Case Title:Dhanbad Fuels Private Limited Vs. Union of India & Anr.
Date of Order: 2025
Case No.: Civil Appeal No. 6846 of 2025 (@SLP (C) No. 4980 of 2021)
Neutral Citation: 2025 INSC 696
Court: Supreme Court of India
Judge: Hon’ble Mr. Justice J.B. Pardiwala
Facts:
The Union of India filed a Money Suit No. 28 of 2019 in the Commercial Court, Alipore, against Dhanbad Fuels Pvt. Ltd. to recover approximately Rs. 8.73 crores. The suit was filed without initiating pre-institution mediation under Section 12A of the Commercial Courts Act, 2015. The defendant challenged the maintainability of the suit on the ground of non-compliance with Section 12A, seeking rejection of the plaint under Order VII Rule 11(d) CPC.
Procedural History:
The Commercial Court rejected the application to dismiss the suit and referred the parties to post-institution mediation.
The Calcutta High Court upheld the trial court's order, directing that the suit be kept in abeyance while the plaintiff approached the District Legal Services Authority for mediation.
The matter reached the Supreme Court through a civil appeal.
Issues:
1. Whether the suit should be dismissed for non-compliance with the mandatory pre-institution mediation under Section 12A of the Commercial Courts Act, 2015?
2. Whether the decision in Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd. (2022) should be applied retrospectively to invalidate the suit.
Decision:
The Supreme Court dismissed the appeal, holding:
Section 12A is mandatory, but its enforcement was declared to be prospective from 20.08.2022 by the decision in Patil Automation.
Since the suit was filed in 2019, before the cutoff date, it was protected by the prospective ruling.
Infrastructure for mediation (rules, SOP, mediators) was not in place at the time of suit filing, making compliance impractical.
The equitable maxim "lex non cogit ad impossibilia" (the law does not compel the impossible) applied.
Hence, the High Court was right in directing that the suit be kept in abeyance and mediation be attempted.
