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CALCUTTA HIGH COURT
Soumen Sen and Biswaroop Chowdhury, JJ.
Asa International India Microfinance Ltd. – Appellant
versus
Northern ARC Capital Ltd. and Anr. – Respondents
FMAT 3 of 2025 with IA No. CAN 1 of 2025, CAN 2 of 2025
Decided on 17.1.2025
Commercial Courts Act, 2015 – Section 12-A – ‘Urgent Interim Relief’ – Meaning and Scope of – Section 12-A of the 2015 Act requires the court to ascertain whether the suit contemplates any urgent interim relief arising out of a commercial dispute as defined in the said Act. ‘Contemplate’ would mean to deliberate and consider whether regard being had to the facts and circumstances pleaded, any urgent relief is called for. It would imply that a die is cast and bolt impending and the act is done in expectation of and with a view to it, or that the dispute is already existing and the act is done in support to one side of it. The judge is required to consider and apply its mind to the facts and take a decision keeping in mind that such relief is ex parte. An ‘urgent interim relief’ would mean that the matter cannot wait for the initial period of three months as required under Section 12-A(3) of the Commercial Courts, Act, 2015. On a reading of a pleading the court has to be satisfied that if the court does not immediately intervene in spite of plaintiff fulfilling the trinity tests namely, prima facie case, balance of convenience and irreparable loss and injury and allow the plaintiff to institute the suit only after the expiry of the statutory period, it would be an injustice to the plaintiff and the situation may be irreversible.
Held: Contemplation thus would not mean an instant immediacy but the prejudice and the irreparable loss and injury that the plaintiff is likely to suffer if the plaintiff is made to wait for pre-litigation mediation. The court has to examine whether the facts and circumstances justify a genuine apprehension as opposed to a camouflage of an irreparable injury the plaintiff is likely to suffer.
Pre suit correspondence and conduct between the parties can be indicative of existence of genuine apprehension in the mind of the plaintiff since any further delay might cause irreparable and irretrievable prejudice to the plaintiff as there might be every likelihood of the assets and properties being dissipated or alienated.
However, in view of the fact the satisfaction recorded was ex-parte and it has been emphasized that the plaintiff had waited till 25th October, 2024 within which time some payments were made, the Pre-institution Mediation could not have been avoided is a matter if raised in an application by the applicant/defendant may be considered keeping in view the law laid down in this regard as summarized in the preceding paragraphs. At this stage, Court was not inclined to go into the said question as the appellant has decided to take out an application for revocation and Court was unaware of the grounds that may be taken in such application for revocation.
The impugned order prima facie shows that preferential treatment was given to the plaintiff as regards repayment of the loan or advances by the plaintiff over other creditors. IDFC First Bank claims to be one of the creditors. That other creditors may be affected by an order cannot dilute the legal right of the plaintiff to secure its claim. In the event of establishing its legal right, notwithstanding at the initial stage, the Court should be circumspect not to pass any drastic order that may cause breach to any existing obligation or procuring a breach of a contract. It is only upon whole facts that are brought on record and to the notice of the Court the order of attachment or injunction as the case may be depending upon the facts of the case.
In view of the fact that the appellant has paid a sum of Rs.1.5 crore after the impugned order was passed and is willing to pay further sum and also agreeable to have an amicable settlement of the dispute to which respondent, at this stage, expressed its disinclination, we vary the interim order to the effect that upon the appellant making payment of Rs.2 crores and filing an affidavit of assets and schedule of payments in respect of other creditors the appellant shall be permitted to utilize the rest of the amounts injuncted by the impugned order.
The appellant shall file an affidavit-in-opposition to the injunction application within two weeks from date reply thereto, if any, shall be filed within ten days thereafter. In the event of compliance of this order, it would be open for the appellant to pray for preponing the date of hearing of the injunction application. In the event of any application for revocation of lease under Section 12A is filed, it shall be heard only after the compliance of this order.
The appellant shall file fortnightly statement of accounts in the pending proceeding upon prior service to the plaintiff with regard to the utilization of its fund in respect of other creditors. [Paras 10 to 24].
Result: Appeal disposed off.
JUDGMENT (ORAL)
Soumen Sen, J.—The plaintiff/respondent no.1 claims to be guarantor in respect of Non-Convertible Debentures in favour of CDC group Plc aggregating to Rs.40 Crores.
2. The plaintiff alleged that due to default of the appellant in payment in terms of the Debenture Trust Deed dated 24th March, 2021 the Debenture Trustee had invoked the deed of guarantee dated 24th March, 2021. The plaintiff as a guarantor paid the default amounts to the respondent no.2, debenture trustee. Presently a sum of over Rs.18 crores is due and payable by the appellant on the basis of clause 4 of the Payment Undertaking executed by the appellant/defendant no.1. The appellant in spite of repeated demands did not discharge its liabilities and pay all the debts, although, payment obligations in respect of other lenders/creditors are being honoured. This is a clear breach of the obligations under the payment undertaking. On such facts and circumstances suit was filed in the Commercial Division of the department concerned with a prayer for dispensation of the mandatory requirement of Section 12A of the Commercial Courts Act, 2015. The learned judge granted leave and thereafter two orders have been passed.
3. On 6th December, 2024, the plaintiff filed an application under Section 12(A) of the Commercial Courts Act, 2015 supported by affidavit praying for exemption from applying for Pre-institution Mediation in view of the urgent interim reliefs. The plaintiff also filed an application for interim relief under Order XXXIX Rules 1 and 2 read with Section 151 of the Code of Civil Procedure. On 19th December, 2024, an order was passed by the learned Commercial Judge granting leave under Section 12(A) relying upon the observation of a coordinate Bench in FMAT 222 of 2024 with CAN 1 of 2024 (Shristi Infrastructure Development Corporation Limited vs. Sarga Hotel Private Limited & Anr.) and thereafter an ex-parte adinterim order was passed restraining the appellant from making any disbursement or payment including any payment to any third party/alleged creditor/s before the petitioners’ monetary overdue is cleared. Subsequently, on 23rd December, 2024, the defendant appeared and contested the said application. On the basis of the oral submission, the interim order was modified to the extent that the parties shall avail the mediation before the appropriate Authority/Forum and till the mediation proceeding comes to an end, the order of ad-interim injunction as it stands after modification, will remain in abeyance since the commencement of the mediation proceeding till its end subject to the condition that the defendants/respondents pay 40% of the outstanding dues of Rs.16 crores and odds to the plaintiff/petitioner within three weeks since the commencement of the mediation proceeding. The matter was directed to be listed on 26th March, 2025 for compliance.
4. Mr. S.N. Mitra, learned senior counsel appearing on behalf of the appellant, has submitted that no application was served upon the appellant before such leave was obtained and in any event, having regard to the decision of Hon’ble Supreme Court in the case of Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd., reported in (2022)10 SCC 1, the Court has a suo motu power to reject the plaint, in the event the Court is satisfied that the urgency pleaded was not genuine and is only a pretext to circumvent the mandatory provision of Section 12A.
5. The learned senior counsel has referred to paragraph 20 of the plaint to show that the plaintiff had received payments. It is further submitted that even after the impugned order was passed a sum of Rs.1.5 Crores have been paid to the plaintiff which clearly disprove the impecunious situation of the appellant.
6. An attempt was made by Mr. Pramit Bag, learned counsel appearing for one of the creditors to submit that the said order ought not to have been passed without hearing the IDFC Frist Bank. However, in absence of any application, we are not inclined
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