Commercial Courts Act Envisages 'Marked Difference' Between Specified Value & Pecuniary Value: Telangana High Court

Factual Matrix:

The Respondent (Plaintiff in the Suit) filed a suit for recovery (C.O.S. No. 15/2023) of ₹1.03 crores. The amount consists of ₹44.53 lacs as principal amount, clubbed with interest at 18% and damages. The Petitioner (Defendant in the Suit) filed I.A. No. 266 of 2023, praying for rejection of the plaint via Order VII Rule 11(d) of the CPC, specifically under the provisions of the CC Act.

The Learned Commercial Court vide order dated 12.02.2025 (“Impugned Order”) dismissed the Petitioner's application for rejection of the plaint under Order VII Rule 11of the CPC. Subsequently, the Petitioner has filed the present CRP assailing the impugned order.

Submissions:

The counsel for the Petitioner made the following submissions:

• The suit has to satisfy the requirement of 'Specified Value' defined u/s 2(1)(i) of the CC Act for being considered a commercial suit. The specified value is not ₹1 crore as the amount prayed in the plaint is bifurcated into components, i.e., principal amount and interest.
• Such bifurcation is not permissible for computing the specified value for crossing the ₹ 1 crore threshold. Furthermore, reducing the 'Specified Value' vide an amendment may not apply to the State of Telangana without a State Notification effecting the amendment.

The counsel for the Respondent made the following submissions:

• The cumulative amount prayed in the plaint would cross ₹ 1 crore threshold as required u/s 2(1)(i) of the CC Act.

Analysis of the Court:

The bench at the outset observed that the 'Specified Value' as defined u/s 2(1)(i) of the CC Act has to be calculated in accordance with Section 12 of the CC Act. Section 12 only aids the quantification of the 'Specified Value' in different classes of suits, by providing pointers for determining the 'Specified Value' of the subject matter of a commercial dispute. It does not quantify any specified value in terms of a number concerning the subject matter of the dispute.

The bench noted that the expression 'Specified Value' u/s 2(1)(i) of the CC Act is different from the expression 'Pecuniary Value' u/s 3 (1A) of the CC Act. Section 3(1A) was added via the 2018 amendment concerning the pecuniary value of the Commercial Courts having original civil jurisdiction under the territorial jurisdiction of the High Court. Furthermore, Section 3(1A), beginning with a non-obstante clause, contemplates that the State Government, in consultation with the High Court, shall specify the pecuniary value of the Commercial Courts, which shall not be less than ₹ 3 lacs. Therefore, although both provisions were added via the 2018 amendment, these provisions are distinct and occupy different fields.

The bench observed that the definition of 'Specified Value' is to flag whether a suit qualifies for a commercial suit in terms of the minimum monetary value. On the contrary, Section 3(1A) concerns the Commercial Court's pecuniary limit within the High Court's territorial jurisdiction. While 'Specified Value' is the litmus test concerning the value of the dispute, the 'Pecuniary Value' demarcates the capability of the receiving Court.

The bench observed that the 'Specified Value' of a commercial dispute u/s 2(1)(i) of the CC Act has a base threshold of ₹ 3 lacs with effect from 03.05.2018. The amended sections apply to the State of Telangana, and no separate State Notification is required to give effect to the 2018 amendment. The 'Pecuniary Value' u/s 3 (1A) of the CC Act is an entirely different purport and is irrelevant to this case. Since the base threshold of the 'Specified Value' of a commercial dispute u/s 2(1)(i) of the CC Act is ₹ 3 lacs, the argument that the suit value is below the 'Specified Value' is devoid of merit.

The bench observed that the Trial Court had not delved into the aspect of 'Specified Value' and presumed that the value of the commercial dispute is ₹ 1 crore. However, the bench agreed with the conclusion of the Trial Court in rejecting the application under Order VII Rule 11 of the CPC. Consequently, the bench dismissed the CRP.

Case Name: M/s Janset Labs Pvt. Ltd. v. Agilent Technologies India Pvt. Ltd.

Case Number: CRP No. 1932 of 2025

Counsel for the Petitioner: Mr. Sharad Sanghi, Adv.

Counsel for the Respondent: Mr. Istiaq Hussain, Adv.