The above issue was considered in Ambalal Sarabhai Enterprises
Limited v. K.S. Infraspace LLP & Anr. reported in (2020) 15 SCC 585 where the implication of Section 2(1)(c)(vii) was construed. In
the concurring judgment, the following was expressed by Justice
Banumathi:
“37. A dispute relating to immovable property per se
may not be a commercial dispute. But it becomes a
commercial dispute, if it falls under sub-clause
(vii) of Section 2(1)(c) of the Act viz. “the
agreements relating to immovable property used
exclusively in trade or commerce”. The words “used
exclusively in trade or commerce” are to be
interpreted purposefully. The word “used” denotes
“actually used” and it cannot be either “ready for
use” or “likely to be used” or “to be used”. It
should be “actually used”. Such a wide interpretation
would defeat the objects of the Act and the fast
tracking procedure discussed above.” {Para }
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
SPECIAL LEAVE PETITION (CIVIL) Diary No(s). 2986/2024
S.P. VELAYUTHAM & ANR. Vs M/S EMAAR MGF LAND LIMITED.
CORAM : HON'BLE MR. JUSTICE HRISHIKESH ROY
HON'BLE MR. JUSTICE PRASHANT KUMAR MISHRA
Date : 26-02-2024 .
UPON hearing the counsel the Court made the following
O R D E R
Delay stand condoned as there have been several litigation
including in this Court in pursuant to the impugned order that was
passed by the learned Single Judge of the High Court on 04.12.2018.
2. Heard Mr. P.S. Patwalia, learned senior counsel appearing for
the petitioners (defendants in the C.S. No. 169 of 2018). Also
heard Mr. Gopal Sankaranarayanan learned senior counsel appearing
for the respondent (plaintiff in the C.S. No. 169 of 2018).
3. The primary challenge in these Special Leave Petitions is to
the order dated 04.12.2018 whereunder, the learned Judge of the
High Court held that the C.S. No. 169 of 2018 filed by the
respondent-plaintiff is a commercial suit, within the meaning of
Section 2(1)(c) of the Commercial Courts Act, 2015. The Court
justified its decision, inter alia, by citing the ratio in Jagmohan
Belal v. State Bank of Indore (decided on 22.09.2017), Monika Arora
v. Neeraj Kohli in CM(M) No. 850 of 2016 (decided on 01.09.2016)
and Soni Dave v. Trans Asian Industries Expositions Pvt. Ltd.
reported in AIR 2016 Del 186.
4. On the other hand, to argue that this was a simple money
recovery suit and cannot therefore be treated as a commercial suit,
the defendants relied on the Gujarat High Court decision in Vasu
Healthcare Private Limtied v. Gujarat Akruti TCG Biotech Limited
reported in (2017) AIR (Gujarat) 153.
5. It is argued with some emphasis by the defendants that it is
only a Suit for recovery of money and if the view in the impugned
judgment is accepted as correct, all money recovery suits will
travel towards the commercial division and it will defeat the very
purpose of creating the commercial divisions, to fast track
commercial category suits. In support of such contention, the
counsel would rely on sub-clause (vii) of Section 2(1)(c) to say
that the concerned agreements must pertain to immovable property
used exclusively in trade or commerce. According to Mr. Patwalia,
the agreements relate to properties which were not used exclusively
for trade or commerce but there could possibly be use of such
property in future, for commercial purpose.
6. Per contra, Mr. Gopal Sankaranarayanan, learned senior counsel
would refer to the explanation in Section 2(1)(c)(vii) in the above
context to say that a commercial dispute shall not cease to be a
commercial dispute merely because the suit pertains to realisation
of money.
7. The above issue was considered in Ambalal Sarabhai Enterprises
Limited v. K.S. Infraspace LLP & Anr. reported in (2020) 15 SCC 585 where the implication of Section 2(1)(c)(vii) was construed. In
the concurring judgment, the following was expressed by Justice
Banumathi:
“37. A dispute relating to immovable property per se
may not be a commercial dispute. But it becomes a
commercial dispute, if it falls under sub-clause
(vii) of Section 2(1)(c) of the Act viz. “the
agreements relating to immovable property used
exclusively in trade or commerce”. The words “used
exclusively in trade or commerce” are to be
interpreted purposefully. The word “used” denotes
“actually used” and it cannot be either “ready for
use” or “likely to be used” or “to be used”. It
should be “actually used”. Such a wide interpretation
would defeat the objects of the Act and the fast
tracking procedure discussed above.”
8. As is seen, the above judgment in Ambalal was pronounced only
on 04.10.2019 and well before that, the impugned judgment was
rendered by the learned Single Judge on 04.12.2018.
9. The counsel for the rival parties therefore submit that the
learned Single Judge of the High Court should be permitted to
decide on whether the Suit should be treated as a commercial
dispute, within the meaning of Section 2(1)(c).
10. Accepting the above submission particularly in light of ratio
in Ambalal, we deem it appropriate to set aside the impugned
judgment of the learned Judge of the High Court rendered on
04.12.2018 in the CS No. 169 of 2018. The matter is remitted back
to the High Court to re-decide on whether the Suit for recovery of
money would fall within the category of cases covered under Section
2(1)(c)(vii) of the Commercial Courts Act, 2015. With this order,
the Special Leave Petitions stand disposed of.
11. Pending application(s), if any, shall stand closed.
(NITIN TALREJA) (KAMLESH RAWAT)
ASTT. REGISTRAR-cum-PS ASSISTANT REGISTRAR
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