Madras High Court
M.K.Moideen Kunhi vs M/S.Sreerosh Properties Pvt. Ltd on 24 October, 2024
C.R.P.(PD).No.4317 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 24.10.2024
CORAM :
THE HON'BLE MR.JUSTICE V.LAKSHMINARAYANAN
C.R.P.(PD).No.4317 of 2024
and C.M.P.No.23989 of 2024
1. M.K.Moideen Kunhi
2. Ramiya Moideen .. Petitioners
Versus
M/s.Sreerosh Properties Pvt. Ltd.,
rep. by its Authorised representative D.Dhiraj .. Respondent
Prayer : Civil Revision Petition filed under Article 227 of the Constitution
of India to set aside the fair and decreetal order passed in I.A.No.4 of 2024
in C.O.S.No.90 of 2024, dated 11.09.2024 on the file of the Principal
Commercial Court at Egmore, Chennai and allow I.A.No.4 of 2024.
For Petitioners : Mr.K.Premkumar
For Respondent : Mr.T.Shrinikethan
ORDER
This Civil Revision Petition challenges the order of the learned
Principal Commercial Court at Egmore, Chennai in I.A.No.4 of 2024 in
C.O.S.No.90 of 2024, dated 11.09.2024. For the sake of convenience, the
parties are referred to as per their array in the suit.
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2. Mr.K.Premkumar, learned Counsel for the petitioners/defendant
Nos.1 and 2 raises an interesting question of law. There is no dispute in the
relationship between the parties. The petitioners/defendant Nos.1 and 2
entered into a contract with the respondent/plaintiff for the purpose of
putting up a residential superstructure. The case of the respondent/plaintiff
is that they proceeded with the construction based on the agreement and
during the course of construction, disputes arose and hence, the construction
was stopped. For the amounts spent by the respondent/plaintiff in putting
up the construction, it brought forth the suit for recovery of a sum of
Rs.24,90,789/- together with interest on the principal amount of
Rs.22,24,245/- at the rate of 18% per annum.
3. On being served with the summons, the petitioners/defendant Nos.1
and 2 moved an application for rejection of plaint pleading that it is not a
commercial dispute and relied upon a judgment of the Supreme Court in
Ambalal Sarabhai Enterprises Limited Vs. K.S.Infraspace LLP and Anr.,
(2020) 15 SCC 585. The plea, being that, the dispute is not a commercial
dispute, it is not triable by the Commercial Court.
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4. The respondent/plaintiff filed a counter-affidavit pleading that
under Section 2(1)(c)(vi) of the Commercial Courts Act, 2015, being a
construction and infrastructure contract, it is a commercial dispute. The
learned Commercial Judge agreed with the respondent/plaintiff and
dismissed the petition. Hence, this Civil Revision Petition.
5. Mr.K.Premkumar invites my attention to the judgment of the
Supreme Court in Ambalal Sarabhai Enterprises Limited's case (cited
supra) and argues that the Supreme Court held that unless and until the
contract relates to an immovable property exclusively used in trade or
commerce, then, it will not attract the provisions of the Commercial Court.
6. Per contra, Mr.T.Shrinikethan, learned Counsel for
respondent/plaintiff invites my attention to Section 2(1)(c)(vi) pointing out
that all construction contracts are governed by the said provision. He relies
upon the judgment of the Bombay High Court in Vaijanath Dayanand Kale
and Ors. Vs. Nerkar Properties LPP and Ors., 2021 (3) Mh.L.J. 202, and
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that of the Andhra Pradesh High Court in Blue Nile Developers Private
Limited Vs. Movva Chandra Sekhar and Ors., 2021:APHC:28878.
7. I have carefully considered the submissions of both the sides.
8. A reading of the judgment in Ambalal Sarabhai Enterprises
Limited's case (cited supra) shows that the dispute that arose between the
parties was relating to mortgage deed which was entered into between the
parties. The mortgage deed was executed, but, was not registered. The
Supreme Court interpreted Section 2(1)(c)(vii) and held that unless and until
it constitutes a commercial dispute arising out in relation to an immovable
property used exclusively for trade or commerce, it will not be governed
under the said clause. I am unable to apply the said judgment to the facts of
this case for the following reasons.
9. A reading of the agreement into between the parties on 21.11.2022
shows that the purpose of the contract was the owners intended to construct
a modern residential over the A-schedule property, of which, they were the
owners. For the mere fact that the building that is sought to be constructed
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is a residential house, it will not take it out of the word "construction" as
used under Section 2(1)(c)(vi) of the Commercial Courts Act. In fact, as
rightly pointed out by Mr.T.Shrinikethan, Hon'ble Mr.Justice S.C.Gupte of
the Bombay High Court, in paragraph No.7 of the judgment in Vaijanath
Dayanand Kale's case (cited supra) specifically holds that the term
"construction contract" includes construction of building for commercial or
residential use.
10. Apart from this judgment, applying the principles of statutory
interpretation also, I come to the same conclusion. This is because, the
word "construction" means the activity of construction that is being carried
on by one party pursuant to an agreement. The Parliament was clear while
enacting Section 2(1)(c)(vi) not to include the words 'transactions which are
not trade or commerce', while dealing with construction contracts. Whether
the respondent/plaintiff had put up a residential house or put up a
commercial complex, it has still indulged in the process of construction.
Furthermore, if I were to accept the submission of Mr.K.Premkumar, then, I
would be interpreting Section 2(1)(c)(vi) to mean that construction and
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infrastructure contracts relating "exclusively to trade or commerce". The
provision, as it stands today, does not include the later inclusion.
11. When the Act is clear, it is the duty of the Court to apply the
statute as it stands. There can be simple construction activities and
construction activities which are infrastructure activities. The section does
not read construction in the nature of infrastructure contracts, but, it reads
construction and infrastructure contracts. Therefore, I am not able to read
the word "construction" and "infrastructure" together. The words of
definition have to be given the interpretation that they deserve. The
respondent/plaintiff entered into an agreement only for the purpose of
construction which is commercial with respect to the respondent/plaintiff.
The fact that the petitioners/defendant Nos.1 and 2 are not exploiting the
said property in a commercial manner, it does not mean that the contract
stops being a construction contract.
12. In the light of the above discussion, I am not inclined to admit the
revision. This Civil Revision Petition is dismissed. No costs.
Consequently, connected miscellaneous petition is closed.
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24.10.2024
Index : yes/no
Speaking order/Non-speaking order
Neutral Citation : yes/no
grs
To
The Principal Commercial Court,
Egmore, Chennai.
https://www.mhc.tn.gov.in/judis
V.LAKSHMINARAYANAN, J.
grs
24.10.2024
https://www.mhc.tn.gov.in/judis
