Calcutta High Court
T.E. Thomson & Company Limited vs Swarnalata Chopra Nee Kapur & Anr on 1 October, 2024
IN THE HIGH COURT AT CALCUTTA
ORIGINAL SIDE
COMMERCIAL DIVISION
Present:
The Hon'ble Justice Krishna Rao
IA No. GA-COM 2 of 2024
In
CS (COM) No. 4 of 2023
T.E. Thomson & Company Limited
Versus
Swarnalata Chopra Nee Kapur & Anr.
Mr. Krishnaraj Thaker
Mr. Chayan Gupta
Mr. Rittick Chowdhury
Mr. Pourush Bandyopadhyay
Mr. Dwip Raj Basu
Mr. Soumyajit Mandal
... for the plaintiff.
Mr. Sarosij Dasgupta
Mr. Javed K. Sanwarwala
Ms. Madhurima Halder
Mr. S.A. Sanwarwala
Ms. Sadaf Aafrin
... for the defendant no.1.
2
Hearing Concluded On : 05.08.2024
Judgment on : 01.10.2024
Krishna Rao, J.:
1. The defendant no.1 has filed the present application being G.A. (Com)
No. 2 of 2024 for dismissal of the suit against the defendant no.1. The
plaintiff has filed the suit being C.S. (Com) No. 4 of 2023 praying for
decree of eviction of the defendants, illegal sub-tenants inducted by the
defendants and for mesne profits.
2. The defendant say that there is no pleading in the plaint pertaining to
the date and other particulars of cause of action and in violation of the
Order VI of the Code of Civil Procedure, 1908 and Chapter VII Rule 1 of
the Original Side Rules of this Court. He submits that the defendant is
continuing paying the monthly rent as fixed by the Rent Controller to
the Kolkata Municipal Corporation as per direction passed by the High
Court in WPO No. 2475 of 2022 dated 20th September, 2022. The
defendant say that since the rent of the suit property is attached to the
Kolkata Municipal Corporation by the order of the Court, the plaintiff
cannot take action with respect to the property till such time the
statutory dues of the plaintiff are cleared by the defendant no. 1.
3. The defendant says that lease of the suit property was given to 8 joint
lessees and composite rent receipts were issued in the name of the joint
lessees. When the plaintiff had filed an application before the Rent
Controller for enhancement of rent, in the said application all the
3
lessees have been made party but in the present suit, the plaintiff has
not made the other 6 lessees as party to the suit. If at all, the lessees
have passed away, the legal heirs could be made as party to the suit.
He submits that even if the plaintiff get decree in the present suit, such
decree cannot be executed against the remaining 6 lessees or their legal
heirs. The defendant has relied upon the judgement in the case of
Trilokchand Kapoorchand vs. Basubai Vastimal Oswal and Others
reported in AIR 1983 Bom 12 wherein the Bombay High Court held
that when a joint lease is given to two persons the landlord can neither
terminate the tenancy of only one of the lessees nor can be file a suit
for eviction only against one of the lessee. If be files such suit that
would be a case of non-joinder of necessary party and it is well known
that if the necessary party is not impleaded the suit has got to be
dismissed.
4. Learned Counsel for the defendant submits that a careful reading of the
intention and purport of Section 111(h) of the Transfer of Property Act,
1882 would show that a lease can be determined by a lessor or lessee
on the expiration of a notice issued under Section 106 of the Transfer of
Property Act, 1882. He submits that the statutory right, which is
otherwise absent, has been given by way of Section 111(h) to both the
parties. He submits that Section 106 cannot be read in isolation.
5. Learned Counsel for the defendant submits that Clause 6 of the Deed of
Lease dated 31st January, 1969 clearly states that the leased property
could be used for office, residence, trade, commerce, godown, hotel and
4
restaurant. Even if such leases have expired by efflux of time, the
permitted use of the subject property, as defined in the said leases
remains binding upon the parties. It is for this purpose, the plaintiff
has disclosed the said leases in the plaint. He submits that the
ingredients of Section 2(1)(c)(vii) of the Commercial Courts Act, 2015
are not satisfied and the suit filed by the plaintiff cannot be said to be a
commercial dispute in any manner whatsoever.
6. Learned Counsel for the defendant submits that the notice of
attachment issued by the Kolkata Municipal Corporation make no
whisper that the property is a commercial or has been exclusively used
for trade and commerce. He submits that the plaintiff has filed the suit
before the Commercial Division but the plaintiff has not pleaded the
specific Sub-Section 2(c) of the Act of 2015, the plaintiff has violated
the mandatory direction contained in the Practice Procedure while
instituting the suit.
7. Learned Counsel for the defendant submits that the defendant is
depositing the rent with the Municipal Corporation every month
without any default and the rent is attached with the Kolkata Municipal
Corporation under Section 225 of the Kolkata Municipal Corporation
Act, 1980, therefore, the plaintiff is not entitled to get any mesne profit.
8. Learned Counsel for the plaintiff submits that the defendant has not
taken the ground of non-joinder of the parties in the present
application. He submits that non-joinder of parties is not the ground
5
for rejection of plaint under Order VII Rule 11 of the Code of Civil
Procedure, 1908. He submits that the plaintiff had filed an application
under Section 17(6) of the West Bengal Premises Tenancy Act, 1997
before the Rent Controller at Kolkata and the defendant no.1 herein
had contested the said application by filing written objection. In the
order of the Rent Controller, the deaths of other lessees are recorded.
He submits that on the death of the joint lessees, the interest does not
devolve upon the heirs or the other surviving lessees.
9. Learned Counsel for the plaintiff submits that the lease agreement
dated 31st January, 1969 expired in the year 1990 i.e. after the period
of 21 years, thereafter no lease agreement has been entered between
the parties The last paid rent receipt reflects that the suit property is
used for the purpose of an office space. He submits that the plaintiff in
paragraph 30 of the plaint pleaded that the subject matter of the suit is
a commercial dispute as the last paid rent receipt relates to the suit
property exclusively used for the trade and commercial purpose. He
submits that the defendants in their written objection before the Rent
Controller admitted that the suit property is used for commercial
purpose.
10. Learned Counsel for the plaintiff submits that the payments made to
the Kolkata Municipal Corporation by the defendants pursuant to the
order of attachment are occupational charges and payments shall be
adjusted form the mesne profit due and payable by the defendants. He
submits that the plaintiff has not accepted any rent from the defendant
6
no.1 and the plaintiff has not issued any rent receipt after issuance of
notice under Section 106 of the Transfer of Property Act, 1882.
