Order on Board

07-02-2023

1. This petition has been filed against the rejection of the application under Section 12A of Commercial Courts Act, 2015.

2. The sum and substance of the case is that, a civil suit was filed before the Commercial Court on 05-07-2019 for recovery of Rs. 99 lacs along with interest against the defendants. On 09-07-2019 an application under Order 38 Rule 5 of the CPC was moved by the plaintiff for exemption from undergoing pre-institution mediation and settlement. The application was allowed by the Commercial Court, thereafter, notice was issued to the defendants and they marked their appearance. An application under Section 12A of the Commercial Courts Act was moved on 21-09-2022 praying for rejection of the suit on the ground that the provisions contained in Section 12A of Commercial Courts Act have not been complied with.

The reply was filed by the plaintiff citing judgment of the Hon’ble Supreme Court in the matter of Patil Automation Private Limited and Ors. Versus Rakheja Engineers Private Limited, (2022) SCC OnLine SC 1028, stating inter alia that the provisions of Section 12A of the Commercial Courts Act would be applicable from 20-08-2022 and the suit was filed on 05-07-2019, therefore, this provision is not applicable in the present suit.

The learned Commercial Court relying upon the judgment passed by the Hon’ble Supreme Court and considering the order dated 07-09- 2019, whereby the application moved under Order 38 Rule 5 of the CPC was allowed, rejected the application moved by the petitioners/defendant No.4 and 5, against which the present petition has been filed.

3. Learned counsel for the petitioners/defendant No.4 and 5 would submit that mere reading of one para of the judgment passed by the Hon’ble Supreme Court is not sufficient. He would further submit that from the date of Gazette Notification, Section 12A of the Commercial Courts Act became effective. He would submit that the case which has already been decided cannot be re-opened, therefore, the learned Commercial Court committed illegality in rejecting the application moved under Section 12A of the Commercial Courts Act. He would also submit that the application moved by the plaintiff under Order 38 Rule 5 of the CPC was allowed prior to issuance of notice in their absence and they have challenged the order dated 09-07-2019 before the High Court by filing writ petition. He would submit that the impugned order passed by the Commercial Court is liable to be set aside.

4. Learned counsel for the respondent No.1/plaintiff would submit that there is no interim order in favour of the petitioners against the order dated 09-07-2019. He would submit that respondent No.1 has not received any notice issued by this Court. He would further submit that, considering the provision of Section 12A of the Commercial Courts Act, which has been dealt by the Hon’ble Supreme Court in case of Patil Automation (supra) the Commercial Court has rightly rejected the application of the petitioners filed under Section 12A of the Commercial Courts Act.

5. I have heard learned counsel for the parties and perused the documents.

6. Section 12A of the Commercial Courts Act reads as under:-

“12A. Pre-institution Mediation and Settlement – (1) A suit, which does not contemplate any urgent relief under this Act, shall not be instituted unless the plaintiff exhausts the remedy of pre-institution mediation in accordance with such manner and procedure as may be prescribed by rules made by the Central Government.”

Further in the matter of Patil Automation Private Limited and Ors. Versus Rakheja Engineers Private Limited (supra), while dealing with scope of Section 12A of the Commercial Courts Act in para 84 of the judgment the Hon’ble Supreme Court has held as under:

“84. Having regard to all these circumstances, we would dispose of the matters in the following manner. We declare that Section 12A of the Act is mandatory and hold that any suit instituted violating the mandate of Sect