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IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT NAGPUR
MANISH PITALE, J.
KANCHANGANGA REALTORS PVT LTD. - Appellant
Versus
MONARCH INFRASTRUCTURE DEVELOPERS PVT LTD. - Respondent
Writ Petition No. 4080 of 2018
Decided on : 08-02-2019
Commercial Courts Act, 2015 - Section 15(2) - Immovable property - Simple agreement of sale and purchase of suit property – Claim of compensation - Whether impugned order passed by Court of Joint Civil Judge Senior Division in refusing to transfer suit filed by respondent no.1, under Section 15(2) of Commercial Courts Act, 2015 to Commercial Court was justified in the facts and circumstances of present case - Whether suit filed by respondent no.1 could be transferred under Section 15(2) of Act of 2015 to Commercial Court it would have to be analyzed - Whether dispute between the parties could be said to be a commercial dispute as defined under provisions of the Act of 2015 - Whether said immovable property is being used exclusively in trade or commerce becomes an important question particularly because trial Court in impugned order has held that it could not be said that property which is the subject matter of said agreement is being used for trade and commerce - Question that arises for consideration in this petition is as to whether impugned order passed by Court of Joint Civil Judge Senior Division in refusing to transfer suit filed by respondent no.1 under Section 15(2) of Commercial Courts Act, 2015 to Commercial Court, was justified in facts and circumstances of present case - It is the contention of petitioners that although the suit filed by respondent no.1 pertains to a prayer for grant of decree of specific performance of agreement by applying definition of commercial dispute under Section 2(1)(c) of Act of 2015 suit filed by respondent no.1 pertains to a commercial dispute and that under Section 15(2) of Act of 2015 suit ought to have been transferred to Commercial Court - Respondent no.1 filed a suit for specific performance against petitioners in respect of aforesaid agreement whereby petitioner no.1 had agreed to sell immovable property specified in suit to respondent no.1 - After entering appearance before trial Court petitioners moved an application under Section 15(2) of Act of 2015 contending that since immovable property in question was intended to be used for commercial purpose dispute between the parties was a commercial dispute and that therefore suit was required to be transferred under Section 15(2) of Act of 2015 - This application filed by petitioners was opposed by respondent no.1 – Held, This is approach that has been adopted by Delhi High Court in the aforesaid two judgments in case - This Court respectfully agrees with the said judgments rendered by Division Bench and learned Single of Delhi High Court - In judgment of Division Bench of Delhi High Court in case specific reference has been also made to Explanation (a) to Section 2(1)(c)(vii) of Act of 2015 and it has been held that words any other relief pertaining to immovable property has to be given broad interpretation - This Court also finds that if definition of term commercial dispute under Section 2(1)(c)(vii) read with Explanation (a) thereto is interpreted in a narrow sense as contended by respondent no.1 herein it would render the same nugatory and Explanation would be rendered redundant - In this context reliance placed on judgment of High Court in the case of Healthcare Private Limited and another on behalf of respondent no.1, would not take its case any further - A perusal of said judgment of Gujarat High Court and another judgment of said High Court in the case reported would show that Gujarat High Court has placed a narrow interpretation on definition of commercial dispute under Section 2(1)(c)(vii) of Act of 2015 and there is no reference made to Explanation (a) to said provision - As noted earlier this Court is of the opinion that expressions used in Section 2(1)(c)(vii) read with Explanation (a) of the Act of 2015 have to be given wide interpretation – Therefore this Court respectfully disagrees with aforesaid judgment of Gujarat High Court - It is also pointed out by learned Counsel appearing for petitioners that in a Special Leave Petition filed against aforesaid judgment of Gujarat High Court in the case of Healthcare Private Limited Honble Supreme Court has granted leave and directed parties therein to maintain status quo - It becomes clear that dispute raised by respondent no.1 in suit for specific performance against petitioners is covered under the definition of commercial dispute under Section 2(1)(c)(vii) read with Explanation (a) of Act of 2015 - This is particularly so when said agreement is read with Memorandum of Understanding, also of same date executed between parties showing beyond any doubt that agreement relates to immovable property which is to be used exclusively in trade or commerce - Respondent no.1 has not denied and in fact it has accepted before this Court about existence of said Memorandum of Understanding executed between parties - It is evident that parties entered into the agreement to develop property in question by undertaking construction activity or to further sell same for commercial gains in terms of very objects of two parties petitioner no.1 and respondent no.1 - There is no dispute about fact that commercial dispute between parties is beyond amount of 1 Crore - Writ Petition is allowed
MANISH PITALE, J.