11. The plaintiff has relied upon in the case of Nandita Bose vs. Ratanlal
Nahata reported in (1987) 3 SCC 705 and submitted that the question
whether the plaintiff is entitled to a decree for mesne profits after the
termination of tenancy is a matter which is to be decided in the suit. If
it is decided that the plaintiff is not entitled to get mesne profit, the
claim over and above, the monthly rent will have to be dismissed but
the question whether the plaintiff is entitled to claim of mesne profit
could not have been disposed of at a preliminary stage even before the
trial is commenced.
The plaintiff relied upon the judgment in the case of Basu House
Pvt. Ltd. Vs. M/s Daw Brothers (Agency Department) reported in
2010 SCC OnLine Cal 1871 and submitted that a claim for mesne
profits is not de hors a claim for eviction and is so intricately connected
with the claim for eviction that it can be made as part of the same suit.
If by virtue of the claim on account of mesne profits, the suit could not
have been carried to any Court other than this Court, it is not for the
defendant to complain that this Court would not have the jurisdiction
to entertain the suit, unless the claim for mesne profit is demonstrably
overvalued.
12. Learned Counsel for the plaintiff submits that the judgment relied by
the defendant in the case of Deepak Polymers Private Limited Vs.
7
Anchor Investments Private Limited reported in 2021 SCC OnLine
Cal 4323, is not binding precedent. He submits that in paragraph 5 of
the said judgment, the Hon’ble Court framed the issues:
“5. The primary question which falls for
consideration is whether a suit, primarily for
recovery of possession of immovable property
under Section 106 of the Transfer of Property Act,
pertains to a “commercial dispute” under the
Commercial Courts Act, 2015. The crux of the
petitioners’ agreement is that Section 2(1)(c)(vii) and
the explanation to the said Section, read conjointly,
indicate that a suit simpliciter for eviction does not
have come within the purview of a commercial
dispute.”
While deciding, the Hon’ble Court did not consider or deal with the
Explanation provided in the said Section. He submits that the
judgment of Deepak Polymers (supra) is sub-silentio on the scope,
purport and effect of the Explanation to Section 2(1)(c) which expressly
provides that a suit for recovery of possession of a property used
exclusively for trade and commerce is a commercial dispute and is
therefore not a binding precedent.
Learned Counsel for the plaintiff submits that from the true
reading of the Explanation, it is clear that the Explanation has widened
the scope of the main Section. In support of his case, has relied upon
the judgment in the case of Manish Kumar Vs. Union of India &
Another reported in (2021) 5 SCC 1 and submitted that it must be
remembered that the legislature speaks through the medium of the
words it uses. The nomenclature, it gives to the device, cannot control
the express language, which it employs. If, in effect, in a particular
8
case, an Explanation does widen the terms of the main provision, it
would become the duty of the Court to give effect to the will of the
legislature.
13. Learned Counsel for the plaintiff submits that the cause of action for
filing the suit was not argued in the case of Deepak Polymers (supra)
and thus the Court has no occasion to discuss or give any decision on
the same. He submits that Cause of action has been defined to mean
every fact, which, if traversed, it would be necessary for the plaintiff to
prove in order to support his right to a judgment of the Court. The
plaintiff has relied upon the judgment in the case of Church of Christ
Charitable Trust and Educational Charitable Society vs.
Ponniamman Educational Trust represented by its Chairperson/
Managing Trustee reported in (2012) 8 SCC 706 and the judgment
in the case of Om Prakash Srivastava vs. Union of India & Another
reported in (2006) 6 SCC 207.
14. Heard the Learned Counsel for the respective parties, perused the
materials on record and the judgements relied by the parties. The
defendant no.1 has relied upon the judgment passed by the Coordinate
bench of this Court in the case of Deepak Polymers Private Limited
Vs. Anchor Investments Private Limited reported in 2021 SCC
OnLine Cal 4323 wherein the Hon’ble Judge held that:
“25. In view of Section 6 of the 2015 Act, a
Commercial Court has jurisdiction to try all suits
and applications relating to “commercial dispute” of
a “specified value” arising out of the entire territory
9over which it has been vested with territorial
jurisdiction. Since the relief sought in the present
suits relate to an immovable property and/or rights
therein, which are actually used for commercial
purpose, the plaintiff has correctly determined the
“specified value” in terms of Section 12(1)(c) of the
2015 Act, the opposite parties argue. The Act of
2015 has an overruling effect notwithstanding
anything inconsistent therewith in any other law in
terms of Section 21 thereof, contends learned
counsel for the opposite parties. As such, no
question of valuation on the basis of lease annual
rent, as contemplated in the West Bengal Court
Fees Act, 1970 and the Suit Valuation Act, 1887,
arises in the present case.
26. Reading the words of the legislature
literally is the primary rule for construction of
statutes. As such, learned counsel for the opposite
parties defends the impugned orders on the
premise that the Commercial Court has jurisdiction
to entertain and decide the suits-in-question.
27. Upon hearing the rival contention of the
parties and perusing their respective written notes
of arguments, as well as on a plain and meaningful
reading of the plaints of the aforesaid suits in their
entirety, it is crystal-clear that the suits have been
filed primarily for recovery of possession of
immovable properties under Section 106 of
the Transfer of Property Act, 1882. In all the
plaints, it has been pleaded that notices were given
under Section 106, which the defendants failed to
comply with even after the expiry of fifteen (15)
days thereafter. Hence, the first ingredient of the
suits which stares in the face is that the suits are
based on the statutory right conferred by Section
106 of the 1882 Act. The cause of action in each of
the suits clearly arises by virtue of the rights
conferred by Section 106. In the event the suits
were for termination of lease on the ground of
forfeiture for violation of any of the clauses of the
lease agreements and/or for specific performance
of the agreements or suits of like nature, the suits
would definitely come within the purview of
“commercial dispute” as defined in
10Section 2(1)(c) of the Commercial Courts Act,
2015.
28. A plain reading of the said provision
indicates that Section 2(1)(c) defines “commercial
dispute” to be a dispute “arising out of” the
subsequent sub-clauses, including several aspects.
Sub-clause (vii) is the only basis of argument of the
plaintiffs/opposite parties. The said sub-clause
stipulates that a dispute arising out of “agreements
relating to immovable property used exclusively in
trade or commerce” come within the ambit of
“commercial dispute”. The judgments cited by the
plaintiffs are distinguishable on their respective
facts with the present case. Most of the cases, as
mentioned above, pertain directly to agreements
from various perspectives. Suits for specific
performance of agreements, suits relating renewal
clauses in agreements and other similar contexts
gave rise to the proceedings which culminated in
the said reports. Thus, the proceedings were
“arising out of” the respective agreements.
29. What has been highlighted in the
judgments placed by the opposite parties is that all
suits arising out of agreements relating to
immovable property used exclusively in trade or
commerce, including eviction suits, would come
within the ambit of the expression “commercial
dispute” and shall be decided by the Commercial
Courts in the event of the pecuniary jurisdiction, on
the basis of valuation of the suits, being above the
stipulated amount.
