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2023 DIGILAW 856 (KER)

C. K. Surendran S/o Achuthan v. Kunhimoosa S/o Kunhi Mammu

2023-11-02

P.SOMARAJAN

body2023
ORDER : 1. These revision petitions are against the two orders passed by the trial court in a subsequent suit in O.S. No. 61/2021 by the plaintiff. The subject of C.R.P. No. 68/2023 is the order passed rejecting an application to pass a decree on admission under Order XII Rule 6 C.P.C by the trial court. C.R.P. No. 134/2023 is against the order dismissing an application for attachment before judgment in that suit. 2. The application submitted by the plaintiff in I.A. No. 1/2023 in O.S. No. 61/2021 is for getting a decree under Order XII Rule 6 C.P.C. based on the admission in the written statement submitted by the defendant. The suit is admittedly for recovery of licence fee based on agreement for licence. The arrears of licence fee comes to Rs. 3,76,98,040/- (Rupees Three Crores Seventy Six Lakhs Ninety Eight Thousand and Forty only). The pleading in paragraph 14 of the written statement admits payment of licence fee upto the month of April, 2020 as per cheque No. 126495 dated 10/8/2020. Further, it is stated that the defendant did not avail the benefit of COVID 19 pandemic as alleged by the plaintiff. He did not have any pleading that the subsequent monthly licence fee was paid or tendered or adjusted otherwise. It is contended that the admission, if any incorporated in paragraph 14 of the written statement is not an unqualified admission, without which no power under Order XII Rule 6 C.P.C. can be exhausted to pass a decree on admission and took reliance from Karan Kapoor vs. Madhuri Kumar, (2022) 10 SCC 496 . 3. The legislative intent by the incorporation of Order XII Rule 6 C.P.C. is to avoid unnecessary trial of any suit, wastage of time and speedy disposal of litigation, when there is an admission regarding the liability to the extent of making it possible to pass a decree on such admission. The admission by way of pleading should be clear, unambiguous and must be of the nature and the extent to pass a decree wholly and completely based on such pleading without leaving any scope for any oral or documentary evidence or any clarification, for that purpose, the entire pleading in the written statement should be taken in whole and not in isolation. At the same time, it cannot be insisted invariably in all cases that there should be an unqualified admission or a declaration to that effect by way of pleading or otherwise to pass a decree on admission. The test that can be applied is to find out whether it is permissible or possible to determine conclusively the rights of parties and to adjudicate it without seeking any clarification or evidence. A mere contention that licence fee was paid upto a particular date though admits non-payment of licence fee thereafter would not by itself empower the court to pass a decree on such admission, when the maintainability of the suit was brought under challenge either on account of limitation or any other debarring provision. The jurisdiction that can be exercised in order to pass a decree on admission under Rule 6 of Order XII C.P.C. is imperative and peremptory, but does not call for an unqualified admission invariably in all cases. The admission can be either by way of pleading or by way of documentary evidence or by oral evidence. What is dealt under Order XII Rule 6 C.P.C. covers both the admission by pleading or otherwise, whether orally or in writing and it can be exercised at any stage of the suit either on the application of any of the party or on its own motion without waiting for determination of any other question between the parties. The Apex Court had laid down in Karan Singh and Another vs. State of M.P. and Others, AIR 1986 SC 1506 that the admission in the written statement should be taken as a whole and not in part. Further, the jurisdiction that can be exercised under Rule 6 of Order XII C.P.C. has no overriding effect over the other provisions of law including the question of res judicata, bar of limitation, bar of any other provision such as Order XXIII Rule 1 C.P.C. Order II Rule 2 C.P.C. etc. but would stand subject to all such provisions inclusive of res judicata as embodied under Section 11 C.P.C. and estoppel under various other provisions including the bar of limitation. When such bar or limitation was taken up in the written statement, it is wholly impermissible to pass a decree on admission without adjudicating the said questions of maintainability or bar of limitation. 4. When such bar or limitation was taken up in the written statement, it is wholly impermissible to pass a decree on admission without adjudicating the said questions of maintainability or bar of limitation. 4. In the written statement, the maintainability of the suit was also disputed and denied on the ground of earlier cause of action which has resulted in the institution of O.S. No. 151/2020 and another suit O.S. No. 81/2019 and the bar under Order IX, Order XXIII Rule 1, Order II Rule 2 C.P.C. with a prayer to decide the same as a preliminary issue. In view of the abovesaid contentions, the pleading in paragraph 14 of the written statement alone cannot be acted upon, otherwise it would amount to rejecting all the abovesaid contentions regarding the maintainability without any adjudication. At this juncture, the legal position settled by the Apex Court in Karan Kapoor’s case (supra) assumes importance, wherein it is held that the grant of relief under the said provision is discretionary in nature and when there is need to decide any justification attached to the defence by a full fledged trial, it is wholly impermissible to grant relief under that provision. 