Madhya Pradesh High Court: Commercial Courts Act Applicable On Immovable Property "Actually Used" For Trade & Commerce, Not "Ready For Use" Or "Likely To Be Used" Or "To Be Used"

The Madhya Pradesh High Court has held that Commercial Courts Act, 2015 is only applicable on the immovable properties "actually used" for trade & commerce and not "ready for use" or "likely to be used" or "to be used".

The Court was considering a Writ Petition against an order by which Application filed by Petitioner under Order 7 Rule 11, CPC for rejection of plaint was dismissed.

The single bench of Justice Gurpal Singh Ahluwalia observed, ".....The conclusion arrived at herein, that in order to fall within Section 2(1)(c)(vii) of the Commercial Courts Act, the immovable property must be "used exclusively" or "being used exclusively" in trade or commerce, is agreed to. 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 for deciding the commercial disputes...."

The Petitioner was represented by Advocate Prakash Chandra Chandil while the Respondent was represented by Advocate Sameer Kumar Shrivastava.

Facts of the Case

The Respondent filed a suit for eviction from the suit shop and the Petitioner filed an Application under Order 7 Rule 11, CPC on the ground that since trade and business is being carried out by petitioner from the suit premises, therefore in view of Section 2(1)(c)(vii) of the Commercial Courts Act, 2015, jurisdiction of Civil Court is barred and thus the Civil Court should have rejected the plaint on the ground of lack of jurisdiction.

On the other hand, Counsel for the Respondent submitted that merely because the Suit for Eviction from the suit shop has been instituted on various grounds as mentioned in Section 12 of the Madhya Pradesh Accommodation Control Act, the dispute would not become a commercial dispute

Reasoning By Court

The Court noted that in order to find out as to whether a dispute is a commercial dispute or not, one has to conjointly read Sections 2(1)(c)(vii), Section 2(1)(i) and Section 12 of the Act which makes it clear that only suits, appeals or applications relating to a commercial dispute of a specified value are to be tried by the Commercial Court.

"Merely because the suit shop is being used for carrying out business or trade, the suit for eviction from the suit shop would not fall within the definition of commercial dispute of specified value," the Court observed.

It referred to the Gujarat High Court's ruling in Ujwala Raje Gaekwar (Supra) wherein it was held that merely because the movable property in question is going to be used or is being used exclusively in trade or commerce, the dispute does not become a commercial dispute as defined under Section 2(1)(c) of the Act.

Further citing Supreme Court's ruling in Ambalal Sarabhai Enterprises Limited Vs. K.S. Infraspace LLP and another (2020), the Court stressed that 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 Commercial Courts Act viz. "the agreements relating to immovable property used exclusively in trade or commerce".

It held that the Commercial Courts Act, 2015 is only applicable on the immovable properties "actually used" for trade & commerce and not "ready for use" or "likely to be used" or "to be used".

"In the present case, there is nothing on record to show that at the time when the agreement to sell came to be executed in 2012, the property was being exclusively used in trade and commerce so as to bring the dispute within the ambit of sub-clause (vii) of Section 2(1)(c) of the Commercial Courts Act. Merely because the property is likely to be used in relation to trade and commerce, the same cannot be the ground to attract the jurisdiction of the Commercial Court." the Court observed.

It thus concluded that merely because suit shop is being used for running business, the question of eviction from said suit shop would not become commercial dispute.

The Petition was accordingly dismissed.

Cause Title: Mohit Sadana vs. Vijay Kumar Goyal (2025:MPHC-GWL:12222)

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