Disputes involving banking transactions can be categorized as commercial under Section 2(1)(c) of the Commercial Courts Act, 2015, based on the nature of the transaction.

JUDGMENT

The original petition has been filed challenging the order dated 25.11.2025 in IA.No.2 of 2024 in CS.No.23 of 2024 of Principal Commercial Court, Thiruvananthapuram, whereby the Court below has held that the dispute involved comes within the meaning of ‘commercial dispute’ and is maintainable before the Commercial Court.

2. The petitioners had availed a home loan from the 1strespondent bank and according to them, the purpose of the end use should decide whether a dispute is a commercial dispute. It is contended that all cases involving a Bank will not automatically become a commercial dispute and there needs to be a distinction based on the end use. The counsel for the petitioners relies on the decision of the Hon’ble Supreme Court inAmbalal Sarabhai Enterprises Ltd vs. K.S.Infraspace LLPand Another[2019 KHC 7012], Ladymoon Towers Private Limited vs. Mahendra Investment Advisors Private Limited [2021 KHC OnLine 7190]decided by the Calcutta High Court and Mrs. Meena Vohra vs. Master Hosts Pvt Limited and others [CS(COMM) 688/2021] decided by the High Court of Delhi.

3. The definition of a ‘commercial dispute’ is contained in Section 2 (1)(c) of the Commercial Courts Act, 2015 . It says that a dispute arising out of ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents would fall within a commercial dispute. The contention of the petitioners is that it is not sufficient that the transaction should be that of a Banker and it should also relate to mercantile documents, failing which, the dispute cannot be termed as a commercial dispute. After referring to the definition contained in Section 2 (1)(c) of the Act, the trial court in the impugned order held that mercantile documents include those documents executed by the bankers in their ordinary transactions and the documents executed by the defendant while availing the home loan can be read as mercantile documents and the dispute hence arises out of ordinary transaction of the plaintiff bank. The Court also noted that the plaintiff is engaged in business of banking and sanctioning of loan to its customers is in its ordinary course of banking business and hence the dispute comes within the frame work of a commercial dispute.

4. The counsel for the petitioners submitted that a mercantile document is not defined in the Act and going by the judgment in Mrs. Meena Vohra (supra), the word ‘mercantile’ should be read as an act relating to a merchant or trading and being commercial in nature. It is submitted that for a dispute to be categorized as a ‘commercial dispute’, the transaction should be supported by a document that records, governs, or evidences trade, commerce, or business activity and that a commercial dispute inherently carries a commercial flavour, encompassing elements of trade and business. The Court in Mrs. Meena Vohra (supra), was not dealing with a case involving a loan transaction between a banker and a customer. The Court was considering a case where there is an absence of a document which recorded the transaction. The situation in this case is different since the suit is based on loan documents executed between the banker and the customer. The definition of a commercial dispute does not require that the transactions are between two commercial entities. It is sufficient if one of the parties to the dispute is involved in commerce and the transaction is one within their ordinary course of business. The definition itself only says that it should be an ordinary transaction involved in by merchants, bankers, financiers and traders and the usage of the words ‘such as’ is only explanatory in nature and not restrictive in nature. The contention based on Mrs.