Gujarat High Court
Vasu Healthcare Private Limited vs Gujarat Akruti Tcg Biotch Limited & on 10 July, 2017
Equivalent citations: AIR 2017 GUJARAT 153
Bench: M.R. Shah, B.N. Karia
C/AO/199/2017 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
APPEAL FROM ORDER NO. 199 of 2017
With
CIVIL APPLICATION NO. 8083 of 2017
In
APPEAL FROM ORDER NO. 199 of 2017
For Approval and Signature:
HONOURABLE MR.JUSTICE M.R. SHAH Sd/
and
HONOURABLE MR.JUSTICE B.N. KARIA Sd/
=============================================
1 Whether Reporters of Local Papers may be allowed to see No
the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law as No
to the interpretation of the Constitution of India or any
order made thereunder ?
=============================================
VASU HEALTHCARE PRIVATE LIMITED....Appellant(s)
Versus
GUJARAT AKRUTI TCG BIOTCH LIMITED & 1....Respondent(s)
=============================================
Appearance:
MR SHALIN MEHTA, SENIOR ADVOCATE with MR SP MAJMUDAR, ADVOCATE for the
Appellant(s) No. 1
MR SALIL M THAKORE, CAVEATOR for the Respondent(s) No. 1
=============================================
CORAM: HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 10/07/2017
CAV JUDGMENT
(PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1.0] Feeling aggrieved and dissatisfied with the impugned order passed by the learned Judge, Commercial Court, Vadodara below Exh.17 in Commercial Civil Suit No.294/2016 by which in exercise of power under Page 1 of 23 HC-NIC Page 1 of 23 Created On Tue Jul 11 00:32:21 IST 2017 C/AO/199/2017 CAV JUDGMENT Order VII Rule 10 of the Code of Civil Procedure, 1908 (hereinafter referred to as "CPC") the learned Judge, Commercial Court has returned the plaint to the original plaintiff to present it before appropriate Court having jurisdiction, the original plaintiff has preferred the present Appeal From Order.
[2.0] The facts leading to the present Appeal From Order in nutshell are as under:
[2.1] That the appellant herein - original plaintiff (hereinafter referred to as "original plaintiff") instituted a Commercial Civil Suit No.294/2016 in the Court of learned Judge, Commercial Court, Vadodara (hereinafter referred to as "learned Commercial Court") for specific performance of the contract and in the alternative for recovery of damages and for refund of part payment, declaration and permanent injunction.
[2.2] It was the case on behalf of the original plaintiff that the State Government allotted the land in question and entered into an agreement wth the respondent No.1 herein - original defendant No.1 (hereinafter referred to as "original defendant No.1") to develop Akruti Gujarat Biotech, PhaseII, at Savli, GIDC Estate, Vadodara. A contract was entered into between the State Government and original defendant No.1. It was the case on behalf of the original plaintiff that the original defendant No.1 thereafter was requried to develop the land for Biotech Park. That the original plaintiff invested huge sum and entered into the contract with the original defendant No.1. It was the case on behalf of the original plaintiff that for number of years nothing was done and the plots which were allotted to the original defendant No.1 were not developed and therefore, the original plaintiff instituted the aforesaid suit before the learned Commercial Court for the following reliefs.
"(a) The decree for specific performance / enforcement of the subject contract i.e. SC may kindly be pleased in favour of the Page 2 of 23 HC-NIC Page 2 of 23 Created On Tue Jul 11 00:32:21 IST 2017 C/AO/199/2017 CAV JUDGMENT plaintiffs as against the defendants and consequentially the defendants may kindly be ordered and directed / mandated to execute the transfer deed / deed of conveyance through execution of lease deed / assignment deed of lease in favour of the plaintiff in respect of the subject property in furtherance of the subject contract i.e. SC and consequentially the subject contract i.e. SC may kindly be ordered to be specifically performed / enforced in favor of the plaintiff and thereby the entire process / formality to effecuate the transfer of the absolute leasehold rights in respect of the subject property may kindly be ordered and directed to be caused by through defendants in favour of the plaintiff and/or alternatively and independently the amount of Rs.10,75,12,196 as specified and detailed by the plaintiff in the plaint may kindly be awarded as compensation in addition to and/or independent to the relief of specific performance of the subject contract;
(b) it may kindly be declared that the defendants have committed breach and/or default in completing the performance and fulfillment of their contractual obligations as per SC in respect of the subject property;
(c) the defendants, their agents, employees, representatives, assignees, transferres and every person claiming for and on behalf of them may kindly be permanently restrained from causing any act, things or deed either threatening and/or invading or in any capable to cause destruction, obstacle, obstruction to and against the plaintiffs' proprietary and legal rights in the subject property in any manner whatsoever;
(d) the defendants, their agents, employees, representatives, assignees, transferres and every person claiming for and on behalf of them may kindly be permanently restrained from causing, executing, creating any document, transaction, paper in respect of the subject property in favor of any person and amounting to alienation of rights or possession of the subject property in nay manner whatsoever and they be further restrained from doing any acts, deeds or things adverse and/or contrary to the proprietary rights of the plaintiff in the subject property by virtue of SC;
