Arvind Processing Park Pvt. Ltd. v. Mayursinh Bhupathsinh Vaghela
2019-10-16
J.B.PARDIWALA, V.B.MAYANI
body2019
DigiLaw.ai
JUDGMENT : J.B. Pardiwala, J. 1. By this application under Article 227 of the Constitution of India, the applicant (original defendant) calls in question the legality and validity of the order passed by the Commercial Court, Ahmedabad, dated 28th August 2018 below Exhibit: 16 in the Commercial Civil Suit No. 107 of 2017. The application Exhibit: 16 came to be filed by the applicant herein on the ground that the Commercial Court has no jurisdiction to entertain the suit as the dispute between the parties is not commercial in nature as defined under Section 2(c) of the Commercial Courts Act, 2015 (for short, 'the Act, 2015') and for return of the plaint to the plaintiff under the provisions of Order VII Rule 10 of the Code of Civil Procedure, 1908 (for short, 'the C.P.C.') for being presented before the Court of competent jurisdiction. 2. In the plaint Exhibit: 16, the applicant raised an issue that the dispute between the parties is not one which could be termed as a commercial dispute within the meaning of Section 2(c)(xviii) of the Commercial Courts Act, 2015 (for short, 'the Act, 2015'). The application Exhibit: 16 came to be rejected by the Commercial Courts holding that the dispute could be said to be of a commercial nature, and therefore, there was no question of returning the plaint to be presented before any other appropriate Court. As the application Exhibit: 16 came to be rejected by the Commercial Court, the applicant is here before this Court with this application invoking the supervisory jurisdiction of this Court under Article 227 of the Constitution of India. 3. For the sake of convenience, the applicant herein shall be referred to as the 'defendant' and the respondent herein shall be referred to as the 'plaintiff'. 4. The facts giving rise to this application may be summarized as under. 4.1. The plaintiff instituted the Commercial Civil Suit No. 107 of 2017 for declaration and recovery of Rupees Seven Crore from the defendant. It appears that the defendant is a private limited company. The defendant waned to purchase few parcels of land. The plaintiff entered into a Memorandum of Understanding with the defendant for the purpose of facilitating the defendant to purchase land.
It appears that the defendant is a private limited company. The defendant waned to purchase few parcels of land. The plaintiff entered into a Memorandum of Understanding with the defendant for the purpose of facilitating the defendant to purchase land. In other words, it appears from the agreement that the plaintiff would negotiate with the farmers for the purchase of the land, and later, the defendant would purchase such parcels of land at the rate of Rupees Thirty Two Lakh per Bigha from the respective farmers. 4.2. It is the case of the plaintiff that he negotiated with different farmers for purchasing 60 Bighas of land falling within the revenue limits of village: Lihoda and village: Pahadiya of Taluka: Dehgam, District: Gandhinagar. 4.3. According to the plaintiff, initially, the defendant purchased the land from the farmers in accordance with the Memorandum of Understanding. But, later, the defendant started directly negotiating with the farmers and purchased the land at the rate less than what has been prescribed in the Memorandum of Understanding executed between the plaintiff and the defendant. 4.4. It is the case of the plaintiff that the unilateral act on the part of the defendant was in breach of the terms of Memorandum of Understanding, and by such unilateral decision, the defendant has suffered loss of about Rupees Seven Crore. 4.5. In such circumstances referred to above, the Commercial Civil Suit No. 107 of 2017 came be instituted by the plaintiff in the Commercial Court at Ahmedabad. 4.6. On the suit being instituted in the Commercial Court at Ahmedabad, the defendant preferred an application under Order VII Rule 10 of the C.P.C. for return of the plaint, which came to be rejected. In the application Exhibit: 16, the stance of the defendant is that the dispute between the parties is not one within the meaning of the Act, 2015, and in such circumstances, the Commercial Court at Ahmedabad would have no jurisdiction to adjudicate the suit under the provisions of the Act, 2015. 4.7. The application Exhibit: 16 came to be adjudicated by the Presiding Officer of the Commercial Court at Ahmedabad, and ultimately, by impugned order dated 28th August 2018, the application Exhibit: 16 came to be rejected. The Commercial Court, while rejecting the application Exhibit: 16, observed as under: "7 I have considered the submissions of the Learned Counsels for the parties and perused the record.
The Commercial Court, while rejecting the application Exhibit: 16, observed as under: "7 I have considered the submissions of the Learned Counsels for the parties and perused the record. It is settled proposition of law that to decide the application under Order VII Rule 10, the averments made in the plaintiff have to be looked into. Therefore, it would be just and expedient to narrate brief facts pleaded by the plaintiff in the plaint. It is the case of the plaintiff that the plaintiff is engaged in the business of sale and purchase of land. The defendant is a private limited company. The defendant required to purchase certain lands in the vicinity of Taluka Dehgam, District Gandhinagar. Therefore, the defendant approached the plaintiff to facilitate the defendant in purchasing the lands. In pursuance thereto, the plaintiff has contacted the land brokers and entered into agreement/bana chittchi with some of the farmers. Both the parties have also entered into MOU in respect of the transaction. The plaintiff had arranged the total admeasuring 60 Bighas of land falls within the revenue estate of village Lihoda and Pahadiya of Taluka Dehgam, District Gandhinagar. The defendant has purchased some of the lands through the plaintiff, but some of the lands which have been arranged by the plaintiff, had directly purchased at the rate of 32 lakh per Bigha, but the defendant has paid lesser price to the farmers. It is also the case of the plaintiff that as per MOU, the plaintiff is entitled to recover the differential amount from the defendant. Therefore, the plaintiff has instituted the present suit for recovery of Rs. 7 crores in respect of the differential amount of the land which was to be paid to the plaintiff, but actually paid to the farmers. Considering the averments made in the plaint, it clearly reveals that the dispute between the parties is not in respect of the agricultural land, but the dispute is regarding differential amount between the actual price of land paid by the defendant to the farmers or to be paid in accordance to the MOU. Thus, obviously, the dispute will not fall within the ambit of section 2(1)(c)(vii) of the Commercial Courts Act. 8 As far as clause xviii of the definition is concerned, the same are reproduced for the sake of reference. "Section 2(1)(c)(xviii): agreements for sale of goods or provision of services;" 9.
