VAIJANATH DAYANAND KALE Vs. NERKAR PROPERTIES LLP

JUDGEMENT

(1.) Heard learned Counsel for the parties.

(2.) This petition challenges an order passed by the District Court at Nashik, sitting as a commercial court. The impugned order has been passed on an application of the Petitioners herein, who are original defendants in the commercial suit, for return of the plaint for presentation to proper court under Order 7 Rule 10 of CPC.

(3.) The controversy in the matter is whether the suit filed by the Respondents herein (original plaintiffs) is a commercial suit. The dispute between the parties arises under an agreement by which the original defendants purportedly agreed to transfer their development rights, for construction of a building, to the plaintiffs in consideration of the latter sharing the development potential with them in the ratio of 43 : 57. This agreement, on the face of it, is prima facie a construction contract; it transfers development rights by way of construction of a building and sale of premises therein in a certain stated proportion as between the parties. The defendants' submission before the District Court was that the transaction did not come within the purview of a "commercial dispute" defined under Clause (c) of Section 2(1) of Commercial Courts Act, 2015 ("Act"). The defendants submitted that the building proposed to be constructed was not used exclusively in trade or commerce as required by Sub-clause (vii) of Clause (c) of Section 2(1); so also, the transaction was not a construction or infrastructure contract covered by Sub-clause (vi) of clause (c) of Section 2(1). It was submitted that the suit not being thus a commercial dispute, the plaint should be returned for presentation to the proper court. The defendants relied on the decision of the Supreme Court in the case of Ambalal Sarabhai Enterprises Ltd. vs. K.S. Infraspace LLP 1, which holds that only those contracts of immovable properties, where the properties are put to commercial or trade use, are covered by Sub-clause (vii) of Clause (c) of Section 2(1) of the Act and give rise to a commercial dispute. The learned District Judge primarily proceeded on the footing that there was no dispute about the proposition stated by the Supreme Court in Ambalal Sarabhai Enterprises case. According to the learned Judge, the contract concerned construction and infrastructure of a building and was accordingly covered by Sub-clause (vi) of Clause (c) of Section 2(1) of the Act, and there was no question of invoking Sub-clause (vii) of Clause (c) of Section 2(1).