Any legal person (company, firm, LLP, partnership, or individual) can sue in a Commercial Court if the dispute qualifies and meets the value threshold. i.e If your claim arises out of a bona fide commercial transaction and the amount to be recovered is more than ₹3 lakhs then the Commercial Court has jurisdiction.

What Disputes Qualify as “Commercial”?

The Commercial Courts Act defines a “commercial dispute” very broadly (Section 2(1)(c)), but in practice the courts focus on the substance of the transaction. Typically, these are trade or finance-related deals – for example, merchant sales, loan financings, export/import contracts, franchising, construction contracts for commercial projects, shareholder/joint-venture agreements, etc. Simply owing money is not enough: the transaction must involve a business/commercial context and usually be documented (letters, invoices, contracts, bills of exchange, etc.).

Section 2(1)(c) of the Act lists categories of commercial disputes. Courts have interpreted this list purposively. Broadly, the following types of claims usually qualify:

• Sales and Services: Contracts for sale of goods or supply of services between businesses or financiers (e.g. manufacturer sells inventory to a retailer, or a software firm provides services under contract).
• Loan/Financial Transactions: Business loans, financing arrangements, bills of exchange, or guarantees among commercial parties (with relevant documentation).
• B2B Contracts: Any ordinary trade or commerce contract (supply, manufacturing, distribution, franchise, licensing, agency, etc.) with “mercantile” documentation (purchase orders, bills, invoices, acknowledgments).
• Capital Projects: Construction or infrastructure contracts (road, building, IT projects) used for commercial purposes, where parties are businesses or financial institutions.
• Corporate Agreements: Disputes under joint-venture, shareholders’, LLP, or partnership agreements.
• Intellectual Property (IP) Used Commercially: For example, patent/license disputes where the IP is being commercially exploited.
• Commercial Paper: Negotiable instruments (cheques, promissory notes) and insurance claims arising from business activities.
• Commercial Property: Contracts relating to immovable property that is exclusively used in trade or commerce (e.g. a factory or office premises). The Supreme Court and High Courts have emphasized that purely personal or residential property disputes do NOT qualify, even if the owner is a business entity.

Examples of Qualifying Claims: Unpaid invoices for goods delivered to another company; recovery of fees under a service contract; breach of franchise or distribution agreements; dispute over business loan payments; claims on bills of exchange from trade; unpaid rent for a shop or factory building.

What Disputes Do Not Qualify?

Any suit that lacks a genuine commercial character is not maintainable in a Commercial Court. Common non‑qualifying examples:

• Purely Personal Transactions: Money lent to a friend or family member for personal reasons, or domestic/educational loans without commercial intent. Courts have held that simple “friendly loans” or personal debts without business documents fall outside the Act.
• Residential Property: Suits involving residential or mixed‑use property (e.g. a home) do not qualify under the Act.
• Statutory Bar: If another law expressly forbids civil suit (for example, certain tax or wage disputes triable only by specific tribunals), Commercial Courts cannot hear it.
• Consumer and Family Matters: Claims suitable for consumer forums, family courts, or specialized tribunals (like motor accident claims, family business succession disputes, matrimonial issues, etc.) are outside Commercial Courts.
• Criminal Causes: Commercial Courts are civil forums; criminal complaints (e.g. cheque bounce cases under NI Act) are filed separately. However, the debt or cheque dishonor underlying a commercial sale can still form the basis of a civil suit if it meets the commercial criteria.
• Government Contracts (sometimes): Disputes under government tenders may or may not qualify depending on whether they are on “commercial terms” or if barred by separate statutes. Each case requires scrutiny.

Bottom Line: A dispute must be rooted in commerce/industry with documentary evidence. Courts look at the substance of the transaction. If it’s essentially a routine civil claim (like a family loan), it will be thrown out of a Commercial Court.

