Bombay City Civil Court Amendment Act, 2023: A Challenge to Amend
The Bombay City Civil Court (Amendment) Act, 2023 (“the Amendment”) increased the pecuniary jurisdiction of the Bombay City Civil Court (“City Civil Court”) from INR 1,00,00,000/- (Indian Rupees One Crore only) to INR 10,00,00,000/- (Indian Rupees Ten Crores only) by amending Section 3 of the Bombay City Civil Court Act, 1948 (“the Act”). The amendment in effect transfers all pending suits and civil proceedings from the Hon’ble Bombay High Court (“Bombay High Court”) barring some1 to the City Civil Court which are below INR 10,00,00,000/- (Indian Rupees Ten Crores only). As per the notification issued by the Law and Judiciary Department of Government of Maharashtra on 16th January 2024, the said amendment was brought into force on 28th January 2024.
Case in Question
While the said amendment was introduced and the arduous task of shifting multiple suits to the City Civil Court began, the Plaintiffs in Grand Paradi Co-operative Housing Society Ltd. v Mont Blanc Properties & Industries Pvt. Ltd2 filed an Interim Application (“the Application”) seeking to amend the valuation of the Suit, in an attempt to increase the valuation to meet the threshold of INR 10,00,00,000/- (Indian Rupees Ten Crore only). This would enable to the Plaintiff to maintain the suit within the pecuniary jurisdiction of the Bombay High Court. The Defendants objected to the said Interim Application on the ground of maintainability, urging that in view of the Amendment the Application as filed by the Plaintiffs is not maintainable before the Hon’ble Bombay High Court and the Hon’ble City Civil Court, would be a court of competent jurisdiction.
Advocates for the Plaintiff mounted a three-pronged challenge as to why the Application filed must be allowed as iterated hereinbelow:
Past Precedent
Advocates for the Plaintiff preliminarily submitted that the Hon’ble Delhi High Court (“Delhi High Court”) in the judgment of Subhashini Malik v S. K. Gandhi3, was faced with a similar situation where by the Delhi High Court (Amendment) Act, 2015 (“Delhi Amendment Act”), the Delhi High Court could only try cases having value of INR 2,00,00,000/- (Indian Rupees Two Crores only) or more while the other cases were transferred to subordinate courts on account of the increase in threshold limit. Advocates for the Plaintiff submitted that in such a situation, an Interim Application was moved in a Suit whereby the Delhi High Court vide a 2:1 majority held that “the Court in which suit is originally filed continues to have jurisdiction to decide application for amendment notwithstanding loss of pecuniary jurisdiction by that Court.” Citing the said judgment, Advocates for the Plaintiff submitted that the Bombay High Court following suit is bound to hear the Application and pass appropriate orders for increase in valuation of the present Suit.
Suit is undervalued
Advocates for the Plaintiff further submitted that when the Suit was instituted, the Defendants had itself raised an objection to the undervaluation of the Suit. Relying on the judgment of the Hon’ble Supreme Court (“Supreme Court’) in Mount Mary Enterprises v M/s. Jivratna Medi Treat Pvt. Ltd.4 , Advocates for the Plaintiff sought for his Application to be allowed on the premise that when Defendants have themselves objected to the undervaluation of the Suit, the Plaintiffs ought to be permitted to take out an application for appropriate valuation of the Suit. Further, the Supreme Court held that merely because a suit would be transferred on account of an amendment being allowed is no reason for rejection of the said amendment.
Logistical Difficulty
Lastly, Advocates for the Plaintiff submitted that the decision of the Bombay High Court not to intervene in the matter and send the Application for hearing to the City Civil Court would cause
unnecessary inconvenience the parties. He submitted that if the Application is heard in the City Civil Court and the amendment is allowed which increases the valuation of the present Suit, the matter would stand transferred to the Bombay High Court which would again require shifting of papers and may result in unnecessary delay. In conclusion, Advocates for the Plaintiff having relied majorly on the said submissions sought for hearing of the Application and disposal thereof permitting increase of the valuation of the Suit.
