Calcutta High Court Clarifies 'Urgency' Under Section 12A, Holds Plaintiff's Pleadings Sacrosanct for Bypassing Pre-Litigation Mediation

KOLKATA – In a significant ruling that reinforces the primacy of a plaintiff's pleadings when seeking urgent interim relief, the Calcutta High Court has upheld an order exempting Berger Paints India Limited from the mandatory pre-litigation mediation stipulated under Section 12A of the Commercial Courts Act, 2015. A single-judge bench of Justice Aniruddha Roy, in a detailed order dated November 7, 2025, dismissed an application filed by GPHP Holdings Pvt Ltd seeking to revoke the exemption, holding that the plaintiff's "contemplation" of urgent relief is the determinative factor, irrespective of the final outcome of the interim application.

The decision provides crucial guidance for commercial litigators, affirming that a court's role at the preliminary stage is not to conduct a mini-trial on the merits of the urgency, but to assess whether the plaintiff's averments, taken as true, demonstrate a genuine contemplation of needing immediate judicial intervention.

Background of the Dispute

The commercial suit, valued at ₹1.01 crore, was initiated by Berger Paints India Limited for the recovery of outstanding dues from GPHP Holdings Pvt Ltd, a manufacturing company, for paints and coatings supplied between February and June 2024.

The catalyst for the urgent court filing, according to Berger Paints, was a series of communications in early 2025. GPHP allegedly informed Berger Paints of its plans to sell its factory land at Sarurpur Industrial Area, Faridabad. Simultaneously, GPHP proposed a Scheme of Compromise and Arrangement before the Kolkata Bench of the National Company Law Tribunal (NCLT) under Section 230 of the Companies Act, 2013, to settle its outstanding debts with various creditors.

Berger Paints, rejecting this proposed settlement, feared that the sale of GPHP's primary asset would leave it without recourse for recovering its dues. Consequently, it filed the commercial suit and sought an urgent ex-parte injunction to restrain GPHP from alienating or transferring its assets. This application for urgent relief formed the basis for its request to bypass the otherwise mandatory pre-litigation mediation under Section 12A of the Commercial Courts Act. The court initially granted this request in an order dated April 16, 2025, allowing the suit to be filed directly. GPHP Holdings subsequently filed an application to have this order revoked.

Arguments Before the Court

The core legal question before Justice Roy was whether Berger Paints had legitimately invoked the exception to mandatory mediation.

GPHP Holdings' Contentions: Represented by Advocates Suddhasatva Banerjee, Kanishk Kejriwal, and Aishwarya Kumar Awasthi, the defendant argued that the plaintiff had manufactured a false sense of urgency to circumvent a statutory requirement. They contended that: 1. The alleged payment default occurred in June 2024, and Berger Paints was aware of GPHP's financial difficulties long before filing the suit. This delay, they argued, negated any claim of genuine urgency. 2. The invocation of "urgent interim relief" was a mere tactic to bypass the legislative intent behind Section 12A, which is to encourage amicable settlement before litigation. 3. The court should look beyond the plaintiff's mere assertions and assess whether a true and emergent need for relief existed.

Berger Paints' Counter-Arguments: Senior Advocate Anirban Ray, assisted by Advocates Soham Sen and Snehashis Sen, countered that the defendant's interpretation of Section 12A was flawed. Their key arguments were: 1. The plain language of Section 12A requires only that the plaintiff "contemplates" urgent relief. It does not mandate that such relief must be granted or that the court must be fully convinced of its merits at the filing stage. 2. The urgency arose specifically from the concrete actions proposed by GPHP in February and March 2025—namely, the confirmed plan to sell its plant and the initiation of a compromise scheme. These actions created an immediate threat to the recovery of the debt, justifying the need for an injunction. 3. Citing Supreme Court precedents, they argued that courts should not interfere with a plaintiff's claim of urgency unless it is found to be "palpably erroneous or mala fide."

The Court's Analysis: The Primacy of Pleadings

Justice Aniruddha Roy sided firmly with the plaintiff, delivering a lucid analysis of the scope and application of Section 12A. The court emphasized that the legislative intent was to make mediation mandatory only when no urgent interim relief is contemplated .

The judgment underscored a critical procedural distinction: the assessment of urgency for bypassing mediation is based solely on the plaintiff's pleadings. The court observed:

“If the plaintiff does not contemplate any urgent interim relief, then it is a mandatory requirement under the statute to avail of the remedy of pre-litigation mediation. Therefore, if an urgent interim relief is contemplated by the plaintiff, there is no bar under the Section upon the plaintiff to file the necessary civil action... To ascertain whether an urgent interim relief has been contemplated by the plaintiff, the averments in the plaint are to be taken as true and correct and to be read as sacrosanct.”

The court found that the emails exchanged on February 12 and March 24, 2025, where GPHP's asset sale plan was discussed, provided a clear and objective basis for Berger Paints to contemplate the need for an urgent injunction.

Referencing the principles laid down in Yamini Manohar , the court reiterated the established legal position:

“The question whether a suit involves any urgent interim relief is to be determined solely on the basis of the pleadings and the relief(s) sought by the plaintiff. If a plaintiff seeks any urgent interim relief, the suit cannot be dismissed on the ground that the plaintiff has not exhausted the pre-institution remedy of mediation.”

In its concluding remarks, the court made it unequivocally clear that the test is one of contemplation, not of success. The final merit of the interim application is a separate consideration to be decided after hearing both parties. The initial exemption from mediation, however, rests entirely on the plaintiff's perspective as articulated in the plaint.

“It matters little whether ultimately the plaintiff would succeed on its prayer for interim relief or on the suit's merits; what matters is that the averments in the plaint should show a contemplation by the plaintiff for an urgent interim relief.”

Finding no error or infirmity in its earlier order of April 16, 2025, the court dismissed GPHP's application, thereby affirming Berger Paints' right to proceed with the suit without prior mediation.

Implications for Commercial Litigation

This judgment serves as a robust precedent for commercial law practitioners. It clarifies that a defendant cannot force a suit into mediation by challenging the plaintiff's perception of urgency, unless they can demonstrate that the claim is manifestly baseless or made in bad faith. For plaintiffs, the ruling highlights the importance of meticulously pleading the facts that give rise to the contemplation of urgency, creating a clear narrative in the plaint that links the defendant's actions to the immediate need for judicial protection.

The decision effectively protects a plaintiff's strategic prerogative to seek immediate relief, ensuring that the mandatory mediation process under Section 12A does not become a procedural hurdle that could render emergent remedies ineffective. It strikes a balance between promoting alternative dispute resolution and preserving the court's essential function of providing swift relief when assets and interests are at imminent risk.