Thus, obviously, the dispute will not fall within the ambit of section 2(1)(c)(vii) of the Commercial Courts Act. 8 As far as clause xviii of the definition is concerned, the same are reproduced for the sake of reference. "Section 2(1)(c)(xviii): agreements for sale of goods or provision of services;" 9. Considering the totality of averments made in the plaint, clearly transpires that the plaintiff has rendered the services to the defendant in respect of purchasing the land. It is not necessary that the plaintiff must say in specific word that he has rendered the services, but the averments of the plaint clearly reveal that the plaintiff has facilitated the defendant for purchasing the land. He arranged the land, he negotiated with the farmers, he entered into agreement to sell/bana chitthi with some of the farmers. He also rendered the same services in respect of the change of user. Thus, all these acts/services rendered by the plaintiff, would fall within the ambit of the "provisions for services." 10 As far as the submission of the learned counsel for the defendant regarding definition of service under the Consumer Protection Act, is concerned, the said definition cannot be made applicable to the Commercial Courts Act in its strict sense. Thus, the contention of the learned counsel for the defendant that the services rendered by the plaintiff do not fall within the definition of Section 2(o) of the consumer Protection Act, 1986, is not sustainable. 11 As far as the judgment relied upon by the learned counsel for the defendant, in the case of Vasu Healthcare Private Limited (supra) is concerned, the issue in that suit was entirely different and in that suit, the plaintiff was seeking the specific performance of the agreement entered into between the parties in respect of the open land. In the present case, the dispute has arisen of the open land, but the dispute is not in respect of the open land, but the dispute has arisen out of the MOU entered into between the parties. Therefore, the subject matter of the case on hand and the subject matter in the case of Vasu Healthcare Private Limited (supra) is entirely different, and therefore, the ratio of that judgment is not applicable in the present facts and circumstances of the same.
Therefore, the subject matter of the case on hand and the subject matter in the case of Vasu Healthcare Private Limited (supra) is entirely different, and therefore, the ratio of that judgment is not applicable in the present facts and circumstances of the same. As far as the judgment relied upon by the learned counsel for the defendant, in the case of Ujwala Raje Gaekwar D/o Udaysinghrao Shivajirao Gaekwar and W/o Jay Vikram Shah (supra) is concerned, the same is also not applicable in the present facts and circumstances of the case, because in the said judgment, the issue was relating to the property arising out of the probate proceedings. Therefore, the ratio of that judgment is also not applicable in the present facts and circumstances of the case." 5. Being dissatisfied with the impugned order passed by the Commercial Court rejecting the application Exhibit: 16, the defendant is here before this Court with the present application. 6. Mr. Gohil, the learned counsel appearing for the defendant vehemently submitted that the Commercial Court committed a serious error in rejecting the application Exhibit: 16. According to the learned counsel, the dispute between the parties do not fall within the definition of Section 2(c) of the Act, 2015. It is submitted that Section 2(1)(c) (xviii) has no application worth the name in the case on hand. According to the learned counsel, it cannot be said that the dispute between the parties arose from an agreement for provision of services. 7. The learned counsel would further submit that the words "provision of services " under sub-clause (xviii) of clause (c) of Section 2(1) of the Act, 2015 should be read with the preceding words "sale of goods". In short, the argument of the learned counsel is that though (xviii) uses words of very wide connotation, yet a line would have to be drawn in a fair and just manner so as to exclude all types of services, as asserted by the plaintiff. It is submitted that if all the words used are given their widest meaning, all services would come within the purview of the definition. The learned counsel would submit that even service rendered by a servant purely in a personal or domestic matter or even in a casual way would fall within the definition.
It is submitted that if all the words used are given their widest meaning, all services would come within the purview of the definition. The learned counsel would submit that even service rendered by a servant purely in a personal or domestic matter or even in a casual way would fall within the definition. It is submitted that it cannot be suggested that in its wide sweep the word "service" is intended to include service howsoever rendered in whatsoever capacity and for whatsoever reason. 8. In the context of the aforesaid submission, the learned counsel has relied upon the doctrine of noscuntur a sociis. It means that a word or phrase is not to be construed as if it stood alone, but in the light of its surrounding. 9. In such circumstances referred to above, the learned counsel prays that there being merit in this application, the same may be allowed and the impugned order be quashed. He prays that the application Exhibit: 16 be allowed and the Court below may be ordered to return the plaint to the plaintiff to be presented before the appropriate Court of competent jurisdiction. 10. On the other hand, this application has been vehemently opposed by Mr. Trivedi the learned counsel appearing for the plaintiff. Mr. Riddhesh Trivedi, the learned counsel appearing for the plaintiff submitted that no error, not to speak of any error of law could be said to have been committed by the Commercial Court at Ahmedabad in passing the impugned order. According to Mr. Trivedi, having regard to the nature of the dispute between the parties and the terms of Memorandum of Understanding and other materials on record, the Commercial Court has the jurisdiction to adjudicate the suit, as the dispute between the parties is a commercial dispute within the meaning of sub-clause (xviii) of clause (c) of Section 2(1) of the Act, 2015 referred to above. Mr. Trivedi would submit that the maxim "noscuntur a sociis" has no application in the present case. He would submit that the maxim "noscuntur a sociis" is merely a rule of construction and it cannot prevail in cases where it is clear that the wider words have been deliberately used in order to make the scope of the defined word correspondingly wider. 11. In such circumstances referred to above, Mr.
He would submit that the maxim "noscuntur a sociis" is merely a rule of construction and it cannot prevail in cases where it is clear that the wider words have been deliberately used in order to make the scope of the defined word correspondingly wider. 11. In such circumstances referred to above, Mr. Trivedi prays that there being no merit in this application, the same be rejected. 12. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is whether the Court below committed any error in passing the impugned order. THE COMMERCIAL COURTS ACT: 13. The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Ordinance, 2015 was promulgated on 23rd October, 2015. 14. Subsequently, the Commercial Courts Act, 2015 was enacted on 31st December, 2015 and was deemed to have come into force on 23rd October, 2015. 15. The Commercial Courts Act came to be enacted pursuant to the recommendations made by the Law Commission of India in its 188th Report ("the 188 th Report") and 253rd Report ("the 253 rd Report"). 16 The purpose for enacting the Commercial Courts Act finds place in the 188th Report wherein the Law Commission recorded: "The purpose of the proposals in this report is to expedite commercial cases of high pecuniary value and create confidence in the commercial circles, within India and outside, that our Courts are quite fast, if not faster than Courts elsewhere. The overall benefits that may accrue to the economy of the country as a whole by the establishment of the Commercial Division will, in our opinion, be in several hundreds of crores of Rupees. In view of the present era of globalisation and liberalization, investment in India, both domestic and foreign is bound to increase tremendously once the investors of the world know with certainty and assurance that the Commercial Division in the High Courts in India will dispose of the matters within a maximum period of two years which is comparable to the period of pendency in USA or UK. The expense involved in establishment of the Commercial Division will, in our view, be a small fraction of the overall benefits that will accrue to the economy of the country.
