Calcutta High Court (Appellete Side)
Adm Agro Industries Kota & Akola Pvt. Ltd vs Aone Agro Products Pvt. Ltd. And Another on 21 January, 2025
AD-02
Ct No.16
21.01.2025
TN
FMAT 259 of 2024
IA No: CAN 2 of 2024
ADM Agro Industries Kota & Akola Pvt. Ltd.
Vs.
Aone Agro Products Pvt. Ltd. and another
Mr. Sakya Sen, Ld. Sr. Adv.,
Mr. Niladri Bhattacharjee,
Mr. Soham Bandyopadhyay,
Ms. Mayuri Ghosh,
Mr. Aditya Chaturvedi,
Mr. Pratik Acharya,
Ms. Poulami Chattopadhyay
Mr. Kanishka
....for the appellant
Mr. Jishnu Chowdhury, Ld. Sr. Adv.,
Mr. Dipak Dey,
Mr. Abhidipta Tarafdar
....for the respondent no.1
1. The present appeal arises at the behest of a
defendant in a suit for declaration and consequential
reliefs. By the impugned order, the learned Trial
Judge granted temporary injunction restraining the
defendants from giving any effect or further effect or
acting in terms of or in furtherance of two debit
notes, both dated December 26, 2022 and bearing
nos. DBOOT/57 and DBOOT/58 respectively, in any
manner whatsoever.
2. Learned senior counsel appearing for the appellant
argues that the impugned order is vitiated due to
lack of jurisdiction of the Civil Court to pass such an
order. It is argued that the suit as framed pertains to
a commercial dispute as contemplated in
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Section 2(1)(c), Clauses (xviii), (i) and (ii) of the
3. In addition, it is submitted that the impugned order
grants an injunction which violates the spirit of
Section 41(b) of the Special Relief Act, 1963.
4. Learned senior counsel further argues on merits that
in view of two consignment notes having admittedly
been issued between the parties, the same formed
the plinth of the contract between the parties which
was subsequently given effect to by virtue of the debit
notes-in-question. Although the defendant/appellant
also relies on two purported contracts, it is submitted
that the said contracts were entered into in
furtherance of the original consignment notes and
that the consignment notes themselves formed a
concluded contract, in view of consensus ad idem
having been arrived at between the parties at that
juncture itself.
5. Learned senior counsel for the appellant cites ANZ
Grindlays Bank Ltd. (now known as Standard
Chartered Grindlays Bank Ltd.) vs. Union of India and
others, reported at (2005) 12 SCC 738, where the
Supreme Court observed inter alia that the dictionary
meaning of the word “dispute” is: to contend any
argument; argue for or against something asserted or
maintained. A conflict or controversy which comes
within the purview of the term “dispute”, it was held,
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means a controversy having both positive and
negative aspects. It postulates the assertion of a
claim by one party and its denial by the other.
6. Thus, it is contended that although the
plaintiff/respondents have sought a declaration that
there is no existence of the two contracts dated
August 16, 2022 and September 29, 2022, which
were later entered into between the parties pursuant
to the consignment note, the defence of the present
appellant is that the said agreements do exist. Since
the said agreements and debit notes pertaining to the
sale of goods which come within the purview of
specified value as contemplated in the Commercial
Courts Act, the dispute is a commercial dispute.
Since the debit notes, cumulatively, put the valuation
of the transaction to around Rs.2.5 crore, it is not the
City Civil Court, sitting in jurisdiction as an ordinary
civil court, but the Commercial Division of this court,
which has jurisdiction.
7. Learned senior counsel appearing for the appellant
next cites an unreported judgment of the Supreme
Court in the matter of Asma Lateef & Anr. Vs.
Shabbir Ahmad & Ors. where the Supreme Court
observed that the question of jurisdiction would
assume importance even at the stage when a court
considers the grant of interim relief. Where interim
relief is claimed in a suit before a civil court and the
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party to be affected by grant of such relief, or any
other party to the suit, raises a point of
maintainability thereof or that it is barred by law and
also contends on the basis that interim relief should
not be granted, grant of relief in whatever form, if at
all, ought to be preceded by formation and recording
of at least a prima facie satisfaction that the suit is
maintainable or that it is not barred by law.
