Section 2 of the Commercial Courts Act, 2015: Definitions

Section 2 is the interpretation provision of the Commercial Courts Act, 2015. It defines the expressions that determine whether a dispute falls within the commercial-court framework, including "commercial dispute", "Commercial Court", "Commercial Division", "Commercial Appellate Court", "document" and "Specified Value".

Current-law update: The minimum "Specified Value" under Section 2(1)(i), read with Section 12, is Rs. 3 lakh unless a higher value is notified. The Rs. 3 lakh threshold was introduced by the 2018 amendment with effect from 3 May 2018.

What Section 2 covers

The jurisdiction and procedure of Commercial Courts depend first on the nature of the dispute and its value. Section 2 therefore supplies the basic definitions used throughout the Act. A case ordinarily needs to involve a "commercial dispute" within Section 2(1)(c), and the value of the subject matter must satisfy the "Specified Value" requirement under Section 2(1)(i), subject to the other jurisdictional provisions of the Act.

The definition of "commercial dispute" is deliberately broad and includes disputes arising from ordinary mercantile transactions, banking and finance, import and export, infrastructure contracts, intellectual property, partnership and shareholder arrangements, sale of goods, provision of services, insurance and other listed commercial relationships.

Key definitions under Section 2

Commercial Appellate Court

A Commercial Appellate Court is a court designated under Section 3A of the Act.

Commercial Appellate Division

It means the Commercial Appellate Division constituted in a High Court under Section 5(1).

Commercial Court

It means a Commercial Court constituted under Section 3(1).

Commercial Division

It means the Commercial Division constituted in a High Court under Section 4(1).

Document

The definition covers matter recorded by letters, figures, marks, electronic means, or a combination of those means.

Specified Value

It is the value of the subject matter determined under Section 12, with the statutory floor presently fixed at Rs. 3 lakh unless a higher value is notified.

What is a "commercial dispute" under Section 2(1)(c)?

Section 2(1)(c) uses an inclusive, subject-based definition. A dispute is commercial when it arises from one or more of the categories specified in the clause. Important categories include ordinary transactions of merchants, bankers, financiers and traders; export or import; admiralty and maritime matters; construction and infrastructure contracts; commercial use of immovable property; franchising; distribution and licensing; joint ventures; shareholder and investment agreements; technology arrangements; intellectual property rights; sale of goods or services; insurance; and agency contracts connected with those matters.

Immovable property: A dispute does not stop being commercial merely because it includes recovery of immovable property, realisation of money from immovable property given as security, or another relief concerning immovable property. However, where Section 2(1)(c)(vii) is invoked, the agreement must concern immovable property used exclusively in trade or commerce.

Government or public bodies: A dispute can remain a commercial dispute even if one contracting party is the State, one of its agencies or instrumentalities, or a private body carrying out public functions.

Section 2 - Definitions

(1) In this Act, unless the context otherwise requires,-

(a) "Commercial Appellate Courts" means the Commercial Appellate Courts designated under section 3A;

(aa) "Commercial Appellate Division" means the Commercial Appellate Division in a High Court constituted under sub-section (1) of section 5;

(b) "Commercial Court" means the Commercial Court constituted under sub-section (1) of section 3;

(c) "commercial dispute" means a dispute arising out of-

ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents;
export or import of merchandise or services;
issues relating to admiralty and maritime law;
transactions relating to aircraft, aircraft engines, aircraft equipment and helicopters, including sales, leasing and financing of the same;
carriage of goods;
construction and infrastructure contracts, including tenders;
agreements relating to immovable property used exclusively in trade or commerce;
franchising agreements;
distribution and licensing agreements;
management and consultancy agreements;
joint venture agreements;
shareholders agreements;
subscription and investment agreements pertaining to the services industry including outsourcing services and financial services;
mercantile agency and mercantile usage;
partnership agreements;
technology development agreements;
intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits;
agreements for sale of goods or provision of services;
exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum;
insurance and re-insurance;
contracts of agency relating to any of the above; and
such other commercial disputes as may be notified by the Central Government.

Explanation.- A commercial dispute shall not cease to be a commercial dispute merely because-

(a) it also involves action for recovery of immovable property or for realisation of monies out of immovable property given as security or involves any other relief pertaining to immovable property;

(b) one of the contracting parties is the State or any of its agencies or instrumentalities, or a private body carrying out public functions;

(d) "Commercial Division" means the Commercial Division in a High Court constituted under sub-section (1) of section 4;

(e) "District Judge" shall have the same meaning as assigned to it in clause (a) of article 236 of the Constitution of India;

(f) "document" means any matter expressed or described upon any substance by means of letters, figures or marks, or electronic means, or by more than one of those means, intended to be used, or which may be used, for the purpose of recording that matter;

(g) "notification" means a notification published in the Official Gazette and the expression "notify" with its cognate meanings and grammatical variations shall be construed accordingly;

(h) "Schedule" means the Schedule appended to the Act; and

(i) "Specified Value", in relation to a commercial dispute, shall mean the value of the subject-matter in respect of a suit as determined in accordance with section 12 which shall not be less than three lakh rupees or such higher value, as may be notified by the Central Government.

(2) The words and expressions used and not defined in this Act but defined in the Code of Civil Procedure, 1908 (5 of 1908) and the Indian Evidence Act, 1872 (1 of 1872), shall have the same meanings respectively assigned to them in that Code and the Act.

Amendment history: clause (a) relating to Commercial Appellate Courts was inserted and the former clause (a) was renumbered as clause (aa) with effect from 3 May 2018. The minimum Specified Value was reduced from Rs. 1 crore to Rs. 3 lakh with effect from the same date.

Evidence-law update after 1 July 2024

Important editorial note: The statutory text of Section 2(2) reproduced above continues to refer to the Indian Evidence Act, 1872. The Bharatiya Sakshya Adhiniyam, 2023 came into force on 1 July 2024 and Section 170 repealed the Indian Evidence Act, 1872, while saving proceedings that were already pending immediately before commencement. Accordingly, the Section 2(2) wording should be read together with the current evidence-law framework and its repeal-and-savings provision.

For current evidence law, see the Bharatiya Sakshya Adhiniyam, 2023. The older wording of Section 2(2) has been retained here because it forms part of the published text of the Commercial Courts Act rather than being silently rewritten.

Provisions commonly read with Section 2

Provision	Subject	Why it matters
Section 3	Constitution of Commercial Courts	Identifies the Commercial Court established under the Act.
Section 3A	Commercial Appellate Courts	Linked directly to Section 2(1)(a).
Section 6	Jurisdiction of Commercial Court	Applies the commercial-dispute and specified-value concepts to jurisdiction.
Section 12	Determination of Specified Value	Provides the method for valuing the subject matter.
Section 12A	Pre-Institution Mediation	Generally requires pre-institution mediation where no urgent interim relief is contemplated.
Section 16	CPC amendments for commercial disputes	Applies the special procedural amendments contained in the Schedule.

Practical reading of Section 2

Before treating a civil dispute as a commercial suit, identify the transaction from which the dispute arises, check whether it fits one of the categories in Section 2(1)(c), determine the Specified Value under Section 12, and then examine the territorial and pecuniary jurisdiction provisions. Where urgent interim relief is not contemplated, Section 12A on pre-institution mediation should also be checked before filing.