Telangana High Court
M/S. Ajaykumar Sushilkumar vs M/S. Shri Vithal Sahakari Sakhar … on 22 July, 2026
HIGH COURT FOR THE STATE OF TELANGANA
AT HYDERABAD
THE HON'BLE JUSTICE MOUSHUMI BHATTACHARYA
AND
THE HON'BLE JUSTICE GADI PRAVEEN KUMAR
C.O.M.C.A. No.10 of 2026
Date: 22-07-2026
Between :
M/s.Ajaykumar Sushilkumar. ... Appellant
And
M/s.Shri Vithal Sahakari Sakhar Khakana Ltd.
And Five Others.
...Respondents
JUDGMENT:
(per Hon’ble Justice Gadi Praveen Kumar)
Heard Sri Basa Chanakya, learned counsel representing Sri
B.Vamshidhar Reddy, learned counsel appearing for the appellant and Sri
C.Raghu, learned Senior Counsel assisted by Sri V.Nitesh, learned counsel
appearing for the respondent Nos.1 to 4.
2. The present Appeal has been filed by the appellant assailing the
order dated 31.12.2025 passed by the learned Judge, Additional Special
Court in the Cadre of District Judge for Trial and Disposal of Commercial
Disputes at Hyderabad (for short ‘the Trial Court’) in I.A.No.30 of 2025 in
C.O.S.No.17 of 2024.
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3. The appellant herein is the plaintiff in the suit instituted for recovery
of Rs.4,75,58,313.81 Ps with interest and costs
4. It is the case of the appellant that it has been supplying gunny bags
and P.P. woven sacks to the respondent No.1 (a Co-operative Sugar
Factory in Maharashtra) since 1995 on the basis of purchase orders issued
by respondent No.1 from time to time. The respondent No.1 received all
the goods, issued statutory compliance and made partial payments till
2013-14 and sporadic payments thereafter and last payment of
Rs.6,54,900/- was made on 04.02.2021. When the respondents, despite
repeated written demands, failed to clear the balance dues, the appellant
got issued a legal notice on 09.05.2018, and even though said legal notice
was not replied, the appellant continued the supply to the respondent No.1
in good faith, thereafter issued another notice on 26.10.2021, and notice
under Section 164 of the Maharashtra Co-operative Societies Act, 1960
(‘the 1960 Act’) to all the respondents. As the respondents failed to clear
the dues within the statutory period of two months prescribed under
Section 164 of the 1960 Act, the appellant filed the suit.
5. On receipt of notice in the suit, the respondents filed I.A.No.30 of
2025 under Order VII Rule 10 r/w Section 151 of the Code of Civil
Procedure, 1908 (CPC) for return of plaint on the ground that the subject
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dispute falls within the exclusive jurisdiction of the Co-operative Court
under Section 91 r/w Section 163 of the 1960 Act and that Courts at
Pandharpur Taluka/Solapur, Maharashtra have jurisdiction under the
clauses mentioned in the purchase orders.
6. The learned Trial Court vide order date 31.12.2025 allowed
I.A.No.30 of 2025 in C.O.S.No.17 of 2024 returning the plaint with a
direction to the appellant for presenting same before the jurisdiction Co-
operative Court on or before 10.02.2026 holding that Section 11 of the
Commercial Courts Act, 2015 (for short ‘the 2015 Act’) imposes a bar on
jurisdiction in respect of which the jurisdiction of Civil Court is either
expressly or impliedly barred, and that the disputes in the present case
exclusively falls within the domain of Special Forum and Civil Court’s
jurisdiction is excluded. The learned Trial Court thereby held that the
Commercial Court lacks territorial and subject matter jurisdiction to try the
suit and allowed the petition returning the plaint.
7. Aggrieved by the same, the present Appeal is filed by the
appellant/plaintiff.
