Pleadings Determine Urgency for Section 12A Mediation Dispensation under Commercial Courts Act: Calcutta High Court

In a significant ruling clarifying the procedural contours of the Commercial Courts Act, 2015, the High Court at Calcutta has affirmed that the necessity for pre-litigation mediation under Section 12A is determined strictly by the pleadings presented in a plaint. Justice Aniruddha Roy ruled in the matter of Berger Paints India Limited v. Gphp Holdings Pvt Ltd that if a plaintiff successfully demonstrates in their pleadings that they "contemplate" urgent interim relief, the statutory requirement for mediation can be dispensed with by the court.

The Backdrop of the Dispute

The litigation arose from a commercial debt dispute between Berger Paints India Limited (the plaintiff) and Gphp Holdings Pvt Ltd (the defendant). The plaintiff alleged that the defendant owed over Rs. 1 crore in unpaid dues for goods supplied between February and June 2024.

As the defendant encountered financial distress, it proposed a scheme of compromise before the National Company Law Tribunal (NCLT) and signaled an intention to liquidate factory assets in Faridabad. Fearing that their prospects of recovery were under threat—particularly given the potential disposal of assets—the plaintiff filed a suit seeking urgent interim relief. Relying on the potential urgency, the court initially granted a dispensation from the mandatory pre-suit mediation procedure outlined in Section 12A of the Commercial Courts Act.

Arguments on the Stand

The defendant sought to revoke this dispensation, arguing that the alleged cause of action had existed since mid-2024. Counsel for the defendant contended that because the plaintiff was aware of the financial situation months prior, there was "no sudden and immediate urgency" to justify bypassing the statutory requirement of pre-litigation mediation.

In contrast, the plaintiff maintained that the determination of urgency rests solely on the content of the plaint. Relying on Supreme Court precedents, they argued that the court’s role is to assess whether the plaintiff genuinely contemplates the need for urgent interim relief at the time of filing, rather than conducting a deep inquiry into the merits of the underlying claim at this preliminary stage.

Legal Analysis and Precedents

Justice Aniruddha Roy's judgment leans heavily on the Supreme Court ruling in * Yamini Manohar vs. T.K.D. Keerthi *, which established that the term "contemplate" in Section 12A involves the plaintiff's own deliberation and consideration. The Court observed:

> "The question whether a suit involves any urgent interim relief is to be determined solely on the basis of the pleadings and the relief(s) sought by the plaintiff. If a plaintiff seeks any urgent interim relief, the suit cannot be dismissed on the ground that the plaintiff has not exhausted the pre-institution remedy of mediation."

Further, the Court drew inspiration from the Division Bench ruling in Shristi Infrastructure Development Corporation Limited Vs. Sarga Hotel Private Limited , noting that if it appears at the time of presentation that a situation for urgent relief might arise, the court should not adopt a stance that renders the process overly dilatory.

Key Observations

• On the Objective of Section 12A: "The expression 'contemplate any urgent interim relief' used under Section 12(1) of the CC Act shall qualify the plaintiff, if pleaded in the plaint, to pray for dispensation of the requirement for pre-litigation mediation."
• On Judicial Discretion: "The court should not ordinarily interfere with such assertion unless it is shown to be palpably erroneous or mala fide."
• On the Nature of Pleadings: "It matters little, whether ultimately the plaintiff would succeed on its prayer for interim relief or with its suit on merit, what matters is that the averments in the plaint should show a contemplation by the plaintiff for an urgent interim relief."

Conclusion

The High Court dismissed the defendant’s application, firmly establishing that parties cannot use the Section 12A mediation requirement to force a pre-trial inquiry into the merits of a specific claim if the plaint unequivocally pleads for urgent relief. This decision reinforces the autonomy of the plaintiff in framing their suit while ensuring that the "urgency" requirement remains a functional procedural guardrail rather than an obstacle to judicial access. For future litigants in commercial disputes, the ruling highlights the importance of precise and well-supported pleadings regarding urgency at the institution stage.