Mandatory pre-institution mediation under Section 12-A of the Commercial Courts Act can be bypassed if urgent interim relief is required, emphasizing the urgency and necessity in litigation.

JUDGMENT

Manmohan, J. (Oral)--The appeal has been heard by way of video conferencing

2. On 24th May, 2021, this Court had directed the respondents to deposit Rs.32,00,000/- with the Registry of this Court within ten days. In the event the said amount was deposited, the Registry was directed to keep the same in a fixed deposit receipt initially for a period of one year. Subject to the deposit of the aforesaid amount, respondents were granted liberty to file an application seeking recall of the order dated 20th May, 2021 by which they were proceeded ex-parte.

3. Today, Mr. Ritwick Shukla, learned counsel for the respondents states that the respondents have no assets and are not in a position to comply with the condition of pre deposit of any amount. He, however, states that the respondents have no objection to the present appeal being allowed and the matter being remanded back to the learned District Judge for further consideration.

4. He clarifies that during the pendency of the suit, the respondents had sold the plant and machinery as well as the factory premises to clear the outstanding dues of the banks and financial institutions alone. He emphasises that though Rs.6 crores had been collected by way of sale proceeds, the respondents had deposited approximately Rs.7.4 crores with the banks and financial institutions.

5. It is pertinent to mention that present appeal had been preferred against the impugned final order and judgment dated 5th September, 2020 passed by the District Judge, Commercial Court-5, Central District, Tis Hazari Courts, Delhi, in C.S.(Comm) No.132/2019 (New No.366/2020), whereby the learned A.D.J. rejected the plaint of the appellant under Order VII Rule 11(d) of the Code of Civil Procedure,1908 on the sole ground that the appellant had failed to comply with Section 12-a of the Commercial Court Act. The relevant portion of the impugned order reads as under:

".....The act of the plaintiff to straightway refusing to take recourse of the mediation proceedings and filing of the case without such genuine efforts is liable to be condemned and there is no hesitation to say that plaintiff itself had made mockery of the mandatory provisions of Section 12A of the COMMERCIAL COURTS ACT by not taking such mandatory steps in real sense prior to institution of the suit and refusing to get the mediation proceedings started because further Rule 8 of Commercial Courts (Pre Institution Mediation & Settlement) Rules 2018 puts an obligation upon the parties to participate in the mediation process in good faith with an intention to settle the dispute. Thus, thinking of the plaintiff that it is a useless provision and simple moving an application before DLSA will be suffice and then refusing to undergo mediation process by presuming that defendant will not join mediation proceedings in any situation or even if joins will not try to settle the matter is not appreciable and it in fact point out that plaintiff was having no good faith and real bona fide intention. Plaintiff should have waited for the decision of mediator before making up mind that defendant in all circumstances would not join mediation proceedings or will frustrate the same. Plaintiff would be getting benefit of extension of limitation also for the period spent in such Pre-Institution Mediation but it was apparently in very hurry to file the suit by defeating the mandatory provisions. The act of the defendant in not participating or refusing to settle the dispute through mediation process initiated by the plaintiff, if any can go against him during trial also and the court can even ask the d