Andhra Pradesh High Court Clarifies “Specified Value” Under Commercial Courts Act: ₹3 Lakhs Threshold Effective Without Notification

I. Introduction

On 18th May 2026, a Full Bench of the High Court of Andhra Pradesh at Amaravati comprising Hon'ble Justice Cheekati Manavendranath Roy, Hon'ble Justice Ravi Nath Tilhari, and Hon'ble Justice Battu Devanand pronounced a landmark judgment in the batch of Civil Revision Petitions led by CRP No.1847 of 2024 (3F Industries Limited v. Transparent Technologies Solutions Private Limited). The judgment settles a controversy that had plagued civil courts and commercial courts across Andhra Pradesh for nearly eight years: whether the reduction of the "Specified Value" under the Commercial Courts Act, 2015 from ₹1 crore to ₹3 lakh — effected by Amendment Act No.28 of 2018 — was self-operative from the date of amendment, or whether a separate government notification was a precondition for its enforcement.

The judgment is significant not merely for its outcome but for the rigour of its statutory interpretation, the clarity with which it distinguishes two hitherto conflated legal concepts, and its forthright directions to both the State Government and the High Court to implement the amended law in its true letter and spirit.

II. Background and Genesis of the Reference

The immediate occasion for this reference arose from an execution petition — E.P. No.20 of 2024 — filed before the XI Additional District Judge at Tadepalligudem, seeking enforcement of an arbitral award through attachment of property under Order XXI, Rule 54 of the Code of Civil Procedure, 1908. The executing court, by an order dated 26th July 2024, directed that the matter be posted for issuance of process.

The petitioner challenged this order before the High Court in CRP No.1847/2024, principally on the ground that the XI Additional District Judge at Tadepalligudem — being a civil court and not a commercial court — lacked inherent jurisdiction to entertain an execution petition arising out of a commercial arbitration. Reliance was placed on the earlier Division Bench judgment in M/s. Obulapuram Mining Company Pvt. Ltd. v. R.K. Mining Private Limited* (CRP No.2183/2022, dated 12-9-2023), wherein it was categorically held that:

"All applications for execution are 'applications' within the meaning of Sections 10 and 15 of the Act and after the Commercial Courts are constituted in the State of Andhra Pradesh, only the said Commercial Courts have jurisdiction over the commercial disputes of Specified Value even for execution. All orders passed by Civil Courts in a commercial dispute after 16-5-2019 were by a coram non-judice and were bad in law."

When the matter was argued before the Division Bench in CRP No.1847/2024, the respondent's counsel relied on a conflicting judgment of a coordinate Division Bench in Bellam Balakrishna v. Greenmount Developers* (CRP No.1749/2023, dated 28-8-2023), which held that until the State Government issues a notification in consultation with the High Court under Section 3(1A) of the Act, the ₹3 lakh pecuniary threshold fixed in Section 2(1)(i) of the Act would not come into operation.

A third Division Bench judgment — U.V. Satyanarayana v. M/s. Shriram City Union Finance Ltd.* (CRP No.740/2024, dated 04-7-2024) — was also placed before the Bench, wherein it was held that an execution petition to enforce an order passed by a Commercial Court must be filed only before the Commercial Court and not before a Civil Court, proceeding on the assumption that the ₹3 lakh Specified Value was operative.

The Division Bench noticed an apparent and irreconcilable conflict between Bellam Balakrishna and U.V. Satyanarayana on the fundamental question of whether the 2018 amendment was self-operative or required a separate executive notification to come into force.

The reference from the Division Bench in CRP No.1847/2024 set off a chain reaction. A similar issue pending before a learned Single Judge in CRP No.1172/2022 was also placed before the Division Bench. Thereafter, CRP Nos.1685, 1686, 1688, and 1689 of 2024 — all raising the identical question — were directed to be listed alongside CRP No.1847/2024. A learned Single Judge additionally noted that the judgment in Bellam Balakrishna appeared contrary to the provisions of Section 3 of the Act and referred the matter upward. Thus, the entire batch was placed before the Full Bench for an authoritative resolution of the reference.

III. Questions Referred to the Full Bench

The Division Bench formulated three specific questions for the reference, which this Full Bench was constituted to answer:

Question A: Whether Amendment Act No.28 of 2018, in respect of Sections 2(1)(i) and 3(1A) of the Commercial Courts Act, 2015, by itself amends the "Specified Value" as "not less than three lakh rupees" for the jurisdiction of the Commercial Court, or does it only enable the Central Government and State Governments to do so by notification — and it is only after such notification that the Specified Value shall stand amended?

Question B: Whether the "Specified Value" in Section 2(1)(i) as substituted by Act 28 of 2018 to the effect "which shall not be less than Rupees three lakhs" shall be operative and effective from —

• (i) the date of amendment, i.e., w.e.f. 03-05-2018; or

• (ii) the date notified in a notification issued by the Central Government under Section 2(1)(i); or

• (iii) the date notified in a notification issued by the Andhra Pradesh State Government in consultation with the High Court under Section 3(1A) of the Act?

