- The Delhi High Court has ruled that the Commercial Courts (Amendment) Act, 2018, cannot be retroactively applied.
- A division bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad held that there is no lack of clarity or ambiguity in Section 19 of the 2018 Amending Act, which states categorically that its provisions will apply to cases relating to commercial disputes filed on or after the date of the Act's commencement.
- The Bench was dealing with a slew of transfer petitions for the transfer of a suit filed by the Respondents where the Petitioners' suits were pending due to the parties raising a common substantial issue.
- The District and Sessions Judge, Patiala House Courts, allowed the transfer petition and transferred the petition filed by the Petitioners to the Court of Additional District Judge, Patiala House Courts, where the suits filed by the Respondents were pending, according to an order dated February 5, 2019.
- The Commercial Courts, Commercial Division, and Commercial Appellate Division Act, 2015 was enacted by the Legislature, and it mandated that all suits worth more than Rs.1 crore be transferred from Ordinary Courts to the designated Commercial Courts.
- The said Act of 2015 was amended in 2018 to require that all commercial disputes involving a sum of Rs.3 lakhs filed on or before the institution of the Amending Act, 2018, be transferred to the designated Commercial Courts.
- Furthermore, the 2015 Act's title was shortened to Commercial Courts Act, 2015.
- The Petitioners then approached the High Court, requesting that the Civil Suits pending before the Additional District Judge, Patiala House Courts, New Delhi, be transferred to the designated Commercial Court on the grounds that the suits were commercial in nature and arose from "commercial disputes" as defined by the 2015 Act.
- The Court stated that a fundamental principle of jurisprudence is that statutes must have a prospective effect because retrospective application threatens to disturb matters that have already been settled, thereby undermining and invading contractual and personal relationships that have already been established under the law that is already in effect.
- The Court also stated that the phrase "save as otherwise provided" in section 19 of the Amending Act is intended to be an exception.
- It stated that the Saving Clause's purpose is to protect existing rights, remedies, and privileges from extinction.
- In light of the aforementioned observations, the Court concluded that the Amending Act would not apply retroactively, and thus the Bench was hesitant to transfer the civil suits pending before the Additional District Judge, Patiala House Courts, New Delhi, to the designated Commercial Court.
- As a result, the pleas were dismissed.
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