Karnataka High Court
M/S. Rhea Healthcare Pvt. Ltd vs M/S. Raj Alkaa Park on 26 June, 2024
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WP No. 3939 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 26TH DAY OF JUNE, 2024
BEFORE
R
THE HON'BLE MR JUSTICE M.I.ARUN
WRIT PETITION NO. 3939 OF 2023 (GM-CPC)
BETWEEN:
M/S. RHEA HEALTHCARE PVT. LTD.,
A COMPANY INCORPORATED UNDER
THE COMPANIES ACT, 1956,
HAVING ITS REGISTERED OFFICE AT
3RD FLOOR, EAST WING,
RAHEJA TOWERS, M.G. ROAD,
BANGALORE - 560 001,
REPRESENTED BY ITS AUTHORIZED SIGNATORY,
SRI. SATHISH KUMAR,
SR. MANAGER-LEGAL.
...PETITIONER
(BY SRI. SUBRAMANYA S. UPASANA, ADVOCATE)
Digitally
AND:
signed by V
MANJUSHA
BAI M/S. RAJ ALKAA PARK
Location: High
Court of A REGISTERED PARTNERSHIP FIRM
Karnataka
HAVING ITS OFFICE AT 9/2-2,
1ST FLOOR, PURUSHOTHAM LAYOUT,
SBI ROAD, BEHIND INDIAN GARAGE,
OFF SAINT MARK'S ROAD,
BENGALURU - 560 001,
REPRESENTED BY ITS MANAGING DIRECTOR.
...RESPONDENT
(BY SRI. R.A. CHANDRASHEKARA REDDY, ADVOCATE FOR
SRI. DWARAKA NATH H.S, ADVOCATE)
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WP No. 3939 of 2023
THIS WP IS FILED UNDER ARTICLE 227 OF THE
CONSTITUTION OF INDIA PRAYING i) TO-CALL FOR RECORDS.
ii) ALLOW THE ABOVE WP. (iii) ISSUE A WRIT OF CERTIORARI
QUASHING THE ORDER DATED 08/04/2022 OF THE HONBLE
LXXXII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE AT
BENGALURU (CCH-83) ON IA NO. III IN COM. OS NO.
390/2019 AT ANNEXURE-A AND ETC.,
THIS PETITION, COMING ON FOR ORDERS, THIS DAY
THROUGH VIDEO CONFERENCING / PHYSICAL HEARING, THE
COURT MADE THE FOLLOWING:
ORDER
1. Aggrieved by the order passed on I.A.No.3 filed in
Commercial O.S.No.390/2019 dated 08.04.2022, by the
LXXXII Additional City Civil and Sessions Judge,
Bengaluru, the plaintiff therein has preferred this writ
petition.
2. The petitioner for the purposes of establishing a
Hospital and to run other allied healthcare services, took
on lease a commercial property from the respondent. It is
submitted that he took possession of the said property.
However, before he could commence business activities,
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on the ground that there was a title dispute regarding the
property which was taken on lease and also for the reason
that the respondent did not build the required
infrastructure within the agreed time for the petitioner to
run its business, the petitioner terminated the contract.
Subsequently, the petitioner also demanded that the
respondent compensate the petitioner for the loss that he
has sustained from the alleged breach of contract by the
respondent. For that reason, the petitioner filed
Commercial O.S.No.390/2019 before the Commercial
Court to recover a sum of Rs.4,07,80,500/- (Rupees Four
Crores Seven Lakhs Eighty Thousand Five Hundred Only)
from the respondent along with interest.
3. The respondent entered appearance before the
Commercial Court, filed its written statement, denied all
the allegations made by the petitioner and prayed for
dismissal of the suit. In addition to it, the respondent
preferred an application under Order XIII-A of the
Commercial Courts Act, 2015 with the following prayers:
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"The Defendant prays that for the reasons
set-forth in the enclosed Affidavit, this
Hon'ble Court may be pleased to pass
summary judgment as follows, in the interest
of justice and equity:
I. Reject prayer (a) for declaration
II. Reject prayer (b) for alleged payment of
Rs.4,07,80,500/- as damages/compensation.