30. However, the cardinal question which
has not been addressed but is pivotal to the
present adjudication is the expression “dispute”
which precedes the expression “arising out of” as
appearing in Section 2(1)(c) of the 2015 Act.
Reading sub-clause (vii) in conjunction with the
starting words of Clause (c), it is seen that the
expression “agreements relating to immovable
property….” qualifies the term “dispute” arising out
of such agreements.
11
31. A “dispute” can only be determined by
the cause of action of the suit and not the preceding
backdrop. Even if Section 106 of the Transfer of
Property Act deals with termination of the jural
relationship of lessor and lessee, pre-supposing a
prior lease agreement, the bundle of facts
comprising the cause of action of the suit is the sole
determinant of the “dispute” involved in the suit.
32. In the event the suits, in the present case,
had been filed for recovery of possession in respect
of immovable property on the ground of forfeiture
for contravention of any of the terms and conditions
of the respective agreements-in-question, it might
have been argued that the suits pertains to
disputes “arising out of” such agreements.
33. However, the dispute itself, in the present
case, arises out of refusal by the defendants to
comply with the notices issued by the lessor under
Section 106 of the Transfer of Property Act, 1882,
which is based on a statutory right independent
and irrespective of any clause of the lease
agreements.
34. Hence, the suits squarely arise out of a
statutory right conferred by Section 106 of the
Transfer of Property Act, having no direct nexus
with the lease agreements in respect of the
immovable properties concerned. Thus, the pre-
condition of the applicability of Section 2(1)(c)(vii),
that is, the emanation of the dispute out of the
lease agreement, is not satisfied in the present
suits. Thus, the secondary question as to whether
the immovable properties are used exclusively in
trade or commerce, pales into insignificance.”
15. The defendant no.1 relied upon Clause 6 of the Deed of Lease dated
31st January, 1969 which reads as follows:
“6. To use the demised premised for the
purpose of office, residence, trade, commerce,
godown, hotel and restaurant.”
12
The defendant no.1 raised contention that the judgment of
Deepak Polymers (supra) provides that a lessor, for determination of
an immovable property, has to show that there has been any violation
of the clauses of the contract and that refusal of a lessee to comply with
the notice issued under Section 106 of the Transfer of Property Act,
1882 does not come within the purview of a commercial dispute.
Relying upon the Clause-6 of the Deed of Lease, the contention of
the defendant is that the clause does not speaks about exclusively used
for commercial purpose and thus Section 2(1(c)(vii) of the Commercial
Courts Act, 2015 will not be applicable.
The defendant contended that till date, none of the High Courts or
the Hon’ble Supreme Court has decided contrary to the principles held
in the case of Deepak Polymers (supra) and thus the said judgment is
also equally applicable in the present case. The contention of the
defendant no.1 that the plaintiff has filed the suit for recovery of
possession on the ground that the defendant has not complied with the
notice issued under Section 106 of the Transfer of Property Act, 1882
which is based on a statutory right independent and irrespective of any
clause of Deed of Lease.
The contention of the plaintiff is that while deciding the issue in
the case of Deepak Polymers (supra), none of the parties brought to
the notice of the Hon’ble Court with regard to the Explanation Clause of
13
Section 2(1)(c) of the Commercial Courts Act, 2015 which reads as
follows:
“Explanation.- A Commercial dispute shall not
cease to be a commercial dispute merely because-
a) It is 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.”
In the case of Deepak Polymers (supra), it has held that the first
ingredient of the suits which stares in the face is that the suits are
based on the statutory right conferred by Section 106 of the Transfer of
Property Act, 1882 and cause of action in each of the suits clearly
arises by virtue of the rights conferred by Section 106.
It is also held in the case of Deepak Polymers (supra) that a plain
reading of the provision indicates that Section 2(1)(c) defines
“Commercial Dispute” to be a dispute “arising out of” the subsequent
sub-clauses, including several aspects. Sub-Clause (vii) is the only
basis of argument of the plaintiffs/opposite parties. The Hon’ble Judge
has only considered Sub-Clause (vii) of Section 2 (1)(c) of the Act but
has not taken note of Explanation of the said Section. Explanation
Clause starts with – A commercial dispute shall not cease to be a
commercial dispute because-
14
“(a) it also involves action for recovery of
immovable property or for realization of monies out
of immovable property given as security or involves
any other relief pertaining to immovable property.”
In the present case though the plaintiff has issued notice under
Section 106 of the Transfer of Property Act, 1882 but in the suit, the
plaintiff has prayed for recovery of possession and mesne profit.
The Hon’ble Supreme Court in the case of Manish Kumar (supra)
deals with the function of an Explanation which reads as follows:
“293. Before we address the argument with
regard to the provisions of the Code, it is necessary
to cull out the principles applicable in regard to the
function of an Explanation.
294. A Bench of three learned Judges, in an
off quoted judgment in S. Sundaram Pillai came to
elaborately examine the scope of an Explanation.
Incidentally, the Court had to deal with an
Explanation which was appended to a proviso and,
therefore, its judgment also deals with the
principles applicable in regard to a proviso. On a
conspectus of various decisions, this Court made a
survey of the earlier case law. We may refer to
paras 49, 50, 52 and, finally, its conclusions in
para 53 as follows :
“49. The principles laid down by the
aforesaid authors are fully supported by
various authorities of this Court. To quote only
a few, in Burmah Shell Oil Storage &
Distributing Co. of India Ltd. v. CTO a
Constitution Bench decision, Hidayatullah, J.
speaking for the Court, observed thus :
’20. Now, the Explanation must be
interpreted according to its own tenor, and it is
meant to explain clause (1)(a) of the Article
and not vice versa. It is an error to explain the
15Explanation with the aid of the Article,
because this reverses their roles.’
50. In Bihta Coop. Development Cane
Mktg. Union Ltd. v. Bank of Bihar this Court
observed thus :
‘8. … The Explanation must be read so
as to harmonise with and clear up any
ambiguity in the main section. It should not be
so construed as to widen the ambit of the
section.’
***
52. In Dattatraya Govind
Mahajan v. State of Maharashtra Bhagwati,
J. observed thus :
‘9. … It is true that the orthodox function
of an explanation is to explain the meaning
and effect of the main provision to which it is
an explanation and to clear up any doubt or
ambiguity in it. … Therefore, even though the
provision in question has been called an
Explanation, we must construe it according to
its plain language and not on any a priori
considerations.’
