The requirement for pre-institution mediation in commercial disputes is mandatory for plaintiffs. Failure to adhere to procedural rules, including the payment of prescribed mediation fees, constitutes failure to discharge the statutory obligation, rendering a suit liable to be rejected under the relevant provincial and national procedural laws.

JUDGMENT :

Rajesh Shankar, J. :

I.A No. 8004 of 2024

1. The present interlocutory application has been filed on behalf of the appellants for condonation of delay of 14 days in filing the present appeal.

2. Having heard learned counsel for the parties and on being satisfied with the reasons stated in the present interlocutory application, the said delay in filing the present appeal is hereby condoned.

3. I.A No. 8004 of 2024 is accordingly disposed of.

Commercial Appeal No. 02 of 2025

4. The present appeal is directed against the order dated 08.05.2024 passed by the District Judge-III-cum-Presiding Officer, Commercial Court, East Singhbhum, Jamshedpur in Original Suit No. 06 of 2022 whereby the plaint filed by the plaintiffs/appellants has been rejected holding that the said suit was filed without compliance of the mandatory provisions as contained in Section 12-A of the Commercial Courts Act, 2015 (hereinafter to be referred as the “Act, 2015”).

5. The factual background of the case as stated in the present appeal is that the defendants/respondents had transported 88,506.07 MT iron ore through rail at concessional freight rate during the period from 01.04.2009 to 31.03.2010, 01.04.2011 to 31.03.2012 and 01.04.2013 to 31.03.2014 on specific representation that the said iron ore would entirely be utilized for domestic consumption, however only 65,884.08 MT iron ore was utilized in the domestic manufacturing units of the respondents for manufacturing the permitted goods and 28,700.16 MT iron ore was used for the purposes other than domestic consumption for which they were liable to pay the charges against evaded freight charges and additional charges at penal rate.

6. The appellants initiated a mediation process set out under rule 3 of the Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018 (in short, “the Rules, 2018”) by filing an application before the District Legal Services Authority, Jamshedpur in Form-1 specified in Schedule-I of the Rules, 2018.

7. The said application was registered as Pre-Institution Mediation and Settlement (PIMS) Case No. 06 of 2019, however the mediation process was treated as “Non-Starter” vide orders dated 23.12.2021 and 20.01.2022 passed by the Secretary (Incharge), DLSA, Jamshedpur on the ground that both the parties did not submit the mediation fee. Further, the office was directed to issue “Non-Starter” report which was issued to both the parties in Form-3 of Schedule-I of the Rules, 2018.

8. The appellants filed a suit against the respondents before the Additional District Judge-I, Commercial Court, East Singhbhum, Jamshedpur for recovery of a sum of Rs.26,73,77,920/- towards the principal amount of evaded freight charges along with compensation of Rs.5,34,75,584/- for direct loss suffered by them caused due to fundamental breach of contract as well as interest of Rs.33,43,36,737/- till 30.06.2019 (in total Rs.65,51,90,241/-) and future interest “pendente lite” till realization of the said amount.

9. The said suit was registered as Original Suit No. 06 of 2022 in which the respondents appeared and filed a petition under order VII rule 11 read with Section 151 CPC and Section 12-A of the Act, 2015. After hearing the parties, the plaint filed by the plaintiffs/appellants was rejected vide order dated 08.05.2024 holding that the said sui