* IN THEHIGH COURTOF DELHIAT NEW DELHI
Date of decision: 11th MARCH, 2026
IN THE MATTER OF:
I.A. 13055/2025
IN
+ CS(COMM) 558/2023
DR K K SHRIVASTAVA .....Plaintiff
Through: Mr. Shantanu Parashar, Mr. Harsh
Trivedi, Mr. Rohan Malik and Mr.
Nitin Kumar, Advocates
versus
STAR INFRATECH PRIVATE LIMITED & ORS ......Defendants
Through: Appearance not given.
CORAM:
HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD
JUDGMENT
1. On 21.01.2026, this Court while considering the present application
being I.A. 13055/2025 filed by the Plaintiff under Order XIIIA of CPC,
reserved Orders only to consider as to whether the present Suit is a
commercial Suit or not.
2. Shorn of unnecessary details, the facts leading to the filing of the
present Suit are as follows:-
a. Defendant Nos.2 & 3 had approached the Plaintiff for the purpose of
re-construction and re-development of a property admeasuring 500 sq.
yards, situated at E-7, East of Kailash, New Delhi - 110065 ["Suit
property"].
b. It is stated that, thereafter, a Collaboration Agreement dated
09.05.2018["Collaboration Agreement"] was executed between the
Plaintiff-Dr. K. K. Shrivastava and Defendant No.1- Star Infratech
Private Limited, represented by Defendant Nos. 2 & 3 for the re-
development and re-construction of the Suit Property. The Defendants
are the Developers herein.
c. For a better understanding of the case, it is necessary to reproduce the
relevant portion of the Collaboration Agreement dated 09.05.2018
which reads as under:
"COLLABORATION AGREEMENT
This COLLABORATION AGREEMENT is made and
executed here at New Delhi on this 09thday of May,
2018 By & Between:
Dr. K. K SHRIVASTAVA son of late Shri Brij Kishore
Shrivastava resident of E-7, East of Kailash, New
Delhi hereinafter referred to as the "OWNER" (which
expression shall, unless repugnant and opposed to the
context hereof, include him, his legal heirs, nominees,
executors, successors, legal representatives,
administrators and permitted assignees, etc.), of the
ONE PART;
AND
M/s STAR INFRATECH PRIVATE LIMITED, a Private
Limited Company, duly incorporated under the
Companies Act, 1956 having its registered office at E-
310, East of Kailash, New Delhi, through its Director
Mr. SANDEEP SONI, duly authorized vide Resolution
passed in the Meeting of the Board of Directors held
on 7th May, 2018 hereinafter referred to as the
"DEVELOPER" (which expression shall, unless
repugnant or opposed to the context hereof, include the
company, its directors, share holders, their legal heirs,
successors, executors, legal representatives,
administrators and permitted assignees, etc.) of the
OTHER PART.
A. WHEREAS Dr. K.K. Shrivastava son of late Shri
Brij Kishore Shrivastava is the owner of the Entire Plot
of land bearing No. E-7,measuring 500 Square Yards,
situated at East of Kailash, New Delhi110065
(hereinafter referred to as the "SAID PLOT OF
LAND") and structure/building constructed thereupon,
by virtue of Conveyance Deed dated 10th August, 2015
duly registered in the office of the Sub Registrar-VII,
New Delhi on 10th August, 2015 as Document No.
12571 in Additional Book No. I Volume No. 5616 on
Pages 29 to 31. (The PLOT OF LAND and the entire
house/building constructed thereupon (together with
all electrical and sanitary fittings, fixtures, wood work,
covered as well as open areas, shafts, sewers,
electricity and water connections and appurtenances
whatsoever appurtenant thereto or enjoyed therewith
shall hereinafter collectively referred to as "THE SAID
PROPERTY", which expression shall include
subsequent construction, re-construction, development,
addition and alteration carried out or to be carried out
therein subsequently.