(e) the defendants, their agents, employees, representatives, assignees, transferres and every person claiming for and on behalf of them may kindly be permanently restrained from alienating, transferring or creating any right, interest or claim in favor of any person by virtue of any transaction of any nature whatsoever and in any manner whatsoever and accordingly they be restrained from doing anything in respect Page 3 of 23 HC-NIC Page 3 of 23 Created On Tue Jul 11 00:32:21 IST 2017 C/AO/199/2017 CAV JUDGMENT of the subject property capable to change or cause any adverse effect on the status, condition, situation and/or potency to achieve completed and specific performance of the SC as executed in respect of the subject property in any manner whatsoever;
(f) That alternatively / simultaneously in coextension to the relief for specific performance of SC as prayed for vide prayer clause No.24(a) the decree for the recovery of Rs.10,75,12,196/ (Rupees Ten Crores Seventy fix Lacs Twelve Thousand One Hundred Ninety Six Only) may kindly be passed against the defendants and in favor of the plaintiff and consequentially the defendants may kindly be ordered and directed to pay and remit the amount of Rs.10,75,12,196/ (Rupees Ten Crores Seventy fix Lacs Twelve Thousand One Hundred Ninety Six Only) in favour of the plaintiff;
(g) the defendant may kindly be ordered and/or directed to pay the amount of interest @ 24% per annum on the total amount of compensation as claimed vide prayer clause No.24(f) from the date of filing of present suit till the realization of the total amount as claimed by plaintiff in the present suit;"
[2.3] That it was the case on behalf of the original plaintiff that as the dispute between the parties is a "commercial dispute" as per Section 2(c) of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (hereinafter referred to as "Commercial Courts Act") and the amount involved is above Rs.1 Crore, invoking jurisdiction of the learned Commercial Court, Vadodara, the original pleaded in para 22 of the plaint as under:
"22. The present suit is filed for the purposes of humbly seeking specific performance of the subject contract and thereby to get the SC fully fulfilled and to ensure the consequential transfer of SP in specific performance of SC as sought for to be fully, performed in favour of the plaintiff and to comply with the obligations of express provisions of Specific Relief Act, the plaintiff has humbly sought the recovery of the amount of the compensation in respect of the loss caused to the plaintiff and the damage as suffered by plaintiff at Vadodara and the written contract i.e. SC is executed between the parties hereto in respect of SP which is situated / located at and within the District of Vadodara and thereby the cause and contractual privity based upon which the present suit for specific performance and coextensive compensation is sought for by the plaintiff based upon the SC which Page 4 of 23 HC-NIC Page 4 of 23 Created On Tue Jul 11 00:32:21 IST 2017 C/AO/199/2017 CAV JUDGMENT is formulated in respect of SP which is existing within the territorial jurisdiction of this Honourable Court and because the breach / refusal of the SC is communicated to the plaintiff at Vadodara and thereby the cause to seek specific performance emerging from out of refusal communicated by defendant for the first ever time vide their letter dated 13.05.2016 has thereby arisen within the territorial jurisdiction of this Honourable Court and therefore the cause of action has arisen within the jurisdiction of this Honoourable Court and this Hon'ble Court is comprehensively having wholesome statutory, pecuniary and territorial jurisdiction to entertain and try the present suit."
[2.4] Having been served with the notice of the summons of the suit, the original defendant No.1 appeared before the learned Commercial Court and thereafter filed the application Exh.17 for returning the plaint to the original plaintiff in exercise of powers under Order VII Rule 10 of the CPC and to return the plaint to the original plaintiff to present it before the appropriate Court having jurisdiction. It was the case on behalf of the original defendant No.1 that the dispute between the parties cannot be said to be commercial dispute within the definition of section 2(c) of the Commercial Courts Act and therefore, the suit before the learned Commercial Court is not maintainable and/or the learned Commercial Court would not have any jurisdiction to entertain the suit for the reliefs prayed in the suit.
[2.5] The application Exh.17 was vehemently opposed by the original plaintiff. Relying upon clause 2(c)(i), 2(c)(ii) and 2(c)(xx) of the Commercial Courts Act, it was submitted that for the reliefs claimed in the suit, the dispute can be said to be commercial dispute within the definition of section 2(c) of the Commercial Courts Act and therefore, the suit before the learned Commercial Court would be maintainable.
[2.6] That by impugned order the learned Commercial Court has allowed the application Exh.17 and has returned the plaint to the original plaintiff to present it before appropriate Court having jurisdiction by observing and holding that for the reliefs sought in the Page 5 of 23 HC-NIC Page 5 of 23 Created On Tue Jul 11 00:32:21 IST 2017 C/AO/199/2017 CAV JUDGMENT plaint / suit, the Commercial Court would not have any jurisdiction and/or suit before the Commercial Court would not be maintainable.
[2.7] Feeling aggrieved and dissatisfied with the impugned order passed by the learned Commercial Court below Exh.17 in Commercial Civil Suit No.294/2016, the original plaintiff has preferred the present Appeal From Order.
[3.0] Shri Shalin Mehta, learned Senior Advocate has appeared with Shri S.P. Majmudar, learned Advocate appearing on behalf of the appellant herein - original plaintiff and Shri Salil Thakore, learned Advocate has appeared on behalf of respondent No.1 herein - original defendant No.1, who is on caveat.
[4.0] Shri Mehta, learned Counsel appearing on behalf of the original plaintiff has vehemently submitted that in the facts and circumstances of the case the learned Commercial Court has materially erred in returning the plaint to the original plaintiff to present it before appropriate Court having jurisdiction by holding that the dispute between the parties for which the suit has been preferred cannot be said to be a "commercial dispute" within the definition of section 2(c) of the Commercial Courts Act.
