- 1 - HC-KAR NC: 2025:KHC:28718-DB COMAP No. 78 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF JULY, 2025 PRESENT THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE AND THE HON'BLE MR. JUSTICE C M JOSHI COMMERCIAL APPEAL NO. 78 OF 2025 BETWEEN: 1. INDIAN OIL CORPORATION LTD., REG OFFICE, INDIAN OIL BHAVAN G-9, ALIYAVAR LUNG MARG BANDRA (EAST) MUMBAI - 400 051 REP. BY ITS CHAIRMAN. 2. INDIAN OIL CORPORATION LTD., MARKETING DIVISION "INDIAN OIL BHAVAN" ABBAKKA NAGAR KOTTARA, KULOOR FERRY ROAD MANGALORE - 575 006 REP. BY ITS DIVISIONAL RETAIL SALES HEAD. …APPELLANTS (BY SRI UDAYA PRAKASH M., ADVOCATE) AND: 1. NAYANA CHANDRA SHETTY AGED ABOUT 45 YEARS S/O SATISH KUMAR SHIVA PRASAD, SHIVABAGH Digitally signed by SUMATHY KANNAN Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:28718-DB COMAP No. 78 of 2025 OPP. IV CROSS KADRI, MANGALURU D.K. DISTRICT - 575 006. …RESPONDENT (BY SRI A.G. GURURAJ, ADVOCATE) THIS COMMERCIAL APPEAL UNDER SECTION 13(1) (A) OF THE COMMERCIAL COURTS ACT, 2015, PRAYING TO ALLOW THIS APPEAL BY SETTING ASIDE THE JUDGMENT AND DECREE DATED 27.11.2024 PASSED IN COM.OS NO.61/2024 ON THE FILE OF THE PRINCIPAL DISTRICT AND SESSIONS JUDGE, COMMERCIAL COURT, UDUPI AND ETC. THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE and HON'BLE MR. JUSTICE C M JOSHI ORAL JUDGMENT (PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE) 1. The appellants [IOCL], have filed the present appeal under Section 13 (1-A) of the Commercial Courts Act, 2015 [CC Act], impugning the judgment and decree dated 27.11.2024 passed by the Principal District and Sessions Judge, Commercial Court, Udupi [Commercial Court], in Commercial O.S.No.61/2024 captioned, "Nayana Chandra Shetty vs. Indian Oil Corporation Ltd". - 3 - HC-KAR NC: 2025:KHC:28718-DB COMAP No. 78 of 2025 2. The respondent had instituted the said suit, seeking possession of the property described as site bearing Sy.No.33/5A (RTC S.No.33/5A1) situated in Udyavara village, Udupi Taluk, measuring 1696.4 sq.mts.,42.41 meters from East to West and 40 metres from North to South, ['Demised Premises']. 3. The respondent had let out the Demised Premises to IBP Company Ltd., on a lease for a period of 20 years for storage and sale of petroleum products, with effect from 30.03.2004, under a registered sale deed dated 16.04.2004 [the Lease Agreement]. IBP Co. Limited was subsequently merged with IOCL, which continued as a tenant of the respondent [plaintiff in the suit], in respect of the Demised Premises. 4. IOCL sent a letter dated 31.07.2023, requesting the respondent to furnish his offer for renewing the lease. The respondent sent a proposal through his Lawyer on 23.12.2023. The respondent had also informed the IOCL that if it failed to accept its proposal within a period of 15 days from the date of receipt of notice, it would have to surrender vacant possession of - 4 - HC-KAR NC: 2025:KHC:28718-DB COMAP No. 78 of 2025 the Demised Premises, immediately on expiry of the term of lease. However, IOCL did not accept the respondent’s proposal. 5. The lease for the Demised Premises expired by efflux of time, on 29.03.2024. However, the IOCL failed to hand over vacant possession of the Demised Premises and continued to occupy the same. 6. In the aforesaid context, the respondent instituted the afore- mentioned action for recovery of possession as well as for payment of mesne profits, at the rate of Rs.2,00,000/- per month. The respondent claimed an amount of Rs.3,01,000/- till the date of filing of the suit. 7. Prior to institution of the suit, the respondent had made a reference to mediation before the District Legal Services Authority, Udupi, in terms of Section 12A of the CC Act. IOCL did not participate in the proceedings. Resultantly, the DLSA issued a 'Non-starter report' dated 29.04.2024. 8. IOCL filed a written statement on 02.09.2024. The said written statement was not accompanied by the Statement of Truth. - 5 - HC-KAR NC: 2025:KHC:28718-DB COMAP No. 78 of 2025 Accordingly, the learned Commercial Court, rejected the same by an order dated 14.10.2024. 