Submissions on behalf of the Defendants
Advocates for the Defendant No. 1 refuted the submissions advanced by Advocates for the Plaintiff and submitted:
Bombay High Court has lost jurisdiction
Advocates for the Defendant No. 1 preliminarily submitted that as on 28th January 2024, any Suit barring the exceptions as stated hereinbelow valued at INR 9,99,99,999/- (Indian Rupees Nine Crore Ninety-Nine Lakhs Ninety-Nine Thousand Nine Hundred Ninety-Nine only) or below stood transferred to the City Civil Court and hence the Bombay High Court could not exercise jurisdiction to decide the Application.
Differentiating the Delhi High Court Judgment
Advocates for the Plaintiff in its arguments placed paramount importance on the judgment of the Delhi High Court and placing reliance on the same had contended that the Application had to be heard by the Bombay High Court as the factual conspectus was similar. Advocates for the Defendant No. 1 refuting the submissions as advanced by Advocates for the Plaintiff stated that the judgment of the Delhi High Court was clearly distinguishable as the amendment challenged before the High Courts was diametrically opposite in language.
He submitted that, Section 4 of the Delhi Amendment Act states “The Chief Justice of the High Court of Delhi may transfer any suit or other proceedings which is or are pending in the High Court immediately before the commencement of this Act to such subordinate Court in the National Capital Territory of Delhi as would have jurisdiction to entertain such suit or proceedings had such suit or proceedings been instituted or filed for the first time after such commencement.” In contrast, Section 4A of the amended City Civil Court Act mandates transfer of suits pending in the City Civil Court which are below the pecuniary jurisdiction.
Thus, Advocates for the Defendant No. 1 submitted that while the Delhi Amendment Act gave the Chief Justice an option to transfer Suits to the subordinate courts, the Amendment in the present Suit mandated for transfer and hence the principles as laid down by the Delhi High Court were not appliable to the facts of the present case.
Hence, Advocates for the Defendant No. 1 supported by Advocates for the Defendant No. 2 staunchly stood for reading the mandatory language of the Amendment and transfer the Application and corresponding Suit to the City Civil Court for any consequential hearing and adjudication.
Court’s Perspective
The Bombay High Court considered the judgment of the Delhi High Court to answer the reference in favour of the Defendants and held:
The Delhi Amendment Act, though similar to the Amendment in question, retained the jurisdiction of the Delhi High Court to decide upon which Suits are transferred to the subordinate courts. Further, the Delhi Amendment Act did not provide for an instant and automatic transfer of suits, while the Amendment in question with its mandatory language required all Suits below a certain pecuniary value to be transferred to the City Civil Court.
The Bombay High Court noted that Hon’ble Justice Endlaw in his judgment noted that the words “may transfer any suit” being indicative of the choice of the Hon’ble Chief Justice to retain some cases while referring others to the subordinate courts. The Bombay High Court concluded that from the wordings of the Delhi High Court judgment it is clear that had the words “shall stand transferred” been used in the amendment, the Delhi High Court would have never ruled on the Application seeking amendment to the valuation of the Suit.
The Bombay High Court concluded its findings by holding that considering the express language adopted in the Amendment, it had lost jurisdiction to hear any suits or consequent applications which are below the pecuniary threshold.
Conclusion
The Bombay High Court, while ruling in the Defendants favour expressed its apprehension on courts entertaining applications having lost jurisdiction. It stated that if the Application filed by the Plaintiffs is heard, this would set a precedent that once suits are transferred, only an application seeking amendment would be maintainable. Further, the Bombay High Court held that if the Application is rejected on any grounds, will the same be valid as the judgment has been passed without having jurisdiction. Hence, the only probable way would be to allow the said application and amend the suit. The Bombay High Court conclusively held that “such result oriented jurisdiction cannot be conferred on Courts.”
