Karnataka High Court
T R L Padmavathi vs Sri. T Vasanth Kumar on 3 March, 2023
Author: G.Narendar
Bench: G.Narendar
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COMAP No. 430 of 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 3RD DAY OF MARCH, 2023
PRESENT
THE HON'BLE MR. JUSTICE G.NARENDAR
AND
THE HON'BLE MR. JUSTICE S RACHAIAH
COMMERCIAL APPEAL NO. 430 OF 2022
BETWEEN:
1. T.R.L.PADMAVATHI
W/O TUMATIRAVIKUMAR
AGED ABOUT 45 YEARS
R/AT#215, "WATERVILLE APARTMENTS"
RAMAGONDANAHALLI
BENGALURU - 560 066.
2. M/S ROMA BUILDERS
NO.P-1, RAYON ORCHARD APARTMENTS
4TH CROSS, A BLOCK
AECS LAYOUT
KUNDALAHALLI
BENGALURU - 37
Digitally
signed by N ALSO AT: SRI TUMATIRAVIKUMAR
UMA MANAGING PARTNER
Location: M/S ROMA BUILDERS
HIGH H.NO.185, 1ST CROSS
COURT OF A BLOCK, AECS LAYOUT
KARNATAKA KUNDALAHALLI
BENGALURU - 37.
...APPELLANTS
(BY SRI. HALASHETTI JAGADISH SIDRAMAPPA, ADVOCATE)
AND:
1. SRI. T.VASANTH KUMAR
S/O NAGABHUSHANAM
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COMAP No. 430 of 2022
AGED ABOUT 41 YEARS
R/AT MURALI NILAYA,
S.R.ROAD, GANDHINAGAR
CHALLKERE - 577 522.
2. THE PAVAGADASOUHARDA MULTIPURPOSE
CO-OPERATIVE LTD.,
HEAD OFFICE AT NO.03
1ST FLOOR, M.G.ROAD
KOLAR - 563 101.
ADMINISTRATIVE OFFICE AT NO.2729
2ND FLOOR, 14TH CROSS
E BLOCK, KODIGEHALLI GATE
SAHAKARANAGAR
BENGALURU - 92
REP. BY ITS CEO
MR.N.VENUGOPALA REDDY.
...RESPONDENTS
(BY SRI. PRAKASH M.H., ADVOCATE FOR R1
SRI. JAIPRAKASH REDDY, ADVOCATE FOR R2)
THIS COMAP IS FILED UNDER SECTION 13(1-A) OF
COMMERCIAL COURTS ACT, 2015, R/W ORDER XLI RULE 1 OF
CODE OF CIVIL PROCEDURE. PRAYING TO A) CALL FOR
RECORDS IN COM.OS NO.4444/2016, ON THE FILE OF
LXXXVIII ADDL. CITY CIVIL AND SESSIONS JUDGE
(EXCLUSIVELY DEDICATED COMMERCIAL COURT) BENGALURU
CITY (CCH-89) AND ETC.,
THIS APPEAL, HAVING BEEN HEARD AND RESERVED ON
11.01.2023, COMING ON FOR PRONOUNCEMENT OF
JUDGMENT, THIS DAY, S.RACHAIAH J., DELIVERED THE
FOLLOWING:
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COMAP No. 430 of 2022
JUDGMENT
This appeal is filed by the appellants being aggrieved by the judgment and decree dated 28.09.2021 in Com.O.S No.4444/2016 on the file of the LXXXVIII Additional City Civil and Sessions Judge (Commercial Court), Bengaluru.
2. For the sake of convenience, the ranking of the parties will be considered henceforth according to their ranking before the Trial Court.
Brief facts of the case:
3. The suit is filed by the plaintiff against the defendants for specific performance of contract based on the agreement of sale dated 12.07.2012 directing the defendants to comply with the agreement and execute the sale deed in respect of B and C schedule properties.
4. It is the case of the plaintiff that, the plaintiff has entered into agreement of sale dated 12.07.2012 in respect of B and C schedule properties. The value of the said properties was fixed at Rs.24.00 lakhs and received Rs.22.00 lakhs as advance sale consideration and there is a recital regarding remaining payment to be made at the time of execution of sale -4- COMAP No. 430 of 2022 deed. It is further stated that according to the plaintiff, the transaction was to be completed within 12 months from the date of agreement of sale. It is further stated that, inspite of readiness and willingness on the part of the plaintiff to complete the transaction, the defendants did not come forward to execute the sale deed. In the meantime, the addendum to this agreement of sale was executed on 24.03.2015 stating that further 11 months time was required to complete the transaction.
5. It is further stated that even after expiry of the time stipulated under addendum to the agreement of sale, the defendants were postponing the execution of sale deed on one or the other pretext. As such, notice was issued by the plaintiff calling upon the defendants to execute the registered sale deed. The notice sent by the plaintiff was avoided by the defendants. The plaintiff learnt that in order to defraud his right under the agreement, the defendants were trying to alienate the properties to the third parties in respect of which the defendants had executed registered sale agreement in his favour, hence, the plaintiff filed the suit for specific performance.
