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SUPREME COURT OF INDIA
R. BANUMATHI, A.S. Bopanna, JJ.
Ambalal Sarabhai Enterprises Ltd. – Appellant(s)
Versus
K.S. Infraspace LLP & Anr. – Respondent(s)
CIVIL APPEAL NO. 7843 OF 2019 (Arising out of SLP (Civil) No.9391 of 2019)
Decided On : 04-10-2019
Per A.S. Bopanna, J.
(a) Commercial Courts Act, 2015 - Section 2(1)(c)(vii) - “Commercial dispute” - Disputes arising out of agreements relating to immovable property used exclusively in trade or commerce - Included. (Para 6)
(b) Administration of justice - Jurisdiction in a civil suit - In a civil suit the pleadings in the plaint would be relevant to confer jurisdiction - Instantly, no reference in the entire plaint to the nature of the land or the type of use to which it was being put as on the date of the Agreement to Sell/Sale Deed/Memorandum of Understanding or as on the date of the suit - Plaintiff referring to territorial jurisdiction but not as to how the Commercial Court would have jurisdiction to try the suit - No mention about the land in question being used in trade or commerce as the basis for invoking jurisdiction of Commercial Court - Procedure for determining commercial nature of immovable property in question should be construed strictly - For invoking jurisdiction of Commercial Court the property must be “used exclusively” or “being used exclusively” in trade or commerce. (Para 9, 13, 14)
(c) Commercial Courts Act, 2015 - Section 2(1)(c)(vii) - Instantly, suit for execution of Mortgage Deed - 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 - Suit, held, not maintainable - High Court rightly directing plaint to be returned for its presentation before Court having jurisdiction. (Para 14)
Per R. Banumathi, J. (Concurring)
(d) Commercial Courts Act, 2015 - Section 2(i) - Specified value - Means value of the subject matter in respect of a suit as determined in accordance with section 12. (Para 10)
(e) Commercial Courts Act, 2015 - Sections 6 and 7 - Only ‘commercial disputes’ within the meaning of section 2(1)(c) and of specified value fall under jurisdiction of Commercial Courts. (Para 11)
(f) Commercial Courts Act, 2015 - Section 2(1)(c)(vii) - Word ‘used’ in ‘used exclusively in trade or commerce’ - Denotes “actually used” - It cannot be either “ready for use” or “likely to be used” or “to be used” - Instantly nothing on record to show that the property was being exclusively used in trade and commerce at the time of execution of agreement to sell in 2012 - Jurisdiction of Commercial Court not attracted. (Para 22, 24)
(g) Commercial Courts Act, 2015 - Section 16, Schedule and Rules 1, 4, 6, 7, 8, Order XVA, Code of Civil Procedure, 1908 - Object of the provisions being that cases involved in commercial disputes are disposed of expeditiously, fairly and at reasonable cost to the litigants - Therefore provisions of the Act are to be meaningfully interpreted for quick disposal of commercial litigations. (Para 27)
Facts of the case:
The appellant herein is the plaintiff in the Commercial Court filed before the Commercial Court at Vadodara. The respondents filed written statement inter alia contending that the suit is not maintainable as the dispute involved cannot be termed as a commercial dispute within the meaning of Section 2(1)(c) of the Commercial Courts Act, 2015. In view of such contention, the respondents herein also filed an application under Order VII Rule 10 of the Civil Procedure Code seeking an order to return the plaint to be presented in the Court in which the suit should have been instituted. The plaintiff did not file objection to the said application, but opposed the same. The application was rejected. The respondents had approached the High Court in R/Special Civil Application. The High Court has allowed the petition, set aside the order dated 17.10.2018 passed by the Commercial Court and on allowing the application filed under Order VII Rule 10 CPC directed that the plaint be returned to the appellant herein to be presented in the Court in which the suit should have been instituted.
Finding of the Court:
High court rightly held that suit was not maintainable before Commercial Court.
Result: Appeal dismissed.
Based on the provided judgement, there is no indication that it has been overruled. The judgement reflects a thorough analysis and reasoning by the court, including the concurrence of multiple judges, and emphasizes the importance of a strict and literal interpretation of the relevant statutory provisions, particularly regarding the use of immovable property in trade or commerce.
Unless there is a subsequent higher court decision explicitly stating otherwise, this judgement remains binding and has not been overruled.
JUDGMENT
A.S. Bopanna,J.
Leave granted.
2. The appellant herein is the plaintiff in Commercial Court Suit No. 41/2018 filed before the Commercial Court at Vadodara. The respondents herein are arrayed as the defendants to the suit. The respondents on being notified in the suit had appeared and filed the written statement inter alia contending that the suit is not maintainable as the dispute involved cannot be termed as a commercial dispute within the meaning of Section 2(1)(c) of the Commercial Courts Act, 2015 (“CC Act, 2015” for short). In view of such contention, the respondents herein also filed an application under Order VII Rule 10 of the Civil Procedure Code seeking an order to return the plaint to be presented in the Court in which the suit should have been instituted. The appellant herein though did not choose to file objection to the said application, had however opposed the same. The application was registered as Exhibit 15 and the learned Judge of the Commercial Court on consideration had through the order dated 17.10.2018 rejected the application. The respondents herein claiming to be aggrieved by the said order had approached the High Court of Gujarat in R/Special Civil Application No.17868/2018. The High Court through a detailed order dated 01.03.2019 has allowed the petition, set aside the order dated 17.10.2018 passed by the Commercial Court, Vadodara and on allowing the application filed under Order VII Rule 10 CPC directed that the plaint be returned to the appellant herein to be presented in the Court in which the suit should have been instituted. The appellant herein, therefore, claiming to be aggrieved by the order dated 01.03.2019 is before this Court in this appeal.
3. The brief facts which led to the present situation is that the appellant herein executed an agreement to sell dated 14.02.2012 in favour of the respondent No. 2 in respect of the land which is described in the agreement. The respondent No. 2 assigned and transferred all his rights under the said agreement to sell in favour of respondent No.1 by executing an assignment deed dated 12.10.2017. In that view, the respondent No. 1 herein was to purchase the lands which were the subject matter of the agreement from the appellant herein. Accordingly, the sale was made under a Deed of Conveyance dated 03.11.2017. Since certain other aspects were to be completed regarding the change relating to the nature of the use of the land for conclusion of the transaction, the right of the appellant in respect of the land was to be protected. In that view a Memorandum of Understanding dated 03.11.2017 was entered into between the appellant and the respondents herein. As per the same, a Mortgage Deed was required to be executed by respondent No. 1 herein in favour of the appellant.
4. Accordingly, a Mortgage Deed dated 03.11.2017 was executed but the same had not been registered. It is in that light the appellant herein filed the Commercial Civil Suit No. 41/2018 so as to enforce the execution of a Mortgage Deed. Consequently, the relief of permanent injunction and other related reliefs were sought. It is in the said suit, summon was issued to respondents herein who are the defendants in the suit, wherein on filing the written statement the application under Order VII Rule 10 of CPC was filed. The Commercial Court while rejecting the application had referred to the Memorandum and Articles of Association of the appellant company and in that light taking note of the business that they were entitled to undertake has arrived at the conclusion that the plaintiff seems to be carrying on the business as an estate agent and in that circumstance has further arrived at its conclusion that it is a commercial dispute. The High Court on the other hand had found fault with the manner in which the Commercial Court had rested its consideration on the Memorandum and Articles of Association and had examined the matter in detail to come to a conclusion that the immovable property in t
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