Indian Oil Corporation Ltd. v. Sri Shiva Kumar Kheny & Anr., COMAP No. 645 of 2025, was decided by the High Court of Karnataka at Bengaluru on 3 February 2026 by a Division Bench comprising Hon’ble Mr. Justice Vibhu Bakhru, Chief Justice, and Hon’ble Mr. Justice C.M. Poonacha. The appeal arose from an order of the Commercial Court which had rejected IOCL’s plaint under Order VII Rule 11(a) of the Code of Civil Procedure, 1908, on the ground that the plaintiff failed to establish service of a lease renewal notice dated 25 March 2024. The dispute concerned IOCL’s claim for renewal of a lease in respect of the suit property, which the defendants opposed by denying receipt of the renewal notice. The High Court examined the scope of rejection of plaint under Order VII Rule 11 CPC and the distinction between absence of cause of action and disputed questions of fact requiring trial.

Issue of Law

The appeal primarily addressed whether a suit could be dismissed at the threshold under Order VII Rule 11 of the CPC (Rejection of Plaint) on the ground that the plaintiff failed to establish service of a crucial notice. The Court examined the distinction between a lack of cause of action on the face of the plaint versus a disputed factual defense that requires a trial.

Facts

The appellant, Indian Oil Corporation Ltd. (IOCL), filed a suit against the respondents (the Khenys) on the matter for renewal of a lease for a property. IOCL claimed it was entitled to a renewal of the lease and asserted that it had sent a letter dated March 25, 2024, seeking such a renewal.

Background (The Lower Court's Decision)

The Commercial Court (Trial Court) had allowed an application filed by the defendants under Order VII Rule 11(a) of the CPC. The Trial Court rejected IOCL's plaint on the grounds that IOCL had failed to establish that the letter dated March 25, 2024, was actually served on the defendants.

Judgment

The High Court of Karnataka allowed the appeal and set aside the order of the Commercial Court rejecting the plaint under Order VII Rule 11(a) of the Code of Civil Procedure, 1908.The Court held that while considering an application for rejection of plaint, only the averments contained in the plaint are relevant, and the Court is precluded from examining the defence raised by the defendants or adjudicating disputed questions of fact. The Trial Court erred in rejecting the plaint on the ground that Indian Oil Corporation Ltd. had failed to establish service of the renewal notice dated 25 March 2024.The High Court observed that the question of service of notice is a matter of evidence, which can be determined only after trial. Since the plaintiff had specifically pleaded in the plaint that the notice seeking renewal of lease was duly issued and served, the existence of a cause of action could not be negated at the threshold stage.The Court further clarified that under the Commercial Courts Act, 2015, if the defendants were of the view that the suit lacked merit, the appropriate remedy would be to seek summary judgment under Order XIII-A CPC, and not rejection of the plaint under Order VII Rule 11 CPC.Accordingly, the impugned order of the Commercial Court was held to be legally unsustainable. The suit was restored to the file of the Commercial Court for adjudication on merits, with all contentions of the parties left open.

Subsequent Development

The suit has been restored to the Commercial Court's file and the parties have been directed to the commercial court.

Access the Official Judgment here

Court

In The High Court Of Karnataka At Bengaluru

Case Title

Indian Oil Corporation Ltd. vs. Sri Shiva Kumar Kheny and Sri Siddharth Kheny

Case Number

COMAP No. 645 of 2025

Bench

The Hon'ble Mr. Vibhu Bakhru

Chief Justice And The Hon'ble Mr. Justice C.M. Poonacha

Date of Judgment

February 3, 2026