The Hon’ble Telangana High Court clarifies the applicability of the 2018 Amendment with respect to minimum value of subject matter in a commercial dispute

M/s. Janset Labs Pvt. Ltd. v. Agilent Technologies India Pvt. Ltd. Civil Revision Petition No.1932 of 2025

Factual Background of the Case

The Petitioner in the present civil revision petition (hereinafter “CRP”) is the defendant in a suit filed by Agilent Technologies before the Commercial Court, Ranga Reddy District. The suit was filed seeking recovery of a sum of Rs.1,03,58,961 (Rupees One Crore Three Lakhs Fifty Eight Thousand Nine Hundred Sixty One). This amount was arrived at by the Plaintiff by combining the principal amount of Rs.44,53,396 (Rupees Forty Four Lakhs Fifty Three Thousand Three Hundred Ninety Six), interest at 18% per annum, and damages. The said Suit was challenged by the Petitioner by way of an Application under Order VII Rule 11(d) of the Code of Civil Procedure, 1908 seeking rejection of the plaint. The Commercial Court dismissed the Application. Hence, the present petition was filed.

The Petitioner argued that the Suit has been incorrectly filed under the Commercial Courts Act as the specified value falls below the minimum threshold of Rupees 1 crore. This assertion was made on the fact that the prayer clause in the Suit was divided into three segments- principal amount, interest and damages. It was argued that the reduced ‘specified value’ of Rs. 3 Lakhs is not applicable to the State of Telangana as there is no notification by the state in that regard. On the contrary, the Respondent argued that the cumulative amount of the relief sought is to be seen to ascertain the specified value.

Observation of the Court

Applicability of 2018 Amendment of Commercial Courts Act

The provision of Section 2 (1) (i) of the Commercial Courts Act, 2015 was amended by the Commercial Courts (Amendment) Act, 2018 (hereinafter referred to as the “2018 Amendment”) which was applicable since May 03, 2018. Prior to the 2018 Amendment, the specified value was fixed at Rs. 1 crore, however, the amended provision reads as follows:

Section 2(1)(i)

“(i) “Specified Value”, in relation to a commercial dispute, shall mean the value of the subject matter in respect of a suit as determined in accordance with section 12 [which shall not be less than three lakh rupees] or such higher value, as may be notified by the Central Government.” (emphasis added)

One of the main contentions of the Petitioner was that the 2018 Amendment was not applicable as the State of Telangana did not bring a notification to that effect.

The Hon’ble Court did not find merit in the Petitioner’s argument and stated that this Section only mentions a notification from the central government for increasing the specified value (from Rs. 3 lakhs) and does not contain any requirement of a separate notification from the state government. The Hon’ble Court affirmed the ruling in the matter of M/s. Sri Srinivasa Construction v. D Muralidhar Rao[1].

Difference between ‘Specified Value’ and ‘Pecuniary Value’

It was observed that the expression ‘Specified Value’ is distinct and different from ‘pecuniary value’ in section 3(1A) of the Commercial Courts Act. The Hon’ble Court discussed the provision of Section 3 of the Commercial Courts Act and noted that Section 3(1) empowers the state government to establish Commercial Courts at the district level, after consultation with the concerned High Court. In the states having High Courts with ordinary original civil jurisdiction, the state government may constitute Commercial Courts at the District Judge level as per the first proviso to Section 3(1). However, no consultation with the High Court is required as per the second proviso which mentions that such states may notify the pecuniary value which shall not be less than three lakh rupees and not more than the pecuniary jurisdiction exercisable by the District Courts. The Court further observed that Section 3(1A) begins with a non-obstante clause which reads as “…the State Government may, after consultation with the concerned High Court, by notification, specify such pecuniary value which shall not be less than three lakh rupees or such higher value, for whole or part of the State…”. It was remarked that the insertion of the term ‘pecuniary value’ in Section 3(1A) and ‘specified value’ in Section 2(1)(i) both by the 2018 Amendment indicates that the two provisions are not similar and governed by different parameters.

The definition of ‘specified value’ pivots on the value of the subject matter of the suit in relation to the commercial dispute, that is whether the suit qualifies to be admitted as a commercial dispute, whereas ‘pecuniary value’ in Section 3(1A) is concerned with the competence-parameters of the Court for receiving a commercial suit. The Hon’ble Court clarified that “while the former focusses on the value of the dispute, the latter sets the floor-limit capability of the receiving Court.”[2].

The Bench also stated that the requirement of a notification by the state government mentioned in Section 3(1A) cannot be imported in Section 2(1)(i).

The Hon’ble Court held that the base threshold of the ‘specified value’ being Rs. 3 Lakhs is applicable in Telangana with effect from May 03, 2018. Moreover, for a dispute to fall under the regime of Commercial Courts Act, 2015 the following criteria is to be fulfilled:

      i.         the existence of a Commercial dispute within the meaning of section 2(1)(c) of the 2015 Act and

     ii.          the Commercial dispute being within the specified value as provided in section 2(1)(i) read with Section 12.

In the present case, the Petitioner did not challenge the commercial nature of the dispute and their entire case was based on the aspect of ‘specified value’.

The Petitioner had filed the Application under Order VII Rule 11(d) of the CPC wherein the plaint can be rejected if it appears from any statement in the plaint to be barred by any law. In the present case, it was the Petitioner’s argument that the Suit was barred by the provisions of the Commercial Courts Act. However, the Commercial Court did not deal with the aspect of ‘specified value’ and dismissed the Petitioner’s Application on the basis that the plaint discloses a cause of action.

Hon’ble Court dismissing the civil revision petition held that the Petitioner’s arguments does not have any statutory basis.

Conclusion

The present decision of the Hon’ble High Court provides much needed clarity on the difference between ‘specified value’ and ‘pecuniary value’. The order also clarifies that a separate notification from the concerned state government is not necessary for the applicability of the 2018 Amendment to Section 2(1)(i) in that state. Hence, it is safe to conclude that the minimum value of the subject matter in a commercial dispute shall be Rs. 3 lakhs across the country (unless any higher value is notified by the central government).

It is pertinent to note that the present petition was filed as a civil revision petition against the order of the Commercial Court, however, Section 12(3) of the Commercial Courts Act, 2015 states that no appeal or civil revision application shall lie from an order of a Commercial Court wherein such Commercial Court has arrived at a finding that it has jurisdiction to hear a commercial dispute under this Act. Interestingly, the bar under this provision was not discussed and the civil revision petition was admitted and decided by the Hon’ble Court.

[1] C.R.P.No.297 of 2025

[2] Paragraph 19