Delhi High Court: In a petition challenging an order exempting the plaintiff from pre-institution mediation under Section 12-A, Commercial Courts Act, 2015, a Single Judge Bench of Vikas Mahajan, J., set aside the order after finding that the defendants were not afforded an opportunity to file a reply, although their counsel was present.
Relying on Novenco Building & Industry A/S v. Xero Energy Engg. Solutions (P) Ltd., 2025 SCC OnLine SC 2278, the Court held that before allowing an application under Section 12-A, the trial court must consider the plaint and material annexed thereto to ascertain whether the suit genuinely contemplates urgent relief. Accordingly, the matter was remanded for fresh consideration after completion of pleadings, with a direction that the Section 12-A application be considered before the other pending applications.
Background
The present petition was directed against the order dated 14 August 2026 whereby the learned trial court allowed the plaintiff’s application under Section 12-A, Commercial Courts Act, 2015 and exempted the plaintiff from pre-institution mediation. The petitioners/defendants contended that the exemption was granted without recording any reasons and without considering the plaint and documents annexed thereto to ascertain whether the suit genuinely contemplated urgent relief. It was further submitted that although the defendants were represented through counsel before the trial court, they were not afforded an opportunity to file a reply or address arguments on the application. The respondent/plaintiff had no objection to the impugned order being set aside and the matter being remanded for fresh consideration.
Analysis and Decision
The Court noted that, after considering its previous decisions, the Supreme Court in Novenco Building & Industry A/S had culled out the principles to be borne in mind while deciding an application under Section 12-A. Section 12-A mandates pre-institution mediation for commercial suits, and non-compliance would ordinarily render the plaint institutionally defective. A plaintiff can be exempted only where the plaint and the documents annexed to it clearly show a real need for urgent interim intervention. The court must look at the plaint, pleadings and supporting documents to decide whether urgent interim relief is genuinely contemplated, considering factors such as the immediacy of peril, irreparable harm, risk of losing rights or assets, statutory timelines or perishable subject-matter, or where delay would render eventual relief ineffective. A pro forma or anticipatory prayer for urgent relief, used as a device to skip mediation, would be ignored. The court is not concerned with the merits of the urgent relief, but where the relief seems plausibly urgent from the plaintiff’s standpoint, it may dispense with Section 12-A.
Applying these principles, the Court held that the trial court ought to have afforded the petitioners an opportunity to file a reply to the application under Section 12-A of the Act, particularly when their counsel was present when the impugned order was passed. The Court further held that before allowing the application under Section 12-A, the trial court ought to have considered the plaint and the material annexed thereto to arrive at a conclusion that the plaint disclosed the need for urgent relief. Since this exercise was not undertaken, the impugned order dated 14 August 2026, to the extent it allowed the Section 12-A application, was set aside and the matter was remanded to the learned trial court. The parties were directed to complete pleadings in all pending applications, including the Section 12-A application, and the trial court was directed to consider the Section 12-A application first before proceeding with the other applications.
[Vasu Agro Tech v. JK Oil Industries, 2026 SCC OnLine Del 7525, decided on 28-9-2026]
Advocates who appeared in this case:
For the Petitioner: Saurav Agrawal, Ajay Rajan, Ajay Sharma, Anusha Sinha and Devang Sherotia, Advocates
For the Respondent: Shravan Kumar Bansal, Arpit Singh and Ayushi Arora, Advocates