B. AND WHEREAS the OWNER is desirous of getting
the SAID PROPERTY re-constructed and redeveloped
and for the purpose approached the DEVELOPER for
carrying out the construction of building afresh
consisting of Basement, Stilt Floor, Ground Floor,
First Floor, Second Floor & Third Floor with Terrace/
Roof (The Proposed Building) over the plot beneath the
Said Property No. E-7, East of Kailash, New Delhi
1110065 after demolishing the old existing structure.
C. AND WHEREAS the OWNER and DEVELOPER
have agreed to construct and develop the SAID
PROPERTY by constructing a Basement, Stilt Floor,
Ground Floor, First Floor, Second Floor & Third
Floor with Terrace, after demolishing the old existing
structure on the terms and conditions hereinafter
appearing.
NOW THEREFORE IT IS HEREBY AGREED,
DECLARED, AND CONVEYED BY AND BETWEEN
THE PARTIES HERETO AS FOLLOW:
1. That the subject matter of this Collaboration
Agreement is the SAID PROPERTY bearing No. E-7,
East of Kailash, New Delhi 1110065 for utilizing the
same for construction of the building consisting of
Basement, Stilt Floor, Ground Floor, First Floor,
Second Floor and Third Floor with Terrace.
2. The parties agree that the DEVELOPER shall
reconstruct and redevelop the SAID PROPERTY at
their own cost and expenses and with their own
resources. After demolishing the old existing building/
structure, the DEVELOPER shall construct a new
/fresh building comprising of Basement, Stilt Floor,
Ground Floor, First Floor , Second Floor & Third
Floor with Terrace as per agreed plans and
specifications as detailed in the Annexure A attached
hereto and duly signed by the parties. The
debris/malba after demolition of the building shall
belong to the DEVELOPER.
3. That it is hereby agreed that the entire financial
commitment for the construction and development of
the SAID PROPERTY and construction of floors over
it will be the exclusive and full responsibility of the
DEVELOPER and the OWNER shall not invest any
amount at any time whatsoever or be responsible for
any consequences as a result of this new construction
, in any manner whatsoever at present or any time in
future.
Similarly, the OWNER shall not claim for any
amount or consideration for the land from the
DEVELOPER, except what has been agreed to be
paid here under.
4. That the OWNER has handed over/ delivered the
complete vacant physical possession of the SAID
PROPERTY to the DEVELOPER.
5. The OWNER through the DEVELOPER shall
file/apply and get the fresh building plan sanctioned
from the MCD/SDMC (duly approved by the OWNER),
the expenses of which shall be paid/borne by the
DEVELOPER.
6. That all rates, levies and taxes due and payable up
to the date of execution of this Collaboration
Agreement in respect of the SAID PROPERTY hereby
agreed to be developed by the DEVELOPER shall be
the exclusive liability of the OWNER. Thereafter the
liability in this behalf shall devolve exclusively on the
OWNER or his nominee/s or transferee/s of their
respective portion(s) proportionately and house tax
shall also be paid separately according to the
respective portion(s) held by them. However, the water
and electricity charges during construction period
shall be paid and borne by the DEVELOPER.
7. That the DEVELOPER agrees to prepare building
plan in accordance with the building bye-laws as
applicable on the SAID PROPERTY (with permissible
deviation) or as may be prescribed by the authority or
authorities concerned from time to time. The
DEVELOPER shall make its full efforts for obtaining
permission for the maximum FAR- to be covered on the
SAID PROPERTY.