8. Thus, even while granting injunction, the learned
Trial Judge, it is argued, ought to have considered
the question of jurisdiction.
9. While controverting the arguments of the appellant,
learned senior counsel appearing for the
plaintiffs/respondents argues that the dispute
involved in the suit, as framed, has to be gathered
from the plaint and not from any further pleadings in
defence. If the plaint is looked at comprehensively, it
is argued, it would clearly indicate that the very
existence of the two commercial agreements which
are relied on by the defendant/appellant has been
questioned in the suit.
10. It is argued that if the very existence of the
agreements are questioned, the suit does not come
within the purview of a commercial dispute as
envisaged in Section 2(1)(c)(xviii) of the Commercial
Courts Act, since the said provision only
contemplates disputes arising out of agreements for
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sale of goods. Where the very existence of the
agreements-in-question has been challenged, there
arises no question of any dispute “arising out of”
such agreements.
11. Insofar as sub-clause (i) of Clause (c) of Section 2(1)
of the Commercial Courts Act is concerned, it is
argued that ordinary transactions of merchants,
traders etc. such as those relating to mercantile
documents are a prerequisite of the dispute coming
within the said provision. It is argued that in the
present case, even the debit notes-in-question arise
out of the purported contracts, the very existence of
which has been challenged.
12. Since the existence of mercantile documents is a sine
qua non for a dispute to come within Section 2(1)(c)(i)
of the Commercial Courts Act, it is contended that
there being no agreement in existence, the said
provision also does not come into play.
13. In support of such contention, learned senior counsel
cites Venkatesh Vincom Private Limited vs. Spice of
Joy, Multicuisine Restaurant cum Bar and Others,
reported at 2022 SCC OnLine Cal 3010, where a
Division Bench of this court held inter alia that there
is no condition laid down in the definition of
„commercial dispute‟ that the mercantile document
must be executed at the beginning or before the
transaction having effected; rather the document
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defined in Section 2(1)(f) of the Act includes any
matter expressed or described upon any substance
by means of letters, figures or marks or electronic
means, etc. for the purpose of recording the matter.
Thus, it is reiterated that the existence of a document
is necessary for the purpose of the dispute coming
within Section 2(1)(c)(i), whereas in the present case
the very existence of the contracts has been assailed.
14. Insofar as sub-clause (ii) is concerned, it is argued
that the present transaction does not pertain to
export or import of merchandise. Whereas the
defendant no.1 might have imported the goods, the
present suit relates to the absence of any agreement
between the plaintiff and the defendant, which is not
in the nature of import or export of such goods.
15. Learned senior counsel appearing for the
plaintiffs/respondents next cites Kailash Devi
Khanna and Others vs. DD Global Capital Ltd. and
Others, reported at 2019 SCC OnLine Del 9954, where
a learned Single Judge of the Delhi High Court
observed that all suits for recovery of monies cannot
fall under Clause (i) of Section 2(1)(c) of the
Commercial Courts Act. Suffice it to state, it was
held, that the suit is not based on any transaction
relating to mercantile documents.
16. Learned senior counsel next relies on a Division
Bench judgment of the Karnataka High Court
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reported at I.L.R. 1991 KAR 254 (Messrs. Paramount
Industries vs. C.M. Malliga). In the said judgment, the
Division Bench of the Karnataka High Court held
that Section 41(b) of the Specific Relief Act applies to
a case wherein the relief sought is only to restrain
any person from instituting or prosecuting any
proceeding in a court not subordinate to that from
which the injunction is sought. It will not apply to a
suit wherein a relief of declaration and other
consequential reliefs including possession etc. are
sought. If the relief sought for in the suit lies within
the jurisdiction of the civil court, it is open to it to
pass an appropriate interim order to aid the final
relief which is sought in the suit. If passing of such a
decree or interim order results in disabling the
defendant in the suit from instituting or prosecuting
any proceeding in a court not subordinate to the
court in which the suit is filed, it cannot be held that
it is hit by Section 41(b) of the Specific Relief Act.
