Prayer For Urgent Interim Relief Should Not Be A Disguise To Wriggle Out Of Mandatory Pre Institution Mediation U/S 12A Of Commercial Courts Act: HP HC
The Himachal Pradesh High Court, while rejecting a plaint, observed that a Commercial Court should examine the suit and the prayer for urgent interim relief should not be a disguise or mask to wriggle out of and get over the pre-institution mediation requirement under Section 12-A of the Commercial Courts Act, 2015.
The Court also relied on the judgments of the Apex Court and reiterated that Section 12-A i.e. Pre-Institution Mediation, is mandatory in nature and without which a plaint is liable to be rejected.
The Bench of Justice Ajay Mohan Goel held, “There is no iota of doubt that as per the pronouncement made by Hon’ble Supreme Court of India, Section 12-A of the Commercial Courts Act is mandatory. Hon’ble Supreme Court has also made it manifestly clear that the power can be exercised suo motu by a Court while dealing with the Commercial Civil Suit and when a plaint is filed under the Commercial Courts Act with a prayer for an urgent interim relief, the Commercial Court should examine the nature and the subject matter of the suit, the cause of action and the prayer for interim relief and the prayer for urgent interim relief should not be a disguise or mask to wriggle out of and get over section 12-A of the Commercial Courts Act.”
Senior Advocate Neeraj Gupta appeared for the Plaintiff whereas Advocate Shadan Farasat appeared for the Defendants.
An application was filed by Defendants under Order VII Rule 11(c) read with Section 151 of the Civil Procedure Code, praying for rejection of the plaint on the ground of being barred by law.
The defendants submitted that the suit constituted a “commercial disputes”, as defined under Section 2 (c) (xvii) of the Commercial Courts Act, 2015, therefore, the non-applicant/plaintiff was mandatorily required to comply with Pre-Institution Mediation, as enunciated under Section 12-A (1) of the Act.
The Court relied on the landmark judgment of the Supreme Court in Patil Automation Private Limited and Others vs. Rakheja Engineers Private Limited (2022) which held that Section 12-A of the Act is mandatory and any suit violating the mandate of Section 12-A must be visited with the rejection of the plaint. The judgment was followed in Yamini Manohar vs. T.K.D. Keerthi (2024).
The Court observed, “There is no material placed on record whatsoever from which any inference can be drawn by the Court qua the urgency involved in the case so as to do away with the provision of Section 12-A of the Commercial Courts Act, in the nature of the actual sales being carried out of the fans in issue in the State of Himachal Pradesh, more so, in the close vicinity of the filing of the Civil Suit, so as to enable this Court to come to the conclusion that there indeed was an urgency involved in the case and the Civil Suit does contemplate an urgent interim relief, de hors Section 12-A of the Commercial Courts Act.”
Accordingly, the Court allowed the application and rejected the Plaint.
Cause Title: Novenco Building & Industry A/S v. Xero Energy Engineering Solutions Private Ltd. & Anr (Neutral Citation:2024:HHC:7518)
Appearances:
Plaintiff: Senior Advocate Neeraj Gupta, Advocates Shradha Karol, Vineet Rohilla, Rohit Rongi, Vaibhav Singh and Aastha Kohli.
Defendants: Advocates Shadan Farasat, Kush Sharma, Aman Naqvi and Pranav Dhawan.