8. That as mentioned above, the project shall consist of
Basement, Stilt Floor, Ground Floor, First Floor,
Second Floor and Third Floor with Terrace. The
parties hereto have agreed to divide and own the
floor(s) /portion(s) separately in the following
manner:-
I. OWNER'S SHARE:-
1) ENTIRE BASEMENT FLOOR;
2) ENTIRE GROUND FLOOR;
3) ENTIRE SECOND FLOOR;
4) ENTIRE THIRD FLOOR;
5) EXCLUSIVE OWNERSHIP AND USAGE RIGHTS
OF THE ENTIRE TERRACE OVER AND ABOVE THE
ENTIRE THIRD FLOOR;
6) 75% SHARE/PORTION OF THE ENTIRE STILT
AREA [ASEARMARKED];
7) USE OF COMMON AREAS, STAIRCASE, LIFT,
BACKCOURTYARD,WITH FREE INGRESS AND
EGRESS TO THE SAID PORTIONS OF THE SAID
PROPERTY;
8) 77.5% UNDIVIDED, INDIVISIBLE AND
IMPARTIBLE OWNERSHIP RIGHTS IN THE SAID
PLOT OF LAND MEASURING 500 SQUARE YARDS,
BEARING NO. E-7, SITUATED AT EAST OF
KAILASH, NEWDELHI.
II DEVELOPER SHARE:-
1) ENTIRE FIRST FLOOR;
2) 25% SHARE/PORTION OF THE ENTIRE STILT
AREA [AS EARMARKED];
3) USE OF COMMON AREAS, STAIRCASE, LIFT,
BACKCOURTYARD,WITH FREE INGRESS AND
EGRESS TO THE SAID PORTIONS OF THE SAID
PROPERTY;
4) 22.5% UNDIVIDED, INDIVISIBLE AND
IMPARTIBLE OWNERSHIPRIGHTS IN THE
SAID PLOT OF LAND MEASURING 500
SQUAREYARDS, BEARING NO. E-7, SITUATED
AT EAST OF KAILASH, NEWDELHI.
And it is agreed that in addition to the floor allocation
as specified above the DEVELOPER would pay a sum
of Rs. 75,00,000 /- (Rupees Seventy Five Lac Only) as
proportionate cost of land and existing building for its
share and also for equalizing its share in the allocation
of the floor in the Said Property.
xxx
14. That the OWNER in discharge of his obligations
and in lieu of the valuable consideration received by
him from the DEVELOPER & also in lieu of the cost of
construction incurred/to be incurred & for the services
rendered/to be rendered in constructing the building,
have appointed and authorized the DEVELOPER to
sell, transfer and dispose of the Entire First Floor with
25% SHARE/PORTION OF THE ENTIRE STILT
AREA [as earmarked] along with 22.5% undivided,
indivisible & impartible land rights underneath the
said newly constructed property for the said floor and
also to commonly use along with the other occupants/
owners of the building the common area facilities such
as passage, staircase, one separate underground, one
separate over headwater tank, sewer lines, space for
electric & water meters etc. in/ of the SAID
PROPERTY falling in the share of the DEVELOPER,
without any objection, hindrance and claim of
whatsoever and undertake not to cancel or revoke the
same under any circumstances.
xxx
15. That it is hereby agreed, understood, acknowledged
and so recorded that the DEVELOPER shall be free
and entitled to book, allot flat/floor, falling to their
share immediately after execution of this agreement.
The DEVELOPER shall be exclusively entitled to
DEVELOPER'S allocation/ share in the building with
the exclusive right to sell, transferor deal with or to
dispose off the same and to make booking, to receive
advance payment and full sale consideration from the
intending buyer(s)in their own name, enter into
agreement to sell in respect of the DEVELOPER'S
allocation/share without any right, claim or interest
therein whatsoever of the OWNER and the OWNER
shall be exclusively entitled to deal with the OWNER'S
allocation without any reservation from the
DEVELOPER.
xxx
19. That Two separate Lifts shall be installed in the
said building by the DEVELOPER i.e. one lift for the
exclusive use of the owners/ occupants of the
Basement, Ground Floor and First Floor and the
second lift for the exclusive use of the
owners/occupants of the Second Floor and Third
Floor. The maintenance cost of the said Lifts as well as
proportionate cost of electricity for their use will be
paid by the respective floor owners of the said
building."
d. The possession of the Suit Property was handed over to the
Developers, building plans were sanctioned, rents were being paid
by the Defendants to the Plaintiff in terms of the Collaboration
Agreement dated 09.05.2018. Occupation Certificate was issued by
MCD on 04.02.2022. It is the case of the Plaintiff that Defendants
failed to carry out re-construction and re-development in terms of the
Collaboration Agreement and the said work is still incomplete. It is
the case of the Plaintiff that the Suit Property has been handed over
to the Plaintiff in an incomplete state resulting in filing of the present
Suit.
