As per case facts, this appeal challenges orders from an Additional District Judge under the Arbitration and Conciliation Act, arising from a commercial dispute of a specified value. The Additional ...
FAO-6574-2023 (O&M) and other connected matter
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IN THE HIGH COURT OF PUNJAB & HARYANA
AT CHANDIGARH
FAO-6574-2023 (O&M)
Date of Decision: 03.11.2025
1.
M/S MANJEET PLASTIC INDUSTRIES
......Appellant
versus
SAMAGRA SHIKSHA ABHIYAN AUTHORITY
PUNJAB AND ANOTHER
......Respondents
2.
FAO-89-2024 (O&M)
KHADIM INDIA LIMITED
.....Appellant
versus
DIRECTOR GENERAL SCHOOL EDUCATION CUM STATE
PROJECT DIRECTOR AND ANR
......Respondents
CORAM: HON'BLE MR. JUSTICE JASGURPREET SINGH PURI
Present:- Mr. Avi Singh, Senior Advocate (through V.C.) with
Mr. Jaskaranjeet Singh Sibia, Advocate for the appellant(s)
in FAO-6574-2023.
Dr. Anmol Rattan Sidhu, Sr. Advocate with
Mr. Raghav Gulati, Advocate,
Mr. Varun Sharma, Advocate and
Mr. Rahul Kesar, Advocate for the appellant(s)
in FAO-89-2024.
Mr. Shekhar Verma, Advocate,
Ms. Komal Bishnoi, Advocate,
Mr. Rahul Chadha, Advocate for the respondent No.1
in both the appeals.
FAO-6574-2023 (O&M) and other connected matter
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Service of respondent No.2 in both cases was ordered to
be dispensed with by this Court vide separate orders
dated 10.04.2024.
*****
JASGURPREET SINGH PURI J.(Oral)
1. Both the appeals are being taken up together for final disposal
with the consent of all the learned counsel for the parties, as the issue
involved in both the appeals is same.
2.The present appeals have been filed for setting aside the
impugned orders dated 16.08.2023 passed by learned Additional District
Judge, SAS Nagar (Mohali), whereby the applications filed by the
respondent(s) under Section 34 of the Arbitration and Conciliation Act
(hereinafter to be referred to as ‘the Act’) were erroneously allowed with a
further prayer for restoration of the original awards dated 14.01.2022 and
27.06.2022.
3. Preliminary objections have been taken by learned counsel for
the respondent(s) with regard to the maintainability of the present appeals
on the ground that the present appeals against the order passed by learned
Additional District Judge, SAS Nagar, Mohali, under Section 34 of the
Arbitration and Conciliation Act, 1996, are not maintainable because the
same could have only been filed before the Commercial Appellate Division
under the Commercial Courts Act, 2015. Learned counsel for respondent
No.1, while substantiating his arguments regarding maintainability,
submitted that the State of Punjab issued a notification dated 14.06.2019 in
exercise of powers conferred by sub-section (1) of Section 3 and
FAO-6574-2023 (O&M) and other connected matter
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Section 3-A of the Commercial Courts, Commercial Division and
Commercial Appellate Division of High Courts Act, 2015, which was
issued in due consultation with the High Court of Punjab and Haryana and
constituted the courts of Additional District Judges- I, II and III of all the
districts in the State of Punjab (except Sessions Division Ludhiana) were
designated as Commercial Courts to decide the cases of the specified value
of more than Rs.50 lakhs within their respective territorial jurisdictions.
He submitted that by virtue of aforesaid notification issued by the State of
Punjab in the year 2019, the objections under Section 34 of the Act in the
present cases were filed in the year 2022, i.e., after the issuance of the
notification, and were decided on 16.08.2023. The value of the subject
matter was more than Rs. 50,00,000/- and therefore, by virtue of the
aforesaid notification, the learned Additional District Judge, SAS Nagar
(Mohali), who decided the objections also being designated as Additional
District Judge-II, decided the objections as a Commercial Court and once
the objections have been decided by a Commercial Court, the only remedy
available with appellants is to file an appeal before the Commercial
Appellate Division, which lies before a Division Bench of this Court and
not before a Single Bench where the present appeals are pending.
