Loan Advanced By Financier Qualifies As Commercial Dispute Even Without Mercantile Document: Calcutta High Court
The Calcutta High Court has held that a dispute arising from a loan advanced by a financier in the ordinary course of its business qualifies as a commercial dispute under the Commercial Courts Act, 2015 even if the transaction is not evidenced by a conventional mercantile document.
A Division Bench of Justices Debangsu Basak and Aryak Dutt set aside the single judge's June 8, 2026 decree directing Sudha Kankaria to pay ₹83.97 lakh in a suit filed by Krishna Kumar Bhatter (HUF) over an ₹80 lakh loan advanced to her late husband, holding that the dispute was commercial and should have been heard by the High Court's Commercial Division.
"The respondent relies on those parts of the definitions that speak of levying or managing public money. That is the older and narrower sense of the word. It cannot control the meaning of 'financiers' in Section 2(1)(c)(i), where the word is placed alongside merchants, bankers and traders in a statute concerned with commercial disputes.", the court said.
The dispute arose from a loan of ₹80 lakh advanced by Krishna Kumar Bhatter to Dilip Chand Kankaria, Sudha Kankaria's late husband, in three instalments, ₹50 lakh on June 17, 2008, ₹20 lakh on July 7, 2008 and ₹10 lakh on September 2, 2009, carrying interest at 15% per annum. After Dilip Chand Kankaria died in 2013, the liability devolved upon Sudha Kankaria who continued paying interest until November 2017 before defaulting.
The HUF filed a recovery suit on December 3, 2020, claiming ₹1.07 crore including principal and accrued interest. On June 8, 2026, a single judge passed a decree for ₹83.97 lakh with 15% interest under Order XII Rule 6 CPC, based on admissions in the written statement. Sudha challenged the decree, contending that the dispute was commercial and should have been heard by the Commercial Division.
The Bench rejected the argument that the term was confined to persons involved in levying or managing public money. It held that the word must be understood in its commercial context, where it appears alongside merchants, bankers and traders and includes a capitalist earning income through investments.
On whether the loan was an ordinary business transaction, the Court observed that the plaint itself stated that the HUF advanced loans as part of its business activities to support the development of other businesses. The ₹80 lakh loan was therefore an instance of its ordinary business activity and not an isolated or gratuitous transaction.
The Bench further held that interest was not merely incidental to the loan. The borrower was contractually required to repay the principal along with interest at 15% per annum until repayment. The interest constituted the commercial return for which the funds were deployed and had been paid for over nine years.
The Court also disagreed with the view that every commercial dispute under Section 2(1)(c)(i) must arise from a transaction formalised through such a document.
It held that the expression “such as” introduces examples of ordinary commercial transactions and does not impose an additional condition. Disputes concerning ordinary loan transactions of bankers and financiers can therefore qualify even without conventional mercantile instruments.
"We are unable to read the clause in that way. The operative words are “ordinary transactions of merchants, bankers, financiers and traders”. The words “such as” introduce examples of such transactions. They do not add a further condition. The words that follow, “including enforcement and interpretation of such documents”, make clear that disputes about the enforcement and interpretation of mercantile documents are included."
The Court accordingly set aside the judgment and decree dated June 8, 2026 and directed that the plaint be returned for presentation before the Commercial Division.
It clarified that it had expressed no opinion on the merits of the recovery claim, which would be decided independently by the Commercial Division. The interim injunction granted on March 22, 2021, was directed to continue for four weeks.
For the Appellants: Advocates Debrup Bhattacharjee and Subrota Goswami.
For the Respondents: Senior Advocate Krishnaraj Thaker, Advocates Chayan Gupta, Samriddha Sen, Kaushik De, Raghav Munshi, Mohini Majumdar, Ayelita Ghosh and Adrish Chatterjee