
not conferred till now on the Courts below the District Judge level, such
notification is not issued by the State Government.
20. The contention raised at the time of hearing the reference that
as no notification in exercise of the powers conferred by the State
Government under Section 3(1A) of the Act was given specifying the
31
pecuniary value, the two Commercial Courts which are now constituted in
the State of Andhra Pradesh have no pecuniary jurisdiction to entertain
the commercial disputes and as such that two special courts are not
competent to try and dispose of any such commercial disputes is
absolutely devoid of any merit. Though the said contention is not
elaborated, obviously the idea that is sought to be conveyed is that the
pecuniary jurisdiction conferred on the District Judge under Section 16 of
the A.P. Civil Courts Act to try a suit is above fifty lakh rupees with
unlimited jurisdiction and as such in respect of disputes involving below
fifty lakh rupees, the District Judge is not competent to entertain the
dispute in the absence of any notification issued by the State Government
in exercise of the power conferred on it under Section 3(1A) of the Act
specifying the pecuniary value of a Commercial Court below fifty lakh
rupees and that he has no pecuniary jurisdiction to entertain the
commercial dispute. The said argument is wholly misplaced and the
contention is untenable.
21. In this regard, it is to be noted that the Commercial Courts Act,
2015 is a special enactment and it is a Central Act. So, the Commercial
Courts are constituted and established under the special enactment.
So, they are special courts established for the purpose of dealing with
a particular nature of disputes viz., the commercial disputes of a Specified
Value. When a special court is constituted under a special enactment to
decide a particular nature of dispute i.e., a commercial dispute of
a Specified Value, irrespective of the pecuniary limits or jurisdiction
conferred on an ordinary Civil Court under the Andhra Pradesh Civil
Courts Act, 1972 which is a State enactment, the special court would
have jurisdiction to try the said particular nature of dispute. Therefore, the
Commercial Court, which is a special court constituted under the special
enactment, would have ample jurisdiction to try the dispute involving
32
above the value of three lakh rupees and it is perfectly competent to try
and dispose of the said cases. Though two Commercial Courts in the
State of Andhra Pradesh were established under the Act, one in
Vijayawada and another in Visakhapatnam conferring territorial
jurisdiction in terms of Section 3(2) of the Act and the officers at the level
of District Judges are presiding over the said Courts, it is well within their
competence to try the said commercial disputes as per the territorial
jurisdiction conferred on them irrespective of the pecuniary limits
conferred on the District Judge under the A.P. Civil Courts Act. It is to be
noticed that as per Section 2 of the A.P. Civil Courts Act dealing with
definition clause, “Court” means a Civil Court established or deemed to
be established under this Act i.e., the A.P. Civil Courts Act. District Court
is established under Section 10 of the A.P. Civil Courts Act. Civil Judges
(Senior Division) and Civil Judges (Junior Division) are also established
under Section 12 of the A.P. Civil Courts Act. So, these are the ordinary
Civil Courts established at three levels i.e., District Judge level, Civil
Judge (Senior Division) and Civil Judge (Junior Division) level in the State
of Andhra Pradesh under the aforesaid A.P. Civil Courts Act which is the
State Act. Pecuniary jurisdiction or limits is conferred on the said Courts
under Section 16 of the Act. The District Judge is conferred with the
jurisdiction to try all suits of civil nature, the amount or value of the subject
matter which exceeds rupees fifty lakhs. Civil Judge (Senior Division) is
conferred with the jurisdiction to try all suits of civil nature which exceeds
rupees twenty lakhs but does not exceed rupees fifty lakhs and similarly,
Civil Judge (Junior Division) can try suits of civil nature involving the
amount or value of the subject matter which does not exceed rupees
twenty lakhs. Thus, the said pecuniary jurisdiction or limits is conferred
on ordinary Civil Courts constituted under the A.P. Civil Courts Act. Now,
it is significant to note that the Commercial Courts, which are special
courts, are not constituted under the A.P. Civil Courts Act to make the
33
said pecuniary limits conferred on the ordinary Civil Courts constituted
under the A.P. Civil Courts Act apply to the Commercial Courts which are
special courts constituted under the Commercial Courts Act, 2015.
Therefore, one should not get confused with the pecuniary limits or
jurisdiction conferred on the ordinary Civil Courts in the A.P. Civil Courts
Act to decide whether the Commercial Courts which are special courts
constituted under the Commercial Courts Act got jurisdiction to try the
disputes as per the pecuniary limits conferred on the Civil Courts.
Jurisdiction conferred on Commercial Courts is a special jurisdiction
under the special enactment.
22. It is also well established law that when a special court is
constituted under the special enactment to deal with the particular nature
of disputes, the jurisdiction of the ordinary Civil Courts is impliedly barred
and excluded. In view of the said law also, the said contention is bereft of
any legal foundation and cannot be countenanced. A three-Judge Bench
of the Apex Court in the case of Chandrakant Tukaram Nikam v.
Municipal Corporation of Ahmedabad
5
held while dealing with
a dispute relating to termination of services of an employee that such
a dispute is an industrial dispute and the appropriate forum to decide
it is the forum constituted under the Industrial Disputes Act, 1947 and the
jurisdiction of the Civil Court in such cases is impliedly barred. The Apex
Court further held that the dispute is essentially an industrial dispute
under the Industrial Disputes Act and the jurisdiction of the Civil Court to
hear such a suit was barred.
23. The analogy squarely applies to the present case also. Here
also, the dispute is a commercial dispute of a Specified Value and special
court is constituted under the Commercial Courts Act to resolve the said
5
(2002) 2 SCC 542
34
dispute. Therefore, the jurisdiction of an ordinary Civil Court is impliedly
barred. So, the A.P. Civil Courts Act cannot be applied for the purpose of
deciding the pecuniary jurisdiction of the special court.
24. The present two Commercial Courts established in the State of
Andhra Pradesh in Vijayawada and Visakhapatnam are being presided
over by an officer of a District Judge cadre. Probably as Section 3(1)(3)
of the Act as it stood prior to its amendment mandates that Commercial
Courts are to be presided over by the officers amongst the cadre of
Higher Judicial Service i.e. District Judges in the State as the Specified
Value at that time was not less than one crore rupees, Commercial
Courts are established with the officers of a District Judge cadre. But no
steps are taken subsequent to the various amendments which are made
in the Act and particularly in Section 3 of the Act as discussed above to
give effect to the said amended provisions. So, the two Commercial
Courts are still being presided over by the officers of District Judge cadre.
As even the amended Section 3(3) of the Act mandates that they can be
presided over by the officers either at the District Judge level or below the
level of a District Judge, the Courts are being continued with the same
cadre officers. But even then, on the ground that pecuniary limits in terms
of Section 3(1A) of the Act are not specified by way of issuing
a notification by the State Government, it cannot be said that the said
officers of the two Courts are not competent to try and adjudicate the
commercial disputes. As long as the Commercial Courts are being
presided over only by one cadre officer i.e., the District Judge, the need
for specifying or question of fixing the pecuniary limits does not arise. It is
only when the Commercial Courts are presided over by more than one
level officers or one cadre officers, then a need or necessity to specify the
pecuniary limits of the said Courts would arise to determine as to which
cadre officer has to try the said suits of particular pecuniary value.
35
For example, if officers at the District Judge level and also at the level
below the District Judge i.e., the Senior Civil Judge are appointed to
preside over the Commercial Courts in view Section 3(3) of the Act, then
to decide which dispute is to be tried by the District Judge level officer
and which dispute is to be decided by the Senior Civil Judge officer,
pecuniary limits are to be specified. As long as there is only one cadre
officer presiding over the Commercial Courts, the question of deciding the
pecuniary limits does not arise at all. When only one cadre officer i.e., the
District Judge level officers are presiding over the Commercial Courts and
if a notification is issued under Section 3(1A) of the Act specifying the
pecuniary limits when there is no officer below the level of a District Judge
to preside over the Commercial Courts and a pecuniary limit of fifty lakh
rupees and above is fixed for the District Judge to try the commercial
disputes, then what would be the fate of the cases pending in the said
Courts below the value of fifty lakh rupees. The question would be who
has to try the said cases below the value of fifty lakh rupees when the
Commercial Courts are not presided over by the officers below the level
of a District Judge. This is the practical problem that may arise at present
if a notification fixing the pecuniary limit under Section 3(1A) of the Act is
issued. It is only if the State Government decides to establish
Commercial Courts to be presided over by the officers below the level of
a District Judge also then only issuance of notification under Section
3(1A) of the Act specifying the pecuniary limits or value assumes
significance. Therefore, if the State Government in consultation with the
High Court in future decides to appoint an officer below the level of
District Judge also to preside over the Commercial Courts then it has to
issue notification under Section 3(1A) of the act specifying the pecuniary
limits. As the Specified Value is reduced from one crore rupees to three
lakh rupees by way of amendment, it will no way affect the competency or
jurisdiction of the District Judge to preside over the Commercial Court and
36
again it is to be clarified that Specified Value has nothing to do with the
pecuniary limits and it is only to determine whether a commercial dispute
is qualified to be decided by a Commercial Court or not, the Specified
Value is to be considered but not to decide the pecuniary limits or
jurisdiction of the Commercial Courts. When more than one level officer
are presiding over the Commercial Courts then only a notification fixing
the pecuniary limits is required.
Therefore, the contention raised to that effect holds no water and it
is devoid of merit and the same is liable to be rejected.
25. The same view which we have taken that “Specified Value” as
defined in Section 2(1)(i) of the Act is different from “pecuniary value” as
mentioned in Section 3(1A) of the Act has been also taken by the Division
Bench of the Telangana High Court in the case of M/s. Janset Labs Pvt.
Ltd. (4 supra). At para-13 of the judgment, it is held as follows:
“13. Second, the expression ‘Specified Value’ in section 2(1)(i) is
distinct and different from ‘pecuniary value’ in section 3(1A) of the
2015 Act. … … …”
At para-15 of the judgment, it is held by the Division Bench of the
Telangana High Court that the second proviso to section 3(1) looks at the
territorial limits of the concerned High Courts having ordinary original civil
jurisdiction and gives the State Government the option, through
Notification,
to specify the pecuniary value of the Courts within such territory which
shall not be less than three lakh rupees and not more than the pecuniary
jurisdiction exercisable by the District Courts.
Ultimately, at para-17 of the judgment, it is held that both the
provisions i.e. Section 2(1)(i) of the Act relating to Specified Value and
Section 3(1A) of the Act relating to pecuniary value are distinct and
marked by different parameters altogether. Paras-18 and 19 of the
judgment are relevant in the context to consider and it is held as follows:
37
“18. The difference would further be evident from of the Amendment
Act, 2018. Section 2(1)(i) was substituted by section 4(II), while
section 3(1A) was inserted by section 6(b) of the Amendment Act,
2018. A more substantive difference would be evident from the
definition of ‘specified value’ which focuses on the value of the
subject matter of the suit in relation to the commercial dispute, that is
whether the suit qualifies for a commercial suit in terms of a minimum
value in monetary terms. Section 3(1A) on the other hand is
concerned with the pecuniary limits of the Commercial Court within
the territorial jurisdiction of the concerned High Court.
19. In other words, while specified value forms the core of the
commercial dispute for admission into the regime of The Commercial
Courts Act, 2015, pecuniary value fixes the competence-parameters
of the Court for receiving a commercial suit. While the former focuses
on the value of the dispute, the latter sets the floor-limit capability of
the receiving Court. The distinguishing features are being repeated in
order to avoid confusion between ‘specified’ and ‘pecuniary’ values as
envisaged in the 2015 Act.”
26. Therefore, in view of the foregoing discussion and after
analyzing the relevant provisions of the Statute, the three questions that
are formulated are answered as follows:
A. Sections 2(1)(i) and 3(1A) of the Act are two distinct and
separate provisions and they are not one and the same. Section 2(1)(i) of
the Act defines “Specified Value” which focuses on the value of the
subject-matter of the suit in relation to a commercial dispute to decide
whether the said commercial dispute is to be adjudicated by the
Commercial Court or not and Section 3(1A) of the Act, on the other hand,
is concerned with pecuniary limits of the Commercial Courts when they
are being presided over by officers of various cadres. Amending Section
2(1)(i) of the Act by way of deleting the words “not less than one crore
rupees” and substituting the same with the words “not less than three lakh
rupees” by way of the Amendment Act 28 of 2018 by itself amends the
38
“Specified Value” as “not less than three lakh rupees” and no separate
notification by the Central Government is required to be given to bring the
amendment into force and to make it operative. The Statute itself has
amended the “Specified Value” as “not less than three lakh rupees”. It is
only when the Central Government intends to fix such higher value, then
a separate notification in exercise of its power of delegated legislation is
required to be given by the Central Government and it comes into force
on the date of issuance of notification and publishing in the Gazette.
B. This question again contains sub-questions (i) to (iii).
Sub-questions (i) and (ii) are interrelated to each other. Therefore, the
said two sub-questions are answered together. The Amendment Act 28
of 2018 relating to Section 2(1)(i) of the Act shall be operative and
effective from the date of amendment itself with effect from 03-5-2018.
No notification is required to be given by the Central Government to make
the said amendment operative and effective and to bring the same into
force. It is only when the Central Government issues notification fixing
the higher value of the Specified Value, then the said higher value comes
into force on the date notified in the notification. As no such notification is
issued by the Central Government in exercise of the power conferred on it
under Section 2(1)(i) of the Act, the value fixed as not less than three lakh
rupees by the Statute under the Amendment Act 28 of 2018 will prevail
and it has to be taken into consideration for deciding the Specified Value
of the commercial dispute. As regards sub-question (iii) is concerned, the
Amendment Act 28 of 2018 amending Section 2(1)(i) of the Act has
absolutely nothing to do with the notification to be issued by the State
Government of Andhra Pradesh in exercise of its power conferred on it
under Section 3(1A) of the Act to specify pecuniary value. It is made
clear and reiterated that “Specified Value” under Section 2(1)(i) of the Act
is altogether different from “pecuniary value” as contained in
39
Section 3(1A) of the Act and they are two separate and distinct terms
which operate in two different fields.
C. The Division Bench of this Court in the case of Bellam
Balakrishna (2 supra) held that until the State Government issues
a notification in consultation with the High Court, the pecuniary value of
three lakh rupees as fixed in Section 2(1)(i) of the Act will not come into
operation is not correct and the law has not been correctly laid down to
that effect. In fact, Section 2(1)(i) of the Act does not deal with the
pecuniary value. It only defines the “Specified Value”. Therefore, the
judgment of the Division Bench of this Court in the case of Bellam
Balakrishna (2 supra) that till the notification is issued by the State
Government in consultation with the High Court the pecuniary value as
fixed in Section 2(1)(i) of the Act will not come into operation is not the
correct proposition of law laid down in the said judgment.
The controversy involved in this reference as per the questions that are
formulated has not been dealt with in the case of
U.V. Satyanarayana (3 supra). All that is decided in the case of
U.V. Satyanarayana (3 supra) by the other Division Bench of this Court is
whether the Court of Principal District Judge, East Godavari District,
which is a Civil Court, has got jurisdiction to entertain an execution
petition in respect of a commercial dispute arising out of arbitration
matters. Therefore, considering Section 10(3) of the Act which mandates
that where the subject-matter of an arbitration is a commercial dispute of
a specified value and if such arbitration is other than an international
commercial arbitration that all applications arising out of such arbitration
under the provisions of the Arbitration and Conciliation Act, 1996 would
ordinarily lie before any principal civil court of original jurisdiction in
a district shall be filed in, and heard and disposed of by the Commercial
Court exercising territorial jurisdiction over such arbitration where such
Commercial Court has been constituted, the Court has held that the
40
execution petition has to be filed before the Commercial Court at
Visakhapatnam as the Commercial Court at Visakhapatnam has territorial
jurisdiction over East Godavari District. But, the Bench which disposed of
U.V. Satyanarayana’s case (3 supra) has completely missed its attention
to a material fact relating to value of the subject matter of the arbitration to
decide whether the subject matter of the arbitration is a commercial
dispute of a Specified Value or not. The execution petition was filed prior
to 03-5-2018 on which day the amendment to Section 2(1)(i) of the Act
defining “Specified Value” came into force. Earlier, the Specified Value
was above one crore rupees. So, only when the value of the subject
matter of the said arbitration is above one crore rupees then only it is
qualified to be tried as a commercial dispute in a Commercial Court.
The value of the subject matter in the arbitration is only forty five lakhs.
So, it is below one crore rupees. So, it does not satisfy the definition of
“Specified Value” under Section 2(1)(i) of the Act as per the unamended
provision. It is only when the value of the subject matter is more than one
crore rupees and if it is a commercial dispute then only it comes within the
jurisdiction of the Commercial Court to entertain an execution petition.
Even Section 10 of the Act which was invoked by the Bench clearly
envisages that when the subject matter of an arbitration is a commercial
dispute of a Specified Value then the section applies. Section 19 of the
Amendment Act 28 of 2018 clearly mandates that the said amendments
apply to the transactions took place only from the date of amendment i.e.
03-5-2018 and the said amendments will not apply to the past
transactions prior to 03-5-2018. So, the amendment is prospective in
nature. As the present transaction relating to the said arbitration is
pertaining prior to 03-5-2018 and as the value of the subject matter is
forty five lakhs which is less than one crore rupees it is not qualified to be
taken up by the Commercial Court. The Bench in U.V. Satyanarayana’s
case (3 supra) did not notice that the Specified Value of the subject
41
matter of the arbitration is only forty five lakhs which is below the amount
of one crore rupees and it does not satisfy the definition of “Specified
Value” under Section 2(1)(i) of the Act prevailing at that time and it is not
qualified to be taken up by the Commercial Courts. So, to that extent, the
law has not been correctly decided in U.V. Satyanarayana’s case
(3 supra). Therefore, question No.C is answered accordingly.
The reference is answered accordingly. Registry shall take steps
to list the civil revision petitions before the respective benches to decide
the same according to law.
27. Before parting with the matter, we would like to make certain
observations and also recommendation to the State Government and the
High Court for effective implementation of the Commercial Courts Act as
amended to achieve the object of the enactment. It is noticed that no
effect is given to the amendments that are made to Sections 2(1)(i), 3(1A)
and 3(3) of the Act, both by the High Court and the State Government.
Except passing resolutions in terms of the said amendments and making
correspondence by the High Court with the Government and issuing
G.O.Rt.No.609, dated 05-6-2023 by the Government in response to the
letter correspondence made by the High Court, till now the amendments
are not implemented in its true spirit. It is brought to our notice that still
the Specified Value as not less than one crore rupees as per the
unamended provision of Section 2(1)(i) of the Act is being taken into
consideration for the purpose of receiving the suits relating to commercial
disputes by the Commercial Courts in Vijayawada and Visakhapatnam.
The commercial disputes above three lakh rupees and up to one crore
rupees are not being entertained by the said two special courts. Earlier
proceedings of High Court specifying the Specified Value as not less than
one crore rupees is not withdrawn and fresh proceedings specifying the
Specified Value as not less than three lakh rupees is not yet given.
42
Consequently, the Commercial Courts are not receiving and entertaining
the commercial disputes from above three lakh rupees till one crore
rupees. It is a lapse on the part of the concerned. It is resulting into
causing grave injustice to the litigant public as they could not obtain
speedy justice in respect of the commercial disputes involving Specified
Value up to one crore rupees. Therefore, steps are to be immediately
taken by the concerned to issue fresh proceedings to the two existing
Commercial Courts specifying the Specified Value in terms of the
amended Section 2(1)(i) of the Act. The High Court also has to take
steps to direct the presiding officers of the two Commercial Courts to
receive the suits relating to commercial disputes involving value of above
three lakh rupees with effect from 03-5-2018. After fresh proceedings are
issued by the High Court to the two Commercial Courts which are in
existence in the State of Andhra Pradesh at present mentioning the
Specified Value as not less than three lakh rupees in terms of amended
Section 2(1)(i) of the Act, the Commercial Courts shall receive all the
commercial suits filed in the said Courts involving more than three lakh
rupees and resolve the same. After issuing such proceedings, all
commercial disputes which are of more than three lakh rupees value shall
stand transferred to the Commercial Courts pending in the ordinary Civil
Courts with effect from 03-5-2018 under Section 15(2) of the Commercial
Courts Act.
