IN THE HIGH COURT AT CALCUTTA

ORIGINAL CIVIL JURISDICTION

ORIGINAL SIDE

COMMERCIAL DIVISION

BEFORE :-

THE HON’BLE JUSTICE SHAMPA SARKAR

AP- COM 821 OF 2025

M/S PRIME PROJECTS

vs.

PRAJNANANANDA JANA

SEVA SANGHA AND ANOTHER.

For the Petitioner : Mr. Chayan Gupta, Adv.

Mr. Souradeep Banerjee, Adv.

Ms. Sanjana Sinha, Adv.

Mr. AbhidiptoTarafder, Adv.

Mr. Pourush Bandyopadhyay, Adv.

For the Respondent no. 1 : Mr. Tanmoy Mukherjee, Adv.

Mr. Souvik Das, Adv.

Mr. RudranilDas, Adv.

For the Respondent no. 2 : Mr. Surya Prasad Chattopadhyay, Adv.

Mr. Ankit Chatterjee, Adv,

Judgment Reserved on : 29.01.2026

Judgment Delivered on : 10.02.2026

Judgment Uploaded on : 10.02.2026

Shampa Sarkar, J.

1. This is an application for appointment of an arbitrator, for resolution

of the dispute between the parties. The disputes arose out of a Joint Venture

Agreement dated July 30, 2022. According to the petitioner, disputes or

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differences in relation to or arising out of or touching the validity,

interpretation, construction, performance, breach or enforceability of the

agreement were to be referred to an arbitral tribunal. The arbitral tribunal

would consist of one arbitrator who shall be an advocate to be jointly

nominated by the legal advisors of the developer and the leaseholder. The

place of arbitration shall be Kolkata.

2. The petitioner is a registered partnership firm and is engaged in the

business of real estate development. The firm was constituted on July 1,

2022, pursuant to a partnership deed. The respondent no. 1 is a society

registered under the West Bengal Societies Registration Act, 1961 and the

respondent no. 2, claiming to be the President of the said society, had

entered into the agreement with the petitioner for development of a property

situated at Plot No. AD-263/C, Sector I, Salt Lake City, Kolkata - 700064.

The petitioner approached this court by filing this application, when the

respondents, despite repeated requests, failed to refer the dispute to

arbitration in terms of the arbitration clause.

3. The case run by the petitioner in the application is as follows :-

a) By an indenture of lease dated January 22, 1981, the Government of

West Bengal as lessor, demised unto and in favour of the respondent

no.1, leasehold rights in respect of land measuring about 6.2719

kathas, situated at plot no. AD-263/C, Sector I, Salt Lake City,

Kolkata - 700064. The lease was valid for 999 years commencing from

the date of execution of the deed subject to payment of lease rent by

the respondent no.1 to the state of West Bengal.

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b) The respondent no.1 obtained possession in respect of the premises

from the concerned authority on February 24, 1981, and constructed

a single-storey building, upon obtaining requisite sanction from the

municipal authorities.

c) Respondent no.1 had been making payments of the lease rent to the

Government of West Bengal.

d) As the respondent no.1 was facing paucity of funds and could not

effectively perform its day-to-day activities, the members of the society

decided to develop the premises by constructing a multi-storeyed

building. The petitioner was requested to undertake the project.

e) Upon negotiations between the parties, the joint venture agreement

dated July 30, 2022 was entered into. The r espondent no.2

represented the respondent no.1 as its President and executed the

said joint venture agreement on behalf of the society.

f) The society had granted exclusive rights to the petitioner to construct

a new building on the premises in question. All expenses for such

construction of the proposed multi-storied building were to be borne

by the petitioner. The petitioner was to make payment of a sum of Rs.

3,41,00,000/- subject to deduction of TDS as non-refundable and

non-adjustable advance, in the manner provided under clause 8.4 of

the said agreement. In the said agreement, the respondent no.1

society, was described as the leaseholder and the petitioner was

described as the developer. The respondent no. 1 was further entitled

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to allocation of the entire first floor together with one covered car

parking space measuring about 150 square feet.

g) The petitioner was entitled to the remaining of the area in the said

building and car parking spaces along with common facilities and

amenities.

h) Further, the petitioner was entitled to 75% of the roof area and the

balance 25% was the entitlement of the respondent no.1. The

petitioner had the authority to deal with the property in terms of the

agreement and negotiate with persons or enter into any agreement or

contract or borrow money or take any advance against its allocation or

acquired right.

i) The petitioner complied with its obligations under the agreement and

transferred a sum of Rs. 20,79,000/- after deduction of TDS to the

account of the respondent no.1. The sum was accepted by the

respondents without any objection or demur. Receipts with regard to

the payment were also granted in favour of the petitioner.

j) The respondent no.1 was under an obligation to hand over vacant

possession of the premises to the petitioner for development purpose.

k) The petitioner requested the respondents to make over such

possession.

l) Despite such request, the respondents, on one pretext or the other,

delayed handing over of the possession of the premises and the time

for performance of the agreement had been extended by mutual

consent.

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m) Later, the petitioner came to learn that one Meghnath Mondal,

representing himself as the Secretary of the respondent no.1, had filed

a suit before the learned Civil Judge (Senior Division) 2

nd

Court at

Barasat being Title Suit no. 550 of 2023, and prayed for various

reliefs. First of such reliefs being, a declaration that the society was a

duly registered society under the Society's Registration Act 1961 and

was represented by the committee which was in charge of the affairs

of the society at the time of filing of the suit. The names of the

committee members were duly entered in the Office of the Registrar of

Firms, Societies and Non-Trading Corporations, West Bengal.

n) In the suit, the President of the Respondent no. 1, Mr. Golok Ranjan

Bose and the petitioner were impleaded as defendants. The allegations

in the suit were that the erstwhile committee mismanaged the Society,

and excluded the participation of its members. Accordingly, the

registration of the Society was cancelled. Thereafter, such registration

was revived and a new committee was formed. That Golok Ranjan

Bose i.e., the respondent no. 2 herein, had misappropriated the assets

of the Society.

o) Prior to filing of the suit, an advertisement was published in two local

dailies by the society, requesting the public at large to return the

documents that had been misplaced by the Society. In response to the

advertisement, an objection was raised by the petitioner by asserting

the execution of the Joint Venture Agreement between the

respondents and the petitioner. When the alleged newly formed

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committee came to learn about the Joint Venture Agreement, the suit

was filed with the relief as prayed for. It was alleged that the

respondent no. 2 was never the President of the Society and he had

entered into a conspiracy with the petitioner, by forging and

manufacturing documents in order to cheat the Society.