[4.1] It is further submitted by Shri Mehta, learned Counsel appearing on behalf of the original plaintiff that the learned Commercial Court has materially erred in holding that for the reliefs sought in the plaint / suit, the suit before the learned Commercial Court shall not be maintainable. It is further submitted by Shri Mehta, learned Counsel appearing on behalf of the original plaintiff that as such the learned Commercial Court has not properly appreciated and/or interpreted section 2(c) of the Commercial Courts Act. It is submitted that by returning the plaint and while holding that the dispute between the parties shall not fall within Page 6 of 23 HC-NIC Page 6 of 23 Created On Tue Jul 11 00:32:21 IST 2017 C/AO/199/2017 CAV JUDGMENT the definition of section 2(c) of the Commercial Courts Act and therefore, the suit before the Commercial Court shall not be maintainable, the learned Commercial Court has taken a very narrow view. It is further submitted by Shri Mehta, learned Counsel appearing on behalf of the original plaintiff that as such considering section 2(c)
(vii) of the Commercial Courts Act, the dispute between the parties shall fall within the definition of section 2(c) of the Commercial Courts Act and the same can be said to be "commercial dispute" within the definition of section 2(c) of the Commercial Courts Act and therefore, for the reliefs sought / prayed in the plaint / suit, the suit before the learned Commercial Court shall be maintainable.
[4.2] Shri Mehta, learned Counsel appearing on behalf of the original plaintiff has submitted that in section 2(c)(vii) of the Commercial Courts Act of the Commercial Courts Act, the words used are "agreements relating to immovable property used exclusively in trade and commerce". It is submitted that in section 2(c)(vii) the words used are not "being used", "actually used" etc. It is submitted that as the GIDC had allotted the land to original defendant No.1 for development of Biotech park and therefore also, it can be said that the immovable property / lands / plots were being used exclusively in trade or commerce. It is submitted that therefore, the agreement between the GIDC and original defendant No.1 which was for development of the lands for Biotech park and therefore, as the land / plots had been given to the original defendant No.1 for use in trade or commerce and therefore, considering section 2(c)(vii) of the Commercial Courts Act, for the reliefs prayed in the suit, the suit before the learned Commercial Court shall be maintainable.
[4.3] It is vehemently submitted by Shri Mehta, learned Counsel appearing on behalf of the original plaintiff that for bringing the case within the definition of "commercial dispute", as per section 2(c)(vii), Page 7 of 23 HC-NIC Page 7 of 23 Created On Tue Jul 11 00:32:21 IST 2017 C/AO/199/2017 CAV JUDGMENT there need not be the immovable property actually used for trade or commerce. It is submitted that if the intention of the legislature was to limit only those immovable properties actually used in that case the phraseology used would have been different, for example "actually used"
or "being used". It is submitted that therefore on plain reading of the relevant clause i.e. section 2(c)(vii) of the Commercial Courts Act, as the land in question was allotted to the original defendant No.1 for use as trade and commerce i.e. for development of Biotech park, the dispute between the parties can be said to be commercial dispute within the definition of section 2(c)(vii) of the Commercial Courts Act. It is submitted that therefore the learned Commercial Court has materially erred in returning the plaint to the plaintiff to present it before appropriate Court having jurisdiction by holding that the dispute between the parties cannot be said to be commercial dispute within the definition of section 2(c) of the Commercial Courts Act and therefore, the suit for the reliefs claimed in the suit shall not be maintainable before the Commercial Court.
Making above submissions, it is requested to admit / allow the present Appeal From Order.
[5.0] Present Appeal From Order is vehemently opposed by Shri Salil Thakore, learned Advocate appearing on behalf of the original defendant No.1. It is vehemently submitted by Shri Thakore, learned Advocate appearing on behalf of the original defendant No.1 that in the facts and circumstances of the case and on true interpretation of section 2(c) of the Commercial Courts Act, the learned Commercial Court has rightly held that the suit filed by the original plaintiff before the learned Commercial Court shall not be maintainable. It is submitted that in the facts and circumstances of the case, no error has been committed by the learned Commercial Court in holding that the dispute between the parties for which the suit has been preferred cannot be said to be a "commercial dispute" within the definition of section 2(c) of the Page 8 of 23 HC-NIC Page 8 of 23 Created On Tue Jul 11 00:32:21 IST 2017 C/AO/199/2017 CAV JUDGMENT Commercial Courts Act.
[5.1] It is further submitted by Shri Thakore, learned Advocate appearing on behalf of the original defendant No.1 that as such in the plaint there are no averments as to how the dispute between the parties can be said to be commercial dispute within the meaning of section 2(c) of the Commercial Courts Act and how the learned Commercial Court would have jurisdiction. It is submitted that nothing has been pleaded on the aforesaid in the plaint.
[5.2] It is further submitted by Shri Thakore, learned Advocate appearing on behalf of the original defendant No.1 that before the learned Commercial Court and at the time of hearing of application Exh.17, the original plaintiff relied upon section 2(c)(i), section 2(c)(ii) and section 2(c)(xx) of the Commercial Courts Act and that no reliance at all was placed on section 2(c)(vii) of the Commercial Courts Act, which is now being relied upon by the learned Counsel appearing on behalf of the original plaintiff. It is submitted that therefore in the facts and circumstances of the case, the learned Commercial Court has not committed any error in returning the plaint to the plaintiff to present it before the appropriate Court having jurisdiction. It is submitted that in the facts and circumstances of the case, the learned Commercial Court has rightly exercised the powers under Order VII Rule 10 of the CPC and has rightly returned the plaint.