Question C: Which judgment — U.V. Satyanarayana or Bellam Balakrishna — lays down the law correctly?

IV. The Relevant Statutory Provisions

To appreciate the Full Bench's analysis, it is necessary to set out the relevant provisions of the Commercial Courts Act, 2015.

Section 2(1)(i) — Definition of "Specified Value"

(As amended by Amendment Act No.28 of 2018, w.e.f. 03-05-2018)

"2. Definitions. — (1) In this Act, unless the context otherwise requires, —
(i) "Specified Value", in relation to a commercial dispute, shall mean the value of the subject-matter in respect of a suit as determined in accordance with Section 12 which shall not be less than three lakh rupees or such higher value, as may be notified by the Central Government."

Prior to its amendment, this provision read: "which shall not be less than one crore rupees."

Section 3 — Constitution of Commercial Courts

Section 3(1): Empowers the State Government, in consultation with the concerned High Court, to constitute Commercial Courts at the District level.

Section 3(1A): (Inserted by Amendment Act No.28 of 2018)

"Notwithstanding anything contained in this Act, the State Government may, after consultation with the concerned High Court, by notification, specify such pecuniary value which shall not be less than three lakh rupees or such higher value, for the whole or part of the State, as it may consider necessary."

Section 3(3): (As amended by Amendment Act No.28 of 2018) Empowers the State Government, with the concurrence of the Chief Justice of the High Court, to appoint one or more persons as Judge(s) of a Commercial Court "either at the level of District Judge or a Court below the level of a District Judge."

Section 10 — Jurisdiction in Respect of Arbitration Matters

Section 10(3):

"Where the subject-matter of an arbitration is a commercial dispute of a Specified Value and such arbitration is other than an international commercial arbitration, all applications or appeals arising out of such arbitration under the provisions of the Arbitration and Conciliation Act, 1996 that would ordinarily lie before any principal civil court of original jurisdiction in a district shall be filed in, and heard and disposed of by, the Commercial Court exercising territorial jurisdiction over such arbitration where such Commercial Court has been constituted."

Section 12 — Determination of Specified Value

Section 12 prescribes the method for calculating Specified Value. It contains four clauses:

• Clause (a): If the suit is for recovery of money — the amount of money sought to be recovered.

• Clause (b): If the suit relates to movable property — the market value of the movable property.

• Clause (c): If the suit relates to immovable property — the market value of the immovable property.

• Clause (d): If the relief relates to any other intangible right — the market value of the said right as estimated by the plaintiff.

If the value so determined is not less than ₹3 lakh, the dispute qualifies as a commercial dispute of Specified Value.

Section 15 — Transfer of Pending Cases

Section 15(2): All suits and applications relating to commercial disputes of Specified Value pending before a Civil Court shall be transferred to the Commercial Court having territorial jurisdiction over such disputes.

Article 13(3)(a) of the Constitution of India

Relevant to the discussion on delegated legislation, the Court extracted this provision:

"13(3)(a): 'law' includes any Ordinance, order, bye-law, rule, regulation, notification, custom or usage having in the territory of India the force of law."

This provision was relied upon to explain that a notification issued under statutory authority constitutes delegated legislation with the force of law — but only if and when issued.

V. The Root of the Confusion: "Specified Value" vs. "Pecuniary Value"

The most foundational contribution of this judgment is its identification of the conceptual error that generated the entire controversy. The Full Bench noted with clarity that the Division Bench that referred the questions proceeded on the erroneous premise that Section 2(1)(i) and Section 3(1A) both deal with the "Specified Value" — and that these provisions must be read together to determine the monetary threshold for Commercial Court jurisdiction. This was held to be factually and legally incorrect.

The Court articulated the distinction as follows:

As the Telangana High Court had aptly summarised in M/s. Janset Labs Pvt. Ltd. v. Agilent Technologies India Pvt. Ltd.* (CRP No.1932/2025, dated 22-9-2025) — approved and quoted by the AP Full Bench:

"While Specified Value forms the core of the commercial dispute for admission into the regime of The Commercial Courts Act, 2015, pecuniary value fixes the competence-parameters of the Court for receiving a commercial suit. While the former focuses on the value of the dispute, the latter sets the floor-limit capability of the receiving Court."

VI. Analysis and Reasoning of the Full Bench

A. On Question A: Does the 2018 Amendment Self-Operate?

The Full Bench answered emphatically in the affirmative. Its reasoning proceeded on three independent but mutually reinforcing grounds.

First, the Court invoked the fundamental constitutional principle of legislative supremacy. Amendment of a statute is the exclusive function of Parliament. When Parliament reduced the Specified Value from ₹1 crore to ₹3 lakh by substituting the relevant words in Section 2(1)(i), the amendment took effect proprio vigore — by its own force — from the date specified in the amending statute. No further executive act is required to operationalise a parliamentary amendment.