28. The State Government may also, in consultation with the High
Court, shall thereafter in case of necessity in view of increase in the
pendency of commercial disputes in the special courts take steps to
appoint officers below the level of District Judge also to preside over the
Commercial Courts, in which event they have to issue notification under
Section 3(1A) of the Act specifying the pecuniary value which shall not be
less than three lakh rupees or such higher value for whole or part of the
43
State it may consider necessary. Since the Parliament conferred the
power on the State Governments to confer jurisdiction to deal with the
cases of commercial disputes even on the courts below the level of
District Judge as and when the need arises for establishment of more
courts to reduce the burden on the existing Commercial Courts, which are
established at District Judge level, in case there is increase in the
commercial disputes in the said courts, it is desirable for the State
Government to take a decision in consultation with the High Court of
Andhra Pradesh to establish more Commercial Courts even below the
level of a District Judge after considering the pendency of cases in the
existing Commercial Courts Act subsequent to issuing fresh proceedings
to the Commercial Courts specifying the Specified Value as not less than
three lakh rupees.
29. To verify as to what steps the High Court and the Government
have taken to give effect to the amendments that are made in the Act to
Sections 2(1)(i), 3(1A) and 3(3) of the Act, we have called for the record
from the concerned Registry and we have gone through the same. The
record reveals that after the amendments came into force on 03-5-2018,
the Administrative Committee of the High Court in its meeting held on 25-
3-2019 made certain recommendations to the Government by way of
passing a resolution. The two important resolutions among them are the
Committee resolved to confer pecuniary jurisdiction from three lakh
rupees to fifty lakh rupees on Commercial Courts in the cadre of Senior
Civil Judges to be established one court in each district and further
resolved to request the Government to make the 13 existing Fast Track
Courts one in each of the 13 districts in the State of Andhra Pradesh as
permanent Commercial Courts in the cadre of Senior Civil Judge Courts
with pecuniary jurisdiction from three lakh rupees to fifty lakh rupees.
Thus, it is now evident that the said resolution is passed in view of
44
Sections 3(1A) and 3(1)(3) of the Act as amended. Thereafter, the
Registry has also addressed various letters to the Government requesting
to establish the said Commercial Courts in the cadre of Senior Civil Judge
Courts below the level of District Judge with the above pecuniary
jurisdiction. But, the Government has only issued a belated G.O.Rt.
No.609 on 05-6-2023 after lapse of four years period from the date on
which the aforesaid resolution was passed, ordering to convert the
existing 13 Fast Track Courts as Commercial Courts in the cadre of
Senior Civil Judge. However, para-2 of the said G.O. reads that the
pecuniary and geographical jurisdiction of the converted courts and their
headquarters will be decided by way of issuing orders to that effect
separately. Thus, everything is only on paper till now to implement the
amended provisions of Sections 3(1A) and 3(1)(3) of the Act. Even
though the aforesaid G.O.Rt.No.609 was issued about three years ago on
05-6-2023 to convert the existing 13 Fast Track Courts as Commercial
Courts in the cadre of Senior Civil Judge, till now the said G.O. is not
implemented and the Fast Track Courts in the cadre of Senior Civil Judge
are not converted into Commercial Courts and they are not established
and made functional. The High Court also did not further pursue the
matter. It is not clarified as to why the 13 Fast Track Courts which are
converted into Commercial Courts in the cadre of Senior Civil Judge are
not made functional till now. Thus everything is only on paper and the
amendments are not actually implemented in its true spirit and letter.
Therefore, to achieve the object of the amendment, the High Court is
directed to pursue the matter with the Government and the Government
shall also immediately take steps to implement G.O.Rt.No.609, dated 05-
6-2023 and make the said Commercial Courts in the cadre of Senior Civil
Judge functional. The State Government of Andhra Pradesh should also
give notification in terms of Section 3(1A) of the Act specifying the
pecuniary value of the said Commercial Courts in the cadre of Senior Civil
45
Judge as recommended by the High Court in its resolution dated 25-3-
2019 conferring pecuniary jurisdiction on the said Courts from three lakh
rupees to fifty lakh rupees. The Government should give a notification
under Section 3(1A) of the Act fixing the pecuniary limits of the
Commercial Courts of the District Judge cadre also conferring pecuniary
jurisdiction on the said Courts from above fifty lakh rupees with unlimited
jurisdiction. As now the Commercial Courts in two different cadres i.e., at
the District Judge level and at the level of Senior Civil Judge would come
into existence, issuance of notification under Section 3(1A) of the Act
conferring pecuniary jurisdiction on the said courts is imperative. The
said notification issued in terms of Section 3(1A) of the Act would be
independent of the A.P. Civil Courts Act and this notification conferring
pecuniary jurisdiction on the Commercial Courts would be issued for the
purpose of the Commercial Courts Act, 2015. Section 16 of the A.P. Civil
Courts Act confers pecuniary jurisdiction on the ordinary Civil Courts
established under the Act whereas notification to be issued under Section
3(1A) of the Commercial Courts Act confers pecuniary jurisdiction on the
Commercial Courts established under the Commercial Courts Act.
___________________________________
CHEEKATI MANAVENDRANATH ROY, J.
____________________
BATTU DEVANAND, J.
18
th
May, 2026.
Note:-
L.R. Copy to be marked.
(B/o)
Ak
46
JUDGMENT: (per Hon’ble Sri Justice Ravi Nath Tilhari)
(Partly, concurring and supplementing on question ‘A’ and
respectfully differing on questions ‘B’ & ‘C’)
This reference has been made to this Larger Bench in 3F
Industries Limited v. Transparent Technologies Solutions Private
Limited
6
by the Division Bench vide order dated 23.08.2024 on the
following questions under the provisions of the Commercial Courts
Act,2015 (Act No.4 of 2016) as amended vide the Commercial Courts,
Commercial Division and Commercial Appellate Division of High Court
(Amendment) Act, 2018 (Act No.28 of 2018). The other CRP(s) have
been connected to the CRP No.1847 of 2024.
“27. We therefore consider it proper to refer the following questions to
the larger bench and accordingly we make the reference:
A. Whether the Amendment Act No.28 of 2018, in respect of Sections
2(1)(i) & 3(1A) of the Commercial Courts Act, 2015, by itself amends the
‘specified value’ as ‘not less than three lakhs rupees’, for the jurisdiction
of the Commercial Court or it only enables the Central Government &
the State Government(s) to do so, by notification specifying any amount,
which shall not be less than three lakhs, as ‘specified value’, and it is
only after such notification, the specified value shall stand amended ?
B. Whether the ‘specified value’ in Section 2(1)(i) in Commercial Courts
Act, 2015, as substituted by Act 28 of 2018 to the effect “which shall not
be less than Rupees three lakhs” in the place of “which shall not be less
than Rupees One Crore” shall be operative and effective from
i) the date of amendment i.e., w.e.f. 03.05.2018; or
ii) on the date notified in the notification being issued by the Central
Government under Section 2(1)(i) of the Act; or
iii) on the date notified in the notification being issued by the Andhra
Pradesh State Government in consultation with the High Court of
6
CRP.No.1847 of 2024 dated 23.08.2024
47
Andhra Pradesh, as provided under Section 3(1A) of the Commercial
Courts Act ?
C. Which judgment, U.V.Satyanarayana (2
nd
supra) or Bellam
Balakrishna (3
rd
supra), lays down the law correctly ?”
I. Order of Reference:
2. The order of reference dated 23.08.2024 reads as under:
“Heard Sri Venkat Challa, learned counsel for the petitioner and Sri V.
Yatendra Kumar, learned counsel for the respondent.
2. This Civil Revision Petition under Section 115 Code of Civil
Procedure (in short ‘CPC’) has been filed by the petitioner/Judgment Debtor
(J.Dr.), challenging the order dated 26.07.2024 in E.P.No.20 of 2024 passed
by the XI Additional District Judge, Tadepalligudem.
3. By the said order, for attachment of property Order 21 Rule 54 CPC,
notice has been issued to the petitioner.
4. The dispute having arises, between the petitioner and the
respondent, an arbitrator was nominated vide letter dated 17.03.2020. The
petitioner objected the same. The petitioner filed an application vide
ARB.APPl.No.27 of 2020 under Section 11(6) of the Arbitration and
Conciliation Act, 1996 (in short ‘Arbitration Act’) for appointment of any
suitable arbitrator. However, the proceedings before the nominated arbitrator
continued. The petitioner did not participate. The award was passed on
25.11.2021 in favour of the respondent. The petitioner filed I.A.No.1 of 2022
in ARB.APPL.No.27 of 2020 and submitted that the award dated 25.11.2021
was exparte and had no legal validity and sanctity and was non est in law,
with further prayer to stay the enforcement of the award. Those proceedings
are pending, without any stay order.
5. The respondent filed E.P.No.20 of 2024 for execution of award.
6. The petitioner did not file any objection. A memo is said to have
been filed, about the ARB.APPl.No.27 of 2020 pending before the High Court
under Section 11(6) of Arbitration Act as also I.A.No.1 of 2022. The Execution
48
Court passed the order dated 26.07.2024, fixing 23.08.2024 to issue Rule 54
notice and attachment, on payment of process.
7. Learned counsel for the petitioner submitted that the Civil Court i.e.,
XI Additional District Judge, Tadepalligudem, has no jurisdiction to execute
the award. There is lack of inherent jurisdiction. He further submitted that
even if it be executable, it can be executed only by the Commercial Court at
Visakhapatnam and not by the present Civil Court, in view of Section 10 & 15
R/w. Section 2(1)(i) of the Commercial Courts Act, 2015 (in short ‘the Act’).
The specified value of the award is Rs.78,66,839/-.
8. Learned counsel for the petitioner placed reliance in M/s.
Obulapuram Mining Company Pvt. Ltd., v. R.K. Mining Private Limited
7
,
decided on 12.09.2023 by the Co-ordinate Bench. He submitted that as per
the judgment in M/s. Obulapuram Mining Company Pvt. Ltd., (1
st
supra),
the execution petition/application is also the ‘application’ within the meaning
of Sections 10 & 15 and with effect from 16.05.2019, by virtue of
G.OMs.No.78, which constituted two Commercial Courts in the State of
Andhra Pradesh in Vijayawada and Visakhapatnam, only such Commercial
Courts have jurisdiction over the Commercial disputes of specified value even
for execution and not the Civil Courts. He submitted that the execution
petition which was pending in the Civil Court was transferred to the
Commercial Court, Vijayawada, with further direction to start the proceedings
afresh from 16.05.2019, also observing that all the orders passed after
16.05.2019 were by a coram non-judice; and were bad in law. He submitted
that in the present case, the award being of the specified value of
Commercial dispute, the execution petition should have been filed in the
Commercial Court. The Civil Court where it is pending lacks inherent
jurisdiction. He further submitted that SLP.No.23322-23325 of 2023 was filed
against the judgment in M/s. Obulapuram Mining Company Pvt. Ltd., (1
st
supra), which is pending before Hon’ble the Apex Court in which there is stay
on transfer of the execution petition. He further submitted that another Co-
ordinate Bench in U.V.Satyanarayana v. M/s.Shriram City Union Finance
Ltd.
8
, considering the judgment in M/s. Obulapuram Mining Company Pvt.
7
CRP.No.2183 of 2022
8
CRP.No.740 of 2014
49
Ltd., (1
st
supra), as also the stay order passed in SLP, set aside the
proceedings in EP.No.151 of 2017 which were before the learned Principal
District Judge, East Godavari District, with a liberty to respondent therein to
either move for transfer of the execution petition to the Commercial Court at
Visakhapatnam or in the alternative to withdraw the same and move a fresh
execution petition before the Commercial Court.
9. Sri V. Yatendra Kumar, learned counsel for the respondent placed
reliance in Bellam Balakrishna v. Greenmount Developers
9
decided on
28.08.2023 to contend that another Co-ordinate Bench of this Court, held
that, until the State Government issues a notification in consultation with the
High Court, the pecuniary value of three lakhs, as fixed in Section 2(1)(i) of
the Act, will not come into operation. He submitted that considering the
specified value of the award, for execution before the Civil Court, being less
than One Crore and in the absence of any notification under Section 3(1A) of
the Act, the Civil Court has the jurisdiction to execute, and not the
Commercial Court.
10. We have considered the aforesaid submissions and perused the
provisions of the statute as also the judgments cited.
11. Section 2(1)(i) of the Act reads as under:
“(i) “Specified Value”, in relation to a commercial dispute, shall mean the
value of the subjectmatter in respect of a suit as determined in accordance
with section 12 which shall not be less than three lakh rupees or such higher
value, as may be notified by the Central Government.”
12. In Section 2(1)(i), the expression “which shall not be less than three
lakh rupees” was substituted by Act No. 28 of 2018 vide Section 4(II), for the
expression “which shall not be less than one Crore rupees”, with effect from
03.05.2018.
13. Section 3(1A) of the Act reads as under:
(1A) Notwithstanding anything contained in this Act, the State Government
may, after consultation with the concerned High Court, by notification,
9
CRP.No.1749 of 2023
50
specify such pecuniary value which shall not be less than three lakh
rupees or such higher value, for whole or part of the State, as it may
consider necessary.
14. Section 2(1)(i) and 3(1A) both provide for ‘notification’ to specify
such pecuniary value, which shall not be less than three lakh rupees or for
such higher value. Notification, in the former case i.e., Section 2(1)(i) is by
Central Government, and in the later case Section 3(1A) is by the State
Government as it considers necessary, in consultation with the High Court for
whole or part of the State. The power of the State Government is,
notwithstanding anything contained in the Commercial Courts Act, which
includes Section 2(1)(i).
15. Prima facie, we are of the view that, under Section 2(1)(i) it is for the
Central Government to determine the specified value, by notification. The
State Government has also the power under Section 3(1A) to do so, by
notification. So, even if there is notification by the Central Government, the
State Government may also issue notification to specify the specified value,
subject to Sub-Section (1A). In the absence of any notification by the Central
Government and also by the State Government the amended provision in
Section 2(1)(i) shall not become operative. Prima facie, we are of the view
that there must be a notification for the specified value, which shall not be
less than three lakh rupees. The Act No. 28 of 2018, only enables the Central
Government as also the State Government, to fix specified value, by
notification. In the absence of any notification there would be no specification
of a specified value. In other words, prima facie, the amendment of Act 28 of
2018 cannot be read as specifying the ‘specified value’ of its own force. After
such amendment, the notification must follow. It is well settled in law that
once the statute prescribes specified procedure that has to be followed.
Consequently, the specified value has to be notified and in the absence of
any notification, merely by the amendment it cannot be that the specified
value for Commercial Court stands amended as not less than three lakh
rupees or that the commercial disputes of the specified value from three lakh
rupees shall be in the Commercial Court and the jurisdiction of the Civil Court
stands barred or ousted.
51
16. Learned counsels for both the parties submitted that there is no
notification either by the Central Government or by the State Government.
17. In M/s. Obulapuram Mining Company Pvt. Ltd., (1
st
supra), a Co-
ordinate Bench held in para 53 as under:
53) Therefore, the following conclusions are reached by ironing out the
creases:
a) The Commercial Court alone is competent to execute decrees, which are
above the specified value. The regular Civil Court will not have the jurisdiction
to entertain such Execution Petitions with effect from 16.05.2019 in the State
of Andhra Pradesh.
b) It is only the Commercial Court, Vijayawada or the Commercial Court at
Visakhapatnam which can entertain the Execution Petitions if they are above
the specified value in view of the G.O.Ms.No.78.
c) All orders passed after 16.05.2019 are orders passed by a coram non-
judice. They suffer from an inherent lack of jurisdiction and they are held to
be per se bad in law.
d) The pending E.P.No.13 of 2016 shall be transferred to the Commercial
Court, Vijayawada, and both the parties are given liberty to start the
proceedings afresh from the said date i.e., 16.05.2019.
18. In M/s. Obulapuram Mining Company Pvt. Ltd., (1
st
supra), the
specified value was 32.86 Crores i.e., above One Crore.
19 In Bellam Balakrishna (3
rd
supra) a Co-ordinate bench held that
even though the specified value is specified in Section 2(1)(i) of the Act as
not less than three lakhs, still under Section 3(1A) of the Act a discretion is
left to the State Government by notification to specify the pecuniary value
which shall not be less than three lakhs and not more than the pecuniary
jurisdiction of the District Courts. This proviso, like all other provisos, carves
out an exception to the main section and therefore, the State Government
has to issue a notification fixing the value between three lakhs to the
pecuniary jurisdiction exercisable by the District Court. That was also clarified
and amplified by Section 3(1A) by Act 28 of 2018, which starts with a non-
52
obstante clause and states that “notwithstanding anything contained in the
Act”, which was interpretated to make it clear that, the further notification was
needed from the State in consultation from the High Court. It was held that in
the absence of notification by the State Government the pecuniary value of
three lakhs as fixed in Section 2(1)(i) will not come into operation.
20. In Bellam Balakrishna (3
rd
supra), a Co-ordinate Bench held as
under:
“Therefore, on consideration of all the above, this Court is of the opinion
that until the State Government issues a notification in consultation with the
High Court, the pecuniary value of three lakhs, as fixed in Section 2(i) of the
Act, will not come into operation. Therefore, this Court does not find any error
in the objections raised by the Commercial Judge.”
21. Another Co-ordinate Bench in U.V.Satyanarayana (2
nd
supra) held
that Section 2(i) of the Act had fixed the specified value to mean a value in
respect of a suit which shall not be less than Rs. 1 Crore. However, this
value was reduced to Rs. 3 lakhs by an Ordinance No.3 of 2018, which was
subsequently replaced by the Central Act No.28 of 2018, with effect from
03.05.2018. The Co-ordinate Bench held that the Principal District Judge,
East Godavari could not deal with E.P.No.151 of 2017, unless it was shown
that the specified value was more than the amount being claimed in the
execution petition. The Co-ordinate Bench took a view that the matter had to
be placed before the Commercial Court.
22. Para Nos.9 to 14 in U.V.Satyanarayana (2
nd
supra) read as follows:
9. Section 2(1)(e) of the Arbitration Act defines Court to mean the Principal
Civil Court of original jurisdiction in the District. Section 36 of the Arbitration
Act stipulates that enforcement of an arbitral award is to be done in
accordance with the provisions of the Code of Civil Procedure, 1908 in the
same manner as if it were a decree of the Court. This would mean that
execution petitions would have to be filed before the Principal Civil Court of
original jurisdiction in the District in as much as the Court has been defined
under Section 2 (1)(e) to mean Principal Civil Court.
53
10. However, Section 10(3) of the Commercial Courts Act, 2015 reads as
follows:-
“Section-10: Jurisdiction in respect of arbitration matters - Where the subject-
matter of an arbitration is a commercial dispute of a Specified Value and–
(1) …….
(2) ……
(3) If such arbitration is other than an international commercial arbitration, all
applications or appeals arising out of such arbitration under the provisions of
the Arbitration and Conciliation Act, 1996 (26 of 1996) that would ordinarily lie
before any principal civil court of original jurisdiction in a district (not being a
High Court) shall be filed in, and heard and disposed of by the Commercial
Court exercising territorial jurisdiction over such arbitration where such
Commercial Court has been constituted.”
11. In view of this provision, the Principal Civil Court of original jurisdiction
would have to be treated to be the Commercial Court having territorial
jurisdiction over the said area. It may also be noted that Section 21 states
that the Commercial Courts Act, 2015, save as otherwise provided will have
effect over every other law which is in force for the time being.
12. This would clearly denude the power of the Learned Principal District
Judge, East Godavari to deal with E.P.No.151 of 2017 unless it is shown that
the specified value is more than the amount being claimed in the execution
petition.
13. Section 2(i) of the Commercial Courts Act, 2015 had fixed the specified
value to mean a value in respect of a suit which shall not be less than
Rs.1,00,00,000/-. However, this value was reduced to Rs.3,00,000/- by an
Ordinance No.3 of 2018, which was subsequently replaced by the Central Act
No.28 of 2018, with effect from 03.05.2018.
