Interim Order 1

Order Details: Order below exhibit
Pdf Text: 1 Comm. Suit 41/2020
Order Below Exh.1
MHCC010115072019
IN THE CITY CIVIL COURT AT MUMBAI.
(Court Room No.32)
ORDER BELOW EXH.1
IN
COMMERCIAL SUIT NO.41 OF 2020
Ramchand Atmaram Nagpal … PLAINTIFF
Versus
Reena Tinaaz Pvt. Ltd. nd others … DEFENDANTS
Smt. Yojana Gandhi h/f. Smt. Rekha Shukla Advocates for
plaintiff
Shri. Omkar Kakad h/f Shri. Maroof Khan Advocate for
defendants
Coram : N.P. Tribhuwan, Judge
ORDER BELOW EXH.1
(Date 16/12/2022)
This is a “Commercial Suit” for recovery of sum of
Rs.35,25,205/ alongwith interest @ 18% p.a. on Rs.30,00,000/ from
the date of suit till realization of entire amount.
2] At the time of hearing on Summary Judgment No.5/2022,
the point arise whether the subject matter is “commercial dispute”
defined u/sec. 2(1) (c) of the Commercial Courts Act. Hence, the said
point taken for decision before going to decide “Summary Judgment”.
3] Plaintiff come with case that defendant no.2 & 3 are
directors of defendant no.1. They requested the plaintiff to raise funds
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of Rs.48,00,000/, to which plaintiff agreed and accordingly on
15/3/2018 he paid the said sum to defendants. Defendant no.1 drew
demand bill of exchange on defendant no.2 & 3 for sum of
Rs.48,00,000/ in favour of plaintiff. The interest and repayment
schedule were mutually agreed between them. Defendant no.1 paid
interest on the said sum upto 9/11/2018. Defendant no.1 issued eight
cheques of Rs.6,00,000/ each towards repayment of the said sum but
only 3 cheques honored and 5 cheques were dishonored. Therefore,
sum of Rs.30,00,000/ remained due and payable by defendants to
plaintiff. According to plaintiff the subject matter is “commercial
dispute” and hence this Commercial Court has jurisdiction.
4] The Hon’ble Delhi High Court in Kailash Devi Khanna vs.
DD Global Capital Ltd.; 2019 SCC Online Del 9954 held that all suits
for recovery of monies cannot brought under Section 2(1)(c)(i) of the
Act where the suit is not based on any transaction relating to mercantile
documents. The Hon’ble Bombay High Court in Bharat Huddanna
Shetty vs. Ahuja Properties & Developers; (Interim Application (L)
No.14350 of 2021) rejected the contention that the suit should be
treated as a commercial summary suit on the mandate that the
transaction had occurred between merchants, bankers, financiers and
traders and further clarified that transactions between individuals
where the plaintiff gives a friendly loan to a needy friend will not be
seen as a transaction in the course of ordinary business. The Hon’ble
Madras High Court in R. Kumar vs. T.A.S. Jawahar Ayya (C.S.
No.431 of 2019) was of the view that since the plaintiffs did not
transact in the capacity of financiers, the dispute was not a "commercial
dispute" and that an ordinary transaction of the four classes of persons
mentioned in 2(1)(c)(i) arising out of mercantile documents alone
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would fall within the definition of a commercial dispute.
5] The Hon’ble Supreme Court in case law of Ambalal
Sarabhai Enterprises Limited Vs. K. S. Infraspace and another :
(2020) 15 SCC 585 held that,
For a dispute to be a commercial dispute under S. 2(1) (c) (vii),
the agreement between the parties must refer to immovable
property used/being used exclusively in trade or commerce. The
word “used” occurring in S.2(1)(c)(vii) denotes “actually used”
and it cannot be either “ready for use” or “likely to be used” or “to
be used”. Merely because the property is likely to be used in
relation to trade and commerce, the same cannot be a ground to
attract jurisdiction of Commercial Court. Such a wide
interpretation would defeat the object of Commercial Courts Act
with regard to speedy disposal of commercial disputes
thereunder. In present case, there was nothing on record to show
that at the time when the agreement to sell concerned came to be
executed, the property was being exclusively used in trade and
commerce so as to bring the dispute within the ambit of S. 2(1)
(c)(vii) of Commercial Courts Act. Consequently, the impugned
order of High Court directing Commercial Court to return the
plaint for its presentation before the appropriate court was
proper.
