In force · As amended up to 2026-08
2. I am sufficiently conversant with the facts of the case and have also examined all relevant documents and records in relation thereto.
2. Definitions.— (1) In this Act, unless the context otherwise requires,--
4 [(a) "Commercial Appellate Courts" means the Commercial Appellate Courts designated under section 3A;]
5 [(aa)] "Commercial Appellate Division" means the Commercial Appellate Division in a High Court constituted under sub-section (1) of section 5;
(b) "Commercial Court" means the Commercial Court constituted under sub-section (1) of section 3;
(c) "commercial dispute" means a dispute arising out of--
(i) ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents;
(ii) export or import of merchandise or services;
(iii) issues relating to admiralty and maritime law;
(iv) transactions relating to aircraft, aircraft engines, aircraft equipment and helicopters, including sales, leasing and financing of the same;
(v) carriage of goods;
(vi) construction and infrastructure contracts, including tenders;
(vii) agreements relating to immovable property used exclusively in trade or commerce;
(viii) franchising agreements;
(ix) distribution and licensing agreements;
(x) management and consultancy agreements;
(xi) joint venture agreements;
(xii) shareholders agreements;
1. Ins. by Act 28 of 2018, s. 2 (w.e.f. 3-5-2018).
2. Subs. by s. 3, ibid., for sub-section (1) (w.e.f. 3-5-2018).
2. Substitution of new section for section 35.— For section 35 of the Code, the following section shall be substituted, namely:--
' 35. Costs.— (1) In relation to any commercial dispute, the Court, notwithstanding anything contained in any other law for the time being in force or Rule, has the discretion to determine:
(a) whether costs are payable by one party to another;
- (b) the quantum of those costs; and
- (c) when they are to be paid.
Explanation .—For the purpose of clause (a), the expression "costs" shall mean reasonable costs relating to—
- (i) the fees and expenses of the witnesses incurred;
- (ii) legal fees and expenses incurred;
- (iii) any other expenses incurred in connection with the proceedings.
(2) If the Court decides to make an order for payment of costs, the general rule is that the unsuccessful party shall be ordered to pay the costs of the successful party:
Provided that the Court may make an order deviating from the general rule for reasons to be recorded in writing.
Illustration
The Plaintiff, in his suit, seeks a money decree for breach of contract, and damages. The Court holds that the Plaintiff is entitled to the money decree. However, it returns a finding that the claim for damages is frivolous and vexatious.
In such circumstances the Court may impose costs on the Plaintiff, despite the Plaintiff being the successful party, for having raised frivolous claims for damages.
2. Discovery by interrogatories.— (1) In any suit the plaintiff or defendant by leave of the court may deliver interrogatories in writing for the examination of the opposite parties or any one or more of such parties, and such interrogatories when delivered shall have a note at the foot thereof stating which of such interrogatories each of such persons is required to answer:
Provided that no party shall deliver more than one set of interrogatories to the same party without an order for that purpose:
Provided further that interrogatories which do not relate to any matters in question in the suit shall be deemed irrelevant, notwithstanding that they might be admissible on the oral cross-examination of a witness.
(2) On an application for leave to deliver interrogatories, the particular interrogatories proposed to be delivered shall be submitted to the court, and that court shall decide within seven days from the day of filing of the said application, in deciding upon such application, the court shall take into account any offer, which may be made by the party sought to be interrogated to deliver particulars, or to make admissions, or to produce documents relating to the matters in question, or any of them, and leave shall be given as to such only of the interrogatories submitted as the court shall consider necessary either for disposing fairly of the suit or for saving costs.
3. The words "except the State of Jammu and Kashmir" omitted by Act 34 of 2019, s. 95 and the Fifth Schedule
(w.e.f. 31-10- 2019).
4. Ins. by Act 28 of 2018, s. 4 (w.e.f. 3-5-2018).
5. Clause (a) renumbered as clause (aa) by s. 4, ibid ., (w.e.f. 3-5-2018).
(xiii) subscription and investment agreements pertaining to the services industry including outsourcing services and financial services;
- (xiv) mercantile agency and mercantile usage;
- (xv) partnership agreements;
(xvi) technology development agreements;
(xvii) intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits;
(xviii) agreements for sale of goods or provision of services;
(xix) exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum;
(xx) insurance and re-insurance;
(xxi) contracts of agency relating to any of the above; and
(xxii) such other commercial disputes as may be notified by the Central Government.
Explanation .--A commercial dispute shall not cease to be a commercial dispute merely because—
(a) it also involves action for recovery of immovable property or for realisation of monies out of immovable property given as security or involves any other relief pertaining to immovable property;
2. Stage for application for summary judgment.— An applicant may apply for summary judgment at any time after summons has been served on the defendant:
Provided that, no application for summary judgment may be made by such applicant after the Court has framed the issues in respect of the suit.