3. While hearing the application filed by the Plaintiff under Order XIIIA
of CPC, a question arose as to whether Order XIIIA of CPC would be
applicable to the present case or not in view of the stand taken by the
Defendants that the present Suit is not a commercial Suit?
4. Learned Counsel appearing for the Plaintiff states that the present
dispute, which arose out of the Collaboration Agreement, would come
within the four corners of Commercial Courts Act, 2015 ["CC Act"].He
states that under the Collaboration Agreement, the Defendant No.1 is a
builder and its work is that of a contractor and, therefore, the present dispute
which arose out of the Collaboration Agreement is in the nature of a
commercial dispute. In support of his contention, he places reliance upon
Sections 2(1)(c)(vi) and 2(1)(c)(vii) of CC Act which read as under:
"2. Definitions.--(1) In this Act, unless the context
otherwise requires,--
xxx
(c) "commercial dispute" means a dispute arising out
of--
xxx
(vi) construction and infrastructure contracts,
including tenders;
(vii) agreements relating to immovable property used
exclusively in trade or commerce;
5. Learned Counsel for the Plaintiff also places reliance upon a
Judgment passed by a Co-ordinate Bench of this Court in Raj Kumar Gupta
v. Jagan Nath Bajaj, 2022 SCC OnLine Del 2995 wherein the dispute also
arose out of a Collaboration Agreement in respect of a residential building
as in the present case. In the said case, an application under Order VII Rule
11 of CPC had been filed stating that the dispute is not a commercial
dispute. Paragraph Nos.12 & 13 of the said Judgment, which indicate the
grounds taken in the application filed under Order VII Rule 11 of CPC and
the contentions of the Plaintiff therein to state that the dispute is in the
nature of a commercial dispute, read as under:
"12. The aforesaid applications are premised on the
following grounds:
i. That the present suit as filed by the plaintiffs does
not fall within the category of a commercial
dispute under Section 2(1)(c) of the Commercial
Courts Act, 2015 as the property in question is a
residential property. Reliance in this regard is
placed on the judgment in Ambalal Sarabhai
Enterprises Limited v. K.S. Infraspace
LLP, (2020) 15 SCC 585.
ii. That the present suit is not maintainable on
account of non-compliance with Section 12 A (1)
of the Commercial Courts Act, 2015 in as much as
the plaintiffs have not taken recourse to pre-
institution mediation.
iii. Plaintiffs have not valued the suit properly for the
purposes of Court Fees and jurisdiction. The
market value of the two floors of the property
bearing no. E-59, South Extension Part 1 is about
Rs. 6 crores but the plaintiffs have valued the suit
at only Rs. 2.15 crores.
iv. The Property Development Agreement dated
19th October, 2018 does not bear the signatures of
all the parties and is not registered document.
13. No reply has been filed on behalf of the
plaintiffs. However, oral submissions have been made.
Counsel for the plaintiffs submits that:
i. In view of the fact that it is a Property
Development Agreement entered into between the
parties which involves re-
development/reconstruction, the present suit is
covered under Section 2 (1) (vi) of the
Commercial Courts Act. Reliance is placed on the
judgment of the Andhra Pradesh High Court
in Blue Nile Developers (P) Ltd. v. Movva
Chandra Sekhar, 2021 SCC OnLine AP 3964.
ii. In view of the urgent interim reliefs sought in the
present suit, Section 12 A of the Commercial
Courts Act, 2015 would not be applicable to the
present case.
iii. The suit has been correctly valued in terms of the
aforesaid Property Development Agreement dated
23rd October, 2018 entered into between the
parties.
iv. The aforesaid Property Development Agreement
is not required to be registered."
