Vijay vs Havells India Limited & Ors.
- Court
- Delhi High Court
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 04.05.2026
Judgment pronounced on: 01.07.2026
Judgment uploaded on: 01.07.2026
+ FAO(COMM) 46/2025
VIJAY .....Appellant
Through: Mr. Abhijit Mishra, Ms. Payal
Bahl, Mr. Himanshu Tomar,
Mr. Vikhyat Gupta, Mr.
Prashant Jaiswal and Mr. Ram
Parvesh Kumar, Advs.
versus
HAVELLS INDIA LIMITED & ORS. .....Respondents
Through: Mr. Divyansh Jain and Mr.
Vidhan Jain, Advs.
CORAM:
HON'BLE MR. JUSTICE ANIL KSHETARPAL
HON'BLE MR. JUSTICE AMIT MAHAJAN
J U D G M E N T
ANIL KSHETARPAL, J.
1. Through the present Appeal, the Appellant assails the
correctness of the Order dated 25.01.2025 (hereinafter referred to as
the „Impugned Order‟), whereby the learned District Judge allowed
the Respondents‟ application under Order VII Rule 11 of the Code of
Civil Procedure, 1908 (hereinafter referred to as the „CPC‟) and
consequently rejected the Counter-claim instituted by the Appellant.
2. The present Appeal turns upon a pure question of law requiring
determination by this Court. The controversy pertains to the scope and
applicability of Section 12A of the Commercial Courts Act, 2015
(hereinafter referred to as the „CC Act‟), in the context of Counter-
Signature Not Verified
FAO(COMM) 46/2025 Page 1 of 18
Signed By:JAI
NARAYAN
Signing Date:01.07.2026
15:04:07
claims instituted in pending commercial suits. The issue assumes
significance in light of the differing approaches sadopted in various
decisions of this Court, inter alia :
1
i. Anil Kumar Pitti v. Comsol Energy Private Limited ;
ii. Sanjana Agarwal v. Namoshivai Apparels Private
2
Limited ; and
iii. Aditya Birla Fashion and Retail Limited v. Mrs Saroj
3
Tandon .
ISSUE FOR CONSIDERATION:
3. The question which falls for consideration before this Court is
the following:Whether a Defendant instituting a Counter-claim in a
pending commercial suit is mandatorily required to independently
comply with the pre-institution mediation condition under Section
12A of the CC Act and, if not, in what circumstances such
requirement may be regarded as having been satisfied?
FACTUAL MATRIX:
4. Though the present Appeal raises a narrow question of law, a
brief recital of the relevant facts is necessary for proper appreciation
of the controversy.
5. The Respondents instituted a commercial suit against the
Appellant. Pursuant thereto, and in terms of the order dated
1
RFA(COMM.) No.479/2025
2
RFA(COMM.) No.212/2023
3
CM(M) No.459/2023
Signature Not Verified
FAO(COMM) 46/2025 Page 2 of 18
Signed By:JAI
NARAYAN
Signing Date:01.07.2026
15:04:07
27.05.2024, inspections were conducted on 01.06.2024 and
17.06.2024 with the assistance of the learned Local Commissioner
appointed by the Court. Thereafter, the Appellant instituted a Counter-
claim founded upon the aforesaid inspections and the commercial
relationship subsisting between the parties, contending that the actions
undertaken by the Respondents were contrary to, and beyond the
scope of, the order dated 27.05.2024.
6. It is not in dispute that, prior to the institution of the Counter-
claim, the Appellant did not independently initiate proceedings under
Section 12A of the CC Act. It is further undisputed that the original
commercial suit itself had been instituted without recourse to pre-
institution mediation on account of the urgent interim reliefs sought
therein.
7. Subsequently, the Respondents preferred an application under
Order VII Rule 11 CPC seeking rejection of the Counter-claim on the
ground of non-compliance with Section 12A of the CC Act. By way
of the Impugned Order, the learned Commercial Court accepted the
said objection and rejected the Counter-claim at the threshold, holding
that independent compliance with Section 12A constituted a
precondition for the institution of the Counter-claim.
