TaxTMI 
TaxTMI 
2024 (11) TMI 1557
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.... 98 of 2023. 2. For adjudication of the lis, the following dates would be necessary. a) 11.11.2022 - Basant Properties Limited executed a deed of conveyance pertaining to land and buildings detailed in Schedule 'A' of the deed (hereinafter referred to as the said property) in favour of the Lord Grih Nirman Private Limited, the appellant/defendant; b) 11.11.2022- Merlin Projects Limited, the respondent/plaintiff and the appellant executed a term sheet for entering into a Joint Development Agreement (hereinafter referred to as the JDA) and the respondent paid an amount of Rs. 2 crores to the appellant as a refundable deposit; c) 21.04.2023 - The appellant's advocate forwarded the final draft of the JDA to the respondent; d) 20.05.2023 - By an e-mail, the respondent requested the appellant to arrange for execution of the JDA as early as possible; e) 22.05.2023 - The respondent paid a further amount of Rs.3 crores to the appellant as a refundable deposit with a request to intimate the date when the JDA would be executed; f) 22.05.2023 - The appellant by an e-mail to the respondent described the document to be a 'v....
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....la Bin Ali vs. Galappa & Ors., reported in (1985) 2 SCC 54 and Asma Lateef & anr. v. Shabbir Ahmed & Ors., reported in (2024) 4 SCC 696. 5. According to Mr. Mookherjee, the Courts are empowered to initiate suo moto proceedings for rejecting a plaint under Order VII Rule 11(d) of the Code. At every stage of the suit, Judges have to be vigilant to see as to whether cause of action to further proceed with the suit survives or not. If answer comes in negative, it should not await a formal application under Order VII Rule 11 and can even suo moto exercise its inherent power under Section 151 of the Code. In Order VII Rule 11(a), the legislature has used the word 'disclose' and not the word 'survive' or 'appear' or 'disappear'. Court is not required to wait till completion of pleadings for ascertaining whether cause of action set up in the plaint survives or not. In support of such contention, reliance has been placed upon the judgments delivered in the cases of Patasibai and Others vs. Ratanlal, reported in (1990) 2 SCC 42 and Patil Automation Private Limited vs. Rakheja Engineers (P) Ltd., reported in (2022) 10 SCC 1. 6. He argues that having not p....
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.... of fact that is disputed cannot be decided at the time of considering an application under Order VII Rule 11 of the Code. A factual dispute as regards existence of an agreement can be decided only after leading evidence, oral as well as documentary. In support of such contention reliance has been placed upon the judgments delivered in the cases of Popat & Kotecha Property vs. State Bank of India Staff Association, reported in (2005) 7 SCC 510 and an unreported judgment delivered in the case of Maharshi Commercial Limited vs. Rajiv R. Balani. 10. He further argues that after the evidence is taken on the question of proof of the term sheet and/or the JDA, it would be still open to the learned Single Judge to consider whether the plaint deserves to be rejected as 'barred by law' under Order VII Rule 11 of the Code. 11. Mr. Chidambaram contends that the challenge in the application for rejection of plaint is restricted to Order VII Rule 11(d) inasmuch as in the said application, there is no averment as regards lack of cause of action contemplated under Order VII Rule 11(a) of the Code and that as such, the judgment delivered in the case of Pattasibai & Ors. vs. Ratanlal ....
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....d on the Ordinary Original Civil Jurisdiction as the dispute is a commercial dispute was rightly discounted by the learned Single Judge since the existence of the agreement is required to be first proved on trial. The former issue needs to be finally decided and then only, the determination of its nature can be explored. In such circumstances, we are of the opinion that at this stage it is unnecessary to delve deeper into the pleas as to whether the agreement is a pure construction contract or as to whether the dispute involved in the suit is a commercial dispute as defined under Section 2(1)(c) of the 2015 Act more so when, the dismissal of the application for rejection of plaint would not prevent the appellant from renewing the application at an appropriate stage of the trial. 16. In view of the discussion made hereinabove, we are not inclined to interfere with the order impugned in the present appeal. However, the observation of the learned Single Judge in the concluding part of the order that the 'dispute involved in the suit are not "commercial dispute" for the reasons stated above', is contrary to the observations made in the earlier part of the order. Accordingly,....
