Gora Lall Seal vs Fine Infra Projects Pvt. Ltd
2023 Latest Caselaw 4185 Cal

                IN THE HIGH COURT AT CALCUTTA
                 CIVIL APPELLATE JURISDICTION
                        APPELLATE SIDE

PRESENT:

The Hon'ble Justice Soumen Sen
           And
The Hon'ble Justice Uday Kumar

                            FMAT 67 of 2023
                              CAN 1 of 2023

                             GORA LALL SEAL
                                    VS.
                     FINE INFRA PROJECTS PVT. LTD.

For the Appellant             : Mr. Jishnu Chowdhury, Adv.
                                Mr. Rittick Chowdhury, Adv.


For the Respondent            : Mr. Arindam Banerjee, Adv.

Mr. Debdoot Mukherjee, Adv.

Mr. Kritin Saraf, Adv.

Ms. Tshawana Parasram, Adv.

Mr. Debartha Chakraborty, Adv.

Hearing concluded on          : 20th June, 2023.

Judgment on                   : 13th July, 2023.


      Soumen Sen, J.:- The appellant is the plaintiff.

2. The appellant is aggrieved by an order dated 7th January, 2023

passed by the Judge, Commercial Court at Alipore in Money Suit 22 of 2021

in an application filed under Order VII Rule 11 read with Section 151 of the

Code of Civil Procedure.

3. The essential question arose before the determination of the

learned Commercial Court was whether the dispute canvassed in the plaint

is a "commercial dispute" within the meaning of Section 2(1)(c)(vii) of the

Commercial Courts Act.

4. The learned trial Judge on consideration of the averments made in

the original plaint held that the suit is non-commercial in nature and,

accordingly, returned the suit to be filed before the court having jurisdiction

to try as a non-commercial suit.

5. The plaintiff/appellant is aggrieved by this order.

6. Mr. Jishnu Chowdhury, the learned Counsel representing the

appellant submits that the learned trial Judge has proceeded erroneously in

accepting the representation made on behalf of the respondent that the

property in question relates to ten residential flats and twelve car parking

spaces which are currently "not used for commercial purpose" or "will be

used for commercial purpose in future" and that the subject properties are

wholly for residential purpose and cannot be used for any commercial

transaction. It is submitted that although the plaintiff filed an application

for amendment of the plaint the learned trial Judge disregarding the well

settled principles that an application for amendment was required to be

heard first, decided the application for rejection of the plaint thereby

preventing the plaintiff from curing the defects.

7. Mr. Chowdhury in this regard has relied upon the two decisions of

our court namely, Nellimarla Jute Mills Company Ltd. v. Rampuria

Industries & Investments Ltd. reported at (2009) 3 CHN 24 and Ahmed

Hossain v. Chambelli reported at (1949) ILR 606 and has submitted that

an order passed for return of the plaint is required to be set aside due to

such serious procedural lapse. It is submitted that the learned trial Court

has failed to take into consideration that the agreement dated 30th March,

2015 and 2nd December, 2016 between the parties would clearly show that

the agreements are in respect of immovable property being exclusively used

for trade and commerce. It is further submitted that the learned trial Judge

has failed to take into consideration the observation of the Hon'ble Supreme

Court In Ambalal Sarabhai Enterprise Limited v. K.S Infra Space LLP

& Anr., reported in 2020 (15) SCC 585 in which it has been specifically

held that the agreement relating to immovable property used "exclusively in

trade or commerce" would be a commercial dispute.

8. Mr. Chowdhury has also referred to the schedule of amendments

proposed in the application for amendment in the plaint to show that it has

been categorically stated in the proposed amendment that the erstwhile

tenants of the plaintiff are still carrying on business in the suit property.

The proposed schedule of the amendment is reproduced below:

"The plaintiff states that the agreements dated 30th March, 2015 and 2nd December, 2016 between the parties are in respect of the immovable suit property which is being used exclusively in trade or commerce and it is a commercial property The erstwhile tenants of the plaintiff are still carrying on business from the suit property. The certificates of enlistment issued by the Kolkata Municipal Corporation to the tenants who are carrying on business from the suit property are annexed hereto and marked with the letter "F". The plaintiff has also issued letters of attornment through which the tenancies in the suit property were transferred in favour of the defendant, copies whereof are annexed hereto and marked with the letter "G"."

9. Per contra, Mr. Arindam Banerjee learned Counsel

representing for the respondents submitted that the parties have entered

into two agreements dated 30th March, 2015 and 2nd December, 2016

respectively. These agreements were proceeded by an agreement dated

October 10, 2014. In the first agreement it is clearly recorded that under the

development agreement dated 10 October, 2014 the plaintiff and one Tiru

Realtor Private Limited (hereinafter referred to as 'Tiru') the plaintiff granted

an exclusive right to the said developer to develop to the suit premises for

mutual benefit. Under the agreement it was, inter alia, agreed by and

between the parties that the plaintiff would be entitled to 45,000 sq. ft. of

residential constructed area in the new building to be constructed in the

suit premises with the right to park 50 cars in the basement and the

remaining areas would belong to the developer. Tiru paid a sum of Rs. 40

lacs as an interest free refundable security deposit. By the subsequent

agreements entered into between the plaintiff and the respondent the

plaintiff had agreed to sell and transfer his 1/3rd undivided share in the

larger premises with various benefits to the respondent and in terms thereof

it was agreed that the entire consideration would be paid partly in cash and

partly allotting 10 number of residential flats.

10. Mr. Banerjee submitted that the schedule to both the agreements

would show that the property is partly tenanted and there is no mention of

any commercial activity being carried out from the suit premises. Mr.