The expense involved in establishment of the Commercial Division will, in our view, be a small fraction of the overall benefits that will accrue to the economy of the country. Investors will make freely investment in business ventures without fear of blocking their substantial business capital in undue prolonged litigation in courts. The proposed changes are likely to render the overall market friendly change in investment in business scenario." 17. As can be seen from the above quoted passage, in the 188 th Report, way back in 2003, it had been recognised that in order to inspire confidence of foreign as well as domestic investors in India, there was a need for Parliament to evolve a mechanism for expeditious disposal of high value commercial disputes in order to bring India's judiciary at par with other developed economies such as the United States of America, the United Kingdom, Singapore, etc. 18. The Law Commission of India, in its 253rd Report stated that there were as on 31st December, 2013, more than 32,656 civil disputes pending in the five Courts having ordinary original jurisdiction viz. the High Courts of Bombay, Delhi, Madras, Calcutta and Himachal Pradesh, out of which more than half were commercial disputes. The Law Commission feared that the high pendency of cases would deter investors from investing in India and suggested the following in response to this problem: "4.2 The Commercial Courts, the Commercial Divisions and the Commercial Appellate Divisions of High Courts that have been recommended are intended to serve as a pilot project in the larger goal of reforming the civil justice system in India. The goal is to ensure that cases are disposed of expeditiously, fairly and at reasonable cost to the litigant. Not only does this benefit the litigant, other potential litigants (especially those engaged in trade and commerce) are also advantaged by the reduction in backlog caused by the quick resolution of commercial disputes. In turn, this will further economic growth, increase foreign investment, and make India an attractive place to do business. Further, it also benefits the economy as a whole given that a robust dispute resolution mechanism is a sine qua non for the all-round development of an economy." 19.
In turn, this will further economic growth, increase foreign investment, and make India an attractive place to do business. Further, it also benefits the economy as a whole given that a robust dispute resolution mechanism is a sine qua non for the all-round development of an economy." 19. The primary aim and object of the Commercial Courts Act, as can be discerned from its Statement of Objects and Reasons, was to provide speedy disposal of high value commercial disputes in order to reduce the pendency of cases. The relevant portion of the Statement of Objects and Reasons reads: "The proposal to provide for speedy disposal of high value commercial disputes has been under consideration of the Government for quite some time. The high value commercial disputes involve complex facts and questions of law. Therefore, there is a need to provide for an independent mechanism for their early resolution. Early resolution of commercial disputes shall create a positive image to the investor world about the independent and responsive Indian legal system." 20. A holistic reading of the Statement of Objects and Reasons for the Commercial Courts Act as also the Law Commission's 188th Report and the 253rd Report, throw immense light on why the Commercial Courts Act was in fact enacted. The Parliament sought to revamp the commercial dispute resolution mechanism system by separating it from other civil disputes in order to effectuate its primary aim i.e. to ensure the speedy disposal of commercial disputes in India. 21. The Commercial Courts Act establishes Commercial Courts at the District level and Commercial Divisions in the various High Courts (including those having ordinary original civil jurisdiction) across India, to deal with Commercial Disputes of a Specified Value, as may be notified by the Central Government. The Specified Value, as defined by the Commercial Courts Act, stood at Rupees One Crore. Therefore, the Commercial Courts Act originally contemplated that only those matters wherein the subject matter of a commercial dispute exceeded Rupees One Crore would fall within the purview of the Commercial Courts Act. However, the Commercial Courts Act came to be amended in 2018 by the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Act, 2018. Amongst other amendments, the Specified Value stood reduced to Rupees Three Lakhs as against the earlier Rupees One Crore. 22.
However, the Commercial Courts Act came to be amended in 2018 by the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Act, 2018. Amongst other amendments, the Specified Value stood reduced to Rupees Three Lakhs as against the earlier Rupees One Crore. 22. In so far as the Commercial Courts Act is concerned, there can be no manner of doubt that the paramount intent of the legislature was to reduce delay in commercial cases and improve our country's image from the perspective of ease of doing business in India. This intent stands further reemphasized by Section 17 of the Commercial Courts Act, which reads as under: "17. Collection and disclosure of data by Commercial Courts, Commercial Divisions and Commercial Appellate Divisions. The statistical data regarding the number of suits, applications, appeals or writ petitions filed before the Commercial Court, Commercial Appellate Courts, Commercial Division, or Commercial Appellate Division, as the case may be, the pendency of such cases, the status of each case, and the number of cases disposed of, shall be maintained and updated every month by each Commercial Courts, Commercial Appellate Courts, Commercial Division, Commercial Appellate Division and shall be published on the website of the relevant High Court." 23. In line with Section 17, the Central Government has also published Commercial Courts (Statistical Data) Rules, 2018. Under Rule 3 of these rules, every Commercial Court, Commercial Appellate Court, Commercial Division and Commercial Appellate Division of all High Courts in India is required to publish statistical data, as required by Section 17 of the Act, by the tenth day of every month in the following manner on the concerned High Court's website: 24. The aforesaid Section 17 and Commercial Courts (Statistical Data) Rules, 2018 provide for a telling argument as to the intent, object and purpose of the Commercial Courts Act. These enactments are important instances as to how the legislature continues to monitor the application of the Commercial Courts Act. As per the statistical data published by this Court for the month of October, 2018, there were 3,220 cases pending before the Commercial Division of this High Court. 25. The consideration required in the instant case is as to whether the transaction between the parties herein which is the subject matter of the suit could be considered as a "commercial dispute" so as to enable the Commercial Court to entertain the suit.
25. The consideration required in the instant case is as to whether the transaction between the parties herein which is the subject matter of the suit could be considered as a "commercial dispute" so as to enable the Commercial Court to entertain the suit. In that regard, it is necessary to take note of Section 2(1)(c)(xviii) of the Act, 2015. The said provision is to the extent relevant is extracted hereinbelow for reference: "Section 2(1) In this Act, unless the context otherwise requires,- (a) *** (b) *** (c) "commercial dispute" means a dispute arising out of- (i) *** (ii) *** (iii)*** (iv) *** (v) *** (vi) *** (vii) *** (viii) *** (ix) *** (x) *** (xi) *** (xii) *** (xiii) *** (xiv) *** (xv) *** (xvi) *** (xvii) *** (xviii) agreements for sale of goods or provision of services;" (xix) *** (xx) *** (xxi) *** (xxii) ***" 26. From a perusal of the provision relied upon by the learned counsel appearing for the plaintiff, it is noticed that the dispute arising out of an agreement for sale of goods or provision of services will qualify to be a commercial dispute to be tried by the Commercial Courts. The question, therefore, would be that in the instant case, though the parties have entered into a Memorandum of Understanding reduced into writing duly signed whether such agreement in writing could be termed as one relating to provision of services falling within clause referred to above so as to confer the jurisdiction upon the Commercial Court to adjudicate the suit. 27. At this stage, we may refer to a decision of the Supreme Court in the case of Ambalal Sarabhai Enterprises Ltd. vs. K.S. Infraspace LLP and another [Civil Appeal No. 7843 of 2019 decided on 4th October 2019], wherein His Lordship Justice A.S. Bopanna has observed in paras 13 and 14 as under: "13. The learned senior advocate for the appellant would however, contend that a strict interpretation as in the case of taxing statutes would not be appropriate in the instant case where the issue relates to jurisdiction.
