Writ Petition No. 9689 of 2025 · The High Court
Case Details
1 Reserved on : 30.06.2025 Pronounced on : 08.07.2025 R IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 08TH DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE M. NAGAPRASANNA WRIT PETITION No.9689 OF 2025 (GM – CPC) BETWEEN: 1 . M/S.TEFILAH INFRASTRUCTURE PVT. LTD., HAVING ITS REGISTERED OFFICE AT: 23/5, REST HOUSE ROAD, OFF CHURCH STREET, BENGALURU – 560 001. 2 . SIDDHARTHA GUPTA MANAGING DIRECTOR, M/S. TEFILAH INFRASTRUCTURE PVT. LTD., 23/5, REST HOUSE ROAD, OFF CHURCH STREET, BENGALURU – 560 001. ... PETITIONERS (BY SRI YASHIR ALI, ADVOCATE) AND: MR. BALWINDER SINGH BAGARY S/O MR. KRIPAL SINGH, RESIDING AT BAUHINIA, BURTONS WAY, CHALFONT ST. GILES, BUCKINGHAMSHIRE, HP8 4BP, ENGLAND. REPRESENTED BY HIS SPA HOLDER – 2 RAJEEV GHADI, RESIDING AT 1103-1104, THE BAYA PARK, DR. SENAPATI MARG, DADAR WEST, MUMBAI – 400 028. (BY SRI SHRISHAIL SHIVABASAPPA NAVALGUND, ADVOCATE FOR R-1; R-2 IS DELETED VIDE ORDER DATED 06.06.2025) ... RESPONDENT THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 28.03.2023 PASSED IN COM. O.S. NO. 787/2022, BY THE LEARNED LXXXIII ADDL. CITY CIVIL AND SESSIONS JUDGE, BANGALORE (CCH-84) DISMISSING I.A. NO. III, FILED UNDER ORDER VII RULE 10 AND SECTION 16 OF THE CPC READ WITH SECTION 2 (1) (c) (vii) AND SECTION 6 OF THE COMMERCIAL COURTS ACT, 2015, FILED BY THE PETITIONERS SEEKING TO RETURN THE PLAINT FILED BY THE PLAINTIFF THEREIN / RESPONDENT NO. 1 HEREIN TO BE RE-PRESENTED BEFORE THE COMPETENT CIVIL COURT HAVING REGULAR JURISDICTION OVER THE SUBJECT MATTER OF THE SUIT AND CONSEQUENTLY ALLOW III AND DIRECT THE I.A. NO. RESPONDENT NO. 1 TO RE-PRESENT THE PLAINT BEFORE THE COMPETENT CIVIL COURT HAVING REGULAR JURISDICTION OVER THE SUBJECT MATTER OF THE SUIT (ANNEXURE-A). THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 30.06.2025, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:- 3 CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA CAV ORDER The petitioners/defendants in Commercial O.S.No.787 of 2022 pending before the LXXXIII Additional City Civil and Sessions Judge at Bangalore are at the doors of this Court calling in question an order dated 28-03-2023, by which the concerned Court dismisses I.A.No.III filed by the petitioner under Order 7 Rule 10 r/w Section 16 of the CPC, seeking to return the plaint to be re-presented before the competent civil Court on the score that the Commercial Court does not have jurisdiction, as the issue before the Court was not a commercial dispute.
