1. By way of this writ petition (PIL), the petitioner Rajasthan High Court Advocates Association, Jodhpur, has questioned legality of the notification
dated 13.10.17 issued by the Department of Law & Legal Affairs, Government of Rajasthan in exercise of the power conferred by sub-section (1) &
(2) of Section 3 of Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (for short “the Actâ€),
whereby the earlier notification dated 20.4.16 issued regarding establishment of Commercial Courts (District Level) at each district, has been
withdrawn. It is prayed that the respondents be directed to constitute appropriate number of Commercial Courts in terms of Section 3 of the Act and
provide necessary infrastructure and facilities for the Commercial Courts so constituted and comply with the requirement of Section 19 of the Act.
2. The Parliament enacted the Act to provide for the constitution of the Commercial Court, Commercial Division and Commercial Appellate Division
in High Courts for adjudicating commercial disputes of specified value and matters connected therewith and incidental thereto. The object behind the
enactment of the Act is that high value commercial disputes which involve complex facts and question of law require an independent mechanism for
their early resolution. It is expected that the Act shall accelerate economic growth, improve the international image of the Indian justice delivery
system and the fate of the investor world in legal culture of the nation.
3. Vide Commercial Courts, Commercial Division And Commercial Appellate Division of High Courts (Amendment) Act, 2018 (for short “the
Amendment Actâ€), the Act was amended and while creating one more court in the hierarchy of the courts i.e. Commercial Appellate Court, the
words ‘Commercial Appellate Court’ has been added in the title of the Act, after the words ‘Commercial Court’. At the same time, by
way of amendment of Section 1 (1) of the Act, the Act has been titled as “The Commercial Courts Act, 2015â€.
4. By the Amendment Act, Section 3 has also been amended. The provisions of Section 3 providing for constitution of Commercial Courts, as
originally enacted read as under :
“Constitution of Commercial Courts.-(1) The State Government, may after consultation with the concerned High Court, by notification, constitute
such number of Commercial Courts at District level, as it may deem necessary for the purpose of exercising the jurisdiction and powers conferred on
those Courts under this Act:
Provided that no Commercial Court shall be constituted for the territory over which the High Court has ordinary original civil jurisdiction.
(2) The State Government shall, after consultation, with the concerned High Court specify, by notification, the local limits of the area to which the
jurisdiction of a Commercial Court shall extend and may, from time to time, increase, reduce or alter such limits.
(3) The State Government shall, with the concurrence of the Chief Justice of the High Court appoint one or more persons having experience in dealing
with commercial disputes to be the Judge or Judges, of a Commercial Court, from amongst the cadre of Higher Judicial Service in the State.â€
5. Section 3 as amended vide Amendment Act, reads as under:
“3. Constitution of Commercial Courts.-(1) The State Government, may after consultation with the concerned High Court, by notification, constitute
such number of Commercial Courts at District level, as it may deem necessary for the purpose of exercising the jurisdiction and powers conferred on
those Courts under this Act:
Provided that with respect to the High Courts having ordinary original civil jurisdiction, the State Government may, after consultation with the
concerned High Court by notification, constitute Commercial Courts at the District Judge level;
Provided further that with respect to a territory over which the High Courts have ordinary original civil jurisdiction, the State Government may, by
notification, specify such pecuniary value which shall not be less than three lakh rupees and not more than the pecuniary jurisdiction exercisable by the
District Courts, as it may consider necessary.
(1A) Notwithstanding anything contained in this Act, the State Government may, after consultation with the concerned High Court, by notification,
specify such pecuniary value which shall not be less than three lakh rupees or such higher value, for whole or part of the State, as it may consider
necessary.
(2) The State Government shall, after consultation, with the concerned High Court specify, by notification, the local limits of the area to which the
jurisdiction of a Commercial Court shall extend and may, from time to time, increase, reduce or alter such limits.
(3) The State Government may, with the concurrence of the Chief Justice of the High Court appoint one or more persons having experience in dealing
with commercial disputes to be the Judge or Judges, of a Commercial Court either at the level of District Judge or a court below the level of a District
Judge.