Jurisdiction of Commercial Courts

Commercial Courts’ jurisdiction is defined by subject‑matter, territorial, and pecuniary limits:

• Subject‑Matter Jurisdiction: Only “commercial disputes” (as above) can be filed. Section 11 of the Act bars Commercial Courts from hearing any case where a civil court’s jurisdiction is barred by law. Similarly, if parties chose arbitration, courts will refer the matter to arbitration (per Section 8 of the Arbitration Act, 1996). In general, an arbitration clause will preclude a commercial suit unless the parties agreed otherwise. (However, note that Commercial Courts under Section 10 also handle arbitration-related applications — e.g. challenges to awards — if the underlying dispute is commercial.)
• Pecuniary Jurisdiction (“Specified Value”): After the 2018 amendment, the minimum threshold is ₹3,00,000 (three lakh rupees) for suits filed in district Commercial Courts. The entire amount claimed (principal plus interest up to filing date) is included in computing this value. For example, if you claim ₹2.8 lakh principal plus ₹0.3 lakh interest, the specified value is ₹3.1 lakh, meeting the threshold. For suits filed in High Court Commercial Divisions, the original specified value remains ₹1 crore (or as notified). Check state notifications, as some states may set higher or lower limits.
• Territorial Jurisdiction: District Commercial Courts (when constituted) generally have jurisdiction over the whole state. (In practice, states notify specific locations, e.g. a “Commercial Court” at Delhi for the National Capital Territory.) For disputes in cities with Commercial Divisions (Delhi, Bombay, Madras, Calcutta, etc.), original suits above the threshold are typically filed directly in the High Court’s commercial bench. Suit usually lies where the defendant resides or contract is made/performed (as in normal civil courts), subject to the state-wide jurisdiction of Commercial Courts.
• Arbitration Clause: A valid arbitration agreement shifts jurisdiction to arbitration per Section 8 of the Arbitration Act. If part of your contract falls under arbitration, you cannot proceed in court until you seek stay and/or arbitral relief. (Note: Section 10 of the Commercial Courts Act vests Commercial Courts/Divisions with authority over arbitration-related applications and appeals, but original contract disputes with an arbitration clause still belong in arbitration first.)

Mandatory Pre‑Litigation Mediation

One of the Act’s hallmark features is pre-institution mediation. Under Section 12A (inserted by the 2018 Amendment), no Commercial suit can be filed without attempting mediation first, unless urgent relief is sought. In Patil Automation v. Rakheja Engineers (2022) the Supreme Court held that Section 12A is mandatory, not directory, and failure to mediate is a jurisdictional defect. In practice, this means:

• Notice and Mediation: Before filing, the plaintiff should serve a formal demand notice on the debtor (good practice, though not strictly codified) and then attempt mediation through a notified Mediation Centre (often attached to High Courts or funded by the state). Keep records: proof of notice served and a certificate of mediation failure are needed when filing the suit.
• Timeline: The Act envisions a short 30‑ to 90‑day mediation period. Some High Courts require a standardized notice period (e.g. 21 days) before mediate. If mediation succeeds, the settlement can be recorded and enforced (similar to an award). If it fails or times out, the suit proceeds with a “failure certificate”.
• Urgent Relief Exception: If you need immediate injunctive relief (for example, to freeze assets or stop ongoing harm), you may file the suit first and then explain urgency. The plaintiff must demonstrate genuine need (e.g. continuing infringement causing irreparable loss). Courts will look at the plaint to see if it truly “contemplates urgent interim relief.” The Supreme Court in Novenco Building A/S v. Xero Engg (2025) clarified that genuine ongoing harm (like continuous IP infringement) can justify bypassing mediation. But pro‑forma prayers for injunction, without real urgency, will not suffice.

To build a solid case, plaintiffs should file all relevant documents with the plaint (and ensure the defendant discloses likewise). Key documents include: contracts or agreements, signed delivery receipts or work completion certificates, invoices, payment acknowledgments, bank statements showing non-payment or part-payment, emails demanding payment, letters of intent, and any security/guarantee documents. If a contract was oral, any proof of its terms (memos, emails, payment schedule) is critical. In all cases, more documentation = stronger case. The Act requires disclosing everything in your control, so a full audit of records is essential before filing.

