I have, speaking for the Division Bench of this Court in Santosh
Arora Vs. M.L. Arora MANU/DE/1162/2014 observed that i) law permits a
claim for future mesne profits i.e. for a relief, the cause of action wherefor
has not accrued to the plaintiff on the date of the institution of the suit to be
made; ii) Order 20 Rule 12 of the CPC requires the Court, in a suit for
recovery of possession of immovable property and for rent or mesne profits,
to, besides passing decree for possession, also pass a decree for mesne
profits or direct an enquiry as to such mesne profits, for the period prior to
the institution of the suit if claimed and if within limitation on the date of
institution of the suit, and for the period, from the date of institution of the
suit until delivery of possession; iii) with regard to future mesne profits, the
plaintiff has no cause of action on the date of the institution of the suit, and it
is not possible for him to plead this cause of action or to value it or to pay
court-fees thereon at the time of the institution of the suit; iv) the limits of
the pecuniary jurisdiction of the Court of first instance does not impede and
is not a bar to award damages beyond its pecuniary jurisdiction.
IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 19th July, 2016
CS(OS) No.2330/2008, IA No.19934/2015 (of the plaintiff for
direction) & CCP (O) No.30/2016.
MRS. SONI DAVE
V
M/S TRANS ASIAN INDUSTRIES EXPOSITIONS
PVT. LTD.
CORAM:-
HON’BLE MR. JUSTICE RAJIV SAHAI ENDLAW
Citation:AIR 2016 Delhi 186
3. Both the suits are for ejectment of the defendant from different parts
of the property no.M-1, Hauz Khas, New Delhi.
4. A decree, on admissions, of ejectement has already been passed and in
appeals preferred thereagainst, time up to 31st July, 2016 has been given to
the defendant to vacate the property. The issue of mesne profits remains for
adjudication.
5. Both suits, as per the plaint therein, for the purposes of Court Fees and
jurisdiction have a value of less than the enhanced minimum pecuniary
jurisdiction of this Court. The suits, in accordance with the Office Order
dated 24th November, 2015 of Hon‟ble the Chief Justice, issued in exercise
of powers under Section 4 of the Delhi High Court (Amendment) Act, 2015,
are liable to be transferred to the concerned District Judge.
6. The counsel for the plaintiff however argues that as far as CS(OS)
No.2331/2008 is concerned, though the valuation thereof as per the plaint is
less than the enhanced minimum pecuniary jurisdiction of this Court, is a
commercial suit within the meaning of The Commercial Courts, Commercial
Division and Commercial Appellate Division of High Courts Act, 2015
(Commercial Courts Act) and since the specified value, i.e. the market value
of the property qua which the relief of ejectment was claimed therein was/is
in excess of Rs.1 crore, the same has to remain in this Court and is not liable
to be transferred. Attention in this regard is invited to Section 12 (c) of the
Commercial Courts Act prescribing the mode of determination of Specified
Value and to Section 21 thereof giving the provisions of the said Act an
overriding effect.
7. The contention of the counsel for the plaintiff, though an innovative
one, does not find favour with me for the reasons following.
8. Per Section 7 of the Commercial Courts Act, all suits and applications
relating to “commercial disputes” of a “specified value” filed in a High
Court having ordinary original civil jurisdiction are to be heard and disposed
of by the Commercial Division of that High Court.
9. A “commercial dispute” is defined in Section 2(1)(c) of the Act as a
dispute arising out of transactions/relationships as described in Clauses (i) to
(xxii) thereunder. The only clause on which the plaintiff can perhaps rely
and to which the counsel for the plaintiff draws attention is Clause (vii)
which is as under:
“(vii) agreements relating to immovable property used
exclusively in trade or commerce;”
The explanation to Section 2(1)(c) is as under:
“Explanation. – A commercial dispute shall not cease to be a
commercial dispute merely because –
(a) it also involves action for recovery of immovable property
or for realisation of monies out of immovable property given as
security or involves any other relief pertaining to immovable
property;
(b) one of the contracting parties is the State or any of its
agencies or instrumentalities, or a private body carrying out public
functions;”
10. The term “specified value” is defined in Section 2(1)(i) of the Act as
under:
“(i) “specified value”, in relation to a commercial dispute, shall
mean the value of the subject matter in respect of a suit as
determined in accordance with Section 12 which shall not be less
than one crore rupees or such higher value, as may be notified by
the Central Government.”
11. Section 12 of the Commercial Courts Act, as contended by the
counsel for the plaintiff, provides for determination of specified value. The
same is as under:
“12. Determination of Specified Value. – (1) The Specified
Value of the subject-matter of the commercial dispute in a suit,
appeal or application shall be determined in the following
manner:––
(a) where the relief sought in a suit or application is for
recovery of money, the money sought to be recovered in the suit or
application inclusive of interest, if any, computed up to the date of
filing of the suit or application, as the case may be, shall be taken
into account for determining such Specified Value;
(b) where the relief sought in a suit, appeal or application
relates to movable property or to a right therein, the market value
of the movable property as on the date of filing of the suit, appeal
or application, as the case may be, shall be taken into account for
determining such Specified Value;
(c) where the relief sought in a suit, appeal or application
relates to immovable property or to a right therein, the market value
of the immovable property, as on the date of filing of the suit,
appeal or application, as the case may be, shall be taken into
account for determining Specified Value;
(d) where the relief sought in a suit, appeal or application
relates to any other intangible right, the market value of the said
rights as estimated by the plaintiff shall be taken into account for
determining Specified Value; and
(e) where the counterclaim is raised in any suit, appeal or
application, the value of the subject-matter of the commercial
dispute in such counterclaim as on the date of the counterclaim
shall be taken into account.
