JK Engineering Private Limited Vs ANE Industries Private Limited

Summary of the Judgment

This commercial legal dispute arose between a plaintiff seeking a money recovery and other reliefs against a defendant company based on a commercial agreement and past court orders. The plaintiff filed the present commercial suit after previous rounds of litigation, asking the court for permission to file without going through mandatory pre-litigation mediation because it claimed there was an urgent need to protect its rights against asset alienation. The plaintiff also sought permission to file the suit in the High Court at Calcutta because a part of the negotiations allegedly took place within its territorial boundary. The defendant challenged both permissions, arguing that the urgency was fake just to bypass mandatory mediation, and that the Kolkata court was an extremely inconvenient location since major offices, banking, and actual contract work happened outside Kolkata, while a related suit was already pending in Punjab. The court analyzed the statutory requirement for mediation and held that whether an urgent relief is contemplated must be seen from the viewpoint of the plaintiff at the time of filing, finding that the plaintiff had enough reason to skip mediation. However, on the issue of territorial convenience, the court agreed with the defendant, holding that making the defendant defend the suit in Kolkata would cause immense hardship when the balance of convenience clearly favored Punjab. Consequently, the court revoked the territorial permission granted to the plaintiff, ordered the return of the suit papers for presentation before the proper commercial court in Punjab, and clarified that since the defendant had already lost its legal right to file a written statement due to procedural delays, the suit would continue before the Punjab court as an undefended suit.

JK Engineering Private Limited Vs ANE Industries Private Limited, July 28 2026, IA NO. GA-COM/3/2025 In CS-COM/834/2024, Neutral Citation: N/A, High Court at Calcutta, Justice Aniruddha Roy

[Disclaimer: Donot treat this as substitute for legal advise as it may contain subjective errors.] Tags: Commercial Courts Act 2015, Section 12A, Pre-Institution Mediation, Clause 12 Letters Patent, Forum Conveniens, Revocation of Leave, Undefended Suit

Analytical Legal Article on the Judgment

Introduction:

The interplay between mandatory statutory pre-requisites under the Commercial Courts Act, 2015 and discretionary territorial doctrines such as forum conveniens under Clause 12 of the Letters Patent, 1865 forms a critical boundary in Indian commercial litigation. While the Commercial Courts Act, 2015 mandates pre-institution mediation to lessen judicial delays, Chartered High Courts exercising ordinary original civil jurisdiction must continuously ensure that territorial privileges under Letters Patent are not weaponized to subject defendants to overwhelming operational inconvenience.

The judgment of the High Court at Calcutta in JK Engineering Private Limited v. ANE Industries Private Limited provides a sharp and nuanced exposition on two major interlocutory threshold issues: first, whether a commercial suit can bypass pre-institution mediation under Section 12A of the Commercial Courts Act, 2015 based on a subjective apprehension of urgency; and second, whether leave granted under Clause 12 of the Letters Patent, 1865 ought to be revoked under the doctrine of forum conveniens when the center of gravity of the dispute lies elsewhere.

Factual and Procedural Background:

The roots of the dispute lie in a commercial transaction and Memorandum of Understanding (MoU) executed between the parties on March 26, 2013. The procedural journey of the litigation is marked by multiple stages:

1. First Suit (CS No. 163 of 2016): The plaintiff initially filed a non-commercial suit on August 18, 2016, before the regular civil division.
2. Second Suit (CS No. 213 of 2016): On August 19, 2016, the plaintiff withdrew the first suit and filed a second suit on the self-same cause of action. In this suit, the plaintiff secured a judgment upon admission on February 07, 2019.
3. Appellate Division Bench Order (December 03, 2024): The defendant filed a demurrer application which was carried in appeal. On December 03, 2024, the Hon'ble Division Bench disposed of the appeal by holding that the suit ought to have been filed in the Commercial Division. The Bench permitted the plaintiff to withdraw the suit and institute a fresh commercial suit within four weeks, specifying that failure to file within four weeks would disentitle the plaintiff to the benefit of Section 14 of the Limitation Act, 1963.
4. Third Suit / Present Suit (CS-COM/834/2024): On December 24, 2024, the plaintiff filed the present suit seeking leave under Order II Rule 2 of the Code of Civil Procedure, 1908, Clause 12 of the Letters Patent, 1865, and dispensation of pre-institution mediation under Section 12A of the Commercial Courts Act, 2015.
5. Initial Ex-Parte Orders (January 06, 2025): A Coordinate Bench granted dispensation from pre-litigation mediation and leave under Clause 12 of the Letters Patent.
6. Defendant’s Interlocutory Application (IA No. GA-COM/3/2025): Filed on August 11, 2025, the defendant prayed for revocation of leave under Section 12A, revocation of leave under Clause 12, and dismissal/rejection of the suit.
7. Forfeiture of Written Statement: Significantly, the defendant failed to file its written statement within the maximum statutory outer limit of 120 days prescribed under Order VIII Rule 1 of the Code of Civil Procedure, 1908 as amended by the Commercial Courts Act, 2015, thereby forfeiting its right to file a written statement by operation of law.

