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2024 Supreme(Online)(DEL) 31531
HIGH COURT OF DELHI
Manoj Jain, J
KARTAR SINGH KOCHHAR – Appellant
Versus
ICICI BANK LTD. – Respondent
CM(M)-512/2022
Mr. Indra Chand Prajapat, Ms. Himanshi Gupta, Ms. Sadhika Atri, Ms. Chetna Bhalla
A commercial dispute can arise from an oral agreement regarding immovable property used for trade, regardless of the absence of a written contract.
Headnote:(A) Commercial Courts Act, 2015 - Definition of 'commercial dispute' - The dispute regarding possession and damages for immovable property used for banking business qualifies as a commercial dispute, irrespective of the absence of a written agreement. (Paras 16-20)
(B) Oral agreements - An oral agreement is valid and enforceable, supported by actions taken by the parties, such as possession being handed over. (Paras 12-15)
(C) Nature of dispute - The dispute arises from the letting of property for commercial use, thus fulfilling the criteria for a commercial dispute as defined in the Act. (Paras 21-24)
Facts of the case:
The plaintiff sought recovery of possession and damages for an additional space let out to the defendant bank without a written agreement, claiming expenses incurred for alterations. (Paras 2-4)
Findings of Court:
The court upheld the trial court's order declaring the dispute as commercial, emphasizing that oral agreements are valid and the nature of the property use qualifies the dispute as commercial. (Paras 8, 26)
Issues: Whether the dispute can be characterized as a commercial dispute despite the lack of a written agreement. (Paras 1, 10)
Ratio Decidendi: The court ruled that the absence of a written agreement does not negate the existence of a valid oral agreement, and the nature of the property use satisfies the definition of a commercial dispute. (Paras 12, 20)
Result: Petition dismissed.
JUDGMENT
MANOJ JAIN, J
1. The limited question herein is whether the dispute disclosed in the plaint can be characterized as „commercial dispute‟ or not.
2. Petitioner/plaintiff filed a suit seeking recovery of possession, damages and mesne profits for the additional space of 302 sq. feet situated at ground floor of C-18, Safdarjung Development Area Market, New Delhi. Said space had been let out to respondent Bank on 01.01.2019, albeit, there was no written agreement.
3. There was another agreement, much prior in time, between the same parties whereby on 10.10.2012, plaintiff and the defendant bank entered into a lease agreement by which another portion admeasuring 1800 sq. feet of same property, part situated in basement and part at ground floor, was let out by the plaintiff to defendant for nine years. Such agreement was in writing.
Signature Not Verified Digitally Signed CM(M) 512/2022 Page 1 of 8 Plaintiff has already filed a separate suit for said portion which is pending adjudication before a Commercial Court only. Presently, we are not concerned with said case pertaining to 1800 sq. feet area.
4. In the suit in question i.e. CS 401/2020, petitioner claimed himself to be the owner of said property of Safdarjung Development Area Market which comprised of basement, ground floor and first floor. The plaintiff, on the basis of request made by the defendant bank, provided them with additional space at ground floor and thus further area of 302 sq. feet was let out to defendant bank on ad-hoc basis. According to plaintiff, he had incurred expenses of Rs. 14,74,388/- for carrying out alteration to bring the said property in conformity with the requirement of defendant bank and despite request, defendant bank did not execute any lease deed and, therefore, besides seeking the possession of said area, it also prayed for compensation, damages and mesne profits.
5. The defendant bank, in its written statement, did not dispute that such additional space had been let out to them but according to them, plaintiff had not reverted to the bank for the purposes of execution of new lease deed. According to them, it was also, repeatedly, asking the plaintiff to rather take back the possession of 1132 sq. feet area situated in the basement which was of no use to them but the plaintiff had been delaying the same as well for the reasons best known to him.
6. As noted already, the issue in hand is with respect to dispute related to letting out of additional space of 302 sq. feet, for which there is no written agreement.
7. During the pendency of the above-said suit, defendant Bank moved Signature Not Verified Digitally Signed CM(M) 512/2022 Page 2 of 8 application before the learned Trial Court contending that the dispute was commercial in nature.
8. Such contention has been upheld vide order dated 27.01.2022.
9. Such order is impugned herein.
10. According to petitioner/plaintiff, the dispute could not have been labelled as commercial dispute for want of agreement in writing. He also contends that dispute between the parties never arose out of agreement but it arose as the defendant failed to enter into an agreement for the suit property.
11. Such contentions seem completely unsustainable.
12. It is settled position of law that an agreement can be oral or in writing. 13. An agreement would not lose its sheen by mere fact that it is oral. Though, the burden to prove its existence may be little arduous but nonetheless such agreement is valid in eyes of law. The existence of oral agreement would get strengthened if pursuant to the same, some tangible action is taken by the parties.
14. Like here, the possession of additional space was handed over which corroborates the execution of oral agreement. The demand of possession, mesne profits by filing a suit further strengthens the above fact.
15. In Nanak Builders and Investors Pvt. Ltd Vs. Vinod Kumar Alag AIR 1991 Delhi 315 , this Court held that an oral agreement is valid and enforceable as a contract. Even th
