Judgment and Decree Passed by Non-Commercial Division in a Commercial Dispute is a Nullity

The appellant (plaintiff), appointed as a receiver for an estate, filed a suit in 2008 for eviction, mesne profits, property tax, and perpetual injunction against the respondents regarding tenanted premises.

The property was used as office space for commercial exploitation.

The suit was valued at over Rs. 4 crores and was originally filed and adjudicated in the Non-Commercial Division of the High Court.

On January 9, 2024, a learned Single Judge dismissed the suit as not maintainable.

The appellant challenged this on the grounds that the dispute was commercial under the Commercial Courts Act, 2015, and the judgment by a Non-Commercial Division was a nullity.

1. Whether a suit involving a commercial dispute of a specified value, which remained in the Non-Commercial Division after the enactment of the Commercial Courts Act, 2015, results in a nullity if a judgment is passed by that Division.

2. Whether the registry’s failure to transfer the suit to the Commercial Division under the 2021 Practice Directions validates the judgment passed by the Non-Commercial Division.

Section 2(1)(c)(vii) of the Commercial Courts Act, 2015, to define a "commercial dispute" involving agreements relating to immovable property used exclusively in trade or commerce.

Section 15 of the Act of 2015, which mandates the transfer of all pending suits relating to commercial disputes of a specified value to the Commercial Division.

The precedent from Starlift Services Pvt. Ltd. v. Syama Prasad Mookherjee Port, Kolkata (2026:CHC-OS:121-DB), which establishes that judgments passed by a Non-Commercial Division in matters that ought to have been transferred under the 2015 Act are a nullity.

The court found that the subject matter (office space exploitation) and the valuation (exceeding Rs. 4 crores) qualified the suit as a commercial dispute of specified value under the 2015 Act.

The court reasoned that the High Court Commercial Courts Practice Directions, 2021, are subservient to Section 15 of the 2015 Act; under Section 15(5), parties could apply for transfer if the Registry failed to act.

Since the suit was never transferred and the judgment was rendered by the Non-Commercial Division despite the mandatory statutory shift in jurisdiction, the court applied the Starlift Services principle to hold that the resulting decree lacked jurisdictional validity.

The court direct the Registry to transfer CS/244/2008 and all pending applications to the Commercial Division for re-numbering and the merits of the dispute remain open for adjudication by the appropriate Commercial Division.