[Cites 7, Cited by 0]
Bombay High Court
Jayaswal Neco Industries Limited, ... vs Abhiruchi Vision Private Limited, ... on 23 December, 2025
2025:BHC-NAG:14914
2312WP5176-25.odt 1 Judgment
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH, NAGPUR.
WRIT PETITION NO. 5176 OF 2025
Jayaswal Neco Industries Limited, F8, MIDC Industrial
Area, Hingna Road, Nagpur, Maharashtra - 440016,
Through its authorized signatory Kailash Sharma, Age :
58 years, Occ: Service, R/o c/o F-8, MIDC Industrial
Area, Hingna Road, Nagpur, Maharashtra - 440016. PETITIONER
VERSUS
Abhiruchi Vision Private Limited, 10, Princep Street, 3rd Floor,
Kolkatta, West Bengal 700072. Through authorized Signatory. RESPONDENT
______________________________________________________________
Shri Sunil Manohar, Senior Advocate with Shri Akshat Goel and Shri R.G.
Pandey, counsel for the petitioner.
Shri Deven Chauhan, Senior Advocate with S/Shri C.S. Dhore, A.D. Chaudhari
and C.J. Dhruv, counsel for the respondent.
---------------------------------------------------------------------------------------------------------------
CORAM : PRAFULLA S. KHUBALKAR, J.
DATE ON WHICH ARGUMENTS WERE HEARD : OCTOBER 07, 2025
DATE ON WHICH JUDGMENT IS PRONOUNCWED : DECEMBER 23, 2025
JUDGMENT
RULE. Rule is made returnable forthwith and heard finally with
consent of the learned counsel for the parties.
2. The petitioner has assailed the order dated 25.06.2025 passed by
the Court of District Judge-2, Nagpur rejecting the application filed by the
petitioner under Order 7 Rule 11 read with Order 7 Rule 10 of the Code of
Civil Procedure, 1908 (for short, 'the Code') read with Section 15 of the
Commercial Courts Act, 2015 (for short, 'the Act of 2015).
FACTUAL BACKGROUND:
3. The petitioner is the original defendant in the suit filed by the
respondent for recovery of an amount of Rs.104,43,67,347.94 along with
interest at the rate of 18% per annum. The parties are hereinafter referred
2312WP5176-25.odt 2 Judgment
to as the plaintiff and the defendant according to their status in the suit
for the sake of convenience.
4. The plaintiff claims to be a Non-Banking Financial Company (NBFC)
and the defendant is a company duly incorporated and registered under
the Companies Act 1956 having business of manufacturing variety of irons
and specialty in steel. The defendant-Company and other companies
belonging to Jayaswal family including a corporate entity viz. Corporate
Ispat Alloys Limited (CIAL) had availed financial facilities and loans from
various lenders and banks for approximately Rs.139 Crores for Strip Mill
Division, which is one of the projects of CIAL. In the month of July-2008
there was a family separation and settlement by which various companies
owned by the members of Jayaswal family were divided amongst them in
between two groups; one being Basant Lal Shaw Group; and other being
Manoj Kumar Jayaswal Group. As per the settlement agreed between the
two groups CIAL came to the share of Manoj Kumar Jayaswal group.
While one project of CIAL viz. Strip Mill Division alongwith its assets and
liabilities got demerged from CIAL and merged with the defendant which
formed part of Basant Lal Shaw group.
