Calcutta High Court on Development MoUs as Commercial Disputes under Commercial Courts Act, 2015

Overview of the Decision

In Aloke Satnaliwala Vs Nirmala Devi Fatehpuria and Ors. (Calcutta High Court), the Division Bench examined whether a civil suit founded on a Memorandum of Understanding (MoU) relating to the development of an immovable property is a “commercial dispute” within the meaning of Section 2(1)(c) of the Commercial Courts Act, 2015.

The Bench also considered the appropriate procedural route once such a suit is found to be a commercial dispute—whether:

  • it should be transferred from the non-commercial side to the Commercial Division under Section 15 of the Commercial Courts Act, 2015, or
  • the plaint should be returned under Order VII Rule 10 of the Code of Civil Procedure, 1908 for presentation before the proper commercial forum.

The appeal arose from an order dated July 20, 2026, where a learned Single Judge had refused ad interim relief to the appellant (plaintiff in the suit). The Division Bench, while disposing of the appeal, focused narrowly on jurisdictional aspects—particularly whether the dispute was a “commercial dispute”—and clarified that it was not adjudicating upon the merits of the underlying monetary and factual claims.

Factual Background of the Suit

Nature of the Claim

The assessee–plaintiff instituted a suit based on a Memorandum of Understanding executed between the parties in October 2020. Key foundational assertions in the plaint included:

  • The respondents requested financial assistance for development of a specific immovable property.
  • Relying on the respondents’ representations, the appellant agreed to advance a sum of Rs.2 crores as an advance connected with this development project.
  • The MoU, though described as an informal document, was recorded in writing and was said to have been finalized after negotiations in October 2020.

Pursuant to this understanding, the appellant claimed to have:

  • Disbursed Rs.2 crores through nine cheques issued between November 5, 2020 and November 9, 2020.

Subsequently, according to the plaint:

  • The respondents allegedly did not comply with their obligations under the MoU concerning the property development.
  • Thereafter, the respondents purportedly agreed to refund Rs.2 crores along with interest at 15% per annum, compounded annually, to compensate for the period during which the appellant’s funds remained with them.

Partial Repayment and Balance Confirmation

The appellant further pleaded that:

  • Between June 1, 2023 and June 30, 2023, the respondents repaid Rs.50 lakhs through multiple cheques.
  • In January 2026, the respondents executed a balance confirmation of accounts, acknowledging the outstanding liability.
  • Despite demands thereafter, the respondents failed to pay the remaining amount.

Based on these averments, the suit was filed to recover the outstanding balance of the principal amount along with interest, supported by:

  • The MoU
  • The alleged partial repayment
  • The balance confirmation
  • Dishonoured cheques issued by the respondents.

Rival Submissions before the Division Bench

Appellant’s Submissions

The appellant’s counsel argued:

  • The suit was primarily a money recovery action arising from a financial arrangement recorded in the MoU.
  • The plaintiff had demonstrated a prima facie case sufficient for ad interim relief, particularly in light of:
    • the balance confirmation, and
    • the dishonour of cheques issued toward repayment.
  • The learned Single Judge, by declining ad interim protection, had erred in exercising discretion.

On the issue of jurisdiction and forum, the appellant submitted:

  • The suit did not seek any relief in respect of title, possession or other proprietary rights in land situated outside the ordinary original civil jurisdiction of the Calcutta High Court and therefore ought not to be treated as a “suit for land”.
  • Even if the Court were to hold that the dispute was a commercial dispute under the Commercial Courts Act, 2015, the appropriate course would be:
    • to return the plaint under Order VII Rule 10 of the Code of Civil Procedure, 1908, and
    • permit its presentation before the competent commercial forum.

To support this, reliance was placed on:

  • AIR 2021 Cal 190 – Laxmi Polyfab Pvt. Ltd. vs. Eden Realty Ventures Pvt. Ltd. & Anr.
  • 2025 SCC OnLine SC 3712 – Aase Ram vs. Amit Kumar
  • Rule 9(2) of The High Court at Calcutta Commercial Courts Practice Directions, 2021.

Respondents’ Submissions

Counsel for the respondents raised preliminary objections as to the maintainability of the suit, contending: