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2016 DIGILAW 1276 (GUJ)

Ujwala Raje Gaekwar v. Hemaben Achyut Shah

2016-07-08

A.S.SUPEHIA, M.R.SHAH

body2016
JUDGMENT : M.R. Shah, J. 1. Present application has been preferred by the applicant herein-original defendant No. 1 for an appropriate order in exercise of powers under sub-section (5) of Section 15 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (hereinafter referred to as "Commercial Courts Act") for withdrawal of Special Civil Suit No. 533/2011 from the Civil Court, Vadodara and transfer it to the Commercial Court, Vadodara. The applicant herein-original defendant No. 1 has also prayed to quash and set aside the impugned order dated 28.06.2016 passed below Exh. 86 by the learned 15th Additional Senior Civil Judge, Vadodara (hereinafter referred to as "trial Court") in Special Civil Suit No. 533/2011 by which on an application preferred by the applicant herein-original defendant No. 1, the learned trial Court has refused to transfer the said Special Civil Suit No. 533/2011 to the Commercial Court, Vadodara. 2. Facts leading to the present application in nut-shell are as under: [2.1] That the applicant claims to be the granddaughter of Princess Kamladevi Gaekwar who passed away intestate on 02.02.1992. According to the applicant one Shri Achyut Shah (hereinafter referred to as original plaintiff) filed a completely frivolous and fraudulent suit being Regular Civil Suit No. 913/2008 against the applicant herein inter alia praying for an injunction restraining the applicant from alienating the share in immovable property being 1/3rd share in Revenue Survey Nos. 86 and 126 paikee 134/95/B paikee known as Shivmahal Palace along with land surrounding the same. That the suit was filed by the original plaintiff relying upon the succession certificate issued to him with respect to the immovable properties by the learned 6th Joint Civil Judge (S.D.), Vadodara in Probate Application No. 74/2000. According to the applicant no alleged Will as referred to in the plaint was produced with the suit. According to the applicant Civil Petition No. 161/2008 filed by the applicant praying for revocation of the illegal succession certificate, the learned Senior Civil Judge, Vadodara passed interim order dated 19.04.2008 restraining the original plaintiff from acting upon the certificate and from holding to have any rights in the property mentioned in the alleged Will. [2.2] That thereafter by way of registered sale deed No. 3494 dated 19.03.2010, land bearing Survey No. 86/3 admeasuring 3000 sq. [2.2] That thereafter by way of registered sale deed No. 3494 dated 19.03.2010, land bearing Survey No. 86/3 admeasuring 3000 sq. meter at Moje Jetalpur, Vadodara was sold by the applicant to the respondent No. 4 herein-original defendant No. 2 for a sale consideration of Rs. 17.76 Crore. That the aforesaid contract of sale led the original plaintiff-Shri Achyut Shah to file the Special Civil Suit No. 533/2011 from which the present application arises. [2.3] That the aforesaid Special Civil Suit No. 533/2011 has been filed by the original plaintiff praying for a declaration that registered sale deed dated 19.03.2010 executed by the applicant in favour of the respondent No. 4 is illegal and for permanent injunction with respect to the land. That the original plaintiff died during the pendency of the suit and therefore, his heirs-respondent Nos. 1 to 3 herein are permitted to be brought on record as plaintiffs. That thereafter the applicant filed Special Civil Application No. 14910/2015 challenging the said order by which the heirs were permitted to be brought on record. That by order dated 01.10.2015 passed in Special Civil Application No. 14910/2015, the proceedings of Special Civil Suit No. 533/2011 came to be stayed by this Court. [2.4] It appears that meanwhile on 04.09.2015, the respondent Nos. 1 to 3 herein (heirs and legal representative of the original plaintiff) filed an application at Exh. 65 for impleading Bhogilal Odhavji Industrial Enterprises and others as defendants. They have also filed an application on 04.09.2015 for amending the plaint and the injunction application. That the said applications were filed on the ground that the suit property has been further conveyed by the respondent No. 4 herein-original defendant No. 2 to company named Bhogilal Odhavji Industrial Enterprises Private Limited by a registered sale deed dated 13.05.2011 for a price of Rs. 21.11 Crore. That in the applications it was stated that that construction for a scheme named Icon Gold is going on. That on about 30.09.2015, the applicants through their advocate gave a public advertisement in the newspaper stating that the shops and offices in the name Golden Icon are being built on the land. [2.5] That subsequently by an order dated 13.04.2016, this Hon'ble Court has dismissed the aforesaid Special