Case Note & Summary
The appeal arose from an order of the Commercial Court No.3, Jaipur Metropolitan II, Jaipur, dated 30.03.2026, by which the respondents' application under Order VII Rule 11 read with Section 151 of the Code of Civil Procedure, 1908 was partly allowed and the plaint in Civil Suit No.80/2025 was returned under Order VII Rule 10 CPC for presentation before the competent court. The appellant had instituted a suit for recovery of Rs.11,95,705 along with interest, alleging that the second respondent, a long-standing friend of the appellant's son, proposed an investment in an optical business to be carried on in partnership with the appellant's son in equal shares. Acting on that proposal, the appellant remitted Rs.5,00,000 by RTGS on 25.02.2022 to the bank account of the first respondent firm and paid a further Rs.3,89,000 in cash on different dates towards renovation, machinery, opening expenses and other business requirements. A draft partnership deed was later prepared by the respondent, but its terms differed materially from what had been agreed and the partnership deed was never finalised. The appellant called upon the respondents to refund Rs.8,89,000, but the money was not returned. The suit was instituted on 19.06.2024. In the suit proceedings, the respondents were served on 17.09.2024 and appeared on 19.09.2024, but did not file a written statement; their right to do so was closed. Their application under Section 151 CPC to reopen that stage was dismissed by a reasoned order dated 26.09.2025, which was never challenged and attained finality. Issues were framed on 10.12.2025 without any objection to maintainability or jurisdiction. The appellant filed affidavits of evidence on 29.01.2026. On 07.02.2026, at the stage of the appellant's evidence, the respondents filed an application under Order VII Rule 11 read with Section 151 CPC contending that the dispute was not a commercial dispute under the Commercial Courts Act, 2015. The appellant filed a reply on 25.02.2026. The Commercial Court partly allowed the application and returned the plaint, leading to the present appeal. The appellant argued that the court below travelled beyond the plaint, decided disputed questions of fact at a preliminary stage and overlooked Sections 6 and 12 of the Commercial Courts Act, 2015; the plaint expressly pleaded payment of Rs.8,89,000 towards a proposed partnership, referred to the draft partnership deed and set out the cause of action in paragraph 26, and the existence and terms of the arrangement were matters for trial. The respondents did not appear despite service. The High Court held that an application under Order VII Rule 11 CPC and an objection to jurisdiction resulting in return of the plaint under Order VII Rule 10 CPC must be decided on demurrer, reading the plaint as a whole with documents and assuming its averments to be true. The trial court's findings that there was no written agreement, no executed partnership deed and no family member became a partner were matters to be proved at trial, not threshold conclusions. The court further held that under Section 2(1)(c)(xv) of the Commercial Courts Act, 2015, a claim for refund of money advanced towards a partnership which failed to fructify arises out of that very partnership arrangement and is a commercial dispute. The stage of the objection was also relevant: written statement had closed, issues framed and evidence commenced, so the appropriate course was to try the question as an issue upon evidence rather than end the suit summarily. The High Court quashed the impugned order, dismissed the respondents' application, restored Civil Suit No.80/2025 to its original number, and directed the Commercial Court to proceed from the stage at which the suit stood on 07.02.2026 and decide the matter on merits. The findings were confined to jurisdiction at the threshold and all contentions on merits remained open for trial.
Headnote
A) Civil Procedure - Return of Plaint - Order VII Rule 10 CPC - Application under Order VII Rule 10 must be decided on demurrer, taking plaint averments as true; disputed facts cannot be resolved at threshold - Code of Civil Procedure, 1908, Order VII Rule 10 and Order VII Rule 11 - The trial court returned the plaint based on absence of written agreement, executed partnership deed, and non-joining of family member as partner, which were triable issues; Held that jurisdiction cannot be declined by prima facie assessment of merits (Paras 10-11). B) Commercial Law - Commercial Dispute - Section 2(1)(c)(xv) Commercial Courts Act, 2015 - Claim for refund of money advanced towards a partnership that failed to fructify arises out of a partnership arrangement; it is not an independent money claim - Commercial Courts Act, 2015, Section 2(1)(c)(xv) - The plaint alleged payment made towards proposed partnership and referred to draft partnership deed; the Court held that the suit discloses a commercial dispute as arising from partnership agreement (Para 12). C) Civil Procedure - Stage of Jurisdictional Objection - Written statement closed, issues framed, and claimant's evidence commenced - Objection to jurisdiction after such stage should be tried as an issue on evidence, not dealt with summarily - Code of Civil Procedure, 1908, Order VII Rule 11 and Section 151 - The respondents raised the application at the evidence stage after issues were framed without demur; the High Court held that the Commercial Court ought to have tried the question as an issue instead of returning the plaint (Para 13). D) Appellate Relief - Restoration of Suit - Quashing of impugned order and dismissal of application - High Court quashed the order dated 30.03.2026, dismissed the respondents' application under Order VII Rule 11 read with Section 151 CPC, and restored Civil Suit No.80/2025 to its original number, directing the Commercial Court to proceed from 07.02.2026 - Code of Civil Procedure, 1908, Order VII Rule 10 and Order VII Rule 11 - The findings were confined to jurisdiction at threshold, and all merits were left open for trial (Paras 14-15).
Issue of Consideration
Whether the Commercial Court erred in returning the plaint under Order VII Rule 10 CPC by deciding disputed questions of fact at the threshold; whether the suit discloses a commercial dispute under Section 2(1)(c)(xv) of the Commercial Courts Act, 2015; whether the objection to jurisdiction could be raised after written statement stage closed and evidence commenced.
Final Decision
The High Court quashed and set aside the order dated 30.03.2026, dismissed the respondents' application under Order VII Rule 11 read with Section 151 CPC, restored Civil Suit No.80/2025 (CIS No.211/2024) to its original number on the file of Commercial Court No.3, Jaipur Metropolitan II, Jaipur, and directed the Commercial Court to proceed from the stage at which the suit stood on 07.02.2026 and decide the same on merits in accordance with law. All pending applications stood disposed of.
Law Points
- Application under Order VII Rule 11/Order VII Rule 10 CPC decided on demurrer
- plaint averments assumed true
- disputed facts cannot be decided at threshold
- claim for refund of money advanced towards failed partnership arises out of partnership agreement under Section 2(1)(c)(xv) Commercial Courts Act
- jurisdiction objection after issues framed and evidence commenced should be tried as issue
- no decision on merits while setting aside return of plaint
