The commercial Courts, commercial Division and Commercial Appellate Division of High Courts Ordinance,2015

CHAPTER 1

PRELIMINARY

 
(1) This Ordinance may be called the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Ordinance, 2015.

(2) It extends to the whole of India, except the State of Jammu and Kashmir.

(3) It shall come into force at once.

2. (1) In this Ordinance, unless the context otherwise requires,—

(a) “Commercial Appellate Division” .means the . Commercial Appellate Division in a High constituted under sub-section (1) of section 5; ~ '

(b) “Commercial Court” means the Commercial Court constituted under sub-section (l)‘of Section 3;

(c) “commercial dispute” means a dispute arising out of—

(i) ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents;

(ii) export or import of merchandise or services;

(iii) issues relating to admiralty and maritime law;

(iv) transactions relating to aircrah, aircraft engines,aircraft equipment and helicopters, including sales, leasing- and financing of the same;

(v) carriage of goods;

(vi) construction and infrastructure contracts, including tenders;

' (vii) agreements relating to immovable property used exclusively in trade or commerce; '

(viii) franchising agreements; (ix) distribution and licensing agreements;

(x) management and consultancy agreements;

(Xi) joint venture agreements; (Xii) shareholders agreements; .

(xiii) subscription and investment agreements pertaining to the services industry including outsourcing services and financial services;

(xiv) mercantile agency and mercantile usage; (xv) partnership agreements; (xvi) technology development agreements;

(xvii) intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits;

(xviii) agreements for sale of goods or provision of services;

(xix) exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum;

(xx) insmance and re-insurance;

(xxi) contracts of agency relating to any of the above; and ‘

'(xxii) such other commercial disputes as may be notified by the Central Government.

Explanation—A commercial dispute shall not cease to be a commercial dispute merely because—-

(a) it also involves action for recovery of immovable property or for realisation of monies out of immovable property given as security or involves any. other relief pertaining to immovable property;

(b) one of the contracting parties is the State or any of its agencies or instrumentalities, or a private body carrying out public functions;

(d) “Commercial Division” means the Commercial . Division in a High Court constituted under sub-section (l) of section 4;
(e) “District Judge" shall have the same meaning as assigned to it in clause (a) of article 236 .of the Constitution of India;

(f) “document” means any matter expressed or described upon any substance by means of letters, figures or marks, or electronic means, or by more than one of those means,

intended to be used, or which may be used, for the purpose of recording that matter;

(g) “notification” means a notification published in the Official Gazette and the expression “notify” with its cognate meanings and grammatical variations shall be construed accordingly;

(h) “Schedule” means the Schedule appended to the Ordinance; and

(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".

(2) The words and expressions used and not defined in this Ordinance but defined in the Code of Civil Procedure, 1908 and the Evidence Act, 1872, shall have the same meanings respectively assigned to them in that Code and the Act.

Constitution of Commercial Courts Chapter 2

CHAPTER II

CONSTITUTION of COMMERCIAL COURTS, COMMERCIAL DIVISIONS AND COMMERCIAL APPELLATE DIVISIONS

3. ( 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 Ordinance:

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 with commercial disputes to be the Judge or Judges, of a Commercial Court, from amongst the cadre of Higher Judicial Service in the State.

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, from amongst the cadre of Higher Judicial Service in the State.

4. ( 1) In all High Courts, having ordinary civil jurisdiction, the Chief Justice of' the High Court may, by order, constitute Commercial Division having one or more Benches consisting of a single Judge for the purpose of exercising the jurisdiction and powers conferred on it under this Ordinance.

(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 Division.

5. (1) After issuing notification under sub-section (1) of section 3 or order under sub-section (1) of section 4, the Chief Justice of the 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 the Ordinance.

