The Delhi High Court has clarified that a claim for recovery of rent, mesne profits, etc. relating to an immovable property which was used exclusively for trade or commerce should be treated as a commercial dispute for the purpose of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015.
“…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 Bench comprising Justice Sanjiv Khanna and Justice A.K. Chawla observed.
The Court was hearing an Appeal challenging an order passed by a Single Judge, whereby the suit seeking recovering of rent and mesne profits was directed to the transferred to the District Court, observing that it did not relate to a commercial dispute. The Single Judge had pointed out the fact that the suit did not seek to enforce any right under an agreement relating to immoveable property.
The Division Bench of the Court, however, opined, “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.”
Section 2(1) (c) (viii) includes “agreements relating to immoveable property used exclusively in trade or commerce” within the definition of a “commercial dispute”.
The Court then noted that in the context of the case at hand, the immovable property was being used exclusively in trade and commerce and therefore, allowed the Appeal.