(2) The aggregate value of the claim and counterclaim, if any
as set out in the statement of claim and the counterclaim, if any, in
an arbitration of a commercial dispute shall be the basis for
determining whether such arbitration is subject to the jurisdiction
of a Commercial Division, Commercial Appellate Division or
Commercial Court, as the case may be.
(3) No appeal or civil revision application under section 115 of
the Code of Civil Procedure, 1908, as the case may be, shall lie
from an order of a Commercial Division or Commercial Court
finding that it has jurisdiction to hear a commercial dispute under
this Act.”
12. According to the counsel for the plaintiff, since the suit relates to
immovable property or to a right therein, the specified value thereof as per
Section 12(1)(c) is the market value of the property as on the date of filing of
the suit and the market value of the immovable property for recovery of
possession of which CS(OS) No.2331/2008 was filed, as per the circle rates
prescribed by the Government of NCT of Delhi (GNCTD), on the date of
institution of the suit also was in excess of Rs.1 crore.
13. As per Section 2(1)(c)(vii) supra, only a dispute arising out of
agreements relating to immovable property used exclusively in trade or
commerce qualifies as commercial dispute. It is nowhere the plea in the
plaint that the property with respect to which the suit is filed is used
exclusively in trade or commerce. The plea of the plaintiff in this regard is
that “the property user was as per law” and that “in the event that the
defendant were to put the suit property to any use that was not normally
permitted under law but could be permitted upon payment of applicable
charges, the defendant was liable to tender such charges as applicable in
respect thereof including any penalties, interest etc. thereon. Since the
defendant has been using the suit property as the show room, the applicable
charges were to be additionally borne by it”. Therefrom it appears that the
property No.M-1 is situated in the residential colony of Hauz Khas and not
in the Hauz Khas market. I may notice that it is the plea of the defendant in
its written statement that the letting out of the property as per the lease deed
between the parties was “for storage, exhibition of handicraft items and
residence”.
14. The plaintiff, without pleading that the transaction from which the
dispute subject matter of suit arises, relates to immovable property used
exclusively in trade or commerce, cannot seek for the suit to remain in this
Court by labeling it as a commercial dispute.
15. I may in this regard also observe that a property, prescribed user
whereof as per the law i.e. the Master Plan and the municipal laws is
residential, even if let out for use exclusively in trade or commerce or when,
without being so let out, is used exclusively in trade or commerce, the same
would still not qualify as an immovable property used exclusively in trade or
commerce within the meaning of Section 2(1)(c)(vii) of the Commercial
Courts Act. The Commercial Courts Act has brought only disputes arising
out of transactions relating to immovable property used exclusively in trade
or commerce within the ambit of a „commercial dispute‟. The legislature
could not have intended to bring disputes arising out of transactions relating
to immovable property illegally used exclusively in trade or commerce
within the ambit of commercial disputes. The principle, as enunciated in the
context of the provisions in the municipal laws, of determination of rateable
value / annual value (for payment of property tax / house tax on the basis of)
the rent at which the property can reasonably be expected to let, will be
applicable. It has been held that where, under the law i.e. the Rent Acts, the
landlord is prohibited from charging from the tenant anything more than the
„standard rent‟ the municipal authority cannot, determine the rateable value /
annual value at a rent more than the standard rent, even if the owner /
landlord is actually receiving rent more than standard rent. Reference in this
regard can be made to Dr. Balbir Singh Vs. M.C.D. (1985) 1 SCC 167. It
was held that the owner / landlord could not reasonably expect to get more
than the maximum rent permitted in law.
16. Justice G.P. Singh in his “Principles of Statutory Interpretation”, 13th
Edition in Chapter 5 titled “Subsidiary Rules” and under the head
“Construction of General Words” has referred to “Principle of Legality”, as
the general words of a statute are not to be construed as to alter the previous
policy of the law, unless no sense or meaning can be applied to those words
consistently with the intention of preserving the previous policy untouched.
It is further authored that there are many presumptions which an interpreter
is entitled to raise which are not readily displaced merely by use of general
words, unless there is the clearest provision to the contrary. The Principle of
Legality has also been described as an aspect of the rule of law known both
to Parliament and the Courts, upon which statutory language will be
interpreted. Similarly, in Chapter 2 titled “Guiding Rules” and under the
head “The Rule of Literal Construction” Lord Macnaghten has been quoted
as opining that “in construing acts of Parliament”, it is a general rule that
“words must be taken in their legal sense unless the contrary intention
appears.”
17. Following the said principles, Section 2(1)(c)(vii) has to be read and
interpreted as „immovable property which is in accordance with law, used
exclusively in trade or commerce‟ and not as „immovable property which, in
contravention of law, is used exclusively in trade or commerce‟.
18. Even otherwise, the claim of the plaintiff in the suit, for recovery of
possession of immovable property, already stands decreed and the suit as of
today or on the date of coming into force of the Commercial Courts Act
could not have been said to be for recovery of immovable property. Thus
the market value of the property is today not relevant. The suit today
survives only for the relief of recovery of arrears of rent and future mesne
profits relating to immovable property.