(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. '

6. 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. '

7. All suits and applications relating to commercial disputes of a Specified Value filed in a High Court having ordinary original civil jurisdiction shall be heard and disposed of by the Commercial Division of that High Court:

Provided that all suits and applications relating to commercial disputes, stipulated by an Act to lie in a court not inferior to‘ a' District Court, and filed on the original side of the High Court,

' shall be heard and disposed of by the Commercial Division of the High Court:

Provided further that all suits and applications transferred to -_ the High Court by virtue of sub-section (4) of section 22 of the Designs Act, 2000 or section 104 of the Patents Act, 1970 shall be heard and disposed of by the Commercial Division of the High Court in all the areas over which the High Court exercises ordinary original civil jurisdiction.
8. Notwithstanding anything contained in any other law for the time being in force, no civil revision application or petition shall be'entertained against any interlocutory order of a Commercial Court, including an order on the issue of jurisdiction, and any such challenge, subject to the provisions of section 13, shall be raised only in an appeal against the decree of the Commercial Court.
9. (1) Notwithstanding anything contained in the Code of Civil Procedure, 1908, in the event that a counter-claim tiled in a suit before a civil court relating to a commercial dispute is of Specified Value, such suit shall be transferred by the civil court to the Commercial Division or Commercial Court, as the case may be, having territorial jurisdiction over such suit. (2) In the event that such suit is not transferred in the manner contemplated in sub—section (1), the Commercial Appellate Division of the High Court exercising supervisory jurisdiction over the civil court in question may, on the application-of any of the parties to the suit, withdraw such suit pending before the civil court and transfer the same for trial or disposal to the Commercial Court or Commercial Division or, as the case may be, having territorial jurisdiction over such suit, and such order of transfer shall be final and binding.
10. 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 that have been filed in a High Court, shall be heard and disposed of by the Commercial Appellate Division where such Commercial Appellate Division has been constituted'in such High Court.
(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 that have been filed on the original side of the High Court, shall be heard and disposed of by the Commercial Appellate Division where such Commercial Appellate 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 that would ordinarily lie before any principal civil court of original jurisdiction in a district (not being a High Court) shall be tiled in, and heard and disposed of by the Commercial Court exercising territorial jurisdiction over such arbitration where such Commercial Court has been constituted. '

11. Notwithstanding anything contained in this Ordinance, a ‘ Commercial Court or a Commercial Division shall not entertain or  decide any suit, application or proceedings relating to any ‘ commercial dispute in respect of which the jurisdiction of the civil court is either expressly or impliedly barred under any other law

for the time being in force.

Constitution of commercial Division of High Court

4. ( 1) In all High Courts, having ordinary civil jurisdiction, the Chief Justice of' the High Court may, by order, constitute Commercial Division having one or more Benches consisting of a single Judge for the purpose of exercising the jurisdiction and powers conferred on it under this Ordinance.

(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 Dwrsion.

Section 45 of the Insurance Act

Section 45 of the Insurance Act

It lays down that no policy can be challenged after two years from the date of policy on the ground that any statement mode in the proposal or in any report of the medical  officer or any document was inaccurate or false unless it is material to disclose and it was fraudulently made and the policy holder knows at the time that it was false or he suppressed the fact material to be disclosed, provided that nothing in that section prevent the insurer from calling for proof of age of assured or to adjust the rate of premium.

In life Insurance Corporation V/s Parvathavardhini

One policy in March 1955 Rs. 20000/-

Second policy in May 1955 Rs.30000/-

Husband of Parvathvardhini died in May 1955 of  Hearth trouble.

It was held by the court that as the company failed to examine the doctors the statement made by the doctors in their reports have to be taken as true unless evidence is adduced to contrary.

The failure to examine the doctors and the other officers of the corporation or company shall make the court draw an adverse inference against the company.

In All India General Insurance Co. Vs. SP Maheshwari

It has been held that the insurance company is entitled to avoid the policy on the grounds of deliberate misrepresentation about a drinking habit and non-discloser of venereal disease.

Mithrolal vs. Life Insurance Corporation

If a period of 2 years has expired from the date of which the policy of life insurance was effected that policy cannot be called in question by an insurer on the ground that statement made in proposal for insurance on an any report of a medical officer or referee or a friend of insured or in any other documents leading to issue of the policy was inaccurate or false.

