Rajasthan Art Emporium Limited v. Shiva Enterprises, Through Proprietor Shiv Narayan Bishnoi, S/o. G. R. Bishnoi
2024-05-24
DINESH MEHTA, RAJENDRA PRAKASH SONI
body2024
DigiLaw.ai
ORDER : I.A. No.01/2024:- 1. For the reasons stated, the application seeking early listing of the matter is allowed. 2. At the request of the learned counsel for the parties, the matter is taken up today itself. D.B. Civil Misc. Appeal No. 1990/2023:- 1. By way of present appeal preferred under Section 13 of the Commercial Courts Act, 2015 (hereinafter referred to as “the Act of 2015”), the appellants have laid challenge to the order dated 31.10.2023, whereby the application under Order VII Rule 11 of Civil Procedure Code (hereinafter referred to as ‘C.P.C.’ or ‘the Code’) preferred by the present appellants (defendants in the original suit) on 19.10.2023 has been rejected by the Commercial Court, Jodhpur. 2. Mr. Yadav, learned counsel for the appellants argued that the Commercial Court has rejected the appellants’ application dated 19.10.2023 cursorily, being swayed by the fact that earlier application under Order VII Rule 11 of C.P.C of the appellants was already rejected by it on 24.08.2022. 3. Learned counsel for the appellants submitted that the issue which was raised by way of the subject application dated 19.10.2023, was not at all raised in the earlier application that was filed by the appellants under Order VII Rule 11 of the Code and therefore, the Commercial Court ought not to have rejected appellants’ application. 4. Learned counsel pointed out that the Commercial Court has not only rejected appellants’ application as barred by res-judicata, but also on merit and held that provisions of section 12A of the Act of 2015 will not be applicable to the suit in question. 5. Advancing the argument, learned counsel submitted that a fundamental question of law and jurisdiction was raised by the appellants which revolved around the provisions of section 12A of the Act of 2015, according to which, since prior to filing of the suit in question, the appellant had not applied for and undertaken the exercise of pre-institution mediation and settlement, as is mandatory under section 12A of the Act of 2015, the suit was liable to be rejected. 6.
6. Taking the Court through section 15 of the Act of 2015, learned counsel argued that as per sub-section (3) of the section 15 of the Act of 2015, the provisions of the Act of 2015 have been made applicable to all the pending suits and accordingly all the proceedings which remained pending or were to be undertaken on the date of transfer of a suit to the Commercial Court will be undertaken. 7. In sum and substance, the argument of Mr. Yadav has been that when the suit came to be transfer to the Commercial Court by virtue of section 15 of the Act of 2015, it was incumbent upon the Commercial Court to first examine as to whether mandate of section 12A of the Act of 2015 has been complied or not? 8. In relation to argument aforesaid, learned counsel apprised the Court about the relevant dates, which are reproduced hereunder:- Date of Institution of Suit 05.06.2012 Transfer to ADJ 23.05.2016 Transfer to Commercial Court, Jaipur 18.10.2017 Transfer to the Commercial Court, Jodhpur 17.02.2020 9. Learned counsel argued that since the suit in question came to be transferred to the Commercial Court, Jodhpur on 17.02.2020, by virtue of sub-section (3) of section 15 of the Act of 2015, the provisions of section 12A of the Act of 2015 became applicable and therefore, the suit became non-maintainable per-force Section 12A of the Act of 2015, which mandates a party to go for pre-institution mediation and settlement before instituting a suit. 10. Mr. Mankad, learned counsel for the respondents submitted that application under Order VII Rule 11 of C.P.C. filed by the appellants was rejected by the Commercial Court, whereafter, again a fresh application under Order VII Rule 11 of C.P.C., raising almost similar ground (except one relating to section 12A of the Act of 2015) was filed and hence, the same was rightly rejected. He highlighted that the earlier order passed by the Commercial Court has been affirmed by the Division Bench of this Court vide its judgment and order dated 09.12.2022 in D.B. Civil Misc. Appeal No.1947/2022 (M/s. Rajasthan Art Emporium Ltd. And Ors. vs. M/s. Shiva Enterprises and Ors.) and therefore, instant appeal is liable to be dismissed. 11. Heard learned counsel for the parties and perused the record. 12.