6] Hon’ble Bombay High Court in case law of Glasswood
Realty Pvt. Ltd. and others .v/s. Chandravilas Kailashkumar Kothari
: 2021 SCC Online Bom 5032 : (2022) 1 Bom CR 527, held
9. The disputes which are in the nature of ordinary transactions
of merchants, business, financers and traders will fall within the
purview of ‘commercial disputes’, and particularly those relating
to mercantile documents. Thus, it covers the ordinary/normal
transactions carried out by the entities mentioned in the said
clause and the term ‘merchant’ would cover a person who buy
and trade, in any commodity and therefore, the term as explained
correspond to all sort of traders, buyers and sellers. A trader is,
necessarily a person who engages himself in trading in goods;
buying and selling them at profit and the word ‘trader’ has
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received a liberal interpretation with passage of time, being not
only one who sell goods substantially in the form in which they
are bought, but it would also cover a member of stock exchange,
who buy and sell securities on the exchange floor or one who
buys and sells commodities and commodity futures for others, in
anticipation of speculative profit. A ‘financer’ as per Oxford
Dictionary is an administrator, collector of taxes or one who is
skilled in levying and managing public money or as a capitalist
concerned in financial operations. The aforesaid is an indicator
that the goal of a financier is to secure ample revenue.
17. In the wake of the above, the impugned order which take a
view that the transaction of advancing the amount as a friendly
loan is commercial in nature, is an erroneous finding as a solitary
transaction of advancing loan, on friendly terms, unlike a
commercial lending with the prevailing market rate, would fall
short or ordinary transaction of a financer, banker. Moreso, even
the plaintiff is conscious of this position and in her response to
the application filed for return of plaint for presentation of
appropriate court, she admit so.
7] In the present case according to plaintiff, the defendant
Nos.2 & 3 approached the plaintiff and requested him to raise funds of
Rs.48,00,000/ for them. Plaintiff further states that he paid them the
said sum on interest. Pertinent to mention here that though the plaintiff
has not mentioned the word “Loan”, the nature of transaction makes it
clear that it is pure “loan transaction”. Considering pleading of plaint,
the nature of transaction is not commercial transaction. There is no
trading transaction between plaintiff and defendants. Plaintiff is not
license holder money lender. “Money lending” is not a business of
plaintiff. Thus, in view of aforesaid case law and facts of present case,
this suit does not come under the definition of commercial dispute.
Hence, this court has no jurisdiction to entertain and try this suit.
Therefore, it is necessary to assign this suit to appropriate court. Hence,
I pass following order.
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Order Below Exh.1
ORDER
i) The Registrar Civil, City Civil Court Gr. Mumbai is directed
to assign this suit bearing commercial suit no.41 of 2020 along
with Summary Judgment No.05 of 2022 and Notice of Motion
dated 14/11/2022 to proper court in which the suit should have
been instituted, not being a “Commercial Dispute”.
ii) The parties to appear before the assigned Court on
16/01/2023.
Date : 16/12/2022.
(N.P. Tribhuwan)
Judge, City Civil Court,
Mumbai. C.R.No.32
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Dictated on : 16/12/2022.
Checked on : 16/12/2022.
Signed on : 16/12/2022.
CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER”
16/12/2022. Mr. Ashok S. Patil
UPLOAD DATE AND TIME NAME OF STENOGRAPHER
Name of the Judge(with CR
No.)
HHJ SHRI. N. P. TRIBHUVAN
(C.R.No.32)
Date of pronouncement of Order 16/12/2022.
Order signed by P.O. on 16/12/2022.
Order uploaded on 16/12/2022.
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