p) The plaintiff prayed for a decree for declaration that the joint venture

agreement dated July 30, 2022, entered into between the respondent

No.2, in the capacity of the President of the Society, and the petitioner

was void, fraudulent and non-binding;

q) Further prayer was for a decree for permanent injunction restraining

the respondent No. 2 from claiming himself to be the President of the

society; from acting in the capacity of the President of the Society;

from interfering with the day-to-day working of the executive body;

from continuing with the construction on the basis of the development

agreement; from interfering with the peaceful enjoyment of the

premises by the society and its tenants and from changing the nature

and character, thereof, and from operating the bank account number

424910100001778 maintained with the Bank of India, Salt Lake

Branch having address as DD-2, Sector-I, Salt Lake, Kolkata -

700064. Ad-interim prayers in terms of the above prayers were also

made.

r) The prayer for ad interim order of injunction was refused by the

landed Civil Judge (Senior Division), 2nd Court, Barasat.

s) Aggrieved and dissatisfied with the order dated May 15, 2023, the

plaintiffs preferred an appeal before the court of the Learned District

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Judge at Barasat being Misc. Appeal No. 67 of 2023.The Learned

appellate court also refused the ad interim order of the injunction.

t) The petitioner confronted the respondent no. 2 about the institution of

the suit and the respondent no.2 assured the petitioner that the issue

would be resolved.

u) The society filed an application for withdrawal of the suit and by order

dated December 11, 2024, Title Suit No. 550 of 2023, was dismissed

for non-prosecution without any liberty to file afresh on the self same

cause of action. The dispute between the society and its members had

been resolved and no cloud was cast over the validity and

enforceability of the joint venture agreement dated July 30, 2022.

v) Despite repeated requests, no steps were taken by the respondents to

honour their obligations under the said agreement. The respondent

no.1 had committed material breach of the agreement. Several letters

were issued to the respondents to perform their obligations under the

agreement, but their requests went unheeded.

w) Suddenly, the respondent No. 2 refunded the money advanced by the

petitioner. The respondent no.2 transferred Rs. 2,50,000/- to the

petitioner through bank transfer. The petitioner requested the

respondent no.1 through the respondent no.2 to share the bank

details so that the sum of Rs.2,50,000/- could be returned. However,

the respondent failed to adhere to that request. Despite being aware of

the stand of the petitioner, the respondent no.2 again issued a cheque

for a sum of Rs.2,50,000/-. The petitioner returned the cheque and

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issued a further cheque dated June 11, 2025, thereby returning the

sum of Rs. 2,50,000/- which was sent by bank transfer.

x) The respondents showed inclination to create third-party rights in

respect of the said premises by transferring, encumbering and or

alienating the same. The respondents also contacted several buyers

and brokers in this regard. Although the petitioner had been ready

and willing to comply with the obligations under the agreement, the

respondents failed to comply with their terms and conditions and

acted in breach thereof. The petiti oner apprehended that the

respondents were taking steps to terminate and revoke the joint

venture agreement dated July 30, 2022.The negotiations had reached

an advanced stage. Under such circumstances, an application under

Section 9 of the Arbitration and Confinement Act, 1996, (hereinafter

referred to as the ‘said act’) was filed before the learned Commercial

Court at Rajarhat and the learned Commercial Court at Rajarhat had

passed an order of injunction restraining the respondents and their

men, agents, office bearers and servants from selling, transferring,

encumbering, alienating and or otherwise creating any third-party

rights in respect of the premises till August 4, 2025. Thereafter, the

order of injunction passed on July 4, 2025 was vacated by an order

dated August 4, 2025.Dissatisfied with the aforementioned order of

August 4, 2025, the petitioner filed an appeal under Section 37 of the

Arbitration and Conciliation Act, 1996. The appeal is still pending

adjudication. The petitioner invoked arbitration by a letter dated July

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14, 2025. In reply to the same, the respondent no.1 contended that

the respondent no.2 did not have any authority to execute the joint-

venture agreement and that there was no privity of contract between

the respondent no.1 and the petitioner. Hence disputes arose between

the parties.

4. In the above background and with the above narration, this

application has been filed for reference of the dispute to arbitration.

5. Mr. Chayan Gupta, learned advocate for the petitioner, submitted that

the Joint Venture Agreement contains an arbitration clause. Whether

the respondent no.2 had the authority to execute the agreement on

behalf of respondent no.1, i.e., the society, was a triable issue. Such

issue should be decided by the learned arbitrator. The referral court

should not probe deeper into the contentions of the respondents with

regard to the legality and validity of the said agreement. He further

submitted that the agreement was a joint venture agreement and as

such the dispute was commercial in nature. The subject matter of the

agreement was also a commercial transaction as it involved

construction for the purpose of sale to third parties. There was an

element of profit for both the parties in the said transaction. Moreover,

the developer was engaged in the business of development of real

estate which was a commercial enterprise. He referred to the following

decisions:-

(i) Ashok Saraf and Ors., vs. Asansol Durgapur Development

Authority, passed in FMA No. 1484 of 2025,

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(ii) Legend Estates Private Limited vs Poulomi Estate Pvt. Ltd.

reported in 2024 SCC Online TS 690 ,

(iii) Raj Kumar Gupta and Anr. vs Jagan Nath Bajaj and Ors.

reported in 2022 SCC Online Del 2995,

(iv) Blue Nile Developers Private Limited vs. Movva Chandra

Sekhar and Ors. reported in 2021 SCC Online AP 3964

(v) M/s Kiran Builders vs. M Surya Babu decided in Writ Petition

No. 3873 of 2023.

6. Mr. Tanmoy Mukherjee, learned advocate, appeared on behalf of the

respondent no.1 and submitted that the dispute should not be referred to

arbitration. The respondent no.2 was neither the President nor an active

member of the society. The execution of the agreement by the respondent

no.2, as the President of the society was nonest in the eye of law in view of

the lack of authority. He referred to the list of executive committee members

of the Society for the year 2022-2023, as available from the annual return

filed by the Society for the financial year 2021-2022 and submitted that the

records would reveal that the respondent no.2 had never been elected as the

President of the society. Thus, the arbitration clause could not be invoked

against the society. The respondent no.1/society, was a non-signatory. If the

petitioner had any dispute with the respondent No. 2, the party could have

resolved the dispute in whatever possible manner they deemed fit and

proper. Reference should not be made for resolution of any dispute between

the petitioner and the respondent no. 1. The respondent no. 1 was not

represented during the execution of the said of Joint Venture Agreement. He

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submitted that, a third party could not enter into an agreement with regard

