Citing Non-Existent Supreme Court Judgments to Justify Jurisdiction Is a Grave Judicial Error: Karnataka

High Court Flags City Civil Judge's Conduct" 
Forum Shopping by Withdrawing Commercial Suit and Refiling Before Civil Court Without Leave Cannot Be 
Permitted—Suit Must Be Returned - Karnataka High Court strongly condemned the procedural manipulation adopted by the plaintiffs to bypass Commercial Court jurisdiction. Justice R. Devdas held that "a party cannot be permitted to withdraw a commercial suit without liberty and then ingeniously refile the same cause before a civil court lacking jurisdiction." The Court further flagged that "the trial judge cited two judgments which do not exist," directing that a copy of the order be placed before the Chief Justice for appropriate action. 
 
The plaintiffs—several Mantri group companies—had earlier filed Com.O.S. No.1351/2024 before the Commercial Court at Bengaluru seeking a permanent injunction to restrain Sammaan Capital Ltd. and its affiliate from acting upon pledge invocation and share sale notices issued on 28.09.2024. However, on 01.10.2024, they withdrew the commercial suit, stating they were not pressing the same and intended to file a fresh one. 
 
Justice Devdas noted, "While withdrawing the commercial suit, the plaintiffs did not seek any liberty to approach the civil court." Instead, they proceeded to file O.S. No. 7166/2024 before the City Civil Court with identical prayers and additional parties, aiming to dilute the commercial nature of the dispute. 
 
The defendants filed an application under Order VII Rule 10 CPC seeking return of the plaint, arguing that the suit was a commercial dispute and thus maintainable only before a Commercial Court. The City Civil Judge dismissed the application, relying on two decisions purportedly from the Supreme Court. 
 
However, Justice Devdas found that, “on careful search, it is found that no such decision is rendered by the Hon’ble Apex Court.” The order had cited M/s. Jalan Trading Co. Pvt. Ltd. v. Millenium Telecom Ltd. and M/s. Kvalrner Cemintation India Ltd. v. Achil Builders Pvt. Ltd., which were declared to be non-existent. The Court remarked, “What is more disturbing is the fact that the learned judge... has cited two decisions which were never decided by the Apex Court or any other Court... this act would require further probe and appropriate action in accordance with law.” 
 
The High Court also scrutinised the plaintiffs' conduct, holding that, “this is an ingenious method adopted by the plaintiffs seeking to maintain a suit before a court which had no jurisdiction.” It was further held that, “only those plaintiffs to whom demand notices were issued are aggrieved and could have sought relief; others have no locus and were added merely to escape the application of the Commercial Courts Act.” 
 
When a pointed question was posed to the plaintiffs’ counsel regarding why they did not seek liberty from the Commercial Court to re-approach the civil court, 
“the learned Senior Counsel had no answer.” 
 
The Court was categorical in its view: “If the plaintiffs had earlier approached the Commercial Court and withdrawn the suit without liberty, they could not have maintained a fresh suit on the same cause before a non-commercial forum.” 
 
Allowing the civil revision petition, Justice Devdas ruled, “The application under Order VII Rule 10 CPC ought to have been allowed. The suit is not maintainable before the City Civil Court.” 
 
In view of Order VII Rule 10A CPC, the Court granted one last opportunity: “The matter stands remitted to the trial court only to enable the plaintiffs to file an application under Rule 10A(2) of Order VII CPC. If no such application is filed, the plaint shall stand returned.” 
 
Directing accountability, the Court concluded, “Copy of this order shall be placed before Hon’ble the Chief Justice, for further action against the learned judge.” 
  
Date of Decision: 24 March 2025