M/S Arogya Aahaara vs. Smt Chandralekha

There are two suits between the parties. O.S.No.1017/2019 has been filed seeking cancellation of the registered lease deed along with other reliefs, whereas O.S.No.2713/2018 has been filed by the owner of the premises seeking recovery of arrears of rent and damages. Both the suits have been clubbed together by the Trial Court.

In that, I.A. No.22 came to be filed in O.S. No.1017/2019 under Section 15(2) of the Commercial Courts Act, 2015, read with Section 151 of the Code of Civil Procedure, HC-KAR NC: 2026:KHC:33039 seeking transfer of both O.S. No.1017/2019 and O.S. No.2713/2018 to the Commercial Court at Bengaluru. The said application came to be dismissed by the order impugned.

The Trial Court, while dismissing the application, observed that, on going through the documents relating to the suit schedule property, it is not a commercial property, but it is a residential property. It is further observed that the plaintiffs had entered into a lease agreement with defendants to take the suit schedule property on monthly rent, and when they attempted to get a commercial license, the competent authority refused to grant a licence to run business activities in the suit schedule property. Therefore, on careful perusal of the pleadings and the material available on record, the transaction between the parties does not fall within the ambit of a commercial transaction as envisaged in the Commercial Courts Act, 2015. 5. The Trial Court further observed that the plaintiffs have not stated as to why they present the suit before this HC-KAR NC: 2026:KHC:33039 Court if the transaction is of commercial in nature, instead of presenting the same before the Commercial Court. The other side has led the evidence and the witness, i.e., P.W.1, had been cross-examined by the plaintiffs. During the said stage, this objection was not raised in the cross-examination of PW1. Thus, looking from any angle, the Trial Court do not find any good grounds to hold that the transaction between the parties was commercial in nature. Accordingly, IA No.22 came to be dismissed.

Aggrieved by the said order, the petitioners have filed W.P. No.10643/2026 and W.P. No.9816/2026. Since both the writ petitions arise out of the suits which have been clubbed together by the Trial Court and challenge the order passed on the identical application, they are being disposed of by this common order.

Smt. Neeraja Karnath, learned counsel appearing for the petitioners/tenants submits that the Trial Court has failed to properly consider the application filed by the petitioners and that the findings recorded therein are contrary to the material available on record. It is submitted that the Trial HC-KAR NC: 2026:KHC:33039 Court proceeded on the erroneous premise that the suit schedule property is a residential property. Learned counsel has drawn the attention of this Court to the Agreement to Lease, particularly to the relevant covenant, which states that the lessee approached and requested the lessor to grant a lease of the schedule premises to him, for manufacturing and sale of food, bakery, ice cream, sweets, hotel/catering business on rent and security deposit for a ten-year duration. It is further stated that the lessor offered to lease the schedule premises on a refundable interest-free security deposit of Rs.12,00,000/- plus Rs.6,00,000/- and monthly rent of Rs.1,20,000/-, plus service tax/GST as applicable on date/subject to changes, plus increase in rent @ 8% every year, thereon and rentals by way of 120 numbers post dated cheques for a term of Ten year duration.

Learned counsel also has drawn the attention of the court to the Clause 5 of the said Lease Agreement, which states that property tax shall be paid by the lessor, but, lessee is liable and shall pay to lessor from the year 2017-2018 and onwards till lessee vacates, BBMP-SAS-taxes within (All the HC-KAR NC: 2026:KHC:33039 total taxes payable, in Excess to, than paid by lessor for commercial for 2016-2017), for any and for additions, covered or added by lessee’s, alterations/modifications in the scheduled premises portions or it will be deducted out of a security deposit.

Learned counsel further submits that, in support of her case, she has also placed on record the tax receipt, which clearly mentions that it is shown as non-residential/commercial property, as declared by the taxpayer. Basing on this, learned counsel for the petitioner submits that it is a commercial property and that the commercial transaction between the parties very well comes within the purview of the Commercial Courts Act. It is submitted that the Commercial Court alone has got the juri iction and the Trial Court has failed to consider all these aspects while rejecting the application.

Learned counsel appearing for the respondent/ landlord submits that the present application has been filed only after the cross-examination of P.W.

Learned counsel for the respondent further submits that, if this Court is inclined to interfere with the impugned order, the matter may be remanded to the Trial Court. It is submitted that the petitioners would have to file an appropriate application seeking return of the plaint under Order VII Rule 10 of the Code of Civil Procedure for presentation before the competent Commercial Court. Learned counsel further submits that the petitioners would be required to go through the process of Section 12A of the Commercial Courts Act and again the petitioner will have the advantage of protracting the matter by another six months. It is submitted that, even if this Court is HC-KAR NC: 2026:KHC:33039 inclined to pass any orders, the matter may be set aside and remand back to the Trial Court for consideration in accordance with law.

Having heard the counsels on either side, perused the material on record, this Court finds that there is no dispute with regard to the fact that two suits are pending between the parties and that corresponding applications were filed seeking transfer of the suits to the Commercial Court on the ground that the transaction between the parties is commercial in nature. In support of the said contention, learned counsel for the petitioners has drawn the attention of this Court to the Lease Agreement and, in particular, to the relevant covenants of the said agreement. This Court has carefully perused the said agreement. A perusal of the order passed by the Trial Court shows that the Trial Court has failed to consider the Lease Agreement between the parties and on what basis the Trial Court has come to the conclusion that the suit schedule property is a residential property is not borne out of the material available on record. HC-KAR NC: 2026:KHC:33039

Considering the Lease Agreement, the covenants and also the property tax receipt that is produced before the Court, which clearly shows that the suit schedule property is a commercial property and as there is a commercial transaction between the parties. Consequently, the Commercial Court alone has got the juri iction to decide the dispute between the parties. In that view of the matter, this Court is of the considered opinion that the order passed by the Trial Court is liable to be set aside.

Then coming to the submission of the learned counsel for the petitioners that order may be set aside and the petitioners have to file an application before the Trial Court seeking transfer of the above suits to the Commercial Court. This Court do not find any force in the said document as in the concerned opinion of the Court, this is a commercial transaction between the parties and the order impugned before the Court needs to be set aside and applications have to be allowed. This Court do not find any reasons to remand the matter.

In the light of the above discussion, this Court is passing the following: HC-KAR NC: 2026:KHC:33039 Order i. The writ petitions are allowed. ii. The order passed on I.A.No.22 in O.S. No.1017/2019 connected with O.S. No. 2713/2018 is set aside. Consequently, both the suits are transferred to the juri ictional Commercial Court at Bengaluru for disposal in accordance with law. Consequently, I.A. No.22 stands allowed. iii. The Commercial Court shall proceed with the suits from the stage where it is pending before the Civil Court. iv. Pending IAs, if any, shall stand closed. (LALITHA KANNEGANTI) JUDGE