23. In U.V.Satyanarayana (2
nd
supra), value of the award was
Rs.46,46,965/- i.e., below One Crore rupees.
24. The apparent conflict which we find is that, in Bellam Balakrishna
(3
rd
supra), without notification, the amendment vide Act No.28 of 2018
54
was held not to be operative so as to make the specified value ‘not less
than three lakhs’, whereas in U.V.Satyanarayana (2
nd
supra) the
specified value has been taken as amended vide Act No.28 of 2018,
itself, to be ‘not less than three lakhs’.
25. In U.V.Satyanarayana (2
nd
supra) the previous judgment of the Co-
ordinate Bench in Bellam Balakrishna (3
rd
supra) was not noticed and
appears that the same was not placed before the Co-ordinate Bench. Section
3(1A) also does not find consideration in U.V.Satyanarayana (2
nd
supra)
which was considered in Bellam Balakrishna (3
rd
supra).
26. There is thus, apparent conflict in U.V.Satyanarayana (2
nd
supra)
and in Bellam Balakrishna (3
rd
supra). Both are by the Co-ordinate
Benches.
27. We therefore consider it proper to refer the following questions to
the larger bench and accordingly we make the reference:
A. Whether the Amendment Act No.28 of 2018, in respect of Sections
2(1)(i) & 3(1A) of the Commercial Courts Act, 2015, by itself amends
the ‘specified value’ as ‘not less than three lakhs rupees’, for the
jurisdiction of the Commercial Court or it only enables the Central
Government & the State Government(s) to do so, by notification
specifying any amount, which shall not be less than three lakhs, as
‘specified value’, and it is only after such notification, the specified value
shall stand amended ?
B. Whether the ‘specified value’ in Section 2(1)(i) in Commercial Courts
Act, 2015, as substituted by Act 28 of 2018 to the effect “which shall not
be less than Rupees three lakhs” in the place of “which shall not be less
than Rupees One Crore” shall be operative and effective from
i) the date of amendment i.e., w.e.f. 03.05.2018; or
ii) on the date notified in the notification being issued by the Central
Government under Section 2(1)(i) of the Act; or
55
iii) on the date notified in the notification being issued by the Andhra
Pradesh State Government in consultation with the High Court of
Andhra Pradesh, as provided under Section 3(1A) of the Commercial
Courts Act ?
C. Which judgment, U.V.Satyanarayana (2
nd
supra) or Bellam
Balakrishna (3
rd
supra), lays down the law correctly ?
28. The Registry shall place the matter before Hon’ble the Chief Justice
for constitution of the larger Bench.
29. By an order dated 22.08.2024, we provided that the Execution Court
shall adjourn the matter and fix any date in the next week. Learned counsel
for the petitioner submitted that in the Execution case, the matter is for
attachment of property, and the petitioner is ready to make deposit of 20% of
the awarded amount under execution.
30. Accordingly, we provide that till the next date of listing, the execution
proceedings in E.P.No. 20 of 2024 shall remain stayed subject to the
petitioner depositing 20% of the awarded amount before the execution Court
within a period of three weeks from today. The execution proceedings shall
remain stayed for a period of three weeks as well, to enable the petitioner to
make the deposit.
31. List before the appropriate Bench after the reference is answered.”
3. The reference was made by the Division Bench finding apparent
conflict in Bellam Balakrishna (supra) & U.V.Satyanarayana (supra).
4. In Bellam Balakrishna (supra) the view taken was that until the
State Government issued a notification in consultation with the High
Court, the pecuniary value of three lakhs, as fixed in Section 2(1)(i) of the
Act, will not come into operation. It was held that though the specified
value is specified in Section 2(1)(i) of the Commercial Courts Act, 2015 as
56
not less than three lakhs, under Section 3 of the Act still a discretion was
left to the State Government, also referring to Section 3(1A) by Act 28 of
2018, which starts with a non-obtante clause and states that
notwithstanding anything contained in the Act, the State Government may
after consultation with the concerned High Court by notification specify
such pecuniary value which shall not be less than three lakhs or such
higher value for whole or part of the State. Bellam Balakrishna (supra)
held that the State Government’s jurisdiction or power in that aspect was
spelt out at more than one place and the use of words “notwithstanding
anything contained in this Act” made it clear that further notification was
needed from the State Government after consultation with the concerned
High Court.
5. In U.V.Satyanarayana (supra) the view taken was that Section
2(1)(i) of the Commercial courts Act, 2015 had fixed the specified value to
mean a value in respect of a suit which shall not be less than Rs.1 Crore,
which however, was reduced to Rs.3 lakhs by an Ordinance No.3 of 2018
replaced by the Central Act No.28 of 2018 with effect from 03.05.2018.
So, the matter (EP) which was filed before the Principal District Judge
should have been placed before the Commercial Court at Visakhapatnam
which had the territorial jurisdiction and it was so directed. The amount
sought to be recovered was Rs.46,46,965/- i.e., below one Crore but not
less than three lakhs.
57
II. Submissions of the learned counsels for the Petitioners:
6. Heard learned counsels for both the sides on the aforesaid points
of reference and perused the material on record.
7. Learned counsels Sri Venkat Challa, Sri G.V.S.Kishore Kumar and
Sri S.V.S.S.Siva Ram for the Revision Petitioners submitted that the
‘specified value’ as defined under Section 2(1)(i) of the Commercial
Courts Act, 2015 as amended vide amendment Act 28 of 2018 of the
Commercial Courts Act, 2015 i.e., ‘not less than three lakh rupees’ for the
jurisdiction of the Commercial Court to become effective does not require
the notification of the Central Government. It is only if the base value of
the specified value is to be fixed at some higher value than three lakh
rupees then only the notification of the Central Government would be
required. Learned counsels for petitioners submitted that Section 2 (1) (i)
uses the expression ‘not less than three lakh’ or such higher value as
may be notified by the Central Government. ‘Or’ is disjunctive. So, the
notification as required by the Central Government is with respect to ‘such
higher value’ and not for ‘not less than three lakhs’ i.e., for 3 lakhs as
base value.
8. Learned counsels for the petitioners further submitted that the
expression used in Section 2 (1) (i) is ‘may’ and therefore it was not
mandatory on the part of the Central Government to issue any notification
for the specified value. ‘May’ is directory.
58
9. With respect to the use of ‘comma’ (,) after the expression ‘such
higher value’ in Section 2(1)(i), learned counsels for the petitioners
submitted that ‘comma’ cannot have any effect on the submissions
advanced by them as ‘comma’ cannot override the affect of the main
provision, as per their argument of the provision.
10. Learned counsels for the petitioners further submitted that to be
effective the ‘specified value’ after amendment, ‘not less than three lakh
rupees’, the notification of the State Government as provided under
Section 3(1A) of the Commercial Courts Act, 2015 is also not required.
Such a provision is not for the ‘specified value’ under Section 2(1)(i) but is
for the ‘pecuniary value’. Both operate in different fields.
Submissions of the learned counsels for the Respondents:
11. Per contra the other set of the learned counsels for the
respondents submitted that under Section 2(1)(i) of the Act 2015, for the
specified value “not less than three lakh rupees” to be effective, the
notification of the Central Government is must. Without the notification of
the Central Government the new ‘specified value’ would not come into
force. Their submission is that the expression “may” as used in Section
2(1)(i) is to be read as “shall” or “must”. They submitted that ‘may’ can be
read as ‘shall’, and the use of the expression ‘or’ does not mean that the
notification would be required only for ‘such higher value’. They submitted
59
that ‘or’ can be read as ‘and’. So the Central Government’s notification
would be required for either of the parts.
12. Learned counsel for the respondent further submitted that the
notification by the State Government under Section 3(1A) is also required
for conferring the pecuniary value/jurisdiction on the Commercial Courts,
without which the Commercial Courts will have no jurisdiction for the
changed/reduced ‘specified value’ as substituted by the Act 28 of 2018.
13. Learned State Counsel also added and submitted that there is
difference between the conditional legislation and delegated legislation.
He referred to the judgment in the cases of A.K.Roy v. Union of India
10
and State of Tamil Nadu v. K. Sabanayagam
11
to contend that the
present is a case of delegated legislation. The parliament after defining
‘specified value’ has delegated the power to fix the base value to the
Central Government and to make the ‘specified value’ ‘not less than three
lakh’. Such delegated power is required to be exercised by the Central
Government by issuing notification.
14. Learned counsels from both the sides cited the judgments of which
reference shall be made during the course of analysis on the points of
reference.
10
(1982) 1 SCC 271
11
(1998) 1 SCC 318
60
III. Consideration and Analysis:
(i) About the Commercial Courts Act, 2015:
15. To answer the reference, first of all, the object and purpose of the
establishment of the Commercial Courts and the enactment of the
Commercial Courts Act, 2015 deserves to be stated.
16. In Jaycee Housing (P) Ltd. v. High Court of Orissa
12
, the
Hon’ble Apex Court considered the aforesaid aspect. It was observed that
in the year 2003, the Law Commission of India took up the issue of
constitution of Commercial Divisions in the High Courts with a view to
facilitate fast disposal of high value commercial disputes. In its 188
th
Report, the Law Commission, recommended setting up of Commercial
Division in each of the High Courts to expedite commercial cases of high
pecuniary value. On the basis of the recommendations of the Law
Commission, a Bill was introduced in Lok Sabha on 16.12.2009 and was
passed on 18.12.2009 for setting up commercial divisions in the High
Courts. The Bill was referred to a Select Committee which suggested
certain amendments to the said Bill. The Bill was redrafted and placed
before the Rajya Sabha for its consideration. The same was however
withdrawn by the Government and the matter was again referred to the
Law Commission for its report. The Law Commission in its 253
rd
Report
submitted in January 2015 suggested a new approach for expediting
commercial disputes and therefore proposed a new Bill. Accordingly, the
12
(2023) 1 SCC 549
61
Commercial Courts, Commercial Division and Commercial Appellate
Division of High Courts Bill, 2015 was introduced in Rajya Sabha on
29.4.2015 which was referred to Departmental Related Parliamentary
Standing Committee on Personnel, Public Grievances, Law and Justice.
While the matter was pending before the Parliamentary Committee, an
Ordinance was promulgated by His Excellency the President of India on
23.10.2015, namely, the Commercial Courts, Commercial Division and
Commercial Appellate Division of High Courts Ordinance, 2015.
Thereafter, the Commercial Courts, Commercial Division and Commercial
Appellate Division of High Courts Act 2015 (Act No.4 of 2016/Principal
Act) was passed by the Parliament. Thereafter, the said Act No.4 of 2016
was amended in the year 2018 vide the Commercial Courts, Commercial
Division and Commercial Appellate Division of High Courts (Amendment)
Act 2018 (Act No.28 of 2018) with effect from 3.5.2018, and was also
renamed as the Commercial Courts Act 2015.
(ii) Statement of objects and reasons for the Act 2015
17. The statement of objects and reasons for the enactment of the
Commercial Courts Act, 2015 also deserves to be stated.
18. The statement of Objects and Reasons of the Commercial Courts
Act, 2015 (Act No.4 of 2016) reads as under:
“Statement of Objects and Reasons: The proposal to provide for speedy
disposal of high value commercial disputes has been under consideration of the
Government for quite some time. The high value commercial disputes involve complex
facts and question of law. Therefore, there is a need to provide for an independent
62
mechanism for their early resolution. Early resolution of commercial disputes shall
create a positive image to the investor world about the independent and responsive
Indian legal system.”
(iii) Sections 2(1)(i), 3, 12 of the Act, 2015 prior to the amendment
vide Act 28 of 2018
19. Section 2(1)(i) of the Commercial Courts Act, 2015, prior to
amendment, 2018, defined ‘specified value’ and read as under:
“2. Definitions.—(1) In this Act, unless the context otherwise requires,––
......................
i)“Specified Value”, in relation to a commercial dispute, shall mean the value
of the subject- matter in respect of a suit as determined in accordance with
section 12 which shall not be less than one crore rupees or such higher
value, as may be notified by the Central Government.”
20. Section 3 of Commercial Courts Act, 2015 prior to amendment,
provided for constitution of Commercial Courts and read as under:
“3. Constitution of Commercial Courts.—(1) The State Government, may after
consultation with the concerned High Court, by notification, constitute such
number of Commercial Courts at District level, as it may deem necessary for
the purpose of exercising the jurisdiction and powers conferred on those
Courts under this Act:
Provided that no Commercial Court shall be constituted for the territory over
which the High Court has ordinary original civil jurisdiction.
(2) The State Government shall, after consultation with the concerned High
Court specify, by notification, the local limits of the area to which the
jurisdiction of a Commercial Court shall extend and may, from time to time,
increase, reduce or alter such limits.
(3) The State Government shall, with the concurrence of the Chief Justice of
the High Court appoint one or more persons having experience in dealing
63
with commercial disputes to be the Judge or Judges, of a Commercial Court,
from amongst the cadre of Higher Judicial Service in the State.
21. Section 12 of Commercial Courts Act, 2015 prior to its
amendment, provided for determination of the ‘specified value’ as
under:
“12. (1) The Specified Value of the subject-matter of the commercial dispute
in a suit, appeal or application shall be determined in the following manner:––
(a) where the relief sought in a suit or application is for recovery of money,
the money sought to be recovered in the suit or application inclusive of
interest, if any, computed up to the date of filing of the suit or application, as
the case may be, shall be taken into account for determining such Specified
Value;
(b) where the relief sought in a suit, appeal or application relates to movable
property or to a right therein, the market value of the movable property as on
the date of filing of the suit, appeal or application, as the case may be, shall
be taken into account for determining such Specified Value;
(c) where the relief sought in a suit, appeal or application relates to
immovable property or to a right therein, the market value of the immovable
property, as on the date of filing of the suit, appeal or application, as the case
may be, shall be taken into account for determining Specified Value;
(d) where the relief sought in a suit, appeal or application relates to any other
intangible right, the market value of the said rights as estimated by the
plaintiff shall be taken into account for determining Specified Value; and
e) Where the counterclaim is raised in any suit, appeal or application, the
value of the subject-matter of the commercial dispute in such counterclaim as
on the date of the counterclaim shall be taken into account.
(2) The aggregate value of the claim and counterclaim, if any as set out in the
statement of claim and the counterclaim, if any, in an arbitration of a
commercial dispute shall be the basis for determining whether such
64
arbitration is subject to the jurisdiction of a Commercial Division, Commercial
Appellate Division or Commercial Court, as the case may be.
(3) No appeal or civil revision application under section 115 of the Code of Civil
Procedure, 1908 (5 of 1908), as the case may be, shall lie from an order of a
Commercial Division or Commercial Court finding that it has jurisdiction to hear a
commercial dispute under this Act.”
(iv) Amendment Act, 2018 (Act No.28 of 2018)
22. The Commercial Courts, Commercial Division and Commercial
Appellate Division of High Court (Amendment) Act, 2018 (28 of 2018)
received the assent of the President of India on 20.08.2018 and was
published for general information on 21.08.2018. It was deemed to have
come into force on 03.05.2018, save as otherwise provided by the Act 28
of 2018 itself.
(v) Statement of objects & reasons:
23. The statement of objects and reasons for the amendment
introducing the amendment bill, 2018 reads as under:
“STATEMENT OF OBJECTS AND REASONS
The Commercial Courts, Commercial Division and Commercial Appellate
Division of High Courts Act, 2015 was enacted for the constitution of
Commercial Courts, Commercial Division and Commercial Appellate Division
in the High Courts for adjudicating commercial disputes of specified value
and for matters connected therewith or incidental thereto.
2. The global economic environment has since become increasingly
competitive and to attract business at international level, India needs to
further improve its ranking in the World Bank Doing Business Report which,
65
inter alia, considers the dispute resolution environment in the country as one
of the parameters for doing business. Further, the tremendous economic
development has ushered in enormous commercial activities in the country
including foreign direct investments, public private partnership, etc., which
has prompted initiating legislative measures for speedy settlement of
commercial disputes, widen the scope of the courts to deal with commercial
disputes and facilitate ease of doing business. Needless to say that early
resolution of commercial disputes of even lesser value creates a
positive image amongst the investors about the strong and responsive
Indian legal system. It is, therefore, proposed to amend the Commercial
Courts, Commercial Division and Commercial Appellate Division of High
Courts Act, 2015.
3. As Parliament was not in session and immediate action was required to be
taken to make necessary amendments in the Commercial Courts,
Commercial Division and Commercial Appellate Division of High Courts Act,
2015, to further improve India's ranking in the Doing Business Report, the
President promulgated the Commercial Courts, Commercial Division and
Commercial Appellate Division of High Courts (Amendment) Ordinance, 2018
on 3rd May, 2018.
4. It is proposed to introduce the Commercial Courts, Commercial Division
and Commercial Appellate Division of High Courts (Amendment) Bill, 2018 to
replace the Commercial Courts, Commercial Division and Commercial
Appellate Division of High Courts (Amendment) Ordinance, 2018, which inter
alia, provides for the following namely:—
(i) to reduce the specified value of commercial disputes from the
existing one crore rupees to three lakh rupees, and to enable the
parties to approach the lowest level of subordinate courts for speedy
resolution of commercial disputes;
(ii) to enable the State Governments, with respect to the High Courts
having ordinary original civil jurisdiction, to constitute commercial courts at
District Judge level and to specify such pecuniary value of commercial
disputes which shall not be less than three lakh rupees and not more than
the pecuniary jurisdiction of the district courts;
66
(iii) to enable the State Governments, except the territories over
which the High Courts have ordinary original civil jurisdiction, to
designate such number of Commercial Appellate Courts at district
judge level to exercise the appellate jurisdiction over the commercial
courts below the district judge level;
(iv) to enable the State Governments to specify such pecuniary value
of a commercial dispute which shall not be less than three lakh
rupees or such higher value, for the whole or part of the State; and
(v) to provide for compulsory mediation before institution of a suit, where
no urgent interim relief is contemplated and for this purpose, to introduce
the Pre-Institution Mediation and Settlement Mechanism and to enable the
Central Government to authorise the authorities constituted under the
Legal Services Authorities Act, 1987 for this purpose.
5. The Bill seeks to achieve the above objectives.
RAVI SHANKAR PRASAD.
NEW DELHI;
The 17th July, 2018.
(vi) Relevant Amendments vide Act 28 of 2018
24. The Amendment Act 28 of 2018, inter alia made the following
amendments in the Act No.4 of 2016 (the Principal Act) relevant for the
present purposes by insertion or substitution;
“Amendment
of long title.
Amendment
of section 1.
2. In the Commercial Courts, Commercial Division and Commercial
Appellate Division of High Courts Act, 2015 (hereinafter referred to
as the principal Act), in the long title, after the words "Commercial
Courts", the words "Commercial Appellate Courts," shall be
inserted.
3. In section 1 of the principal Act, for sub-section (1), the following
sub-section shall be substituted, namely:-
"(1) This Act may be called the Commercial Courts Act, 2015.".
4. In section 2 of the principal Act, in sub-section (1),-
(1) clause (a) shall be renumbered as clause (aa) thereof, and
before clause (aa) as so renumbered, the following clause shall be
4 of 2016
5
67
Amendment
of section 2.
Substitution
of chapter
heading
Amendment
of section 3.
inserted, namely:-
"(a) "Commercial Appellate Courts" means the Commercial
Appellate Courts designated under section 3A;;
(II) in clause (i), for the words "which shall not be less than one
crore rupees", the words "which shall not be less than three lakh
rupees" shall be substituted.
5. In the principal Act, in Chapter II, for the Chapter heading, the
following Chapter heading shall be substituted, namely:-
"COMMERCIAL COURTS, COMMERCIAL APPELLATE COURTS,
COMMERCIAL DIVISIONS AND COMMERCIAL APPELLATE
DIVISIONS”.