8. Sri Basa Chanakya, learned counsel appearing for the appellant
contended that the learned Trial Court ought to have appreciated the fact
that in an application filed under Order VII Rule 10 C.P.C., objections to
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jurisdiction have to be decided based on ‘demurrer principle’; that all the
pleaded facts in the plaint are assumed to be true at the preliminary stage;
that the appellant is not required to prove the facts through evidence; and
that the respondents’ pleadings are contesting factual litigations such as the
purchase order containing jurisdictional clause, when the appellant
specifically contended that overleaf page was not supplied to it at the time
of supply of the purchase order by the respondents and only the first page
of the purchase order was supplied. It is contended that the suit is filed by
a third party/vendor for recovery of money of the goods supplied on
purchase orders, that the appellant is not a member or officer of the
Society, and that the learned Trial Court has erred in holding that the
dispute between the parties falls within the ambit of Section 91 of the 1960
Act and as such, the plaint is liable to be returned under Section 163 of the
1960 Act.
9. It is further contended that the learned Trial Court grossly erred in
holding that the subject matter of the suit falls within the jurisdiction of
Maharashtra Court and that there is a bar under the jurisdiction of the
Commercial Courts to deal with the matter, is contrary to the settled
principles of law.
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10. Learned counsel for the appellant further contended that Section 21
of the 2015 Act overrides the 1960 Act and therefore, the suit is squarely a
commercial dispute under Section 2-C(i) and Section 2-C(xviii) of the
2015 Act and when the value exceeds Rs.3,00,000/-, the remedy lies before
the Commercial Court at Hyderabad.
11. It is further contended that notice under Section 164 of the 1960 Act
does not imply jurisdiction, but states that no suit can be filed against a
Co-operative Society until a 2 months’ notice in writing is delivered to the
Registrar, and that the ambit and purpose of Section 164 of the 1960 Act is
akin to Section 80 CPC wherein notice has to be issued to the Government
Department to enable the Government to determine whether the issue can
be settled without any unnecessary litigation. It is therefore contended that
the question whether the appellant is a member of the respondent No.1
Society or not is a disputed question of fact and the respondents ought to
have raised such a contention at the time of filing of application under
Order VII Rule 10 CPC and the learned Trial Court did not have any
opportunity to adjudicate upon the issue completely ,is contrary to the
settled principles of law, thereby contended to set aside the order passed by
the learned Trial Court and allow the Appeal.
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12. In support of this contentions, learned counsel appearing for the
appellant placed reliance on the decision of the High Court Delhi at New
Delhi in Sun Pharmaceutical Industries Ltd. Vs. Artura Pharmaceuticals
P. Ltd 1 and the order passed by this Court in M/s.Sant Damaji Sahakari
Sakhar Kharkana Ltd. Vs. M/s.Ajaykumar Sushilkumar2.
13. On the other hand, Sri C.Raghu, learned Senior Counsel appearing
for the respondent Nos.1-4 contended that as per the terms and conditions
of the purchase order, the Courts at Pandharpur Taluka, Solapur District
alone have exclusive jurisdiction and that the terms and conditions printed
on the back side of the purchase order, governed the supply in question and
therefore, the Civil Court at Hyderabad lacks territorial jurisdiction to
entertain the present suit.
14. It is further contended that as per the terms and conditions, there is a
specific clause to the effect that the appellant has become a nominal
member of the respondent-Karkhana by paying a sum of Rs.5/- only,
which clearly establishes that the appellant is a member of the Society, and
that the appellant submitted a nominal membership application along with
corresponding receipt, and therefore, the provisions pertaining to the
1
Judgment delivered on 24.11.2025 in CS (Comm) 1038/2024 in I.A.45746/2024 & I.A.16842/2025
2
Order dated 16.04.2025 passed in C.R.P.No.241 of 2025.
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membership and the bye-laws govern the rights, obligations and status of
members, including nominal members, are binding on the appellant.
15. Learned Senior Counsel further contended that Section 2(19) of the
1960 Act defines a ‘Member’, and the definition is inclusive in nature and
has to be read together with Section 24 of the 1960 Act, which covers
different categories such as ordinary members, associate members and
nominal members.
