The Calcutta High Court ruled on May 23, 2026, that the market value of immovable property, rather than the valuation stated in a legal plaint, must determine the “specified value” for commercial suits.
This significant decision by a Division Bench comprising Justice Sabyasachi Bhattacharyya and Justice Biswaroop Chowdhury led to the setting aside of interim injunction orders in a tenancy dispute involving a property at College Street, Kolkata.
The court found that because the premises were used for trade, the matter fell under the Commercial Courts Act, 2015, and should not have been entertained by a judge acting in ordinary civil jurisdiction.
The case originated from a suit filed by tenant Uttam Kumar Agarwal, who operated a business under the name Uttam Shoe & Chappal.
Agarwal sought to protect his possession of a three-storeyed property used as a shop and godown, leading the City Civil Court, Calcutta, to issue an ad interim injunction against the owner, Dev Sahitya Kutir Pvt Ltd.
However, the High Court determined that the trial court overstepped its authority by failing to recognize the commercial nature of the dispute, which is triggered when the subject property is used for trade or commerce.
In setting aside the lower court’s orders, the High Court emphasized that the trial judge had also granted relief beyond what was actually requested. The injunction had restrained construction activities despite the fact that no such specific prayer was included in documents annexed to the plaint or the temporary injunction application. This procedural oversight, combined with the jurisdictional error, rendered the lower court’s intervention invalid.
Determining specified value for commercial suits
The legal heart of the matter lies in Section 12 of the Commercial Courts Act, 2015. This section dictates how the “specified value” of a commercial dispute is calculated. For cases involving immovable property used for trade, the law requires using the market value of the property.
The bench noted that even a “prima facie glance” at the pleadings showed the value of the College Street premises was well above the ₹3 lakh threshold required for a commercial suit.
A 2018 amendment to the Act lowered this minimum threshold from ₹1 crore to ₹3 lakh to bring more business disputes under the specialized commercial court system. By using the property as a godown and shop, the respondent’s dispute was inherently commercial.
Consequently, the High Court held that whatever valuation the plaintiff initially attributed to the suit, the objective market value of the property must govern the court’s jurisdiction.
| Jurisdictional Authority | Pecuniary Threshold (INR) | Notes on Jurisdiction |
|---|---|---|
| Commercial Court (Exclusively) | ₹3 Lakh to ₹10 Lakh | Within City Civil Court at Calcutta territory |
| Concurrent Jurisdiction | Exceeding ₹10 Lakh to ₹1 Crore | Commercial Court and High Court (Commercial Division) |
| Commercial Division (High Court) | Exceeding ₹10 Lakh | Specific to the High Court at Calcutta |
Procedural requirements and jurisdictional thresholds
The ruling clarifies that for the Commercial Division of the High Court, Calcutta, the amount in dispute must exceed ₹10 lakh. This distinction is vital for litigants in West Bengal, as proper framing of a suit is a prerequisite for a court to grant valid relief.
In this instance, because the suit was not framed as a commercial matter, the trial judge lacked the authority to issue the ad interim injunction in the first place.
The High Court also addressed the delay in filing the appeal by Dev Sahitya Kutir Pvt Ltd. The appellant faced delays of 66 days and 10 days, which the court condoned after accepting that case papers were misplaced during a counsel’s chamber relocation.
This procedural leniency allowed the court to address the core jurisdictional failure of the trial court. Such precision in filing is often as important as the substance of the case, similar to how written statements in commercial suits are held to strict timelines.
Impact on future commercial property disputes
This judgment reinforces the mandatory nature of the Commercial Courts Act for business-related property disputes. Under Section 12A, plaintiffs are ordinarily required to undergo mandatory pre-institution mediation unless there is a proven need for urgent interim relief. By misidentifying the suit as an ordinary civil matter, these specialized procedures were bypassed, which the High Court identified as a fundamental error.
For businesses and landlords, the ruling means that the physical use of the property for “trade or commerce” is the primary factor in determining the legal path.
It prevents parties from undervaluing a claim in court papers to remain in an ordinary civil court when the asset’s market value clearly places it in the commercial category. This focus on objective “specified value” serves as a gatekeeper for the Indian judiciary’s specialized commercial divisions.
Frequently Asked Questions
How is the “specified value” of a commercial suit calculated?
According to Section 12 of the Commercial Courts Act, 2015, if a dispute involves immovable property used for trade or commerce, the value is determined by the market value of that property, not just the valuation stated by the plaintiff in the plaint.
What is the minimum threshold for a commercial dispute in India?
Following a 2018 amendment, the minimum “specified value” for a commercial suit is ₹3,00,000 (three lakh rupees). Any commercial dispute meeting or exceeding this amount must be handled by designated commercial courts rather than ordinary civil courts.
Why was the injunction set aside in this specific case?
The Calcutta High Court set aside the injunction because the trial judge acted under ordinary civil jurisdiction for a commercial matter. Additionally, the judge granted relief regarding construction activities that the plaintiff had not actually requested in their legal filings.