Cabinet nod to setting up of more district level commercial courts

The Union Cabinet on Wednesday approved a bill that proposes establishment of commercial courts at district level under the jurisdiction of Madras, Delhi, Calcutta, Bombay and Himachal Pradesh high courts.

The proposed bill amends a law on arbitration for speedy settlement of business disputes as part of the government's efforts to further improve India's Ease of Doing Business ranking. It also recommends to bring down the specified value of a commercial dispute to Rs 3 lakh from the present Rs 1 crore.

The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Bill, 2018 was cleared in a cabinet meeting chaired by Prime Minister Narendra Modi here.

The proposed bill will now be introduced in Parliament before being enacted as law.

The original Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 allowed the establishment of commercial courts at district levels in all jurisdictions except under the five high courts.

"The amendment provides for establishment of commercial courts at district Judge level for the territories over which respective High Courts have ordinary original civil jurisdiction in the cities of Madras, Delhi, Calcutta, Bombay and Himachal Pradesh."

These High Courts have original ordinary civil jurisdiction, meaning they can transfer to itself any civil case pending in a subordinate court and try the case by itself. In such territories, there are no commercial courts at district level and instead commercial divisions were constituted in each of these High Courts.

The proposed bill seeks to bring down the time taken (presently 1,445 days) in resolution of commercial disputes and "thus further improve India's ranking in the Ease of Doing Business", an official statement said.

The state governments in such territories may by notification specify such pecuniary value of commercial disputes to be adjudicated at the district level, which shall "not be less than Rs 3 lakh and not more than the pecuniary jurisdiction of the district court", according to objectives of the bill.

The introduction of the pre-institution mediation process in cases where no urgent or interim relief is contemplated will provide an opportunity to the parties to resolve the commercial disputes outside the ambit of the courts.

This "will also help in reinforcing investor's confidence in the resolution of commercial disputes", the statement said.

The statement said the amendments were being introduced in the backdrop of considerable increase in commercial activities and consequent steep rise in number of commercial disputes at domestic and international level.

"Increase of Foreign Direct Investment (FDI) and overseas commercial transactions have contributed to a significant increase of commercial disputes."

India jumped 30 positions and reached 100th ranked country in terms of Ease of Doing Business amongst 190 countries in the World Bank rating released on October 31, 2017.

--IANS

sar/dg