Legal Reasoning
this Court in the subject petition. 9 8. The issue now would be, whether the investments made for returns directly or indirectly or even tacitly would fall under commercial dispute or otherwise. Since the order of the concerned Court is called in question, the reasons so rendered to dismiss the application become germane to be noticed. They read as under: “…. …. …. 11. On looking to the plaint averments, according to plaintiff, dispute comes within Sec.2(1)(c)(i) of Commercial Courts Act, as plaintiff is a financial investor and has invested funds in different projects in real estate and present claim is in respect of one of such investment. Defendant in the affidavit para no.10 and 11 has stated that dispute also do not come under Sec.2(1)(c)(i), as the documents relied are not mercantile documents connected to transactions of merchants, bankers, financiers and traders. On looking to the documents on the basis of which present suit has been filed, plaintiff’s claim is based on several agreements starting from 2011. By these agreements, according to the plaintiff, investment has been made in the real estate project of the defendants and for the amount agreed to be paid, as per the terms of the agreement, present suit has been filed. Defendants contend in their affidavit, that these agreements are in the nature of agreement to sell and are not mercantile documents. On looking to the various clauses of these documents like, Memorandum of Agreement Dt:14.4.2014 and MOU Dt:12.5.2014 and also Demand promissory note stated to have been executed by the defendant for payment of amount and the agreements assuring particular returns and on the failure to achieve particular return, defendant undertaking to pay particular price for the plots and also the defendant giving buy back option at the higher rate than the rate agreed for purchasing the plots etc., and also on looking to the status of the plaintiff as NRI settled in United Kingdom and financier as stated in the plaint, it is clear that the dispute pertains to ordinary transactions of financier as defined in Sec.2(1)(c)(i) of Commercial Courts Act. 10 12. Though in the said section, there is reference to mercantile documents etc., it is mentioned as ‘such as’, which show that dispute relating to mercantile document is only illustrative. Therefore, ordinary transaction of financier and such financial transaction would come within this definition. In the present case, as the dispute is based on several agreements stating that plaintiff has invested in the real estate projects of the defendants and plaintiff is stated to be NRI who has made such investments in different countries, dispute related to these agreements would be commercial dispute under Sec.2(1)(c)(i) of Commercial Courts Act. Merely because property in respect of which investment is made or merely because property given as security, is residential property, commercial dispute coming under Sec.2(1)(c)(i) of Commercial Courts Act, would not lose its character as commercial dispute. Meaning of Commercial dispute under Sec.2(1)(c)(vii) of Commercial Courts Act is not exhaustive and dispute which comes under Sec.2(1)(c)(i) of Commercia1 Courts Act, do not go out of meaning of commercial dispute, if it does not fit in Sec.2(1) (c)(vii) of Commercial Courts Act, because both are separate clauses which separately include different disputes as commercial dispute. 13. Learned counsel for the defendant has argued that explanation in Sec.2(1)(c) of the Act will not help the plaintiff as, “... an explanation added to statutory provision is not a substantive provision in any sense of the term but as the plain meaning of the word itself shows, it is merely meant to explain or clarify certain ambiguities, which may have crept in the statutory provision” as held in the decision of the Hon’ble Supreme Court in S.Sundaram Pillai V/s V.R.Pattabiraman (1985) 1 SCC 591. However, Sec.2(1)(c) of Commercial Courts Act, states different disputes which would be commercial dispute. All these disputes independently would be commercial dispute and requirement of all the clauses of Sec.2(1)(c)(i) to (xxii) is not necessary to become a Commercial dispute. Therefore, contention of the defendants that as property referred in the agreements are residential property, dispute cannot be a commercial dispute under any sub sections of Sec.2(1)(c) of the Commercial Courts Act cannot be accepted. As the dispute raised by the plaintiff prima facie appears to be commercial dispute u/s Sec.2(1)(c)(i), 11 this court is having jurisdiction and plaint cannot be returned as prayed. 14. In the course of the arguments, learned counsel for the defendants has also raised several points on maintainability of the suit, on the ground that suit is for recovery of money and the suit is barred under Money lenders act and also under Karnataka Prohibition of charging exorbitant interest Act etc., These contentions are not taken in the application and therefore, they are beyond the scope of present application. Moreover, present application is under order 7 Rule 10 of CPC for return of the plaint. If suit is not maintainable, remedy is not return of plaint. Therefore, regarding maintainability of the suit and the decisions cited by the plaintiff to counter the arguments need not be considered in this order. these arguments 15. For all the discussions made above, defendants have failed to show that the dispute raised in the present suit is not a commercial dispute. Dispute raised by the plaintiff prima facie comes within Sec.2(1)(c)(i) of Commercial Courts Act. Hence, this court has jurisdiction to try the suit. Application filed by the defendants U/o 7 Rule 10 CPC is devoid of merits and deserves is to be dismissed with cost. Accordingly, point No.1 answered in the Negative. 16. POINT No.2: For the discussion made on above point, following order is passed:
