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2021 Supreme(Online)(Bom) 1158

BOMBAY HIGH COURT
Dama Seshadri Naidu, J.
Bharat Huddanna Shetty v. Ahuja Properties and Developers
Summons for Judgment No. 9 of 2021, Commercial Summary S. No. 6 of 2021, Interim Appl. (L) No. 14350, 14343 of 2021



Advocates:
For the Appellants/Petitioners: Gauraj Shah
For the Respondents: Mikhail Behl

The transaction in question was ruled to not constitute a commercial dispute as defined under relevant law.

Headnote:The Court considered the applicability of Section 2(1)(c)(i) of the Commercial Courts Act, asserting that the transaction was a private friendly loan and not a commercial dispute. The Court ruled that the suit is to be treated as a Summary Suit rather than a Commercial Summary Suit, allowing for re-numbering.

Table of Content
1. suit involves a personal loan, not a commercial transaction. (Para 1 , 6)
2. court clarifies the classification criteria for commercial disputes. (Para 4 , 8 , 18)
3. final ruling classifies suit as summary suit. (Para 20 , 21)

1. The plaintiff is a businessman. The 1st defendant is a partnership firm; the 2nd and 3rd defendants are its partners. And the 2nd defendant is said to be the plaintiffs friend. Therefore, acting beyond the call of his business, the plaintiff has given “a friendly loan” to the defendants. The defendants executed a promissory note and issued cheques as well. But the cheques were dishonoured. So, the plaintiff has sued the defendants for recovery.

2. On the last occasion, the defendants pointed out that the suit must be treated as a Summary Suit rather than a Commercial Summary Suit, going by the plaint allegations. In that context, the plaintiffs counsel did not join the issue; instead, he requested the Court treat this Suit as a Summary Suit simpliciter. Then, through an order dt.5.7.2021, I required the Registry to re - number the Suit as Summary Suit.

3. Now, the Registry has brought to my notice the Minutes of the Meeting held on 31.3.2016 by a three - Judge Committee. That Committee took a decision, on the administrative side though, that
“the Registry shall transfer all Summary Suits to the Commercial Division and if any objection is received to the Notice issued to all the Advocates and Parties appearing - in - person with regard to, as to whether claim under pending Summary Suits is within the purview of definition of Commercial Dispute or not, then the same will be decided by the Hon'ble Court on Judicial Side.”

4. The above - extracted portion, thus, indicates that the Committee's decision, if ever, must affect the suits that had been pending by 31.3.2016. In other words, the Committee's decision is for the suits filed before that date. It does not bind the future cases. At any rate, I have once again heard the respective counsel based on the Registry's note.

5. Heard Mr. Gauraj Shah, the learned counsel for the plaintiff, and Mr. Mikhail Behl, the learned counsel for the defendants.

6. To begin with, the learned counsel for the plaintiff has drawn my attention to S.2(1)(c)(i) of the Commercial Courts Act. He has contended that the suit is based on negotiable instruments, which are mercantile documents. He also submits that it is a transaction between business people. In the end, he has submitted that if the Court still reckons that it is a simple summary suit rather than a commercial summary suit, it may direct the Registry to have the suit renumbered as a summary suit.

7. But the learned counsel for the defendants has pointed out that it is allegedly a private transaction between an individual and partners of a firm. Nor has the alleged debt has arisen during any trading activity. So, he has insisted that it must be a simple summary suit.

8. To put the issue in perspective, let us check what S.2 (1) (c) (i) of the Commercial Courts Act, 2015 says.
S.1(1)(c) “commercial dispute” means a dispute arising out of -
(i) ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents;
(ii) export or import of merchandise or services; (iii) issues relating to admiralty and maritime law; (iv) transactions relating to aircraft, aircraft engines, aircraft equipment and helicopters, including sales, leasing and financing of the same; (v) carriage of goods; (vi) construction and infrastructure contracts, including tenders; (vii) agreements relating to immovable property used exclusively in trade or commerce; (viii) franchising agreements; (ix) distribution and licensing agreements; (x) management and consultancy agreements; (xi) joint venture agreements; (xii) shareholders agreements; (xiii) subscription and investment agreements pertaining to the services industry including outsourcing
















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