16. It is further contended that issuance of notice under Section 164 of
the 1960 Act is a clear admission on the part of the appellant that the
dispute touches the business of the society, squarely governs the provisions
of the said Act. It is contended that the concept of ‘business of the society’
comes within the ambit of Section 91 of the 1960 Act, thereby the present
dispute squarely falls within the scope of Section 91 as it pertains to
transactions arising out of the business dealings of the respondent-Society
and involves the appellant, who is a member/nominal member having
direct nexus with the affairs of the Society.
17. It is further contended that Section 163 of the 1960 Act expressly
bars the jurisdiction of Civil Courts in respect of matters which are
required to be decided by the Co-operative Court or competent authority
under the 1960 Act. He therefore contended that the learned Trial Court,
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after considering the available on record, rightly allowed the return of
plaint and the Appeal filed by the appellant is liable to be dismissed.
18. We have extensively heard learned counsel for the parties and have
gone through the impugned orders and the material placed on record.
19. The appellant instituted the suit for recovery of Rs.4,75,58,313.81 ps
with interest and costs, on the basis of supply of jute gunny bags and P.P.
woven sacks made to respondent No.1 under various purchase orders
issued from time to time. According to the appellant, the respondent No.1
received the goods without any objection, issued statutory C-Forms, made
part-payments over the years and lastly paid a sum of Rs.6,54,900/- on
04.02.2021. It is the contention of the appellant that despite repeated
requests, legal notices and statutory notice under Section 164 of the 1960
Act, the respondents failed to clear the outstanding amount, compelling the
appellant to institute the present suit before the Commercial Court at
Hyderabad.
20. The respondents sought return of the plaint principally on two
grounds, namely, that the dispute falls exclusively within the jurisdiction
of the Co-operative Court under Sections 91 and 163 of the 1960 Act and
that, in view of the jurisdiction clause contained in the purchase orders,
only the Courts at Pandharpur Taluka, Solapur District, Maharashtra have
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territorial jurisdiction. The learned Trial Court, considering the said
contentions held that the plaint has to be returned as it lacked both the
territorial and subject matter jurisdiction.
21. On perusal of the material placed on record, it is necessary to bear in
mind the scope of an enquiry under Order VII Rule 10 CPC. It is well
settled that while deciding an application for return of plaint, the Court is
required to confine itself to the averments contained in the plaint and the
documents relied upon by the plaintiff. The Court has to proceed on the
assumption that the plaint averments are correct and determine whether, on
those averments alone, it lacks jurisdiction to entertain the suit.
22. In the present case, the plaint discloses a simple commercial
transaction arising out of supply of goods by the appellant to respondent
No.1 under purchase orders issued from time to time. The relief claimed in
the suit is confined to recovery of the unpaid sale consideration together
with interest. There is no averment in the plaint alleging any dispute
relating to the constitution, management, election or internal affairs of the
respondent Society. The cause of action, as pleaded, arises solely out of
non-payment of the price of goods supplied.
23. The learned Trial Court, however, while deciding the application
under Order VII Rule 10 CPC, proceeded to consider the contention of the
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respondents that the purchase orders were fabricated in collusion with the
previous management of the Society and that the transaction involved
mismanagement of the affairs of the Society. Whether the purchase orders
are genuine, whether there was collusion with the previous management
and whether any fraud was committed, are all disputed questions of fact
require adjudication upon leading evidence. Such questions could not have
been examined at the stage of deciding an application under Order VII
Rule 10 CPC.
24. The learned Trial Court principally proceeded on the premise that
the dispute falls within Section 91 of the 1960 Act and consequently the
jurisdiction of the Civil Court stands excluded under Section 163 the 1960
Act thereof. In our considered opinion, such conclusion could not have
been reached at the stage of Order VII Rule 10 CPC. Section 91 does not
confer exclusive jurisdiction upon the Co-operative Court merely because
one of the parties to the dispute happens to be a Co-operative Society. The
jurisdiction of the Co-operative Court arises only when two jurisdictional
requirements co-exist, namely, that the dispute touches the constitution,
elections, management or business of the Society and that the parties to the
dispute belong to any of the classes specified under Section 91(1) of the
Act. Unless both these conditions are satisfied, the exclusion of the
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jurisdiction of the Civil Court under Section 163 the 1960 Act cannot
readily be inferred.