Arguments
2. Heard Sri Yashir Ali, learned counsel appearing for the petitioners and Shri Shrishail Navalgund, learned counsel appearing for respondent. 3. Facts, in brief, germane are as follows: - The respondent who is the plaintiff institutes a commercial O.S.No.787 of 2022 seeking a judgment and decree for recovery of 4 an amount of ₹3,97,35,644/- along with interest aggregating to ₹23,02,75,718/- contending that the plaintiff as an individual of Indian origin is currently settled in United Kingdom. The plaintiff is said to have invested in the year 2011 an amount of ₹2,99,47,777/- in the real estate project of the petitioners in the name and style of Tefilah Rose. Dispute arose between the two. Contending that the plaintiff had to get amounts from the hands of the petitioners institutes a commercial suit in Commercial O.S.No.787 of 2022 before the concerned Court. An application under Order 39 Rules 1 and 2 of the CPC was also filed seeking restraint of the petitioners from alienating, encumbering or disposing off the land parcels in the aforesaid investment. The petitioners, on receipt of summons, file their written statement and also filed an application under Order 7 Rule 10 of the CPC seeking return of the plaint to the plaintiff, as the suit is not maintainable before the Commercial Court. The concerned Court rejects the application in terms of its order dated 28-03-2023. The petitioners have challenged the said order, in the subject petition, for it having been filed on 26-03-2025 two years thereafter. 5 4. The learned counsel appearing for the petitioners/ defendants would submit that there is no flavour of a commercial dispute in the case at hand. It is a pure buy-back of the residential apartment to be built on the land and it has to be tried as a normal civil dispute and not as a commercial dispute. He would seek to place reliance on the judgments of the Apex Court and that of the Division Bench of Gujarat High Court to buttress his submission that every dispute which has certain flavour of commercial nature or involve finance would not become a commercial dispute. 5. Per contra, the learned counsel appearing for the plaintiff/respondent would vehemently refute the submissions contending that there is no warrant to interfere with the order passed by the concerned Court, which reject the application filed by the petitioners under Order 7 Rule 10 of the CPC, for the reason that, it does have a flair of commercial dispute, as the plaintiff has invested amounts in the project and that investment is for better returns or the option of a buy-back when the apartments are ready. Therefore, it is clear that the dispute concerns financial transaction between the parties. He would seek dismissal of the petition. 6 6. I have given my anxious consideration to the submissions made by the respective learned counsel and have perused the material on record. In furtherance whereof, the only issue that falls for consideration is: ‘Whether the plaint averments would clearly indicate that it is a commercial dispute or otherwise?’ 7. The genesis of the relationship between the petitioners and the respondent is the admitted investment made by the plaintiff in the real estate project of the petitioners. The plaintiff and defendants in the year 2011 enter into an agreement for investment of ₹2,99,47,777/- initially in a project named Tefilah Rose. The investment was for a period of 36 months with guaranteed return of 48% and security of a part of the proposed development equal to the value guaranteed return of the sum that is invested. The plaintiff is said to have invested periodically the following amounts: “Sl.No. 1. 2. Date 09-06-2011 09-06-2011 Rs. 40,64,731 17,92,500 7 3. 4. 5. 14-06-2011 28-03-2012 21-05-2012 Total 1,37,97,800 43,31,250 42,27,000 2,82,13,281” The dispute between the two arose for repayment of the amounts. It is then the plaintiff institutes original suit in Commercial O.S.No.787 of 2022. The suit was entertained. The entertainment of the suit is challenged before the Division Bench of this Court in Commercial Appeal No.141 of 2023. The Division Bench grants an interim order which reads as follows: “ORDER Heard the learned counsel for the appellants. It is submitted that the appellants had preferred an interlocutory application under Order VII Rule 10 of CPC praying for return of the plaint on the ground that the transaction involves purchase and sale of a residential apartment and that the Commercial Courts Act, more particularly, Section 2(1)(c)(vii) defines ‘Commercial Dispute’ as under:- “2. Definitions. – (1) xxx Xxx Xxx “commercial dispute” means a dispute arising out of- (a) (b) (c) (i) to (vi) xxx (vii) agreements relating to immovable property used exclusively in trade or commerce;” 8 That the immovable property involved is a residential apartment and hence, the same is in applicable. In support of his contention, reliance is placed on the ruling of the Hon’ble Apex Court rendered in the case of Ambalal Sarabhai Enterprises Limited vs. K. S. Infraspace LLP and Another reported in (2020) 15 SCC 585. the facie, Prima canvassed merits consideration. Hence, there shall be stay of further proceedings in Com. O. S. No.787/2022 pending on the file of LXXXIII Addl. City Civil and Sessions Judge, Bengaluru. Accordingly, I.A.No.1/2023 is allowed. contention Issue emergent notice regarding admission.” The said Commercial Appeal comes to be disposed of by the Division Bench on 12-03-2025 on a submission made by the appellants that the appeal was not maintainable. By then two orders had been passed and an interim order of stay in the commercial original suit was operating. On revival of the proceedings in Commercial O.S.No.787 of 2022, the petitioners file an application under Order 7 Rule 10 of the CPC praying return of the plaint to the plaintiff on the score that the commercial Court had no jurisdiction. This is answered against the petitioners holding that it was a commercial dispute and the Commercial Court did have jurisdiction. It is this order that has driven the petitioners to
