In short. Three things make up the value of a commercial suit. The unpaid principal. Interest up to the day you file. Any damages you claim. Add them up and that's your value, while interest running after filing is left out. That one figure decides a lot: whether a Commercial Court will hear you at all (Rs 3 lakh and above), whether in Delhi you're in a district court or the High Court (the line is Rs 2 crore), and what ad valorem court fee you'll pay. Spend a day or two on the sums before you file. Correcting a wrong value later is far more expensive.
Is this your situation?
- A buyer owes you on a whole stack of invoices, and you'd like to claim the principal, interest and some damages in one suit.
- You've added interest to the claim and now can't tell if you've crossed Rs 3 lakh, or the Rs 2 crore line in Delhi.
- Your purchase orders have a late-payment clause, or the contract has a liquidated damages clause, and you want to know how either one gets valued.
- You lost profit, maybe some goodwill too. You've no idea what number to put in the plaint.
- You're registered as a micro or small supplier and want MSMED Act interest included.
- The defendant says your suit is undervalued. Or the registry has sent back a court fee objection.
- Along with the money, you want an injunction or a declaration, and you aren't sure how each one is valued.
In short: what goes into the value of a commercial suit
In a Commercial Court, a money suit is valued at the amount you ask for plus interest worked out to the date you file. That's Section 12(1)(a) of the Commercial Courts Act, 2015. If you're also claiming damages, the figure you put on them goes in as well. What stays out is the interest you ask the court to award after filing and after the decree.
That single number does three jobs. It tells you whether the dispute crosses the specified value of Rs 3 lakh and belongs in a Commercial Court at all. It tells you which court, since in Delhi a suit above Rs 2 crore goes to the High Court and anything below goes to the district Commercial Court. And it's the base for ad valorem court fee, a fee that goes up as the claim goes up.
Most valuation trouble we see has nothing to do with law. It's arithmetic done in a rush. Interest is run to the date of the legal notice, not the filing date. GST gets left out of the principal. A damages figure is pulled out of thin air, or two reliefs are claimed and only one is valued. Any of these can hold up a recovery suit for unpaid business dues at the filing counter. Or hand the defendant an easy objection.
The provisions that decide how a suit is valued
Section 12, Commercial Courts Act, 2015
Section 12(1) is where you start. For a money claim, the specified value is the amount sought, including interest computed up to the date of filing. For movable or immovable property, it's the market value on the filing date. For other intangible rights, such as a trademark or a licence, it's the market value as the plaintiff estimates it. And Section 12(3) says no appeal or civil revision lies against an order of a Commercial Court or Commercial Division holding that it has jurisdiction.
Order VII Rules 2 and 2A, Code of Civil Procedure, 1908
Under Rule 2, a money plaint has to state the exact amount claimed. The exceptions are mesne profits and amounts to be found due on taking accounts. There, an approximate figure is enough. Rule 2A was added for commercial suits. It makes you say whether interest is claimed under a contract or a statute, at what rate, from which date and up to which date, how much interest that comes to, and the daily rate after that.
Court Fees Act, 1870 (as applied in each state) and Suits Valuation Act, 1887
Section 7 of the Court Fees Act sets the basis for each kind of suit. A money suit, including one for damages or compensation, is valued on the amount claimed. An injunction, a declaration with consequential relief or a suit for accounts is valued at whatever figure the plaintiff gives the relief. Delhi applies the 1870 Act with its own amendments. Uttar Pradesh and Haryana have their own schedules. Section 8 of the Suits Valuation Act adds that where court fee is ad valorem, the value for jurisdiction and the value for court fee are the same.
Section 21 CPC and Section 11, Suits Valuation Act
A plea that the court lacks pecuniary jurisdiction has to be taken at the earliest stage. An appeal court will look at it later only if there's been a failure of justice. Section 11 of the Suits Valuation Act treats over-valuation and under-valuation the same way. The decree isn't disturbed in appeal on that ground unless the case was prejudiced on the merits.
Specified value, jurisdiction value, court fee value: one number or three?
For a plain money claim, it's one number. The specified value under Section 12, the value that decides which court hears you, and the value on which you pay court fee all come from the same total. That's why one wrong entry in the interest column can land a suit in the wrong court and leave the court fee short. Both at once.