5. It is the plaintiff's case that the liability of discharging loans of strip
mill division fell upon defendant and accordingly from the month of
August-2008 onwards the defendant commenced repayment of loan to the
bankers of Strip Mill Division and in view of various correspondences, the
defendant company acknowledged the debt of the bankers. Thereafter, in
the month of August-2010 the defendant stopped repayment of the
2312WP5176-25.odt 3 Judgment
lenders of Strip Mill Division and therefore CIAL which belonged to Manoj
Kumar Jayaswal group started making payments from August-2010 to
March-2013 for and on behalf of the defendant to ensure that the account
of Strip Mill Division did not turn into non-performing asset (NPA). It is
alleged that during this period CIAL made payment of more than Rs.104
Crores to the lenders of Strip Mill Division for and on behalf of the
defendant. In this background, after a dispute arose between the
members of Jayaswal family, the matter was referred to the arbitrator and
a Settlement Scheme on behalf of the parties was approved by this Court
as well as the High Court of Calcutta. It is alleged that during entire
period, CIAL had cumulatively paid amount of more than Rs.104 Croers
and this amount was acknowledged by the defendant by sending email, so
also the said amount is shown outstanding in the account books of the
defendant. It is thus the case of the plaintiff that the defendant had
acknowledged the liability to repay the said amount to CIAL in its balance-
sheet for the year 2013-14 and onwards under the head of unsecured
loan. It is the case of plaintiff that by letter dated 20.09.2014, the
defendant denied its liability to pay the aforesaid amount, even though
the said amount was reflected in its balance-sheet. Under these
circumstances, CIAL approached the plaintiff and offered to assign the
debt due against defendant and accordingly the debt which was payable
by the defendant to CIAL was assigned in favour of the plaintiff as per
Assignment Agreement dated 24.03.2017 for consideration.
2312WP5176-25.odt 4 Judgment
6. On the basis of these pleadings, the plaintiff filed commercial suit
for recovery of money against the defendant before the Court of District
Judge, Nagpur which came to be registered as Commercial Suit no.4 of
2024. The defendant appeared in the suit and filed an application under
Order VII Rule 11 read with Order VII Rule 10 of the Code read with
Section 15 of the Commercial Courts Act, 2015 which came to be rejected
by order dated 25.06.2025. This order is subjected to challenge by the
petitioner-defendant by way of instant petition. By the impugned order,
the trial Court has held that the suit filed by the plaintiff is a commercial
dispute within the meaning of term as per the provisions of Act of 2015.
CONTENTIONS OF THE PARTIES
7. Shri Sunil Manohar, learned Senior Advocate for the petitioner
while challenging the impugned order raised mainly two-fold submissions;
firstly that the suit filed by the plaintiff did not disclose any cause of
action as the controversy raised by way of the suit is an attempt of re-
litigation of the dispute which is not permissible and therefore the plaint
deserved to be rejected for want of cause of action; and secondly he
submitted that the suit filed by the plaintiff is not at all a commercial suit
as there are no documents of mercantile transaction between the parties
to the suit and the plaint deserved to be rejected on this count also.
8. The primary contention of the learned Senior Advocate for the
petitioner is that there exists no cause of action to file the instant suit in
view of the fact that the controversy in between the plaintiff and Jayaswal
Neco Industries Group stood settled by the judgment of National Company
2312WP5176-25.odt 5 Judgment
Law Appellate Tribunal, Principle Bench, New Delhi (for short, 'NCLAT')
delivered on 04.07.2023. He also submitted that the special leave petition
challenging the judgment of NCLAT was dismissed on 20.11.2023 and
thus the dispute attained finality. He thus submitted that the alleged
assignment in favour of the plaintiff is of the dispute and not of a debt and
in absence of any crystallized debt, there is no entitlement with the
plaintiff to recover any money from the defendant. He invited attention to
the judgment of NCLAT to put forth his submission that the assignment
was nothing but a transfer of litigation in favour of the appellant therein
i.e. the plaintiff in the commercial suit. He also submitted that a perusal
of the plaint of the commercial suit in question clearly shows that there is
no dispute based on or relating to any mercantile document and the
dispute does not fall within the definition of 'commercial dispute' as
defined under Section 2(1)(c)(vii) of the Act of 2015. In support of his
submissions, he placed reliance on the following judgments:-
(i) Commissioner of Police & Others Versus Acharya
Jagadishwarananda Avadhuta & Others [(2004) 12 SCC 770].
(ii) Ambalal Sarabhai Enterprises Ltd. Versus K.S. Infraspace LLP &
Another [(2020) 15 SCC 585].
