The judgment establishes the principle that disputes relating to recovery of rent or mesne profit, security deposit, etc., pertaining to immoveable property exclusively used in trade or commerce should be treated as commercial disputes under the Commercial Courts Act, 2015.

SANJIV KHANNA, J.

This intra-Court appeal raises an interesting issue on interpretation of Section 2 (1) (c) (vii) of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (Act, for short).

2. Facts in brief relevant for the present controversy may be noted. The appellant, Jagmohan Behl, has instituted CS (OS) No. 2008/2010 against the tenant, State Bank of Indore, who is respondent before us. For the sake of convenience, the appellant has been described as the “plaintiff” and the respondent has been described as the “defendant” in the present order and judgment.

3. The aforesaid suit pertains to recovery of mesne profits of Rs.1.08 crores for the period between 1st September, 2007 till 30th August, 2010 along with interest from the defendant in respect of property No.M-46, Connaught Circus, New Delhi (hereinafter referred to as “the property”). The said property was given on lease to the defendant in the year 1986 for a period of five year on a monthly rent of Rs.40,000/- with renewal clause for two further terms with enhancement of rent by 15%. The defendant bank had also sanctioned a loan of Rs.24 lakhs with interest @ 17.5% per annum to the plaintiff which was agreed to be paid by way of adjustment against the rent.

4. The plaintiff had earlier filed a civil suit seeking possession (sic ejectment) on 27th October, 2001 being Suit No.340/2001 in which a decree under Order XII Rule 6 of the Code of Civil Procedure, 1908 (Code, for short) was passed on 1st May, 2002.However, in RFA No.361/2002 preferred by the defendant Bank the execution was stayed. For the sake of completeness, we would also record that the plaintiff has also sought decree of mandatory injunction and mesne profits with effect from 1st September, 2010 till the date of decree @ Rs.18,000/- per day. Interest on the amounts due was claimed.

5. In RFA No. 361/2002, the defendant on 25th August, 2011 had given an undertaking to vacate the premises within one year. The undertaking was accepted on the term that the defendant would pay Rs.1 lakh per month to the plaintiff towards rent/mesne profit for the period the defendant had remained in occupation along with interest and water charges. According to the said undertaking, the defendant was to vacate the premises by 24th August, 2012. However, on 4th August, 2012, defendant had filed C.M. No.13656/2012 for extension of time. This application was allowed, granting six months’ further time to vacate the property, subject to the defendant paying Rs.2,75,000/- towards rent/mesne profit for the period it continued to remain in occupation along with water and electricity charges.

6. It appears that possession of the property has been handed over to the plaintiff. However, the plaintiff has persisted with his suit CS (OS) No.2008/2010.

7. CS(OS) NO. 2008/2010 was filed in the Delhi High Court in view of the pecuniary jurisdiction. However, vide office order dated 24th November, 2015, issued by the Chief Justice in exercise of power conferred under Section 4 of the Delhi High Court (Amendment) Act, 2015, pecuniary jurisdiction for ordinary suits, which were not “commercial disputes”, was raised to Rs.2 crores. Suits below Rs.2 crores were to be transferred to district courts. However, in cases of “commercial disputes” as defined under the Act, suits of specified value as determined vide Section 12 thereof, of not less than Rs.1 crore were to be tried by the High Court and were not to be transferred.

8. Learned single Judge by the impugned order dated 1st March, 2016, referring to Section 2 (1) (c) (vii) of the Act has held that the suit has to be transferred to the district court as it does not relate to a commercial dispute for no right under an agreement relating to immoveable property was sought to be enforced, inasmuch as the suit only seeks recovery of rent and mesne profits. It would be a suit under Section 9 of the Act and not pursuant to an agreement.

9. In order to