The learned senior advocate for the appellant would however, contend that a strict interpretation as in the case of taxing statutes would not be appropriate in the instant case where the issue relates to jurisdiction. In that regard, the learned senior advocate has referred to 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. Hence, he contends that a purposive interpretation be made. It is contended that a wider purport and meaning is to be assigned while entertaining the suit and considering the dispute to be a commercial dispute. Having taken note of the submission we feel that 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 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 seeking early disposal would only clog the system and block the way for the genuine commercial disputes which may have to be entertained by the Commercial Courts as intended by the law makers. In commercial disputes as defined a special procedure is provided for a class of litigation and a strict procedure will have to be followed to entertain only that class of litigation in that jurisdiction. If the same is strictly interpreted it is not as if those excluded will be non-suited without any remedy. The excluded class of litigation will in any event be entertained in the ordinary Civil Courts wherein the remedy has always existed. 14. In that view it is also necessary to carefully examine and entertain only disputes which actually answers the definition "commercial disputes" as provided under the Act. In the instant case, as already taken note 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.
In the instant case, as already taken note 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. Further the very 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. Therefore, if all these aspects are kept in view, we are of the opinion that in the present facts the High Court was justified in its conclusion arrived through the order dated 01.03.2019 impugned herein. The Commercial Court shall therefore return the plaint indicating a date for its presentation before the Court having jurisdiction." Her Ladyship R. Banumathi, J. in her separate judgement, though concurring with Justice Bopanna, has observed as under: "20. Various provisions of the Act namely Case Management Hearing and other provisions makes the court to adopt a pro-active approach in resolving the commercial dispute. A new approach for carrying out case management and strict guidelines for completion of the process has been introduced so that the adjudicatory process is not delayed. I have referred to the various provisions of the Act and the Schedule bringing in amendments brought to the Civil Procedure Code to deal with the commercial disputes, only to highlight that the trial of the commercial dispute suits is put on fast track for disposal of the suits expeditiously. Various provisions of the Act referred to above and the amendments inserted to Civil Procedure Code by the Schedule is to ensure speedy resolution of the commercial disputes in a time bound manner. The intent of the legislature seems to be to have a procedure which expedites the disposal of commercial disputes and thus creates a positive environment for investment and development and make India an attractive place to do business. 21.
The intent of the legislature seems to be to have a procedure which expedites the disposal of commercial disputes and thus creates a positive environment for investment and development and make India an attractive place to do business. 21. A perusal of the Statement of Objects and Reasons of the Commercial Courts Act, 2015 and the various amendments to Civil Procedure Code and insertion of new rules to the Code applicable to suits of commercial disputes show that it has been enacted for the purpose of providing an early disposal of high value commercial disputes. A purposive interpretation of the Objects and Reasons and various amendments to Civil Procedure Code leaves no room for doubt that the provisions of the Act require to be strictly construed. If the provisions are given a liberal interpretation, the object behind constitution of Commercial Division of Courts, viz. putting the matter on fast track and speedy resolution of commercial disputes, will be defeated. If we take a closer look at the Statement of Objects and Reasons, words such as 'early' and 'speedy' have been incorporated and reiterated. The object shall be fulfilled only if the provisions of the Act are interpreted in a narrow sense and not hampered by the usual procedural delays plaguing our traditional legal system. 22. A dispute relating to immovable property per se may not be a commercial dispute. But it becomes a commercial dispute, if it falls under sub-clause (vii) of Section 2(1)(c) of the Act viz. "the agreements relating to immovable property used exclusively in trade or commerce". The words "used exclusively in trade or commerce" are to be interpreted purposefully. The word "used" denotes "actually used" and it cannot be either "ready for use" or "likely to be used" or "to be used". It should be "actually used". Such a wide interpretation would defeat the objects of the Act and the fast tracking procedure discussed above." "27. The object and purpose of the 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 litigants.
The object and purpose of the 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 litigants. Keeping in view the object and purpose of the establishment of the Commercial Courts and fast tracking procedure provided under the Act, the statutory provisions of the Act and the words incorporated thereon are to be meaningfully interpreted for quick disposal of commercial litigations so as to benefit the litigants especially those who are engaged in trade and commerce which in turn will further economic growth of the country. On the above reasonings, I agree with the conclusion arrived at by my esteemed brother Justice A.S. Bopanna." 28. The following is discernible from the aforesaid decision of the Supreme Court: [1] The Act, 2015 has been enacted for the purpose of providing an early disposal of high value commercial disputes. [2] The provisions of the Act should be strictly construed. If the provisions are given a liberal interpretation, the object behind the constitution of the commercial division of Courts namely putting the matter on fast track and speedy resolution of the commercial dispute would be defeated. [3] A dispute relating to the immovable property per se may not be a commercial dispute. But it may become a commercial dispute if it falls under any of the sub-clauses of Section 2(1)(c) of the Act. [4] The purpose for which the Act of 2015 has been enacted would be defeated if every other suit merely because it is filed before the Commercial Court is entertained. 29. The argument pressed into service by the learned counsel appearing for the applicant is that the word "or" must be read ejusdem generis or analogous to the preceding specific words "agreement for sale of goods", and therefore, the words "provision of services" should be read only in context with the sale of goods. The argument proceeds on the footing that if provision of services is to be interpreted as any service, then the same may lead to an incongruous situation.
