Judicial Analysis Court Copy Headnote Facts Arguments Court observation

judgment-img

2025 Supreme(Online)(Bom) 249348

HIGH COURT OF BOMBAY
HONBLE JUSTICE PRAFULLA S. KHUBALKAR
JAYASWAL NECO INDUSTRIES LIMITED NAGPUR THR. AUTH. SIGNATORY KAILASH SHARMA – Appellant
Versus
ABHIRUCHI VISION PRIVATE LIMITED KOLKATTA – Respondent
WP/5176/2025

Advocates:
For the Appellants/Petitioners: Sunil Manohar, Akshat Goel, R.G. Pandey
For the Respondents: Deven Chauhan, C.S. Dhore, A.D. Chaudhari, C.J. Dhruv

A plaint cannot be rejected under Order VII Rule 11 if it discloses triable issues on its face. Additionally, high valuation or the commercial status of parties does not automatically render a dispute 'commercial'; it must strictly satisfy the statutory definition, typically requiring mercantile documents.

Headnote:(A) Code of Civil Procedure, 1908 - Order VII Rule 11 and Order VII Rule 10 - Commercial Courts Act, 2015 - Section 2(1)(c) and Section 15 - Rejection and return of plaint - Rejection of a plaint under Order VII Rule 11 is permissible only when the plaint, on its face and without considering the defense, fails to disclose a cause of action, is barred by law, is undervalued, or is insufficiently stamped - If triable issues arise from the pleadings, the suit cannot be summarily rejected and must be adjudicated on the basis of evidence (Paras 18, 19, 21).

(B) Commercial Courts Act, 2015 - Section 2(1)(c) - Definition of 'commercial dispute' - A suit is not categorized as a commercial suit merely because the valuation of the suit is for a high amount or because it is a dispute between two commercial entities - A strict interpretation of the definition is necessary to ensure that only genuine commercial disputes are entertained by the designated courts - In the absence of mercantile documents bringing the suit within the purview of the definition, the suit cannot be treated as a commercial dispute (Paras 23, 24).

(C) Constitution of India - Article 227 - The supervisory jurisdiction of the High Court is to be exercised sparingly to ensure that courts and tribunals act within the limits of their jurisdiction and is not to be used to substitute its own view for that of the court of first instance (Paras 18, 22).

Facts of the case:
A plaintiff filed a suit for recovery of a substantial amount based on an assigned debt. The defendant sought rejection of the plaint under Order VII Rule 11 and return of the plaint under Order VII Rule 10 of the Code of Civil Procedure, 1908, contending that there was no cause of action as the dispute had been previously settled and that the suit did not qualify as a commercial dispute. The trial court rejected the application.

Findings of Court:
The court found that the plaint contained averments regarding an assignment agreement and exchanged emails, which raised triable issues that necessitated adjudication on merits. However, the court also found that there were no mercantile documents to categorize the suit as a commercial dispute, regardless of the high claim amount.

Issues: The main issues were whether the plaint failed to disclose a cause of action warranting rejection and whether the dispute qualified as a 'commercial dispute' under the Commercial Courts Act, 2015.

Ratio Decidendi: The court ruled that since the plaint disclosed triable issues on its face, it could not be rejected for lack of cause of action. It further held that high valuation alone does not make a suit 'commercial'; it must strictly satisfy the statutory definition, which requires a mercantile transaction or document.

Result: The writ petition is partly allowed. The application at Exhibit 21 under Order VII Rule 11 of the Code of Civil Procedure, 1908 is rejected whereas, the prayer for return of plaint under Order VII Rule 10 of the Code of Civil Procedure, 1908 is granted.

Legal Category Hierarchy

##PAGE1##

2025:BHC-NAG:14914

2312WP5176-25.odt 1 Judgment

IN THE HIGH COURT OF JUDICATURE AT BOMBAY,

NAGPUR BENCH, NAGPUR.