19. Also, though the counsel for the plaintiff has argued that the specified
value of the property is more than Rs.1 crore but has not paid the court fees
thereon and court fees has been paid in terms of Section 7(iv) of the Court
Fees Act, 1870 as on a suit between the landlord and tenant, for recovery of
immovable property from a tenant including a tenant holding over after the
determination of tenancy, according to the amount of the rent of the
immovable property payable for the year next before the date of presenting
the plaint.
20. As per Section 4 of the Suits Valuation Act, 1887, the valuation of a
suit for the purpose of jurisdiction is not to exceed the value of the land or
interest in land as determined by Section 7(iv) of the Court Fees Act and as
per which as aforesaid, the value is according to the amount of the rent
payable for the year next before the date of presenting the plaint.
21. It would thus be seen that by a statutory fiction created by Section
7(iv) of the Court Fees Act, the value of the immovable property for the
purposes of recovery of possession thereof from a tenant is not its market
value but its rental value for the year next before the date of presenting the
plaint. The reason therefor is not difficult to understand. The owner /
landlord of a immovable property, for the relief of eviction of a tenant
paying or who had agreed to pay, not the market value of the property, but
rent of the property which may be a miniscule part of the market value
of the property, cannot be made to pay ad valorem court fees on the basis of
market value of the property.
22. I am unable to agree with the contention of the counsel for the
plaintiff that owing to Section 21 of the Commercial Courts Act as under:
“21. Act to have overriding effect. – Save as otherwise provided,
the provisions of this Act shall have effect, notwithstanding anything
inconsistent therewith contained in any other law for the time being in
force or in any instrument having effect by virtue of any law for the
time being in force other than this Act.”
the Court Fees Act and the Suits Valuation Act stand overridden or
superceded.
23. The Commercial Courts Act has not been enacted to interfere with the
Courts Fees Act or the Suits Valuation Act. It is a settled principle of law
that the provisions such as Section 21 supra have to be read and interpreted
by finding out the extent to which the legislature intended to give it a
overriding effect and the context in which such a provision is made and on a
consideration of purpose and policy underlying the enactment. It is also
relevant to consider whether the conflicting enactment can be described as a
special one and in which case the special one may prevail over the more
general one, notwithstanding that the general one is later in time.
24. Supreme Court, in A.G. Varadarajulu Vs. State of T.N. (1998) 4 SCC
231, while dealing with a non-obstante clause under which the legislature
wants to give overriding effect to a section held that the Court must try to
find out the extent to which the legislature had intended to give one
provision overriding effect over another provision. It was reiterated that the
non-obstante clause, no doubt a very potent clause intended to exclude every
consideration arising from other provisions of the same statute or other
statute but when the section containing the said clause does not refer to any
particular provision which it intends to override but refers to the provisions
of statute generally, it is not permissible to hold that it excludes the whole
Act and stands all alone by itself. Similarly, in Central Bank of India Vs.
State of Kerala (2009) 4 SCC 94, in the context of non-obstante clauses in
Section 34(1) of the Recovery Of Debts Due To Banks And Financial
Institutions Act, 1993 (DRT Act) and Section 35 of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 (SARFAESI ACT), giving overriding effect to the
provisions of those statutes, it was held that they had overriding effect only
if there was anything inconsistent in any other law or instrument having
effect by virtue of any other law and if there was no provision in the other
enactment which was inconsistent with the DRT Act or SARFAESI Act, the
said provisions could not override other legislations.
25. In my view Section 12 of the Commercial Courts Act providing for
determination of specified value as defined in Section 2(i) thereof is not
intended to provide for a new mode of determining the valuation of the suit
for the purpose of jurisdiction and court fees. It would be incongruous to
hold that while for the purpose of payment of court fees the deemed fiction
provided in the Court Fees Act for determining the value of the property is
to apply but not for determining the specified value under the Commercial
Courts Act.
26. In my opinion Section 12 of the Commercial Courts Act has to be
read harmoniously with the Court Fees Act and the Suits Valuation Act and
reading so, the specified value of a suit where the relief sought relates to
immovable property or to a right thereunder has to be according to the
market value of the immovable property only in such suits where the suit as
per the Court Fees Act and / or the Suits Valuation Act has to be valued on
the market value of the property and not where as per the Court Fees Act and
the Suits Valuation Act the valuation of a suit even if for the relief of
recovery of immovable property or a right therein is required to be anything
other than market value as is the case in a suit by a landlord for recovery of
possession of immovable property from a tenant.
27. I have already in judgment dated 5th May, 2016 in RFA No.76/2016
titled Mukesh Kumar Gupta Vs. Rajneesh Gupta while setting aside the
judgment and decree of dismissal at the threshold of two separate suits for
specific performance of two separate agreements for sale of immovable
property inter alia on the ground that two separate suits had been filed to
create pecuniary jurisdiction of the Additional District Judge which
otherwise has no jurisdiction as per the value of the property in accordance
with the circle rates and Section 12 of the Commercial Courts Act held (a)
that since as per the Court Fees Act and Suits Valuation Act the valuation
for the purpose of court fees and jurisdiction of a suit for specific
performance of an agreement of sale of immovable property has to be as per
the consideration agreed in the contract, the specified value of such a suit
necessarily has to be in accordance with the consideration agreed in the
contract for sale and not the market value of the property; (b) Circle rates
notified by the GNCTD for the purpose of guidance of Sub-Registrars to
whom the documents/instruments of transfer of property are presented for
registration, to ensure that stamp duty in accordance with law is paid thereon
have in Manu Narang Vs. The Lieutenant Governor, Government of
National Capital Territory of Delhi MANU/DE/4234/2015 and in Amit
Gupta Vs. Government of NCT of Delhi MANU/DE/0841/2016 been held
to be only presumptive, open to rebuttal.