Circumstances affecting the Risk in Life Insurance

Circumstances affecting  the Risk in Life Insurance

Risk in life insurance is the risk of death at an early date due to disease or distinguished from accident

In. Thomson vs. Weems 1884 9 AC 671,681

 Lord Blackburn observed

“Those whose business is to insure lives calculate on the average rate of mortality and charge a premium which on that average will prevent their being loses.

a.       Age of the proponent.

b.      His family history.

c.       Personal health

d.      Moral history including habits of life past and present.

e.      Geographical position & occupation

Age of the Proponent

                Age is an important material fact in life insurance as the rate of premium depends on theage of the assured.

Case law:-Alliance and strutgarter Vs. Hemantha Kumar  AIR 1938 Cal 641

Once it is written

Then it is admitted

In case of M.K. Shah V. Yorkshire Insurance Co. AIR 1938 Bom 161

Once the age is admitted by the insurer then correctness of the age cannot be questioned unless the insurer can prove that his admission was procured by the fraud of the assured.

{Section 45 of the Insurance Act 1938 says After 2 years company have no right to reopen the things.}

The section generally provides that the correctness of a representation shall not be questioned by an insurer after two years but the proviso specifically makes an exception with reference to the representation of the age in a proposal form.

·         According to this the insurer is entitled to call for proof of the age from the assured at any time if the same had not been proved and admitted as true by an endorsement on the policy notwithstanding the fact that the requisition of the proof has been made by insurer after two years.

·         When once a date is given as date of birth and on subsequesnt verification after the issue of the policy the date is found to be wrong it may result in either

Overstatement of Age :---------- Overage

Understatement of Age:---------Underage

In either case the original representation becomes a misrepresentation, but effect on the validity of the policy is different.

Ø  If it is overstatement:- it is considered to be an innocent misrepresentation as it will be against the interest of the maker and so in such cases the validity of the policy is not affected. In such cases if the insurer accepts the proof of age, he can be compelled to refund the excess  payment towards the premium and to adjust the rate for future payment according to the proved age.

Ø  But when it turns out to be an understatement of age, if is proved gross understatement or is proved to have been made willfully, it amounts to fraud and the policy become voidable.

1.       The sum assured may be reduced to such amount

2.       The assured may be required if he wants to continue the policy for the entire insured amount to pay the difference of premium with interest.

Hemmin’s v/s Scetore (1905) ch 365

Misstated age as 41 years through in fact she was at that time forty-four years, of age. This fact was brought  to notice of the insurers in 1997 and inspite of that the insurers accepted the premiums for two subsequent year later they demanded form the assignee a highter rate of premium ande also the difference of premiums accumulate to date at the revised rate premium and the insurers refused to receive the same.

                If after becoming acquainted with a breach of warranty the office continue to treat the policy as valid it will be held to have waived the breach.

Family History

                The risk in life policies the assured and heredity throws sufficient light and play an important role in the determination or the probable longevity of a person.

                In Asia Assurance Company V/s Kartiya Devi 1936 Cal 437 The total numbers of bothers and sisters had to be filled in one column and the actual number alive in another column. The assured filled the first column but left the other b lank. It was helf that answer amounted to suppression of truth and hence amounted to misrepresentation and the policy was void.

Personal Health and Moral History

                The habits of life, past and present and which tend to shorten the life must be disclosed ,e.g. the use of opium, tobacco or alcohol.

·         The present state of health is important.

·         The past illness also become important

·         Regulat habits regarding food, sleep etc. tend to increase the longevity.

Geographical Position

        The place where the applicant lives is important as climate and environment have an appreciable effect on one’s health. Unhealthy surrounding  have  a  tendency to shorten the life.  Further, the particular, place may be subject to earthquake, volcanoes and floods.

        Huguenin v/s Rayley Where the assured gave his residential address but actually he was not there at that time. It was held that the omission of this fact was fatal to the policy and the insurance company was not liable.

Occupation

If it is a dangerous occupation like a soldier, sailor, airman or workman in an ammunition factory the insurers charge a higher rate of premium.