Authority: High Court at Calcutta (Civil Appellate Jurisdiction)

Order Date: 07.10.2026

Case Overview

  • Parties: Appellants – Funidea Projects Private Limited and another; Respondents – Dr. Dilip Kumar Ghosh (defendant nos. 1 & 2) and others (defendant nos. 3‑33). The dispute centres on two agreements dated 16 May 2012 and 10 April 2013 concerning the transfer of shares of Venkateswar Medicare Private Limited (the “defendant 3‑company”) and the associated lease‑hold plot (Plot DN‑20, Sector V, Salt Lake, 15.01570 cottahs) and a multi‑storey building.
  • Background: A single judge dismissed GA 2 of 2015 and, invoking Section 15 of the Commercial Courts Act, 2015 (CC Act), transferred the suit to the Commercial Division, treating the dispute as a “commercial dispute” under Section 2(1)(c)(xii) (shareholders’ agreement). The appellants challenged that the agreements are share‑purchase agreements, not shareholders’ agreements, and that the suit involves land‑related reliefs situated outside the court’s territorial jurisdiction.
  • Key Legal Issues:

1. Whether the dispute falls within the definition of a “commercial dispute” under Clause (xii) of Section 2(1)(c) of the CC Act.

2. Whether the plaint is barred by Order II Rule 2(3) of the Code of Civil Procedure (CPC) and the Doctrine of Election, given that the plaintiffs had earlier filed Money Suit No. 101 of 2015 (a specific‑performance/ money suit) and omitted the relief of cancellation of the agreements.

3. Whether the suit is a “suit for land/immovable property” under Clause 12 of the Letters Patent, considering that the reliefs sought would affect title and possession of the Salt Lake plot.

4. Whether the earlier judgment constitutes a “judgment” under Clause 15 of the Letters Patent, making the intra‑court appeal maintainable.

  • Factual Matrix: The agreements required the plaintiffs (who were also the sole directors and 100 % shareholders of the defendant 3‑company) to transfer all shares and, by implication, the assets of the company (the plot and building). The plaintiffs allege fraud: the defendants induced issuance of un‑allotted shares to 28 stranger entities (defendant nos. 6‑33), induced the plaintiffs’ directors onto the board, failed to repay a loan from Allahabad Bank, and retained control of the company’s assets. The alleged fraud amounts to Rs 89 lakhs (share issuance) and an additional Rs 25 lakhs promised after settlement with Recon Engineers (India) Pvt. Ltd.
  • Procedural History: The single judge’s order (dated 5 March 2021) dismissed the application for dismissal (GA 2) and transferred the suit. The appellants filed A.P.O. 84 of 2021 (challenge to dismissal) and A.P.O. 85 of 2021 (challenge to transfer). The matter was heard on 12‑08‑2026, 19‑08‑2026, 02‑09‑2026 and 09‑09‑2026; judgment reserved on 09‑09‑2026 and delivered on 07‑10‑2026.
  • Judicial Reasoning:
  • The Court examined the definitions of “shareholders’ agreement” (Vodafone International Holdings (2012) 6 SCC 613) and “share‑purchase agreement” (Bhaskar Naidu (2025) SCC OnLine Kar 5). The defendants were outsiders at the time of execution; therefore, the agreements do not fall within Clause (xii) of Section 2(1)(c) of the CC Act. Consequently, the transfer to the Commercial Division was erroneous.
  • The Court applied the tests from Cuddalore Powergen Corp. Ltd. (2025) SCC OnLine SC 82 and S. Valliammai (2026) SCC OnLine SC 603 on Order II Rule 2(3). The cause of action in both suits is identical (fraudulent share‑issuance and asset control). The plaintiffs were entitled to the relief of cancellation in the earlier suit but voluntarily relinquished it in favour of monetary relief. No leave under Order II Rule 2 was obtained. Hence, the bar under Order II Rule 2(3) is attracted, and the Doctrine of Election precludes the plaintiffs from seeking the opposite relief now.
  • Regarding jurisdiction, the Court noted that the land and building are situated in Salt Lake, outside the ordinary original jurisdiction of the Calcutta Court. The reliefs sought would affect title and possession of that immovable property, making the suit a “suit for land” under Clause 12 of the Letters Patent. Therefore, the court lacks jurisdiction to receive, try, and determine the suit.
  • The portion of the March 5 2021 judgment that classified the suit as a commercial suit and ordered its transfer is a “judgment” within the meaning of Clause 15 of the Letters Patent; thus, the intra‑court appeal is maintainable.

Final Outcome

  • The suit does not involve a commercial dispute; the transfer to the Commercial Division under Section 15 of the CC Act is set aside.
  • The plaint is rejected outright as it is barred by Order II Rule 2(3) of the CPC and the Doctrine of Election, and it is also vexatious and harassive.
  • A.P.O. 85 of 2021 is allowed, overturning the transfer order; A.P.O. 84 of 2021 is allowed, overturning the dismissal of the application and rejecting the plaint.
  • GA No.2 of 2026 (filed in connection with A.P.O. 84) stands disposed of.
  • No order as to costs; separate decrees to be drawn up for each appeal.

Topics: Commercial Courts Act; Order II Rule 2 (CPC); Jurisdiction of Civil Courts