Case Note & Summary
The appellant, Ambalal Sarabhai Enterprises Ltd., filed a Commercial Civil Suit No. 41/2018 before the Commercial Court at Vadodara seeking enforcement of a Mortgage Deed and related reliefs. The respondents, K.S. Infraspace LLP and another, filed a written statement contending the suit was not maintainable as a commercial dispute under Section 2(1)(c) of the Commercial Courts Act, 2015, and applied under Order VII Rule 10 CPC for return of the plaint. The Commercial Court rejected the application, but the Gujarat High Court allowed the respondents' petition, set aside the Commercial Court's order, and directed return of the plaint. The Supreme Court upheld the High Court's decision, holding that the plaint lacked pleadings that the immovable property was used exclusively in trade or commerce, as required under Section 2(1)(c)(vii) of the CC Act, 2015. The Court emphasized that jurisdiction must be determined from the plaint averments, not extraneous material. The appeal was dismissed, and the plaint was ordered to be returned for presentation in the appropriate court.
Headnote
A) Commercial Law - Commercial Dispute - Section 2(1)(c)(vii) Commercial Courts Act, 2015 - Immovable Property Used Exclusively in Trade or Commerce - The dispute must arise out of an agreement relating to immovable property used exclusively in trade or commerce. The plaint must contain pleadings indicating such use; without such pleadings, the suit is not maintainable before a Commercial Court. (Paras 6-9)
B) Civil Procedure - Return of Plaint - Order VII Rule 10 CPC - Jurisdiction - When a suit is filed in a court lacking jurisdiction, the plaint must be returned for presentation in the proper court. The High Court correctly allowed the application for return of plaint as the Commercial Court lacked jurisdiction. (Paras 2, 4, 10)
C) Commercial Law - Pleadings - Jurisdiction - The nature of the dispute and jurisdiction must be reflected in the plaint itself. Extraneous material cannot be considered to ascertain whether the transaction is a commercial dispute. (Paras 8-9)
Issue of Consideration
Whether the dispute arising out of an agreement relating to immovable property, where the property is not pleaded to be used exclusively in trade or commerce, constitutes a 'commercial dispute' under Section 2(1)(c)(vii) of the Commercial Courts Act, 2015, and whether the Commercial Court has jurisdiction to entertain the suit.
Final Decision
The Supreme Court dismissed the appeal and upheld the High Court's order directing return of the plaint to be presented in the appropriate court, as the suit did not constitute a commercial dispute under the Commercial Courts Act, 2015.
Law Points
- Commercial dispute
- Immovable property used exclusively in trade or commerce
- Section 2(1)(c)(vii) Commercial Courts Act 2015
- Pleadings determine jurisdiction
- Return of plaint under Order VII Rule 10 CPC
Case Details
2019 LawText (SC) (10) 30
Civil Appeal No. 7843 of 2019 (Arising out of SLP (Civil) No.9391 of 2019)
Shri Dhruv Mehta, Shri Deven Parikh
Ambalal Sarabhai Enterprises Ltd.
K.S. Infraspace LLP & Anr.
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Civil suit seeking enforcement of a Mortgage Deed and related reliefs, with a preliminary objection regarding maintainability before the Commercial Court.
Remedy Sought
The appellant (plaintiff) sought enforcement of a Mortgage Deed and permanent injunction; the respondents (defendants) sought return of the plaint under Order VII Rule 10 CPC for lack of jurisdiction.
Filing Reason
The appellant filed a suit in the Commercial Court to enforce a Mortgage Deed arising from a Memorandum of Understanding related to a land transaction.
Previous Decisions
The Commercial Court rejected the application for return of plaint; the High Court allowed the petition and directed return of the plaint.
Issues
Whether the dispute is a 'commercial dispute' under Section 2(1)(c)(vii) of the Commercial Courts Act, 2015.
Whether the plaint contained necessary pleadings to confer jurisdiction on the Commercial Court.
Whether the High Court correctly ordered return of the plaint under Order VII Rule 10 CPC.
Submissions/Arguments
Appellant argued that the land was used for trade or commerce as the appellant ran an industry and the respondent purchased it for development.
Respondents argued that the land was not used for trade or commerce as the appellant had ceased operations and the land use was subject to change.
Ratio Decidendi
For a dispute to be a 'commercial dispute' under Section 2(1)(c)(vii) of the Commercial Courts Act, 2015, the immovable property must be used exclusively in trade or commerce, and the plaint must contain pleadings to that effect. Without such pleadings, the Commercial Court lacks jurisdiction, and the plaint must be returned under Order VII Rule 10 CPC.
Judgment Excerpts
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.
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.
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.
Procedural History
The appellant filed Commercial Civil Suit No. 41/2018 before the Commercial Court at Vadodara. The respondents filed an application under Order VII Rule 10 CPC for return of plaint, which was rejected by the Commercial Court on 17.10.2018. The respondents challenged this order before the Gujarat High Court in R/Special Civil Application No.17868/2018, which allowed the petition on 01.03.2019 and directed return of the plaint. The appellant appealed to the Supreme Court.
Acts & Sections
- Commercial Courts Act, 2015: Section 2(1)(c)(vii)
- Code of Civil Procedure, 1908: Order VII Rule 10