to the premises belonging to the society and if the representation of the

respondent no. 2, as the President of the society was accepted, in that event,

any person could enter into any kind of an agreement on behalf of a party,

irrespective of whether the person entering into such agreement had the

authority or the locus to do so. It would be as if a passer-by could sign an

agreement with another, thereby transferring Victoria Memorial or the

Calcutta High Court, just by claiming to have a position of authority. Such

kind of transactions could never be taken as valid transactions. Thus, the

respondent no. 1, not being a party to the agreement, could not be dragged

into any dispute between the petitioner and the respondent no. 2. He relied

on the decisions of Cox & Kings Ltd. v. SAP India (P) Ltd. reported in

(2024) 4 SCC 1 and ASF Building Private Limited v Shapoorji Pallonji

and Company Private Limited reported in 2025 INSC 616, in support of

such a contention. He submitted that the non-signatory did not have any

role to play either in the execution of the agreement or in the performance of

the underlying obligations arising out of the agreement. The society was not

getting any benefit under the agreement. The nexus between a signatory and

a non-signatory must be direct and the parties should be interconnected

and interlinked. In this case, the respondent n o. 2 was neither

interconnected nor interlinked with the society. The respondent no. 2, by

creating forged and fabricated document s represented himself as the

President of the society to the petitioner. The entire action was collusive and

to the detriment of the society. Neither the society, nor its executive

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committee members were aware of the underhand dealings between the

respondent no. 2 and the petitioner. The agreement was void abinitio and

non-existent in the eye of law. The alleged arbitration clause could not be

invoked against the respondent no. 1. There was nothing on record which

would indicate that the respondent no. 2 was, in any way, connected to the

respondent no. 1.

7. As the society denied the validity of the said agreement, there could

neither be any commonality of interest nor commonality of subject matter

nor commonality in the performance of the contract by the society. Thus,

the learned Advocate prayed for dismissal of the application against the

respondent no. 1. Mr. Mukherjee further submitted that the dispute was not

commercial in nature and that the application should be rejected, on the

ground that the Commercial Division of the High Court lacked the

jurisdiction to entertain this application.

8. Mr. Chattopadhyay learned Advocate for the respondent No.2

submitted that the property was not being used for commercial purpose.

The subject agreement, although named and styled as a joint venture

agreement, was in effect, a development agreement. It was neither a

construction and infrastructure agreement, nor was the agreement entered

into between the parties after completion of a tender process. Thus, the

dispute being non-commercial, the application must be rejected for having

been filed in the wrong forum.

9. He relied on the decision of Faqir Chand Gulati vs Uppal Agencies

Private Limited and Anr. reported in (2008) 10 SCC 345, in support of

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his contention that, the subject agreement could never be termed as a joint

venture agreement, only because the caption of the agreement described the

same as one. The agreement read as a whole would clearly indicate that it

was essentially a development agreement, for construction of a G+4 storeyed

building, to be used for residential purpose.

10. Mr. Chattopadhyay submitted that the leaseholder did not have any

control or role in the management of the activities arising out of the said

agreement. There was no sharing of profits and losses. In the legal sense, for

the document to be a joint venture agreement, control should have been also

vested upon the leaseholders, and there should have been sharing of profits

and losses. Mere use of the word joint venture’, or ‘collaboration’ in the title

of the agreement, would not make the agreement a joint venture agreement.

Reliance was further placed on the decision of the Telangana High Court

passed in Smt. Sharada Devi Kedia vs Kisna Avenues Pvt. Ltd. decided

in Civil Revision No. 1622 of 2024 . He distinguished the decision of

Ashok Saraf (supra), on the ground that the level of construction which

was the subject matter of the said appeal, was of much greater impact and

an overall infrastructural development was being contemplated. Moreover,

the agreement between Ashok Saraf and Asansol Durgapur Development

Authority, emerged from a tender process. Under such circumstances, and

in view of such distinguishing factors, the Division Bench of the High Court

had observed that the dispute was a commercial dispute. He further

distinguished the decision of the Andhra Pradesh High Court in Blue Nile

Developers (supra) on the ground that, the extent of construction, and the

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nature of construction envisaged in the project, were way beyond the one

envisaged under the subject agreement. The decision of the Telangana High

Court in Smt. Sharada Devi Kedia (supra) was relied upon to substantiate

that the gateway to the Act of 2015 was not necessarily a free-for-all entry,

where all kinds of disputes could find easy seating within the arena of

Section 2(1)(c) of the Act of 2015. Each of the 22 sub-clauses under Section

2(1)(c) must be strictly construed, and given a purposive meaning. The

agreement in question must underscore an inclination to commerce and

commercial activity for a sizable section of persons.

11. It was urged that, a G+4 storeyed building was to come up, out of

which the society was entitled to one floor, and the remaining area to be

constructed would be the developer's allocation. Thus, the nature of

transaction did not involve construction of such magnitude, which affected a

larger section of the society. Construction of the said building would also not

create any extension of infrastructural facilities in and around the area,

which would benefit the people at large. Under such circumstances, such

kind of commercial endeavours would neither fall within the definition of a

commercial transaction, nor could the dispute be classified as a commercial

dispute under clause 2(1)(c) of the Commercial Courts Act, 2015 . Mr.

Chattopadhyay referred to Blue Nile Developers (supra) to submit that the

transaction reflected development of a residential project in a phased

manner within a gated community, including setting up of clubs, common

areas. The project involved deep-rooted infrastructural changes. The nature

of construction was such that, not only was the project beneficial for the

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people who would book the same and reside within the premises, but the

upcoming project and proper completion thereof with the overall

infrastructural development of the surrounding areas, would also positively

affect the locality. Under such circumstance, the agreement was considered

to be a commercial agreement.

12. Heard the learned advocates for the respective parties. A dispute

arising out of a joint venture agreement falls within the definition of a

commercial dispute under the 2015 Act. The expression ‘joint venture’ not

only appears as the caption or the heading of the said agreement, but also

in several parts of the said agreement. As the element of control in the

management, sharing of profits and losses etc. were absent, it was urged

that the agreement must be classified as a development agreement. The

question now is whether the development agreement and the dispute arising

therefrom can be termed as a commercial dispute. The petitioner is a

partnership firm which is engaged in the business of real estate

development. The case of the petitioner is that the respondents approached

the petitioner to develop the property as the petitioner was well known for its

development business. The Division Bench in Ashok Saraf (supra) held

that :-

“63. As held by the Hon ‟ble Apex Court in Ambalal Sarabhai

(supra)14, a purposive interpretation in consonance with the object

and purpose of the CC Act has to be given to the Sections thereof,

thus implying a strict construction. Going by the said yardstick, sub-

clause (vi) refers to “construction and infrastructure contracts,

including tenders”. Hence, the interpretation of the said provision, to

be in consonance with the object and purpose of the CC Act, has to be

through the focal lens of “commercial dispute”. The yardstick to be

applied is not whether an agreement is a pure construction agreement

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or a development agreement but whether it comprises of a commercial

transaction.

