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2020 Supreme(Kar) 647

IN THE HIGH COURT OF KARNATAKA AT BENGALURU
M. Nagaprasanna, J.
M/s. Property Infra Tech India (p ) Ltd. - Appellant
Versus
Urmila Ramesh - Respondent
Writ Petition No. 11431 of 2019
Decided On : 23-07-2020

Advocates Appeared:
Ravishankar Shastry G, Advocate, Vijaya Krishna Bhat M, Advocate

The main legal point established in the judgment is the need for a careful and accurate interpretation of the statutory provisions and the definition of a commercial dispute under the Commercial Courts Act, 2015.

Headnote:

Jurisdiction - Commercial Dispute - The Code of Civil Procedure, 1908 Section 9, The Commercial Courts Act, 2015 Section 2(1)(c)(vii)

Fact of the Case:

The petitioner filed a suit against the respondents for recovery of a sum of money. The respondents contended that the suit was a commercial dispute and should be transferred to the Commercial Court. The trial Court agreed and transferred the suit to the Commercial Court. The petitioner challenged this decision through a writ petition.

Finding of the Court:

The Court found that the trial Court's decision was based on a misinterpretation of the statutory provisions and the law laid down by the Hon'ble Supreme Court. The trial Court failed to consider the specific provisions of the Commercial Courts Act, 2015 and the definition of a commercial dispute. The Court set aside the trial Court's decision and remitted the matter back to the trial Court for fresh consideration.

Issues: The main issue was whether the trial Court's decision to transfer the suit to the Commercial Court was based on a correct interpretation of the law.

Ratio Decidendi: The trial Court's decision was found to be flawed as it did not consider the specific provisions of the Commercial Courts Act, 2015 and the definition of a commercial dispute. The Court emphasized the need for a careful examination of the pleadings and the nature of the dispute to determine if it qualifies as a commercial dispute under the Act.

Final Decision: The writ petition was allowed in part, the trial Court's decision was set aside, and the matter was remitted back to the trial Court for fresh consideration.

JUDGMENT

M Nagaprasanna, J. - Sri Ravishankar Shastry G., learned counsel for the petitioner.

    Sri Vijay Krishna Bhat M., learned counsel for caveators - respondents appeared through video conferencing.

      Being aggrieved by the order dated 12.02.2019 passed in O.S. No.433/2018 by the II Additional Senior Civil Judge and Chief Judicial Magistrate, Mangaluru (hereinafter referred to as the 'trial Court') whereby, the trial Court has transferred the suit of the plaintiff to the Commercial Court on the ground that the dispute between the parties was commercial in nature and had to be dealt with by the Court constituted under the Commercial Courts Act, 2015 (hereinafter referred to as 'the said Act of 2015'), on a memo filed by the defendants therein, the plaintiff has preferred the instant writ petition.

      2. Facts leading to filing of the instant writ petition are that, the petitioner who is the plaintiff in O.S.No.433/2018, filed a suit against the defendants therein (respondents herein) for recovery of the amount of Rs.2,47,18,493/- with interest from 01.12.2018 till the date of realisation. It transpires in terms of the pleadings that the plaintiff and the 2nd defendant were acquainted to each other through their business transactions. The 1st respondent is the wife of the 2nd respondent. On 06.06.2015, the petitioner-plaintiff and the 1st respondent entered into an agreement for sale of several immovable properties owned by the 1st respondent. On failure of the respondents to comply with the conditions of the agreement, the petitioner issued a notice on 18.02.2017 seeking refund of the earnest money paid in terms of the agreement of sale dated 06.06.2015. It appears that the respondents on receipt of notice, agreed to reimburse the entire amount with interest and since they could not mobilize the fund, the 1st respondent transferred the immovable property in favour of the petitioner on 11.10.2017 towards part of the earnest money received in terms of the agreement to sell.

      3. In terms of the sale mentioned hereinabove, the amount of Rs.2.00 crores was set off and the balance was agreed to be paid within three months along with interest. The respondents having failed to adhere to outer limit of three months to pay the balance amount, the petitioner instituted a suit before the trial Court in O.S.No.433/2018 for recovery of Rs.1 crore.

      4. On issuance of notice, the respondents herein filed a memo before the trial Court contending that the lis is one of a commercial dispute and the trial Court has no jurisdiction to entertain the suit in the light of the Commercial Courts established under the said Act of 2015 and the plaint will have to be transferred to the Commercial Courts dealing with commercial disputes. On the memo filed by the respondent, the petitioner filed his objections. Considering the plaint averments, memo and the objections, the trial Court gave a finding that the transaction between the parties was commercial in nature, the suit arose out of a joint venture business and it had no jurisdiction to entertain a commercial dispute and had to transfer the suit to the Commercial Court established under the said Act of 2015 and closed the suit by transferring the same to the Commercial Court established under the said Act. The petitioner - plaintiff, aggrieved by the order of the trial Court passed on the memo filed by the respondentsdefendants seeking transfer of the suit, filed the present writ petition.

      5. The issue that falls for my consideration in this writ petition is whether the jurisdiction of the Civil Court under Section 9 of Code of Civil Procedure, 1908, is taken away with the establishment of the said Act of 2015, in the facts and circumstances of the case on hand.

      6. In terms of the plaint averments the cause of action arose to the petitioner to file O.S. No.433/2018 was with regard to failure on the part of the respondents herein to comply with the agreement between the parties to return the earnest money that

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