Should the court reject the plaint if the plaintiff fails to comply Pre-litigation mediation as mandated U/S 12A of The Commercial courts' Act?

 We declare that Section 12A of the Act is mandatory and hold that any suit instituted violating the mandate of Section 12A must be visited with rejection of the plaint under Order VII Rule 11. This power can be exercised even suo moto by the court as explained earlier in the judgment. We, however, make this declaration effective from 20.08.2022 so that concerned stakeholders become sufficiently informed. Still further, we however direct that in case plaints have been already rejected and no steps have been taken within the period of limitation, the matter cannot be reopened on the basis of this declaration. Still further, if the order of rejection of the plaint has been acted upon by filing a fresh suit, the declaration of prospective effect will not avail the plaintiff. Finally, if the plaint is filed violating Section 12A after the jurisdictional High Court has declared Section 12A mandatory also, the plaintiff will not be entitled to the relief. {Para 92}

 In the Supreme Court of India

(Before K.M. Joseph and Hrishikesh Roy, JJ.)

Civil Appeal No. of 2022

Patil Automation Private Limited and Others Vs

Rakheja Engineers Private Limited 

Decided on August 17, 2022

Citation: 2022 SCC OnLine SC 1028

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Whether commercial court can refuse to entertain suit if the plaintiff has not exhausted the remedy of pre-institution mediation?

The learned Judge has directed to return the plaint on the ground that the petitioner should first exhaust the remedy of pre-institution mediation under Section 12(A)(1) of the Act. To see whether the invocation of Section 12(A)(1) of the Act in this case was right, it would be necessary to extract the provisions of Section 12(A)(1) of the Act. It reads as follows:

"12A. Pre-Institution Mediation and Settlement.- (1) A suit, which does not contemplate any urgent interim relief under this Act, shall not be instituted unless the plaintiff exhausts the remedy of pre-institution mediation in accordance with such manner and procedure as may be prescribed by rules made by the Central Government."

9. It can be seen from what is extracted above that it is only in cases where the suit does not contemplate any urgent interim relief that there is a bar for institution of the suit without the plaintiff exhausting the remedy of pre-institution mediation. The expression used in Section 12(A)(1) of the Act is "A suit which does not contemplate any urgent relief".

10. Unfortunately, the learned Judge has read the above expression to mean as if only in cases where the plaintiff is entitled to urgent interim relief, the provision will not apply. The entitlement of a party to an urgent relief is a matter that would come up for consideration if the suit is numbered and several aspects taken into account. What is required to satisfy Section 12(A)(1) of the Act is the contemplation of an urgent relief.

11. In any case, the very nature of a suit for injunction against infringement of a copyright, is such that urgent reliefs will invariably be contemplated. Therefore, it is completely wrong on the part of the Commercial Court to say that there is no urgency in the matter.

12. In view of the above, the impugned endorsement made on the plaint, filed by the petitioner, is wholly illegal and liable to be set aside. Accordingly, the revision is allowed, the impugned endorsement is set aside and the Commercial Court is directed to number the suit, if other procedural aspects are in order and proceed with the matter in accordance with law.

Telangana High Court

M/S.M K Food Products vs M/S.S H Food Products on 21 February, 2019

Bench: V Ramasubramanian, Shameem Akther

     CIVIL REVISION PETITION No.3690 of 2018


ORDER: (Per Hon'ble Sri Justice V. Ramasubramanian)

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