16. Amendments to the Code of Civil Procedure, 1908 in its application to commercial
disputes.—
(1) The provisions of the Code of Civil Procedure, 1908 (5 of 1908) shall, in their application
to any suit in respect of a commercial dispute of a Specified Value, stand amended in the manner as
specified in the Schedule.
(2) The Commercial Division and Commercial Court shall follow the provisions of the Code of Civil
Procedure, 1908 (5 of 1908), as amended by this Act, in the trial of a suit in respect of a commercial
dispute of a Specified Value.
(3) Where any provision of any Rule of the jurisdictional High Court or any amendment to the Code
of Civil Procedure, 1908 (5 of 1908), by the State Government is in conflict with the provisions of the
Code of Civil Procedure, 1908 (5 of 1908), as amended by this Act, the provisions of the Code of Civil
Procedure as amended by this Act shall prevail.
CHAPTER VII
MISCELLANEOUS
17. Collection and disclosure of data by 1[Commercial Courts, Commercial Appellate Courts],
Commercial Divisions and Commercial Appellate Divisions.—The statistical data regarding the
number of suits, applications, appeals or writ petitions filed before the 1[Commercial Courts, Commercial
Appellate Courts], Commercial Division, or Commercial Appellate Division, as the case may be, the
pendency of such cases, the status of each case, and the number of cases disposed of, shall be maintained
and updated every month by each 1[Commercial Courts, Commercial Appellate Courts], Commercial
Division, Commercial Appellate Division and shall be published on the website of the relevant High
Court.
18. Power of High Court to issue directions.—The High Court may, by notification, issue practice
directions to supplement the provisions of Chapter II of this Act or the Code of Civil Procedure, 1908 (5
of 1908) insofar as such provisions apply to the hearing of commercial disputes of a Specified Value.
19. Infrastructure facilities.—The State Government shall provide necessary infrastructure to
facilitate the working of a Commercial Court or a Commercial Division of a High Court.
20. Training and continuous education.—The State Government may, in consultation with the
High Court, establish necessary facilities providing for training of Judges who may be appointed to the
2
[Commercial Courts, Commercial Appellate Courts], Commercial Division or the Commercial Appellate
Division in a High Court.
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.
1. Subs. by Act 28 of 2018, s. 15, for “Commercial Court” and “Commercial Courts” (w.e.f. 3-5-2018).
2. Subs. by s. 16, ibid., for “Commercial Court” (w.e.f. 3-5-2018).
9
1
[21A. Power of Central Government to make rules.—
(1) The Central Government may, by
notification, make rules for carrying out the provisions of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may
provide for or any of the following matters, namely:—
(a) the manner and procedure of pre-institution mediation under sub-section
(1) of section 12A;
(b) any other matter which is required to be, or may be, prescribed or in respect of which
provision is to be made by rules made by the Central Government.
(3) Every rule made by the Central Government under this Act shall be laid, as soon as may be after
it is made, before each House of Parliament, while it is in session, for a total period of thirty days which
may be comprised in one session, or in two or more successive sessions, and if, before the expiry of the
session immediately following the session or the successive sessions aforesaid, both Houses agree in
making any modification in the rule, or both Houses agree that the rule should not be made, the rule shall
thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that
any such modification or annulment shall be without prejudice to the validity of anything previously done
under that rule.]
22. Power to remove difficulties.—
(1) If any difficulty arises in giving effect to the provisions of
this Act, the Central Government may, by order published in the Official Gazette, make such provisions,
not inconsistent with the provisions of this Act as may appear to it to be necessary or expedient for
removing the difficulty:
Provided that no such order shall be made under this section after the expiry of a period of two years
from the date of commencement of this Act.
(2) Every order made under this section shall be laid, as soon as may be, after it is made, before each
House of Parliament.
23. Repeal and savings.—
(1) The Commercial Courts, Commercial Division and Commercial
Appellate Division of High Courts Ordinance, 2015 (Ord. 8 of 2015) is hereby repealed.
(2) Notwithstanding such repeal, anything done or any action taken under the said Ordinance, shall be
deemed to have been done or taken under the corresponding provisions of this Act.
1. Ins. by Act 28 of 2018, s. 17 (w.e.f. 3-5-2018).
10
SCHEDULE
(See section 16)
1. Amendment of section 26.—In section 26 of the Code of Civil Procedure, 1908 (5 of 1908)
(hereafter referred to as the Code), in sub-section
(2), the following proviso shall be inserted, namely:––
“
Provided that such an affidavit shall be in the form and manner as prescribed under Order VI of
Rule 15A.”.
