1. Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015, as amended (in short ‘CCA’) has been enacted with the object to have a streamlined procedure which is to be adopted for the conduct of cases in the Commercial Courts and in the Commercial Divisions by amending the Code of Civil Procedure, 1908, so as to improve the efficiency and reduce delays in disposal of commercial cases. The proposed case management system and provisions for summary judgment will enable disposal of commercial disputes in a time bound manner.
2. As per Section 16 of CCA, certain provisions of CPC stand amended in the manner specified in the Schedule to the Act, with respect to their application to any suit in respect of a commercial dispute of a specified value, and the same shall be followed by the Commercial Division and Commercial Court in the trial of a suit in respect of a commercial dispute of a specified value.
Order XIII–A has been incorporated in CPC only for purposes of adjudication of commercial suit under the said Act in terms of the Schedule referable to Section 16. The said Order reads as under:
7. Insertion of Order XV-A – 7. After Order XV of the Code, the following Order shall be inserted, namely:
6. Powers of the Court in a Case Management Hearing. – (1) In any Case Management Hearing held under this Order, the Court shall have the power to-
(a) prior to the framing of issues, hear and decide any pending application filed by the parties under Order XIII-A;
* * *”
3. It may be noted here itself that the provisions of Order XIII – A CPC are para materia to Rule 24.2 of the Civil Procedure Rules in England.
4. Emphasising the scope of Order XIII – A CPC, the Delhi High Court in the judgment of Bright Enterprises Private Limited MJ Bizcraft LLP[1], held as under:
“21…Rule 3 of Order XIII-A CPC empowers the Court to give a summary judgment against a plaintiff or defendant on a claim if it considers that – (a) the plaintiff has no real prospect of succeeding on the claim or the defendant has no real prospect of successfully defending the claim, as the case may be; and (b) there is no other compelling reason why the claim should not be disposed of before recording of oral evidence…”
5. In the judgment of Rockwool International A/S v. Thermocare Rockwool (India) Pvt. Ltd.[2], the Delhi High Court observed the following requisites for passing a summary judgment:
6. The scope of Summary Judgment has also been explained by the Delhi High Court in the judgment of R. Impex v. Punj Lloyd Ltd.[3], as under:
“18….but vide the said Act, Order XIII-A titled “Summary Judgment” has been incorporated in CPC insofar as applicable to commercial suits and Rule 2 whereof, while prescribing the stage for making application for summary judgment, provides that the same be filed at any time after the summons have been served on the defendant but not after the court has framed the issues in respect of the suit. Rule 3 of Order XIII-A, while prescribing the grounds for summary judgment, empowers the Court to give summary judgment against a plaintiff or defendant on a claim, if it considers inter alia that the plaintiff has no real prospect of succeeding on the claim or the defendant has no real prospect of successfully defending the claim, as the case may be and there is no other compelling reason why the claim should not be disposed before recording of oral evidence. Rule 4 prescribes the procedure for making summary judgment.
27. The purpose of the proviso to Rule 2 of Order XIII-A is to discourage filing of applications for summary judgment after issues have been framed, thereby delaying trial and to empower the Court to, if finding the same to be dilatory, dismiss the same in limine.
28. The objective of the Commercial Courts Act even otherwise is to expedite the disposal of the commercial suits and none of the provisions thereof can be interpreted as counterproductive to the said objective of the Commercial Courts Act and it would delay rather than expedite the disposal of commercial suits, if inspite of finding a suit to be befitting of summary judgment, the Court considers itself constrained merely on account of issues having been framed.”
7. The scope of Summary Judgment as also the object of CCA was re-emphasised by the Delhi High Court in Mallcom (India) Limited Rakesh Kumar[4].
