Commercial suit plaint not rejected under O VII R 11 for bypassing Sec 12-A pre-mediation if urgent interim relief contemplated from plaintiff's plaint averments showing apprehension of harm from breach of settlement amid enforcement actions.

Headnote:(A) Commercial Courts Act, 2015 - Section 12-A - CPC - Order VII Rule 11 - Rejection of plaint in commercial suit - Mandatory pre-institution mediation - Exemption where urgent interim relief contemplated from standpoint of plaintiff - Test: whether, on examination of nature, subject-matter of suit and cause of action averred in plaint, prayer for urgent relief could be said to be contemplable - Facts and circumstances to be viewed holistically from plaintiff's perspective - Prayer not mere camouflage if pleadings disclose genuine apprehension of precipitative action on secured assets despite settlement agreement - Post-filing delays or procedural listing irrelevant at threshold stage - Mere non-grant of interim relief on merits post-notice does not justify rejection. (Paras 37-53)

(B) SARFAESI Act, 2002 - Section 34 - Specific Relief Act, 1963 - Section 41 - Suit for specific performance of framework settlement agreement for discharge of loan liabilities, release of securities and acceptance of premises in lieu - Not barred at threshold despite ongoing enforcement proceedings and possession notices - Substantive prayers for enforcement of settlement and profit-sharing agreements with assignee developer not within exclusive jurisdiction of specialised tribunal - Section 41 injunction bar inapplicable where cause of action based on pleaded partial performance and breach. (Paras 34-36)

(C) CPC - Order VII Rule 11 - Cause of action - Disclosed against all defendants where pleadings aver execution and acting upon settlement by lenders, nomination of developer assignee, transfer of projects, execution of profit-sharing agreement and subsequent breach by precipitative enforcement - Plaint not rejected in part or whole; warrants trial. (Paras 29-32)

Facts of the case:
Plaintiffs comprising real estate developers availed loan facilities from defendant non-banking finance companies for development projects. Upon default and initiation of enforcement notices, parties executed framework agreement dated 20th December 2024 for composite settlement by transfer of premises in discharge of liabilities by 31st December 2024, failing which auto-termination. Defendants nominated third defendant developer as assignee for two projects; profit-sharing agreement executed. Plaintiffs alleged partial performance and breach by continued enforcement actions including possession notices, filed suit for specific performance, declarations, release of securities and urgent injunctions restraining dealing with projects/secured assets without pre-institution mediation.

Findings of Court:
Applications for rejection of plaint dismissed; suit discloses contemplation of urgent interim relief justifying non-compliance with pre-institution mediation; sufficient cause of action against all defendants; no bars under enforcement or specific relief laws applicable at threshold.

Issues: Whether plaint liable to rejection under Order VII Rule 11 for non-compliance with Section 12-A, absence of cause of action against certain defendants, and statutory bars under enforcement proceedings and injunction prohibitions.

Ratio Decidendi: Court examines plaint averments holistically from plaintiff's standpoint to determine if urgent interim relief genuinely contemplated based on apprehended irreparable harm from breach of acted-upon settlement; power to reject drastic and strictly confined to plaint statements; post-filing conduct irrelevant; enforcement bars do not oust jurisdiction over specific performance of settlement superseding loan documents.

Result: Interim applications dismissed.

Table of Content
1. suit seeks specific performance of framework agreement; rejection applications filed. (Para 1 , 2 , 3)
2. mordani group defaulted; framework agreement terminated automatically. (Para 4 , 5 , 6)
3. non-compliance with section 12a; no urgent relief camouflage. (Para 7 , 8 , 9 , 10)
4. sarfaesi bar applies; no cause against defendant no.2. (Para 11 , 12 , 13 , 14)
5. no cause of action against defendant no.3. (Para 15)
6. post-filing conduct irrelevant; urgent relief contemplated. (Para 16 , 17 , 18 , 19 , 20)
7. framework acted upon; no sarfaesi or sra bar. (Para 21 , 22 , 23)
8. loans defaulted; framework agreement executed and partially acted upon. (Para 24 , 25 , 26 , 27 , 28 , 29)
9. cause of action against all defendants; no statutory bars apply. (Para 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37)
10. urgent interim relief test from plaintiff's standpoint; no post-filing consideration. (Para 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49)
11. urgency contemplated; rejection applications dismissed. (Para 50 , 51 , 52 , 53 , 54)

JUDGMENT:

GAURI GODSE, J.

1. These applications are filed by the Defendants for rejection of the plaint under Order VII Rule 11 of the Civil Procedure Code, 1908 (“CPC”), on the grounds of non- compliance with Section 12-A of the Commercial Courts Act, 2015 (“said Act”), bar under Section 41 of the Specific Relief Act, 1963 and Section 34 of the The Securitisation And Reconstruction Of Financial Assets and Enforcement Of Security Interest Act, 2002 (SARFAESI Act).

2. The suit is filed for specific performance of the Framework Agreement dated 20^th December 2024 by discharging the plaintiffs and the entire Mordani Group from all liabilities in relation to the loan facilities availed from defendant nos. 1 and 2, including all security interests created by them, by accepting the premises in compliance with the Framework Agreement. The plaintiffs have also prayed for a declaration that, in view of the Framework Agreement, no amount is due and payable by the plaintiffs. The plaintiffs have therefore prayed for directions to release the securities on the ground of the execution of the Framework Agreement.

3. In view of the apprehension that defendant nos. 1 and 2 shall take steps in furtherance of the terms and conditions of the loan documents and take precipitative steps in respect of the secured assets, the plaintiffs filed the suit without complying with the mandatory requirement under Section 12-A of the said Act. Hence, by way of interim relief, the plaintiffs prayed for an injunction restraining defendant nos. 1 and 2 from dealing with, transferring, or creating third-party rights in respect of the plaintiffs’ three projects referred to in the Framework Agreement, and from not enforcing the security under the loan agreements.

SUBMISSIONS ON BEHALF OF DEFENDANT NO.1:

4. The plaintiffs are all part of the Mordani Group and are engaged in developing real estate projects. Defendant nos.1 and 2 are non-banking financial companies engaged in the business of providing loans/finance. Defendant no.3 is a real estate developer and was the nominee developer of defendant no.1 for the purpose of the transfer of projects under the Framework Agreement entered into by Mordani Group and defendant nos. 1 and 2. The agreements were executed by the Mordani Group to avail loan facilities from defendant nos. 1 and 2 for the development of their real estate projects, including the projects known as La Maison, Signature Suits, and Celyn Project.

5. The plaint alleges that defendant nos. 1 and 2 are signatories to a so-called “Framework Agreement” dated 20^th December 2024, which purportedly recorded a composite resolution of all loan facilities. The Framework Agreement forms part of the plaint and records that the Mordani Group was required to perform its obligations by 31^st December 2024, and if the Mordani Group failed to perform its obligations by the end of business hours on 31^st December 2024, the composite settlemen

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2026 Supreme(Bom) 797

Commercial suit plaint not rejected under O VII R 11 for bypassing Sec 12-A pre-mediation if urgent interim relief contemplated from plaintiff's plaint averments showing apprehension of harm from breach of settlement amid enforcement actions.

Cases Referred (5)