Case: AMBALAL SARABHAI ENTERPRISES LTD Vs. K.S. INFRASPACE LLP

A.S. Bopanna,J. 1. Leave granted. 2. The appellant herein is the plaintiff in Commercial Court Suit No. 41/2018 filed before the Commercial Court at Vadodara. The respondents herein are arrayed as the defendants to the suit. The respondents on being notified in the suit had appeared and filed the written statement inter alia contending that the suit is not maintainable as the dispute involved cannot be termed as a commercial dispute within the meaning of Section 2(1)(c) of the Commercial Courts Act, 2015 ( CC Act, 2015 for short). In view of such contention, the respondents herein also filed an application under Order VII Rule 10 of the Civil Procedure Code seeking an order to return the plaint to be presented in the Court in which the suit should have been instituted. The appellant herein though did not choose to file objection to the said application, had however opposed the same. The application was registered as Exhibit 15 and the learned Judge of the Commercial Court on consideration had through the order dated 17.10.2018 rejected the application. The respondents herein claiming to be aggrieved by the said order had approached the High Court of Gujarat in R/Special Civil Application No.17868/2018. The High Court through a detailed order dated 01.03.2019 has allowed the petition, set aside the order dated 17.10.2018 passed by the Commercial Court, Vadodara and on allowing the application filed under Order VII Rule 10 CPC directed that the plaint be returned to the appellant herein to be presented in the Court in which the suit should have been instituted. The appellant herein, therefore, claiming to be aggrieved by the order dated 01.03.2019 is before this Court in this appeal. 3. The brief facts which led to the present situation is that the appellant herein executed an agreement to sell dated 14.02.2012 in favour of the respondent No. 2 in respect of the land which is described in the agreement. The respondent No. 2 assigned and transferred all his rights under the said agreement to sell in favour of respondent No.1 by executing an assignment deed dated 12.10.2017. In that view, the respondent No. 1 herein was to purchase the lands which were the subject matter of the agreement from the appellant herein. Accordingly, the sale was made under a Deed of Conveyance dated 03.11.2017. Since certain other aspects were to be completed regarding the change relating to the nature of the use of the land for conclusion of the transaction, the right of the appellant in respect of the land was to be protected. In that view a Memorandum of Understanding dated 03.11.2017 was entered into between the appellant and the respondents herein. As per the same, a Mortgage Deed was required to be executed by respondent No. 1 herein in favour of the appellant. 4. Accordingly, a Mortgage Deed dated 03.11.2017 was executed but the same had not been registered. It is in that light the appellant herein filed the Commercial Civil Suit No. 41/2018 so as to enforce the execution of a Mortgage Deed. Consequently, the relief of permanent injunction and other related reliefs were sought. It is in the said suit, summon was issued to respondents herein who are the defendants in the suit, wherein on filing the written statement the application under Order VII Rule 10 of CPC was filed. The Commercial Court while rejecting the application had referred to the Memorandum and Articles of Association of the appellant company and in that light taking note of the business that they were entitled to undertake has arrived at the conclusion that the plaintiff seems to be carrying on the business as an estate agent and in that circumstance has further arrived at its conclusion that it is a commercial dispute. The High Court on the other hand had found fault with the manner in which the Commercial Court had rested its consideration on the Memorandum and Articles of Association and had examined the matter in detail to come to a conclusion that the immovable property in the instant case was not being used for trade or commerce. In that regard, the legal position enunciated by the various decisions was referred to and had accordingly directed the return of the plaint to be presented in an appropriate Court which is assailed herein. 5. We have heard Shri Dhruv Mehta, learned senior advocate for the appellant, Shri Deven Parikh, learned senior advocate for the respondents and perused the appeal papers. 6. At the outset, it is noticed that the consideration required in the instant case is as to whether the transaction between the parties herein which is the subject matter of the suit could be considered as a commercial dispute so as to enable the Commercial Court to entertain the suit. In that regard, it is necessary to take note of Section 2(1)(c)(vii) of the CC Act, 2015. The said provision to the extent relevant is extracted here below for reference. Sec.2(1) In this Act, unless the context otherwise requires,- (a) xxx (b) xxx (c) commercial dispute means a dispute arising out of – (i) xxx (ii) xxx (iii) xxx (iv) xxx (v) xxx (vi) xxx (vii) agreements relating to immovable property used exclusively in trade or commerce; (viii) xxx (ix) xxx (x) xxx (xi) xxx (xii) xxx (xiii) xxx (xiv) xxx (xv) xxx (xvi) xxx (xvii) xxx (xviii) xxx (xix) xxx (xx) xxx (xxi) xxx (xxii) xxx From a perusal, of the provision relied upon by the learned senior advocates it is noticed that the disputes arising out of agreements relating to immovable property used exclusively in trade or commerce will qualify to be a commercial dispute to be tried by Commercial Courts. The question therefore would be that, in the instant case though the parties have entered into a sale transaction of the immovable property and presently in the suit the registration of a Mortgage Deed pertaining to the immovable property is sought, whether the immovable property involved could be considered as being used exclusively in trade or commerce. 