The court ruled that the recovery suit based on mortgage deeds is valid and falls under the Commercial Courts Act, as both parties engaged in a commercial transaction, with the suit being timely filed within the limitation period.

ORDER :

V. LAKSHMINARAYANAN, J.

The Civil Revision Petition is directed against the order dated 26.06.2024 made in I.A. No. 2 of 2024 in C.O.S. No. 125 of 2023 on the file of Commercial Court at Egmore, Chennai.

2. The respondent/plaintiff presented C.O.S. No. 125 of 2023 seeking the relief of recovery of money on the basis of a mortgage. The civil revision petitioner is the defendant in the suit.

3. The case of the respondent/plaintiff is that on 04.07.2012, the civil revision petitioner/defendant had borrowed a sum of Rs.35 lakhs by mortgaging the suit schedule mentioned property. Furthermore, on 10.07.2012, the civil revision petitioner had borrowed a further sum of Rs.15 lakhs and had executed another mortgage deed. Both mortgage deeds were registered on the file of SRO, Joint II Central,Chennai.

4. On 20.06.2017, the plaintiff demanded the defendant to pay the amounts under the mortgage deeds. However, the defendant did not clear the amounts. On 03.07.2017, the defendant issued a reply. Being left with no other option, invoking the provisions of Section 2(1)(c)(i) read withSection 6 of ‘The COMMERCIAL COURTS ACT , 2015’ (hereinafter ‘CCA’ for the sake of brevity and convenience), the plaintiff presented the suit.

5. It is admitted by both sides that the defendant did not present his defence as required under CCA within a period of 120 days. Therefore, he had forfeited his right to set up defence in the suit. Having lost his right, he filed an application for rejection of plaint. This application was received in I.A. No. 2 of 2024.

6. The grounds on which the defendant sought rejection of plaint are two-fold and they are:

(i) It is not a “commercial dispute” within the meaning of Section 2(1)(c)(i) of CCA and

(ii) The suit is barred by time.

The learned District Judge dismissed the application on 26.06.2024 as against which the present revision is filed.

7. Heard Mr.B. Manimaran, learned counsel for the civil revision petitioner and Mr. Anish Gopi, learned counsel for the respondent/caveator.

8. Mr.B. Manimaran reiterated the submissions made before the Commercial Court. First, he would state that although the mortgage deedshad been executed in the year 2012, the suit was instituted only in the year 2023. Therefore, according to him, the suit is barred by time.

9. Secondly, he would state that the suit, being one on mortgage, is not covered by Section 2(1)(c)(i) of CCA.

10. Insofar as the plea of limitation is concerned, the suit is for recovery of money on registered mortgage deeds. The period of limitation for such a suit is governed by Article 62 of The LIMITATION ACT , 1963. In terms of Article 62 of the said Act, the plaintiff is entitled to enforce payment of money secured on a mortgage by presentation of a suit within 12 years from the date on which the money becomes due. In this case, the plaintiff had made a demand on the defendant by virtue of an advocate's notice dated 20.06.2017. If that date is taken for calculation of limitation, then the plaintiff, having filed the suit in 2023, it is well within time. Even if the date of execution of the mortgage deeds is taken as the date of commencement of limitation, the suit having been filed on 03.03.2023, it is atleast one year and 6 months prior to the expiry of the period of limitation. Therefore, the argument of the learned counsel for the civil revision petitioner that the suit is barred by time fails.

11. With respect to the plea that the dispute involved in the suit does not fall within the definition of ‘commercial dis