Bombay High Court imposes ₹25 lakh costs on a company for wasting “scarce judicial time”

The Bombay High Court has imposed costs of ₹25 lakh on a private company for instituting “vexatious and mischievous” proceedings thereby wasting the Court's time (La Fin Financial Services Pvt Ltd v. Multi-Commodity Exchange of India Ltd).

The Court was hearing an interim application filed by the petitioner La Fin Financial Services Pvt Ltd in a suit (later converted to commercial suit) against Multi Commodity Exchange Of India Ltd (MCX).

The application sought orders against MCX for exceeding its 120-day time limit for filing of written statement in the suit with reference to the Commercial Courts Act (CC Act).

Justice Gautam Patel deduced from the pleading that since the suit had been filed as a regular suit despite the prevalence of CC Act, the rules of CC Act would not have applied to the regular suit.

The Court observed that in certain cases, years after institution of a regular suit, the Court or the law may require the suit to be taken into commercial division and if the contentions raised in the application are to be believed then that would lead to dismissal of every written statement filed after period of 120 days.

Having reached this conclusion, the Court gave an opportunity to La Fin to withdraw the interim application, which they did not agree to.

Highlighting that the object of the Commercial Courts Act was to ensure speedy disposal of proceedings, the Court deduced that the interim application was frivolous and an “unconscionable waste of very, very scarce judicial time”.

“Because this is clearly a vexatious and mischievous proceeding that has unnecessarily wasted the Court’s time, I can think of no reason to withhold an order of costs against the Plaintiffs,” Justice Patel observed.

Plaintiffs like La Fin’ will remember that “courts are not playgrounds, and litigation is not a pastime,” Justice Patel emphasized imposing costs payable to MCX within 2 weeks.

He clarified that if the order is not complied with in stipulated time, the costs will carry interest at 9 percent per annum.

[Read Order]