7. The learned senior advocate for the appellant has made detailed submissions referring to the documents to contend that the appellant was running an industry in the land concerned which was acquired for that purpose and presently the respondent No.1 has purchased the same for developing the said land and in that view the land is one which is used for trade and commerce. The learned senior advocate for the respondents on the other hand has contended to the contrary that the appellant had ceased to function for the past several years and the company being defunct, the land involved was not being used for trade or commerce and even though the respondent No.1 has sought for change of land use and to develop the land, the same would be subject to such change of land use that would be granted and the use to which it would be put in future. Hence it is contended that as on the date of transaction the land is not being used for trade or commerce and a suit at present would not be maintainable before the Commercial Court. 8. Though such rival contentions are put forth by the learned senior advocate on either side, these aspects cannot be dealt with in abstract. Instead the nature of the dispute and the jurisdiction to try the same is to be reflected in the suit itself since in a civil suit the pleadings, namely averments in the plaint would at the outset be relevant to confer jurisdiction. Hence before adverting to the other aspects it would be necessary to carefully examine the plaint. The plaintiff has in detail referred to the nature of the transaction between the appellant and the respondents herein. In para 5 thereof the detail of the land bearing R.S. No.122 corresponding to City Survey No.1101 and 1100/1 having land area of 9207 square metres at Mouje Subhanpura Reg. District, Vadodara is referred. Further the schedule of the property is indicated in para 6 and reference is made to the Memorandum of Understanding where again the reference is made to the land. It is averred therein that it would be the total responsibility of the respondent No.1 herein (defendant No.2 in the suit) to change the land use as well as to pay the amount that may be required for the permission. The amount to be paid as premium is referred and the right of the plaintiff to secure the Mortgage Deed in view of the terms of the MoU is stated. In the entire plaint there is no reference to the nature of the land or the type of use to which it was being put as on the date of the Agreement to Sell/Sale Deed/Memorandum of Understanding or as on the date of the suit. 9. Further on referring to the cause of action in para 21, the plaintiff has thereafter referred in para 22 to the jurisdiction of the Court to hear and decide the matter. It would be appropriate to extract the same which reads as hereunder: 22. Jurisdiction: The Plaintiff states that the Defendants having their office at Vadodara land which is the subject matter of the instant suit is situated within the territorial jurisdiction of this Honble Court and hence this Honble Court has the jurisdiction to hear and decide the matter. Even though in the paragraph describing jurisdiction the plaintiff has stated with regard to the territorial jurisdiction since the office and land being at Vadodara, there is no reference indicating the reason for which the plaintiff pleads that the Court which is the Commercial Court exclusively constituted to try the commercial disputes has jurisdiction to try the instant suit. In that background, a perusal of the prayer made in the plaint would essentially indicate that the suit is one seeking for specific performance of the terms of MoU whereunder it is agreed that the Mortgage Deed be executed. Even if the immovable property under the Mortgage Deed was the subject matter it was necessary to plead and indicate that the same was being used in trade or commerce due to which the jurisdiction of Commercial Court is invoked. Without such basic pleadings in the plaint, any explanations sought to be put forth subsequently would only lead to a situation that if an objection is raised, in every suit a consideration would be required based on extraneous material even to ascertain as to whether the intended transaction between the parties was of such nature that it is to be construed as a commercial dispute. 