Fraudulent transactions do not constitute a commercial dispute under the Commercial Courts Act, and jurisdiction lies with Civil Courts.

JUDGMENT :

K. BABU, J.

The petitioners, plaintiffs in a suit for recovery of money, challenge Ext.P4 judgment of the trial Court transferring the suit to the Commercial Court under Section 15 of the COMMERCIAL COURTS ACT . Respondents are the defendants. The plaintiffs instituted O.S.No.380 of 2010 before the Subordinate Judge’s Court, Ernakulam, seeking recovery of Rs.3,61,73,477/-. Plaintiff No.1 is M/s Teliz Realtors, a partnership firm, having its office at Thiruvananthapuram represented by its Managing Partner. Defendant No.1 is M/s JTL Projects Pvt. Ltd. Ernakulam, represented by its Managing Director.

2. The plaintiffs pleaded that defendant Nos. 2 and 3 formed a sham company and defrauded the plaintiffs by giving false promises and obtained hefty amounts. Defendant Nos. 2 and 3 declared through published materials that the intention behind the company was to make a housing project. According to the plaintiffs, the defendants, with fraudulent and dishonest intention to deceive them, made the plaintiffs to transfer large sums of money to their accounts. The plaintiffs pleaded that the defendants, while receiving the amount, fully knew that the same were being received without the intention to make or commence any project. According to the plaintiffs, while receiving money and promising to transfer landed properties, the defendants even furnished false survey numbers and offered to transfer properties over which they had no right. In those transactions, the plaintiffs and the defendants entered into an agreement, which, according to the plaintiffs, was caused by undue influence, fraud, and misrepresentation. The plaintiffs pleaded that though the defendants represented that they intended to engage in construction and infrastructure activities, they had not even obtained any licence to do so and falsely induced the plaintiffs to transfer amounts, making them believe that the construction project would be established. Though both the plaintiffs and defendants entered into an agreement, it cannot be termed as a joint venture agreement in the sense that the defendants never intended to honour the terms in the agreement.

3. The defendants resisted the pleadings in the plaint, inter alia, contending that the transaction alleged is a commercial dispute. The question of maintainability of the suit before the Civil Court was sought to be decided as a preliminary issue. The trial Court held that the transactions pleaded in the plaint fall under Sections 2(c)(vi) and 2(c)(xi) of the COMMERCIAL COURTS ACT .

4. I have heard the learned counsel for the petitioners and the learned counsel for the respondents.

5. The learned counsel for the petitioners submitted that the defendants fraudulently induced the plaintiffs to transfer money, highlighting properties over which they have no right or ownership. The learned counsel submitted that a fraudulent document resembling the ingredients of a ‘joint venture’ was created at the instance of the defendants, which never came into effect. The learned counsel submitted that n