S.12A Commercial Courts Act | Party Cannot Be Non-Suited For Want Of Pre-Institution Mediation If Urgent Interim Relief Sought: MP High Court

Section 12A of the Commercial Courts Act, 2015 (Act of 2015) deals with the mandatory provision of undergoing pre-institution mediation with respect to suits that are contemplated to be instituted under the Act without any accompanying interim urgent application.

The division bench of Justices Sujoy Paul and Amar Nath Kesharwani observed that the pre-institution mediation contemplated under Section 12A of the Act has been mandated only in a class of suits-

The language employed in Section 12-A itself is very clear which leaves no room for any doubt that in cases where interim relief is prayed for, the appellant cannot be non-suited for want of pre-institution mediation process. The curtains are finally drawn on this aspect in the recent judgment of Supreme Court in Patil Automation Pvt. Ltd. (supra)…In view of foregoing analysis, we are unable to give our stamp of approval to the order dated 10.01.2023 passed by learned Commercial Court, Jabalpur. The instant suit is pregnant with an application for interim relief. In view of urgency shown, suit assumes a different character. In a case of this class/character, pre- institution mediation is not a pre-condition.

The facts of the case were that Appellants/Plaintiffs had instituted a suit against the Respondents/Defendants and the same was accompanied with multiple applications before the trial court. They had sought for, among other things, permanent injunction and compensation. The Plaint of the Appellants was rejected under Order VII Rule 11 CPC for non-compliance of Section 12A of the Act and want of jurisdiction. Aggrieved, the Appellants preferred an appeal before the Court.

The Appellants submitted that the court below had not appreciated the averments made in their Plaint. It was argued that their pleadings along with the documents placed on record before the trial court elucidated as to why the respective court had the jurisdiction to hear the matter. It was also pointed out that the pleadings before the lower court was accompanied with multiple applications seeking interim relief and thus the suit was not hit by the provision under Section 12-A of the Act. Therefore, it was prayed that the impugned order be set aside.

Examining the submissions of parties and documents on record, the Court found merit in the arguments put forth by the Appellants. It noted that the impugned order did not deal with the specific averments made by the Appellants in their Plaint with respect to jurisdiction and hence, it was vulnerable to be interfered with-

If the present matter is examined on the touchstone of principles laid down by Division Bench in Curewin Pharmaceuticals (supra), it will be clear like noon day that to examine the aspect of cause of action, the Court needs to examine each fact and averment meticulously. In addition, the documents filed with the suit must be gone into to examine whether any part of or in other words, a minuscule part of cause of action has arisen within the jurisdiction of the Court. As noticed above, it cannot be said that there was no pleading whatsoever about existence of cause of action within the territorial jurisdiction of Commercial Court, Jabalpur. The Court below was obliged to examine the aforesaid paragraphs mentioned in the Civil Suit and in the injunction application. After having dealt with those paragraphs and the relevant documents filed by the appellant, the Court below could have given a finding regarding availability of cause of action in its jurisdiction. In our considered opinion, the Court below did not deal with those averments in specific and also failed to see the documents filed with the suit. Thus, the order became vulnerable and liable to be interfered with.

The Court then dealt with the objection regarding the non-compliance of Section 12-A of the Act. It observed that considering that the Appellants had also sought for interim relief, their suit was not in the teeth of Section 12A of the Act.

With the aforesaid observations, the appeal was allowed and the impugned order was set aside. The Court further directed the trial court to rehear the Appellants on the question of territorial jurisdiction and pass an order afresh in accordance with law.

Representations: Mr. Brian da Silva, Sr. Advocate with Mr. Sarabvir Singh Oberoi for the Appellants

Case Title: OMFR Pipes and Products & Anr. v. Itarsi Pipe Sales & Ors.

Citation: 2023 LiveLaw (MP) 30

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