1. Rule. Rule made returnable forthwith. Heard finally by consent of the learned Counsel appearing for the parties.
2. The question that arises for consideration in this petition is, as to whether the impugned order passed by the Court of Joint Civil Judge Senior Division, Nagpur (trial Court), in refusing to transfer the suit filed by respondent no.1, under Section 15(2) of the Commercial Courts Act, 2015 (for short, 'the Act of 2015') to the Commercial Court, was justified in the facts and circumstances of the present case. It is the contention of the petitioners (original defendants) that although the suit filed by respondent no.1 pertains to a prayer for grant of decree of specific performance of agreement dated 04-04-2015, by applying definition of "commercial dispute" under Section 2(1)(c) of the Act of 2015, the suit filed by respondent no.1 pertains to a commercial dispute and that under Section 15(2) of the Act of 2015, the suit ought to have been transferred to the Commercial Court.
3. The respondent no.1 filed a suit for specific performance against the petitioners in respect of the aforesaid agreement dated 04-04-2015, whereby petitioner no.1 had agreed to sell immovable property specified in the suit to respondent no.1. After entering appearance before the trial Court, the petitioners moved an application under Section 15(2) of the Act of 2015, contending that since the immovable property in question was intended to be used for commercial purpose, the dispute between the parties was a commercial dispute and that therefore, the suit was required to be transferred under Section 15(2) of the Act of 2015. This application filed by the petitioners was opposed by respondent no.1.
4. By the impugned order dated 26-04-2018, the trial Court found that the pleadings on record and the documents nowhere demonstrated that the property was intended to be used for trade and commerce. On this basis, it was held that the dispute between the parties could not be said to be a commercial dispute under Section 2(1)(c)(vii) of the Act of 2015 and on this basis, the application filed by the petitioners was rejected.
5. Mr. A.G. Gharote, learned Counsel appearing for the petitioners, submitted that the trial Court committed an error in rejecting the application of the petitioners in a cryptic manner, without appreciating the true scope of the definition of commercial dispute under section 2(1)(c) (vii) of the Act of 2015 read with Explanation (a) to the said provision. It was submitted that the words "relating to" used in the said provision ought to be interpreted in a wide sense and Explanation (a) to the said provision also further widened the scope of the expression "commercial dispute" as the words used therein "involves any other relief pertaining to immovable properties" were crucial, which was not appreciated by the trial Court, while passing the impugned order. It was submitted that reliance placed by respondent no.1 before the trial Court on the judgment of the Gujarat High Court in the case of Vasu Healthcare Private Limited vs Gujarat Akruti TCG Biotech Limited and another, reported at, (2017) AIR Gujarat 153, was erroneous because, firstly, the said judgment of the Gujarat High Court had not interpreted the aforesaid provisions of Act of 2015, in the proper perspective and secondly, that in a Special Leave Petition filed against the said judgment of the Gujarat High Court, the Hon'ble Supreme Court had granted leave and directed the parties to maintain status quo. It was submitted that there were plethora of judgments of the Hon'ble Supreme Court and High Courts, wherein it had been held that the expression "relating to" had to be interpreted in a wide sense. It was also submitted that there were judgments of various Courts laying down that the word "used" included the expression "intended for use". Specific reliance was placed on the judgments of the Delhi High Court in the case of Jagmohan Behi vs Sta
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