6. In section 3 of the principal Act,-
(a) in sub-section (1), for the proviso, the following provisos shall be
substituted, namely:-
"Provided that with respect to the High Courts having ordinary
original civil jurisdiction, the State Government may, after
consultation With the concerned High Court, by notification,
constitute Commercial Courts at the District Judge level:
Provided further that with respect to a territory over which the High
Courts have ordinary original civil jurisdiction, the State Government
may, by notification, specify such pecuniary value which shall not be
less than three lakh rupees and not more than the pecuniary
jurisdiction exercisable by the District Courts, as it may consider
necessary.";
(b) after sub-section (1), the following sub-section shall be inserted,
namely:-
"(IA) Notwithstanding anything contained in this Act, the State
Government may, after consultation with the concerned High Court,
by notification, specify such pecuniary value which shall not be less
than three lakh rupees or such higher value, for whole or part of the
State, as it may consider necessary.";
(c) in sub-section(3),-
(i) for the words "State Government shall", the words "State
Government may" shall be substituted;
(ii) for the words "Commercial Court, from amongst the cadre of
Higher Judicial Service in the State", the following words shall be
substituted, namely:-
"Commercial Court either at the level of District Judge or a court
below the level of a District Judge.".
7. After section 3 of the principal Act, the following section shall be
10
15
20
25
30
35
40
45
68
5
10
15
Application
of provisions
of this Act to
cases filed
on or after
its
commence-
ment Repeal
and savings.
inserted, namely:
"3A. Except the territories over which the High Courts have ordinary
original civil jurisdiction, the State Government may, after
consultation with the concerned High Court, by notification,
designate such number of Commercial Appellate Courts at District
Judge level, as it may deem necessary, for the purposes of
exercising the jurisdiction and powers conferred on those Courts
under this Act.".
8. In section 4 of the principal Act, in sub-section (1), for the words
"ordinary civil jurisdiction", the words "ordinary original civil
jurisdiction" shall be substituted.
9. Section 9 of the principal Act shall be omitted.
10. In section 12 of the principal Act, in sub-section (1).-
(i) in clause (c), after the words "Specified Value;", the word "and"
shall be inserted;
(ii) in clause (d), the word "and", occurring at the end, shall be
omitted;
(iii) clause (e) shall be omitted.
......................
19. Save as otherwise provided, the provisions of this Act shall
apply only to cases relating to commercial disputes filed on or after
the date of commencement of this Act.
..........”
Insertion of
new section
3A
Designation
of
Commercial
Appellate
Courts.
Amendment
of section 4.
Omission of
Section 9.
Amendment
of Section
12.
25. Inter alia, Section 4 of the Act No.28/18 made changes in Section 2
of the Principal Act. In sub-section (1) the definition of ‘specified value’
clause (i) for the words “which shall not be less than one crores of
rupees”, the words “which shall not be less than three lakh rupees” were
substituted.
69
26. Section 3 of the Principal Act was amended vide Section 6 of the
Act 28 of 2018. In sub-section (1) of Section 3 for the proviso, the new
two provisos were substituted and after sub-section (1) of Section 3, sub-
section (1A) was inserted. In sub-section (3) the ‘State Government shall’
was substituted by ‘State Government may’ and the ‘Commercial Court
from amongst the cadre of Higher Judicial Services in the State’ was
substituted by ‘Commercial Court either at the level of District Judge or a
Court below the level of a District Judge’ By Section 7 of the Act No.28 of
2018 after Section 3 of the Principal Act, Section 3A was inserted
“Designation of Commercial Appellate Courts”.
27. Section 19 of the Act 28 of 2018 also deserves reproduction. It
provided as under:
“Save as otherwise provided the provisions of this Act shall apply only to
cases relating to commercial dispute filed on or after the date of
commencement of this Act.”
The date of commencement of Act No.28 of 2018 is 03.05.2018.
(vii) Section 2(1)(i), 3, 3A, 12, 21 of Commercial Courts Act, 2015
after amendment:
28. Section 2(1)(i) of the Commercial Courts Act, 2015, as amended by
Act 28 of 2018 defines ‘specified value’ as under:
“2. Definitions.—(1) In this Act, unless the context otherwise requires,––
....................
70
(i) “Specified Value”, in relation to a commercial dispute, shall mean the
value of the subject-matter in respect of a suit as determined in
accordance with section 12 which shall not be less than three lakh rupees
or such higher value, as may be notified by the Central Government.”
29. Section 3 of Commercial Courts Act, 2015 as amended by Act 28
of 2018 provides for constitution of the Commercial Court as under:
“3. Constitution of Commercial Courts.—(1) The State Government,
may after consultation with the concerned High Court, by notification,
constitute such number of Commercial Courts at District level, as it may
deem necessary for the purpose of exercising the jurisdiction and powers
conferred on those Courts under this Act:
Provided that with respect to the High Courts having ordinary original civil
jurisdiction, the State Government may, after consultation with the
concerned High Court, by notification, constitute Commercial Courts at the
District Judge level:
Provided further that with respect to a territory over which the High Courts
have ordinary original civil jurisdiction, the State Government may, by
notification, specify such pecuniary value which shall not be less than
three lakh rupees and not more than the pecuniary jurisdiction
exercisable by the District Courts, as it may consider necessary.
(1A) Notwithstanding anything contained in this Act, the State Government
may, after consultation with the concerned High Court, by notification,
specify such pecuniary value which shall not be less than three lakh
rupees or such higher value, for whole or part of the State, as it may
consider necessary.
(2) The State Government shall, after consultation with the concerned
High Court specify, by notification, the local limits of the area to which the
jurisdiction of a Commercial Court shall extend and may, from time to time,
increase, reduce or alter such limits.
71
(3) The State Government may, with the concurrence of the Chief Justice
of the High Court appoint one or more persons having experience in
dealing with commercial disputes to be the Judge or Judges, of a
Commercial Court either at the level of District Judge or a court below the
level of a District Judge.”
30. Section 3A of Commercial Courts Act, 2015 as amended by Act
28 of 2018 reads as under:
“3A. Designation of Commercial Appellate Courts.—Except the territories
over which the High Courts have ordinary original civil jurisdiction, the
State Government may, after consultation with the concerned High Court,
by notification, designate such number of Commercial Appellate Courts at
District Judge level, as it may deem necessary, for the purposes of
exercising the jurisdiction and powers conferred on those Courts under
this Act.”
31. Section 12 of Commercial Courts Act, 2015, as amended by Act
28 of 2018 provides for the determination of the ‘specified value’ as
under:
“12. Determination of Specified Value.—(1) The Specified Value of the
subject-matter of the commercial dispute in a suit, appeal or application
shall be determined in the following manner:––
(a) where the relief sought in a suit or application is for recovery of money,
the money sought to be recovered in the suit or application inclusive of
interest, if any, computed up to the date of filing of the suit or application,
as the case may be, shall be taken into account for determining such
Specified Value;
(b) where the relief sought in a suit, appeal or application relates to
movable property or to a right therein, the market value of the movable
property as on the date of filing of the suit, appeal or application, as the
72
case may be, shall be taken into account for determining such Specified
Value;
(c) where the relief sought in a suit, appeal or application relates to
immovable property or to a right therein, the market value of the
immovable property, as on the date of filing of the suit, appeal or
application, as the case may be, shall be taken into account for
determining Specified Value; 1[and]
(d) where the relief sought in a suit, appeal or application relates to any
other intangible right, the market value of the said rights as estimated by
the plaintiff shall be taken into account for determining Specified Value;
(2) The aggregate value of the claim and counterclaim, if any as set out in
the statement of claim and the counterclaim, if any, in an arbitration of a
commercial dispute shall be the basis for determining whether such
arbitration is subject to the jurisdiction of a Commercial Division,
Commercial Appellate Division or Commercial Court, as the case may be.
(3) No appeal or civil revision application under section 115 of the Code of
Civil Procedure, 1908 (5 of 1908), as the case may be, shall lie from an
order of a Commercial Division or Commercial Court finding that it has
jurisdiction to hear a commercial dispute under this Act.”
32. Section 21 of the Commercial Courts Act, 2015 provides for this Act
to have overriding effect. It reads s under:
“21. Act to have overriding effect.—Save as otherwise provided, the
provisions of this Act shall have effect, notwithstanding anything inconsistent
therewith contained in any other law for the time being in force or in any
instrument having effect by virtue of any law for the time being in force other
than this Act.”
III.A Consideration on Question No. ‘A’
33. Having mentioned the relevant provisions of law, now I proceed to
consider Question ‘A’ of the reference.
73
34. Section 2 (1) (i) defines ‘specified value’ in relation to a commercial
dispute which shall mean the value of the subject matter in respect of a
suit as determined in accordance with section 12 (1) which shall not be
less than three lakh rupees or such higher value, as may be notified by
the Central Government.
35. So, specified value as defined is ‘not less than three lakh rupees’,
which means ‘from three lakh rupees’. In other words ‘three lakh rupees’
is the base value of the specified value of a Commercial dispute. The
specified value is determined as per Section 12 of the Act. On such
determination of the value of the commercial dispute it should be not less
than three lakh, so as to be covered under the Act, 2015.
36. Learned counsels for the petitioners submitted that in Section
2(1)(i) the expression used is ‘or’, between “which shall not be less than
three lakhs” and “such higher value”. The expression ‘or’ is disjunctive
and separates the first part “which shall not be less than three lakhs” from
the second part “such higher value”. The expression “as may be notified
by the Central Government” would govern or control the second part
‘such higher value’. It is only for the ‘higher value’ notification from the
Central Government is required and not for “not less than rupees three
lakhs”. So even in the absence of a notification by the Central
Government, the specified value would be taken as ‘not less than rupees
three lakhs’ i.e., from rupees three lakhs, as there is no notification by the
74
Central Government. The contention of the respondents counsels is that
‘or’ can be read as ‘and’ as well, so Central Government notification will
be required for any amount of the ‘specified value’.
(i) Interpretation of word ‘Or’:
37. The word ‘or’ is normally disjunctive. The word ‘and’ is normally
conjunctive. But at times they are read as vice versa, to give effect to the
manifest intention of the legislature as disclosed from the context.
38. In Cable Corporation of India Limited v. Additional
Commissioner of Labour
13
, the Hon’ble apex Court held as under in
paras 11 to 14:
“11. The word “or” is normally disjunctive and “and” is normally
conjunctive. But at times they are read as vice versa to give effect to the
manifest intention of the legislature as disclosed from the context. As
stated by Scrutton, L.J.:
“You do sometimes read ‘or’ as ‘and’ in a statute. But you do not do it unless
you are obliged because ‘or’ does not generally mean ‘and’ and ‘and’ does
not generally mean ‘or’. And as pointed out by Lord Halsbury the reading of
‘or’ as ‘and’ is not to be resorted to, ‘unless some other part of the same
statute or the clear intention of it required that to be done’. But if the literal
reading of the words produces an unintelligible or absurd result ‘and’ may be
read for ‘or’ and ‘or’ for ‘and’ even though the result of so modifying the words
is less favourable to the subject provided that the intention of the legislature is
otherwise quite clear. Conversely if reading of ‘and’ as ‘or’ produces
grammatical distortion and makes no sense of the portion following ‘and’, ‘or’
cannot be read in place of ‘and’. The alternatives joined by ‘or’ need not
always be mutually exclusive.”
13
(2008) 7 SCC 680
75
12. In Fakir Mohd. v. Sita Ram [(2002) 1 SCC 741] it was held that the word
“or” is normally disjunctive. The use of the word “or” in a statute
manifests the legislative intent of the alternatives prescribed under law.
13. Had the legislature intended that the reference could be made after the
Government or the specified authority deals with the review power, it would
have said so specifically by specific words. It could have provided for a direct
reference. The parameters of review are different from a reference.
14. A plain reading of the provision makes the position clear that two
courses are open. Power is conferred on the appropriate Government to
either on its own motion or on an application made, review its order or refer
the matter to the Tribunal. Whether one or the other of the courses could be
adopted depends on the fact of each case, the surrounding circumstances
and several other relevant factors.”
39. In Spentex Industries Limited v. Commissioner of Central
Excise
14
, the Hon’ble Apex Court held that these two words normally “or”
and “and” are to be given their literal meaning unless there is a clear
instruction otherwise and it requires so to be done. Paras 28 to 32 of
Spentex Industries limited (supra) read as under:
“Interpretation of word “or” occurring in Rule 18
28. The aforesaid discussion leads us to the only inevitable consequence
which is this : the word “or” occurring in Rule 18 cannot be given literal
interpretation as that leads to various disastrous results pointed out in
the preceding discussion and, therefore, this word has to be read as “and”
as that is what was intended by the rule-maker in the scheme of things
and to carry out the objectives of Rule 18 and also to bring it on a par
with Rule 19.
29. We are conscious of the principle that the word “or” is normally disjunctive
and “and” is normally conjunctive (see Union of India v. Kamalabai
Harjivandas Parekh [AIR 1968 SC 377 : (1968) 1 SCR 463] ). However, there
may be circumstances where these words are to be read as vice versa to
14
(2016) 1 SCC 780
76
give effect to manifest intention of the legislature as disclosed from the
context.
30. Of course, these two words normally “or” and “and” are to be given their
literal meaning in unless some other part of the same statute or the clear
intention of it requires that to be done. However, wherever use of such a
word viz. “and”/“or” produces unintelligible or absurd results, the Court
has the power to read the word “or” as “and” and vice versa to give
effect to the intention of the legislature which is otherwise quite clear.
This was so done in State of Bombay v. R.M.D. Chamarbaugwala [AIR 1957
SC 699 : 1957 SCR 874] and while doing so, the Court observed as under :
(AIR p. 709, para 20)
“20. … Considering the nature, scope and effect of the impugned Act, we
entertain no doubt whatever that the first category of prize competitions does
not include any innocent prize competitions. Such is what we conceive to be
the clear intention of the legislature as expressed in the impugned Act read
as a whole and to give effect to this obvious intention as we are bound to do,
we have perforce to read the word ‘or’ appearing in the qualifying clause after
the word ‘promoter’ and before the word ‘or’ as ‘and’. Well-known canons of
construction of statutes permit us to do so. (See Maxwell on the Interpretation
of Statutes, 10th Edn., p. 238.)”
31. In J. Jayalalitha v. Union of India [(1999) 5 SCC 138 : 1999 SCC (Cri)
670] , the provisions of Section 3 of the Prevention of Corruption Act, 1988
empower the Government to appoint as many Special Judges as may be
necessary for such area or areas or for such case or group of cases, as may
be specified in the notification. Construing the italicised “or” it was held that it
would mean that the Government has the power to do either or both the
things i.e. the Government may, even for an area for which a Special Judge
has been appointed, appoint a Special Judge for a case or group of cases.
32. Likewise, in Mazagaon Dock Ltd. v. CIT and Excess Profits Tax [AIR
1958 SC 861 : (1959) 1 SCR 848] , word “or” occurring under Section
42(2) of the Income Tax Act, 1922 was construed as “and” when the
Court found that the legislature “could not have intended” use of the
expression “or” in that Section. We have already explained the statutory
scheme contained in the Act and the Rules which express manifest intention
of the legislature which provide for granting of both kinds of rebates to the
77
assessee. In Mazagaon Dock Ltd. [AIR 1958 SC 861 : (1959) 1 SCR 848] ,
this aspect was explained in the following manner : (AIR p. 865-66, para 10)
“10. The word ‘or’ in the clause would appear to be rather inappropriate,
as it is susceptible of the interpretation that when some profits are made but
they are less than the normal profits, tax could only be imposed either on the
one or on the other, and that accordingly a tax on the actual profits earned
would bar the imposition of tax on profits which might have been received.
Obviously, that could not have been intended, and the word ‘or’ would have
to be read in the context as meaning ‘and’. Vide Maxwell's Interpretation of
Statutes, 10th Edn., pp. 238-39. But that, however, does not affect the
present question which is whether the word ‘derived’ indubitably points to the
business of the non-resident as the one taxable under Section 42(2), and for
the reasons already given, the answer must be in the negative.”
40. In Kamta Prasad Aggarwal v. Executive Officer, Ballabgarh
15
Hon’ble Apex Court held that :
“12. Again, the language of Article 276(2) shows that the Constitution uses
the words “any one person” in juxtaposition with any one municipality, district
board, local board or other authority. The provisions are clear in their
effect that the word “or” occurring between the words “the State” and
the words “to any one municipality” cannot be read as the word “and”
in a conjunctive sense.”
41. In Hyderabad Asbestos Cement Products v. Union of India
16
on the aspect of the expression ‘and’ and ‘or’ the Hon’ble Apex Court held
that :
“8. The language of the rule is plain and simple. It does not admit of any
doubt in interpretation. Provisos (i) and (ii) are separated by the use of the
conjunction “and”. They have to be read conjointly. The requirement of both
the provisos has to be satisfied to avail the benefit. Clauses (a) and (b) of
15
(1974) 4 SCC 440
16
(2000) 1 SCC 426
78
proviso (ii) are separated by the use of an “or” and there the availability
of one of the two alternatives would suffice. ……”
42. In J.Jayalalitha v. Union of India
17
the Hon’ble Apex Court held
that:
“9. …………….The dictionary meaning of the word “or” is “a particle used to
connect words, phrases, or classes representing alternatives”. The word
“or”, which is a conjunction, is normally used for the purpose of joining
alternatives and also to join rephrasing of the same thing but at times to
mean “and” also. Alternatives need not always be mutually exclusive.
Moreover, the word “or” does not stand in isolation and, therefore, it will
not be proper to ascribe to it the meaning which is not consistent with
the context of Section 3. It is a matter of common knowledge that the
word “or” is at times used to join terms when either one or the other or
both are indicated. Section 3 is an empowering section and depending upon
the necessity the Government has to appoint Special Judges for an area or
areas or case or group of cases. Even in the same area where a Special
Judge has already been appointed, a necessity may arise for appointing one
more Special Judge for dealing with a particular case or group of cases
because of some special features of that case or cases or for some other
special reasons. We see no good reason to restrict the power of the
Government in this behalf by giving a restricted meaning to the word “or”. In
our opinion, the word “or” as used in Section 3 would mean that the
Government has the power to do either or both the things. Therefore, the first
contention raised on behalf of the appellants has to be rejected.”
43. The expression ‘or’ therefore is normally disjunctive. Sometimes it
is used in a statute to manifest the intention of the legislature of the
alternatives prescribed under law as well. Normally the expression is to
be given literal meaning. Giving literal meaning to the word ‘or’ if it
provides an unintelligible or absurd results, then it can also be read as
17
(1999) 5 SCC 138
79
‘and’ or otherwise permissible to give effect to the manifest intention of
the legislature as disclosed from the context. However in the present case
in the context of Section 2(1)(i) the use of the word ‘or’ is disjunctive. It
separates the first part ‘which shall not be less than three lakhs’ from the
second part ‘such higher value’. The legislative intent is very clear. It is
that, the specified value cannot be less than rupees three lakhs. It is from
three lakhs but it can also be of higher value. For higher value the
discretion is left to the Central Government. So the intention being clear
and the use of word ‘or’ providing for the alternative base value of the
specified value, both the courses are open. The first is as fixed by the
legislature itself and the second of ‘higher value’ which may be specified
by the Central Government in the manner prescribed. So long as the
second course is not adopted, the first remains and continues. I do not
find any reason to read the word ‘or’ as ‘and’, nor not to read it as ‘or’,
which gives the clear intention of the legislature.
(ii) Use of Comma (,) punctuation:
44. In Section 2(1)(i) after the expression “or such higher value’ comma
(,) has been used followed by “as may be notified by the Central
Government”. The question is what does use of comma (,) mean.
80
45. In Union of India v. Rabinder Singh
18
, between two parts of
Section 52(f) of Army Act, 1950 a ‘comma’ and the expression ‘or’ were
used. The Hon’ble Apex Court, accepted the submission that if the
legislature wanted both these parts to be read together, it would have
used the conjunction ‘and’.
46. Para 25 in Rabinder Singh (supra) reads as under:
“25. We accept the submission of Shri Tripathi that the two parts of Section
52(f) are disjunctive, which can also be seen from the fact that there is a
comma and the conjunction “or” between the two parts of this clause (f) viz.
