Commercial Courts Act, 2015: s. 2(1)(c)(vii) – Commercial dispute – Maintainability of, before the Commercial Court – On facts, dispute arising out of an agreement involving an immovable property – Suit filed before the Commercial Court – In the suit, the registration of a mortgage deed pertaining to the immovable property is sought – High Court held that the immovable property was not being used for trade or commerce as such the suit not maintainable before the Commercial Court – On appeal, held: It is clear from s. 2(1)(c)(vii) that disputes arising out of agreements relating to immovable property used exclusively in trade or commerce will qualify to be a commercial dispute to be tried by Commercial Courts – On facts, neither the agreement between the parties refers to the nature of the immovable property being exclusively used for trade or commerce as on the date of the agreement nor is there any pleading to that effect in the plaint – Relief sought in the suit is for execution of the Mortgage Deed which is in the nature of specific performance of the terms of Memorandum of Understanding without reference to nature of the use of the immovable property in trade or commerce as on the date of the suit – Thus, the transaction between the parties which is the subject matter of the suit could not be considered as a “commercial dispute”, so as to enable the Commercial Court to entertain the suit – Order passed by the High Court is justified – Commercial Court to return the plaint to the court having jurisdiction. Objects and reasons – Held: Is to provide speedy disposal of high value commercial disputes – Wider purport and meaning is to be assigned while entertaining the suit and considering the dispute to be a commercial dispute, else the very purpose of the enactment would be defeated.
Dismissing the appeal, the Court
Per A. S. Bopanna, J.
HELD: 1.1 From a perusal of Section 2(1)(c)(vii) of the Commercial Courts Act, 2015 it is noticed that the disputes arising out of agreements relating to immovable property used exclusively in trade or commerce will qualify to be a commercial dispute to be tried by Commercial Courts. [Para 6] [614-F-G]
1.2 Even though in the paragraph describing jurisdiction the plaintiff has stated with regard to the territorial jurisdiction since the office and land being at Vadodara, there is no reference indicating the reason for which the plaintiff pleads that the Court which is the Commercial Court exclusively constituted to try the commercial disputes has jurisdiction to try the instant suit. In that background, a perusal of the prayer made in the plaint would essentially indicate that the suit is one seeking for specific performance of the terms of MoU whereunder it is agreed that the Mortgage Deed be executed. Even if the immovable property under the Mortgage Deed was the subject matter it was necessary to plead and indicate that the same was being used in trade or commerce due to which the jurisdiction of Commercial Court is invoked. Without such basic pleadings in the plaint, any explanations sought to be put forth subsequently would only lead to a situation that if an objection is raised, in every suit a consideration would be required based on extraneous material even to ascertain as to whether the intended transaction between the parties was of such nature that it is to be construed as a commercial dispute. [Para 9] [616-C-F]
1.3 The statement of objects and reasons with which the Commercial Courts Act, 2015 is enacted so as to provide speedy disposal of high value commercial disputes so as to create the positive image to the investors world about the independent and responsive Indian Legal System. A purposive interpretation be made. A wider purport and meaning is to be assigned while entertaining the suit and considering the dispute to be a commercial dispute. In view thereof, the very purpose for which the CC Act of 2015 has been enacted would be defeated if every other suit merely because it is filed before the Commercial Court is entertained. This is for the reason that the suits which are not actually relating to commercial dispute but being filed merely because of the high value and with the intention of seeking early disposal would only clog the system and block the way for the genuine commercial disputes which may have to be entertained by the Commercial Courts as intended by the law makers. In commercial disputes as defined a special procedure is provided for a class of litigation and a strict procedure will have to be followed to entertain only that class of litigation in that jurisdiction. If the same is strictly interpreted it is not as if those excluded will be non–suited without any remedy. The excluded class of litigation will in any event be entertained in the ordinary Civil Courts wherein the remedy has always existed. [Para 13] [620-B-E]
1.4 It is also necessary to carefully examine and entertain only disputes which actually answers the definition ‘commercial disputes’ as provided under the Act. In the instant case, neither the agreement between the parties refers to the nature of the immovable property being exclusively used for trade or commerce as on the date of the agreement nor is there any pleading to that effect in the plaint. Further the very relief sought in the suit is for execution of the Mortgage Deed which is in the nature of specific performance of the terms of Memorandum of Understanding without reference to nature of the use of the immovable property in trade or commerce as on the date of the suit. Therefore, if all these aspects are kept in view, in the present facts the High Court was justified in its conclusion arrived through the order impugned. The Commercial Court shall therefore return the plaint indicating a date for its presentation before the Court having jurisdiction. [Para 14] [620F-H; 621-A]
Vasu Healthcare Private Limited v. Gujarat Akruti TCG Biotech Limited AIR 2017 Gujarat 153 – approved.
Jagmohan Behl v. State Bank of Indore (2017) SCC OnLine Del 10706 ; Federation of A.P. Chambers of Commerce & Industry and Ors. v. State of A.P. and Ors., (2000) 6 SCC 550 : [2000] 2 Suppl. SCR 151 –
referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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