(3) In making an order for the payment of costs, the Court shall have regard to the following circumstances, including—
(a) the conduct of the parties;
(b) whether a party has succeeded on part of its case, even if that party has not been wholly successful;
(c) whether the party had made a frivolous counterclaim leading to delay in the disposal of the case;
(d) whether any reasonable offer to settle is made by a party and unreasonably refused by the other party; and
(e) whether the party had made a frivolous claim and instituted a vexatious proceeding wasting the time of the Court.
(4) The orders which the Court may make under this provision include an order that a party must pay--
(a) a proportion of another party's costs;
(b) a stated amount in respect of another party's costs;
(c) costs from or until a certain date;
(d) costs incurred before proceedings have begun;
(e) costs relating to particular steps taken in the proceedings;
(f) costs relating to a distinct part of the proceedings; and
(g) interest on costs from or until a certain date.'.
(3) In adjusting the costs of the suit inquiry shall at the instance of any party be made into the propriety of exhibiting such interrogatories, and if it is the opinion of the taxing officer or of the court, either with or without an application for inquiry, that such interrogatories have been exhibited unreasonably, vexatiously, or at improper length, the costs occasioned by the said interrogatories and the answers thereto shall be paid in any event by the party in fault.
(4) Interrogatories shall be in the form provided in Form No. 2 in Appendix C to the Code of Civil Procedure, 1908 (5 of 1908), with such variations as circumstances may require.
(5) Where any party to a suit is a corporation or a body of persons, whether incorporated or not, empowered by law to sue or be sued, whether in its own name or in the name of any officer of other person, any opposite party may apply for an order allowing him to deliver interrogatories to any member or officer of such corporation or body, and an order may be made accordingly.
(6) Any objection to answering any interrogatory on the ground that it is scandalous or irrelevant or not exhibited bona fide for the purpose of the suit, or that the matters inquired into are not sufficiently material at that stage, or on the ground of privilege or any other ground may be taken in the affidavit in answer.
(b) one of the contracting parties is the State or any of its agencies or instrumentalities, or a private body carrying out public functions;
(d) "Commercial Division" means the Commercial Division in a High Court constituted under sub-section (1) of section 4;
(e) "District Judge" shall have the same meaning as assigned to it in clause (a) of article 236 of the Constitution of India;
(f) "document" means any matter expressed or described upon any substance by means of letters, figures or marks, or electronic means, or by more than one of those means, intended to be used, or which may be used, for the purpose of recording that matter;
(g) "notification" means a notification published in the Official Gazette and the expression "notify" with its cognate meanings and grammatical variations shall be construed accordingly;
(h) "Schedule" means the Schedule appended to the Act; and
(i) "Specified Value", in relation to a commercial dispute, shall mean the value of the subjectmatter in respect of a suit as determined in accordance with section 12[1] [which shall not be less than three lakh rupees] or such higher value, as may be notified by the Central Government.
(2) The words and expressions used and not defined in this Act but defined in the Code of Civil Procedure, 1908 (5 of 1908) and the Indian Evidence Act, 1872 (1 of 1872), shall have the same meanings respectively assigned to them in that Code and the Act.
2. Orders to be passed in a Case Management Hearing.— In a Case Management Hearing, after hearing the parties, and once it finds that there are issues of fact and law which require to be tried, the Court may pass an order--
(a) framing the issues between the parties in accordance with Order XIV of the Code of Civil Procedure, 1908 (5 of 1908) after examining pleadings, documents and documents produced before it, and on examination conducted by the Court under Rule 2 of Order X, if required;
(b) listing witnesses to be examined by the parties;
(c) fixing the date by which affidavit of evidence to be filed by parties;
(d) fixing the date on which evidence of the witnesses of the parties to be recorded;
(e) fixing the date by which written arguments are to be filed before the Court by the parties;
(f) fixing the date on which oral arguments are to be heard by the Court; and
(g) setting time limits for parties and their advocates to address oral arguments.
(7) Any interrogatories may be set aside on the ground that they have been exhibited unreasonably or vexatiously, or struck out on the ground that they are prolix, oppressive, unnecessary or scandalous and any application for this purpose may be made within seven days after service of the interrogatories.
(8) Interrogatories shall be answered by affidavit to be filed within ten days, or within such other time as the court may allow.
(9) An affidavit in answer to interrogatories shall be in the form provided in Form No. 3 in Appendix C to the Code of Civil Procedure, 1908 (5 of 1908), with such variations as circumstances may require.
(10) No exceptions shall be taken to any affidavit in answer, but the sufficiency or otherwise of any such affidavit objected to as insufficient shall be determined by the court.
(11) Where any person interrogated omits to answer, or answers insufficiently, the party interrogating may apply to the court for an order requiring him to answer, or to answer further, as the case may be, and an order may be made requiring him to answer, or to answer further, either affidavit or by viva voce examination, as the court may direct.
1. Subs. by Act 28 of 2018, s. 4, for " which shall not be less than one crore rupees" (w.e.f. 3-5-2018).
Source: India Code