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BOMBAY HIGH COURT
Abhay Ahuja, J.
Varanium Cloud Limited in the Matter Between Rolta Private Limited and Anr. – Applicat/ Plaintiffs
versus
Varanium Cloud Limited and Anr. – Defendants
Interim Application (L) No.6341 of 2024 in Summary Suit No.18 of 2023
Decided on 11.11.2024
Civil Procedure Code, 1908 – Order VII Rule 10 and Order XXXVII Rule 1 – Commercial Courts Act, 2015 – Section 12-A – 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 – Just because dispute arises purportedly out of a contract which has been referred to as a commercial contract for the purposes of levying interest which has not been stated in agreement cannot be used to say that dispute arising out of a purported breach of said contract is a commercial dispute, even if transaction is a commercial one in a general sense as dispute to be a commercial dispute has to arise out of specific items listed in Section 2(1)(c)(i) to (xiii), which is not the case here – If dispute as held is not commercial dispute even if dispute is above specified value that would be of no consequence – Application rejected. (Paras 21, 22, 27 and 28)
Result: Interim Application rejected.
Certainly. Based on the provided legal document, here are the key points:
The application for return of the Plaint was filed under Order VII Rule 10 of the Civil Procedure Code (CPC), arguing that the suit was incorrectly filed as an ordinary summary suit instead of a commercial summary suit under the Commercial Courts Act, 2015 (!) .
The core issue was whether the dispute qualifies as a "commercial dispute" under Section 2(1)(c)(i) of the Commercial Courts Act. The Court emphasized that only disputes arising out of specific transactions listed in Sections 2(1)(c)(i) to (xiii) are considered commercial disputes (!) (!) .
The Court clarified that merely referring to a contract as a "commercial contract" or including interest provisions not specified in the agreement does not automatically classify a dispute as commercial. The dispute must arise out of specific items enumerated in the law (!) .
The Court examined the nature of the plaintiff's business, which is primarily leasing services, and found that the transaction in question—an assignment of debt—does not fall within the scope of ordinary transactions of merchants, financiers, or traders as defined under the Act (!) (!) .
The Court highlighted that the transaction was a singular assignment of debt, not part of the plaintiff's ordinary course of business, and therefore does not constitute an "ordinary transaction" of a merchant, banker, financier, or trader (!) (!) .
The Court underscored that the purpose of the Commercial Courts Act is to expedite genuine commercial disputes. A broad or liberal interpretation of the law should not be used to convert non-commercial disputes into commercial ones, which would defeat the law's objective (!) (!) .
The Court rejected the application for return of the plaint, concluding that the dispute does not arise out of an "ordinary transaction" as required for a commercial dispute, and therefore, it does not fall within the jurisdiction of the Commercial Division of the Court (!) .
Consequently, the Court also dismissed the objection regarding non-compliance with Section 12A of the Act, as the suit is not deemed a commercial suit (!) .
The Court observed that the defendants' attempt to reclassify the suit as a commercial summary suit appears to be a delaying tactic, and it imposed a cost of Rs. 5 lakhs on the defendants for this conduct (!) .
Overall, the Court reaffirmed the importance of a strict, narrow interpretation of what constitutes a "commercial dispute" to ensure the effective functioning of the commercial courts and to prevent non-commercial cases from clogging the system (!) (!) .
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ORDER
This Interim Application seeks return of the Plaint under Order VII Rule 10 of the Code of Civil Procedure, 1908 (“CPC”) on the ground that the Summary Suit falls within the scope and ambit of the Commercial Courts Act, 2015 (the “said Act”) and has been incorrectly instituted as an Ordinary Summary Suit on the Ordinary Original Civil Jurisdiction of this Court, but ought to have been filed before the Commercial Division of this Court as a Commercial Summary Suit under the said Act.
2. Mr. Narvekar, learned Counsel appearing for the Applicant-Defendant No.1 would submit that considering that the Plaintiff No.1 had advanced the loan in the course of its business to Rolta India Limited having acted as a financier and then has sought to assign it to the Defendant No.1 viz the Applicant, is only acting as a Financier/Trader which falls within the definition of commercial dispute in terms of Section 2(1)(c)(i) of the said Act and that therefore, the Plaint should be returned to the Court in which it should have been instituted viz. the Commercial Court Division of this Court as a Commercial Summary Suit as the dispute set out in the Plaint is a commercial dispute of a specified value viz. more than Rs. 3 lacs.
3. Mr. Narvekar has submitted that in view of the dictionary meanings of the words Ordinary, Financier, Trader and Mercantile as appearing in Section 2(1)(c)(i) of the said Act, the present dispute is a commercial dispute. That the said term had to be seen in their expansive sense and not in the narrow sense in view of the use of the words arising out of Section 2(1)(c)(i) of the said Act.
4. Mr. Narvekar would submit that the Plaintiff No.1 has acted as a financier and financed monies to Rolta India Limited, which was to be assigned to the Defendant No.1 and for purely commercial purposes as admitted in paragraph 4.3 of the Plaint. That the present dispute is of a specified value has been admitted by the Plaintiffs.
5. Mr. Narvekar would submit that if it is shown from the Plaint that the dispute is a commercial dispute of specified value then the suit has to be mandatorily tried as such by the Commercial Division of the High Court as the exclusive jurisdiction lies with the commercial division. Mr. Narvekar has taken this Court through the preamble to the said Act as well as Sections 4, 7 and 15 of the said Act.
6. As noted above, Mr. Narvekar has relied upon the dictionary meanings of the words Ordinary, Transaction, Financer, Trader, Mercantile, Commerce in support of his submissions. In support of his contentions Mr. Narvekar has also relied upon the decisions in the following cases:-
i) State of Mysore Vs. T. V. Sundaram Iyengar, (1980) 1 SCC 66.
ii) M/s Doypack Systems Pvt. Ltd. Vs. Union of India, (1988) 2 SCC 299.
iii) Ambalal Sarabhai Enterprises Ltd. Vs. K. S. Infraspace LLP & Anr., (2020) 15 SCC 585.
7. Mr. Narvekar would therefore submit that the Plaint be therefore returned under Order VII Rule 10 of the CPC to be filed before the Commercial Division of this Court.
8. On the other hand, Mr. Ankit Lohia, learned Counsel appearing for the Plaintiffs has opposed the said submissions. Mr. Lohia has submitted that the Application filed under Order VII Rule 10 is nothing but a dilatory tactic to prevent this Court from adjudicating the Suit.
9. Mr. Lohia would submit that this Interim Application is a delayed attempt to correct the false assumptions in Interim Applications (L) No.3102 of 2024 which has been filed seeking dismissal of the Suit on account of the purported non-compliance with Section 12A of the said Act.
10. Mr. Lohia would submit that it is denied that the present Summary Suit falls within the ambit of the said Act as the said Act is only applicable to a Summary Suit with respect to a commercial dispute as defined under Section 2(1)(c)(i) of the said Act. That the subject dispute in the present Summary Suit does not fall within a ambit of “Commercial Disputes” as defined under the said Act a
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.
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.
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....
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....
Suits misclassified as commercial must be treated under ordinary civil jurisdiction; designation does not create a distinct court.
A dispute arising from an agreement to sell immovable property used for trade is a commercial dispute, mandating resolution in a Commercial Court, as clarified by statutory definitions.
The transaction in question was ruled to not constitute a commercial dispute as defined under relevant law.
The mandatory requirement of pre-institution mediation under Section 12-A of the Commercial Courts Act, 2015 must be complied with for a suit to be maintainable.
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