8. While arriving at the aforesaid conclusion, the learned
Commercial Court principally relied upon the decision of the learned
Single Judge of this Court in Aditya Birla Fashion (supra) .
9. Aggrieved by the Impugned Order and the findings returned
therein, the Appellant has preferred the present Appeal.
Signature Not Verified
FAO(COMM) 46/2025 Page 3 of 18
Signed By:JAI
NARAYAN
Signing Date:01.07.2026
15:04:07
CONTENTIONS ON BEHALF OF THE PARTIES:
10. This Court has heard learned counsel representing the parties,
and perused the material placed on record.
11. Learned counsel representing the Appellant advanced the
following submissions:
i. The expression “suit” occurring in Section 12A of the CC
Act does not encompass a set-off or Counter-claim.
Consequently, a Counter-claim instituted in a pending
commercial suit is not subject to an independent requirement of
pre-institution mediation. It was further contended that, despite
introducing extensive amendments to the CPC through the CC
Act, the Legislature consciously refrained from amending Order
VIII Rules 6A, 6B and 6C CPC, thereby indicating that the
Legislature did not intend to subject Counter-claims to an
independent requirement of pre-institution mediation.
ii. Since the Appellant had not invoked Order VIII Rule 6C
CPC seeking exclusion of the Counter-claim from the suit, the
Counter-claim continued to remain part of the same proceedings
and could not be treated as an independent action for the
purposes of Section 12A. Reliance was placed upon Satyender v.
4
Saroj , to contend that Counter-claims are intended to avoid
multiplicity of proceedings and secure comprehensive
adjudication of disputes.
4
(2022) 17 SCC 154
Signature Not Verified
FAO(COMM) 46/2025 Page 4 of 18
Signed By:JAI
NARAYAN
Signing Date:01.07.2026
15:04:07
iii. In commercial suits, Counter-claims are ordinarily
instituted within the timeline available for filing the written
statement under Order VIII Rule 6A CPC read with Order VIII
Rule 1 CPC. It was contended that insistence on prior
compliance with Section 12A would, in several cases, render it
impracticable for a Defendant to institute a Counter-claim within
the prescribed timelines.
iv. While the provisions of the CC Act would prevail in the
event of inconsistency, no special amendment having been
introduced in respect of Order VIII Rules 6A to 6C CPC, the
existing statutory framework governing Counter-claims
continues to operate unaffected.
v. The decisions in Anil Kumar Pitti (supra) and Sanjana
Agarwal (supra) were distinguishable on facts and did not
govern the controversy in the present case. It was pointed out
that, unlike the present matter, the requirement of pre-institution
mediation stood complied with in Sanjana Agarwal .
vi. The decision in Aditya Birla Fashion (supra) does not
correctly appreciate the statutory scheme governing Counter-
claims under Order VIII Rules 6 and 6A CPC, inasmuch as it
treats a Counter-claim as a proceeding wholly distinct from the
principal suit for the purposes of Section 12A of the CC Act.
vii. In conclusion, a Counter-claim, though in the nature of a
cross-suit, is intended to be adjudicated alongside the principal
suit so as to avoid multiplicity of proceedings. Reliance in this
Signature Not Verified
FAO(COMM) 46/2025 Page 5 of 18
Signed By:JAI
NARAYAN
Signing Date:01.07.2026
15:04:07
regard was placed upon Jag Mohan Chawla v. Dera Radha
5
Swami Satsang .
12. Per contra , learned counsel representing the Respondents
supported the Impugned Order and advanced the following
submissions:
i. The present Appeal had substantially been rendered
academic, as the issue forming the subject matter of the Counter-
claim already stood framed and was pending adjudication before
the learned Commercial Court in CS (COMM) 294/2024.
ii. The learned Commercial Court rightly rejected the
Counter-claim on account of the admitted non-compliance with
Section 12A of the CC Act. Reliance was placed upon Aditya
Birla Fashion (supra) to contend that a Counter-claim
constitutes a cross-action by the Defendant and is therefore
equally subject to the mandate of Section 12A.
iii. A second round of mediation may not be necessary
where pre-institution mediation has already been undertaken
between the parties. However, the present case stands on a
different footing, since the original suit itself had been instituted
without recourse to pre-institution mediation owing to the urgent
interim reliefs sought therein. Consequently, the Counter-claim
represented the first occasion on which the parties‟ rival claims
could be subjected to mediation under Section 12A.