Civil Application No. 14910/2015 filed by the applicants challenging the impleadment of respondent Nos. 1 to 3 herein as plaintiffs in the suit. [2.5] That subsequently by an order dated 13.04.2016, this Hon'ble Court has dismissed the aforesaid Special Civil Application No. 14910/2015 filed by the applicants challenging the impleadment of respondent Nos. 1 to 3 herein as plaintiffs in the suit. [2.6] That in October, 2015 the Parliament enacted the Commercial Courts Act. That by notification in May/June, 2016, the Commercial Court came to be established in Vadodara and started functioning. [2.7] That on about 21.06.2016, the applicants submitted an application before the learned trial Court before whom the Special Civil Suit No. 533/2011 was pending at Exh. 86 stating that the aforesaid suit has been filed for declaration in respect of a sale deed valued at Rs. 17.76 Crore and that as per Section 2(1)(c)(vii) of the Commercial Courts Act, it has been clearly mentioned that agreement relating to immovable property used exclusively in trade or commerce would be governed by the said Commercial Courts Act and further stating that the matters above the value of Rs. 1 Crore are to be transferred to the Commercial Court. Therefore, it was prayed to transfer Special Civil Suit No. 533/2011 to the Commercial Court, Vadodara. That by way of impugned order the learned trial Court has rejected the said application. Therefore, the applicant herein-original defendant No. 1 has preferred the present miscellaneous application to transfer the proceedings of Special Civil Suit No. 533/2011 to the Commercial Court, Vadodara exercising the powers under sub-section (5) of Section 15 of the Commercial Courts Act. 3. Shri Salil Thakore, learned advocate appearing on behalf of the applicant has vehemently submitted that the learned trial Court has materially erred in not transferring the Special Civil Suit No. 533/2011 to the Commercial Court, Vadodara. 3.1. It is further submitted by Shri Thakore, learned advocate appearing on behalf of the applicant herein-original defendant No. 1 that in the Special Civil Suit No. 533/2011 the dispute pertains to and arises out of an agreement relating to immovable property, used exclusively in trade and commerce. It is submitted that the suit seeks declaration with respect to a sale deed wherein the suit land was sold by the applicant to respondent No. 4 at a value of Rs. 17.76 Crore. It is submitted that therefore considering the provision of section 2(c) of the Commercial Courts Act and as the suit value is above Rs. It is submitted that the suit seeks declaration with respect to a sale deed wherein the suit land was sold by the applicant to respondent No. 4 at a value of Rs. 17.76 Crore. It is submitted that therefore considering the provision of section 2(c) of the Commercial Courts Act and as the suit value is above Rs. 1 Crore, on the enactment of Commercial Courts Act and on establishment of the Commercial Court, Vadodara, the Commercial Court, Vadodara alone has the jurisdiction to decide the suit and therefore, the learned trial Court ought to have transferred the said suit to the Commercial Court, Vadodara. It is further submitted by Shri Thakore, learned advocate appearing on behalf of the applicant that while passing the impugned order and refusing to transfer the Special Civil Suit No. 533/2011 to the Commercial Court, Vadodara, the learned trial Court has failed to appreciate the object and purpose of the Commercial Courts Act. It is submitted that the impugned order of refusing to transfer Special Civil Suit No. 533/2011 to Commercial Court, Vadodara frustrates and defeats the object and purpose of the Commercial Courts Act. 3.2. It is further submitted by Shri Thakore, learned advocate appearing on behalf of the applicant that the learned trial Court has erred in not appreciating that the suit arises from a contract under which land is sold and for a declaration with respect to the same and is, therefore, covered by the provisions of the Commercial Courts Act. It is further submitted that while observing that the suit is based on a disputed Will, the learned trial Court has ignored the fact that the suit is actually the result of an agreement with respect to an immovable property namely the sale deed under challenge but for which the suit would have never been filed. It is further submitted by Shri Thakore, learned advocate appearing on behalf of the applicant that the findings of the learned trial Court are incorrect and are in complete ignorance of the fact that the relief that has been sought is in connection with an agreement relating to immovable property and that the immovable property is used exclusively in trade and commerce. Making above submissions, it is requested to allow the present application and transfer the Special Civil Suit No. 533/2011 pending in the learned trial Court to the Commercial Court, Vadodara. 