JUDGMENT

1. This petition under Article 227 of the Constitution of India assails orders dated 16th August 2021 and 2nd February 2022, passed by the learned District Judge (Commercial Courts) ('the learned Commercial Court') in CS DJ 1070/2018 (Jotun India Pvt Ltd v. Extreme Coatings Pvt Ltd).

2. CS DJ 1070/2018 was preferred by the respondent against the petitioner. The dispute between parties being admittedly commercial, the suit was filed as a commercial suit under the provisions of the Code of Civil Procedure, 1908 (CPC), as amended by the Commercial Courts Act, 2015.

3. The petitioner, as the defendant in the suit, moved an application under Order VII Rule 11 of the CPC, seeking rejection of the suit on the ground that it had been filed in violation of Section 12-A1 of the Commercial Courts Act, which requires the plaintiff to resort to pre-institution mediation before approaching the Court. The respondent having not travelled the said route, the petitioner, as defendant in the suit, prayed that the suit be rejected under Order VII Rule 11 of the CPC.

1 12-A. Pre-Institution Mediation and Settlement. -

(1) A suit, which does not contemplate any urgent interim relief under this Act, shall not be instituted unless the plaintiff exhausts the remedy of pre-institution mediation in accordance with such manner and procedure as may be prescribed by rules made by the Central Government.

(2) The Central Government may, by notification, authorise the Authorities constituted under the Legal Services Authorities Act, 1987 (39 of 1987), for the purposes of pre-institution mediation.

(3) Notwithstanding anything contained in the Legal Services Authorities Act, 1987 (39 of 1987), the Authority authorised by the Central Government under sub-section (2) shall complete the process of mediation within a period of three months from the date of application made by the plaintiff under sub-section (1): Provided that the period of mediation may be extended for a further period of two months with the consent of the parties: Provided further that, the period during which the parties remained occupied with the pre-institution mediation, such period shall not be computed for the purpose of limitation under the Limitation Act, 1963 (36 of 1963).

(4) If the parties to the commercial dispute arrive at a settlement, the same shall be reduced into writing and shall be signed by the parties to the dispute and the mediator.

(5) The settlement arrived at under this section shall have the same status and effect as if it is an arbitral award on agreed terms under sub-section (4) of Section 30 of the Arbitration and Conciliation Act, 1996 (26 of 1996).

4. The learned Commercial Court, addressing the objection of the petitioner, noted that the suit had been filed by the respondent on 20th September 2018. On that date, the learned Commercial Court noted that, though the Delhi Legal Services Authority (DLSA) had been notified under Section 12-A(2) of the Commercial Courts Act as the agency for pre-institution mediation under Section 12-A of the Commercial Courts Act, vide notification dated 3rd July 2018, no mechanism, for such pre-institution mediation, had been put in place. The learned Commercial Court observed that implementation of the protocol prescribed by Section 12-A of the Commercial Courts Act involves three stages. The first stage was the coming into force of the provision itself. This stage had stood crossed on 3rd May 2018 when Section 12-A was introduced in the Commercial Courts Act. Thereafter, notes the learned Commercial Court, Section 12-A(2) required the Central Government to notify authorities constituted under the Legal Services Authorities Act, 1987, for the purposes of pre-institution mediation under Section 12-A(1). This stage also stood crossed on 3rd July 2018, when a notification was issued by the Central Government notifying the DLSA as the authority for pre-institution mediation under Section 12-A(1). Once the authority for the purposes of Sect