Suit For Eviction From Property Being Used For Running Business Lies Before Commercial Division: Calcutta High Court

The instant proceedings arose out of a rent agreement entered into between the plaintiff and third parties for the purpose of running a business and whereupon such third parties, being parties to the said rent agreement, handed over possession of the suit premises to the instant defendants. Counsels for the defendants submitted that as the suit premises were let out for the purpose of running a commercial establishment, the instant dispute constituted a commercial dispute in terms of Section 2(1)(c)(vii) of the Commercial Courts Act, 2015 ("Act").

Counsels for the plaintiff contended that there was no commercial agreement between the plaintiff and the instant defendants as the rent agreement was entered into by the plaintiff with third parties and therefore, the instant dispute between the plaintiff and the instant defendants could not fall within the purview of S. 2(1)(c)(vii) of the Act and consequently, the instant defendants were in illegal possession of the suit premises.

The Single Judge Bench of Justice Krishna Rao, in narrowly tailoring the scope of adjudication of an application for return/transfer of the said eviction suit to a commercial court of competent jurisdiction, distinguished the judgment of the Supreme Court in Vinaykishore Punamchand Mundhada & Anr. v. Shri Bhumi Kalpataru & Anr. reported in (2010) 9 SCC 129 sought to be relied upon by the plaintiffs, observing:

"In the instant application only the question whether the premises is being used for commercial purpose or not and whether the defendants are tenants or illegal occupier or not is to be decided during the hearing of the suit and thus the judgment is distinguishable."

Therefore, the only operative consideration before the Court at the stage of deciding the instant application was to assess whether the suit premises forming the subject matter of the instant dispute was used for commercial purposes or not and without going into the merits of the legal relationship of the defendants in respect of the said rent agreement which was to be decided subsequently at the time of hearing the suit de novo in terms of Order 7 Rule 10 read with Rule 10-A and in accordance with the judgment of the Supreme Court in EXL Careers & Anr. v. Frankfinn Aviation Services Private Limited, reported in (2020) 12 SCC 667.

The Court's findings was in respect of the plaintiff's admissions that firstly, the rent agreement was entered into for the purpose of establishing a commercial establishment and secondly, the plaintiff's issuance of rent receipts in the name of the defendant no. 3 under the impression that the aforesaid third parties were partners of the defendant no. 3, were critical in arriving at its conclusion that the instant dispute was covered under S. 2(1)(c)(vii) of the Act, holding:

"In the instant case, it is admitted by the plaintiff that the plaintiff had initially let out the shop room to Mr. B.G. Harchandani, Mr. D.G. Harchandani and J.G. Harchandani who were the partners of M/s. Getco Electricals and still the defendant no. 3 is running his business in the said shop though Mr. B.G. Harchandani, Mr. D.G. Harchandani and J.G. Harchandani are not the partners but the defendants no.1 and 2 are the partners and thus this Court is of the view that defendants are using the suit schedule property for business purpose and would constitute a commercial dispute."

As the Court, on merits, was satisfied that the suit premises were let out for the purpose of setting up business, the said eviction suit was returned to the plaintiff for presentation before a commercial court of competent jurisdiction, without going into the merits of the rent agreement and the issue of privity of parties involved therewith.

Case: Maharshi Commerce Limited v. Rajiv R. Balani & Ors., CS 3 of 2019

Date: 10.11.2022

Citation: 2022 LiveLaw (Cal) 337

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