Gujarat High Court
Creator Enterprise vs Associated Infrastructure Company on 28 March, 2025
NEUTRAL CITATION
C/CRA/158/2025 ORDER DATED: 28/03/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CIVIL REVISION APPLICATION NO. 158 of 2025
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CREATOR ENTERPRISE & ORS.
Versus
ASSOCIATED INFRASTRUCTURE COMPANY & ORS.
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Appearance:
MR KUNAL P VAISHNAV(5111) for the Applicant(s) No. 1,2,3,4
YUVRAJ G THAKORE(7785) for the Applicant(s) No. 1,2,3,4
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CORAM:HONOURABLE MR.JUSTICE SANJEEV J.THAKER
Date : 28/03/2025
ORAL ORDER
1. The present civil division application challenging the order dated 28.01.2025, passed by Principal Senior Civil Judge, Porbandar in Civil Suit No.11 of 2024, whereby the application under Order VII Rule 11, read with Order VII Rule 10 of the Code of Civil Procedure, 1908 (for short "the Code"), has been rejected. The learned advocate for the petitioner has drawn attention of this Court to the plaint that has been filed in Special Civil Suit No.11 of 2024, and has stated that looking to the averments made in the plaint, the said suit could not be filed in ordinary Civil Court, but the same had to be filed before the Commercial Court, in view of Section 2(1)(c) of the Commercial Courts Act, 2015. Page 1 of 9 Uploaded by URIL KRISHNAKUMAR RANA(HC01406) on Wed Apr 02 2025 Downloaded on : Wed Apr 02 21:40:33 IST 2025
NEUTRAL CITATION C/CRA/158/2025 ORDER DATED: 28/03/2025 undefined
2. For the sake of brevity and convenience, the parties herein are referred to as plaintiff and the defendant.
3. The learned advocate for the defendant has argued that as per the provisions of the Section 2(1)(c) of the Commercial Courts Act, 2015, the present dispute had to be filed before the Commercial Court, and therefore, the ordinary Civil Court lacks jurisdiction to hear and decide the suit and the suit was required to be transferred to the Commercial Court, as the subject matter of the suit was a commercial transaction. It has been argued by the defendant that from the averments in the plaint, it can be clearly established that the transaction between the parties was a commercial transaction and cannot be considered as a friendly loan, as the plaintiff no.1 is a partnership firm and plaintiff nos.2 to 5 are the partners of plaintiff no.1-partnership firm and defendant no.1 is a partnership firm and defendant nos.2 to 4 are the partners of defendant no.1.
4. The learned advocate for the defendant has also argued that the provisions of Order VII Rule 11 of the Code were required to be looked into and the only option that the Court had while deciding the application under Order VII Rule 11 of the Code was to look at Page 2 of 9 Uploaded by URIL KRISHNAKUMAR RANA(HC01406) on Wed Apr 02 2025 Downloaded on : Wed Apr 02 21:40:33 IST 2025 NEUTRAL CITATION C/CRA/158/2025 ORDER DATED: 28/03/2025 undefined the averments in the plaint and to consider whether the dispute sought to be raised before it would come within the meaning of Commercial Dispute defined under Section 2(1)(c) of the Commercial Courts Act, 2015 and therefore the application, exhibit 12, filed under Order VII Rule 11 read with Order VII Rule 10 of the Code was required to be allowed.
