Satish Mishra vs. Deepak

Facts

The Petitioner (Defendant) assails an order dated 02.03.2023 by the Trial Court, which dismissed the Petitioner's application under Order VII Rule 11 CPC. The Respondent (Plaintiff) filed a suit for recovery of Rs. 8,85,460/- along with applicable GST and interest. The Defendant argued that the Plaintiff failed to exhaust the mandatory pre-institution mediation under Section 12A of the Commercial Courts Act, 2015. The Plaintiff contended that an application for urgent interim relief under Order XXXIX Rules 1 and 2 CPC read with Order XXXVIII Rule 5 CPC was filed along with the plaint, exempting them from pre-institution mediation. The Trial Court dismissed the Defendant's application, holding that contemplation of urgent interim relief excused the Plaintiff from mediation.

Held

The Court held that the provisions of Section 12A of the Commercial Courts Act, 2015, are mandatory, and failure to comply necessitates rejection of the plaint, as established by the Supreme Court in Patil Automation Private Limited and Others v. Rakheja Engineers Private Limited. However, the Court clarified that this mandatory requirement applies only to plaintiffs who do not contemplate urgent interim relief. The Court found that the Plaintiff had indeed sought urgent interim relief by filing an application under Order XXXIX Rules 1 and 2 CPC read with Order XXXVIII Rule 5 CPC. The Court further held, following the Division Bench judgment in Chandra Kishore Chaurasia v. RA Perfumery Works Private Ltd., that it is for the Plaintiff to decide if they seek urgent interim relief and the nature of that relief. Crucially, whether the Court ultimately grants the relief sought is irrelevant to determining whether pre-institution mediation was necessary. Since the Plaintiff contemplated and sought urgent interim relief, they were not required to exhaust the remedy of pre-institution mediation. The Trial Court's finding that the Plaintiff was not required to exhaust this remedy was found to be in consonance with the established legal position.

Key Issues

1. Whether the provisions of Section 12A of the Commercial Courts Act, 2015, are mandatory and require rejection of the plaint for non-compliance, as argued by the Petitioner, relying on Patil Automation Private Limited and Others v. Rakheja Engineers Private Limited? 2. Whether filing an application for urgent interim relief, even if not ultimately granted, exempts a plaintiff from the mandatory pre-institution mediation under Section 12A of the Commercial Courts Act, 2015, as contended by the Respondent, and whether the Trial Court correctly applied this principle, as argued by the Petitioner, who claimed the interim relief sought was illusory and not genuinely urgent for a recovery suit? Petitioner's Arguments: The Petitioner argued that the Trial Court erred by not considering that clever drafting to create an illusion of urgent relief should be rejected. They contended that the suit was a simple recovery suit, and the application for freezing bank accounts or seeking security was not genuinely urgent, given the property's value. Therefore, the Plaintiff should have undergone pre-institution mediation. Respondent's Arguments: The Respondent argued that filing an application for urgent interim relief along with the plaint exempted them from the mandatory pre-institution mediation under Section 12A of the Act.