Commercial dispute test: a personal loan with interest, without mercantile character, is not a commercial suit.

A personal loan claim with interest does not become a commercial dispute merely because interest is charged. The Delhi High Court applied Section 2(1)(c) of the Commercial Courts Act, 2015 and held that clause (i) covers transactions in the ordinary course of merchants, bankers, financiers or traders, typically involving mercantile documents. Here, the loan was advanced from personal funds, was not shown to arise in the ordinary course of financing business, and lacked the mercantile character required for commercial jurisdiction. The plaint was therefore liable to rejection under Order VII Rule 11 CPC, and the suit was not maintainable as a commercial suit.

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Issues: Whether a suit based on a personal loan carrying interest, without mercantile documents or a transaction in the ordinary course of business of merchants, bankers, financiers, or traders, falls within the definition of a commercial dispute under Section 2(1)(c)(i) of the Commercial Courts Act, 2015, and is therefore maintainable as a commercial suit.

Analysis: Order VII Rule 11 of the Code of Civil Procedure, 1908 permits rejection of a plaint where the suit is barred by law or otherwise not maintainable. Section 2(1)(c) of the Commercial Courts Act, 2015 defines commercial dispute by an exhaustive enumeration, and clause (i) confines the category to ordinary transactions of merchants, bankers, financiers, and traders, particularly those relating to mercantile documents and their enforcement or interpretation. The suit in question arose from a personal loan advanced by an individual out of personal funds. The transaction was not shown to be in the ordinary course of financing business, nor was it supported by mercantile documents of the kind ordinarily executed in trade or commerce. The presence of interest by itself was held to be insufficient to convert a personal loan into a commercial dispute. A commercial dispute requires the necessary commercial character and nexus with trade, commerce, or business, which was absent here.

Conclusion: The suit does not qualify as a commercial dispute under Section 2(1)(c)(i) of the Commercial Courts Act, 2015, and the application under Order VII Rule 11 was allowed.

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