WRIT PETITION NO. 5176 OF 2025

Jayaswal Neco Industries Limited, F8, MIDC Industrial

Area, Hingna Road, Nagpur, Maharashtra – 440016,

Through its authorized signatory Kailash Sharma, Age :

58 years, Occ: Service, R/o c/o F-8, MIDC Industrial

Area, Hingna Road, Nagpur, Maharashtra – 440016. PETITIONER

VERSUS

Abhiruchi Vision Private Limited, 10, Princep Street, 3^rd Floor,

Kolkatta, West Bengal 700072. Through authorized Signatory. RESPONDENT

______________________________________________________________

Shri Sunil Manohar, Senior Advocate with Shri Akshat Goel and Shri R.G.

Pandey, counsel for the petitioner.

Shri Deven Chauhan, Senior Advocate with S/Shri C.S. Dhore, A.D. Chaudhari

and C.J. Dhruv, counsel for the respondent.

---------------------------------------------------------------------------------------------------------------

CORAM : PRAFULLA S. KHUBALKAR, J.

DATE ON WHICH ARGUMENTS WERE HEARD : OCTOBER 07, 2025

DATE ON WHICH JUDGMENT IS PRONOUNCWED : DECEMBER 2 3 , 2025

JUDGMENT

RULE. Rule is made returnable forthwith and heard finally with

consent of the learned counsel for the parties.

2. The petitioner has assailed the order dated 25.06.2025 passed by

the Court of District Judge-2, Nagpur rejecting the application filed by the

petitioner under Order 7 Rule 11 read with Order 7 Rule 10 of the Code of

Civil Procedure, 1908 (for short, ‘the Code’) read with Section 15 of the

Commercial Courts Act, 2015 (for short, ‘the Act of 2015).

FACTUAL BACKGROUND:

3. The petitioner is the original defendant in the suit filed by the

respondent for recovery of an amount of Rs.104,43,67,347.94 along with

interest at the rate of 18% per annum. The parties are hereinafter referred

##PAGE2##

2312WP5176-25.odt 2 Judgment

to as the plaintiff and the defendant according to their status in the suit

for the sake of convenience.

4. The plaintiff claims tobe a Non-BankingFinancial Company (NBFC)

and the defendant is a company duly incorporated and registered under

the Companies Act 1956 having business of manufacturing variety of irons

and specialty in steel. The defendant-Company and other companies

belonging to Jayaswal family including a corporate entity viz. Corporate

Ispat Alloys Limited (CIAL) had availed financial facilities and loans from

various lenders and banks for approximately Rs.139 Crores for Strip Mill

Division, which is one of the projects of CIAL. In the month of July-2008

there was a family separation and settlement by which various companies

owned by the members of Jayaswal family were divided amongst them in

between two groups; one being Basant Lal Shaw Group; and other being

Manoj Kumar Jayaswal Group. As per the settlement agreed between the

two groups CIAL came to the share of Manoj Kumar Jayaswal group.

While one project of CIAL viz. Strip Mill Division alongwith its assets and

liabilities got demerged from CIAL and merged with the defendant which

formed part of Basant Lal Shaw group.

5. It is the plaintiff’s case that the liability of discharging loans of strip

mill division fell upon defendant and accordingly from the month of

August-2008 onwards the defendant commenced repayment of loan to the

bankers of Strip Mill Division and in view of various correspondences, the

defendant company acknowledged the debt of the bankers. Thereafter, in

the month of August-2010 the defendant stopped repayment of the

##PAGE3##

2312WP5176-25.odt 3 Judgment

lenders of Strip Mill Division and therefore CIAL which belonged to Manoj

Kumar Jayaswal group started making payments from August-2010 to

March-2013 for and on behalf of the defendant to ensure that the account

of Strip Mill Division did not turn into non-performing asset (NPA). It is

alleged that during this period CIAL made payment of more than Rs.104

Crores to the lenders of Strip Mill Division for and on behalf of the

defendant. In this background, after a dispute arose between the

members of Jayaswal family, the mat

Click Here to Read the rest of this document