9. The respondent tendered his affidavit by way of evidence. 10. The learned Commercial Court held in favour of the respondent. The court found that IOCL was in illegal possession of the Demised Premises with effect from 30.03.2024. Accordingly, the court directed the IOCL to hand over vacant possession of the Demised Premises, within a period of 30 days from the date of the judgment. Additionally, IOCL was directed to pay a sum of Rs.3,02,000/- and a further amount of Rs.1,00,000/- per month, on account of mesne profits, from the date of the suit till the date of payment. 11. The learned counsel for IOCL has assailed the impugned judgment, on two fronts. First, he submits that the learned Commercial Court had not afforded the IOCL any opportunity to file a Statement of Truth and thus, the decision to reject the written statement and proceed with the suit, is erroneous. The impugned judgment and decree rendered without considering the written - 6 - HC-KAR NC: 2025:KHC:28718-DB COMAP No. 78 of 2025 statement, is thus liable to be set-aside. And second, the learned Commercial Court had no jurisdiction to adjudicate the suit, as the dispute between the parties could not have been classified as a commercial dispute. 12. He submitted that since the lease for the Demised Premises had expired by efflux of time, the dispute between the parties had arisen de hors the Lease Agreement. He referred to the decision of the Calcutta High Court in Deepak Polymers Private Ltd. v. Anchor Investments Private Ltd. and Other connected matters : C.O. No. 759 / 2021 decided on 24.06.2021 and on the strength of the said decision contended that the subject dispute could not be considered as a commercial dispute. 13. In terms of Order VI Rule 15A(1) of the Code of Civil Procedure, 1908, [CPC] as amended by virtue of the CC Act, every pleading is required to be verified by an affidavit in the manner and the form as prescribed in Appendix to the First Schedule of the CPC. Rule 15A is mandatory. Sub-rule (4) of Rule 15A makes it amply clear that in cases where pleadings are not verified in the manner as provided, the party shall not be permitted to rely on - 7 - HC-KAR NC: 2025:KHC:28718-DB COMAP No. 78 of 2025 such pleadings as evidence. Order VI Rule 15A CPC, is set out below: "15A. Verification of pleadings in a commercial dispute— (1) Notwithstanding anything contained in Rule 15, every pleading in a commercial dispute shall be verified by an affidavit in the manner and form prescribed in the Appendix to this Schedule. (2) An affidavit under sub-rule (1) above shall be signed by the party or by one of the parties to the proceedings, or by any other person on behalf of such party or parties who is proved to the satisfaction of the Court to be acquainted with the facts of the case and who is duly authorised by such party or parties. (3) Where a pleading is amended, the amendments must be verified in the form and manner referred to in sub- rule (1) unless the Court orders otherwise. (4) Where a pleading is not verified in the manner provided under sub-rule (1), the party shall not be permitted to rely on such pleading as evidence or any of the matters set out therein. (5) The Court may strike out a pleading which is not verified by a Statement of Truth, namely, the affidavit set out in the Appendix to this Schedule." 14. Admittedly, the written statement filed by IOCL was not supported by a Statement of Truth. IOCL had also not made an - 8 - HC-KAR NC: 2025:KHC:28718-DB COMAP No. 78 of 2025 application to permit it to cure the defect and file the Statement of Truth for complying with the requirement of Order VI Rule 15A CPC. 15. In A.V. Industries v. Neo Neon Electrical Pvt. Ltd.,: 2023 SCC Online Del 5397 the Division Bench of the Delhi High Court had held that the time for filing a Statement of Truth could not be extended indefinitely keeping in view the limitation for filing the pleadings. The Court further held that a plaint that is not supported by Statement of Truth would