Case Note & Summary
The case involves an Interim Application filed by Defendant No. 1 (Varanium Cloud Limited) seeking return of the plaint under Order VII Rule 10 of the Code of Civil Procedure, 1908 (CPC) on the ground that the Summary Suit filed by the Plaintiffs (Rolta Private Limited and another) ought to have been instituted as a Commercial Summary Suit before the Commercial Division of the Bombay High Court under the Commercial Courts Act, 2015. The Plaintiffs had filed the suit to recover Rs. 800 Crores with interest based on an agreement dated 7 July 2023, whereby Defendant No. 1 agreed to acquire Plaintiff No. 1's secured financial debt in Rolta India Limited. The Plaintiffs are engaged in the business of providing leasing services, and the Defendant No. 1 is a public listed company in information technology. The Defendant No. 1 argued that the dispute arises out of an ordinary transaction of a financier or trader, falling within the definition of 'commercial dispute' under Section 2(1)(c)(i) of the Commercial Courts Act, and therefore the suit should be tried by the Commercial Division. The Plaintiffs contended that the transaction was not in the ordinary course of their business, as their main business is leasing services, not financing or trading, and thus the dispute is not commercial. The court analyzed the plaint, the agreement, and the Memorandum of Association of Plaintiff No. 1. It held that for a dispute to be commercial under Section 2(1)(c)(i), the transaction must be an 'ordinary transaction' of a person who is a 'financier' or 'trader' in the ordinary course of their business. Since Plaintiff No. 1's ordinary business is leasing services, the assignment of debt was not an ordinary transaction of a financier or trader. The court distinguished the cases cited by the Defendant and relied on the principle that the term 'ordinary transaction' must be interpreted in the context of the party's usual business activities. Consequently, the court dismissed the Interim Application, holding that the suit was correctly filed as an ordinary summary suit and not a commercial suit.
Headnote
A) Commercial Law - Commercial Dispute - Definition - Section 2(1)(c)(i) Commercial Courts Act, 2015 - The court considered whether an agreement for assignment of debt by a company whose main business is leasing services falls within the definition of 'commercial dispute' as arising out of an 'ordinary transaction of a financier or trader'. The court held that the transaction must be in the ordinary course of the party's business; since the plaintiff's ordinary business is leasing services and not financing or trading, the assignment of debt was not an ordinary transaction of a financier or trader, and thus the dispute is not a commercial dispute under the Act. (Paras 14-20) B) Civil Procedure - Return of Plaint - Order VII Rule 10 CPC - The court examined the application for return of plaint on the ground of lack of jurisdiction. The court held that since the dispute is not a commercial dispute, the suit was correctly instituted as an ordinary summary suit on the Ordinary Original Civil Jurisdiction of the High Court, and the application for return of plaint was dismissed. (Paras 1, 21-22) C) Commercial Courts Act, 2015 - Specified Value - Section 2(i) - The court noted that the suit is of a specified value (over Rs. 3 lakhs), but since the dispute is not commercial, the Commercial Courts Act does not apply. (Para 15A)
Issue of Consideration
Whether the dispute arising from an agreement for assignment of debt by a company engaged in leasing services to another company constitutes a 'commercial dispute' under Section 2(1)(c)(i) of the Commercial Courts Act, 2015, so as to require the suit to be filed as a Commercial Summary Suit before the Commercial Division of the High Court.
Final Decision
The Interim Application (L) No. 6341 of 2024 is dismissed. The court held that the dispute is not a commercial dispute under Section 2(1)(c)(i) of the Commercial Courts Act, 2015, and therefore the suit was correctly instituted as an ordinary summary suit on the Ordinary Original Civil Jurisdiction of the High Court. The application for return of plaint under Order VII Rule 10 CPC was rejected.
Law Points
- Interpretation of commercial dispute
- ordinary transaction
- financier
- trader
- Section 2(1)(c)(i) Commercial Courts Act
- 2015
- Order VII Rule 10 CPC
- return of plaint
- jurisdiction of Commercial Division
