Commercial disputes in India are rising — and so is the financial risk attached to unpaid invoices, contract breaches, and business defaults.
As per judiciary data published on the national eCourts platform, lakhs of civil and commercial cases remain pending across Indian courts. While the Commercial Courts Act, 2015 was enacted to fast-track business disputes, recovery still depends heavily on strategy — especially at the execution stage.
Most businesses focus on winning the case.
Smart businesses focus on recovering the money.
This 2026 guide explains:
- What is a commercial suit
- Minimum value requirement
- Step-by-step filing process
- Summary suit option under CPC
- Decree execution procedure
- Common mistakes to avoid
- How to improve recovery success
What Is a Commercial Suit in India?
A commercial suit is a civil lawsuit arising from business or trade transactions.
Commercial disputes are governed by the Commercial Courts Act, 2015 and the Code of Civil Procedure, 1908, as amended for commercial matters.
Examples include:
- Recovery of unpaid invoices
- Breach of supply or service agreements
- Shareholder and partnership disputes
- Infrastructure and construction payment claims
- Franchise and distribution conflicts
- Banking and financial recovery matters
- Arbitration award enforcement
Commercial Courts deal strictly with civil business disputes — not criminal cases.
What Is the Minimum Value for a Commercial Suit?
The minimum specified value is ₹3 lakh (subject to state notifications).
Claims below ₹3 lakh are typically filed before regular civil courts.
Who Can File a Commercial Suit?
The following may initiate a commercial suit:
- Private Limited Companies
- Public Companies
- LLPs
- Partnership Firms
- Proprietorship Businesses
- MSMEs
- Individuals engaged in trade transactions
If your claim arises from commercial dealings, you are eligible.
Where Is a Commercial Suit Filed?
A commercial suit may be filed before:
- District Commercial Court
- Commercial Division of the High Court
Jurisdiction depends on:
- Where cause of action arose
- Defendant’s place of business
- Contractual jurisdiction clause
- Pecuniary limits
Filing in the wrong jurisdiction may result in rejection under Order 7 Rule 11 CPC.
What Is Cause of Action in Commercial Litigation?
Cause of action means the bundle of facts that gives you the right to sue.
Example:
Goods supplied → Invoice raised → Payment due → Default in payment.
Non-payment despite contractual obligation creates the legal right to file suit.
Step-by-Step Process to File a Commercial Suit in India (2026)
Step 1: Check Limitation Period
For breach of contract, the limitation period is generally 3 years from the date of breach.
Missing limitation permanently bars your claim.
Step 2: Mandatory Pre-Institution Mediation
Except in urgent cases requiring interim relief, mediation must be attempted before filing.
If mediation fails, a Non-Settlement Report is issued, allowing you to proceed with the suit.
This is compulsory for most commercial recovery cases.
Step 3: Drafting and Filing the Plaint
Commercial suits require strict procedural compliance.
The plaint must include:
- Complete disclosure of documents
- Clear commercial value calculation
- Jurisdiction details
- Relief sought
- Mandatory Statement of Truth
The Statement of Truth verifies pleadings under oath. False verification may attract penalties.
Technical defects often cause delays in commercial court proceedings.
Step 4: Summary Suit Under Order 37 CPC (Fast Recovery Option)
If the dispute is based on:
- Written contracts
- Invoices
- Promissory notes
- Admitted liabilities
You may file a summary suit under Order 37 CPC.
Advantages:
- Defendant cannot defend without court permission
- Faster disposal
- Strong recovery mechanism
This is highly effective for unpaid invoice recovery and contractual defaults.
Choosing summary procedure early can significantly reduce litigation time.
Step 5: Decree and Execution Proceedings
Winning a commercial suit is only half the journey.
Execution under Order 21 CPC includes:
- Attachment of assets
- Bank garnishee proceedings
- Property seizure
- Arrest (in limited circumstances)
Many decree holders struggle at this stage due to:
- Asset concealment
- Delay tactics
- Lack of enforcement planning
A decree without execution strategy is only paper success.
Difference Between Civil Suit and Commercial Suit
| Civil Suit | Commercial Suit |
| General disputes | Business disputes |
| Flexible procedure | Strict timelines |
| Slower hearings | Case management system |
| No Statement of Truth | Mandatory Statement of Truth |
| Ordinary courts | Specialized Commercial Courts |
Commercial suits follow a more disciplined, time-bound framework.
Common Mistakes in Commercial Suits
Businesses often weaken their recovery chances by:
- Filing in incorrect jurisdiction
- Missing limitation deadlines
- Ignoring summary suit option
- Incomplete document disclosure
- Poor drafting of relief clause
- Delaying execution planning
Recovery strategy should begin before filing — not after decree.
Latest Developments in Commercial Litigation (2025–2026)
Recent procedural emphasis includes:
- Strict enforcement of timelines
- Digital filing compliance
- Limited adjournments
- Enhanced document disclosure
- Structured case management hearings
- Increased mediation focus
Commercial Courts now emphasize efficiency and accountability.
Frequently Asked Questions
What cases are filed in Commercial Court?
Business disputes including breach of contract, unpaid invoices, shareholder disputes, franchising conflicts, export/import matters, and arbitration award enforcement.
What is the limitation period for commercial suits?
For most breach of contract claims, 3 years from the date of breach.
Is Commercial Court civil or criminal?
Commercial Courts handle only civil business disputes.
How to recover unpaid invoices legally in India?
File a commercial suit or, where applicable, a summary suit under Order 37 CPC for faster disposal.
Can a civil case be transferred to Commercial Court?
Yes, if it qualifies as a commercial dispute and meets the ₹3 lakh threshold.
Why Filing Alone Is Not Enough
Across India, a significant number of decrees remain unexecuted for years.
Common enforcement challenges include:
- Asset transfers during litigation
- Layered corporate structures
- Banking concealment
- Delayed execution applications
Winning the judgment does not guarantee recovery.
Strategic asset tracing and execution planning are critical.
How LegalFund Funds Commercial Recovery (Zero-Risk Model)
LegalFund provides non-recourse litigation funding for commercial disputes and recovery matters.
This means:
- We fund the entire legal process — including court fees, advocate fees, documentation, expert costs, and execution expenses
- Businesses do not deploy their own capital
- We take the financial risk of the case
- If the case is unsuccessful, the client does not repay our funding
- We earn only a pre-agreed share from the recovered amount upon successful recovery
There is no upfront legal expenditure from the client.
Instead of blocking working capital in prolonged litigation, businesses can pursue commercial recovery without financial strain.
Winning the case is important.
Recovering the money without risking additional capital is strategic.
Final Takeaway
A commercial suit in India is a powerful legal remedy for business disputes exceeding ₹3 lakh.
However, success depends on:
- Filing within limitation
- Correct jurisdiction selection
- Proper procedural strategy
- Strict compliance with commercial court rules
- Early execution planning
Winning the case is important.
Recovering the money is critical.
If your commercial claim is substantial and enforcement risk exists, structured recovery planning should begin at the litigation stage itself.