28. If it were to be held that all suits arising out of agreements relating to
immovable property used exclusively in trade or commerce and / or for
recovery of possession thereof and / or for realization of monies with respect
thereto, where the market value of the property is in excess of Rs.1 crore are
commercial dispute triable by the Commercial Division of the High Court, it
would bring to the Commercial Division of this Court all the disputes as
between landlord and tenant of such property and for specific performance
of agreements of sale of such property, even if the annual rent thereof or the
sale purchase consideration thereof is of less than Rs.1 crore, inundating the
commercial divisions of the High Court and not allowing commercial
disputes for expeditious disposal whereof the Commercial Courts Act was
enacted to be decided expeditiously and defeating the very purpose of
enactment of the Commercial Courts Act. It is a settled principle of
interpretation of statutes that the provisions of a statute have to be interpreted in
a reasonable way, to serve the purpose for which the statute has been
enacted and not to defeat the said purpose. Supreme Court in Union of India
Vs. Ranbaxy Laboratories Ltd. AIR 2008 SC 2286 held that the Court has
not only to take a pragmatic view while interpreting a statutory provision,
but must also consider the practical aspect of it.
29. The claim of the plaintiff in the suit which survives as aforesaid, for
realization of monies, even if held to be monies pertaining to immovable
property within the meaning of explanation to Section 2(1)(c) of the
Commercial Courts Act was for less than the specified value of Rs.1 crore.
Even if the claim now of the plaintiff for realization of such monies, taking
into account, the rent / mesne profits accruing in the last nearly eight years
since the institution of the suit were to be more than Rs.1 crore, the same
also according to me would not make the specified value of the suit to be
more than Rs.1 crore. The determination of specified value as per Section
12(1)(a) of the Commercial Courts Act, where the relief is for recovery of
money, is the amount due up to the date of filing of the suit and not the
amount due which may be falling due thereafter.
30. I have, speaking for the Division Bench of this Court in Santosh
Arora Vs. M.L. Arora MANU/DE/1162/2014 observed that i) law permits a
claim for future mesne profits i.e. for a relief, the cause of action wherefor
has not accrued to the plaintiff on the date of the institution of the suit to be
made; ii) Order 20 Rule 12 of the CPC requires the Court, in a suit for
recovery of possession of immovable property and for rent or mesne profits,
to, besides passing decree for possession, also pass a decree for mesne
profits or direct an enquiry as to such mesne profits, for the period prior to
the institution of the suit if claimed and if within limitation on the date of
institution of the suit, and for the period, from the date of institution of the
suit until delivery of possession; iii) with regard to future mesne profits, the
plaintiff has no cause of action on the date of the institution of the suit, and it
is not possible for him to plead this cause of action or to value it or to pay
court-fees thereon at the time of the institution of the suit; iv) the limits of
the pecuniary jurisdiction of the Court of first instance does not impede and
is not a bar to award damages beyond its pecuniary jurisdiction. Reliance
was placed on Mahadeo Savlaram Shelke Vs. Puna Municipal
Corporation (1995) 3 SCC 33.
31. Thus, for this reason also the suit will not qualify as a commercial
dispute to be tried by this Court.
32. The next contention of the counsel for the plaintiff is that the suits
cannot be transferred owing to the plaintiff having filed petitions averring
the contempt of court by the defendant for non-compliance with the
direction for payment of monthly amounts.
33. Order XV-A as added to the CPC applicable in Delhi provides a
remedy therefor of striking off of the defence. Even if the contention of the
counsel for the plaintiff that Order XV-A having been introduced after the
institution of the suit would not apply were to be accepted, the law as
developed under Order 39 Rule 10 prior to addition of Order XV-A also was
that if the defendant failed to comply with the order of deposit/payment of
rent during the pendency of the suit, the remedy therefor was of striking off
of the defence. Reference to be made to Raghubir Rao Vs. Prem Lata 211
(2014) DLT 516 and Shakuntala Devi Vs. Seven Star Electricals Pvt. Ltd.
MANU/DE/2725/2008.
34. Rather, I have enquired from the counsel for the plaintiff whether not
the grant of time to the defendant to vacate the property was subject to such
payment and if it was so, why the plaintiff, upon non-payment by the
defendant, not apply to the Court for the order of ejectment to be executed
forthwith.
35. The counsel for the plaintiff states that though the order of grant of
time was subject to the payment which the defendant was directed to make
but since the time is coming to an end on 31st July, 2016, the plaintiff has not
applied therefor.
36. In my view the pendency of application/s averring contempt of court
by the defendant also does not come in the way of the suits to be transferred
to the subordinate court for the reason i) the said applications are in the
nature of Order XXXIX Rule 2A and which the subordinate courts are
competent to deal with; and, ii) even if a case for contempt were to be made
out it is always open to the plaintiff to independently approach this Court
under its contempt jurisdiction or the subordinate courts are empowered to
make a contempt reference to this Court.
37. Accordingly, the suits with pending applications are transferred to the
District Judge (South-East), Saket Courts within whose jurisdiction the
property at Hauz Khas, New Delhi is situated. The parties to appear before the
District Judge/Additional District Judge (South-East), Saket Courts, New Delhi
on 29
th August, 2016.
RAJIV SAHAI ENDLAW, J.