4. He submitted that a Coordinate Bench of this Court had sought
a report from the learned Additional District Judge, SAS Nagar, to clarify
the position as to whether the impugned orders under Section 34 of the Act
were passed while exercising the powers as a designated Commercial Court
under the Act. Pursuant thereto, reports were submitted in both the cases on
FAO-6574-2023 (O&M) and other connected matter
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27.01.2025 by the learned Additional District Judge, SAS Nagar, wherein it
has been so reported that the cases had been decided by the learned
Additional District Judge-II, SAS Nagar, on 16.08.2023, who was vested
with powers of a Commercial Court. It was, however, mentioned in the
report that a note regarding the case being a ‘Commercial Court Case’ had
inadvertently not been recorded on the first page of the orders.
5. He also referred to another notification dated 04.07.2019
issued by the Registrar General of this Court to all the District and Sessions
Judges in the State of Punjab (except Ludhiana), whereby a request was
made to all the District and Sessions Judges in the State of Punjab (except
Ludhiana) to assign the cases of Commercial Disputes to Additional
District Judge-II/Additional District Judge-III, apart from Additional
District Judge-I, and the cases to be dealt with by Civil Judges (Sr. Divn.)
having more than 5 years' service at the District Headquarters and Sub-
Divisional level, as the case may be, in consultation with the Hon'ble
Administrative Judge, keeping in view the number of said cases including
original and appellate jurisdiction.
6. He further submitted that in this way the impugned orders
under Section 34 of the Act have been passed by learned Additional District
Judge, who was designated as a Commercial Court by virtue of the
aforesaid notification, and therefore, the appeals would lie only before the
Commercial Appellate Division of this Court, i.e., before a Division Bench,
and not before any other Court and therefore on this ground, the appeals
may be returned to the Registry and he has no objection in case, after
FAO-6574-2023 (O&M) and other connected matter
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returning the appeals, the same are preferred before a Division Bench of
this Court in accordance with law.
7. On the other hand, Dr. Anmol Rattan Sidhu, Senior Advocate,
with Mr. Raghav Gulati, Advocate for the appellant(s) in FAO-89-2024,
and Mr. Avi Singh, Senior Advocate (through V.C.), with Mr. Jaskaranjeet
Singh Sibia, Advocate for the appellant(s) in FAO-6574-2023, jointly
submitted that the preliminary objections taken by learned counsel for the
respondent No.1 are not sustainable in view of the fact that when the
learned Additional District Judge, SAS Nagar, Mohali, decided the
objections under Section 34 of the Act, the same were not decided in the
capacity of a Commercial Court and that is the reason why the same has
not been reflected in the orders itself as to whether learned Additional
District Judge was exercising the powers of a Commercial Court or not.
They also referred to the reports dated 27.01.2025 submitted by the learned
Additional District Judge, SAS Nagar, Mohali, in pursuance of the order
passed by this Court wherein it has been so specifically reported that no
note has been given in the impugned orders with regard to the commercial
court case and submitted that in this way the impugned orders were not
passed by the learned Additional District Judge while exercising powers as
a Commercial Court. Had the orders been passed by the learned Additional
District Judge as a Commercial Court, a note was required to have been
appended stating that learned Additional District Judge, SAS Nagar
(Mohali), was exercising the powers of a Commercial Court. Therefore, on
this ground, the appeals cannot be returned or dismissed. Learned Senior
FAO-6574-2023 (O&M) and other connected matter
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Counsels also submitted that the objections were filed before learned
District Judge, who in turn referred them to the concerned Additional
District Judge. Since learned District Judge had referred the matters to
learned Additional District Judge for adjudication of objections under
Section 34 of the Act, there were no orders directing that the matters be
listed before the learned Additional District Judge exercising the powers of
a Commercial Court and therefore, the impugned orders were passed by
learned Additional District Judge, SAS Nagar (Mohali), and not by the
Commercial Court and as such objections raised by learned counsel for
respondent No.1 are not sustainable.