Second, the Court undertook a close textual analysis of Section 2(1)(i). The provision reads: "...which shall not be less than three lakh rupees or such higher value, as may be notified by the Central Government." The conjunction "or" performs a critical disjunctive function, separating two independent parts of the section. The first part — "not less than three lakh rupees" — is a legislative prescription that is immediately operative. The second part — "such higher value as may be notified" — merely confers a discretionary delegated power on the Central Government to increase the base limit. Notification is thus required only if the Central Government chooses to exercise this discretionary power to raise the threshold beyond ₹3 lakh.

Third, the Court noted that Section 3(1A) — which does require a notification — is an entirely separate provision dealing with an entirely different subject: the pecuniary limits of specific cadres of courts within the Commercial Court structure. Since no officer below the District Judge level presides over any Commercial Court in Andhra Pradesh at present, there is no functional need for such a notification, and its absence does not affect the operation of the ₹3 lakh Specified Value.

B. On Question B: From Which Date is the Amendment Operative?

The Full Bench answered: from 3rd May 2018, the date of the amendment itself.

Sub-question (iii) — whether the amendment would be operative only upon the State Government issuing a notification under Section 3(1A) — was specifically rejected. The Court reiterated that Section 3(1A) deals with pecuniary value of courts, not with Specified Value of disputes. These two provisions operate in entirely different statutory fields and the absence of a notification under one has no bearing on the operative effect of the other.

Additionally, the Court noted that Section 19 of Amendment Act No.28 of 2018 explicitly mandates that the amendments are prospective in nature — applicable only to transactions occurring on or after 03-05-2018 — and this temporal clarity further confirms the self-operating nature of the amendment from that date.

C. On Question C: Which Judgment is Correct?

The Full Bench held that neither judgment was entirely correct, though for different reasons.

Bellam Balakrishna's case was held to be incorrectly decided. The error was fundamental: it confused "Specified Value" under Section 2(1)(i) with "pecuniary value" under Section 3(1A), leading the Court to wrongly conclude that the amendment would not operate absent a State Government notification.

U.V. Satyanarayana's case was held to be partially correct but for the wrong reasons. While the direction to file the execution petition before the Commercial Court was on the right track regarding jurisdictional principles, the Bench critically overlooked a material fact: the subject matter of the arbitration was valued at only ₹45 lakh, and the transaction pre-dated 03-05-2018. Under the unamended Act, the Specified Value was ₹1 crore. A ₹45 lakh dispute therefore did not qualify as a commercial dispute of Specified Value and could not have come before a Commercial Court at all. This error went unnoticed by the Bench.

VII. The Court's Directions: A Wake-Up Call for Implementation

Perhaps the most striking aspect of this judgment is the Full Bench's unambiguous observations about the systemic failure in implementing the 2018 amendments — a failure spanning both the High Court's administrative machinery and the State Government.

The Full Bench noted with concern that despite the 2018 amendment having been operative since 03-05-2018:

1.    The Commercial Courts at Vijayawada and Visakhapatnam continue to function under the unamended Specified Value of ₹1 crore — effectively shutting out commercial disputes worth between ₹3 lakh and ₹1 crore from the fast-track Commercial Court system entirely.

2.    Earlier administrative proceedings of the High Court specifying the Specified Value as ₹1 crore were never withdrawn, and fresh proceedings specifying ₹3 lakh were never issued.

3.    G.O.Rt.No.609 dated 05-6-2023, issued by the State Government converting 13 existing Fast Track Courts into Commercial Courts at the Senior Civil Judge cadre level, remains unimplemented even three years after its issuance.

Against this background, the Full Bench issued the following concrete directions:

• The High Court must immediately issue fresh administrative proceedings to the two existing Commercial Courts at Vijayawada and Visakhapatnam specifying the Specified Value as not less than ₹3 lakh with effect from 03-05-2018.

• All commercial disputes above ₹3 lakh pending before ordinary Civil Courts shall stand transferred to the Commercial Courts under Section 15(2) of the Act.

• The State Government shall forthwith implement G.O.Rt.No.609 and make the 13 converted Commercial Courts at the Senior Civil Judge cadre functional.

• Upon making these courts functional, the State Government must issue a notification under Section 3(1A) specifying pecuniary jurisdiction as: Senior Civil Judge cadre — ₹3 lakh to ₹50 lakh; District Judge cadre — above ₹50 lakh with unlimited jurisdiction.

VIII. Conclusion

This judgment stands as a model of purposive statutory interpretation. By anchoring its analysis in the legislative intent behind the Commercial Courts Act — speedy resolution of commercial disputes for the benefit of the investor ecosystem — the Full Bench resisted interpretations that would have left the 2018 amendment as a mere paper reform for nearly a decade.

The core principle that emerges is clear: Parliament speaks through statute, and its word requires no executive endorsement to become law. The notification power delegated to the Executive is strictly confined to raising the threshold beyond the statutory floor — not to activating it. Any other interpretation would invert the constitutional hierarchy between Parliament and the Executive and defeat the very purpose of a legislative amendment.