5
(1996) 4 SCC 699
Signature Not Verified
FAO(COMM) 46/2025 Page 6 of 18
Signed By:JAI
NARAYAN
Signing Date:01.07.2026
15:04:07
iv. A Counter-claim, though instituted in a pending suit,
possesses the essential characteristics of an independent suit and
is therefore equally amenable to the requirement of pre-
institution mediation under Section 12A.
v. Since the controversy before this Court raises a pure
question of law, learned counsel did not address the merits of the
underlying disputes between the parties.
13. No other submissions have been made by learned counsel
representing the parties.
ANALYSIS AND FINDINGS:
14. At the outset, it must be clarified that the present Appeal does
not raise any issue concerning the mandatory nature of Section 12A of
the CC Act. The said question stands conclusively settled by the
Supreme Court in Patil Automation (P) Ltd. v. Rakheja Engineers
6
(P) Ltd. , wherein it was held that compliance with Section 12A is
mandatory in all commercial disputes not contemplating urgent
interim relief. The issue before this Court is of a different nature. The
question is whether, and in what circumstances, a Defendant seeking
to institute a Counter-claim in a pending commercial suit must
independently comply with Section 12A.
15. In the considered view of this Court, the issue cannot be
answered by adopting either of the two extreme positions canvassed
before this Court. To hold that every Counter-claim must invariably
6
(2022) 10 SCC 1
Signature Not Verified
FAO(COMM) 46/2025 Page 7 of 18
Signed By:JAI
NARAYAN
Signing Date:01.07.2026
15:04:07
be preceded by a separate mediation process, irrespective of the
surrounding circumstances, would amount to reading Section 12A of
the CC Act in an unduly rigid and formalistic manner. Equally, to hold
that once mediation proceedings have been initiated between the
parties, all future Counter-claims automatically stand exempted from
Section 12A would substantially dilute the statutory object underlying
the provision.
16. The answer, in the considered view of this Court, lies in the
purpose sought to be achieved by Section 12A of the CC Act. The
provision does not merely require parties to participate in mediation as
a matter of procedural formality. Rather, it seeks to afford the parties a
meaningful opportunity to amicably resolve their disputes before
being subjected to adversarial litigation. Such opportunity necessarily
requires that the disputes sought to be agitated are capable of being
meaningfully addressed during the mediation process.
17. Consequently, a material consideration is whether the disputes
subsequently sought to be raised by way of Counter-claim had formed
part of, or were capable of being meaningfully addressed during, the
mediation proceedings undertaken under Section 12A of the CC Act.
Where the parties had already been afforded an opportunity to engage
with and attempt settlement of such disputes, the legislative object
underlying Section 12A may reasonably be said to stand fulfilled.
Conversely, where the proposed Counter-claim was never disclosed
during mediation proceedings, the statutory requirement cannot be
treated as satisfied.
Signature Not Verified
FAO(COMM) 46/2025 Page 8 of 18
Signed By:JAI
NARAYAN
Signing Date:01.07.2026
15:04:07
18. The above principle may operate differently depending upon
the outcome of the mediation proceedings. Where mediation
culminates in a settlement, the question of a subsequent Counter-claim
ordinarily would not arise, save where claims have been expressly
reserved. Where mediation culminates in a non-settlement report and
the Defendant had disclosed its own claims during such proceedings, a
further round of mediation prior to institution of the Counter-claim
may not be necessary. However, where the Defendant had not
disclosed its proposed claims during mediation, or where no mediation
proceedings were undertaken at all, compliance with Section 12A
would continue to be required before such claims are instituted.
