Commercial Suits Filed Before Civil Courts Cannot Be Rejected As Barred By Law: Kerala High Court

The Kerala High Court has held that a plaint involving a commercial dispute, filed before an ordinary civil court instead of a designated Commercial Court, cannot be rejected under Order VII Rule 11(d) of the Code of Civil Procedure (CPC) merely on that ground, as the Commercial Courts Act, 2015 does not impose a statutory bar on filing such suits.

Justice S. Manu made the observation while rejecting an appeal filed by two defendants against the Thrissur Sub Court's February 14, 2025 order directing the return of a plaint in a partnership dissolution suit for presentation before the competent Commercial Court. The Court held:

"A commercial suit is therefore not envisioned as a lawsuit shorn of all attributes of a civil suit. Hence when a suit involving a commercial dispute is filed in a civil court, the situation is not comparable to institution of a suit in a court that inherently lacks jurisdiction or lodging of a suit that is barred under any laws. As Commercial Courts Act, 2015 does not impose any bar in the matter of filing of suits."

The dispute arose in an original suit before the First Additional Sub Court, Thrissur. The plaintiff had filed an application seeking the return of the plaint or its treatment as a commercial suit, contending that the partnership dissolution dispute fell within the definition of a commercial dispute under Section 2(1)(c) of the Commercial Courts Act.

The defendants opposed the application, arguing that only a Commercial Court could entertain the dispute and that the plaint was liable to be rejected, rather than returned under Order VII Rule 10 CPC. The Sub Court directed its return on February 14, 2025, prompting the appeal.

The High Court explained that the Commercial Courts Act creates a specialised and robust adjudicatory framework to ensure the speedy resolution of commercial disputes but does not impose a prohibition on instituting suits before ordinary civil courts.

"The Act puts in place a more robust adjudicatory regime aiming at the swift resolution of commercial disputes. The Act provides designated forums for adjudication of causes related to commercial disputes as outlined in Section 2(1)(c)."

Justice Manu therefore held that Order VII Rule 11(d), which provides for rejection of a plaint where the suit appears from its statements to be barred by law, applies only where a statutory prohibition exists.

Relying on decisions of the Bombay and Delhi High Courts, Justice Manu agreed that returning the plaint for presentation before the appropriate Commercial Court was the proper course.

The Court accordingly found no illegality or error in the Sub Court's order and rejected the appeal without costs.

For Appellants: Advocates N.M. Madhu, C.S. Rajani, Prem Nath P

For Respondents: Advocates Anil S. Raj, Radhika Rajasekharan P, K.N. Rajani, Anila Peter, Simi S. Ali, Saritha K.S., Meenakshi Krishna S.M., Athira Girish, Devika S Chandran