Section 12 of the Commercial Courts Act, 2015: Determination of Specified Value
Section 12 of the Commercial Courts Act, 2015 explains how the "Specified Value" of a commercial dispute is calculated. The valuation is important because the Act applies to commercial disputes of Specified Value and the amount can affect the forum and jurisdiction in which the matter is instituted or heard.
Meaning of "Specified Value"
Section 2(1)(i) of the Commercial Courts Act defines "Specified Value" in relation to a commercial dispute by reference to the value of the subject-matter of the suit as determined under Section 12. After the 2018 amendment, the statutory floor was reduced from Rs. 1 crore to Rs. 3 lakh.
A "commercial dispute" is separately defined in Section 2 and includes specified categories of business and commercial disputes such as mercantile transactions, construction and infrastructure contracts, intellectual property matters, agreements for sale of goods or provision of services, insurance and other listed commercial arrangements.
How Section 12 determines Specified Value
| Type of relief or subject-matter | Value taken into account |
|---|---|
| Recovery of money | Amount sought to be recovered, including interest computed up to the date of filing. |
| Movable property or a right in movable property | Market value as on the date of filing. |
| Immovable property or a right in immovable property | Market value as on the date of filing. |
| Any other intangible right | Market value of the right as estimated by the plaintiff. |
| Commercial arbitration | Aggregate value of the claim and counterclaim, if any, as set out in the arbitration pleadings. |
Text of Section 12 - Determination of Specified Value
(1) The Specified Value of the subject-matter of the commercial dispute in a suit, appeal or application shall be determined in the following manner:-
(a) where the relief sought in a suit or application is for recovery of money, the money sought to be recovered in the suit or application inclusive of interest, if any, computed up to the date of filing of the suit or application, as the case may be, shall be taken into account for determining such Specified Value;
(b) where the relief sought in a suit, appeal or application relates to movable property or to a right therein, the market value of the movable property as on the date of filing of the suit, appeal or application, as the case may be, shall be taken into account for determining such Specified Value;
(c) where the relief sought in a suit, appeal or application relates to immovable property or to a right therein, the market value of the immovable property, as on the date of filing of the suit, appeal or application, as the case may be, shall be taken into account for determining Specified Value; and
(d) where the relief sought in a suit, appeal or application relates to any other intangible right, the market value of the said rights as estimated by the plaintiff shall be taken into account for determining Specified Value.
(2) The aggregate value of the claim and counterclaim, if any as set out in the statement of claim and the counterclaim, if any, in an arbitration of a commercial dispute shall be the basis for determining whether such arbitration is subject to the jurisdiction of a Commercial Division, Commercial Appellate Division or Commercial Court, as the case may be.
(3) No appeal or civil revision application under section 115 of the Code of Civil Procedure, 1908 (5 of 1908), as the case may be, shall lie from an order of a Commercial Division or Commercial Court finding that it has jurisdiction to hear a commercial dispute under this Act.
Amendment note: In Section 12(1), the word "and" was inserted after clause (c), the earlier "and" after clause (d) was omitted, and former clause (e) relating to counterclaims was omitted by the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Act, 2018 with effect from 3 May 2018.
Money recovery suits: interest is included
For a money recovery suit or application, Section 12(1)(a) requires the amount claimed to be combined with interest, if any, calculated up to the date of filing. This total is used for determining the Specified Value. Interest accruing after filing is not part of the statutory calculation described in this clause.
Movable and immovable property
Where the relief concerns movable property, immovable property, or a right in such property, the relevant measure is its market value on the date the suit, appeal or application is filed. The provision therefore focuses on market value at filing rather than merely the amount stated in an agreement or an arbitrary valuation.
Intangible rights
Section 12(1)(d) applies where the dispute concerns an intangible right. The market value of that right, as estimated by the plaintiff, is used for determining Specified Value. Depending on the commercial dispute, intangible rights can include rights connected with intellectual property, contractual rights or other non-physical commercial interests.
Arbitration claims and counterclaims
Under Section 12(2), the aggregate value of the claim and counterclaim, if any, in a commercial arbitration is the basis for determining whether the arbitration matter falls within the jurisdiction contemplated by the Commercial Courts Act. This provision should be read with Section 10, which deals with jurisdiction over arbitration matters.
Bar on appeal or civil revision against a finding of jurisdiction
Section 12(3) provides that no appeal or civil revision application under Section 115 of the Code of Civil Procedure, 1908 lies from an order of a Commercial Division or Commercial Court finding that it has jurisdiction to hear a commercial dispute under the Act. The provision is designed to prevent a separate appeal or revision merely against such an affirmative jurisdictional finding.
Practical points before filing
A party should first determine whether the dispute falls within the definition of a commercial dispute under Section 2(1)(c). The next step is to calculate the Specified Value under Section 12 using the category applicable to the relief claimed. The relevant Commercial Court or Commercial Division, territorial jurisdiction, local pecuniary limits and any applicable government notification should then be checked before filing.
Where a suit does not contemplate urgent interim relief, Section 12A on pre-institution mediation may also require attention before institution of the commercial suit.
Official legal sources
For the current central statutory text, refer to India Code - Commercial Courts Act, 2015. Court users may also consult the eCourts Services portal for court-related services and case information.
This page is intended as a general legal information resource. Court jurisdiction can depend on the nature of the dispute, valuation, local notifications and the facts of the case.