Decision
ORDER I.A.No.III filed under Order VII Rule 10 and sec.16 of CPC R/w Sec. 2(1)(c) (vii) and Sec.6 of Commercial Courts Act, by the defendants is dismissed with cost of Rs.5000/-.” The concerned Court on the basis of pleadings in the plaint averments holds that an investment for return of amount would undoubtedly come within Section 2(1)(c) of the Commercial Courts 12 Act, 2015 (‘the Act’ for short). Submissions are made by the learned counsel for the petitioners that it does not amount to commercial dispute, as it is only an investment of money to buy an apartment. It, therefore, becomes necessary to notice Section 2(1)(c) of the Act. It read as follows: “2. Definitions.—(1) In this Act, unless the context otherwise requires, - … … … (c) “commercial dispute” means a dispute arising out of— (i) transactions of merchants, bankers, ordinary financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents; (ii) export or import of merchandise or services; (iii) issues relating to admiralty and maritime law; (iv) transactions relating to aircraft, aircraft engines, aircraft equipment and helicopters, including sales, leasing and financing of the same; (v) carriage of goods; (vi) construction and infrastructure contracts, including tenders; (vii) agreements relating to immovable property used exclusively in trade or commerce; (viii) franchising agreements; (ix) distribution and licensing agreements; 13 (x) management and consultancy agreements; (xi) joint venture agreements; (xii) shareholders agreements; (xiii) subscription and investment agreements pertaining to the services industry including outsourcing services and financial services; (xiv) mercantile agency and mercantile usage; (xv) partnership agreements; (xvi) technology development agreements; (xvii) intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits; (xviii) agreements for sale of goods or provision of services; (xix) exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum; (xx) insurance and re-insurance; (xxi) contracts of agency relating to any of the above; and (xxii) such other commercial disputes as may be notified by the Central Government. Explanation. - A commercial dispute shall not cease to be a commercial dispute merely because— (a) it also involves action for recovery of immovable property or for realisation of monies out of immovable property given as security or involves any other relief pertaining to immovable property; 14 (b) one of the contracting parties is the State or any of its agencies or instrumentalities, or a private body carrying out public functions;” Section 2 of the Act deals with definitions. Section 2(1)(c) defines what is a commercial dispute. The concerned Court places heavy reliance upon Section 2(1)(c). Section 2(1)(c) defines a commercial dispute arising out of ordinary transaction of merchants, bankers, financiers and traders, such as those relating to mercantile documents, including enforcement and interpretation of such documents. Explanation is also found as to what is a commercial dispute. A commercial dispute would not cease to be a commercial dispute merely because it involves action for recovery of immovable property or for realisation of monies out of immovable property given as security or involves any other relief pertaining to immovable property. 9. Section 2(1)(c) and the explanation has borne consideration by the Apex Court and that of the Gujarat High Court. The Apex Court in the case of AMBALAL SARABHAI 15 ENTERPRISES LIMITED v. K.S. INFRASPACE LLP1, has held as follows: “…. …. …. 6. At the outset, it is noticed that the consideration required in the instant case is as to whether the transaction between the parties herein which is the subject-matter of the suit could be considered as a “commercial dispute” so as to enable the Commercial Court to entertain the suit. In that regard, it is necessary to take note of Section 2(1)(c)(vii) of the CC Act, 2015. The said provision to the extent relevant is extracted here below for reference. “2. Definition.—(1) In this Act, unless the context otherwise requires— (a)-(b) * * * (c) “commercial dispute” means a dispute arising out of— (i)-(vi) * * * (vii) agreements relating to immovable property used exclusively in trade or commerce; (viii)-(xxii) * * *” From a perusal of the provision relied upon by the learned Senior Advocates it is noticed that the disputes arising out of agreements relating to immovable property used exclusively in trade or commerce will qualify to be a commercial dispute to be tried by Commercial Courts. The question therefore would be that, in the instant case though the parties have entered into a sale transaction of the immovable property and presently in the suit the registration of a mortgage deed pertaining to the immovable property is sought, whether the immovable property involved could be considered as being used exclusively in trade or commerce. … … … 8. Though such rival contentions are put forth by the learned Senior Advocate on