1) Lucknow Development Authority vs. M. K. Gupta [1994 (1) SCC 243]
2) Friends Colony Development Committee vs. State of Orissa [2004 (8) SCC 733
3) New Horizons Ltd vs. Union of India [1995 (1) SCC 478)
Faqir Chand Gulati vs Uppal Agencies Pvt. Ltd. & Anr on 10 July, 2008
A joint venture is frequently defined as an association of two or more persons formed to carry out a single business enterprise for profit. More specifically, it is in association of persons with intent, by way of contract, express or implied, to engage in and carry out a single business venture for joint profit, for which purpose such persons combine their property, money, effects, skill, and knowledge, without creating a partnership, a corporation or other business entity, pursuant to an agreement that there shall be a community of interest among the parties as to the purpose of the undertaking, and that each joint venturer must stand in the relation of principal, as well as agent, as to each of the other coventurers within the general scope of the enterprise.
Black's Law Dictionary (7th Edition, page 843) defines `joint venture' thus :
"Joint Venture : A business undertaking by two or more persons engaged in a single defined project. The necessary elements are : (1) an express or implied agreement; (2) a common purpose that the group intends to carry out; (3) shared profits and losses; and (4) each member's equal voice in controlling the project."
An illustration of joint venture may be of some assistance. An agreement between the owner of a land and a builder, for construction of apartments and sale of those of apartments so as to share the profits in a particular ratio may be a joint venture, if the agreement discloses an intent that both parties shall exercise joint control over the construction/development and be accountable to each other for their respective acts with reference to the project.
(i) A development agreement is one where the land-holder provides the land. The Builder puts up a building. Thereafter, the land owner and builder share the constructed area. The builder delivers the `owner’s share’ to the land-holder and retains the `builder’s share’. The land-holder sells/transfers undivided share/s in the land corresponding to the Builder’s share of the building to the builder or his nominees. The land-holder will have no say or control in the construction or have any say as to whom and at what cost the builder’s share of apartments are to be dealt with or disposed of. Such an agreement is not a “joint venture” in the legal sense. It is a contract for “services”.
(2) On the other hand, an agreement between the owner of a land and a builder, for construction of apartments and sale of those of apartments so as to share the profits in a particular ratio may be a joint venture, if the agreement discloses an intent that both parties shall exercise joint control over the construction/development and be accountable to each other for their respective acts with reference to the project.
(3) The title of the document is not determinative of the nature and character of the document, though the name may usually give some indication of the nature of the document. The use of the words `joint venture’ or `collaboration’ in the agreement will not make the transaction a joint venture, if there are no provisions for shared control and losses.
2) Friends Colony Development Committee vs. State of Orissa [2004 (8) SCC 733
3) New Horizons Ltd vs. Union of India [1995 (1) SCC 478)
Faqir Chand Gulati vs Uppal Agencies Pvt. Ltd. & Anr on 10 July, 2008
A joint venture is frequently defined as an association of two or more persons formed to carry out a single business enterprise for profit. More specifically, it is in association of persons with intent, by way of contract, express or implied, to engage in and carry out a single business venture for joint profit, for which purpose such persons combine their property, money, effects, skill, and knowledge, without creating a partnership, a corporation or other business entity, pursuant to an agreement that there shall be a community of interest among the parties as to the purpose of the undertaking, and that each joint venturer must stand in the relation of principal, as well as agent, as to each of the other coventurers within the general scope of the enterprise.
Black's Law Dictionary (7th Edition, page 843) defines `joint venture' thus :
"Joint Venture : A business undertaking by two or more persons engaged in a single defined project. The necessary elements are : (1) an express or implied agreement; (2) a common purpose that the group intends to carry out; (3) shared profits and losses; and (4) each member's equal voice in controlling the project."
An illustration of joint venture may be of some assistance. An agreement between the owner of a land and a builder, for construction of apartments and sale of those of apartments so as to share the profits in a particular ratio may be a joint venture, if the agreement discloses an intent that both parties shall exercise joint control over the construction/development and be accountable to each other for their respective acts with reference to the project.
(i) A development agreement is one where the land-holder provides the land. The Builder puts up a building. Thereafter, the land owner and builder share the constructed area. The builder delivers the `owner’s share’ to the land-holder and retains the `builder’s share’. The land-holder sells/transfers undivided share/s in the land corresponding to the Builder’s share of the building to the builder or his nominees. The land-holder will have no say or control in the construction or have any say as to whom and at what cost the builder’s share of apartments are to be dealt with or disposed of. Such an agreement is not a “joint venture” in the legal sense. It is a contract for “services”.
(2) On the other hand, an agreement between the owner of a land and a builder, for construction of apartments and sale of those of apartments so as to share the profits in a particular ratio may be a joint venture, if the agreement discloses an intent that both parties shall exercise joint control over the construction/development and be accountable to each other for their respective acts with reference to the project.
(3) The title of the document is not determinative of the nature and character of the document, though the name may usually give some indication of the nature of the document. The use of the words `joint venture’ or `collaboration’ in the agreement will not make the transaction a joint venture, if there are no provisions for shared control and losses.
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