8. I have heard the learned counsels for the parties.
9.The issue involved in the present cases is as to whether the
present first appeals against the orders are maintainable before a Single
Bench of this Court when the objections under Section 34 of the Act are
being decided in the State of Punjab by ADJ-I, ADJ-II and ADJ-III (in the
present cases, they pertain to Additional District Judge-II), without
mentioning in the orders that they are being decided by the Additional
District Judge as a Commercial Court. Before adverting to the rival
submissions, it would be appropriate to first refer to the relevant
notifications. The notifications dated 14.06.2019 and 04.07.2019 are
reproduced as under:-
FAO-6574-2023 (O&M) and other connected matter
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“ Punjab Govt. Gaz. (Extra), June 14, 2019
(JYST 24, 1941 SAKA)
PART-III
Government of Punjab
Department of Home Affairs and Justice (Judicial-I Branch)
Notification
The 14th June, 2019
No. S.O.59/C.A.4/2016/Ss.3 and 3-A/2019.- In exercise of
the powers conferred by sub-section (1) of section 3 and 3-A of the
Commercial Court, Commercial Division and Commercial Appellate
Division of High Courts Act, 2015 (Central Act No. 4 of 2016), and all
other powers enabling him in this behalf, the Governor of Punjab in due
consultation with the High Court of Punjab and Haryana, is pleased to
constitute the courts of Additional District Judge-I, II and III, in each
District in the State of Punjab (except Sessions Division, Ludhiana), to
be the 'Commercial Courts', to decide the cases of the specified value of
more than rupees fifty lac, within its respective territorial jurisdiction,
and is further pleased to designate the said courts to be the 'Commercial
Appellate Courts', to decide the appeals arising out of the judgments,
decrees and orders of the courts of the Civil Judge (Senior Division)/
Additional Civil Judge (Senior Division) and Civil Judge (Junior
Division, having more than five years Service), for the purpose of
exercising the jurisdiction and powers conferred on the said courts under
the aforesaid Act.
Dr. N.S. KALSI,
Additional Chief Secretary to
Government of Punjab,
Department of Home Affairs and Justice. “
FAO-6574-2023 (O&M) and other connected matter
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Notification dated 04.07.2019
“From
The Registrar General,
Punjab and Haryana High Court,
Chandigarh.
To
All the District & Sessions Judge,
in the State of Punjab (except Ludhiana).
Dated: Chandigarh; the 04.07.2019
Subject:- Establishment of commercia courts in the State
of Punjab.
Sir/Madam,
I am directed to refer you on the subject cited above
and to forward herewith copies of notification Nos.
S.O.57/C.A.4/2016/S.3/2019, S.O/58/C.A.4/2016/Ss.3 and 3-2019
and S.O.59/C.A.4/2016/Ss.3 and 3-A/2019 dated 14.06.2019
received from the Government of Punjab, Department of Home
Affairs and Justice for information and making compliance thereof.
You are further requested to assign the cases of
Commercial Disputes to Additional District Judge-II/Additional
District Judge-III, apart from Additional District Judge-I, and the
cases to be dealt with by Civil Judge (Sr. Divn.) having more than 5
years' service at the District Headquarter and Sub-Divisional level
as the case may be, in consultation with the Hon'ble Administrative
FAO-6574-2023 (O&M) and other connected matter
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Judge, keeping in view the number of said cases including original
and appellate jurisdiction.
Kindly acknowledge the receipt of this
communication.
Yours faithfully,
Sd/-
Assistant Registrar (Gaz-II)
for Registrar General”
10. The statutory provisions contained under the Commercial
Courts Act 2015 are also required to be considered and reproduced.
Section 2(1)(c)(xviii) of Commercial Courts Act, 2015 is reproduced as
under:-
2. Definitions.—(1) In this Act, unless the context otherwise
requires-
(a) (aa) (b) xxxxx xxxxx xxxxx
(c) “commercial dispute” means a dispute arising out of––
(i) to (xvii) xxxxx xxxxx xxxxx
(xviii) agreements for sale of goods or provision of
services;
11. Sections 3, 5, 6, 10, 13 and 15 of Commercial Courts Act, are
also reproduced as under:-
“Section 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
FAO-6574-2023 (O&M) and other connected matter
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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 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.
(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].”
FAO-6574-2023 (O&M) and other connected matter
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“Section 5 — Constitution of Commercial Appellate
Division (1) After issuing notification under sub-section (1)
of section 3 or order under sub-section (1) of Section 4, the
Chief Justice of concerned High Court shall, by order,
constitute Commercial Appellate Division having one or
more Division Benches for the purpose of exercising the
jurisdiction and powers conferred on it by this Act.
(2) The Chief Justice of the High Court shall nominate
such Judges of the High Court who have experience in
dealing with commercial disputes to be judges of the
Commercial Appellate Division.”
“Section 6. Jurisdiction of Commercial Court.—The
Commercial Court shall have jurisdiction to try all suits and
applications relating to a commercial dispute of a Specified
Value arising out of the entire territory of the State over
which it has been vested territorial jurisdiction.
Explanation.––For the purposes of this section, a
commercial dispute shall be considered to arise out of the
entire territory of the State over which a Commercial Court
has been vested jurisdiction, if the suit or application
relating to such commercial dispute has been instituted as
per the provisions of sections 16 to 20 of the Code of Civil
Procedure, 1908 (5 of 1908).”
