Commercial Disputes, Arbitration & High-Value Claims
Recovery of commercial dues, arbitration, corporate cheque dishonour and high-value consumer disputes — before the Commercial Courts, the Karnataka State Consumer Commission and the High Court of Karnataka, including for companies based outside India.
Where commercial disputes are heard in Bangalore
Civil disputes in Bangalore are ordinarily instituted before the Court of Small Causes, the City Civil and Sessions Court, or the High Court of Karnataka, depending on the nature of the claim and its value. Since the Commercial Courts Act, 2015, disputes falling within the statutory definition of a "commercial dispute" and above the specified value of three lakh rupees are tried by designated Commercial Courts, with appeals to the Commercial Appellate Division of the High Court.
The Act also imposed a stricter procedural regime on commercial suits — a mandatory statement of truth, case management hearings, tighter timelines for written statements, and disclosure obligations. Section 12A requires pre-institution mediation to be exhausted unless urgent interim relief is contemplated, a requirement the Supreme Court held to be mandatory in Patil Automation Private Limited v. Rakheja Engineers Private Limited (2022).
Contract Disputes & Recovery
Claims arising from the breach of a commercial agreement are governed by the Indian Contract Act, 1872 as to liability and by the Limitation Act, 1963 as to time. A suit for compensation for breach of contract must generally be brought within three years of the breach under Article 55 of the Limitation Act, though a written acknowledgement of liability signed before that period expires gives a fresh start under Section 18.
Where a claim is for a debt or liquidated demand arising on a written contract, Order XXXVII of the Code of Civil Procedure provides for a summary suit, in which the defendant must seek leave to defend. This is often the faster route in a straightforward recovery matter.
Breach of contract suits
Summary suits under Order XXXVII CPC
Recovery of dues and outstanding payments
Legal notices and demand notices
Pre-institution mediation under Section 12A
Execution of decrees
Arbitration & Alternative Dispute Resolution
Where the contract contains an arbitration clause, the dispute is referred to arbitration under the Arbitration and Conciliation Act, 1996. Section 8 obliges a judicial authority to refer the parties to arbitration where an action is brought in a matter covered by an arbitration agreement. Section 9 permits a party to seek interim measures from the court before or during the arbitration, and Section 11 governs the appointment of an arbitrator where the parties fail to agree.
An award may be challenged only on the narrow grounds in Section 34, within three months of receipt, extendable by a further thirty days on sufficient cause. The court hearing such an application does not sit in appeal over the merits of the award.
Domestic arbitration proceedings
Interim measures under Section 9
Appointment applications under Section 11
Challenges to awards under Section 34
Enforcement of awards under Section 36
Drafting of arbitration clauses
Corporate & High-Value Cheque Dishonour
Where a substantial commercial payment is involved, a complaint under Section 138 of the Negotiable Instruments Act, 1881 is rarely the whole answer. It is usually one part of a wider recovery strategy — alongside a commercial suit, arbitration or an insolvency application — and it has to be planned with that strategy in view. The practice accepts Section 138 matters in that commercial setting: cheques issued by or on behalf of companies, and high-value transactions between businesses or individuals.
The issues that decide such cases are technical. Section 141 extends liability to the directors and officers who were in charge of and responsible for the company's business, and the complaint must say so specifically — a defect that has defeated many prosecutions against directors. Under Section 143A the court may order interim compensation of up to twenty per cent of the cheque amount, and under Section 148 an appellate court may require a deposit of at least twenty per cent. Where the drawer company is in insolvency, the Supreme Court held in P. Mohanraj v. Shah Brothers Ispat (2021) that the moratorium protects the company but not its directors. Section 142(2) fixes jurisdiction where the payee's bank branch is located.
The practice's work in this area is directed mainly to the statutory notice and the complaint, and to proceedings before the High Court: petitions to quash proceedings against directors who were not in charge of the company's business, and revisions and appeals.
Cheques issued by companies and their directors
Director liability under Section 141
Quashing petitions for directors in the High Court
Coordination with suit, arbitration or IBC
Defence of directors and company officers
Compounding and structured settlement
High-Value Consumer Disputes
Under the Consumer Protection Act, 2019, pecuniary jurisdiction depends on the consideration paid. Since 2021, claims where the consideration exceeds fifty lakh rupees go to the State Commission — for Karnataka, the Karnataka State Consumer Disputes Redressal Commission at Bangalore — and those exceeding two crore rupees to the National Commission at New Delhi. The practice acts in consumer matters before the State and National Commissions.