53. Thus, from a conspectus of the
authorities referred to above, it is manifest
that the object of an Explanation to a statutory
provision is–
‘(a) to explain the meaning and
intendment of the Act itself,
(b) where there is any obscurity or
vagueness in the main enactment, to
clarify the same so as to make it
consistent with the dominant object
which it seems to subserve,
(c) to provide an additional support to
the dominant object of the Act in order to
make it meaningful and purposeful,
16
(d) an Explanation cannot in any way
interfere with or change the enactment or
any part thereof but where some gap is
left which is relevant for the purpose of
the Explanation, in order to suppress the
mischief and advance the object of the
Act it can help or assist the Court in
interpreting the true purport and
intendment of the enactment, and
(e) it cannot, however, take away a
statutory right with which any person
under a statute has been clothed or set at
naught the working of an Act by
becoming an hindrance in the
interpretation of the same.’ ”
295. It is important to actually understand
the scope of an Explanation. We have already
noticed the summary of the conclusions of this
Court in S. Sundaram Pillai at para 53. It may give
the impression that an Explanation, in those
circumstances, does not widen the boundaries of
the main provision to which it is an Explanation.
296. However, it is apposite that we hearken
back to what this Court said on an earlier occasion.
In a judgment rendered by four learned Judges
in Hiralal Rattanlal v. State of U.P. this Court
had, while considering the scope of an Explanation
in a taxing statute viz. the United Provinces Sales
Tax Act, 1948, had this to say : (Hiralal Rattanlal
case, SCC pp. 224-25, paras 22 & 25)
“22. It was next urged that on a true
construction of Explanation II to Section 3-D,
no charge can be said to have been created on
the purchases of split or processed pulses. It
was firstly contended that an Explanation
cannot extend the scope of the main section, it
can only explain that section. In construing a
statutory provision, the first and the foremost
rule of construction is the literary construction.
All that we have to see at the very outset is
what does that provision say? If the provision
is unambiguous and if from that provision, the
legislative intent is clear, we need not call into
aid the other rules of construction of statutes.
17
The other rules of construction of statutes are
called into aid only when the legislative
intention is not clear. Ordinarily a proviso to a
section is intended to take out a part of the
main section for special treatment. It is not
expected to enlarge the scope of the main
section. But cases have arisen in which this
Court has held that despite the fact that a
provision is called proviso, it is really a
separate provision and the so-called proviso
has substantially altered the main section.
In CIT v. Bipinchandra Maganlal & Co. Ltd.
this Court held that by the fiction in Section
10(2)(vii) second proviso read with Section 2(6-
C) of the Indian Income Tax Act, 1922 what is
really not income is, for the purpose of
computation of assessable income, made
taxable income.
***
25. On the basis of the language of the
Explanation this Court held that it did not
widen the scope of clause (c). But from what
has been said in the case, it is clear that if on
a true reading of an Explanation it appears
that it has widened the scope of the main
section, effect be given to legislative intent
notwithstanding the fact that the legislature
named that provision as an Explanation. In all
these matters the courts have to find out the
true intention of the legislature.”
297. Even though, in a later decision in S.
Sundaram Pillai, this Court had adverted to this
judgment when it came to culling out the
propositions, the aspect about an Explanation,
widening the scope of a provision, has not been
expressly spelt out. It must be remembered that the
legislature speaks through the medium of the
words it uses. The nomenclature, it gives to the
device, cannot control the express language, which
it employs. If, in effect, in a particular case, an
Explanation does widen the terms of the main
provision, it would become the duty of the court to
give effect to the will of the legislature.”
18
In the case of Ambalal Sarabhai Enterprises Ltd. vs. K.S.
Infraspace LLP and Another reported in (2020) 15 SCC 585, the
Hon’ble Supreme Court by referring the judgement of the Hon’ble
Division Bench of Delhi High Court in the case of Jagmohan Behl vs.
State Bank of Indore reported in 2017 SCC OnLine Del 10706 held
that the dispute involved therein would constitute a commercial dispute
and the expressions “arising out of” and “in relation to immovable
property” should not be given 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.
16. The case of Deepak Polymers (supra) is sub silentio with regard to the
Explanation of Section 2(1)(c) of the Commercial Courts Act, 2015
which expressly provides as mentioned in para 16 (supra). Now in the
present case, the plaintiff has brought to the notice of this Court to the
Explanation Clause.
In the case of Deba Prasad Datta vs. State of West Bengal
reported in 2011 SCC OnLine Cal 335, the Hon’ble Division Bench of
this Court held that :
“16. In the event we would abide by the
decision of Secretary of the Managing Committee,
Kalinagar Girls’ High School, Nadia v. Archana
19Ghosh (Saha) (supra), the entire issue can be
resolved very easily and the order under appeal
has to be forthwith set aside. Sitting in a coordinate
Division Bench, we are bound by the ratio, thereof
so also the Hon’ble Single Judge.
17. The binding precedence of a Division Bench
decision is required to be followed not only by the
Single Judge but also by us in a coordinate Division
Bench. This is the rule of stare decisis. But there
are some exceptions. Those are doctrine of per
inquirrium and sub silentio. In the instant case
the Division Bench in Secretary of the Managing
Committee, Kalinagar Girls’ High School,
Nadia v. Archana Ghosh (Saha) (supra) was in
total oblivion of the Rule 8(5)(a) of the West Bengal
Schools (Recruitment of Non-Teaching Staff) Rules,
2005 and came to a conclusion, which was bereft
of appreciation of the said Rules.
20. Similarly, the Supreme Court in A-One
Granites v. State of U.P., reported in 2001 (3) SCC
537, relying on its earlier decisions in State of
U.P. v. Synthetics and Chemicals Ltd., 1991 (4)
SCC 139 and Arnit Das v. State of Bihar, 2000
(5) SCC 488, has held that where a point
“………having not been referred to, much less
considered by this Court in the earlier appeals, it
cannot be said that the point is concluded by the
same and no longer res integra and accordingly
this Court is called upon to decide the same.”
25. Straight away, we would find the same
being sub silentio having no impinging effect upon
us as a successor Bench.”
