CS Professional · Arbitration, Mediation and Conciliation · Commercial Transactions

Anand Realty leases a showroom building to Sharma Motors for use exclusively as a car showroom. On default in rent, Anand sues to recover possession of the premises and the arrears. Sharma argues the claim is not commercial because it seeks recovery of immovable property. Which is correct?

The dispute remains potentially commercial. Agreements relating to immovable property used exclusively in trade or commerce are covered, and the Explanation says a dispute does not cease to be commercial merely because it also involves recovery of immovable property.

1. AIt ceases to be commercial because possession of immovable property is sought
2. BIt remains potentially commercial, as agreements relating to immovable property used exclusively in trade or commerce are covered and seeking recovery of property does not by itself remove that characterCorrect
3. CIt is commercial only if the rent exceeds one crore rupees
4. DIt is never commercial since leases are excluded from the definition