5. Inter-alia, they have raised a contention that they have improved the property by spending amount for the construction of building and it can be adjusted towards the licence fee arrears. But no counter claim or set off was raised in the suit and no suit was filed for recovery of the said amount. The amended provision by Act 104 of 1976 with effect from 01/02/1977 enables and empowers the court to pass a decree on admission without waiting for the determination of any other question between the parties and hence it is permissible to pass a decree on admission in favour of the plaintiff without waiting for the adjudication or determination of any other question between the same parties. As such, the abovesaid contention may not stand in the way of passing a decree on admission under Rule 6 of Order XII C.P.C. 6. The question whether the jurisdiction of regular civil court will stand ousted regarding commercial dispute of specified value by the commencement of Commercial Courts Act, 2015 and the establishment of Commercial Court under the said special enactment was not raised either in the final pleading by way of written statement or at any earlier point of time. The question whether the jurisdiction of regular civil court will stand ousted regarding commercial dispute of specified value by the commencement of Commercial Courts Act, 2015 and the establishment of Commercial Court under the said special enactment was not raised either in the final pleading by way of written statement or at any earlier point of time. It is well settled that the question of maintainability has to be raised at the first opportunity and not beyond the stage of submission of final pleadings by way of written statement, unless permitted for valid reason. But it may have the operation only with respect to either pecuniary or territorial jurisdiction and may not have any application in the case of inherent lack of jurisdiction, which would make the entire proceedings vitiated. There is material difference between the expression “inherent lack of jurisdiction” and “lack of jurisdiction.” The legal position is settled by this Court in Steel Complex Ltd. vs. K.G. Subramania Iyer, 2019 (3) KHC 732 : ILR 2019 (3) Ker. 512. Unless there is inherent lack of jurisdiction and parties have proceeded with the suit without raising the question of lack of jurisdiction on other counts either pecuniary or territorial, the proceedings culminated in a decree will not stand vitiated or invalid. Sections 6 and 7 of the Commercial Courts Act, 2015 dealing with the jurisdiction of Commercial Court and Commercial Divisions are extracted below for reference: “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. Explanation - For the purposes of this section, a commercial dispute shall be considered to arise out of the entire territory of the State over which a Commercial Court has been vested jurisdiction, if the suit or application relating to such commercial dispute has been instituted as per the provisions of sections 16 to 20 of the Code of Civil Procedure, 1908 (5 of 1908). 7. 7. Jurisdiction of Commercial Divisions of High Courts: All suits and applications relating to commercial disputes of a Specified Value filed in a High Court having ordinary original civil jurisdiction shall be heard and disposed of by the Commercial Division of that High Court: Provided that all suits and applications relating to commercial disputes, stipulated by an Act to lie in a court not inferior to a District Court, and filed or pending on the original side of the High Court, shall be heard and disposed of by the Commercial Division of the High Court: Provided further that all suits and applications transferred to the High Court by virtue of subsection (4) of section 22 of the Designs Act, 2000 (16 of 2000) or section 104 of the Patents Act, 1970 (39 of 1970) shall be heard and disposed of by the Commercial Division of the High Court in all the areas over which the High Court exercises ordinary original civil jurisdiction.” (Emphasis supplied) 7. It is quite interesting that the wording used in Section 6 of the Act that the commercial court “shall have jurisdiction to try all suits and applications” relating to a commercial dispute of a specified value does not say anything about the ouster of jurisdiction of regular civil court. In fact, there is no exclusion of the jurisdiction of the civil court either under Section 6 or under Section 7 of the Act and no non-obstante clause akin to that of Section 11 of Kerala Buildings (Lease and Rent Control) Act or any other special enactment, is incorporated in the abovesaid two provisions. The mere user of the word “shall” will not by itself constitute ouster of jurisdiction. Certainly, the legislative intention will not support the proposition that the jurisdiction of civil court will not stand ousted by the