64. It is not necessary for a transaction to involve equal controlling

interest or profit-earning on the part of both parties, to be labelled as

“commercial”, it would suffice if the transaction is „commercial‟ from

the perspective of even one of the parties, such as regular business

transactions by traders. In sub-clause (xx) of Section 2(1)(c), even

insurance and re-insurance contracts have been included, in which

only one of the parties, being the insurer, looks at the contract from

the perspective of commerce whereas the insured has no commercial

benefit or profit therefrom. Thus, it is fairly indicated in the different

sub-clauses of Clause (c) of Section 2(1) that for an agreement to be a

commercial one, it is not necessary that both parties have to have a

commercial interest or share in profit and loss. It would suffice if the

transaction is a commercial one even from the viewpoint of one of the

parties.

65. Applying such yardstick, what has to be looked into is whether an

agreement is for construction, be it in the form of a development

agreement or a construction agreement simpliciter. If it is a

development agreement, it is all the more a commercial transaction,

since a developer would definitely enter into the same with commercial

motive. Thus, the distinction between pure construction agreements

and development agreements, as highlighted in the cited judgments in

the context of other statutes, would be an erroneous yardstick under

the CC Act and juxtaposing the rationale of the said decisions to the

present case would be a comparison between disparate concepts,

somewhat like the adage “apples and oranges”.

* * *

* * *

67. Thus, the dispute raised in the suit is specifically covered by

Section 2(1)(c)(vi) of the CC Act and is a “commercial dispute” of more

than the specified value as enumerated in the said Act. Hence, the

learned Trial Judge, being an ordinary civil court and not a designated

commercial court under the CC Act, did not have jurisdicti on to

entertain the suit or pass any orders therein.”

13. For a development agreement to be a commercial one, it is not

mandatory that both the parties would have to have equal control in the

management of the project or equal distribution to profit and loss. It will

suffice if the transaction is a commercial venture from the viewpoint of the

parties. The said principle can be applied in respect of an agreement for

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construction, on the rationale that the developer definitely entered into such

agreement with a commercial motive. Real estate business was the forte of

the petitioner. A distinction must be drawn between a pure construction

agreement and a development agreement. The developer has a commercial

interest in the entire transaction. He can also sell the units developed and

earn therefrom.

14. In Blue Nile Developers (supra), the Hon’ble Division Bench of the

Andhra Pradesh High Court held that when it came to the issue of clause (vi)

of section 2(1)(c) of the Act, which read as ‘construction and infrastructure

contracts, including tenders’ it would mean construction contracts, tenders

relating to construction, infrastructure contracts and tenders relating to

construction and infrastructure contracts.

15. A meaningful expansion of the definition was also given in the same

report, upon discussing the dictionary meaning of the words ‘construction’

and ‘infrastructure’. Relevant portions of the said decision are quoted

below:-

“19. For the purpose of the present case on hand it is necessary to

look into the scope and meaning of some of the clauses of Section

2(1)(c) of the Act before going into the scope and meaning of Section

2(1)(c)(vi) of the Act.

(i) Clause(i) of Section 2(1)(c) of the Act reads as ‘ordinary

transactions of merchants, bankers, financiers, and traders such as

those relating to mercantile documents, including enforcement and

interpretation of such documents’.

That means it covers ordinary transactions of merchants in relation

to the mercantile documents and either enforcement of such

documents or interpretation of such documents, ordinary

transactions of bankers in relation to mercantile documents and

either enforcement of such documents or interpretation of such

documents, ordinary transactions of financiers in relation to their

mercantile documents and either enforcement of such documents or

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interpretation of such documents and ordinary transactions of

traders in relation to their mercantile documents and either

enforcement of such documents or interpretations of s uch

documents.

(ii) Similarly clause (iv) of Section 2(1)(c) reads as ‘transactions

relating to aircraft, air craft engines, air craft equipment and

helicopters, including sales, leasing and financing of the same’.

That means it covers the transactions relating to the aircraft and it's

sales, it's leasing and it's financing, the transactions of air craft

engines and it's sales, it's leasing and it's financing, the transactions

of aircraft equipment and it's sales, it's leasing and its financing and

the transactions of helicopters and it's sales, it's leasing and it's

financing.

iii) Similarly when it comes to the issue involved that is clause (vi) of

the Section 2(1)(c) of the Act, which reads as, “construction and

infrastructure contracts, including tenders”, means and covers that

construction contracts, tenders relating to construction,

infrastructure contracts, tenders relating to infrastructure and

construction, and infrastructure contracts and tenders of

construction and infrastructure contracts.

20. To understand better the meaningful expansion of the above said

clause, the dictionary meaning of the words “construction” and

“infrastructure” can also be seen as hereunder:

OXFORD LEARNERS DICTIONARIES:

• Construction-

(1) The process or method of building or making something,

especially roads, buildings, bridges, etc.

(2) The people and activities involved in making buildings

(3) The way that something has been built or made

(4) A thing that has been built or made.

• Infrastructure-the basic systems and services that are necessary

for a country or an organisation to run smoothly, for example

buildings, transport and water and power supplies.

LEXICO:

• Infrastructure - the basic physical and organisational structures

and facilities (e.g. buildings, roads, power supplies) needed for the

operation of a society or enterprise.

• Construction-

(1) The action of building something, typically a large structure

(2) The industry of constructing buildings, roads, etc.

(3) The style or method used in the building of something

(4) A building or other structure

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Construction is an activity while infrastructure is the outcome of that

activity.

Merriam Webster Dictionary:

• Construction-

(1) The process, art, or manner of constructing something

(2) The construction industry

(3) A sculpture that is put together out of separate pieces of often

disparate materials

• Infrastructure-

(1) The system of public works of a country, state or region

(2) The underlying foundation or basic framework (as of a system or

organisation)

(3) The permanent installations required for military purposes.

21. Since the above said two “words” also carry different meanings in

contrast the above said expansion of the said clause is necessitated.

