IN THE HIGH COURT OF ALLAHABAD
MANISH MATHUR, J.
Indian Oil Corporation Ltd., Thru. G.M. Engineering Department - Petitioner
Versus
Commercial Court-Ii, Lko. And Another - Respondents
Matters Under Article 227 No. 1220 of 2023
Decided On : 12-05-2023
Constitution of India, 1950 – Article 227 – Commercial Courts Act 2015 – Section 12 (A) (1) – Pre-Institution Mediation and Settlement – Raising challenge to order – Defendant regarding maintainability of suit – Pre-institution remedy of mediation – Maintainability of suit – Mandatory in nature and therefore – Held, Facts and circumstances although the suit has been filed after almost one and a half months of termination of contract but since it indicates urgent interim relief particularly in view of clause 6.13 being invoked against plaintiff, in considered opinion of this Court, plaint as such contemplates urgent interim relief and therefore mandatory provisions pertaining to pre institution mediation have been rightly waived by Commercial Court – No exception can be taken to the order impugned – Petition dismissed.
JUDGMENT :
(Manish Mathur, J.)
1. Supplementary affidavit filed on behalf of opposite party no. 2 is taken on record.
2. Heard Mr. Ashok Kumar Singh, learned counsel for petitioner and Mr. Ashish Shukla, learned counsel for opposite party no. 2.
3. Notice to opposite party no. 1 stands dispensed with as it is proforma party.
4. Petition under Article 227 of the Constitution of India has been filed raising challenge to order dated 08.02.2023 passed by the Commercial Court in Civil Suit No. 274 of 2022 rejecting preliminary objections raised by petitioner/defendant regarding maintainability of suit on the ground that pre-institution remedy of mediation as contemplated under Section 12 (A) (1) of the Commercial Courts Act 2015 having not been undertaken, without which suit in terms of the aforesaid provisions is barred.
5. Learned counsel for petitioner has placed reliance on judgment rendered by Hon'ble Supreme Court in the case of M/s. Patil Automation Private Limited and others versus Rakheja Engineers Private Limited reported in 2022 (10) SCC (1) to submit that the provisions of Section 12 A(1) of the aforesaid act have been held to be mandatory in nature and therefore, any suit filed before the Commercial Court in terms of the Act of 2015 without availing the remedy of Section 12 A of pre institution mediation is liable to be rejected. It is further submitted that in the present case, a contract was entered into between the parties on 02.12.2021 with regard to supply, transportation, installation and commissioning of new unipols at the retail outlets/KSK's of the petitioner. It is submitted that due to unfulfilment of terms and conditions of contract, show cause notice was issued to the opposite party no. 2 and after considering its reply, the contract was terminated on 31.10.2022. It is submitted that suit challenging the termination order has been filed only on 08.12.2022 and as such, there is no question of any urgency in the case due to which waiver of provisions of Section 12 A(1) of the Act of 2015 would not be required. It is submitted that it was in these circumstances that preliminary objections were filed before the Court concerned and have been rejected by means of impugned order on the ground that since the plaintiff has sought urgent interim relief, therefore, the suit would not be barred in terms of Section 12 A of the Act. Learned counsel has placed reliance on judgment rendered by High Court of Madras in the case of M/s Microlabs Limited versus Mr. A.Santosh , C.S (Comm. Div) No. 185 of 2022 to buttress his submissions.
6. Learned counsel appearing for opposite party no. 2 has refuted submissions advanced by learned counsel for petitioner with the submission that although the contract was terminated on 08.12.2022 but the same has also invoked provisions of clause 6.13 (b) of the contract pertaining to price adjustments for delays with the submissions that in pursuance of termination of contract, further action has been contemplated against the answering opposite party including forfeiting of security deposits, holiday listing or initiating any other penal action as deemed fit by Indian Oil Corporation/petitioner. It is thus submitted that it was only when the petitioner started initiating action against the opposite party no. 2 that the suit was filed along with an application for temporary injunction for restraining the petitioner/defendant from invoking the termination letter. Learned counsel has adverted to judgment rendered in the case of M/s. Patil Automation Private Limited and others versus Rakheja Engineers Private Limited reported in 2022 (10) SCC (1) as well as judgment of Division Bench of the Delhi High Court in the case of Chandra Kishor Chaurasiya versus R A Perfumery Works Private Limited (2022/DHC/004454 decided on 27.10.2022) to buttress his submissions.
7. In view of submissions advanced, the following question would require to be adjudicated:
Section 12A of the Commercial Courts Act requires pre-institution mediation for suits not seeking urgent relief, establishing a mandatory procedural framework.
Section 12A of the Commercial Courts Act mandates exhaustion of pre-institution mediation unless a suit clearly contemplates urgent interim relief, a point upheld by the court in dismissing the petit....
Maintainability of commercial suit – Suit which does not contemplate any urgent interim reliefs cannot be instituted unless plaintiff exhausts mandatory remedy provided under Section 12A of Commercia....
Mandatory compliance with Section 12A of the Commercial Courts Act, 2015 for suits not contemplating urgent interim relief, and the prevention of deceptive invocation of urgent relief to circumvent t....
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