Commercial suit plaint not rejected for skipping pre-institution mediation if pleadings holistically show urgent interim relief contemplated from plaintiff's view to avert asset disposal and irreparable harm; post-filing conduct irrelevant.

JUDGMENT :

GAURI GODSE, J.

1. This application is filed by the defendants under Order VII Rule 11 of the Code of Civil Procedure, 1908 (“CPC”), praying for rejection of the plaint at the threshold on the ground that it is barred for non-compliance with the mandatory provision under Section 12A of the Commercial Courts Act, 2015 (“the said Act”).

2. The suit is filed for recovery of an amount of approximately Rs. 123,50,10,401/-, which, according to the plaintiff, is due and payable as on 30^th September 2022. The plaintiff is a non-banking financial company engaged in financial and advisory services. As pleaded in the plaint, defendant no. 1 is the borrower, and defendant no. 2 is the personal guarantor who has guaranteed the facility availed by defendant no. 1 from the plaintiff. Defendant no. 3 is the corporate guarantor. According to the plaintiff, a loan agreement was executed, and defendant no. 1 unconditionally agreed and undertook to secure the loan amount by creating a charge over its assets in favour of the plaintiff. To secure the loan amount due and payable, defendant no. 2 executed a personal guarantee, and defendant no. 3 executed the corporate guarantee, and unconditionally agreed and undertook and guaranteed to pay an amount on demand to the plaintiff. The plaintiff has also relied upon copies of the undertakings, pledge agreements and a power of attorney in favour of the plaintiff. Since defendant no. 1 failed to comply with the terms and conditions and committed default in payments, plaintiff issued demand letters and legal notice calling upon the defendants to make the payment due and payable towards the loan.

3. As pleaded in the plaint, defendant no. 1 failed to comply with the demand notice, thereby breaching the contractual obligations. Defendant nos. 2 and 3 were also called upon to comply with the terms and conditions of the guarantee. The plaintiff has relied on various correspondence with the defendants, including a settlement proposal they submitted. The board of directors of the plaintiff considered the same; however, the proposal was rejected as not commercially viable for the plaintiff. Accordingly, the defendants were called upon to submit a revised settlement proposal. Despite all efforts, the defendants failed to repay the dues. Hence, the plaintiff called upon the defendants to repay the entire amount due and invoked the personal and corporate guarantees. The plaintiff has also pleaded about the proposal for the one-time settlement. However, according to the plaintiff, the defendants failed and neglected to discharge their obligations. Hence, the plaintiff filed this summary suit to recover the amount.

4. The plaintiff filed a separate application for interim relief for a direction to the defendants to deposit the due amount in this court as per the particulars of the claim in the suit. The plaintiff also prayed for an order directing the defendants to furnish security for the suit claim. In the same application, the plaintiff prayed for directions to the defendants to disclose their assets and for the appointment of a Court Receiver to take charge of the disclosed assets. The plaintiff thus also prayed for an injunction restraining the defendants from disposing of or creating a third-party interest in respect of the disclosed assets. In the application for interim relief, the plaintiff pleaded that the defendants, with a view to avoiding and delaying payment and defeating the plaintiff's legitimate claim, were likely to sell, transfer, and d