Calcutta HC: Suit Seeking Eviction from Business-Use Property Lies Before Commercial Division

Savvy Thakur

Published on: 13 November 2022 at 20:39 IST

In transferring an eviction suit from its non-commercial Ordinary Original Civil Jurisdiction to its Commercial Division, the Calcutta High Court ruled that the only operative consideration for the Court to give effect to such a transfer is to determine whether the premises forming the subject matter of the dispute were used for commercial purposes or not, and that issues pertaining to illegal occupancy or contractual privity of parties involved would not be included in such consideration.

The plaintiff and third parties entered into a rent agreement for the purpose of running a business, and as parties to the rent agreement, these third parties gave the defendants the suit premises. This led to the current proceedings.

The counsel for the defendants argued that the present dispute was a commercial dispute under Section 2(1)(c)(vii) of the Commercial Courts Act, 2015 (“Act”) because the suit premises were let out for the purpose of operating a commercial establishment.

Counsel for the plaintiff argued that because the rent agreement was signed by the plaintiff with third parties, there was no commercial agreement between the plaintiff and the current defendants. As a result, the current dispute between the plaintiff and the current defendants could not fall under Section 2(1)(c)(vii) of the Act, and as a result, the current defendants were in illegal possession of the suit premises.

In narrowly tailoring the scope of adjudication for an application for return or transfer of the aforementioned eviction suit to a commercial court of competent jurisdiction, Justice Krishna Rao’s Single Judge Bench distinguished the Supreme Court’s decision in Vinaykishore Punamchand Mundhada & Anr. vs. Shri Bhumi Kalpataru and Ors. in (2010), which the plaintiffs sought to rely on, noted:

“The judgment is distinguishable because in the instant application only the question of whether the premises are being used for commercial purposes and whether the defendants are tenants or illegal occupiers is to be decided during the hearing of the suit.”

As a result, the Supreme Court’s decision in EXL Careers & Anr. necessitated a de novo decision on the merits of the defendants’ legal relationship with regard to the aforementioned rent agreement at the time of hearing the suit de novo in accordance with Order 7 Rule 10 read with Rule 10-A.

The plaintiff’s admits that the rent agreement was made with the intention of establishing a commercial establishment and that the plaintiff issued rent receipts in the name of defendant no. 3  under the  impression that the aforementioned third parties for partners of the defendant no.3, were crucial in determining that the present dispute was covered by Section 2(1)(c)(vii) of the Act, ruling:

“In the present case, the plaintiff has admitted that she initially gave the shop room to Mr. B.G. Harchandani, Mr. D.G. Harchandani, and Mr. J.G. Harchandani, who were M/s.’s partners. M/s Getco Electricals remains the defendant in this case.”

Despite the fact that Mr. B.G. Harchandani, Mr. D.G. Harchandani, and Mr. J.G. Harchandani are not partners, defendants Nos. 1 and 2 are partners, and this Court is of the opinion that defendants are using the suit schedule property for business purposes, which would constitute a commercial dispute. However, Mr. 3 is operating his business in the aforementioned shop.”

Without discussing the merits of the rent agreement or the issue of privity between the parties involved, the eviction suit was returned to the plaintiff for presentation before a commercial court of competent jurisdiction because the Court was satisfied on the merits that the premises were let out for the purpose of setting up a business.

Related Post