The Supreme Court has held that an appeal against the order rejecting a plaint is maintainable under Section 13(1A) Commercial Courts Act 2015.

The appeal before the Apex Court was filed against the final judgment of the Bombay High Court in a Commercial First Appeal arising out of the Commercial Suit whereby the High Court dismissed the appeal preferred by MITC Rolling Mills Pvt. Ltd. holding the same to be non-maintainable under Section 13(1A) of the Commercial Courts Act, 2015.

Referring to the judgment of the Apex Court in Bank of India v. Maruti Civil Works (2023), the Division Bench of Justice Vikram Nath and Justice Sandeep Mehta stated, ““The plaintiff who is aggrieved of the order rejecting the plaint under Order VII Rule 11 CPC cannot be left remediless or compelled to institute a fresh suit for availing such a challenge”.

Senior Advocate Jay Savla represented the Appellant while AOR Bhaskar Nayak represented the Respondent.

Factual Background

The appellant-company instituted a Commercial Suit before the Court of District Judge, Nashik seeking recovery of a sum of Rs 1,64,60,528 towards principal and Rs.87,78,300 towards interest, aggregating to Rs.2,52,38,828, alleging that the respondents failed to make payment for the supply of TMT/Fe-500 material effected by the appellant-company. The respondents filed an application under Order VII Rule 11 of the Code of Civil Procedure, 1908, seeking rejection of the plaint on the ground that the appellant-company had not undertaken the mandatory Pre-Institution Mediation and Settlement (PIMS) as contemplated under Section 12A of the CCA, 2015.

The Trial Court accepted the said application and rejected the plaint. Being aggrieved by the rejection of the plaint, the appellant company preferred an appeal under Section 13(1A) of the CCA, 2015, before the High Court, raising various grounds for consideration. The High Court dismissed the appeal as not maintainable, holding that an order rejecting the plaint does not fall within the ambit of Order XLIII of CPC, and therefore, such a challenge could not be maintained under Section 13(1A) of the CCA, 2015, read with the proviso appended thereto. The order passed by the High Court was under challenge in the proceedings before the Apex Court by way of special leave.

Reasoning

The Bench explained that an order rejecting the plaint under Order VII Rule 11 CPC decides the lis finally and would tantamount to a decree within the meaning of Section 2(2) CPC. “There is also no cavil with the proposition that a decree passed by a Commercial Court at the level of a District Judge exercising original civil jurisdiction or, as the case may be, the Commercial Division of a High Court would ordinarily be appealable before the High Court under Section 13(1A) of the CCA, 2015, read with the applicable provisions of the CPC”, it added.

The Bench explained that Section 13(1A) of the CCA, 2015, contemplates appeals against ‘judgments’ and ‘orders’ of the Commercial Court to the Commercial Appellate Division of the High Court. “The proviso, operating as an exception, must be construed harmoniously with the main provision and not in derogation thereof. Where the language of the main provision is plain and unambiguous, the proviso cannot be invoked to curtail or whittle down the scope of the principal enactment, save and except where such exclusion is clearly and expressly contemplated. The proviso merely restricts appeals against interlocutory orders to those specifically enumerated under Order XLIII CPC and Section 37 of the Arbitration and Conciliation Act, 1996.”

The Bench stated that only such interlocutory orders as are expressly specified therein would be amenable to an appeal under the proviso; orders not so enumerated would not fall within the restricted fold of the proviso. The Bench thus held that order rejecting application under Order VII Rule 10 and Order VII Rule 11(d) of the CPC would not be amenable to an appeal under Section 13(1A) of the CCA, 2015, and rather, can be challenged by filing a revision or a petition/application under Article 227 of the Constitution.

Thus, allowing the appeal and quashing the impugned order, the Bench restored the appeal preferred by the appellant-company in the High Court to its original number. “The High Court shall consider and decide the same on merits, in accordance with law”, it concluded.

Cause Title: MITC Rolling Mills Private Limited v. M/s. Renuka Realtors (Neutral Citation: 2025 INSC 1300)

Appearance

Appellant: Senior Advocate Jay Savla, Advocates Amol Doijode, Prabhat Chaurasia, Jasdeep Singh Dhillon, Anirudh Jamwal, AOR M/S Mps Legal

Respondent: AOR Bhaskar Nayak

Click here to read/download Judgment



Justice Vikram NathJustice Sandeep Mehta

Tulip Kanth

Assistant Editor

Tulip Kanth is an Assistant Editor at Verdictum having over 5 years of experience in the field of legal journalism and editing. She extensively covers judgments of the Supreme Court, High Courts as well as Tribunals. She has previously worked with a legal publishing website where she oversaw the work of other editors and has also created updates on notifications of different Government Ministries. She holds an English Honours Degree from SGTB Khalsa College, Delhi University and has completed her LLB course with specialisation in Corporate Law from Amity University.