“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) If such arbitration is 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 have been filed in a
High Court, shall be heard and disposed of by the
Commercial Division where such Commercial Division has
been constituted in such High Court.
FAO-6574-2023 (O&M) and other connected matter
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(2) 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
have been filed on the original side of the High Court, shall
be heard and disposed of by the Commercial Division where
such Commercial Division has been constituted in such High
Court.
(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.”
“13. Appeals from decrees of Commercial Courts and
Commercial Divisions.—(1) [Any person aggrieved by the
judgment or order of a Commercial Court below the level of
a District Judge may appeal to the Commercial Appellate
Court within a period of sixty days from the date of
judgment or order.
(1A) Any person aggrieved by the judgment or order
of a Commercial Court at the level of District Judge
exercising original civil jurisdiction or, as the case may be,
Commercial Division of a High Court may appeal to the
Commercial Appellate Division of that High Court within a
period of sixty days from the date of the judgment or order:
Provided that an appeal shall lie from such orders
passed by a Commercial Division or a Commercial Court
that are specifically enumerated under Order XLIII of the
FAO-6574-2023 (O&M) and other connected matter
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Code of Civil Procedure, 1908 (5 of 1908) as amended by
this Act and section 37 of the Arbitration and Conciliation
Act, 1996 (26 of 1996).]
(2) Notwithstanding anything contained in any other law for
the time being in force or Letters Patent of a High Court, no
appeal shall lie from any order or decree of a Commercial
Division or Commercial Court otherwise than in accordance
with the provisions of this Act.”
“15. Transfer of pending cases.—(1) All suits and
applications, including applications under the Arbitration
and Conciliation Act, 1996 (26 of 1996), relating to a
commercial dispute of a Specified Value pending in a High
Court where a Commercial Division has been constituted,
shall be transferred to the Commercial Division.
(2) All suits and applications, including applications
under the Arbitration and Conciliation Act, 1996 (26 of
1996), relating to a commercial dispute of a Specified Value
pending in any civil court in any district or area in respect
of which a Commercial Court has been constituted, shall be
transferred to such Commercial Court:
Provided that no suit or application where the final
judgment has been reserved by the Court prior to the
constitution of the Commercial Division or the Commercial
Court shall be transferred either under sub-section (1) or
sub-section (2).
(3) Where any suit or application, including an
application under the Arbitration and Conciliation Act, 1996
(26 of 1996), relating to a commercial dispute of Specified
Value shall stand transferred to the Commercial Division or
Commercial Court under sub-section (1) or sub-section (2),
the provisions of this Act shall apply to those procedures
that were not complete at the time of transfer.
FAO-6574-2023 (O&M) and other connected matter
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(4) The Commercial Division or Commercial Court,
as the case may be, may hold case management hearings in
respect of such transferred suit or application in order to
prescribe new timelines or issue such further directions as
may be necessary for a speedy and efficacious disposal of
such suit or application in accordance 3 [with Order XV-A]
of the Code of Civil Procedure, 1908 (5 of 1908).
Provided that the proviso to sub-rule (1) of Rule 1 of Order
V of the Code of Civil Procedure, 1908 (5 of 1908) shall not
apply to such transferred suit or application and the court
may, in its discretion, prescribe a new time period within
which the written statement shall be filed.
(5) In the event that such suit or application is not
transferred in the manner specified in sub-section (1), sub-
section (2) or sub-section (3), the Commercial Appellate
Division of the High Court may, on the application of any of
the parties to the suit, withdraw such suit or application
from the court before which it is pending and transfer the
same for trial or disposal to the Commercial Division or
Commercial Court, as the case may be, having territorial
jurisdiction over such suit, and such order of transfer shall
be final and binding. “
12. So far as the question as to whether the subject matter of the
arbitration/disputes is a commercial dispute is concerned, undisputedly it
falls under Section 2(1)(c)(xviii) of the Commercial Courts Act, i.e.,
‘agreements for sale of goods or provision of services’, and therefore
undoubtedly the disputes were commercial disputes within the meaning of
Section 2(1)(c)(xviii) of the Commercial Courts Act. When the objections
were filed before the learned District Court, they were decided by learned
FAO-6574-2023 (O&M) and other connected matter
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Additional District Judge-II, who has already been designated as a
Commercial Court by virtue of the aforesaid notification dated 14.06.2019.
Therefore, to this extent, there is no dispute that the impugned orders under
Section 34 of the Act were decided by learned Additional District Judge-II,
who was also designated as Commercial Court by virtue of the aforesaid
notification.
