Khadi Gramodyog Bhawan vs. M/S Vipin Chand And Sons HUF

Regular First Appeal under Section 96 read with Order XLI Rule 1 of the Code of Civil Procedure, 1908 (CPC) has been filed against the Judgment dated 23.02.2024 whereby the Suit for possession and mesne profits at the rate of Rs. 6,00,000/-, calculated at the rate of Rs. 2,00,000/- per month from 01.07.2023 till the date of filing of the Suit, was partly decreed.

Brief facts, as per the Plaint, are that basement of property bearing No. 4863/24, Darya Ganj, New Delhi (hereinafter referred to as ―suit premises‖), which was the HUF property, was let out by Mohit Rastogi, the This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/06/2026 at 10:05:21

1.2 The basement shall not be used for residential purposes. 14.12.2 The basement shall have the following requirements: i) every basement shall be in every part at least 2.4 m in height from the floor to the underside of the roof slab or ceiling; ii) Adequate ventilation shall be provided for the basement. The standard of ventilation shall be the same as required by the particular occupancy according to Bye-laws. Any deficiency may be met by providing adequate mechanical ventilation in the form of blowers, exhaust fans (one exhaust fan for 50 sq. m. of Basement area), Air-conditioning system etc. iii) the minimum height of the ceiling of any basement shall be 0.9 m and maximum of 1.2 m above the average surrounding ground level; iv) adequate arrangement shall be made such that surface drainage does not enter the basement; v) the walls and floors of the basement shall be water- tight and be so designed that the effect of the surrounding soil and moisture, if any, are taken into account in design and adequate damp proofing treatment is given; vi) the access to the basement shall be separate from the main and alternate stair-case providing access and exit from higher floors. Where the staircase is continuous the same shall be enclosed type serving as fire separation from the basement floor and higher floors. Open ramps shall be permitted if they are constructed within the building line subject to the provision of (iv); This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/06/2026 at 10:05:21

In the present case, the basement has been given for godown purposes which is not in violation of Delhi Building Bye-laws, as reproduced above. It has not been proved by the Appellant that there was any violation of the Building Bye-laws. The usage of basement can only be for storage purposes, for which it had been let out to the Appellant. It cannot be said that the letting out of basement was in violation of Building Bye-laws or merely letting it out for storage purposes, made it commercial in nature.

From this very definition of a Commercial Suit Clause 2(1)(c)(vii) provides that the agreements relating to immovable property used This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/06/2026 at 10:05:21 ‘used exclusively’ or ‘being used exclusively’. It is, therefore, evident that it is only when the entire premises are being used for commercial purpose that the immovable property can be termed to be used for commercial purpose.

Clause 10 of MDP, 2001 deals with Mixed Use Regulation - Non- Residential Use of Residential Premises. It provides that the resident can be permitted to use part of his residence to the extent of 25% or 50 sq. meters, whichever is less, for a non-residential or a non-nuisance activity, which is for the purpose of rendering services based on his professional skills.

In the present case, it has emerged that the Suit premises was only a godown, which as per MDP, 2001 is permitted to be used for storage purposes/godown. Therefore, it is evident that usage of a basement for storage, does not qualify as a commercial activity and the premises remain residential.

Having held that the suit property had been let out for godown purposes, it further needs to be considered, if it is covered under the definition of commercial dispute, under the Commercial Courts Act.

Whether a dispute qualifies as a commercial dispute as delineated under Section 2(1)(c) Commercial Courts Act would essentially be a matter of interpretation of the Agreement.

Section 2(1)(c) defines commercial dispute as a dispute arising out of wide array of Agreements from ordinary transaction of merchants and bankers to export and import of merchandise and admiralty and carriage of This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/06/2026 at 10:05:21

The relevant clause of S.2 (1) (c) is reproduced ass under: (c) "commercial dispute" means a dispute arising out of- (i) ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents; (ii) export or import of merchandise or services; (iii) issues relating to admiralty and maritime law; (iv) transactions relating to aircraft, aircraft engines, aircraft equipment and helicopters, including sales, leasing and financing of the same; (v) carriage of goods; (vi) construction and infrastructure contracts, including tenders; (vii) agreements relating to immovable property used exclusively in trade or commerce; (viii) franchising agreements; (ix) distribution and licensing agreements; (x) management and consultancy agreements; (xi) joint venture agreements; (xii) shareholders agreements; (xiii) subscription and investment agreements pertaining to the services industry including outsourcing services and financial services; (xiv) mercantile agency and mercantile usage; (xv) partnership agreements; (xvi) technology development agreements; (xvii) intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits; (xviii) agreements for sale of goods or provision of services; (xix) exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum; This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/06/2026 at 10:05:21

Section 2 (1) (c) clarifies that an action for recovery of immovable property or of the contracting parties is the State or private body carrying out public functions, may qualifies as a commercial dispute. The range of agreements from (i) to (xxii) of Section 2(1)(c) presumes that the Agreement must have a commercial substratum i.e. a commercial flavor with regard to understanding of the parties to the Agreement and impact of the Agreement, on Trade and Commerce as well.

The „Trade’, essentially is bilateral or monolateral and involves give and take, which means transfer of goods and services; while the term ‘Commerce’ includes all the activities necessary to facilitate trade which Civil Rev. Pet. No. 1622/2024 decided on 16.07.2024, Telangana High Court, after making a reference to the definition of commercial dispute under Section 2(1)(c) Commercial Courts Act, observed that in essence, a This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/06/2026 at 10:05:21

In Smt. Sharda Devi Kedia (supra) it was further noted that the eagerness of the litigant and lawyers to put a tag of commercial dispute or on an action involving a dispute, can be related to the Statement of Object and Reasons of the Commercial Courts Act which pitches for speedy disposal of high value commercial disputes and for an independent mechanism for their early resolution. The Commercial Courts are hence, imbued with a sense of urgency and fast-tracking of matters. 33. objective of the Commercial Courts Act, is to fast-track the procedure for deciding commercial dispute. It also was in the favour of narrow interpretation of the expression ―commercial dispute‖, to mean the agreements which are exclusively used in trade and commerce.

As noted above, the object of the Commercial Courts Act was to ensure expeditious disposal of commercial disputes which is essential for the economic health of a nation. However, at the same time, it has been highlighted that the Commercial Courts cannot be clogged by transfer of all This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/06/2026 at 10:05:21

In the present case, as noted above, the Appellant had apparently taken on rent the premises for storage of its goods which can neither be termed as Trade or Commerce. In fact, the Appellant has been running its business from a shop, in another place. Therefore, merely taking a place on hire for storage of goods, cannot be termed as a commercial activity. There is no element of trade and commerce which is met and essentially it is only for storage purposes and, therefore, cannot be termed as commercial activity.

It is also pertinent to note that there is no GST being charged on the rent being paid by the Appellant, which further indicates that the nature of activity is not commercial. Therefore, the assertions of the Appellant that the Suit was covered under Commercial Courts Act, is not tenable.

In view of the above discussion, the Suit No. CS DJ 1136/2023 for recovery of Possession and Mesne Profits does not qualify as a commercial dispute.

Hence, the Suit for Possession has been rightly decreed in the favour of the Plaintiff/Respondent.

There is no infirmity in the Impugned Order and the Appeal is hereby, dismissed.

In view of the above, pending Application(s) are disposed of accordingly.