AMBALAL SARABHAI ENTERPRISES LTD. versus K. S. INFRASPACE LLP & ANR.

Citation: [2019] 13 S.C.R. 605 · Decided: 04-10-2019 · Supreme Court of India · Bench: R. BANUMATHI · Disposal: Dismissed

Judgment (excerpt)

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AMBALAL SARABHAI ENTERPRISES LTD.
v.
K. S. INFRASPACE LLP & ANR.
(Civil Appeal No. 7843 of 2019)
OCTOBER 04, 2019
[A. S. BOPANNA AND R. BANUMATHI, JJ.]
Commercial Courts Act, 2015: s. 2(1)(c)(vii) – Commercial
dispute – Maintainability of, before the Commercial Court – On
facts, dispute arising out of an agreement involving an immovable
property – Suit filed before the Commercial Court – In the suit,
the registration of a mortgage deed pertaining to the immovable
property is sought – High Court held that the immovable property
was not being used for trade or commerce as such the suit not
maintainable before the Commercial Court – On appeal, held: It
is clear from s. 2(1)(c)(vii) that 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 – On facts, 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 –
Relief sought in the suit is for execution of the Mortgage Deed
which is in the nature of specific performance of the terms of
Memorandum of Understanding without reference to nature of the
use of the immovable property in trade or commerce as on the date
of the suit – Thus, the transaction between the parties which is the
subject matter of the suit could not be considered as a “commercial
dispute”, so as to enable the Commercial Court to entertain the
suit – Order passed by the High Court is justified – Commercial
Court to return the plaint to the court having jurisdiction.
Objects and reasons – Held: Is to provide speedy disposal
of high value commercial disputes – Wider purport and meaning
is to be assigned while entertaining the suit and considering the
dispute to be a commercial dispute, else the very purpose of the
enactment would be defeated.
   [2019] 13 S.C.R. 605
605
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SUPREME COURT REPORTS
[2019] 13 S.C.R.
Dismissing the appeal, the Court
Per A. S. Bopanna, J.
HELD: 1.1 From a perusal of Section 2(1)(c)(vii) of the
Commercial Courts Act, 2015 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. [Para 6] [614-F-G]
1.2 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 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 in
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. [Para 9] [616-C-F]
1.3 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. A purposive interpretation
be made. A wider purport and meaning is to be assigned while
entertaining the suit and considering the dispute to be a
commercial dispute. In view thereof, 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
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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 

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