(i) does any other thing with intent to defraud, and (ii) to cause wrongful gain
to one person or wrongful loss to another person. If the legislature wanted
both these parts to be read together, it would have used the conjunction
“and”. As we have noted earlier in Vimla [AIR 1963 SC 1572 : (1963) 2 Cri
LJ 434] it was held that the term “fraudulently” is wider than the term
“dishonestly” which however, requires a wrongful gain and a wrongful loss.
The appellants had charged the respondent for acting with “intent to defraud”,
and therefore it was not necessary for the appellants to refer to the second
part of Section 52(f) in the charge. The reliance by the Division Bench on the
judgment in S. Harnam Singh [(1976) 2 SCC 819 : 1976 SCC (Cri) 324 : AIR
1976 SC 2140] to justify the conclusions drawn by it was clearly erroneous.”
47. In Aswini Kumar Ghosh (supra) it was held that when a statute is
carefully punctuated and there is doubt about its meaning, a weight
should undoubtedly be given to the punctuation. It was held that the
punctuation may have its uses in some cases, but it cannot certainly be
regarded as a controlling element and cannot be allowed to control the
18
(2012) 12 SCC 787
81
plain meaning of a text. Paragraph No.58 in Aswini Kumar Ghosh
(supra) relevant part reads as under:
“58. …………….. Punctuation is after all a minor element in the
construction of a statute, and very little attention is paid to it by English
courts. Cockburn, C.J. said in Stephenson v. Taylor [Stephenson v. Taylor,
(1861) 1 B & S 101 : 121 ER 652] : (ER p. 654)
“… On the Parliament roll there is no punctuation, and we therefore are not
bound by that in the printed copies.”
It seems, however, that in the vellum copies printed since 1850 there are some
cases of punctuation, and when they occur they can be looked upon as a sort
of contemporanea expositio [Craies on Statute Law, p. 185] . When a statute
is carefully punctuated and there is doubt about its meaning, a weight
should undoubtedly be given to the punctuation [Crawford on Statutory
Construction, p. 383] . I need not deny that punctuation may have its uses in
some cases, but it cannot certainly be regarded as a controlling element
and cannot be allowed to control the plain meaning of a text [Ibid.] .”
48. On the meaning and use of ‘comma’, in C.V.Raju v. C.
Balagopal
19
it was held by this Court as under in paragraphs 8, 9, 14 and
16:
“8. In Oxford Dictionary the meaning of “comma” is stated as follows:
“comma: n. 1 a punctuation mark (,) indicating a pause between parts of a
sentence, or dividing items in a list, string of figures, etc. 2. Mus. A definite minute
interval or difference of pitch.”
In the said dictionary, the author while dealing with the “Punctuation Marks” (Appendix
VIII) explained about ‘comma’, which reads:
“5. Comma(,)
5.1 Use of the comma is more difficult to describe than other punctuation marks,
and there is much variation in practice. Essentially, its role is to give detail to the
structure of sentences, especially longer ones, and make their meaning clear. Too
19
2001 SCC OnLine AP 442
82
many commas can be distracting; too few can make a piece of writing difficult to read
or, worse, difficult to understand.
5.2.1. The comma is widely used to separate the main clauses of a compound
sentence when they are not sufficiently close in meaning or content to form a
continuous unpunctuated sentence, and are not distinct enough to warrant a
semicolon. A conjunction such as and, but, yet, etc., is normally used:
The road runs through a beautiful wooded valley, and the railway line follows it
closely.
5.2.2. It is considered incorrect to join the clauses of a compound sentence without
a conjunction. In the following sentence, the comma should either be replaced
semicolon, or be retained and followed by and:
I like swimming very much, I go to the pool every week.
5.2.3. It is also considered incorrect to separate a subject from its verb with a
comma:
Those with the smallest incomes and no other means, should get most support.
5.3.1. Commas are usually inserted between adjectives coming before a noun:
An enterprising, ambitious person. A cold, damp, badly heated room.
5.3.2. But the comma is omitted when the last adjective has a closer relation to the
noun than the others:
A distinguished foreign politician.
A little old lady,
9. In Webster's Dictionary the word “comma” means:
“comma: n. [a short clause in a sentence; that which is struck or cut off, from
koptein, to cut-off]
(1) a mark of punctuation (,) used to indicate a slight separation of sentence
elements: commas are used to set off non-restrictive or parenthetical elements,
quotations, items in a series, etc
(2) a slight pause
(3) in music, any of various minute intervals, as that between the major and the
minor tone
(4) in ancient prosody, a phrase or short clause.
(5) a butterfly, Grapta comma-album, bearing a white, comma-shaped mark on the
lower wings.
Comma bacillus; a comma-shaped bacillus, also known as the cholera bacillus,
because is causes Asiatic cholera.”
83
14. In Wren and Martin Grammar and Composition Book, the author defines the
usage of “comma”, which reads:
“265. The COMMA represents the shortest pause, and is used:
(1) To separate a series of words in the same construction; as England, France and
Italy formed an alliance. He lost lands, money, reputation and friends. It was a long,
dull and wearisome journey. He wrote, his exercise neatly, quickly and correctly.
Note: A comma is generally not placed before the word preceded by and.
(2) To separate each pair of words connected by and as we should be devout and
humble, cheerful and serene. High and low rich and poor, wise and foolish. Must all
dies.
(3) After a native absolute: as
This done she retained to the old man with a lovely smile on her face. The wind
being favourable, the squadron sailed. The genius making me no answer, I turned
about to address myself to him a second time.
(4) To mark off Noun or phrase in apposition:”
16. In the instant case, however, “comma” has been used to support all disjunctive
words. Having regard to the fact that the clause prescribed for educational
qualifications speaks of a qualification essential for holding a responsible post, and,
thus, it is not possible for this Court to accept the submission that only because the
same had been interpreted differently at an earlier point of time the same should be
allowed to prevail”
49. The use of ‘comma’ (,) after ‘such higher value’ is only a mark of
punctuation. There is no doubt about the meaning of specified value. The
punctuation is a minor element in the construction of a statute. It cannot
be allowed to control the plain meaning of a text. Here, it has been used
to give detail, to the structure of the sentence, which is longer one and to
make their meaning clear. That comma ‘(,)’ in my view cannot be
regarded as controlling the meaning of the ‘specified value’ i.e., ‘not less
than three lakh’ and in case of ‘higher value’ to be so notified by the
Central Government.
84
(iii) Use of expression ‘May’, its meaning:
50. Now coming to the use of expression ‘may’ in Section 2(1)(i) it was
contended by the learned counsels for the petitioners that ‘may’ is
directory and so there is no mandate to issue the notification by the
Central Government. The learned counsel for respondents submitted that
the word “may” in the expression “as may be notified by the Central
Government” shall be read as “must” or “shall” and ‘may’ is not always
directory.
51. In State of Uttar Pradesh v. Jogendra Singh
20
, it was held that
the expression “may” is capable of meaning “must” or “shall” in the light of
the context though generally it does not mean ‘must’ or ‘shall’. The
Hon’ble Apex Court held as under in para 8:
“8. Rule 4(2) deals with the class of gazetted government servants and gives
them the right to make a request to the Governor that their cases should be
referred to the Tribunal in respect of matters specified in clauses (a) to (d) of
sub-rule (1). The question for our decision is whether like the word “may” in
Rule 4(1) which confers the discretion on the Governor, the word “may”
in sub-rule (2) confers the discretion on him, or does the word “may” in
sub-rule (2) really mean “shall” or “must”? There is no doubt that the
word “may” generally does not mean “must” or “shall”. But it is well
settled that the word “may” is capable of meaning “must” or “shall” in
the light of the context. It is also clear that where a discretion is
conferred upon a public authority coupled with an obligation, the word
“may” which denotes discretion should be construed to mean a
command. Sometimes, the legislature uses the word “may” out of
20
AIR 1963 SC 1618
85
deference to the high status of the authority on whom the power and
the obligation are intended to be conferred and imposed. In the present
case, it is the context which is decisive. …………….”
52. In State (Delhi Admn.) v. I.K.Nangia
21
the Hon’ble Apex Court
held:
“15. ………………… Normally, the word “may” implies what is optional,
but for the reasons stated, it should in the context in which it appears,
mean “must”. There is an element of compulsion. It is a power coupled
with a duty. In Maxwell on Interpretation of Statutes, llth Edn. at p. 231, the
principle is stated thus:
“Statutes which authorise persons to do acts for the benefit of others or, as
it is sometimes said, for the public good or the advancement of justice,
have often given rise to controversy when conferring the authority in terms
simply enabling and not mandatory. In enacting that they ‘may’ or ‘shall, if
they think fit’, or, ‘shall have power’, or that ‘it shall be lawful” for them to
do such acts, a statute appears to use the language of mere permission,
but it has been so often decided as to have become an axiom that in such
cases such expressions may have — to say the least — a compulsory
force, and so would seem to be modified by judicial exposition.” (emphasis
supplied)…………….”
53. In Sahodara Devi v. Government of India
22
the Hon’ble Apex
Court held that:
“5. …………... Normally, the word “may” is used to grant a discretion
and not to indicate a mandatory direction. Had the intention been that
the Military Estates Officer must grant a lease in all cases, the word
used would have been “shall” instead of “may”. It is true that the word
“may”, in some context, has been interpreted as containing a
21
(1980) 1 SCC 258
22
(1972) 3 SCC 156
86
mandatory direction and the authority given the power has to exercise that
power unless there be special reasons. ……………..”
“6. It may be noticed that, in that case, the word “may” as used in the general
sub-section (2) was not held to indicate a mandatory direction. It was only in
sub-section (3), because of the special context, that the Court held that the
word “may” was equivalent to “shall” or “must”. In the case before us, Rule 27
only confers a power in general on the Military Estates Officer to grant leases
and, by using the word “may”, it clearly gives him discretion to grant it in
suitable cases. ……………….”
54. In Ramji Missir v. The State of Bihar
23
, the Hon’ble Apex Court,
on the expression “may” held as under in para Nos.15 & 16:
“15. A considerable portion of the argument by the respondent was based on
the import of the facultative verb “may” in the words “may be made” occurring
in the operative part of the sub-section as conferring a discretion and that as
no limitations were placed by this or any other section on the exercise of this
discretion, the same “should be held to be unfettered and therefore capable
of being exercised, no doubt, on judicial principles but not subject to any
statutory limitations. It might be mentioned that from the relevant passage of
the judgment of the High Court which we have extracted, it would appear that
the learned Judge has proceeded on this interpretation of Section 11.
16. Though the word “may” might connote merely an enabling or
premissive power in the sense of the usual phrase “it shall be lawful”, it
is also capable of being construed as referring to a compellable duty,
particularly when it refers to a power conferred on a court or other
judicial authority. As observed in Maxwell on Statutes:
“Statutes which authorise persons to do acts for the benefit of others, or, as it
is sometimes said, for the public good or the advancement of justice, have
often given rise to controversy when conferring the authority in terms simply
enabling and not mandatory. In enacting that they ‘may’, or shall, if they think
fit, or, ‘shall have power,’ or that ‘it shall be lawful’ for them to do such acts, a
23
AIR 1963 SC 1088
87
statute appears to use the language of mere permission, but it has been so
often decided as to have become an axiom that in such cases such
expressions may have — to say the least — a compulsory
force.………………..”
55. In C.Bright v. The District Collector
24
the Hon’ble Apex Court on
the aspect of “may” and “shall” held as under in paragraph 8:
“8. A well-settled rule of interpretation of the statutes is that the use of the
word “shall” in a statute, does not necessarily mean that in every case it is
mandatory that unless the words of the statute are literally followed, the
proceeding or the outcome of the proceeding, would be invalid. It is not
always correct to say that if the word “may” has been used, the statute is
only permissive or directory in the sense that non-compliance with those
provisions will not render the proceeding invalid [State of U.P. v.
Manbodhan Lal Srivastava, AIR 1957 SC 912] and that when a statute uses
the word “shall”, prima facie, it is mandatory, but the Court may ascertain
the real intention of the legislature by carefully attending to the whole scope
of the statute [State of U.P. v. Babu Ram Upadhya, AIR 1961 SC 751] . The
principle of literal construction of the statute alone in all circumstances
without examining the context and scheme of the statute may not serve the
purpose of the statute [RBI v. Peerless General Finance & Investment Co.
Ltd., (1987) 1 SCC 424] .”
56. Normally the word ‘may’ implies what is optional and it does not
indicate the mandatory direction. It also connate an enabling or
permissive power. A well-settled rule of interpretation of the statutes is
that the use of the word “shall” in a statute, does not necessarily mean
that in every case it is mandatory that unless the words of the statute are
literally followed, the proceeding or the outcome of the proceeding, would
be invalid. It is also not always correct to say that if the word “may” has
24
(2021) 2 SCC 392
88
been used, the statute is only permissive or directory in the sense that
non-compliance with those provisions will not render the proceeding
invalid. When a statute uses the word “shall”, prima facie, it is mandatory,
but the Court may ascertain the real intention of the legislature by
carefully attending to the whole scope of the statute. The principle of
literal construction of the statute alone in all circumstances without
examining the context and scheme of the statute may not serve the
purpose of the statute.
(iv) Delegated legislation/conditional legislation:
57. Learned State Counsel submitted that Section 2(1)(i) is a delegated
legislation. The legislature has delegated the power to fix the specified
value to the Central Government, so, the notification by the Central
Government is must to implement the will of the legislature.
58. In State of Tamil Nadu v. K. Sabanayagam
25
the distinction
between the delegated legislation and conditional legislation was
explained, as clear and well settled. The case of Hamdard Dawakhana
(Wakf) Lal Kuan, Delhi v. Union of India was referred. It was held that
the distinction between the conditional legislation and delegated
legislation is that, in the former the delegate’s power is that of determining
when a legislative declared rule of conduct shall become effective and the
law involves delegation of rule making power which constitutionally may
25
(1998) 1 SCC 318
89
be exercised by the administrative agent. This means that the legislature
having laid down the broad principles of its policy in the legislation can
then leave the details to be supplied by the administrative authority. In
other words by delegated legislation the delegate completes the
legislation by supplying details within the limits prescribed by the statute
and in the case of conditional legislation the power of legislation is
exercised by the legislature conditionally leaving the discretion on an
external authority, the time and manner of carrying its legislation into
effect as also the determination of the area to which it is to extend. In
Hamdard Dawakhana (supra) it was further held that, when the delegate
is given the power of making rules and regulations in order to fill in the
details to carry out and subserve the purposes of the legislation the
manner in which the requirements of the statute are to be met and the
rights therein created to be enjoyed, it is an exercise of delegated
legislation. But when the legislation is complete in itself and the
legislature has itself made the law and the only function left to the
delegate is to apply the law to an area or to determine the time and
manner of carrying it into effect, it is conditional legislation.
59. In K. Sabanayagam (supra) Hon’ble Apex Court held as under:
“17. ……………….The distinction between delegated legislation and
conditional legislation is a clear and well-settled one. In this connection we
may usefully refer to a Constitution Bench decision of this Court in the case of
Hamdard Dawakhana (Wakf) v. Union of India [AIR 1960 SC 554 : (1960) 2
90
SCR 671] . Kapur, J. speaking for the Constitution Bench has made the
following pertinent observations at pp. 695-96 of the Report:
“The distinction between conditional legislation and delegated legislation
is this that in the former the delegate's power is that of determining
when a legislative declared rule of conduct shall become effective;
Hampton & Co. v. U.S. [276 US 394 : 72 L Ed 624 (1928)] and the latter
involves delegation of rule-making power which constitutionally may
be exercised by the administrative agent. This means that the
legislature having laid down the broad principles of its policy in the
legislation can then leave the details to be supplied by the
administrative authority. In other words by delegated legislation the
delegate completes the legislation by supplying details within the
limits prescribed by the statute and in the case of conditional
legislation the power of legislation is exercised by the legislature
conditionally leaving to the discretion of an external authority the
time and manner of carrying its legislation into effect as also the
determination of the area to which it is to extend; (R. v. Burah [(1878)
3 AC 889, PC] ; Russell v. R. [(1882) 7 AC 829 : 51 LJPC 77, PC] , AC at
p. 835; King Emperor v. Benoari Lal Sarma [(1944) 72 IA 57 : AIR 1945
PC 48] ; Sardar Inder Singh v. State of Rajasthan [AIR 1957 SC 510 :
1957 SCR 605] ). Thus when the delegate is given the power of making
rules and regulations in order to fill in the details to carry out and subserve
the purposes of the legislation the manner in which the requirements of
the statute are to be met and the rights therein created to be enjoyed it is
an exercise of delegated legislation. But when the legislation is complete
in itself and the legislature has itself made the law and the only function
left to the delegate is to apply the law to an area or to determine the time
and manner of carrying it into effect, it is conditional legislation.”
It is thus obvious that in the case of conditional legislation, the legislation
is complete in itself but its operation is made to depend on fulfilment of
certain conditions and what is delegated to an outside authority, is the
power to determine according to its own judgment whether or not those
conditions are fulfilled. In case of delegated legislation proper, some
portion of the legislative power of the legislature is delegated to the outside
91
authority in that, the legislature, though competent to perform both the
essential and ancillary legislative functions, performs only the former and
parts with the latter, i.e., the ancillary function of laying down details in favour
of another for executing the policy of the statute enacted. The distinction
between the two exists in this that whereas conditional legislation contains no
element of delegation of legislative power and is, therefore, not open to attack
on the ground of excessive delegation, delegated legislation does confer
some legislative power on some outside authority and is therefore open to
attack on the ground of excessive delegation. In this connection we may also
refer to a decision of this Court rendered in the case of Sardar Inder Singh v.
State of Rajasthan [AIR 1957 SC 510 : 1957 SCR 605] wherein it is laid down
that when an appropriate legislature enacts a law and authorises an outside
authority to bring it into force in such area or at such time as it may decide,
that is conditional and not delegated legislation.”
60. Learned State counsel placed reliance in A.K.Roy (supra) to
contend that the proposition is that once the power is conferred by the
parliament upon the Central Government it is visualized by the parliament
that the Central Government would not fail to implement the will of the
parliament. The contention is that under Section 2(1)(i) of the Commercial
Courts Act the power was conferred to the Central Government to fix the
specified value by notification, so it is for the Central Government to do
that, which should have been done by the Central Government without
fail.
61. In A.K.Roy (supra) the Hon’ble Apex Court held as under in para-
58:
“58. It is in this background that the Parliament conferred upon the Central
Government the power to bring the provisions of the 44th Amendment Act
92
into force. The Parliament could not have visualised that, without any
acceptable reason, the Central Government may fail to implement its
constituent will. We hope that the Central Government will, without
further delay, bring Section 3 of the 44th Amendment Act into force. That
section, be it remembered, affords to the detenu an assurance that his
case will be considered fairly and objectively by an impartial tribunal.”
62. I am of the view that the expression ‘may’ is used in its ordinary
sense as ‘may’ and not as shall or must. It is to the discretion of the
Central Government to determine the specified value for any higher
value, than three lakhs. So ‘may’ confers the discretion in the Central
Government to determine that ‘specified value’ from above three lakhs, as
the base value up to an amount of any other higher value. The discretion
by the use of word ‘may’ is to that extent and in that regard. The
discretion is not that, the notification is not to be issued once the Central
Government has decided to increase the base value of specified value to
a higher value over and above three lakhs. On such a
decision/determination of the specified value, the same is to be notified by
the Central Government because that is the mode prescribed for doing
the act. So, I am not inclined to take the view that ‘may’ has to be read as
‘must’ or ‘shall’ for issuing notification for the specified value, ‘which shall
not be less than three lakhs’ as determined by the legislature.
