The Delhi High Court has clarified that disputes arising directly from an employer-employee relationship, including claims relating to unpaid salary and increments, cannot be treated as “commercial disputes” under the Commercial Courts Act, 2015.
However, the Court also made an important procedural clarification: where a Commercial Court finds that a suit does not fall within its jurisdiction because the dispute is not commercial in nature, it should return the plaint for presentation before the competent court rather than dismissing the suit outright.
A Division Bench comprising Justice Prathiba M. Singh and Justice Vikas Mahajan dealt with the issue in Ram Lakhan Shukla v. Hintek Electronics Private Limited & Anr., RFA(COMM) 47/2025.
Dispute Over Salary and Employment Increments
The dispute arose from the employment of Ram Lakhan Shukla with Hintek Electronics Pvt. Ltd. Shukla was appointed as a Senior Manager on 1 August 2016 at a monthly salary of ₹50,000.
According to the employee, subsequent communications from the employer provided for salary increments. He claimed that amounts towards salary and increments had remained unpaid.
The outstanding claim was stated to be approximately ₹14.33 lakh.
Shukla instituted a recovery suit before the Commercial Court at Saket, treating the dispute as one falling within the jurisdiction of the Commercial Courts Act.
The Commercial Court issued summons to the defendants. Despite repeated opportunities, the defendants did not file their written statement, and the proceedings consequently moved forward ex parte on 13 March 2024.
However, the Commercial Court subsequently examined the nature of the dispute and concluded that an employer-employee dispute does not constitute a “commercial dispute” under the Commercial Courts Act, 2015.
On 12 September 2024, the Commercial Court dismissed the suit.
Employee Challenged Dismissal of Suit
Aggrieved by the dismissal, Shukla approached the Delhi High Court.
His principal contention was not that an employment dispute should be treated as a commercial dispute. Rather, he argued that once the Commercial Court concluded that the dispute was outside the scope of the Commercial Courts Act, it should have returned the plaint so that he could present it before the court having proper jurisdiction.
The distinction was significant.
A dismissal would effectively require the litigant to initiate proceedings afresh, potentially resulting in additional litigation expenses and court fees. A return of the plaint, on the other hand, would enable the plaintiff to present the same plaint before the appropriate forum.
Delhi High Court: Employment Disputes Are Outside Commercial Courts Act
The Division Bench agreed with the Commercial Court on the substantive question.
The High Court examined the nature of the claims and observed that the dispute arose from the terms of employment, particularly the employee’s claims concerning salary and increments.
The Court held that merely because one of the parties is a company or the claim involves a monetary recovery, the dispute does not automatically become a “commercial dispute”.
The definition contained in Section 2(c) of the Commercial Courts Act, 2015 has to be applied according to its legislative framework. The Court emphasised that the statutory definition cannot be expanded judicially to bring ordinary employer-employee disputes within the jurisdiction of Commercial Courts.
The Bench accordingly affirmed the finding that the dispute between Shukla and Hintek Electronics was not a commercial dispute.
Commercial Court Should Return, Not Dismiss, the Plaint
While upholding the finding on jurisdiction, the High Court disagreed with the manner in which the Commercial Court dealt with the case.
The Delhi High Court held that once it was determined that the suit did not constitute a commercial dispute, the appropriate procedural course was to return the plaint for presentation before the competent court.
The Court considered outright dismissal inappropriate because it could place an unnecessary financial and procedural burden on the litigant.
A plaintiff who has approached the wrong forum should not ordinarily be compelled to bear the additional consequences of instituting an entirely new proceeding when the plaint can instead be returned for presentation before the proper court.
Important Takeaway for Employees and Employers
The ruling is significant for employment-related litigation in Delhi and may serve as a useful reference in determining the proper forum for disputes arising from contracts of employment.
Claims involving salary arrears, contractual increments and other obligations arising directly from an employer-employee relationship cannot be brought within the definition of a commercial dispute merely because the employer is a corporate entity or because the monetary claim is substantial.
At the same time, the judgment highlights an important procedural safeguard. Where a Commercial Court concludes that the dispute does not fall within its jurisdiction, return of the plaint, rather than dismissal of the suit, may be the appropriate course.
The High Court therefore modified the impugned order and directed that the plaint be placed before the Commercial Court on 24 August 2026 for its return, enabling the appellant to pursue the claim before the appropriate forum.
Case Details
Case Title: Ram Lakhan Shukla v. Hintek Electronics Private Limited & Anr.
Case Number: RFA(COMM) 47/2025
Court: Delhi High Court
Bench: Justice Prathiba M. Singh and Justice Vikas Mahajan
Date of Order: 7 August 2026
Claim: Approximately ₹14.33 lakh towards salary and increments
Counsel for Appellant: Advocate Ayush Singh
Conclusion
The Delhi High Court’s decision reinforces the principle that the jurisdiction of Commercial Courts is governed by the statutory definition of “commercial dispute” and cannot be expanded merely because a dispute involves a business entity or a monetary claim.
The judgment also provides an important procedural clarification: when a Commercial Court finds that a plaint does not disclose a commercial dispute, the appropriate remedy is generally to return the plaint for presentation before the competent court rather than dismissing the proceedings outright.
For employees pursuing contractual salary or increment claims, and for lawyers determining the appropriate forum for employment disputes, the ruling provides useful guidance on both jurisdiction and procedural fairness.