5. Having heard learned advocate for the defendant, the application that has been filed by the defendant vide exhibit 12, is under the provisions of Order VII Rule 11 read with Order VII Rule 10 of the Code therefore, the application is a composite application under Order VII Rule 11 and Order VII Rule 10 of the Code and in this regard it would be relevant to refer to the judgment passed in Civil Revision Application No.286 of 2017 in the case of Patel Enterprise & 1 Vs. Gujarat Tea Depot Company & 1, wherein it has been held that criteria for consideration of an application under Order VII Rule 10 of the Code would be absolutely different from the criteria of consideration of an application under Order VII Rule 11 of the Code. It has also been observed in the said order that the plaint could be returned at any stage under Order VII Rule 10 of the Code, if the Court finds that the Court lacks jurisdiction Page 3 of 9 Uploaded by URIL KRISHNAKUMAR RANA(HC01406) on Wed Apr 02 2025 Downloaded on : Wed Apr 02 21:40:33 IST 2025 NEUTRAL CITATION C/CRA/158/2025 ORDER DATED: 28/03/2025 undefined either pecuniary or territorial to try the suit, whereas the plaint could be rejected under Order VII Rule 11 of the Code, if the case falls under any of the clauses mentioned therein. It has also been observed in the said order that, if the Court wants to reject the plaint under the provisions of Order VII rule 11(d) of the Code, the suit must appear from the statement in the plaint to be barred by law i.e. there has to be statutory bar of jurisdiction and the Court has held that it is inconceivable that a composite application under both the provisions would be filed. Para no.6 of the Patel Enterprise & 1 Vs. Gujarat Tea Depot Company & 1, reads as under:
"6. Now, it is not disputed by Mr. Nanavati for the applicants that the application under Order VII Rule 11 of CPC seeking rejection of the plaint was sought to be converted by the applicants - plaintiffs into an application under Order VII Rule 10 seeking return of the plaint. The question therefore which falls for consideration before this Court is as to whether such a conversion of application could be permitted, or whether a composite application under Order VII Rule 11 and Order VII Rule 10 would be maintainable in the eye of law ? It is needless to say that the Page 4 of 9 Uploaded by URIL KRISHNAKUMAR RANA(HC01406) on Wed Apr 02 2025 Downloaded on : Wed Apr 02 21:40:33 IST 2025 NEUTRAL CITATION C/CRA/158/2025 ORDER DATED: 28/03/2025 undefined criteria for consideration of an application under Order VII Rule 10 would be absolutely different from the criteria for consideration of an application under Order VII Rule 11 of CPC. The plaint could be returned at any stage under Order VII Rule 10 if the Court finds that the Court lacks jurisdiction either pecuniary or territorial to try the suit, whereas the plaint could be rejected under Order VII Rule 11, if the case falls under any of the clauses mentioned therein. For the purpose of rejection of plaint under Clause(d) of Rule 11, the suit must appear from the statement in the plaint to be barred by any law i.e. there has to be a statutory bar of jurisdiction. Therefore, it is inconceivable that a composite application under both the provisions could be filed, or if the application was filed under one provision that be permitted to be converted into the one under the other provision. Further, it cannot be gainsaid that the plaint could be rejected in part under Order VII, Rule 11, but the plaint could not be returned in part under Order VII, Rule 10. It has to be returned as a whole for being presented to the Court in which the suit should have been instituted, after Page 5 of 9 Uploaded by URIL KRISHNAKUMAR RANA(HC01406) on Wed Apr 02 2025 Downloaded on : Wed Apr 02 21:40:33 IST 2025 NEUTRAL CITATION C/CRA/158/2025 ORDER DATED: 28/03/2025 undefined following the procedure laid down therein. In the instant case, therefore, Mr. Nanavati's submission that the plaint be returned under Order VII, Rule 10 on the ground that the trial Court does not have the jurisdiction to grant the prayer sought in para 36(c) of the plaint, though it has jurisdiction to grant other prayers, cannot be accepted."
