In short. Your business dispute goes to a Commercial Court when two things are true. It's a commercial dispute, and its specified value is Rs 3 lakh or more. For a money claim, that value is the principal plus interest worked out up to the day you file. Cross the line and you'll usually have to try mediation first, then file with every document. A contested case often runs one to three years. Stay under it and an ordinary civil court hears you. So get the total right before you pick a court.
Is this your situation?
- A business customer owes you money and you're not even sure which court the case would go to.
- The unpaid bill is just under Rs 3 lakh. Add two years of interest and it might cross the line.
- Your claim is hovering around Rs 2 crore, and nobody can tell you whether that means Saket or the Delhi High Court.
- You do business out of Ghaziabad, Noida, Gurugram or Faridabad and want to know if the High Court comes in at the start at all.
- You need an injunction to stop someone copying your brand, and you've no idea how to put a number on it.
- You've been sued. The figure in the plaint looks like it was picked just to land the case in a particular court.
- One buyer has left eleven invoices unpaid. Do you file one suit, or several?
The Rs 3 lakh rule, quickly
A suit lands in a Commercial Court only if it's a commercial dispute and its specified value is Rs 3 lakh or more. Section 2(1)(i) of the Commercial Courts Act, 2015 defines specified value as the value of the subject matter of the suit, worked out under Section 12. It can't be less than Rs 3 lakh, or any higher figure the Central Government notifies. It wasn't always this low. When the Act came in, the figure was Rs 1 crore. The 2018 amendment, in force from 3 May 2018, cut it to Rs 3 lakh, and that dragged most ordinary business recovery claims into the commercial courts.
Value isn't the whole story. A Rs 50 lakh fight over selling a residential flat isn't a commercial dispute at all, so the Rs 3 lakh rule never even comes up, however big the number. If you're not sure your deal is commercial, start with our guide on what is a commercial dispute. Here we'll assume it is, and talk about the number.
How Section 12 tells you to count the value
Section 12(1)(a): recovery of money
The value is the money you're trying to recover, including any interest calculated up to the date you file the suit. Interest that runs during the case and after the decree isn't added. It hasn't accrued yet.
Section 12(1)(b) and (c): movable and immovable property
If your relief is about movable property, or a right in it, the value is its market value on the filing date. The same goes for immovable property, like a shop or warehouse used in trade. Market value, on that date.
Section 12(1)(d): other intangible rights
For rights like a trademark, a copyright or a contractual right, the value is the market value of that right as the plaintiff estimates it. Most brand and IP suits are valued under this clause.
Section 12(1)(e): counter-claims
A counter-claim is valued separately, as on the day it's filed. Defendants, take care here. A big counter-claim changes the court fee, and it can change where the whole case is heard, so the number needs the same discipline as the plaintiff's.
Section 12(2): arbitration matters
For court applications tied to an arbitration of a commercial dispute, the value is the claim and counter-claim before the arbitral tribunal, added together. We deal with those applications on arbitrationlawyer.in.
Money claims: what you count, and what you leave out
In a recovery suit, begin with the principal, which is the unpaid invoice amounts with GST included, minus every credit note and part payment the buyer can point to in its own books. Then add interest. Only up to the filing date. If the invoices or the agreement fix a rate, you can use it. If you're a registered micro or small supplier, the MSMED Act, 2006 gives you a statutory rate. Otherwise you claim a reasonable commercial rate and hope the court accepts it. Our interest guide explains which rate you can claim without trouble.
Some things never go into the figure. Court fee and the legal costs you hope to recover aren't part of specified value. Future interest, from filing till payment, is asked for in the prayer, but you don't add it to the value. Damages for lost business can go in. Only, though, as an amount you can actually back up. Pump up the damages and you pay more court fee, and you hand the defence an easy line: the claim is speculative.
For smaller claims, interest is often the whole question. Say Rs 2.6 lakh has been sitting unpaid for two years and your invoices carry 18 percent contractual interest, so once you add that interest the claim can cross Rs 3 lakh. Now it's a commercial suit. Compulsory mediation applies, and so does the 120-day deadline for the defence. Claim the same principal without interest and it stays an ordinary civil suit. Do the sum honestly. On paper, before you choose the court.