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....es. Merlin deposited Rs. 2 and 3 crores in two phases and sent a draft of the Joint Development Agreement. However, on May 22, 2023, the defendant refunded the amount and asserted via email that, although negotiations were ongoing, no final agreement was reached, and the Term Sheet' and JDA were not definitive documents. Given the situation, Merlin was compelled to institute the suit. 4. Upon receiving the summons, the defendant appeared and filed an application under Order VII Rule 11 of the Code, seeking rejection of the plaint. In addition to the assertions made in the email, the defendant claimed that even if the allegations in the plaint were assumed to be correct, the dispute qualifies as a "commercial dispute" under the Commercial Courts Act, 2015, yet the suit was not filed in the Commercial Division of this Hon'ble Court. Therefore, the Hon'ble Court, in its Ordinary Original Civil Jurisdiction, lacks the jurisdiction to hear the suit, rendering the plaint liable to rejection as barred by law. 5. Merlin opposed the application by filing written objections, denying all the averments made therein. It specifically contended that none of the conditions under ....
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....ed under the names of Merlin and the landowner and according to the 'Term Sheet', the land would be provided by the landowner, while Merlin would bear all costs and expenses associated with the construction and development of the land. 11. Referring to clause 8 of the Term Sheet,' he argued that this clause of the 'Term Sheet' included a provision for sharing the proceeds from sales arising from the 'Saleable Areas,' as defined in clause 6. Consequently, no interest in the property was created. He contended that it is not anyone's case that an agreement existed and therefore, there can be no cause of action to enforce the performance of any agreement. He relied upon the decision (1990) 2 SCC 42 (Patasibai & Ors. v. Ratanlal) for the proposition that that if a plaint discloses no cause of action, allowing the suit to continue is akin to licensing frivolous and vexatious litigation, which should not be permitted. 12. He contended that the provisions of Section 12A of the Act of 2015 are mandatory in nature; therefore, the suit, which was instituted without exhausting the remedy available under Section 12A, is flawed. To lend support to such conte....
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....dhu & Ors.) and 2022 SCC OnLine SC 898 (Rameshwar & Ors. v. State of Haryana & Ors.). 18. Drawing our attention to Clauses 4.1, 10.1, 10.1(a), and 10.1(b) of the draft joint development agreement, he asserted that the use of the words 'Revenue Share and other rights' in Clause 4.1, along with the provisions for the division and allocation of unsold and/or residual areas in Clauses 10.1, 10.1(a), and 10.1(b), clearly indicates that an interest in the property was created in favour of Merlin. According to him, in view of this, the dispute cannot be claimed to fall within the ambit of Section 2(1)(c)(vi). 19. He further argued that Section 2(1)(c)(xi) of the Act of 2015, which deals with joint venture agreements, requires the sharing of capital, profit, risk, or loss. He contended that, in the present case, it was agreed that the entire cost of construction and/or development would be borne by Merlin, with no provision for sharing risk or losses. Therefore, it cannot be argued that the dispute falls within the ambit of Section 2(1)(c)(xi) of the Act of 2015. In support of such contention, he placed reliance upon the decisions, reported at (2016) 8 SCC 429 (Bunga Daniel B....
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....ng in Subal Paul v. Malini Paul ((2003) 10 SCC 361). Therefore, it is no longer res integra that an order by a Hon'ble Single Bench refusing to reject the plaint is a 'judgment' (preliminary judgment) within Clause 15 of the Letters Patent, and thus, appealable before the Hon'ble Division Bench of this Chartered High Court. 25. The next question to resolve is whether the plaint was liable to be rejected under Order VII Rule 11(d) of the Code as barred by law, on the ground that the dispute giving rise to the suit qualifies as a 'commercial dispute' within the meaning of the Commercial Courts Act, 2015. 26. As noticed earlier, the learned Single Bench observed that the question raised in the application for rejection of plant can only be determined upon appreciation of evidence since the existence of agreement (herein the 'Term Sheet') is in dispute. 27. Mr. Mookherjee argued that a jurisdictional issue, raised in the application for rejection of the plaint, should be addressed at the outset. However, it is well settled proposition of law that absence of jurisdiction of the Court can be raised at different stages and under different provision....