22. Hence from the above, it is clear that the “legislature” has

included the various types of commercial transactions to bring under

the fold of “commercial dispute” in case of any dispute arises from

any of those transactions. On a careful reading of the above said

provision of the Act, it is obvious that the legislature has taken due

care while incorporating the above said clauses from (i) to (xxii) in

Section 2(1)(c) of the Act by avoiding the repetition of words and

sentences without effecting the full fledged meaning of the same even

on expansion of the said each clause. Therefore, either giving any

restrictive meaning or reading of a clause in isolation and expansion

of one word only in the said clause would hamper and frustrate the

meaningful definition of the said clause on it's expansion by

abrogating certain category of transactions from the purview of the

benefit of the above said Act which is not otherwise the intendment

of the legislature in bringing out the said enactment.

23. For the sake of illustration, if we confine the definition of clause

(vi) of the above said provision of the Act to the infrastructure

contracts only, then it would exclude the category of construction

contracts and construction and infrastructure contracts from it's

purview.

24. Suppose, if it is read as “construction and infras tructure

contracts” as one word/one sentence, then it would exclude the

category of the construction contracts and infrastructure contracts

separately from its purview.

25. But that is not the intendment of the above said central

enactment, as it is clear from the scope and object of the Act. All the

types of “commercial transactions” are saved in the Section 2(1)(c) of

the Act subject to the condition that it satisfies the “specified value”

stipulated under the Act for the purpose of assumption of the

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jurisdiction by the Special Court/the Commercial Court. Except that

no category of commercial transaction is excluded from the purview

of the above said Act which is evident from the reading of the above

said section and its clauses.”

16. The decision in Blue Nile Developers (supra) was followed by the

Karnataka High Court in M/s Kiran Builders (supra). The decision in Smt.

Sarada Kedia was in respect of bifurcating farm lands. Thus, in my view,

construction and infrastructure cannot be read as a part of a single

transaction, but as two identical activities arising out of the same

agreement, that is, construction and infrastructure, or both. The expression

construction must be construed as a separate and distinct activity from

infrastructure. The subject agreement definitely has a commercial angle to

it, at least in respect of the party whose services are being accepted for such

construction work. The dispute is a commercial one. The true purport and

meaning of the expression ‘construction’ appearing in clause (vi) of Section

2(1)(c) of the Commercial Courts Act, 2015 must be read into and applied to

the context. Section 2(1)(c) begins with the expression “unless the context

otherwise requires”. Thus, the legislature was conscious of the fact that the

definition could not be given a restrictive meaning, and could be expanded

and given a more purposive meaning, if the context otherwise required.

17. A building which was to be used as a library, was sought to be

handed over for development. Services of a developer was accepted. The

developer had a share in the allocation of flats in the newly constructed

area. The developer who invested in the construction work of the building,

21

could also deal with such area commercially, by selling it to others. For the

developer, there is only a commercial angle in the business venture.

18. The developer was to render its business knowledge and expertise, as

it was engaged in the business of real estate development. Employment of

plant, machinery, workforce was essential to such work. In lieu of such

services and investment, the developer was entitled to the developer's share.

The relevant clauses of the said agreement are discussed below, as a

reference to the venture to be undertaken by the developer in the project.

19. Clause 5.1.1 of the said agreement provides that, the building was to

be erected on the plot by the leaseholder, upon the land being leased for 999

years. The lease was for construction of a library for higher studies. Thus,

the lease was not granted by the Governor of the State of West Bengal to the

leaseholder for any residential purpose. Secondly, the agreement further

provides that, the leaseholder had expressed his desire to develop the land

by constructing a multi-storeyed building, in accordance with the building

sanction plan, to be sanctioned by the concerned Bidhannagar Municipal

Corporation and the developer had accepted the proposal and the parties

had decided to enter into a Joint Venture Agreement.

20. Clause 10.1 provides that the developer shall have the authority to

deal with the property in terms of the agreement, negotiate with any person

or persons for the purpose of entering into any contract or agreement or

borrow money or take advance against their allocation on the acquired right

under the agreement. Clause 7 provides that for smooth running of the

project, the leaseholders had agreed to execute a power of attorney by which

22

the leaseholder had appointed and nominated Mr. Rabindranath Tandon

and Mr. Ashrayy Tandon, partners of the petitioner, as their constituted

attorneys to act on behalf of the leaseholder. Clause 10 deals with the

developers/promoter's rights, which includes entering into bookings and

agreements for transfer, and how and when the said developer would hand

over the possession to the intended transferees. The profit and loss earned

from the project would be borne entirely by the developer. Clause 13 deals

with the procedure and powers, which indicates that, all the statutory

compliances and permissions to be obtained by the landowner shall be

obtained by the developer as the constituted attorney of the landowner. The

management and maintenance of the premises, including the buildings to be

constructed was also the duty of the developer.

21. Clause 14 deals with the proposed new building. The developer was to

construct the building at its own cost, provide good and standard material

as specified by the engineer of the developer. The construction of the pump,

storage, overhead reservoir, electrification, installation of electricity,

permanent electrical connection etc. were services which were also to be

provided by the developer. The architects fees, the other taxes and liabilities,

the repair, upkeep, and management etc. were to be provided by the

developer. Clause 14 and Clause 15 deals with the procedure for delivery of

possession to the leaseholder.

22. Thus, a holistic reading of the entire agreement clearly indicates that

the developer, who in the usual course of its business of construction and

sale of real estate had entered into the development/joint venture agreement

23

with the respondents and was responsible for developing the property upon

obtaining all sanctions and permissions from the respective authorities on

behalf of the leaseholder. The developer was to supply good quality

materials, designs including civil, architectural, and electrical, complete the

project, install the water pump, electrify the project, obtain electricity

connection etc. The developer was entitled to obtain financial assistances

from banks and other financial institutions or from any other source. Thus,

the entire transaction included investment of the land by the lease holder,

rendering of services by the developer and in lieu of such services, the

developer was allocated a considerable portion of the proposed constructed

area, along with equal rights in the common facilities, and major portion of

the roof rights. The developer also had the right to enter into transactions

with third party buyers and sell the flats to be constructed. The entire profit

and loss was to be borne and/or enjoyed by the developer.

23. Under such circumstances, this agreement was not only restricted to

construction alone, but the developer was required to provide materials,

expertise, designs, and services towards the construction of the building.

The respondents were desirous of developing the building by earning from

such venture and also by acquiring a portion thereof. There is an element of

profit on the part of the society too. As the society was not in a position to

exploit the property from their own resources, they had entered into an

agreement with the petitioner, who was to render all services and expertise,

and not only develop the property, but make it habitable and sell it off to

others after handing over the respondents’ allocation and also upon making

24

a lumpsum payment to the respondents. Under such circumstances, the

dispute cannot be said to be a non-commercial one. The application is

maintainable in the Commercial Division of the High Court.