[5.3] It is further submitted by Shri Thakore, learned Advocate appearing on behalf of the original defendant No.1 that as such the land in question even according to the original plaintiff is a barren open land and at present and at the time of filing of the suit the same was not used for trade or commerce and therefore, on literal interpretation of section 2(c) of the Commercial Courts Act, the dispute cannot be said to be commercial dispute within the definition of section 2(c) and therefore, Page 9 of 23 HC-NIC Page 9 of 23 Created On Tue Jul 11 00:32:21 IST 2017 C/AO/199/2017 CAV JUDGMENT the suit before the learned Commercial Court shall not be maintainable. Relying upon the decisions of the Hon'ble Supreme Court in the case of State of Haryana vs. Dalmia Dadri Cement Ltd. reported in 1987 (Suppl) SCC 679; in the case of Mahakoshal Tourist, Napier Town & Ors. Vs. State of M.P. & Ors. reported in (2002) 7 SCC 245; Federation of A.P. Chambers of Commerce and Industry vs. State of A.P. reported in (2000) 6 SCC 550, it is vehemently submitted by Shri Thakore, learned Advocate appearing on behalf of the original defendant No.1 that as held by the Hon'ble Supreme Court in the aforesaid decisions, provision in the statute is required to be interpreted as it is and literally.
It is submitted that as in section 20(c)(vii) of Commercial Courts Act, the pharseology used is "immovable property used", it has to be interpreted that "immovable property is actually used or being used". It is submitted that adding anything more as suggested by learned Counsel appearing on behalf of the original plaintiff would tantamount to adding in the statute which is not there and therefore, the same is not permissible.
[5.4] Shri Thakore, learned Advocate appearing on behalf of the original defendant No.1 has also relied upon the decision of Bombay High Court (Nagpur Bench) in the case of Dineshkumar Gulabchand Agrawal vs. Commissioner of Income Tax and Anr. reported in (2004) 267 ITR 768 (Bom) in support of his submission that the word "used" denotes "actually used" and not merely ready for use.
[5.5] Shri Thakore, learned Advocate appearing on behalf of the original defendant No.1 has relied upon the averments in the plaint more particularly in paras 10(a) to 10(f) in support of his submission that the dispute between the parties cannot be said to be "commercial dispute" within the definition of section 2(c) of the Commercial Courts Act.
[5.6] Shri Thakore, learned Advocate appearing on behalf of the Page 10 of 23 HC-NIC Page 10 of 23 Created On Tue Jul 11 00:32:21 IST 2017 C/AO/199/2017 CAV JUDGMENT original defendant No.1 has submitted that as such the issue involved in the present appeal is squarely covered by the decision of the Division Bench of this Court in the case of Ujwala Raje Gaekwar D/o.Udaysinghrao Shivajirao Gaekwar and W/o. Jay Vikram Shah vs. Hemaben Achyut Shah & Ors. rendered in Miscellaneous Civil Application No.1879/2016.
[5.7] It is further submitted by Shri Thakore, learned Advocate appearing on behalf of the original defendant No.1 that if the submission on behalf of the original plaintiff is accepted, in that case all the suits of the like nature will have to be transferred to the Commercial Courts and therefore, the purpose and object of establishment of Commercial Courts shall be frustrated.
Making above submissions and relying upon above decisions, it is requested to dismiss the present Appeal From Order.
[6.0] In reply to the submissions made by Shri Thakore, learned Advocate appearing on behalf of the original defendant No.1, Shri Mehta, learned Counsel appearing on behalf of the plaintiff has submitted that none of the decisions relied upon by the learned Advocate appearing on behalf of the original defendant No.1 shall be applicable to the facts of the case on hand. It is submitted that as such and on the contrary para 9 of the decision of the Hon'ble Supreme Court in the case of Dalmia Dadri Ltd. (Supra) shall be applicable in support of the submission on behalf of the original plaintiff and it will help the original plaintiff rather than original defendant No.1.
[6.1] Now, so far as the reliance placed upon the decision of the Division Bench of this Court in the case of Ujwala Raje Gaekwar D/o.Udaysinghrao Shivajirao Gaekwar and W/o. Jay Vikram Shah (Supra) relied upon by the learned Advocate appearing on behalf of original defendant No.1 is concerned, it is submitted that in the facts and Page 11 of 23 HC-NIC Page 11 of 23 Created On Tue Jul 11 00:32:21 IST 2017 C/AO/199/2017 CAV JUDGMENT circumstances of the case and more particularly the controversy and the reliefs sought in the said case, the said decision shall not be applicable to the facts of the case on hand. It is submitted that in the aforesaid case the original plaintiff claimed the reliefs on probate and the dispute was with respect to the probate and also to quash and set aside the sale deed and therefore, as such the Division Bench rightly held that such a dispute shall not be considered as "commercial dispute" within the definition of section 2(c) of the Commercial Courts Act. It is submitted that therefore the said decision shall not be applicable to the facts of the case on hand.