III. Reject prayer (c) for interest at 18% p.a."
4. However, during the course of the arguments before
the Commercial Court, the respondent confined his
submission only about the commercial nature of the
dispute involved in the suit. In the light of the submissions
made by the parties, the Commercial Court has examined
whether the dispute involves a commercial dispute or not
and came to the conclusion that there is no commercial
dispute and has passed the following order:
"It is ordered to return the Plaint filed by the
Plaintiff for presentation before the
Jurisdictional Court under Order VII Rule 10
of the Civil Procedure Code.
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It is further ordered that after allotment to
the particular court by the Hon'ble Principal
City Civil and Sessions Judge, both parties
are directed to appear before the said court,
without expecting any fresh summons or
notice, on 30.06.2022.
The Office is directed to send copy of this
Orders to Plaintiff and Defendant to their
email ID as required under Order XX Rule 1 of
the Civil Procedure Code as amended under
Section 16 of the Commercial Courts Act.
Accordingly, I.A.No.III is disposed of as per
the above orders."
5. Aggrieved by the same, the plaintiff therein has
preferred this writ petition.
6. The case of the plaintiff is that the property which is
the subject matter of the suit is a commercial property,
the same is taken on lease for establishment of a Hospital
and other allied healthcare services which is for
commercial purposes and that there was breach of
contract by the respondent, because of which, the
petitioner was constrained to terminate the contract and
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the actions of the respondent in breaching the terms of
the contract made the commercial property unusable for
which the property was taken on lease because of which,
the petitioner has suffered injuries and hence, it has filed
the commercial suit for recovery of a sum of
Rs.4,07,80,500/- (Rupees Four Crores Seven Lakhs Eighty
Thousand Five Hundred Only) along with the interest
thereon and the said sum is above the specified value as
contemplated under Commercial Courts Acts and hence as
the dispute is a commercial dispute and the specified
value is much morethan what is specified in the
Commercial Courts Acts, the Commercial Court gets the
jurisdiction and that the Commercial Court erred in
holding the same into the contrary.
7. Per contra, the respondent submits that though the
value involved in the suit is much morethan the specified
value, the dispute involved is not a commercial dispute
and for that reason, justifies the order passed by the trial
Court and prays for dismissal of the writ petition.
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8. The question that arises for consideration in the
instant writ petition is, given the facts and circumstances
of the case can it be considered that the dispute between
the parties as a commercial dispute as per Section
2(1)(c)(vii) of the Commercial Courts Act, 2015.
9. A dispute arising out of agreements relating to
immovable property used exclusively in trade or
commerce will have to be considered as a commercial
dispute as per Section 2(1)(c)(vii) of the Commercial
Courts Act.
10. The trial Court based on the decision of the Hon'ble
Apex Court reported in (2020) 15 SCC 585 (Ambalal
Sarabhai Enterprises Limited vs. K.S.Infraspace LLP
and Another), has held as under:
"9. In the said background, the above
mentioned decision reported in 2020(15)-
S.C.C.-585 (Ambalal Sarabhai
Enterprises Limited vs. K.S.Infraspace
LLP and Another), is to be considered.
According to the said decision a dispute
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relating to immovable property per se may
not be a Commercial dispute, that but it
becomes a commercial dispute, if it falls
under sub-clause (vii) of Section 2(1) (c) of
the Commercial Courts Act, viz., "the
agreements relating to immovable property
used exclusively in trade or commerce", that
the words "used exclusively in trade or
commerce are to be interpreted purposefully,
that the word "used" denotes "actually used"
and it cannot be either "ready for use" or
"likely to be use" or "to be sued". As per the
said decision it should be "actually used".
When such being the case, as per the ratio of
the said decision, the present case is not a
Commercial Dispute. Hence, I answer this
Point in Negative."
and consequently returned the plaint to be presented
before the regular Court, as the trial Court is of the
opinion that the dispute is not a commercial dispute.
11. It is contended by the petitioner that the facts of the
case relied upon by the trial Court is not applicable to the
present case on hand.
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12. The facts in the decision of the Apex Court are
recorded in Paragraph Nos.3 and 4 of the judgment, which
reads as under:
"3. The brief facts which led to the present
situation is that the appellant herein executed
an agreement to sell dated 14.02.2012 in
favour of the respondent No. 2 in respect of
the land which is described in the agreement.