24. Under the agreement, the respondent No. 1 invested by supplying the

land and the developer was to raise the construction at its own cost. Both

parties agreed to exploit the property commercially. The developer got the

right to sell the constructed flats to third parties. Both parties were

contributors to this common commercial business enterprise. The

cumulative effect of the agreement was that, the parties jointly agreed to put

the property to commercial use, thereby, earning from the same. As the

respondent denied to perform their obligations under the agreement, the

developer sought to enforce their rights by raising a dispute and by invoking

the dispute resolution clause. Both parties had a profit oriented motive.

25. Mr. Tanmay Mukherjee's contention that the respondent no. 1, being

a non-signatory, could not be dragged into an arbitral proceeding, is not

accepted at this stage. This is a matter of evidence. The respondent no. 2

signed the agreement on behalf of the society, and not in his personal

capacity. Whether he had the authority to do so is a triable issue. Secondly,

a suit was filed before the civil court, and the same was withdrawn. In the

suit, a prayer had been made for cancellation of the joint venture agreement

on the ground that the respondent no.2 did not have the authority to enter

into such an agreement, and further that the agreement was a product of

fraud and forgery. It also appears that cheques were issued by the petitioner

25

in the name of the respondent no. 1, and the money was deposited in the

bank account. The prayers in the suit are quoted below:-

“The plaintiff, therefore prays:-

a. For decree for declaration that the plaintiff is a bonafide Society

duly registered-under the Society Registration Act, 1961 and

represented by its present committee duly entered in the records of

the office the Registrar of Firm, Societies and Non Trading

Corporation, West Bengal and the absolute owner of the property

mentioned in the schedule below;

b. For a decree declaring that the joint venture agreement dated 30th

July, 2022 entered into by the defendant No.l in the capacity of the

President of Plaintiff Society and the defendant No.2 in respect of

the A Schedule property are void, fraudulent and not binding on

the plaintiff and the same be delivered up so that the same may

not be used to cause any loss to the plaintiff society.

c. For a decree of permanent injunction restraining the defendant

No.l from claiming himself to be the President of the plaintiff

society and from acting in the capacity of the President and from

interfering with the present executive body in discharging their

duties and responsibilities within the framework of the Rules and.

bye laws of the plaintiff Society and from making construction

through the defendant No.2 in or over the suit property and from

interfering with the peaceful enjoyment of the same by the Plaintiff

Society and its tenants and from changing the nature and

character of the same and also from operating the bank account

being No. 424910100001778 with Bank of India, Salt Lake Branch

having its address at DD-2 Sector-I, Salt Take, Kolkata- 700 064.”

26. The order by which the suit was dismissed for non-prosecution is

quoted below:-

“The record is put-up today by petition submitted by representative,

namely Mr. Meghnad Mondal, Secretary of the plaintiff,

Prajnanananda Jana Seva Sangha.

Mr. Meghnad Mondal, Secretary of the plaintiff is present and files

hazira.

Ld. Counsel for the plaintiff is also present.

Mr. Meghnad Mondal, Secretary of the plaintiff files an application

supported by an affidavit praying for dismiss the suit for non -

prosecution.

The petition is taken up for hearing. Mr. Meghnad Mondal, Secretary

of the plaintiff deposed himself as PW-1 and discharged.

Ld. Counsel for the plaintiff submitted before this court that the

plaintiff filed an application praying for dismissal the suit for non-

prosecution as the plaintiff do not intend to proceed case further.

26

I have heard the Ld. Counsel for the plaintiff.

I have perused the petition of the plaintiff in this regard supported by

an affidavit, deposition of the plaintiff and other materials on record.

Considered.

So, in view of the fact as well as evidence of PW-1, i.e. Mr. Meghnad

Mondal, Secretary of the plaintiff and the facts and circumstances of

the present position of the suit, it appears that the he made an

application and put his signature on behalf of Prajnanananda Jana

Seva Sangha voluntarily after a decision taken by the authority of

plaintiff Seva Sangha for non-prosecution of the suit and accordingly,

he has made this application. So, I am of view that the petition

praying for dismissal the suit for non-prosecution is required to be

allowed without giving liberty to file the suit afresh on the same

cause of action.

Hence it is

O R D E R E D,

that the petition praying for dismissal for non-prosecution of the

plaintiff is allowed without giving liberty to file afresh on the same

cause of action. Thus, this suit is disposed of without any order as to

costs.”

27. The allegation of forgery and misrepresentation by the respondent no.

2 has to be tried by the learned arbitrator. Moreover, the arbitration clause

clearly provides that any dispute with regard to the very existence and

validity of the agreement shall also be referred to arbitration. The objection

of Mr. Mukherjee is entirely on the validity of the agreement as it is alleged

that the same is a product of fraud, misrepresenta tion and forgery

committed by the respondent no. 2.Thus, whether the agreement is a

nullity, and non est in the eye of law, will have to be decided by the learned

arbitrator. The purpose of enquiry by the referral court is limited to the,

prima facie, satisfaction as to the existence of the arbitration agreement.

Clause 23 of the agreement is quoted below:-

“23. DISPUTES:

Disputes or differences in relation to or as rising out of or touching

this Agreement or the validity, interpretation, construction,

performance, breach or enforceability of this Agreement (collectively

27

Disputes) shall be referred to the Arbitral Tribunal and finally resolved

by arbitration under the Arbitration and Conciliation Act, 1996, with

modifications made from time to time. In this regard, the Parties

irrevocably agree that:

Constitution of Arbitral Tribunal: The Arbitral Tribunal shall consist of

one Arbitrator, who shall be an Advocate, to be nominated jointly by

the Legal Advisors of the Developer and leaseholder.

Place: The place of arbitration shall be Kolkata only.

Binding Effect: The Arbitral Tribunal shall have summary powers and

be entitled to give interim awards/directions regarding the Dispute

and shall further be entitled to avoid all rules relating to procedure

and evidence as are expressly avoidable under the law. The

interim/final award of the Arbitral Tribunal shall be binding on the

Parties.”

28. Whether the respondent no. 2 could enter into an agreement on behalf

of the respondent no. 1 or not, will have to be decided by the learned

arbitrator upon weighing evidence. The relationship between the non -

signatory and the signatory is of great significance which, again, will have to

be decided by the learned arbitrator, especially in view of the withdrawal of

the suit.

29. Whether the respondent no. 2, at any point of time was elected or

nominated as the President of the respondent no. 1 and under what

circumstances did the respondent no. 2 act on behalf of the respondent no.