63. Legislature has provided for the Central Government to decide
what should be the specified value, if the base value is not to be three
lakhs, but a higher value. The ‘specified value’ is from three lakhs i.e., it
93
starts from three lakhs, without any upper cap and so, it is for the Central
Government, if the Central Government decides that the specified value
(base amount) should be higher than three lakhs, to specify such higher
value by notification. So for specified value of not less than three lakhs
(i.e., three lakhs as base value) that has been fixed by the legislature, no
notification is required from the Central Government. That has been
specified by the legislature itself. No one except the legislature can
change it i.e, below three lakhs. The language of Section 2(1)(i) ‘specified
value’ is clear and unambiguous. It admits of only one interpretation and
that is that, in case of higher value to be fixed, as specified value, than
three lakhs (base amount) the Central Government will have to issue the
notification. ‘May’ here confers the discretion in the central Government to
change the specified value from three lakhs to any higher amount and if
that discretion is be exercised by the Central Government then a
notification will have to be issued. It cannot be done by any other way by
the Central Government. To that extent (for issuance of notification in
case the Central Government decides so, for higher value) ‘may’ would
then be not directory but mandatory. “Specified value” can be changed to
an higher amount only by notification, such power has been given to the
Central Government by the statute itself.
64. The contention of the respondents’ counsel on the delegated
legislation, and conditional legislation and a duty cast on the Central
94
Government to implement the Will of the parliament, based on the
judgments in A.K.Roy (supra) and K.Sabanayagam (supra), on principle
of law cannot be disputed. But, on the applicability of the tests of
conditional legislation and delegated legislation, Section 2(1)(i) cannot be
said to be a delegated legislation or a conditional legislation in its entirety.
Here, the legislation is complete in itself. The specified value has been
defined ‘not less than three lakhs’ i.e., from three lakhs. An alternative
specified value by use of ‘or’ has also been provided i.e., ‘higher value.
The legislature has then delegated the power to the Central Government
to fix such higher value as the specified value (base value). Discretion
has also been given to the Central Government to determine any higher
value by use of the word ‘such’ in the expression ‘such higher value’ and
the legislature has also prescribed the mode of doing it i.e., by
notification. If the Central Government has not decided to go for the
Higher value, for which there is no mandatory direction, but discretion
conferred by the statute, the specified value from three lakhs as fixed by
the legislature stands. That is subject to change by Central Government
but it is not mandatory on the Central Government to change it. So, the
legislative intent and the legislation is clear as to under what
circumstances the Central Government is required to issue notification
and any such notification not having being issued, the ‘specified value’
95
‘not below three lakhs’, or from ‘three lakhs’ is statutorily fixed by the
legislature.
65. I am therefore of the view that the notification by the Central
Government under Section 2 (1) (i) of the Act 2015 is not required for the
specified value not less than Rs.3 lakh, but it shall be required for a
higher value than starting from Rs.3 lakh, if the Central Government so
decides. In the absence of any notification by the Central Government,
the specified value shall start from Rs.3 lakh without any upper cap.
III.B - Consideration on Question No. ‘B’
66. The question ‘B’ in substance is, that the substituted specified
value in Section 2(1)(i) of the Act, 2015 shall be operative and effective
from the date of amendment (03.05.2018) or the date of notification by
the Central Government or the date of notification by the State
Government.
67. In answer to Question ‘A’, it has been held that the notification by
the Central Government is not necessary for the specified value from
three lakhs. So, in this part - I would consider the necessity of any
notification by the State Government under Section 3(1A) of the Act, 2015
and its impact or no impact, on the specified value for it being operative
and effective from what date.
96
(i) Meaning of ‘pecuniary value’ in Section 3 (1A):
68. Section 3 provides for the “Constitution of Commercial Courts”. The
State Government may after consultation with the concerned High Court
by notification, constitute such number of Commercial Courts at District
level, as it may deem necessary for the purpose of exercising the
jurisdiction and powers conferred on those Courts under the Act. The first
proviso and the second proviso relate to the High Courts having ordinary
original civil jurisdiction. The High Court of Andhra Pradesh is not the
High Court ‘having ordinary original civil jurisdiction’.
69. Sub-Section (1A) of Section 3, provides that notwithstanding
anything contained in the Act, the State Government may, after
consultation with the concerned High Court, by notification, specify such
pecuniary value which shall not be less than three lakh rupees or such
higher value, for whole or part of the State, as it may consider necessary.
Sub-Section (2), provides for the State Government after
consultation with the concerned High Court by notification to specify the
local limits of the area to which the jurisdiction of a Commercial Court
shall extend, which may from time to time be increased, decreased or
altered. Sub-Section (3), deals with the appointment of one or more
persons as Judge or Judges of the Commercial Courts either at the level
of District Judge or a Court below the level of District Judge.
97
70. Section 3 (unamended) (i.e., prior to Act 28 of 2018) provided for
the constitution of such number of Commercial Courts, as the State
Government may deem necessary at District Level by notification after
consultation with the High Court. The proviso provided that no
Commercial Court shall be constituted for the territory over which the
High Court had ordinary original civil Jurisdiction. Sub-Section (2)
provided for specifying the local limits of the area to which the jurisdiction
of a commercial court shall extend by notification after consultation with
the concerned High Court. Local area was subject to increase, decrease
or alternation of limits. Sub-Section (3) provided for appointment of Judge
or Judges of a Commercial Court from amongst the cadre of Higher
Judicial Services under the concurrence of the Chief Justice. It was only
the Constitution, and the territorial jurisdiction of the Commercial Court
that was to be specified. There was no specific provision, like present
Sub-section (1A), providing for the State Government to specify the
‘pecuniary value’ of such constituted Commercial Courts either for the
whole or part of the State. Now, sub-Section (1A) has also been inserted
specifically for the pecuniary value. Another change has been made that
now even for the territory over which the High Court has an ordinary
original civil jurisdiction, Commercial Court is to be constituted.
98
71. There was no independent provision to provide for the ‘pecuniary
value’ as in Sub-Section (1A). It was only the ‘specified value’. ‘Specified
value’ was defined under Section 2 (1) (i) of the Act, 2015.
72. The point then is whether the ‘specified value’ and ‘pecuniary value’
are the same or different expressions. For both the expressions the words
“which shall not be less than three lakh rupees or such higher value”,
have been used. If both the expressions are different then what is the
meaning of ‘pecuniary value’. This expression has not been defined in
the Commercial Court Act 2015. Section 2 (2) of the Commercial Court
Act provides that “The words and expressions used and not defined in the
Act, but defined in the Code of Civil Procedure 1908, and the Indian
Evidence Act 1812, shall have the same meaning respectively assigned
to them in the Code and the Act”. The Code of Civil Procedure (C.P.C),
also does not define the expression ‘pecuniary value’. However Section 6
CPC deals with the ‘pecuniary jurisdiction’ and throws light. It reads that
“Save in so far as is otherwise expressly provided, nothing herein
contained shall operate to give any Court jurisdiction over suits the
amount or value of the subject-matter of which exceeds the pecuniary
limits (if any) of its ordinary jurisdiction.” Section 21 (2) CPC also
provides, inter alia, about the competence of a Court with reference to the
‘pecuniary limits of its jurisdiction’ and the objection in that regard to be
raised at the Court of first instance.
99
73. Sub-Section (1A) falls in Section 3. Section 3 provides for the
constitution of Commercial Courts. Sub-Section (1) for constitution, Sub-
Section (2) for local limits of area i.e., territorial jurisdiction and Sub-
Section (3) for appointment of Judge or Judges to both kinds of
Commercial Courts either at the Level of District Judge or below the level
of District Judge. So, placing Sub-Section (1A) in Section 3 and using the
expression ‘pecuniary value’ an expression different from ‘specified value’
(which has been defined), in my view shows the clear intention of the
legislature that the ‘pecuniary value’ refers to the ‘pecuniary jurisdiction of
the commercial court’ at different levels. This view that pecuniary value
refers to pecuniary jurisdiction also gets support from the 2
nd
proviso to
Section 3(1), which also uses the expression ‘pecuniary value’ referring to
the ‘pecuniary jurisdiction’ of the District Judge. So, pecuniary value is
different from the ‘specified value’ which is in relation to the value of the
subject matter of the suit of commercial dispute, which in order to be
covered by the Commercial Court Act shall not be less than three lakhs.
The pecuniary value relates to the pecuniary jurisdiction of the
commercial court. The commercial court having a particular pecuniary
jurisdiction, shall entertain the suit / application / execution petition of that
part of the ‘specified value’, which falls with its pecuniary jurisdiction
limits, in different territorial jurisdictions. In Nandita Bose (smt.) v.
Ratanlal Nahata
26
, the Hon’ble Apex Court held that “the principles which
26
(1987) 3 SCC 705
100
regularize the pecuniary jurisdiction of a civil Courts are well settled.
Ordinarily, the valuation of a suit depends upon the relief claimed therein
and the plaintiff’s valuation in his plaint determines the Court in which
it can be presented.”
74. The pecuniary value or pecuniary jurisdiction of a Commercial
Court may be at par the ‘specified value’ in one Commercial Court or in
different commercial courts in different territorial jurisdictions or it may be
fixed for more than one Commercial Court in the same territorial
jurisdiction at different levels/slabs of the ‘specified value’. The object
being speedy disposal, at different levels with different pecuniary
jurisdiction the commercial court more than one, for whole or part of the
State may be constituted. To explain further, ‘Specified value’ now starts
from Rs.3 lakh. There is no upper limit. So, the commercial dispute of
‘specified value’ (for illustration) from Rs.3 lakhs to Rs.50 lakh may be
made the ‘pecuniary value’ of one commercial court jurisdiction and for
the amount above that, the ‘pecuniary value’ may be fixed for another
commercial court, so as to cover different slabs of the specified value, in
many Commercial Courts to be established for expeditious disposal of
high value commercial dispute as also low value commercial dispute
which is the object of the Act and to achieve the same.
75. If the dispute is a commercial dispute within the meaning of Section
2 (1) (c) of the Act 2015, which defines ‘commercial dispute’ and is of the
101
specified value, for example, the specified value being rupees ten lakh,
the question would be as to in which commercial court the
suit/application/execution petition is to be filed and the answer would be
in the Commercial Court constituted having the pecuniary jurisdiction to
cover the specified value of rupees ten lakhs and having the territorial
jurisdiction. The pecuniary value/jurisdiction, is therefore to be notified
under Section 3 (1A) by the State Government. In the absence of any
such fixation or specification of pecuniary value, the commercial dispute
cannot be instituted in any particular commercial court. Even those
already constituted Commercial Courts at Visakhapatnam & Krishna
(Vijayawada) will not be competent to entertain the commercial disputes
of a specified value below one crore. Those two commercial courts were
established for the area specified and for the specified value then existing
not below one crore, in the cadre of District & Sessions Judges.
76. At this stage it would be apt to refer about the G.O(s) on
constitution of the commercial Courts in the State of Andhra Pradesh.
Vide G.O.Ms.No.74 dated 10.06.2016, the Courts of all the Principal
District & Sessions Judges were notified as Commercial Courts in their
respective districts for trial and disposal of commercial disputes.
Thereafter vide G.O.Ms.No.27 dated 01.03.2017, two special Courts, in
the cadre of District & Sessions Judge, one each at Visakhapatnam and
Vijayawada, Krishna District were established for the respective Districts
102
and vide G.O.Rt.No.251 dated 03.04.2018 the territorial jurisdiction was
only over the limits of Municipal Corporation areas of Visakhapatnam and
Vijayawada. Thereafter, vide G.O.Ms.No.78 dated 16.05.2019 the
Special Commercial Court at Visakhaptnam was reassigned the territorial
jurisdiction over the entire Revenue Districts of Srikakulam,
Vizianagaram, Visakhapatnam and East Godavari areas. The Special
Commercial Court at Vijayawada was reassigned the territorial jurisdiction
over the entire revenue districts of West Godavari, Krishna, Guntur,
Prakasham, SPSR Nellore, Chittoor, YSR Kadapa, and Anantapuram.
77. The aforesaid G.O(s) were issued constituting new Commercial
courts for trial and disposal of the commercial disputes for the territorial
jurisdiction assigned and reassigned. That was as per the specified value
at that time i.e., not below one crore. So, the pecuniary jurisdiction of
those two commercial courts under those GO(s) necessarily meant from
One Crore and not below one Crore.
78. No notification has till date been issued by the State Government
under the provisions of Sub-Section (1A) of Section 3 of the Act 2015.
79. So, now in view of the reduction of the amount of ‘specified
value’(not below Rs.3 lakh, from not below Rs.1 crore), unless the
commercial courts are constituted with the pecuniary value from rupees
three lakh upto less than rupees one crore, by notification in terms of
amended Section 3 (1A), the commercial disputes of the part of the
103
specified value from Rs.3 lakh upto below Rs.1 crore, cannot be instituted
in any commercial court firstly, for want of establishment of Commercial
Court for such part of the specified value and secondly, the existing two
commercial courts at Visakhapatnam and Krishna (Vijayawada), do not
have the pecuniary value/jurisdiction for that part of the specified value
i.e., below Rs.1 crore. They were constituted for the specified value
starting from Rs.1 crore.
(ii) No automatic conferment of pecuniary value/jurisdiction:
80. Change in ‘specified value’ by amendment, in my view would not
automatically confer such pecuniary jurisdiction (i.e., below Rs.1 crore),
as well, on the existing commercial courts unless it is so conferred by the
State Government by notification under Section 3 (1A).
(iii) Thing must be done in the manner prescribed:
81. It is settled principle of law that where power is given to do a certain
thing in a certain manner, the thing must be done in that way. In
Dhanajaya Reddy v. State of Karnatana
27
the said principle was
reiterated referring to the case of Nazir Ahmad v. King Emperor {AIR
1936 PC 253 (2)}, Taylor v. Taylor {(1876) 1 Ch D 426} and State of
U.P. v. Singhara Singh {AIR 1964 SC 358}. It is apt to refer paragraphs
23 to 26 of Dhanajaya Reddy (supra) as under:
“23. It is a settled principle of law that where a power is given to do a certain thing
in a certain manner, the thing must be done in that way or not at all. This Court in State
27
(2001) 4 SCC 9
104
of U.P. v. Singhara Singh [AIR 1964 SC 358 : (1964) 1 Cri LJ 263 (2)] : (AIR p. 361,
para 8) held
“A Magistrate, therefore, cannot in the course of investigation record a confession
except in the manner laid down in Section 164. The power to record the confession
had obviously been given so that the confession might be proved by the record of it
made in the manner laid down.”
24. Looking to the facts of the case we are at pains to note that Shambulingappa
(PW 50) failed in the performance of his statutory obligations which has resulted in
excluding the otherwise voluntary confessional statement Exhibit P-77 made by A-4.
Had the said Magistrate taken due care and applied his mind by referring to the bare
provisions of Section 164 of the Code, such a glaring illegality in recording the
confessional statement would have been avoided. In view of this finding, no reliance
can be placed upon the judicial confession Exhibit P-77, allegedly made by A-4,
particularly against A-1.
25. We examined the matter from a different angle as well by considering to see
the admissibility of the said confessional statement not as a judicial confession but as
extrajudicial confession made to PW 50. We found it difficult to treat Exhibit P-77 as
extrajudicial confession of A-4 made to PW 50. Confessions in criminal law have been
categorised to be either judicial or extrajudicial. The prosecution is obliged to refer and
rely on the alleged confession of the accused in any one of the aforesaid categories.
As extrajudicial confession cannot be treated as judicial confession, similarly an
alleged judicial confession proved to have not been legally recorded cannot be used as
extrajudicial confession. Otherwise also such an approach would result in dragging the
judicial officers into uncalled-for and unnecessary controversies. In Nazir
Ahmad v. King Emperor [AIR 1936 PC 253 (2) : 37 Cri LJ 897] it was observed, which
we approve, that: (AIR p. 258)
“[I]t would be particularly unfortunate if Magistrates were asked at all generally to
act rather as police officers than as judicial persons; to be by reason of their position
freed from the disability that attaches to police officers under Section 162 of the Code;
and to be at the same time freed, notwithstanding their position as Magistrates, from
any obligation to make records under Section 164. In the result they would indeed be
relegated to the position of ordinary citizens as witnesses and then would be required
to depose to matters transacted by them in their official capacity unregulated by any
statutory rules of procedure or conduct whatever.”
26. Relying upon Nazir Ahmad case [AIR 1936 PC 253 (2) : 37 Cri LJ 897] and
applying the principles laid down in Taylor v. Taylor [(1876) 1 Ch D 426] this Court
in Singhara Singh case [AIR 1964 SC 358 : (1964) 1 Cri LJ 263 (2)] held: (AIR p. 361,
para 8)
105
“8. The rule adopted in Taylor v. Taylor [(1876) 1 Ch D 426] is well recognised and
is founded on sound principle. Its result is that if a statute has conferred a power to do
an act and has laid down the method in which that power has to be exercised, it
necessarily prohibits the doing of the act in any other manner than that which has been
prescribed. The principle behind the rule is that if this were not so, the statutory
provision might as well not have been enacted. A Magistrate, therefore, cannot in the
course of investigation record a confession except in the manner laid down in Section
164. The power to record the confession had obviously been given so that the
confession might be proved by the record of it made in the manner laid down. If proof
of the confession by other means was permissible, the whole provision of Section 164
including the safeguards contained in it for the protection of accused persons would be
rendered nugatory. The section, therefore, by conferring on Magistrates the power to
record statements or confessions, by necessary implication, prohibited a Magistrate
from giving oral evidence of the statements or confessions made to him.”
82. In view of the specific provision under Section 3 (1A), the power
has been given to the State Government to specify the pecuniary value
by notification and in consultation with the High Court. So, for such
pecuniary value, the notification shall be required to be issued in the
manner prescribed. There cannot be an automatic conferment of
pecuniary value for the part of the new ‘specified value’ from Rs.3 lakh to
less than Rs.1 crore, on the already constituted two special commercial
courts, once a statutory provision (1A) has been made for doing that in a
particular manner by a particular mode.
83. Section 2 (1) (i) has been amended by the same Amendment Act
28 of 2018 by which Sub-section (1A) has been inserted in Section 3. So,
Section 2 (1) (i), the specified value not below Rs.3 lakh i.e., from Rs.3
lakh, by reducing the earlier specified value i.e., from Rs.1 crore, has to
106
be read along with Section 3 (1A) to achieve the object of the Act as per
the statement of object and reasons, which are inter alia,
(i) to expedite disposal of commercial dispute even of lower value,
(ii) to enable the parties in different parts of the State to approach
the Court of the lowest level, and
(iii) to enable the State Governments to specify the pecuniary
value not below three lakhs or such higher value.
So, unless the State exercises that power under Section 3(1A), the very
object of bringing down the specified value from Rs.1 crore to an amount
of not less than Rs.3 lakh, will not be achieved. The object is speedy
resolution of the commercial disputes even of the new specified value
starting from Rs.3 lakhs.
(iv) STATEMENT OF OBJECTS AND REASONS – IMPORTANCE IN
INTERPRETATION:
84. The Statement of objects and reasons play a pivotal role to get the
object of the enactment and keeping in view the same provision can be
interpreted to give effect to the legislative intent.
85. In State of Tamilnadu v. K.Shyam Sunder
28
, the Hon’ble Apex
Court held that the statement of objects and reasons appended to the bill
while interpreting the statutory provisions can be looked into for
appreciating the true intent of the legislature or to find out the object
sought to be achieved by enactment of the particular Act or even for
28
(2011) 8 SCC 737
107
judging the reasonableness of the classifications made by the Act. Para
Nos.66 to 68 in K. Shyam Sunder (supra) reads as under:
“XI. Reading of the Statement of Objects and Reasons : While
interpreting the statutory provisions
66. The Statement of Objects and Reasons appended to the Bill is not
admissible as an aid to the construction of the Act to be passed, but it can be
used for limited purpose of ascertaining the conditions which prevailed at that
time which necessitated the making of the law, and the extent and urgency of
the evil, which it sought to remedy. The Statement of Objects and Reasons
may be relevant to find out what is the objective of any given statute
passed by the legislature. It may provide for the reasons which induced
the legislature to enact the statute. “For the purpose of deciphering the
object and purport of the Act, … the court can look to the Statement of
Objects and Reasons thereof.” (emphasis supplied) (Vide Kavalappara
Kottarathil Kochuni v. States of Madras and Kerala [AIR 1960 SC 1080] and
Tata Power Co. Ltd. v. Reliance Energy Ltd. [(2009) 16 SCC 659] , SCC p.
