Commercial Courts Amendment Bill Passed By Lok Sabha Reduces Pecuniary Jurisdiction to Rs 3 Lakhs [Read Bill]

The Commercial Courts(Amendment) Bill 2018 passed by the Lok Sabha on August 1  seeks to lower the pecuniary jurisdiction of Commercial Courts from Rs 1 Crore to Rs 3 lakhs.

This is sought to be done through amendment to Section 2(j) of the Act which defines "specified value". As per Section 6, Commercial Courts can try suits relating to commercial transactions having the "specified value".  The amendment will widen the scope of Commercial Courts, by bringing in more commercial disputes within its fold.

The Bill also seeks to amend the name of the principal Act as "Commercial Courts Act" from "Commercial Courts, Commercial Divisions and Commercial Appellate Division of High Courts Act".

Another change proposed by the Bill is that it enables the State Government to set up Commercial Courts at or below the level of District Judges in consultation with the High Court, through amendment to Section 3(3). The Bill further enables the State Government to notify Commercial Appellate Courts at District Judge level in territories where High Courts do not exercise original civil jurisdiction, by insertion of Sec.3A. As per the scheme proposed in the Bill by amendments to Section 13, appeals from Commercial Courts below the level of District Judge will lie to Commercial Appellate Courts at the District Judge level, and the appeals from Commercial Courts at District Judge level will lie to Commercial Appellate Division of the High Court.

Section 9 of the principal act, which mandated transfer of a pending suit involving commercial dispute of specified value from a Civil Court to Commercial Court, is proposed to be omitted by the Bill.

The Bill also proposes inclusion of a special chapter, Chapter IIIA, to lay down procedure for pre-institution mediation and settlement of commercial disputes. All disputes, which do not contemplate urgent interim relief, have to compulsarily undergo this mediation process. Suit cannot be instituted without exhaustion of mediation process.  It is made clear in the Bill that the changes will apply only to cases filed on or after the commencement of the amendment Act.

The Bill was introduced by Union Minister for Law and Justice Ravi Shanker Prasad, who said that it was aimed at increasing the ease of doing business. The Bill replaces the Ordinance brought on May 3.