8. The above principle has been reiterated in the matter of Jindal Saw Limited Aperam Stainless Services and Solutions Precision SAS[5], wherein the Delhi High Court have explained the scope of Order XIII-A CPC. The relevant text of the judgment is reproduced below:
9. Reference in this regard may also be made to Oxbridge Associates Limited v. Atul Kumra[6] and Universal Contractors & Engineers (P) Ltd. v. National Projects Constructions Corporation Ltd.[7]
10. Comparing the scope of Order XII Rule 6 CPC and Order XIII–A CPC, the Delhi High Court in its judgment Venezia Mobili (India) Pvt. Ltd. v. Ramprastha Promoters and Developers Pvt. Ltd.[8], observed as under:
“36…broadly speaking, the basis for seeking summary judgment as well as judgment on admission is the same i.e. that there is no triable issue which arises for consideration, there are reasons for allowing the claim without oral evidence and the defence raised by the defendants is a moonshine and a sham.”
11. Re-emphasising the legislative intent in incorporating Order XIII–A CPC, the Delhi High Court in Su-Kam Power Systems Ltd. v. Kunwer Sachdev[9], observed as:
“49. Consequently, this Court is of the view that when a summary judgment application allows the Court to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective. It bears reiteration that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the Court the confidence that it can find the necessary facts and apply the relevant legal principles so as to resolve the dispute as held in Robert Hryniak (supra).
50. In fact, the legislative intent behind introducing summary judgment under Order XIII-A CPC is to provide a remedy independent, separate and distinct from judgment on admissions and summary judgment under Order XXXVII CPC.
51. This Court clarifies that in its earlier judgment in Venezia Mobili (India) Pvt. Ltd. v. Ramprastha Promoters & Developers Pvt. Ltd.[10], while deciding two applications, both filed by the plaintiff in the said case (one under Order XII Rule 6 and other under Order XIII-A) it had applied the lowest common denominator test under both the provisions of the Code of Civil Procedure and held that the suit could be decreed by way of a summary judgment.
52. Consequently, this Court is of the opinion that there will be ‘no real prospect of successfully defending the claim’ when the Court is able to reach a fair and just determination on the merits of the application for summary judgment. This will be the case when the process allows the court to make the necessary finding of fact, apply the law to the facts, and the same is a proportionate, more expeditious and less expensive means to achieve a fair and just result…”
It is thus clear that Order XIII–A CPC confers much wider powers upon the Commercial Courts for a speedy and expeditious disposal of Commercial Suits than under Order XII Rule 6 CPC which, as held above, is a test of lowest denominator for the purposes of Order XIII–A CPC.
12. In exercise of powers conferred by Section 129 CPC, the Delhi High Court has framed the Delhi High Court (Original Side) Rules, 2018. Chapter X-A of the said Rules under the heading Case Management, and more particularly relating to Summary Judgment provides as under:
“1. Summary Judgment.- At the time of Case Management hearing, a Court, may of its own, decide a claim pertaining to any dispute, by a summary judgment, without recording oral evidence.”
(emphasis supplied)
13. It is trite law that in case of conflict between the provisions of CPC and Original Side Rules, the latter would prevail and override the former. [Refer HTIL Corporation B.V. v. Ajay Kohli[11]; Iridium India Telecom Ltd. v. Motorola Inc.[12] and Print Pak Machinery Ltd. v. Jay Kay Papers Converters[13].]
14. Though Order XIII–A CPC, as applicable to CCA, provides for presentation of a formal application as also the outer time-limit for moving such an application, however, not only in view of the Original Side Rules of the Delhi High Court to the contrary but also interpreting the provisions of Order XIII–A CPC by the Delhi High Court on the touchstone of Doctrine of Purposive Legislation, while interpreting the same, held that an application is not essential to seek summary judgment and the Court, on its own or on the asking of either party, at any point of time, even after settlement of issues, is entitled to see/adjudicate as to whether a case for summary judgment is made out. [See R. Impex[14] (supra), Mallcom (India) Limited[15] (supra) and Jindal Saw Limited[16] (supra]).
*Advocate and a qualified Chartered Accountant. Author is currently a Senior Associate in the Dispute Resolution Practice at L&L Partners Law Offices, New Delhi. Author’s views are personal only.
[1] (2017) 1 HCC (Del) 100 : 2017 SCC OnLine Del 6394 at p. 110