(3A) Except the territories over which the High Courts have ordinary original civil jurisdiction, the State Government may, after consultation with the
concerned High Court, by notification, designate such number of Commercial Appellate Courts at District Judge level, as it may deem necessary, for
the purposes of exercising the jurisdiction and powers conferred on those Courts under this Act.â€
(Highlighted portion is added/substituted by way of amendment)
6. After the enactment of the Act, in the first instance, vide notification dated 20.4.16 issued by the Law & Legal Affairs Department, Commercial
Courts were constituted in the State of Rajasthan in each district for the local limit of the Judgeship concerned and the Judicial Officers of the DJ
Cadre were appointed as Presiding Officers of the Courts. However, after collecting the information regarding pending commercial disputes from all
the districts and after consideration of the relevant aspects including that the Capital city Jaipur is well connected by air with Delhi, Mumbai, Pune,
Kolkota, Hyderabad, Nagpur, Bengaluru and most of the commercial transactions are carried out with firms and companies situated in such cities, the
proposal was submitted by the State Government for consultation to the High Court for constituting one Commercial Court (District Level) at Jaipur.
With the concurrence of the High Court, vide notification dated 13.10.17, the earlier notification dated 20.4.16 constituting 35 Commercial Courts (one
in each Judgeship) was withdrawn and one Commercial Court (District Level) with its headquarter at Jaipur, having jurisdiction over the whole area of
the State of Rajasthan, was constituted. Keeping in view the provisions of Section 6 of the Act dealing with jurisdiction of the Commercial Court and
the definition of ‘specified value’ contained in Section 2 (f) (i), the commercial disputes as defined under Section 2 (1)(c), the subject matter
whereof was not less than Rs. 1 crore, were transferred from all District Judgeships to the Commercial Court established at Jaipur.
7. During the pendency of the petition, Section 2 (f)(i) of the Act has also been amended by Amendment Act and the words ‘one crore rupees’
has been substituted by ‘three lakh rupees’ and thus, now all the matters wherein the value of the subject matter of commercial dispute as
determined in accordance with Section 12, is not less than three lakhs, the Commercial Court, if any constituted by the State Government as per the
provisions of Section 3, shall have the jurisdiction. Further, as per sub-section (3) of Section 3, as amended vide Amendment Act, the State
Government is empowered to constitute the Commercial Court either at the level of District Judge or a court below the level of the District Judge.
That apart, by virtue of sub-section (3A) inserted by Amendment Act, the State Government is empowered to create such number of Commercial
Appellate Courts at the District Judge level as it may be necessary for the purpose of exercising the jurisdictions and powers conferred on those
courts under the Act.
8. After coming into force of the Amendment Act, the State Government vide notification dated 8.8.18, in partial modification of earlier notification
dated 13.10.17 impugned in the present writ petition, in consultation with the High Court, have constituted seven Commercial Courts in addition to the
one Commercial Court already established at Jaipur; one Commercial Court each has been constituted at Ajmer, Jodhpur, Kota and Udaipur and three
more Commercial Courts have been constituted at Jaipur. The Commercial Courts established at Ajmer, Kota and Udaipur have been vested with the
jurisdiction in respect of the commercial disputes arising from the districts falling in Ajmer, Kota and Udaipur Division respectively, whereas
Commercial Court, Jodhpur has been vested with jurisdiction in respect of all commercial disputes arising from Jodhpur Division and Bikaner Division.
9. Precisely, the grievance of the petitioner is that the minimum specified value of the subject matter having been reduced from one crore to five lakhs,
the pendency of the commercial disputes in each district of the State of Rajasthan to the Commercial Courts constituted having been tremendously
increased, it is absolutely necessary to constitute the Commercial Court in each district. According to the learned counsel for the petitioner, though the
courts have been constituted and the Presiding Officers have been appointed, the cases pending in various courts including the Commercial Court at
Jaipur are not being transferred to the respective Commercial Courts and thus, the proceedings in the suits pending are being unnecessarily delayed.
