Trial Court Order Refusing To Return Or Reject A Plaint Not Appealable Under Commercial Courts Act: Bombay High Court

The Bombay High Court recently held that no appeal is maintainable under the Commercial Courts Act, 2015 against an order of the court dismissing the defendant's application for rejecting or returning a plaint.

A division bench of Chief Justice Devendra Kumar Upadhyaya and Justice Arif S Doctor observed that such orders are not specifically enumerated in Order 43 of the CPC which lists the kind of orders appealable under section 13 of the Commercial Courts Act.

“Sub Section 1A of Section 13 provides that a person aggrieved by a judgment or order can file an appeal, however, the said provision is to be read in conjunction with the proviso which specifically states that an appeal shall lie only from orders which are specifically enumerated under Order XLIII of the CPC…the order under challenge in this appeal has been passed by the learned trial court rejecting the Application moved by the Defendants under Order VII Rule 10 and Rule 11(d) of the CPC. Such an order is not enumerated in Order XLIII of the CPC”, the court observed.

The court dismissed an appeal challenging an order of the District Judge, Thane rejecting Bank of India's application for rejecting a commercial suit against it.

The appeal, filed under Section 13(1A) of the Commercial Courts Act, contested the rejection of an application under Order 7 Rule 10 and Rule 11(d) of the CPC read with Section 19(6) to (10) of the Recovery of Debts and Bankruptcy Act, 1993.

Maruti Civil Works, a partnership firm in the business of builders and contractors, filed a commercial suit seeking recovery of losses, damages, and compensation totalling Rs.100 Crores + Rs.10,10,733/-, along with interest at 13.95 per cent pa from Bank of India. It alleged that BoI fraudulently invoked the SARFAESI Act to seize the property of one of its partners.

BoI argued that the jurisdiction to entertain the suit rested with the Debts Recovery Tribunal (DRT) at Mumbai. They filed an application under Order 7 Rule 10 and 11(d) of the CPC, seeking the rejection of the plaint. However, the trial court rejected the application, asserting its jurisdiction over the suit, given the allegations of fraud. Inquiry relating to the commission of any alleged fraud by the bankers is outside the scope of DRT, the trial court said.

Thus, BoI filed the present appeal under Section 13(1A) of the Commercial Courts Act, challenging the Trial Court's decision.

Appellant BoI submitted that it had granted credit facilities to Maruti Civil Works, who defaulted on repayment. Thus, it initiated SARFAESI proceedings, leading to the possession of certain mortgaged properties. BoI further highlighted that it has filed an application before the DRT for recovery.

The court noted that the proviso to section 13(1) of the Commercial Courts Act provides that appeals could be filed against judgments or orders specifically enumerated in Order 43 of the CPC.

“Provided that an appeal shall lie from such orders passed by a Commercial Division or a Commercial Court that are specifically enumerated under Order XLIII of the Code of Civil Procedure, 1908 (5 of 1908) as amended by this Act and section 37 of the Arbitration and Conciliation Act, 1996 (26 of 1996)”, the proviso reads.

In the present case, the order being challenged was rejecting BoI's application under Order 7 Rule 10 and Rule 11(d) of the CPC. The court noted that Order 43 doesn't list the kind of decision where the court rejects such applications. It only talks about what happens if the court allows the application for returning the plaint under Order 7 Rule 10, the court noted.

Thus, Order 43 enlists the order passed on an Application for returning a plaint if it is allowed, but not if it is rejected, the court said. However, Order 43 does not enlist any order, either allowing or rejecting an application for rejection of plaint, the court noted.

As the order in question rejecting an application under Order 7 Rule 10 and Rule 11(d) of the CPC is not listed in Order 43, it is non-appealable under the Commercial Courts Act, the court held, dismissing BoI's appeal.

Advocate OA Das represented Bank of India.

Advocate Kishor P Vig i/b. Manish K Vig represented Maruti Civil Works

Case no. – Appeal From Order No. 362 of 2021

Case Title – Bank of India v. M/s. Maruti Civil Works