Kolkata, May 14 -- The Calcutta High Court has held that disputes arising out of property development agreements are "commercial disputes" under the Commercial Courts Act and must be heard by designated Commercial Courts, setting aside two orders passed by a Barasat court for want of jurisdiction.
A division bench comprising Justice Debangsu Basak and Justice Md. Shabbar Rashidi delivered the judgment on May 12 while hearing two connected appeals filed by Chandra Saha and another against A.S. Construction and others.
The dispute arose out of a development agreement executed on December 3, 2003 for development of an immovable property. According to the judgment, disputes and differences emerged between the parties over alleged non-execution of the project in terms of the agreement.
The respondents claimed they had learnt that the appellants intended to enter into another development agreement with a different local developer and create third-party interests in the property. They also stated that a notice under Section 21 of the Arbitration and Conciliation Act had been issued.
Citing urgency, the respondents moved an application under Section 9 of the Arbitration and Conciliation Act seeking interim protection before the Additional District and Sessions Judge, Fast Track Court-5 at Barasat in 2022.
Before the High Court, the appellants argued that the dispute was commercial in nature and therefore could only be adjudicated by a designated Commercial Court under the Commercial Courts Act, 2015.
Accepting the contention, the division bench observed that a development agreement involving development of immovable property amounts to "commercial exploitation" of property and therefore falls within the definition of a commercial dispute under the 2015 Act. The court further noted that a Commercial Court for the concerned jurisdiction had already been notified in February 2021, before the arbitration proceedings were initiated in 2022. Since the proceedings were entertained by a court that lacked the requisite jurisdiction under the Commercial Courts Act, the High Court set aside both the original order and the subsequent order rejecting a review plea.
Soumyadip Mullick
kolkata: The Calcutta High Court has held that disputes arising out of property development agreements are "commercial disputes" under the Commercial Courts Act and must be heard by designated Commercial Courts, setting aside two orders passed by a Barasat court for want of jurisdiction.
A division bench comprising Justice Debangsu Basak and Justice Md. Shabbar Rashidi delivered the judgment on May 12 while hearing two connected appeals filed by Chandra Saha and another against A.S. Construction and others.
The dispute arose out of a development agreement executed on December 3, 2003 for development of an immovable property. According to the judgment, disputes and differences emerged between the parties over alleged non-execution of the project in terms of the agreement.
The respondents claimed they had learnt that the appellants intended to enter into another development agreement with a different local developer and create third-party interests in the property. They also stated that a notice under Section 21 of the Arbitration and Conciliation Act had been issued.
Citing urgency, the respondents moved an application under Section 9 of the Arbitration and Conciliation Act seeking interim protection before the Additional District and Sessions Judge, Fast Track Court-5 at Barasat in 2022.
Before the High Court, the appellants argued that the dispute was commercial in nature and therefore could only be adjudicated by a designated Commercial Court under the Commercial Courts Act, 2015.
Accepting the contention, the division bench observed that a development agreement involving development of immovable property amounts to "commercial exploitation" of property and therefore falls within the definition of a commercial dispute under the 2015 Act. The court further noted that a Commercial Court for the concerned jurisdiction had already been notified in February 2021, before the arbitration proceedings were initiated in 2022. Since the proceedings were entertained by a court that lacked the requisite jurisdiction under the Commercial Courts Act, the High Court set aside both the original order and the subsequent order rejecting a review plea.
Published by HT Digital Content Services with permission from Millennium Post.