The argument proceeds on the footing that if provision of services is to be interpreted as any service, then the same may lead to an incongruous situation. In this regard, the learned counsel has placed strong reliance on the decision of the Supreme Court in the case of State of Bombay vs. Hospital Mazdoor Sabha reported in 1960 AIR (SC) 610, more particularly, para 12, which reads thus: "It is clear, however, that though S. 2(j) uses words of every wide denotation, a line would have to be drawn in a fair and jut manner so as to exclude some callings, services or undertakings. If all the words used are given their widest meaning, all services and all callings would come within the purview of the definition; even service rendered by a servant purely in a personal or domestic matter or even in a casual way would fall within the definition. It is not and cannot be suggested that in its wide sweep the word "service" is intended to include service howsoever rendered in whatsoever capacity and for whatsoever reason. We must, therefore, consider where the line should be drawn and what limitations can and should be reasonably implied in interpreting the whole words used in S. 2(j); and that no doubt is a somewhat difficult problem to decide." 30. According to Maxwell on the interpretation of Statutes, Tenth Edition, which runs thus: "But the general word which follows particular and specified words of the same nature as itself takes its meaning from them, and is presumed to be restricted to the same genus as those words. In other words, it is to be read as comprehending only things of the same kind as those designated by them, unless, of course, there be something to show that a wider sense was intended, as, for instance, as proviso specifically excepting certain classes clearly not within the suggested genus." 31. In the same book at page 338, however, it is mentioned that: "Unless there is a genus or category there is no room for the application of the ejusdem generis doctrine." 32. There is no doubt that the word "or" is a disjunctive that marks an alternative which generally corresponds to the word "either".
In the same book at page 338, however, it is mentioned that: "Unless there is a genus or category there is no room for the application of the ejusdem generis doctrine." 32. There is no doubt that the word "or" is a disjunctive that marks an alternative which generally corresponds to the word "either". Where general words follow the designation of particular things, or classes of persons or subjects, the general words will usually be construed to include only those persons or things of the same class or general nature as those specifically enumerated. This is the rule known as "ejusdem generis ", and it is founded upon the idea that if the legislature intended the general words to be used in an unrestricted sense, the particular classes would not have been mentioned. It is, specially applicable to the penal statutes. But under no circumstances, and regardless of the type of the statute involved, must the rule be used where the language of the statute under consideration is plain and there is no uncertainty. Its use is permissible only as an aid to the Court in its attempt to ascertain the intent of the law makers. Nor will it be proper for the Court to follow the rule where to do so will defeat or impair the plain purpose of the legislature. It cannot be employed to restrict the operation of an Act within narrower limits than was intended by the lawmakers. Nor is the rule to be applied where the specific words enumerate subjects which greatly differ from each other, or where the specific words exhaust all the objects of the class mentioned. Under such circumstances, the general words must have a different meaning from that of the specific words or be meaningless. 33. It should be remembered that the rule of construction, which is called the ejusdem generis doctrine, or sometimes the doctrine 'noscitur a sociis" which is that, where general words immediately follow or are closely associated with the specific words, their meaning must be limited by reference to the 'preceding words' is one which ought to be applied with great caution; because it implies a departure from the natural meaning or words, in order to give them a meaning which may or may not have been the intention of the legislature: Smelting Co. of Australia, Ltd. v. Commr.
of Australia, Ltd. v. Commr. of Inland Revenue, (1897) 1 QB 175 at p. 182 (A). 34. The principle, which should govern such a case, in our opinion, has been clearly set out in Randall on Cardinal Rules of Legal Interpretation, Third Edition, at page 355. They are in these words: "General words in a statute are prima facie to be taken in their usual sense. General words following the specific words in a statute are prima facie to be taken in their general sense unless the reasonable interpretation of the statute requires them to be used in a sense limited to things ejusdem generis with those which have been specifically mentioned before. If the particular words exhaust the whole genus the general word must refer to some larger genus." 35. One of the safest guides to the construction of such sweeping general words is to find out the intention of the legislature in using such general words, when it is difficult to apply them in their literal sense and to hold them to be limited to alia similia. As observed by Hawkins, J., in Hawke v. Dunn, (1897) 1 QB 579, at p. 586 (B): "I, of course, recognise the usual rule observed in the construction of Acts of Parliament, that general, following specific, words should be limited to things ejusdem generis with those before enumerated; but this rule of construction must be controlled by another equally general one, that Acts of Parliament ought, like wills or other documents, to be construed so as to carry out the object sought to be accomplished by them so far as it can be collected from the language employed." 36. The question when the rule of ejusdem generis is to be applied with reference to the words "Or otherwise" came up for determination before the Supreme Court in Lila Vati Bai v. State of Bombay, (S) AIR 1957 SC 521 (C). Their Lordships were considering the constitutionality of the Bombay Land Requisition Act (Act XXXIII), 1948.
The question when the rule of ejusdem generis is to be applied with reference to the words "Or otherwise" came up for determination before the Supreme Court in Lila Vati Bai v. State of Bombay, (S) AIR 1957 SC 521 (C). Their Lordships were considering the constitutionality of the Bombay Land Requisition Act (Act XXXIII), 1948. Explanation (a) to Section 6 of the Act contained the words (omitting other words not necessary) "premises which are in the occupation of the landlord, the tenant or the sub-tenant, as the case may be, shall be deemed to become vacant when such landlord ceases to be in occupation...upon termination of his tenancy, eviction, or assignment or transfer in any other manner of his interest in the premises 'or otherwise' (underlined here in ' ') by me)". The argument presented there was that in that case admittedly there was no termination, eviction, assignment or transfer, and that the words "or otherwise" must be construed as ejusdem generis with the words immediately preceding them. This argument, which was pressed as an off-shoot of the main argument, was rejected by their Lordships. In delivering the unanimous opinion of the Court his Lordship Sinha, J., observed: "In the second place, the rule of ejusdem generis sought to be pressed in aid of the petitioner can possibly have no application. The Legislature has been cautious and thorough-going, enough to bar all avenues of escape by using the words "or otherwise". Those words are not words of limitation but of extension so as to cover all possible ways in which a vacancy may occur. Generally speaking, a tenant's occupation of his premises ceases when his tenancy is terminated by acts of parties or by operation of law or by eviction by the landlord or by assignment or transfer of the tenant's interest. But the Legislature, when it used the words "or otherwise" apparently intended to cover other cases which may not come within the meaning of the preceding clauses, for example, a case where the tenant's occupation has ceased as a result of trespass by a third party. The Legislature, in our opinion, intended to cover all possible cases of vacancy occurring due to any reasons whatsoever. Hence, far from using those words ejusdem generis with the preceding clauses of the explanation, the Legislature used those words in an all inclusive sense.
