High Court of Delhi was dealing with the petition filed under Article 227 of the Constitution of India impugns the order dated 10th September, 2021 passed by District Judge, Commercial Court-02, Delhi, whereby the Commercial Court has held that the suit filed on behalf of the petitioner/plaintiff Company does not fall within the definition of ‘commercial dispute’ under Section 2(1)(c) of the Commercial Courts Act, 2015.
Brief Facts:
The petitioner Company is into the business of providing real estate consultancy. An agreement was entered into between the petitioner Company and the respondent for the petitioner Company to provide consultancy and brokerage services in relation to the leasing of the property of the respondents to the prospective lessee being Domino’s Pizza India Pvt. Ltd, as introduced by the petitioner Company. The scope of the services was to facilitate the leasing of the aforesaid premises for commercial purposes by arranging site inspections, organizing meetings and discussions with the prospective lessees. In respect of the aforesaid services, a fee was payable by the respondent to the petitioner Company.
It is the case of the petitioner Company that the respondents did not pay the requisite fee in terms of the aforesaid agreement after the petitioner Company negotiated with Jubilant Foodworks Limited, who holds the master franchise of Domino’s Pizza, for materializing a commercial lease transaction in respect of the said property of the respondents. Therefore, the suit from which the present petition arises was filed as a commercial suit seeking recovery money along with pedente lite and future interest.
Commercial Court’s Decision:
In the decision given by commercial court on 10th September, 2021, the aforesaid suit was not taken to be the subject matter of a ‘commercial dispute’ by observing/reasoning that, (i) the agreement between the parties, which is titled as ‘Confirmation of fee payable for Consultancy/Brokerage Service’, could not be termed as an agreement relating to immovable property and therefore, the dispute between the parties would not fall under the ambit of a ‘commercial dispute’; and, (ii) the agreement is regarding the broker’s fee and therefore, the suit cannot be termed as a ‘commercial dispute’.
Petitioner’s Contention:
The counsel for the petitioner has drawn the attention of the Court to Section 2(1)(c)(vii) and Section 2(1)(c)(x) of the Commercial Courts Act and contended that the aforesaid agreement between the parties clearly falls within the ambit of a ‘commercial dispute’ and therefore, the petitioner Company was entitled to file a suit before the Commercial Court.
HC’s observations:
After looking into the provisions of the Commercial Courts Act the Court stated that “all agreements relating to immovable properties, which are to be used exclusively in trade and commerce are covered within the ambit of ‘commercial dispute’ in terms of Section 2(1)(c)(vii) of the Commercial Courts Act.”
The Court found that the property in question of the respondents for leasing of which the agreement was entered into between the parties, was a property to be leased for commercial use. Even otherwise, in terms of Section 2(1)(c)(x) of the Commercial Courts Act, all management and consultancy agreements would be covered within the ambit of commercial disputes. The Court stated that a bare reading of the agreement in question makes it clear that the aforesaid agreement is in the nature of a consultancy agreement.
HC Held:
HC held that “the agreement in question between the petitioner Company and the respondent would be covered under Section 2(1)(c)(vii) as well as Section 2(1)(c)(x) of the Commercial Courts Act. Accordingly, the suit filed by the petitioner Company would be taken to be a commercial suit covered under the provisions of the Commercial Courts Act.” HC set aside the order passed by the Commercial Court.
HC allowed the petition.
Bench: Hon'ble Mr. Justice Amit Bansal
Case Title: Realistic Realtors Pvt. Ltd. v. Karanpreet Singh Walia & Anr.
Case Details: CM(M) 1146/2021
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