Calcutta HC Upholds Transfer of Suit for Recovery of Municipal Taxes to Commercial Division [Read Order]

The Calcutta High Court upheld the transfer of suit for recovery of municipal taxes to commercial division and refused to interfere with the same.It issued consequential directions for the department to transmit the records of CS/53/2010 to the Commercial Division immediately and re-number the suit, treating it as disposed of in the Non-Commercial Division.

Dalhousie Properties Limited, the appellant, filed an appeal challenging a Single Judge's order which directed the transfer of CS/53/2010 from the Non-Commercial Division to the Commercial Division. The appellant contended that the suit, which primarily concerns the recovery of municipal taxes and land revenue under a deed of conveyance, does not constitute a "commercial dispute" as defined under the Commercial Courts Act, 2015.

It was argued that the immovable property in question was not used exclusively for commercial purposes, as portions were vacant, and reliance was placed on Ambalal Sarabhai Enterprises Limited to argue for a strict construction of the Act.

The Division Bench of Justice Debangsu Basak and Justice Md. Shabbar Rashidi noted that the twin conditions for transfer that the suit involves a commercial dispute and its valuation exceeds the specified limit of Rs. 10 lakhs were required to be examined. The suit, valued at over Rs. 15 lakhs, satisfied the monetary threshold.

Regarding the nature of the dispute, the Court observed that the property in question was described as office spaces leased to various companies, fulfilling the criteria of Section 2(1)(c)(vii) of the Act of 2015 (agreements relating to immovable property used exclusively in trade and commerce).

The Court held that the Single Judge did not err in classifying the suit as a commercial dispute. It found that at the time of filing, the property was used as office space for companies, bringing it squarely within the definition of a commercial dispute. The Bench rejected the appellant's arguments, stating that the facts aligned with the statutory provisions.

Consequently, the Court found no reason to interfere with the order. It issued consequential directions for the department to transmit the records of CS/53/2010 to the Commercial Division immediately and re-number the suit, treating it as disposed of in the Non-Commercial Division. The appeal was disposed of without any order as to costs.

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