Injunctions, brand cases and claims that aren't about money
If you're not asking for a sum of money, you have to put a value on what you are asking for. In a trademark or copyright suit, Section 12(1)(d) makes the value your own estimate of the market value of the right you're protecting, plus any damages or rendition of accounts you claim. In a suit to stop a distributorship being terminated, it might be the value of the contract, or the loss that would follow.
Be honest with that estimate. Courts can look behind a number that's obviously been chosen to reach a particular forum. An undervalued plaint can be rejected under Order VII Rule 11(b) if you don't correct the value and pay the shortfall in court fee when told to. Overvaluing isn't safe either. You pay more court fee than you need to, and in Delhi you might end up in a court you never meant to be in. In brand cases, Advocate B.K. Singh has the valuation reasoning written down before drafting starts. If it's challenged, the answer is already on file.
Which court hears you, going by value
| Where | Under Rs 3 lakh | Rs 3 lakh to Rs 2 crore | Over Rs 2 crore |
|---|---|---|---|
| Delhi | The ordinary civil court in the district, normal CPC rules | District Judge (Commercial Court) in the district court complex | Commercial Division of the Delhi High Court, original side |
| Ghaziabad and Gautam Buddh Nagar (UP) | Ordinary civil court | The court designated as Commercial Court for the district | Still the district Commercial Court. The Allahabad High Court has no original side |
| Gurugram and Faridabad (Haryana) | Ordinary civil court | The court designated as Commercial Court for the district | Still the district Commercial Court. The Punjab and Haryana High Court has no original side |
| Appeals in Delhi | Regular first appeal | Commercial Appellate Division, Delhi High Court | Commercial Appellate Division, Delhi High Court |
| Appeals in UP and Haryana | Regular first appeal | The High Court's Commercial Appellate Division | The High Court's Commercial Appellate Division |
Delhi: the Rs 2 crore line between the district courts and the High Court
Delhi is the odd one out. The Delhi High Court has ordinary original civil jurisdiction, which means it can try a suit as the first court. Since 2015, suits above Rs 2 crore go to the High Court and suits up to Rs 2 crore stay in the district courts. For commercial disputes, that works out like this. A commercial suit from Rs 3 lakh up to Rs 2 crore goes to the District Judge (Commercial Court) in the right district. Anything above Rs 2 crore goes to the Commercial Division of the Delhi High Court. There's been a proposal since late 2025 to raise the district court limit. Check the current limit before you file.
Inside the district court system, territory picks the district. A buyer in Okhla takes you to the South East district at Saket. Karol Bagh means the Central district at Tis Hazari. Dwarka means the South West district at Dwarka. Our Delhi district commercial courts page lists the complexes and how filing works in each. Above the line, the Delhi High Court Commercial Division page covers that court's own rules, including the Delhi High Court (Original Side) Rules, 2018.
Claims close to Rs 2 crore are tricky. Interest grows every month, and a claim of Rs 1.92 crore on the day you start drafting can easily be over the line by the time the plaint is ready and actually filed. Recalculate on the filing date. Then file in the court that figure points to.
Uttar Pradesh and Haryana: one commercial court for anything above Rs 3 lakh
The Allahabad High Court and the Punjab and Haryana High Court don't try civil suits as first courts. So no Rs 2 crore split. Not in Ghaziabad, Noida, Greater Noida, Gurugram or Faridabad. Rs 4 lakh or Rs 40 crore, it makes no difference. Every commercial suit of Rs 3 lakh or more goes to the court designated as Commercial Court for the district. In Ghaziabad, that's the district court at Ghaziabad. For Noida and Greater Noida, it's the Gautam Buddh Nagar court at Surajpur.
The High Court only comes in at the appeal stage. Appeals go to its Commercial Appellate Division under Section 13 of the Act, within 60 days of the judgment. Court fee follows the state's own schedule, which isn't the same as Delhi's, and the rates get revised now and then, so check the current schedule before filing. For local filing practice, see our Ghaziabad commercial court and Gurugram commercial court pages.