In the case of Municipal Corporation of Delhi vs. Gurnam Kaur
reported in (1989) 1 SCC 101, the Hon’ble Supreme Court held that:
“11. Pronouncements of law, which are not
part of the ratio decidendi are classed as obiter
dicta and are not authoritative. With all respect to
the learned Judge who passed the order in Jamna
Das case and to the learned Judge who agreed
with him, we cannot concede that this Court is
20bound to follow it. It was delivered without
argument, without reference to the relevant
provisions of the Act conferring express power on
the Municipal Corporation to direct removal of
encroachments from any public place like
pavements or public streets, and without any
citation of authority. Accordingly, we do not
propose to uphold the decision of the High Court
because, it seems to us that it is wrong in principle
and cannot be justified by the terms of the relevant
provisions. A decision should be treated as given
per incuriam when it is given in ignorance of the
terms of a statute or of a rule having the force of a
statute. So far as the order shows, no argument
was addressed to the court on the question
whether or not any direction could properly be
made compelling the Municipal Corporation to
construct a stall at the pitching site of a pavement
squatter. Professor P.J. Fitzgerald, editor of
the Salmond on Jurisprudence, 12th Edn. explains
the concept of sub silentio at p. 153 in these
words:
A decision passes sub silentio, in the
technical sense that has come to be attached
to that phrase, when the particular point of
law involved in the decision is not perceived
by the court or present to its mind. The court
may consciously decide in favour of one party
because of point A, which it considers and
pronounces upon. It may be shown, however,
that logically the court should not have
decided in favour of the particular party
unless it also decided point B in his favour;
but point B was not argued or considered by
the court. In such circumstances, although
point B was logically involved in the facts and
although the case had a specific outcome, the
decision is not an authority on point B. Point B
is said to pass sub silentio.
12. In Gerard v. Worth of Paris Ltd. (k), the
only point argued was on the question of priority of
the claimant’s debt, and, on this argument being
heard, the court granted the order. No
consideration was given to the question whether a
garnishee order could properly be made on an
account standing in the name of the liquidator.
When, therefore, this very point was argued in a
21
subsequent case before the Court of Appeal
in Lancaster Motor Co. (London) Ltd. v. Bremith
Ltd., the court held itself not bound by its previous
decision. Sir Wilfrid Greene, M.R., said that he
could not help thinking that the point now raised
had been deliberately passed sub silentio by
counsel in order that the point of substance might
be decided. He went on to say that the point had to
be decided by the earlier court before it could make
the order which it did; nevertheless, since it was
decided “without argument, without reference to
the crucial words of the rule, and without any
citation of authority”, it was not binding and would
not be followed. Precedents sub silentio and
without argument are of no moment. This rule has
ever since been followed. One of the chief reasons
for the doctrine of precedent is that a matter that
has once been fully argued and decided should not
be allowed to be reopened. The weight accorded to
dicta varies with the type of dictum. Mere casual
expressions carry no weight at all. Not every
passing expression of a judge, however eminent,
can be treated as an ex cathedra statement,
having the weight of authority.”
In the case of D.J. Malpani & Ors vs. Commissioner of Central
Excise, Nashik reported in (2019) 9 SCC 120 held that:
“27. In this case, CESTAT decided against
the assessee relying on Panchmukhi. The case
of Panchmukhi was apparently decided not after
a discussion on facts and law but because the
counsel for the Revenue submitted that the matter
is covered by the decision in TISCO Ltd. and the
counsel for the assessee “was not in a position to
dispute this legal position”. The judgment
in Panchmukhi has little precedential value. The
point whether Dharmada involved
in Panchmukhi and the surcharge held as price
in TISCO Ltd. were identical and liable to be
included in the transaction value passed sub
silentio. Salmond on Jurisprudence, Twelfth Edn.,
p. 15 states that a decision held is not binding
since it was decided “without argument, without
reference to the crucial words of the rule, and
without any citation of authority”, therefore, would
22not be followed. The author also states that
precedents sub silentio and without arguments are
of no moment. This is enough reason for not
treating the decision in Panchmukhi as a binding
precedent.”
In the case of Shanti Conductors (P) Ltd. vs. Assam State
Electricity Board & Ors. reported in (2016) 15 SCC 13, the Hon’ble
Supreme Court held that :
“49. Since a reading of the Statement of
Objects and Reasons of the Act makes it very clear
that the Act has been enacted for the benefit of the
small-scale and ancillary industries at large, the
decision in Purbanchal Cables & Conductors (P)
Ltd. does not correctly lay down the position of law
with respect to the nature of the Act and its effect
on its prospectivity as well.
50. In my considered view, Purbanchal
Cables & Conductors (P) Ltd. and other decisions of
this Court referred to supra did not consider the
important aspect of the matter, namely, as to
whether the provisions of the Act are retroactive or
not? They merely held that the provisions of the Act
have no retrospective effect. Thus, the judgments
have been rendered sub silentio on this aspect.”
17. In the application filed by the plaintiff before the Rent Controller at
Kolkata under Section 17(6) of the West Bengal Premises Tenancy Act,
1997, one of the lessee, namely, Premlata Chopra has filed written
objection in the said application stating as follows:
“8. With reference to paragraphs 5, 6 and 7 of
the said application the Opposite Party No. 8
denies and disputes each and every statement,
contention and allegation contained therein which
are either not supported by facts or documentary
evidence or riot borne out from the records. This
Opposite Party states that the relationship between
the applicant and the Opposite Parties as landlord
and tenants under the provisions of West Bengal
23Premises Tenancy/Act came into existence on
1.02.1990 and 1.3.1990 when the Opposite Parties
became tenants by holding over in respect of the
aforesaid tenancies and since then relationship
between the applicant and the Opposite Parties are
guided by said Act. The entitlement of the applicant
to have the rent increased is, therefore, also guided
by the West Bengal Premises Tenancy Act, 1997 as
amended up to date and more particularly by the
provisions envisaged under Section 17(4A) thereof
which applies in case of the Opposite parties where
the tenancy subsist for the more than 20 years or
more in respect of the premises constructed in or
before the year 1984 and used for commercial
purpose and as such the fair rent in this case shall
be determined by adding the rent as on 1.7.1976
five times or by accepting the existing rent if such,
rent is more than the increased rent determined
under this Section.”
18. In the rent receipts also the description of tenancy is mentioned as
follows:
Description of Tenancy Area under tenancy (in
sq. ft.)
a. Office space on the ground 2,328
floor of the front building
(North-West side).
b. Office space on the entire 880
ground floor in the
backside building (North-
East side).
c. Office space on the entire 7,700
mezzanine floor of the front
building, andd. Car parking space on
Ground floor, covering the
passage on the North side
& the back side (i.e. East),
of the front building within
the tenanted premises at
9A, Sidhu Kanu Dahar
(previously Esplanade Row
24(East), Kolkata – 700 069.
Total area under tenancy 10,908
19. Section 2(1)(c)(vii) and Explanation of the Commercial Courts Act, 2015
reads as follows:
“2.(1) In this Act, unless the context otherwise
requires,-
(c) “commercial dispute” means a dispute
arising out of–
(vii) agreements relating to immovable property
used exclusively in trade or commerce;
Explanation.- A Commercial dispute shall not cease
to be a commercial dispute merely because-
c) It is 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;
d) One of the contracting parties is the
State or any of its agencies or
instrumentalities, or a private body carrying
out public functions.”
