The Supreme Court of India, in the case of S.P. Velayutham & Anr. v/s M/S EMAAR MGF Land Limited; SPECIAL LEAVE PETITION (CIVIL) Diary No(s). 2986/2024, addressed the issue of whether a suit for the recovery of money should be considered a commercial dispute under the Commercial Courts Act, 2015. The primary contention revolved around the interpretation of Section 2(1)(c)(vii) of the Act, which specifies that agreements related to immovable property used exclusively in trade or commerce fall under the purview of commercial disputes.
During the proceedings, the Petitioners argued that categorizing a money recovery suit as a commercial dispute would undermine the purpose of establishing commercial divisions to expedite commercial cases. They relied on the Gujarat High Court decision in Vasu Healthcare Private Limited v/s Gujarat Akruti TCG Biotech Limited to support their stance.
On the other hand, the Respondents contended that a commercial dispute should not be limited to cases directly involving trade or commerce, citing the explanation in Section 2(1)(c)(vii) of the Act. They referred to the judgment in Ambalal Sarabhai Enterprises Limited v/s K.S. Infraspace LLP & Anr., where the interpretation of Section 2(1)(c)(vii) was discussed.
The Hon’ble Supreme Court noted that the above issue is already settled in Ambalal Sarabhai Case, which held that the suit for money recovery related to immovable property cannot be simply considered as a commercial suit unless the dispute related to immovable property is ‘actually used’ exclusively in trade or commerce and not either “ready for use” or “likely to be used” or “to be used”.
Thus, the Apex Court, considering the arguments presented and the precedent set in the Ambalal Sarabhai Case, set aside the judgment of the High Court and remitted the matter back for re-consideration.

Author of this article:
Adv. Ravish Bhatt,
Partner, R&D Law Chambers,
Dual Qualified Lawyer Solicitor | International Tax Affiliate

Connect with Mr. Bhatt on Linkedin:

  • Readers should contact their attorney to obtain advice with respect to any particular legal matter. No reader or user should act or refrain from acting on the basis of information written above without first seeking legal advice from qualified law practitioner.