Telangana High Court
M/S.Satyam Process Pvt Ltd vs Purushottam Modani on 23 January, 2024
THE HONOURABLE SMT. JUSTICE K. SUJANA
CIVIL REVISION PETITION No.44 of 2023
ORDER:
Aggrieved by the order dated 16.12.2022 in I.A.No.1622
of 2022 in O.S.No.4352 of 2022 passed by the learned V
Junior Civil Judge, City Civil Court, Hyderabad, the present
Civil Revision Petition is filed.
2. I.A.No.1622 of 2022 is filed under Order VII Rule 11
read with Section 151 of C.P.C seeking to reject the plaint on
the ground that the subject matter of the suit was a
commercial dispute of a specified value within the meaning of
Section 2 (c) and 2 (i) read with Section 12 of the Commercial
Courts Act, 2015 (for short 'the Act').
3. Petitioner/defendant filed the above I.A stating that the
suit transaction pertains to the sale of goods (purchase of
PVC Flex Material) and the claim is for Rs.9,85,990/-, which
is above the minimum value of Rs.3,00,000/- as prescribed
under Section 2(i) of the Act. The goods were sent under
invoices. Thus, the dispute is a commercial dispute and falls
within the exclusive jurisdiction of the Commercial Court
constituted under Section 3 of the Act. The Commercial
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Court constituted at Hyderabad alone has got exclusive
jurisdiction to hear the suit and this Court is coram non
judice, as such, the Court below has no jurisdiction and suit
has to be tried under Commercial Court under Sections 6 and
19 of the Act, as such prayed the Court below to reject the
plaint.
4. The respondent/plaintiff filed counter denying the
averments of the petition stating that there is no dispute with
regard to the fact that it is a commercial dispute as it is a
transaction of purchase and the sale of goods. However, it
does not fall under the jurisdiction of the Commercial Courts
as the Commercial Court has no jurisdiction to entertain the
suits valued below Rs.1,00,00,000/-. The said provision of
commercial suits valued at Rs.3,00,000/- and above is not yet
notified and implemented by the State of Telangana and the
High Court, as such, the petition is liable to be dismissed.
5. After hearing learned counsel for both sides, the trial
Court came to the conclusion that the State Government after
consultation with the concerned High Court, by notification,
specify such pecuniary value which shall not be less than
three lakh rupees or such higher value, for whole or part of
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the State, as it may consider necessary. Therefore, the trial
Court dismissed the petition under Order VII Rule 11 of CPC.
6. Heard Sri Botla Venkateshwar Rao, learned counsel
representing Sri Nausheen Najm US Sahar, learned counsel
for the petitioner as well as Ms. Divya Mundra, learned
counsel appearing on behalf of the respondent.
7. Learned counsel for the petitioner would submit that
when Central Government notifies the specified value, the
Courts in the Country have to follow the same. Learned
counsel for the petitioner further relied on the judgment of the
Division Bench of this Court vide CMA No.163 of 2022,
wherein this Court observed that the specified value of the
commercial Court is more than Rs.1,00,00,000/- and the
same was observed in paragraph No. 22 of the Judgment
which reads as follows:
"22. It is not in dispute that arrears of rent was
more than two crore. Therefore, the 'specified value' of the
subject dispute is more than one crore and in view of the
specific provision in Section 10 read with Section 12 of the
Act, 2015, application under Section 9 of the Act, 1996 has to
be filed in a designated Commercial Court only and Civil
Court has no jurisdiction to deal with such applications.
Therefore, the order under challenge is not sustainable and is
accordingly set aside."
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8. Making his submission, learned counsel for the
petitioner further relied on the judgment in the case between
K. Srimanaraya Murthy and another vs. V. Agastya Sagar
and others 1, wherein at paragraph 24 of the order, it is held
as follows:
"24. The Commercial Courts are established with
avowed object to fast tract all disputes which have
commercial stake. The Act intends to erase the impression
world over that in India, litigation takes long years.
Multinational companies were reluctant to invest in India for
ear of litigation taking long time to resolve. Therefore, the Act
gives wide import to 'commercial dispute' and brings within
its fold all disputes commercial in nature whose specific value
is more than three lakhs, so that such disputes can be put
into fast track mode. It is to be noted that Commercial Courts
are not inferior to Civil Courts. They are presided over by
experienced judicial officers. It envisages detailed procedure
of adjudication and above all, early disposal of dispute.
