Calcutta High Court (Appellete Side)
Infrastructure Pvt. Ltd vs Atanu Mondal & Ors on 2 August, 2025
Author: Hiranmay Bhattacharyya
Bench: Hiranmay Bhattacharyya
Form No. J(2)
IN THE HIGH COURT AT CALCUTTA
Civil Revisional Jurisdiction
Appellate Side
Present :
The Hon'ble Justice Hiranmay Bhattacharyya
C.O. 1759 of 2024
M/s. Soumita Realty and
Infrastructure Pvt. Ltd.
-Versus-
Atanu Mondal & Ors.
For the petitioner : Mr. Arijit Bardhan
Ms. Soumyajit Mishra
Ms. Gourab Mondal
For the Opposite parties : Mr. Partha Pratim Roy
Mr. Nemai Chandra Betal
Heard On: : 02.08.2025
Judgment On: : 02.08.2025.
Hiranmay Bhattacharyya, J.
1. Affidavit of service filed in Court today is taken on record.
2. This application under Article 227 of the Constitution of India is at the
instance of an applicant under Section 34 of the Arbitration and Conciliation
Act, 1996 and is directed against an order dated June 13, 2023 passed by the
learned Additional District Judge, Fast Track, 5th Court, Barasat, North 24
Parganas in Miscellaneous Case No. 24 of 2022 (Arb).
3. By the order impugned the said miscellaneous case was held to be not
maintainable before that court and it was further held that the same ought to
have been filed before the learned Commercial Court.
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4. The petitioner and the opposite parties herein entered into a
development agreement for the purpose of developing several plots of land
which have been specifically described in the first schedule of the
development agreement dated 2nd May, 2016. A dispute cropped up between
the parties with regard to the development agreement and such dispute was
referred to arbitration before the sole arbitrator nominated by the opposite
parties. The sole arbitrator passed an award dated 11th March, 2022. Being
aggrieved by such award the petitioner filed an application under Section 34
of the Arbitration and Conciliation Act, 1996 being Miscellaneous Case No. 24
of 2022 (Arb) before the learned District Judge, North 24 Parganas at
Barasat. The said miscellaneous case was thereafter transferred to the court
of the Additional District Judge, Fast Track, 5th Court at Barasat. The
opposite parties filed an application raising an objection as to the
maintainability of the said miscellaneous case before that court. The learned
Additional District Judge, by the order impugned, observed that the
arbitration arose out of a subject matter which by the nature of the
agreement is a commercial dispute and held that the same ought to have
been filed before the learned commercial court and was not maintainable
before that court.
5. Mr. Bardhan, learned advocate appearing for the petitioner draws the
attention of the Court to several clauses of the development agreement in
support of his contention that the same cannot be construed as a joint
venture agreement. As to what is the difference between a joint venture
agreement and a development agreement, Mr. Bardhan, learned advocate
places reliance upon a decision of the Hon’ble Supreme Court in the case
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Faqir Chand Gulati Vs. Uppal Agencies Private Limited and another
reported at (2008) 10 SCC 345.
6. Mr. Bardhan, learned advocate submits that the learned Additional
District Judge was swayed by the averments made in the maintainability
application that the agreement in question was a joint venture agreement and
held that the dispute between the parties before the arbitral tribunal is a
commercial dispute. He further submits that the agreement in question
relates to an immovable property which is not exclusively used for the
purpose of trade or commerce and, therefore, the same cannot come within
the scope of sub-clause (vii) of Clause (c) of sub-section (1) of Section 2 of the
Commercial Courts Act, 2015. He submits that the agreement in question
was styled as a development agreement and not as a joint venture agreement
and, therefore, the same would not fall within sub-clause (xi) of Section 2(1)(
c) of the 2015 Act. He concludes by submitting that the learned Additional
District Judge without considering the nature and scope of the agreement in
question held that the dispute between the parties is a “commercial dispute”
within the meaning of Section 2(1)(c) of the 2015 Act.
