Delhi High Court
Sanjeev Kumar Arora & Ors vs Satish Mohan Agarwal & Ors on 28 March, 2017
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 28th March, 2017.
+ CS(COMM) 1353/2016
SANJEEV KUMAR ARORA & ORS ..... Plaintiffs
Through: Mr. Rajiv Bajaj, Adv.
Versus
SATISH MOHAN AGARWAL & ORS ..... Defendants
Through: Mr. Pankaj Gupta and Ms. R. Gupta,
Advs. for D-1.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
IA No.15636/2016 (of D-1 u/O VII R-10 CPC)
1. The applicant/defendant No.1 seeks return of the plaint, in this suit for
recovery of Rs.1,60,00,000/- filed in this Court on 23rd September, 2016 as a
commercial dispute, contending that it is not a commercial dispute.
2. The claim of the plaintiffs for money in the present suit is on the basis
of the three defendants having sold immoveable property to the plaintiffs
with a promise to deliver the title documents and the plaintiffs subsequently
realising that the title documents were lying deposited by way of equitable
mortgage with the State Bank of Patiala and for release whereof the plaintiffs
had to deposit monies before the Debt Recovery Tribunal and which monies
are now sought to be recovered from the defendants.
3. The suit has been labelled as a „commercial dispute‟ pleading that the
property purchased has always been used by the plaintiffs for commercial
purpose.
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4. It is not in dispute that the minimum pecuniary jurisdiction of this
Court to entertain original suits with effect from amendment of Section 5 of
the Delhi High Court Act, 1966 vide Delhi High Court (Amendment) Act,
2015 which came into force on 26th October, 2015 was enhanced to above
Rs.2 crores and unless this suit qualifies as a commercial dispute within the
meaning of Commercial Courts, Commercial Division and Commercial
Appellate Division of High Courts Act, 2015 („Commercial Courts Act‟), the
suit, having been instituted thereafter, will be below the minimum pecuniary
jurisdiction of this Court and the plaint will have to be returned to be filed in
the Court of appropriate pecuniary jurisdiction.
5. The only question for adjudication thus is whether the claim in the suit
is a commercial dispute within the meaning of Section 2(1)(c) of the
Commercial Courts Act.
6. Section 2(1)(c) supra in Clauses (i) to (xxii) thereof lists the
transactions dispute arising out of which qualify as a commercial dispute.
With respect to such commercial disputes, vide Section 7 read with Section
2(1) of the Commercial Courts Act, if the valuation of the subject matter is
not less than Rs.1 crore, this Court as the Commercial Division of the High
Court would have jurisdiction.
7. The counsel for the plaintiffs relies only on Clause (vii) of Section
2(1)(c) of the Commercial Courts Act supra, as per which a dispute arising
out of "agreements relating to immovable property used exclusively in trade
or commerce" is a commercial dispute. The counsel for the plaintiffs argues
that the dispute subject matter of the present suit arises out of agreement of
sale by the defendant No.1 to the plaintiffs of a property used exclusively in
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trade or commerce. He thus contends that Commercial Division of this Court
i.e. this Bench has the jurisdiction to decide the suit and the plaint is not
liable to be returned for filing in the Court of appropriate pecuniary
jurisdiction.
8. The counsel for the plaintiffs, on being asked to show that the
immovable property sold by the defendant No.1 to the plaintiffs is used
exclusively in trade or commerce, has drawn attention to the site plan
annexed to the Sale Deeds of the property to contend that the same does not
contain any toilet or kitchen and is constructed like a shop.
9. I have drawn the attention of the counsel for the plaintiffs to my
judgment in Soni Dave Vs. Trans Asian Industries Expositions Pvt. Ltd.
