Case title:
Satyanarain Khandelwal Vs Prem Arora
Date of Order:
18/07/2022
Bench:
Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad
Parties:
SATYANARAIN KHANDELWAL – Petitioner
PREM ARORA – Respondent
SUBJECT
The Commercial Courts (Amendment) Act, 2018, cannot be applied retroactively, according to the Delhi High Court. A division bench composed of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad expressly held that section 19 of the 2018 Amending Act, which emphasizes that its regulations will pertain to cases relating to commercial disputes filed on or around the date of the Act's commencement, or May 3, 2018, cannot be said to be unclear or ambiguous.
FACTS
- In accordance with Section 15(5) of the Commercial Courts Act, 2015, these six petitions had been submitted to transfer Civil Suit No.574/2017, Prem Arora & Associates v. Satyanarayan Khandelwal, which is currently being heard by the Additional District Judge at Patiala House Courts in New Delhi, to the designated Commercial Court.
- The Respondent executed a gift deed in favour of the petitioner even before he actually came into the custody of the said property, the former went on to extract money from the petitioner reassuring him at each stage that he is virtually the owner of the property.
- Subsequently, Respondents No. 1 and 2 filed lawsuits against the Petitioners, in this case, seeking control of the shops on the suit property as well as money owed in rent arrears and mesne profits. A suit requesting specific performance and permanent prohibitory injunction was filed by the petitioner against the respondent.
- The petitioners have now come before this court and filed the current petitions, asking that the civil cases currently being heard by the Additional District Judge at the Patiala House Courts in New Delhi be transferred to the designated Commercial Court on the grounds that they are business-related and concern "commercial disputes" as defined by the 2015 Act.
ISSUE
- Wheatear the Commercial Courts (Amendment) Act, 2018 would be applied retrospectively to the current situation.
ARGUMENTS ADVANCED BY THE PETITIONER
- In accordance with this Act, the stipulated value of such things was set at Rs. 1 crore, and as a result, any matter with a value of Rs. 1 crore or more had to be considered by a designated Commercial Court, as submitted under the directions of the petitioner's attorney.
- According to him, cases involving problems of the stipulated amount that were ongoing before any Civil Court in any District or area would be moved to a Commercial Court in accordance with Section 15(5) of the 2015 Act.
ARGUMENTS ADVANCED BY THE RESPONDENT
- According to the learned counsel appearing for the respondent, the Amending Act expressly stipulates that it only applies to commercial dispute cases that have been filed on or after the date of its beginning, or 03.05.2018, in order to be effective.
- He asserts that the Supreme Court has often reaffirmed that when a statute's terms are straightforward and explicit, courts must give them their ordinary meaning and must not ascribe their own interpretation that would be at odds with what the Parliament intended.
JUDGMENT
- The Court took notice of a fundamental tenet of law that being statutes must have a prospective effect because their retroactive application would undermine and intrude upon existing contractual and interpersonal relationships created by the law as it is currently in force by threatening to disturb issues that have already been resolved.
- The court observed that a strong assumption exists that the law is prospective in application, unless explicitly rendered retrospective, in order to guarantee that statutes that are being newly issued do not disturb such previously settled subjects.
- It was also stated that the words of a statute must, at a minimum, be accorded their ordinary meaning and that when those words are obvious, plain, and unambiguous, the courts must give effect to that understanding, regardless of the results.
- Bypassing language in a statute and substituting the legislature's meaning instead goes against sound construction principles. It is a well-established principle that judges must abstain from legislating and keep in mind that there is a narrow line between adjudication from legislation, the court stated,
- The Court further pointed out that section 19 of the Amending Act's prefix "save as otherwise provided" is intended to be read as an exception. It stated that the Saving Clause's goal was to protect some pre-existing rights, remedies, and privileges from being eliminated.
- The court held that this clause does not grant any new rights; rather, it preserves all existing rights. As a result, the Petitioners cannot rely on the Saving Clause in Section 19 of the Amending Act to claim that Section 15 of the 2015 Act is affected retroactively by the Amending Act and that the Commercial Courts Act, 2015 will apply to the disputes involving the lowered specified value of Rs. 3 lakhs that are currently pending before the District Courts.
- The court reasoned that if the Amending Act is interpreted to be retrospective in character, the parties who previously filed their lawsuits in regular Civil Courts prior to the Amending Act's enforcement will lose some of their substantive rights.
- Holding it differently may cause administrative and practical issues, which cannot be stated to have been the Legislature's objective when it promulgated the aforementioned Amending Act. Nothing would have prohibited the Legislature from clearly stating that the Amending Act is retrospective if that were the Legislature's intention.
CONCLUSION
The Court ruled that the Amending Act would not apply retroactively in light of the aforementioned observations, and as a result, the Bench was not inclined to transfer the civil lawsuits currently being heard by the Additional District Judge at Patiala House Courts in New Delhi to the designated Commercial Court. Thus, the pleas were rejected.
Learn the practical aspects of CrPC HERE, CPC HERE, IPC HERE, Evidence Act HERE, Family Laws HERE, DV Act HERE
Click here to download the original copy of the judgement