The respondent No.2 assigned and
transferred all his rights under the said
agreement to sell in favour of respondent
No.1 by executing an assignment deed dated
12.10.2017. In that view, the respondent No.
1 herein was to purchase the lands which
were the subject matter of the agreement
from the appellant herein. Accordingly, the
sale was made under a Deed of Conveyance
dated 03.11.2017. Since certain other
aspects were to be completed regarding the
change relating to the nature of the use of
the land for conclusion of the transaction, the
right of the appellant in respect of the land
was to be protected. In that view a
Memorandum of Understanding dated
03.11.2017 was entered into between the
appellant and the respondents herein. As per
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the same, a Mortgage Deed was required to
be executed by respondent No.1 herein in
favour of the appellant.
4. Accordingly, a Mortgage Deed dated
03.11.2017 was executed but the same had
not been registered. It is in that light the
appellant herein filed the Commercial Civil
Suit No. 41/2018 so as to enforce the
execution of a Mortgage Deed. Consequently,
the relief of permanent injunction and other
related reliefs were sought. It is in the said
suit, summon was issued to respondents
herein who are the defendants in the suit,
wherein on filing the written statement the
application under Order VII Rule 10 of
CPC was filed. The Commercial Court while
rejecting the application had referred to the
Memorandum and Articles of Association of
the appellant company and in that light
taking note of the business that they were
entitled to undertake has arrived at the
conclusion that the plaintiff seems to be
carrying on the business as an estate agent
and in that circumstance has further arrived
at its conclusion that it is a commercial
dispute. The High Court on the other hand
had found fault with the manner in which the
Commercial Court had rested its
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consideration on the Memorandum and
Articles of Association and had examined the
matter in detail to come to a conclusion that
the immovable property in the instant case
was not being used for trade or commerce. In
that regard, the legal position enunciated by
the various decisions was referred to and had
accordingly directed the return of the plaint to
be presented in an appropriate Court which is
assailed herein."
13. Based on the aforementioned facts, the Apex Court
by holding that the dispute cannot be considered as a
commercial dispute, has held as under:
"11. On the other hand, the learned senior
advocate for the respondents has relied on
the decision of a Division Bench of the
Gujarat High Court in the case of Vasu
Healthcare Private Limited vs. Gujarat
Akruti TCG Biotech Limited, AIR 2017
Gujarat 153 wherein a detailed consideration
has been made and the conclusion reached
therein by taking note of an earlier
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decision is that on a plain reading of Clause
2(1)(c) of CC Act, 2015 the expression "used"
must mean "actually used" or "being used". It
is further explained that if the intention of the
legislature was to expand the scope, in that
case the phraseology "likely to be used" or
"to be used" would have been employed. The
verbatim consideration therein is as
hereunder;
"Therefore, if the dispute falls within any of
the clause 2(c) the dispute can be said to be
"commercial dispute" for which the
Commercial Court would have jurisdiction. It
is required to be noted that before the
learned Commercial Court the original plaintiff
relied upon section 2(c)(ii) and 2(c)(xx) of
the Commercial Courts Act only. Learned
Counsel appearing on behalf of the original
plaintiff has candidly admitted and/or
conceded that the case shall not fall within
clause 2(c)(i); 2(c)(ii) or 2(c)(xx) of
the Commercial Courts Act. It is required to
be noted that before the learned Commercial
Court it was never the case on behalf of the
original plaintiff that case would fall
within section 2(c)(vii) of the learned
Commercial Court. Despite the above we
have considered on merits whether even
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considering section 2(c)(vii) of the
Commercial Courts Act, the dispute between
the parties can be said to be "commercial
dispute" within the definition of section
2(c) of the Commercial Courts Act or not?
Considering section 2(c)(vii), "commercial
dispute" means a dispute arising out of the
agreements relating to immovable property
used exclusively in trade or commerce.
