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CDJ 2026 MHC 7349 My Notes print Preview print print
Court : High Court of Judicature at Madras
Case No : CRP No. 6063 of 2026 & CMP No. 26248 of 2026
Judges: THE HONOURABLE MR JUSTICE N. ANAND VENKATESH
Parties : Soundararajan Cashews, Rep. by its Proprietrix, Cuddalore Versus African Kaju Trading Pvt Ltd, Rep. by its Director, Cuddalore
Appearing Advocates : For the Petitioner: G.M. Ananthakumar, Advocate. For the Respondents: T.S. Baskaran, Advocate.
Date of Judgment : 29-09-2026
Head Note :-
Criminal Procedure Code - Section 115 -

Comparative Citation:
2026 MHC 4094,
Judgment :-

(Prayer: Petition filed under Section 115 of Cr.PC., to set aside the order dated 20.07.2026 passed in IA No. 1288 of 2025 in COS No. 3 of 2025 on the file of the Principal District Judge (Commercial Court) at Cuddalore.)

This Civil Revision Petition has been filed under Section 115 of Cr.PC, against the fair and decreetal order passed in IA No. 1288 of 2025 in COS No. 3 of 2025, dated 20.07.2006, on the file of the Principal District Judge (Commercial Court), Cuddalore. wherein the application filed by the petitioner/defendant under Order VII Rule 11 of CPC, for rejection of plaint on the ground that the transaction in question is not a commercial transaction as defined under Section 2(1)(c) of the Commercial Courts Act, 2015, [hereinafter referred to as ‘the Act’] came to be rejected by the Court below.

2. Heard the learned counsel for the petitioner and the learned counsel for the respondent.

3. This Court carefully considered the submissions made on either side and the materials available on record. This Court also went through the order passed by the Court below.

4. The respondent is the plaintiff who filed the suit in COS No.3 of 2025, seeking for the relief of recovery of money and for creating a charge over the immovable property.

5. The petitioner who is the defendant filed IA No.1288 of 2025, under Order VII Rule 11 of CPC, for rejection of plaint mainly by raising two grounds. The first ground is that as per the averments made in the plaint, it was only a loan transaction between the plaintiff and the defendant. The second ground raised is that without following the mandate under Section 12A, the plaint is liable to be rejected in limine.

6. The Court below considering the averments made in the plaint came to a conclusion that the transaction involved between the parties is prima facie a commercial transaction and insofar as the second ground is concerned, the Court below held that IA.No.960 of 2025, was filed to grant leave to dispense with the pre-mediation process under Section 12A of the Act and this application was allowed and the plaintiff was exempted. In view of the same, the Court below dismissed the application for rejection of plaint. Aggrieved by the same, the present Civil Revision Petition has been filed before this Court.

7. The main ground that was raised on the side of the petitioner is that the averments made in the plaint makes it clear that it was an isolated loan transaction and it does not satisfy the requirement of a commercial dispute under Section 2 (1)(c) of the Act. To substantiate this submission, the judgment of the Apex Court in Ambalal Sarabhai Enterprises Limited vs. K.S.Infraspace and Another reported in (2020) 15 SCC 585 was relied upon.

8. The next ground raised is that the pre-litigation mediation is mandatory under Section 12(A) of the Act, when there is no urgent interim relief involved and without following this mandate, the suit has been entertained.

9. Insofar as the first ground is concerned, a careful reading of the averments made in the plaint shows that the plaintiff is engaged in the import of raw cashew nuts and the defendant is involved in the business of processing raw cashew nuts into finished cashew kernels and supplying the same to corporate buyers. It is also averred that the plaintiff and the defendant are in the same field of business and that the plaintiff helps the defendant by way of introducing many entrepreneurs in the same field. The further averment made is that M/s. Cool Nuts had raised their claim for payment of a sum of Rs.53,20,000/- and in order to clear the said claim, the plaintiff had lent loan by way of two transactions to the defendant. Since the amount was not repaid back, the suit has been filed before the Commercial Court for recovery of money.

10. In the judgment that was relied upon by the learned counsel for the petitioner, the Apex Court held that the dispute involved must be a commercial dispute as defined under Section 2(1)(c) of the Act and in that case, it involved an agreement for sale without there being any averment that the property was exclusively used in the Trade and Commerce. The Apex Court held that the property that is involved must be actually used for Trade and Commerce and in the absence of the same, it will not satisfy the requirements of a commercial dispute under Section 2(1)(c)(vii) of the Act.

11. In the case in hand, the business transaction was between two trade merchants who are involved in the same field of business. As per the averments in the plaint, the amount was paid by the plaintiff to the defendant as a loan for the purpose of clearing the claims that were raised by Ms/. Cool Nuts against the defendant. It must be seen as to whether this averment will satisfy the requirement under Section 2(1)(c)(i) of the Act.

12. The transaction in the instant case was between two merchants and in the case in hand they are involved in the same field of business. In the course of their business, the plaintiff has lent money to the defendant to enable the defendant to clear the bills raised by another merchant. This transaction cannot be held to be a friendly loan and it has to be necessarily held to be a dispute arising out of ordinary transactions of merchants in the course of business. In view of the same, the dispute will fall within the meaning of the term commercial dispute as defined under Section 2(1)(c)(i) of the Act.

13. While dealing with an issue of this nature, the Court has to see the entities or the persons between whom the transaction takes place and determine whether it is a transaction as between two merchants in the ordinary course of business or it is a case of a friendly loan without there being any connection to business transactions. The averments that have been made in the plaint certainly brings this case within the scope of Section 2(1)(c)(i) of the Act. In view of the same, the first ground raised on the side of the petitioner to the effect that the transaction does not satisfy a commercial dispute, is hereby rejected.

14. Insofar as the second ground that is raised, the order passed by the Court below clearly shows that the Court below has granted leave by passing a specific order in IA.No.960 of 2025, dispensing with the pre-litigation mediation under Section 12A of the Act. In the absence of any challenge made to that order, the plaint cannot be rejected on the ground that the mandatory requirement has not been satisfied. Hence, the second ground raised also stands rejected by this Court.

15. In the result, the order passed by the Court below is sustained and this Civil Revision Petition is dismissed. No costs.
 
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