1. Suit for mortgage decree — Exemption from pre-institution mediation under Section 12A of Commercial Courts Act, 2015. (Para 1 , 2 )
Back
Next 
2026 Supreme(Online)(Del) 4719
IN THE HIGH COURT OF DELHI AT NEW DELHI
Subramonium Prasad, J
Vardhman Trusteeship Pvt Ltd – Appellant
Versus
Jyotsana Dubey – Respondent
CS(COMM) 177/2026|I.A. 5022/2026|I.A. 5023/2026|I.A. 5024/2026|I.A. 5026/2026|I.A. 5027/2026|I.A. 5025/2026
Advocates:
For the Appellants/Petitioners: Yashvardhan, Devesh Mohan, Gyanendra Shukla, Pranav Das
For the Respondents: Ankit Jain, Mihir Gujjewar, Parth Gautam, Divyanshu Rathi, Abhinav Garg, Deepanshu Latka, Mahima Ahuja
For the Appellants/Petitioners: Yashvardhan, Devesh Mohan, Gyanendra Shukla, Pranav Das
For the Respondents: Ankit Jain, Mihir Gujjewar, Parth Gautam, Divyanshu Rathi, Abhinav Garg, Deepanshu Latka, Mahima Ahuja
Section 12A of the Commercial Courts Act, 2015 is mandatory; exemption for urgent interim relief cannot be granted based on vague averments, particularly when the security (mortgaged property) is already in the plaintiff's favor, as such claims do not constitute sufficient urgency.
Headnote:(A) Commercial Courts Act, 2015 - Section 12A - Pre-institution mediation - Exemption on grounds of urgent interim relief - Application seeking stay on alienation of property already mortgaged in favor of the plaintiff - Court held that bald or vague averments regarding the creation of third-party rights on a property already under mortgage do not constitute sufficient urgency to bypass mandatory pre-institution mediation. (Paras 13, 14)
(B) Mandatory Nature of Mediation - The requirement for pre-institution mediation under the Act is mandatory unless the suit contemplates urgent interim relief. The court must examine the nature of the suit, cause of action, and prayers to ensure that the request for urgent relief is not a disguise to avoid the statutory mandate of mediation. (Paras 10, 11)
Facts of the case:
A plaintiff filed a commercial suit for the recovery of money and a mortgage decree against the defendants, seeking the sale of a subject property. The plaintiff filed an application for exemption from pre-institution mediation under Section 12A of the Commercial Courts Act, 2015, contending that urgent interim relief was required to prevent the defendants from creating third-party rights in the subject property.
Findings of Court:
The court found that the subject property was already mortgaged in favor of the plaintiff. Consequently, the assertion that there was an urgent need to prevent the creation of third-party rights was considered vague and insufficient to establish the urgency required for exemption under the law.
Issues: Whether the plaintiff could be exempted from undergoing mandatory pre-institution mediation proceedings based on the urgency of the interim relief sought.
Ratio Decidendi: Section 12A of the Commercial Courts Act, 2015 is mandatory for suits not contemplating urgent interim relief. Urgency must be substantive and evident from the pleadings and facts; mere vague claims of potential third-party interest in a property already mortgaged do not satisfy the threshold for exemption.
Result: Plaint returned.
Legal Category Hierarchy
Table of Contents
2. Plaintiff sought exemption citing urgent interim relief; Defendant opposed, asserting no genuine urgency existed. (Para 3 , 4 , 5 , 6 )
3. Bare allegation of third-party rights creation without substance does not constitute urgency warranting exemption from mandatory mediation. (Para 13 )
4. A court must examine the nature and substance of the plea for urgent interim relief to prevent evasion of mandatory pre-institution mediation. (Para 10 )
5. Plaint returned with liberty to resort to pre-institution mediation proceedings before re-filing. (Para 14 , 15 )
6. What test determines if a suit contemplates urgent interim relief for Section 12A exemption?
The court must examine the plaint, documents, and facts holistically from the plaintiff's standpoint to see if genuine urgency is indicated. (Para 10 , 13 )
7. Can a plaintiff evade mandatory mediation by merely claiming urgent interim relief in the plaint?
No. The prayer for urgent interim relief must not be a disguise or mask to bypass Section 12A; the court must verify its substance. (Para 10 , 13 )
O R D E R
% 24.02.2026 I.A. 5025/2026
1. This application under Section 12A of the Commercial Courts Act, 2015 [“CC Act”] has been filed on behalf of the Plaintiff seeking exemption from undergoing pre-institution mediation proceedings.