17. Lastly, learned senior counsel for the respondents
cites the judgment of a learned Single Judge of this
court reported at AIR 1925 Cal 233 (Ram Sadan
Biswas vs. Mathura Mohan Hazra and others). It was
held in the said judgment that it is well-settled that
temporary injunctions are governed not by the Act
(Specific Relief Act) but by the provisions of the Code
of Civil Procedure, Order XXXIX Rule 1, and a
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temporary injunction may be granted by a
subordinate court against a party even in respect of
proceedings in a superior court. So far as perpetual
injunctions are concerned, they are regulated by the
Act and an injunction cannot be issued by a court to
stay proceedings in a suit not subordinate to that
from which the injunction is issued.
18. Upon hearing learned counsel for the parties, we
arrive at the following conclusions:
19. Insofar as the argument of the appellant that the
injunction granted by the impugned order hits
Section 41(b) of the Specific Relief Act is concerned,
we are unable to agree with such proposition. The
injunction has been passed in respect of enforcement
of two purported debit notes. The said documents‟
veracity has been challenged in the suit and, as
such, the temporary injunction granted is in aid of
the final relief. Per se, a restraint order in respect of
the debit notes does not translate directly to an order
restraining the defendants from instituting or
prosecuting any proceeding in a court not
subordinate to that from which the injunction is
sought. As held by the Division Bench of the
Karnataka High Court, even if incidentally such grant
of temporary injunction has the secondary effect of
retraining a person from relying on such document in
a suit, the said fact ipso facto does not tantamount to
9
the injunction order being violative of Section 41(b) of
the Specific Relief Act.
20. However, with utmost respect to the high erudition of
the learned Single Judge rendering the judgment in
Ram Sadan Biswas (supra), we are unable to agree
with such proposition. The relief of temporary
injunction, contrary to what was held in the said
judgment, does not flow from Order XXXIX Rules 1
and 2 of the Code of Civil Procedure at all. The origin
and source of grant of injunction lies in equity. After
crystallization of such equitable principles by
codification in the Indian context, Sections 36 and 37
of the Specific Relief Act clearly provide for such
grant.
21. Section 36 stipulates that preventive relief is granted
at the discretion of the court by injunction,
temporary or perpetual. Again, Section 37 deals with
temporary and perpetual injunctions. Sub-section (1)
refers to temporary injunctions whereas sub-section
(2) of Section 37 speaks about perpetual injunctions.
Thus, the source of power to grant temporary
injunctions flows from Section 37 of the Specific
Relief Act. Order XXXIX, Rules 1 and 2 of the Code of
Civil Procedure provide merely the procedure
governing such grants and the circumstances in
which such grant is permitted.
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22. As such, the distinction between a temporary
injunction being governed by the Code and a
perpetual injunction by the Specific Relief Act is an
artificial distinction, not sanctioned by the scheme of
things in Indian jurisprudence.
23. Be that as it may, in view of our earlier observations,
we are of the opinion that the injunction granted in
the present case is in aid of the final relief sought in
the suit and is not in contravention of Section 41
(b) of the Specific Relief Act per se.
24. The next question which arises is as to jurisdiction.
25. A very relevant question has been raised as to
whether the suit is covered by Section 2(1)(c)(xviii) of
the Commercial Courts Act, 2015.
26. It would be diametrically contrary to the scheme and
object and reasons of the enactment of the
Commercial Courts Act in the event a restrictive
interpretation is lent to the provisions thereof. In the
statement of objects and reasons of the 2015 Act, it
is specifically provided that the proposal to provide
for speedy disposal of high value commercial
disputes was the trigger for such enactment. Again,
the statement of objects and reasons of the
amendment Act of 2018 to the said Act provides that
the global economic environment has since become
increasingly competitive and to attract business at
international level, India needs to further improve its
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ranking in the world bank „Doing Business Report‟
which, inter alia, considers the dispute resolution
environment in the country as one of the parameters
for doing business. In such context, the statement of
objects and reasons further records that the
tremendous economic development has ushered in
enormous commercial activities in the country and
early resolution of commercial disputes has been
given a positive thrust in the said objects and
reasons. In such context, if we, as Indian Courts, give
an extremely restrictive view to the same, it would be
contrary to the legislative intent behind enacting the
said statute.