JULY 19, 2016
Arora Vs. M.L. Arora MANU/DE/1162/2014 observed that i) law permits a
claim for future mesne profits i.e. for a relief, the cause of action wherefor
has not accrued to the plaintiff on the date of the institution of the suit to be
made; ii) Order 20 Rule 12 of the CPC requires the Court, in a suit for
recovery of possession of immovable property and for rent or mesne profits,
to, besides passing decree for possession, also pass a decree for mesne
profits or direct an enquiry as to such mesne profits, for the period prior to
the institution of the suit if claimed and if within limitation on the date of
institution of the suit, and for the period, from the date of institution of the
suit until delivery of possession; iii) with regard to future mesne profits, the
plaintiff has no cause of action on the date of the institution of the suit, and it
is not possible for him to plead this cause of action or to value it or to pay
court-fees thereon at the time of the institution of the suit; iv) the limits of
the pecuniary jurisdiction of the Court of first instance does not impede and
is not a bar to award damages beyond its pecuniary jurisdiction.
IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 19th July, 2016
CS(OS) No.2330/2008, IA No.19934/2015 (of the plaintiff for
direction) & CCP (O) No.30/2016.
MRS. SONI DAVE
V
M/S TRANS ASIAN INDUSTRIES EXPOSITIONS
PVT. LTD.
CORAM:-
HON’BLE MR. JUSTICE RAJIV SAHAI ENDLAW
Citation:AIR 2016 Delhi 186
3. Both the suits are for ejectment of the defendant from different parts
of the property no.M-1, Hauz Khas, New Delhi.
4. A decree, on admissions, of ejectement has already been passed and in
appeals preferred thereagainst, time up to 31st July, 2016 has been given to
the defendant to vacate the property. The issue of mesne profits remains for
adjudication.
5. Both suits, as per the plaint therein, for the purposes of Court Fees and
jurisdiction have a value of less than the enhanced minimum pecuniary
jurisdiction of this Court. The suits, in accordance with the Office Order
dated 24th November, 2015 of Hon‟ble the Chief Justice, issued in exercise
of powers under Section 4 of the Delhi High Court (Amendment) Act, 2015,
are liable to be transferred to the concerned District Judge.
6. The counsel for the plaintiff however argues that as far as CS(OS)
No.2331/2008 is concerned, though the valuation thereof as per the plaint is
less than the enhanced minimum pecuniary jurisdiction of this Court, is a
commercial suit within the meaning of The Commercial Courts, Commercial
Division and Commercial Appellate Division of High Courts Act, 2015
(Commercial Courts Act) and since the specified value, i.e. the market value
of the property qua which the relief of ejectment was claimed therein was/is
in excess of Rs.1 crore, the same has to remain in this Court and is not liable
to be transferred. Attention in this regard is invited to Section 12 (c) of the
Commercial Courts Act prescribing the mode of determination of Specified
Value and to Section 21 thereof giving the provisions of the said Act an
overriding effect.
7. The contention of the counsel for the plaintiff, though an innovative
one, does not find favour with me for the reasons following.
8. Per Section 7 of the Commercial Courts Act, all suits and applications
relating to “commercial disputes” of a “specified value” filed in a High
Court having ordinary original civil jurisdiction are to be heard and disposed
of by the Commercial Division of that High Court.
9. A “commercial dispute” is defined in Section 2(1)(c) of the Act as a
dispute arising out of transactions/relationships as described in Clauses (i) to
(xxii) thereunder. The only clause on which the plaintiff can perhaps rely
and to which the counsel for the plaintiff draws attention is Clause (vii)
which is as under:
“(vii) agreements relating to immovable property used
exclusively in trade or commerce;”
The explanation to Section 2(1)(c) is as under:
“Explanation. – A commercial dispute shall not cease to be a
commercial dispute merely because –
(a) it also involves action for recovery of immovable property
or for realisation of monies out of immovable property given as
security or involves any other relief pertaining to immovable
property;
(b) one of the contracting parties is the State or any of its
agencies or instrumentalities, or a private body carrying out public
functions;”
10. The term “specified value” is defined in Section 2(1)(i) of the Act as
under:
“(i) “specified value”, in relation to a commercial dispute, shall
mean the value of the subject matter in respect of a suit as
determined in accordance with Section 12 which shall not be less
than one crore rupees or such higher value, as may be notified by
the Central Government.”
11. Section 12 of the Commercial Courts Act, as contended by the
counsel for the plaintiff, provides for determination of specified value. The
same is as under:
“12. Determination of Specified Value. – (1) The Specified
Value of the subject-matter of the commercial dispute in a suit,
appeal or application shall be determined in the following
manner:––
(a) where the relief sought in a suit or application is for
recovery of money, the money sought to be recovered in the suit or
application inclusive of interest, if any, computed up to the date of
filing of the suit or application, as the case may be, shall be taken
into account for determining such Specified Value;
(b) where the relief sought in a suit, appeal or application
relates to movable property or to a right therein, the market value
of the movable property as on the date of filing of the suit, appeal
or application, as the case may be, shall be taken into account for
determining such Specified Value;
(c) where the relief sought in a suit, appeal or application
relates to immovable property or to a right therein, the market value
of the immovable property, as on the date of filing of the suit,
appeal or application, as the case may be, shall be taken into
account for determining Specified Value;
(d) where the relief sought in a suit, appeal or application
relates to any other intangible right, the market value of the said
rights as estimated by the plaintiff shall be taken into account for
determining Specified Value; and
(e) where the counterclaim is raised in any suit, appeal or
application, the value of the subject-matter of the commercial
dispute in such counterclaim as on the date of the counterclaim
shall be taken into account.