(iii) Varanium Cloud Limited - Applicant in the Matter between Rolta
Private Limited & Another Versus Varanium Cloud Limited & Another
[2024 SCC OnLine Bom 3518].
(iv) Meena Vohra Versus Master Hosts Private Limited & Others [2025
SCC OnLine Del 1758].
(v) Glasswood Realty Pvt.Ltd. & Others Versus Chandravilas
Kailashkumar Kothari [(2022) 1 Bom CR 527].
2312WP5176-25.odt 6 Judgment
(vi) Vicco Laboratories, Proprietor Vicco Products (Bombay) Versus
Union of India & Another [2007(1) Mh.L.J. 738].
(vii) M. Nagabhushana Versus State of Karnataka & Others [(2011)3
SCC 408].
(viii) SNP Shipping Services Pvt. Ltd. Versus Kara Mara Shipping Co.Ltd.
[2000(1) Mh.L.J. 699].
(ix) T. Arivandandam Versus T.V. Satyapal & Another [(1977) 4 SCC
467].
(x) Shri Mukund Bhawan Trust & Others Versus Shrimant Chhatrapati
Udayan Raje Pratapsinh Maharaj Bhonsle & Another [2024 SCC OnLine
3844].
9. By relying upon the judgment in the matter of SNP Shipping Services
Pvt. Ltd. (Supra), M. Nagabhushana and Vicco Laboratories (Supra) he
submitted that re-litigation of a point is an abuse of process of the court
and has to be nipped in the bud by exercising powers under Order VII
Rule 11 read with Section 151 of Civil Procedure Code.
10. By highlighting the legal position in T. Arivandandam (Supra), he
submitted that while considering an application under Order VII Rule 11
of the Code, the Court is empowered to deal with the aspect of absence of
cause of action even though it is not specifically raised in the said
application since it is the bounden duty of the Court to ensure that
vexatious litigation is not contested.
11. By placing heavy reliance on the judgment of the Hon'ble Supreme
Court in Shri Mukund Bhawan Trust & Others (supra), he submitted that
the position of law is reiterated by the Hon'ble Supreme Court that under
Order VII Rule 11 of the code, a duty is cast upon the Court to reject the
2312WP5176-25.odt 7 Judgment
plaint if it is found that the suit is manifestly vexatious and without any
merit. He submitted that a suit without cause of action should be nipped
in the bud so that bogus litigation ends at the earliest stage and the Court
has to ascertain existence of real cause of action as against the illusory
one. On the basis of legal position, he submitted that in the instant case
there does not exist any cause of action against the defendant entitling the
plaintiff to recover the amount.
12. Further, by relying on the legal position as laid down in Ambalal
Sarabhai Enterprises Ltd., Meena Vohra and Varanium Cloud Limited
(supra) he submitted that the dispute raised by the suit does not fall in
any of the clauses of S. 2 (1) (c) of the Commercial Courts Act, 2015 and
therefore the plaint deserved to be returned.
13. Per Contra, Shri Deven Chauhan, learned Senior Advocate for the
respondent vehemently opposed the petition and primarily submitted that
in the wake of triable issues raised in the plaint the suit cannot be
summarily rejected. He submitted that the plaint clearly discloses a cause
of action as against the defendant and justified the impugned order. As
regards the contention canvassed by the learned Senior Advocate for the
petitioner that the plaint deserved to be rejected for absence of cause of
action, learned Senior Advocate for the respondent submitted that an
application under Order VII Rule 11 of the Code as filed before the trial
Court does not raise this ground and hence the petitioner is precluded
from raising the said ground before this Court. In support of his
2312WP5176-25.odt 8 Judgment
submission, he placed reliance on the judgment in Kushal Anand (supra)
and by inviting attention to paragraph 22 he submitted that the
submission which was never advanced before the trial Court in support of
application under Order VII Rule 11 of the Code cannot be raised in the
petition under Article 227 of the Constitution of India. He further
submitted that, the plaint indeed disclosed a cause of action as the alleged
settlement by NCLAT cannot be considered to be final in view of the
specific observation of the Hon'ble Supreme Court by its order dated
20.11.2023 stating that 'In case any civil proceeding are initiated, the
same shall be decided in accordance with the Law. All issues in relation to
the civil proceedings are left open.' He therefore submitted that the
averments in the plaint sufficiently disclosed cause of action in several
paragraphs including paragraph 39 of the plaint.
