Failure to exercise contractual renewal options precludes claims of "urgent interim relief" to bypass Section 12-A mediation.

The appellant (franchisee) and respondent (franchisor) entered into a Franchise Agreement on 25.07.2020 for an initial term of three years.

The agreement provided for a renewal option, contingent upon the appellant serving notice six months prior to expiry and paying a renewal fee.

On 29.08.2023, following the expiry of the agreement, the respondent issued a termination notice.

The appellant filed a civil suit on 28.10.2023 seeking recovery of ₹50 lakhs, a declaration that the termination was void, and injunctive relief to continue operations.

The respondent moved an application under Order VII Rule 11 of the CPC, arguing the suit was barred for non-compliance with the mandatory pre-institution mediation under Section 12-A of the Commercial Courts Act, 2015.

The Trial Court rejected the plaint, leading to this appeal.

1. Whether the statutory pre-institution mediation under Section 12-A of the Commercial Courts Act, 2015, is mandatory even when an application for urgent interim relief is filed

2. Whether the interim relief sought by the appellant constituted a genuine "urgent interim relief" sufficient to bypass the requirements of Section 12-A

Section 12-A of the Commercial Courts Act, 2015, which mandates pre-institution mediation unless the suit contemplates urgent interim relief.

Supreme Court’s definitive ruling in M/s Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd., which held Section 12-A to be mandatory and that non-compliance must result in the rejection of the plaint under Order VII Rule 11.

The "standpoint of the plaintiff" test and the "camouflage" doctrine established in Yamini Manohar v. T.K.D. Keerthi and M/s Dhanbad Fuels Private Ltd. v. Union of India, asserting that courts must verify if the urgency is genuine or a maneuver to evade mediation.

The five-point test from Novenco Building and Industry v. Xero Energy Engineering Solutions Pvt. Ltd. to distinguish between proforma prayers and real immediate peril.

The Court reasoned that while Section 12-A(1) allows an exception for "urgent interim relief," such urgency must be substantiated by the pleadings and documents.

Upon examining the Franchise Agreement, the Court found that the appellant had failed to exercise its renewal option within the contractually mandated window (6-12 months prior to expiry).

Consequently, the appellant had no subsisting legal right to continue the franchise at the time of filing.

The Court observed that the primary relief sought was monetary (₹50 lakhs as damages), suggesting that any injury was compensable by money and not irreparable.

The Court concluded that the prayer for an injunction was a "crafty drafting" exercise and a "camouflage" designed solely to bypass the mediation process, as the appellant remained "indolent" until the termination notice was served.

The High Court upheld the Trial Court's order dated 31.07.2025, dismissing the appeal and confirming the rejection of the plaint under Order VII Rule 11 of the CPC for failure to undergo pre-institution mediation.