Commercial Court Cannot Entertain Eviction Suit Under Rent Act, Holds Jharkhand HC [Read Order]

Ranchi: The Jharkhand High Court has dismissed a writ petition filed by Aditya Birla Lifestyle Brands Limited seeking to halt an eviction proceeding pending before the Rent Controller at Dhanbad, holding that a Commercial Court has no jurisdiction to entertain an eviction suit even where the tenancy relates to property used for trade or commerce.

Justice Ananda Sen was hearing the petition filed under Article 226 of the Constitution, which had challenged the continuation of Eviction Case No.44 of 2023 as well as an order rejecting the petitioner's application for rejection of the landlord's plaint.

The dispute arose out of commercial premises in Dhanbad that the petitioner-company had taken on lease from the respondent, M/s Devanand Singh & Son HUF, and operated through a franchise. After the petitioner terminated its franchise arrangement, a commercial dispute followed before the Commercial Court at Bangalore, in which the landlord had also been made a party. The landlord separately filed an eviction suit against the petitioner-company before the Rent Controller at Dhanbad, prompting the petitioner to argue that the true nature of the dispute was commercial and therefore fell outside the Rent Controller's jurisdiction.

Appearing for the petitioner, senior counsel Vineeta Meharia argued that since the tenancy concerned immovable property used exclusively for trade, the dispute fell within Section 2(1)(c)(vii) of the Commercial Courts Act, 2015, and that Section 21 of that Act, which gives it overriding effect over other laws, stripped the Rent Controller of jurisdiction. Reliance was placed on the Delhi High Court's ruling in Jagmohan Behl v. State Bank of Indore. It was further contended that the petitioner was not in possession of the premises, its franchise being in occupation instead, and that the Rent Controller's contrary finding on possession was erroneous.

Counsel for the respondent-landlord countered that the proceeding was squarely one for eviction, which only the Rent Controller could entertain under the Jharkhand Building (Lease, Rent & Eviction) Control Act, 2011, and that questions of possession were disputed facts unsuited for determination at the threshold stage.

Examining the statutory scheme, the Court noted that Section 11 of the Commercial Courts Act bars a Commercial Court or Commercial Division from entertaining any suit relating to a commercial dispute where the jurisdiction of the civil court is expressly or impliedly excluded under any other law in force. Tracing the legislative history from the Bihar Building (Lease, Rent & Eviction) Control Act, 1982, through its adoption by Jharkhand in 2000, to the 2011 Act, the Bench found that the power to order eviction, once vested in civil courts, now lies exclusively with the Controller, an executive officer not below the rank of Sub-Divisional Officer.

“Any dispute in relation to eviction, the tenant is beyond the jurisdiction of Civil Court,”

the Court held, reasoning that since the 2011 Act impliedly bars civil courts from entertaining eviction disputes, Section 11 of the Commercial Courts Act equally bars Commercial Courts from doing so, regardless of the commercial character of the underlying transaction.

“I hold that the grounds and the contention raised by the petitioner that the Commercial Courts exclusively has got jurisdiction to entertain an eviction suit, cannot be accepted,”

the Court ruled, affirming that the Sub-Divisional Magistrate had correctly held that it possessed jurisdiction to decide the eviction question.

On the petitioner's plea regarding possession, the Court declined to record any finding, holding that whether the petitioner remained in possession, or whether its franchise's occupation amounted to constructive possession, was a disputed question of fact to be decided by the Rent Controller only after parties led oral and documentary evidence. It clarified that the Rent Controller's observations in the impugned order were prima facie findings confined to the maintainability application and should not influence the Rent Controller while deciding the eviction case on merits.

The Court also rejected the petitioner's argument that the entire petition before the Rent Controller ought to have been dismissed merely because one of the prayers made therein was held to be beyond its competence, observing that rejection of one prayer does not render the remaining prayers or the suit itself not maintainable.

The Bench further directed the Sub-Divisional Officer/Rent Controller to dispose of the eviction case expeditiously, without granting unnecessary adjournments to the parties. Finding no merit in the petition, the Court dismissed the writ petition.

Appearances: Mrs. Vineeta Meharia, Senior Advocate, with Mr. Harsh Chandra and Mr. Piyush Meharia, Advocates, for the petitioner; Mr. Amritansh Vats and Mr. Arpan Manjash Ekka, Advocates, for the respondent.

Case Title: Aditya Birla Lifestyle Brands Limited vs. M/s Devanand Singh & Son HUF

[Read Order]