14. In support of his submissions, he relied on the following
judgments:-
(i) K. Valarmathi & Others Versus Kumaresan [2025 SCC OnLine SC
985].
(ii) Vinod Infra Developers Ltd. Versus Mahaveer Lunia & Others
[2025 SCC OnLine SC 1208].
(iii) Kushal Anand Versus Mandhir Sachdeva [2022 SCC OnLine Del
2102].
15. While highlighting the scope of interference under Article 227 of
the Constitution of India with reference to an order on an application
under Order 7 Rule 11 of the Code, he placed reliance on the judgment of
the Hon'ble Supreme Court in Vinod Infra Developers Ltd. (supra) and
2312WP5176-25.odt 9 Judgment
submitted that rejection of plaint under Order 7 Rule 11 of the Code is
permissible only when the plaint on its face, without considering the
defence, fails to disclose any cause of action or other circumstances
mentioned in the provision. He submitted that in view of the settled
position, at the preliminary stage, the Court is required to confine its
examination strictly in consonance with the averments made in the plaint
and in case a triable issue arises from the pleadings, the suit cannot be
summarily rejected.
16. As regards the contention of the petitioner that the suit filed by the
plaintiff does not fall within the definition of 'commercial suit' as defined
under the Act of 2015, the learned Senior Advocate for the respondent
submitted that the controversy is in between two commercial entities with
respect to recovery of amount of more than Rs.104 Crores and considering
the nature of transaction and reliefs claimed, the suit was filed as a
commercial dispute. However, as regards the contention about lack of
foundation to style the suit as 'commercial suit', in absence of any
mercantile document he candidly submitted that there does not exist any
document to be strictly categorised as a mercantile document to bring the
suit within the purview of the definition of 'commercial dispute'.
17. In the backdrop of the rival contentions the controversy thus falls
for my consideration.
18. The instant petition is a challenge to the order passed by the trial
Court rejecting the application under Order VII Rule 11 read with Order
2312WP5176-25.odt 10 Judgment
VII Rule 10 of the Code. Thus, the primary issue is whether in view of the
grounds raised in the application under Order VII Rule 11 of the Code, the
plaint deserved to be rejected. While deciding this controversy, the Court
has to be mindful about the scope of interference under Article 227 of the
Constitution of India in the wake of the judgment of the Hon'ble Supreme
Court in K. Valarmathi & Others (supra) from which paragraphs 8 to 11
being relevant are reproduced below:-
"8. Power of the High Court under Article 227 is supervisory and
is exercised to ensure courts and tribunals under its supervision act
within the limits of their jurisdiction conferred by law. This power is
to be sparingly exercised in cases where errors are apparent on the face
of record, occasioning grave injustice by the court or tribunal assuming
jurisdiction which it does not have, failing to exercise jurisdiction
which it does have, or exercising its jurisdiction in a perverse manner.
9. Essence of the power under Article 227 being supervisory, it
cannot be invoked to usurp the original jurisdiction of the court which
it seeks to supervise. Nor can it be invoked to supplant a statutory
legal remedy under the Civil Proedure Code, 1908. For example,
existence of appellate remedy under Section 96 of the Code operates
as a near total bar to exercise of supervisory jurisdiction under
Article 227.
10. Civil Procedure Code is a self-contained Code and order VII
Rule 11 therein enumerates the circumstances in which the trial
court may reject a plaint. Such rejection amunts to a deemed decree
which is appealable before the High Court under Section 96 of the
Code. This statutory scheme cannot be upended by invoking
supervisory jurisdiction of the High Court under Article 227 to
entertain a prayer for rejection of plaint.
