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Calcutta High Court defines what constitutes as commercial dispute

The Calcutta High Court has extensively defined the term 'commercial dispute' under Section 2(1)(c) of the Commercial Courts Act, 2015. The Court had the opportunity to define the term when it was considering whether a plea filed before the Commercial Division of the High Court should be tried under the provisions of the 2015 Act or be adjudicated upon as a regular suit. The petitoner had sought recovery of amount to the tune of Rs.64,50,000 along with accured interest against the defendant as well as raised an objection as to the conduct of the defendant in not filing a written statement, claiming it to be an attempt to take advantage of the more liberal procedural regime that governs a regular suit in comparison to the given timeframe.


Justice Bhattacharya observed that it was necessary to break down the classes of persons and transactions contemplated in Section 2(1)(c) to understand what was meant by commercial dispute. The definition in the Act is "'ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents." It related 'ordinary transactions of merchants, bankets, financiers and traders' to the facts at hand, stating that a 'hand-loan' would not come within the purview of the Act.


Next, the Court held that 'commercial action' would include any cause arising out of the ordinary transactions of merchants and traders and without prejudice to the generality of the foregoing words, any cause relating to the construction of a mercantile document, the export or import of merchandise, affreightment, insurance, banking, mercantile agency and mercantile usage.' It also stated that commercial purpose would include an undertaking of project wherein the object is to make profits. The Court also stated that Section 2(1)(c) is 'group neutral' in that it makes no distinction between transactions between individuals and companies or those between individuals and juristic entities.

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