2. Substitution of new section for section 35.—For section 35 of the Code, the following section
shall be substituted, namely:––
‘35. Costs.—
(1) In relation to any commercial dispute, the Court, notwithstanding anything
contained in any other law for the time being in force or Rule, has the discretion to determine:
(a) whether costs are payable by one party to another;
(b) the quantum of those costs; and
(c) when they are to be paid.
Explanation.—For the purpose of clause
(a), the expression “costs” shall mean reasonable costs
relating to—
(i) the fees and expenses of the witnesses incurred;
(ii) legal fees and expenses incurred;
(iii) any other expenses incurred in connection with the proceedings.
(2) If the Court decides to make an order for payment of costs, the general rule is that the
unsuccessful party shall be ordered to pay the costs of the successful party:
Provided that the Court may make an order deviating from the general rule for reasons to be
recorded in writing.
Illustration
The Plaintiff, in his suit, seeks a money decree for breach of contract, and damages. The Court
holds that the Plaintiff is entitled to the money decree. However, it returns a finding that the claim for
damages is frivolous and vexatious.
In such circumstances the Court may impose costs on the Plaintiff, despite the Plaintiff being the
successful party, for having raised frivolous claims for damages.
(3) In making an order for the payment of costs, the Court shall have regard to the following
circumstances, including—
(a) the conduct of the parties;
(b) whether a party has succeeded on part of its case, even if that party has not been wholly
successful;
(c) whether the party had made a frivolous counterclaim leading to delay in the disposal of
the case;
(d) whether any reasonable offer to settle is made by a party and unreasonably refused by the
other party; and
(e) whether the party had made a frivolous claim and instituted a vexatious proceeding
wasting the time of the Court.
(4) The orders which the Court may make under this provision include an order that a party must
pay––
(a) a proportion of another party’s costs;
11
(b) a stated amount in respect of another party’s costs;
(c) costs from or until a certain date;
(d) costs incurred before proceedings have begun;
(e) costs relating to particular steps taken in the proceedings;
(f) costs relating to a distinct part of the proceedings; and
(g) interest on costs from or until a certain date.’.
3. Amendment of section 35A.—In section 35A of the Code, sub-section
(2) shall be omitted.
4. Amendment of First Schedule.—In the First Schedule to the Code,––
(A) in the Order V, in Rule 1, in sub-rule
(1), for the second proviso, the following proviso shall
be substituted, namely:––
“Provided further that where the defendant fails to file the written statement within the said
period of thirty days, he shall be allowed to file the written statement on such other day, as may
be specified by the Court, for reasons to be recorded in writing and on payment of such costs as
the Court deems fit, but which shall not be later than one hundred twenty days from the date of
service of summons and on expiry of one hundred twenty days from the date of service of
summons, the defendant shall forfeit the right to file the written statement and the Court shall not
allow the written statement to be taken on record.”;
(B) in Order VI,––
(i) after Rule 3, the following Rule shall be inserted, namely:––
“3A. Forms of pleading in Commercial Courts––In a commercial dispute, where forms of
pleadings have been prescribed under the High Court Rules or Practice Directions made for
the purposes of such commercial disputes, pleadings shall be in such forms.”;
(ii) after Rule 15, the following Rule shall be inserted, namely:––
‘‘15A. Verification of pleadings in a commercial dispute.—
(1) Notwithstanding anything contained in Rule 15, every pleading in a commercial
dispute shall be verified by an affidavit in the manner and form prescribed in the Appendix to
this Schedule.
(2) An affidavit under sub-rule
(1) above shall be signed by the party or by one of the
parties to the proceedings, or by any other person on behalf of such party or parties who is
proved to the satisfaction of the Court to be acquainted with the facts of the case and who is
duly authorised by such party or parties.
(3) Where a pleading is amended, the amendments must be verified in the form and
manner referred to in sub-rule
(1) unless the Court orders otherwise.
(4) Where a pleading is not verified in the manner provided under sub-rule
(1), the party
shall not be permitted to rely on such pleading as evidence or any of the matters set out
therein.