either side, these aspects cannot be dealt with in abstract. Instead the nature of the dispute and the 1 (2020) 15 SCC 585 16 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. Hence before adverting to the other aspects it would be necessary to carefully examine the plaint. The plaintiff has in detail referred to the nature of the transaction between the appellant and the respondents herein. In Para 5 thereof the detail of the land bearing R.S. No. 122 corresponding to City Survey Nos. 1101 and 1100/1 having land area of 9207 sq m at MoujeSubhanpura Reg. District, Vadodara is referred. Further the schedule of the property is indicated in Para 6 and reference is made to the Memorandum of Understanding where again the reference is made to the land. It is averred therein that it would be the total responsibility of Respondent 1 herein (Defendant 2 in the suit) to change the land use as well as to pay the amount that may be required for the permission. The amount to be paid as premium is referred and the right of the plaintiff to secure the mortgage deed in view of the terms of the MoU is stated. In the entire plaint there is no reference to the nature of the land or the type of use to which it was being put as on the date of the agreement to sell/sale deed/memorandum of understanding or as on the date of the suit. 9. Further on referring to the cause of action in Para 21, the plaintiff has thereafter referred in Para 22 to the jurisdiction of the Court to hear and decide the matter. It would be appropriate to extract the same which reads as hereunder: “22. Jurisdiction: The plaintiff states that the defendants having their office at Vadodara land which is the subject-matter of the instant suit is situated within the territorial jurisdiction of this Hon'ble Court and hence this Hon'ble Court has the jurisdiction to hear and decide the matter.” Even though in the paragraph describing jurisdiction the plaintiff has stated with regard to the territorial jurisdiction since the office and land being at Vadodara, there is no reference indicating the reason for which the plaintiff pleads that the court which is the Commercial Court exclusively constituted to try the commercial disputes has jurisdiction to try the instant suit. In that background, a perusal of the prayer made in the plaint 17 would essentially indicate that the suit is one seeking for specific performance of the terms of MoU whereunder it is agreed that the mortgage deed be executed. Even if the immovable property under the mortgage deed was the subject-matter it was necessary to plead and indicate that the same was being used in trade or commerce due to which the jurisdiction of Commercial Court is invoked. Without such basic pleadings the plaint, any explanations sought to be put forth subsequently would only lead to a situation that if an objection is raised, in every suit a consideration would be required based on extraneous material even to ascertain as to whether the intended transaction between the parties was of such nature that it is to be construed as a commercial dispute. in … … .. 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 Vasu Healthcare (P) Ltd. v. Gujarat Akruti TCG Biotech Ltd. [Vasu Healthcare (P) Ltd. v. Gujarat Akruti TCG Biotech Ltd., 2017 SCC OnLineGuj 724 : AIR 2017 Guj 153] wherein a detailed consideration has been made and the conclusion reached therein by taking note of an earlier decision is that on a plain reading of Section 2(1)(c) of the 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: (SCC OnLineGuj para 33) “33. Therefore, if the dispute falls within any of the Section 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 Sections 2(c)(i), 2(c)(ii) and 2(c)(xx) of the Commercial Courts Act only. The learned counsel appearing on behalf of the original plaintiff has candidly admitted and/or conceded that the case shall not fall within Sections 2(c)(i); 2(c)(ii) or 2(c)(xx) of the Commercial Courts Act. It is learned required to be noted that before the 18 in the said plaint, pleaded to be agreements Commercial Court it was never the case on behalf of the original plaintiff that the case would fall within Section 2(c)(vii) of the learned Commercial Court. Despite the above we have considered on merits whether even 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 in trade or commerce. As observed exclusively hereinabove, at the time of filing of the suit and even so the immovable property/plots the agreements between the parties cannot be 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 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 1 has failed to provide any infrastructural facilities and develop the plots and therefore, a civil suit for specific performance of the agreement has 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 phraseology 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 19 clause it is clear that the expression “used” must mean “actually used” or “being used”. If the intention of the legislature was to expand 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 Dineshkumar Gulabchand Agrawal [Dineshkumar Gulabchand Agrawal v. CIT, 2003 SCC OnLine Bom 1289 : (2004) 267 ITR 768] 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 [DineshkumarGulabchand Agrawal v. CIT, 2004 SCC OnLine SC 13] by the Hon'ble Supreme Court.” (emphasis in original) … …. … 13. The learned Senior Advocate for the appellant would however, contend that a strict interpretation as in the case of taxing statutes would not be appropriate in the instant case where the issue relates to jurisdiction. In that regard, the learned Senior Advocate has referred to the