Appealability Of Order Has No Bearing On Whether Suit Is Commercial Dispute: Calcutta High Court

The Calcutta High Court has held that the availability or absence of an appeal against an order passed in a suit has no bearing on determining whether the dispute is a commercial dispute under Section 2(1)(c) of the Commercial Courts Act, 2015.

The Court said the test is whether on a meaningful and purposive reading of the plaint, the dispute falls within Section 2(1)(c) of the Act.

"Availability of an appeal or its absence against an order passed in a suit has no manner of bearing on the decision as to whether or not the disputes involved in the suit is a commercial dispute within the meaning of the Act of 2015. The test to be applied by the Court on a meaningful and purposive reading of the plaint is whether the disputes between the parties to the suit have fallen within the meaning of commercial dispute under Section 2(1)(c) of the Act of 2015 or not.", a division bench of Justices Debangsu Basak and Aryak Dutt observed.

The ruling came in an appeal arising from a suit filed by LMJ International Ltd. against Concast Steel & Power Ltd and others. The suit filed in 2013, concerned LMJ's claim of title over a portion of metallurgical coke imported through M.V. Filia Joy and M.V. Glovis Master through High Sea Sales.

The plaintiff sought delivery of the coke, cancellation of a tripartite agreement dated March 23, 2012, injunctions against dealing with the goods and damages.

The Single Judge on March 8, 2022 had allowed substitution of the plaintiff's liquidator after insolvency proceedings and rejected an application seeking abatement of the suit.

Before the division bench, the plaintiff contended that the dispute was commercial in nature and sought transfer of the suit to the Commercial Division. The defendants opposed this, arguing that the suit essentially concerned title, wrongful detention and alleged fraud, and did not fall within Section 2(1)(c).

The Court agreed with the arguments of the plaintiff.

It held that the plaint showed that the parties were business entities engaged in High Sea Sales and that the dispute involved mercantile documents concerning the metallurgical coke.

Section 2(1)(c)(i) of the Act, it noted, covers ordinary transactions of merchants, bankers, financers and traders relating to mercantile documents, including their enforcement and interpretation.

"Transactions relating to metallurgical coke and in fact, title thereto, would necessarily involve commercial instruments entered into between the legal entities involved in commerce with regard to the metallurgical coke in the suit.", the Court said.

The Court further observed that the plaintiff had claimed title to the coke through a sanctioned scheme of amalgamation and had stepped into the shoes of the original plaintiff.

On a meaningful and purposive reading of the plaint, the parties had a jural relationship requiring consideration by the suit court.

The Bench held that the dispute involved a commercial dispute under Section 2(1)(c)(i) and directed the suit to be transferred from the Non-Commercial Division to the Commercial Division under Section 15 of the 2015 Act.

The appeal was also directed to be transmitted to the Commercial Appellate Division, while the Court refrained from deciding the separate issue concerning abatement and substitution.

For Appellant: S.N. Mitra, Advocate General, D. N. Sharma, Sr. Advocate

For Respondents: Senior Advocates, Trilok Bose, Jayanta Kr. Mitra, Rupak Ghosh, Pourush Bandopadhyay, Rajesh Upadhyay, Trilok Bose, Suchismita Ghosh, Pradip Kr. Sarawagi,