19. The aforesaid understanding is consistent with the observations
of the Supreme Court in Patil Automation (supra) that pre-institution
mediation is intended to produce meaningful results and facilitate
settlement of disputes before litigation commences. The legislative
emphasis is not merely upon participation in a process, but upon
providing parties a genuine opportunity to resolve identified disputes
before approaching the Court.
20. It is in this context that the decision of the Co-Ordinate Bench
of this Court in Sanjana Agarwal (supra) assumes significance. The
Co-Ordinate Bench observed that requiring parties to undergo a
second round of mediation in respect of disputes that had already
formed part of the earlier mediation process would be contrary to the
objective of expeditious commercial adjudication. The relevant
portion of the said judgment is extracted hereinafter for ready
reference:
Signature Not Verified
FAO(COMM) 46/2025 Page 9 of 18
Signed By:JAI
NARAYAN
Signing Date:01.07.2026
15:04:07
“25. There is no cavil that under the provisions of the Code of Civil
Procedure, 1908, a counter-claim is to be treated as a plaint and
governed by the rules applicable to plaint. However, in the case of
commercial disputes to say that each counter-claim will be subject to
pre-institution mediation process separately when the Plaintiff has
already exhausted the remedy of pre-institution mediation, may not be
apposite. The object of the CC Act is to ensure speedy resolution of
commercial disputes to accelerate economic growth and improve the
international image of the Indian Justice System and to restore the
faith of the investors. Once a party has taken steps to exhaust the
remedy of pre-institution mediation to then ask the opposite party in a
case where the subject matter of dispute is entirely the same, to once
again undertake pre-institution mediation, prior to filing its counter-
claim would defeat the very purpose of the CC Act and delay
adjudication of the commercial dispute between the parties.
25.1 The Supreme Court in Ambalal Sarabhai Enterprises Ltd. v.
9
K.S. Infraspace LLP case has held that the statement of object and
reasons for the enactment of the CC Act was the early and speed
resolution of the commercial disputes and thus, there was an
amendment made and fast track procedure set in place by the CC Act.
The relevant extract is set out below:
“31…
The object and purpose of the Commercial Courts Act is to
ensure that the Commercial Courts, Commercial Appellate
Courts, Commercial Division and Commercial Appellate
Division of the High Courts and also to ensure that the
commercial cases are disposed of expeditiously, fairly and at
reasonable cost to the litigant.
…
34. The Schedule to the Commercial Courts Act amends
various provisions of the Code of Civil Procedure and thereby
makes significant departure from the Code. After Order 13 of
the Code, Order 13-A — “Summary Judgment” has been
inserted. Order 13A contains the scope and classes of suits to
which Order 13-A applies, grounds for summary judgment,
procedure to be followed, evidence for hearing of summary
judgment, orders that may be made by Court in such
proceedings for summary judgment, etc. After Order 15 of the
Code, Order 15-A—“Case Management Hearing” has been
inserted. Order 15-A provides for first case management
hearing (Rule 1); recording of oral evidence on a day-to-day
basis (Rule 4); powers of the court in a case management
Signature Not Verified
FAO(COMM) 46/2025 Page 10 of 18
Signed By:JAI
NARAYAN
Signing Date:01.07.2026
15:04:07
hearing (Rule 6); adjournment of case management hearing
(Rule 7); consequences of non-compliance with orders (Rule 8).
By way of amendment, several rules have been incorporated to
make the matters of commercial disputes on fast track. In Order
20 of the Code — “Judgment”, Rule 1 has been substituted that
within ninety days of the conclusion of arguments, the
Commercial Court/Commercial Division/Commercial Appellate
Division to pronounce the judgment and copies thereof shall be
issued to all the parties to the dispute through electronic mail or
otherwise.