Making above submissions it is requested to admit/allow the present Appeal From Order.
[7.0] Heard learned Advocates appearing for respective parties at length. By the impugned order the learned Commercial Court has allowed the application Exh.17 and has returned the plaint to the original plaintiff to present it before appropriate Court having jurisdiction in exercise of powers under Order VII Rule 10 of the CPC. That by the impugned order the learned Commercial Court has held that for the dispute between the parties for which the suit has been preferred and the reliefs are prayed, the dispute cannot be said to be "commercial dispute" within the definition of section 2(c) of the Commercial Courts Act and therefore, for the reliefs prayed in the suit, the suit before the learned Commercial Court shall not be maintainable.
Therefore, the short question which is posed for consideration of this Court is whether the dispute between the parties can be said to be a "commercial dispute" within the definition of section 2(c) of the Commercial Courts Act?
[7.1] Reliefs which are prayed in the suit are reproduced hereinabove. In para 22 on the aspect of jurisdiction it is pleaded as under:
"22. The present suit is filed for the purposes of humbly seeking specific performance of the subject contract and thereby to get the SC Page 12 of 23 HC-NIC Page 12 of 23 Created On Tue Jul 11 00:32:21 IST 2017 C/AO/199/2017 CAV JUDGMENT fully fulfilled and to ensure the consequential transfer of SP in specific performance of SC as sought for to be fully, performed in favour of the plaintiff and to comply with the obligations of express provisions of Specific Relief Act, the plaintiff has humbly sought the recovery of the amount of the compensation in respect of the loss caused to the plaintiff and the damage as suffered by plaintiff at Vadodara and the written contract i.e. SC is executed between the parties hereto in respect of SP which is situated / located at and within the District of Vadodara and thereby the cause and contractual privity based upon which the present suit for specific performance and coextensive compensation is sought for by the plaintiff based upon the SC which is formulated in respect of SP which is existing within the territorial jurisdiction of this Honourable Court and because the breach / refusal of the SC is communicated to the plaintiff at Vadodara and thereby the cause to seek specific performance emerging from out of refusal communicated by defendant for the first ever time vide their letter dated 13.05.2016 has thereby arisen within the territorial jurisdiction of this Honourable Court and therefore the cause of action has arisen within the jurisdiction of this Honoourable Court and this Hon'ble Court is comprehensively having wholesome statutory, pecuniary and territorial jurisdiction to entertain and try the present suit."
Paras 10(a), 10(d) and 10(f) in the plaint / suit read as under:
"10(a) It is submitted that the defendant company appears to have taken on lease the plots at GIDCSavli and thereafter decided to develop the same as a Biotech Park in the name and style of "Gujarat Akruti Biotech ParkPhase II" and sublease the Plots after developing the amenities to different industries for the purposes of setting up their manufacturing plants / factory units. Thus, the complete development of infrastructure amenities and facilities was condition precedent, obligation of defendants and only subject to such prior performance of aforesaid obligation further course of contract and execution sub lease could have become possible but nothing could proceed only because defendants have hopelessly failed to effectively proceed or carry out any further progress on the site of SP and naturally therefore it is physically impossible for the plaintiff to in any way occupy and or use the SP and complete silence of defendant No.1 is added cause for plaintiff to suffer completely clueless state of situation. Infact plaintiff has made all round and sincere efforts to connect and communicate and coordinate with the defendant No.1 and find out their clear plans for the purposes of making the entire unit of SEZ ready with infrastructure which could pave the way for the plaintiff to move on the next step as required under the SC. The plaintiff at this juncture craves leave to draw kind attention to the terms, conditions of SC and the nature and operational consequences / effects of such clauses which are capable to confirm Page 13 of 23 HC-NIC Page 13 of 23 Created On Tue Jul 11 00:32:21 IST 2017 C/AO/199/2017 CAV JUDGMENT that the entire execution and performance of SC essentially pre depends upon the prior and on site performances by the defendant to make the SP available and usable both. Therefore the plaintiff herein craves leave to rely and refer such contractual clauses as humbly reserves right to confirm that the nature and resultant operational effect and meaning of contractual clauses, always required defendant to perform their part of their obligations and promises in advance. In this regard it is humbly clarified that the availablility of SP pre supposes the defendant No.1 being the lessor the amenities which are clearly listed in the SC and as per the clear terms of the SC the defendant No.1 is also required to arrange and provide for the various provisions of facilities / services such as water, electricity, utility and such facilities, services provisions and amenities as narrated in the forgoing part of the plaint and are essentially required to be provided well in advance without and in absence of which nothing can be done on the site leave apart setting up the industrial unit as is planned and forming part of the object of the plaintiff to enter into the SC and thereby to acquire the SP.
10(d) It is submitted that after the execution of the SC and the receipt of the amount of Rs.35,00,000.00 (Rupees Thirty Five Lakhs Only), the defendant company was required to also perform its obligations as are stipulated in the SC. It is submitted that obligations which the defendant company was required to perform were that of developing of the SP and providing of the amenities as were agreed upon and listed in the SC amongst other obligations arising out of the SC. It is submitted that because the plaintiff company had performed its obligations to pay an advance amount at the time of signing the SC, the plaintiff company is conferred upon with a right and reciprocally the defendant company is / was preemptively obliged / bound to undertake and complete its obligations as stipulated vide the SC. It may not be out of place to mention here that the availablility of roads, facilities, amenities and ready infrastructure is naturally a sine qua non for commencing any construction or industrial work leave apart any manufacturing. It is submitted that in spite of a lapse of few days which started into being months, when the defendant company did not take any action or step for the purposes of performing their obligations under the SC, the plaintiff company approached the officers of the defendant company and requested them that the plaintiff company is required to have the SP for the purposes of establishing their manufacturing units.
