Calcutta HC Sets Aside Injunction, Says Market Value, Not Plaint Valuation, Determines Commercial Suit Threshold

The Calcutta High Court has held that where a dispute relates to immovable property used for trade, the market value of the property, not the valuation stated in the plaint (for determining specified value under the Commercial Courts Act), must govern, while setting aside interim injunction orders in a tenancy dispute.

A Division Bench of Justice Sabyasachi Bhattacharyya and Justice Biswaroop Chowdhury observed:

“Thus, whatever might have been attributed as valuation in the plaint by the plaintiff/respondent no.1, by operation of Section 12 of the 2015 Act, the subject matter of dispute in the suit goes above the specified value even at a prima facie glance of the pleadings made in the plaint and the related documents.”

The appeals were filed by Dev Sahitya Kutir Pvt Ltd against ad interim injunction orders passed by the City Civil Court, Calcutta, in a suit filed by tenant Uttam Kumar Agarwal.

Agarwal claimed he was in possession of the suit property at College Street, Kolkata, under a tenancy agreement and had been using it as a godown for trade products under the name Uttam Shoe & Chappal. He alleged interference with his peaceful possession and sought injunctive relief.

Dev Sahitya Kutir challenged both the original ad interim injunction order and the subsequent order extending it.

The High Court also condoned delays of 66 days and 10 days in filing the appeals after accepting Dev Sahitya Kutir's explanation that case papers had been misplaced during the shifting of its counsel's chamber. Applications seeking substitution of the legal representative of a deceased respondent were also allowed.

Before the High Court, Dev Sahitya Kutir argued that the trial court lacked jurisdiction to entertain the suit in ordinary civil jurisdiction, contending that the dispute arose from a tenancy agreement relating to immovable property used exclusively for trade or commerce and therefore fell within the definition of a commercial dispute under the Commercial Courts Act.

It further argued that since the relief sought related to rights in immovable property, valuation had to be based on the market value of the property rather than the amount disclosed in the plaint, which would place the dispute above the pecuniary threshold for a commercial suit.

Dev Sahitya Kutir also argued that the trial court had granted relief beyond the pleadings by restraining construction activity despite no such specific prayer being made either in the plaint or in the temporary injunction application.

The respondents argued that the valuation disclosed in the plaint was below the statutory threshold, that the dispute was not a commercial one, and that the appeals were not maintainable since ad interim orders were not appealable.

The High Court did not accept those submissions.

Examining the plaint and tenancy agreement, the Bench noted that Agarwal himself had stated the premises were being used as a godown for trade products, while the tenancy agreement showed the premises had been let out as a shop room for commercial use.

The Court held that the three-storeyed property at College Street prima facie had a market value well above ₹3 lakh, the relevant specified value threshold, meaning the suit ought to have been treated as a commercial dispute.

“Hence, at least at a prima facie level, the learned trial Judge, acting in ordinary civil jurisdiction, could not have entertained the suit, which is not framed as a commercial suit, and have granted ad interim injunction,” the Bench held.

On the injunction itself, the High Court found that the trial court had restrained construction activity at adjacent premises nos. 68 and 68/1, College Street, despite those premises not forming part of the suit property and despite no such relief being specifically sought.

“Moreover, the trial Court acted de hors jurisdiction by granting a relief which is not even sought for either in the plaint or in the temporary injunction application itself,” the Court observed.

The Bench further observed that the more appropriate course would have been to first decide the pending application for local inspection to determine whether the construction actually interfered with Agarwal's possession.

The High Court accordingly allowed both appeals, set aside the ad interim injunction and the order extending it, and directed the trial court to expeditiously decide the pending local inspection application and thereafter the temporary injunction application.