Summary Judgment under the Commercial Courts Act, 2015 – An Underutilized Tool in Contractual Disputes

The Commercial Courts Act: A game of catch-up 

The Commercial Courts Act, 2015 (“Act”) introduced a slew of measures intended to streamline procedures relating to commercial litigation as part of the Ease of doing Business in India initiative. The changes brought about were made on the recommendation of the Law Commission of India to bring Indian commercial litigation on par with international standards. Among the measures introduced to improve efficiency and reduce delays was a mechanism for summary judgment of claims pertaining to commercial disputes.

The procedure for summary judgment was inserted by the Act under Order XIII-A in the Code of Civil Procedure, 1908 (“CPC”). Under these provisions, on application by a party (i.e. the plaintiff or the defendant), courts can decide a claim (which may include a part of a claim, a counter-claim, or a particular question on which whole or part of the claim depends) pertaining to commercial disputes without recording oral evidence. This is intended to avoid the prolonged trial process in cases where (a) the plaintiff has no real prospect of succeeding on the claim or the defendant has no real prospect of successfully defending the claim, as the case may be; and (b) there is no other compelling reason why the claim should not be disposed of before recording of oral evidence. A party may apply for summary judgment in the prescribed manner at any time after summons has been served on the defendant, and before issues have been framed. The respondent may reply in the prescribed manner within 30 days. Pursuant to this, the court may make any order it deems fit including judgment on the claim, dismissal of the claim, dismissal of the application, a conditional order (for instance, subject to providing security for restitution of costs), and the like.

Given the pendency of cases in India and the time sensitivities and pressures in commercial suits in particular, it would have been safe to assume that litigants would have eagerly sought summary judgment of their claims. However, this has not been the case. Nearly five years after the Act came into force, summary judgment can only be found to have been sought in a handful of reported judgments. Many of these pertain to passing off, trademark and copyright infringement, where litigants have been more proactive in seeking recourse under these provisions. Litigants embroiled in contractual disputes have surprisingly not exploited the full potential of these provisions so far.

Summary judgment: where sought and when granted  

For their part, courts appear to have viewed such applications favorably and have largely been willing to pass summary judgments. The provisions have come in handy in a number of cases where defendants have not entered appearance or filed a written statement, where the courts have passed summary judgments instead of requiring the plaintiff to lead evidence ex-parte. [1] In such ex-parte cases, courts have examined the documents provided by the plaintiff to reach a conclusion on whether there is any real prospect of success of the defendant.[2] Similarly, in cases relating to refund of money wrongfully paid or, conversely, non-payment of a contractually agreed amount, summary judgment has been awarded where the said receipt / non-payment has been admitted by the defendant or is clearly evidenced from documents.[3] There have also been more cut and dry cases. In a case of alleged plagiarism of software where the case primarily depended on the report of a third-party expert comparing the codes for the two software, the Delhi High Court was happy to accept the defendant’s application for summary judgment when the expert found no evidence of plagiarism.[4] In this case, the court also took into account the inconsistency in the plaintiff’s pleadings as well as the plaintiff’s refusal to reimburse the cost of litigation in the event of failure. It is to be noted that in these cases, defenses had been taken by the defendants, but were found to be lacking any real prospect of success by the court.

While courts have, of course, rejected applications in cases where triable issues were found – for instance, whether a mark alleged to have been infringed was a validly registered trademark or was generic in nature[5] – they have also been innovative in using the power to pass conditional orders. In Syrma Technology Private Limited v. Powerwave Technology Sweden AD,[6] the defendant had been paid an advance for a full shipment of antennae but shipped only part of the order. The defendant did not refund the remainder of the amount paid, claiming to have adjusted the money against other dues from the plaintiff on oral instructions given by the plaintiff’s holding company. The Single Judge accepted the plaintiff’s application for summary judgment, highlighting in particular, the lack of specificity in the defendant’s pleadings, which failed to name the parties who had given and received the oral instructions on which the defendant’s case hinged.  A Division Bench of the Madras High Court set aside the Single Judge’s order. The Division Bench found that there was a possibility, although improbable, that the defendant would be successful, and as such the matter ought to proceed to trial. However, this was made conditional to the deposit of a sum of Rs. 2.8 crore by the defendant in court. This comprised a significant portion of the disputed amount of Rs. 3.9 crore.

It is evident that courts have utilized these provisions to limit delay in proceedings due to frivolous or baseless grounds being adopted. Even where the application for summary judgment is not accepted, courts have made use of the power to pass conditional orders to ensure that parties are cognizant of their responsibility to bear costs on failure, or be willing to deposit the disputed amount before proceeding to trial.

The scope for summary judgment in contractual disputes

 In Su-Kam Power Systems Ltd. v. Kunwer Sachdev,[7] (“Su-Kam”) the High Court of Delhi analysed when a plaintiff / defendant has “no real prospect of success,” a pre-requisite to passing a summary judgment under Order XIII-A. After analysing at some length similar provisions in the UK, US and Canada, the Hon’ble Court held,

“…this Court is of the view that when a summary judgment application allows the Court to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective. It bears reiteration that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the Court the confidence that it can find the necessary facts and apply the relevant legal principles so as to resolve the dispute…Consequently, this Court is of the opinion that there will be ‘no real prospect of successfully defending the claim’ when the Court is able to reach a fair and just determination on the merits of the application for summary judgment. This will be the case when the process allows the court to make the necessary finding of fact, apply the law to the facts, and the same is a proportionate, more expeditious and less expensive means to achieve a fair and just result.”

