Proceedings filed in Non-Commercial Division deemed invalid; court emphasizes adherence to Commercial Courts Act, 2015
In a significant ruling, the Calcutta High Court on July 14, 2026, invalidated orders issued under Section 9 of the Arbitration and Conciliation Act, 1996, concerning commercial disputes involving Kedarnath Tradecomm LLP and Omkar Tradecomm LLP. The bench comprising Justices Debangsu Basak and Md. Shabbar Rashidi highlighted that the proceedings, initially filed in the Non-Commercial Division, were nullified due to a lack of subject matter jurisdiction as mandated by the Commercial Courts Act, 2015.
The case involved two appeals and three cross objections linked to disputes between partners of the two LLPs. The appeals challenged judgments from June 15, 2023, where a learned Single Judge dismissed the petitions with costs, citing suppression of material facts by the petitioners. However, the High Court bench noted that the proceedings under Section 9 were improperly instituted in the Non-Commercial Division, despite involving commercial disputes of specified value, thereby falling within the jurisdiction of the Commercial Division.
The court reiterated that all suits and applications related to commercial disputes of specified value must be heard by the Commercial Division, as per Sections 7 and 10 of the Commercial Courts Act, 2015. The bench emphasized that failure to comply with this jurisdictional requirement renders proceedings and orders passed therein null and void. The decision underscores the mandatory nature of filing commercial disputes in the designated Commercial Division, a stance supported by various precedents, including Patil Automation Pvt. Ltd. vs. Rakheja Engineers Private Limited and Dhanbad Fuels Private Limited vs. Union of India.
The court directed that the proceedings improperly filed in the Non-Commercial Division should have been returned under Order VII Rule 10 of the Civil Procedure Code, 1908, and not merely transferred, as the initial filing itself was jurisdictionally defective. The judgment also addressed the issue of lack of jurisdiction raised by the respondents, which the appellants failed to rectify by seeking a transfer to the correct forum.
Ultimately, the High Court set aside the judgments passed by the Single Judge, highlighting the critical importance of jurisdictional compliance to uphold the integrity and efficiency of the legal process for commercial disputes in India.
Bottom line:-
Proceedings involving commercial disputes of specified value must be instituted in the Commercial Division of the High Court as mandated by the Commercial Courts Act, 2015. Non-compliance renders such proceedings and orders passed therein null and void due to lack of subject matter jurisdiction.
Statutory provision(s): Arbitration and Conciliation Act, 1996 Section 9, Commercial Courts Act, 2015 Sections 2(1)(c)(xv), 6, 7, 10, Civil Procedure Code, 1908 Order VII Rule 10
Kedarnath Tradecomm LLP v. Mayank Agarwal, (Calcutta)(DB) : Law Finder Doc id # 2940352