commencement of Commercial Courts Act, 2015. It was enacted for the speedy disposal of certain commercial disputes by establishing sufficient machinery to meet the requirement. The bar and the non-obstante clause incorporated under Section 8 of the Act is pertaining to a civil revision on any interlocutory order of a commercial court and hence will not give any assistance so as to give an extended meaning or interpretation to the provisions, Sections 6 and 7 of the Act. The bar and the non-obstante clause incorporated under Section 8 of the Act is pertaining to a civil revision on any interlocutory order of a commercial court and hence will not give any assistance so as to give an extended meaning or interpretation to the provisions, Sections 6 and 7 of the Act. Section 9 of the Act was subsequently omitted by the Amendment Act of 2018 (Act 28 of 2018) with effect from 03/05/2018. But, the legislative intent can be safely discerned from the language used in Section 15 of the Act by the user of expression “shall stand transferred” which would amply make it clear that the transfer of pending cases is somewhat mandatory and automatic, though a formal order of transfer is necessary to effectuate the transfer of cases. 8. When the language in a statute found to be unambiguous and clear, the normal principle of interpretation is to accept the same in its plain language and the literary meaning. But if it is found against the legislative intention and offending to some other provision in the same enactment viz. Section 15 of the Act, by the user of the expression “shall stand transferred” having the effect of transfer of pending commercial dispute of specified value from the regular civil court to the newly constituted commercial court and the repugnancy meted out by Sections 6 and 7 of the Act, without providing exclusive jurisdiction by ousting the jurisdiction of regular civil court, a harmonious interpretation so as to promote both the provisions and not to alter or reduce or defeat the scope or application of any of such provision, should be adopted, bearing in mind the legislative intent under the special enactment. It is settled law [Raju K. Thomas and Another vs. Union of India, 2017 (4) KHC 59 (DB)] that the principle of harmonious interpretation can be applied when there is inconsistency or repugnancy either within a section or between sections and other parts of the statute. The principle of harmonious construction is intended to give full effect of the provisions and not to reduce the impact of any one of the provision. It is really intended to avoid inconsistency and repugnancy between the parts of same statute. The principle of harmonious construction is intended to give full effect of the provisions and not to reduce the impact of any one of the provision. It is really intended to avoid inconsistency and repugnancy between the parts of same statute. While applying the principle of harmonious interpretation and taking into consideration the legislative intention, it is well within the jurisdiction of this Court to interpret Section 6 and 7 of the Act so as to suit with the mandate of other provision, Section 15 of the Act. The said proposition would stand further fortified by the legal position settled by the Apex Court in Sri Venkataramana Devaru and Others vs. State of Mysore and Others, 1958 KHC 304 : AIR 1958 SC 255 . The rule of construction is well settled that when there are in an enactment, two provisions which cannot be reconciled with each other, they should be so interpreted that, if possible, effect could be given to both. This is what is known as the rule of harmonious construction. It is true that the repugnancy between Section 15 and Sections 6 and 7 is not on the basis of the language employed in the abovesaid provisions or its construction, but resting on its application. While Section 15 gives an exclusive mandate of transfer of pending litigations (commercial dispute of specified value) by giving exclusive jurisdiction to the newly constituted commercial court, having the effect of an implied bar of jurisdiction of regular civil court, no such mandate was incorporated in Section 6 of the Act regarding fresh litigation having the effect of implied bar of jurisdiction or any express bar. Mere user of the expression “shall be heard and disposed of” will not convey exclusive jurisdiction or ouster of jurisdiction of regular civil court. Hence, it is not possible to reconcile these two provisions with each other. Hence, the rule of harmonious construction can safely be applied by holding that the expression “shall be heard and disposed of” appearing in Sections 6 and 7 stands for exclusive jurisdiction. 