Neutral Citation Number: 2022/DHC/004923

RFA(COMM) 14/2022

Page 1 of 12

*

IN THE HIGH COURT OF DELHI AT NEW DELHI

Date of decision: 16^th NOVEMBER, 2022

IN THE MATTER OF:

+

RFA(COMM) 14/2022

KAPIL GOEL

..... Appellant

Through:

Mr. Abhishek Kumar, Mr. Sumit

Kashyap and Ms. Vedika Sharma,

Advocates.

versus

RAM DULARE YADAV @ GANDHI BHAI

..... Respondent

Through:

Advocate (Appearance not given)

CORAM:

HON’BLE THE CHIEF JUSTICE

HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD

JUDGMENT

1.

The instant appeal arises out of Order dated 07.04.2021, passed by the

learned District Judge, Commercial Court-II, Shahdara, Karkardooma

Courts, Delhi, in CS (COMM) 82/2019.

2.

CS (COMM) 82/2019 was filed by the Appellant herein/Plaintiff for

recovery of Rs.27,33,433/- from the Respondent herein/Defendant. Learned

District Judge, Commercial Court-II, Shahdara, Karkardooma Courts, Delhi,

vide Order impugned herein dismissed the Suit by allowing the application

filed by the Respondent herein/Defendant under Order VII Rule 11(d) of the

CPC on the ground of Section 12A of the Commercial Courts Act, 2015

(hereinafter referred to as 'the Act'), which mandates Pre-Institution

Mediation.

3.

The facts leading up to the filing of this Appeal are as under:

Digitally Signed

By:SHAZAAD ZAKIR

Signing Date:17.11.2022

19:53:03

Signature Not Verified

Neutral Citation Number: 2022/DHC/004923

RFA(COMM) 14/2022

Page 2 of 12

a)

The Appellant herein runs a business of sale and purchase of

fabric in the name and style of M/s Kapil Creations. It is stated

that the Respondents herein had purchased fabric from the

Appellant herein on credit basis and defaulted in the payment of

Rs.17,98,319/-.

b)

The Appellant herein, before instituting a Suit, approached the

Secretary, Delhi Legal Services Authority (DLSA) for initiation

of Pre-Institution Mediation proceedings for recovery of

Rs.17,98,319/- with interest @ 24% per annum, by filing an

application under Schedule I, Form 1 as specified under Rule

3(1) of the Commercial Courts (Pre-Institution Mediation and

Settlement) Rules, 2018 (hereinafter referred to as 'the Rules')

which had been framed under the Act.

c)

Material on record discloses that DLSA gave a Non-starter

Report for the Mediation.

d)

Since the mediation was a Non-starter, the Appellant herein

filed a Suit, being CS (COMM) 82/2019, for recovery of

Rs.27,33,433/- before District Judge, Commercial Court-II,

Shahdara, Karkardooma Courts, Delhi. Summons was ordered

to be served on the Respondent/Defendant. A written statement

was filed by the Respondent herein/Defendant and the

Appellant herein/Plaintiff filed a replication.

e)

Arguments were advanced. According to the learned District

Judge, the Suit was filed without complying with Section 12A

of the Act. The learned District Judge, Commercial Court-II,

Shahdara, Karkardooma Courts, Delhi, after perusing the

material on record came to the conclusion that the

Digitally Signed

By:SHAZAAD ZAKIR

Signing Date:17.11.2022

19:53:03

Signature Not Verified

Neutral Citation Number: 2022/DHC/004923

RFA(COMM) 14/2022

Page 3 of 12

Plaintiff/Appellant herein had filed an application to the DLSA

for initiation of Pre-Institution Mediation proceedings only as a

formality in order to file a Civil Suit and had no real intention

to proceed with the mediation process. The learned District

Judge, Commercial Court-II, Shahdara, Karkardooma Courts,

Delhi, dismissed the Suit by observing that Section 12A of the

Act is mandatory in nature, and since the Plaintiff/Appellant

herein has not acted in good faith and refused to participate in

the Pre-Institution Mediation process and, therefore, the

Plaintiff/Appellant herein is barred by law.

f)

It is this Order which is the subject matter of the instant appeal.

4.

For a better appreciation of the facts and the law on the subject, it is

necessary to extract the relevant provisions of the Commercia