1, are matters of evidence. Furthermore, what led to the withdrawal of the

suit filed by the respondent no. 1 through its Secretary, is also a matter

which requires a deeper probe and the referral court is not required to go

into such detail. Thus, the objections taken by the respondents shall be

adjudicated by the arbitrator. Question with regard to arbitrability and

jurisdiction can be decided by the learned arbitrator. If the arbitrator finds

that the respondents No.1 was unnecessarily dragged into the proceedings,

the arbitrator can impose costs on the petitioner. If the arbitrator finds that

28

the respondent no. 1 was wrongly impleaded, the arbitration can expunge

such party from the proceeding. Thus, this court must honour the doctrine

of competence-competence, by giving effect to the arbitration clause and

leaving the issue raised by Mr. Mukherjee of misjoinder, to be decided by the

learned arbitrator.

30. In Adavya Projects Pvt. Ltd. Vs. M/s. Vishal Structurals Pvt. Ltd.

& Ors. reported in 2025 INSC 507, it was observed that Section 16 of the

1996 Act was inclusive and covered all jurisdictional questions. Validity and

existence of an arbitration agreement, issue of mis-joinder and non-joinder,

whether a non-signatory can be bound by the arbitration clause, must be

decided by the learned arbitrator. The arbitrator can either include a non-

signatory or delete a non-signatory. The relevant portion from Adavya

Projects (supra) is quoted below:-

“24. As briefly stated above, the determination of who is a party to

the arbitration agreement falls within the domain of the arbitral

tribunal as per Section 16 of the ACA. Section 16 embodies the

doctrine of kompetenz-kompetenz, i.e., that the arbitral tribunal

can determine its own jurisdiction. The provision is inclusive and

covers all jurisdictional questions, including the existence and

validity of the arbitration agreement, who is a party to the

arbitration agreement, and the scope of disputes referrable to

arbitration under the agreement. Considering that the arbitral

tribunal’s power to make an award that binds the parties is

derived from the arbitration agreement, these jurisdictional issues

must necessarily be decided through an interpretation of the

arbitration agreement itself. Therefore, the arbitral tribunal’s

29

jurisdiction must be determined against the touchstone of the

arbitration agreement.”

31. The scope of the referral court is limited to the, prima facie,

satisfaction as to the existence of an arbitration agreement or arbitration

clause. No deeper probe or mini trial is permissible at this stage. In the

matter of Aslam Ismail Khan Deshmukh v. Asap Fluids Pvt. Ltd. & Anr.

reported in (2025) 1 SCC 502, the Hon’ble Apex Court held as follows:-

“51. It is now well-settled law that, at the stage of Section 11

application, the referral Courts need only to examine whether

the arbitration agreement exists — nothing more, nothing less.

This approach upholds the intention of the parties, at the time

of entering into the agreement, to refer all disputes arising

between themselves to arbitration. However, some parties might

take undue advantage of such a limited scope of judicial

interference of the referral Courts and force other parties to the

agreement into participating in a time-consuming and costly

arbitration process. This is especially possible in instances,

including but not limited to, where the claimant canvasses

either ex facie time-barred claims or claims which have been

discharged through “accord and satisfaction”, or cases where

the impleadment of a non-signatory to the arbitration agreement

is sought, etc.”

32. The referral court only gives legal meaning to the doctrine of

competence-competence. The decision of SBI General Insurance Co. Ltd.

vs Krish Spinning reported in 2024 SCC Online SC 1754, the relevant

paragraphs are quoted below:-

“94. A seven-Judge Bench of this Court, in In Re : Interplay

Between Arbitration Agreements under the Arbitration and

Conciliation Act, 1966 and the Indian Stamp Act, 1899 reported

in 2023 INSC 1066, speaking eruditely through one of us, Dr

Dhananjaya Y. Chandrachud, Chief Justice of India, undertook

a comprehensive analysis of Sections 8 and 11 respectively of

the Act, 1996 and, inter alia, made poignant observations about

the nature of the power vested in the Courts insofar as the

aspect of appointment of arbitrator is concerned. Some of the

30

relevant observations made by this Court in In Re :

Interplay (supra) are extracted hereinbelow:

“179. […] However, the effect of the principle of competence-

competence is that the arbitral tribunal is vested with the power

and authority to determine its enforceability. The question of

enforceability survives, pending the curing of the defect which

renders the instrument inadmissible. By appointing a tribunal

or its members, this Court (or the High Courts, as the case may

be) is merely giving effect to the principle enshrined in Section

16. The appointment of an arbitral tribunal does not necessarily

mean that the agreement in which the arbitration clause is

contained as well as the arbitration agreement itself are

enforceable. The arbitral tribunal will answer precisely these

questions.

xxxxxxxxx

185. The corollary of the doctrine of competence-competence is

that courts may only examine whether an arbitration agreement

exists on the basis of the prima facie standard of review. The

nature of objections to the jurisdiction of an arbitral tribunal on

the basis that stamp-duty has not been paid or is inadequate is

such as cannot be decided on a prima facie basis. Objections of

this kind will require a detailed consideration of evidence and

submissions and a finding as to the law as well as the facts.

Obligating the court to decide issues of stamping at the Section

8 or Section 11 stage will defeat the legislative intent underlying

the Arbitration Act.

186. The purpose of vesting courts with certain powers under

Sections 8 and 11 of the Arbitration Act is to facilitate and

enable arbitration as well as to ensure that parties comply with

arbitration agreements. The disputes which have arisen between

them remain the domain of the arbitral tribunal (subject to the

scope of its jurisdiction as defined by the arbitration clause).

The exercise of the jurisdiction of the courts of the country over

the substantive dispute between the parties is only possible at

two stages:

a. If an application for interim measures is filed under Section 9

of the Arbitration Act; or

b. If the award is challenged under Section 34.

Issues which concern the payment of stamp-duty fall within the

remit of the arbitral tribunal. The discussion in the preceding

segments also make it evident that courts are not required to

deal with the issue of stamping at the stage of granting interim

measures under Section 9.

* * *

31

* * *

117. By referring disputes to arbitration and appointing an

arbitrator by exercise of the powers under Section 11, the

referral court upholds and gives effect to the original

understanding of the contracting parties that the specified

disputes shall be resolved by arbitration. Mere appointment of

the arbitral tribunal doesn't in any way mean that the referral

court is diluting the sanctity of “accord and satisfaction” or is

allowing the claimant to walk back on its contractual

undertaking. On the contrary, it ensures that the principal of

arbitral autonomy is upheld and the legislative intent of

minimum judicial interference in arbitral proceedings is given

full effect. Once the arbitral tribunal is constituted, it is always

open for the defendant to raise the issue of “accord and

satisfaction” before it, and only after such an objection is

rejected by the arbitral tribunal, that the claims raised by the

claimant can be adjudicated.

