Kashida Developers Pvt. Ltd., Thr ... vs N.P.S. Infrastructure Thr Its ...
2021 Latest Caselaw 8670 Bom

                                             (1)


           IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                      BENCH AT AURANGABAD

                  CIVIL APPLICATION NO.4591 OF 2021
                                  IN
                     FIRST APPEAL NO.660 OF 2021

 1.       Kashida Developers Private
          Ltd., Through its Directors -

 1-A. Sandip s/o Omprakash Koyate
      and Ors.                                                = APPLICANTS]
                                                            (Orig.Defendants)
          VERSUS

 N.P.S.Infrastructure through
 its Owner -
 Shri Neeraj s/o Prafulla Shaha                               = RESPONDENT
                                                            (Orig.Plaintiff)
                                         -----
 Mr.RN Dhorde, Sr.Counsel                          i/by     Shri      VR      Dhorde,
 Advocate for Appellants;

 Mr.PV Mandlik, Sr.Counsel, i/by Shri AS Gandhi,
 Advocate for Respondent.
                        -----
                    CORAM : SMT.VIBHA KANKANWADI,J.

DATE : 1st July, 2021.

PER COURT :-

 1.               Heard          learned           Sr.Counsel            for         the

 respective parties.

 2.               Present        application          has    been       filed        for

stay to the execution and implementation of the

judgment and decree dated 9.9.2020 passed by

learned Civil Judge, Senior Division, Rahata,

District Ahmednagar in Special Civil Suit No.

12/2019 (Old Special Civil Suit No.68/2012).

3. Learned Sr.Counsel appearing for the

applicants-original defendants submitted that the

impugned judgment suffers from many illegalities

right from the point of jurisdiction. The learned

Trial Judge has failed to apply proper legal

provisions. If we peruse the plaint and the

impugned judgment, it is clear that the amount that

was claimed from the defendants, was to the tune of

Rs.1,24,87,610/-, which the plaintiff contended

that it was on account of a construction contract.

If we consider the definition of "Commercial

dispute" as per Section 2(c) of The Commercial

Courts Act, 2015 (herein after referred to as the

said Act), which came into force on 23.10.2015,

then sub-clause (vi) thereof says that a dispute,

arising out of construction and infrastructure

contracts including tenders, is a commercial

disputes. Therefore, after the said Act came into

force, the present suit ought to have been

transferred to the Commercial Court. Further, the

said Act came to be amended by the Act of 28 of

2018 and if specified value up to and inclusive of

Rupees One Crore was only to be tried at Civil

Judge,Senior Division level even at a Taluka Court.

However, if the specified value is more than Rupees

One crore, then it should go to District Judge-1 at

the District Head quarter as well as the Court of

District Judge-2, if available at Taluka place.

Section 15 of the said Act deals with Transfer of

pending cases. Therefore, when the present suit was

originally filed and it appears that it was at

different place than Rahata in 2012 then it ought

to have been transferred in 2015 to the appropriate

Court under the said Act. It appears that the

Court of Civil Judge, Senior Division came to be

established at Rahata in 2019 and, therefore, the

suit came to be transferred to that Court.

However, still no efforts were made to transfer the

suit. No doubt a specific contention that it is a

commercial dispute appears to be not taken in the

written statement by the present appellants; yet it

was even for the Court to decide the same.

Further, the Issue No.1 was in respect of

valuation. The point could have been covered in

that issue; yet the finding has been given in the

affirmative. The suit was for recovery of amount

which was more that Rupees One crore though the

decree has been passed to the tune of Rs.

61,84,212/- and, therefore, the said Court had no

jurisdiction at all to decide the dispute.

4. Another fact which was not considered at

all was that even the defendants have filed Special

Civil Suit No.8/2014 for recovery of Rs.

5,71,26,794/- and that was not considered along

with this suit. On merits also, it can be seen

that the plaintiff had not produced original

documents and only summary of the accounts was

produced which could not have been taken as proof

for any outstanding amount. When the defendants

had come with a case that, in fact, there is an

amount outstanding from the plaintiff to them,

unless those matters would have been tried

together, the learned Trial judge could not have

come to a different conclusion and, therefore, all

these points are required to be gone into in the

First Appeal. The learned Sr. Counsel, therefore,

prayed for stay to the impugned judgment and

decree.