AIR 2016 Del 186 where I have held that an immovable property if illegally
used exclusively for trade or commerce cannot qualify under Section
2(1)(c)(vii) of the Commercial Courts Act supra and it has to be shown that
the immovable property is legally permitted to be used exclusively for trade
or commerce. The plaintiffs though in the plaint have pleaded that the
property was purchased by the plaintiffs for commercial purposes and the
plaintiffs are conducting their clothes business therefrom and the property
has always been used for commercial purposes and the plaintiffs are
continuing to use the same for commercial purposes but has not filed any
document to show that the use permitted by law, of the property, is for trade
or commerce or that the property is situated in a zone / locality, properties
wherein are permitted to be used exclusively for trade or commerce.
10. The counsel for the plaintiffs has next drawn attention to the
description of the property in one of the sale deeds as comprising of "one
CS(OS) No.1353/2016 Page 3 of 11
shop and back side portion of said shop....".
11. However therefrom also it cannot be said with certainty that the
property is legally permitted to be used exclusively for trade or commerce.
Else, the recitals in the said sale deeds describe the property as comprising of
ground, first and second floors with roof rights "duly fitted with running
electric, water and sewer connections" and which belies the contention of
there being no toilet and kitchen etc. in the property.
12. Needless to state that the counsel for the defendant No.1 contends that
the property is not permitted to be used exclusively for trade and commerce.
13. The version of the counsel for the defendant No.1 is also supported by
the recitals in the sale deeds of other portions of the property which do not
describe the portions sold thereunder as a shop.
14. The counsel for the plaintiffs then contends that it is a matter of trial
whether the property is used exclusively for trade and commerce and since
the plaintiffs are averring that the property is so used and the defendant No.1
is controverting, no case for return of the plaint of the plaintiffs is made out.
15. I am unable to agree with the aforesaid contention of the counsel for
the plaintiffs.
16. Once a plaintiff seeks to bring a suit, which otherwise is below the
minimum pecuniary jurisdiction of this Court for original civil disputes, to
this Court claiming the same to be arising out of a commercial dispute, it is
the bounden duty of the plaintiffs to establish that it is so. It is not as if the
question, whether an immovable property is legally permitted to be used
exclusively in trade or commerce, is a question, answer whereto depends on
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evidence to be led by parties. It is not open to the parties to, as per their
sweet will, commence use of an immovable property for whichsoever
purpose they may like, whether for trade or for commerce or for residence or
for recreational or for institutional purpose. The Municipal and
Development Laws enacted for a planned development of Delhi earmark
Zones / Regions of Delhi and specify the user permitted therein. If it were to
be held that the user depends upon the sweet will of the owner of the
property, it would lead to an unplanned and uncivilised development of the
city with residences interwoven with premises used for trade or commerce.
It cannot be lost sight of that a human being is a social animal and the
society in which we live is a civilised society. When human beings live in
proximity to each other with the enjoyment of basic human rights being
dependent upon the conduct of the neighbours, ownership of an immovable
property does not carry with it any right to use the immovable property or to
allow the use of immovable property for whatsoever purpose one may desire.
With this motive / intent, the Master Plan and Zonal Development Plans
prescribe the use to which a particular area / region / zone can be put to. The
said plans also provide for Mixed Use Zones where, either the front portions
of the ground floor are permitted to be used for trade or commerce with the
rear portion of the ground floor and upper floor being used for residences or
the entire ground floor being permitted to be used for trade or commerce
with the upper floors being used for residences. Thus, it is not as if from the
use of the word „shop‟ in a portion of the property, it axiomatically follows
that the entire property is being used for trade and commerce. If the
plaintiffs in this suit for recovery of money, which is below the minimum
pecuniary jurisdiction of this Court, desire the suit to be tried not by the
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Court of the appropriate pecuniary jurisdiction i.e. by the Court of the
District Judge (DJ) / Additional District Judge (ADJ) but by a Commercial
Division of this Court, it was incumbent upon the plaintiffs to along with the
plaint file documents to show the prescribed use of the property. The
plaintiffs, not only have not done so but have inspite of the application of the
defendant No.1 also have not bothered to show so.
