Compliance with pre-institution mediation under Section 12A is not required for counterclaims if it has been previously exhausted for the main claim.

ORAL ORDER

The petitioner is before this Court, seeking the following prayer:

"A. Call for the records;

B. To set aside the impugned Order Dated: 06/03/2025, passed on I.A.No.1, filed under Order VII Rule 11 Read with Sec. 151 of Code of Civil Procedure in Com.O.S.No.26/2024, by the Court of LXXXVII Additional Commercial Court & Sessions Judge, Bangalore;

C. To allow I.A.No.1, dated: 24/09/2024, filed under Order VII Rule 11 Read with Sec. 151 of Code of Civil Procedure in Com. O.S.No.26/2024, on the file of the Court of LXXXVII Additional Commercial Court & Sessions Judge, Bangalore; and consequently This Hon'ble Court be pleased to reject the Counter Claim filed in Com. O.S.No.26/2024, pending on the file of The Court of LXXXVII Additional Commercial Court & Sessions Judge, Bangalore;

D. To pass such any other order direction has this Hon'ble court might deem fit in the affirmation facts and circumstances of the case in the interest of justice and equity."

2. Learned counsel appearing for the petitioner submits that pre-institution mediation as available under Section 12A of the Commercial Courts Act, 2015 is to be afforded to a counterclaim also.

3. This Court, in terms of its order dated 18.07.2025 in W.P.No.4479/2025, has rejected the said claim by holding as follows:

"7. The afore-narrated facts are not in dispute. The issue in the lis lies in a narrow compass, as to whether before the counter claim could be registered by the defendants, compliance under Section 12A of the Act should be followed all over again, notwithstanding the fact that Section 12A of the Act had been complied prior to the institution of the suit.

8. The afore-narrated facts, link in the chain of events are not in dispute. Section 12A of the Act reads as follows:

“12A. Pre-Institution Mediation and Settlement.---

(1) A suit, which does not contemplate any urgent interim relief under this Act, shall not be instituted unless the plaintiff exhausts the remedy of preinstitution mediation in accordance with such manner and procedure as may be prescribed by rules made by the Central Government.

(2) The Central Government may, by notification, authorise the Authorities constituted under the Legal Services Authorities Act, 1987 (39 of 1987), for the purposes of pre-institution mediation.

(3) Notwithstanding anything contained in the Legal Services Authorities Act, 1987 (39 of 1987), the Authority authorised by the Central Government under sub-section (2) shall complete the process of mediation within a period of three months from the date of application made by the plaintiff under sub-section (1):

Provided that the period of mediation may be extended for a further period of two months with the consent of the parties:

Provided further that, the period during which the parties remained occupied with the pre-institution mediation, such period shall not be computed for the purpose of limitation under the Limitation Act, 1963 (36 of 1963).

(4) If the parties to the commercial dispute arrive at a settlement, the same shall be reduced into writing and shall be signed by the parties to the dispute and the mediator.

(5) The settlement arrived at under this section shall have the same status and effect as if it is an arbitral award on agreed terms under sub-section (4) of section 30 of the Arbitration and Conciliation Act, 1996 (26 of 1996).”

Section 12A of the Act mandates that parties before the institution of the suit should mandatorily be referred for mediation, which would be pre-institution mediation.

9. It is not in dispute when the respondent wanted to institute the suit, the parties were referred to pre- institution mediation and after the failure of pre- institution mediation, the aforesaid commercial O.S. is registered. Therefore, it is a fact that both the parties being the same, have already mediated and have failed in such medi