Facts: The petitioner, Vivienda Luxury Home, sought to purchase a property from respondents Gregory and Nicholas for Rs. 8.05 crore to develop their business. Negotiations began in November 2003, leading to an oral agreement. The petitioner’s lawyer conducted due diligence, and the petitioner paid Rs. 73.16 lakh for stamp duty, registration, and other fees. Respondent no. 2, the designated partner for the sale, informed the petitioner on May 11, 2024, that respondent no. 3’s presence was needed for registration, which did not occur. The respondents failed to attend rescheduled registration dates on June 4 and 10, 2024, prompting the petitioner to allege a breach of the oral agreement.
Procedural Background: The petitioner filed Commercial Suit No. 20/2024/B, seeking a declaration of a valid oral agreement and specific performance or, alternatively, Rs. 8 crore in damages with 18% interest. The Trial Court granted interim relief on June 13, 2024, maintaining the status quo regarding third-party rights in the property. The respondents filed an application under Order VII Rule 10 of the Code of Civil Procedure, 1908, for return of the plaint, arguing the dispute was not commercial under the Commercial Courts Act, 2015. The petitioner responded on October 4, 2024, asserting the dispute’s commercial nature and filed an amendment application on October 5, 2024, to clarify jurisdictional facts. The Trial Court prioritized the return of plaint application over the amendment application, leading to the impugned order.
Dispute: The core issue was whether the Trial Court, a Commercial Court, had subject-matter jurisdiction to hear the suit, given the respondents’ claim that the dispute over the property sale was not commercial as the property was not “actually used” for trade or commerce, per section 2(1)(c)(vii) of the Commercial Courts Act, 2015. The petitioner argued the suit was commercial and sought to amend the plaint to clarify jurisdiction, while the respondents contended that a court lacking jurisdiction could not entertain an amendment application.
Discussion: The court examined whether the Trial Court’s decision to prioritize the return of plaint application over the amendment application was valid. The petitioner argued that procedural rules should not defeat justice and that amendments to clarify jurisdiction should be allowed. The respondents, citing precedents like Ambalal Sarabhai Enterprises Ltd., argued that only disputes involving property “actually used” for commerce qualify as commercial, and a court lacking jurisdiction cannot entertain amendments. The court distinguished between territorial and subject-matter jurisdiction, noting that subject-matter jurisdiction is fundamental to a suit’s validity. It held that a court without subject-matter jurisdiction cannot adjudicate or allow amendments to confer jurisdiction, as such orders would be null. The court found no infirmity in the Trial Court’s reasoning, emphasizing that the chronological order of applications and the foundational nature of jurisdictional issues justified prioritizing the return of plaint application.
Decision: The court upheld the Trial Court’s impugned order, finding no error in deciding the return of plaint application before the amendment application. It clarified that subject-matter jurisdiction is critical, and amendments cannot cure its absence if the plaint lacks essential jurisdictional facts.