11. In the present case, High Court has supervened the
provisions of the Code when it rejected the palint on the ground it
was barred by law. In doing so, the High Court not only substituted
itself as the court of first instance but also rendered nugatory a
valuable right to appeal available to the appellant had the issue been
adjudicated by the trial court in the first place."
2312WP5176-25.odt 11 Judgment
Reference also need to be made to the judgment of the Hon'ble Supreme
Court in Vinod Infra Developers Ltd. (supra) dealing with the position of
law in paragraph 8 which is reproduced below:-
"8. The position of law is that rejection of a plaint under Order
VII Rule 11 CPC is permissible only when the plaint, on its face and
without considering the defence, fails to disclose a cause of action, is
barred by any law, is undervalued, or is insufficiently stamped. At
this preliminary stage, the court is required to confine its
examination strictly to the averments made in the plaint and not
venture into the merits or veracity of the claims. If any triable issues
arise from the pleadings, the suit cannot be summarily rejected.
Keeping in mind this settled principle of law, we proceed to examine
whether the High Court was justified in rejecting the plaint under
Order VII Rule 11 CPC."
19. On a perusal of the application under Order VII Rule 11 of the
Code, which is under consideration, it has to be noted that the application
is filed by raising only one issue to the effect that the suit filed by the
plaintiff is not a commercial dispute. There are no averments/grounds in
the application to contend that the plaint deserves to be rejected for
absence of cause of action. However, while advancing arguments before
this Court, learned counsel for the petitioner has vehemently submitted
that the issue as to rejection of plaint for absence of cause of action has to
be considered by this Court, even though it was not specifically raised
before the trial Court since it is the boundan duty of this Court while
exercising powers under Article 227 of the Constitution of India to
examine this issue. As such, even though the issue of absence of cause of
action was not raised, the contentions in this regard are considered
herewith.
2312WP5176-25.odt 12 Judgment
20. It is relevant to see as to whether averments in the plaint are
sufficient to disclose a cause of action. The scrutiny is confined to the
averments in the plaint and there is no requirement to consider the
defence sought to be raised by the defendant. On a perusal of the plaint,
it appears that there are averments to the effect that there was an
assignment of debt by CIAL in favour of Plaintiff. There are pleadings with
respect to the document of 'Assignment agreement' dated 24.03.2017 and
further there are pleadings with respect to the emails exchanged. As such,
in view of pleadings in the plaint, at this stage it cannot be concluded that
the plaint does not at all disclose cause of action. Apart from this, in view
of the order dated 20.11.2023 passed by the Hon'ble Supreme Court, the
plaintiff became entitled to initiate civil proceedings and thus the plaint
cannot be rejected by terming it as an act of re-litigation.
21. In the wake of these averments and the documents filed alongwith
the plaint, it appears that the plaintiff has raised a triable issue in the suit
which needs adjudication on merits. The contentions of the petitioner
that there was no assignment of debt or that there was no crystallized
debt needs adjudication on the basis of evidence. Further, contention of
the learned counsel for the petitioner that the suit is in nature of re-
litigation if seen in the wake of rival submissions demonstrating that there
was no compromise in between the parties, also requires adjudication on
the basis of evidence. On a bare reading of the pleadings in the plaint
alongwith the documents, it is difficult to conclude at this stage that there
is no cause of action at all warranting rejection of plaint on that count.
2312WP5176-25.odt 13 Judgment
22. In the backdrop of consideration of above mentioned factual and
legal aspects, I am of the firm opinion that the plaint filed by the plaintiff
disclose triable issues which need adjudication on the basis of evidence
and it cannot be rejected at the threshold for lack of cause of action. By
applying the position of law laying down the parameters of exercise of
supervisory jurisdiction under Article 227 of the Constitution of India, this
Court is required to test the legality of the order passed by the trial Court
and is not required to substitute itself as the Court of first instance. As
such, in view of the fact that the plaint discloses a cause of action, it does
not deserve to be rejected under Order VII Rule 11 as claimed by the
petitioner.
