Karnataka HC Sets Aside Commercial Suit Dismissal, Orders Urgency Review Before Rejecting Suit For Skipping Section 12A Mediation

The petitioner instituted Com. O.S. No. 55/2025 without first undertaking pre-institution mediation under Section 12-A of the Commercial Courts Act, 2015.

He relied on an asserted risk that the defendant would alienate immovable properties and create third-party rights, and had sought urgent interim relief under Order XXXVIII Rule 5 CPC

The Commercial Court rejected the Section 12-A application and dismissed the suit on 15 September 2025; it later rejected the petitioner’s application for refund of court fee on 25 February 2026

The petitioner challenged both orders in connected writ petitions

Section 12-A of the Commercial Courts Act, 2015 makes pre-institution mediation mandatory, but a suit contemplating urgent interim relief may be instituted without first resorting to mediation

Under M/s. Dhanbad Fuels Private Limited v. Union of India, 2025 INSC 696, the court assesses urgency by considering the nature and subject matter of the suit and its cause of action from the plaintiff’s standpoint; it must guard against an unfounded urgency claim used to bypass mediation.

If the test for urgent interim relief is met, the suit may proceed even if the interim relief is ultimately refused

The Supreme Court’s decision in Patil Automation establishes the mandatory character of Section 12-A and that non-compliant suits instituted on or after 20 August 2022 are liable to rejection under Order VII Rule 11 CPC, subject to the urgent-interim-relief exception

The Commercial Court treated Section 12-A as mandatory in all circumstances and did not consider whether the pleadings and prayer disclosed a bona fide need for urgent interim relief

Nor did it assess whether the suit could proceed without mediation notwithstanding the eventual outcome of the interim-relief application

Because the court’s decision rested on an incomplete application of Dhanbad Fuels, the High Court set it aside and remitted the Section 12-A application for fresh consideration; it did not itself decide whether the petitioner’s urgency claim met the test

W.P. No. 12650/2026, concerning the court-fee refund, was dismissed as infructuous because the order underlying that dispute had been set aside