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6. The Trial Court after considering the oral and documentary evidence on record decreed the suit.
7. Heard Sri. Halashetti Jagadish Sidramappa, learned counsel for appellants, Sri.Prakash M.H., learned counsel for respondent No.1 and Sri. Jaiprakash Reddy, learned counsel for respondent No.2.
8. Sri. Halashetti Jagadish Sidramappa, learned counsel for the appellants submits that, the decree passed by the Trial Court is contrary to the facts and material on record, as such, the judgment and decree passed by the Trial Court is liable to be set aside.
9. It is further submitted that, the Commercial Courts were established under the Commercial Courts Act, 2015. The jurisdiction of the Commercial Courts have been fixed and the Commercial Courts should not try the suits other than commercial disputes. It is the submission of the learned counsel that, the averments made in the suit discloses that it is not coming within the purview of "commercial dispute' as defined under Section 2(1)(c)(vii) of the Commercial Courts Act, 2015.
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10. It is further submitted that, the suit properties cannot be used exclusively for any trade or commerce. Therefore, the dispute would not lie before the Commercial Courts.
11. It is the further contention of the learned counsel for the appellants that, after filing the written statement by defendants Nos.1 and 2, the learned counsel for defendant Nos.1 and 2, except on 30.11.2019, did not appear on subsequent hearings. The Trial Court took the cross- examination of the appellants as NIL on 01.03.2021 and also took the evidence of defendants Nos.1 and 2 as NIL and posted the matter for arguments. However, on 04.09.2021, the learned counsel for defendants Nos.1 and 2 filed the retirement memo stating that the counsel is retiring from the case. The Trial Court without verifying as to whether the notice has been served to the defendants Nos.1 and 2 or not allowed the memo filed by the counsel. Consequently, learned counsel for defendants Nos.1 and 2 retired from the case. Thereafter, the impugned judgment and decree is passed by the Trial Court. -7- COMAP No. 430 of 2022
12. It is further submitted that, the suit filed by the plaintiff is barred by limitation. The registered agreement of sale is dated 12.07.2012 and the notice was issued on 28.04.2016, thereby, there is a delay of four years. The said delay is hit by Article 54 of the Limitation Act. The reason assigned by the Trial Court on this aspect is not in consonance with the Limitation Act. As such, the learned counsel for the appellants / defendants Nos.1 and 2 sought to allow the appeal and prays to set aside the judgment and decree passed by the Trial Court.
13. Per contra, Sri.Prakash M.H, learned counsel for plaintiff/respondent No.1 justifying the judgment and decree passed by the Trial Court submits that, the Trial Court after appreciating the oral and documentary evidence on record passed appropriate order. Inspite of sufficient opportunity having been granted to the defendants Nos.1 and 2, they did not take steps to cross-examine the plaintiff and also adduce the evidence to substantiate their claim.
14. It is further submitted that, appellants/ defendants Nos.1 and 2 cannot raise the jurisdictional issue before the -8- COMAP No. 430 of 2022 Appellate Court as they did not raise such points at the earliest stage before the Trial Court. The learned counsel for the respondent No.1 submits that Section 21 of the Code of Civil Procedure (for short 'CPC') has clearly stated as to how the question of jurisdiction has to be raised.
15. It is further submitted that the suit filed by the plaintiff is very well within the time. The Trial Court after considering the sale agreement and also addendum dated 24.03.2015 held that the suit filed by the plaintiff is well within time.
16. It is further submitted that, the suit is filed on 18.06.2016 against defendants Nos.1 and 2. During the pendency of the suit, the plaintiff obtained exparte temporary injunction against defendants Nos.1 and 2 restraining them from alienating the schedule B and C properties to the third parties. However, during the pendency of this suit, the sale transaction had taken place in respect of the same properties and the transaction was held between defendants Nos.1 and 2, as such, there is an apprehension expressed by the plaintiff and suit came to be filed against defendant Nos.1 to 3. It is further -9- COMAP No. 430 of 2022 stated that, defendant No.3 entered appearance in the suit and filed written statement stating that it has extended the financial support to defendants Nos.1 and 2 and documents/title deeds have been obtained by way of mortgage. As such, the learned counsel for the respondent No.1/plaintiff sought to dismiss the appeal.
17. Heard the learned counsel for the respective parties and also perused the documents available on record.
18. After having gone through the judgment and decree and also documents, the points which arose for our consideration are:
1) Whether the judgment and decree passed by the Commercial Court/Trial Court is sustainable?
2) Whether the appellants have made out grounds to interfere with the judgment and decree passed by the Commercial Court?
19. Before adverting to the other facts, it is relevant to refer to the judgment of the Hon'ble Supreme Court in the case of BHARAT KALA BHANDAR LTD. v. MUNICIPAL
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COMAP No. 430 of 2022COMMITTEE1 wherein the Apex court held that if the question of jurisdiction had not been raised in this suit or in the ground of appeal before this Court and was advanced before the Hon'ble Supreme Court for the first time, the Hon'ble Supreme Court held that, the scope of the appeal cannot be broadened at the instance of the parties, but, if a plea raises a question of law which is of considerable importance, the Court may entertain the same.