Appeal No.1947/2022 (M/s. Rajasthan Art Emporium Ltd. And Ors. vs. M/s. Shiva Enterprises and Ors.) and therefore, instant appeal is liable to be dismissed. 11. Heard learned counsel for the parties and perused the record. 12. Indisputably, the appellants had filed another application under under Order VII Rule 11 of C.P.C. before the Commercial Court on 11.03.2022, which was rejected by the Commercial Court per-viam order dated 24.08.2022. 13. In our opinion, the appellants’ subsequent application preferred under Order VII Rule 11 of C.P.C. dated 19.10.2023 was barred by the provisions of Order II Rule 2 of C.P.C., which bars a party to make a claim with respect to a cause of action, which was otherwise available to him in previous suit. The same principle applies to ground or law point as well. The first application under Order VII Rule 11 of C.P.C. was filed in the year 2022, by which time the provisions of section 12A of the Act of 2015 had already been introduced in the Act of 2015 and thus, the plea or ground which the appellants have taken by the contentious application in the year 2023, was available to the appellants, at the time of filing first application. 14. Be that as it may, as the question of very maintainability of application and the issue in hand is purely a question of law, we deem it expedient to pronounce upon the issue of applicability of section 12A of the Act of 2015 in the proceedings in question, so zealously harped upon by learned counsel for the appellants. 15. It is to be borne in mind that section 12A was introduced in the Act of 2015 with effect from 03.05.2018. The suit in question was instituted in the Civil Court on 05.06.2012 and after promulgation of the Act of 2015, it stood transferred, firstly to the Commercial Court at Jaipur on 18.10.2017, much before Section 12A was introduced in the Act of 2015. Thereafter, on account of change of jurisdiction, the suit in question came to be transferred to Commercial Court, Jodhpur on 17.02.2020. 16.
Thereafter, on account of change of jurisdiction, the suit in question came to be transferred to Commercial Court, Jodhpur on 17.02.2020. 16. In our considered opinion, transfer of the suit in question to the Commercial Court, Jodhpur on 17.02.2020 is a fortuitous circumstance, which cannot be considered as a transfer of suit to the Commercial Court, as the transfer had already taken place to Commercial Court, Jaipur on 18.10.2017, when section 12A had not even seen the light of the day. 17. It is pertinent to note that by virtue of section 19 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Act, 2018 (hereinafter referred to as “the amending Act of 2018”, all the provisions of the amending Act of 2018, including section 12A which were inserted in the Act of 2015, have been made applicable to cases relating to commercial dispute filed on or after the date of commencement of the Act, i.e. 03.05.2018. 18. “Section 19 of the amendment Act of 2018 is reproduced hereunder:- “Save as otherwise provided, the provisions of this Act shall apply only to cases relating to commercial disputes filed on or after the date of commencement of this Act.” 19. Hence, the suit which stood transferred to the Commercial Court under section 15(3) on 18.10.2017 prior to 03.05.2018 will not be affected by introduction of section 12A by the amending Act of 2018. 20. Even if for a moment, it is presumed that the suit stood transferred to the Commercial Court on 17.02.2020, then also for the same reasoning, the plea raised by the appellants turns out to be misconceived. If the argument of Mr. Yadav is tested on the anvil of statutory provision, the same appears fallacious. 21. A simple reading of provisions of section 12A of the Act of 2015 and considering the reasons for which it was introduced, it cannot be said that the provisions of section 12A of the Act of 2015 would be applicable to pending suits. If that be so, after introduction of section 12A of the Act of 2015 (with effect from 03.05.2018), all suits which were pending before the Commercial Court would have to be dismissed, because the proceedings for pre-institution mediation and settlement were not undertaken.
If that be so, after introduction of section 12A of the Act of 2015 (with effect from 03.05.2018), all suits which were pending before the Commercial Court would have to be dismissed, because the proceedings for pre-institution mediation and settlement were not undertaken. Such result can neither be conceived by any legislation while promulgating the said amendment nor can any Court accept or countenance such consequence. 22. During the course of submission, Mr. Yadav relied upon the judgment of M/s. Patil Automation Private Limited and Ors. vs. Rakheja Engineers Private Limited reported in AIR 2022 SC 3848 . 23. A simple look at the factual backdrop of the case (M/s. Patil Automation Private Limited supra) makes it abundantly clear that the suit therein was laid on 12.10.2020, admittedly, after introduction of section 12A of the Act of 2015. For this solitary reason, the judgment of Hon’ble the Supreme Court is inapplicable to the facts of the present case, as has rightly been dealt with by the Commercial Court. 24. The application under Order VII Rule 11 of C.P.C. so also the appeal is misconceived, which according to us was filed simply with a view to protract the proceedings or buy time. 25. We dismiss the appeal with a cost of Rs.1,00,000/- which shall be paid by the appellants to the respondents within a period of two months from today. If the cost is not paid, it shall form part of decree and recoverable in accordance with law. The cost aforesaid being deposited/recovered, Rs.50,000/- shall be remitted to the Rajasthan State Legal Services Authority concerned and the remaining shall be paid to the respondents/plaintiffs. 26. Stay application also stands dismissed accordingly.