Real Estate, Property and Legal Issues : How Supreme Court Answered Complex Legal Issue

Real Estate, Property and Legal Issues : How Supreme Court Answered Complex Legal Issue

S.2 (1) (c) of Commercial Courts Act, 2015 defines "Commercial dispute". The words used are "means". 

It has been held by 2-Judges' Bench of Hon'ble Supreme Court that in order to fall within Section 2(1)(c)(vii) of the Commercial Courts Act, 2015 the immovable property must be “used exclusively” or “being used exclusively” in trade or commerce. 

This Judgment traverses through 253rd Report of Law Commission. 

In this case after discussing facts it was said that 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. Also facts of case showed that 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 next aspect observed was the relief sought in the suit which was "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."

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.

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. 

For more details refer Ambalal Sarabhai Enterprises Ltd. v K.S. Infraspace LLP & Anr. [2019] GCtR 4768 (SC).