Under Rs 3 lakh: where smaller business claims go
A commercial dispute under Rs 3 lakh isn't a second-class claim. It just goes to the ordinary civil court in the district, usually before a Civil Judge, under the normal Code of Civil Procedure. Section 12A mediation isn't compulsory there. The special commercial rules on disclosure and summary judgment don't apply. And the defence deadline follows the general rule, not the hard 120-day commercial limit.
There's a trade-off. You skip mediation, so you get to file sooner. But ordinary suits have no case management timetable, and they can crawl. A summary suit under Order XXXVII is still available in the ordinary courts if your claim rests on a written contract, an invoice or a cheque. For small claims with good papers, it's still the quickest civil route. And frankly, for a lot of small suppliers, a firm legal notice and a short negotiation get the money back without any suit at all.
Lots of invoices, one buyer: one suit or several?
If the invoices are part of one running account with the buyer, you usually have one claim, for the balance on that account. File it as one suit, for the full amount. Order II Rule 2 of the Code of Civil Procedure says that if you leave out part of a claim arising from the same cause of action, you can't sue for that part later. Some people try to split a Rs 9 lakh ledger balance into three suits of Rs 2.9 lakh each to stay out of the commercial court. It's likely to fail on exactly that ground. And it irritates the judge.
Truly separate deals are different. Two distinct contracts on different terms can be two claims, or you can join them in one suit, in which case the values are simply added together and the total decides the court. Your choice. Either way, the honest course is the simple one. Sue for everything that's due and go to whichever court that figure points to.
Wrong court because of value: what happens then
If you file in a court without pecuniary jurisdiction, it won't decide the case on merits. Under Order VII Rule 10 of the Code of Civil Procedure, it returns the plaint so you can present it in the proper court, with the dates of filing and return endorsed on it. Then you refile. In real terms, that's two to six months gone. Sometimes more, if someone challenges the return order. And limitation isn't automatically protected for that lost time. Section 14 of the Limitation Act, 1963 can exclude time spent in good faith in the wrong court. You still have to prove the good faith.
It works the same way when a commercial claim of Rs 3 lakh or more is filed as an ordinary suit, or the other way round. The defendant usually objects at the first hearing or in the written statement. Sometimes the registry raises a valuation objection itself, at scrutiny. The lesson's simple. The hour you spend valuing the claim properly is the cheapest hour of the whole case.
Counter-claims and set-off: value from the defendant's side
If you're a defendant in a commercial suit and you have your own money claim against the plaintiff, you've got two tools. A set-off cuts down the plaintiff's claim by what the plaintiff owes you. A counter-claim is a full claim in its own right. It's valued separately under Section 12(1)(e) on the date you file it, and you pay court fee on that value. A buyer sued for unpaid invoices, for example, might counter-claim damages for defective goods or late delivery.
Timing matters more than people think. File the counter-claim with your written statement, within the same 30-day period, or at the very outside within the 120-day limit from service of summons. Defendants who try to bring one in after the defence is closed are often turned away. Then they're stuck filing a separate suit. If it's a commercial dispute, that means another round of mediation, too.
Time and money once you're over Rs 3 lakh
| Stage | Usual time | Costs, not counting the lawyer's fee |
|---|---|---|
| Working out value and interest | A few days | An accountant's certificate on the ledger, if you use one |
| Legal notice | 15 to 30 days for the reply | No court fee |
| Section 12A mediation | Up to 3 months, plus 2 months if both sides agree | Rs 1,000 to apply, then a one-time mediation fee on a slab by claim size, split equally. Confirm the current slab with the legal services authority |
| Filing the commercial suit | 1 to 4 weeks for scrutiny and listing | Ad valorem court fee on the specified value, under the Delhi, UP or Haryana schedule. Check the current schedule first |
| Pleadings up to the case management hearing | Roughly 4 to 7 months | Process fee, copies, maybe costs for delay |
| Evidence, arguments, judgment | Often another 6 to 18 months, depending on the court | Witness expenses, certified copies |
| Appeal under Section 13 | Must be filed within 60 days | Court fee on the appeal |
Working out your specified value and picking the court
These steps are written for the plaintiff. If you're the defendant, run through the same steps to see whether the plaintiff got it right.
