Rejection of Plaint in view of Non compliance of Section 12A of Commercial Court Act 2015
Introduction:
In a recent judgment, the Allahabad High Court brought to the forefront the critical importance of Section 12A of the Commercial Court Act 2015 when initiating legal proceedings. The case in question involved an appeal challenging an order dated October 31, 2023, where the respondents' application under Order VII Rule 11 and Section 151 of the Civil Procedure Code, 1908, led to the rejection of the appellant's plaint in Original Suit No.15 of 2023, citing non-compliance with Section 12A of the Commercial Court Act 2015.
Background:
The appellant initially filed Original Suit No.4 of 2022 without seeking urgent interim relief. Subsequently, through an application, the appellant sought to withdraw the suit, obtaining permission to file a fresh suit. The withdrawal of the first suit was sanctioned by an order dated January 3, 2023.
The appellant then filed the second suit, Suit No.15 of 2023, along with an application seeking urgent interim relief. The trial court observed that in the first suit, there was no request for urgent interim relief. Consequently, the trial court deemed the appellant's request for urgent relief in the second suit as "imaginary," emphasizing that Section 12A of the Commercial Courts Act, 2015, which mandates pre-litigation mediation, could not be bypassed.
In a recent judgment, the Allahabad High Court underscored the significance of Section 12A of the Commercial Court Act 2015 prior to initiating a lawsuit.
The appeal challenged an order dated October 31, 2023, where the respondents/defendants' application under Order VII Rule 11, along with Section 151 of the Civil Procedure Code, 1908, in Original Suit No.15 of 2023, was allowed. The appellant/plaintiff's plaint was rejected due to non-compliance with Section 12A of the Commercial Court Act 2015 before instituting the suit.
Initially, the appellant filed Original Suit No.4 of 2022 without seeking any urgent interim relief. Subsequently, through an application, the appellant sought to withdraw the suit, requesting liberty to file a fresh suit. The withdrawal of the first suit was permitted by an order dated January 3, 2023.
Following this, the appellant filed the second suit, Suit No.15 of 2023, along with an application seeking urgent interim relief. The trial court noted that in the first suit, the appellant did not request urgent interim relief.
Consequently, the trial court deemed the request for urgent relief in the second suit as "imaginary," asserting that Section 12A of the Commercial Courts Act, 2015, mandating pre-litigation mediation, could not have been bypassed.
The Allahabad High Court disposed of the appeal, emphasizing that the invocation of urgent relief should not be used as a pretext to circumvent or evade Section 12A of the Act.
Notably, the court observed that the plaintiff, in this case, failed to demonstrate urgency initially by filing a suit without seeking urgent interim relief and later withdrew it.
Despite affirming that Section 12A should have been complied with, the court modified the trial court's order, directing the appellant to approach the mediation center as per Section 12A of the Act, setting aside the rejection of the plaint for the ends of justice.
isposition:
The Allahabad High Court disposed of the appeal, underscoring that the invocation of urgent relief should not serve as a pretext to circumvent or evade Section 12A of the Act. Notably, the court highlighted the plaintiff's failure to demonstrate urgency initially, having filed a suit without seeking urgent interim relief and subsequently withdrawing it. Despite acknowledging that Section 12A should have been complied with, the court modified the trial court's order.
The Modified Direction:
In a move to achieve the ends of justice, the Allahabad High Court directed the appellant to approach the mediation center as per Section 12A of the Act. This modification set aside the rejection of the plaint, providing an avenue for the dispute to be addressed through the prescribed mediation process.
Conclusion:
The case serves as a notable example of the intricate considerations surrounding Section 12A in commercial court proceedings. It emphasizes the court's insistence on adhering to the mandatory pre-litigation mediation process and the consequences of attempting to bypass it. The modification of the trial court's order demonstrates the court's commitment to achieving a fair and just resolution while upholding the procedural requirements laid out in the Commercial Court Act 2015.
The Case Law Discussed:
Case Title: Pankaj Rastogi Vs Mohd Sazid and another
Date of Judgement/Order:30.01.2024
Case No. First Appeal No. 30 of 2024
Neutral Citation: 2024:AHC:15223
Name of Hon'ble Court: Allahabad High Court
Name of Hon'ble Judge: Shekhar B. Saraf, H.J.
Disclaimer:
Ideas, thoughts, views, information, discussions and interpretation expressed herein are being shared in the public Interest. Reader's discretion is advised as these are subject to my subjectivity and may contain human errors in perception, interpretation and presentation of the fact and issue involved herein.
Written By: Advocate Ajay Amitabh Suman,
IP Adjutor - Patent and Trademark Attorney,
Ph No: 9990389539