6. After considering the arguments of both sides, the Co-ordinate Bench
of this Court came to the conclusion that the dispute therein is a commercial
dispute. The Co-ordinate Bench of this Court in Raj Kumar Gupta (supra)
observed as under:
"18. I am in respectful agreement with the view
taken by the Andhra Pradesh High Court. A restrictive
meaning cannot be given to the phrase „construction
and infrastructure contracts‟. The aforesaid phrase
would include both „construction contracts‟ as well as
„infrastructure contracts‟ and cannot be given a
restrictive meaning to include only infrastructure
contracts involving construction. This becomes clear
from the use of the words „including tenders‟, which
would imply that all tenders relating to construction
contracts as well as infrastructure contracts would be
covered under the scope of commercial disputes.
19. In the present case the plaintiff seeks specific
performance of the Property Development Agreement,
in terms of which the plaintiffs were to construct the
property. The plaintiffs, being the builders are required
to pay Rs. 2,15,00,000/- crores to the defendants, being
the owners of the property and carry out construction
on the suit property at their own expense. In lieu
thereof, the plaintiffs would be entitled to two floors of
the building to be constructed and the remaining floors
are to go to the defendants. Clearly, construction is the
core of the aforesaid agreement and the dicta in Blue
Nile Developers (supra) would be squarely applicable.
20. In the plaint it has been stated that the plaintiffs
are in the business of developing the private properties
belonging to the third parties in accordance with the
property development agreement/collaboration
agreement inter se. The present agreement is in the
nature of a collaboration agreement, which would also
qualify as a „joint venture‟ agreement under Section 2
(1) (c) (xi) of the Commercial Courts Act. Black's Law
Dictionary 7th Edition defines „joint venture‟ as „a
business undertaking by two or more persons engaged
in a single defined project‟.
21. The subject matter of the suit is specific
performance of the said agreement. Therefore, in my
view it would be covered under the definition of
„commercial dispute‟ both under Section 2(1) (c) (vi)
and Section 2(1) (c) (xi) of the Commercial Courts
Act."
7. On the basis of the aforesaid judgment - Raj Kumar Gupta (supra), the
learned Counsel for the Plaintiff contends that the present case is squarely
covered by the said Judgment passed by the Co-ordinate Bench of this Court
and, therefore, the present dispute is a commercial dispute.
8. Per contra, learned Counsel for the Defendant No.2 places reliance
upon a Judgment passed by the Apex Court in Ambalal Sarabhai Enterprises
Ltd. v. K.S. Infraspace LLP, (2020) 15 SCC 585 and more particularly on
the following paragraphs:-
"36. A perusal of the Statement of Objects and
Reasons of the Commercial Courts Act, 2015 and the
various amendments to the Civil Procedure Code and
insertion of new rules to the Code applicable to suits of
commercial disputes show that it has been enacted for
the purpose of providing an early disposal of high
value commercial disputes. A purposive interpretation
of the Statement of Objects and Reasons and various
amendments to the Civil Procedure Code leaves no
room for doubt that the provisions of the Act require to
be strictly construed. If the provisions are given a
liberal interpretation, the object behind constitution of
Commercial Division of Courts viz. putting the matter
on fast track and speedy resolution of commercial
disputes, will be defeated. If we take a closer look at
the Statement of Objects and Reasons, words such as
"early" and "speedy" have been incorporated and
reiterated. The object shall be fulfilled only if the
provisions of the Act are interpreted in a narrow sense
and not hampered by the usual procedural delays
plaguing our traditional legal system.
37. A dispute relating to immovable property per se
may not be a commercial dispute. But it becomes a
commercial dispute, if it falls under sub-clause (vii) of
Section 2(1)(c) of the Act viz. "the agreements relating
to immovable property used exclusively in trade or
commerce". The words "used exclusively in trade or
commerce" are to be interpreted purposefully. The
word "used" denotes "actually used" and it cannot be
either "ready for use" or "likely to be used" or "to be
used". It should be "actually used". Such a wide
interpretation would defeat the objects of the Act and
the fast tracking procedure discussed above.
