Commercial matters valued at ₹3 lakh or more must go to commercial courts: Andhra Pradesh High Court

The Andhra Pradesh High Court recently clarified that commercial matters valued at ₹3 lakh and above must be placed before the appropriate commercial court with jurisdiction. [UV Satyanarayana & Ors v. Shriram Union Finance Ltd] .A Bench of Justices R Raghunandan Rao and Harinath N observed,"Principal Civil Court of original jurisdiction would have to be treated to be the Commercial Court having territorial jurisdiction over the said area. It may also be noted that Section 21 states that the Commercial Courts Act, 2015, save as otherwise provided will have effect over every other law which is in force for the time being."The Court added that Section 2(i) of the Commercial Courts Act, 2015 initially set the specified value for suits at ₹1,00,00,000 and this was reduced to ₹3,00,000 by Ordinance No. 3 of 2018, and later replaced by Central Act No 28 of 2018, effective from May 3, 2018..In the present case, an arbitrator ruled in favor of the respondent, awarding ₹32,99,625 plus 10% annual interest and costs in a 2014 case. The respondent in 2017 filed an arbitration execution plea with the Principal District Judge, East Godavari District, to enforce the award.The petitioners objected to the proceedings before the district judge, arguing that the execution petition for ₹46,46,965 should have been filed in the commercial court at Visakhapatnam, as per the Commercial Courts Act, 2015.On January 1, 2024, the district judge ruled that the jurisdiction objection was not maintainable since the commercial court's jurisdiction applies to amounts above ₹1 crore, while the amount sought was ₹46,46,965.Aggrieved by the same, the petitioner moved the High Court..Counsel for the respondent submitted that the execution petition proceedings have reached the stage of auctioning the petitioners' property, with only the finalisation of the auction terms remaining. The Supreme Court stayed the transfer of the execution proceedings, rendering the Division Bench's order unreliable, he added.To this, the Bench replied,"It is now settled law that it is only the suspension of a Judgment that will stop the operation of the principles or interpretation of law set out in the said Judgment. In the case of a stay, it is only the parties to the Judgment that are affected and the principle laid down in the said Judgment would continue to hold the field and could be relied upon."The Court ruled that the matter should be placed before the Commercial Court at Visakhapatnam. The proceedings before the Principal District Judge, East Godavari District were set aside, with the respondent given the option to transfer or approach the execution petition in the appropriate Commercial Court.Advocate Arrabolu Sai Naveen appeared for petitioners.Advocate Maheswara Rao Kunchem appeared for respondent..[Read Order]