Mandatory Pre-Institution Mediation Cannot Be Dispensed With Absent Proof of Genuine Urgent Interim Necessity

The Appellant (Plaintiff) filed a suit alleging that Defendant No. 2, a former employee, breached a confidentiality agreement by sharing proprietary drawings and trade secrets with Defendant No. 1

This alleged infringement and breach of trust purportedly occurred continuously from 2016 until the employee’s termination in 2022

The Appellant claimed discovery of these acts in 2022 and moved for an urgent ex-parte interim order in March 2023, obtaining a dispensation of the mandatory pre-institution mediation required under Section 12A of the Commercial Courts Act, 2015

Defendant No. 1 subsequently applied for revocation of this dispensation. The Single Judge allowed the application, holding that no grounds for urgent interim relief were established, and rejected the plaint for non-compliance with Section 12A

1. Whether the averments in the plaint regarding the discovery of illegal activities since 2016 and the subsequent filing in 2023 established a "real need" for urgent interim relief to warrant dispensation of Section 12A of the Commercial Courts Act, 2015.

2. Whether the Court possesses the power to revisit and revoke an ex-parte leave granted under Section 12A if it finds the leave was obtained through deception or lack of merit.

Section 12A of the Commercial Courts Act, 2015, mandates pre-institution mediation unless the plaintiff seeks "urgent interim relief"

The court relied on the Supreme Court ruling in Yamini Manohar v. T.K.D Keerthi [2023 SCC Online SC 1382] and its own Division Bench precedent in Unique Entrepreneurs and Finance Limited v. Really Agritech Private Limited [2026: CHC-OS-117-DB], which establish that while dispensation is based on the plaintiff’s perception of urgency, such perception must be assessed on the specific facts of the case to prevent defeating the mandatory statute

The court also noted that leave granted under Section 12A can be recalled if obtained through deception or falsity

The Court examined the timeline of the alleged infringement to determine if a bona fide urgency existed. It noted that the Appellant alleged illegal activities starting in 2016 but failed to provide specific dates for either the occurrence or the "discovery" in 2022

Given that the Appellant waited until March 2023 to institute the suit for acts dating back over five years, the Court reasoned that the claim of "urgent interim relief" was a ruse to bypass the mandatory mediation process

The Court emphasized that for Section 12A to be bypassed, there must be a "real need" for immediate judicial intervention

Since the Appellant had been aware of the issues since at least 2022 (and the acts occurred since 2016), the sudden claim of urgency at the time of filing lacked the necessary factual foundation

The Court affirmed the Single Judge's decision that the Appellant's five-year delay in acting against the alleged misappropriation negated the claim of urgency. The appeal was dismissed, and the order rejecting the plaint was upheld