10. Be that as it may, the learned senior advocates on both sides have sought to rely on the legal position decided by the various High Courts in the absence of the pronouncement of this Court. The learned senior advocate in that regard have referred to the various decisions on the same point. However, we do not find it appropriate to refer to each of them and over burden this order since we notice that the High Court in fact has referred to various decisions while deciding the instant case and has thereafter arrived at its conclusion. The discussion as made by the High Court with reference to the various decisions is also justified. In that view, we would refer to the decision of a Division Bench in the case of Jagmohan Behl vs. State Bank of Indore, 2017 SCC OnLine Del 10706 relied on by the learned senior advocate for the appellant. In that regard, it is noticed that in the said case on taking note of the provision contained in Clause 2(1)(c)(vii) of the CC Act, 2015 it is held that the dispute involved therein would constitute a commercial dispute and the expression arising out of and in relation to immovable property should not be given the narrow and restricted meaning and the expression would include all matters relating agreements in connection with the immovable properties. The said conclusion reached was in a circumstance where the immovable property in question was undoubtedly being used for a trade or commerce and it was held so when the claim in the suit is for recovery of rent or mesne profit, security deposit etc. for the use of such immovable property. 11. On the other hand, the learned senior advocate for the respondents has relied on the decision of a Division Bench of the Gujarat High Court in the case of Vasu Healthcare Private Limited vs. Gujarat Akruti TCG Biotech Limited, AIR 2017 Gujarat 153 wherein a detailed consideration has been made and the conclusion reached therein by taking note of an earlier decision is that on a plain reading of Clause 2(1)(c) of CC Act, 2015 the expression used must mean actually used or being used. It is further explained that if the intention of the legislature was to expand the scope, in that case the phraseology likely to be used or to be used would have been employed. The verbatim consideration therein is as hereunder; Therefore, if the dispute falls within any of the clause 2(c) the dispute can be said to be commercial dispute for which the Commercial Court would have jurisdiction. It is required to be noted that before the learned Commercial Court the original plaintiff relied upon section 2(c)(i), 2(c)(ii) and 2(c)(xx) of the Commercial Courts Act only. Learned Counsel appearing on behalf of the original plaintiff has candidly admitted and/or conceded that the case shall not fall within clause 2(c)(i); 2(c)(ii) or 2(c)(xx) of the Commercial Courts Act. It is required to be noted that before the learned Commercial Court it was never the case on behalf of the original plaintiff that case would fall within section 2(c)(vii) of the learned Commercial Court. Despite the above we have considered on merits whether even considering section 2(c)(vii) of the Commercial Courts Act, the dispute between the parties can be said to be commercial dispute within the definition of section 2(c) of the Commercial Courts Act or not? Considering section 2(c)(vii), commercial dispute means a dispute arising out of the agreements relating to immovable property used exclusively in trade or commerce. As observed hereinabove, at the time of filing of the suit and even so pleaded in the plaint, the immovable property/plots the agreements between the parties cannot be said to be agreements relating to immovable property used exclusively in trade or commerce. As per the agreement between the party after getting the plots on lease from the GIDC, the same was required to be thereafter developed by the original defendant No. 1 and after providing all infrastructural facilities and sub-plotting it, the same is required to be given to other persons like the original plaintiff. It is the case on behalf of the original plaintiff that as the original defendant No. 1 has failed to provide any infrastructural facilities and develop the plots and therefore, a civil suit for specific performance of the agreement has been filed. There are other alternative prayers also. Therefore, it cannot be said that the agreement is as such relating to immovable property used exclusively in trade or commerce. It is the case on behalf of the original plaintiff that as in clause (vii) of section 2(c), the pharseology used is not actually used or being used and therefore, even if at present the plot is not used and even if it is likely to be used even in future, in that case also, section 2(c)(vii) shall be applicable and therefore, the Commercial Court would have jurisdiction. The aforesaid has no substance. As per the cardinal principle of law while interpreting a particular statute or the provision, the literal and strict interpretation has to be applied. It may be noted that important words used in the relevant provisions are immovable property used exclusively in trade or commerce. If the submission on behalf of the original plaintiff is accepted in that case it would be adding something in the statute which is not there in the statute, which is not permissible. On plain reading of the relevant clause it is clear that the expression used must mean actually used or being used. If the intention of the legislature was to expand the scope, in that case the phraseology used would have been different as for example, likely to be used or to be used. The word used denotes actually used and it cannot be said to be either ready for use or likely to be used; or to be used. Similar view has been taken by the Bombay High Court (Nagpur Bench) in the case of Dineshkumar Gulabchand Agrawal (Supra) and it is observed and held that the word used denotes actually used and not merely ready for use. It is reported that SLP against the said decision has been dismissed by the Honble Supreme Court. 