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2024 Supreme(Kar) 436

IN THE HIGH COURT OF KARNATAKA AT BENGALURU
M.I.ARUN, J.
M/s. Rhea Healthcare Pvt. Ltd. – Appellant
Versus
M/s. Raj Alkaa Park – Respondent
Writ Petition No. 3939 of 2023 (GM-CPC)
Decided on : 26-06-2024

Advocates:
Advocate Appeared:
For the Appellant :SRI. SUBRAMANYA S. UPASANA, ADVOCATE
For the Respondent:SRI. R.A. CHANDRASHEKARA REDDY, ADVOCATE FOR SRI. DWARAKA NATH H.S, ADVOCATE

IMPORTANT POINT
A dispute regarding a lease for commercial purposes qualifies as a commercial dispute under the Commercial Courts Act, necessitating the jurisdiction of the Commercial Court.

Headnote:

Commercial - Lease Agreement - Commercial Courts Act, 2015 - Section 2(1)(c)(vii) - The court interpreted the definition of 'commercial dispute' under the Act, emphasizing that disputes must arise from agreements relating to immovable property used exclusively in trade or commerce to fall under its jurisdiction.

Fact of the Case:

The petitioner leased a commercial property to establish a hospital but terminated the contract due to the respondent's failure to provide necessary infrastructure. The petitioner sought damages for breach of contract, leading to a dispute over whether the case qualified as a commercial dispute under the Commercial Courts Act.

Finding of the Court:

The court found that the trial court incorrectly determined that the dispute was not commercial. It emphasized that the lease agreement was for a commercial purpose, thus qualifying the dispute as a commercial one under the relevant Act.

Issues: Whether the dispute between the parties qualifies as a commercial dispute under Section 2(1)(c)(vii) of the Commercial Courts Act, 2015.

Ratio Decidendi: The court held that a dispute arising from agreements related to immovable property used exclusively in trade or commerce constitutes a commercial dispute, and the trial court erred in its interpretation.

Result: The writ petition is allowed, and the order returning the plaint is set aside, affirming the Commercial Court's jurisdiction.

ORDER :

1. Aggrieved by the order passed on I.A.No.3 filed in Commercial O.S.No.390/2019 dated 08.04.2022, by the LXXXII Additional City Civil and Sessions Judge, Bengaluru, the plaintiff therein has preferred this writ petition.

2. The petitioner for the purposes of establishing a Hospital and to run other allied healthcare services, took on lease a commercial property from the respondent. It is submitted that he took possession of the said property. However, before he could commence business activities, on the ground that there was a title dispute regarding the property which was taken on lease and also for the reason that the respondent did not build the required infrastructure within the agreed time for the petitioner to run its business, the petitioner terminated the contract. Subsequently, the petitioner also demanded that the respondent compensate the petitioner for the loss that he has sustained from the alleged breach of contract by the respondent. For that reason, the petitioner filed Commercial O.S.No.390/2019 before the Commercial Court to recover a sum of Rs.4,07,80,500/- (Rupees Four Crores Seven Lakhs Eighty Thousand Five Hundred Only) from the respondent along with interest.

3. The respondent entered appearance before the Commercial Court, filed its written statement, denied all the allegations made by the petitioner and prayed for dismissal of the suit. In addition to it, the respondent preferred an application under Order XIII-A of the Commercial Courts Act, 2015 with the following prayers:

    "The Defendant prays that for the reasons set-forth in the enclosed Affidavit, this Hon'ble Court may be pleased to pass summary judgment as follows, in the interest of justice and equity:

I. Reject prayer (a) for declaration

II. Reject prayer (b) for alleged payment of Rs.4,07,80,500/- as damages/compensation.

III. Reject prayer (c) for interest at 18% p.a."

4. However, during the course of the arguments before the Commercial Court, the respondent confined his submission only about the commercial nature of the dispute involved in the suit. In the light of the submissions made by the parties, the Commercial Court has examined whether the dispute involves a commercial dispute or not and came to the conclusion that there is no commercial dispute and has passed the following order:

    "It is ordered to return the Plaint filed by the Plaintiff for presentation before the Jurisdictional Court under Order VII Rule 10 of the Civil Procedure Code.

It is further ordered that after allotment to the particular court by the Hon'ble Principal City Civil and Sessions Judge, both parties are directed to appear before the said court, without expecting any fresh summons or notice, on 30.06.2022.

The Office is directed to send copy of this Orders to Plaintiff and Defendant to their email ID as required under Order XX Rule 1 of the Civil Procedure Code as amended under Section 16 of the Commercial Courts Act.

Accordingly, I.A.No.III is disposed of as per the above orders."

5. Aggrieved by the same, the plaintiff therein has preferred this writ petition.

6. The case of the plaintiff is that the property which is the subject matter of the suit is a commercial property, the same is taken on lease for establishment of a Hospital and other allied healthcare services which is for commercial purposes and that there was breach of contract by the respondent, because of which, the petitioner was constrained to terminate the contract and the actions of the respondent in breaching the terms of the contract made the commercial property unusable for which the property was taken on lease because of which, the petitioner has suffered injuries and hence, it has filed the commercial suit for recovery of a sum of Rs.4,07,80,500/- (Rupees Four Crores Seven Lakhs Eighty Thousand Five Hundred Only) along with the interest thereon and the said sum is above the specified value as contemplated under Commercial Courts Acts and hence as the dispute is a commercial dispute and the sp

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