IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Bharati Dangre, J.
Glasswood Realty Pvt. Ltd. - Appellant
Versus
Chandravilas Kailashkumar Kothari - Respondent
Writ Petition No. 8393 of 2021
Decided On : 06-12-2021
Commercial Summary Suit - Commercial Dispute - Code of Civil Procedure, 1908 - Commercial Courts Act, 2015, Sec. 2(c), Sec. 20 - The court discussed the provisions of the Commercial Courts Act, 2015 and the definition of 'commercial dispute' under Sec. 2(c). It emphasized that disputes involving ordinary transactions of merchants, bankers, financiers, and traders fall within the purview of 'commercial disputes'. The court also highlighted the need for a commercial flavor and a commercial purpose in the transaction to qualify as a 'commercial dispute'. The judgment referenced the case of Ambala Sarabhai Enterprises Ltd Vs. K.S. Infraspace LLP and others to support its interpretation of 'commercial dispute' and the purpose of the Commercial Courts Act, 2015.
Fact of the Case:
A Commercial Summary Suit was filed by the respondent seeking recovery of a friendly loan with interest. The defendant sought to return the plaint, arguing that it did not fall within the purview of 'commercial transaction' under the Commercial Courts Act, 2015. The court found that the transaction was commercial in nature and dismissed the defendant's motion.
Finding of the Court:
The court found that the transaction between the parties, despite being termed as a 'friendly loan', had a commercial nature due to the financial transaction and the agreement to pay interest. It held that the dispute fell within the definition of 'commercial dispute' under the Commercial Courts Act, 2015.
Issues: The main issue was whether the transaction qualified as a 'commercial dispute' under the Commercial Courts Act, 2015, and whether the suit should be returned on that basis.
Ratio Decidendi: The court emphasized the need for a commercial flavor and purpose in the transaction to qualify as a 'commercial dispute'. It referenced the provisions of the Commercial Courts Act, 2015 and the case of Ambala Sarabhai Enterprises Ltd Vs. K.S. Infraspace LLP and others to support its interpretation.
Final Decision: The court set aside the impugned order and allowed the plaint to be presented to the appropriate court, not being a 'commercial dispute'.
JUDGMENT
1. A Commercial Summary Suit under Order 37 Rule 2 of the Code of Civil Procedure was filed by Mrs. Mrs.Chandravilas Kailashkumar Kothari (respondent herein) seeking the following relief:-
"(a) The Defendants be ordered and decreed to pay to the Plaintiff a sum of Rs.35,00,000.00 as per particulars of claim Exhibit 'O' hereto together with interest at the rate of 18% p.a. and further interest from the date of filing of the present suit till payment and/or realization"
2. The plaintiff staked the claim on the basis that the amount is due and payable to her, from the defendant as the amount of Rs.35.00 lakhs was advanced as a friendly loan and on default in its repayment, it was sought back with interest.
3. In the said Commercial Suit, the petitioner (original defendant) filed Notice of Motion No.877 of 2021 requesting the Court to exercise the powers under Order 7 Rule 10, sub-Sec. (1) of the Code of Civil Procedure, to return the plaint to the plaintiff. The affidavit in support of Notice of Motion pleaded that the plaintiff in the plaint has admitted that the suit transaction is a friendly loan, of which the refund is sought and the defendant has filed written statement on record in which the and existence of any commercial relationship or any commercial transaction, attracting the provisions of Commercial Courts Act, 2015, was denied. The Notice of Motion was based on a pleading that the Suit of the plaintiff do not fall within the purview of 'commercial transaction' contemplated under Sec. 2(c) of the Commercial Courts Act, 2015 and hence the Suit is liable to be returned.
4. The Notice of Motion was responded to, by the plaintiff by filing an affidavit, wherein it is set out that the word 'commercial' before the word 'summary suit' is a mistake and it is clearly admitted that it is not a commercial suit and the following statement is made in para 9 to the following effect :
"9. I say that further in Paragraph No. 23 of the said Written Statement filed by the Defendants again it has been clearly admitted that the Plaintiff has filed the suit as Summary suit under the provision of Order XXXVII Rule 2 of CPC and therefore the Defendants are very well aware that the suit filed by the Plaintiff is under the provisions of CPC and not under the provisions of Sec. 20 of the Commercial Courts Act, 2015 and therefore no question or right arises for the Defendants to allege that the suit is filed as commercial suit as they have clearly admitted that the Suit is filed under the Provisions of CPC.
11. I repeat and reiterate that except the word Commercial in hand written, there is no change in the provision of the recovery suit which is still as such there in the plaint which clearly shows that the suit filed is not as a commercial suit but it is a recovery suit strictly as per the provisions of the Code of Civil Procedure, 1908. Therefore the Defendants cannot say that the said suit is filed under the provisions of the Commercial Courts Act, 2015 as it is nowhere mentioned that the suit is filed under Sec. 20 of Commercial Courts Act, 2015 as alleged by the said Defendant."
5. The Notice of Motion came to be decided by the Addl. Sessions Judge, Mumbai under the impugned order passed on 31/3/2021, with the result that it is dismissed. The learned Judge has reasoned the dismissal by holding that the plaintiff had provided finance to the defendants for business purpose and the defendant had agreed to pay interest @ 18% p.a, which goes to suggest that there is a financial transaction involved and the transaction is commercial, despite the use of the word 'friendly loan' by the plaintiff. It is recorded that the word 'friendly' does not take away nature of the transaction, which is purely commercial and will fall within the definition of 'commercial dispute' as defined in Sec. 2, sub-sec. (3)(1) of the Commercial Courts Act, 2015. The learned Judge further record that plaintiff has acted as a financer and there is a transaction of
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.