Statement of Objects and Reasons with which the Commercial Courts Act, 2015 is enacted so as to provide speedy disposal of high value commercial disputes so as to create the positive image to the investors world about the independent and responsive Indian legal system. Hence, he contends that a purposive interpretation be made. It is contended that a wider purport and meaning is to be assigned while entertaining the suit and considering the dispute to be a commercial dispute. Having taken note of the submission we feel that the very purpose for which the CC Act of 2015 has been enacted would be defeated if every other suit merely because it is filed before the Commercial Court is entertained. This is for the reason that the suits which are not actually relating to commercial dispute but being filed merely because of the high value and with the intention of seeking early disposal would only clog the system and block the way for the genuine commercial disputes which may have to be entertained by the Commercial Courts as intended by the lawmakers. In commercial disputes as defined a special procedure is provided for a class of 20 litigation and a strict procedure will have to be followed to entertain only that class of in that jurisdiction. If the same is strictly interpreted it is not as if those excluded will be non-suited without any remedy. The excluded class of litigation will in any event be entertained in the ordinary civil courts wherein the remedy has always existed. litigation 14. In that view it is also necessary to carefully examine and entertain only disputes which actually answers the definition “commercial disputes” as provided under the Act. In the instant case, as already taken note neither the agreement between the parties refers to the nature of the immovable property being exclusively used for trade or commerce as on the date of the agreement nor is there any pleading to that effect in the plaint. Further the very relief sought in the suit is for execution of the mortgage deed which is in the nature of specific terms of Memorandum of performance of Understanding without reference to nature of the use of the immovable property in trade or commerce as on the date of the suit. Therefore, if all these aspects are kept in view, we are of the opinion that in the present facts the High Court was justified in its conclusion arrived through the order dated 1-3-2019 [K.S. Infraspace LLP v. Ambalal Sarabhai Enterprises Ltd., 2019 SCC OnLineGuj 1926] impugned herein. The Commercial Court shall therefore return the plaint indicating a date for its presentation before the Court having jurisdiction. the … … … 27. As per Section 11 of the Act, notwithstanding anything contained in the Act, a Commercial Court or a Commercial Division shall not entertain or decide any suit relating to any commercial dispute in respect of which the jurisdiction of the civil court is either expressly or impliedly barred under any other law for the time being in force. … … … 37. A dispute relating to immovable property per se may not be a commercial dispute. But it becomes a commercial dispute, if it falls under sub-clause (vii) of Section 2(1)(c) of the Act viz. “the agreements relating to immovable property used exclusively in trade or 21 commerce”. 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. … … … Raje 40. In Ujwala Gaekwar v. Hemaben Achyut Shah [UjwalaRaje Gaekwar v. HemabenAchyut Shah, 2017 SCC OnLineGuj 583] , Special Civil Suit No. 533 of 2011 was instituted for declaration that the sale deed valued at Rs 17.76 crores executed by the appellant-original Defendant 1 in favour of Respondent 4 be declared illegal and also, for permanent injunction with respect to the land in question. The appellants- defendants thereon filed an application that in sale deed, it has been clearly mentioned that the agreement relating to immovable property used exclusively in trade or commerce and falls within the meaning of Section 2(1)(c)(vii) of the Commercial Courts Act and that the matters above, the value of rupees one crore are to be transferred to the Commercial Court. Trial court rejected the said application which was challenged before the Gujarat High Court. The Gujarat High Court held that the aim, object and purpose of establishment of Commercial Courts, Commercial Divisions and Commercial Appellate Divisions of the High Court is to ensure that the cases involved in commercial disputes are disposed of expeditiously, fairly and at reasonable cost to the litigant, and if such a suit which is as such arising out of the probate proceedings and/or is dispute with respect to the property Commercial Division/Commercial Court, there shall not be any difference between the regular civil courts and the Commercial Division/Commercial Courts and the object for Commercial Division/Commercial Courts shall be frustrated. establishment transferred the are the the to of … … … 42. The object and purpose of the establishment of Commercial and Commercial Commercial Appellate Divisions of the High Court is to ensure that the cases involved in commercial disputes are Divisions Courts, 22 disposed of expeditiously, fairly and at reasonable cost to the litigants. Keeping in view the object and purpose of the establishment of the Commercial Courts and fast- tracking procedure provided under the Act, the statutory provisions of the Act and the words incorporated thereon are to be meaningfully interpreted for quick disposal of commercial litigations so as to benefit the litigants especially those who are engaged in trade and commerce which in turn will further economic growth of the country. On the above reasonings, I agree with the conclusion arrived at by my esteemed Brother A.S. Bopanna, J.” (Emphasis supplied) Prior to the judgment of the Apex Court in AMBALAL SARABHAI ENTERPRISES LIMITED’s case supra, a Division Bench of Gujarat High Court in the case of MADHURAM PROPERTIES v. TATA CONSULTANCY SERVICES LIMITED2, answering an identical circumstance of investment, has held as follows: “…. …. …. 