6. In the present case, the judgment of Monica Zahir Laliwala Vs. Power Palazzo Private Limited reported in 2024 (0) AIJEL HC 248112, will also assist in deciding the application. In the said case, the suit was filed in the Commercial Court and an application under Order VII Rule 11 of the Code was filed wherein it was contended that the Commercial Court would not have jurisdiction to hear and decide the dispute as the said transaction was a personal loan and not a commercial transaction and the Trial Court had rejected the application under Order VII Rule 11 of the Code and the Division Bench under the Commercial Courts, Commercial Appellate Courts, Commercial Division And Commercial Appellate Division of High Courts Act, 2015, had observed in para nos.6 to 9 as under:-
"6. We may record that a perusal of Order Page 6 of 9 Uploaded by URIL KRISHNAKUMAR RANA(HC01406) on Wed Apr 02 2025 Downloaded on : Wed Apr 02 21:40:33 IST 2025 NEUTRAL CITATION C/CRA/158/2025 ORDER DATED: 28/03/2025 undefined VII Rule 11 of CPC would indicate that the plaint can be rejected on NEUTRAL CITATION C/SCA/15912/2023 ORDER DATED: 29/02/2024 undefined jurisdictional issue only where the suit is barred by a statutory provision. In the instant case, the dispute was raised by the defendants with regard to the nature of transaction, which would require leading of evidence and adjudication on the issues of facts and law as well.
7. There was, thus, no occasion for the Commercial Court to treat the application Exh. 31 as application under Order VII Rule 11 of CPC for rejection of plaint. Moreover, no such prayer was made in the said application as demonstrated before us. We, therefore, do not find any substance in the submission of the learned Senior Counsel for the petitioners that the Commercial Court has committed an error of law in rejecting the application Exh. 31 on the premise that prima facie the transaction-in-question does not seem to be a purely personal transaction.
8. Be that as it may, the issue with regard to Page 7 of 9 Uploaded by URIL KRISHNAKUMAR RANA(HC01406) on Wed Apr 02 2025 Downloaded on : Wed Apr 02 21:40:33 IST 2025 NEUTRAL CITATION C/CRA/158/2025 ORDER DATED: 28/03/2025 undefined the dispute-in-question being a commercial dispute within the meaning of Section 2(1)(c) of the Commercial Courts Act, NEUTRAL CITATION C/SCA/15912/2023 ORDER DATED: 29/02/2024 undefined 2015, is still open to be agitated by the defendants and the Commercial Court would be required to frame issues with the assistance of the Counsels, if such issues are raised at the time of framing of the issues.
9. For the aforesaid, without entering into the merits of the claim of the petitioners about the nature of transaction, or nature of dispute between the parties, we dismiss the instant petition. It is clarified that the Commercial Court shall be obliged to deal with all the issues raised before it without being influenced by any of the observations made hereinabove and shall not be guided by the prima facie findings contained in the impugned order. Pending application/s, if any, shall also stands disposed of."
7. And therefore, in the present case also, the only dispute that the defendant has raised is with respect to the nature of transaction and the same could only be decreed after leading of evidence and Page 8 of 9 Uploaded by URIL KRISHNAKUMAR RANA(HC01406) on Wed Apr 02 2025 Downloaded on : Wed Apr 02 21:40:33 IST 2025 NEUTRAL CITATION C/CRA/158/2025 ORDER DATED: 28/03/2025 undefined adjudication of the issues on the fact, as well as law and therefore the issue, whether the transaction is a commercial dispute within the meaning of Section 2(1)(c) of the Commercial Courts Act, 2015, or is an ordinary transaction which is required to be decided by an ordinary Court cannot be decided without leading evidence and adjudication of the issues of facts and law and therefore it will be open for the defendants to agitate before the Court while the Court examines the entire matter on merits and the Civil Court would be required to frame issues. Therefore, without entering into the merits of the same, the present Civil Revision Application is dismissed with a clarification that the Civil Court shall deal with all the issues raised before it without being influenced by any of the observations made herein above and shall not be guided by the prima facie findings contained in the order as this Court is only deciding the Civil Revision Application pertaining to a composite application filed under provisions of Order VII Rule 11 read with Order VII Rule 10 of the Code.
8. In view of the same, the present Civil Revision Application is dismissed.
(SANJEEV J.THAKER,J) URIL RANA Page 9 of 9 Uploaded by URIL KRISHNAKUMAR RANA(HC01406) on Wed Apr 02 2025 Downloaded on : Wed Apr 02 21:40:33 IST 2025