Dispute over municipal tax liabilities under a conveyance for commercial office space constitutes a "commercial dispute."

The Plaintiff (Respondent) filed a suit (CS/53/2010) seeking recovery of money (Rs. 15,77,812/-) and other reliefs (Rs. 20 Lakhs) based on a 2003 deed of conveyance.

The dispute involves the Appellant’s (Defendant No. 1) alleged failure to pay municipal taxes and land revenue for property purchased by the Plaintiff, which consisted of office spaces in two three-storied buildings.

The Plaintiff filed an application (GA/1/2025) to transfer the suit to the Commercial Division, asserting it involved a "commercial dispute".

A Single Judge of the High Court allowed the transfer on February 27, 2026.

The Appellant challenged this order, arguing that tax liabilities do not constitute a commercial dispute and that portions of the property were vacant, thus not used exclusively for trade.

1. Whether a dispute arising out of a deed of conveyance regarding municipal tax liabilities for office spaces qualifies as a "commercial dispute" under Section 2(1)(c)(vii) of the Commercial Courts Act, 2015?

2. Whether the suit met the "specified value" criteria for transfer to the Commercial Division?

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

The "specified value" threshold, which at the time of the order was in excess of Rs. 10 Lakhs.

Ambalal Sarabhai Enterprises Limited v. K.S. Infraspace LLP and Another (2020) 15 SCC 585, which mandates a strict construction of the definition of commercial disputes, ensuring only those actually answering the statutory definition are covered.

The Court first addressed the valuation criteria, noting the suit was valued at over Rs. 35 Lakhs, thereby exceeding the Rs. 10 Lakh threshold required for the Commercial Division.

The Court scrutinized the deed of conveyance dated August 4, 2003, and its schedules, observing that the property consisted of tenanted office spaces and that the tenants were companies.

The Court rejected the Appellant’s argument that vacant portions exempted the property from the "commercial" classification, finding that as of the date of filing, the immovable property was used as office space.

Applying the strict construction rule from Ambalal Sarabhai, the Court determined that because the foundational basis of the suit was an agreement relating to property used for trade/commerce (office spaces), the dispute fell squarely within the meaning of Section 2(1)(c)(vii) of the Act.

The Court issued consequential directions for the Department to transmit the records of CS/53/2010 to the Commercial Division, re-number the suit and pending applications, and treat the matter as disposed of in the Non-Commercial Division.

Parties were granted liberty to take steps regarding the related suit EOS/7/2010.