Should Commercial Suit Be Rejected Under O VII R 11 CPC For Not Following Pre-Institution Mediation? Supreme Court To Examine

The Supreme Court will examine the question whether a commercial suit should be rejected at the threshold for not following the pre-institution mediation as per Section 12A of the Commercial Courts Act.

While issuing notice in a Special Leave Petition, a bench comprising Chief Justice of India Sanjiv Khanna and Justice PV Sanjay Kumar observed :

"The question that requires consideration by this Court is whether, due to non-compliance with Section 12A of the Commercial Courts Act, 2015, a suit should be dismissed under Order VII Rule 11 of the Code of Civil Procedure, 1908, or whether it should be kept in abeyance, directing the parties to first explore the possibility of settlement by instituting mediation."

In 2022, the Supreme Court had held in M/s Patil Automation Private Limited and others versus Rakheja Engineers Private Ltd 2022 LiveLaw (SC) 678 that pre-institution mediation was mandatory in commercial suits.

"We declare that Section 12A of the Act is mandatory and hold that any suit instituted violating the mandate of Section 12A must be visited with rejection of the plaint under Order VII Rule 11. This power can be exercised even suo moto by the court," the Court declared in the said judgment.

Case : NOVENCO BUILDING AND INDUSTRY A/S vs XERO ENERGY ENGINEERING SOLUTIONS PRIVATE LIMITED & ANR | SLP (c) 2753/2025

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