4. Making above submissions, it is requested to allow the present application and transfer the Special Civil Suit No. 533/2011 pending in the learned trial Court to the Commercial Court, Vadodara. 4. Shri Dipen Shah, learned advocate appearing on behalf of the respondent Nos. 1 to 3, who is on caveat, has supported the impugned order. 5. Heard the learned advocates appearing for respective parties at length and perused the impugned order passed by the learned trial Court below Exh. 86 by which the learned trial Court has refused to transfer the Special Civil Suit No. 533/2011 to the Commercial Court, Vadodara. While considering the legality and validity of the impugned order passed by the learned trial Court refusing to transfer Special Civil Suit No. 533/2011 to the Commercial Court, Vadodara, controversy in the suit and the relief sought in the suit are required to be considered. At the outset it is required to be noted that in the Special Civil Suit No. 533/2011 the original plaintiffs have prayed to quash and set aside the sale deed executed by the applicant in favour of the respondent No. 4 herein-original defendant No. 2. In the said suit the original plaintiff had claimed the right on the basis of the order passed in probate proceedings and on the basis of the Will for which with respect to immovable properties a succession certificate was issued in his favour by the learned 6th Joint Civil Judge (S.D.), Vadodara in Probate Application No. 74/2000. Therefore, in the aforesaid Special Civil Suit No. 533/2011 filed by the original plaintiffs it has been prayed for a declaration that the registered sale deed dated 19.03.2010 executed by the applicant in favour of respondent No. 4 herein-original defendant No. 2 is illegal and also for permanent injunction with respect to the land in question. 5.1. In backdrop of the above facts the prayer of the applicant to transfer Special Civil Suit No. 533/2011 to the Commercial Court, Vadodara is required to be considered. 5.1. In backdrop of the above facts the prayer of the applicant to transfer Special Civil Suit No. 533/2011 to the Commercial Court, Vadodara is required to be considered. While considering the issue involved in the present application, certain provisions of the Commercial Courts Act are required to be referred to which are as under: "2(b) "Commercial Court" means the Commercial Court constituted under sub-section (1) of section 3; 2(c) "commercial dispute" means a dispute arising out of- (i) ordinary transactions of merchants, bankers, 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; (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. 3. Constitution of Commercial Court.-(1) The State Government, may after consultation with the concerned High Court, by notification, constitute such number of Commercial Courts at District level, as it may deem necessary for the purpose of exercising the jurisdiction and powers conferred on those Courts under this Act: Provided that no Commercial Court shall be constituted for the territory over which the High Court has ordinary original civil jurisdiction. (2) The State Government shall, after consultation with the concerned High Court specify, by notification, the local limits of the area to which the jurisdiction of a Commercial Court shall extend and may, from time to time, increase, reduce or alter such limits. (2) The State Government shall, after consultation with the concerned High Court specify, by notification, the local limits of the area to which the jurisdiction of a Commercial Court shall extend and may, from time to time, increase, reduce or alter such limits. (3) The State Government shall, with the concurrence of the Chief Justice of the High Court appoint one or more persons having experience in dealing with commercial disputes to be the Judge or Judges, of a Commercial Court, from amongst the cadre of Higher Judicial Service in the State. 5. Constitution of Commercial Appellate Division.-(1) After issuing notification under sub-section (1) of Section 3 or order under sub-section (1) of section 4, the Chief Justice of the concerned High Court shall, by order, constitute Commercial Appellate Division having one or more Division Benches for the purpose of exercising the jurisdiction and powers conferred on it by the Act. (2) The Chief Justice of the High Court shall nominate such Judges of the High Court who have experience in dealing with commercial disputes to be Judges of the Commercial Appellate Division. 6. Jurisdiction of Commercial Court.-The Commercial Court shall have jurisdiction to try all suits and applications relating to a commercial dispute of a Specified Value arising out of the entire territory of the State over which it has been vested territorial jurisdiction. 11. Bar of jurisdiction of Commercial Courts and Commercial Divisions.