13. However, the only dispute raised by both learned Senior
Counsels for the appellants is that since the orders passed by the learned
Additional District Judge do not reflect that they were decided as
Commercial Court cases, the same cannot be deemed to have been decided
by a Commercial Court and therefore, a normal course of appeal would lie
against the aforesaid orders and not before the Commercial Appellate
Division of this Court. This Court, however, is unable to accept the
contention raised by both the learned Senior Counsels for the appellants.
The relevant portion of the reports submitted by the learned Additional
District Judge, SAS Nagar (Mohali), on the basis of the query raised by this
Court in both the cases, are also reproduced as under :-
“Subject:-Report of ARB 806/28.03.2022 decided by
Sh. Sandeep Kumar Singla, the Additional District Judge, SAS
Nagar Mohali on 16.08.2023, required in FAO 6574-2023
pending for 03.02.2025.
Kindly refer to your office letter No.728 Judicial Dated
15.01.2025 on the subject cited above. It is submitted that this
FAO-6574-2023 (O&M) and other connected matter
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case arises out of commercial dispute between Samagra
Shiksha Abhiyan Authority Punjab and M/s Manjeet Plastic
Industries, for an amount of Rs.9,69,19,174/-.
It is further submitted that this case was decided by my
Ld.Predecessor Sh. Sandeep Kumar Singla, the then ADJ-2,
SAS Nagar, on 16.08.2023 who was vested with exercising the
powers of Commercial Courts. It is pertinent to mention here
that the note regarding Commercial Court case has not been
written on the first page of order.”
Subject:- Report of Arb 1290/28.09.2022 decided by Sh.
Sandeep Kumar Singla, the Additional District Judge, SAS
Nagar Mohali on 16.08.2023, required in FAO 89 of 2024
pending for 03.02.2025.
Respected Sir,
Kindly refer to your office letter No.728 Judicial Dated
15.01.2025 on the subject cited above. It is submitted that this
case arises out of commercial dispute between Director
General School Education-cum-State Project Director Vs.
Khadim India Limited and Ors. for an amount of
Rs.31,96,86,729/-.
It is further submitted that this case was decided by my
Ld. Predecessor Sh. Sandeep Kumar Singla, the then ADJ-2,
SAS Nagar, on 16.08.2023 who was vested with exercising the
FAO-6574-2023 (O&M) and other connected matter
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powers of Commercial Courts. It is pertinent to mention here
that the note regarding Commercial Court case has not been
written on the first page of order.”
14. Once a notification has been issued by the State of Punjab
while exercising its powers under Sections 3 and 3-A of the Commercial
Courts Act and by virtue of such statutory notification, the learned
Additional District Judge-II has been designated as a Commercial Court,
the impugned orders passed by the learned Additional District Judge-II
would, therefore, be deemed to be decisions of a Commercial Court. The
mere fact that learned Additional District Judge has not mentioned in the
impugned orders that they were decided as Commercial Court cases would
not make any difference, because by virtue of the aforesaid notification
dated 14.06.2019, learned Additional District Judge was de jure exercising
the powers of a Commercial Court, notwithstanding the fact that it was not
specifically incorporated in the orders that such powers were being
exercised as a Commercial Court.
15. It was also so pleaded by learned Senior Counsels for the
appellants that these objections with regard to Commercial Court or not a
Commercial Court ought to have been taken before the Court concerned
since no such objection was raised at that stage, the appellants are now
estopped from raising the same. However, this argument is not sustainable,
as there can be no estoppel against law.
FAO-6574-2023 (O&M) and other connected matter
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16. The reports of learned Additional District Judge, SAS Nagar,
also make it clear that the impugned orders were passed by the Court of
ADJ-II, who, by virtue of the aforesaid notification, has been designated as
a Commercial Court and therefore, the mere fact that it was not so noted in
the orders that the same were decided as Commercial Court cases would
not mean that they were not decided as such by a Commercial Court.
17. Therefore this Court is of the considered view that the present
appeals are not maintainable before this Court and same would lie only
before the Commercial Appellate Division in accordance with law.
18. Consequently, both the appeals are returned back to the
Registry and the Registry is directed to place the same before the
Commercial Appellate Division of this Court.
19. A photocopy of this order be placed on the file of other
connected matter.
(JASGURPREET SINGH PURI)
JUDGE
03.11.2025
shweta
Whether speaking/reasoned : Yes/No
Whether reportable : Yes/No
Legal Notes
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