Promissory notes qualify as commercial disputes under the Commercial Courts Act, enabling suits for money recovery in the Commercial Court despite challenges on jurisdiction and compliance with procedural mandates.

COMMON ORDER

These Civil Revision Petitions have been filed to set aside the Order and Decreetal Order dated 02.01.2025 made in I.A. No.7 of 2024 in C.O.S. No.9 of 2022 & I.A. No.4 of 2024 in C.O.S. No.10 of 2023 on the file of the Commercial District Court, Salem.

2. These revisions have been filed challenging the dismissal of Interlocutory Applications filed by the revision petitioners, being defendants in two Commercial Suits, seeking rejection of the plaint.

3. Heard Mr.N.Jothi, learned Senior Counsel for Mr.S.Vinod, learned counsel for the petitioners and Mr.Arun Anbumani, learned counsel for Mr.N.Guruprasad, learned counsel for the respondent.

4. The arguments of the learned Senior Counsel Mr.N.Jothi, can be summarized as hereunder:

(i) The suit claim is for recovery of money based on promissory note and the same does not fall within any of the 22 categories enumerated under Section 2 (1)(c) of the Commercial Courts Act, 2015 (in short 'Act').

(ii) The promissory note can never be a commercial dispute, entitling the respondent to move the Commercial Court.

(iii) Neither the cause of action nor the averments and allegations of the plaint, vest jurisdiction with the Commercial Court.

(iv) The plaintiff has failed to fulfill the requirements of the Tamil Nadu Money Lenders Act, 1957 .

(iv) Even on the ground of non-compliance of Section 12 (A) of the Commercial Courts Act, the plaints are liable to be rejected.

(v) The Commercial Court has not appreciated the various decisions that had been relied on in support of the Application to reject the plaint.

(vi) The plaintiffs having instituted the suit as well as proceedings under the Negotiable Instruments Act, 1881 before the learned Magistrate Court, cannot have the benefit of two parallel proceedings.

5. The learned Senior Counsel Mr.N.Jothi, in order to substantiate the above summarized arguments would state that in order to attract the jurisdiction of the Commercial Court, the documents should fall within the definition of “mercantile document”. He would contend that a promissory note, which is only a negotiable instrument cannot be styled as a “mercantile document”. Though he would fairly submit that “mercantile document” is not defined in any of the enactments including the Commercial Courts Act, 2015 , the Indian Contract Act, 1872 , he would however draw my attention to Section 137 of the Transfer of Property Act , which is extracted for easy reference:-

137. Saving of negotiable instruments, etc.—

Nothing in the foregoing sections of this Chapter applies to stocks, shares or debentures, or to instruments which are for the time being, by law or custom, negotiable, or to any mercantile document of title to goods.

Explanation.—The expression “mercantile document of title to goods” includes a bill of lading, dock-warrant, warehouse-keeper’s certificate, railway receipt, warrant or order for the delivery of goods, and any other document used in the ordinary course of business as proof of the possession or control of goods, or authorising or purporting to authorise, either by endorsement or by delivery, the possessor of the document to transfer or receive goods thereby represented.

6. Relying on the above explanation, the learned Senior Counsel would state that the promissory note is therefore not covered under the expression ‘mercantile document’. The learned Senior Counsel also fairly states that two suits between the connected parties, which was originally disposed by this Court in (CAD) Nos.12 and 13 of 2023, arising out of the decree in C.O.S. No.s 25 and 26 of 2022, on the file of the Commercial Court, Salem, were only tried as commercial disputes. However, it is the contention of the learned Senior Counsel that the said plea of whether a promissory note can be brought within a “commercial dispute” was never argued and tested by the Hon’ble Division Bench and therefore, he would state that the adverse orders passed against the revision petitioners by the Hon’ble Division Benc