Pre-institution mediation may be dispensed with where plaint documents disclose plausible urgency for interim relief.

The petitioner/plaintiff instituted a commercial suit seeking recovery of money and permanent injunction against the respondents.

It filed an application under Section 12A of the Commercial Courts Act, 2015, seeking dispensation of pre-institution mediation on the ground that, even before expiry of the notice period on 31 August 2026, the first respondent was allegedly attempting to dispossess it without repaying the advance amount.

The Principal Commercial Court, Egmore, dismissed the application, holding that the suit did not involve an urgent interim relief and did not fall within the circumstances identified in K. Varadhan v. Prakash Babu Nakundhi Reddy.

The plaintiff challenged that order under Article 227 of the Constitution.

Whether the requirement of pre-institution mediation under Section 12A of the Commercial Courts Act could be dispensed with where the plaint and accompanying materials disclosed a potential and immediate threat of dispossession or other irreparable harm.

Whether the Commercial Court had correctly assessed the existence of an urgent interim relief by refusing to consider the plaintiff’s apprehension from the plaintiff’s standpoint.

What consequential directions should be issued in light of the respondent’s proposal for an amicable settlement.

The Court applied Section 12A of the Commercial Courts Act, 2015, which ordinarily mandates pre-institution mediation for commercial suits, while permitting exemption where the plaint and supporting documents genuinely disclose a need for urgent interim intervention.

It relied on K. Varadhan v. Prakash Babu Nakundhi Reddy, reported in 2023 (1) CTC 201, and principally on Novenco Building & Industry A/S v. Xero Energy Engineering Solutions (P) Ltd., reported in 2026 (4) SCC 815, which held that urgency must be assessed from a holistic reading of the plaint and accompanying documents; relevant indicators include immediacy of peril, irreparable harm, risk of losing rights or assets, statutory timelines, perishability of the subject matter, or the possibility that delay would render the eventual relief ineffective.

A merely pro forma or anticipatory prayer for urgent relief cannot be used to bypass Section 12A, but the court need not determine the merits of the interim relief if the urgency is plausibly established from the plaintiff’s standpoint.

The Court exercised supervisory jurisdiction under Article 227 of the Constitution.

The High Court held that the Commercial Court had misdirected itself by treating the absence of an established urgent relief as decisive.

The proper inquiry was whether the plaint and supporting documents disclosed a plausible peril and whether delay could cause irreparable loss or hardship to the plaintiff.

The petitioner’s allegation that the first respondent was attempting to dispossess it before expiry of the notice period constituted a potential and immediate threat requiring consideration from the plaintiff’s perspective.

Applying the principles in Novenco Building, the Court concluded that the apprehension was sufficient to justify interference with the order refusing to dispense with pre-institution mediation.

Since the first respondent represented that the dispute could be amicably resolved and placed a settlement proposal before the Court, the Court directed that the parties be referred to mediation rather than permitting the matter to proceed immediately on the merits.

The order dated 25 August 2026 dismissing the petitioner’s application under Section 12A was set aside.

The Principal Commercial Court was directed to refer the parties to mediation and grant four weeks for receipt of the mediation report.

If settlement was reached, it could be recorded and the proceedings closed; otherwise, the suit was to proceed in accordance with law.

Pending mediation and further proceedings, the petitioner’s possession was directed not to be disturbed.

No costs were awarded, and the connected miscellaneous petition was closed.