Having regard to object of Commercial Courts Act, 2015, even
when a party to a claim or application or suit does not specify
the value of claim in an application filed under Section 9 of
the Act, 1996 before a Commercial Court, and/or before a
Civil Court, the Court has to 'determine' whether the dispute
is a commercial dispute or a civil dispute."
9. Learned counsel for petitioner further relied on Section
2(i) of the Act, which reads as under:
"Specified Value", in relation to a 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 lakhs rupees or such higher value, as may
be notified by the Central Government.
2022 (2) ALD 717 (TS) (DB)
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10. Learned counsel for petitioner further relied on Section
2(i) of the Act, which is amended by the amendment Act of 28
of 2018 with effect from 03.05.2018, which reads as under:
"Specified Value", in relation to a 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 one crore rupees or such higher value, as may be
notified by the Central Government.
Section 3 of the Act says that The State Government, may
after consultation with the concerned High Court, by
notification, constitute such number of Commercial Courts at
District level, as it may deem necessary for the purpose of
exercising the jurisdiction and powers conferred on those
courts under this Act:
[Provided that with respect to the High Courts having
ordinary original civil jurisdiction, the State Government may,
after consultation with the concerned High Court, by
notification, constitute Commercial Courts at the District
Judge Level:
Provided further that with respect to a territory over which
the High Courts have ordinary original jurisdiction, the State
Government may, by notification, specify such pecuniary
value which shall not be less than three lakh rupees and not
more than the pecuniary jurisdiction exercisable by the
District Courts, as it may consider necessary].
Section 3 of 2nd provisio says that the State Government
shall, after consultation, with the concerned High Court
specify, by notification, the local limits of the area to which
the jurisdication of a Commercial Court shall extend and
may, from time to time, increase, reduce or alter such limits."
11. The detailed discussion is about the object of
commercial Courts Act. Therefore, it is not necessary to
notify the 'specified value' by the State Government, as such,
the impugned order is not in accordance with law and it is
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liable to be set aside and as such prayed this Court to set
aside the order of the trial Court by allowing this petition.
12. On the other hand, learned counsel for the respondent
would submit that there is no notification by the State
Government. The Commercial Court will not entertain the
claims below Rs.1,00,00,000/-, as such, without notification
by the State Government, the claimants cannot file the suit
below Rs.1,00,00,000/- in Commercial Courts. As such,
there is no illegality in the order of the trial Court and prayed
the Court to dismiss the petition.
13. Having regard to the rival submissions made by both
the learned counsel and having gone through the material
available on record, the contention of the petitioner is that the
Court has no jurisdiction and the suit has to be tried by a
Commercial Court, whereas the contention of the respondent
is that without notification by the State Government, the
Commercial Court will not entertain the claims below
Rs.1,00,00,000/-.
14. As seen from the record, it is undisputed fact that the
State Government has not notified the 'specified value' after
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the amendment made by the Central Government by Act 28 of
2018 with effect from 03.05.2018.
15. It is an admitted fact that Central Government amended
the 'specified value' by way of amendment with effect from
03.05.2018 and in the said amendment, the Central
Government has also amended Section 3 of the Act, wherein it
is stated that the State Government may, by notification,
specify such peculiar value which shall not be less than three
lakhs and not more than the pecuniar jurisdiction exercisable
by the District Courts, as it may consider necessary.
16. At present, the State Government has not notified the
specified value, as such, the Commercial Courts are following
the old specified value mentioned by the State Government
before the amendment of Section 3 of the Act by the Central
Government amendment dated 03.05.2018. The Judgment of
this Court in K. Srimanarayana Murthy's case is basing on
the facts and in paragraph 27, it is observed that in the
absence of disclosure of value by the first respondent,
deliberate or otherwise, the Court is required to take up the
onerous responsibility of deciding the specified value. For
this purpose, the Court is required to look into the
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surrounding facts to assess whether the Civil Court has
jurisdiction or aggrieved person has to go before the
Commercial Court. Paragraph 27 of the above case reads as
under:
"27. In the absence of disclosure of value by the first
respondent, deliberate or otherwise, the Court is required to
take up the onerous responsibility of 'deciding' the 'specified
value'. For this purpose, the Court is required to look into the
surrounding facts to assess whether the Civil Court has
jurisdiction or aggrieved person has to go before the
Commercial Court. The contribution by all the partners to the
LLLP is now Rs.1,00,00,000/- (Rupees One Crore) and
contribution of first respondent is Rs.15,00,000/- (Rupees
fifteen lakhs). His share in profit and loss is pegged at 15%.
