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2024 Supreme(Guj) 429
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
VAIBHAVI D. NANAVATI, J.
Amthabhai Desai & Ors. – Appellants
Versus
Meera Education Trust Through Authorized Trustee Farzan Kureshi & Anr. – Respondents
R/Civil Revision Application No.149 of 2024
Decided on : 03-05-2024
Advocate Appeared:
For the Appellant : MR. MEHUL SHAH, assisted by MR. D.P. KINARIWALA
For the Respondent: MR. DHAVAL DAVE, SENIOR COUNSEL assisted by MR ASHISH H SHAH
IMPORTANT POINT
The main legal point established in the judgment is that the property used exclusively for educational purposes did not qualify as a commercial dispute under the Commercial Courts Act, 2015. The court emphasized the charitable nature of imparting education and the need to interpret the word 'commerce' narrowly to ensure strict inclusion of commercial activities.
Headnote:
Code of Civil Procedure - Commercial Dispute - Section 115 - Order-7 Rule-10 - Commercial Courts Act, 2015 - Section 2(1)(C)(VII)
Fact of the Case:
The plaintiff, an educational institution, filed a suit seeking declaration, specific performance, and permanent injunction against the defendants regarding a property used for educational purposes. The defendants sought to return the plaint under Order-7 Rule-10 of the Code of Civil Procedure, treating the suit as a commercial dispute under the Commercial Courts Act, 2015.
Finding of the Court:
The court found that the subject matter of the suit did not qualify as a commercial dispute under Section 2(c)(vii) of the Act, 2015. It held that the property, used exclusively for educational purposes, did not fall under the definition of a commercial dispute. The court also noted that the specific performance sought was based on a draft agreement not signed by the defendants, and the provision of Section 8 of the Arbitration Act was not applicable.
Issues: The main issue was whether the suit qualified as a commercial dispute under the Commercial Courts Act, 2015, and whether the provision of Section 8 of the Arbitration Act was applicable.
Ratio Decidendi: The court relied on legal principles established in TMA Pai Foundation v/s. State of Karnataka and Ambalal Sarabhai Enterprises v/s. K.S. Infraspace LLP, emphasizing that imparting education is charitable in nature and distinct from trade or commerce. It also highlighted the need to interpret the word 'commerce' narrowly to ensure that only strictly commercial activities are included under the Act. The court also considered the decision in Kushal Limited and the judgment of the Karnataka High Court in Dhee Educational and Cultural Trust & Ors. v/s. M/s. Hartana Projects LLP.
Final Decision: The Civil Revision Application was dismissed, and the interim relief, if any, was vacated.
JUDGMENT :
1. The present Civil Revision Application under Section 115 of the Code of Civil Procedure, 1908, is directed, being aggrieved and dissatisfied by the impugned order dated 07.03.2024 passed below Exh.9, rejecting the application filed by the applicants for returning the plaint, under Order-7 Rule-10 of the Code of Civil Procedure, 1908, in Special Civil Suit No. 175 of 2023 by the 4th Additional Senior Civil Judge and Additional Chief Judicial Magistrate, Vadodara, copy of the said order is duly produced at Annexure-A.
2. Brief facts leading to the filing of the present Application reads thus:
2.1. The respondent No.1 herein has filed Suit being Special Civil Suit No. 175 of 2023 before the Court of Senior Civil Judge, Vadodara for declaration and direction alongwith the prayer of permanent injunction. The Suit was filed with respect to the property situated behind Swaminarayan Temple on Survey No. 49, City Survey No. 749 at Atladara, Vadodara. So far as the prayer of declaration is concerned, it is prayed that the respondent No.1 is running a school in the capacity of the tenant. It was prayed that respondents have no right to interfere with the possession and with the educational activity being carried out in the school premises. It was further prayed that whatever writing or declaration or agreement, are there against the school, which are false and the same are without consent and has obtained by false declaration. So far as prayer of direction is concerned, it was prayed that the applicants be directed to execute a lease agreement as per the oral understanding. So far as prayer of permanent injunction is concerned, it was prayed that the applicants may be restrained from interfering with the possession and educational activity being carried out by the respondent no.1 in the school premises. The said plaint is duly annexed at Annexure-B to the application.
2.2. In response to the summons issued, the applicants herein appeared and filed application under Order-7 Rule-10 of the Code of Civil Procedure on 08.08.2023. The same was exhibited at Exh.8. In the said application, it was mainly contended by the applicants herein that the premises is used for the commercial purpose, and therefore, the provision of Commercial Courts Act, 2015 would be applicable and it is the Commercial Court, who has jurisdiction to entertain the Suit, and therefore, the plaint be returned, to be presented before the appropriate Court. The said application – under Order-7 Rule-10 of CPC, 1908 is duly produced at Annexure-C.
2.3. In view of the pendency of the application before the competent Court, the applicants approached this Court by way of filing Special Civil Application No. 856 of 2024, which came to be disposed of by order dated 05.02.2024 directing the competent court to decide the application below Exh.8 on 19.02.2024 and if the competent Court needs to hear the parties, then hear and decide the said application, within period of 15 days, the said order dated 05.02.2024 is duly produced at Annexure-E.
2.4. The competent Court has rejected the application filed by the present applicants under Order-7 Rule-10 of CPC, by impugned order dated 07.03.2024, on the ground that the plaintiff is educational institution, which was on lease of 33 years, which is cancelled on 28.02.2023 and the suit is for permanent injunction with reference to the interference of the possession, and therefore, the suit is not such that the same can be referred as a commercial dispute and the Civil Court has jurisdiction to decide the Suit, and accordingly, the application came to be dismissed.
2.5. Being aggrieved and dissatisfied with the impugned order at Annexure-A, the applicants herein have approached this Court, with the following reliefs:
“A. Your Lordships may be pleased to admit and allow this application;
B. Your Lordships may be pleased to quash and set aside the order dated 07.03.2024 passed below Exh.9 in Special Civil Suit No. 175 of 2023 by the Ld. 4th