14. At the outset, it is required to be noted that by the impugned order learned Commercial Court has returned the plaint to the original plaintiff to present it before the appropriate Court having jurisdiction, while exercising the powers under Order VII Rule 10 of the Code of Civil Procedure. While passing the impugned order, learned Commercial Court has observed and held that as the dispute between the parties cannot be said to be “commercial dispute” within the definition of Section 2(c) of the Commercial Courts Act, for the dispute between the parties for which the suit has been preferred and for the reliefs 2 2017 SCC OnLine Guj 725 23 prayed for in the suit, suit before the learned Commercial Court shall not be maintainable and the learned Commercial Court shall not have any jurisdiction. 15. Therefore, the short question which is posed for the consideration of this Court is whether in the facts and circumstances of the case, learned Commercial Court has erred in holding so and whether the dispute between the parties for which, the suit is filed and the reliefs are sought, can be said to be “commercial dispute” within the definition of Section 2(c) of the Commercial Courts Act or not? 16. Considering the averments in the plaint and the cause of action pleaded and even the nature of dispute between the parties and the reliefs sought in the plaint, it appears that the dispute is with respect to the agreement entered into between the plaintiff and the defendant in respect of 216 flats situated in block Nos. A to L of residential premises developed by the appellant styled as “Madhuram Greens”. It is not in dispute that “Madhuram Greens” is a residential project and the flats in question were given to the defendant on lease to be used for residential purpose. The agreement of lease was entered into between the plaintiff and defendant in respect of aforesaid residential flats to be used for residential purpose. At the cost of repetition, it is observed that the project “Madhuram Greens” is a residential project/scheme. Therefore, the agreement/indenture between the plaintiff and the defendant in respect of aforesaid 216 residential flats cannot be said to be an agreement relating to trade or immovable property used exclusively commerce. Considering the sub-section (vii) of Section 2(c) of the Commercial Courts Act, the “commercial dispute” means a dispute arising out of agreements relating to immovable property used exclusively in trade or commerce. As observed herein above, the agreements are relating to immovable property exclusively for residential purpose and same cannot be said to be relating immovable property used agreement exclusively immovable in trade or commerce. The property in question - 216 residential flats are used exclusively for residential purpose and same cannot be said to be used exclusively in trade or commerce. Under the circumstances, considering Section 2(c)(vii) of the to in 24 Commercial Courts Act, the dispute arising out of the indenture/agreement in question cannot be said to be relating to immovable property used exclusively in trade or commerce and therefore, said cannot be said to be commercial dispute as defined under Section 2(c) of the Commercial Courts Act. … … … as the 18. Under circumstances, the agreement/indenture for which dispute has arisen is with respect to immovable property used exclusively for residential purpose and cannot be said to be immovable property used exclusively in trade or commerce, the learned Commercial Court has rightly held that dispute between the parties cannot be said to be “commercial dispute” within the definition of Section 2(c) of the Commercial Courts Act and therefore, the learned Commercial Court has rightly held that the Commercial Court shall not have any jurisdiction and therefore, the learned Commercial Court has rightly returned the plaint to the original plaintiff to present it before the appropriate Court having the jurisdiction.” (Emphasis supplied) The Division Bench of Gujarat High Court holds that agreement or indenture arising with respect to immovable property used exclusively for residential purpose cannot be said to be an immovable property used exclusively in trade and commerce. It therefore, holds that the Commercial Court did not have jurisdiction and the plaint ought to have been returned. 25 10. The Apex Court in the case of S.P. VELAYUTHAM v. M/S. EMAAR MGF LAND LIMITED3, on an identical investment following AMBALAL SARABHAI ENTERPRISES LIMITED’s case has held as follows: “…. …. …. 3. The primary challenge in these Special Leave Petitions is to the order dated 04.12.2018 whereunder, the learned Judge of the High Court held that the C.S. No. 169 of 2018 filed by the respondent-plaintiff is a commercial suit, within the meaning of Section 2(1)(c) of the Commercial Courts Act, 2015. The Court justified its decision, inter alia, by citing the ratio in Jagmohan Belal v. State Bank of Indore (decided on 22.09.2017), Monika Arora v. Neeraj Kohli in CM(M) No. 850 of 2016 (decided on 01.09.2016) and Soni Dave v. Trans Asian Industries Expositions Pvt. Ltd. reported in AIR 2016 Del 186. 