686, para 79)
67. In A. Manjula Bhashini [(2009) 8 SCC 431 : (2009) 2 SCC (L&S) 441] this
Court held as under : (SCC p. 459, para 40)
“40. The proposition which can be culled out from the aforementioned
judgments is that although the Statement of Objects and Reasons contained
in the Bill leading to enactment of the particular Act cannot be made the sole
basis for construing the provisions contained therein, the same can be
referred to for understanding the background, the antecedent state of affairs
and the mischief sought to be remedied by the statute. The Statement of
Objects and Reasons can also be looked into as an external aid for
appreciating the true intent of the legislature and/or the object sought to
be achieved by enactment of the particular Act or for judging
reasonableness of the classification made by such Act.”
(emphasis added)
108
68. Thus, in view of the above, the Statement of Objects and Reasons of
any enactment spells out the core reason for which the enactment is
brought and it can be looked into for appreciating the true intent of the
legislature or to find out the object sought to be achieved by enactment
of the particular Act or even for judging the reasonableness of the
classifications made by such Act.”
86. In A.Manjula Bhashini v. Managing Director
29
the Hon’ble Apex
Court held that:
“33. Although in Aswini Kumar Ghose v. Arabinda Bose [(1952) 2 SCC 237 :
AIR 1952 SC 369] it was held that the Statement of Objects and Reasons
contained in the Bill cannot be used or relied upon for the purpose of
construction of the statute, this rule has not been strictly followed in the
subsequent judgments. In A. Thangal Kunju Musaliar v. M. Venkatachalam
Potti [AIR 1956 SC 246] the Statement of Objects and Reasons was used for
judging reasonableness of the classification made in an enactment to see if it
infringed or was contrary to the Constitution. In Central Bank of India v.
Workmen [AIR 1960 SC 12] it was held that the Statement of Objects and
Reasons can be used for the limited purpose of understanding the
background and antecedent state of affairs leading up to the legislation.
34. The same view was reiterated in a large number of other judgments
including Bhaiji v. SDO [(2003) 1 SCC 692] in which the Court referred to
Principles of Statutory Interpretation by Justice G.P. Singh, 8th Edn., 2001
and observed: (SCC p. 700, para 11)
“11. Reference to the Statement of Objects and Reasons is permissible for
understanding the background, the antecedent state of affairs, the
surrounding circumstances in relation to the statute, and the evil which the
statute sought to remedy. The weight of judicial authority leans in favour of
the view that the Statement of Objects and Reasons cannot be utilised for the
purpose of restricting and controlling the plain meaning of the language
employed by the legislature in drafting a statute and excluding from its
operation such transactions which it plainly covers.”
29
(2009) 8 SCC 431
109
35. In B. Banerjee v. Anita Pan [(1975) 1 SCC 166] this Court approved the
view expressed by the Calcutta High Court that the Statement of Objects and
Reasons contained in the West Bengal Premises Tenancy (Second
Amendment) Bill, 1969 and proceedings of the legislature including the
speech made by the Minister at the time of introducing the Bill could be
looked into for understanding the true character of the amendment and
observed: (SCC p. 173, para 8)
“8. The explosive import of neglecting such a distressing urban development
reasonably obliges the State to impose drastic restrictions on landlords' right
to property. And when circumvention of wholesome legal inhibitions is
practised on a large scale the new challenge is met by clothing the law with
more effective armour and that is the rationale of the Amendment Act. The
learned Judges rightly refer to the legislative proceedings, notorious common
knowledge and other relevant factors properly brought to their ken. The
‘sound-proof theory’ of ignoring voices from Parliamentary debates, once
sanctified by British tradition, has been replaced by the more legally realistic
and socially responsible canon of listening to the legislative authors when
their artefact is being interpreted.”
36. In K.P. Varghese v. ITO [(1981) 4 SCC 173 : 1981 SCC (Tax) 293] this
Court while rejecting the argument of the Revenue that rule of strict
construction should be applied for interpreting Section 52(2), referred to the
Statement of Objects and Reasons contained in the Bill presented before
Parliament, speech made by the Finance Minister and observed: (SCC p.
184, para 8)
“8. … Now it is true that the speeches made by the Members of the
Legislature on the floor of the House when a Bill for enacting a statutory
provision is being debated are inadmissible for the purpose of interpreting the
statutory provision but the speech made by the Mover of the Bill explaining
the reason for the introduction of the Bill can certainly be referred to for the
purpose of ascertaining the mischief sought to be remedied by the legislation
and the object and purpose for which the legislation is enacted. This is in
accord with the recent trend in juristic thought not only in western countries
but also in India that interpretation of a statute being an exercise in the
110
ascertainment of meaning, everything which is logically relevant should be
admissible.”
37. In Chern Taong Shang v. Commander S.D. Baijal [(1988) 1 SCC 507 :
1988 SCC (Cri) 162] the Court referred to the object sought to be achieved by
enacting the Maritime Zones of India (Regulation of Fishing by Foreign
Vessels) Act, 1981 i.e. preventing the illegal poaching of fishes by foreign
vessels including foreign vessels chartered by Indian parties by providing
deterrent punishment to protect Indian fishermen and observed: (SCC p. 516,
para 26)
“26. It is pertinent to mention that in interpreting a statute the court has to
ascertain the will and policy of the legislature as discernible from the object
and scheme of the enactment and the language used therein. Viewed in this
context it is apparent that the said Act has been made with the sole purpose
of preventing poaching of fishes by foreign vessels chartered by Indian
citizens within the exclusive economic zone of India as specified in Rule
8(1)(q) of the Maritime Zone of India Rules as amended in 1982 as well as in
breach of the provisions of the said Act and the terms and conditions of
permit issued under Section 5 of the said Act.”
38. In Utkal Contractors and Joinery (P) Ltd. v. State of Orissa [(1987) 3 SCC
279] the Court interpreted the provisions of the Orissa Forest Produce
(Control of Trade) Act, 1981 and observed: (SCC pp. 288-89, para 9)
“9. … A statute is best understood if we know the reason for it. The
reason for a statute is the safest guide to its interpretation. The words of
a statute take their colour from the reason for it. How do we discover the
reason for a statute? There are external and internal aids. The external aids
are Statement of Objects and Reasons when the Bill is presented to
Parliament, the reports of committees which preceded the Bill and the reports
of Parliamentary Committees. Occasional excursions into the debates of
Parliament are permitted. Internal aids are the Preamble, the scheme and the
provisions of the Act. Having discovered the reason for the statute and so
having set the sail to the wind, the interpreter may proceed ahead. No
provision in the statute and no word of the statute may be construed in
isolation. Every provision and every word must be looked at generally before
111
any provision or word is attempted to be construed. The setting and the
pattern are important. It is again important to remember that Parliament does
not waste its breath unnecessarily. Just as Parliament is not expected to use
unnecessary expressions, Parliament is also not expected to express itself
unnecessarily. Even as Parliament does not use any word without meaning
something, Parliament does not legislate where no legislation is called for.
Parliament cannot be assumed to legislate for the sake of legislation; nor can
it be assumed to make pointless legislation. Parliament does not indulge in
legislation merely to state what it is unnecessary to state or to do what is
already validly done. Parliament may not be assumed to legislate
unnecessarily.”
39. In Gurudevdatta VKSSS Maryadit v. State of Maharashtra [(2001) 4 SCC
534] a three-Judge Bench of this Court interpreted the provisions of the
Maharashtra Cooperative Societies Act, 1960, the Maharashtra Cooperative
Societies (Second Amendment) Ordinance, 2001 and observed: (SCC pp.
549-50, paras 19 & 21)
“19. Further, after introduction of the Bill and during the debates thereon
before Parliament, if a particular provision is inserted by reason of such a
debate, question of indication of any object in the Statement of Objects and
Reasons of the Bill does not and cannot arise. The Statement of Objects
and Reasons needs to be looked into, though not by itself a necessary
aid, as an aid to construction only if necessary. To assess the intent of
the legislature in the event of there being any confusion, Statement of
Objects and Reasons may be looked into and no exception can be taken
thereto — this is not an indispensable requirement but when faced with an
imperative need to appreciate the proper intent of the legislature, statement
may be looked into but not otherwise. …
***
21. While the Statement of Objects and Reasons in the normal course of
events cannot be termed to be the main or principal aid to construction but in
the event it is required to discern the reasonableness of the classification as
in Shashikant Laxman Kale v. Union of India [(1990) 4 SCC 366 : 1990 SCC
112
(Tax) 428] Statement of Objects and Reasons can be usefully looked into for
appreciating the background of the legislature's classification.”
40. The proposition which can be culled out from the aforementioned
judgments is that although the Statement of Objects and Reasons
contained in the Bill leading to enactment of the particular Act cannot
be made the sole basis for construing the provisions contained therein,
the same can be referred to for understanding the background, the
antecedent state of affairs and the mischief sought to be remedied by
the statute. The Statement of Objects and Reasons can also be looked
into as an external aid for appreciating the true intent of the legislature
and/or the object sought to be achieved by enactment of the particular
Act or for judging reasonableness of the classification made by such
Act.”
87. In Jaycee Housing (P) Ltd. v. High Court of Orissa
30
the
Hon’ble Apex Court after considering the statement of objects and
reasons of the Act 2015, held that to achieve the said objective the
legislature in its wisdom inserted Section 3 (1A) & 3A vide amendment in
the year 2018 enabling the State Government to designate such number
of Commercial Appellate Courts at District Level to exercise appellate
jurisdiction over the Commercial Courts below the District Judge level.
88. Paragraphs 22 to 24 of Jaycee Housing (P) Ltd. (supra) read as
under:
“22. That thereafter, the Commercial Courts, Commercial Division and Commercial
Appellate Division of High Courts Act, 2015 was passed by Parliament, which has
been subsequently renamed as the Commercial Courts Act, 2015. The Statement of
Objects and Reasons of the said Act, inter alia, provides as under:
“The proposal to provide for speedy disposal of high value commercial disputes
has been under consideration of the Government for quite some time. The high value
30
(2023) 1 SCC 549
113
commercial disputes involve complex facts and question of law. Therefore, there is a
need to provide for an independent mechanism for their early resolution. Early
resolution of commercial disputes shall create a positive image to the investor world
about the independent and responsive Indian legal system.”
23. That thereafter the Commercial Courts Act, 2015 has been amended in the
year 2018 which has come into force with effect from 3-5-2018, by which Sections 3(1-
A) & 3-A have been inserted enabling the State Governments to designate such
number of Commercial Appellate Courts at District level to exercise appellate
jurisdiction over the Commercial Courts below the District Judge level. Thus, a
Commercial Court can be set up under Section 3 of the 2015 Act and a Commercial
Appellate Court can be set up under Section 3-A of the 2015 Act.
24. Thus, the Objects and Reasons of the Commercial Courts Act, 2015 is to
provide for speedy disposal of the commercial disputes which includes the arbitration
proceedings. To achieve the said Objects, the legislature in its wisdom has specifically
conferred the jurisdiction in respect of arbitration matters as per Section 10 of the 2015
Act. At this stage, it is required to be noted that the 2015 Act is the Act later in time and
therefore when the 2015 Act has been enacted, more particularly Sections 3 & 10,
there was already a provision contained in Section 2(1)(e) of the 1996 Act. As per
settled position of law, it is to be presumed that while enacting the subsequent law, the
legislature is conscious of the provisions of the Act prior in time and therefore the later
Act shall prevail.”
89. In Jaycee Housing (P) Ltd. (supra), the Hon’ble Apex Court
further held that “as per the settled law, it is to be presumed that while
enacting the subsequent law, the legislature was conscious of the
provisions of the Act prior in time and therefore the later Act shall prevail”.
90. Here it can be said that the legislature was conscious about the
previous specified value as also the constitution of Commercial Court for
that specified value, and so while reducing the specified value by making
amendment also added sub-Section (1A) in Section 3, enabling the State
Government to constitute the Commercial Court at the District Judge level
114
and also below the level of the District Judge as also to specify the
pecuniary value of such Commercial Courts.
(v) Interpretation of the expression ‘notwithstanding anything
Contained in this Act’ in Section 3 (1A)
91. The legislature, therefore, used the expression ‘not withstanding
anything contained in this Act’ so as to make it evident that sub-Section
(1A) prevails over any other Section of the Act viz., Section 2(1)(i) as
amended, and it shall be operative on issuance of the notification in terms
of Section 3(1A) by the State Government fixing pecuniary value of the
Commercial Court.
92. Section 3 (1A) start with “notwithstanding anything contained in this
Act”. It is a non abstanti clause. In Mohd Abdul Samad v. State of
Telangana
31
it was held that a non obstante clause is usually appended
to a section in the beginning with a view to give the enacting part of the
section, in case of a conflict, an overriding effect over the provision or the
Act mentioned in the non obstante clause. The Hon’ble Apex Court
further held that the expression ‘notwithstanding anything contained in
this Act’ has to be construed to take away the effect of any provision in
that particular Act in which the section occurs. Paragraphs 82 to 86 of
Mohd.Abdul Samad (supra) read as under:
“82. A non obstante clause is usually appended to a section in the beginning with a
view to give the enacting part of the section, in case of a conflict, an overriding effect
31
(2025) 2 SCC 49
115
over the provision or the Act mentioned in the non obstante clause. In other words, in
spite of the provision or the Act mentioned in the non obstante clause, the enactment
following it will have its full operation or that the provisions embraced in the non
obstante clause will not be an impediment for the operation of the enactment. Thus, a
non obstante clause is a legislative device used by a Parliament or legislature
sometimes to give an overriding effect to what has been specified in the enacting part
of a section in case of a conflict with what is contained in the non obstante clause as
stated above.
83. Further, a non obstante clause has to be distinguished from the expression
“subject to” where the latter would convey the idea of a provision yielding place to
another provision or other provisions to which it is made subject to. Also, the
expression “notwithstanding anything in any other law” in a section of an Act has to be
contrasted with the use of the expression “notwithstanding anything contained in this
Act”, which has to be construed to take away the effect of any provision of that
particular Act in which the section occurs but it cannot take away the effect of any other
law. [Source : Principles of Statutory Interpretation by Justice G.P. Singh, 15th Edn.,
Chapter 5.4, p. 284.]
84. Recently, a seven-Judge Bench of this Court in Interplay Between Arbitration
Agreements under Arbitration & Conciliation Act, 1996 & Stamp Act, 1899, In
re [Interplay Between Arbitration Agreements under Arbitration & Conciliation Act, 1996
& Stamp Act, 1899, In re, (2024) 6 SCC 1] , in para 83 of the said judgment considered
the implication of a non obstante clause in a provision with reference to Chandavarkar
Sita Ratna Rao v. Ashalata S. Guram [Chandavarkar Sita Ratna Rao v. Ashalata S.
Guram, (1986) 4 SCC 447] , wherein it was observed as under : (Interplay Between
Arbitration Agreements under Arbitration & Conciliation Act, 1996 & Stamp Act, 1899,
In re case [Interplay Between Arbitration Agreements under Arbitration & Conciliation
Act, 1996 & Stamp Act, 1899, In re, (2024) 6 SCC 1] , SCC p. 61, para 83)
“83. …. ‘67. A clause beginning with the expression ‘notwithstanding anything
contained in this Act or in some particular provision in the Act or in some particular Act
or in any law for the time being in force, or in any contract’ is more often than not
appended to a section in the beginning with a view to give the enacting part of the
section in case of conflict an overriding effect over the provision of the Act or the
contract mentioned in the non obstante clause. It is equivalent to saying that in spite of
the provision of the Act or any other Act mentioned in the non obstante clause or any
contract or document mentioned the enactment following it will have its full operation or
that the provisions embraced in the non obstante clause would not be an impediment
for an operation of the enactment.’ [ As observed in Chandavarkar Sita Ratna
Rao v. Ashalata S. Guram, (1986) 4 SCC 447, at pp. 477-78, para 67.] ”
116
It was further observed in reference to ICICI Bank Ltd. v. SIDCO Leathers
Ltd. [ICICI Bank Ltd. v. SIDCO Leathers Ltd., (2006) 10 SCC 452 : (2006) 131 Comp
Cas 451] , that even if a non obstante clause has wide amplitude, the extent of its
impact has to be measured in view of the legislative intention and legislative policy.
85. Further, the utility of non obstante clause is where there is a conflict between
what is stated in a provision and any other law for the time being in force, or anything
else contained in the said enactment. As already noted, only in the case of a conflict,
the object is to give the enacting or operative portion of the section an overriding effect,
not otherwise. In other words, only in a case of a conflict, a provision in an enactment
containing a non obstante clause, would be given its full operation and what is stated in
the non obstante clause will not be an impediment for the operation of the particular
provision in the enactment. This would mean that what is stated in the non obstante
clause would not take away the effect of any provision of the Act which follows the
same.
86. In Aswini Kumar Ghose v. Arabinda Bose [Aswini Kumar Ghose v. Arabinda
Bose, (1952) 2 SCC 237 : AIR 1952 SC 369] , this Court speaking through Patanjali
Sastri, C.J. observed that only when there is any inconsistency between what is
contained in a provision of an enactment and a non obstante clause would make the
latter in what is to yield to what is stated in the provision following the same. In other
words, it is only when the enacting part of the statute cannot be read harmoniously with
what is stated in the non obstante clause, would the non obstante clause result in
yielding to what is stated in the enacting part. Similarly, in Municipal Corpn.,
Indore v. Ratnaprabha [Municipal Corpn., Indore v. Ratnaprabha, (1976) 4 SCC 622 :
AIR 1977 SC 308] , it was observed that there should be a clear inconsistency
between a special enactment or rules and a general enactment.”
93. I am of the view that Sub-section (1A) of Section 3, for issuing
notification for pecuniary value cannot be read in harmony in Section 2 (1)
(i) for the part of the specified value from Rs.3 lakh upto less than Rs.1
crore if it is given effect to with effect from 03.05.2018 and would be not
effective in the absence of the notification under Section 3 (1A). The
expression ‘notwithstanding anything contained in this Act’ as used in
Sub-Section (1A) of Section 3 takes away the implementation of the
117
provision of Section 2 (1) (i) of the Act 2015, to the extent of not less than
Rs.3 lakh i.e., from Rs.3 lakh to less than Rs.1 crore, till the notification is
issued by the State Government. The non obstante clause in Section 3
(1A) is to be given full effect till a notification is issued by the State
Government in terms of Sub-Section (1A) of Section 3.
(vi) Position of the Commercial Courts in Andhra Pradesh:
94. In this State of Andhra Pradesh there are only two Commercial
Courts, established vide G.O.Ms.No.27 Home (Courts-A) Department,
dated 01.03.2017, one is at District Visakhapatnam, and the other is at
District Krishna (at Vijayawada). If it be taken that in view of the
amendment in Section 2 (1) (i), all the commercial disputes of the
‘specified value from Rs.3 lakh and upwards shall be cognizable by these
two Courts as per their territorial limits, then all the commercial dispute
cases pending in the regular Courts starting from the valuation of Rs.3
lakh up to the valuation of less than Rs.1 crore (Rs.99,99,999/-) instituted
after the date of commencement of the Amendment Act 28 of 2018 (dated
03.05.2018) shall have to be transferred from the entire State to these
two Courts. This will also include;
i) the execution petitions, arising out of fresh cases of commercial
disputes, instituted on or after 03.05.2018;
118
ii) the execution petitions arising out of the cases of specified
value (i.e., from three lakhs up to less than one Crore),
instituted prior to 03.05.2018 but decided after 03.05.2018 and
iii) even those EP(s) in the case decided prior to 03.05.2018 but
the execution petition being filed on or after 03.05.2018.
iv) The aforesaid would be in addition to the institution of fresh
cases of the specified value from Rs.1 crore and upwards
including the Execution Petitions in those two Commercial
Courts.
That would certainly overburden these two Commercial Court. Then the
object of the Amendment 2018 will not be achieved but would be
defeated. The object of the Principal Act 2015, as well, which is early
resolution of the commercial disputes of high value, would also not be
achieved. If the Commercial Courts are not constituted or conferred the
pecuniary value/jurisdiction, as per new ‘specified value’ at least from
rupees three lakhs upto less than one crore, the object of the Act shall not
be fulfilled. So giving effect to the specified value from the date of the
amendment (03.05.2018) and not from the date of issuance of the state
notification under Section 3(1A), would neither be practical nor preferable
and would result in unworkable scenario.