Reconcile the account
Put the customer's ledger next to the invoices, credit notes and bank receipts and match them up. You want one principal figure you can prove line by line.
Settle the interest rate and period
If the contract or invoices give a rate, use it. If you're a registered micro or small supplier, use the MSMED Act rate. If neither, a reasonable commercial rate. Work out interest invoice by invoice, from each due date to the date you expect to file.
Add other money claims
Damages, demurrage or retention money go in only if you can show how you got to the number. Keep that working on file.
Check it against the thresholds
Under Rs 3 lakh, it's the ordinary civil court. Rs 3 lakh and up, commercial court. In Delhi, check which side of the High Court limit (Rs 2 crore right now) you fall on, and confirm that limit hasn't changed.
Choose the territory
Pick the district where the defendant does business or where the cause of action arose. If there's a valid exclusive jurisdiction clause, respect it. Our which commercial court page goes through the choices.
Redo the sum on filing day
Mediation took three months? Then interest has grown. Update the figure on the day you file. Pay court fee on that.
Attach your interest working sheet as an annexure. The court will ask for it, and so will the other side. A clean sheet settles a lot of valuation arguments at the first hearing.
Papers you'll need to fix the value
- The contract, purchase orders or work orders, showing the agreed price and any interest clause
- Every tax invoice you raised on the buyer, with the GST break-up
- Credit notes and debit notes, all of them
- Bank statements that show each payment you received
- The buyer's ledger account, ideally certified by your CA
- Your interest sheet, worked out invoice by invoice
- Your Udyam (MSME) certificate, if you're relying on the MSMED Act rate
- Anything in writing where they admitted the balance, like a confirmation of accounts or an email accepting the dues
- In brand and IP suits, the registration certificates, sales figures and what you've spent on advertising, to back up the valuation
What the rule means for different businesses
Small suppliers and MSMEs feel the Rs 3 lakh line most. A lot of their claims sit between Rs 2 lakh and Rs 10 lakh, and whether interest goes in decides the forum. Registered micro and small enterprises can also go to the MSME Facilitation Council under Section 18 of the MSMED Act. That runs alongside the court route, with its own rules, including interest at three times the RBI bank rate.
Service firms and startups often build their claims on milestones and retainers, not invoices. For them, valuation is mostly about proving which milestones the client accepted. Lenders, and businesses that gave trade advances, value the claim as principal plus agreed interest. They need to watch limitation like a hawk, because loans often get rolled over informally with nothing on paper. Big companies with claims in crores face the Rs 2 crore choice in Delhi. In UP and Haryana they file everything in the district commercial court and see the High Court only on appeal.
Defendants, check the valuation early. If the claim's been inflated with shaky interest or damages to reach the High Court, or kept artificially low, raise it in the written statement or by an application at the outset. When a plaint comes to Advocate B.K. Singh for the defence, the valuation and the court fee paid are among the first things he looks at. Mistakes there are cheap to raise early. Later, they're much harder.
An invented example: does a Rs 2.7 lakh claim cross the line?
This is a made-up example, not a real client. Arjun runs a printing press in Noida. A publisher in Daryaganj, Delhi owes him Rs 2.7 lakh on six invoices raised between January and April 2024. Every invoice says interest at 18 percent a year is payable after 30 days. Nothing has been paid since.
Suppose Arjun files in November 2026. Interest at 18 percent on Rs 2.7 lakh for about two and a half years comes to roughly Rs 1.2 lakh. On the filing date, his claim is close to Rs 3.9 lakh. That's over Rs 3 lakh. So it's a commercial suit. He isn't asking for urgent relief, so he has to apply for Section 12A mediation first. The figure is nowhere near Rs 2 crore, so if he sues in Delhi it goes to the District Judge (Commercial Court) for the Central district, where the publisher does business. If the orders were placed and accepted at his press in Noida, he may also be able to sue at the Gautam Buddh Nagar court in Surajpur.