20. In the case of Jagmohan Behl (supra), the Hon’ble Division Bench of
Delhi High Court held that:
“8. Learned single Judge by the impugned
order dated 1st March, 2016, referring to Section
2(1)(c)(vii) of the Act has held that the suit has to be
transferred to the district court as it does not relate
to a commercial dispute for no right under an
agreement relating to immoveable property was
sought to be enforced, inasmuch as the suit only
seeks recovery of rent and mesne profits. It would
be a suit under Section 9 of the Act and not
pursuant to an agreement.
25
10. The explanation in the present case has
to be read as part and parcel of clause (vii), for the
language of the explanation shows the purpose,
and the construction consistent with the purpose
which should be placed on the main provision. The
main provision, therefore, has to be construed and
read in the light of the explanation and accordingly
the scope and ambit of sub-clause (vii) to clause(c),
defining the expression “commercial dispute”, has
to be interpreted. The explanation harmonises and
clears up any ambiguity or doubt when it comes to
interpretation of the main provision. In S.
Sundaran Pillai v. V.R. Pattabiraman (1985) 1
SCC 591, it was observed that explanation to a
statutory provision can explain the meaning and
intendment of the provision itself and also clear
any obscurity and vagueness to clarify and make it
consistent with the dominant object which the
explanation seems to sub-serve. It fills up the gap.
However, such explanation should not be construed
so as to take away the statutory right with which
any person under a statute has been clothed or to
set at naught the working of the Act by becoming a
hindrance in the interpretation of the same.
11. Clause (c) defines the “commercial
dispute” in the Act to mean a dispute arising out of
different sub-clauses. The expression “arising out
of” in the context of clause (vii) refers to an
agreement in relation to an immoveable property.
The expressions “arising out of” and “in relation to
immoveable property”1 have to be given their
natural and general contours. These are wide and
expansive expressions and are not to be given a
narrow and restricted meaning. The expressions
would include all matters relating to all agreements
in connection with immoveable properties. The
immoveable property should form the dominant
purpose of the agreement out of which the dispute
arises. There is another significant stipulation in
clause (vii) relating to immoveable property, i.e., the
property should be used exclusively in trade or
commerce. The natural and grammatical meaning
of clause (vii) is that all disputes arising out of
agreements relating to immoveable property when
the immoveable property is exclusively used for
trade and commerce would qualify as a commercial
dispute. The immoveable property must be used
26exclusively for trade or business and it is not
material whether renting of immoveable property
was the trade or business activity carried on by the
landlord. Use of the property as for trade and
business is determinative. Properties which are not
exclusively used for trade or commerce would be
excluded.
12. The explanation stipulates that a
commercial dispute shall not cease to be a
commercial dispute merely because it involves
recovery of immoveable property, or is for
realisation of money out of immoveable property
given as security or involves any other relief
pertaining to immoveable property, and would be a
commercial dispute as defined in sub-clause (vii) to
clause (c). The expression “shall not cease”, it could
be asserted, has been used so as to not
unnecessarily expand the ambit and scope of sub-
clause (vii) to clause (c), albeit it is a clarificatory in
nature. The expression seeks to clarify that the
immoveable property should be exclusively used in
trade or commerce, and when the said condition is
satisfied, disputes arising out of agreements
relating to immoveable property involving action for
recovery of immoveable property, realization of
money out of immoveable property given as
security or any other relief pertaining to
immoveable property would be a commercial
dispute. The expression “any other relief pertaining
to immoveable property” is significant and wide.
The contours are broad and should not be made
otiose while reading the explanation and sub-
clause (vii) to clause (c) which defines the
expression “commercial dispute”. Any other
interpretation would make the expression “any
other relief pertaining to immoveable property”
exclusively used in trade or commerce as nugatory
and redundant.
13. Harmonious reading of the explanation
with sub-clause (vii) to clause (c) would include all
disputes arising out of agreements relating to
immoveable property when used exclusively for
trade and commerce, be it an action for recovery of
immoveable property or realization of money given
27
in the form of security or any other relief pertaining
to immoveable property.
18. Lease of immoveable property is dealt
with under the Transfer of Property Act in Chapter
V thereof. The said enactment vide section 105
defines what is lease, lessor, lessee and rent and
vide section 107 stipulates how leases are made
and can be terminated. Leases can be both oral or
in writing. Noticeably, sub-clause (vii) to clause (c)
in Section 2 of the Act does not qualify the word
“agreements” as referring to only written
agreements. It would include oral agreements as
well. The provisions of the Transfer of Property Act
deal with the effect of non-payment of rent, effect of
holding over and most importantly the
determination of the leases or their termination. It
cannot be disputed that action for recovery of
immoveable property would be covered under sub-
clause (vii) to clause (c) when the immoveable
property is exclusively used in trade or commerce.
Read in this manner, we do not think that claim for
recovery of rent or mesne profit, security deposit
etc., relating to immoveable property which was
used exclusively in trade or commerce should not
be treated as a commercial dispute in view of the
language, ambit and scope of sub-clause (vii) to
clause (c) to Section 2 of the Act. These would
qualify and have to be regarded as commercial
disputes. The use of expression”any other relief
pertaining to immoveable property” would mean
disputes relating to breach of agreement and
damages payable on account of breach of
agreement would be covered under sub-clause (vii)
to clause (c) to Section 2 of the Act when it is
arising out of agreement relating to immoveable
property exclusively used in trade and commerce.
21. In the present case by way of two registered Deeds of Lease dated 31st
January, 1969, the plaintiff had granted lease to Anuradha Devi (Since
Deceased), Radhika Devi (Since Deceased), Kishori Devi (Since
Deceased), Sudama Devi (Since Deceased), Premlata Chopra (Since
Deceased), Raj Mohini Chopra (Since Deceased), Swarnalata Chopra,
28
the defendant No.1 and Roma Chopra, the defendant no. 2 herein as
joint lessees with respect to various spaces in the property for non-
residential/ commercial use i.e.:
“a) Office space on the Ground Floor of the
front building (North- Western side) measuring
about 2,328 Sq. Ft.; b) Office space on the Ground
Floor at the back building (North-Eastern side)
measuring about 880 Sq. Ft. and c) Office space on
the entire Mezzanine Floor of the front building
measuring 7,700 Sq. Ft., in all totaling to 10,908
Sq. Ft. at 9A, Sidhu Kanu Dahar (previously
Esplanade Row East), P.S. – Hare Street, Kolkata
700 069.
3. That apart, the lessees are also occupying
car parking spaces on the Ground Floor covering
the entire passages on the Northern side and the
Eastern side of the front building (measuring 2,000
Sq. Ft.) and a partial tin shed area (measuring
1,200 Sq. Ft.) also on the Southeastern Side of the
front building within the tenanted premises at 9A,
Sidhu Kanu Dahar (previously, Esplanade Row
(East)), Kolkata – 700 069. Therefore, there is a
total area of 3,200 Sq. Ft. at the said premises
which is also under the occupation of the
defendants.