Dispute Before the Court:

The primary legal and factual questions presented before the Court for determination were:

1. Validity of Dispensation under Section 12A of the Commercial Courts Act, 2015: Whether the plaintiff genuine contemplated an "urgent interim relief" at the time of instituting the commercial suit, or whether the plea of urgency was an unfounded excuse to bypass statutory mediation.
2. Revocation of Leave under Clause 12 of the Letters Patent, 1865: Whether the ex-parte leave granted under Clause 12 should be revoked based on the doctrine of forum conveniens and balance of convenience, given that the registered offices, bankers, execution of works, and parallel litigation were situated outside Kolkata.

Competing Contentions of the Parties:

• Defendant's Stand: The defendant argued that no actual application for urgent interim relief was pressed by the plaintiff after filing. The dispute had been lingering since 2016, proving there was no real emergency. On jurisdiction, the defendant established that its registered office was in Punjab, the plaintiff’s registered office was in Sikkim, payments came from Punjab, and execution of work was in Assam. Furthermore, a cross-suit filed by the defendant was already pending in Punjab. Thus, holding the trial in Kolkata was highly inconvenient and prejudiced the defendant.
• Plaintiff's Stand: The plaintiff argued that urgency must be assessed from the plaintiff's standpoint at the time of filing. Having previously obtained a judgment upon admission, the plaintiff reasonably apprehended that the defendant might dissipate assets during the time taken by mediation. On territorial jurisdiction, the plaintiff asserted that part of the cause of action (negotiations and execution of MoU) occurred at its corporate office in Kolkata. The plaintiff also claimed that the defendant's plea was barred by res judicata.

Reasoning and Analysis of the Court:

A. Interpretation of Section 12A of Commercial Courts Act, 2015 & Practice Directions

The Court acknowledged that Section 12A of the Commercial Courts Act, 2015 creates a mandatory bar against instituting commercial suits without exhausting pre-institution mediation, unless the suit "contemplates any urgent interim relief".

In analyzing the legal standard for dispensation, the Court surveyed landmark precedents of the Hon’ble Supreme Court:

• Patil Automation Private Limited and Others v. Rakheja Engineering Private Limited [(2022) 10 SCC 1]: Established that Section 12A is mandatory and non-compliance results in rejection of the plaint under Order VII Rule 11 of CPC.
• Yamini Manohar v. T.K.D. Keerthi [(2024) 5 SCC 815]: Clarified that "contemplation of urgent interim relief" must be evaluated holistically from the standpoint of the plaintiff, and should not be a mere disguise to wriggle out of Section 12A.
• Dhanbad Fuels Private Limited v. Union of India and Another [(2025) 9 SCC 424]: Held that the test is not whether urgent interim relief is ultimately granted, but whether on an examination of the nature, subject-matter, and cause of action, the prayer for urgent interim relief could be said to be contemplable from the plaintiff's standpoint. No separate formal application is necessary; plaint averments and oral submissions are sufficient.
• Novenco Building and Industry A/S v. Xero Energy Engineering Solutions Private Limited [2025 SCC OnLine SC 2278]: Summarized the distilled legal test: courts look at whether urgent interim intervention is genuinely contemplated from the plaintiff's viewpoint, without evaluating the ultimate merits of the interim relief.

Applying these principles alongside Rule 6 and Rule 8 of the High Court at Calcutta Commercial Court Practice Directions, 2021, the Court held that the Coordinate Bench in its order dated January 06, 2025 had taken a plausible and possible view. Considering the procedural background—where the plaintiff had previously secured a judgment on admission and faced strict court-mandated deadlines—the apprehension of asset dissipation was reasonable from the plaintiff's standpoint. Hence, dispensation under Section 12A was upheld.

