Disputes arising out of immovable property “Actually used” in trade or commerce alone are commercial disputes: SC

Case Title: Ambalal Sarabhai Enterprises Ltd. Vs. K.S. Infraspace LLP & Anr. Civil Appeal No. 7843 of 2019 Supreme Court dated 04.10.2019

The issue that came up before the Hon’ble Supreme Court was. “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. Whether an immovable property which is a subject matter of sale transaction between the parties and in the Suit the registration the registration of mortgage deed is sought, could be considered as being used exclusively in trade or commerce so as to fit within the definition of commercial dispute under S.2(1)(c)(vii) of the Comercial Courts Act, 2015.

Held:

1. The very purpose for which Commercial COURT Act of 2015 has been enacted would be defeated if every other suit merely because it is filed before commercial court is entertained. 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.
2. On a plain reading of Clause 2(1)(c) of Commercial Courts 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.
3. In the instant case 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. The very relief sought 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.
4. 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.
5. 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 immovable property in trade or commerce as on the date of the suit.