4. On the other hand, to argue that this was a simple money recovery suit and cannot therefore be treated as a commercial suit, the defendants relied on the Gujarat High Court decision in Vasu Healthcare Private Limited v. Gujarat Akruti TCG Biotech Limited reported in (2017) AIR (Gujarat) 153. 5. It is argued with some emphasis by the defendants that it is only a Suit for recovery of money and if the view in the impugned judgment is accepted as correct, all money recovery suits will travel towards the commercial division and it will defeat the very purpose of creating track commercial category suits. In support of such contention, the counsel would rely on sub-clause (vii) of Section 2(1)(c) to say that the concerned agreements must pertain to immovable property used exclusively in trade or commerce. According to Mr. Patwalia, the agreements relate to properties which were not used exclusively for the commercial divisions, fast to 3 S.L.P. (Civil) Diary No(s).2986 of 2024 26 trade or commerce but there could possibly be use of such property in future, for commercial purpose. 6. Per contra, Mr. Gopal Sankaranarayanan, learned senior counsel would refer to the explanation in Section 2(1)(c)(vii) in the above context to say that a commercial dispute shall not cease to be a commercial dispute merely because the suit pertains to realisation of money. 7. The above issue was considered in Ambalal Sarabhai Enterprises Limited v. K.S. Infraspace LLP & Anr. reported in (2020) 15 SCC 585 where the implication of Section 2(1)(c)(vii) was construed. In the concurring judgment, the following was expressed by Justice Banumathi: “37. A dispute relating to immovable property per se may not be a commercial dispute. But it becomes a commercial dispute, if it falls under sub- clause (vii) of Section 2(1)(c) of the Act viz. “the agreements relating to immovable property used exclusively in trade or commerce”. The words “used in trade or commerce” are to be exclusively 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.” 8. As is seen, the above judgment in Ambalal was pronounced only on 04.10.2019 and well before that, the impugned judgment was rendered by the learned Single Judge on 04.12.2018. 9. The counsel for the rival parties therefore submit that the learned Single Judge of the High Court should be permitted to re-decide on whether the Suit should be treated as a commercial dispute, within the meaning of Section 2(1)(c). 10. Accepting the above submission particularly in light of ratio in Ambalal, we deem it appropriate to set aside the impugned judgment of the learned Judge of the High Court rendered on 04.12.2018 in the CS No. 169 of 27 2018. The matter is remitted back to the High Court to re- decide on whether the Suit for recovery of money would fall within the category of cases covered under Section 2(1)(c)(vii) of the Commercial Courts Act, 2015. With this order, the Special Leave Petitions stand disposed of.” (Emphasis supplied) The finding was by following AMBALAL SARABHAI ENTERPRISES LIMITED and remitting the matter back to the concerned Court in the light of the fact that in AMBALAL SARABHAI ENTERPRISES LIMITED the judgment was pronounced on 04-10-2019 and the judgment rendered by the learned single Judge was on 04-12-2018. It was directed to be reconsidered as to whether the issue would come within Section 2(1)(c) of the Act. 11. On a coalesce of the judgments rendered by the Apex Court and that of Gujarat High Court, the agreement between the parties which forms the fulcrum of the lis is required to be considered. The agreement is for the purpose of investment in a residential apartment complex that is to be constructed by the petitioners. Since it is residential complex, it is not for trade or commerce. The option for buy-back will not amount to the issue becoming a commercial dispute. Though much water has flown 28 between the parties right from 2011, this Court is now required to answer whether this would amount to a commercial dispute or otherwise. Identical agreement and investment were considered by the Division Bench of Gujarat High Court, to which I am in respectful agreement. 12. Insofar as the judgment relied on by the learned counsel appearing for the respondent, there can be no qualm about the principles laid down therein. The investment, in the said case, was for construction of mega shopping mall. Shops in the shopping mall would undoubtedly be used for trade and commerce. The agreement executed between the two was clear that when the shops are sold or rented out, the amount of investment would be returned with applicable interest. The said judgment would not become applicable to the facts of the case on hand, as the investment in the case at hand is clearly for a project which seeks to construct residential apartments. Merely because an option of buy-back is available to the investor, it does not become a commercial dispute. In that light, the plaint ought to have been returned. Even looking at the plaint averments, the Commercial 29 Court has entertained the dispute as it runs counter to what the Apex Court has held in AMBALAL SARABHAI ENTERPRISES LIMITED’S case and the Division Bench of Gujarat High Court . In that light, the petition deserves to succeed. 13. For the aforesaid reasons, the following: - O R D E R (i) Writ Petition is allowed. (ii) The order dated 28-03-2023 passed by the LXXXIII Additional City Civil and Sessions Judge, Bengaluru on I.A.No.III in Com.O.S.No.787 of 2022 stands quashed. (iii) The application, I.A.No.III filed by the petitioners under Order 7 Rule 10 of the CPC in Com. O.S.No.787 of 2022, is allowed. The plaint is directed to be returned to the plaintiff for taking appropriate action in accordance with law, if he so desires. Sd/- (M.NAGAPRASANNA) JUDGE Bkp/CT:MJ