Most cases relating to contractual disputes revolve around the interpretation of specific provisions of a contract and application of settled principles of contract law. The court’s conclusions in such matters are generally based on the collective and combined interpretation of undisputed agreements and correspondence to ascertain the intention of the parties. Based on the analysis set out in Su-Kam, in contractual matters where the agreement itself is not in dispute,  it would be possible for the court to interpret facts and documents, apply the law to the same and if the conclusion arrived at indicates that ‘there is no real prospect of a party succeeding in or defending a claim’, go on to pass a summary judgment on the said claim. This was done for instance in Jindal Saw Limited v. Aperam Stainless Services and Solutions Precisions SAS,[8] where there was a dispute over the implementation of a share purchase agreement and allegations of misrepresentation of valuation were made by the buyer. Similarly, in Venezia Mobili (India) Pvt. Ltd. v. Ramprastha Promoters and Developers Pvt. Ltd.,[9] certain kitchens were to be supplied for a construction. However, the construction could not be completed in time. The supplier sought payment for cost of raw material incurred for the supply of kitchens, as provided in the contract itself. The buyer argued that no loss was proved and no case for damages made out. However, on an analysis of the agreements in question, the court concluded that a case for summary judgment had been made out and allowed the prayers. As is evident, the court’s conclusions would be based on the peculiar facts of each case and a ‘broad brush stroke’ approach is unlikely to be followed.

In each of the above cases, the lengthy process of trial and oral evidence was avoided. At the same time the court engaged with the issues at hand and passed a reasoned order based on an analysis of the documents placed before it. While the jurisprudence on this question is still developing and the Supreme Court is yet to consider Order XIII-A, the decision of the Delhi High Court in Su-Kam­ as well as the willingness of courts to admit such applications does indicate that recourse to summary judgment is a potent option available with litigants in contractual disputes to expedite the judicial process.


[1] See: Impressario Entertainment and Hospitality Private Limited v. Mocha Blu Coffee Shop MANU/DE/4042/2018; Bharati Rawan v. Shree Jee Prakashan MANU/DE/6448/2017; K. Venugopal v. VSK Kumaran MANU/TN/0821/2019; Kamachi Industries Ltd. v. Geetha Sai Energy Solution Pvt. Ltd. MANU/TN/6463/2018

[2] MSC Mediterranean Shipping Co SA Geneva v. Chloride Alloys (India) Limited MANU/TN/7458/2018

[3] Oxbridge Associates v. Atul Kumra MANU/DE/3409/2019; Kamachi Industries Ltd. v. Geetha Sai Energy Solution Pvt. Ltd. MANU/TN/6463/2018

[4] Campus Eai India Pvt. Ltd. v. Neeraj Tiwari MANU/DE/1355/2019

[5] Rockwool International A/S v. Thermocare Rockwool (India) Pvt. Ltd.

[6] MANU/TN/2684/2020

[7] MANU/DE/3503/2019

[8] MANU/DE/2233/2019

[9] MANU/DE/1031/2019

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Photo of Indranil Deshmukh Indranil Deshmukh

Partner in the Dispute Resolution Practice Area at the Mumbai office of Cyril Amarchand Mangaldas. Indranil has extensive experience in a wide range of disputes, both of a general commercial litigation nature as well as public and regulatory disputes. His experience is diversified…

Partner in the Dispute Resolution Practice Area at the Mumbai office of Cyril Amarchand Mangaldas. Indranil has extensive experience in a wide range of disputes, both of a general commercial litigation nature as well as public and regulatory disputes. His experience is diversified across numerous sectors including financial regulation, health, sports, local government, planning and environment and public sector projects. Indranil also routinely advises the Board of Control for Cricket in India (BCCI) in relation to their contracts and tenders. He can be reached at indranil.deshmukh@cyrilshroff.com

Photo of Vineet Unnikrishnan Vineet Unnikrishnan

Principal Associate in the Dispute Resolution Team at the Mumbai office of Cyril Amarchand Mangaldas. Vineet has seven years’ experience in the practice area of dispute resolution. Vineet focusses on arbitration matters (both domestic and international) as well as litigation before the Supreme…

Principal Associate in the Dispute Resolution Team at the Mumbai office of Cyril Amarchand Mangaldas. Vineet has seven years’ experience in the practice area of dispute resolution. Vineet focusses on arbitration matters (both domestic and international) as well as litigation before the Supreme Court and High Courts emanating from contractual / corporate commercial disputes. He can be reached at vineet.unnikrishnan@cyrilshroff.com

Photo of Samhita Mehra Samhita Mehra

Associate in the Dispute Resolution Team at the Mumbai office of Cyril Amarchand Mangaldas. Samhita has two years’ of experience in dispute resolution, having moved to the practice area after working in the spheres of employment law and the financial regulatory practice. Samhita…

Associate in the Dispute Resolution Team at the Mumbai office of Cyril Amarchand Mangaldas. Samhita has two years’ of experience in dispute resolution, having moved to the practice area after working in the spheres of employment law and the financial regulatory practice. Samhita focusses on arbitration matters (both domestic and international) as well as litigation emanating from contractual / corporate commercial disputes. She can be reached at samhita.mehra@cyrilshroff.com