Typical matters are disputes with builders over delayed or defective possession of apartments and villas, repudiation of substantial insurance claims, and medical negligence.
Homebuyers v. builders and developers
Repudiation of insurance claims
Medical negligence
Karnataka State Commission and appeals
Commercial Documentation
Drafting and review of commercial documents, with attention to stamp duty under the Karnataka Stamp Act, 1957 and to registration requirements under the Registration Act, 1908. An instrument that is insufficiently stamped or unregistered where registration is compulsory may be inadmissible in evidence, which is frequently decisive when a dispute later reaches court.
Commercial and service agreements
Founder and shareholder agreements
Vendor, distribution and licence agreements
Partnership deeds and LLP agreements
NDAs and confidentiality agreements
Settlement agreements
Applicable Laws: Indian Contract Act 1872, Code of Civil Procedure 1908, Limitation Act 1963, Commercial Courts Act 2015, Arbitration and Conciliation Act 1996, Specific Relief Act 1963, Karnataka Stamp Act 1957.
Commercial Disputes — Frequently Asked
What is the pecuniary threshold for a Commercial Court in Karnataka?
Under the Commercial Courts Act, 2015 as amended in 2018, a commercial dispute is triable by a Commercial Court where the specified value of the subject matter is not less than three lakh rupees. Bangalore has dedicated Commercial Courts, and appeals lie to the Commercial Appellate Division of the High Court of Karnataka. Whether a dispute is "commercial" depends on it falling within the categories listed in Section 2(1)(c) of the Act.
Is mediation compulsory before filing a commercial suit?
Yes, in most cases. Section 12A of the Commercial Courts Act, 2015 requires a plaintiff to exhaust pre-institution mediation before instituting a suit, unless the suit contemplates urgent interim relief. In Patil Automation Private Limited v. Rakheja Engineers Private Limited (2022) the Supreme Court held this requirement to be mandatory, and a suit filed in breach of it is liable to be rejected under Order VII Rule 11.
How long do I have to file a suit for recovery of money?
Generally three years. Under Article 55 of the Limitation Act, 1963 a suit for compensation for breach of contract must be filed within three years of the date of the breach. Section 18 provides that a written acknowledgement of liability signed by the party before the period expires gives a fresh start to limitation from the date of that acknowledgement. Time limits are strict, so delay in taking advice can be fatal to an otherwise good claim.
Can an arbitration award be challenged in court?
Only on the limited grounds in Section 34 of the Arbitration and Conciliation Act, 1996 — incapacity of a party, an invalid arbitration agreement, want of proper notice, the award dealing with a dispute outside the scope of the reference, an irregular composition of the tribunal, non-arbitrability, or conflict with the public policy of India. The application must be made within three months of receiving the award, extendable by thirty days on sufficient cause. The court does not re-hear the merits.
Can the directors of a company be prosecuted when a company cheque is dishonoured?
Yes. Under Section 141 of the Negotiable Instruments Act, 1881, every person who was in charge of and responsible to the company for the conduct of its business at the time of the offence may be prosecuted along with the company, and the complaint must specifically allege that role. Where the company is in insolvency, the moratorium protects the company but not its directors (P. Mohanraj v. Shah Brothers Ispat, 2021).
Which consumer forum hears a high-value complaint in Karnataka?
Since 2021, pecuniary jurisdiction under the Consumer Protection Act, 2019 depends on the consideration paid: above fifty lakh rupees and up to two crore rupees, the Karnataka State Consumer Disputes Redressal Commission at Bangalore; above two crore rupees, the National Consumer Disputes Redressal Commission at New Delhi.
What is a summary suit and when can it be used?
Order XXXVII of the Code of Civil Procedure provides a summary procedure for suits on bills of exchange, hundis and promissory notes, and for suits to recover a debt or liquidated demand arising on a written contract, an enactment, or a guarantee. The defendant cannot defend as of right; leave to defend must be sought within ten days of service of the summons for judgment. Where the defence appears to be a sham, leave may be refused and the plaintiff obtains a decree without a full trial, which makes it considerably faster than an ordinary suit.
Enquiries on a matter in this area
The office can be reached for correspondence on the details below. An enquiry does not create a lawyer-client relationship, and no advice is given until a matter is formally accepted.