Case Note & Summary
The appeal before the Rajasthan High Court arose from an order of the Commercial Court No.3, Jaipur Metropolitan II, Jaipur, which had partly allowed an application filed by the respondents and returned the plaint in Civil Suit No.80/2025 (CIS No.211/2024) under Order VII Rule 10 CPC for presentation before the competent court. The appellant, original plaintiff, had instituted a suit for recovery of Rs.11,95,705/- with interest, alleging that respondent no.2, a friend of his son, proposed an investment in an optical business to be run in partnership with his son in equal shares after the COVID-19 period. Acting on the proposal, the appellant remitted Rs.5,00,000/- through RTGS on 25.02.2022 to the account of respondent no.1 firm and paid Rs.3,89,000/- in cash on different dates for renovation, machinery, opening expenses and other business requirements. A draft partnership deed prepared later by the respondent differed materially from what had been agreed and was never finalised; despite demand, the total sum of Rs.8,89,000/- was not refunded, leading to the suit filed on 19.06.2024. In the suit proceedings, the respondents were served and appeared but failed to file a written statement; their right was closed, and an application under Section 151 CPC to reopen that stage was dismissed on 26.09.2025, which order 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 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 replied on 25.02.2026. By the impugned order dated 30.03.2026, the Commercial Court partly allowed the application and returned the plaint. The core legal issue was whether the Commercial Court erred in returning the plaint by deciding disputed questions of fact at the preliminary stage and misapplying the definition of commercial dispute under Section 2(1)(c)(xv) of the Commercial Courts Act, 2015. The appellant argued that the court below travelled beyond the plaint, decided disputed questions of fact, and overlooked Sections 6 and 12 of the Commercial Courts Act; the plaint expressly pleaded payment of Rs.8,89,000/- towards a proposed partnership and referred to the draft partnership deed, so the existence and terms of the arrangement were matters for trial. The respondents remained absent despite service. The High Court held that an application under Order VII Rule 11 CPC or an objection to jurisdiction resulting in return of plaint under Order VII Rule 10 CPC must be decided on demurrer; the plaint must be read as a whole with documents and its averments assumed true. The Commercial Court's reliance on absence of written agreement, absence of executed partnership deed, non-production of deed and absence of actual partnership were findings requiring trial, not conclusions drawn from the plaint taken as true. Section 2(1)(c)(xv) of the Commercial Courts Act, 2015 covers disputes arising out of partnership agreements, and a claim for refund of money advanced towards a partnership which failed to fructify arises out of that partnership arrangement, not an independent money claim. The stage of the objection was also material; since the written statement stage had closed, issues had been framed and evidence had commenced, the appropriate course was to try the nature of the dispute as an issue upon evidence, not to terminate the suit summarily. The High Court quashed the impugned order, dismissed the respondents' application under Order VII Rule 11 read with Section 151 CPC, restored the suit 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 case on merits. The findings were expressly confined to the question of jurisdiction at the threshold, leaving all contentions on merits open for trial.
Headnote
A) Civil Procedure - Return of Plaint and Jurisdictional Objection - Demurrer Principle - Code of Civil Procedure, 1908, Order VII Rule 10, Order VII Rule 11, Section 151 - An application under Order VII Rule 11 CPC or an objection to jurisdiction resulting in return of plaint under Order VII Rule 10 CPC must be decided on demurrer; the plaint shall be read as a whole with documents and its averments assumed true; the objection must demonstrate lack of jurisdiction even accepting plaintiff's pleaded facts as true. The Commercial Court erred by relying on absence of written agreement, executed partnership deed, and lack of actual partnership, which are matters for trial, thus deciding disputed questions of fact at preliminary stage. Held that jurisdiction was declined upon a prima facie view of merits, which is impermissible (Paras 10-11). B) Commercial Law - Commercial Dispute - Partnership Agreement - Commercial Courts Act, 2015, Section 2(1)(c)(xv) - A claim for refund of money advanced towards a partnership which failed to fructify arises out of the partnership arrangement and is not an independent money claim divorced from the transaction. Section 2(1)(c)(xv) of the Commercial Courts Act, 2015 covers disputes arising out of partnership agreements. Held that the suit disclosed a commercial dispute and the return of plaint under Order VII Rule 10 CPC was contrary to law (Para 12). C) Civil Procedure - Stage of Objection and Trial of Preliminary Issue - Code of Civil Procedure, 1908, Order VII Rule 11, Section 151 - When written statement stage stood closed, issues were framed on 10.12.2025 without demur and appellant's evidence had commenced, the appropriate course for a jurisdictional doubt is to try that question as an issue upon evidence, not to bring the suit to an end summarily. Held that the Commercial Court should not have returned the plaint upon a tentative view at that stage (Para 13). D) Civil Procedure - Relief and Restoration of Suit - Code of Civil Procedure, 1908, Order VII Rule 10, Order VII Rule 11, Section 151; Commercial Courts Act, 2015, Section 2(1)(c)(xv) - The High Court quashed and set aside the order dated 30.03.2026, dismissed the 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 and directed the Commercial Court to proceed from the stage at which the suit stood on 07.02.2026 and decide on merits. Held that all findings were confined to the question of jurisdiction at the threshold and merits remain open (Paras 14-15).
Issue of Consideration
Whether the dispute between the parties is a commercial dispute within the meaning of Section 2(1)(c)(xv) of the Commercial Courts Act, 2015, and whether the Commercial Court erred in returning the plaint under Order VII Rule 10 CPC by deciding disputed questions of fact at the preliminary stage.
Final Decision
The appeal was allowed; the order dated 30.03.2026 of the Commercial Court No.3, Jaipur Metropolitan II, Jaipur was quashed and set aside. The application filed by the respondents under Order VII Rule 11 read with Section 151 CPC was dismissed. Civil Suit No.80/2025 (CIS No.211/2024) was restored to its original number on the file of the learned Commercial Court No.3, Jaipur Metropolitan II, Jaipur, with direction to proceed from the stage at which the suit stood on 07.02.2026 and decide the same on merits in accordance with law. Findings were confined to the question of jurisdiction at the threshold; all contentions on merits, including the true character of the transaction, remained open for trial.
Law Points
- Plaint must be read as a whole and averments assumed true at demurrer stage
- objection to jurisdiction under Order VII Rule 10/11 CPC must demonstrate lack of jurisdiction based on plaintiff's pleaded facts
- disputed questions of fact cannot be decided summarily
- claim for refund of money advanced towards unfructified partnership arises out of partnership arrangement under Section 2(1)(c)(xv) Commercial Courts Act
- 2015
- after framing of issues and commencement of evidence
- jurisdictional doubt should be tried as an issue on evidence