4. The said Deeds of Lease were for a period
of 21 years commencing on and from 1st February,
1969 and 1st March, 1969 respectively. The said
Deeds of Lease had expired by efflux of time on
31st January, 1990 and 28th February, 1990
respectively.”
As per rent receipts, the defendant is paying rent for the office
spaces as mentioned in paragraph 19 (supra).
22. Section 106 of Transfer of Property Act, 1882, reads as follows :
“106. Duration of certain leases in
absence of written contract or local usage.–
(1) In the absence of a contract or local law or
usage to the contrary, a lease of immovable
29property for agricultural or manufacturing purposes
shall be deemed to be a lease from year to year,
terminable, on the part of either lessor or lessee, by
six months’ notice; and a lease of immovable
property for any other purpose shall be deemed to
be a lease from month to month, terminable, on the
part of either lessor or lessee, by fifteen days’
notice.
(2) Notwithstanding anything contained in any
other law for the time being in force, the period
mentioned in sub-section (1) shall commence from
the date of receipt of notice.
(3) A notice under sub-section (1) shall not be
deemed to be invalid merely because the period
mentioned therein falls short of the period specified
under that sub-section, where a suit or proceeding
is filed after the expiry of the period mentioned in
that sub-section.
(4) Every notice under sub-section (1) must be
in writing, signed by or on behalf of the person
giving it, and either be sent by post to the party
who is intended to be bound by it or be tendered or
delivered personally to such party, or to one of his
family or servants at his residence, or (if such
tender or delivery is not practicable) affixed to a
conspicuous part of the property.”
Section 106 does not give any statutory right to sue. The materials
facts on which the right is founded i.e., the agreement for tenancy
would have to be considered by the Court. In the case of A.B.C.
Laminart (P) Ltd. -vs- A.P. Agencies reported in (1989) 2 SCC 163,
the Hon’ble Supreme Court explained the meaning of cause of action
which reads as follows:
“12. A cause of action means every fact,
which, if traverse d, it would be necessary for the
plaintiff to prove in order to support his right to a
judgment of the Court. In oth er words, it is a
bundle of facts which taken with the l aw
applicable to them gives the plaintiff a fight to reli
30ef against the defendant. It must include some act
done by t he defendant since in the absence of
such an act no cause of action can possibly accrue.
It is not limited to the actu al infringement of the
fight sued on but includes all t he material facts on
which it is founded. It does not compri se evidence
necessary to prove such facts, but every fa ct
necessary for the plaintiff to prove to enable him to
obta in a decree. Everything which if not proved
would give t he defendant a fight to immediate
judgment must be part of t he cause of action. But it
has no relation whatever to t he defence which may
be set up by the defendant nor does it depend upon
the character of the relief prayed for by t he
plaintiff.”
23. While dealing the suit filed after issuance of notice under Section 106 of
the Transfer of Property Act, 1882, the Court has to look into the
contract between the parties as in provisions of Section 106 relating to
tenure and termination of the lease apply only subject to contract
between the parties. If the contract relating to immovable property used
for trade and commerce would come under the provisions of
commercial dispute. If the suit is solely based on Section 106 of the
Transfer of Property Act, 1882, the defendant could not take defence
relying upon the agreement between the parties.
The purpose of the provision under Section 106 of the Transfer of
Property Act, 1882 is to terminate the relationship of the lessor and
lessee before the lessor sues for possession. He has no right of entry till
the tenancy is disrupted. Further, the idea is that every lessee must
have some reasonable notice before he is asked to vacate the premises.
In the case of Samir Mukherjee -vs- Davinder K. Bajaj & Ors.
reported in (2001) 5 SCC 259, the Hon’ble Supreme Court held that:
31
“5. Section 106 lays down a rule of
construction which is to apply when the parties
have not specifically agreed upon as to whether the
lease is yearly or monthly. On a plain reading of
this section it is clear that the legislature has
classified leases into two categories according to
their purposes and this section would be attracted
to construe the duration of a valid lease in the
absence of a contract or local law or usage to the
contrary. Where the parties by a contract have
indicated the duration of a lease, this section would
not apply. What this section does is to prescribe the
duration of the period of different kinds of leases
by legal fiction — leases for agricultural or
manufacturing purposes shall be deemed to be
lease from year to year and all other leases shall
be deemed to be from month to month. Existence of
a valid lease is a prerequisite to invoke the rule of
construction embodied in Section 106 of the
Transfer of Property Act.
6. Section 107 prescribes the procedure for
execution of a lease between the parties. Under the
first para of this section a lease of immovable
property from year to year or for any term
exceeding one year or reserving a yearly rent can
be made only by a registered instrument and
remaining classes of leases are governed by the
second para, that is to say all other leases of
immovable property can be made either by a
registered instrument or by an oral agreement
accompanied by delivery of possession.
7. In the case in hand we are concerned with
an oral lease which is hit by the first para of
Section 107 of the Transfer of Property Act. Under
Section 107 parties have an option to enter into a
lease in respect of an immovable property either for
a term less than a year or from year to year, for
any term exceeding one year or reserving a yearly
rent. If they decide upon having a lease in respect
of any immovable property from year to year or for
any term exceeding one year, or reserving a yearly
rent, such a lease has to be only by a registered
instrument. In the absence of a registered
instrument no valid lease from year to year or for a
term exceeding one year or reserving a yearly rent
can be created. If the lease is not a valid lease
32within the meaning of the opening words of Section
106 the rule of construction embodied therein
would not be attracted. The above is the legal
position on a harmonious reading of both the
sections.
8. In Ram Kumar Das Section 106 was
considered by a Bench of four Judges of this Court.
This Court held that this Section 106 lays down the
rule of construction which is to be applied when
there is no period agreed upon between the parties
and in such cases duration has to be determined
by reference to the object for the purpose for which
tenancy is created. It was also held that the rule of
construction embodied in this section applies not
only to express leases of uncertain duration but
also to leases implied by law which may be
inferred from possession and acceptance of rent
and other circumstances. It was further held that it
is not disputed that a contract to the contrary as
contemplated by Section 106 of the Transfer of
Property Act need not be an express contract; it
may be implied, but it certainly should be a valid
contract. On the facts of the case, the Court held (at
AIR p. 27, para 13) that
“the difficulty in applying this rule to the
present case arises from the fact that a
tenancy from year to year or reserving an
yearly rent can be made only by registered
instrument, as laid down in Section 107 of the
Transfer of Property Act”.
14. In Jagat Taran Berry v. Sardar Sant
Singh the Delhi High Court considered the views
expressed by different High Courts and correctly
took the view that there is no conflict between
Sections 106 and 107 of the Act and for application
of Section 106 a valid year-to-year lease shall be
deemed to exist only when it is created by a
registered instrument; non-existence of a registered
instrument to create such a lease will by itself
exclude Section 106.”