(2) The aggregate value of the claim and counterclaim, if any
as set out in the statement of claim and the counterclaim, if any, in
an arbitration of a commercial dispute shall be the basis for
determining whether such arbitration is subject to the jurisdiction
of a Commercial Division, Commercial Appellate Division or
Commercial Court, as the case may be.
(3) No appeal or civil revision application under section 115 of
the Code of Civil Procedure, 1908, as the case may be, shall lie
from an order of a Commercial Division or Commercial Court
finding that it has jurisdiction to hear a commercial dispute under
this Act.”
12. According to the counsel for the plaintiff, since the suit relates to
immovable property or to a right therein, the specified value thereof as per
Section 12(1)(c) is the market value of the property as on the date of filing of
the suit and the market value of the immovable property for recovery of
possession of which CS(OS) No.2331/2008 was filed, as per the circle rates
prescribed by the Government of NCT of Delhi (GNCTD), on the date of
institution of the suit also was in excess of Rs.1 crore.
13. As per Section 2(1)(c)(vii) supra, only a dispute arising out of
agreements relating to immovable property used exclusively in trade or
commerce qualifies as commercial dispute. It is nowhere the plea in the
plaint that the property with respect to which the suit is filed is used
exclusively in trade or commerce. The plea of the plaintiff in this regard is
that “the property user was as per law” and that “in the event that the
defendant were to put the suit property to any use that was not normally
permitted under law but could be permitted upon payment of applicable
charges, the defendant was liable to tender such charges as applicable in
respect thereof including any penalties, interest etc. thereon. Since the
defendant has been using the suit property as the show room, the applicable
charges were to be additionally borne by it”. Therefrom it appears that the
property No.M-1 is situated in the residential colony of Hauz Khas and not
in the Hauz Khas market. I may notice that it is the plea of the defendant in
its written statement that the letting out of the property as per the lease deed
between the parties was “for storage, exhibition of handicraft items and
residence”.
14. The plaintiff, without pleading that the transaction from which the
dispute subject matter of suit arises, relates to immovable property used
exclusively in trade or commerce, cannot seek for the suit to remain in this
Court by labeling it as a commercial dispute.
15. I may in this regard also observe that a property, prescribed user
whereof as per the law i.e. the Master Plan and the municipal laws is
residential, even if let out for use exclusively in trade or commerce or when,
without being so let out, is used exclusively in trade or commerce, the same
would still not qualify as an immovable property used exclusively in trade or
commerce within the meaning of Section 2(1)(c)(vii) of the Commercial
Courts Act. The Commercial Courts Act has brought only disputes arising
out of transactions relating to immovable property used exclusively in trade
or commerce within the ambit of a „commercial dispute‟. The legislature
could not have intended to bring disputes arising out of transactions relating
to immovable property illegally used exclusively in trade or commerce
within the ambit of commercial disputes. The principle, as enunciated in the
context of the provisions in the municipal laws, of determination of rateable
value / annual value (for payment of property tax / house tax on the basis of)
the rent at which the property can reasonably be expected to let, will be
applicable. It has been held that where, under the law i.e. the Rent Acts, the
landlord is prohibited from charging from the tenant anything more than the
„standard rent‟ the municipal authority cannot, determine the rateable value /
annual value at a rent more than the standard rent, even if the owner /
landlord is actually receiving rent more than standard rent. Reference in this
regard can be made to Dr. Balbir Singh Vs. M.C.D. (1985) 1 SCC 167. It
was held that the owner / landlord could not reasonably expect to get more
than the maximum rent permitted in law.
16. Justice G.P. Singh in his “Principles of Statutory Interpretation”, 13th
Edition in Chapter 5 titled “Subsidiary Rules” and under the head
“Construction of General Words” has referred to “Principle of Legality”, as
the general words of a statute are not to be construed as to alter the previous
policy of the law, unless no sense or meaning can be applied to those words
consistently with the intention of preserving the previous policy untouched.
It is further authored that there are many presumptions which an interpreter
is entitled to raise which are not readily displaced merely by use of general
words, unless there is the clearest provision to the contrary. The Principle of
Legality has also been described as an aspect of the rule of law known both
to Parliament and the Courts, upon which statutory language will be
interpreted. Similarly, in Chapter 2 titled “Guiding Rules” and under the
head “The Rule of Literal Construction” Lord Macnaghten has been quoted
as opining that “in construing acts of Parliament”, it is a general rule that
“words must be taken in their legal sense unless the contrary intention
appears.”
17. Following the said principles, Section 2(1)(c)(vii) has to be read and
interpreted as „immovable property which is in accordance with law, used
exclusively in trade or commerce‟ and not as „immovable property which, in
contravention of law, is used exclusively in trade or commerce‟.
18. Even otherwise, the claim of the plaintiff in the suit, for recovery of
possession of immovable property, already stands decreed and the suit as of
today or on the date of coming into force of the Commercial Courts Act
could not have been said to be for recovery of immovable property. Thus
the market value of the property is today not relevant. The suit today
survives only for the relief of recovery of arrears of rent and future mesne
profits relating to immovable property.