10(f) It is most humbly submitted that because the SC was executed and there was complete inaction on the part of defendants on site about creating the infrastructure and/or for carrying out the necessary administrative process to cause and execute the deed of transfer by way lease or sublease, naturally the passage and passing of time started giving rise to the most adverse and painful sufferings Page 14 of 23 HC-NIC Page 14 of 23 Created On Tue Jul 11 00:32:21 IST 2017 C/AO/199/2017 CAV JUDGMENT for plaintiff as their plans to start the new manufacturing unit in the SP was not only getting delayed but in fact was suffering unbearable uncertainty and the entire financial plan and growth plan as also the industrial roadmap as drawn by the plaintiff was suffering disturbance on account of nonavailability of SP. Therefore, from onwards 2010, the plaintiff started very effective, active and continuous correspondence with defendant No.2 through its industrial development corporation followed with the correspondence caused with defendant No.1 and series of letters and emails have been written and addressed to the defendants with a view to ensure that the SC is effectively fulfilled and thereby the SP is properly and legally transferred through lease / sublease in furtherance of SC. It is pertinent to note at this juncture that in the course of such contractual correspondence, plaintiff's director has also made personal visits to the offices of both the defendants and all such meetings also proved to be futile and none of the defendants and all such meetings also proved to be futile and none of the defendants were giving any positive response leave apart any effective action to complete and fulfill their part of the contractual obligations which are and essentially sine qua non / condition precedent obligations as is clear from the terms and conditions of the SC and the nature of contractual privity between the parties hereto. It is these failures, defaults and inactions on the part of defendants which has continuously given rise to the cause of action in favour of the plaintiff to claim the reliefs in furtherance of the rights acquired and conferred through SC. However, an intersting fact may kindly be appreciated that when plaintiff made vigorous and serious followups particularly with the office of defendant No.2, the Mission Director of Defendant No.2 has written a letter on 2nd Sept. 2014 to defendant No.1 with a copy marked to the plaintiff and the copy whereof is submitted vide separate list of documents. The kind attention of this Honourable Court is drawn to the contents of above letter wherein it is clearly confirmed that GATBL i.e. defendant No.1 is not able to move ahead with the project and is not able to provide the basic infrastructure and it is also confirmed that defendant No.1 cannot move ahead with their obligations unless and because the basic infrastructure in the biotect park is not provided by defendant No.1. The defendant No.2 therefore, out of their administrative control and authority directed to defendant No.1 that they should refund the advance payment received from the plaintiff for acquiring the subject property i.e. the amount of Rs.35,00,000/ though however, the plaintiff never ever intended leave apart accepted such unilateral proposition to receive back the amount as for plaintiff to have the property was and has always remained a very precious and most essential course as a part of long drawn financial and industrial plans of which the acquisition of SP is an integral part for very many purposes as mentioned above."
[7.2] From the aforesaid it appears that and even according to the Page 15 of 23 HC-NIC Page 15 of 23 Created On Tue Jul 11 00:32:21 IST 2017 C/AO/199/2017 CAV JUDGMENT original plaintiff so pleaded in the plaint, the original defendant No.1 Company have taken on lease the plots of GIDC/Savli and thereafter decided to develop the same as Biotech in the name and style of "Akruti Gujarat Biotech, PhaseII" and subleased the plots after developing the amenities to different industries for the purpose of manufacturing plants / factory units. The complete development of infrastructure, amenities and facilities was required to be provided by the original defendant No.1. It appears that the plaintiff entered into agreement for one of the plot / subplot and it is the case on behalf of the plaintiff that thereafter nothing was done and the plots which are taken on lease by the original defendant No.1 from GIDC are kept as they are. Therefore, the original plaintiff had instituted the suit for specific performance of the agreement / contract / MOU entered into between the original plaintiff and the original defendant No.1. It has nothing to do with any agreement and/or MOU between the State Government and the original defendant No.1 and/or between the GIDC and the original defendant No.1. The original plaintiff has also prayed alternatively to return the amount which the original plaintiff has paid to the original defendant No.1 for subplot and for damages etc. Considering the aforesaid facts and circumstances, it is required to be considered whether the dispute between the parties for which the suit has been preferred can be said to be "commercial dispute" within the definition of section 2(c) of the Commercial Courts Act or not? Section 2(c) of the Commercial Courts Act reads as under:
"2(c) commercial dispute means a dispute arising out of
(i) ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents;
(ii) export or import of merchandise or services;
(iii) issues relating to admiralty and maritime law;Page 16 of 23
HC-NIC Page 16 of 23 Created On Tue Jul 11 00:32:21 IST 2017 C/AO/199/2017 CAV JUDGMENT
(iv) transactions relating to aircraft, aircraft engines, aircraft equipment and helicoptors, including sales, leasing and financing of the same;
(v) carriage of goods;
(vi) construction and infrastructure contracts, including tenders;
(vii) agreements relating to immovable property used exclusively in trade or commerce;
(viii) franchising agreements;
(ix) distribution and licensing agreements;
(x) management and consultancy agreements;
(xi) joint venture agreements;
(xii) shareholders agreements;
(xiii) subscription and investment agreements pertaining to the services industry including outsourcing services and financial services;
(xiv) mercantile agency and mercantile usage;
(xv)
(xv) partnership agreements;
(xvi) technology development agreements;
(xvii) intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits;
(xviii)agreements for sale of goods or provision of services; (xix) exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum;
(xx) insurance and reinsurance;
(xxi) contracts of agency relating to any of the above; and (xxii) such other commercial disputes as may be notified by the Central Government."
