Courts Need Not Hold Trial In Commercial Suits If Defendant Lacks A Real Prospect of Success: Delhi HC [Read Judgment]

Delhi High Court has held that the courts need not hold trial in commercial suits, even if there are disputed questions of fact, if it comes to the conclusion that the defendant lacks a real prospect of successfully defending the claim.

Justice Manmohan reiterated that the intent behind incorporating the summary judgment procedure in the Commercial Court Act, 2015 is to ensure disposal of commercial disputes in a time-bound manner.

He also opined that Rule 3 of Order XIIIA, CPC, as applicable to commercial disputes, empowers the Court to grant a summary judgement against the defendant where the Court considers that the defendant has no real prospect of successfully defending the claim and there is no other compelling reason why the claim should not be disposed of before recording of oral evidence.

In the present suit, the Liquidator of the Petitioner company had moved an application under Order XIIIA of CPC for obtaining a summary judgement against the Respondent. The suit was filed for declaration, permanent injunction, damages and incidental reliefs.

Appearing on behalf of the Petitioner, Mr Amit Sibal had argued that the Respondent had no real prospect of defending its claim and that his defence was an abuse of the process of law.

He also submitted that the Respondent had made several admissions that the Petitioner was the rightful owner, proprietor and user of the Su-Kam Marks in respect of goods covered under Class 9 of the Trade Marks Act, 1999 and such admissions supersede any and all issues, including those disputed by him.

Due to these admissions, Sibal argued, the Respondent shall be estopped from making contradictory allegations.

Seeking a proper trial, the counsel for the Respondent, Mr Rajeev Virmani, argued that there's a need to lead oral evidence in the case as both the Trade Mark License Agreement and the Deed of Agreement of the Petitioner are questionable.

Responding to the allegation of fabrication of documents, Mr Virmani also submitted that where contentious issues of fraud and fabrication arise, a suit cannot be decided summarily and without oral evidence.

While holding that the Respondent is estopped from leading contrary evidence, the court noted that the Respondent has no real prospect of defending the allegations made by the plaintiff and there is no compelling reason for trial.

While interpreting the provision for summary judgement under the Commercial Courts Act, the court opined that the expression 'real' directs the Court to examine whether there is a 'realistic' as opposed to 'fanciful' prospects of success. The court also referred to a similar provision in the civil procedure rules of Ontario, Canada.

Finally, the court also went on to opine that Order XIIIA, CPC would be attracted if the Court, while hearing such an application, can make the necessary findings of fact, apply the law to the facts and the same is a proportionate, more expeditious and less expensive means of achieving a fair and just result.  

Click Here To Download Judgment

[Read Judgment]