No Separate Govt Notification Needed To Reduce Commercial Dispute Threshold To ₹3 Lakh After 2018 Amendment: AP High Court Full Bench

Andhra Pradesh High Court's full bench has clarified as to when the Commercial Courts (Amendment) Act, 2018 reducing the “specified value” for filing commercial disputes suits from Rs. 1 crore to Rs. 3 Lakhs becomes operational, holding that no notification from central government was required for the threshold to operate. Specified Value in relation to a commercial dispute, means that the value of the subject-matter of a suit shall not be less than Rs. 3 Lakh. The 2018 amendment brought down the specified value for filing a commercial dispute suit from Rs. 1 crore to Rs. 3 Lakh. In a 133 page order, the majority judgment of two judges ruled that the amendment became operative from May 3, 2018 and without requiring any notification from the Central Government. Meanwhile a separate opinion by the third judge has held that disputes valued between Rs. 3 Lakhs and below Rs. 1 crore could be entertained by Commercial Courts in Andhra Pradesh only after issuance of a State notification under Section 3(1A) of the Commercial Courts Act 2015.The reference arose in a batch of Civil Revision Petitions led by 3F Industries Limited v. Transparent Technologies Solutions Private Limited, concerning the jurisdiction of commercial courts to execute arbitral awards below Rs. 1 crore but above Rs. 3 Lakhs.The Division Bench had referred three questions to the Full Bench, including whether the amendment itself reduced the pecuniary threshold to Rs. 3 Lakhs or whether a separate notification by the Central or State Government was necessary before the amended threshold could operate.A three judge bench of Justice Cheekati Manavendranath Roy, Justice Ravi Nath Tilhari and Justice Battu Devanand was constituted to resolve conflicting coordinate Bench rulings in U.V. Satyanarayana v. M/s. Shriram City Union Finance Ltd., CRP.No.740 of 2014 and Bellam Balakrishna v. Greenmount Developers, CRP.No.1749 of 2023, on the interpretation of Sections 2(1)(i) and 3(1A) of the Commercial Courts Act, 2015.Justice Cheekati Manavendranath Roy and Justice Battu Devanand in its decision held that Sections 2(1)(i) and 3(1A) operate in distinct fields, that the amended Rs. 3 Lakhs threshold became operative from 03.05.2018 without any Central Government notification, and that Section 3(1A) concerns only constitution of Commercial Courts and fixation of pecuniary limits.For context, Section 2(1)(i) Commercial Courts Act 2015, defines the “specified value” of commercial disputes and fixes the minimum threshold at Rs. 3 Lakhs after the 2018 amendment.Section 3(1A) of the Act empowers the State Government, in consultation with the High Court, to notify the pecuniary jurisdiction for Commercial Courts within the State.The majority observed: “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.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 up to less than Rs.1 crore), after consultation with the High Court is mandatory.”The majority judgment notes that it was brought to the court's notice that despite amendment, Specified Value as per the unamended Section 2(1)(i) is being taken into consideration for the purpose of receiving the suits relating to commercial disputes by the Commercial Courts in Vijayawada and Visakhapatnam. Further, commercial disputes above three lakh rupees and up to one crore rupees are not being entertained by the said two special courts."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 court...

No Separate Govt Notification Needed To Reduce Commercial Dispute Threshold To ₹3 Lakh After 2018 Amendment: AP High Court Full Bench

Ritika Verma

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

No Separate Govt Notification Needed To Reduce Commercial Dispute Threshold To ₹3 Lakh After 2018 Amendment: AP High Court Full Bench

Ritika Verma

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

This is a premium content
Available exclusively to
Our subscribers