27. Seen from such perspective, Section 2(1)(c) speaks
about disputes “arising out of” and Clause (xviii)
stipulates agreements for sale of goods or provisions
of services. In such context, a dispute arising out of
an agreement for sale also encompasses a dispute as
to the veracity, authenticity or, stretched a bit
further, the very existence of such agreement as well.
28. As rightly argued by learned senior counsel for the
appellant, it may very well be that a plaint relies on a
particular commercial agreement whereas the
defence taken in the written statement is that such
agreement does not exist. In such case, it would be
absurd to say that although at the inception the
12
commercial court had jurisdiction, it loses the same
in view of the defence taken.
29. Learned senior counsel for the respondents has
argued that the question as to jurisdiction under the
Commercial Courts Act has to be decided on the
frame of the suit for which the court has to look only
to the plaint pleadings. However, the issue of
jurisdiction, which hits at the maintainability of an
injunction application and the prima facie case
aspect of the matter, is wider than the limited scope
of a demurrer application under Order VII Rule 11 of
the Code of Civil Procedure. Whereas in the latter,
the court only has to look at the plaint pleadings
while deciding an issue of jurisdiction, the “dispute”,
for the purpose of deciding the issue of jurisdiction,
even prima facie, has to be considered as a whole.
30. A “dispute”, by its very definition, can only arise, akin
to an “issue” as contemplated in the Code of Civil
Procedure, when one party asserts something and
the other denies the same. Thus, if we consider the
broader perspective of the expression “commercial
dispute”, the entire dispute, including the
contentions of the rival parties, has to be taken into
consideration to ascertain the nature of the dispute.
Thus, in the present case, although the plaintiff
asserts that there was no existence of the two
contracts-in-question, the defendant very much relies
13
on such documents, which is evident from the plaint
itself and furnishes the very cause of action of the
suit. Unless the defendant relied on such contracts,
and made a claim thereon, there would not arise any
occasion for the rights of the plaintiff being infringed
and the suit being filed in the first place.
31. Also, from the defendant‟s application under Order
XXXIX Rule 4 of the Code of Civil Procedure and its
written objection to the plaintiffs‟ injunction
application, we can gather that the
defendant/appellant asserts the existence of such
contracts.
32. Thus, in the present context, since agreements for
sale of goods pertaining to the specified value as
contemplated in the Commercial Courts Act has been
challenged in the suit, the dispute definitely comes
within the purview of Section 2(1)(c)(xviii) of the said
Act.
33. Furthermore, sub-clause (i) of Clause (c) of Section
2(1) is also attracted. In the Division Bench judgment
of this court in the matter of Venkatesh Vincom
Private Limited (supra), cited by the respondents
themselves, the court rightly held that a document,
for the purpose of a commercial dispute, includes
any matter expressed or described upon any
substance by means of letters, figures or marks or
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even electronic means intended to be used for the
purpose of recording the matter.
34. Although the context of the said judgment was an
interpretation of the term “document” as defined in
Section 2(1)(f) of the said Act, the said concept can be
imported to the present case as well. In the present
suit, the plaintiff has not only challenged the
existence of two particular contracts but has also
sought specific declaration challenging the two debit
notes as well as perpetual injunction in respect of
such debit notes. The debit notes, cumulatively,
indicate a figure of around Rs.2.5 crore which comes
within the specified value and, as such, brings the
suit within the purview of a commercial dispute as
envisaged in Section 2(1)(c)(i), being related to an
“ordinary transaction relating to mercantile
documents”.