23. As regards the contention of the learned Senior Counsel for the
petitioner that the suit filed as commercial suit is not maintainable in
absence of any mercantile document, also needs due consideration. In
response to these arguments, there is no strong opposition by the counsel
for the respondent since he has fairly submitted that there exists no
mercantile document. A perusal of the plaint and documents placed on
record in support of the plaint do not prima-facie show that any of the
documents could form the basis to categorize the suit as a commercial
suit. Merely because the valuation of the suit is for a higher amount, the
suit cannot be treated to be a commercial suit. Reliance placed by the
learned Senior Advocate for the petitioner on the judgment of the Hon'ble
Supreme Court in Ambalal Sarabhai Enterprises Limited (supra)
highlighting the legal position about nature of dispute being a commercial
2312WP5176-25.odt 14 Judgment
dispute is appropriate. It is profitable to reproduce paragraph 13 of the
said judgment which reads as under:-
"13. The learned Senior Advocate for the appellant would
however, contend that a strict interpretation as in the case of taxing
statutes would not be appropriate in the instant case where the issue
relates to jurisdiction. In that regard, the learned Senior Advocate
has referred to the Statement of Objects and Reasons with which the
Commercial Courts Act, 2015 is enacted so as to provide speedy
disposal of high value commercial disputes so as to create the positive
image to the investors world about the independent and responsive
Indian legal system. Hence, he contends that a purposive
interpretation be made. It is contended that a wider purport and
meaning is to be assigned while entertaining the suit and considering
the dispute to be a commercial dispute. Having taken note of the
submission we feel that the very purpose for which the CC Act of
2015 has been enacted would be defeated if every other suit merely
because it is filed before the Commercial Court is entertained. This is
for the reason that the suits which are not actually relating to
commercial dispute but being filed merely because of the high value
and with the intention of seeking early disposal would only clog the
system and block the way for the genuine commercial disputes which
may have to be entertained by the Commercial Courts as intended by
the lawmakers. In commercial disputes as defined a special
procedure is provided for a class of litigation and a strict procedure
will have to be followed to entertain only that class of litigation in
that jurisdiction. If the same is strictly interpreted it is not as if those
excluded will be non-suited without any remedy. The excluded class
of litigation will in any event be entertained in the ordinary civil
courts wherein the remedy has always existed."
24. As regards the categorization of the suit as commercial suit in view
of the consideration of relevant aspects as aforesaid, I am of the firm view
that the suit need not be tried as a 'commercial suit' although it is a
dispute between two commercial entities and to that extent, interference
is warranted with the impugned order. A perusal of the impugned order
2312WP5176-25.odt 15 Judgment
passed by the trial Court shows that despite there being no mercantile
document or other documents to bring the suit in defination of Clause
2(1)(c), the Court has concluded that the categorization of the suit as
'commercial suit' is proper. The impugned order deserves to be modified
to this extent by observing that the suit be tried as a regular/special civil
suit and not a commercial suit.
25. In view of the above mentioned factual and legal aspects the
contentions canvassed on behalf of the petitioner for rejection of plaint
under Order VII Rule 11 of the Code for absence of cause of action cannot
be accepted. However, the application at Exhibit 21 is entertained to the
extent of Order VII Rule 10 of Code and the order dated 25.06.2025 is
accordingly modified. Hence, the following order is passed:-
I. The writ petition is partly allowed.
II. The application at Exhibit 21 under Order VII Rule 11 of the Code
of Civil Procedure, 1908 is rejected whereas, the prayer for return
of plaint under Order VII Rule 10 of the Code of Civil Procedure,
1908 is granted.
26. Rule is made absolute in aforesaid terms. No order as to costs.
(PRAFULLA S. KHUBALKAR, J.)
APTE
Signed by: Apte
Designation: PS To Honourable Judge
Date: 23/12/2025 19:19:59
