M/S Umrah Developers vs M/S J Sons Developers
2023 Latest Caselaw 7194 Kant

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                                                         NC: 2023:KHC:37037-DB
                                                     COMAP No. 186 of 2023




                     IN THE HIGH COURT OF KARNATAKA AT BENGALURU
                          DATED THIS THE 11TH DAY OF OCTOBER, 2023
                                          PRESENT
                            THE HON'BLE MR JUSTICE G.NARENDAR
                                             AND
                       THE HON'BLE MR JUSTICE VIJAYKUMAR A. PATIL
                            COMMERCIAL APPEAL NO. 186 OF 2023


                   BETWEEN:

                   M/S UMRAH DEVELOPERS
                   (A PROPRIETORSHIP FIRM)
Digitally signed   OFFICE AT NO.22/1,
by YAMUNA K L      MILLER TANK BUND ROAD,
Location: High     KAVERIYAPPA LAYOUT
Court of           BENGALURU-560052
Karnataka
                   REPRESENTED BY ITS PROPRIETOR
                   MR YUSUF SHARIFF @ D BABU.
                                                                  ...APPELLANT
                   (BY SRI. REUBEN JACOB, SR. ADV. FOR
                    SRI. YADUPATHI G., ADVOCATE)
                   AND:

                   M/S J SONS DEVELOPERS
                   (A PROPRIETORSHIP FIRM)
                   REPRESENTED BY ITS PROPRIETOR,
                   MR NAVEEN MOHAMMED
                   AGED ABOUT 48 YEARS
                   S/O MOHAMMED ATTAULLA
                   PRESENT OFFICE AT NO.128/3,
                   19TH CROSS, ELEPHANT ROAD,
                   JAYANAGAR, 3RD BLOCK,
                   BENGALURU-560011
                                                                ...RESPONDENT
                   (BY SRI. HRISHIKESH .C FOR SMT. VAMSHI KRISHNA, ADV'S.)
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                                      NC: 2023:KHC:37037-DB
                                     COMAP No. 186 of 2023




     THIS COMAP IS FILED UNDER SECTION 13(1A) OF THE
COMMERCIAL COURTS ACT, 2015 READ WITH SECTION
37(1)(C) OF THE ARBITRATION AND CONCILIATION ACT, 1996,
PRAYING TO SET ASIDE THE JUDGMENT DATED 28.02.2023 IN
COM.A.S.NO. 22/2019 PASSED BY THE COURT OF THE LXXXIX
ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU
(CCH-90) AND CONSEQUENTLY TO ALLOW THE SAID SUIT IN
COM.A.S NO. 22/2019 FILED BY THE APPELLANT HEREIN ETC.

     THIS APPEAL, COMING ON FOR FINAL HEARING, THIS
DAY, THE COURT DELIVERED THE FOLLOWING:

                        JUDGMENT

1. Heard Sri. Reuben Jacob, learned Senior counsel

along with Sri. Yadupathi G, learned counsel for the

appellant and Sri. Hrishikesh C, learned counsel for

Sri. Vamshi Krishna, learned counsel for the respondent.

2. The appellant is in appeal being aggrieved by the

judgment passed by the dedicated Commercial Court in

COM.A.S.No.22/2019 whereby the dedicated Commercial

Court was pleased to reject the suit preferred under

Section 34 of the Arbitration and Conciliation Act, 1996.

3. At the initial stage, we have raised a query with

regard to the maintainability of the suit before the

Commercial Court in view of the various pronouncements,

NC: 2023:KHC:37037-DB COMAP No. 186 of 2023

more particularly, the law laid down by the Hon'ble Apex

Court in the case of Ambalal Sarabhai Enterprises

Limited vs. K. S. Infraspace LLP and Another1. While

so deciding the appeal, the Hon'ble Apex Court has been

pleased to interpret the provisions of Section 2 (1) (c) of

the Commercial Courts Act and in particular, Clause (vii)

i.e., agreements relating to immovable property used

exclusively in trade or commerce. Proceeding further, the

Hon'ble Apex Court has in paragraph Nos.14 and 26 of the

judgment interpreted the same as property that was being

put to use to commercial use as on the date of agreement.

4. Proceeding further, in paragraph No.13, the Hon'ble

Apex Court has also sounded a warning note, whereby the

desire of the litigants to secure early disposal of their

disputes though not falling under Section 2 (c) of the

Commercial Courts Act would go to clog the system.

(2020)15 SCC 585

NC: 2023:KHC:37037-DB COMAP No. 186 of 2023

5. The facts though slightly different in the case on

hand, the fact remains that the land which is the subject

matter was never used for commercial purposes as on the

date of the agreement.

6. Learned Senior counsel has also placed reliance on

the observations of the Hon'ble Apex Court in Hira Lal

Patni vs. Sri Kali Nath2. In paragraph No.4 of Hira Lal

Patni's case and in paragraph No.18 of Chiranjilal Shrilal

Goenka vs. Jasjit Singh and Others3, to contend that

the Commercial Court did not have subject matter

jurisdiction and in that view, the decree passed by the

Court is a nullity and non-est in the eye of the law.

7. Learned counsel for the respondent has fairly

conceded the legal position.

8. The facts reveal that as on the date of the agreement

i.e., 16.10.2012, the land is described in the nature of

2 1961 SCC OnLine SC 42

3 (1993) 2 SCC 507

NC: 2023:KHC:37037-DB COMAP No. 186 of 2023

agricultural land though it is described in the Joint

Development Agreement as having been converted for

residential use and this is discernible from the way the

measurements have been detailed i.e., in acres and

guntas and the identity of the land is described by survey

number and the agreement entered into is for Joint

Development of the property.

9. In that view of the matter, the only question that

arises for consideration is whether the dedicated

Commercial Court had subject matter jurisdiction to try

the Arbitration Suit preferred under Section 34 of the

Arbitration and Conciliation Act, 1996. The fact remains

that there is no dispute with regard to the status of the

property as on the date of the agreement. It is also not in

dispute that the land was not being used for commercial

purposes on the date of the agreement. In that view of the

matter, the ruling of the Hon'ble Apex Court in Chiranjilal

Shrilal Goenka squarely applies. In that view of the matter

and in view of the respondent fairly conceding the same,

NC: 2023:KHC:37037-DB COMAP No. 186 of 2023

the appeal is allowed and the order of the dedicated

Commercial Court rendered in Com. A. S. No.22/2019 is

hereby set-aside.

10. The matter is remanded back to the Principal City

Civil and Sessions Judge, Bengaluru, to re-allot the case to

any other regular Court.

11. The suit filed under Section 34 of the Arbitration and

Conciliation Act, 1996, shall be taken up and considered

from the stage of arguments.

12. The appeal stands ordered accordingly.

Sd/-

JUDGE

Sd/-

JUDGE

DN/List No.: 1 Sl No.: 19.1