12. Though we are informed that the said decision is assailed before this Court in a Special Leave Petition we are inclined to agree with the view expressed therein. This is for the reason that this Court while examining the issue relating to exclusive land use, though in the different context has laid emphasis on the present user of the land either for agriculture or non-agriculture purpose being relevant. In that regard, the decision relied on by the learned senior advocate for the respondent in the case of Federation of A.P. Chambers of Commerce & Industry and Ors. vs. State of A.P. and Ors., (2000) 6 SCC 550 is noticed, wherein it is observed as under: 6. Section 3 of the said Act speaks of land is used for any industrial purpose, land is used for any commercial purpose and land is used for any other non-agricultural purpose. The emphasis is on the word is used. For the purpose of levy of assessment on non-agricultural lands at the rate specified in the Schedule for land used for industrial purposes, therefore, there has to be a finding as a fact that the land is in fact in praesenti in use for an industrial purpose. The same would apply to a commercial purpose or any other non-agricultural purpose. 9. We are in no doubt whatever, therefore, that it is only land which is actually in use for an industrial purpose as defined in the said Act that can be assessed to non-agricultural assessment at the rate specified for land used for industrial purposes. The wider meaning given to the word used in the judgment under challenge is untenable. Having regard to the fact that the said Act is a taxing statute, no Court is justified in imputing to the legislature an intention that it has not clearly expressed in the language it has employed. (emphasis supplied) 13. The learned senior advocate for the appellant would however, contend that a strict interpretation as in the case of taxing statutes would not be appropriate in the instant case where the issue relates to jurisdiction. In that regard, the learned senior advocate has referred to the statement of objects and reasons with which the Commercial Courts Act, 2015 is enacted so as to provide speedy disposal of high value commercial disputes so as to create the positive image to the investors world about the independent and responsive Indian Legal System. Hence, he contends that a purposive interpretation be made. It is contended that a wider purport and meaning is to be assigned while entertaining the suit and considering the dispute to be a commercial dispute. Having taken note of the submission we feel that the very purpose for which the CC Act of 2015 has been enacted would be defeated if every other suit merely because it is filed before the Commercial Court is entertained. This is for the reason that the suits which are not actually relating to commercial dispute but being filed merely because of the high value and with the intention of seeking early disposal would only clog the system and block the way for the genuine commercial disputes which may have to be entertained by the Commercial Courts as intended by the law makers. In commercial disputes as defined a special procedure is provided for a class of litigation and a strict procedure will have to be followed to entertain only that class of litigation in that jurisdiction. If the same is strictly interpreted it is not as if those excluded will be non-suited without any remedy. The excluded class of litigation will in any event be entertained in the ordinary Civil Courts wherein the remedy has always existed. 14. In that view it is also necessary to carefully examine and entertain only disputes which actually answers the definition commercial disputes as provided under the Act. In the instant case, as already taken note neither the agreement between the parties refers to the nature of the immovable property being exclusively used for trade or commerce as on the date of the agreement nor is there any pleading to that effect in the plaint. Further the very relief sought in the suit is for execution of the Mortgage Deed which is in the nature of specific performance of the terms of Memorandum of Understanding without reference to nature of the use of the immovable property in trade or commerce as on the date of the suit. Therefore, if all these aspects are kept in view, we are of the opinion that in the present facts the High Court was justified in its conclusion arrived through the order dated 01.03.2019 impugned herein. The Commercial Court shall therefore return the plaint indicating a date for its presentation before the Court having jurisdiction.