17. The Commercial Courts Act, as per „Statement of Objects and
Reasons‟, was enacted to provide for speedy disposal of high value
commercial disputes involving complex facts and question of law and to
fulfil the need for early resolution of such disputes to create a positive image
to the investor world about the independent and responsive Indian legal
system. The said statement of objects and reasons for enactment of the law
would be defeated, if doors of Commercial Courts / Commercial Division of
the High Courts were to be open too wide by giving an extensive
interpretation to Section 2(1)(c) of the Commercial Courts Act defining what
is a commercial dispute. I say so because then the Commercial Courts and
the Commercial Divisions of the High Courts would be inundated and which
would put breaks on the objective of speedy resolution of such disputes. The
whole purpose of classifying commercial disputes and specifying the value
thereof shall then be lost.
18. It is also the case of the applicant/defendant No.1 that the
applicant/defendant No.1 has instituted a suit for cancellation of the sale
deeds and for recovery of possession and which suit though originally
instituted in this Court has since, on enhancement of pecuniary jurisdiction
of this Court, been transferred to the Subordinate Courts and the present suit
CS(OS) No.1353/2016 Page 6 of 11
is by way of a counter-blast.
19. I have enquired from the counsel for the plaintiffs, whether the
plaintiffs in their written statement to the suit filed by the defendant No.1
have taken a plea of the dispute being a commercial one. It has further been
enquired whether the plaintiffs at the time of transfer of the suit filed by the
defendant No.1 from this Court to the Sub-ordinate Courts took an objection
that it was not liable to be transferred owing to being a commercial dispute.
It has yet further been enquired, whether after the said suit has been so
transferred, any objection has been taken that the same is not entertainable
by the Sub-ordinate Courts, being a commercial dispute to be adjudicated by
the Commercial Division of this Court. I say so because Explanation (a) to
Section 2(1)(c) of the Commercial Courts Act provides that a commercial
dispute shall not cease to be a commercial dispute merely because 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.
20. If the counsel for the plaintiffs is correct in his submission that the
claim of the plaintiffs for realisation of monies, arising out of an agreement
to sell by the defendant No.1 to the plaintiffs of immovable property is a
commercial dispute, then so would be the claim of the defendant No.1 for
cancellation of the said agreement i.e. the sale deeds.
21. The counsel for the plaintiffs fairly states that he has not taken any
such objection.
22. The plaintiffs cannot blow hot and cold i.e. while defending a dispute
raised by the other party to an agreement of sale of immovable property not
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claim it to be a commercial dispute and while himself raising a dispute with
respect to same agreement, claim it to be a commercial dispute.
23. That also gives an inkling of the reason for the insistence by the
counsel for the plaintiffs on retaining this suit in this Court. Owing to the
difference in the number of suits pending for disposal before the Courts of
DJs / ADJs and before this Court and owing to the difference in the number
of Judges on the Original Side of this Court and the DJs / ADJs, the disposal
of a suit before the DJ / ADJ as of now is much quicker than before this
Court. The plaintiffs, if were interested in early recovery of the money
claimed by them to be due in this suit, for the said reason would not
unreasonably insist upon continuing this suit in this Court. It appears that
the plaintiffs, being in possession of the property, desire to prolong their
possession by insisting upon this suit remaining before this Court, so as to,
on the basis of the pendency of this suit in this Court, not allow the suit filed
by the defendant No.1 and pending before the Sub-ordinate Courts also to
proceed.
24. The counsel for the plaintiffs has handed over in the Court a copy of
the order dated 16th September, 2016 of this Court in CS(OS) No.2493/2013
titled Bharam Dutt Gupta Vs. Sarju Kumar where observing that the
counter-claim in the suit was for a sum of Rs.1.61 crores and was in relation
to an agreement to sell of an immovable property which was for the purposes
of running a factory, the suit under Section 2(1)(c)(vii) of the Commercial
Courts Act was treated as a commercial suit.
