Bombay High Court

Urgent interim relief is evaluated from the plaintiff’s standpoint; post-filing conduct does not mandate plaint rejection.

Warana Sugar Limited & Others v. IL & FS Financial Services Limited [Interim Application No. 5723 of 2025 in Commercial Summary Suit No. 93 of 2022]

Bombay High CourtJUDGMENT: no citation3 MIN READSOURCE JUDGMENT
THE ORIGINAL LAWLENS SUMMARY
01

Facts

The Plaintiff, a non-banking financial company, filed a commercial summary suit for the recovery of ₹123,50,10,401/- against the Defendants (borrower and guarantors).

Source reference: p. 2

The suit was filed alongside an interim application seeking the disclosure of assets, an injunction against the creation of third-party rights, and the appointment of a Court Receiver.

Source reference: p. 4-5

The Defendants filed the present application under Order VII Rule 11 of the CPC, seeking rejection of the plaint on the grounds that the Plaintiff failed to comply with the mandatory pre-institution mediation required under Section 12A of the Commercial Courts Act, 2015.

Source reference: p. 5

The Defendants argued that a money suit does not contemplate "urgent interim relief" and that the Plaintiff's post-filing conduct (delay in moving the court) proved the lack of genuine urgency.

Source reference: p. 6
02

Issues

Whether the suit is barred under Order VII Rule 11 of the CPC for non-compliance with the mandatory pre-institution mediation under Section 12A of the Commercial Courts Act, 2015.

Source reference: p. 5 / para. 1

Whether the "urgency" contemplated under Section 12A to exempt a plaintiff from mediation must be assessed from the standpoint of the plaintiff at the time of filing or based on post-filing conduct and the eventual grant/refusal of interim relief.

Source reference: p. 16 / para. 35
03

Law Applied

The court applied Section 12A of the Commercial Courts Act, 2015, which mandates pre-institution mediation unless the suit "contemplates urgent interim relief".

Source reference: p. 6

It relied on the Supreme Court's mandate in *Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd.*, establishing Section 12A as mandatory.

Source reference: p. 15

It further applied the "standpoint of the plaintiff" test from *Yamini Manohar v. T.K.D. Keerthi* and *Dhanbad Fuels Pvt. Ltd. v. Union of India*, which clarified that the "contemplation" of urgency involves deliberation by the court and that the eventual denial of relief on merits does not retroactively invalidate the institution of the suit.

Source reference: p. 17; p. 15-16

Finally, it applied *Novenco Building and Industry A/S v. Xero Energy Engineering Solutions*, holding that mediation should not be used to allow a defendant to profit from procedural formalities while a plaintiff's rights are imperiled.

Source reference: p. 19
04

Reasoning

The Court reasoned that "contemplate" signifies the plaintiff’s deliberation and the court's assessment of the need for immediate intervention at the threshold.

Source reference: p. 16

It rejected the Defendants' argument that money suits cannot involve urgency, noting the Plaintiff’s specific pleadings regarding the risk of Defendants disposing of assets to defeat the decree.

Source reference: p. 20-21

The Court emphasized that the validity of the suit's institution depends on the pleadings in the plaint and the interim application at the time of filing, not on post-filing events such as the Department's' objections or the court's failure to grant immediate ad-interim relief.

Source reference: p. 21-22

It distinguished cases cited by the Defendants by noting that Section 12A cannot be "weaponized" to render a plaintiff remediless in the face of ongoing breaches or potential asset dissipation.

Source reference: p. 19-20
05

Holding

The Court held that the Plaintiff’s pleadings sufficiently demonstrated a contemplation of urgent interim relief to protect its claim from being defeated, thereby justifying the bypass of pre-institution mediation.

The Court concluded that post-filing circumstances are irrelevant to the jurisdictional bar of Section 12A.

Source reference: p. 22

Consequently, the application for rejection of the plaint under Order VII Rule 11 was dismissed.

Source reference: p. 23
Bombay High Court

Original Court PDF

Warana Sugar Limited & Others v. IL & FS Financial Services Limited [Interim Application No. 5723 of 2025 in Commercial Summary Suit No. 93 of 2022]

Bombay High Court · no citation

Click to open original judgment

Original judgment, available to read, download and summarize on LawLens.in

Click to open original judgment