19. Also, though the counsel for the plaintiff has argued that the specified
value of the property is more than Rs.1 crore but has not paid the court fees
thereon and court fees has been paid in terms of Section 7(iv) of the Court
Fees Act, 1870 as on a suit between the landlord and tenant, for recovery of
immovable property from a tenant including a tenant holding over after the
determination of tenancy, according to the amount of the rent of the
immovable property payable for the year next before the date of presenting
the plaint.
20. As per Section 4 of the Suits Valuation Act, 1887, the valuation of a
suit for the purpose of jurisdiction is not to exceed the value of the land or
interest in land as determined by Section 7(iv) of the Court Fees Act and as
per which as aforesaid, the value is according to the amount of the rent
payable for the year next before the date of presenting the plaint.
21. It would thus be seen that by a statutory fiction created by Section
7(iv) of the Court Fees Act, the value of the immovable property for the
purposes of recovery of possession thereof from a tenant is not its market
value but its rental value for the year next before the date of presenting the
plaint. The reason therefor is not difficult to understand. The owner /
landlord of a immovable property, for the relief of eviction of a tenant
paying or who had agreed to pay, not the market value of the property, but
rent of the property which may be a miniscule part of the market value
of the property, cannot be made to pay ad valorem court fees on the basis of
market value of the property.
22. I am unable to agree with the contention of the counsel for the
plaintiff that owing to Section 21 of the Commercial Courts Act as under:
“21. Act to have overriding effect. – Save as otherwise provided,
the provisions of this Act shall have effect, notwithstanding anything
inconsistent therewith contained in any other law for the time being in
force or in any instrument having effect by virtue of any law for the
time being in force other than this Act.”
the Court Fees Act and the Suits Valuation Act stand overridden or
superceded.
23. The Commercial Courts Act has not been enacted to interfere with the
Courts Fees Act or the Suits Valuation Act. It is a settled principle of law
that the provisions such as Section 21 supra have to be read and interpreted
by finding out the extent to which the legislature intended to give it a
overriding effect and the context in which such a provision is made and on a
consideration of purpose and policy underlying the enactment. It is also
relevant to consider whether the conflicting enactment can be described as a
special one and in which case the special one may prevail over the more
general one, notwithstanding that the general one is later in time.
24. Supreme Court, in A.G. Varadarajulu Vs. State of T.N. (1998) 4 SCC
231, while dealing with a non-obstante clause under which the legislature
wants to give overriding effect to a section held that the Court must try to
find out the extent to which the legislature had intended to give one
provision overriding effect over another provision. It was reiterated that the
non-obstante clause, no doubt a very potent clause intended to exclude every
consideration arising from other provisions of the same statute or other
statute but when the section containing the said clause does not refer to any
particular provision which it intends to override but refers to the provisions
of statute generally, it is not permissible to hold that it excludes the whole
Act and stands all alone by itself. Similarly, in Central Bank of India Vs.
State of Kerala (2009) 4 SCC 94, in the context of non-obstante clauses in
Section 34(1) of the Recovery Of Debts Due To Banks And Financial
Institutions Act, 1993 (DRT Act) and Section 35 of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 (SARFAESI ACT), giving overriding effect to the
provisions of those statutes, it was held that they had overriding effect only
if there was anything inconsistent in any other law or instrument having
effect by virtue of any other law and if there was no provision in the other
enactment which was inconsistent with the DRT Act or SARFAESI Act, the
said provisions could not override other legislations.
25. In my view Section 12 of the Commercial Courts Act providing for
determination of specified value as defined in Section 2(i) thereof is not
intended to provide for a new mode of determining the valuation of the suit
for the purpose of jurisdiction and court fees. It would be incongruous to
hold that while for the purpose of payment of court fees the deemed fiction
provided in the Court Fees Act for determining the value of the property is
to apply but not for determining the specified value under the Commercial
Courts Act.
26. In my opinion Section 12 of the Commercial Courts Act has to be
read harmoniously with the Court Fees Act and the Suits Valuation Act and
reading so, the specified value of a suit where the relief sought relates to
immovable property or to a right thereunder has to be according to the
market value of the immovable property only in such suits where the suit as
per the Court Fees Act and / or the Suits Valuation Act has to be valued on
the market value of the property and not where as per the Court Fees Act and
the Suits Valuation Act the valuation of a suit even if for the relief of
recovery of immovable property or a right therein is required to be anything
other than market value as is the case in a suit by a landlord for recovery of
possession of immovable property from a tenant.
27. I have already in judgment dated 5th May, 2016 in RFA No.76/2016
titled Mukesh Kumar Gupta Vs. Rajneesh Gupta while setting aside the
judgment and decree of dismissal at the threshold of two separate suits for
specific performance of two separate agreements for sale of immovable
property inter alia on the ground that two separate suits had been filed to
create pecuniary jurisdiction of the Additional District Judge which
otherwise has no jurisdiction as per the value of the property in accordance
with the circle rates and Section 12 of the Commercial Courts Act held (a)
that since as per the Court Fees Act and Suits Valuation Act the valuation
for the purpose of court fees and jurisdiction of a suit for specific
performance of an agreement of sale of immovable property has to be as per
the consideration agreed in the contract, the specified value of such a suit
necessarily has to be in accordance with the consideration agreed in the
contract for sale and not the market value of the property; (b) Circle rates
notified by the GNCTD for the purpose of guidance of Sub-Registrars to
whom the documents/instruments of transfer of property are presented for
registration, to ensure that stamp duty in accordance with law is paid thereon
have in Manu Narang Vs. The Lieutenant Governor, Government of
National Capital Territory of Delhi MANU/DE/4234/2015 and in Amit
Gupta Vs. Government of NCT of Delhi MANU/DE/0841/2016 been held
to be only presumptive, open to rebuttal.
