India: Changes Brought About By The Commercial Courts Act To The Code Of Civil Procedure, 1908


The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act (hereinafter 'Act') was enacted in the year 2015. Its purpose was to adjudicate on matters of commercial disputes of specified value and matters which are related or connected to that issue.

S. 16 of the Act clearly states that this Act will have overriding effect on the provisions of Code of Civil Procedure, 1908 (hereinafter 'Code'), and its amendments. It clearly mentions that in case of conflict between any rules of the Code, rules of jurisdictional High Courts or any state amendments made to the Code, the provisions of the Act, as it amends the Code, will prevail.


Below are some of the important changes which the Act makes on the Code.

  • With regards to Costs – S. 35 of the Code deals with the costs which are ordered by the Court in a suit and it confers discretionary powers on the Court to determine the quantum of costs.

    The Act1 instead provides for a general rule for payment of costs by the judgment debtor. The Courts are allowed to deviate from the general rule provided they lay down the reasons for the same in writing.
  • Verification of pleadings – The Act2 now provides for verification of pleadings before it can be relied upon as evidence, something which was not in place previously. All pleadings have to be verified by evincing affidavits which have to be signed by the party, or one of the parties to the proceedings or any person who is acquainted with the facts of the case and authorized by such parties. The same is applied while amending of pleadings.
  • Procedure for discovery, disclosure and inspection of documents – The Code3 laid down that and inspection of facts of the suits are to be done through interrogatories and discovery applications. The Act has added extra criteria for disclosure of the facts relevant to the case. Now, under the Act, the parties are mandatorily required to file a list of all the documents along with their photocopies at the stage of filing the plaint/written document. Moreover, the parties are prohibited from relying on any documents which have not been mentioned in the list along with their photocopies without the leave of Court. The Courts have been granted discretionary power to award exemplary costs against a party who willfully, unreasonably, wrongfully, or even negligently failed to disclose all documents pertaining to the suit in their possession.
  • Written arguments – The Act has introduced a new provision toOrder XVIII to the Code, where it has been made mandatory that parties submit short and to the point written arguments under clear and distinct headings, within four weeks from the commencement of oral arguments. It also allows for filing of revised written arguments within one week of the conclusion of arguments. Such a provision was not there previously.
  • Time period within which judgment has to be given – The Code4 stipulates that judgments have to be pronounced within sixty days of conclusion of hearings. The Act extends it to ninety days from the date of conclusion of arguments.
  • Case management hearing – This is an international practice which has been introduced for the first time in India by the Act.5 It allows the Court to make a timeline, and fix dates for the proceedings of the matter, which helps achieve the objective of quick disposal of cases. Under this new practice, no adjournments will be granted for the sole reason of the absence of the counsel, which has long been used as a delaying tactic.

    The Court is given authority to penalize parties if there are non-compliances with its orders. They can impose costs, forfeit parties' right to conduct suit and in extreme cases dismiss the plaint.
  • Disposal of suit at first hearing – The Act omits Order XV of the Code which allowed for disposing a suit in the first hearing. This adds to the process of fair hearing and natural justice.


The intent of the Act is to deal with commercial disputes where huge monetary costs are at stake. To better deal with such disputes and for its quick disposal, this Act has been enacted to override certain provisions of the Code. Since the Code forms the basis of all procedures in civil litigation and covers all civil disputes, an amendment to the Code may not have been a correct approach.

Instead, the approach taken by this Act to allow for some changes in the Code, without actually amending the Code to better suit certain types of civil disputes, namely commercial disputes, is not only innovative but also an effective and purposeful approach to that end. As the Act restricts itself to quick disposition of commercial disputes coupled with the fact that it allows for arbitration, this can indeed go a long way in attracting foreign investments in India. Although the Act provides for adherence to strict timelines and imposing penalty in case of non-compliance to deal with the issue of pendency and delay in litigation, the success of the same in the long run is still contingent upon how effectively and efficiently the provisions are enforced.


1 Schedule 2.

2 Rule 15A under SCHEDULE.

3 Order XI.

4 Rule 1, Order XX.

5 Order XV-A, new order under the Code.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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