The Punjab and Haryana High Court last week ruled that parties can approach the High Court under Article 227 of the Constitution against interim orders passed by commercial courts, even though the Commercial Courts Act bars civil revision petitions against such orders. At the same time, the court underlined that this constitutional power cannot be used as a substitute for an appeal.
Article 227 gives High Courts supervisory control over all courts and tribunals within their jurisdiction, allowing them to step in only to correct serious jurisdictional errors or procedural injustice.
In a 91-page ruling dated January 12, Justice Sudepti Sharma dismissed two connected petitions filed by Otsuka Chemicals India Private Limited against orders of the Exclusive Commercial Court, Gurgaon, in a recovery dispute with Trans Engineers India Pvt. Ltd.
The challenge was to commercial court orders that allowed Trans Engineers to file a replication, submit additional documents and correct procedural affidavits in an ongoing suit. A replication is a reply filed by the plaintiff to counter claims raised by the defendant in its written statement.
Otsuka argued that Section 8 of the Commercial Courts Act clearly bars civil revision petitions against interlocutory orders, which are interim orders passed during the pendency of a case, and therefore, the High Court should not entertain the challenge at all.
The High Court rejected this argument, holding that while Section 8 does bar statutory revision petitions, it cannot limit the constitutional powers of the High Court under Article 227. The court said these powers flow directly from the Constitution and cannot be taken away by legislation.
However, the court refused to interfere with the commercial court’s orders. It observed that Article 227 does not allow the High Court to re-examine cases on merits or sit as an appellate court. Its role is limited to ensuring that lower courts act within their authority and follow fair procedure.
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Dispute background
The dispute arises from civil and structural work carried out by Trans Engineers for a chemical plant expansion project of Otsuka Chemicals at Kotpuli in Rajasthan. Trans Engineers was initially appointed as a consultant in 2016, with the engagement later expanding into supply and installation works under purchase orders worth about Rs 28 crore.
In 2018, Trans Engineers filed a summary suit seeking recovery of Rs 5.31 crore, claiming it had carried out additional work beyond the original scope. It relied on an email in which Otsuka was alleged to have acknowledged liability of Rs 4.15 crore plus GST and interest, sent after Trans Engineers issued a demand notice under the Insolvency and Bankruptcy Code.
The suit initially ran into jurisdictional issues and was returned in 2020 for filing before the appropriate commercial court. It was refiled in Gurugram in 2022 and later converted into a regular recovery suit after Otsuka was granted leave to defend.
Procedural dispute
The present petitions stemmed from orders passed in August 2024 allowing Trans Engineers to place further material on record after Otsuka filed its written statement. The commercial court permitted filing of additional documents, including purchase orders and email correspondence, on the ground that they were required to respond to defences raised by Otsuka for the first time.
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Otsuka contended that allowing around 600 pages of documents at this stage was irregular and caused prejudice.
The High Court disagreed, noting that the case was still at an early stage and that issues had not yet been framed. It said procedural rules should not be applied so strictly as to prevent a party from properly answering the other side’s defence, particularly when the opposite party will have a full opportunity to contest the material during trial.
Finding no serious legal error or unfairness in the commercial court’s approach, the High Court dismissed the petitions.
The ruling makes it clear that while High Courts retain constitutional supervision over commercial courts, they will not interfere with routine procedural orders unless there is a clear case of abuse of jurisdiction or denial of justice.
© The Indian Express Pvt Ltd
