Pre-institution mediation under Section 12A of the Commercial Courts Act is mandatory unless genuine urgency is shown; plaintiff must substantiate claims of urgency.

JUDGMENT :

PURUSHAINDRA KUMAR KAURAV, J.

I.A. 16164/2025 (BY THE PLAINTIFF- FOR EXEMPTION FROM PRE-INSTITUTION MEDIATION UNDER SECTION 12A CCA , 2015)

The instant application has been filed by the Plaintiff seeking exemption from pre-institution mediation envisaged under Section 12 A of the Commercial Courts Act, 2015 (hereinafter referred to as the 'Act').

2. The instant civil suit is for various reliefs, inter alia, seeking specific performance of a collaboration agreement dated 03.06.2015 (hereinafter referred to as the 'agreement').

Brief facts

3. In May 2015, the Plaintiff is stated to have been approached by defendant Nos. 1 and 2 with a proposal to reconstruct a property situated at U-29, Green Park Main, New Delhi (hereinafter referred to as the 'suit property'). As per a mutual understanding, the Plaintiff was to demolish and reconstruct the entire property, post which the Ground Floor and First Floor would be owned by the Plaintiff, while the Second and Third Floors would belong to Defendant No. 1.

4. Subsequently, the agreement was executed between the Plaintiff and Defendant No. 1, formalizing the terms of the proposed redevelopment. Along with the agreement, Defendant No. 1 executed various supporting documents, including General Power of Attorney, Special Power of Attorney, Affidavit, and Will in favour of the Plaintiff to enable necessary approvals and permissions from the concerned authorities. In furtherance thereto, the Plaintiff paid a sum of INR 1.2 Crores and took possession of the property.

5. However, as per the Plaintiff’s case, it later came to light that Defendant No. 1 had also agreed the Second Floor of the same property to one Mrs. Kusum Srivastava. Further complications arose when Defendant No. 6 i.e., Union Bank of India (hereinafter referred to as the 'Bank') issued a legal notice alleging that the suit property was mortgaged with it and that the bank was in possession of the original title documents. The Plaintiff responded, asserting its bona fide possession and development of the property based on the agreement.

6. The Plaintiff subsequently filed police complaints against Defendants No. 1 and 2, alleging offences related to cheating and conspiracy. In connection with the same issues, FIR No. 0125/2016 was registered at Safdarjung Enclave Police Station under Sections 406 and 420 of Indian Penal Code, 1860 (hereinafter referred to as 'IPC'). Meanwhile, the Bank initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as 'SARFAESI Act') against Defendant Nos. 1 to 3, issuing notices under Sections 13 (2) and 13(4) of the SARFAESI Act and seeking possession of the suit property. It was only upon the visit of the Bank's officials to the property that the Plaintiff came to know about the aforenoted notices.

7. In response, the Plaintiff addressed a letter to the Bank asserting its lawful possession arising out of the collaboration agreement and later filed an application under Section 17 of the SARFAESI Act before the Debt Recovery Tribunal (hereinafter referred to as the 'DRT'). The said application was dismissed, and the Plaintiff preferred an appeal under Section 18 of the SARFAESI Act before the Debt Recovery Appellate Tribunal (hereinafter referred to as the 'DRAT'). The Plaintiff issued notices to Defendants No. 1 to 3 and the Bank.

8. During the pendency of the appeal, as per the Plaintiff’s case, unknown persons approached the Plaintiff with a letter purportedly evidencing that a One-Time Settlement between Defendants No. 1 to 3 and the Bank. The Plaintiff continued to prosecute its appeal and also issued notices to prevent third-party interests in the suit property. A public notice was issued on behalf of Defendants No. 4 and 5 expressing interest in purchasing the suit property, to which the Plaintiff