IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/FIRST APPEAL NO. 300 of 2025 With CIVIL APPLICATION (FOR INJUCTION) NO. 1 of 2024 In R/FIRST APPEAL NO. 300 of 2025 With CIVIL APPLICATION (FOR AMENDMENT) NO. 1 of 2025 In R/FIRST APPEAL NO. 300 of 2025 ==================================================

SBS POLYCHEM PVT. LTD.

Versus M/S CHEMICAL COMPOUND LLC & ORS.

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Appearance MR. VISHAL J. PATEL, ADVOCATE WITH NIMIT Y SHUKLA(8338) for the Appellant(s) No. 1 ==================================================

CORAM:HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL and HONOURABLE MR. JUSTICE PRANAV TRIVEDI Date : 17/02/2025

ORAL ORDER

(PER : HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL)

[1] The amendments are formal in nature. The amendment application is allowed. Necessary incorporation be made within 24 hours.

[2] By means of the present petition, two orders dated 25.10.2024 passed by the Commercial Court rejecting the suit for non compliance of the requirement of Section 12A of the Commercial Courts Act, 2015 (hereinafter referred to as "the Act, 2015") are subjected to challenge on the ground that the rejection of suit in exercise of suo moto power by the Commercial Court invoking the provisions of Order VII Rule 11 of the Code of Civil Procedure, 1908 (hereinafter referred to as "the CPC") is an illegal exercise of power.

[3] The contention is that none of the clauses of Rule 11 of Order VII of the CPC would be attracted in the present case, inasmuch as, neither it can be said that the claim does not disclose a cause of action nor the suit can be said to be barred by any law as per clauses (a) and (d) of Rule 11 of under Order VII of the CPC. Apart from these two clauses, no other clause contained in Rule 11 can be taken aid of, to reject the plaint. It is argued that Section 12A of the Act, 2015 only requires mandatory process of pre-institution mediation to be exhausted by the plaintiff in view of sub-section (1) of Section 12A before instituting a suit under the Act, 2015. The requirement is that the plaintiff filing the commercial suit shall first undergo the process of pre-institution mediation and only in case of failure thereof, the suit can be instituted. The period of 3 months for completion of the process of mediation has been provided in sub-section (3) of Section

12A of the Act, 2015.

[4] It is further argued that even from a perusal of sub-section (1) of Section 12A, it can be seen that the requirement to exhaust the remedy of pre-institution mediation in accordance with Section 12A can be dispensed with and the plaintiff may be exempted from taking recourse of the said remedy, in a suit which contemplates any urgent interim relief under the Act, 2015. The submission, thus, is that there is no absolute bar from institution of the suit without exhausting remedy of pre-institution mediation under Section 12A of the Act, 2015. The Commercial Court has, thus, erred in dismissing the suit by taking recourse to the provisions of Order VII Rule 11 of the CPC.

[5] Taking note of the above submissions, we may record that the Hon'ble Apex Court in case of M/s Patil Automation Private Limited and Others versus Rakheja Engineers Private Limited reported in (2022) 10 SCC 1 as followed in case of Yamini Manohar versus T.K.D. Keerthi reported in (2024) 5 SCC 815 has discussed the scope of Section 12A of the Act, 2015 and it is held therein that the said provision is mandatory and any suit instituted violating the mandate of Section 12A must be visited with rejection of the plaint under Order VII Rule 11 of the CPC. The observations of the Hon'ble Apex Court in case of M/s Patil Automation Private Limited and Others (supra) in paragraphs '113.1' to '113.3' are relevant to be extracted hereinbelow:-

"113.1 We declare that Section 12A of the Act is mandatory and hold that any suit instituted violating the mandate of Section 12A must be visited with rejection of the plaint under Or