IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
N.V.ANJARIA, A. P. THAKER, JJ.
GUJARAT STATE WAREHOUSING CORPORATION - APPELLANT
Versus
DIVINE DEVELOPERS - RESPONDENT
SPECIAL CIVIL APPLICATION NO. 9705 of 2019
Decided On : 24-12-2021
Code of Civil Procedure, 1908 - Section 16, 20 - Order VII Rule 11(d) - Commercial Courts Act, 2015 - Section 2(1)(c) - Special Civil Application - Rejection of plaint - Commercial dispute - Defendant had taken on rent four godowns for purpose of storing groundnut - When goods were being loaded in godown, fire took place - As a result of fire, quantity of groundnut lying was reduced to ashes - It was pleaded that fire broke out because of negligence on part of defendant - Seeds of groundnut happens to be inflammable, it was pleaded - Godown had heavy angles, yet it got completely damaged and its entire structure stood destroyed in the fire - Defendant was required to keep godown in good condition and was under obligation to handover to plaintiffs in same condition - Defendant filed written statement, and also filed application under Order VII Rule 11(d), CPC - It was contended that Act of letting godown by plaintiffs to defendant would not make dispute ‘commercial dispute’ and suit before Commercial Court could not have been instituted - Other ground urged for rejecting plaint under Order VII Rule 11(d), CPC was that plaint was liable to be rejected for want of jurisdiction – Held, one of limbs of commercial dispute is an agreement relating to immovable property used exclusively in trade or commerce - Explanation provides that a commercial dispute would otherwise not cease to be commercial dispute merely because action involves recovery of immovable property or realisation of money out of immovable property or involve any other relief pertaining to immovable property - Principles set out in relation to operation and applicability of Section 16, CPC and statements of law observed answers controversy in present case - Section 16 of CPC which speaks principle that action against property shall have to be brought in forum where property is situated, has an overriding effect over what is provided in Section 20 - Court other than Porbandar will not have territorial jurisdiction to deal with the subject matter since godown is situated within limits of Porbandar district - Submission that parties have agreed in agreement that Courts in Ahmedabad shall alone have jurisdiction, has no room to sustain - When provisions of Section 16, CPC, are juxtaposed with Section 20, there is no gainsaying that Section 16 shall prevail over Section 20 and jurisdiction for suit against res shall have necessary reference of place where such res or property is situated - Commercial Court holding that Court at Porbandar shall have jurisdiction is eminently proper and legal - When Commercial Court has rejected application of defendant under Order VII Rule 11(d), CPC, refusing to reject plaint, it does not book any error – Application dismissed.
JUDGMENT :
N.V.ANJARIA, J.
Heard learned advocate Mr.P.J. Kanabar for the petitioner and learned Senior advocate Mr.Dhaval Dave with by learned advocate Mr.Udit Vyas for the respondents.
2. In the present Special Civil Application filed by the petitioner-original defendant, what is called in question is order dated 04th May, 2019 below Exh.26 in Commercial Special Civil Suit NO.132 of 2016 passed by learned Judge, Commercial Court, Rajkot. Thereby application of the petitioner defendant seeking rejection of the plaint under Order VII Rule 11(d) of the Code of Civil Procedure, 1908 came to be dismissed.
3. Respondents herein instituted Special Civil Suit No.132 of 2016 against the petitioner-defendant for recovery of damages to the tune of Rs.06,84,19,350/-. It was pleaded in the plaint that plaintiff No.1 was a registered partnership firm whereas plaintiff Nos.2 and 3 were the partners. The plaintiffs owned four godowns at Village Dharampur, Taluka Ranavav, Probandar, details of which in terms of their size and measurement were stated in paragraph No.3 of the plaint. It was averred that since 23rd December, 2013 defendant had taken on rent the said four godowns for the purpose of storing groundnut on monthly rent of Rs.03.50 ps. per sq. ft., and that a written agreement was also executed between the parties. The possession of the godowns was handed over to the defendant on 23rd December, 2013. On 09th January, 2015, possession of godown Nos.2, 3 and 4 was given back to the plaintiffs as defendant did not require the same. Godown No.1 admeasuring 52070 sq. ft. remained in possession of the defendant, the monthly rent of which at Rs.03.50 ps. per sq. ft amounted to Rs.01,82,245/-.
3.1 It was further averred that on 29th February, 2014 at around 01.40 in the midnight, when the goods were being loaded in the godown, fire took place. As a result of the fire, quantity of groundnut lying therein was reduced to ashes. It was pleaded that fire broke out because of negligence on part of the defendant. The seeds of groundnut happens to be inflammable, it was pleaded. It took as many as four months before the fire could be extinguished. The godown had heavy angles, yet it got completely damaged and its entire structure stood destroyed in the fire. The incident of fire was reported in the police station of the nearby area at Udyognagar and inquiry was undertaken by the police. Also the F.S.L. report was called for and together with the photographs of the site the Panchnama of the place was prepared.
3.2 It was the case that under the terms of rent agreement, the defendant was required to keep the godown in good condition and was under obligation to handover to the plaintiffs in the same condition. Though the seeds of groundnut being loaded in the godown were inflammable, defendant failed to ensure taking of the safety measures, it was pleaded. The fire extinguishing equipments were not kept, and the defendant did not supervise by not keeping adequate staff, averred the plaintiff.
3.3 It was pleaded that the plaintiffs were receiving rent as per the rent agreement from the defendant. Due to destruction of the godown, they have suffered every month the rental income which was Rs.01,82,245/- per month. It was stated that as per the assessment of the Valuer, the expenditure towards reconstruction of the godown would come to Rs.06,28,42,000/-. It was stated that had the fire been not broken out, the plaintiffs could have earned the rent income but due to defendant’s negligence and carelessness, the godown was destroyed in fire depriving plaintiffs the said recurring income. The plaintiffs accordingly claimed Rs.06,84,19,350/- towards damages inclusive of reconstruction cost of Rs.06,28,42,000/- and Rs.54,67,350/- being the rental loss from 22nd February, 2014 to 22nd August, 2016, in addition claimed other expenses.
3.4 The cause of action to institute the suit was mentioned in paragraph No.17 of the plaint averring that it arose since the incident of
Jurisdiction over immovable property cannot be altered by agreement; the local court where the property is situated retains jurisdiction.
The Courts at Patiala did not have jurisdiction to entertain the suit of the respondent as the suit property/res is situated in Gurugram. The agreement in question is a forged and fabricated document....
The central legal point established in the judgment is the interpretation of the definition of 'commercial dispute' under the Commercial Courts Act and its application to the nature of the dispute be....
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