35. Various provisions of the Act, namely, case management
hearing and other provisions makes the court to adopt a
proactive approach in resolving the commercial dispute. A new
approach for carrying out case management and strict
guidelines for completion of the process has been introduced so
that the adjudicatory process is not delayed. I have referred to
the various provisions of the Act and the Schedule bringing in
amendments brought to the Civil Procedure Code to deal with
the commercial disputes, only to highlight that the trial of the
commercial dispute suits is put on fast track for disposal of the
suits expeditiously. Various provisions of the Act referred to
above and the amendments inserted to the Civil Procedure
Code by the Schedule is to ensure speedy resolution of the
commercial disputes in a time bound manner. The intent of the
legislature seems to be to have a procedure which expedites the
disposal of commercial disputes and thus creates a positive
environment for investment and development and make India
an attractive place to do business. ”
[Emphasis is ours]
25.2 The Supreme Court analysed the provisions of the CC Act and
based on such analysis held that statutory provisions of the CC Act
and the language therein should be interpreted purposefully to
facilitate the swift resolution of commercial disputes, thereby
benefiting litigants involved in trade and commerce and contributing
to the country's economic growth. The relevant extract reads as
follows:
“42. The object and purpose of the establishment of
Commercial Courts, Commercial Divisions and Commercial
Appellate Divisions of the High Court is to ensure that the cases
involved in commercial disputes are disposed of expeditiously,
fairly and at reasonable cost to the litigants. Keeping in view
the object and purpose of the establishment of the Commercial
Courts and fast tracking procedure provided under the Act, the
Signature Not Verified
FAO(COMM) 46/2025 Page 11 of 18
Signed By:JAI
NARAYAN
Signing Date:01.07.2026
15:04:07
statutory provisions of the Act and the words incorporated
thereon are to be meaningfully interpreted for quick disposal
of commercial litigations so as to benefit the litigants
especially those who are engaged in trade and commerce
which in turn will further economic growth of the country. On
the above reasonings, I agree with the conclusion arrived at by
my esteemed Brother A.S. Bopanna, J.”
[Emphasis is ours]
26. In the present case, non-starter report which is available shows
that the service of the pre-institution mediation was done through
email to NAPL and that there was no appearance of NAPL leading to
the closure of the pre-institution mediation.
26.1 There is another reason as well. In the present case as both the
plaint and the counter-claim emanate from the same series of
transactions between the parties. The dispute revolved around the 5
disputed invoices and to that extent the counter-claim is an integral
part of NAPL’s defence to Molmek’s claim as articulated in the plaint.
In such a scenario, to relegate the parties a period to a second round
of preinstitution mediation would be contrary to the object of the CC
Act for a speedy resolution of commercial disputes.”
21. In the aforesaid judgment, the Bench noted that, since the
Appellant had conceded before the learned Commercial Court that the
filing of the Counter-claim did not require compliance with the pre-
institution mediation requirement, he was precluded from assailing the
maintainability of the Counter-claim on that ground before the
Appellate Court. The relevant observations are reproduced below:
“26.2 In any event, as stated above, although initially an objection on
this aspect was taken by Molmek before the learned Commercial
Court, Molmek conceded that the remedy of pre-institution mediation
prior to filing the counter-claim was not requisite. Thus, Molmek is
now precluded from raising such a challenge.”
22. The aforesaid reasoning is consistent with a purposive
understanding of Section 12A of the CC Act in cases where the rival
claims had already formed part of the pre-institution mediation
proceedings.
Signature Not Verified
FAO(COMM) 46/2025 Page 12 of 18
Signed By:JAI
NARAYAN
Signing Date:01.07.2026
15:04:07
23. Reliance was also placed on behalf of the parties upon the
decision in Anil Kumar Pitti (supra) . The said decision, however,
arose in an entirely distinct factual matrix. In that case, although pre-
institution mediation had been initiated, the suit was subsequently
instituted by the opposite party and not by the party which had
invoked Section 12A of the CC Act. While emphasising the object of
the CC Act, namely, the expeditious resolution of commercial
disputes, the Bench rejected the contention that the statutory
requirement stood satisfied merely because pre-institution mediation
had earlier been initiated by the opposite party. Significantly, the
Bench also noted that the claim sought to be agitated by the Appellant
had never formed part of the claims referred to mediation. The
relevant observations are reproduced below:
“ 31. Besides, even on a reading of the reference to pre-litigation
mediation, as invoked by the respondent, and the specific paragraphs
thereof to which Mr. Kaushik has drawn our attention, we are not in a
position to accept the submission that the dispute which forms subject
matter of the present suit has already endured an exercise of
prelitigation mediation. The specific dispute which was referred to the
mediation at the instance of the respondent was the respondent’s
claim against the appellant of ₹ 2.10 crores. No doubt, para 4(8) of
the note referring the matter to mediation does advert to the claim of
the appellant against the respondent and states that it is an unmerited
claim. That, however, would not constitute exhaustion, by the
appellant, of the mandate of Section 12A of the Commercial Courts
Act.