7. Per contra, Mr. Roy, learned advocate appearing for the opposite
parties submits that the agreement in question relates to construction and,
therefore, the same squarely falls within sub-clause (vi) of Clause (c) of sub-
section (1) of Section 2 of the 2015 Act. He further submits that the
agreement constitutes a commercial transaction as the nature of the work to
be executed under the agreement involves an element of profit accruing to a
party to the agreement. He, therefore, submits that the learned Additional
District Judge was right in holding that the dispute between the parties is a
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commercial dispute and the application under Section 34 of the Arbitration
and Conciliation Act, 1996 was rightly held to be not maintainable before that
court.
8. Heard the learned advocates for the respective parties and perused the
materials placed.
9. Before entering into the factual dispute it would be beneficial to take
note of the decision of the Hon’ble Supreme Court wherein the Supreme
Court considered the nature of three agreements namely “joint venture
agreements”, development agreements and collaboration agreements between
a land holder and a builder.
10. The Hon’ble Supreme Court observed that in an agreement of
joint-venture there has to be a relationship of principal and agent between the
parties. As to would what is the nature and ingredients of a joint-venture
agreement was stated in paragraph 21 to 25 of Faqir Chand Gulati (supra)
which is extracted hereinafter:-
“21. This Court had occasion to consider the nature of “joint-
venture” in New Horizons Ltd. v. Union of India [(1995) 1 SCC 478]
. This Court held: (SCC pp. 493-94, para 24)
“24. The expression „joint venture‟ is more frequently used in the
United States. It connotes a legal entity in the nature of a
partnership engaged in the joint undertaking of a particular
transaction for mutual profit or an association of persons or
companies jointly undertaking some commercial enterprise
wherein all contribute assets and share risks. It requires a
community of interest in the performance of the subject-matter, a
right to direct and govern the policy in connection therewith, and
duty, which may be altered by agreement, to share both in profit
and losses. (Black’s Law Dictionary, 6th Edn., p. 839.) According
to Words and Phrases, Permanent Edn., a joint venture is an
5association of two or more persons to carry out a single business
enterprise for profit (p. 117, Vol. 23).”
22. The following definition of “joint venture” occurring
in American Jurisprudence (2nd Edn., Vol. 46, pp. 19, 22 and 23)
is relevant:
“A joint venture is frequently defined as an association of two or
more persons formed to carry out a single business enterprise for
profit. More specifically, it is in association of persons with intent,
by way of contract, express or implied, to engage in and carry out
a single business venture for joint profit, for which purpose such
persons combine their property, money, effects, skill, and
knowledge, without creating a partnership, a corporation or other
business entity, pursuant to an agreement that there shall be a
community of interest among the parties as to the purpose of the
undertaking, and that each joint venturer must stand in the
relation of principal, as well as agent, as to each of the other
coventurers within the general scope of the enterprise.
Joint ventures are, in general, governed by the same rules
as partnerships. The relations of the parties to a joint venture and
the nature of their association are so similar and closely akin to a
partnership that their rights, duties, and liabilities are generally
tested by rules which are closely analogous to and substantially
the same, if not exactly the same as those which govern
partnerships. Since the legal consequences of a joint venture are
equivalent to those of a partnership, the courts freely apply
partnership law to joint ventures when appropriate. In fact, it has
been said that the trend in the law has been to blur the
distinctions between a partnership and a joint venture, very little
law being found applicable to one that does not apply to the other.
Thus, the liability for torts of parties to a joint venture agreement
is governed by the law applicable to partnerships.
A joint venture is to be distinguished from a relationship of
independent contractor, the latter being one who, exercising an
independent employment, contracts to do work according to his
own methods and without being subject to the control of his
employer except as to the result of the work, while a joint venture
is a special combination of two or more persons where, in some
6specific venture, a profit is jointly sought without any actual
partnership or corporate designation.”