28. If it were to be held that all suits arising out of agreements relating to
immovable property used exclusively in trade or commerce and / or for
recovery of possession thereof and / or for realization of monies with respect
thereto, where the market value of the property is in excess of Rs.1 crore are
commercial dispute triable by the Commercial Division of the High Court, it
would bring to the Commercial Division of this Court all the disputes as
between landlord and tenant of such property and for specific performance
of agreements of sale of such property, even if the annual rent thereof or the
sale purchase consideration thereof is of less than Rs.1 crore, inundating the
commercial divisions of the High Court and not allowing commercial
disputes for expeditious disposal whereof the Commercial Courts Act was
enacted to be decided expeditiously and defeating the very purpose of
enactment of the Commercial Courts Act. It is a settled principle of
interpretation of statutes that the provisions of a statute have to be interpreted in
a reasonable way, to serve the purpose for which the statute has been
enacted and not to defeat the said purpose. Supreme Court in Union of India
Vs. Ranbaxy Laboratories Ltd. AIR 2008 SC 2286 held that the Court has
not only to take a pragmatic view while interpreting a statutory provision,
but must also consider the practical aspect of it.
29. The claim of the plaintiff in the suit which survives as aforesaid, for
realization of monies, even if held to be monies pertaining to immovable
property within the meaning of explanation to Section 2(1)(c) of the
Commercial Courts Act was for less than the specified value of Rs.1 crore.
Even if the claim now of the plaintiff for realization of such monies, taking
into account, the rent / mesne profits accruing in the last nearly eight years
since the institution of the suit were to be more than Rs.1 crore, the same
also according to me would not make the specified value of the suit to be
more than Rs.1 crore. The determination of specified value as per Section
12(1)(a) of the Commercial Courts Act, where the relief is for recovery of
money, is the amount due up to the date of filing of the suit and not the
amount due which may be falling due thereafter.
30. I have, speaking for the Division Bench of this Court in Santosh
Arora Vs. M.L. Arora MANU/DE/1162/2014 observed that i) law permits a
claim for future mesne profits i.e. for a relief, the cause of action wherefor
has not accrued to the plaintiff on the date of the institution of the suit to be
made; ii) Order 20 Rule 12 of the CPC requires the Court, in a suit for
recovery of possession of immovable property and for rent or mesne profits,
to, besides passing decree for possession, also pass a decree for mesne
profits or direct an enquiry as to such mesne profits, for the period prior to
the institution of the suit if claimed and if within limitation on the date of
institution of the suit, and for the period, from the date of institution of the
suit until delivery of possession; iii) with regard to future mesne profits, the
plaintiff has no cause of action on the date of the institution of the suit, and it
is not possible for him to plead this cause of action or to value it or to pay
court-fees thereon at the time of the institution of the suit; iv) the limits of
the pecuniary jurisdiction of the Court of first instance does not impede and
is not a bar to award damages beyond its pecuniary jurisdiction. Reliance
was placed on Mahadeo Savlaram Shelke Vs. Puna Municipal
Corporation (1995) 3 SCC 33.
31. Thus, for this reason also the suit will not qualify as a commercial
dispute to be tried by this Court.
32. The next contention of the counsel for the plaintiff is that the suits
cannot be transferred owing to the plaintiff having filed petitions averring
the contempt of court by the defendant for non-compliance with the
direction for payment of monthly amounts.
33. Order XV-A as added to the CPC applicable in Delhi provides a
remedy therefor of striking off of the defence. Even if the contention of the
counsel for the plaintiff that Order XV-A having been introduced after the
institution of the suit would not apply were to be accepted, the law as
developed under Order 39 Rule 10 prior to addition of Order XV-A also was
that if the defendant failed to comply with the order of deposit/payment of
rent during the pendency of the suit, the remedy therefor was of striking off
of the defence. Reference to be made to Raghubir Rao Vs. Prem Lata 211
(2014) DLT 516 and Shakuntala Devi Vs. Seven Star Electricals Pvt. Ltd.
MANU/DE/2725/2008.
34. Rather, I have enquired from the counsel for the plaintiff whether not
the grant of time to the defendant to vacate the property was subject to such
payment and if it was so, why the plaintiff, upon non-payment by the
defendant, not apply to the Court for the order of ejectment to be executed
forthwith.
35. The counsel for the plaintiff states that though the order of grant of
time was subject to the payment which the defendant was directed to make
but since the time is coming to an end on 31st July, 2016, the plaintiff has not
applied therefor.
36. In my view the pendency of application/s averring contempt of court
by the defendant also does not come in the way of the suits to be transferred
to the subordinate court for the reason i) the said applications are in the
nature of Order XXXIX Rule 2A and which the subordinate courts are
competent to deal with; and, ii) even if a case for contempt were to be made
out it is always open to the plaintiff to independently approach this Court
under its contempt jurisdiction or the subordinate courts are empowered to
make a contempt reference to this Court.
37. Accordingly, the suits with pending applications are transferred to the
District Judge (South-East), Saket Courts within whose jurisdiction the
property at Hauz Khas, New Delhi is situated. The parties to appear before the
District Judge/Additional District Judge (South-East), Saket Courts, New Delhi
on 29
th August, 2016.
RAJIV SAHAI ENDLAW, J.
JULY 19, 2016
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