be non est. We consider it apposite to set out the following extract from the said decision: 34. For appreciating this argument, we need to consider the provisions of both, Order VI Rule 15 (4) & (5) of CPC as amended by the CC Act, whereby filing of the Statement of Truth is mandatory. The said provisions are extracted hereunder: “Order 6 Rule 15-A. Verification of pleadings in a Commercial Dispute 15-A. Verification of pleadings in a Commercial Dispute. - (4) Where a pleading is not verified in the manner provided under sub-rule (1), the party shall not be permitted to rely on such pleading as evidence or any of the matters set out therein (5) The court may strike out a pleading which is not verified by a Statement of Truth, namely, the affidavit set out in the Appendix to this Schedule.” - 9 - HC-KAR NC: 2025:KHC:28718-DB COMAP No. 78 of 2025 35. A perusal of the aforesaid provisions, particularly Order VI Rule 15A of CPC as amended by CC Act, would bring to fore that the Legislature had, in its wisdom, intentionally laid great stress on the filing of the Statement of Truth along with the plaint, in support thereof, to reduce the time spent in the litigation by parties. The delay in filing of the same may be considered as a procedural irregularity, however, the filing of the same, in our view, would be mandatory. Moreover, the filing of the Statement of Truth and the limitation thereafter provided for filing of the same, in our view is restrictive in nature and cannot be extended endlessly nor can the plaint and the documents annexed thereto be read in evidence. This has great significance since sub rule (4) and (5) of Rule 15A of Order VI of CPC as amended by CC Act mandate the filing of the Statement of Truth and also prescribe the effect of such non filing. It is clear that the parties are not permitted to rely upon the said pleadings by virtue of sub rule (4) and simultaneously the Court is empowered to strike out a pleading which is not supported by the statement of truth, prescribed by sub rule (5) of Rule 15A of Order VI of CPC as amended by CC Act. Our endeavour in the present case is only to consider the effect of non filing of the Statement of Truth, since the facts obtaining in the present case do not give rise to any other question and thus, our views are restricted only to the said issue. 36. In the present case, it is admitted by the learned counsel for the respondent/plaintiff that the Statement of Truth indeed, was never filed either with the plaint or any time later at all. Keeping this fact in view, we are of the opinion that the same would fall within the purview of issue of law and hold that the plaint itself is non est and could not have been read in evidence either. Thus, while non-filing of Statement of Truth may be a curable defect, it is necessary that the said defect be cured, as filing of the - 10 - HC-KAR NC: 2025:KHC:28718-DB COMAP No. 78 of 2025 Statement of Truth is mandatory and non-filing is not a defect that can be ignored. 16. Having stated the above, we have also examined the written statement filed by the IOCL. A plain reading of the said written statement indicates that IOCL had admitted all material facts, which were necessary for decreeing the suit preferred by the respondent. There is no dispute that the IOCL was bound by the terms of the Lease Agreement. IOCL had also expressly acknowledged that it had received the legal notice dated 23.12.2023. It is the IOCL's case that it had attempted to negotiate with the respondent in good faith, but they were unable to arrive at mutually agreeable terms. 