33
In the case of Park Street Properties Pvt. Ltd. -vs- Dipak
Kumar Singh & Anr. reported in (2016) 9 SCC 268, the Hon’ble
Supreme Court held that:
“17. A perusal of Section 106 of the Act
makes it clear that it creates a deemed monthly
tenancy in those cases where there is no express
contract to the contrary, which is terminable at a
notice period of 15 days. The section also lays
down the requirements of a valid notice to
terminate the tenancy, such as that it must be in
writing, signed by the person sending it and be
duly delivered. Admittedly, the validity of the notice
itself is not under challenge. The main contention
advanced on behalf of the respondents is that the
impugned judgment and order is valid in light of
the second part of Section 107 of the Act, which
requires that lease for a term exceeding one year
can only be made by way of a registered
instrument.
18. At this stage, it will also be useful to
examine Clause 6 of the agreement dated 7-8-
2006, which reads as under:
“6. Default.– In the event of any default
on the part of the tenants in making payment
of the rent for 3 consecutive months or in the
event of any breach of any of the terms and
conditions herein contained and on the part of
the tenants to be performed and observed
and the landlord shall be entitled to serve a
notice on call upon the tenants to make
payment of the rent and to remedy for the
breach of any of the remaining terms and
conditions herein contained and if within a
period of 30 days, the tenants shall fail to
remedy the breach, the landlord shall be
entitled to determine or terminate the
tenancy.”
Thus, in terms of Clause 6 of the agreement,
the landlord was entitled to terminate the tenancy
in case there was a breach of the terms of the
agreement or in case of non-payment of rent for
34
three consecutive months and the tenants failed to
remedy the same within a period of thirty days of
the receipt of the notice. The above said clause of
the agreement is clearly contrary to the provisions
of Section 106 of the Act. While Section 106 of the
Act does contain the phrase “in the absence of a
contract to the contrary”, it is a well-settled position
of law, as pointed out by the learned Senior
Counsel appearing on behalf of the appellant that
the same must be a valid contract.
20. Thus, the question of remanding the
matter back to the trial court to consider it afresh in
view of the fact that the same has been admitted in
evidence, as the High Court has done in the
impugned judgment and order, does not arise at
all. While the agreement dated 7-8-2006 can be
admitted in evidence and even relied upon by the
parties to prove the factum of the tenancy, the
terms of the same cannot be used to derogate from
the statutory provision of Section 106 of the Act,
which creates a fiction of tenancy in the absence of
a registered instrument creating the same. If the
argument advanced on behalf of the respondents is
taken to its logical conclusion, this lease can never
be terminated, save in cases of breach by the
tenant. Accepting this argument would mean that
in a situation where the tenant does not default on
rent payment for three consecutive months, or does
not commit a breach of the terms of the lease, it is
not open to the lessor to terminate the lease even
after giving a notice. This interpretation of Clause 6
of the agreement cannot be permitted as the same
is wholly contrary to the express provisions of the
law. The phrase “contract to the contrary” in
Section 106 of the Act cannot be read to mean that
the parties are free to contract out of the express
provisions of the law, thereby defeating its very
intent. As is evident from the cases relied upon by
the learned Senior Counsel appearing on behalf of
the appellant, the relevant portions of which have
been extracted supra, the contract between the
parties must be in relation to a valid contract for
the statutory right under Section 106 of the Act
available to a lessor to terminate the tenancy at a
notice of 15 days to not be applicable.”
35
24. The Commercial Courts Act, 2015 has not specified any dispute arising
out of the agreement relating to the immovable property used
exclusively in trade of commerce which could qualify as commercial
dispute in terms of Section 2(1)(c) of the Act. In the Explanation of
Section 2(1)(c) it is mentioned that “A commercial dispute shall not
ceased to be a commercial dispute merely because – (a) it also involves
action for recovery of immovable property or for realization of moneys out
of immovable property given as security or involves any other reliefs
pertaining to immovable property”.
In the case of Deepak Polymers (supra), the Hon’ble Judge has
not considered the Explanation Clause of Section 2(1)(c) of the
Commercial Courts Act, 2015 and scope, purports and effect of Section
106 of the Transfer of Property Act, 1882.
25. The judgment passed by the Coordinate Bench of this Court in Deepak
Polymers (supra), is binding upon this Court but considering the fact
that in the case of Deepak Polymers (supra), the Explanation Clause
of Section 2(1)(c) of the Commercial Courts Act, 2015 has not
considered and only relying upon Section 106 of the Transfer of
Property Act, 1882, the Hon’ble Judge has come to the conclusion that
refusal by the defendants to comply with the noticed issued by the
lessor under Section 106 of the Transfer of Property Act, 1882 which is
based on statutory right independent and irrespective of any clause of
the lease agreements and thus the suit squarely arising out of a
statutory right conferred by Section 106 of the Transfer of Property Act,
36
1882, having no direct nexus with the lease agreements in respect of
the immovable properties concerned. Thus, the pre-condition of
applicability of Section 2(1)(c)(vii), that is, the emanation of the dispute
out of the lease agreement, is not satisfied in the present suit.
26. This Court with great respect of the Hon’ble Judge dissent the order
passed in Deepak Polymers (supra), in the said case, the Explanation
Clause of Section 2(1)(c) of the Commercial Courts Act, 2015 and the
judgment passed in the case of Samir Mukherjee (supra) and Park
Street Properties Private Limited (supra) were not brought to the
notice of the Hon’ble Judge.
Taking into consideration of the judicial decorum, the matter is
referred to the Hon’ble Chief Justice to constitute Special Bench to
decide the following issues:
a. Whether after issuance of notice under Section
106 of the Transfer of Property Act, 1882, the
defendant or the parties cannot rely the
agreement/ or Lease Deed as the case may
be?
b. Whether only on the basis of the case initiated
under Section 106 of the Transfer of Property
Act, 1882, it can be said that Court cannot
look into the agreement between the parties
and thus the suit cannot be treated as
commercial suit in terms of Section 2(1)(c)(vii)
of the Commercial Courts Act, 2015?
c. Whether if the Explanation Clause of Section
2(1((c) of the Commercial Courts Act, 2015
taken into consideration along with Section
106 of the Transfer of Property Act, 1882, the
suit can be treated as commercial suit in terms
of the lease agreement/ rent agreement
entered between the parties?
37
27. The Registrar, Original Side of this Court is directed to place the record
of the suit being C.S. (COM) No. 4 of 2023 along with the connected
application being G.A. (COM) No. 2 of 2024 before the Hon’ble Chief
Justice for constitution of Special Bench.
(Krishna Rao, J.)