What if he claimed only the principal and dropped the interest? Then he'd be in an ordinary civil court with no compulsory mediation. That might feel faster. But he'd be giving up Rs 1.2 lakh, and Order II Rule 2 would stop him coming back for it later. The right route depends on whether he wants the interest and how solid his interest clause is. The example shows the arithmetic. It says nothing about how any case would turn out.
Valuation mistakes that waste months
- Valuing on the notice date instead of the filing date. Interest keeps ticking through the notice and the mediation. The suit is valued on the day you file it.
- Forgetting GST, or a part payment. Your principal has to match the books exactly. If it doesn't, the defendant's first attack on your accounts is handed to them.
- Chopping one account into small suits. Order II Rule 2 bars a later suit for the part you left out. Courts see through this.
- Pulling a damages figure out of the air. A big unsupported number raises your court fee and invites the court to throw out that part of the claim summarily.
- Choosing the court and then fitting the number to it. Value first, forum second. Do it the other way and the valuation ends up looking strained.
- Paying the wrong court fee. You can make up a shortfall when the court tells you to. If you don't, the plaint can be rejected.
What to do this week
Get the ledger reconciled. Then work out interest to a realistic filing date, not today's date, because mediation alone can add three months or more. Check the three-year limitation from each invoice due date, or from the last acknowledgment, and put it in your diary. If the total is Rs 3 lakh or more and nothing's urgent, get the Section 12A mediation application ready; our pre-institution mediation page explains how that works. Debt on invoices or a written contract, with no real dispute? See whether a summary suit fits. For other claims, a regular money recovery suit is the way. For Delhi court fee, see the court fee guide.
Want someone to check your ledger, your interest working and your choice of court before you act? Or need to know the current Delhi district court limit? Share your papers with Advocate B.K. Singh's team through the contact page.
Frequently asked questions
What is the specified value for a commercial court?
It's the value of the subject matter of a commercial dispute, worked out under Section 12 of the Commercial Courts Act, 2015. It has to be Rs 3 lakh or more. A commercial dispute below that goes to the ordinary civil court.
Does interest count towards the Rs 3 lakh?
Yes. For a money claim, Section 12(1)(a) counts the money you're claiming, with interest worked out up to the date you file. Interest that runs after filing isn't added.
Which court hears a commercial suit above Rs 2 crore in Delhi?
Right now, the Commercial Division of the Delhi High Court, on its original side. Suits from Rs 3 lakh up to Rs 2 crore go to the District Judge (Commercial Court) in the district courts. There's a proposal to raise that limit, so check the current figure before you file.
Does a commercial suit above Rs 2 crore in Ghaziabad or Gurugram go to the High Court?
No. The Allahabad High Court and the Punjab and Haryana High Court don't try civil suits as first courts. Every commercial suit of Rs 3 lakh and above is filed in the court designated as Commercial Court for the district. The High Court hears the appeals.
Can I split my claim to stay out of the commercial court?
Not if it comes from one cause of action, like a single running account. Order II Rule 2 of the CPC stops you suing later for the part you leave out. Separate contracts can be separate claims. Artificial splitting usually fails.
How do you value a trademark suit?
Under Section 12(1)(d), the plaintiff estimates the market value of the right being protected, plus any damages claimed. Give reasons and supporting figures for it. Courts can question a valuation that looks picked just to reach a particular court.
What happens if I undervalue my commercial suit?
The court can tell you to correct the value and pay the shortfall in court fee. Ignore that and the plaint can be rejected under Order VII Rule 11. There's a second risk. A wrong value can put the suit in the wrong court altogether, and then the plaint is handed back to you for filing in the right one.
My claim is just over Rs 3 lakh. Is mediation still compulsory?
Yes, if it's a commercial dispute and you don't need urgent interim relief, because Section 12A covers every commercial suit of specified value, big or small. Below Rs 3 lakh? It doesn't apply.
Advocate B.K. Singh
Founder of B.K. Singh & Associates. MCA, LL.B., LL.M. More than twenty years in practice before the Supreme Court, the Delhi High Court, district and commercial courts in Delhi NCR, and tribunals.
This guide explains the law in general terms and is not legal advice. For advice on your own papers, contact the team.