Learned counsel submitted that despite constitution of the Commercial Courts, the same have not become functional on account of non availability of
the suitable buildings and requisite infrastructure facilities necessary for working of a Commercial Court. Learned counsel submitted that appropriate
directions deserve to be issued to the State Government to provide the buildings for the establishment of the Commercial Courts and the requisite
funds for infrastructure facilities. It is submitted that the Commercial Court initially constituted at Jaipur and all the subordinate courts should be
directed to transfer all the commercial disputes cognizable by the Commercial Court to the respective Commercial Courts forthwith. Learned counsel
submitted that the State must be directed to allot the appropriate land for the construction of the building of the Commercial Court where the suitable
space is not available for establishment of the Commercial Court in the existing Court Complex of the District Judgeship concerned.
10. By way of compliance report dated 18.9.18, the State Government has taken the stand that the District Collectors of Jaipur, Kota, Jodhpur, Ajmer
and Udaipur have been directed for immediately providing Government building and on non availability of Government building, to provide the building
on rent, for newly constituted Commercial Courts. It is submitted that the District Collector has also been directed to earmark the land for the
construction of the building of Commercial Courts at the various places. In this regard, the communication dated 14.9.18 issued by the State
Government to the District Collectors concerned is also placed on record.
11. Learned AAG submitted that three newly created Commercial Courts at Jaipur, for the present, shall be established in the building of Department
of Forest wherein, one Commercial Court already constituted, is functioning. For establishing the Commercial Court at Jodhpur, it is submitted that the
requisite accommodation shall be available in Rural Treasury Building, which is presently occupied by Officers Training School (OTS). It is submitted
that construction of the new building of OTS is at the verge of completion but on account of ensuing elections of the State Assembly, since Model
Code of Conduct has been made operative, the Department is not in position to issue tender for remaining work. It is submitted that at present, OTS is
occupying the space in the building of Rural Treasury on the ground floor as well as on first floor and after shifting of the OTS to the new building, the
Department of Registration which is occupying the building in the Rural Treasury on the first floor may be shifted to the ground floor and the first floor
may be made available for establishing the Commercial Court. It is submitted that no other suitable space is available within the Court Complex or in
the Collectorate Premises. Learned AAG fairly submitted that the requisite funds for the infrastructure facilities shall be made available by the State
Government on the proposal being sent by the High Court. It is submitted that the matter regarding transfer of the cases is to be dealt with by the High
Court and the State Government has already made request in this regard to the Registrar General of the High Court.
12. Dr. Sachin Acharya, learned counsel appearing for the High Court submitted that the instructions have already been issued by the Registrar
General of the High Court to the Commercial Court, Jaipur and the District Judges concerned to transfer all the commercial disputes cognizable by the
Commercial Court to the Commercial Courts already constituted forthwith. It is submitted that it is not possible to give the actual figure of the
pendency of the commercial disputes in the various Commercial Courts constituted by the State Government till such matters pending in various courts
are transferred to the Commercial Courts. Learned counsel submitted that for the present, the Commercial Courts at Udaipur and Kota are being
established in the existing Court Complex and in Ajmer, for the time being, the Commercial Court shall be established in the building of Rent Appellate
Tribunal, which is presently lying vacant on account of non availability of the Presiding Officer. It is submitted that no space is available in the existing
Court Complex of the Jodhpur Metropolitan for establishing the Commercial Court. Learned counsel submitted that State has to provide the land and
the funds for separate Complexes of Commercial Courts with the requisite infrastructure. It is submitted that the High Court has already initiated the
proceedings for preparing the map for Model Commercial Court and after the allotment of the land, the proposal for required budgetary allocation shall
be sent to the State Government. It is submitted that the funds required for requisite infrastructure facilities for the Commercial Courts, which are
being temporarily established in various buildings shall be sent by the High Court to the State Government with the utmost expedition.
13. On 27.9.18, this court was apprised that so far as Jodhpur is concerned, there is availability of the appropriate accommodation with the Central
Administrative Tribunal, which is presently functioning only for a fix days in the month and therefore, till the proper infrastructure facilities are
developed by the State Government, the accommodation available with the Central Administrative Tribunal, Jodhpur may be provided for operating the
Commercial Court.