As observed hereinabove, at the time of filing
of the suit and even so pleaded in the plaint,
the immovable property/plots the
agreements between the parties cannot be
said to be agreements relating to immovable
property used exclusively in trade or
commerce. As per the agreement between
the party after getting the plots on lease from
the GIDC, the same was required to be
thereafter developed by the original
defendant No. 1 and after providing all
infrastructural facilities and sub-plotting it,
the same is required to be given to other
persons like the original plaintiff. It is the
case on behalf of the original plaintiff that as
the original defendant No. 1 has failed to
provide any infrastructural facilities and
develop the plots and therefore, a civil suit
for specific performance of the agreement has
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been filed. There are other alternative
prayers also. Therefore, it cannot be said that
the agreement is as such relating to
immovable property used exclusively in trade
or commerce. It is the case on behalf of the
original plaintiff that as in clause (vii)
of section 2(c), the pharseology used is not
"actually used" or "being used" and therefore,
even if at present the plot is not used and
even if it is likely to be used even in future, in
that case also, section 2(c)(vii) shall be
applicable and therefore, the Commercial
Court would have jurisdiction. The aforesaid
has no substance. As per the cardinal
principle of law while interpreting a particular
statute or the provision, the literal and strict
interpretation has to be applied. It may be
noted that important words used in the
relevant provisions are "immovable
property used exclusively in trade or
commerce". If the submission on behalf of
the original plaintiff is accepted in that case it
would be adding something in the statute
which is not there in the statute, which is not
permissible. On plain reading of the relevant
clause it is clear that the expression "used"
must mean "actually used" or "being used". If
the intention of the legislature was to expand
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the scope, in that case the phraseology used
would have been different as for example,
"likely to be used" or "to be used". The word
"used" denotes "actually used" and it cannot
be said to be either "ready for use" or "likely
to be used"; or "to be used". Similar view has
been taken by the Bombay High Court
(Nagpur Bench) in the case of Dineshkumar
Gulabchand Agrawal (Supra) and it is
observed and held that the word "used"
denotes "actually used" and not merely
"ready for use". It is reported that SLP
against the said decision has been dismissed
by the Hon'ble Supreme Court."
14. Thus, as per the Apex Court in the above referred
judgment, merely because the property is likely to be
used in relation to, trade or commerce, a suit filed in
respect of the said property cannot be necessarily
considered as a commercial dispute. Thus, there is a
requirement for the Commercial Court to consider whether
the dispute itself is a commercial dispute as defined under
Section 2(1)(c) of the Commercial Courts Acts.
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15. In the judgment of the Apex Court, the dispute
pertains to the enforcement of the execution of a
mortgage deed pertaining to the property concerned. It
did not pertain to an agreement relating to an immovable
property used exclusively in trade or commerce.
16. In the light of the same, based on the pleadings
made in the plaint, in the instant case, it is necessary to
analyze whether the dispute pertains to an agreement
relating to immovable property used exclusively in trade
or commerce.
17. As per the averments made in the plaint, the
petitioner entered into a registered Lease Deed with the
respondent to take on lease a commercial space for a
specified period for running the Hospital and other allied
healthcare services, which is a commercial activity. The
petitioner has alleged breach of terms and conditions of
the Lease Deed on the part of the respondent, because of
which the petitioner could not use the property for the
purpose it was taken on lease and it is further alleged that
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the petitioner sustained a legal injury and he has filed the
instant suit for recovery of damages. Thus, the cause of
action for the petitioner to file the present suit is that he
entered into an agreement relating to an immovable
property to use the same for commercial purposes and he
was prevented from using the same for commercial
purposes and because of the breach of the terms and
conditions of the lease by the respondent, he suffered
injuries in his business and he has filed a suit for recovery
of money. Under the circumstances, it has to be
considered as a commercial dispute arising out of an
agreement relating to the immovable property used
exclusively in trade or commerce.
18. For the aforementioned reasons, in my opinion, the
facts of the case dealt with by the Hon'ble Apex Court,
reported in (2020) 15 SCC 585 (Ambalal Sarabhai
Enterprises Limited vs. K.S.Infraspace LLP and
Another) being different from the facts of the present
case and the ratio in the said case is not applicable to the
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present facts and circumstances. The trial Court erred in
returning the plaint relying on the said judgment.
19. For the aforementioned reasons, the Writ Petition is
hereby allowed. The order passed on I.A.No.3 in
Commercial O.S.No.390/2019 is hereby set aside. It is
hereby held that the Commercial Court has the necessary
jurisdiction to try the case and the Commercial Court is
directed to hear the Commercial O.S.No.390/2019 in the
manner known to law. The parties shall appear before the
trial Court on 29.07.2024, without any further notice.
Sd/-
JUDGE
CH
CT: BHK