-Notwithstanding anything contained in this Act, a Commercial Court or a Commercial Division shall not entertain or decide any suit, application or proceedings 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. 15. Transfer of pending cases.-(1) All suits and applications, including applications under the Arbitration and Conciliation Act, 1996, relating to a commercial dispute of a Specified Value pending in a High Court where a Commercial Division has been constituted, shall be transferred to the Commercial Division. 15. Transfer of pending cases.-(1) All suits and applications, including applications under the Arbitration and Conciliation Act, 1996, relating to a commercial dispute of a Specified Value pending in a High Court where a Commercial Division has been constituted, shall be transferred to the Commercial Division. (2) All suits and applications, including applications under the Arbitration and Conciliation Act, 1996, relating to a commercial dispute of a Specified Value pending in any civil court in any district or area in respect of which a Commercial Court has been constituted, shall be transferred to such Commercial Court: Provided that no suit or application where the final judgment has been reserved by the Court prior to the constitution of the Commercial Division or the Commercial Court shall be transferred either under sub-section (1) or sub-section (2). (3) Where any suit or application, including an application under the Arbitration and Conciliation Act, 1996, relating to a commercial dispute of Specified Value shall stand transferred to the Commercial Division or Commercial Court under sub-section (1) or sub-section (2), the provisions of this Act shall apply to those procedures that were not complete at the time of transfer. (4) The Commercial Division or Commercial Court, as the case may be, may hold case management hearings in respect of such transferred suit or application in order to prescribe new timelines or issue such further directions as may be necessary for a speedy and efficacious disposal of such suit or application in accordance with Order XIV-A of the Code of Civil Procedure, 1908: Provided that the proviso to sub-rule (1) of Rule 1 of Order V of the Code of Civil Procedure, 1908 shall not apply to such transferred suit or application and the court may, in its discretion, prescribe a new time period within which the written statement shall be filed. (5) In the event that such suit or application is not transferred in the manner specified in sub-section (1), sub-section (2) or sub-section (3), the Commercial Appellate Division of the High Court may, on the application of any of the parties to the suit, withdraw such suit or application from the court before which it is pending and transfer the same for trial or disposal to the Commercial Division or Commercial Court, as the case may be, having territorial jurisdiction over such suit, and such order of transfer shall be final and binding." 5.2. That in exercise of powers under Section 3 of the Commercial Courts Act, the Commercial Court, Vadodara is established and made functional. Therefore, considering section 15 of the Commercial Courts Act, all suits and applications, including the applications under the Arbitration and Conciliation Act, 1996 relating to "commercial dispute" of a "specified value" pending in any Civil Court in any District or area in respect of which the Commercial Court has been constituted is required to be transferred to such Commercial Court. As per sub-section (5) of Section 15, in the event that such suit or application is not transferred in the manner specified in sub-section (1), sub-section (2) or sub-section (3), the Commercial Appellate Division of the High Court may, on the application of any of the parties to the suit, withdraw such suit or application from the Court before which it is pending and transfer the same for trial or disposal of the Commercial Division or Commercial Court as the case may be, having territorial jurisdiction over such suit and such order of transfer shall be final and binding. 5.3. Considering the aforesaid provisions of the Commercial Courts Act, only those suits or applications relating to a "commercial dispute" of a "specified value" are required to be transferred from the concerned Civil Court to the concerned commercial court having jurisdiction. 