After filing the Plaint, Defendants have 30 days from service to file a Written Statement (Order VIII, CPC). Courts usually grant an extension up to 120 days total, but no further. If a defendant fails to respond within 120 days, the court can strike out their defence and proceed as if the defendant admitted the claim. Plaintiffs should be aware of this timeline and move to press for judgement or interim relief if the defendant delays beyond 120 days.

Commercial Courts actively manage cases to avoid delay. After the first CASE MANAGEMENT HEARING (CMH), the judge exercises broad powers to shape the trial. This includes fixing the order of witness examination, setting strict dates for filing evidence affidavits and arguments, and limiting adjournments. The goal is to finish evidence and close arguments within 6 months of the first CMH. If any party deviates from the schedule (missing deadlines, unexplained adjournments), the court may impose costs or even foreclose rights to present evidence. Diligent follow-up on CMH orders is crucial for both sides.

Summary Judgment (Order XIII-A)

Under Order XIII-A (added by the Act), either side can seek a Summary Judgment on the entire claim or a portion of it if the other side has no real defence (or no real claim). This is an important tool for plaintiffs with clean cases: they may avoid a lengthy trial if the defendant’s defence is clearly untenable. For example, in a construction payment dispute with undisputed invoices, courts have granted summary judgment in a matter of months. To use this, file a detailed application (including all evidence) immediately after summons are served. The court will then give the opponent 30 days’ notice to respond. If granted, the court can decide the case on the pleadings and documents alone without a full trial.

Interim relief applications require separate hearings and usually security for the defendant’s loss if the order turns out unjustified.

Is my Commercial Suit, time barred?

Under the Limitation Act, 1963:

• Contractual Debts: Limitation is 3 years from the date of breach/default. For example, if an invoice was due on Jan 1, 2021, the suit must be filed by Jan 1, 2024.
• Promissory Note/Cheque: If dishonored, limitation is 3 years from dishonor (plus notice, for promissory note).
• Acknowledgement or Part Payment: Each written acknowledgment of the debt or part payment restarts a new 3-year period from that act.
• Example: A supply invoice of ₹5 lakhs was due Dec 2019. You sent reminders but got nothing. In Dec 2022, you accepted a ₹1 lakh partial payment (under protest). Limitation would run 3 years from that payment (i.e. Dec 2025).

Always check the exact accrual date. Note: if you delay unreasonably after a breach, you risk time-bar or losing urgency claim. Also, equitable considerations may sometimes extend limitation (as per recent amendments), but do not rely on that without strong grounds.

Fact Pattern Table: Suit Qualifies for Commercial Court?

Fact Pattern	Commercial Court?	Reason (merit vs fail)
1. Company A sells goods (value ₹50L) to Company B; goods delivered, no payment despite invoice.	Yes	B2B sale under contract; documented by invoices. Involves “ordinary transaction of merchants” – meets Act’s definition.
2. IT firm provides services to a corporate client (₹20L) and is unpaid.	Yes	Service agreement between businesses. Commercial contract with performance proof. Clearly a commercial dispute (services for ₹≥₹3L).
3. Person P lends ₹5L to friend Q for personal reasons (no business context).	No	Personal loan without business documentation. Not an “ordinary merchant transaction,” lacking mercantile paperwork.
4. Company X loans ₹10L (with signed loan agreement) to Company Y (both traders), unpaid.	Yes	Loan between companies with formal contract qualifies as a commercial transaction. A loan agreement is a mercantile document supporting the claim.
5. Retailer rents an office/shop (commercial premises) from landlord; defaults on rent.	Yes	Lease of property used exclusively for business. Immovable property for trade; covered by Act.
6. Landlord sues ex-tenant for unpaid rent of a family dwelling (residential).	No	Residential lease does not involve property “used exclusively in trade or commerce.” Out of Commercial Court jurisdiction.