Calcutta High Court

Evergreen Dealer Private Limited vs Gujarat Eco Textile Park Limited on 31 August, 2023

                 IN THE HIGH COURT AT CALCUTTA
                 (Ordinary Original Civil Jurisdiction)
                              ORIGINAL SIDE


Present:

The Hon'ble Justice Krishna Rao



                         IA No: GA 4 of 2021

                             In CS 112 of 2020


                  Evergreen Dealer Private Limited
                                  Versus
                  Gujarat Eco Textile Park Limited




           Mr. Suman Dutt
           Ms. Manju Dutta
           Mr. Rajesh Upadhyay
           Ms. Surabita Biswas
                                              ... For the Plaintiff.

           Mr. Shuvasish Dasgupta
           Mr. Balarko Sen
           Mr. Soumyajit Mishra
                                            ... For the Defendant.


Hearing Concluded On : 07.08.2023

Judgment on          : 31.08.2023
                                        2


Krishna Rao, J.:


1.

The defendant has filed the instant application being G.A No. 4 of 2021

for dismissal of the suit or for rejection of the plaint. The plaintiff has

filed the suit praying for decree for a sum of Rs. 96,02,719/- along with

consequential reliefs.

2. The defendant contended that as per the claim of the plaintiff, the

dispute is arising out of transaction of financers and borrowers and

therefore, the suit filed by the plaintiff falls under "commercial dispute"

as defined under Section 2(1)(c) of the Commercial Courts Act, 2015.

3. Mr. Shuvasish Sengupta, learned Advocate representing the defendant

submitted that as per Section 7 of the Commercial Courts Act, 2015, all

the suits and applications relating to commercial disputes of a specified

value filed in a High Court having Ordinary Original Civil Jurisdiction

shall be heard and disposed of by the Commercial Division of the High

Court.

4. Mr. Sengupta submitted that as per Section 2(1)(i) of the Commercial

Courts Act, 2015, the 'Specified Value' in relation to commercial

dispute, shall mean the value of the subject matter in respect of a suit

as determined in accordance with Section 12 which shall not be less

than three lakh rupees or such higher value, as may be notified by the

Central Government.

5. Mr. Sengupta submitted that by a Notification dated 20th March, 2020,

the Government of West Bengal in terms of Sub-Section (1A) of Section

3 of the Act of 2015 has specified the pecuniary jurisdiction, with

immediate effect and as per the Notification, the value of the

commercial disputes in case of Commercial Division of the High Court,

Calcutta is amounting to a sum exceeding Rs. 10,00,000/-.

6. Mr. Sengupta submitted that the instant suit is related to a commercial

dispute and is arising out of a transaction as mentioned in Section

2(1)(c) of the Commercial Courts Act, 2015 having specified value of Rs.

96,02,719/-.

7. Mr. Suman Dutt, learned Advocate representing the plaintiff submits

that the application filed by the defendant is misconceived and is liable

to be dismissed.

8. Mr. Dutt submitted that it is the specific case of the plaintiff that as per

the request of the defendant company, the plaintiff lent an advance

amount of Rs. 36,00,000/- to the defendant by way of RTGS on 30th

December, 2011 and the defendant agreed to repay the loan amount to

the plaintiff with interest at the rate of 12% per annum.

9. Mr. Dutt submitted that on 13th December, 2012, the defendant had

paid an interest amount of Rs. 48,865/- after deducting TDS. He

submits that the defendant has also issued balance confirmation for

the financial year 2011-2012, 2013-2014, 2015-2016 and 2016-2017

confirming the said amount.

10. Mr. Dutt submits that the plaintiff has filed an application for summary

judgment and only to delay the hearing of the said application, the

defendant has filed the present application. He further submits that the

transaction between the plaintiff and the defendant is not covered

under any of the clauses of the Section 2 (c) of the Act of 2015.

11. Mr. Dutt submits that there are no mercantile documents entered

between the parties and the transaction between the parties is not with

respect of any commercial transaction and the loan provided by the

plaintiff to the defendant is simple money lent and advance given by the

plaintiff to the defendant.

