Urgent interim relief averments exempt commercial suits from mandatory pre-institution mediation under Section 12A.

The Plaintiff filed a commercial suit for the recovery of ₹2,69,25,660/- arising from unpaid invoices for advertising services executed under the 'Mission Shakti' project in Odisha

The Defendant filed an application under Order VII Rule 11 of the CPC seeking rejection of the plaint on three grounds: (i) non-compliance with the mandatory pre-institution mediation under Section 12A of the Commercial Courts Act, 2015; (ii) failure to disclose a cause of action, alleging payments made exceeded the work value; and (iii) non-joinder of a necessary party (Directorate of Mission Shakti)

Procedurally, the suit was presented on 18.09.2021, though the Defendant contended the "valid" institution occurred post-August 2022 after defects were cured

1. Whether the suit is liable to be rejected under Order VII Rule 11(d) for failure to exhaust pre-institution mediation under Section 12A of the Commercial Courts Act

2. Whether the plaint fails to disclose a cause of action under Order VII Rule 11(a)

3. Whether the non-joinder of the Directorate of Mission Shakti warrants rejection of the plaint

The court primarily applied Order VII Rule 11 of the CPC regarding the rejection of plaints

It relied on Popat and Kotecha Property v. State Bank of India Staff Assn. [(2005) 7 SCC 510], which mandates that for Rule 11, the court must only look at averments in the plaint and not the written statement, ensuring the suit is not "manifestly vexatious"

Regarding pre-institution mediation, the court applied Section 12A of the Commercial Courts Act, 2015, alongside M/s Patil Automation Private Limited v. Rakheja Engineers Private Limited [(2022) 10 SCC 1], which held Section 12A to be mandatory but effective prospectively from 20.08.2022, and clarified that the date of presentation of the plaint is the date of institution for limitation purposes

The Court observed that the Plaintiff had specifically pleaded a need for "urgent interim relief" in paragraph 11 of the plaint to prevent the siphoning of funds, thus triggering the statutory exemption from mediation under Section 12A

The Court rejected the Defendant's argument that the suit was instituted in 2022, holding that the initial filing on 18.09.2021 (pre-dating the Patil Automation cut-off) remained valid even if defects were cured later

On the issue of cause of action, the Court noted that the plaint detailed the contract, work execution, and unpaid invoices, satisfying the legal threshold; the Defendant’s claims of overpayment were deemed matters of trial defense rather than grounds for summary rejection

Finally, regarding non-joinder, the Court held that since the Plaintiff’s rights arose from bilateral work orders with the Defendant, the Directorate was not a necessary party on the face of the record, and even if it were, non-joinder is not a ground for rejection under Order VII Rule 11

Application under Order VII Rule 11 is dismissed; parties referred to the Delhi High Court Mediation and Conciliation Centre to explore an amicable settlement