(1) The State Government, may after consultation with the concerned High Court, by notification, constitute such number of Commercial Courts at District level, as it may deem necessary for the purpose of exercising the jurisdiction and powers conferred on those Courts under this Act:
Provided that for areas where High Courts exercise ordinary original civil jurisdiction, the State Government may constitute Commercial Courts at the District Judge level or below District Judge level.
(1A) Notwithstanding anything contained in this Act, the State Government may, after consultation with the concerned High Court, by notification, specify the pecuniary value which shall not be less than three lakh rupees and not more than the pecuniary jurisdiction exercisable by the District Courts.
(2) The State Government shall, after consultation with the High Court, specify, by notification, the local limits of the area to which the jurisdiction of a Commercial Court shall extend.
(3) The State Government may, with the concurrence of the Chief Justice of the High Court, appoint one or more persons having experience in dealing with commercial disputes to be the Judge or Judges of a Commercial Court.
Legal Commentary & Landmark Judgments: Section 3
Section 3 of the Commercial Courts Act, 2015 governs the constitution and establishment of Commercial Courts at the district level by State Governments in consultation with respective High Courts.
Judges presiding over Commercial Courts are appointed from amongst judicial officers with specialized experience in dealing with commercial, contractual, and corporate disputes. The notification defines both the territorial jurisdiction and the specific pecuniary limits of each Commercial Court, preventing jurisdictional overlap with regular civil courts.
The 2018 amendment democratized access to Commercial Courts by lowering the pecuniary entry threshold to three lakh rupees. In practice, jurisdiction challenges frequently arise regarding whether a claim was properly assigned to the Commercial Court or regular civil court; Section 3 makes it clear that once a court is notified, its jurisdiction over commercial disputes of specified value within that territory is exclusive.