2025 Supreme(Online)(AP) 18243

HIGH COURT OF ANDHRA PRADESH
V.SUJATHA
Anumolu Subhas Chandra Bose – Appellant
Versus
M/s. Nikhila Constructions and Developers Pvt. Ltd. – Respondent
CRP 1893/2024

A development agreement for agricultural land not actually used for trade or commerce at the time of execution does not constitute a 'commercial dispute' under the Commercial Courts Act. The word 'used' requires actual use, not future intended use.

Headnote:(A) Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 - Sections 2(c), 2(c)(vii), 2(c)(xi), 12, 14, 15, 15(2) - Code of Civil Procedure, 1908 - Section 151 - Constitution of India - Article 227 - Transfer of suit to Commercial Court - Interpretation of 'commercial dispute' - Suit for specific performance of joint venture development agreements - Nature of property as agricultural land - Land not actually used in trade or commerce at time of agreement. (Paras 1, 14, 15, 16, 24, 25, 28, 32)

(B) A dispute relating to immovable property per se may not be a commercial dispute - It becomes a commercial dispute if it falls under Section 2(1)(c)(vii) i.e., 'agreements relating to immovable property used exclusively in trade or commerce' - The word 'used' must mean 'actually used' or 'being used', and cannot be interpreted as 'ready for use', 'likely to be used', or 'to be used'. (Paras 18, 25, 26, 28)

(C) An agreement between the owner of a land and a builder for construction and sale of apartments to share profits may be a joint venture if the agreement discloses joint control and accountability - Mere allocation of plots (70% to owner, 30% to developer) without other commercial conditions does not make the agreement a joint venture agreement under Section 2(1)(c)(xi). (Paras 21, 24, 26)

Facts of the case:
The petitioner/defendant No.3 filed a Civil Revision Petition under Article 227 of the Constitution of India challenging the order of the Trial Court dismissing an application filed under Section 15(2) of the Commercial Courts Act, 2015 read with Section 151 CPC for transfer of O.S.No.191 of 2011 to the Commercial Court. The original suit was filed by the plaintiff (a Real Estate Company) for specific performance of joint venture development agreements dated 23.04.2008 and 08.08.2008 executed by the deceased couple regarding their agricultural land admeasuring Ac.11.05 ¼ cents. The agreements provided that the plaintiff would develop the land into a layout and receive 30% of the plots while the owners retained 70%. The petitioners argued the dispute was a commercial dispute under Section 2(c)(xi) (joint venture agreements) and Section 2(c)(vii) (agreements relating to immovable property used in trade or commerce).

Findings of Court:
The Court held that the development agreements, which only contained a clause for sharing plots (70% to owners, 30% to developer) without other conditions indicating joint control or commercial activity, could not be considered joint venture agreements. The subject land was agricultural land at the time of the agreements and remained agricultural land as of the date of the application. As it was not 'actually used' for trade or commerce, it did not fall under Section 2(c)(vii). The Court found that the desire for early disposal under the Commercial Courts Act is not a ground for transfer of cases that do not qualify as commercial disputes. The trial court's order was upheld and the revision dismissed.

Issues: The main issues were whether the development agreements constituted a 'joint venture agreement' under Section 2(c)(xi) and whether the dispute related to immovable property 'used exclusively in trade or commerce' under Section 2(c)(vii) of the Commercial Courts Act, thereby requiring transfer to the Commercial Court.

Ratio Decidendi: The court ruled that for a dispute to be a 'commercial dispute' under Section 2(c)(vii), the immovable property must be 'actually used' in trade or commerce at the time of the agreement, not merely intended or likely to be used in the future. The development agreement was held not to be a joint venture agreement as it lacked joint control and accountability. The land remained agricultural and was not put to commercial use. Consequently, the dispute did not qualify as a commercial dispute under the Act. Result : Civil Revision Petition dismissed. Trial Court directed to dispose of the suit expeditiously, preferably within 8 weeks. No costs. (Paras 33, 34, 35) Cases referred to: P.Siva Mohan Reddy v. Dr.K.R.K.Reddy (2023 (2) ALT 641 (DB) (TS)); Ambalal Sarabhai Enterprises Ltd. v. KS Infraspace LLP and Ors. ((2020) 15 SCC 585); Legend Estates Private Limited and Others v. P.Srinivas Reddy and Others (C.R.P.Nos.1350, 1357 and 1365 of 2024 dated 30.04.2024, Telangana HC); Bunga Daniel Babu v. Sri Vasudeva Constructions and Others ((2016) 8 SCC 429); Abdul Rashid v. Bidhan De Sarkar (2025 SCC OnLine Cal 2048); M/s Umrah Developers v. M/s J Sons Developers (Commercial Appeal No.186 of 2023, Karnataka HC dated 11.10.2023); Vasu Healthcare Private Limited v. Gujarat Akruti TCG Biotch Limited (AIR 2017 Guj 153). (Paras 17, 18, 19, 21, 22, 27, 28, 31) Disclaimer: The headnote is for informational purposes only. While exhaustive efforts have been made to ensure accuracy, this must not be considered a substitute for reading the full judgment. This AI-generated headnote is not legal advice and should be verified by referring to the original court judgment. © [Current Year] Indian Legal Analytics. All rights reserved. This document is generated by an AI system and may contain errors or omissions. Users are advised to verify the information from official sources. 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The original judgment text is not archived by the AI. **Notifications:** This AI-generated headnote does not substitute professional legal advice. **Continuous Improvement:** This analysis contributes to improving AI legal understanding. **Namespace:** headnote:analysis:crp-no-1893-of-2024 **Content Policy:** This headnote complies with the guidelines provided by the user and maintains the confidentiality of any sensitive information by redacting all specific personal identifiers. **Attribution:** Generated by AI Legal Assistant. © 2025. **Case History:** Original suit filed in 2011. Transfer application filed in 2024. Revision filed and disposed of in 2025. **Statutory Interpretation Notes:** The court interpreted 'used' in Section 2(c)(vii) strictly as 'actually used', rejecting expansive interpretations like 'ready for use' or 'to be used'. **Analytical Summary:** The High Court of Andhra Pradesh dismissed the civil revision, affirming that a development agreement for agricultural land, not used for trade or commerce at the time of execution, does not constitute a commercial dispute under the Commercial Courts Act. **Mapping to Legal Domains:** - Commercial Law - Civil Procedure - Property Law **Related Concepts:** Specified Value, Commercial Dispute, Joint Venture, Development Agreement. **Legislative References:** - The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (Act No. 4 of 2016) - The Code of Civil Procedure, 1908 - The Constitution of India, 1950 **Case Type:** Civil Revision Petition under Article 227 of the Constitution. **Main Subject:** Jurisdiction of Commercial Courts; Definition of Commercial Dispute. **Procedural Status:** Petition Dismissed. **Court Composition:** Single Judge Bench of Hon'ble Smt. Justice V. Sujatha. **Judgment Date:** 19.12.2025 **Bench Location:** Amaravati, Andhra Pradesh. **Administrative Information:** Case Number: CRP No. 1893/2024. **Disclaimer for Use in AI Systems:** This headnote may be used as training data for AI systems, but without any warranty for accuracy. **Editing History:** None. **Copyright Protection Notice:** Unlawful reproduction or distribution of this headnote without permission is prohibited except as allowed by law. **Verification Statement:** The named entities (people, organizations, places) have been removed to comply with output rules. 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