1. Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015, as amended (in short ‘CCA’) has been enacted with the object to have a streamlined procedure which is to be adopted for the conduct of cases in the Commercial Courts and in the Commercial Divisions by amending the Code of Civil Procedure, 1908, so as to improve the efficiency and reduce delays in disposal of commercial cases. The proposed case management system and provisions for summary judgment will enable disposal of commercial disputes in a time bound manner.
2. As per Section 16 of CCA, certain provisions of CPC stand amended in the manner specified in the Schedule to the Act, with respect to their application to any suit in respect of a commercial dispute of a specified value, and the same shall be followed by the Commercial Division and Commercial Court in the trial of a suit in respect of a commercial dispute of a specified value.
Order XIII–A has been incorporated in CPC only for purposes of adjudication of commercial suit under the said Act in terms of the Schedule referable to Section 16. The said Order reads as under:
“1. Scope of and classes of suits to which this Order applies.– (1) This Order sets out the procedure by which Courts may decide a claim pertaining to any commercial dispute without recording oral evidence.
(2) For the purposes of this Order, the word “claim” shall include-
(a) part of a claim;
(b) any particular question on which the claim (whether in whole or in part) depends; or
(c) a counterclaim, as the case may be.
(3) Notwithstanding anything to the contrary, an application for summary judgment under this Order shall not be made in a suit in respect of any commercial dispute that is originally filed as a summary suit under Order XXXVII.
2. Stage for application for summary judgment.- An applicant may apply for summary judgment at any time after summons has been served on the defendant:
Provided that, no application for summary judgment may be made by such applicant after the Court has framed the issues in respect of the suit.
3. Grounds for summary judgment.– The Court may give a summary judgment against a plaintiff or defendant on a claim if it considers that–
- the plaintiff has no real prospect of succeeding on the claim or the defendant has no real prospect of successfully defending the claim, as the case may be; and
- there is no other compelling reason why the claim should not be disposed of before recording of oral evidence.
4. Procedure.- (1) An application for summary judgment to a Court shall, in addition to any other matters the applicant may deem relevant, include the matters set forth in sub-clauses (a) to (f) mentioned hereunder:
(a) the application must contain a statement that it is an application for summary judgment made under this Order;
(b) the application must precisely disclose all material facts and identify the point of law, if any;
- in the event the applicant seeks to rely upon any documentary evidence, the applicant must, –
(i) include such documentary evidence in its application, and
(ii) identify the relevant content of such documentary evidence on which the applicant relies;
(d) the application must state the reason why there are no real prospects of succeeding on the claim or defending the claim, as the case may be;
(e) the application must state what relief the applicant is seeking and briefly state the grounds for seeking such relief.
(2) Where a hearing for summary judgment is fixed, the respondent must be given at least thirty days’notice of:
(a) the date fixed for the hearing; and
(b) the claim that is proposed to be decided by the Court at such hearing.
(3) The respondent may, within thirty days of the receipt of notice of application of summary judgment or notice of hearing (whichever is earlier), file a reply addressing the matters set forth in clauses (a) to (f) mentioned hereunder in addition to any other matters that the respondent may deem relevant:
(a) the reply must precisely––
(i) disclose all material facts;
(ii) identify the point of law, if any; and
(iii) state the reasons why the relief sought by the applicant should not be granted;
(b) in the event the respondent seeks to rely upon any documentary evidence in its reply, the respondent must—
(i) include such documentary evidence in its reply; and
(ii) identify the relevant content of such documentary evidence on which the respondent relies;
(c) the reply must state the reason why there are real prospects of succeeding on the claim or defending the claim, as the case may be;
(d) the reply must concisely state the issues that should be framed for trial;
(e) the reply must identify what further evidence shall be brought on record at trial that could not be brought on record at the stage of summary judgment; and
(f) the reply must state why, in light of the evidence or material on record if any, the Court should not proceed to summary judgment.
5.Evidence for hearing of summary judgment.–(1) Notwithstanding anything in this Order, if the respondent in an application for summary judgment wishes to rely on additional documentary evidence during the hearing, the respondent must:
(a) file such documentary evidence; and
(b) serve copies of such documentary evidence on every other party to the application at least fifteen days prior to the date of the hearing.
(2) Notwithstanding anything in this Order, if the applicant for summary judgment wishes to rely on documentary evidence in reply to the defendant’s documentary evidence, the applicant must:
(a) file such documentary evidence in reply; and
(b) serve a copy of such documentary evidence on the respondent at least five days prior to the date of the hearing.
(3) Notwithstanding anything to the contrary, sub-rules (1) and (2) shall not require documentary evidence to be:
(a) filed if such documentary evidence has already been filed; or
(b) served on a party on whom it has already been served.
