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2025 Supreme(Online)(Del) 6833
IN THE HIGH COURT OF DELHI AT NEW DELHI
Anil Kshetarpal, Harish Vaidyanathan Shankar, JJ
M/S CHOPRA MARKETING PRIVATE LIMITED – Appellant
Versus
M/S DRISHTICON PROPERTIES PRIVATE LIMITED & ANR. – Respondent
EFA(COMM) 4/2024
For the Appellants/Petitioners: Mr. Amulya Dhingra, Mr. Aashutosh Jagtap
For the Respondents: Mr. Jayesh Kain, Mr. Vinayak Batta, Mr. Yogendra Kumar Verma, Mr. V.S. Dubey
The classification of a dispute as commercial depends on the nature of the transaction involved, not merely the type of property at issue.
Headnote:(A) Commercial Courts Act, 2015 - Section 2(1)(c) - Jurisdiction - Execution petition dismissed for being a 'non-commercial dispute' concerning residential property - Court warns against focusing on nature of property instead of the transaction - Dispute involves financial dealings between companies, thus qualifies as 'commercial dispute'. (Paras 28-30)
(B) Execution Proceedings - Court cannot re-determine the nature of the transaction already deemed commercial in prior judgments - Commercial Court's overreach on execution matters leads to mischaracterization of the case. (Paras 32-34)
Facts of the case:
Disputes arose from an Agreement to Sell verified as collateral for an unsecured loan. The Award directed payment but the Execution Court claimed jurisdiction was lacking due to nature of the property.
Findings of Court:
The court found the earlier decisions correctly characterized the agreement as commercial, not merely a residential property issue, thus the execution could proceed despite objections.
Issues: The key issue was whether the Execution Petition was maintainable according to the Commercial Courts Act’s definition of commercial disputes.
Ratio Decidendi: The court held that the actual nature of the transaction, rather than the property type, determines whether it is a commercial dispute, reaffirming the appropriateness of earlier decisions regarding the case’s commercial nature.
Result: The appeal is allowed; the Execution Petition is deemed maintainable, and the earlier order is set aside.
| Table of Content |
|---|
| 1. the appeal arises out of an execution petition dismissed for lack of jurisdiction under the commercial courts act. (Para 1 , 2 , 6 , 8 , 10) |
| 2. execution proceedings initiated for an arbitral award concerning a real estate transaction. (Para 3 , 4 , 5) |
| 3. parties argue the nature of the property and its implications on commercial dispute categorization. (Para 11 , 12 , 14 , 15) |
| 4. determination of the execution petition's maintainability is based on the transaction's characteristics. (Para 18 , 20 , 30) |
| 5. court's emphasis on the nature of the transaction over property type in determining jurisdiction. (Para 21 , 22) |
| 6. clarification that the nature of transactions determines the applicability of commercial dispute definitions. (Para 28) |
| 7. court allowed the appeal, directing the execution application to proceed. (Para 35 , 36) |
2. By the said order, the learned Commercial Court dismissed the execution application on the ground that the dispute between the parties does not qualify as a 'commercial dispute' within the meaning of the CC Act and, therefore, is not executable by the Commercial Court under Section 6 of the said Act.
BRIEF FACTS:
3. The Appellant (Decree Holder) and the Respondent (Judgment Debtor) are duly incorporated companies under the Companies Act, engaged in commercial activities, including the real estate business.
4. Disputes arose pursuant to an Agreement to Sell dated 18.07.2006 in respect of property bearing No. 4, Ata-Ur-Rehman Lane, Under Hill Road, Rajpur Road, Delhi–110054. Upon failure of the transaction, the Appellant invoked arbitration before the learned Sole Arbitrator.
5. By an Arbitral Award dated 25.07.2015, the learned Sole Arbitrator declined the relief of specific performance but directed the Respondent to pay the Appellant a sum of Rs. 94,00,000/- along with interest at 12% per annum from 25.07.2015 until realization.
6. The Appellant challenged the Award by filing a petition under Section 34 of the Arbitration and Conciliation Act, 1996 4 before a learned Single Judge of this Court, registered as OMP (Comm.) No. 3/2016. The petition was disposed of by order dated 01.08.2019.
7. Dissatisfied, the Appellant preferred an appeal under Section 37 of the A&C Act, registered as FAO(OS)(Comm.) No. 213/2019, which was disposed of by a Division Bench of this Court on 31.10.2019.
8. Thereafter, the Appellant carried the matter to the Hon’ble Supreme Court by way of Special Leave Petition5, bearing No. SLP (C) No. 5855/2020. The Hon’ble Supreme Court disposed of the SLP by order dated 22.01.2024.
9. With the disposal of the SLP, the Award dated 25.07.2015 attained finality. The Appellant, therefore, initiated execution proceedings by filing Execution (Comm.) No. 88/2024 on 06.03.2024 before the learned Commercial Court.
10. The learned Commercial Court, however, on the objections raised by the Respondent/ Judgement Debtor, dismissed the execution application, by the Impugned Order dated 17.05.2024, holding that the dispute related to a residential property and, therefore, did not fall within the ambit of ‘commercial dispute’ as defined under Section 2 (1)(c) of the CC Act. On this reasoning, it concluded that it lacked jurisdiction under Section 6 of the CC Act to proceed with the execution. The relevant portion of the Impugned Order is as follows:
“This Award was challenged upto the Hon’ble Supreme Court, but was not modified. The claimant has filed this execution seeking recovery of the award amount with interest. The JD/respondent filed the objections under Section 47 of CPC stating that this court does not have jurisdiction to entertain this execution as the subject matter of the Award was not a commercial dispute as contemplated under Section 2 (c) of the Commercial Courts Act. It was stated that the subject matter of the agreement to sell was not a commercial property and the agreement between the parties was in respect of a residential property and it is an ordinary civil dispute.
Ld. C