119
(vii) INTERPRETATION TO RECOGNIZE THE GOAL OR PURPOSE
OF THE LEGAL TEXT:
95. In Rohan Builders (India) Private Limited v. Berger Paints India
Limited
32
the Hon’ble Apex Court held that “An interpretive process must
recognise the goal or purpose of the legal text”, it was held that while
interpreting a statute, the court must strive to give meaningful life to an
enactment or rule and avoid cadaveric consequences that result in
unworkable or impracticable scenarios. An interpretation which produces
an unreasonable result is not to be imputed to a statute if there is some
other equally possible construction which is acceptable, practical and
pragmatic. Para-18 of Rohan Builders (India) Private Limited (supra)
as under:
“18. While interpreting a statute, we must strive to give meaningful life to an
enactment or rule and avoid cadaveric consequences that result in unworkable or
impracticable scenarios. [Franklin Templeton Trustee Services (P) Ltd. v. Amruta Garg,
(2021) 6 SCC 736 : (2021) 225 Comp Cas 226] An interpretation which produces an
unreasonable result is not to be imputed to a statute if there is some other equally
possible construction which is acceptable, practical and pragmatic.”
96. In Renaissance Hotel Holdings Inc. V. B. Vijaya Sai
33
the
Hon’ble Apex Court held that it is the trite law that while interpreting the
provisions of a statute, it is necessary that the textual interpretation should be
matched with the contextual one. The Act must be looked at as a whole and it
must be discovered what each section, each clause, each phrase and each
32
2024 SCC OnLine SC 2494
33
(2022) 5 SCC 1
120
word is meant and designed to say as to fit into the scheme of the entire Act. No
part of a statute and no word of a statute can be construed in isolation.
97. Para Nos.66 & 67 of Renaissance Hotel Holdings Inc. (supra) are
as under:
“66. It is thus trite law that while interpreting the provisions of a statute, it is
necessary that the textual interpretation should be matched with the
contextual one. The Act must be looked at as a whole and it must be
discovered what each section, each clause, each phrase and each word is
meant and designed to say as to fit into the scheme of the entire Act. No part
of a statute and no word of a statute can be construed in isolation. Statutes
have to be construed so that every word has a place and everything is in its
place. As already discussed hereinabove, the said Act has been enacted by
the legislature taking into consideration the increased globalisation of trade
and industry, the need to encourage investment flows and transfer of
technology, and the need for simplification and harmonisation of trade mark
management systems. One of the purposes for which the said Act has been
enacted is prohibiting the use of someone else's trade mark as a part of the
corporate name or the name of business concern. If the entire scheme of the
Act is construed as a whole, it provides for the rights conferred by registration
and the right to sue for infringement of the registered trade mark by its
proprietor. The legislative scheme as enacted under the said statute
elaborately provides for the eventualities in which a proprietor of the
registered trade mark can bring an action for infringement of the trade mark
and the limits on effect of the registered trade mark. By picking up a part of
the provisions in sub-section (4) of Section 29 of the said Act and a part
of the provision in sub-section (1) of Section 30 of the said Act and
giving it a textual meaning without considering the context in which the
said provisions have to be construed, in our view, would not be
permissible. We are at pains to say that the High Court fell in error in doing
so.
67. Another principle that the High Court has failed to notice is that a part of
a section cannot be read in isolation. This Court, speaking through A.P.
Sen, J., in Balasinor Nagrik Coop. Bank Ltd. v. Babubhai Shankerlal Pandya
121
[Balasinor Nagrik Coop. Bank Ltd. v. Babubhai Shankerlal Pandya, (1987) 1
SCC 606] , observed thus : (SCC p. 608, para 4)
“4. … It is an elementary rule that construction of a section is to be made
of all parts together. It is not permissible to omit any part of it. For, the
principle that the statute must be read as a whole is equally
applicable to different parts of the same section.”
This principle was reiterated by this Court in Kalawatibai v. Soiryabai
[Kalawatibai v. Soiryabai, (1991) 3 SCC 410] : (SCC p. 418, para 6)
“6. … It is well settled that a section has to be read in its entirety as one
composite unit without bifurcating it or ignoring any part of it.”
98. In Aswini Kumar Ghosh v. Arabinda Bose
34
it was held that it is
one of the settled laws of construction that to ascertain the legislative
intent, all the constituent parts of a statute are to be taken together and
each word, phrase or sentence is to be considered in the light of the
general purpose and object of the Act itself. Paragraph Nos.56 in Aswini
Kumar Ghosh (supra) relevant part reads as under:
“56. It is one of the settled rules of construction that to ascertain the
legislative intent, all the constituent parts of a statute are to be taken
together and each word, phrase or sentence is to be considered in the
light of the general purpose and object of the Act itself..…”
99. Alternatively, even if it be taken that the ‘specified value’, under
Section 2 (1) (i) as amended becomes effective with effect from
03.05.2018 and it is not dependent on the issue of the notification by the
State Government for the pecuniary jurisdiction of commercial courts
under Section 3 (1A) and the commercial courts already established
would automatically get the pecuniary jurisdiction for the entire specified
34
AIR 1952 SC 369
122
value now from Rs.3 lakhs, the consequence would be that all the
commercial dispute cases from the entire State will have to be transferred
to these two Commercial Courts. If that be the only interpretation
possible, then there would be no difficulty in giving that interpretation
ignoring the consequence, on the settled principle that if on a plain
reading of the provisions of law only one conclusion and one
interpretation is possible, then that has to be given effect to irrespective of
the consequences flowing there from. But, if from the reading of the
statute, another view is also possible, which would avoid inconvenient
consequences, and would achieve the object or the goal for which the
statute is framed, then the possible other interpretation which recognizes
the goal and seeks to achieve that object shall be preferred, is also a well
settled principle of interpretation of statute.
100. Further, even if it be taken that Section 2 (1) (i) comes into effect
with effect from 03.05.2018, and then from the consequences aforesaid
following, if the State Government then being of the view, that more
commercial courts are to be constituted at the level of District Judge or
below that level for the whole or part of the State with the pecuniary value
as now changed, and then it may issue notification under Section 3 (1A),
in that situation also, I am of the view that then again the consequences
would be to transfer those cases from these two commercial courts to
such newly constituted or established commercial courts of the specified
123
pecuniary jurisdiction. So, I am of the view that at present the same
exercise can be done which deserves to be done and should have been
done by the State Government in terms of Section 3 (1A) when that is a
mandate expressing the legislative intent and the legislation also being in
clear terms.
101. I am of the view that the pecuniary jurisdiction is required to be
conferred, as per the specified value (for different levels/slabs of it) on the
Commercial Courts by the State Government under Section 3(1A) of the
Act.
102. Consequently, in view of the legislative intent, the legislation being
clear, use of ‘notwithstanding anything contained in this Act’ in Section 3
(1A), the object of amendment and the consequences, all discussed
above, the date for implementation of the part of the reduced specified
value under Section 2 (1) (i), from Rs.3 lakh to less than Rs.1 crore, shall
be from the date of the issuance of the notification by the State
Government under Section 3 (1A) of the Commercial Courts Act in
accordance therewith.
103. It is clarified that the State Government has not been given power
to issue notification for the specified value under Section 2(1)(i) like the
power given to the Central Government. So the State Government
cannot change the specified value nor can raise the base value of the
124
‘specified value’ for Rs.3 lakh to any higher value. But, the State
Government has to issue notification under Section 3(1A) for the
pecuniary jurisdiction of the Commercial Court(s) to make the ‘specified
value’ under Section 2 (1) (i) workable. If it does not notify the pecuniary
value under Section 3(1A) and it is held that the amended specified value
comes into effect on 03.05.2018 the difficulties would arise in institution of
the suit/EP etc., before the already existing Commercial Courts, on the
ground of lack of pecuniary jurisdiction in those Courts from three lakhs to
less than one crore as these Courts were constituted for the ‘specified
value’ from Rs.1 crore. Any change i.e., reduction in ‘specified value’
below Rs.1 crore but not below Rs.3 lakh, will not automatically give
pecuniary jurisdiction for the reduced specified value. These commercial
courts would refuse to entertain commercial dispute of the specified value
from Rs.3 lakh upto less than Rs.1 crore. Similarly, the Regular Civil
Court would also not entertain such commercial dispute of such pecuniary
jurisdiction of specified value on the ground that it is only the commercial
court which has jurisdiction. In few cases, which came (before me) this
was the position, so the grievance raised was, as to which court the
litigant should approach. So, the insertion of Section 3 (1A) enabling the
State Government to issue notification, using the expression
‘notwithstanding anything contained in this Act’, vide the same
Amendment Act 28 of 2018 which amended Section 2 (1) (i) as well, it is
125
necessary for the State Government to issue notification under Section 3
(1A).
104. Till such exercise is done by the State Government, the commercial
dispute cases of the specified value from Rs.3 lakh to less than Rs.1
crore, should continue in the regular civil Courts in which those are
pending and should be tried by those Courts. But, if any such case has
already been transferred to any of the two commercial courts, pursuant to
any judicial order of this Court passed in individual cases, those cases
should remain with that Commercial Court.
III.C: Consideration of Question – C
105. In Bellam Balakrishna (supra) it was held that until the State
Government issues a notification in consultation with the High Court, the
specified value of rupees three lakhs as fixed in Section 2 (1) (i) will not
come into operation.
106. In M/s. Janset Labs Pvt. Ltd v. Agilent Technologies India Pvt.
Ltd.
35
, High Court for the State of Telengana, Hyderabad held, which can
be summarised, as follows:
a) that Section 2(1)(i) only mentions notification by the Central
Government for raising the base level from Rs.3 lakh to a higher value
with regard to the specified value of a Commercial dispute.
35
CRP.1932 of 2025 THC on 22.09.2025
126
b) that the specified value under Section 2(1)(i) is distinct and different
from ‘pecuniary value’ in Section 3(1A) of the Act, 2015. Both the
provisions Section 2(1)(i) (specified value) and Section 3(1A)
(pecuniary value) were marked by different parameters altogether.
While specified value forms the core of the commercial dispute for
admission into the regime of the Commercial Courts Act, 2015,
pecuniary value fixes the competence-parameters of the Court for
receiving a commercial suit.
c) The requirement of a notification by the State Government in
Section 3(1A) cannot be read into or imported in Section 2(1)(i), which
does not contemplate any such notification save and except of the
Central Government.
d) that the Commercial dispute under Section 2(1)(i) of the 2015 Act
contemplates a base threshold of three lakhs with effect from
03.05.2018. The amended Section 2(1)(i) applies to the State of
Telangana and no separate State Notification is required for giving
effect to the said Amendment.
107. The propositions as in (a) & (b) of para-106, in M/s.Janset Labs
Pvt. Ltd. (supra), this Court is in respectful agreement. However, for the
conclusions in (c) & (d), I respectfully differ, for the reasons assigned in
this judgment. True, that the meaning of ‘specified value’ in Section 2 (1)
127
(i) and the ‘pecuniary value’ in Section 3 (1A) have different connotations.
But, issuance of the notification under Section 3 (1A) for the pecuniary
value/jurisdiction of the commercial courts in the State of Andhra Pradesh
is required and is necessary to give effect to the substituted definition of
‘specified value’. On the combined reading of both the sections, the
object to be achieved by the Amendment Act and the introduction of
Section 3 (1A) by the same amendment Act, using the expression
‘notwithstanding anything contained’, it cannot be said that the Sub-
Section (1A) of Section 3 is not related or will have no impact on the
applicability of Section 2 (1) (i). So, a notification under Section 3 (1A) is
required, to give effect to Section 2 (1) (i) the ‘specified value’ at least to
the extent of part of it from three lakhs to less than One Crore in the State
of Andhra Pradesh.
108. In Daimler Financial Services India Pvt.Ltd., v. Vikash Kumar
36
,
the learned Single Judge of the High Court of Jharkhand at Ranchi has
taken the view:
a) that after amendment of Section 2(1)(i) of Commercial Courts Act
by the Amendment Act 28 of 2018, the specified value of the
Commercial Courts established under Section 3(1) of the Commercial
Courts Act, 2015 which is to be determined in accordance with Section
12 of the Act, is “not less than three lakhs rupees”. In other words it
36
WP(C).3941 of 2019 Jharkhand HC dated 24.06.2020
128
means an amount of rupees three lakhs or more with effect from
30.05.2018.
b) that in the absence of any notification under Section 3(1A) of the
Act, 2015 as amended by the said Act 28 of 2018, the commercial
Court at Dhanbad having been established under Section 3(1) of the
Commercial Courts Act by the notification will have its revised
“specified value” of not less than three lakhs rupees” with effect from
03.05.2018 instead of “not less than rupees one crore” as it stood fixed
prior to 2018.
109. With respect I am not in agreement with the view taken in Daimler
Financial Services India Pvt. Ltd. (supra) in Para-108(b) (supra).
110. In M/s.Obulapuram Mining Company Pvt.Ltd., v.
M/s.R.K.Mining Private Limited
37
, a Co-ordinate Bench of this Court
held as under:
“53) Therefore, the following conclusions are reached by ironing out the
creases:
a) The Commercial Court alone is competent to execute decrees, which are
above the specified value. The regular Civil Court will not have the jurisdiction
to entertain such Execution Petitions with effect from 16.05.2019 in the State of
Andhra Pradesh.
b) It is only the Commercial Court, Vijayawada or the Commercial Court at
Visakhapatnam which can entertain the Execution Petitions if they are above
the specified value in view of the G.O.Ms.No.78.
37
CRP.2183 of 2022 APHC 25.09.2023
129
c) All orders passed after 16.05.2019 are orders passed by a coram non-judice.
They suffer from an inherent lack of jurisdiction and they are held to be per se
bad in law.
d) The pending E.P.No.13 of 2016 shall be transferred to the Commercial
Court, Vijayawada, and both the parties are given liberty to start the
proceedings afresh from the said date i.e., 16.05.2019.”
Against the judgment in M/s.Obulapuram (supra) SLP was field in
M/s.R.K.Mining Private ltd., v. M/s.Obulapuram Mining Company
Pvt.Ltd., in which stay was granted that the transfer of execution
proceedings shall remain stayed by the Hon’ble Apex Court.
M/s.Obulapuram Mining Company Pvt. Ltd. (supra) was a case
for the ‘specified value’ of the award of Rs.32.86 crore i.e., more than
Rs.1 crore.
111. In U.V.Satyanarayana (supra) the amount sought to be recovered
was Rs.46,46,965/- i.e., less than Rs.1 crore. There the execution
petition was filed in the year 2017 numbered E.P.No.151 of 2017. The
said E.P. was before the learned Principal District Judge, East Godavari
District. The same was directed to be transferred to the commercial court
on the ground of change in the ‘specified value’ i.e., not less than Rs.3
lakh, pursuant to the amendment.
However, it appears that in U.V.Satyanarayana (supra) Section 19
of the Amendment Act 28 of 2018, was not brought to the notice of the
learned Division Bench.
130
Section 19 reads as under:
“Save as otherwise provided the provision of this Act shall apply only to cases
relating to commercial disputes filed on or after the date of commencement of this Act”
There the E.P.was filed not on or after the date of commencement
of the amendment Act, but before that date in the year 2017.
In view of the discussion made hereinabove, I am of the view that
U.V.Satyanarayana (supra) applying the ‘specified value’ as per the
amended section 2 (1) (i) from the date of commencement of the
Amendment Act 28/2018 with effect from 03.05.2018 and implementing it
to a case pending on 03.05.2018, which was instituted prior to 03.05.2018
is not correct.
IV. Conclusions:
Answers on Questions A to C of the reference:
112. In view of the consideration made above I answer the reference as
follows:
112.1. On Question No.’A’ the notification by the Central Government,
would be required only if the ‘specified value’ under the amended Section
2 (1) (i) of the Commercial Court Act, 2015 is to be raised from three
lakhs (base value) to a ‘higher value’. Otherwise the Central Government
notification is not required. In the absence of any notification by the
Central Government, the ‘specified value’ shall start from three lakhs
rupees, without any upper cap.
131
112.2.On Question No. ‘B’ the ‘specified value’ under the amended
Section 2(1)(i) of the Commercial Courts Act, 2015 shall be operative in
the State of Andhra Pradesh, on issuance of the notification by the State
Government in terms of Section 3 (1A) of the Commercial Court Act, for
the part of the ‘specified value’ i.e., from Rs.3 lakh up to less than Rs.1
crore. It shall not come into effect, to the extent of that part (from three
lakhs to less than one Crore) from 03.05.2018 the date of amendment Act
28 of 2018. A notification by the State Government, in terms of Section 3
(1A), constituting the Commercial Courts with the pecuniary jurisdiction of
that part of the specified value (from Rs.3 lakh upto less than Rs.1 crore),
after consultation with the High Court is mandatory.
112.3 On Question No. ‘C’ The judgment in Bellam Balakrishna (supra)
lays down the law correctly to the effect that unless the State Government
issues the notification in consultation with the High Court the amended
specified value in Section 2 (1) (i) shall not come into operation, but with
this modification/clarificaion that, it shall be for the extent of the ‘specified
value’ ‘from three lakhs upto less than one Crore’, as held in this
judgment.
112.4. U. V. Satyanarayana (supra) which applies the specified value (in
that case less than one Crore), from the date of amendment Act i..e, 28 of
2018 with effect from 03.05.2018, as also to a case which was filed in the
year 2017 i.e., pending on 03.05.2018, (without taking note of Section 19
132
of the Act 28 of 2018) to transfer that case to the Commercial Court, does
not lay down the correct law.
112.5. For the aforesaid answers, it is further laid down as a necessary
consequence, as under:
1. The commercial disputes of the specified value from rupees one
crore and upwards including the execution petitions, for such
amount, shall be in the Commercial Courts at Visakhapatnam
District and at Krishna District (Vijayawada) for their respective
territorial limits.
2. The commercial disputes including execution petitions of the
‘specified value’ from Rs.3 lakh upto less than Rs.1 crore, so long
as the notification is not issued by the State Government in terms
of Section 3 (1A), of the Commercial Courts Act, 2015 shall not be
instituted in the Commercial Courts at Visakhapatnam and Krishna
District (Vijayawada), but shall be before the regular civil courts as
per their pecuniary value and the territorial limits, subject to the
issuance of the notification by the State Government in terms of
Section 3(1A) of the Commercial Courts Act.
3. The commercial dispute cases of the part of the ‘specified value’
i.e., from Rs.3 lakh upto less than Rs.1 crore,
a) pending in the Regular Civil Courts on 03.05.2018 (the date
of the Amendment Act 28 of 2018) shall continue to be tried
133
by those Regular Civil Courts, in terms of Section 19 of the
Amendment Act 28 of 2018, and
b) filed on or after 03.05.2018, in the regular civil courts shall
also continue to be tried by such regular Civil Courts, subject
to the issuance of the notification by the State Government
under Section 3 (1A) of the Commercial Courts Act, 2015.
4. The aforesaid para-3 shall apply also to the Execution Petitions,
arising out of the commercial dispute cases of the part of the
‘specified value’ from Rs.3 lakh upto less than Rs.1 crore,
a) irrespective of the date of the institution whether on or after
03.05.2018 and
b) irrespective of whether those arise out of the commercial
dispute cases, filed before, on or after 03.05.2018;
113. It is expected that the State Government shall take necessary steps
in terms of the mandate under Section 3, including sub-Section 1A, of the
Commercial Court Act, 2015, on priority basis.
114. All the CRP(s) shall now be listed before the appropriate benches.
115. Let a copy of this judgment be sent to the learned Advocate
General, State of Andhra Pradesh, the Chief Secretary to the State
Government and the Law Secretary to the State Government for
necessary action.
_______________________
RAVI NATH TILHARI, J
Date: 18.05.2026
Dsr/Ag
Legal Notes
Add a Note....