B. Forum Conveniens and Revocation of Leave under Clause 12 of Letters Patent

On the second issue, the Court examined whether ex-parte leave granted under Clause 12 of the Letters Patent, 1865 should be revoked.

The Court cited the foundational principles from Madanlal Jalan v. Madanlal & Ors. [AIR 1949 Cal 495], which established that:

1. Granting leave under Clause 12 ex-parte is an administrative/judicial practice based solely on plaint averments.
2. When the defendant enters an appearance and seeks revocation, the court must apply an unfettered judicial mind to reconsider the balance of convenience as if considering the matter afresh.
3. If only a small part of the cause of action arose within jurisdiction and the bulk of witnesses/documents reside outside, the court may apply the doctrine of forum conveniens to revoke leave.

The Court further relied on Mighty Metals Pvt. Ltd. and Anr. v. Rajasthan Financial Corporation [2011 SCC OnLine Cal 2113], Ultra Engineering v. Spintex Industry [AIR 1980 Cal 159], and Assam Company Ltd. v. State of Andhra Pradesh [(2010) 3 CHN 26] to emphasize that where overwhelming inconvenience to the defendant is evident, leave ought to be revoked.

Assessment of Facts:

• The plaintiff's registered office is in Sikkim. Under company law, statutory registers and records are mandated to be kept at its registered office.
• The defendant’s registered office and banking channels are located in Punjab.
• The underlying works under the MoU were executed in Assam.
• The defendant had already instituted a suit against the plaintiff arising out of the same transaction before a jurisdictional court in Punjab.

The Court held that forcing the defendant—who has no place of business in West Bengal—to defend the suit in Kolkata would cause immense hardship. In contrast, litigating in Punjab would cause minimal additional inconvenience to the plaintiff, as it would need to transport records from Sikkim regardless of whether the forum was Kolkata or Punjab.

Addressing the defendant's procedural status, the Court distinguished Isha Distribution House Pvt. Ltd. v. Aditya Birla Nuvo Ltd. [(2019) 12 SCC 205] and ruled that an application for revocation on forum conveniens can be entertained independently, even when the defendant has lost its right to file a written statement.

Final Decision of the Court:

The High Court disposed of the interlocutory application (IA NO. GA-COM/3/2025 in CS-COM/834/2024) with the following directions:

1. Section 12A Challenge Rejected: The plea to reject the plaint for non-compliance with pre-institution mediation was dismissed. The dispensation granted on January 06, 2025 was affirmed.
2. Clause 12 Leave Revoked: Leave granted under Clause 12 of the Letters Patent, 1865 was revoked on the ground of forum conveniens.
3. Return of Plaint: The plaint was ordered to be returned to the plaintiff along with court fees.
4. Transfer to Competent Court as Undefended Suit: The plaintiff was granted liberty to present the plaint before the competent jurisdictional Commercial Court in Punjab where the defendant's suit is pending. Crucially, the Court directed that the suit shall proceed from its present stage as an undefended suit, because the defendant’s statutory forfeiture of its right to file a written statement remains binding.
5. Connected applications (IA NO. GA-COM/4/2025 and GA-COM/5/2026) were disposed of with liberty to re-file identical interim prayers before the Punjab Commercial Court.

Point of Law Settled:

1. Subjective Test for Urgency under Section 12A: "Contemplation of urgent interim relief" under Section 12A of the Commercial Courts Act, 2015 is a subjective test evaluated strictly from the plaintiff's standpoint at the time of filing. Subsequent failure or delay in pressing for interim relief does not automatically invalidate the initial dispensation or justify rejection of the plaint.
2. Primacy of Forum Conveniens in Letters Patent Jurisdiction: Ex-parte leave under Clause 12 of the Letters Patent, 1865 is conditional. Even if a technical part of the cause of action arose within jurisdiction, the Court will revoke leave if the balance of convenience overwhelmingly favors another competent jurisdiction.
3. Persistence of Procedural Default Upon Return of Plaint: The return of a plaint for re-presentation before a convenient forum does not reset procedural defaults. A defendant who has forfeited its right to file a written statement under the Commercial Courts Act, 2015 in the original court must face the suit as an undefended suit in the transferee court.

JK Engineering Private Limited Vs ANE Industries Private Limited, July 28 2026, IA NO. GA-COM/3/2025 In CS-COM/834/2024, Neutral Citation: N/A, High Court at Calcutta, Justice Aniruddha Roy