Actual Usage of Immovable Property, Not Intended Use, is Decisive in Commercial Dispute Classification
In a pivotal judgment rendered by the Bombay High Court, Justice N.J. Jamadar has clarified the parameters under which disputes involving immovable property can be classified as commercial disputes under the Commercial Courts Act, 2015. The case, Jayshree Jagdish Thakker v. Pragati Infra Interiors Pvt Ltd, revolved around the classification of a dispute arising from a Leave and License Agreement for premises intended for use in trade or commerce.
The court emphasized that the actual use of immovable property exclusively in trade or commerce is crucial to classify a dispute as a commercial dispute under Section 2(1)(c)(vii) of the Commercial Courts Act, 2015. Intended or proposed usage is insufficient for such classification. The court set aside the order of the Commercial Court, which had rejected the Notice of Motion by the Petitioners seeking the rejection of the Plaint on the grounds that the underlying dispute was not a commercial dispute.
Justice Jamadar highlighted the legislative intent behind the enactment of the Commercial Courts Act, 2015, which was to ensure the speedy disposal of high-value commercial disputes. He noted that the fast-track procedures under the Act should be reserved for genuine commercial disputes, and not be clogged by ordinary suits that do not meet the definition of commercial disputes.
The judgment draws heavily from the Supreme Court's decision in Ambalal Sarabhai Enterprises Limited v. K.S. Infraspace LLP, where the apex court underscored the necessity of actual usage of immovable property in trade or commerce for a dispute to qualify as commercial. The Bombay High Court reiterated this principle, stating that the word "used" denotes "actually used" and cannot be interpreted as "ready for use" or "likely to be used."
The court ordered that the Plaint in the commercial suit be returned to the Plaintiff for presentation to the ordinary City Civil Court, as the Commercial Court was found to have no jurisdiction to entertain, try, and decide the suit. This decision underscores the importance of accurately interpreting the statutory provisions to prevent undue expansion of the definition of commercial disputes, which could otherwise burden the commercial court system.
Bottom line:-
Commercial Courts Act, 2015 - Dispute regarding immovable property - The test of "actual use" of immovable property exclusively in trade or commerce is crucial to classify a dispute as a "commercial dispute." Intended or proposed usage cannot bring the dispute within the ambit of Section 2(1)(c)(vii).
Statutory provision(s): Commercial Courts Act, 2015 Section 2(1)(c)(vii), Civil Procedure Code, 1908 Order 7, Rule 10
Jayshree Jagdish Thakker v. Pragati Infra Interiors Pvt Ltd, (Bombay) : Law Finder Doc id # 2936439
