Proviso Under Section 13(1A) Commercial Courts Act Not Applicable To Section 13(1): Kerala High Court

The Kerala High Court held that the proviso in Section 13 of the Commercial Courts Act, 2015 (CC Act) is applicable to Section 13(1-A) and not Section 13(1) of the said Act.

The Court held thus in an Original Petition filed against the Order passed by the Commercial Court-II (Additional Sub Judge-II), which dismissed an Application under Order VII Rule 11(d) of the Civil Procedure Code, 1908 (CPC), for rejection of a plaint.

A Single Bench of Justice K. Natarajan observed, “The Proviso is applicable only to Section 13(1-A) of the C.C. Act and not to the Section 13(1) of the C.C. Act. The proviso clearly reveals, any order passed by the Commercial Court at the level of District Judge, then it has to be appealable before the Commercial Division of the High Court within 60 days. Therefore, I am of the view, the proviso will be applicable to Section 13(1-A) of the C.C. Act, but not applicable to Section 13(1) of the C.C. Act.”

The Bench added that any Judgment or Order passed by the Commercial Court, below the level of a District Judge, has to be appealed before the Commercial Appellate Court under Section 13(1) of the CC Act.

Advocate Abraham P. Meachinkara appeared for the Petitioners while Senior Advocate Lakshmi Narayanan appeared for the Respondents.

Facts of the Case

The Respondents had filed a commercial suit before the Commercial Court for realisation of money for an amount of Rs. 29,20,426/-. Along with the suit, the Respondents filed an application for attaching the bank accounts of the Petitioners under Order 38 Rule 1 of CPC, which was allowed and the accounts of the Petitioners were attached. Later, the Petitioners appeared, furnished security to the said amount and got lifted the order of attachment. Subsequently, they filed an application under Order VII Rule 11(d) of CPC for rejection of the plaint on the ground that there is a violation of Section 12A of the CC Act, the suit was not filed before the pre-trial mediation settlement before filing the suit in the Court.

Hence, the Petitioners prayed for the rejection of the plaint. Whereas, the Respondents contended that the Plaintiffs filed a suit for granting urgent interim relief by way of attachment before Judgment in the said suit. After hearing the arguments, the Commercial Court dismissed the application of the Petitioners, holding that due to the urgency for getting the interim relief, the suit could be filed and obtain the attachment order; therefore, there is no need for compliance with the provision under Section 12A of the CC Act. Hence, the application of the Petitioners was dismissed by an interim order and they approached the High Court.

Reasoning

The High Court after hearing the contentions of the counsel, noted, “The Commercial Court is a sub court that passed the order. Hence, I am of the view that the order of dismissal of the application filed by the petitioner is required to be appealed before the Commercial Appellate Court under Section 13(1) of the C.C. Act before the District Judge and not before the High Court under Article 227 of the Constitution of India.”

The Court said that the Petition shall be permissible before the High Court, only if any Order or Judgment passed by the Commercial Appellate Court under Section 13(1) of CC Act but not any Order passed by the Commercial Court, the level of a Sub Judge.

“Therefore, the petition under Article 227 of the Constitution of India filed by the petitioners is not maintainable before this Court. The petitioners ought to have filed appeal under Section 13(1) of the C.C. Act before the District Judge”, it remarked.

The Court further observed that the Plaintiff cannot file the suit without fulfilling the conditions provided under Section 12A of the CC Act.

“The Hon'ble Supreme Court, considering all the aspects, by holding that, the provision 12A, C.C. Act, it is mandatory to file the suit before the Commercial Court. However, it is held that if any urgency is pleaded, then the court can entertain the suit”, it elucidated.

Conclusion

The Court also noted that the Commercial Court initially verified the urgency, then allowed the Plaintiffs to file the commercial suit before the Court, and thereafter attachment order was issued, and it was pleaded that even oral pleading is also acceptable, and the Plaintiff can get exemption for non-compliance under Section 12A of the CC Act.

“I am of the view that the Commercial Court, after considering the various aspects, rightly dismissed the application of the petitioner. Therefore, the impugned order under challenge does not call for any interference”, it concluded.

Accordingly, the High Court dismissed the Original Petition.

Cause Title- KITCO Ltd. & Anr. v. PH Shebuna & Anr. (Neutral Citation: 2025:KER:64797)

Appearance:

Petitioners: Advocate Abraham P. Meachinkara

Respondents: Senior Advocate Lakshmi Narayanan, Advocates Ramanarayana Prabhu, and S. Sudha.

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