The Legislature, in our opinion, intended to cover all possible cases of vacancy occurring due to any reasons whatsoever. Hence, far from using those words ejusdem generis with the preceding clauses of the explanation, the Legislature used those words in an all inclusive sense. No decided case of any Court, holding that the words "or otherwise" have ever been used in the sense contended for on behalf of the petitioner, has been brought to our notice." His Lordship proceeding further referred, by way of illustration, the case of Skinner and Co. v. Shew and Co. (1893) 1 Ch 413 (D), and observed: "The rule of ejusdem generis is intended to be applied where general words have been used following particular and specific words of the same nature on the established rule of construction that the Legislature presumed to use the general words in a restricted sense, that is to say, as belonging to the same genus as the particular and specific words. Such a restricted meaning has to be given to words of general import only where the context of the whole scheme of legislation requires it. But where the context and the object and mischief of the enactment do not require such restricted meaning to be attached to words of general import, it becomes the duty of the Courts to give these words their plain and ordinary meaning. In our opinion, in the context of the object and the mischief of the enactment there is no room for the application of the rule of ejusdem generis. Hence it follows that the vacancy as declared by the order impugned in this case, even though it may not be covered by the specific words used, is certainly covered by the legal import of the words "or otherwise"." 37. In the present case, there is no doubt that if the ejusdem generis doctrine is applied, it would imply a departure from the natural meaning of words in order to give them a meaning which may or may not have been the intention of the Legislature. 38. It is settled law that the word "or" can be read as "and" and the word "and" can be read as "or" where it is necessary to do so in order to give effect to the intention of the legislature. The Supreme Court in Mazagaon Dock Ltd. v. Commr.
38. It is settled law that the word "or" can be read as "and" and the word "and" can be read as "or" where it is necessary to do so in order to give effect to the intention of the legislature. The Supreme Court in Mazagaon Dock Ltd. v. Commr. of Income-tax and Excess Profits Tax, AIR 1958 SC 861 laid down the proposition that the word "or" has to be read as "and" to give effect to the intention of the legislature. A Full Bench of the Madras High Court has held in P.V. Rayarappa v. P. Kelappa, AIR 1918 Mad 1026 (FB) that the word 'and' can be read as 'or' where it is necessary to do so in order to carry out the obvious intention of the legislature. 39. Reed Dickerson in his book "The Interpretation and Application of Statutes" (1975), at page 95 has said: "On the necessity of legislative purpose to legislative interpretation, Llewellyn has said, "If a statute is to make sense, it must be read in the light of some assumed purpose. A statute merely declaring a rule, with no purpose or objective, is nonsense. Hart and Sacks have inquired whether it is not true that "The meaning of a statute is never plain unless it fits with some intelligible purpose". 40. Reed Dickerson at page 105, while dealing with the importance of context, said: "The essence of a language is to reflect, express, and perhaps even affect the conceptual matrix of established ideas and values that identifies the culture to which it belongs. For this reason, language has been called a "conceptual map of human experience." As with any map, it has little or no significance apart from what it mirrors." 41. It has been said by some one that words are partly known by their backgrounds, their past, like men, and like men they do not have their full significance when standing alone, but are known by the company they keep. Full effect of the word is felt only when the context in which it has occurred is not ignored. 42. In M. Pentiah v. Veeramallappa Muddala [ AIR 1961 SC 1107 at p. 1111], the Supreme Court said that the Courts strongly lean against a construction which reduces the statute to a futility.
Full effect of the word is felt only when the context in which it has occurred is not ignored. 42. In M. Pentiah v. Veeramallappa Muddala [ AIR 1961 SC 1107 at p. 1111], the Supreme Court said that the Courts strongly lean against a construction which reduces the statute to a futility. A statute must be construed in a manner which makes it effective and operative on the principle expressed in the maxim ut res magis valeat quam pereat (See CIT v. Sardar Teja Singh, AIR 1959 SC 352 ). 43. Lord Denning dealing with this aspect of the matter in Fawcett Properties v. Buckingham County Council, (1960) 3 All ER 503, observed: "But when a statute has some meaning even though it is obscure, or several meanings even though it is little to choose between them, the Courts have to say what meaning the statute to bear, rather than reject it as a nullity." 44. Cross in his book on Statutory Interpretation, at p. 74, dealing with the rule of interpretation quoted the observations of Lord Reid's speech in Pinner v. Everett, (1969) 3 All ER 257 thus: "In determining the meaning of any word or phrase in a statute the first question to ask always is what is the natural or ordinary meaning of that word or phrase in its context in the statute. It is only when that meaning leads to some result which cannot reasonably be "supposed to have been the intention of the legislature that it is proper to look for some other permissible meaning of the word or phrase." 45. From what we have said above, it follows that if the meaning of the word sought to be given stultifies the purpose of the statute, or produces absurdity or contradiction, in that event the Court must take into account the purpose and the context of the provisions of the Act while interpreting the same. 46. At this stage, we may look into relevant averments made in the plaint., which reads thus: "(3) The defendant of this case is mostly connected with the business of clothe manufacturing having old and prominent brand. Its main company is famous world wide named Arvind Mills Limited. Its main business is clothe manufacturing. The other sub-companies and Subsidiary Companies of this Company have been founded, and such companies have also been registered under The Companies Act.
Its main company is famous world wide named Arvind Mills Limited. Its main business is clothe manufacturing. The other sub-companies and Subsidiary Companies of this Company have been founded, and such companies have also been registered under The Companies Act. The defendant Company of this case is one of its sister companies. As the requirement of the land arose for establishing the Manufacturing Unit of the new company, and as the Government of Gujarat converted the stretch of the road situated in the land of Lihoda/Pahadiya village and leading towards Rakhiyal into Industrial Zone or happened to be converted as such, and as the defendant of this case was in requirement of the land in bulk, they met the different brokers Bhavin Amin and Dhanabhai Maharaj to purchase the land in the name of the Company. The legal representative of the defendant of this case Mr. Jayeshbhai Thakkar and K.B. Makadiya met us along with other persons and discussed with us-Plaintiff about the requirement of the land. They discussed with us as to what is the rate of land per bigha in the said stretch of land. At that time, we-the Plaintiff told that, the rate differs with the land. The land near the road costs more and the interior land costs less. We had such type of discussion. We had also oral discussions that, the brokerage will be 2% and the terms of the brokerage. The Representative of the defendant company Mr. K.B. Makadiya and Jayesh Thakkar and other persons told us that, the Company needed about 60 bigha of land i.e. .... Sq. Mt. land. The company is planning to construct a large scale clothe mill, which will provide opportunity of employment to the residents in vicinity. The entire group is Kasturbhai Bhailalbhai Group which is having vast reputation. The surrounding villages and residents will be financially and socially uplifted by this company. He donates a lot. School/hospital/religious institutions will be created and in future, both villages will get fame at both Gujarat and India level. Having been impressed by his such beautiful dialogues, he put proposal before us to purchase the land at the rate of Rs. 32,00,000/- per bigha. All the aforesaid land will be purchased through Plaintiff. They will not be purchased directly from farmers.