He alleges that he is subjected to losses due to conduct of
business by other partners. Further, in Column 8 of
Arbitration Application No.61 of 2020 under Section 11 of the
Act of 1996 before this Court for appointment of Arbitrator,
the first respondent has specified the tentative value of his
claim as Rs.20,00,00,000/- (Rupees twenty crores) subject to
final computation. He has also admitted that his capital
contribution to LLP was Rs.15,00,000/-. This application
was filed on 24.09.2020 i.e., within two months of filing of
arbitration O.P.No.40 of 2020. Within two months the value
cannot multiply from unspecified/zero to Rs.20,00,00,000/-.
Thus, the 1st respondent was aware that he was subjected to
huge losses due to the conduct of partners in the LLP and
that his interests are required to be protected to recoup the
loss caused to him, compelling him to move applications,
under Section 9 and 11 of the Act, 1996."
17. In paragraph 28, it was observed that there is a dispute
between the partners arising out of the partnership agreement
and according to 1st respondent, he was subjected to huge
loss of Rs.20 crores and that is a specified value and that
being so, what is agitated by the 1st respondent is a
commercial dispute. Therefore, the judgment is basing on the
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facts and it is not agitated before the Bench about the
notification of State Government, therefore, the said judgment
is not applicable to this case.
18. Further, the Division Bench in C.M.A.No.163 of 2022 in
paragraph 22 has observed that the specified value of the
subject dispute is more than one crore and in view of specific
provision in Section 10 read with Section 12 of the Act 2015,
application under Section 9 of the Act, 1996 has to be filed in
a designated commercial Court only and the Civil Court has
no jurisdiction to deal with such applications.
19. In view of the later judgment of the Division Bench, the
fact that the State Government has not notified the 'specified
value' after the amendment made by the Central Government
by Act 28 of 2018 with effect from 03.05.2018, is not placed
before the Bench. The specified value as on today is rupees
one crore only. Though the learned counsel for the petitioner
submitted that no notification is required by the State
Government when the Central Government notified the
specified value. The State Government of Sikkim as well as
the State Government of Assam have issued a notification
specifying the value which shall not be less than three lakhs
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and which does not exceed Rs.6 lakhs. As such, it cannot be
said that it is not required by the State Government to specify
the value. In Section 3(2) of the amended Act, it is clearly
mentioned that the State Government has to specify, by
notification, the local limits of the area to which the
jurisdiction of a commercial court shall extend and may, from
time to time, increase, reduce or alter such limits. Whereas,
The Government of Telangana issued G.O.Ms.No.32 on
21.04.2016 categorizing the jurisdiction only to the district
Courts, one in Hyderabad and the other at XIII Additional
District and Sessions Judge-cum-XIII Additional Metropolitan
Sessions Judge, Ranga Reddy District which is designated as
the Commercial Court, Telangana for trial and disposal of the
suits except Hyderabad.
20. Subsequently, State Government has not notified the
specified value after the amendment made by the Central
Government with effect from 03.05.2018. Therefore, in
Commercial Courts in the State of Telangana, the specified
value as on today is above Rs.1 crore only, as such, there is
no illegality in the order of the trial Court and there are no
merits in the petition and it is liable to be dismissed.
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21. Accordingly, this Civil Revision Petition is dismissed
confirming the order dated 16.12.2022 in I.A.No.1622 of 2022
in O.S.No.4352 of 2022 passed by the learned V Junior Civil
Judge, City Civil Court, Hyderabad. There shall be no order
as to costs.
As a sequel, miscellaneous petitions, pending if any,
shall stand closed.
______________
K.SUJANA, J
DATE:23.01.2024
SAI
