Commercial Courts Cannot Hear Eviction Suits Under Jharkhand Rent Act: Jharkhand High Court

The Jharkhand High Court has recently held that the Commercial Courts Act does not confer jurisdiction over eviction proceedings where a special rent control law vests that jurisdiction exclusively in the Rent Controller.

It ruled that a Commercial Court cannot entertain such disputes merely because the leased premises are used exclusively for trade and commerce.

Justice Ananda Sen delivered the judgment.

The court held that the Jharkhand Building (Lease, Rent & Eviction) Control Act, 2011 impliedly excludes the jurisdiction of civil courts in eviction disputes. Since Section 11 of the Commercial Courts Act bars Commercial Courts from entertaining matters where the jurisdiction of civil courts is expressly or impliedly barred, the court observed:

"In view of the aforesaid bar, in terms of Section 11 of the Commercial Courts Act, the Commercial Courts of Jharkhand, has got no jurisdiction to entertain an eviction suit filed by the landlord against the tenant, even though in terms of Section 2(1)(c)(vii) of the Commercial Courts Act, the immovable property is exclusively used in trade and commerce. Thus, 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 Sub-Divisional Magistrate has correctly held that it has jurisdiction to decide the question of eviction."

The dispute arose after Devanand Singh & Son HUF instituted eviction proceedings in 2023 before the Rent Controller-cum-Sub-Divisional Officer, Dhanbad, against Aditya Birla Lifestyle Brands Ltd. The company challenged the continuation of those proceedings before the High Court.

The company argued that the leased premises were used exclusively for trade and commerce. It also pointed out that the value of the dispute exceeded ₹43 lakh. On that basis, it contended that the matter qualified as a commercial dispute under the Commercial Courts Act and could only be adjudicated by a Commercial Court.

The company further argued that it was no longer in possession of the premises. According to it, its franchisee continued to occupy the property after the franchise arrangement was terminated. It, therefore, contended that the Rent Controller lacked jurisdiction to continue with the eviction proceedings.

The company also argued that since the Rent Controller had held that one of the reliefs sought was beyond his competence, the entire eviction proceeding was not maintainable.

The landlord opposed the petition. It argued that the case was an eviction dispute governed by the Jharkhand Building (Lease, Rent & Eviction) Control Act, 2011. It maintained that only the Rent Controller had jurisdiction to decide the matter.

After going through the relevant statutes, the court traced the evolution of the rent control law in Jharkhand. It noted that under the earlier legislation, eviction suits were decided by civil courts. The 2011 Act repealed that framework. It vested the power to decide eviction proceedings in the Rent Controller, who is appointed by the State Government.

The court observed that the 2011 Act does not expressly bar the jurisdiction of civil courts. However, such a bar is implicit from the scheme of the legislation. It flows from the definition of "Controller", the powers vested in that authority and the repeal of the earlier law, which had empowered civil courts to decide eviction suits.

The court concluded that because civil courts cannot entertain eviction proceedings under the 2011 Act, Commercial Courts are also barred from doing so. The fact that the leased premises were used exclusively for trade and commerce did not alter that position or confer jurisdiction on a Commercial Court.

Turning to the company's argument that it was no longer in possession of the premises, the court held that the issue required evidence. It observed that whether the franchisee's occupation amounted to the company's constructive possession was a disputed question of fact. Those issues could only be decided by the Rent Controller after the parties led oral and documentary evidence.

The court clarified that the observations made by the Rent Controller on possession and tenancy while rejecting the company's objection to maintainability were only prima facie findings. It directed that those observations should not prejudice the Rent Controller while deciding the eviction proceedings after considering the evidence led by both sides.

The court also rejected the company's submission that the eviction proceedings were not maintainable because the Rent Controller had held that one of the reliefs sought was beyond his competence. It held that the inability to grant one relief does not render the entire proceeding non-maintainable or require dismissal of the eviction case.

Accordingly, the court directed the Rent Controller to dispose of the eviction proceedings as early as possible without granting unnecessary adjournments. It then dismissed the writ petition.

For Petitioner: Senior Advocate Vineeta Meharia with Advocates Harsh Chandra, Piyush Mehari

For Respondent: Advocates Amritansh Vats, Arpan Manjash Ekka,