Case Note & Summary
The petitioner, M/s. Viswas Textile Processors, a partnership firm, filed a suit for recovery of money against ICICI Bank and other respondents. The suit was based on a loan agreement entered into for business purposes. The trial court, by order dated 30.08.2022, rejected the plaint on the ground that the dispute was not a commercial dispute under Section 2(1)(c) of the Commercial Courts Act, 2015. The petitioner challenged this order before the High Court of Karnataka under Article 227 of the Constitution of India. The High Court heard the counsel for the petitioner and the counsel for respondent No.1. The court considered the definition of 'commercial dispute' under Section 2(1)(c) of the Act, which includes disputes arising out of commercial contracts. The court noted that the loan agreement was for business purposes and thus fell within the ambit of a commercial contract. The court held that the trial court erred in rejecting the plaint and that the suit ought to be tried by the Commercial Court. Accordingly, the High Court allowed the writ petition, set aside the impugned order, and directed the trial court to proceed with the suit as a commercial dispute.
Headnote
A) Commercial Law - Commercial Dispute - Section 2(1)(c) of the Commercial Courts Act, 2015 - Loan Agreement for Business Purpose - The petitioner-plaintiff filed a suit for recovery of money based on a loan agreement for business purposes. The trial court rejected the plaint as not being a commercial dispute. The High Court held that a loan for business purposes falls within the definition of a commercial dispute under Section 2(1)(c) of the Act, as it relates to a commercial contract. The impugned order was set aside and the suit was directed to be tried by the Commercial Court. (Paras 1-4)
Issue of Consideration
Whether a suit for recovery of money based on a loan agreement for business purposes constitutes a commercial dispute under Section 2(1)(c) of the Commercial Courts Act, 2015.
Final Decision
The High Court allowed the writ petition, set aside the impugned order dated 30.08.2022, and directed the trial court to proceed with the suit as a commercial dispute under the Commercial Courts Act, 2015.
Law Points
- Commercial dispute
- Section 2(1)(c) Commercial Courts Act 2015
- Loan agreement
- Business purpose
- Recovery suit
- Commercial Court jurisdiction
Case Details
2025 LawText (KAR) (06) 2
WP No. 17588 of 2022 (GM-CPC)
Hemanth R. Rao, Rukkoji Rao H.S, Jai M. Patil
M/s. Viswas Textile Processors
ICICI Bank Limited, Mr. Mohan Naik, Mr. Arun Kumar K.S, Ms. Shalini B.G, Mr. Shivalingegowda
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Nature of Litigation
Writ petition under Article 227 of the Constitution of India challenging an order rejecting plaint as not a commercial dispute.
Remedy Sought
Petitioner sought setting aside of the order dated 30.08.2022 passed by the X Addl. District and Session Judge, Bengaluru Rural District in Comm.OS.No.95/2022 and direction to try the suit as a commercial dispute.
Filing Reason
The trial court rejected the plaint on the ground that the dispute was not a commercial dispute under Section 2(1)(c) of the Commercial Courts Act, 2015.
Previous Decisions
The trial court passed an order on 30.08.2022 rejecting the plaint as not a commercial dispute.
Issues
Whether a suit for recovery of money based on a loan agreement for business purposes is a commercial dispute under Section 2(1)(c) of the Commercial Courts Act, 2015.
Submissions/Arguments
Petitioner argued that the loan agreement was for business purposes and thus the dispute is a commercial dispute under Section 2(1)(c) of the Act.
Respondent No.1 (ICICI Bank) opposed the petition.
Ratio Decidendi
A suit for recovery of money based on a loan agreement for business purposes falls within the definition of a commercial dispute under Section 2(1)(c) of the Commercial Courts Act, 2015, as it relates to a commercial contract.
Judgment Excerpts
The petitioner - plaintiff is before this Court calling in question an order dated 30.08.2022 by which the concerned Court rejects the plea of the petitioner - plaintiff that the dispute is a commercial dispute within the meaning of Section 2(1)(c) of the Commercial Courts Act, 2015 ('the Act for short) and therefore as to be tried by the Commercial Court.
Procedural History
The petitioner filed a suit for recovery of money in Comm.OS.No.95/2022 before the X Addl. District and Session Judge, Bengaluru Rural District. The trial court passed an order on 30.08.2022 rejecting the plaint as not a commercial dispute. The petitioner then filed the present writ petition under Article 227 of the Constitution of India before the High Court of Karnataka.
Acts & Sections
- Commercial Courts Act, 2015: Section 2(1)(c)
- Constitution of India: Article 227
