Telangana High Court
M/S. Big Bang Boom Solutions vs M/S Centauri Composites Pvt. Ltd on 17 June, 2021
Bench: M.S.Ramachandra Rao, T.Vinod Kumar
HONOURABLE SRI JUSTICE M.S. RAMACHANDRA RAO
AND
HONOURABLE SRI JUSTICE T. VINOD KUMAR
Interlocutory Application No.1 of 2021
in
Civil Miscellaneous Appeal No.253 of 2021
and
Civil Miscellaneous Appeal No.253 of 2021
COMMON JUDGMENT: (Per Sri Justice M.S.Ramachandra Rao)
This appeal is filed challenging the endorsement dt.19.02.2020 on
the file of the Chief Judge, City Civil Court, Hyderabad in C.S.R.No.55
of 2020 in OS.SR.No.363 of 2020.
2. The plaint in the said OS.SR was presented by appellant on
06.01.2020 before the Chief Judge, City Civil Court, at Hyderabad, and
in the said plaint the appellant had sought a direction to respondent to
pay damages amounting to Rs.5 crores. It is the allegation of appellant
in the plaint that respondents had addressed an e-mail to IDEX and other
e-mail groups on 10.11.2019 defaming and causing loss to appellant, and
that such defamation of appellant on various online platforms is
continuing, and that is the cause of action for filing this suit.
3. The Court below had initially raised an objection for numbering
the suit that the dispute, as per averments in the plaint arose in the
ordinary transaction of parties in the capacity of trader / merchants, and
that the case would fall within the purview of Section 2(1)(c)(i) of the
Commercial Courts Act, 2015.
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4. The petitioner re-submitted the case bundle contending that as per
Section 2(1)(c)(i) of the Commercial Courts Act, 2015, a commercial
dispute arises when a dispute arises out of mercantile documents
including enforcement and interpretation of such documents; and that in
the instant suit, the dispute arose after a defamatory e-mail was sent by
the defendants / respondents, and that the suit is filed for damages on
that count.
5. Thereafter, the matter was heard on bench.
6. Vide the impugned endorsement dt.19.02.2020, the Chief Judge,
City Civil Court, at Hyderabad again returned the plaint for presentation
observing as under :
"A perusal of the plaint reveals that the plaintiff is a Private Limited
Company and the 1st defendant is also a Private Limited Company.
The plaint also discloses that the plaintiff and the 2nd defendant are the
share holders in the 1st defendant's company and in view of the dispute
that arose between them during the course of business transactions,
there was exchange of e-mails, and further, the version of the plaintiff
is that he sustained heavy loss in his business due to the acts of the
defendants (at para no.29) and thus, he is entitled for a total sum of
Rs.5,00,00,000/- towards damages.
Section 2(1) (c) of the Commercial Courts Act defines what a
commercial dispute is and it clearly lays down that a dispute arises
during ordinary transaction of merchants is also a commercial
dispute. Further, the value of the subject matter is more than
Rs.1,00,00,000/-. Thus, undoubtedly, the suit has to be instituted
before the Commercial Court, which is established specifically for the
purpose of dealing with the disputes arising out of the commercial
transactions, whose specified value exceeds Rs.1,00,00,000/-.
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Thus, the plaint is returned for presentation before the proper
Forum."
7. The counsel for appellant contends that the interpretation placed
by the Court below on Section 2(1)(c)(i) of the Commercial Courts Act,
2015 is erroneous, that the dispute raised in the suit did not arise out of
the ordinary business transaction and arose from defamatory and
damaging statements allegedly made by the respondents against the
appellant; and since the defamatory e-mail was sent to a third-party with
intention to malign the reputation of the appellant and was unrelated to
the shareholding of the appellant in the 1st respondent-Company, the
appellant was not obliged to approach the Commercial Court for filing
the suit and is entitled to file it in the ordinary Civil Court in view of
Section 9 of Civil Procedure Code, 1908 which makes all suits
entertainable by such a court unless expressly or impliedly admitted by
law.
8. Interlocutory Application No.1 of 2021 in Civil Miscellaneous
Appeal No.253 of 2021 is filed to dispense with filing of certified copy
of the endorsement dt.19.02.2020 on the file of the Chief Judge, City
Civil Court, Hyderabad in C.S.R.No.55 of 2020 in OS.SR.No.363 of
2020. The same is ordered since photocopy of the order of the said Court
is filed.
9. We have perused the contents of the plaint presented by the
appellant in the Court of the Chief Judge, City Civil Court, at
Hyderabad.
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10. The basis for the claim of damages in the suit is not a commercial
transaction between the parties, but is alleged to be circulation of an e-
mail by the 1st respondent to a third-party allegedly maligning the
reputation of the appellant. Such a claim cannot be said to fall under
Section 2(1)(c)(i) of the Commercial Courts Act, 2015, because the
dispute raised in the suit is not a commercial dispute arising out of
ordinary transactions of merchants on the basis of mercantile documents
or the enforcement and interpretation of such documents.
11. In Ambalal Sarabhai Enterprises Ltd. v. K.S. Infraspace LLP1,
the Supreme Court explained that provisions of the Commercial Courts
Act,2015 have to be strictly construed and merely on account of high
value, a suit cannot be filed before a Commercial Court, particularly
where it does not relate to a 'commercial dispute' . It explained:
" 13. ... 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.
(2020) 15 SCC 585, at page 594
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14. In that view it is also necessary to carefully examine and entertain
only disputes which actually answers the definition "commercial disputes"
as provided under the Act..."
12. Keeping in mind the said decision, we hold that the observation of
the Court below that the valuation of the suit makes a difference to
decide whether the suit is entertainable by an ordinary Civil Court (like
the Chief Judge, City Civil Court, Hyderabad) or by the Commercial
Court under the Act, is incorrect; and that the Court below erred in
holding that the plaint should have been presented by the appellant only
before the Commercial Court and not before it, i.e., the Court of the
Chief Judge, City Civil Court, Hyderabad.
13. Accordingly, the impugned endorsement dt.19.02.2020 on the file
of the Chief Judge, City Civil Court, Hyderabad in C.S.R.No.55 of 2020
in OS.SR.No.363 of 2020 is set aside. The appellant is directed to re-
submit the plaint to the said Court within 7 days from the date of receipt
of a copy of this order, and the said Court is directed to number the suit,
if it is otherwise in accordance with law, and then proceed to decide it in
the manner as provided in Civil Procedure Code, 1908.
14. Accordingly, the Civil Miscellaneous Appeal is allowed as above.
No costs.
15. Interlocutory Application No.1 of 2021 in Civil Miscellaneous
Appeal No.253 of 2021 is also allowed.
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16. As a sequel, miscellaneous petitions pending if any in this Civil
Miscellaneous Appeal, shall stand closed.
____________________________
M.S.RAMACHANDRA RAO, J
_______________________
T.VINOD KUMAR, J
Date: 17.06.2021
Note : Issue C.C. by 22.06.2021.
B/o.
Ndr
