Non-Compliance with Section 12-A of Commercial Courts Act Requires Mandatory Stay or Rejection of Plaint

In brief

The question

1. Whether the Plaintiff established "urgent interim relief" sufficient to bypass the mandatory pre-institution mediation under Section 12-A of the Commercial Courts Act, 2015.

The court held

The Court held that the Plaintiff failed to demonstrate genuine urgency and thus violated the mandate of Section 12-A

It also directed

Instead of rejecting the plaint under Order VII Rule 11, the Court ordered Commercial Suit No. 3 of 2025 and all pending applications to be kept in abeyance; the parties were directed to explore institutional mediation under Section 12-A within a fixed timeframe of three months, extendable by two months by mutual consent

Interim Application (L) No. 340 of 2025 was disposed of with these directions

01Facts

The Plaintiff (Oram Realty), a civil contractor, filed a commercial suit against the Defendant (Piramal Sunteck) for the recovery of ₹18,58,21,798/- arising from a 2016 work order

¶ 8.1

The Plaintiff also sought to declare a 'No Claim Certificate' dated 10.02.2021 void, alleging it was signed under duress

¶ 8.2

The Defendant filed Interim Application (L) No. 340 of 2025 seeking rejection of the plaint under Order VII Rule 11 of the CPC, contending that the Plaintiff failed to comply with the mandatory pre-institution mediation required by Section 12-A of the Commercial Courts Act, 2015

¶ 2, 5

While the Plaintiff claimed "urgency" to bypass mediation (alleging the Defendant was siphoning funds by selling flats), the record showed the suit was filed a year after the legal notice, and the interim application was not pressed for nearly ten months

¶ 9.1, 11.4, 18

02Issues

i.1. Whether the Plaintiff established "urgent interim relief" sufficient to bypass the mandatory pre-institution mediation under Section 12-A of the Commercial Courts Act, 2015.

¶ 14, 16

ii.2. Whether the failure to comply with Section 12-A necessitated the absolute rejection of the plaint under Order VII Rule 11 of the CPC or if an alternative procedure could be adopted.

¶ 20, 21

03Law Applied

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

¶ 9.3

Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd. (2022), which declared Section 12-A mandatory and held that non-compliance leads to rejection of the plaint

¶ 11.2, 20

Yamini Manohar v. T.K.D Keerthi (2024) to ensure "urgency" is not a mask used to bypass the statute

¶ 16

Dhanbad Fuels Private Limited v. Union of India (2025) regarding the "contemplatability" of urgent relief from the plaintiff’s standpoint

¶ 19

Provisions in the judgment · 3 · Linked ones open on LawLens

Code of Civil Procedure, 1908 Section 80 Section 7

Indian Partnership Act, 1932 Section 69

04Reasoning

The Court found that the Plaintiff’s plea of urgency was a "product of profound thinking about the possibility of happening" rather than a factual necessity

¶ 14

Examining the timeline, the Court noted the dispute dated back to 2016, and the suit was filed in July 2024, yet the Plaintiff did not press for interim reliefs until the Defendant moved for rejection in 2025

¶ 17

This delay indicated that the sense of urgency was lost and the Plaintiff was "indolent"

¶ 17, 18

The Court observed that the Plaintiff could not unilaterally decide mediation would be futile

¶ 18

While acknowledging the Patil Automation mandate for rejection, the Court noted that the parties had engaged in extensive private settlement talks and the Plaintiff had performed the work. To avoid the loss of court fees and promote resolution, the Court determined that keeping the suit in abeyance was a more equitable course than outright rejection

¶ 10.6, 21