(5) The Court may strike out a pleading which is not verified by a Statement of Truth,
namely, the affidavit set out in the Appendix to this Schedule.”;
(C) in Order VII, after Rule 2, the following Rule shall be inserted, namely:—
“2A. Where interest is sought in the suit,—
(1) Where the plaintiff seeks interest, the plaint shall contain a statement to that effect
along with the details set out under sub-rules
(2) and
(3).
12
(2) Where the plaintiff seeks interest, the plaint shall state whether the plaintiff is seeking
interest in relation to a commercial transaction within the meaning of section 34 of the Code
of Civil Procedure, 1908 (5 of 1908) and, furthermore, if the plaintiff is doing so under the
terms of a contract or under an Act, in which case the Act is to be specified in the plaint; or
on some other basis and shall state the basis of that.
(3) Pleadings shall also state—
(a) the rate at which interest is claimed;
(b) the date from which it is claimed;
(c) the date to which it is calculated;
(d) the total amount of interest claimed to the date of calculation; and
(e) the daily rate at which interest accrues after that date.”;
(D) in Order VIII,––
(i) in Rule 1, for the proviso, the following proviso shall be substituted, namely:––
“Provided that where the defendant fails to file the written statement within the said
period of thirty days, he shall be allowed to file the written statement on such other day, as
may be specified by the Court, for reasons to be recorded in writing and on payment of such
costs as the Court deems fit, but which shall not be later than one hundred twenty days from
the date of service of summons and on expiry of one hundred twenty days from the date of
service of summons, the defendant shall forfeit the right to file the written statement and the
Court shall not allow the written statement to be taken on record.”;
(ii) after Rule 3, the following Rule shall be inserted, namely:––
“3A. Denial by the defendant in suits before the Commercial Division of the High Court
or the Commercial Court—
(1) Denial shall be in the manner provided in sub-rules
(2),
(3),
(4) and
(5) of this
Rule.
(2) The defendant in his written statement shall state which of the allegations in the
particulars of plaint he denies, which allegations he is unable to admit or deny, but which
he requires the plaintiff to prove, and which allegations he admits.
(3) Where the defendant denies an allegation of fact in a plaint, he must state his
reasons for doing so and if he intends to put forward a different version of events from
that given by the plaintiff, he must state his own version.
(4) If the defendant disputes the jurisdiction of the Court he must state the reasons for
doing so, and if he is able, give his own statement as to which Court ought to have
jurisdiction.
(5) If the defendant disputes the plaintiff’s valuation of the suit, he must state his
reasons for doing so, and if he is able, give his own statement of the value of the suit.”;
(iii) in Rule 5, in sub-rule
(1), after the first proviso, the following proviso shall be inserted,
namely:—
‘‘Provided further that every allegation of fact in the plaint, if not denied in the manner
provided under Rule 3A of this Order, shall be taken to be admitted except as against a
person under disability.”;
(iv) in Rule 10, 1***, the following proviso shall be inserted, namely:––
1. The words “after the first proviso” omitted by Act 28 of 2018, s. 18 (w.e.f. 3-5-2018).
13
“1[
Provided that ] no Court shall make an order to extend the time provided under Rule 1
of this Order for filing of the written statement.”;
(E) for Order XI of the Code, the following Order shall be substituted, namely:—
“ORDER XI
DISCLOSURE, DISCOVERY AND INSPECTION OF DOCUMENTS IN SUITS BEFORE THE COMMERCIAL DIVISION
OF A HIGH COURT OR A COMMERCIAL COURT
1. Disclosure and discovery of documents.—
(1) Plaintiff shall file a list of all documents and
photocopies of all documents, in its power, possession, control or custody, pertaining to the suit, along
with the plaint, including:—
(a) documents referred to and relied on by the plaintiff in the plaint;
(b) documents relating to any matter in question in the proceedings, in the power, possession,
control or custody of the plaintiff, as on the date of filing the plaint, irrespective of whether the same
is in support of or adverse to the plaintiff’s case;
(c) nothing in this Rule shall apply to documents produced by plaintiffs and relevant only––
(i) for the cross-examination of the defendant’s witnesses, or
(ii) in answer to any case set up by the defendant subsequent to the filing of the plaint, or
(iii) handed over to a witness merely to refresh his memory.
(2) The list of documents filed with the plaint shall specify whether the documents in the power,
possession, control or custody of the plaintiff are originals, office copies or photocopies and the list shall
also set out in brief, details of parties to each document, mode of execution, issuance or receipt and line of
custody of each document.