135. The existence of the arbitration agreement as contained in

Clause 13 of the insurance policy is not disputed by the

appellant. The dispute raised by the claimant being one of

quantum and not of liability, prima facie, falls within the scope

of the arbitration agreement. The dispute regarding “accord and

satisfaction” as raised by the appellant does not pertain to the

existence of the arbitration agreement, and can be adjudicated

upon by the arbitral tribunal as a preliminary issue.”

33. In the decision of the Hon’ble Apex Court in ASF Building (supra) it

was decided that the issues of joinder, non-joinder, mis-joinder etc. were

also within the domain of the learned arbitrator. The relevant portions are

quoted below:-

“113. It is well within the jurisdiction of the Arbitral Tribunal to

decide the issue of joinder and non-joinder of parties and to

assess the applicability of the Group of Companies Doctrine.

Neither in Cox and Kings (I) (supra) nor in Ajay Madhusudhan

(supra), this Court has said that it is only the reference courts

that are empowered to determine whether a non -signatory

should be referred to arbitration. The law which has developed

over a period of time is that both 'courts and tribunals' are fully

32

empowered to decide the issues of impleadment of a non -

signatory and Arbitral Tribunals have been held to be preferred

forum for the adjudication of the same.

114. In the case of Ajay Madhusudhan (supra), this Court,

placing reliance on Cox and Kings (I) (supra), has expressly held

that Section 16 is an inclusive provision which comprehends all

preliminary issues touching upon the jurisdiction of the arbitral

tribunal and the issue of determining parties to an arbitration

agreement goes to the very root of the jurisdictional competence

of the arbitral tribunal.

115. The case of Ajay Madhusudhan (supra) also recognizes that

the legal relationship between the signatory and non-signatory

assumes significance in determining whether the non-signatory

can be taken to be bound by the Arbitration Agreement. This

Court also issued a caveat that the 'courts and tribunals should

not adopt a conservative approach to exclude all persons or

entities who are otherwise bound by the underlying contract

containing the arbitration agreement through their conduct and

their relationship with the signatory parties. The mutual intent

of the parties, relationship of a non- signatory with a signatory,

commonality of the subject matter, the composite nature of the

transactions and performance of the contract are all factors that

signify the intention of the non-signatory to be bound by the

arbitration agreement'.

116. Recently, a coordinate bench of this Court in Adavya

Projects Pvt. Ltd. v. Vishal Strcturals Pvt. Ltd., 2025 INSC 507,

also held that an arbitral tribunal under Section 16 of the Act,

1996 has the power to implead the parties to an arbitration

agreement, irrespective of whether they are signatories or non-

signatories, to the arbitration proceedings. This Court speaking

through. P.S. Narasimha J. observed that since an arbitral

33

tribunal's jurisdiction is derived from the consent of the parties

to refer their disputes to arbitration, any person or entity who is

found to be a party to the arbitration agreement can be made a

part of the arbitral proceedings, and the tribunal can exercise

jurisdiction over him. Section 16 of the Act, 1996 which

empowers the arbitral tribunal to determine its own jurisdiction,

is an inclusive provision that covers all jurisdiction question

including the determination of who is a party to the arbitration

agreement, and thus, such a question would be one which falls

within the domain of the arbitral tribunal. It further observed

that, although most national legislations do not expressly

provide for joinder of parties by the arbitral tribunal, yet an

arbitral tribunal can direct the joinder of a person or entity,

even if no such provision exists in the statute, as long as such

person or entity is a party to the arbitration agreement.

Accordingly, this Court held that since the respondents therein

were parties to the underlying contract and the arbitration

agreement, the arbitral tribunal would have the power to

implead them as parties to the arbitration proc eedings in

exercise of its jurisdiction under Section 16 of the Act, 1996.

The relevant observations read as under: -

"24. As briefly stated above, the determination of who is

a party to the arbitration agreement falls within the

domain of the arbitral tribunal as per Section 16 of the

ACA. Section 16 embodies the doctrine of kompetenz -

kompetenz, i.e., that the arbitral tribunal can determine

its own jurisdiction. The provision is inclusive and covers

all jurisdictional questions, including the existence and

validity of the arbitration agreement, who is a party to

the arbitration agreement. and the scope of disputes

referrable to arbitration under the agreement.

Considering that the arbitral tribunal's power to make an

34

award that binds the parties is derived from the

arbitration agreement, these jurisdictional issues must

necessarily be decided through an interpretation of the

arbitration agreement itself. Therefore, the arbitral

tribunal's jurisdiction must be determined against the

touchstone of the arbitration agreement.”

34. In the decision of the Hon’ble Supreme Court in Cox & Kings (supra)

the Hon’ble Apex Court held as follows:-

“169. In case of joinder of non-signatory parties to an arbitration

agreement, the following two scenarios will prominently emerge : first,

where a signatory party to an arbitration agreement seeks joinder of a

non-signatory party to the arbitration agreement; and second, where a

non-signatory party itself seeks invocation of an arbitration

agreement. In both the scenarios, the referral court will be required to

prima facie rule on the existence of the arbitration agreement and

whether the non-signatory is a veritable party to the arbitration

agreement. In view of the complexity of such a determination, the

referral court should leave it for the Arbitral Tribunal to decide

whether the non-signatory party is indeed a party to the arbitration

agreement on the basis of the factual evidence and application of legal

doctrine. The Tribunal can delve into the factual, circumstantial, and

legal aspects of the matter to decide whether its jurisdiction extends to

the non-signatory party. In the process, the Tribunal should comply

with the requirements of principles of natural justice such as giving

opportunity to the non-signatory to raise objections with regard to the

jurisdiction of the Arbitral Tribunal. This interpretation also gives true

effect to the doctrine of competence-competence by leaving the issue

of determination of true parties to an arbitration agreement to be

decided by the Arbitral Tribunal under Section 16.”

35. Thus, Section 16 of the said Act, empowers the learned arbitrator to

decide all kinds of jurisdictional issues.

36. Under such circumstances, the Court appoints Mr. Sabyasachi

Chowdhury, learned Senior Advocate, as the learned arbitrator, to arbitrate

upon the disputes between the parties. This appointment is subject to

35

compliance of Section 12 of the Arbitration and Conciliation Act, 1996. The

learned Arbitrator shall fix his own remuneration as per the Schedule of the

Act.

37. AP-COM 821 of 2025 is accordingly disposed of.

Urgent Photostat certified copies of this judgment, if applied for, be

supplied to the parties upon fulfillment of requisite formalities.

(Shampa Sarkar, J.)