25. The material on record shows that the appellant has consistently
pleaded that it is an independent commercial entity carrying on business
from Hyderabad and that it supplied goods to respondent No.1 as an
outside vendor under various purchase orders. The respondents dispute the
said assertion by contending that the appellant became a nominal member
of the Society upon payment of Rs.5/- and is, therefore, governed by the
provisions of the 1960 Act, such contention itself is disputed by the
appellant and necessarily requires evidence. The said disputed plea cannot
be made the basis for returning the plaint under Order VII Rule 10 CPC.
26. We are of the considered opinion that the reliance by the learned
Trail Court placed reliance upon the decision of the Bombay High Court in
Eknath Namdev Lashkare and others v. Pancharatna Properties and
others 3 has no application to the facts of the present case. In the said case,
the dispute arose out of resolutions passed by the General Body of the
Society and the validity of a development agreement executed on behalf of
the Society, which directly related to the internal management and affairs
of the Co-operative Society. The present case, however, is one instituted
3
2025 SCC online Bom 4345
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by an outside supplier seeking recovery of the price of goods supplied
under commercial transactions.
27. On the other hand, this Court in M/s. Sant Damaji Sahakari Sakhar
Kharkana Ltd (supra), while dealing with a substantially similar issue
involving the very same appellant and another Co-operative Society
governed by the 1960 Act, held that where the plaintiff is not shown to be
a member of the Society and the dispute relates to recovery of money for
goods supplied by a third party, the bar contained under Sections 91 and
163 of the 1960 Act would not apply and the jurisdiction of the
Commercial Court cannot be excluded. The ratio laid down in the said
decision squarely governs the facts of the present case.
28. Section 21 of the 2015 Act provides that the provisions of the said
Act shall have effect notwithstanding anything inconsistent contained in
any other law for the time being in force. The present suit, being one
arising out of commercial transactions relating to supply of goods and the
specified value admittedly exceeding the pecuniary limits prescribed under
the Act, answers the description of a commercial dispute under Section
2(1)(c) of the 2015 Act. Therefore, unless the jurisdiction of the
Commercial Court is clearly barred by law, the Commercial Court would
be competent to entertain the suit.
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29. The contention of the respondents that issuance of notice under
Section 164 of the 1960 Act amounts to an admission by the appellant that
the dispute is triable only by the Co-operative Court is untenable. Section
164 merely prescribes a condition precedent requiring service of notice
before institution of a suit against a Co-operative Society. The object of the
provision is to afford the Society an opportunity to examine the claim and
settle the dispute, if possible, without driving the parties to litigation.
Compliance with such statutory requirement cannot be construed as
conferring jurisdiction upon the Co-operative Court nor can it amount to
waiver of the jurisdiction otherwise available to a competent Commercial
Court.
30. The plaint further discloses that the appellant carries on business at
Hyderabad, the goods were dispatched from Hyderabad and payments
were also received by the appellant at Hyderabad. These averments
constitute part of the cause of action within the meaning of Section 20
CPC.
31. In view of the foregoing discussion, we are of the considered
opinion that the learned Commercial Court travelled beyond the limited
scope of enquiry under Order VII Rule 10 CPC. Consequently, the
impugned order cannot be sustained and is liable to be set aside.
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32. Accordingly, C.O.M.C.A.No.10 of 2026 is allowed. The impugned
order dated 31.12.2025 passed by the learned Trial Court in I.A.No.30 of
2025 in C.O.S.No.17 of 2024 is set aside.
33. Miscellaneous applications pending, if any stand closed. No order
as to costs.
_______________________________
MOUSHUMI BHATTACHARYA, J
__________________________
GADI PRAVEEN KUMAR, J
Date: 22.07.2026
Vsv
