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M/s. Big Bang Boom Solutions v/s M/s. Centauri Composites Pvt. Ltd.

    Interlocutory Application No. 1 of 2021 in Civil Miscellaneous Appeal No. 253 of 2021

    Decided On, 17 June 2021

    At, High Court of for the State of Telangana

    By, THE HONOURABLE MR. JUSTICE M.S. RAMACHANDRA RAO & THE HONOURABLE MR. JUSTICE T. VINOD KUMAR

    For the Petitioner: ------ For the Respondent: ------



Judgment Text

Common Judgment:(M.S. Ramachandra Rao, J.)

1. 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.

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/-.

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.

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 email 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 LLP (2020) 15 SCC 585, at page 594), 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.

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 impugne

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d 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 resubmit 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. 16. As a sequel, miscellaneous petitions pending if any in this Civil Miscellaneous Appeal, shall stand closed.
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