Banerjee has specifically referred to the first schedule of the agreement

dated 30th March, 2015 which reads:

"All that the brick built messuages tenements hereditaments

residential buildings sheds structures and dwelling houses (having total

constructed area of 90000 sq. ft. more or less) together with the piece or

parcel of land or ground thereunto belonging whereon or on parts whereof

the same are erected and build containing by an area of 12 bighas 2 cottas 3

chittacks 21 sq. ft. more or less statute lying at and being Municipal

Premises No. 35 Diamond Harbour Road, Police Station South Port, Kolkata

700 027, within the limits of Kolkata Municipal Corporation, ward no. 79

and butted and bounded in the manner the following that is to say:

On the North                        : by 35/1 Diamond Harbour Road,


On the East                         : by Diamond Harbour Road 25 feet wide


On the South                        : by Port Commissioner's land and


On the West                         : by Port Commissioner's land.

Or howsoever otherwise the same now are or is or heretofore were or was

situated butted bounded called known numbered described or

distinguished."

11. It is submitted that similar schedule is mentioned in the

second agreement dated 2nd December, 2016 which is in relation to the

other premises. It is submitted that both the agreement would show that

after the construction is completed the respondent shall deliver to the

plaintiff possession of the owners allocation as defined in the development

agreement. Mr. Banerjee has submitted that in Ambalal Sarabhai (supra)

the Hon'ble Supreme Court has clearly stated that the words "used

exclusively in trade or commerce" are to be interpreted purposefully and

meaningfully and the consideration for deciding whether it is a commercial

dispute it has to be shown that the property is actually used "for commercial

purpose and not "ready for use" or "likely to be used".

12. Mr. Banerjee accordingly submitted that in view of the fact that

on the date of institution of the suit the immovable property was not

actually used for commercial purpose, the suit is required to be treated as a

non-commercial suit and the learned trial Judge has rightly returned the

plaint to be presented to the appropriate court. It is further submitted that

by the order dated January, 2022 the learned trial Judge had decided to

hear the application for rejection of the plaint first and thereafter to decide

the application for amendment of the plaint. This order is not under

challenge. The said issue cannot be raised in this appeal.

13. In reply Mr. Chowdhury has submitted that in an appeal from an

order allowing the application for rejection of the plaint if it is demonstrated

that a learned trial Judge has acted contrary to law and there is a lack of

procedural fairness the appellate Court is not precluded to decide the

legality of the order after taking into consideration the proposed

amendment.

14. In deciding the jurisdiction to try the suit in the commercial

division the trial court is required to take into consideration the averments

in the plaint. In the event an application in the nature of demurer is filed

like the present one where the question of jurisdiction is involved the court

is required to take into consideration the proposed amendment first and

depending upon the outcome of the said application the demurrer

application is to be decided. The trial court is required to ascertain the

nature of the immovable property mentioned in the agreement if being

exclusively used for trade or commerce as on the date of the agreement and

any pleading to that effect. The use of the property for trade and business in

preasenti on the date of the agreement is determinative. The trial judge

seems to have overlooked the aforesaid principle.

15. In Amballal Sarabhai (supra) "the words "used exclusively in

trade or commerce" are to be interpreted purposefully. The word "used"

denotes "actually used" and it cannot be either "ready for use" or "likely to be

used" or "to be used". It should be "actually used". Such a wide

interpretation would defeat the objects of the Act and the fast tracking

procedure discussed above."

16. It thus makes it clear that a dispute relating to immovable

property simplicitor will not amount to a commercial dispute unless it is

also actually used exclusively in trade and commerce.

17. The application for rejection/ return of the plaint proceeds on the

basis that it is not a commercial dispute. In Ambalal Sarabhai (supra) it is

clearly stated that the nature of the dispute and the jurisdiction to try the

same is to be reflected in the suit itself since in a civil suit the pleadings,

namely, averments in the plaint would at the outset be relevant to confer

jurisdiction. It was further held that the very purpose for enacting the said

act is to expedite adjudicating process and to place such suits on a fast

track. It is therefore necessary to strictly construe the provision of the Act.

It is necessary to carefully examine the plaint. The nature of the transaction

between the parties, the nature of the land and the type of use to which it

was being put as on the date of the agreement need to be seen. The entire

plaint is required to be read as a whole. It is thus, necessary that the nature

of the amendment is required to be considered before deciding the

jurisdiction of the commercial court to try the suit. The court at this stage is

not to consider the defence on merits and required to decide the application

for amendment following the settled principles of law. The court however is

entitled to consider the agreement in deciding its jurisdiction. The plaintiff

filed the suit after obtaining dispensation under Section 12A of the Act.

18. The court needs to find out if after allowing the amendment the

dispute can still be regarded as a commercial dispute. It is possible that

even if it is registered as a commercial suit after a trial on appreciation of

evidence, the contract and its nature are finally assessed, it may well turn

out to be not a commercial dispute within the meaning of Section 2(1)(c) of

the Act.

20. In fact, in the affidavit-in-opposition to the application for

rejection of plaint it has been specifically stated that the property was used

exclusively in trade and commerce and the proposed amendment was

reiterated in paragraph 15 of the objection which was overlooked

presumably on the ground that it was not stated in the original plaint.

Under such circumstances, the impugned order is set aside. The learned

Judge, commercial court, is directed to decide the application for

amendment first on merits without being influenced by the observation

made in this order and then consider the application for rejection/return of

the plaint.

21. The appeal and the application succeed.

      I agree                                         (Soumen Sen, J.)




      (Uday Kumar, J.)