M/S Spazeclub PVT LTD And Another vs. M/S Venus Cotspin PVT LTD And Another

Facts

The petitioners, M/s Spazeclub Pvt. Ltd. & Anr., are defendants in a suit filed by M/s Venus Cotspin Pvt. Ltd. & Anr. (the respondent/plaintiff). The suit, filed under the Commercial Courts Act, 2015, seeks possession, injunctions, and recovery of amounts related to a property leased by the respondent to the petitioners. The lease commenced on March 7, 2018, with a monthly rent of ₹8,50,000/- plus GST. Payments were made until April 2019. Subsequently, disputes arose over rent payments, leading to an addendum to the lease deed on September 3, 2019, reducing the rent. The petitioners allegedly continued to underpay. The respondent terminated the lease on April 3, 2023, after pre-litigation mediation proceedings failed. The petitioners challenged the dismissal of their application under Order VII Rule 11 CPC, which sought rejection of the plaint.

Held

The Court held that the plaint was not liable for rejection under Order VII Rule 11 CPC. The learned trial court had correctly observed that the appropriate court fee had been affixed on the claimed amount. The Court reasoned that merely because the monetary relief claimed in the suit (₹1,00,30,000/-) was an enhancement from the amount sought in the pre-litigation mediation application (₹37,80,000/- or ₹38,80,000/-) was not a ground for rejecting the plaint. The plaintiff had provided specific reasons for the increased claim, including balance lease amounts and mesne profits/damages. The Court emphasized that at the stage of considering an application under Order VII Rule 11 CPC, only the contents of the plaint are to be looked into, and the defense set up by the defendants cannot be considered. The case did not fall under any of the categories mentioned in Order VII Rule 11 CPC for rejection of a plaint. Therefore, no illegality was found in the impugned order.

Key Issues

1. Whether the plaint is liable to be rejected under Order VII Rule 11 CPC on the ground that the monetary claim in the suit (₹1,00,30,000/-) was significantly enhanced from the amount stated in the pre-litigation mediation proceedings (₹37,80,000/- or ₹38,80,000/-), thereby allegedly bringing it within the jurisdiction of the Commercial Court mischievously. Petitioner's Arguments: The petitioners argued that the substantial increase in the claimed amount from the pre-litigation stage to the suit stage was a deliberate attempt to bring the case under the purview of the Commercial Courts Act, rendering the plaint liable for rejection. Respondent's Arguments: The respondent contended that the plaint was properly valued, and the court fee was affixed accordingly. They explained that the increase in the claim amount was due to subsequent accrual of lease arrears, mesne profits, and damages after the pre-litigation mediation. They asserted that the contents of the plaint alone should be considered at the Order VII Rule 11 stage, and the defense cannot be looked into.