Court rules that development agreements involving construction and infrastructure are commercial disputes, ordering plaints to be presented in commercial courts.
In a significant judgment, the Calcutta High Court has affirmed that disputes arising from development agreements primarily focused on construction and infrastructure fall under the category of "commercial disputes" as per the Commercial Courts Act, 2015. The judgment was delivered by a division bench comprising Justices Sabyasachi Bhattacharyya and Supratim Bhattacharya, who upheld the trial court's decision to return the plaints for presentation before the appropriate commercial court.
The case involved two appellants, Ramen Roy and Ashis Sarkar, who had entered into registered development agreements with Sambriddhi Real Estate Private Limited. The appellants had filed suits for the cancellation of these agreements, alleging non-completion of development work by the respondents. Initially filed in an ordinary civil court, the suits were challenged by the respondents, who argued that the disputes were commercial in nature and should be adjudicated by a commercial court.
The High Court's ruling emphasized that the presence of additional components, such as the transfer of ownership rights, does not detract from the core nature of development agreements as commercial disputes. It further clarified that the 'specified value' for determining jurisdiction should be based on the market value of the immovable property involved, as stipulated by the Commercial Courts Act, overriding the provisions of the Court Fees Act.
The court also addressed procedural concerns, stating that the return of the plaints was appropriate given the lack of inherent jurisdiction in the ordinary civil court to hear commercial disputes. The bench underscored the necessity for such matters to be handled by the commercial courts to ensure swift and efficient resolution, aligning with the objectives of the Commercial Courts Act.
The decision is expected to have far-reaching implications for similar cases, reinforcing the jurisdictional boundaries between ordinary civil courts and commercial courts in India.
Bottom line:-
A development agreement, primarily for construction and infrastructure, does not lose its character as a "commercial dispute" under the Commercial Courts Act, 2015, merely because it includes additional elements like transfer of certain ownership rights.
Statutory provision(s): Commercial Courts Act, 2015 Sections 2(1)(c)(vi), 12(1)(c), Civil Procedure Code, 1908 Order VII Rule 10
Ramen Roy v. Sambriddhi Real Estate Private Limited, (Calcutta)(DB) : Law Finder Doc id # 2932206
