The court reaffirmed that disputes involving contracts for construction and development, such as the MOU in question, fall within the jurisdiction of commercial courts under the Commercial Courts Act, 2015.

JUDGMENT :

SABYASACHI BHATTACHARYYA, J.

1. These appeals arise out of two successive orders passed in the same suit and, as such, are taken up together for hearing.

2. By the first order dated May 17, 2025, impugned in FMA 1484 of 2025, the learned Trial Judge refused to grant ad interim injunction on an application filed by the plaintiffs/appellants for temporary and ad interim injunction restraining the defendant/respondent from taking any coercive steps against the plaintiffs and/or demanding or claiming any amount by way of penalty in terms of Clause 9 of the MOU dated June 7, 2007 and from issuing any fresh demand notices or communications to the plaintiffs claiming penalties under the said clause or from initiating any proceedings on the basis of the same.

3. By the second order dated June 9, 2025, challenged in FMA 1485 of 2025, the learned Trial Judge refused to grant ad interim injunction on the second application filed by the plaintiffs/appellants for temporary and ad interim injunction restraining the defendant/respondent from giving effect to and/or acting upon an order dated May 16, 2025 and/or from taking any coercive or consequential steps including the recovery, threat of recovery, interference with the project activities of the plaintiffs, allotments or operations, pursuant to any such notice.

4. The said injunction applications have been filed in a suit instituted by the plaintiffs/appellants for recovery of money by way of refund, loss, damage, etc., for declaration that no penalty is payable under Clause 9 of the MOU dated June 7, 2007 by the plaintiffs to the defendant, and for permanent injunction restraining the defendant from taking any coercive steps against the plaintiffs and/or demanding or claiming any amount by way of penalty in terms of the said clause.

5. The genesis of the dispute is an MOU dated June 7, 2007 entered into between the parties pursuant to a tender notice dated July 7, 2006 floated by the defendant/respondent, the Asansol Durgapur Development Authority (ADDA), for development of a housing project for certain categories of State Government employees.

6. As per Clause 9 of the MOU, the appellants were to complete the project within a period of four years from the date of receiving necessary clearances and sanctions from all concerned authorities. As per the contract, in the event such timeline was exceeded, penalty would have to be paid by the plaintiffs at the rate of Rs. 5 lakh per month after the completion of the stipulated period.

7. In the year 2015, the plaintiffs applied for an extension of the timeline and the terms of the contract were revised to the effect that the time for completion of the project was extended for a further period of two years, during which the plaintiffs would have to pay a penalty of Rs.1.5 lakh per month; in the event the project could not be completed within the said extended period, penalty would be chargeable at the rate of Rs.5 lakh per month.

8. Subsequently, the plaintiffs expressed their inability to fetch buyers for commercial units and, on the request of the plaintiffs, the defendant/respondent applied before the Urban Land Development Authority for conversion of the project to a residential one.

9. In the meantime, construction was substantially completed and necessary sanctions and revised plan were obtained and allotment of the flats/apartments/plots also started partially. However, the defendant allegedly having insisted upon payme