32. We, therefore, do not accept Mr. Kaushik’s submission that the
appellant had exhausted the remedy of pre-institution mediation, or
that insisting on the appellant doing so would amount to an exercise
in duplication. To our mind, this would be the first pre-institution
mediation on the claim of the appellant against the respondent for ₹
3.8 crores.”
24. Further, the decision in Anil Kumar Pitti (supra) , though
rendered in a distinct factual context, lends support to the proposition
Signature Not Verified
FAO(COMM) 46/2025 Page 13 of 18
Signed By:JAI
NARAYAN
Signing Date:01.07.2026
15:04:07
that where the claims sought to be agitated had never formed part of
the process contemplated under Section 12A of the CC Act,
independent compliance may still be required. The dismissal of the
contention therein rested on the finding that the Appellant‟s monetary
claim had never been referred to mediation. The relevant
consideration, therefore, is whether the parties had previously been
afforded an opportunity to engage with and attempt an amicable
resolution of the disputes subsequently sought to be raised.
25. Reliance was also placed by learned counsel representing the
Respondents upon the decision of the learned Single Judge of this
Court in Aditya Birla Fashion (supra) , which has also formed the
basis of the Impugned Order. The said decision proceeds on the
premise that independent compliance with Section 12A of the CC Act
is invariably required prior to the institution of a Counter-claim.
However, for the reasons already indicated hereinabove, said
observations arose in a distinct factual context and, in the considered
opinion of this Court, do not govern the controversy arising in the
present case.
26. The learned Single Judge in Aditya Birla Fashion (supra)
observed that treating the requirement of pre-institution mediation
under Section 12A of the CC Act as optional would amount to altering
the rules of the game during the course of the proceedings. Reliance
was also placed upon the decision of the Supreme Court in Patil
Automation (supra) to hold that, in the absence of a claim for urgent
interim relief, the mandate of Section 12A admits of no waiver. This
Court is in agreement with the proposition that compliance with
Signature Not Verified
FAO(COMM) 46/2025 Page 14 of 18
Signed By:JAI
NARAYAN
Signing Date:01.07.2026
15:04:07
Section 12A is mandatory in cases not involving urgent interim relief.
However, as noticed hereinabove, the issue arising in the present
Appeal is not the mandatory character of Section 12A, which stands
conclusively settled by Patil Automation , but the circumstances in
which such mandate can be regarded as having been fulfilled in the
context of a Counter-claim arising between parties who have not
undergone a process of pre-institution mediation.
27. This Court also finds no merit in the contention advanced on
behalf of the Appellant that a Counter-claim does not fall within the
ambit of the expression “suit” occurring in Section 12A of the CC
Act. The scheme of the CPC recognizes a Counter-claim as being in
the nature of a cross-suit and accords to it many of the incidents of an
independent suit. The controversy, therefore, is not whether a
Counter-claim is, in principle, amenable to the mandate of Section
12A, but whether, on the facts of a given case, insistence upon a fresh
round of mediation would further the object sought to be achieved by
Section 12A.
