Back
IN THE HIGH COURT OF CALCUTTA
Harish Tandon, Shampa Dutt Paul, JJ.
Venkatesh Vincom Private Limited - Appellant
Versus
Spice Of Joy, Multicuisine Restaurant Cum Bar And Others - Respondent
FMAT 20 of 2022 & CAN 1 of 2022
Decided On : 26-09-2022
Commercial Dispute - Money Suit - Code of Civil Procedure - Section 2(1)(c)(i)
Fact of the Case:
The appellant filed a suit for recovery of a sum of Rs. 97,65,333/- along with interest before the Commercial Court at Alipore. The respondent filed an application for rejection of the plaint primarily on the ground that the dispute does not satisfy the definition of a commercial dispute given under Section 2(1)(c)(i) of the Commercial Courts Act, 2015.
Finding of the Court:
The court found that the dispute involved in the suit satisfies the definition of a commercial dispute and the order of the Commercial Court was set aside.
Issues: The primary issue was whether the dispute raised in the suit and the relief claimed thereunder satisfied the definition of a commercial dispute so as to make the suit entertainable and maintainable before the Commercial Court.
Ratio Decidendi: The court held that the lending of money for business purposes by the non-banking financial company comes within the ambit of a commercial dispute. It also emphasized that the definition of a mercantile document is expansive and includes any matter expressed or described upon any substance by means of letters, figures, or marks, or electronic means intended to be used for the purpose of recording the matter.
Final Decision: The order impugned was set aside and the appeal succeeded.
Based on the provided legal document, the main legal point established is that the definition of a commercial dispute under the relevant legislation is broad and inclusive. It encompasses transactions related to lending money for business purposes conducted by non-banking financial companies, recognizing such transactions as falling within the scope of commercial disputes (!) (!) .
The court emphasized that the scope of what constitutes a mercantile or commercial document is expansive, covering any matter expressed or described upon any substance by means of letters, figures, or marks, or electronic means, intended for recording purposes (!) (!) . This broad interpretation aligns with the legislative intent to facilitate the speedy resolution of high-value commercial disputes and to include a wide range of transactions, including those involving financial support and loans extended by financial institutions engaged in business activities (!) (!) .
Furthermore, the judgment clarifies that transactions involving loans or financial assistance provided by non-banking financial companies to merchants or business entities are considered ordinary commercial transactions. Such transactions are deemed to involve mercantile documents, especially when the transaction is for profit and the involved parties are engaged in trade or commerce (!) (!) .
The court also highlighted that the absence of a formal written agreement or specific document does not exclude a transaction from being considered commercial, provided the transaction falls within the broad scope of mercantile activities and documents as defined by law (!) (!) . The interpretative approach recognizes the evolving nature of commercial transactions, especially with technological advancements, and emphasizes that the legislative intent is to include transactions that are inherently commercial in nature, even if not documented in traditional forms (!) (!) .
In summary, the judgment affirms that the scope of a commercial dispute is extensive, encompassing various types of transactions related to finance, trade, and commerce, and that the definition should be interpreted broadly to align with the legislative purpose of expediting commercial justice.
JUDGMENT
Harish Tandon, J. - The present appeal arises from a judgment and order dated 11.11.2021 passed by the learned Judge, Commercial Court at Alipore in Money Suit no. 12 of 2021 whereby and whereunder an application of Order 7 Rule 11 of the Code of Civil Procedure was disposed of directing the return of the plaint to be presented before the Competent Court.
2. Shorn of unnecessary details the suit was filed by the appellant for recovery of a sum of Rs. 97,65,333/- along with an interest at the rate of 4 per cent per annum till the realisation of the said amount before the Commercial Court at Alipore which was registered as Money Suit no. 12 of 2021. The plaint proceeds that the plaintiff-appellant is a non-banking financial company and engaged in lending money for business. The Respondent no 2 and 3 carrying on business of a multicuisine restaurant and bar in partnership, approached the appellant company for an accommodation loan of Rs. 15 lakhs for a period of 180 days at an agreed rate of interest at the rate of 4 per cent per month. The said amount was given through an account payee cheque in favour of the Respondent no. 2 for and on behalf of the Respondent no. 1 which was duly encashed and receipt was issued by the Respondent no. 1 under his letterhead duly signed by the Respondent no. 2 as partner thereof. It is further stated that for few months the respondents paid the interest at such agreed rate by an account payee cheque to the appellant and further approach was made in the month of January, 2016 for further financial assistance of Rs. 25 lakhs at such agreed rate of interest. The said sum of Rs. 25 lakhs was further paid through an account payee cheque in favour of the Respondent no. 2 for and on behalf of the Respondent no. 1 which was duly encashed and the receipt issued by the Respondent no. 1 would corroborate the same. It is further stated that the sum of Rs. 1 lakh was paid by the respondents on 19.5.2018 towards the agreed amount of an interest which would be evident from the bank statements issued by the banker of the appellant for the relevant period. The plaint further proceeds that subsequently the cheques were issued by the defendants which were dishonoured for insufficient funds and proceeding under Section 138 of the Negotiable Instrument Act has been initiated and simultaneously the suit was filed before the Commercial Court for realisation of the money lent and advanced to the defendants together with an agreed rate of interest. It is pertinent to record that the TDS was deducted and deposited with the Income Tax Department and the certificate issued in this regard by the said authority would evince the transaction to have been affected and acknowledgement is made to the same.
3. An application under Order 7 Rule 11 read with Section 151 of the Code of Civil Procedure was taken out by the respondent before the Commercial Court for rejection of the plaint primarily on the ground that the dispute does not satisfy the definition of a commercial disputes given under Section 2 (1)(c)(i) of the Commercial Courts Act, 2015. Though the other plea relating to pecuniary jurisdiction was also raised but the Commercial Court discarded the aforesaid contention in the impugned judgment which has not been challenged by the respondents either by filing a separate proceeding nor a cross-objection in the instant matter. Therefore, we are not venturing to go into the aforesaid aspect and restricted our determination to the core issue whether the dispute satisfies the definition of a commercial dispute assigned in Section 2 (1)(c)(i) of the said act. The statement pertaining to the object and reasons for promulgation of the Commercial Courts Act, 2015 was conceptualised to create a global economic environment because of the seemingly increased competition and to attract the business at the international level to boost the economic growth of the country. The Law Commission of India in its 188th report recommended th
The main legal point established in the judgment is that the definition of a commercial dispute is expansive and includes transactions related to lending money for business purposes by non-banking fi....
A dispute must arise from ordinary transactions of merchants, bankers, financiers, and traders to qualify as a commercial dispute under the Commercial Courts Act, 2015.
Return of Plaint – Summary Suit – Only disputes which are in nature of ordinary transactions of merchants, financiers and traders will fall within purview of commercial disputes.
The central legal point established in the judgment is the interpretation of 'commercial dispute' under the Commercial Courts Act, 2015, emphasizing the need for a commercial flavor and purpose in th....
Misappropriation of funds from a current account qualifies as a commercial dispute under Section 2(1)(c) of the Commercial Courts Act, 2015, allowing the Commercial Court to have jurisdiction over th....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