They can come apart when you're asking for more than money. Say you sue a former distributor who's still using your brand, and you want an injunction plus damages. The damages are the money part, valued at what you claim. The injunction is the non-money part, valued at whatever figure you give it in the plaint, and Section 12(1)(d) lets you estimate the market value of an intangible right yourself. The court looks at both for jurisdiction. Court fee is paid on each.
So before anyone writes a word of the plaint, list every relief you want in a column and put a value against each. A relief with no value next to it usually means one of two things. You haven't thought it through, or you don't need it.
Interest before filing: how it's counted in the value
Interest from the day each payment fell due up to the day you file is part of the claim. It's added to the principal for both value and court fee. Section 12(1)(a) says up to the date of filing. Not the invoice date. Not the date of the legal notice, and not the day you first walked into a lawyer's office. The day the plaint goes in.
You'll have to show the basis for it. That can be an agreed rate in a purchase order, an agreement or the accepted terms printed on your invoices. It can be the statutory rate under Section 16 of the MSMED Act, 2006 for a registered micro or small supplier, which is compound interest with monthly rests at three times the bank rate notified by the RBI. Or, where nothing was agreed, a reasonable commercial rate that you'll need to justify. Choosing the rate is covered in our guide on how much interest you can claim on unpaid dues. This page is about what that rate does to the value of your suit.
Work it out invoice by invoice. One interest figure on the total outstanding is nearly always wrong. Invoices fall due on different dates, and part payments cut the balance at different points. Order VII Rule 2A also wants the daily rate at which interest runs after your calculation date. Once you've got the invoice-wise sheet, that part's easy.
When Advocate B.K. Singh settles a valuation, he has the interest sheet run again on the actual morning of filing and the plaint figures changed to match. Even if the last draft is only a few weeks old. Section 12A mediation, notice periods and drafting time can easily add two to five months, and on a claim sitting near a threshold, that much interest can change the court.
Why interest during the suit and after decree stays out of the value
Your prayer will also ask for interest from filing until decree, called pendente lite interest (interest while the case is pending), and from decree until payment, called future interest. Section 34 of the CPC leaves both to the court. You name the rate you'd like. No amount for either period is added to the value. No court fee is paid on them.
The logic is simple. On the day you file, nobody can say how long the case will run, so nobody can put a rupee figure on that interest. Section 12 fixes the value as of the filing date for that very reason. However much interest builds up during the case, the value stays where it was.
People are often surprised by what follows. Take a Rs 1.8 crore claim filed in a district Commercial Court in Delhi. Four years of interest later, the decree may be well past Rs 2 crore. The suit still stays put. Jurisdiction was fixed when it was filed, and interest that comes later can't take it away.
Valuing damages when nobody has fixed the amount
Damages come in two forms. Courts treat them differently. The first is liquidated damages, a sum written into the contract itself, for instance 1 percent of the order value per week of delay. You can claim that sum, but Section 74 of the Indian Contract Act, 1872 lets the court give only reasonable compensation, capped at the figure in the clause. Think of the clause as an upper limit, not a promise. The second is unliquidated damages, losses the contract never priced: profit you'd have made on an order that got cancelled, the higher price you paid for replacement goods elsewhere, expenditure that went to waste. Section 73 of the Contract Act covers loss arising naturally from the breach, or loss both parties knew at the time was likely.
With unliquidated damages, the number is yours to state. No formula exists. You do need workings, though. Whatever you claim is added to the suit's value and court fee is charged on it. That has two consequences. A padded damages claim means extra court fee spent for nothing, and it can lift the suit into a higher court. And costs in commercial disputes generally go with the result under Section 35 of the CPC, so if a large damages head fails, you may end up paying the defendant's actual costs for that part.
Don't count on pre-suit interest on unliquidated damages. Nobody knew the amount before the suit was filed, so courts don't usually allow interest for that earlier period. Ask for it from the suit date or the decree date instead. And leave it out of the value.
Advocate B.K. Singh tells every client with a damages claim the same thing. Every rupee needs a paper behind it. A bill for the replacement purchase. Your own customer's cancellation email, a penalty letter you paid on, a stock register showing goods sitting unsold in the godown. If a damages figure can't be traced to a document, the defendant attacks it first. The court cuts it first, too.