12. Section 2 (1) (c) (i) of the Commercial Courts Act,2015 reads as follows :

"2(c) "commercial dispute" means a dispute arising out of-- (i) ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents."

13. As per the case of the plaintiff, the plaintiff is a company registered

under the provisions of the Companies Act, 1956 and is engaged in the

trading business and the defendant company carries the business of

construction of sewerage and water treatment project. The specific case

of the plaintiff is that as per the request of the principal officers and

representative of the defendant company, the plaintiff had lent an

advanced amount of Rs. 36,00,000/- to the defendant.

14. The defendant has relied upon the judgments reported in 2023 SCC

Online Del 1808 (Amanpreet Kohli -vs- Pankaj Dayal), 2022 SCC

Online Cal 126 (Padma Logistics and Khanij Pvt. Ltd -vs- Ideal

Unique Realtors Pvt. Ltd.) and 2023 SCC OnLine Cal 165 (Subrata

Kumar Ghose -vs- Rites Limited and Another) but in all the cases

there is a written contract between the parties and the courts held that

the dispute is of commercial nature and thus the fact and

circumstances of the cases referred by the defendant and the present

case is distinguishable as in the present case there is no contract or

any written documents executed between the parties for the loan paid

by the plaintiff to the defendant and the transaction between the

plaintiff and the defendant is simple money lent and advanced.

15. The plaintiff has relied upon the judgment reported in

MANU/WB/0547/2021 (Ladymoon Towers Private Limited -vs-

Mahendra Investment Advisors Private Limited) wherein the

Coordinate Bench of this Court held that:

"The definition section of the 2015 Act only contemplates a "commercial dispute" and not any other form of dispute where the basis of disagreement between the parties has a non- commercial cause. The gradation of disputes in Section 2(1)(c) taking into account all possible forms of agreements from which a "commercial dispute" may arise, makes it clear that the framers of the statute gave emphasis on the commercial flavour of the transaction as opposed to agreements entered into between parties without a commercial purpose. The qualification of the person being a Merchant, Banker, Trader or Financier imparts an unimpeachable commercial flavour to the transaction and the resulting dispute. The Insolvency and Bankruptcy Code,

2016, for example, defines a dispute from a broader perspective as any suit or arbitration proceedings relating to an existing debt - Section 5(6)(a). The commercial purpose would generally mean a transaction by which a person's commercial or economic interests may be advanced and would result in an economic benefit to that person. It would not include an agreement where profit-making is an incidental outcome of the transaction or may happen by accident. Although, a "hand loan", for example, is given by a person or entity to another with the expected outcome of the principal sum being returned with interest, the essential commercial flavour in such a loan may be lost by reason of the informal terms under which the money is lent and advanced and the consequent uncertainty which may result therefrom. The requirement of fixing the transaction within the ambit of Section 2(1)(c)(i), namely, between the named classes of persons can be construed being in aid of what the Act intends to cut down, namely, unnecessary wastage of time on ascertaining whether a dispute is a commercial dispute. The exhaustive categories of agreements in 2(1)(c)(i) - (xxii) leaves no doubt that the 2015 Act seeks to bring within its fold an inclusive range of disputes where the underlying purpose of the transaction is a commercial interest of the parties."

16. As to what would constitute a "commercial dispute" under the option

contemplated in Section 2(1)(c) of the Act is important since courts

generally tend to accept the listing of the matters before the

Commercial Division or Commercial Appellate Division of the High

Court, as correct. The categorisation of the matter before these benches

are usually done by the concerned department or by the occasional

assessment by the concern court where a party takes objection to such

classification. The two indices which from the basis of the decision as to

the classification of a matter are (a) whether the dispute is a

"commercial dispute" and if held to be in affirmative (b) whether the

Specified Value of the subject matter of the commercial dispute, the

suit is to be heard by Commercial Dispute. Since 2015 Act prescribes a