Appeal U/S. 13(1A) Of Commercial Courts Act Maintainable Only Against Judgments & Orders Enlisted Under Order 43 CPC: Bombay HC

The Bombay High Court held that appeals filed under Section 13(1A) of the Commercial Courts Act, 2015 (CC Act) are only maintainable against judgments and orders enlisted under Order 43 of the Code of Civil Procedure, 1908 (CPC).

The Court emphasized that an order declining an application under Order VII Rule 10 or Order VII Rule 11(d) of the CPC is not specifically mentioned in the catalogue of orders eligible for appeal in Order XLIII of the CPC. Consequently, the Court noted that such an order cannot be subject to appeal.

The Bench headed by Chief Justice Devendra Kumar Upadhyaya and comprising Justice Arif S. Doctor observed, “Thus, from the discussion made above, we are clear in our mind that an appeal under Section 13(1A) of the Act of 2015 would lie only against the judgment and orders which are enumerated or enlisted under Order XLIII of the CPC. An order rejecting an Application moved under Order VII Rule 10 or Order VII Rule 11(d) of the CPC is not enumerated or enlisted in Order XLIII of the CPC hence, such an order is not appealable”.

Advocate O.A. Das appeared for the Appellants (Defendant in original suit) and Advocate Kishor P. Vig appeared for the Respondents (plaintiff in original suit).

The Respondent, a partnership firm involved in the construction business since 1987, had filed a lawsuit alleging that the Appellants wrongly utilized the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) to unlawfully seize the property belonging to one of the Respondents’ partners. The Respondent sought compensation in the amount of Rs.100 Crores + Rs.10,10,733/-, along with interest at the rate of 13.95% per annum from the date of filing the suit until the amount is fully realized.

An appeal was filed under Section 13(1A) of the CC Act before the High Court challenging the rejection of their application under Order VII Rule 10 and Rule 11(d) of the CPC read with Section 19(6) to (10) of Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) to dismiss the Respondents' lawsuit.

The Court analysed Section 13 of the Commercial Courts Act (CC Act) and noted the key distinction between pre- and post-amendment provisions regarding appeals. Previously, the Court noted that appeals could be filed against any "decision" of a Commercial Court, but the amendment now restricts them to specific "judgments or orders." Importantly, the pre-amendment proviso requiring appeals to comply with Order XLIII of the Code of Civil Procedure (CPC) remained in effect.

The Court further observed that subsection (2) of Section 13, is a a non-obstante clause. This subsection emphasized that appeals under Section 13 must strictly adhere to CC Act provisions, superseding any conflicting rules in other laws or High Court Letters Patent.

“Sub Section 1A of Section 13 provides that a person aggrieved by a judgment or order can file an appeal, however, the said provision is to be read in conjunction with the proviso which specifically states that an appeal shall lie only from orders which are specifically enumerated under Order XLIII of the CPC. The occurrences of the expression “shall” and “specifically” in the proviso has to be noted for correctly understanding the legislative intent in framing the scheme of Section 13 of the Act of 2015”, the Bench noted.

Applying these principles to the case, the Court considered the appealability of an order rejecting the Appellants' application under Order VII Rules 10 and 11(d) of the CPC. While Rule 10 orders are appealable under certain conditions, the rejection of such applications was not explicitly listed in Order XLIII. Similarly, Order XLIII did not include any provision for appeals related to applications under Rule 11(d). Therefore, the Court held that appeals under Section 13(1A) are limited to judgments and orders explicitly enumerated in Order XLIII. 

Accordingly, the Court dismissed the Appeal.

Cause Title: Bank of India v M/s. Maruti Civil Works (2023:BHC-AS:37793-DB)

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