Accounts, mesne profits and sums the court will work out later
Some claims can't be stated exactly on filing day. A suit for rendition of accounts against a distributor who collected money on your behalf. A partner's share in a dissolved firm. Mesne profits, meaning the profit someone in wrongful possession of property made or could have made. All of these depend on figures the court will find later. Order VII Rule 2 lets you give an approximate value in such cases, and court fee is paid on that approximate figure.
If the decree later comes out higher than your value, Section 11 of the Court Fees Act says it won't be executed until you pay the difference in court fee. An honest estimate costs you nothing extra in the end. A deliberately low one only puts the fee off. Courts also look hard at a nominal value on an accounts claim that obviously runs into crores, and they may ask for a proper valuation before the suit goes any further.
Money plus an injunction or a declaration: valuing mixed reliefs
Plenty of commercial suits ask for more than money. A franchisor wants unpaid royalty and an injunction stopping use of its mark after termination. A landlord of a commercial unit wants arrears of rent and possession back. A company wants a declaration that it validly terminated a supply contract, plus damages for the breach that led to it.
Each relief is valued on its own basis, and court fee goes on each. For an intangible right, Section 12(1)(d) lets you use your own estimate of market value, but it has to be a real estimate. Put a token figure on an injunction protecting a brand that sells crores a year and you're inviting an objection that the suit was undervalued to pick a court. For immovable property, Section 12(1)(c) takes the market value on the filing date. In Delhi that runs into crores even for a modest shop.
With trademark and copyright claims, valuation also decides whether you go to a district Commercial Court or the IP Division of the Delhi High Court. If yours is that kind of claim, read our page on trademark infringement and passing off suits before you settle on a figure.
Item by item: what counts towards the value of your suit
| What you're claiming | Counts in specified value? | Court fee on it? | What to watch |
|---|---|---|---|
| Unpaid principal on invoices or the contract | Yes | Yes | Take the full invoice value with GST if the buyer hasn't paid the GST either. |
| TDS the buyer deducted and deposited | No | No | Look at Form 26AS. You can't claim tax that's already been credited to you. |
| Interest from due date to filing (contract rate) | Yes | Yes | Work it out invoice by invoice, up to the filing date. |
| MSMED Act interest up to filing | Yes | Yes | Compound, monthly rests, three times the RBI bank rate; Udyam registration has to come before the supply. |
| Interest from filing to decree | No | No | Goes in the prayer; the court decides under Section 34 CPC. |
| Interest from decree to payment | No | No | Also discretionary; in commercial matters it can go above 6 percent. |
| Liquidated damages under a clause | Yes | Yes | The court gives reasonable compensation up to the stated sum (Section 74). |
| Unliquidated damages (lost profit, extra cost) | Yes, at whatever you claim | Yes | Back every figure with paper; don't ask for pre-suit interest on it. |
| Sum due on accounts, or mesne profits | Yes, at your approximate figure | Yes, plus the balance if the decree is higher | Section 11 of the Court Fees Act applies. |
| Injunction or declaration with the money claim | Yes, at the value you give it | Yes | Give intangible rights a realistic market value. |
| Notice charges and litigation costs | Usually claimed separately, as costs | Not if claimed as costs | Adding them to principal raises the fee and is often disallowed. |
Once the value is fixed, where does the suit go?
Below Rs 3 lakh, no Commercial Court will take the case, however commercial it is. It's an ordinary civil court matter. At Rs 3 lakh and above, the whole Commercial Courts Act regime kicks in. That means Section 12A pre-institution mediation (unless you're asking for urgent interim relief), a 120-day cap on the written statement, and the stricter procedure generally. The threshold itself is explained in our guide on the Rs 3 lakh specified value rule.
Delhi adds a second cut-off. It's Rs 2 crore. Claims up to that amount are filed before the District Judge (Commercial Court) of whichever district has territorial jurisdiction. Bigger claims go on the original side of the Delhi High Court, before its Commercial Division. There's been talk since 2025 of raising the district courts' ceiling, so confirm the limit on filing day. For how High Court filing actually runs, see our page on which court hears a dispute above Rs 2 crore in Delhi.