28. Learned counsel representing the Appellant also advanced a
further submission, noticed in Paragraph No.11(iii) hereinabove, that
an unqualified application of Section 12A of the CC Act to every
Counter-claim would, in many cases, operate to the prejudice of a
Defendant. It was contended that a written statement in a commercial
suit is required to be filed within thirty (30) days, extendable up to a
maximum period of one hundred and twenty (120) days, and that
Order VIII Rule 6A CPC contemplates the institution of a Counter-
claim before the Defendant has delivered its defence or before the
Signature Not Verified
FAO(COMM) 46/2025 Page 15 of 18
Signed By:JAI
NARAYAN
Signing Date:01.07.2026
15:04:07
time prescribed for delivering such defence has expired. It was thus
argued that, if a Defendant were invariably required to undertake pre-
institution mediation prior to filing a Counter-claim, the period
prescribed under Section 12A for completion of mediation, namely
three months extendable by a further two months, could in certain
cases exceed the outer limit prescribed for filing the written statement,
thereby hindering the right to institute a Counter-claim.
29. The argument of learned counsel for the Appellant proceeds on
an incorrect reading of Order VIII Rule 6A CPC. The said provision
enables a Defendant to set up, by way of Counter-claim, any right or
claim arising from a cause of action accruing against the Plaintiff
either before or after the institution of the suit, provided such cause of
action accrues before the Defendant has delivered its defence or
before the time limited for delivering the defence has expired. The
provision merely stipulates the stage up to which a Counter-claim may
be founded on an accruing cause of action; it does not expressly
mandate that every Counter-claim must invariably accompany the
written statement.
30. This Court may also notice that Section 12A of the CC Act
itself contains a safeguard inasmuch as the period during which the
parties remain engaged in the pre-institution mediation process is
liable to be excluded for the purposes of limitation. The apprehension
that requiring recourse to pre-institution mediation would, in every
case, defeat the Defendant‟s right to institute a Counter-claim is,
therefore, misplaced.
Signature Not Verified
FAO(COMM) 46/2025 Page 16 of 18
Signed By:JAI
NARAYAN
Signing Date:01.07.2026
15:04:07
31. Further, in the present case, it is undisputed that no pre-
institution mediation proceedings whatsoever were undertaken prior to
the institution of the commercial suit, the same having been instituted
on the basis of the exception carved out under Section 12A of the CC
Act in respect of urgent interim reliefs. Consequently, the disputes
now sought to be agitated by way of the Counter-claim were never
subjected to the statutory process contemplated under Section 12A,
nor were the parties afforded an opportunity to explore an amicable
resolution thereof before the institution of the Counter-claim.
32. In the instant case, acceptance of the proposition canvassed by
the Appellant would effectively amount to judicially creating an
unqualified exemption in favour of all Counter-claims, irrespective of
whether the underlying disputes had already formed part of, or were
capable of being addressed during, the mediation process. Such an
interpretation, in the view of this Court, would not only dilute the
mandate of Section 12A of the CC Act but would also run contrary to
the ratio laid down by the Supreme Court in Patil Automation (supra) .
33. Hence, where the claims forming the subject matter of a
Counter-claim had already been subjected to pre-institution mediation
and the parties had been afforded an opportunity to explore an
amicable settlement thereof, insistence upon a fresh round of
mediation may, in an appropriate case, frustrate the objective of
expeditious commercial adjudication. Conversely, where the proposed
Counter-claim had never formed part of any mediation process, or
where no mediation had been undertaken at all, independent
compliance with Section 12A of the CC Act would ordinarily be
Signature Not Verified
FAO(COMM) 46/2025 Page 17 of 18
Signed By:JAI
NARAYAN
Signing Date:01.07.2026
15:04:07
required.
CONCLUSION:
34. Applying the aforesaid principles to the facts of the present
case, since no pre-institution mediation whatsoever was undertaken,
the claims forming the subject matter of the Counter-claim were never
subjected to the statutory process contemplated under Section 12A.
35. In view thereof, this Court finds no infirmity in the conclusion
reached by the learned Commercial Court in rejecting the Counter-
claim on the ground of non-compliance with Section 12A of the CC
Act.
36. The Appeal is accordingly dismissed, albeit for reasons partly
differing from those assigned in the Impugned Order.
ANIL KSHETARPAL, J.
AMIT MAHAJAN, J.
JULY 01, 2026 /sp/shah
Signature Not Verified
FAO(COMM) 46/2025 Page 18 of 18
Signed By:JAI
NARAYAN
Signing Date:01.07.2026
15:04:07