"Actual use" of immovable property in commercial disputes includes its construction and gestation phases.

The appellants (landowners) instituted a suit for ejectment and recovery of arrears of rent amounting to ₹8,10,000/- against the respondents

The suit property, measuring 1575 sq. mts., was converted for "Non-Agricultural Commercial, Petrol Station purposes" via an order dated 03.12.2018

A lease deed was executed on 06.03.2021 for 29 years and 11 months specifically for setting up a retail petroleum outlet

While the petrol station was fully constructed and fuel dispensing units were installed, the business had not yet commenced due to a pending NOC from the NHAI

On 14.03.2024, the Principal District and Sessions Judge, Chikkamagaluru (Commercial Court), ordered the return of the plaint, holding that the suit did not involve a "commercial dispute" under Section 2(1) of the Commercial Courts Act, 2015 (CC Act)

The appellants challenged this order before the High Court.

The court primarily applied Section 2(1)(c)(vii) of the Commercial Courts Act, 2015, which defines a "commercial dispute" as one arising out of agreements relating to immovable property "used exclusively in trade or commerce"

The court relied on the expansive interpretation of the phrase "arising out of" as established in Doypack Systems (P) Ltd. vs. Union of India, which includes expressions "pertaining to" and "in relation to"

The court interpreted the word "used" as appearing in Section 2(1)(c)(vii) of the CC Act in light of the Supreme Court's decision in Ambalal Sarabhai Enterprises Ltd. vs. K.S. Infraspace LLP, distinguishing between "actual use" and "future use"

The High Court examined whether the suit property satisfied the "actual use" criteria required by the CC Act.

The court rejected the respondent's restrictive interpretation that "used" implies only active revenue-generating operations

It observed that the property had already been legally converted for commercial use and a petrol station was physically constructed with equipment installed

The court reasoned that the gestation period of a business—including construction and setting up infrastructure—is an integral part of the commercial enterprise and its profit-making apparatus

It distinguished Ambalal Sarabhai, noting that in that case, the property had not been converted and its commercial use was merely a future possibility, whereas here, the property was currently being utilized for the purpose of establishing a retail outlet

The court emphasized that the CC Act’s objective of "ease of doing business" would be frustrated if disputes arising during the setup phase of a commercial project were excluded from the specialized jurisdiction of Commercial Courts

The court held that the dispute qualifies as a "commercial dispute" because the property was being used exclusively for a commercial purpose (the establishment of a petrol pump), regardless of whether revenue operations had commenced

The court restored the plaint and directed the parties to appear before the Commercial Court on 10.04.2026 for further proceedings