In Uttar Pradesh and Haryana, original suits have no second cut-off. Anything from Rs 3 lakh upwards is filed in the district's designated Commercial Court, be it in Ghaziabad, Gautam Buddh Nagar, Gurugram or Faridabad, and size makes no difference. Appeals lie to the Commercial Appellate Division of the Allahabad High Court or of the Punjab and Haryana High Court. Court fee there still depends on value. So the arithmetic is no less important.
And value answers only one of three questions. You also need to know whether the dispute counts as commercial, and which city's courts have territorial jurisdiction. All three are brought together on our page on which court will hear your commercial case.
Can you drop part of the claim to stay in a particular court?
Yes, it's allowed. Be careful, though. You may give up a slice of the claim, perhaps some interest, so the value sits at Rs 1.95 crore and the suit stays in a Delhi district Commercial Court. What you give up is gone for good. Order II Rule 2 of the CPC bars you from suing later for any part of the claim you deliberately left out, if it arises from the same cause of action.
Clients usually ask for this for practical reasons. Maybe the district court is ten minutes from the office. Maybe they expect more frequent dates there. Fair enough. Still, every rupee of interest you relinquish is a rupee you won't recover. We rarely think it's worth giving up more than a small sum. If you do it, say so in the plaint, which stops anyone arguing later that the value was rigged.
The reverse trick is worse. Some plaintiffs inflate a claim just to get into the High Court. Courts check whether a valuation is genuine, and a damages head that exists only to clear Rs 2 crore can be struck down at the outset. You then get the plaint back to present in the proper court, months down the line.
What if the suit is undervalued, or overvalued?
Say the registry or the judge thinks your value or court fee is too low. Order VII Rule 11(b) and (c) don't throw you out straight away. You get time to fix the valuation or pay the shortfall. Only if you don't is the plaint rejected. Most such objections end at this stage, with a few weeks lost and a red face, provided the corrected figure still falls within that court's limits.
It's worse when the corrected value is beyond the court's pecuniary jurisdiction. Then Order VII Rule 10 applies and the plaint is returned, to be presented in the right court. The Supreme Court decided in EXL Careers v. Frankfinn Aviation Services (2020) that a returned plaint begins again from scratch in the new court. All the hearings so far count for nothing. Limitation doesn't stop either, unless you can bring yourself under Section 14 of the Limitation Act, 1963, which excludes time spent pursuing the case in good faith in a court that lacked jurisdiction.
From the defendant's side, a valuation objection must come early, in the written statement or an application right at the start. Section 21 of the CPC and Section 11 of the Suits Valuation Act prevent a defendant from keeping the point in reserve for appeal, unless real prejudice can be shown. Section 12(3) of the Commercial Courts Act goes further. Once a Commercial Court holds that it has jurisdiction, there's no appeal or revision against that order at that stage. Our guide on when a commercial court can reject a plaint at the first stage covers rejection in general.
Valuing your commercial suit, one step at a time
This is the order we follow on valuation, before a single line of the plaint gets drafted.
Write down every relief
List each thing you want the court to order: money, damages, an injunction, a declaration, accounts, possession. The court can't grant a relief that isn't in the prayer. And every relief that is in the prayer has to carry a value.
Fix the principal, invoice by invoice
Take each unpaid invoice or instalment with its due date, part payments and credit notes, and match them to your ledger. Take out TDS the buyer has deposited against your PAN. Leave GST in if the buyer hasn't paid it.
Pick the interest basis and keep the proof
Find the contract clause, invoice term, MSMED Act right or trade practice that supports interest. Keep that paper handy. Order VII Rule 2A makes you state the basis.
Run interest to the filing date
Calculate up to the date you'll actually file, and give the daily rate after it. If filing slips, run it again.
Value damages and the other reliefs
Put a supported figure on each damages head and a realistic value on any injunction or declaration. Write a one-page note showing how you reached each figure. You'll be glad of it later.
Add it up and match it to a court
Total the money and non-money values. Check the Rs 3 lakh line, and in Delhi the Rs 2 crore line as well. Territory is a separate check.
