The bench of
Justices M. R. Shah and B. V. Nagarathna was hearing the matter where the Court had in May
issued certain directions to tackle the problem of delay in deciding the matters related to commercial disputes in the state of UP. The direction was issued after being apprised of the burgeoning pendency in the execution proceedings of arbitral awards and applications to set aside award under Section 34 of the Arbitration and Conciliation Act, 1996, in the state of UP. The bench had
earlier expressed its displeasure at huge pendency of cases filed under two statutes i.e. the Arbitration and Conciliation Act, 1996 and the Commercial Courts Act, 2015 which envisages the speedy disposal of cases.
The bench on Wednesday noted that according to the counsel for the High Court, the cases which are filed under the Arbitration Act prior to the establishment of the Commercial Courts Act are not transferred to the Commercial Courts and the jurisdiction is continued with the regular courts.
"Prima facie not transferring the pending arbitration matters/commercial cases to the concerned Commercial Courts can be said to be contrary to Section 15 of the Commercial Courts Act. Section 15 of the Commercial Courts Act deals with respect to transfer of pending cases, which reads as under:- '15. Transfer of pending cases...'", observed the bench, saying that let the High Court look into the same and respond on the aforesaid.
Further,
on Tuesday, Ms. Garima Prasad, Senior Advocate/AAG appearing on behalf of the state of UP placed on record Notification of 21.07.2022 issued by the government of UP, by which the government has constituted four additional commercial courts in UP at Meerut, Gautam Buddha Nagar, Agra and Lucknow. The bench had on Tuesday noted that however, from the Notification it appears that those four additional commercial courts would have jurisdiction over different Districts and that the aforesaid is likely to create more problems and delay in disposal of the commercial cases- For example, if the additional commercial court at Meerut would have jurisdiction over six different Districts, in that case the litigants in other Districts may have to go to Meerut even those districts may not have a large pendency.
"There may be a justification for additional commercial courts at Meerut, Gautam Buddha Nagar, Agra and Lucknow, as the case may be, but there may not be any justification for additional commercial courts in other Districts where the pendency of the commercial courts may be less than 750/1000. Ms. Garima Prasad, learned Senior Advocate has submitted that the notification has been issued pursuant to the proposal made by the High Court. Mr. Nikhil Goel learned counsel appearing on behalf of the High Court has submitted that the High court might not have made the proposal to have four additional commercial courts having jurisdiction over different Districts. Ms Garima Prasad, learned Senior Advocate also prays for time to look into the Notification and, if required, to take a corrective measure", the bench had recorded on Tuesday.
When the matter was taken up on Wednesday, the bench noted that it is pointed out by Ms. Prasad that 4 Additional Commercial Courts are established having jurisdiction over respective Districts as per the original Notification of 31.10.2017.
"Learned counsel appearing on behalf of the High Court and even the Registrar General, who is present in the Court, is not in a position to point out as to how many commercial cases are pending in the Commercial Courts at Meerut, Gautam Buddha Nagar, Agra and Lucknow and the respective Districts over which the aforesaid Commercial Courts, namely, Meerut, Gautam Buddha Nagar, Agra and Lucknow have jurisdiction", recorded the bench on Wednesday.
The bench then directed the Registrar General of the High Court to file the specific affidavit pointing out the pendency of commercial cases/arbitration cases either by way of execution petitions or Section 34 of the Arbitration Act under Act, 1940 or under the 1996 Act in the respective Commercial Courts originally constituted, more particularly, the pendency in the Commercial Courts at Meerut, Gautam Buddha Nagar, Agra and Lucknow and the concerned Districts over which the aforesaid 4 Commercial Courts would have jurisdiction.
In May, 2022, the Supreme Court had directed the UP state government to consider the proposal made by the Allahabad High Court to create additional commercial courts in four districts and take a final decision within a period of four weeks. In
July, the Allahabad High Court filed an affidavit and reported that approximately 40,000 Execution Petitions are pending in the State of UP, that now the execution petitions are distributed among the Judicial Officers and a judicial officer would have an average of 47 such cases before himself or herself, apart from judicial work, that between 01.05.2022 and 04.07.2022, 9678 Execution Petitions and 1373 Petitions under Section 34 of the Arbitration Act have been disposed of, and that the cases are transferred to the Additional District Judges in terms of Civil Laws (U.P. Amendment Act) 2019 and the distribution of the work has taken place in the month of May, 2022 itself. The bench comprising Justices Shah and Nagarathna had directed the High Court to submit a further status report and the progress in disposal of the matters relating to the commercial disputes.
