Introduction:The case of T.E. Thomson & Company Limited vs. Swarnalata Chopra Nee Kapur & Anr. revolves around a significant question of law concerning the jurisdiction of commercial courts to entertain suits for eviction based on lease agreements once the lease has expired and possession is sought under Section 106 of the Transfer of Property Act, 1882. The core issue addressed by the Division Bench of the Calcutta High Court was whether such eviction suits can be treated as "commercial disputes" under Section 2(1)(c)(vii) of the Commercial Courts Act, 2015, when the immovable property in question is used exclusively for trade or commerce.
Factual Background:T.E. Thomson & Company Limited, the plaintiff, had entered into registered lease agreements with the defendant, Swarnalata Chopra, with the leases expiring in 1990. Post expiry, the lease was treated as a monthly lease. A notice of termination under Section 106 of the Transfer of Property Act, 1882 was issued on 30th March 2023. As the defendants failed to vacate the property, the plaintiff initiated a suit for eviction and mesne profits before the commercial division of the High Court, claiming that the dispute qualifies as a commercial dispute under the 2015 Act, considering the commercial nature of the leased premises.
Procedural Background:The suit was registered as CS (COM) No. 4 of 2023 before the Commercial Division of the Calcutta High Court. The defendants filed an application seeking rejection of the plaint, arguing that the dispute did not fall within the ambit of a "commercial dispute" as defined under the Commercial Courts Act, 2015. The learned Single Judge observed a divergence of views between existing decisions and made a reference to a larger bench under the commercial appellate division. Accordingly, the matter came up for consideration before a Division Bench comprising Justices Soumen Sen and Smita Das De.
Legal Issue:The primary legal questions referred for determination were whether after issuance of notice under Section 106 of the Transfer of Property Act, 1882, parties can still rely on the lease agreement? whether a suit based solely on Section 106 of the TPA precludes examination of the lease agreement, and thus cannot be termed a commercial suit under Section 2(1)(c)(vii) of the Commercial Courts Act, 2015; and whether, considering the explanation to Section 2(1)(c) of the Commercial Courts Act along with Section 106 TPA, such suits can be treated as commercial suits.
Discussion on Judgments:Numerous precedents were cited by both parties and the amicus curiae to argue their respective positions. The case of Deepak Polymers Pvt. Ltd. vs. Anchor Investments Pvt. Ltd., 2021 SCC OnLine Cal 4323, held that a suit purely based on a statutory notice under Section 106 TPA lacks direct nexus with the lease agreement and therefore cannot be treated as a commercial dispute. On the other hand, Jagmohan Behl vs. State Bank of Indore, 2017 SCC OnLine Del 10706, held that disputes arising out of agreements relating to commercial use of immovable property are covered under the Commercial Courts Act, even if the relief sought includes eviction. In Church of Christ Charitable Trust vs. Ponniamman Educational Trust, (2012) 8 SCC 706, the Supreme Court clarified the concept of cause of action as a bundle of facts that must be proved to get relief.
In Manish Kumar vs. Union of India, (2021) 5 SCC 1, and Sundaram Pillai vs. V.R. Pattabiraman, (1985) 1 SCC 591, the Court explained the purpose and effect of explanation clauses in statutory interpretation, affirming that such explanations can expand the scope of the provision if legislatively intended. The decision in Ambalal Sarabhai Enterprises Ltd. vs. KS Infraspace LLP, (2020) 15 SCC 585, interpreted the Commercial Courts Act narrowly, emphasizing that commercial usage must exist at the time of the dispute. In Park Street Properties Pvt. Ltd. vs. Dipak Kumar Singh, (2016) 9 SCC 268, it was emphasized that under TPA, a right to possession arises after expiry of valid notice, making it independent of the lease deed.
In Gulam Mohmad Khan vs. Gulam Nabi Channu Miya, 2009 (6) Mh.L.J. 954, the Court held that a valid notice under Section 106 TPA alone suffices for a decree of eviction under the TPA. Similarly, in MEC India Pvt. Ltd. vs. Lt. Col. Inder Maira, 1999 SCC OnLine Del 422, the Court explained that each lapse of time post-termination of tenancy gives rise to a fresh cause of action. Finally, in A.B.C. Laminart Pvt. Ltd. vs. A.P. Agencies, (1989) 2 SCC 163, the Court clarified that cause of action includes all relevant material facts and not just the immediate statutory right.
Reasoning and Analysis of the Judge:The Division Bench held that a rigid dichotomy between statutory and contractual rights is misleading in the context of eviction suits under the Transfer of Property Act. The Court emphasized that Section 106 of the TPA is merely a rule of construction to determine the tenure and method of termination of lease, and not an independent source of cause of action to the exclusion of the underlying lease agreement.
The Court observed that the phrase “relating to” in Section 2(1)(c)(vii) of the Commercial Courts Act is of wide import and includes all matters connected with commercial use of immovable property, including eviction proceedings following lease expiry. The explanation to Section 2(1)(c) reinforces this by expressly clarifying that the nature of relief (e.g., recovery of possession) does not detract from the commercial character of the dispute if the agreement pertained to commercial use.
The Court distinguished Deepak Polymers, holding that it failed to consider the explanation to Section 2(1)(c) and adopted an unduly narrow construction. Relying on the judgments in Manish Kumar, Sundaram Pillai, and Jagmohan Behl, the Court held that eviction suits concerning commercial premises should be adjudicated as commercial disputes.
Final Decision:The Division Bench answered the reference in favour of the plaintiff. It held that parties can rely on the lease agreement even after issuance of notice under Section 106 of the TPA. A suit initiated under Section 106 TPA does not preclude examination of the lease agreement, and such a suit may qualify as a commercial dispute. Considering the explanation to Section 2(1)(c) of the Commercial Courts Act along with Section 106 TPA, the suit can indeed be treated as a commercial suit.
The Court thus affirmed that such eviction disputes are within the jurisdiction of commercial courts where the property in question is used exclusively for trade or commerce.
Law Settled in This Case:This case settles that suits for recovery of possession of commercial premises, even when founded on notice under Section 106 of the Transfer of Property Act, 1882, fall within the ambit of “commercial disputes” as defined under Section 2(1)(c)(vii) of the Commercial Courts Act, 2015. The lease agreement and the nature of use of the property remain relevant to determine the jural relationship and the commercial nature of the dispute, notwithstanding the procedural reliance on Section 106.
Case Title: T.E. Thomson & Company Limited vs. Swarnalata Chopra Nee Kapur & Anr.
Date of Order: 18th June, 2025
Case Number: CS (COM) No. 4 of 2023
Name of Court: High Court at Calcutta
Name of Judge: Hon’ble Justice Soumen Sen and Hon’ble Justice Smita Das De
Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.
Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
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