09 June 2025 Civil Suits >> Civil & Consumer Law  

In a significant ruling on June 9, 2025, the High Court of Judicature at Bombay addressed the necessity of serving a writ of summons in commercial suits transferred from regular suits, particularly when the defendant has already entered an appearance. The case, Anil Dhanraj Jethani & Another v/s Firoz A. Nadiadwala & Others, involved Interim Application (L) No. 15505 of 2023 in Commercial Suit No. 88 of 2015. The judgment was delivered by The Honourable Mr. Justice Abhay Ahuja.

The interim application was filed by Defendant No.1, seeking the dismissal of Commercial Suit No. 88 of 2015 on the grounds that the plaintiffs had not taken steps to issue and serve a writ of summons as required by the Code of Civil Procedure, 1908, and/or the Commercial Courts Act, 2015. Additionally, Defendant No.1 sought to have orders dated October 21, 2016, and December 13, 2016, passed by the Prothonotary and Senior Master, High Court, Bombay, declared null and void. The defendant also requested the vacation or recall of an ad-interim order dated September 1, 2015.

Background of the Case:

The original suit, filed on August 19, 2015, by the Plaintiffs, sought to recover an amount of Rs. 24,00,00,000/-. This suit was filed as a regular suit before the enactment of the Commercial Courts Act, 2015. Copies of the plaint, along with exhibits and notice of motion, were served on Defendant No.1 on August 20, 2015, who was also notified of the hearing date of August 24, 2015. Defendant No.1 was represented by lawyers and a Senior Advocate at subsequent hearings on August 24, 2015, August 28, 2015, and September 1, 2015. A consent order was passed on September 1, 2015, where Defendant No.2 deposited Rs. 12,50,00,000/- in the Court.

The Commercial Courts Act came into effect on October 23, 2015. Subsequently, on October 21, 2016, the Prothonotary & Senior Master ordered the conversion of regular Suit No. 1148 of 2015 to Commercial Suit No. 88 of 2015 and transferred it to the Commercial Division of the High Court. Defendant No.1 filed the current application on June 9, 2023.

Arguments Presented:

Mr. Vashi, learned Senior Counsel for Defendant No.1, argued that no writ of summons was served either when the suit was a regular suit or after its conversion to a commercial suit. He contended that the orders of October 21, 2016, and December 13, 2016, passed by the Prothonotary & Senior Master, were null and void as they were contrary to the Code of Civil Procedure, 1908. Mr. Vashi cited Rule 87 of the Bombay High Court (Original Side) Rules, 1980, which mandates dismissal if a writ of summons is not served within six months. He also emphasized that in a Commercial Suit or transferred Suit, a writ of summons must be served on the Defendant, rejecting the concept of "deemed service" even if the Defendant appears at the interlocutory stage, relying on Axis Bank Limited vs. Mira Gehani and Others (2019 SCC OnLine Bom 358).

Conversely, Mr. Engineer, learned Senior Counsel for the Plaintiffs, argued that the Axis Bank Limited judgment was not applicable as it pertained to suits originally filed as Commercial Suits, not those transferred from regular suits. He referred to a Notification dated September 29, 2008, which stated that if a Defendant had filed a Vakalatnama and entered an appearance, formal service of a writ of summons was not necessary. Mr. Engineer further cited Sunil Poddar and Others vs. Union Bank of India ((2008) 2 SCC 326) and Hikal Limited vs. Paxchem Limited (2023 SCC Online Bom 1826), which held that insisting on service of a writ of summons is too technical if the defendant has entered an appearance and is aware of the claim's nature. He also highlighted that Section 15(4) of the Commercial Courts Act grants the Commercial Division the jurisdiction to fix timelines at a case management hearing for transferred suits, negating the 120-day period.

Court's Decision:

The Court acknowledged that the suit was originally filed as a regular suit and subsequently converted to a Commercial Suit. It distinguished Axis Bank Limited vs. Mira Gehani and Others, confirming its applicability only to suits originally filed as Commercial Suits. The Court noted the 2008 Notification, which superseded earlier rulings like Tardeo Properties Pvt. Ltd. vs. Bank of Baroda, by stating that formal service of summons is not required if a Vakalatnama is filed and appearance is entered.

Justice Ahuja emphasized that the purpose of a writ of summons is to notify the defendant of the plaintiff's claim. Since Defendant No.1 had received copies of the plaint and notice of motion, engaged attorneys who filed Vakalatnama, and was represented by a Senior Advocate, the objective of service was satisfied. The Court concluded that insisting on formal service of a writ of summons in such circumstances would be overly technical.

Regarding the orders passed by the Prothonotary & Senior Master, the Court sided with Mr. Engineer's submission, referring to One Square Investments Ltd. vs. Remedial Resolutions Advisors Pvt. Ltd. (2020 SCC OnLine Bom 399). It held that the Prothonotary & Senior Master lacks jurisdiction to fix timelines for written statements in transferred suits, as Section 15(4) of the Commercial Courts Act vests this power in the Commercial Division. Consequently, the orders dated October 21, 2016 (to the extent of directions to file written statement), and December 13, 2016, were set aside.

The Court directed the defendants to file their written statement within a period of thirty days, subject to the removal of objections and obtaining a registered number.

In summary, the Court ruled that in transferred commercial suits where the defendant has already entered an appearance and is aware of the plaintiff's claim, a formal writ of summons is not required. The rigorous timelines of the amended CPC do not apply to such transferred suits, and the Commercial Division of the High Court is empowered to fix new timelines. The interim application for dismissal of the suit was rejected, and the ad-interim order was not vacated on the ground of non-signing of the agreement, as that issue is to be decided at trial. The court also acknowledged the allegations of mala fides against Defendant No.1 for filing the application.