Headline: Contemplated urgent interim relief exempts Section 12-A compliance despite pending mediation or missing non-starter report.

The Plaintiff, an asset reconstruction company, filed a suit for a mandatory injunction to compel Defendant No. 1 to infuse equity of Rs. 250 crores into Defendant No. 2 and to restrain the disposal of certain brands.

The Plaintiff is the assignee of loan facilities originally granted to Defendant No. 2, which were secured by royalty income from trademark license agreements.

These agreements were set to expire on July 1, 2025.

On March 21, 2025, the Plaintiff initiated pre-institution mediation under Section 12-A of the Commercial Courts Act ("the Act").

The mandatory three-month period for mediation expired on June 20, 2025, without a settlement.

The Plaintiff filed the present suit on July 4, 2025, citing the imminent expiry of the trademark agreements as a ground for urgent interim relief.

The Defendants raised a preliminary objection under Order VII Rule 11 of the CPC, arguing the suit was barred for non-compliance with Section 12-A, as no "Non-Starter Report" had been issued before filing, and alleged suppression of the Plaintiff's failure to pay mediation fees.

1. Whether the suit is liable to be rejected under Order VII Rule 11 CPC for non-compliance with the mandatory pre-institution mediation requirement under Section 12-A of the Act.

2. Whether the initiation of mediation, followed by the filing of a suit after the expiry of the statutory three-month period but before a Non-Starter Report is issued, satisfies the "exhaustion of remedy" under Section 12-A.

3. Whether the suit contemplated "urgent interim relief" from the Plaintiff's standpoint, thereby exempting it from the bar under Section 12-A.

4. Whether the Plaintiff’s conduct in the mediation process amounted to material suppression warranting dismissal at a preliminary stage.

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

Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018, specifically Rule 3(8), which prescribes a three-month timeline for mediation.

Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd. (2022) regarding the mandatory nature of Section 12-A.

Yamini Manohar v. T.K.D. Keerthi (2024) and Dhanbad Fuels Pvt. Ltd. v. Union of India (2025), which established that "urgent interim relief" must be assessed holistically from the plaintiff's standpoint.

Novenco Building and Industry A/S v. Xero Energy Engineering Solutions Pvt. Ltd. (2025), holding that a real need for urgent intervention to prevent irreparable harm exempts a party from mediation.

The court reasoned that the purpose of Section 12-A is to decongest courts through settlement, but it cannot be interpreted to strip a party of the right to seek urgent relief when a "peril" arises.

The court found that the Plaintiff did not abandon mediation; rather, the initial three-month period under Rule 3(8) expired on June 20, 2025, and no extension was granted by mutual consent.

The court observed that the trademark agreements—constituting the primary security for a debt exceeding Rs. 500 crores—expired on July 1, 2025, creating a genuine and objective urgency for interim protection.

The court rejected the "suppression" argument, noting that the Non-Starter Report was only generated on August 20, 2025 (after the suit was filed), and the Plaintiff had disclosed the mediation's initiation in the pleadings.

It held that "contemplating" urgent relief is a subjective standard based on the plaintiff's standpoint at the time of filing; the prior attempt at mediation did not preclude the Plaintiff from subsequently seeking court intervention when the situation became critical.

It ruled that the bar under Section 12-A of the Commercial Courts Act did not apply because: (i) the Plaintiff had substantively exhausted the mediation period prescribed by the Rules; and (ii) the suit genuinely contemplated urgent interim relief due to the imminent expiry of security interests.

The court emphasized that insisting on a Non-Starter Report despite a valid need for urgent relief would render the Plaintiff remediless and defeat the object of the Act.