Page 17 of 23HC-NIC Page 17 of 23 Created On Tue Jul 11 00:32:21 IST 2017 C/AO/199/2017 CAV JUDGMENT [7.3] Therefore, if the dispute falls within any of the clause 2(c) the dispute can be said to be "commercial dispute" for which the Commercial Court would have jurisdiction. It is required to be noted that before the learned Commercial Court the original plaintiff relied upon section 2(c)(i), 2(c)(ii) and 2(c)(xx) of the Commercial Courts Act only. Learned Counsel appearing on behalf of the original plaintiff has candidly admitted and/or conceded that the case shall not fall within clause 2(c)(i); 2(c)(ii) or 2(c)(xx) of the Commercial Courts Act. It is required to be noted that before the learned Commercial Court it was never the case on behalf of the original plaintiff that case would fall within section 2(c)(vii) of the learned Commercial Court. Despite the above we have considered on merits whether even considering section 2(c)(vii) of the Commercial Courts Act, the dispute between the parties can be said to be "commercial dispute" within the definition of section 2(c) of the Commercial Courts Act or not? Considering section 2(c)(vii), "commercial dispute" means a dispute arising out of the agreements relating to immovable property used exclusively in trade or commerce. As observed hereinabove, at the time of filing of the suit and even so pleaded in the plaint, the immovable property / plots the agreements between the parties cannot be said to be agreements relating to immovable property used exclusively in trade or commerce. As per the agreement between the party after getting the plots on lease from the GIDC, the same was required to be thereafter developed by the original defendant No.1 and after providing all infrastructural facilities and subplotting it, the same is required to be given to other persons like the original plaintiff. It is the case on behalf of the original plaintiff that as the original defendant No.1 has failed to provide any infrastructural facilities and develop the plots and therefore, a civil suit for specific performance of the agreement has been filed. There are other alternative prayers also. Therefore, it cannot be said that the agreement is as such Page 18 of 23 HC-NIC Page 18 of 23 Created On Tue Jul 11 00:32:21 IST 2017 C/AO/199/2017 CAV JUDGMENT relating to immovable property used exclusively in trade or commerce. It is the case on behalf of the original plaintiff that as in clause (vii) of section 2(c), the pharseology used is not "actually used" or "being used"
and therefore, even if at present the plot is not used and even if it is likely to be used even in future, in that case also, section 2(c)(vii) shall be applicable and therefore, the Commercial Court would have jurisdiction. The aforesaid has no substance. As per the cardinal principle of law while interpreting a particular statute or the provision, the literal and strict interpretataion has to be applied. It may be noted that important words used in the relevant provisions are "immovable property used exclusively in trade or commerce". If the submission on behalf of the original plaintiff is accepted in that case it would be adding something in the statute which is not there in the statute, which is not permissible. On plain reading of the relevant clause it is clear that the expression "used" must mean "actually used" or "being used". If the intention of the legislature was to expand the scope, in that case the phraseology used would have been different as for example, "likely to be used" or "to be used". The word "used" denotes "actually used" and it cannot be said to be either "ready for use" or "likely to be used"; or "to be used". Similar view has been taken by the Bombay High Court (Nagpur Bench) in the case of Dineshkumar Gulabchand Agrawal (Supra) and it is observed and held that the word "used" denotes "actually used" and not merely "ready for use". It is reported that SLP against the said decision has been dismissed by the Hon'ble Supreme Court.
[7.4] Even the submission on behalf of the original plaintiff that as the plots are given to original defendant No.1 for developing and establishing Biotech Park which ultimately is to be used for trade or commerce and therefore, section 2(c)(vii) shall be applicable, the Page 19 of 23 HC-NIC Page 19 of 23 Created On Tue Jul 11 00:32:21 IST 2017 C/AO/199/2017 CAV JUDGMENT aforesaid has no substance and cannot be accepted. Merely because the ultimate use might be for the purpose of trade or commerce and that too after developing and establishing Biotech Park after providing of infrastructural facilities, section 2(c)(vii) shall not be applicable, more particularly with respect to the agreement / contract between the original plaintiff and the original defendant No.1. It cannot be said that the agreement between the original plaintiff and the original defendant No.1 is the agreement relating to immovable property used exclusively in trade or commerce.
