Supreme Court: In a special leave petition filed against the impugned final judgment and order dated 08-05-2023 passed by the Delhi High Court, wherein the Court upheld the order of the District Judge (Commercial Court) dated 06-02-2023, rejecting the application under Order VII, Rule 11 of the Code, the division bench of Sanjiv Khanna and SVN Bhatti, JJ. while upholding the impugned judgment and order, held that the words ‘contemplate any urgent interim relief’ in Section 12A(1) of the Commercial Courts Act, 2015, (‘CC Act’), with reference to the suit, should be read as conferring power on the court to be satisfied.
The Court said that the application under Order VII, Rule 11 of the Code of Civil Procedure, 1908, filed by the petitioner has been rightly dismissed.
The Court referred to Section 12-A of the CC Act that provides for Pre-litigation Mediation and Settlement. Further, it took note of Patil Automation (P) Ltd. v. Rakheja Engineers (P) Ltd., (2022) 10 SCC 1 , wherein it was held that Section 12-A of the CC Act is mandatory. Pre-litigation mediation is necessary, unless the suit contemplates urgent interim relief.
The Court said that the words used in Section 12-A of the CC Act are- “a suit which does not contemplate any urgent interim relief”, wherein the word “contemplate” connotes to deliberate and consider. Further, the legal position that the plaint can be rejected and not entertained reflects application of mind by the court viz. the requirement of urgent interim relief.
The Court said that in the present case, it is an accepted fact that an urgent interim relief has been prayed for and the condition that the plaint “contemplates” an urgent interim relief is satisfied. Therefore, it held that the impugned judgment/order of the Delhi High Court dated 08-05-2023, which upholds the order of the District Judge (Commercial Court) dated 06-02-2023, rejecting the application under Order VII, Rule 11 of the Code, is correct and in accordance with law.
The Court opined that when a plaint is filed under the CC 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. 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 CC Act. The facts and circumstances of the case have to be considered holistically from the standpoint of the plaintiff
The Court further said that the non-grant of interim relief at the ad-interim stage, when the plaint is taken up for registration/admission and examination, will not justify dismissal of the commercial suit under Order VII, Rule 11 of the Code; at times, interim relief is granted after issuance of notice.
The Court disagreed with the proposition that the plaintiff has the absolute choice and right to paralyze Section 12-A of the CC Act by making a prayer for urgent interim relief
The Court said that an ‘absolute and unfettered right’ approach is not justified if the pre-institution mediation under Section 12A of the CC Act is mandatory, as held in Patil Automation (supra)
The Bench, while interpreting the words ‘contemplate any urgent interim relief’ in Section 12A (1) of the CC Act, said that these words should be read as conferring power on the Court to be satisfied. They suggest that the suit must “contemplate”, which means the plaint, documents and facts should show and indicate the need for an urgent interim relief. This is the precise and limited exercise that the commercial courts will undertake. This will be sufficient to keep in check and ensure that the legislative object/intent behind the enactment of section 12-A of the CC Act is not defeated.
Also read:
Mandatory Pre-Institution Mediation — Effective Remedy to Declog Courts in India
[Yamini Manohar v TKD Keerthi, 2023 SCC OnLine SC 1382, Order dated 13-10-2023]
Advocates who appeared in this case :
For Petitioner(s): Advocate J. Sai Deepak, Advocate Kartikey Bhatt, Advocate R. Abhishek, . Advocate Shraddha Chirania, Advocate-On-Record Kunal Mimani
For Respondent(s): Advocate Kunal Khanna, Advocate-On-Record Rishi Raj Sharma, Advocate Vidhi Pasricha, Advocate Swastik Bisarya, Advocate Pranav Prasoon