Work out the court fee
Apply the current court fee schedule of the state you're filing in to each relief. In Delhi it's paid by e-stamp or e-court fee; check the current schedule.
The same figures go into the Section 12A mediation application and then, if mediation fails, into the plaint. If the value changes between the two, someone will ask why. So explain any change, such as interest added for the mediation period.
Time and money that turn on the value
| Stage | What the value affects | Usual time | Costs to plan for |
|---|---|---|---|
| Working out the claim | Interest sheet, damages note, a value for each relief | 1 to 7 days if records are clean | Your accounts team's time; a CA if the books are a mess |
| Legal notice | The amount demanded, which should match the plaint later | 15 to 30 days for a reply | Drafting and dispatch |
| Section 12A mediation | Amount in the application; the authority fixes the mediation fee | Up to 3 months, plus 2 more with consent | A modest fee to the legal services authority; check the current figure |
| Filing the suit | Which court, and the ad valorem court fee | Scrutiny usually 1 to 3 weeks | Court fee goes up with value; check the current state schedule |
| A valuation objection, if one comes | Time to correct, or return of the plaint | A few weeks if corrected; months if returned | Deficit court fee, and lost time |
| Trial and decree | Interest keeps running outside the value | Often 1 to 3 years if contested | Costs follow the result; inflated heads can hurt you |
| Execution | Decree amount with interest until it's paid | Months to years, depending on assets | Execution filing costs; extra court fee only where Section 11 applies |
Papers you'll need to get the value right
- Purchase orders, contracts, work orders or the agreement, with the payment and interest clauses marked
- Every unpaid invoice with its due date, plus delivery proof: challans, e-way bills, LR copies or signed acknowledgments
- The defendant's ledger account in your books, and any balance confirmation they signed
- Bank statements showing each part payment that came in, with dates
- Credit notes, debit notes, and any emails where they argued about rates or quantities
- Form 26AS or TDS certificates for tax they deducted
- Your Udyam certificate if you're relying on MSMED Act interest. The registration date matters.
- Paper behind each damages head: replacement purchase bills, orders your own customers cancelled, penalty letters, stock registers
- For brand or IP reliefs: sales figures, registration certificates and whatever supports the value you've put on the right
- The legal notice, their reply and the Section 12A mediation papers, so the figures can be squared up
What valuation looks like for different businesses
- Goods suppliers and traders. Mostly invoice principal plus interest. Watch the part payments. You may have adjusted them against the oldest invoices while the buyer adjusted them against the newest, and that changes the interest. Reconcile before filing.
- Service firms and IT vendors. The principal is usually milestone payments, and claims for wrongful termination are common. Keep the earned fees apart from the damages, so the court can see what's a debt and what's an estimate.
- Lenders and businesses that gave advances. Interest is usually agreed in a loan note or an email, and at 18 to 24 percent the value climbs quickly. The court may cut an excessive rate. You still value the suit on what you claim.
- Registered micro and small enterprises. MSMED Act interest compounds every month. On old dues it can overtake the principal, which pushes the value up sharply. Before fixing the figure, ask whether the MSME Facilitation Council under Section 18 is the better forum.
- Larger companies. Claims often bundle principal, damages and an injunction together. Board approvals and internal valuations should match the plaint, because the defendant will ask for the working behind any large damages head.
- Startups claiming against big clients. Interest on small invoices may not come to much, so damages for lost follow-on business look tempting. Claim only what you can prove. An inflated head can cost you more in costs than it ever brings in.
An invented example: a Naraina printing unit near the Rs 2 crore line
None of this is real. Picture a printing and packaging unit in Naraina Industrial Area that's been sending cartons to a West Delhi food company for 14 months. Unpaid invoices add up to Rs 1.62 crore, GST included. The buyer cut TDS of Rs 1.4 lakh and deposited it with the department, which brings the principal down to roughly Rs 1.61 crore. Interest at 18 percent a year after 60 days is agreed in the purchase orders.
