The Andhra Pradesh High Court recently clarified that commercial matters valued at ₹3 lakh and above must be placed before the appropriate commercial court with jurisdiction. [UV Satyanarayana & Ors v. Shriram Union Finance Ltd]
A Bench of Justices R Raghunandan Rao and Harinath N observed,
“The Principal Civil Court of original jurisdiction should be treated as the Commercial Court with territorial jurisdiction over the said area. It is also noted that Section 21 states that the Commercial Courts Act, 2015, will have precedence over every other law in force, unless otherwise provided.”
The Court added that Section 2(i) of the Commercial Courts Act, 2015 initially set the specified value for suits at ₹1,00,00,000, which was later reduced to ₹3,00,000 by Ordinance No. 3 of 2018, and subsequently replaced by Central Act No 28 of 2018, effective from May 3, 2018.
In the present case, an arbitrator ruled in favor of the respondent, awarding ₹32,99,625 plus 10% annual interest and costs in a 2014 case. The respondent filed an arbitration execution plea in 2017 with the Principal District Judge, East Godavari District, to enforce the award.
The petitioners objected to the proceedings before the district judge, arguing that the execution petition for ₹46,46,965 should have been filed in the commercial court at Visakhapatnam, as per the Commercial Courts Act, 2015.
On January 1, 2024, the district judge ruled that the jurisdiction objection was not maintainable since the commercial court’s jurisdiction applies to amounts above ₹1 crore, while the amount sought was ₹46,46,965.
Aggrieved by this decision, the petitioner moved the High Court.
Counsel for the respondent submitted that the execution petition proceedings have reached the stage of auctioning the petitioners’ property, with only the finalization of the auction terms remaining. He also noted that the Supreme Court stayed the transfer of the execution proceedings, rendering the Division Bench’s order unreliable.
To this, the Bench replied,
“It is now settled law that only the suspension of a Judgment will stop the operation of the principles or interpretation of law set out in the said Judgment. In the case of a stay, it only affects the parties to the Judgment, and the principle laid down in the said Judgment would continue to hold and could be relied upon.”
The Court ruled that the matter should be placed before the Commercial Court at Visakhapatnam. The proceedings before the Principal District Judge, East Godavari District were set aside, with the respondent given the option to transfer or approach the execution petition in the appropriate Commercial Court.
Advocate Arrabolu Sai Naveen appeared for the petitioners.
Advocate Maheswara Rao Kunchem appeared for the respondent.
