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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Abhay Ahuja, J.
Magathane Kinara Co-Op. Hsg. Soc. Ltd. - Applicant
In The Matter of
M/S. Amogh Enterprises - Plaintiff
Versus
Magathane Kinara Co-Op. Hsg. Soc. Ltd. and another - Defendants
Interim Application No. 1210 of 2025 In Commercial Suit No. 1249 of 2019
Decided On : 08-04-2025
(A) Commercial Courts Act, 2015 - Section 2(1)(c) - Code of Civil Procedure, 1908 - Order VII Rule 10 - Jurisdiction of Commercial Court - Suit for specific performance of a Memorandum of Understanding (MOU) for redevelopment of residential property - Court held that the suit does not constitute a commercial dispute as defined under the Act, as the property is not used exclusively in trade or commerce. (Paras 6, 24, 30, 32)
(B) Jurisdiction - The court emphasized that the definition of a commercial dispute requires actual use of the property in trade or commerce, not merely potential use. (Paras 20, 24, 29)
Facts of the case:
The Plaintiff filed a suit against Defendant no.1 for specific performance of an MOU dated 16th May 2014 regarding redevelopment of a residential building, which was terminated by the Defendant on 22nd October 2018. The Defendant argued that the suit was improperly registered as a commercial suit.
Findings of Court:
The court found that the plaint did not indicate that the property was used exclusively for commercial purposes, thus lacking jurisdiction under the Commercial Courts Act.
Issues: The main issues were whether the suit constituted a commercial dispute and whether the Commercial Court had jurisdiction to hear the case.
Ratio Decidendi: The court ruled that the absence of pleadings indicating the property was used exclusively for trade or commerce meant the suit could not be classified as a commercial dispute.
Result: The plaint was ordered to be returned to be presented before the appropriate Civil Court.
ORDER :
1. On 6th March 2025, this Court had recorded that Mr.Mishra, learned Counsel for the Applicant (Defendant no.1) had concluded his arguments and Ms.Talati, learned Counsel for the Plaintiff had taken time.
2. Today, Ms.Talati has responded on behalf of the Plaintiff and Mr.Mishra, learned Counsel has also made submissions in rejoinder.
3. Accordingly, having heard the learned Counsel I pass the following order.
4. This Interim Application seeks return of the plaint under Order VII Rule 10 of the Code of Civil Procedure, 1908 (“CPC”) from the Commercial Division of this Court to be presented before Civil Court of jurisdiction.
5. Mr.Mishra, learned Counsel, appearing for the Defendant no.1 – society has submitted that the Suit has been filed seeking specific performance of a Memorandum of Understanding dated 16th May 2014 (“MOU”) between the Plaintiff and the Defendant no.1 and for damages from the Defendant no.1 – society.
6. Mr.Mishra has submitted that the averments in the plaint and the supporting annexures in no manner indicate or even suggest that the dispute between the parties is a commercial dispute as defined under Section 2(1)(c) of the Commercial Courts Act, 2015 (the “Commercial Courts Act”), nor is there even an averment to that effect, and that, therefore, the Suit has improperly been registered as a Commercial Suit.
7. Mr.Mishra has submitted that the Suit is for specific performance of the MOU and does not give any right, title or interest in the Suit property to the Plaintiff nor is there a dispute which is commercial in nature.
8. The MOU, Mr.Mishra submits, and as averred in the plaint, was for re-development of the Defendant no.1 – society’s residential building which was not in a good condition. Mr.Mishra submits that since the Plaintiff – developer was not able to complete the re- development, the development agreement was admittedly not executed and the MOU was terminated by the Defendant no.1 – society on 22nd October 2018 and it is the said termination that has been challenged by way of this Suit which has erroneously been filed as a Commercial Suit.
9. Mr.Mishra refers to the reply filed by the Plaintiff and submits that the Plaintiff has opposed this application on the ground that the Defendant no.1 – society has no locus standi to file the application as it has not filed the written statement and that Interim Application No.115 of 2021 seeking condonation of delay of 407 days in filing the written statement is pending. Mr.Mishra refers to the provision of Order VII Rule 10 of the CPC and submits that the plaint can be returned at any stage of the Suit to be presented to the Court in which the Suit should have been instituted and that non-filing of the written statement or the pendency of an Interim Application seeking condonation of delay in filing written statement does not in any way bar the Defendant no.1 from making an application.
10. Mr.Mishra next submits that the second argument of the Plaintiff is that the terms and conditions of the MOU are commercial in nature as the MOU is for redevelopment of a building of the Defendant no.1 – society. Mr.Mishra reiterates that the MOU is with regard to redevelopment of a residential building and there is nothing commercial about the same. Mr.Akhilesh Dubey, learned Counsel for the Defendant No.2 however contradicts and submits that some of the units would be commercial although pre-dominantly the building would be for residential use.
11. Referring to the submissions in the reply that the present Commercial Suit is in respect of a commercial dispute as defined in sub-clause (vii) of Section 2(1)(c), Mr.Mishra for Defendant No.1 submits that the said provision clearly refers to agreements relating to immovable property(ies) used exclusively in trade or commerce whereas in the present case the immovable property is not used exclusively in trade or commerce. The MOU is for the redevelopment of the residential property and may have some commercial units and r
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