Delhi HC: Recovery of rent from immovable property in trade is a commercial dispute

The Delhi High Court has clarified that a claim for recovery of rent, mesne profit relating to an immovable property which has been exclusively used for trade or commerce should be treated as a commercial dispute for the purpose of the commercial courts, a commercial division and commercial appellate division of High courts act, 2015.

The bench comprising of Justice Sanjeev Khanna and Justice A.K Chawla said that the claim for recovery of rent or mesne profit, security deposit etc, relating to immovable property which was used exclusively in trade or commerce should not be treated as a commercial dispute in view of the language, ambit, and scope.

The court was hearing an Appeal challenging an order passed by the single judge whereby the suit seeking recovering of  rent and mesne profits was directed to the transferred to the District Court observing that it did not relate to commercial dispute. The single judge has pointed out the fact that the suit did not seek to enforce any right under an agreement relating to immovable property.

The division bench of the court, however opined that, the use of expression “any other relief pertaining to immovable property would mean disputes relating to breach of agreement and damages payable on account of breach of agreement and damages payable on account of breach of agreement would be covered under subclause (vii) to clause (c) to Section 2 of the Act when it is arising out of agreement relating to immovable property exclusively used in trade and commerce.

The court then noted that in the context of the case at hand, the immovable property was being used exclusively in trade and commerce and therefore allowed the appeal.


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