In a recent judgment by the Delhi High Court, a decision was made regarding the transfer of case CS (Comm) 525/2018. The court ruled that the transfer was not justified, and Defendant no. 1 was instructed to deposit Rs. 10,000 for causing undue delay. The petitioner’s arguments regarding the application under Section 340 CrPC were carefully considered. Read on for details on this significant ruling in commercial litigation.
Arguments
- Mr. Wadhwa contends that the Commercial Court’s decision was contrary to the law laid down in Prayag Polytech Pvt.
- The Commercial Court had granted time to the petitioner but later imposed costs due to delayed filing of the application.
- Mr. Wadhwa argues that there was no requirement to serve a copy of the application under Section 340 CrPC to the respondent as per the law.
- The Commercial Court was mistaken in requiring the copy of the application to be served on the respondent.
- The Supreme Court’s judgment in State of Punjab v. Jasbir Singh was cited by the petitioner, stating that advance notice is not necessary for an application under Section 340 of CrPC.
- The documents were filed under an index dated 17 August 2021.
Analysis
- Section 195(1) deals with the power of a court to take cognizance of specific offenses under the Indian Penal Code or of abetment or conspiracy to commit such offenses.
- Cognizance can only be taken on a written complaint from the public servant concerned.
- The act of making a complaint is distinct from the court taking cognizance based on that complaint.
- The Supreme Court raised the question of whether a preliminary inquiry and hearing for the accused were necessary before a complaint under Section 195.
- The case under consideration before the Supreme Court involved the interpretation of Section 195(2) of the Criminal Procedure Code.
- The issue before the Supreme Court was whether a preliminary inquiry had to precede the making of a complaint under Section 340 CrPC.
- In a civil case involving Jasbir Singh, it was alleged that he had resorted to forgery.
- A preliminary inquiry is crucial before filing a complaint under Section 340 CrPC.
- The delay in commercial proceedings seriously impacts the judge’s morale and should be avoided at all costs.
- Transfer of a matter outside the court with jurisdiction is a serious matter and should be done in exceptional circumstances only.
- Abuse of process applications are frowned upon as they can delay proceedings.
- The decision of the Commercial Court-04 to direct a copy of the application under Section 340 CrPC to be provided to the respondent was within its legitimate discretion.
- Applications aiming to delay proceedings are not valid grounds for transferring the case outside the commercial court currently hearing it.
- In commercial litigation, litigants often use various tactics to disrupt the proceedings.
- Litigants cannot avoid court decisions by choosing to argue in a different forum.
- Practices aimed at evading court decisions must be strongly discouraged.
Decision
- The transfer of case CS (Comm) 525/2018 is not justified.
- Defendant no. 1 is instructed to deposit Rs. 10,000 as cost to DLSA for causing undue delay.
- The petition is rejected with a penalty of Rs. 50,000 to be paid to the Delhi High Court Legal Services Committee within one week.
Case Title: SANJAY GOEL Vs. MAJESTIC BUILDCON PVT. LTD. (2024:DHC:3772)
Case Number: TR.P.(C.)-75/2024
