Commercial Court – Jurisdiction – every dispute of property and MOU for development of property per se is not “commercial dispute”
Commercial Court & Civil Court – Jurisdiction – MOU for development of property – Merely because property is likely to be used in relation to trade or commerce, the jurisdiction of the Commercial Court is attracted- Section 2[c][vii] of the Commercial Disputes Act, 2015
MOU dated 26.12.2009 between the plaintiff and defendant nos.1 & 7 for development of the property at MIDC, Chikalthana, Aurangabad. The defendant no.1 agreed to give property for development to the plaintiff and accepted part payment of Rs.5,92,55,000/-. But the defendant no.1 failed to discharge his obligations as per MOU.
The plaintiff filed the suit for specific performance of MOU and perpetual injunction.
The defendant nos.9 to 11 filed application under Order VII Rules 10 & 11 of the Code of the Civil Procedure for return of the plaint on the ground that the Civil Court has no jurisdiction to entertain commercial suit.
The trial Court held that the MOU is a “construction contract”
Section 2[c][vii] of the Commercial Courts Act, 2015, provides for “Disputes arising out of “ commercial dispute to mean “agreements relating to immovable property used exclusively in trade or commerce.”
In 2020 (15) SCC 585 of Ambalal Sarabhai case, the SC held that the expression “used” must mean “actually used or being used” and not “likely to be used or to be used”. The property must be used for trade or commerce and not likely to be used.
HELD that every dispute of immovable property per se is not a commercial dispute and the trial Court need to examine the plaint & the MOU if dispute is “commercial dispute”. The matter was remanded to the trial Court for fresh consideration.
Judgment dated 10.11.2023 of the High Court of Bombay – Appeal from Order No.34 of 2023 in Sanjay Suganchand Kasliwal Vs. M/s. Golden Dreams Buildcon Pvt Ltd and others
