M/S.B.M.B. Foundations Pvt. Ltd. Vs a. Mohanasundaram

PRAYER: Civil Revision Petition is filed under Article 227 of the Constitution of India, to set-aside the Docket Order dated 24.03.2022 passed by the Principal District Judge at Thiruvallur in O.S.(S.R.).No.6398 of 2022, subsequently numbered as O.S.No.153 of 2022, by allowing this Civil Revision Petition and consequently to return the plaint in O.S.No.153 of 2022 to be presented to the Court in which the suit should have been initiated.

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For Petitioners : Mr.Ralph V.Manohar

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For R1 and R2 : Mr.R.Munuswamy

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O R D E R

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The Civil Revision Petition is filed challenging the order passed by the Principal District Judge, Thiruvallur registering the Suit as Commercial Suit by order dated 24.03.2022 in O.S.(S.R.).No.6398 of 2022, subsequently numbered as O.S.No.153 of 2022 .

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The respondents 1 and 2 herein filed a suit seeking declaration that

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various Sale Deeds executed by the plaintiffs in favour of the defendants 1 and 2 were null and void and for consequential relief of permanent injunction. Though the suit was originally filed as ordinary suit, the Trial Court by impugned order registered the same as a commercial suit. After 2/10

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entering appearance, the petitioners herein filed an application in I.A.No.4 of 2023 seeking to convert the suit from commercial suit to ordinary original suit. The said interlocutory application was dismissed by the Trial Court. Aggrieved by the same, the petitioners filed a revision before this Court in C.R.P.No.1857 of 2024 and the said revision was dismissed on technical ground that the petitioners failed to challenge the earlier order passed by the Trial Court, dated 24.03.2022 registering the present suit as a commercial suit. Thereafter, the petitioners filed the present civil revision petition challenging the order dated 24.03.2022.

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The learned counsel appearing for the petitioners by taking this Court to the definition of the expression 'Commercial Dispute' which was defined under Section 2(1)(c) of the Commercial Courts Act, 2015 submits that the prayer sought for in the plaint will not fit into to the definition of commercial disputes. Therefore, according to him, the Trial Court committed an error in registering the present suit as a commercial suit.

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The learned counsel appearing for the respondents 1 and 2 would submit that after entering appearance, the petitioners participated in the proceeding for several months and belatedly filed an application seeking

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conversion of the suit as ordinary suit and the said interlocutory application

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was dismissed and the order passed by the Trial Court in I.A.No.4 of 2023 has been confirmed by this Court. In view of the same, the petitioners are not entitled to challenge the earlier order passed by the Court registering the suit as commercial suit.

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Section 2(1)(c) of the Commercial Courts Act, 2015 reads as

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follows:-

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“2.(1)(c) “commercial dispute” means a dispute arising

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out of-

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(i) ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents;

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(ii) export or import of merchandise or services;

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(iii) issues relating to admiralty and maritime law;

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(iv) transactions relating to aircraft, aircraft engines, aircraft equipment and helicopters, including sales, leasing and financing of the same;

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(v) carriage of goods;

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(vi) construction and infrastructure contracts, including tenders;

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(vii) agreements relating to immovable property used exclusively in trade or commerce;

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(viii) franchising agreements;

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(ix) distribution and licensing agreements;

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(x) management and consultancy agreements;

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(xi) joint venture agreements;

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(xii) shareholders agreements;

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(xiii) subscription and investment agreements pertaining to the services industry including outsourcing services and financial services;

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(xiv) mercantile agency and mercantile usage;

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(xv) partnership agreements;

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(xvi) technology development agreements;

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(xvii) intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits;

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(xviii) agreements for sale of goods or provision of services; (xix) exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum;

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(xx) insurance and re-insurance;

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(xxi) contracts of agency relating to any of the above; and (xxii) such other commercial disputes as may be notified by the Central Government.”

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A close scrutiny of the definition Section would make it clear a

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suit filed by the plaintiffs seeking declaration certain documents executed by them in favour of the defendants 1 and 2 are null and void and would not

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come within the definition of the expression 'commercial dispute'. Therefore, the order passed by the Trial Court dated 24.03.2022 registering the present suit as a commercial suit appeared to be incorrect.

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The learned counsel appearing for the respondents 1 and 2 made a technical objection that after dismissal of the civil revision petition filed by the petitioners in C.R.P.No.1857 of 2024, they are not entitled to challenge the earlier order.

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A perusal of the order passed in C.R.P.No.1857 of 2024 would indicate that the civil revision petition was dismissed mainly on the technical ground that the petitioners failed to challenge the earlier order dated 24.03.2022. The relevant observation reads as follows:-

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“10. When the suit was returned that the suit does not fall under Section 2(1)(c)(i) of Commercial Courts Act, despite it is a financial transaction, which was clarified and the suit taken on file as Commercial Suit now petitioner take shield for non filing of the written statement within the stipulated period citing the earlier filing. Further in the absence of the petitioners, not challenging the order dated 24.03.2022, in taking the suit as Commercial Suit and thereafter participating

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in the suit and after nine months in a setting aside ex-parte order makes such a claim may not be proper. Further the petitioners relying upon Ambalal Sarabhai case for the reason that a dispute relating to immovable property per se may not be a commercial dispute on the facts of the present case is not applicable. Further contention of the petitioners is that merely because the suit was filed before the Commercial Court, the same cannot be entertained for the reason that the suit is of high value may not be proper. These are the grounds available for the petitioners, if a challenge is made on the order dated 24.03.2022, wherein the trial Court had taken the case on file as Commercial Original Suit, but not by challenging the impugned order, which was filed seeking the Registry to number the application to set aside the ex-parte order dated 08.12.2022. In view of the above, this Court finds no reason to interfere with the impugned order passed by the learned Principal District Judge, Tiruvallur.”

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This Court, in the earlier order has not giving any positive finding that the suit filed by the respondents 1 and 2/plaintiff will come under the definition of commercial dispute as defined under Section 2(1)(c) of the Commercial Courts Act, 2015. The said order was passed only on technical ground that the petitioners failed to challenge the order registering the suit as a commercial suit. Therefore, the order passed in C.R.P.No.1857 of 2024

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will not come in the way of the petitioners challenging the earlier order dated 24.03.2022. Further, it is pertinent to mention that the order dated 24.03.2022 was passed by the Trial Court even before the petitioners entered appearance in the suit. After entering the appearance, the petitioners are entitled to challenge the same. Therefore, this Court is not inclined to accept the technical objection made by the learned counsel appearing for the respondents 1 and 2.

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In view of the discussion made earlier, the impugned order passed by the Trial Court dated 24.03.2022 is set aside and the Principal District Court, Thiruvallur is directed to treat the suit as a ordinary suit and proceed with the same in accordance with law.

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It is brought to the notice of this Court that the written statement filed by the petitioners was already returned by the Trial Court on the ground it could not receive it beyond the period of 120 days, as per proviso to Order 8 Rule 1 of Code of Civil Procedure applicable to the Commercial Courts. Now, this Court directed the Trial Court to treat the suit as an ordinary suit, therefore, the outer time limit prescribed under Order 8 Rule 1 of Civil Procedure Code applicable to the Commercial Courts will not come

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in the way of the petitioners and any application filed by the petitioners seeking reception of the written statement can be considered by the Trial Court on its own merits as per the Civil Procedure Code applicable to ordinary suit.

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