Prospective operation of pecuniary threshold reduction for commercial suits upheld; classification based on institution date found rational and non-arbitrary under Article 14
In a significant judgment dated September 30, 2026, the Delhi High Court (Division Bench) dismissed a constitutional challenge against Section 19 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Act, 2018. The petitioners, M/s Alpro Industries and others, had questioned the constitutional validity of Section 19, which restricts the applicability of an amendment reducing the pecuniary threshold for commercial suits from Rs.1 crore to Rs.3 lakh only to cases instituted on or after May 3, 2018.
The dispute arose from a suit filed in 2016 by Respondent No. 2 against the petitioners seeking recovery of over Rs. 35 lakh. At the time of filing, the pecuniary threshold for commercial suits was Rs.1 crore, placing the suit outside the ambit of the Commercial Courts. The 2018 Amendment Act lowered this threshold, expanding the jurisdiction of Commercial Courts. The petitioners contended that Section 19's prospective operation created arbitrary classification denying similarly situated litigants the benefit of Commercial Courts, violating Article 14 of the Constitution.
The trial court rejected the petitioners' application for transfer of the suit to the Commercial Court, holding that the amendment applies only prospectively. The petitioners' subsequent revision petition was also dismissed, leading to the present writ petition under Article 226.
The Delhi High Court upheld the validity of Section 19, holding that the prospective operation of legislation is a normal legislative feature and does not violate the right to equality under Article 14. The Court emphasized that classification based on the date of institution of suits is an intelligible differentia having a rational nexus with the legislative objective of orderly implementation and expeditious disposal of commercial disputes. Retrospective application of the amendment would unsettle ongoing trials at various stages, affecting pleadings, procedure, and timelines.
Further, the Court distinguished the present case from precedents cited by the petitioners and relied on its earlier decision in Satyanarain Khandelwal v. Prem Arora (2022), which had interpreted Section 19 as clear and unambiguous in limiting the amendment's applicability to suits instituted on or after May 3, 2018. The Court noted that the "save as otherwise provided" clause merely preserves existing rights without conferring new ones.
Constitutional principles governing legislative cut-off dates were reiterated, highlighting the presumption of constitutionality and the burden on challengers to prove manifest arbitrariness or irrationality. The petitioners failed to discharge this burden, and the Court found no merit in the Article 14 challenge.
The judgment reinforces the legislative intent to facilitate quicker resolution of commercial disputes by expanding the jurisdiction of Commercial Courts while balancing the need to avoid disruption to ongoing litigation. The ruling provides clarity on the temporal operation of the 2018 amendment and upholds the constitutional validity of Section 19.
Bottom Line:
Commercial Courts Act - Constitutional validity of Section 19 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Act, 2018 upheld - Provision making amendment applicable only to cases filed on or after 03.05.2018 is prospective in operation - Classification based on date of institution is an intelligible differentia having rational nexus with object of orderly implementation and expeditious disposal of commercial disputes - Merely because suits instituted before amendment continue under pre-amendment regime, Article 14 is not violated.
Statutory provision(s):
Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 Section 15, Section 19; Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Act, 2018 Section 19; Constitution of India Article 14
M/s Alpro Industires v. Union of India, (Delhi)(DB) : Law Finder Doc Id # 2990684
