Calcutta HC Sets Aside ₹84-Lakh Decree Against Widow, Sends Lender’s Business-Loan Suit to Commercial Division Without Requiring Mercantile Documents

The respondent HUF sued to recover money lent to the appellant’s late husband, claiming principal of Rs. 80,00,000 and interest, for a total claim of Rs. 1,07,97,808 as at 31 March 2020

The appellant admitted the loan and payment of interest until November 2017, but pleaded, among other things, a bar under the Bengal Money Lenders Act, 1940 and an alleged agreement to treat the outstanding amount as an advance towards the purchase of a painting

The Single Judge, on the regular side, entered judgment on admission under Order XII Rule 6 CPC for Rs. 83,97,808 with interest at 15% per annum from 1 December 2017

In appeal, the appellant argued that the suit was a commercial dispute of Specified Value and therefore fell within the Commercial Division’s jurisdiction under the Commercial Courts Act, 2015

Section 2(1)(c)(i) of the Commercial Courts Act, 2015 includes disputes arising from ordinary transactions of merchants, bankers, financiers and traders; the words “such as” introduce examples and do not make a mercantile document a necessary condition for every dispute within the clause

“Ordinary transactions” are transactions normally undertaken in the regular course of the relevant person’s activity, and the court must assess the plaint as a whole when determining whether the dispute falls within the statutory definition

Under Sections 2(1)(i) and 12(1)(a), the Specified Value for a money-recovery claim includes the money sought, together with interest calculated up to the date of filing

Section 7 requires a suit relating to a commercial dispute of Specified Value to be heard and disposed of by the Commercial Division

Where the suit was instituted in a court lacking the required forum jurisdiction, the plaint may be returned under Order VII Rule 10 CPC for presentation to the competent court

The plaint pleaded that, in the course of its business, the plaintiff decided to lend funds to others for developing businesses in their community and advanced Rs. 80,00,000 to the defendant’s husband for his business at 15% interest

The court treated the plaintiff as a financier and the loan as an ordinary transaction undertaken in that capacity; it considered the interest to be the return for deploying the funds, rather than an incidental outcome

It rejected the contention that a mercantile document was indispensable, distinguishing the relevant observation in Ladymoon Towers by reference to the pleadings and context of that case

Since the claim exceeded the applicable Specified Value, Section 7 required the Commercial Division to hear the suit.

The court therefore set aside the decree without deciding the merits of the loan claim or the defence under the 1940 Act

It set aside the judgment and decree passed on the regular side and directed that the plaint be returned for presentation before the Commercial Division; it expressed no opinion on the merits, leaving those issues for that Division

The injunction of 22 March 2021 was continued for four weeks from the date of judgment, and the appeal was allowed to that extent.