[7.5] Identical question came to be considered by the Division Bench of this Court and after considering the relevant provisions of the Commercial Courts Act more particularly section 2(c) of the Commercial Courts Act, in para 5.5 after considering section 2(c)(vii) of the Commercial Courts Act, it is observed that merely because the immovable property is going to be used exclusively in trade or commerce, the dispute would not become commercial dispute as defined under Section 2(c) of the Commercial Courts Act. It is further observed and held in the said decision that if contention on behalf of the applicant that as immovable property, which is the subject matter of the suit, is going to be used exclusively for trade and commerce, the same would beecome commercial dispute as per section 2(c) and therefore the same is to be transferred to the concerned Commercial Court having jurisdiction is accepted, in that case, the object and purpose of establishment of Commercial Courts under the Commercial Courts Act would be frustrated. That thereafter in para 5.6 to 5.8, the Division Bench has observed and held as under:
"[5.6] The object and purpose of establishment of Commercial Courts, Commercial Divisions and Commercial Appellate Divisions of the High Court is to ensure that the cases involved in commercial disputes are disposed of expeditiously, fairly and at reasonable cost to the litigant. The Commercial Courts, Commercial Divisions and Commercial Page 20 of 23 HC-NIC Page 20 of 23 Created On Tue Jul 11 00:32:21 IST 2017 C/AO/199/2017 CAV JUDGMENT Appellate divisions of the High Courts are intended to serve as a pilot project in the larger goal of reforming the civil justice system in India. As per the recommendations made by the Law Commission on the basis of which the Commercial Courts have been established, the Commercial Courts more particularly will benefit the litigant, other potential litigants (especially those engaged in trade and commerce) shall also be advantaged by the reduction in backlog caused by the quick disposal of the commercial disputes, which in turn, will further economic growth, increase foreign investment, and make India an attractive place to do business.
[5.7] From the 188th report of the Law Commission it appears that the constitution of Commercial Divisions Courts were necessitated due to inordinate delays, and the need to ensure the fast disposal of high value commercial disputes to provide assurance to domestic and foreign investors. It has been aimed to give a clear assurance to investors that high value commercial suits would directly go before the Commercial Division / Commercial Courts / Commercial Appellate Courts, which would follow fast track procedures.
[5.8] Thus, considering the aim, object and purpose of the enactment of the Commercial Courts Act noted hereinabove, the submission on behalf of the appellant that the dispute in the present suit, which as observed hereinabove, cannot be said to be the commercial dispute within the definition of Section 2(c) of the Commercial Courts Act, is required to be transferred to the Commercial Division, Vadodara cannot be accepted. If such a suit which is as such arising out of the probate proceedings and/or is dispute with the respect to the property are transferred to the Commercial Division / Commercial Court, there shall not be any difference between the Regular Civil Courts and the Commercial Division / Commercial Courts and therefore, if all such suits are transferred to the Commercial Division / Commercial Courts, the object and purpose of the establishment of the Commercial Division / Commercial Courts shall be frustrated."
[7.6] Considering the aforesaid facts and circumstances and the dispute between the parties for specific performance of the agreement between the original plaintiff and original defendant No.1 and the reliefs sought and the language and phraseology "exclusively in trade or commerce"
used in section 2(c)(vii) of the Commercial Courts Act, it cannot be said that the dispute between the original plaintiff and original defendant No.1 can be said to be "commercial dispute" within the definition of section 2(c) of the Commercial Courts Act, for which the Commercial Page 21 of 23 HC-NIC Page 21 of 23 Created On Tue Jul 11 00:32:21 IST 2017 C/AO/199/2017 CAV JUDGMENT Court would have jurisdiction. The learned Commercial Court has rightly allowed the application Exh.17 and has rightly returned the plaint to the original plaintiff to present it before appropriate Court by observing that as the dispute between the original plaintiff and defendants cannot be said to be "commercial dispute" within the definition of section 2(c) of the Commercial Courts Act and therefore, the suit before the Commercial Court shall not be maintainable. We are in complete agreement with the view taken by the learned Commercial Court.
[8.0] In view of the above and for the reasons stated above, present Appeal From Order fails and the same deserves to be dismissed and is, accordingly, dismissed. No costs.
CIVIL APPLICATION NO. 8083 of 2017 In view of dismissal of main Appeal From Order, Civil Application No.8083/2017 also stands dismissed.
Sd/ (M.R. SHAH, J.) Sd/ (B.N. KARIA, J.) FURTHER ORDER At this stage, Shri Majmudar, learned Advocate appearing on behalf of the appellant has requested to continue the adinterim relief granted earlier by the learned Commercial Court by which the defendants were directed to maintain status quo with respect to the property in question.
The prayer is opposed by Shri Thakore, learned Advocate appearing on behalf of the respondent by submitting that there is no question of continuing the adinterim relief granted earlier by the Page 22 of 23 HC-NIC Page 22 of 23 Created On Tue Jul 11 00:32:21 IST 2017 C/AO/199/2017 CAV JUDGMENT learned Commercial Court as the learned Commercial Court has held that the suit before the learned Commercial Court is not maintainable and therefore, the learned Commercial Court had no jurisdiction to pass any order whatsoever and therefore, the adinterim relief granted earlier can be said to be without jurisdiction.
Having heard the learned Advocates appearing on behalf of the respective parties recorded hereinabove and accepting the submissions made by the learned Advocate appearing on behalf of the respondent, recorded hereinabove, the prayer of the appellant stands rejected.
At the request of the learned Adocate appearing on behalf of the appellant, time to appear before the Court of learned Senior Civil Judge is extended upto 24.07.2017.
Sd/ (M.R. SHAH, J.) Sd/ (B.N. KARIA, J.) Ajay Page 23 of 23 HC-NIC Page 23 of 23 Created On Tue Jul 11 00:32:21 IST 2017