Commercial Courts: Need for a new paradigm

Commercial Courts: Need for a new paradigm

Bar & Bench

Ajit Warrier

In an earlier article, the author had offered suggestions for the efficient and robust working of the Commercial Courts Act, 2015 (“the 2015 Act”). 

This article examines whether a Commercial Court should bear the mantle of an adjudicator whose participation in the proceedings is confined to passively presiding over the trial or whether the presiding judge should take on a more visible and proactive role in the proceedings and, in a sense, re-define the traditionally adversarial court system in India.   

This conundrum has been agitating the judicial conscience in India for several decades now. In Ram Chander v. State of Haryana, the Supreme Court of India noted that in criminal cases, the courts should cease to be a ‘spectator’ and a ‘mere recording machine’ and must become a participant in the trial by evincing intelligent active interest. Justice Chinnappa Reddy, who authored the judgment, posited the judicial quandary by raising the following questions:

“What is the true role of a judge trying a criminal case? Is he to assume the true role of a referee in a football match or an umpire in a cricket match, occasionally answering, as Pollock and Maitland(1) point out, the question ‘How is that’, or, is he to, in the words of Lord Kenning ‘drop the mantle of a judge and assume the role of an advocate? (2) Is he to be a spectator or a participant at the trial? Is passivity or activity to mark his attitude? If he desires to question any of the witnesses, how far can he go? Can he put on the gloves and ‘have a go’ at the witness who he suspects is lying or is he to be soft and suave?”

The Supreme Court, adverting to Section 165 of the Indian Evidence Act, 1872, held that it was the bounden duty of a judge to discover the truth. 

Almost a decade later, the Supreme Court, in Mohanlal Shamji Soni v. Union of India, dealt with the question whether a court, faced with withholding of best evidence by a party, should “simply sit as a mere umpire” or has a legal duty of its own to take an active role in the proceedings in finding the truth and administering justice. The Supreme Court again reposed its faith in the latter approach.  

This judicial sentiment is not confined to criminal cases alone, and has been reiterated by the Apex Court in other categories of cases also.

  1.  In Makhan Lal Bangal v. Manas Bhunia and others (2001) 2 SCC 652, the Supreme Court held that while framing issues, an obligation is cast on the court to read the plaint/petition and the written statement/counter, if any, and then determine the material propositions of fact or of law on which the parties are at variance. 
  2. In Ritesh Tewari v. State of U.P. (2010) 10 SCC 677, it was held that “every trial is a voyage of discovery in which truth is the quest”.
  3. In Maria Margarida Sequeria Fernandes v. Erasmo Jack de Sequeria (2012) 5 SCC 370, the Supreme Court expressed its disagreement with the observation of Lord Denning in Jones v. National Coal Board (1957) 2 QB 55 that in the system of trial prevalent in England, the judge “sits to hear and determine the issues raised by the parties, not to conduct an investigation or examination on behalf of [the] society at large, as happens, we believe, in some foreign countries”. The Supreme Court held that a judge in the Indian system has to play an active role to bring on record a relevant fact and it must be the endeavour of all judicial officers and judges to ascertain the truth in every matter.  
  4. In A Shanmugam v. Ariya Kshatriya Rajakula Vamsathu Madalaya Nandhavana Paripalanai Sangam represented by its President and others (2012) 6 SCC 430, the Supreme Court held that the pleadings needed to be critically examined by the judge before issuing an ad interim injunction and/or while framing issues. 

In the author’s view, the 2015 Act provides several ports of call for a presiding judge of the Commercial Court to engage in discovery of truth. Some of the noteworthy provisions inserted into the Code of Civil Procedure, 1908 (“the Code”) include the following:

  1. Order XI Rule 5 of the Code inter alia empowers the court to order (even suo motu) production by any party or person of documents in their possession or power, relating to any matter in question.  
  2. Order XIII-A of the Code empowers the court to pass a myriad range of orders while deciding on the passing of summary judgment. In the author’s view, the onus is on the court to adopt creative and innovative approaches so as to balance the equities between the parties to the litigation, remove the ‘incentives’ for the adoption of dilatory tactics by a party (or parties), and impart complete justice.  
  3. Order XV-A of the Code vests the court with wide latitude while dealing with a Case Management Hearing, including examination of pleadings and documents produced before it, and examination of the parties under Order X Rule 2 (if required).
  4. The Court may regulate the evidence as to issues on which it requires evidence and the manner in which such evidence may be placed before the Court (Order XIX Rule 4 of the Code).
  5. The Delhi High Court has, by a notification dated October 16, 2018, made certain amendments in the Delhi High Court (Original Side) Rules, 2018. The new Rule 6, Chapter XI vests the court with the power to permit, either suo motu, or on an application of any party, an expert witness to testify and pass appropriate orders for recording of such testimony (including by hot tubbing technique). It is further provided that the court may appropriately mould the protocol for hot tubbing, based upon the facts and circumstances of the case.
  6. During the trial, the court has the power to hold further Case Management Hearings at any time and issue appropriate orders so as to ensure adherence to the timelines and facilitate speedy disposal of the suit (Order XV-A Rule 5 of the Code).
  7. Under Order XVIII Rule (3F) of the Code, the court has the power to limit the time for oral submissions. In Roland Corporation v. Sandeep Jain 2019 SCC Online Del 6557, the Delhi High Court held that the provisions relating to “time limit for completion of trial” in Rule 3 of Order XV-A of the Code would also apply at a stage where recording of evidence is over and the suit is ripe for final hearing.  

The author believes that when the special provisions introduced by the 2015 Act begin to be employed by the Commercial Courts with greater frequency and creativity, that would, to paraphrase Justice Chinnappa Reddy’s words in the Ram Chander judgment, enable the judge “like the conductor of a choir” to “by force of personality, induce his team to work in harmony, subdue the raucous, encourage the timid, conspire with the young, flatter and (sic the) old”. 

The author is a Partner at Shardul Amarchand Mangaldas & Co. He specialises in the Dispute Resolution and Litigation Practice.

DisclaimerThe content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Further, the views in this article are the personal views of the author.

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