5. Per contra the learned Sr. Counsel,

representing the Respondent - original plaintiff,

submitted that since money decree has been passed,

it cannot be stayed. At no earlier point of time a

specific contention was raised by the defendants

that the said Court had no jurisdiction to try the

said suit. In view of Section 15 of the said Act,

in fact, the transfer was not warranted. No steps,

as contemplated under sub-section(5) of Section 15

of the said Act, were ever taken by the defendants.

Sub-section (5) of Section 15 of the said Act,

reads thus, -

"(5) In the event that such suit or application is not transferred in the manner specified in sub-section (1), sub- section (2) or sub-section (3), the Commercial Appellate Division of the High Court may, on the application of any of the parties to the suit, withdraw such suit or application from the Court before which it is pending and transfer the same for trial or disposal to the Commercial Division or Commercial Court, as the case may be, having territorial jurisdiction over such suit, and such order of transfer shall be final and binding."

6. The suit, which has been filed by the

present appellants is on different footing and this

suit need not have waited or need not be tried

along with the other suit. The entire evidence that

was adduced by the plaintiff has been properly

assessed by the learned Civil Judge, Senior

Division and, therefore, it need not be disturbed.

As regards the extract of the account is concerned,

though objection was raised, it has been dealt with

by the learned Trial Judge and it is specifically

stated that when those accounts were received by

the defendants and those have been properly proved,

they are definitely the basis for the decree. He,

therefore, prayed for rejection of the application.

7. At the outset, definitely since the

decree that has been passed is a money decree, the

law stands that it should not be normally stayed.

However, in the present case, jurisdiction of the

trial Court, which passed the decree itself, is

challenged. Prima facie, there appears to be

substance in the same. As aforesaid, Section 2 of

the said Act provides for definitions. Section

2(c) (vi) reads that, construction and

infrastructure contracts, including tenders would

be "commercial dispute". There is no dispute about

the fact that the basis on which the plaintiff

wanted to recover the amount is the construction

contract. No doubt, the suit initially came to be

filed in the year 2012 and the Commercial Courts

Act came into force on 23.10.2015. Section 15 of

the said Act deals with transfer of pending cases.

It says in sub-section (1) in assertive manner that

all suits and applications, including applications

under the Arbitration and Conciliation Act, 1996

relating to a commercial dispute of a Specified

Value pending in a High Court where a Commercial

Division has been constituted, shall be transferred

to the Commercial Division. Sub-section (2) states

that all suits and applications relating to a

commercial dispute of a Specified Value pending in

any Civil Court in any district or area in respect

of which a Commercial Court has been constituted,

shall be transferred to such Commercial Court. Only

proviso to sub-section (2) states that where the

final judgment has been reserved by the Court prior

to the constitution of the Commercial Division or

the Commercial Court, need not be transferred. This

is not the case here. Sub-section (5) states that

in the event that such suit or application is not

transferred in the manner specified in sub-section

(1), sub-section (2) or sub-section (3), the

Commercial Appellate Division of the High Court

may, on the application of any of the parties to

the suit, withdraw such suit or application from

the Court before which it is pending and transfer

the same for trial or disposal to the Commercial

Division or Commercial Court, as the case may be,

having territorial jurisdiction over such suit and

such order of transfer shall be final and binding.

Definitely it is required to be considered as to

whether this suit could have been saved under sub-

section (5). But prima facie, it appears that sub-

section (5) is relating to the territorial

jurisdiction and not as regards pecuniary

jurisdiction. Further, Section 12 of the said Act

deals with determination of Specified Value. Sub-

section (1)(a) thereof states that where the relief

sought in a suit or application is for recovery of

money, the money sought to be recovered in the suit

or application inclusive of interest, if any,

computed up to the date of filing of the suit or

application, as the case may be, shall be taken

into account for determining such Specified Value.