38. On 3-11-2017, a Memorandum of
Understanding was executed between the appellant-
plaintiff, respondent-defendant and Ketan Bhailalbhai
Shah, second respondent. As per the terms of MoU,
parties executed a deed of conveyance of the land. A
mortgage deed was executed simultaneously along with
the MoU with respect to the part of the land
admeasuring 15,000 sq ft in favour of the plaintiff. It
was understood between the parties that Respondent 1
would apply for change of land use permission for the
land in question on signing of the MoU. Mortgage
deed was executed by Respondent 1 in favour of the
appellant in order to ensure performance of
obligations under the MoU. But the said mortgage
deed was not presented for registration.
39. It appears that the trial court has proceeded
under the footing that the parties to the suit more
particularly, the appellant-plaintiff seems to be
carrying on business as estate agent and to manage
land, building, etc. and the very object as enumerated
in Memorandum and Articles of Association of the
appellant-plaintiff company established that the
property in question is being used exclusively in trade
or commerce rather in the business of the plaintiff. As
rightly pointed out by the High Court, there is nothing
on record to show that at the time when agreement to
sell came to be executed in 2012, the property was
being exclusively used in trade and commerce so as to
bring dispute within the ambit of sub-clause (vii) of
Section 2(1)(c) of the Act. Merely because, the property
is likely to be used in relation to trade and commerce,
the same cannot be the ground to attract the
jurisdiction of the Commercial Court.
40. In Ujwala Raje Gaekwar v. Hemaben Achyut
Shah [Ujwala Raje Gaekwar v. Hemaben Achyut Shah,
2017 SCC OnLine Guj 583] , Special Civil Suit No.
533 of 2011 was instituted for declaration that the sale
deed valued at Rs 17.76 crores executed by the
appellant-original Defendant 1 in favour of
Respondent 4 be declared illegal and also, for
permanent injunction with respect to the land in
question. The appellants-defendants thereon filed an
application that in sale deed, it has been clearly
mentioned that the agreement relating to immovable
property used exclusively in trade or commerce and
falls within the meaning of Section 2(1)(c)(vii) of the
Commercial Courts Act and that the matters above, the
value of rupees one crore are to be transferred to the
Commercial Court. Trial court rejected the said
application which was challenged before the Gujarat
High Court. The Gujarat High Court held that the aim,
object and purpose of establishment of Commercial
Courts, Commercial Divisions and Commercial
Appellate Divisions of the High Court is to ensure that
the cases involved in commercial disputes are disposed
of expeditiously, fairly and at reasonable cost to the
litigant, and if such a suit which is as such arising out
of the probate proceedings and/or is dispute with
respect to the property are transferred to the
Commercial Division/Commercial Court, there shall
not be any difference between the regular civil courts
and the Commercial Division/Commercial Courts and
the object for the establishment of the Commercial
Division/Commercial Courts shall be frustrated.
41. In Vasu Healthcare (P) Ltd. v. Gujarat Akruti
TCG Biotech Ltd. [Vasu Healthcare (P) Ltd. v. Gujarat
Akruti TCG Biotech Ltd., 2017 SCC OnLine Guj 724 :
AIR 2017 Guj 153] , referred to in extenso by my
learned Brother, it was held that: (SCC OnLine Guj
para 33)
"33. ... On plain reading of the relevant clause, it is
clear that the expression "used" must mean "actually
used" or "being used". If the intention of the
legislature was to expand the scope, in that case the
phraseology used would have been different as for
example, "likely to be used" or "to be used". The
word "used" denotes "actually used" and it cannot be
said to be either "ready for use" or "likely to be
used"; or "to be used"."
We entirely agree with the above purposive
interpretation adopted by the Gujarat High Court.
