SC: Rejection of Plaint Under Order VII Rule 11 is Appealable Under the Commercial Courts Act

MITC Rolling Mills Pvt. Ltd. filed a commercial suit before the District Judge, Nashik, seeking recovery of Rs. 2.52 crore from M/s Renuka Realtors for unpaid supply of TMT/Fe-500 material. The defendants applied under Order VII Rule 11 CPC to reject the plaint, contending that the plaintiff had failed to undertake mandatory pre-institution mediation under Section 12A of the Commercial Courts Act, 2015. The trial court accepted this plea and rejected the plaintiff’s claim on 10 November 2022.

The company appealed under Section 13(1A) of the Act, but the High Court dismissed the appeal as “non-maintainable,” holding that an order rejecting a plaint was not appealable under Order XLIII CPC. Aggrieved, the company approached the Supreme Court challenging the High Court’s interpretation.

Main Issue: Whether an order rejecting a plaint under Order VII Rule 11 of the Code of Civil Procedure, 1908, is appealable under Section 13(1A) of the Commercial Courts Act, 2015.

SC Decided: The Hon’ble Apex Court held that the rejection of a plaint under Order VII Rule 11 CPC amounts to a “decree” within the meaning of Section 2(2) of the CPC, and hence is appealable under Section 13(1A) of the Commercial Courts Act, 2015. The Court emphasized that the main provision of Section 13(1A) allows appeals from “judgments or orders,” and the proviso restricting appeals to interlocutory orders under Order XLIII cannot override the main clause.

The Court noted that the earlier case dealt with rejection of applications under Order VII Rules 10 and 11(d), not rejection of the plaint itself. It clarified that a litigant aggrieved by rejection of a plaint cannot be left without remedy or compelled to refile the suit. The Supreme Court thus set aside the High Court’s order and restored the appeal for adjudication on merits.

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