Here in this case, the Specified Value, that was

determined by the plaintiff itself, was more than

Rupees one crore, i.e.1,24,87,610/- and, therefore,

prima facie there appears to be substance in the

submissions advanced on behalf of the defendants

(present applicants) that the point as regards the

jurisdiction of the Court, which decided the

Special Civil Suit No.12/2019, will have to be gone

into and further, the fact that is also required to

be noted is that in view of the Amendment Act of

28/2018, the Government of Maharashtra had

constituted and appointed the Commercial Courts

from 3rd July, 2019 and their jurisdiction is

bifurcated on the basis of Specified Value. The

Court of senior most Civil Judge Senior Division in

District Head Quarters and the Court of senior most

Civil Judge,Senior Division, if any, at Taluka Head

Quarters in the State, is designated as Commercial

Court at District Level for deciding commercial

disputes of specified value up to and inclusive of

Rs.1 Crore; whereas the Court of District Judge-2

at District Head Quarter as well as the Court of

District Judge-2, if available at Taluka place,

shall be the Commercial Court for deciding

commercial disputes of specified value above Rs.1

crore. The Notification dated 3rd July, 2019

issued by the Law and Judiciary Department,

Government of Maharashtra, further states that

where there is no post of District Judge-2 at

Taluka Level, the Court of the District Judge-1 at

Taluka level shall be the Commercial Court for

deciding the commercial disputes having specified

value of more that Rs.1 crore. The Notification

further states that the territorial jurisdiction of

the Commercial Court shall be as per the respective

jurisdiction of those Courts.

8. Another Notification of the same date,

issued by Law & Judiciary Department, Government of

Maharashtra, in exercise of powers conferred by

section 3A of the Commercial Courts Act, 2015, as

amended by Amendment Act of 28/2018, designated

Court of District Judge-1 at District Head Quarter

as well as Taluka Level as Commercial Appellate

Court for entertaining appeals against the judgment

and orders of the Courts of the Civil Judges,

Senior Division, which are constituted as the

Commercial Courts. That means by this

Notification, if the Specified Value of the

commercial dispute in a suit was Rs.1 crore or less

than that and it is tried by the Court of Civil

Judge, Senior Division, then the Appeal would lie

before the District Judge-1 at the District Head

Quarter. Under such circumstance, all these

aspects are required to be considered in this First

Appeal and, therefore, stay to the impugned decree

appears to be inevitable.

9. Another fact that is also required to be

considered is, as to why the Trial Judge did not

consider the suit filed by the defendants for

recovery of the amount from the plaintiff along

with this suit. It appears that parties have not

come with a case that there was any other

transaction or construction agreement they want

which is involved in the present suit. Even the

defendants had not filed counter-claim in this

suit, but perusal of the written statement would

definitely state that they were going to file

another separate suit for the recovery of amount of

Rs.2 crores. Then, whether it was in the interest

of the parties to try both the suits together ought

to have been properly considered ought to have been

properly considered. A party may not point out

that the other suit may be tried together with this

suit. But when the fact is brought to the notice of

the Court then the Court should visualize as to

what kind of legal hurdles would be to decide any

of the matters if they are not tried together and

this can be only on the basis of what bearing the

dispute has against one another. This point is

also required to be taken into consideration along

with the other point that is raised that the suit

came to be decreed only on the basis of summary of

the accounts and not detailed account. A perusal

of the Judgment would show that in an application

under Order 38 Rule 5 of CPC, 8 twin bungalows as

listed in para 1-B of Exhibit-8, came to be

attached prior to the judgment by order dated

1.2.2013. Alternatively, it was stated that

security should be given by the defendants for an

amount of Rs.2 crores and fifty lakhs. Accordingly,

the defendants had given security by giving a

pursis on 11.4.2014. the said security given at

Exh.108, has been continued by the learned Trial

Judge by way of this decree till recovery of the

decreetal amount. Now, the learned Sr. Counsel

appearing for the original plaintiff submits that

the said security by way of the pursis dated

11.4.2014, cannot be said to be a legal security.

Important point to be noted is that at least

whatever documents are with this Court right now,

and the contents of the judgment would show that

the plaintiff never objected to the said pursis and

prayed for proper procedure and proper security to

be given after the pursis dated 11.4.2014 till the

decree passed on 9.9.2020. So for about six years

when the plaintiff preferred to keep mum, then now,

at this stage, when as per the decree, the Court

has directed that it should be in force till the

recovery of the decreetal amount, no such objection

needs to be attended. When that security is

continued, definitely the impugned decree deserves

to be stayed though it is the money decree. Hence,

following order, -

ORDER i. The Civil Application stands allowed in terms of prayer clause (A) till final disposal and decision of the First Appeal.

(SMT. VIBHA KANKANWADI) JUDGE BDV