9. The valuation involved in the instant case comes to more than rupees three crores. Hence, it would satisfy the “specified value” so as to bring the matter within the sweep of pecuniary jurisdiction invested with the commercial court under Section 2(c) r/w Section 12(1)(a) of the Act. 9. The valuation involved in the instant case comes to more than rupees three crores. Hence, it would satisfy the “specified value” so as to bring the matter within the sweep of pecuniary jurisdiction invested with the commercial court under Section 2(c) r/w Section 12(1)(a) of the Act. On coming to the question of “commercial dispute” as defined under the Act, extensive arguments were made by the counsel for the plaintiff Sri.B. Krishnan by referring to the earlier decision rendered by this Court in C.R.P. No. 146/2021 on 17/9/2021 and also the decision rendered by the Apex Court in Ambalal Sarabhai Enterprises Ltd. vs. K.S. Infraspace LLP and Another, 2020 (15) SCC 585 : 2019 KHC 7012, especially paragraphs 10, 11 and 37 of the said judgment. The relevant portions of the abovesaid judgment are extracted below for reference: “10. xxx xxx xxx In that regard, it is noticed that in the said case on taking note of the provision contained in Section 2(1)(c) (vii) of the CC Act, 2015 it is held that the dispute involved therein would constitute a commercial dispute and the expression “arising out of” and “in relation to immovable property” should not be given the narrow and restricted meaning and the expression would include all matters relating agreements in connection with the immovable properties. The said conclusion reached was in a circumstance where the immovable property in question was undoubtedly being used for a trade or commerce and it was held so when the claim in the suit is for recovery of rent or mesne profit, security deposit, etc. for the use of such immovable property. 11. On the other hand, the learned Senior Advocate for the respondents has relied on the decision of a Division Bench of the Gujarat High Court in Vasu Healthcare (P) Ltd. vs. Gujarat Akruti TCG Biotech Ltd. 2017 SCC Online Guj. 724 : AIR 2017 Guj. 153 wherein a detailed consideration has been made and the conclusion reached therein by taking note of an earlier decision is that on a plain reading of Section 2(1)(c) of the CC Act, 2015 the expression “used” must mean “actually used” or “being used.” It is further explained that if the intention of the legislature was to expand the scope, in that case the phraseology “likely to be used” or “to be used” would have been employed. The verbatim consideration therein is as hereunder: “33. Therefore, if the dispute falls within any of the Section 2(c) the dispute can be said to be “commercial dispute” for which the Commercial Court would have jurisdiction. It is required to be noted that before the learned Commercial Court the original plaintiff relied upon Sections 2(c)(i), 2(c)(ii) and 2(c)(xx) of the Commercial Courts Act only. The learned counsel appearing on behalf of the original plaintiff has candidly admitted and/or conceded that the case shall not fall within Sections 2(c)(i); 2(c)(ii) or 2(c)(xx) of the Commercial Courts Act. It is required to be noted that before the learned Commercial Court it was never the case on behalf of the original plaintiff that the case would fall within Section 2(c) (vii) of the learned Commercial Court. Despite the above we have considered on merits whether even considering Section 2(c)(vii) of the Commercial Courts Act, the dispute between the parties can be said to be “commercial dispute” within the definition of Section 2(c) of the Commercial Courts Act or not ? Considering Section 2(c)(vii), “commercial dispute” means a dispute arising out of the agreements relating to immovable property used exclusively in trade or commerce. As observed hereinabove, at the time of filing of the suit and even so pleaded in the plaint, the immovable property/plots the agreements between the parties cannot be said to be agreements relating to immovable property used exclusively in trade or commerce. As per the agreement between the party after getting the plots on lease from the GIDC, the same was required to be thereafter developed by the original Defendant No. 1 and after providing all infrastructural facilities and sub-plotting it, the same is required to be given to other persons like the original plaintiff. It is the case on behalf of the original plaintiff that as the original Defendant 1 has failed to provide any infrastructural facilities and develop the plots and therefore, a civil suit for specific performance of the agreement has been filed. There are other alternative prayers also. Therefore, it cannot be said that the agreement is as such relating to immovable property used exclusively in trade or commerce. There are other alternative prayers also. Therefore, it cannot be said that the agreement is as such relating to immovable property used exclusively in trade or commerce. It is the case on behalf of the original plaintiff that as in clause (vii) of Section 2(c), the phraseology used is not “actually used” or “being used” and therefore, even if at present the plot is not used and even if it is likely to be used even in future, in that case also, Section 2(c)(vii) shall be applicable and therefore, the Commercial Court would have jurisdiction. The aforesaid has no substance. As per the cardinal principle of law while interpreting a particular statute or the provision, the literal and strict interpretation has to be applied. It may be noted that important words used in the relevant provisions are “immovable property used exclusively in trade or commerce.” If the submission on behalf of the original plaintiff is accepted in that case it would be adding something in the statute which is not there in the statute, which is not permissible. On plain reading of the relevant clause it is clear that the expression “used” must mean “actually used” or “being used.” If the intention of the legislature was to expand the scope, in that case the phraseology used would have been different as for example, “likely to be used” or “to be used.” The word “used” denotes “actually used” and it cannot be said to be either “ready for use” or “likely to be used” or “to be used.” Similar view has been taken by the Bombay High Court (Nagpur Bench) in Dineshkumar Gulabchand Agrawal vs. CIT, 2003 SCC Online Bom. 1289 : (2004) 267 ITR 768 and it is observed and held that the word “used” denotes “actually used” and not merely “ready for use.” It is reported that SLP against the said decision has been dismissed by the Hon’ble Supreme Court. 