Decision reasoning: 0[ds]10. Be that as it may, the learned senior advocates on both sides have sought to rely on the legal position decided by the various High Courts in the absence of the pronouncement of this Court. The learned senior advocate in that regard have referred to the various decisions on the same point. However, we do not find it appropriate to refer to each of them and over burden this order since we notice that the High Court in fact has referred to various decisions while deciding the instant case and has thereafter arrived at its conclusion. The discussion as made by the High Court with reference to the various decisions is also justified.11. On the other hand, the learned senior advocate for the respondents has relied on the decision of a Division Bench of the Gujarat High Court in the case of Vasu Healthcare Private Limited vs. Gujarat Akruti TCG Biotech Limited, AIR 2017 Gujarat 153 wherein a detailed consideration has been made and the conclusion reached therein by taking note of an earlier decision is that on a plain reading of Clause 2(1)(c) of CC Act, 2015 the expression used must mean actually used or being used. It is further explained that if the intention of the legislature was to expand the scope, in that case the phraseology likely to be used or to be used would have been employed. The verbatim consideration therein is as hereunder;Therefore, if the dispute falls within any of the clause 2(c) the dispute can be said to be commercial dispute for which the Commercial Court would have jurisdiction. It is required to be noted that before the learned Commercial Court the original plaintiff relied upon section 2(c)(i), 2(c)(ii) and 2(c)(xx) of the Commercial Courts Act only. Learned Counsel appearing on behalf of the original plaintiff has candidly admitted and/or conceded that the case shall not fall within clause 2(c)(i); 2(c)(ii) or 2(c)(xx) of the Commercial Courts Act. It is required to be noted that before the learned Commercial Court it was never the case on behalf of the original plaintiff that case would fall within section 2(c)(vii) of the learned Commercial Court. Despite the above we have considered on merits whether even considering section 2(c)(vii) of the Commercial Courts Act, the dispute between the parties can be said to be commercial dispute within the definition of section 2(c) of the Commercial Courts Act or not? Considering section 2(c)(vii), commercial dispute means a dispute arising out of the agreements relating to immovable property used exclusively in trade or commerce. As observed hereinabove, at the time of filing of the suit and even so pleaded in the plaint, the immovable property/plots the agreements between the parties cannot be said to be agreements relating to immovable property used exclusively in trade or commerce. As per the agreement between the party after getting the plots on lease from the GIDC, the same was required to be thereafter developed by the original defendant No. 1 and after providing all infrastructural facilities and sub-plotting it, the same is required to be given to other persons like the original plaintiff. It is the case on behalf of the original plaintiff that as the original defendant No. 1 has failed to provide any infrastructural facilities and develop the plots and therefore, a civil suit for specific performance of the agreement has been filed. There are other alternative prayers also. Therefore, it cannot be said that the agreement is as such relating to immovable property used exclusively in trade or commerce. It is the case on behalf of the original plaintiff that as in clause (vii) of section 2(c), the pharseology used is not actually used or being used and therefore, even if at present the plot is not used and even if it is likely to be used even in future, in that case also, section 2(c)(vii) shall be applicable and therefore, the Commercial Court would have jurisdiction. The aforesaid has no substance. As per the cardinal principle of law while interpreting a particular statute or the provision, the literal and strict interpretation has to be applied. It may be noted that important words used in the relevant provisions are immovable property used exclusively in trade or commerce. If the submission on behalf of the original plaintiff is accepted in that case it would be adding something in the statute which is not there in the statute, which is not permissible. On plain reading of the relevant clause it is clear that the expression used must mean actually used or being used. If the intention of the legislature was to expand the scope, in that case the phraseology used would have been different as for example, likely to be used or to be used. The word used denotes actually used and it cannot be said to be either ready for use or likely to be used; or to be used. Similar view has been taken by the Bombay High Court (Nagpur Bench) in the case of Dineshkumar Gulabchand Agrawal (Supra) and it is observed and held that the word used denotes actually used and not merely ready for use. It is reported that SLP against the said decision has been dismissed by the Honble Supreme Court12. Though we are informed that the said decision is assailed before this Court in a Special Leave Petition we are inclined to agree with the view expressed therein. This is for the reason that this Court while examining the issue relating to exclusive land use, though in the different context has laid emphasis on the present user of the land either for agriculture or non-agriculture purpose being relevantHaving taken note of the submission we feel that the very purpose for which the CC Act of 2015 has been enacted would be defeated if every other suit merely because it is filed before the Commercial Court is entertained. This is for the reason that the suits which are not actually relating to commercial dispute but being filed merely because of the high value and with the intention of seeking early disposal would only clog the system and block the way for the genuine commercial disputes which may have to be entertained by the Commercial Courts as intended by the law makers. In commercial disputes as defined a special procedure is provided for a class of litigation and a strict procedure will have to be followed to entertain only that class of litigation in that jurisdiction. If the same is strictly interpreted it is not as if those excluded will be non-suited without any remedy. The excluded class of litigation will in any event be entertained in the ordinary Civil Courts wherein the remedy has always existed