(3) The plaint shall contain a declaration on oath from the plaintiff that all documents in the power,
possession, control or custody of the plaintiff, pertaining to the facts and circumstances of the proceedings
initiated by him have been disclosed and copies thereof annexed with the plaint, and that the plaintiff does
not have any other documents in its power, possession, control or custody.
Explanation.––A declaration on oath under this sub-rule shall be contained in the Statement of Truth
as set out in the Appendix.
(4) In case of urgent filings, the plaintiff may seek leave to rely on additional documents, as part of
the above declaration on oath and subject to grant of such leave by Court, the plaintiff shall file such
additional documents in Court, within thirty days of filing the suit, along with a declaration on oath that
the plaintiff has produced all documents in its power, possession, control or custody, pertaining to the
facts and circumstances of the proceedings initiated by the plaintiff and that the plaintiff does not have
any other documents, in its power, possession, control or custody.
(5) The plaintiff shall not be allowed to rely on documents, which were in the plaintiff’s power,
possession, control or custody and not disclosed along with plaint or within the extended period set out
above, save and except by leave of Court and such leave shall be granted only upon the plaintiff
establishing reasonable cause for non–disclosure along with the plaint.
(6) The plaint shall set out details of documents, which the plaintiff believes to be in the power,
possession, control or custody of the defendant and which the plaintiff wishes to rely upon and seek leave
for production thereof by the said defendant.
(7) The defendant shall file a list of all documents and photocopies of all documents, in its power,
possession, control or custody, pertaining to the suit, along with the written statement or with its
counterclaim if any, including—
(a) the documents referred to and relied on by the defendant in the written statement;
1. Subs. by Act 28 of 2018, s. 18, for “Provided further that” (w.e.f. 3-5-2018).
14
(b) the documents relating to any matter in question in the proceeding in the power, possession,
control or custody of the defendant, irrespective of whether the same is in support of or adverse to the
defendant’s defence;
(c) nothing in this Rule shall apply to documents produced by the defendants and relevant only––
(i) for the cross-examination of the plaintiff’s witnesses,
(ii) in answer to any case set up by the plaintiff subsequent to the filing of the plaint, or
(iii) handed over to a witness merely to refresh his memory.
(8) The list of documents filed with the written statement or counterclaim shall specify whether the
documents, in the power, possession, control or custody of the defendant, are originals, office copies or
photocopies and the list shall also set out in brief, details of parties to each document being produced by
the defendant, mode of execution, issuance or receipt and line of custody of each document.
(9) The written statement or counterclaim shall contain a declaration on oath made by the deponent
that all documents in the power, possession, control or custody of the defendant, save and except for those
set out in sub-rule
(7)
(c) (iii) pertaining to the facts and circumstances of the proceedings initiated by the
plaintiff or in the counterclaim, have been disclosed and copies thereof annexed with the written
statement or counterclaim and that the defendant does not have in its power, possession, control or
custody, any other documents.
(10) Save and except for sub-rule
(7)
(c) (iii), defendant shall not be allowed to rely on documents,
which were in the defendant’s power, possession, control or custody and not disclosed along with the
written statement or counterclaim, save and except by leave of Court and such leave shall be granted only
upon the defendant establishing reasonable cause for non-disclosure along with the written statement or
counterclaim.
(11) The written statement or counterclaim shall set out details of documents in the power,
possession, control or custody of the plaintiff, which the defendant wishes to rely upon and which have
not been disclosed with the plaint, and call upon the plaintiff to produce the same.
(12) Duty to disclose documents, which have come to the notice of a party, shall continue till disposal
of the suit.
2. Discovery by interrogatories.—
(1) In any suit the plaintiff or defendant by leave of the court may
deliver interrogatories in writing for the examination of the opposite parties or any one or more of such
parties, and such interrogatories when delivered shall have a note at the foot thereof stating which of such
interrogatories each of such persons is required to answer:
Provided that no party shall deliver more than one set of interrogatories to the same party without an
order for that purpose:
Provided further that interrogatories which do not relate to any matters in question in the suit shall be
deemed irrelevant, notwithstanding that they might be admissible on the oral cross-examination of a
witness.