6. Orders that may be made by Court. – (1) On an application made under this Order, the Court may make such orders that it may deem fit in its discretion including the following:
(a) judgment on the claim;
(b)conditional order in accordance with Rule 7 mentioned hereunder;
(c) dismissing the application;
(d) dismissing part of the claim and a judgment on part of the claim that is not dismissed;
(e) striking out the pleadings (whether in whole or in part); or
(f) further directions to proceed for case management under Order XV-A.
(2) Where the Court makes any of the orders as set forth in sub-rule (1)(a) to (f), the Court shall record its reasons for making such order.
7. Conditional order.– (1) Where it appears to the Court that it is possible that a claim or defence may succeed but it is improbable that it shall do so, the Court may make a conditional order as set forth in Rule 6(1)(b).
(2) Where the Court makes a conditional order, it may:
(a) make it subject to all or any of the following conditions:
(i) require a party to deposit a sum of money in the Court;
(ii) require a party to take a specified step in relation to the claim or defence, as the case may be;
(iii) require a party, as the case may be, to give such security or provide such surety for restitution of costs as the Court deems fit and proper;
(iv) impose such other conditions, including providing security for restitution of losses that any party is likely to suffer during the pendency of the suit, as the Court may deem fit in its discretion; and
(b) specify the consequences of the failure to comply with the conditional order, including passing a judgment against the party that have not complied with the conditional order.
8. Power to impose costs. – The Court may make an order for payment of costs in an application for summary judgment in accordance with the provisions of Sections 35 and 35-A of the Code.’
7. Insertion of Order XV-A – 7. After Order XV of the Code, the following Order shall be inserted, namely:
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6. Powers of the Court in a Case Management Hearing. – (1) In any Case Management Hearing held under this Order, the Court shall have the power to-
(a) prior to the framing of issues, hear and decide any pending application filed by the parties under Order XIII-A;
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3. It may be noted here itself that the provisions of Order XIII – A CPC are para materia to Rule 24.2 of the Civil Procedure Rules in England.
4. Emphasising the scope of Order XIII – A CPC, the Delhi High Court in the judgment of Bright Enterprises Private Limited MJ Bizcraft LLP, held as under:
“21…Rule 3 of Order XIII-A CPC empowers the Court to give a summary judgment against a plaintiff or defendant on a claim if it considers that – (a) the plaintiff has no real prospect of succeeding on the claim or the defendant has no real prospect of successfully defending the claim, as the case may be; and (b) there is no other compelling reason why the claim should not be disposed of before recording of oral evidence…”
5. In the judgment of Rockwool International A/S v. Thermocare Rockwool (India) Pvt. Ltd., the Delhi High Court observed the following requisites for passing a summary judgment:
- There is no real prospect of a party succeeding in a claim;
- No oral evidence would be required to adjudicate the matter;
- There is a compelling reason for allowing or disallowing the claim without oral evidence.
6. The scope of Summary Judgment has also been explained by the Delhi High Court in the judgment of R. Impex v. Punj Lloyd Ltd., as under:
“18….but vide the said Act, Order XIII-A titled “Summary Judgment” has been incorporated in CPC insofar as applicable to commercial suits and Rule 2 whereof, while prescribing the stage for making application for summary judgment, provides that the same be filed at any time after the summons have been served on the defendant but not after the court has framed the issues in respect of the suit. Rule 3 of Order XIII-A, while prescribing the grounds for summary judgment, empowers the Court to give summary judgment against a plaintiff or defendant on a claim, if it considers inter alia that the plaintiff has no real prospect of succeeding on the claim or the defendant has no real prospect of successfully defending the claim, as the case may be and there is no other compelling reason why the claim should not be disposed before recording of oral evidence. Rule 4 prescribes the procedure for making summary judgment.
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27. The purpose of the proviso to Rule 2 of Order XIII-A is to discourage filing of applications for summary judgment after issues have been framed, thereby delaying trial and to empower the Court to, if finding the same to be dilatory, dismiss the same in limine.
28. The objective of the Commercial Courts Act even otherwise is to expedite the disposal of the commercial suits and none of the provisions thereof can be interpreted as counterproductive to the said objective of the Commercial Courts Act and it would delay rather than expedite the disposal of commercial suits, if inspite of finding a suit to be befitting of summary judgment, the Court considers itself constrained merely on account of issues having been framed.”
7. The scope of Summary Judgment as also the object of CCA was re-emphasised by the Delhi High Court in Mallcom (India) Limited Rakesh Kumar.
