A civil court lacks jurisdiction to adjudicate a commercial dispute of a specified value once a notification under the Commercial Courts Act, 2015, designates a specific court as the Commercial Court for such matters; failure to transfer the suit renders the decision void.

JUDGMENT

The appeal is directed against the judgment and decree in O.S.No.968/2018 of the Munsiff Court, Chavakkad, affirmed in A.S. No.24/2024 by the Sub Court, Chavakkad.

The plaintiff, which is a kuri company, had instituted O.S.No.968/2018 before the Munsiff Court, Chavakkad, seeking for recovery of a sum of Rs.3,47,587/- on the basis of a pro-note executed by the defendants. The suit was instituted initially before the Munsiff Court, Chavakkad. During the pendency of the suit, by G.O.(Ms)No.51/2020/Home. dated 24.02.2020, the Government of Kerala had issued a notification in exercise of power conferred under sub-sections (1) and (2) of Section 3 of the Commercial Courts Act, 2015 (Central Act 4 of 2016), designating the sub court as commercial court for the purpose of recovery of amount above Rs.3 lakhs for the whole of the State.

It is pointed out that, in view of Section 15 of the Commercial Courts Act, 2015, the suit ought to have been transferred automatically by the Munsiff Court before the Sub Court and without looking into the same, the Munsiff Court has proceeded to consider the suit on merits and dismissed the same. This aspect has not been noticed by the appellant while they preferred an appeal before the Sub Court, Chavakkad as A.S.No.24/2024 and thus, it is the case of the appellant that, both the judgments and decrees passed by the Munsiff Court, Chavakkad as well as by the Sub Court, Chavakkad is without jurisdiction.

This Court, on 18.05.2026, admitted the appeal and notice was issued to the respondents on the following substantial question of law, but none appears for them:

“Whether after coming into force of the Commercial Courts Act, 2015, can a civil court try and adjudicate a case of commercial dispute of a specified value which is to be tried only by a commercial court ?”

Heard, Sri. G.Krishnakumar – learned counsel appearing for the appellant.

On a consideration of the submissions raised across the Bar by the learned counsel for the appellant, this Court finds considerable force in the same. When notification is issued by the State of Kerala designating sub Courts as commercial courts for recovery of amount above Rs.3 lakhs, necessarily the Munsiff Court, Chavakkad ought to have transferred the suit to the Principal Sub Court, Thrissur. Without transferring the same, the act of the Munsiff Court in proceeding to consider the suit on merits is clearly unsustainable and without jurisdiction. The said illegality was perpetuated at the appellate stage as well and the Sub Court, Chavakkad failed to notice the fact that an appeal against an order rendered without jurisdiction is not maintainable before it.

In such circumstances, without entering into the merits of the findings rendered by the courts below, interest of justice would suffice if the judgment and decree in O.S.No.968/2018 on the files of Munsiff Court, Chavakkad, as affirmed in A.S.No.24/2024 by the Sub Court, Chavakkad is set aside and all findings rendered by the respective courts be vacated.

Accordingly, the substantial question of law framed as above are answered in favour of the appellant and the judgment and decree dated 31.01.2024 dismissing O.S.No.968/2018 by the Munsiff Court, Chavakkad, as affirmed in AS No.24/2024 by the Sub Court, Chavakkad, stands set aside. O.S.No.968/2018 pending before the Munsiff Court, Chavakkad, will stand transferred to the Principal Sub Court, Thrissur. The Principal District Court, Thrissur, is directed to pass consequential orders on the administrative side transferring the case to the Principal Sub Court, Thrissur. Once the suit is transferred, the Principal Sub Court, Thrissur, shall issue notice to the plaintiff as well as the defendants and proceed with the merits of the case. The appellant will be entitled to refund of court fee paid before this Court as well as before the first appellate court.

With the above observations, the appeal is disposed of.