Employer-employee disputes fall outside the Commercial Courts Act; plaints must be returned, not dismissed.

The Appellant was appointed as Senior Manager/General Manager of Hintek Electronics Pvt. Ltd. on 1 August 2016.

His employment terms included a monthly salary, appraisal, annual increment, reimbursement of out-of-pocket expenses, and sales incentives.

Alleging non-payment of salary-related dues, increments, expenses and incentives, he instituted a recovery suit for ₹14,33,073 before the Commercial Court.

The Respondents appeared initially but failed to file their written statement despite repeated opportunities and costs; they were consequently proceeded against ex parte on 13 March 2024.

After the Appellant led evidence, the Commercial Court dismissed the suit on 12 September 2024, holding that an employer–employee dispute concerning salary arrears was not a “commercial dispute” under Section 2(c) of the Commercial Courts Act, 2015.

The Appellant challenged the dismissal, contending that the plaint ought to have been returned for presentation before the appropriate court rather than dismissed.

Whether a dispute between an employer and employee arising from non-payment of salary, increments, expenses and alleged sales incentives constitutes a “commercial dispute” under the Commercial Courts Act, 2015.

Whether, upon finding that the suit was not a commercial dispute, the Commercial Court ought to have returned the plaint for presentation before the appropriate court instead of dismissing the suit.

The Court applied Section 2(1)(c) of the Commercial Courts Act, 2015, holding that the statutory definition of “commercial dispute” does not ordinarily encompass disputes arising from contracts of personal service between employers and employees.

Relying principally on M/s Ekanek Networks Private Limited v. Aditya Mertia [2024:DHC:4384] and Atmastco Ltd. v. Mandeep Kalra [2024:DHC:4830], the Court held that remuneration, service benefits, or even ancillary business-related terms in an employment contract do not convert a personal-service dispute into a commercial dispute.

The Court also followed ARM Digital Media Pvt. Ltd. v. Ritesh Singh [2025:DHC:10726], which held that employment disputes remain outside the Commercial Courts Act even where the agreement includes confidentiality, non-compete, intellectual-property or other business-related clauses.

As to procedure, the Court applied the principle that where a litigant approaches the wrong forum, the plaint should be returned for presentation before the competent court rather than dismissed, thereby avoiding fresh court fees and litigation expenses.

The Court found, on a reading of the plaint, that the substance of the claim concerned alleged dues arising from the Appellant’s employment relationship, including salary and increments, and therefore constituted an intra-employment service dispute rather than a commercial dispute under Section 2(1)(c).

The alleged sales commission did not alter this conclusion, particularly since the Trial Court had found no contractual basis for such commission in the appointment and confirmation letters.

Applying Ekanek Networks, Atmastco and ARM Digital Media, the Court held that the personal-service character of the relationship was determinative and could not be displaced by the monetary value or incidental commercial features of the employment terms.

However, although the Commercial Court correctly determined that it lacked commercial jurisdiction, dismissal of the suit was procedurally inappropriate; the plaint ought to have been returned for presentation before the competent non-commercial court.

The High Court affirmed the finding that the employer–employee dispute was not a “commercial dispute” under the Commercial Courts Act, 2015, but modified the impugned order to permit presentation of the plaint before the appropriate court.

The matter was listed before the Commercial Court on 24 August 2026 for return of the plaint; upon its return, the Appellant was granted 30 days to present it before the competent court.

The appeal and pending applications were disposed of accordingly.