35. Also, even if the dispute falls within the purview of
ordinary transactions de hors a particular document,
sub-clause (i) of clause (c) is applicable. The said
provision stipulates that disputes arising out of
ordinary transactions of merchants, traders, etc.
“such as” those relating to mercantile documents
come within the purview of the Act. The use of the
term “such as” clearly shows that the existence of
documents is not a sine qua non but the stress lies
on the expression “transactions”. For example, even if
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there was a verbal transaction in due course of the
regular business practice of the particular trade,
without anything being reduced to written
agreements or documents, it would come within the
purview of Section 2(1)(c)(i), since the said provision
relates to ordinary transactions of traders; the use of
the expression “such as” makes the said provision
inclusive and not exhaustive.
36. Thus, mercantile documents are used as an example
by way of illustration in sub-clause (i) of clause (c) of
Section 2 (1) and the main provision relates to
ordinary transactions, with or without written
documents.
37. However, coming to sub-clause (ii) of clause (c) of
Section 2(1), we are unable to agree that the present
transaction relates to export or import. In paragraph
no.4 of the plaint, the plaintiff has stated that the
defendant no.1 was importing crude palm oil.
However, the transactions-in-question pertained to
agreements (or non-existent agreements) between the
plaintiff and the defendant, which is a domestic
transaction. Although incidentally the defendant no.1
might have imported crude palm oil, the present
transaction is not pertaining to such import but is a
domestic transaction.
38. As such, sub-clause (ii) is not attracted.
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39. However, the very nature of the plaint pleadings
indicate that the suit relates to a commercial dispute
coming within the purview of Section 2(1)(c), sub-
clauses (i) and (xviii).
40. Even a bare perusal of the plaint shows that the
entire gamut of the transactions involved in the
dispute is commercial in nature, revolving around
the debit notes which have been challenged. In
paragraph no.3 of the plaint, the plaintiffs allege that
they were not aware of the precise nature of the
business of defendant no.1 and never had any form
of business relation. However, from enquires made,
the plaintiff learnt that the defendant no.1 is an
importer of different commodities. More importantly,
in paragraph no.4 it is alleged that the plaintiff “in
the usual course of business” had a business
requirement of crude palm oil of a designated entity.
The plaintiff was aware that the defendant no.1 was
importing such crude palm oil and contacted
defendant no.2. Upon such approaches being made,
the plaint further goes on to plead, e-mails were
exchanged and confirmation notes were executed
agreeing to ship crude palm oil in July 2022 and
August 2022.
41. The plaint case is that subsequently such
transaction failed to go through and, as such, the
contract never fructified.
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42. Such paragraphs of the plaint themselves show
amply that the entire purview of the dispute revolves
around commercial transactions and, as such, there
cannot be any manner of doubt that the suit comes
within the purview of a “commercial dispute” as
envisaged in Section 2 of the Commercial Courts Act.
43. In view of the specified value, as extracted from the
debit notes which are under challenge, being to the
tune of around Rs.2.5 crore, even on a prima facie
premise, it cannot but be said that the Commercial
Division of this court has jurisdiction to entertain
and decide the suit under Section 7 of the
Commercial Courts Act, 2015.
44. Since maintainability of a suit hits at the very root of
the prima facie case, which is a sine qua non for
grant of injunction, we are of the opinion that even
without entering into the merits of the contentions of
the parties otherwise, it is palpable that the learned
Trial Judge lacked jurisdiction, as an ordinary civil
court (as opposed to a commercial court), to entertain
the suit and to pass the order of injunction.
45. Hence, the impugned order of injunction ought to be
set aside on such count alone.
46. Accordingly, FMAT 259 of 2024 is allowed on contest,
thereby setting aside the impugned order bearing
Order No. 20 dated June 06, 2024 passed by the
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Fifth Bench, City Civil Court at Calcutta in Title Suit
No. 85 of 2023.
47. The connected application, bearing CAN 2 of 2024,
stands disposed of consequentially.
48. There will be no order as to costs.
(Sabyasachi Bhattacharyya, J.)
(Uday Kumar, J.)
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