(2) On an application for leave to deliver interrogatories, the particular interrogatories proposed to be
delivered shall be submitted to the court, and that court shall decide within seven days from the day of
filing of the said application, in deciding upon such application, the court shall take into account any
offer, which may be made by the party sought to be interrogated to deliver particulars, or to make
admissions, or to produce documents relating to the matters in question, or any of them, and leave shall be
given as to such only of the interrogatories submitted as the court shall consider necessary either for
disposing fairly of the suit or for saving costs.
(3) In adjusting the costs of the suit inquiry shall at the instance of any party be made into the
propriety of exhibiting such interrogatories, and if it is the opinion of the taxing officer or of the court,
either with or without an application for inquiry, that such interrogatories have been exhibited
unreasonably, vexatiously, or at improper length, the costs occasioned by the said interrogatories and the
answers thereto shall be paid in any event by the party in fault.
15
(4) Interrogatories shall be in the form provided in Form No. 2 in Appendix C to the Code of Civil
Procedure, 1908 (5 of 1908), with such variations as circumstances may require.
(5) Where any party to a suit is a corporation or a body of persons, whether incorporated or not,
empowered by law to sue or be sued, whether in its own name or in the name of any officer of other
person, any opposite party may apply for an order allowing him to deliver interrogatories to any member
or officer of such corporation or body, and an order may be made accordingly.
(6) Any objection to answering any interrogatory on the ground that it is scandalous or irrelevant or
not exhibited bona fide for the purpose of the suit, or that the matters inquired into are not sufficiently
material at that stage, or on the ground of privilege or any other ground may be taken in the affidavit in
answer.
(7) Any interrogatories may be set aside on the ground that they have been exhibited unreasonably or
vexatiously, or struck out on the ground that they are prolix, oppressive, unnecessary or scandalous and
any application for this purpose may be made within seven days after service of the interrogatories.
(8) Interrogatories shall be answered by affidavit to be filed within ten days, or within such other time
as the court may allow.
(9) An affidavit in answer to interrogatories shall be in the form provided in Form No. 3 in Appendix
C to the Code of Civil Procedure, 1908 (5 of 1908), with such variations as circumstances may require.
(10) No exceptions shall be taken to any affidavit in answer, but the sufficiency or otherwise of any
such affidavit objected to as insufficient shall be determined by the court.
(11) Where any person interrogated omits to answer, or answers insufficiently, the party interrogating
may apply to the court for an order requiring him to answer, or to answer further, as the case may be, and
an order may be made requiring him to answer, or to answer further, either affidavit or by viva voce
examination, as the court may direct.
3. Inspection.—
(1) All parties shall complete inspection of all documents disclosed within thirty
days of the date of filing of the written statement or written statement to the counterclaim, whichever is
later. The Court may extend this time limit upon application at its discretion, but not beyond thirty days in
any event.
(2) Any party to the proceedings may seek directions from the Court, at any stage of the proceedings,
for inspection or production of documents by the other party, of which inspection has been refused by
such party or documents have not been produced despite issuance of a notice to produce.
(3) Order in such application shall be disposed of within thirty days of filing such application,
including filing replies and rejoinders (if permitted by Court) and hearing.
(4) If the above application is allowed, inspection and copies thereof shall be furnished to the party
seeking it, within five days of such order.
(5) No party shall be permitted to rely on a document, which it had failed to disclose or of which
inspection has not been given, save and except with leave of Court.
(6) The Court may impose exemplary costs against a defaulting party, who wilfully or negligently
failed to disclose all documents pertaining to a suit or essential for a decision therein and which are in
their power, possession, control or custody or where a Court holds that inspection or copies of any
documents had been wrongfully or unreasonably withheld or refused.
4. Admission and denial of documents.—
(1) Each party shall submit a statement of admissions or
denials of all documents disclosed and of which inspection has been completed, within fifteen days of the
completion of inspection or any later date as fixed by the Court.
(2) The statement of admissions and denials shall set out explicitly, whether such party was admitting
or denying:—
(a) correctness of contents of a document;
(b) existence of a document;
16
(c) execution of a document;
(d) issuance or receipt of a document;
(e) custody of a document.
Explanation.––A statement of admission or denial of the existence of a document made in accordance
with sub-rule
(2)
(b) shall include the admission or denial of the contents of a document.
(3) Each party shall set out reasons for denying a document under any of the above grounds and bare
and unsupported denials shall not be deemed to be denials of a document and proof of such documents
may then be dispensed with at the d