17. A plain reading of the written statement indicates that the IOCL had acknowledged that the lease of the Demised Premises had expired and it was continuing to remain in occupation of the Demised Premises despite being served by a notice dated 23.12.2023. It is clear from the above, that the respondent was entitled to the impugned judgment and decree. IOCL can draw no benefit from the fact that it had failed to support its pleadings by - 11 - HC-KAR NC: 2025:KHC:28718-DB COMAP No. 78 of 2025 affirming its Statement of Truth, as required in terms of Order VI Rule 15A of the CPC. 18. We find no merit in the contention that the subject disputes between the parties, do not fall within the definition of 'commercial dispute'. The expression 'commercial dispute', is defined under Clause (c) of sub-section (1) of Section 2 of the CC Act. Sub- clause (vii) of Clause (c) of sub-section (1) of Section 2 is relevant, and is reproduced below: "2. Definitions.-- (1) In this Act, unless the context otherwise requires,-- *** *** *** (c) "commercial dispute" means a dispute arising out of -- *** *** *** (vii) agreements relating to immovable property used exclusively in trade or commerce;" 19. A plain reading of the Lease Agreement in respect of the Demised Premises indicates that the use of Demised Premises had been converted from agricultural to commercial purpose, in terms of the order passed by the Deputy Commissioner, Udupi, on 23.09.2003, which was prior to the parties executing the Lease - 12 - HC-KAR NC: 2025:KHC:28718-DB COMAP No. 78 of 2025 Agreement. The Lease Agreement also expressly states that the Demised Premises were leased "for the purpose of establishing a Retail Outlet". Thus, undisputedly, the Demised Premises was leased exclusively for commercial purposes. The learned counsel also does not controvert that the Lease Agreement would be covered under the description of an “agreement relating to an immovable property used exclusively in trade and commerce”. 20. However, it is the IOCL's contention that the dispute does not arise from the terms of the Lease Agreement but on account of IOCL continuing to occupy the premises after the term of lease has expired. This contention is insubstantial. The Lease Agreement contains an express covenants that the Lessee [IOCL] ‘shall deliver and yield up the Demised Premises at the expiration or sooner determination of the said term’. 21. A dispute arising from failure on the part of the IOCL to deliver the Demised Premises on expiry of the lease, is clearly a dispute arising from an agreement relating to the immovable property used exclusively for commercial purposes. It is, thus, a - 13 - HC-KAR NC: 2025:KHC:28718-DB COMAP No. 78 of 2025 'commercial dispute', within the meaning of Section 2(1)(c) (vii) of the CC Act. 22. In Deepak Polymers Pvt. Ltd. v. Anchor Investments Pvt. Ltd (supra), the Calcutta High Court had held that the dispute that arises from refusal to comply with the notice issued by the lessor under Section 106 of the Transfer of Property Act, 1882 [TP Act], would not fall within the scope of a 'commercial dispute'. Notwithstanding the prior lease agreement. We, most respectfully, are unable to concur with this view. The expression “dispute arising out of” as used in the opening sentence of clause (c) of Section 2(1) of the CC Act, is of wide import. In context of sub-clause (vii), the said expression is not confined to mean dispute relating to the performance of the terms of the agreement; but it covers all disputes that arise of the contractual relationship relating to premises used for commercial purposes. 23. A dispute arising from an agreement relating to an immovable property used exclusively in trade or commerce, is not confined to disputes arising during the term of the agreement. Such an interpretation unduly restricts the import of the expression - 14 - HC-KAR NC: 2025:KHC:28718-DB COMAP No. 78 of 2025 'commercial dispute' as defined under Section 2(1)(c)(vii) of the CC Act. 24. The dispute arising from the failure of the lessee to vacate the premises after expiry of the term of lease despite service of notice under Section 106 of the TP Act, cannot be construed as a dispute that does not arise from the agreement relating to immovable property used for commercial purposes. 25. The present appeal is unmerited and accordingly dismissed. 26. Pending application also stands disposed of. Sd/- (VIBHU BAKHRU) CHIEF JUSTICE Sd/- (C M JOSHI) JUDGE KS List No.: 1 Sl No.: 37