Having been impressed by his such beautiful dialogues, he put proposal before us to purchase the land at the rate of Rs. 32,00,000/- per bigha. All the aforesaid land will be purchased through Plaintiff. They will not be purchased directly from farmers. Entire consideration amount decided between us will be paid at the time of execution of sale deed and only then the Respondent will demand possession of relevant land from us and Plaintiff will have to facilitate transfer of possession of the land from relevant farmers. In this way, an agreement came to be executed between Plaintiff and defendant. Aforesaid agreement is referred to as M.O.U. in the said suit. Aforesaid agreement is executed on 05/12/2013 wherein Plaintiff has put signature. Defendant company's representative has stated that I have put signature afterwards. Before giving written form to such talks, terms and conditions of M.O.U., 15-20 meetings were held. I- Plaintiff talked, held meeting with different representatives of defendant. In this way, as Plaintiff/defendant met on daily basis, an atmosphere of trust was created, and therefore, I put trust on representatives of defendant company; and he stated in the M.O.U. that he would put signature and submit it. By putting such faith and trust, I put signature in aforesaid M.O.U. and gave it to defendant to obtain signature of its officer in the M.O.U. But, signature of defendant has not been obtained on aforesaid M.O.U. till date. In this way, I have been cheated and subjected to criminal breach of trust. I have produced the M.O.U. before the Court wherein signature of Representative is not put. But, the agreement on stamp paper has been signed by representative of the company. I declare the same before the Court. (4) Upon execution of such agreement, the plaintiff started to purchase the agricultural lands for the defendant company and restricted the land owners by executing agreement. Thus, I had transferred the lands purchased by me in favour of the respondent company by Registered Sale Deeds and also handed over peaceful, actual as well as symbolic possessions of the lands.
(4) Upon execution of such agreement, the plaintiff started to purchase the agricultural lands for the defendant company and restricted the land owners by executing agreement. Thus, I had transferred the lands purchased by me in favour of the respondent company by Registered Sale Deeds and also handed over peaceful, actual as well as symbolic possessions of the lands. (5) Thus, I had completed formalities to execute Sale Deed of the land from the farmers and though the farmers had executed Registered Sale Deeds and handed over the possession relying on the respondent company, the said defendant company breached conditions of the M.O.U. and has not made full payment of sale consideration of the sold lands to the farmers. Besides, the company has not paid the sale price of the land as decided to the plaintiff. Thus, the defendant company has breached conditions of the M.O.U. and committed breach and cheating with the plaintiff. (6) The details as to which lands are purchased by the defendant through us, from whom it was purchased, in what consideration it was purchased, how many rupees were paid to the farmers, how much amount has been paid to the plaintiff as per memorandum executed by the respondent and how much is due are given hereunder. 47. We shall now look into the Memorandum of Understanding executed between the parties dated 5th December 2013. The relevant clause reads thus: "1.1 Party of One Part agrees to arrange for sale of lands from land owners as per the details given in Annexure A in favour of APPL or its nominees in the manner and on the terms and conditions recorded herein. 1.2 The scope of this MOU is till the lands are procured for APPL, and are duly properly and legally vested in favour of APPL, or its nominees and entered in its/their name in the Government records. 2 MANNER OF ACQUISITION OF LANDS: 2.1 Party of One Part shall procure Banachithhi/Banakhats of APPL from the land owners as per model draft of the 'Banachithhi/Banakhats that may be prepared by APPL with such terms and conditions as may be agreed and generally acceptable to the land owners and APPL. This Banachithhi will be obtained by the Party of One Part immediately for 56.43 Bighas of lands.
This Banachithhi will be obtained by the Party of One Part immediately for 56.43 Bighas of lands. All payment/s from time to time to land owners, other costs, charges and expenses till the completion of sale in favour of APPL or its nominee shall be paid and borne by APPL. The payment terms as mentioned in the Banachithhi shall be observed by the parties. 2.2 Subject to Clause 2.1, Original of such Banachithhi/Banakhats obtained by the Party of One Part from the land owners shall be handed over to APPL not later than 10 days of execution of this MoU. 2.3 APPL shall not be required to pay, contribute or spend any amount during the process; and progress of the transaction to any person or on any account whatsoever. 2.4 APPL shall carry out due diligence on the title with respect to the lands through their Solicitor that may be appointed for the purpose by them. 2.5 Party of One Part shall be required to clear all irregularities and defects-in-title and shall duly and satisfactorily answer all questions on title as may be raised by APPL and/or its Solicitors in respect of entire lands. 2.6 Party of One Part and APPL shall in cooperation with each other obtain appropriate permissions as may be required for legal and proper transfer of the lands in favour of APPL or its nominees under. the applicable provisions of law as mentioned in respective Banachithhi/Banakhats. 2.7 Sale Deed shall be completed by execution and registration of Deeds of Conveyance supported by Declaration-Cum-Indemnity on the title, and such other documents, papers and writings as may be prepared by the Solicitors from the tend owners. 3 SCOPE OF WORK OF PARTY OF ONE PART: 3.1 Party of One Part shall be responsible on signing of this MoU to immediately procure Banachithhis/Banakhats through his family, friends and associates who owns lend and for all matters and things and legal documentation work till the Lands are duly, properly and absolutely vested in favour of APPL and entered in its name/in the nominee of APPL' in the revenue records.
3.2 Party of One Part shall be responsible on signing of this MoU to ensure to procure Banachithhts/Banakhats from other land owners who own land of the area not less than 56.43 Bighas and for all matters and things and legal documentation work till the lands are duly, properly and absolutely vested in favour of APPL, and entered in its name/in the nominee of APPL in the revenue records. 3.3 Party of One Part shall be responsible for payment of premium for new tenure land for or at the time of conversion of agriculture land into non-agriculture land for industrial use by APPL or its nominees. 4. SCOPE OF WORK OF APPL: 4.1 To make payments against completion of transaction under the terms hereof. 4.2 To co operate in the matters relating to this MOU for completion of sale. 4.3 To get the sale completed in its favour as soon as appropriate permissions as may be required are obtained. clear and marketable titles are made out by Party of One Part and it is legal and proper to complete the sale. 5. THE SCHEDULE OF WORK; 5.1 The Banachithhis/Banakhats from the Owners for minimum land of 56.43 Bighas of land as one contiguous land and same shall be obtained immediately. In case Banchithhis/Banakhats for balance lands are not procured by Party of One Part within the time frame prescribed herein. APPL reserves the right to go ahead with Banachithhis/Banakhats procured for lands or claim refund of the amount paid in this regards. 5.2 Due Diligence on title of such lands shall be initiated by APPL 7 days thereafter with usual public notice to be given and by taking necessary search with the revenue and sub registry records, and Solicitor shall raise their special or general requisitions on title. Such special or general requisitions on title shall be answered duly and satisfactorily within a period of fifteen days thereafter. 6 REPRESENTATION AND WARRANTIES WAND_RAMADIES FOR BREACH: 6.1 Party of One Part hereby makes the following representations and warranties to APPL relying upon which the APPL has entered into this Agreement vis a vis Banachithhi proposed to be executed with land owners. 6.2 Land owners have prima facie clear and marketable title to the Land and have right, full power and absolute authority and capacity under law to enter into Banachithhis for themselves and on behalf of others.
