Plaint Cannot Be Rejected Even If No Satisfaction Is Recorded By Court On Bypassing Pre-Institution Mediation U/S 12A Of Commercial Courts Act: Calcutta HC

Brief Facts:

The present revisional application has been filed against an order dismissing an application under Order VII Rule 11 of the Civil Procedure Code (“CPC”) seeking rejection of the suit.

It is the case of the applicant that the present suit could not have been filed bypassing the pre-institution mediation provided under section 12A of the Commercial Courts Act.

Contentions:

The applicant submitted that the provisions of Section 12A of the said Act is mandatory. Unfortunately, when the plaint was filed bypassing such mandatory provision, the order recording presentation of the plaint did not record the satisfaction of the learned Judge that the suit contemplates an urgent relief.

It was further contended that the Supreme Court in Yamini Manohar versus T. K. D. Keerthi (2024) held that although, the provisions of Section 12A of the Commercial Courts Act may not require grant of a formal leave by a Court but the same does not do away with the object of consideration as 4 to whether the suit contemplates an urgent relief or not.

It was further contended that in Skipper Limited versus Prabha Infrastructure Private Limited (2023), the Calcutta High Court held that unless a plaint contemplates an urgent relief which can be gathered from the plaint at the time of admission and not at a subsequent stage, the remedy of pre institution mediation cannot be bypassed.

Per contra, the respondent submitted that though the provision of Section 12A of the said Act is mandatory, the same does not pre-supposes grant of any leave for instituting a suit contemplating an urgent relief.

It was also argued that the suit filed before the District Court unlike the Hon'ble Court is not presented before the learned Judge and as such there is no scope at the initial stage for the learned Judge to record his satisfaction in the order as to whether the suit contemplates an urgent relief.

Lastly, reliance was placed on the Calcutta High Court in Gavrill Metal Pvt. Ltd. versus Maira Fabricators Pvt. Limited (2023)' where it was held that it is not necessary for the interlocutory application to succeed for maintaining a suit without complying with the mandatory provision of Section 12A of the Commercial Courts Act. So long the plaint contemplates a case of urgent relief, though a weak one, there is no embargo in receiving the plaint.

Observations:

The court at the outset observed that section 12A of the Commercial Courts Act provides for the pre-institution mediation which is mandatory in nature. However, this section has carved out an exception that in case of urgent relief, the requirement of pre-institution mediation can be bypassed. The case of urgent relief should be made out from a holistic reading of the plaint at the time of its institution.

The Supreme Court in Yamini Manohar (supra) held that when the plaintiff tries to make out a case for an urgent relief, the commercial court is not prohibited from checking whether the case for such relief has been made out. The court can conduct such an inquiry to dismantle the falsity and deception created in the plaint to bypass the pre-institution mediation provided under section 12A of the Commercial Courts Act.

Similarly, the Telangana High Court in 'Kohinoor Seed Fields India Pvt. Ltd. vs. Veda Seed Sciences Pvt. Ltd. & Anr. (2024)' held that there is no requirement of taking a leave of the court before filing the suit seeking urgent relief. However, the court in the same judgment observed that the court can peruse the plaint and prayers made therein to ascertain whether the case for urgent intervention is made out.

The court observed that accepting the plaint without recording the satisfaction as to the urgency of relief cannot be said to be fatal. The court at the time of scrutinizing the plaint has to see whether the case for the urgent relief is established. It need not go into the question whether the plaintiff will succeed in obtaining the same. Even if interim relief is denied or the case is weak, the plaint cannot be rejected on this ground alone.

The court further noted that from a bare perusal of the statements made in the plaint, it becomes clear that the plaintiffs have prayed for an urgent interim relief. From the order-sheet filed in this case, it would transpire that simultaneously with the filing of the suit, the plaintiffs had also filed an application under Order XXXIX Rule 1 and 2 of the CPC. Admittedly, the suit was filed to seek urgent relief. The plaintiffs have however, failed to succeed in obtaining any ex parte interim order.

It added that just because the plaintiff failed to obtain the interim relief, this does not justify rejection of the plaint.

It also observed that even a weak case for urgent relief cannot be thrown out. The events subsequent to presentation of the plaint are not relevant consideration to decide whether the statutory remedy provided for in section 12A of the said Act can be bypassed.

The court concluded that “In the facts as noted hereinabove, the above suit cannot be said to have been filed with the object of bypassing the remedy with deception or falsity.”

Case Title: Haldibari Tea Manufacturers LLP & Anr. Versus Mahindra Tubes Limited & Ors.

Case Number: CO 204 of 2024

Judgment Date: 05/02/2025

For the petitioners : Mr. Avishek Guha Mr. Bikramaditya Ghosh Ms. Supriya Singh

For the opposite party : Mr. Shounak Mukhopadhyay nos. 1 & 2.

For the opposite party : Mr. Vikram Chandravanshi nos. 3, 4 & 5. Mr. Diwash Gupta Mr. Ravi Prasad

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