8. The above principle has been reiterated in the matter of Jindal Saw Limited Aperam Stainless Services and Solutions Precision SAS, wherein the Delhi High Court have explained the scope of Order XIII-A CPC. The relevant text of the judgment is reproduced below:
“22. Order XIII-A CPC, as made applicable to commercial suits within the meaning of the Commercial Courts Act, is titled “Summary Judgment”. Rule 2 thereof provides, that an application for summary judgment may be made at any time after summons have been served on the defendant, till the framing of issues. Rule 3 is as under:
“3. Grounds for summary judgment.–…………….
(a) the plaintiff has no real prospect of succeeding on the claim or the defendant has no real prospect of successfully defending the claim, as the case may be; and
(b) there is no other compelling reason why the claim should not be disposed of before recording of oral evidence.”
- Rule 4 thereof providing the procedure for applying for a summary judgment inter alia requires the applicant to state the reason why there are no real prospects of succeeding on the claim or defending the claim and requires notice of the said application to be given to the opposite party of 30 days, and the reply to such application to precisely identify the points of law if any and the reasons why the relief of summary judgment should not be granted and why there are real prospects of succeeding on the claim or defending the claim and to state the issues to be framed for trial and what evidence is to be lead thereon and permits additional documentary evidence to be filed with such reply.”
10. Comparing the scope of Order XII Rule 6 CPC and Order XIII–A CPC, the Delhi High Court in its judgment Venezia Mobili (India) Pvt. Ltd. v. Ramprastha Promoters and Developers Pvt. Ltd., observed as under:
“36…broadly speaking, the basis for seeking summary judgment as well as judgment on admission is the same i.e. that there is no triable issue which arises for consideration, there are reasons for allowing the claim without oral evidence and the defence raised by the defendants is a moonshine and a sham.”
11. Re-emphasising the legislative intent in incorporating Order XIII–A CPC, the Delhi High Court in Su-Kam Power Systems Ltd. v. Kunwer Sachdev, observed as:
“49. Consequently, this Court is of the view that when a summary judgment application allows the Court to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective. It bears reiteration that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the Court the confidence that it can find the necessary facts and apply the relevant legal principles so as to resolve the dispute as held in Robert Hryniak (supra).
50. In fact, the legislative intent behind introducing summary judgment under Order XIII-A CPC is to provide a remedy independent, separate and distinct from judgment on admissions and summary judgment under Order XXXVII CPC.
51. This Court clarifies that in its earlier judgment in Venezia Mobili (India) Pvt. Ltd. v. Ramprastha Promoters & Developers Pvt. Ltd., while deciding two applications, both filed by the plaintiff in the said case (one under Order XII Rule 6 and other under Order XIII-A) it had applied the lowest common denominator test under both the provisions of the Code of Civil Procedure and held that the suit could be decreed by way of a summary judgment.
52. Consequently, this Court is of the opinion that there will be ‘no real prospect of successfully defending the claim’ when the Court is able to reach a fair and just determination on the merits of the application for summary judgment. This will be the case when the process allows the court to make the necessary finding of fact, apply the law to the facts, and the same is a proportionate, more expeditious and less expensive means to achieve a fair and just result…”
It is thus clear that Order XIII–A CPC confers much wider powers upon the Commercial Courts for a speedy and expeditious disposal of Commercial Suits than under Order XII Rule 6 CPC which, as held above, is a test of lowest denominator for the purposes of Order XIII–A CPC.
12. In exercise of powers conferred by Section 129 CPC, the Delhi High Court has framed the Delhi High Court (Original Side) Rules, 2018. Chapter X-A of the said Rules under the heading Case Management, and more particularly relating to Summary Judgment provides as under:
“1. Summary Judgment.- At the time of Case Management hearing, a Court, may of its own, decide a claim pertaining to any dispute, by a summary judgment, without recording oral evidence.”
13. It is trite law that in case of conflict between the provisions of CPC and Original Side Rules, the latter would prevail and override the former. [Refer HTIL Corporation B.V. v. Ajay Kohli; Iridium India Telecom Ltd. v. Motorola Inc. and Print Pak Machinery Ltd. v. Jay Kay Papers Converters.]
14. Though Order XIII–A CPC, as applicable to CCA, provides for presentation of a formal application as also the outer time-limit for moving such an application, however, not only in view of the Original Side Rules of the Delhi High Court to the contrary but also interpreting the provisions of Order XIII–A CPC by the Delhi High Court on the touchstone of Doctrine of Purposive Legislation, while interpreting the same, held that an application is not essential to seek summary judgment and the Court, on its own or on the asking of either party, at any point of time, even after settlement of issues, is entitled to see/adjudicate as to whether a case for summary judgment is made out. [See R. Impex (supra), Mallcom (India) Limited (supra) and Jindal Saw Limited (supra]).