42. The object and purpose of the establishment of
Commercial Courts, Commercial Divisions and
Commercial Appellate Divisions of the High Court is
to ensure that the cases involved in commercial
disputes are disposed of expeditiously, fairly and at
reasonable cost to the litigants. Keeping in view the
object and purpose of the establishment of the
Commercial Courts and fast tracking procedure
provided under the Act, the statutory provisions of the
Act and the words incorporated thereon are to be
meaningfully interpreted for quick disposal of
commercial litigations so as to benefit the litigants
especially those who are engaged in trade and
commerce which in turn will further economic growth
of the country. On the above reasonings, I agree with
the conclusion arrived at by my esteemed Brother A.S.
Bopanna, J."
9. It is contended by learned Counsel for Defendant No.2 that since the
Suit Property is a residential property, the aforesaid judgment -Ambalal
Sarabhai Enterprises Ltd. (supra) passed by the Apex Court would squarely
apply to the present case and, therefore, the present dispute cannot be said to
be a commercial dispute.
10. Heard learned Counsel appearing for the Parties and perused the
material on record.
11. In the opinion of this Court, the issue as to whether Collaboration
Agreement under which a portion of a Property is to be given to the
developer is a commercial dispute or not, has been settled by a Division
Bench of this Court in Asif Ali Khan v. Manoj Kumar, 2024 SCC
OnLineDel 2083. In the said Judgment, the Division Bench of this Court
dealt with a Collaboration Agreement under which certain portions of the
property were to be given to the developer. The relevant portions of the said
Judgment reads as under:
"2. The appellant had instituted the said suit - CS
(COMM) No. 482/2022 captioned Asif Ali
Khan v. Manoj Kumar - for recovery of sum of Rs.
55,00,000/-. The appellant claims that the respondent
had entered into a Collaboration Agreement dated
22.06.2016 (hereafter Collaboration Agreement) with
the owners of the property bearing no. 260 & 260A,
Khasra No. 210 min., Village Hauz Rani, Tehsil Hauz
Khas, Malviya Nagar, New Delhi -110017,
admeasuring 573 sq. yds (hereafter the subject
property). In terms of the Collaboration Agreement,
the subject property was required to be demolished and
a new building was required to be raised by the
respondent. Further, in terms of the Collaboration
Agreement, the respondent was entitled to accept
bookings for sale of separate portions of the subject
property.
xxx
7. We have heard the learned counsel for the
appellant.
8. The principal controversy is whether the said
flat, which was agreed to be purchased by the
appellant in terms of the Agreement to Sell, is (or
would be) a commercial property. Admittedly, the
Agreement to Sell does not describe the said flat or the
subject property as a commercial property. More
importantly, the description of the said flat in the
Agreement to Sell clearly indicates that the first floor
of the subject property, which was subject matter of
transaction under the Agreement to Sell, is a
residential property. The same is evident from the
description of the property which, as noticed above,
comprises of three bed rooms, one drawing/dining
room, three bathrooms, kitchen, staircase, lift with one
car parking.
9. It is also relevant to note that there is no material
on record to indicate that the land, on which the
subject property was agreed to be built, is permitted to
be used for a commercial purposes.
10. The learned counsel for the appellant contends
that in a residential colony certain commercial
use/activity is permissible. Illustratively, he refers the
use of premises by a doctor. The fact that residential
properties may be permitted to be used by
professionals to carry on their profession does not
change the nature of those properties. The same would
remain a residential property and not become a
commercial property. Thus, we find no merit in the
aforesaid contention.
11. The learned counsel appearing for the appellant
submits that the disputes involved in the present
petition would also be covered as a commercial dispute
under Clause (vi) of Section 2(1)(c) of the CC Act. The
said clause reads as under:
"(vi) construction and infrastructure contracts,
including tenders;"
12. The Agreement to Sell is in the nature of a
contract for sale and purchase of immovable property;
it is not a construction contract as contemplated under
Clause 2(1)(vi) of the CC Act. Merely, because the
payment of instalments of the purchase consideration
is linked to the stage of construction, does not change
the nature of the Agreement to Sell to a construction
contract. A plain reading of the Agreement to Sell
indicates that it is an agreement for purchase of a flat.
