Commercial Suit Filed Before Ordinary Civil Court Must Be Returned, Not Rejected: Kerala High Court

The Kerala High Court on 30 September held that a plaint filed before an ordinary civil court in a suit involving a commercial dispute must be returned for presentation before the competent Commercial Court, rather than rejected under Order VII Rule 11(d) of the Civil Procedure Code (CPC).

Justice S Manu dismissed an appeal filed by the defendants against the First Additional Sub Court, Thrissur's order directing return of the plaint in a suit for dissolution of partnership. The Bench observed that a “commercial suit is therefore not envisioned as a lawsuit shorn of all attributes of a civil suit.”

The plaintiff had filed an application under Order VII Rule 10A of the CPC, contending that the dispute was a “commercial dispute” under the Commercial Courts Act, 2015. The plaintiff sought return of the plaint for presentation before the Commercial Court or its treatment as a commercial suit.

Defendants opposed the application. They argued that although the dispute was commercial in nature, the Sub Court could neither renumber the suit as a commercial suit nor return the plaint. They contended that return of a plaint was permissible only where the court lacked territorial or pecuniary jurisdiction. Since the issue concerned subject-matter jurisdiction, they argued that the plaint had to be rejected.

The Sub Court rejected the defendants' contention and directed return of the plaint. It held that the suit was not barred by law and that the defect was only that the plaintiff had instituted it before the wrong forum. The defendants challenged this order before the High Court.

The Court noted that the parties did not dispute that the suit involved a commercial dispute. It said the issue was the proper course to follow when a commercial dispute had been filed before an ordinary civil court instead of the Commercial Court.

It held that the Commercial Courts Act does not prohibit the filing of any category of suit but provides designated forums for adjudicating commercial disputes. It also referred to decisions of the Bombay and Delhi High Courts, which held that the appropriate course in such circumstances was to return the plaint for presentation before the Commercial Court.

The Bench rejected the defendants' argument that Order VII Rule 11(d) applied, holding that the Commercial Courts Act did not create a statutory bar against filing the suit before an ordinary civil court. It held:

“As Commercial Courts Act, 2015 does not impose any bar in the matter of filing of suits, I hold that the argument advanced by the learned counsel for the appellant that the suit should have been rejected according to Order VII Rule 11(d) is untenable.”

Accordingly, the High Court upheld the Sub Court's order directing return of the plaint and dismissed the appeal without costs.

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

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