5.4. "Commercial dispute" is defined under section 2(c), which is reproduced hereinabove. According to the learned advocate appearing on behalf of the applicant that as the land in question is going to be used for commercial purpose and has to be used exclusively in trade and commerce, considering section 2(c)(vii) and considering the fact that the suit valuation is above the specified value i.e. above Rs. 1 Crore, the suit is required to be transferred to the Commercial Court, Vadodara. The aforesaid has no substance. As observed hereinabove the suit is instituted for a declaration that the sale deed executed by the appellant herein-original defendant No. 1 in favour of the respondent No. 4 herein-original defendant No. 2 be declared illegal and also for permanent injunction with respect to the land in question. Therefore, by no stretch of imagination it can be said to be a dispute arising out of the agreements relating to immovable property used exclusively in trade or commerce. Therefore, by no stretch of imagination it can be said to be a dispute arising out of the agreements relating to immovable property used exclusively in trade or commerce. Merely because the immovable property in question is going to be used or is being used exclusively in trade or commerce, the dispute would not become "commercial dispute" as defined under Section 2(c) of the Commercial Courts Act. 5.5. If the contention on behalf of the applicant that as the immovable property which is subject matter of the suit is being used and/or going to be used exclusively for trade and commerce and therefore, the same would become "commercial dispute", as per section 2(c) of the Commercial Courts Act and therefore, the same is to be transferred to the concerned Commercial Court having jurisdiction is accepted, in that case, the object and purpose of the establishment of Commercial Courts under the Commercial Courts Act would be frustrated. 5.6. The 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. The Commercial Courts, Commercial Divisions and Commercial Appellate divisions of the High Courts are intended to serve as a pilot project in the larger goal of reforming the civil justice system in India. As per the recommendations made by the Law Commission on the basis of which the Commercial Courts have been established, the Commercial Courts more particularly will benefit the litigant, other potential litigants (especially those engaged in trade and commerce) shall also be advantaged by the reduction in backlog caused by the quick disposal of the commercial disputes, which in turn, will further economic growth, increase foreign investment, and make India an attractive place to do business. 5.7. From the 188th report of the Law Commission it appears that the constitution of Commercial Divisions Courts were necessitated due to inordinate delays, and the need to ensure the fast disposal of high value commercial disputes to provide assurance to domestic and foreign investors. It has been aimed to give a clear assurance to investors that high value commercial suits would directly go before the Commercial Division/Commercial Courts/Commercial Appellate Courts, which would follow fast track procedures. 5.8. It has been aimed to give a clear assurance to investors that high value commercial suits would directly go before the Commercial Division/Commercial Courts/Commercial Appellate Courts, which would follow fast track procedures. 5.8. Thus, considering the aim, object and purpose of the enactment of the Commercial Courts Act noted hereinabove, the submission on behalf of the appellant that the dispute in the present suit, which as observed hereinabove, cannot be said to be the "commercial dispute" within the definition of Section 2(c) of the Commercial Courts Act, is required to be transferred to the Commercial Division, Vadodara cannot be accepted. If such a suit which is as such arising out of the probate proceedings and/or is dispute with the respect to the property are transferred to the Commercial Division/Commercial Court, there shall not be any difference between the Regular Civil Courts and the Commercial Division/Commercial Courts and therefore, if all such suits are transferred to the Commercial Division/Commercial Courts, the object and purpose of the establishment of the Commercial Division/Commercial Courts shall be frustrated. 5.9. Considering the aforesaid facts and circumstances and the nature of controversy in the suit and the reliefs sought in the Special Civil Suit No. 533/2011, it cannot be said that the dispute in the suit is a "commercial dispute" within the definition of section 2(c) of the Commercial Courts Act, the same is not required to be transferred to the Commercial Court, Vadodara. No error has been committed by the learned trial Court in dismissing the application Exh. 86 and refusing to transfer Special Civil Suit No. 533/2011 to the Commercial Court, Vadodara. 6. Consequently and for the reasons stated above, the present application submitted by the applicant herein-original defendant No. 1 to transfer the Special Civil Suit No. 533/2011 pending in the Court of learned 15th Additional Senior Civil Judge, Vadodara to the Commercial Court, Vadodara, in exercise of powers under sub-section (5) of Section 15 of the Commercial Courts Act is hereby rejected and consequently the present application is dismissed. In the facts and circumstances of the case, there shall be no order as to costs.