In terms of the Agreement to Sell, the respondent had
agreed to deliver the possession of the said flat on or
before December, 2017 in a semi furnished stage - with
fan, light, geyser, exhaust fan, Kent RO, chimney,
modular kitchen, one wardrobe extra. Notwithstanding
the clear terms of the Agreement to Sell, the learned
counsel submits that since the Collaboration
Agreement was for redevelopment of the subject
property, the Agreement to Sell is required to be
considered in the same light. The said contention is
insubstantial. It is the appellant's case that the
respondent was entitled to sell a portion of the
property, which was agreed to be redeveloped in terms
of the Collaboration Agreement.
13. The learned counsel appearing for the
appellant, at this stage, seeks to advance the
contention, which is in variation with the pleadings in
the plaint. He submits that since the first floor of the
property fell into the share of the owners, the
Agreement to Sell must be considered as a construction
contract. He submits that as the Collaboration
Agreement was for development of the subject property
and the respondent was merely acting as an agent of
the owners. This contention is also insubstantial apart
from being in variation with the pleadings. Whether the
said flat would fall to the share of the developer (the
respondent) or the owner of the subject property makes
little difference to the nature of the dispute involved. As
noted above, the Agreement to Sell is a contract for
sale and purchase of a residential flat; not a
construction contract.
12. A perusal of the aforesaid Judgment indicates that an Agreement to
Sell was entered into between the parties therein pursuant to the
Collaboration Agreement, where certain portions of the Suit Property are to
be sold by the Builder/Developer. The Division Bench of this Court took a
view that the nature of the Agreement being one for sale of property and not
that of a construction Agreement, the same will not fall within the purview
of a commercial dispute. Similarly, in the present case, a Collaboration
Agreement was entered into by the parties herein, whereby the Developer
taken the form of an owner of the certain shares of the Suit Property, which
he may put such shares for sale. The Division Bench of this Court in Asif
Ali Khan (supra) held that a dispute arising out of such an Agreement cannot
fall within the ambit of commercial dispute. Moreover, the said case - Asif
Ali Khan (supra) is binding on this Court.
13. A perusal of the Collaboration Agreement indicates that the
Developer/Defendants were to bear the entire expenses for the construction
and development of the Suit Property and the Plaintiff was not to spend any
money. After the Suit Property is constructed, the Suit Property is to be
divided between owner's share i.e., entire basement, ground floor, second
floor, third floor of the Suit Property and the Developer's share i.e., entire
first floor of the Suit Property. The effect of the Collaboration Agreement is
that the Developer/Defendants after constructing the entire Suit Property by
using their own funds will become the owner of the entire first floor of the
Suit Property and, therefore, the Collaboration Agreement assumes the
character of an Agreement to Sell of the Suit Property. Unlike a contract
entered into between the owner and the contractor wherein the contractor's
job is only to construct the property at the expenses being borne by the
owner only, then the dispute arising out of such a contract becomes a
commercial dispute. However, in the present case, the
Developer/Defendants have agreed to purchase the entire first floor of the
Suit Property at the cost being computed by the clauses of the Collaboration
Agreement.
14. In the opinion of this Court, the present dispute, arising out of the
Collaboration Agreement, is not a commercial dispute as the Judgment - Raj
Kumar Gupta (supra) passed by the Co-ordinate Bench of this Court has
been impliedly overruled by the Division Bench of this Court in the
Judgment - Asif Ali Khan (supra).
15. Resultantly, the application being I.A. 13055/2025 filed by the
Plaintiff under Order XIIIA of CPC would not be maintainable as the
present Suit cannot be treated as a commercial Suit. I.A. 13055/2025 stands
dismissed.
CS(COMM) 558/2023 & I.A. 15522/2025
List before the Ld. Joint Registrar on 11.05.2026.
SUBRAMONIUM PRASAD, J
MARCH 11, 2026
S. Zakir/SM