23. To the same effect is the definition in Corpus Juris
Secundum (Vol. 48-A, pp. 314-15):
” „Joint venture‟, a term used interchangeably and synonymous
with „joint adventure‟, or coventure, has been defined as a special
combination of two or more persons wherein some specific venture
for profit is jointly sought without any actual partnership or
corporate designation, or as an association of two or more persons
to carry out a single business enterprise for profit or a special
combination of persons undertaking jointly some specific
adventure for profit, for which purpose they combine their
property, money, effects, skill, and knowledge… Among the acts or
conduct which are indicative of a joint venture, no single one of
which is controlling in determining whether a joint venture exists,
are: (1) joint ownership and control of property; (2) sharing of
expenses, profits and losses, and having and exercising some
voice in determining division of net earnings; (3) community of
control over, and active participation in, management and direction
of business enterprise; (4) intention of parties, express or implied;
and (5) fixing of salaries by joint agreement.”
24.Black’s Law Dictionary (7th Edn., p. 843) defines “joint
venture” thus:
“Joint venture.–A business undertaking by two or more
persons engaged in a single defined project. The necessary
elements are: (1) an express or implied agreement; (2) a common
purpose that the group intends to carry out; (3) shared profits and
losses; and (4) each member’s equal voice in controlling the
project.”
25. An illustration of joint venture may be of some
assistance. An agreement between the owner of a land and a
builder, for construction of apartments and sale of those
apartments so as to share the profits in a particular ratio may be a
joint venture, if the agreement discloses an intent that both parties
shall exercise joint control over the construction/development and
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be accountable to each other for their respective acts with
reference to the project.” (emphasis supplied)
11. The Hon’ble Supreme Court further held that whether an
agreement is a joint-venture agreement or a collaboration
agreement or a development agreement has to be decided on the
basis of the nature and substance of the said agreement without
going by the nomenclature of the same.
12. It was further held that the contract for construction of an
apartment or house for the landowner in accordance with the
specifications and in terms of a contract cannot be termed as a
joint venture agreement even if there is a consideration for such
construction flowing from the landowner to the builder in the
form of sale of undivided share in the land and permission to
construct and own certain portion.
13. After going through the impugned order, this Court finds that
the learned Additional District Judge without taking into
consideration whether the agreement in question satisfies the
tests of a joint-venture agreement held that the dispute is a
“commercial dispute”.
14. The learned Additional District Judge also did not return any
finding as to the applicability or otherwise of the decision in
Faqir Chand Gulati‘s case.
15. Before arriving at a finding as to whether a dispute involved
between the parties is “commercial” or not, the Court is required
to consider the terms of the said agreement and then decide as
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to whether the dispute arising out of the same falls within the
definition of “commercial dispute” as defined under Section
2(1)(c) of the 2015 Act. Whether the agreement in question falls
within sub-clause (VI), (VII) or (XI) under any of the other
subclauses of Section 2 (1) (c) of the 2015 Act, also has to be
considered before arriving at a final conclusion as to whether the
dispute is “commercial” in nature. Such an exercise was not
undertaken by the learned Additional District Judge while
holding that the application under Section 34 of the Arbitration
and Conciliation Act was not maintainable before that Court.
16. In view thereof, this Court is inclined to remand the matter
before the learned Additional District Judge.
17. With the above observation, CO 1759 of 2024 stands allowed.
The impugned order stands set aside and the application under
Section 34 of the Arbitration and Conciliation Act being
Miscellaneous Case No.24 of 2022 (Arb.) is remanded to the
learned Additional District Judge, Fast Track, 5th Court at
Barasat for deciding the issue of maintainability of the said
miscellaneous case afresh after giving opportunity of hearing to
the respective parties and by passing a reasoned order in the
light of the observation made hereinbefore. The learned
Additional District Judge shall proceed thereafter in accordance
with law depending upon the fate of the maintainability
application.
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18. Parties will be at liberty to approach the learned Additional
District Judge, Fast Track, 5th Court at Barasat for fixing an
early date of hearing of such application on the issue of
maintainability. If such an approach is made the learned
Additional District Judge shall fix an early date of hearing and
shall make an endeavour to dispose of the same as expeditiously
as possible but preferably within a period of 4 weeks from the
date of communication of a server copy of this order.
19. There shall be, however, no order as to costs.
20. Urgent certified photocopy of this order, if applied for, be
supplied to the parties expeditiously on compliance of usual legal formalities.
(Hiranmay Bhattacharyya, J.)
B.P./Aritra Ghosh
A.R. Court