Calculated bill by bill to the day the legal notice went out, interest is Rs 29 lakh. Total: about Rs 1.90 crore. That's district court territory, with room to spare. Then mediation under Section 12A runs about three months and fails. The plaint takes a further month. Interest worked out again to the real filing day comes to Rs 38 lakh, so the value has crept up to about Rs 1.99 crore. And the owner also wants Rs 15 lakh in damages for cartons printed with the buyer's brand that nobody else can use.
Put the damages in and the claim goes past Rs 2 crore. That's a Delhi High Court suit now. The owner has three honest choices. Go to the High Court with everything. Give up the damages and stay in the district court, accepting that Order II Rule 2 kills that head for good. Or check whether the branded cartons can be sold after all, which reduces the actual loss. The one thing that isn't open is filing in the district court on the notice-date interest figure. The filing date fixes the value. Full stop.
Valuation mistakes that cost you time and money
- Interest run to the wrong date. The plaint carries interest to the notice date or the mediation application. It has to run to the filing date.
- One interest figure for the whole balance. Invoices fall due on different days. A lump sum is easy to attack, and it's usually overstated.
- GST or TDS got wrong. Leave out unpaid GST and you lose money. Claim TDS already credited to you and the defendant will say your whole account can't be trusted.
- Damages without any working. A round figure with nothing behind it raises the court fee, looks greedy, and usually gets cut.
- Non-money reliefs with no value. An injunction or declaration sitting in the prayer with no figure against it means a registry objection now, or a court fee deficit later.
- Notice, mediation and plaint that don't match. A different figure in each document, with no explanation, gives the other side an easy line of cross-examination.
- Notice and legal costs added to the principal. Claim them as costs instead. Putting them into the debt pushes up the fee and is often disallowed.
What you can do this week
Get four things from your accounts team: the defendant's ledger, a list of unpaid invoices with due dates, the bank entries for any part payments, and the Form 26AS position. Find the clause in the contract or on the invoices that gives you interest, and mark it. MSMEs should pull out the Udyam certificate and check when it was issued. Then prepare an interest sheet, bill by bill, up to today, with the daily rate at the bottom.
Next, go through the damages honestly. Which are real, and which are wishful? Write down the document that supports each real one. Once you've got those two sheets, an afternoon is enough to see the value and the right court. Then comes the legal notice, Section 12A mediation and a money recovery suit before the proper court. If you're worried about cost, read our guides on court fee for a recovery suit in Delhi and what a commercial court case costs in Delhi.
Want a second pair of eyes on the interest sheet, the damages working and the court fee before you file? Send them to Advocate B.K. Singh's team through the contact page.
Frequently asked questions
Does GST count in the value of a recovery suit?
Yes, if the buyer hasn't paid it. The invoice value with GST is the price the buyer agreed to, so the unpaid GST is part of the principal. It counts for value and for court fee.
Do I pay court fee on interest?
On interest up to the filing date, yes, because it's part of the amount you claim. Not on interest for the period after filing or after decree. That's left to the court's discretion under Section 34 CPC.
Can the court award more damages than the value I put on the suit?
Generally, no. The court decides the claim as you pleaded and valued it, so it won't decree damages above what you claimed. Accounts claims are different. There you pay the extra court fee before executing a higher decree.
Can a counter-claim change which court my suit is in?
A counter-claim is treated like a plaint and pays its own court fee on its own value. A big counter-claim in a district court can raise pecuniary jurisdiction questions, which the court decides on the facts. If the defendant's counter-claim is larger than yours, get advice early.
What's the daily rate of interest in a plaint?
It's the interest that builds up each day after the date you calculated interest to. Order VII Rule 2A makes a commercial plaint state it, so interest after filing is easy to work out at the decree stage.
Can I change the value of my suit later?
You can apply to amend the valuation and pay the extra court fee, and courts often allow genuine corrections. But if the new value takes the suit beyond that court's limits, the plaint is returned for filing in the proper court. That costs time.
How is a suit to get back a security deposit valued?
It's a money claim. Value it at the deposit plus interest up to filing, if you've got a basis for interest. If you're also claiming damages, say for wrongful forfeiture, add that figure too.
Is an MSME claim valued any differently?
Same method: principal plus interest up to filing. The difference is that MSMED Act interest compounds monthly at three times the RBI bank rate, so the interest figure is usually much larger. And it applies only if you were registered before the supplies.
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.