BRD Finance Limited v. Santhosh P. & Anr.

What happened

A kuri company sued on a promissory note to recover ₹3,47,587 in 2018. During the suit, Kerala’s February 2020 notification designated commercial courts for the relevant class of disputes above ₹3 lakh. The Munsiff Court nevertheless decided and dismissed the claim in January 2024; the first appellate court affirmed it in September 2025.

Questions before the court

• Whether the civil court could continue deciding this commercial recovery suit after the applicable commercial-court designation.

What each side argued

The lender argued that section 15 required transfer and both judgments lacked jurisdiction. The respondents did not appear after notice of the second appeal’s substantial question of law.

Why the court ruled this way

The High Court held that the pending suit should have been transferred to the designated Commercial Court. Proceeding to its merits in the original forum was unsustainable, and the first appeal perpetuated the defect. The High Court therefore vacated the findings without examining whether the promissory-note debt was proved.

Controlling point

A pending qualifying commercial recovery suit must follow the statutory transfer mechanism when the designated Commercial Court becomes the competent forum.

Order and next steps

Both judgments and decrees were set aside. The suit was transferred to the Principal Sub Court, Thrissur, with consequential administrative orders directed. That court must notify the parties and determine the merits. The appellant may obtain refund of the court fees paid in the High Court and first appeal.

Practical implications

A lender reviewing older recovery files should check commercial classification, specified value and designation notifications during pendency. A judgment from the wrong forum can lose effect despite years of litigation; transfer preserves a proper merits hearing rather than proving the debt.

Limits of this ruling

• The decision concerns a qualifying commercial dispute, not every civil money claim.
• No finding on the borrower’s liability survived the jurisdictional correction.