37. 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. 37. 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.” (Emphasis supplied) 10. After discussing what actually amounts to the expression “used” in the definition clause (c) (vii) of Section 2 of the Act that it denotes “actually used” and not “likely to be used” or “ready for use” or “to be used” the Apex Court had entertained an element of caution that such a wide interpretation would defeat the object of the Act and the fast tracking procedure discussed in the judgment. The abovesaid legal position was laid down by the Apex Court in a suit for specific performance. 11. In the instant case, since it is for recovery of licence fee of a building let out for commercial purpose and being used as such and conducting a commercial business in that building, the question as to what actually denotes the word “used” as found in Section 2(1)(c) of the Act does not arise for consideration, firstly on the reason that the question was taken up and raised in a suit for specific performance on the allegation of failure to perform part of agreement by the respective parties. No such issue is involved in the present case. Secondly on the reason that it is a suit for recovery of money being arrears of the licence fee based on a licence arrangement pertaining to a building given solely for commercial purpose and being used as such and doing commercial business therein and hence, it would fall within the sweep of the expression “used” as occurred under the abovesaid clause. At this juncture, it is relevant to note the Explanation attached to Section 2(1)(c) of the Act, by which the legislature had given an exhaustive and comprehensive nature to all the provisions under clause (c) of that sub-section, which runs as follows: “Explanation: A commercial dispute shall not cease to be a commercial dispute merely because: (a) it also involves action for recovery of immovable property or for realisation of monies out of immovable property given as security or involves any other relief pertaining to immovable property. (b) one of the contracting parties is the State or any of its agencies or instrumentalities, or a private body carrying out public functions.” (Emphasis supplied) 12. A licence fee or a monthly or annual premium or any periodical payment though would stand bound by obligation arising out of the contract by way of an agreement of licence or lease or otherwise or by the application of statutory principles as to “mesne profits” for use and occupation of immovable property would squarely come under the ambit of profit or money realisable out of the immovable property, hence would come within the sweep of Explanation attached to clause (c) for the purpose of sub-clause (vii) which takes in agreements relating to immovable property used exclusively in trade or commerce and would satisfy a “commercial dispute” as defined under the said clause of Section 2(1) of the Act. 13. The application submitted for attachment was rejected even without ordering show cause notice to the respondent either to furnish security or to show cause and that too, without passing a conditional order of attachment. Necessarily, the impugned order suffers material draw backs and cannot be sustained and it would come under the purview of Rule 5 of Order XXXVIII C.P.C. and hence, a revision is maintainable. The trial court ought to have issued show cause notice either to furnish security or to show cause and also by ordering a conditional attachment over the property till that time. The trial court ought to have issued show cause notice either to furnish security or to show cause and also by ordering a conditional attachment over the property till that time. Hence, there will be a conditional order of attachment over the property listed till 20/11/2023 directing the respondent to furnish security or to show cause and the matter is remanded back to the trial court to transfer the case to the commercial court established, forthwith and the matter will stand posted before the Commercial Court on 20/11/2023 for proceeding further in the matter with a direction to dispose of the attachment application and the suit within a time schedule of three months from the next posting date, for which the parties shall appear before the trial court on 10/11/2023. The order passed by the trial court in the application submitted for attachment before judgment will stand set aside for the said purpose. 14. C.R.P. No. 134/2023 will stand allowed in part accordingly and C.R.P. No. 68/2023 will stand dismissed.