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SUPREME COURT OF INDIA
R. MAHADEVAN, J.B. PARDIWALA, JJ.
M/s Dhanbad Fuels Private Limited – Appellant
Versus
Union Of India & Anr. – Respondents
Civil Appeal No. 6846 of 2025 (@Special Leave Petition (C) No. 4980 of 2021)
Decided on : 15-05-2025
Certainly. Based on the provided legal document, here are the key points summarized:
The Commercial Courts Act mandates pre-institution mediation under Section 12A, which became effective prospectively from August 20, 2022. Suits filed before this date are not to be dismissed solely for non-compliance (!) (!) .
The law emphasizes the mandatory nature of Section 12A, requiring parties to attempt pre-institution mediation before filing a suit, except in cases involving urgent interim relief (!) (!) .
If a suit is filed without prior compliance with Section 12A, the appropriate course is to keep the suit in abeyance and refer the parties to mediation, rather than dismissing the suit outright, especially if the suit is at an early stage (!) (!) (!) .
The declaration regarding the mandatory nature of Section 12A is to be given prospective effect from August 20, 2022, to accommodate suits filed earlier, which are protected from rejection on this ground (!) (!) .
The scope of "urgent interim relief" under Section 12A is limited to cases where the nature and cause of action suggest the prayer for interim relief is contemplable, not to be used as a guise to bypass mediation requirements (!) (!) .
The approach of keeping suits in abeyance and referring them to mediation aligns with the legislative intent to promote alternative dispute resolution and avoid unnecessary delays and procedural dismissals (!) (!) .
The law does not require court permission or leave to file suits that do not contemplate urgent interim relief, nor does it prescribe a specific application for exemption from mediation in such cases (!) (!) .
The period spent in pre-institution mediation is excluded from the computation of limitation periods, and mediated settlements have the same enforceability as arbitral awards, reinforcing the importance of mediation as a dispute resolution mechanism (!) (!) .
The procedural framework and infrastructure for pre-institution mediation, including trained mediators and SOPs, were developed progressively over time, impacting the feasibility of compliance for suits filed during the initial phases (!) (!) .
The courts are expected to interpret and apply the provisions of Section 12A in a manner consistent with legislative intent, ensuring that suits are not dismissed prematurely but are instead directed towards mediation where appropriate (!) (!) .
The decision underscores that suits at an initial stage, especially those with no substantial progress, should generally be kept in abeyance and referred to mediation unless they involve urgent relief or fall within specific exceptions (!) (!) .
The approach of courts in referring parties to mediation and keeping suits in abeyance aligns with the overarching objective of expediting dispute resolution and promoting judicial economy (!) (!) .
Please let me know if you need further analysis or specific legal advice based on these points.
JUDGMENT :
J.B. PARDIWALA, J.
For the convenience of exposition, this judgment is divided into the following parts:
| INDEX |
| A. FACTUAL MATRIX |
| B. SUBMISSIONS ON BEHALF OF THE APPELLANT |
| C. SUBMISSIONS ON BEHALF OF THE UNION OF INDIA |
| D. ANALYSIS |
| i. Legislative intent behind the enactment of Section 12A of the 2015 Act |
| ii. Section 12A of the 2015 Act is mandatory in nature |
| iii. How the expression “urgent interim relief” is to be construed |
| iv. The effect of according prospectivity to the declaration in Patil Automation (supra) on cases like the one at hand |
| v. The equitable maxim lex non cogit ad impossibilia |
| E. CONCLUSION |
1. Leave granted.
2. This appeal arises from the judgment and order passed by the High Court at Calcutta on its appellate side dated 22.02.2021 in C.O. No. 1678 of 2020 by which the High Court disposed of the revision application filed by the appellant herein by directing that the suit instituted by the respondent herein, i.e., Union of India, on 09.08.2019, shall be kept in abeyance for seven months from the date of the order or until the receipt of the report of the mediator, whichever is earlier. In other words, the High Court proceeded to pass an order keeping in mind Section 12A of the Commercial Courts Act, 2015 (for short, “the 2015 Act”), as amended in 2018.
A. FACTUAL MATRIX
3. The facts giving rise to this appeal may be summarised as under:
a. The respondent Union of India instituted Money Suit No. 28 of 2019 on 09.08.2019 in the Commercial Court, Alipore against the appellant herein for the recovery of a sum of Rs. 8,73,36,976/- (Rupees Eight Crore, Seventy-Three Lakh, Thirty- Six Thousand, Nine Hundred and Seventy-Six only) towards differential freight and penalty. Indisputably, no urgent interim relief was prayed for in the said suit.
b. No sooner the suit referred to above came to be instituted than the appellant herein, as defendant, raised a preliminary objection in its written statement dated 20.12.2019 as regards the maintainability of the suit without availing the remedy of pre- institution mediation under Section 12A of the 2015 Act read with Pre-Institution Mediation and Settlement Rules, 2018 (in short, “the PIMS Rules”) which came into force with effect from 03.07.2018.
c. On 30.09.2020, the appellant herein preferred Interim Application No. 190 of 2020 under Order VII Rule 11(d) of the Civil Procedure Code, 1908 (for shot, the “CPC”) read with Section 12A of the 2015 Act seeking rejection of the plaint, inter alia, on the ground that the Money Suit No. 28 of 2019 suffered from institutional defects and was violative of the mandatory provisions of pre-institution mediation.
d. The Order VII Rule 11(d) application, referred to above, came to be rejected by the Commercial Court vide order dated 21.12.2020. While rejecting the I.A. No. 190 of 2020 the Commercial Court observed thus:
14. Once the plaint has been accepted by this Court, it would be presumed that the Court has no reason whatsoever to reject the plaint and obviously, the Defendant can raise this issue even at the time of filing W/S but admittedly, the Defendant no. 1 filed W/S even without taking the plea as now he has taken and in that case, it would be presumed that they are not also interested in the mediation proceedings.
15. This Court has been established on 05.07.2019 and within a month or more, the instant suit has been filed and at this stage, there is no proper infrastructure for conducting pre-litigation mediation and standard operating procedure has also not been framed by the Hon'ble High Court at Calcutta.
16. In the above circumsta
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