6.2 Land owners have prima facie clear and marketable title to the Land and have right, full power and absolute authority and capacity under law to enter into Banachithhis for themselves and on behalf of others. 6.3 Land owners are in peaceful possession and enjoyment of the land and that there are no tenants, occupants or squatters on the land. 6.4 The (and is free from all encumbrances and there is no action or inaction which could render the transactions contemplated by this Agreement as void/unenforceable or untenable under law save and except certain mortgages as described in respective Extract of 7/12 of concern Survey Nos. 6.5 Land is not covered/affected by any reservation or any government order adversely affecting the land. 6.6 Party of One Part shall cause the agriculturists/owners of lands, to transfer the said lands as required and in accordance with respective Banachithhi 6.7 Land owners have net entered into any agreement(s) for sale or alienation in any manner whatsoever or any other arrangement(s) for Land with any other Person(s), nor have they issued any power(s) of attorney or any other authority, oral or otherwise empowering any other Person(s) to deal with the Land in any manner howsoever. 6.8 Land owners free and unhindered access to and from the Land and there is no pending or threatened litigation including without limitation insolvency, attachment or other forms of distress with respect to the Land or against the them which may adversely effect the rights of the APPL contained in this Agreement. 6.9 In the event Party of One Part commits any breach of the representations and warranties, obligation and/or any other terms and conditions of this MoU, APPL shall be entitled extend the time to enable them to procure lands at its discretion and term of this MoU as well. In addition to that APPL shall also be entitled to enforce specific performance of this MoU and recover any payment made thereof, cost expenses and losses incurred them as a consequence of such breach by Party of One Part from them. The remedies specified herein are in addition to remedies available generally or under any applicable law, contract or equity." 48. The issue, whether the dispute in question is a commercial dispute, is required to be judged from the pleadings and the documents produced.
The remedies specified herein are in addition to remedies available generally or under any applicable law, contract or equity." 48. The issue, whether the dispute in question is a commercial dispute, is required to be judged from the pleadings and the documents produced. It is clear from the MOU dated 5th December 2013 (which is sought to be relied upon) that, certain lands were required to be procured by Mayursing Waghela (party of the first part) for the Arvind Processing Park Private Limited. 49. Certain relevant provisions of the MOU may be looked at: As per para 2.1, insofar as 56.43 bighas of the minimum land required is concerned, all the payments to the land owners and the incidental expenses are to be borne by the APPL. Para 5.1 provides that if the Banakhat for the balance lands are not procured, then the APPL reserves the right to go ahead with the Banakhat already procured. Para 6 cast responsibility on the party of the first part to make sure that the persons selling the lands, i.e. the land owners, have a clear and marketable title. Para 7.2 provides that until the completion of sale, all responsibilities and obligations under the Banakhat shall be that of the party of the first part and not of the APPL. Para 7.4 provides that the MOU is not a partnership for a joint venture, nor an agency agreement. Importantly, para 7.5 provides that all acts, deeds and things done by the party of the first part are being done on their on behalf and at their own risk, cost and consequence. In the event of failure of the transaction for any reason not attributable to the APPL, the APPL shall not be required to pay any amount to the land owners, i.e. the APPL shall not be required to reimburse or contribute any amount paid by the party of the first part to the land owners. Again, importantly, para 6.9 nonetheless grants a right to the APPL to seek specific performance of the MOU as well as to recover any payments, expenses, loss, etc. as a consequence of breach of the MOU on the part of the party of the first part. 50.
Again, importantly, para 6.9 nonetheless grants a right to the APPL to seek specific performance of the MOU as well as to recover any payments, expenses, loss, etc. as a consequence of breach of the MOU on the part of the party of the first part. 50. The aforesaid demonstrates that though the party of the first part does not have any rights under the MOU till the stage of the execution of the sale-deeds, at least to the extent of minimum lands of 56.43 bighas are executed in favour of the APPL, on the other hand, the APPL does have a specific right to seek specific performance of the MOU. Clearly, therefore, the signing of the agreement itself creates enforceable rights that the APPL can enforce against the party of the first part. Needless to state that these rights are in the context of doing acts that are essential for procuring the lands as a broker. 51. To place the issue beyond any doubt, reference may be made to the pleadings in the plaint, and more specifically para 3 thereof, which states that the party of the first part was to act as a broker and was entitled to 2% commission. This, admittedly, would demonstrate an agreement of service. 52. Again, the contents of the plaint, and more specifically para 5 thereof, demonstrates that the sale-deeds have already been executed and are not disputed by the APPL. Thus, the MOU has fructified to the extent of the sale-deeds being executed, which would have the effect of granting rights to the party of the first part under the MOU itself. This is not a case in which the sale-deeds have not been executed due to which the MOU has failed. On the contrary, the rights in the suit are claimed on the basis of the MOU itself. 53. The provisions of the Service Tax Act also provide for rendering the service tax on brokerage services. 54. There is no doubt that the provisions of Section 2(1)(c)(xviii) of the Commercial Courts Act are to be read to mean an agreement for sale of goods or an agreement for provision of service disjunctively, so as to mean an incorporation of two different kinds of agreements. The facts narrated herein above demonstrate that even a right to specific performance is granted and, as per the pleadings themselves, the service is one of brokerage.
The facts narrated herein above demonstrate that even a right to specific performance is granted and, as per the pleadings themselves, the service is one of brokerage. Even 2% commission is admitted to be paid. Hence, the aspect of remuneration also stands admitted. The dispute, therefore, clearly falls within the scope of a dispute relating to an agreement for provision of service and is, therefore, a commercial dispute. 55. In view of the aforesaid discussion, we are of the opinion that the Commercial Court committed no error, not to speak of any error of law in passing the impugned order, warranting any interference at our end in exercise of our supervisory jurisdiction under Article 227 of the Constitution of India. 56. In the result, this application fails and is hereby rejected.