2. Shorn of unnecessary details, facts leading to the filing of the present Plaint are as under:
a) The Plaintiff is a company incorporated under the Companies Act, 1956. The Plaintiff is engaged in the business of providing trusteeship services such as Debenture Trusteeship, Security Trusteeship, Share Pledge Trusteeship, Escrow Agency, Safe Keeping Agent, Securitization Trustee, Alternative Investment Fund and Facility Agent etc to its customers.
b) Defendant No.1 is the owner of entire ground floor portion, admeasuring 241.66 sq. yards, consisting of three bedrooms along with three bathrooms, one drawing-cum-dining room, family lounge, one kitchen, front and back courtyard along with 25% freehold right in the land underneath the Property Bearing No.56, Block E, E.P. Railway Refugees Rehabilitation House Building Cooperative Society Ltd., presently known as Greater Kailash Enclave-II, New Delhi [“Subject Property”] which has been mortgaged by Defendant No.1 by deposit of title deeds in favour of the Plaintiff.
c) Defendant No.2 is a company registered under the Companies Act, 1956, engaged in the business of providing technology solutions in the information and communication technology space such as deploying secure Enterprise Networks, Data Centre Builds, Audio- Video Integration Solutions, Command and Control Centres etc. that consolidates, integrates and enables management of information for mission critical applications.
d) It is stated that Defendant No.2 had borrowed money by issuing debentures and the Plaintiff had given a loan to Defendant No.2. Defendant No.1’s property has been used as security for this borrowing.
e) Material on record indicates that the Subject Property was first allotted to one Smt. Shakuntla Bhasin by executing a Perpetual Sub-
Lease. It is stated that after the demise of Smt. Shakuntla Bhasin, the Subject Property devolved upon her three sons, namely, Vijay Bhasin, Avinash Bhasin and Sanjeev Bhasin and after devolution, the Subject Property was mutated in their name. It is stated that subsequently, the aforesaid lease was converted from leasehold into freehold vide a Conveyance Deed dated 06.09.2006 executed by Delhi Development Authority. It is stated that, thereafter, the Subject Property was sold to Defendant No.1 herein for a total sale consideration of Rs.45,00,000/-. A meeting of Board of Directors of Defendant No. 2 was held on 12.10.2023 wherein it was resolved that financial assistance to the tune of Rs. 50,00,00,000/- is required by way of Debenture Trust Deed and Private Placement Offer cum Application Letter. It is stated that on 23.10.2023, a Debenture Trustee Appointment Agreement dated 23.10.2023 [“Agreement No.1”] was executed between the Plaintiff and Defendant No.2 for appointment of the Plaintiff as the Debenture Trustee. In accordance with Agreement No.1, Defendant No.2 issued 5000 unlisted, senior, secured, redeemable, taxable, transferable, non-convertible debentures having a face value of Rs.1,00,000/- each. These debentures were subscribed to by one Vivriti Asset Management Pvt. Ltd. [“Debenture Holders”]. On
23.10.2023, the following documents were executed:
i. Debenture Trustee Appointment Agreement: Appointed the Plaintiff as the Debenture Trustee;
ii. Private Placement Cum Application Letter (PPOAL-1):
Outlined the terms for the private placement of the debentures;
iii. Deed of Hypothecation: Created a charge over specific hypothecated properties;
iv. Irrevocable Power of Attorney: Executed by Defendant No. 2 in favour of the Plaintiff to effectuate the security interest under the Deed of Hypothecation;
v. Share Pledge Agreement: Executed by Mr. Krishan Kumar Girdhar and Mr. Sandeep Arya, pledging 1,30,000 and 1,20,000 shares respectively;
vi. Irr