20. In another case, in the case of VASANTKUMAR RADHAKISAN VORA v. BOARD OF TRUSTEES OF PORT OF BOMBAY2 the Hon'ble Supreme Court held that when the matter relating to pure question of law which goes to the root of the case, the jurisdiction point can be raised for the first time in an appeal.
21. On careful perusal of the dictum of the Hon'ble Supreme Court and also the issue of jurisdiction raised by the appellants in this case, we are of the considered opinion that the question of jurisdiction is a pure question of law and it can be raised even at the appellate stage. In view of the 1 AIR 1966 SC 249 2 (1991) 1 SCC 761
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COMAP No. 430 of 2022observation, the contention of the appellants with regard to jurisdiction of the Commercial Courts raised in the appeal for the first time is sustainable.
22. It is relevant to refer Section 2(c)(vii) of Commercial Courts Act to conclude as to whether the averments made in the plaint falls within the purview of commercial dispute. Section 2(c)(vii) of Commercial Courts Act reads thus:
"2. Definitions.--(1) In this Act, unless the context otherwise requires,--
(c) "commercial dispute" means a dispute arising out of-
-
(i) xxx;
(ii) xxx;
(iii) xxx;
(iv) xxx,
(v) xxx;
(vi) xxx;
(vii) agreements relating to immovable property used exclusively in trade or commerce;"
23. It is also relevant to refer to the judgment of the Hon'ble Supreme Court in the case of AMBALAL SARABHAI
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COMAP No. 430 of 2022ENTERPRISES LIMITED v. K.S.INFRA SPACE LLP AND ANOTHER3 paragraph No.14 held as under:
"14. In that view it is also necessary to carefully examine and entertain only disputes which actually answers the definition "commercial disputes" as provided under the Act. In the instant case, as already taken note 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. Further 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 the immovable property in trade or commerce as on the date of the suit. Therefore, if all these aspects are kept in view, we are of the opinion that in the present facts the High Court was justified in its conclusion arrived through the order dated 1-3-2019 [K.S. Infraspace LLP v. Ambalal Sarabhai Enterprises Ltd., 2019 SCC OnLine Guj 1926] impugned herein. The Commercial Court shall therefore return the plaint indicating a date for its presentation before the Court having jurisdiction."
Thus, on careful reading of the above dictum of the Hon'ble Supreme Court, it appears that the sale agreement relating to immovable properties, if it is not relating to trade or commerce, such dispute cannot be construed as commercial 3 2020(15) SCC 585
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COMAP No. 430 of 2022dispute. Therefore, the transfer of the suit from the Trial Court to the Commercial Court appears to be erroneous and unsustainable. In that view of the matter, we are of the considered opinion that, the averment made in the plaint is not a commercial dispute.
24. It is needless to say that, the judgment and decree passed by the Courts having no jurisdiction is non-est in law. Therefore, the judgment and decree passed by the Commercial Court is not sustainable and deserves to be set aside. Even otherwise, the defendant Nos.1 and 2 have been deprived of cross-examining the plaintiff and also did not lead evidence to substantiate their claim. Therefore, we are of the considered opinion that, the matter requires to be remanded to the Trial Court.
25. It is noticed that, as per the notification dated 17.08.2020 vide No.ADM-1(A)/411/2020 the case was transferred to CCH-84. Later, on 09.12.2020 as per the order dated No.ADM-1(A)/1812/20 dated 22.12.2020, the case was withdrawn from CCH-84 and made over to CCH-89. It is needless to say that as per the order sheet the suit was filed
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COMAP No. 430 of 2022before the City Civil and Sessions Judge, Bengaluru and the suit was placed before CCH-62.
26. In the light of the observations made above, the points which arose for our consideration are answered as:
(i) Point No.1 in the "negative" holding that the judgment and decree passed by the Commercial Court is unsustainable as it has no jurisdiction to try the suit.
(ii) Point No.2 in the "affirmative" holding that the appellants have made out a case to interfere with the judgment and decree passed by the Commercial Court.
27. Hence, we proceed to pass the following:
ORDER
1. The appeal filed by the appellants is allowed in part.
2. The judgment and decree dated 28.09.2021 in Com.O.S No.4444/2016 on the file of learned LXXXVIII Additional City Civil and Sessions Judge (Commercial Court) at Bengaluru (CCH-89) is set aside.
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COMAP No. 430 of 2022
3. The matter is remitted to the City Civil and Sessions Judge, Bengaluru (CCH-62) where it was filed at the earliest before it was transferred to Commercial Court and be tried afresh.
4. All contentions are kept open and any observations made in the appeal are not to be construed to be a finding on merits of the matter except as regards the aspect of jurisdiction.
5. The Registry is directed to send the records to the Trial Court forthwith.
In view of the disposal of the appeal, the I.A No.2/2022 filed by the appellants for stay does not survive for consideration, accordingly disposed of.
Sd/-
JUDGE Sd/-
JUDGE UN List No.: 19 Sl No.: 0