14. Mr. Sanjeet Purohit, Additional Solicitor General submitted that the order dated 27.9.18 passed by this court regarding making accommodation
available for establishment of the Commercial Court in the premises of the Central Administrative Tribunal, Jodhpur was sent to the Chairperson of
the Central Administrative Tribunal, however, the Chairperson of the Central Administrative Tribunal has expressed his inability to make the
accommodation available.
15. Undoubtedly, to achieve the laudable object behind the legislation providing for establishment of the Commercial Courts, for speedy and efficacious
resolution of the commercial disputes, it is absolutely necessary to provide separate complexes for Model Commercial Courts together with the
requisite infrastructure. It is noticed that in the joint conference of Chief Ministers and Chief Justices of the various States, it was resolved that the
Union Government shall in consultation with Chief Justice of India constitute a High Powered Committee for formulating national para meters for the
design, construction, setting up and operationalizing of Model Commercial Courts. There is nothing brought on record suggesting that the appropriate
steps in this regard have been taken by the State Government. In any case, the Commercial Courts having already been constituted, till the appropriate
complexes for Commercial Courts with the requisite infrastructure are developed, the State Government is under an obligation to provide the suitable
space with the infrastructure facilities for the working of the Commercial Courts already constituted. The matters cognizable by the Commercial
Courts, pending in various courts of the respective Judgeships, need to be transferred to the Commercial Courts constituted with utmost expedition.
Thus, taking into consideration the rival submissions, we issue following interim directions to the respondents:-
(i) The Registrar General, Rajasthan High Court shall ensure that all the commercial disputes pending in various courts of the State of Rajasthan
including the Commercial Court No.1, Jaipur, in respect whereof the jurisdiction stands vested in the various Commercial Courts constituted by the
State Government vide notification dated 8.8.18, are transferred to the respective Commercial Courts expeditiously, in any case, within a period of two
weeks.
(ii) The District Collector/State Government in consultation with the District Judge concerned and the High Court, shall make the suitable building
available for the establishment of the Commercial Court constituted as aforesaid, till the appropriate separate complex for each Commercial Court is
developed as per the National Parameters for the design, if any, formulated for setting up and operationalizing of Model Commercial Court.
(iii) The High Court shall send the proposal for making the funds available for infrastructure facilities for working of Commercial Courts in the
buildings temporarily allotted, within a period of four weeks to the State Government, which in its turn shall sanction the funds within a period of two
weeks thereafter.
(iv) The places where the appropriate land is not available for establishment of the Commercial Courts within the existing Metropolitan Courts/District
Courts Complexes, the concerned District Collector shall earmark and allot the land for establishment of the Commercial Court after consultation with
the District Judge concerned and the High Court expeditiously, in any case, within a period of six weeks.
(v) The Registrar General, Rajasthan High Court is directed to ensure that the design and the map for construction of the separate Complexes with
requisite infrastructure facilities for each Commercial Court constituted by the State Government as aforesaid, is prepared and the proposals for
budgetary allocations for each Commercial Court are sent to the State Government expeditiously, in any case, within a period of two months.
(vi) The State Government is directed to ensure that the work of the construction of the building of the OTS is completed with utmost expedition. We
direct that the Model Code of Conduct made operative on account of ensuing elections shall not come in the way of the Department concerned to
float the tenders for completion of the work of the building of OTS. As soon as the construction work of the OTS building is completed, the OTS shall
vacate the space occupied by it in the building of the Rural Treasury. The Department of Registration operating on the first floor shall be shifted to the
ground floor and the first floor of the said building shall be made available for establishment of the Commercial Court as suggested by the learned
AAG appearing on behalf of the State. Till the building of the Rural Treasury occupied by the OTS and Department of Registration is made available
for establishment of the Commercial Court at Jodhpur, the District Collector, Jodhpur shall identify and make available some other building for
establishment of the Commercial Court at Jodhpur in Collectorate Complex within a period of two weeks.
(vii) After transfer of the matters, the High Court shall place the details of commercial disputes pending in the various courts on record by way of an
additional affidavit. The matter with regard to requirement of constitution of the more Commercial Courts at the district level shall be considered
thereafter. The compliance report shall be filed by the respondents before the next date of hearing.