25. I do not understand the purport of citing the aforesaid order. The said
order is merely a procedural order and has no precedential value. With the
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advantage of all orders available on the internet, a practice of citing thereof
as precedent has evolved. Only those orders that adjudicate after noticing
the rival contentions of the parties and giving reasons, qualify as precedent.
The said order does not qualify as one. Reference with benefit can be made
to Deepesh Pakhru Vs. State of Maharashtra AIR 2002 Bom 116 (DB).
26. The counsel for the defendant No.1 has handed over a judgment dated
of the Division Bench in Hindpal Singh Jabbal Vs. Jasbir Singh 2016 SCC
OnLine Del 4901. The suit therein was for seeking cancellation of General
Power of Attorney, Sale Deeds and for recovery of possession of immovable
property. It had come on record that the value of the property in question
was Rs.1 crore. The reliefs claimed in the suit were however valued at
approximately Rs.10.50 lakhs. It was held (i) that neither General Power of
Attorney nor Sale Deeds can be regarded as "agreements relating to
immovable property"; (ii) that a sale deed brings about a conveyance of
property and cannot, by any stretch of imagination be construed as an
"agreement relating to immovable property"; (iii) that the distinction
between a sale and a contract for sale of immovable property has been
brought out in Section 54 of the Transfer of Property Act, 1882 itself; (iv)
that a General Power of Attorney does not amount to an „agreement relating
to immovable property‟ because the attorney holder only gets a power from
the owner to transact business on his behalf.
27. The aforesaid judgment, in my view, applies on all fours to the
controversy at hand.
28. The counsel for the plaintiffs however draws attention to para 15 of
the aforesaid judgment where the Division Bench of this Court did not go
CS(OS) No.1353/2016 Page 9 of 11
into the question whether the property subject matter of dispute before the
Division Bench was exclusively used in trade or commerce, being of the
view that the nature of the dispute raised in the suit did not concern any
„agreement relating to immovable property‟. I am however unable to see as
to how the same helps the plaintiffs. The present is also a case of sale deeds
of property executed by the defendant No.1 in favour of the plaintiffs and
cancellation whereof the defendant No.1 is seeking in his suit which has
already been transferred to the Sub-ordinate Court and for compensation for
misrepresentation allegedly practised by the defendant No.1 in execution
thereof, the plaintiffs are suing by way of this suit. On the same parity of
reasoning as given by the Division Bench of this Court, the plaint in this suit
would also not qualify as a commercial dispute.
29. I therefore hold the dispute subject matter of the present suit to be not
a commercial dispute within the meaning of Section 2(1)(c) of the
Commercial Courts Act.
30. That being the position, the institution of this suit in this Court on 23rd
September, 2016, after the amendment with effect from 26th October, 2015
of Section 5 of the Delhi High Court Act, 1966 enhancing the minimum
pecuniary jurisdiction of this Court for Original Side suits to above Rs.2
crores and after the Office Order dated 24th November, 2015 of Hon‟ble the
Chief Justice of this Court in exercise of powers under Section 4 of the Delhi
High Court (Amendment) Act, 2015 was not in the Court of appropriate
pecuniary jurisdiction and the plaint is liable to be returned and is ordered to
be returned to the plaintiffs for filing in the Court of appropriate pecuniary
jurisdiction.
CS(OS) No.1353/2016 Page 10 of 11
31. The application is disposed of.
CS(COMM) No.1353/2016
32. In accordance with the above, the plaint be returned to the plaintiffs
for filing in the Court of appropriate pecuniary jurisdiction.
33. The date fixed of 15th May, 2017 before the Joint Registrar is
cancelled.
RAJIV SAHAI ENDLAW, J.
MARCH 28, 2017 bs (corrected & released on 22nd April, 2017) CS(OS) No.1353/2016 Page 11 of 11