JK Engineering Private Limited Vs ANE Industries Private Limited
Date of Judgment: 28.07.2026
Case No.: IA NO. GA-COM/3/2025 In CS-COM/834/2024
Neutral Citation : Not Available
In The High Court at Calcutta (Ordinary Original Civil Jurisdiction - Commercial Division)
Name of Hon'ble Judge: Hon'ble Justice Aniruddha Roy
### Factual and Procedural Background
The plaintiff originally instituted a non-commercial suit in 2016, followed by a second suit on the same cause of action, which was later permitted to be withdrawn by the Division Bench on 03.12.2024 with liberty to file a fresh commercial suit within four weeks. The plaintiff then filed the present commercial suit on 24.12.2024, seeking dispensation of pre-institution mediation under Section 12A of the Commercial Courts Act, 2015 and leave under Clause 12 of the Letters Patent, 1865, both of which were granted ex-parte by a Coordinate Bench on 06.01.2025. The defendant filed an application seeking revocation of both the Section 12A dispensation and the Clause 12 Letters Patent leave, contending that no urgent interim relief was contemplated and that Calcutta was an inconvenient forum given that the contract was executed in Punjab, work was executed in Assam, and the parties were registered in Sikkim and Punjab.
### Dispute before Court
Whether the court should revoke the dispensation granted to the plaintiff from exhausting mandatory pre-institution mediation under Section 12A of the Commercial Courts Act, 2015, and whether the leave granted under Clause 12 of the Letters Patent, 1865 ought to be revoked on the ground of forum conveniens.
### Reasoning of Judge
The Court held that dispensation under Section 12A of the Commercial Courts Act, 2015 was validly granted because the plaintiff genuinely contemplated urgent interim relief from its own standpoint, supported by pleadings and oral submissions regarding the apprehension that the defendant might alienate assets. However, regarding Clause 12 of the Letters Patent, the Court held that even if a minuscule part of the cause of action arose within its jurisdiction, the balance of convenience heavily favored the defendant, as no operations or registered offices were in West Bengal, and a related suit was already pending in Punjab.
### Decision
The application was allowed in part. The prayer to recall the Section 12A dispensation was rejected, but the leave granted under Clause 12 of the Letters Patent, 1865 was revoked on the principle of forum conveniens, and the plaint was ordered to be returned to the plaintiff to be presented before the competent jurisdictional commercial court in Punjab.
### One Important legal principle held in the case
Even if a part of the cause of action arises within the territorial jurisdiction of a Chartered High Court, the leave granted under Clause 12 of the Letters Patent, 1865 can be revoked if the balance of convenience overwhelmingly favors the defendant under the doctrine of forum conveniens.
[Disclaimer: Readers are advised not to treat this as a substitute for legal advice as it may contain errors in perception, interpretation, and presentation ]
# Analytical Legal Article
## Introduction:
Commercial litigation in India demands a delicate balance between procedural efficiency, statutory compliance, and equitable access to an appropriate legal forum. The interplay between mandatory pre-institution mediation under commercial law and the discretionary territorial jurisdiction exercised by Chartered High Courts often gives rise to complex procedural battles. A prominent instance of such litigation involves the challenge raised by a defendant seeking the dismissal or return of a commercial suit on two distinct procedural grounds: the failure to undergo mandatory pre-litigation mediation and the improper invocation of territorial jurisdiction under historic letters patent provisions. The judgment in question offers a comprehensive analysis of how courts evaluate the stand-point of a plaintiff seeking urgent interim relief against the hardships faced by a defendant forced to litigate in a forum that lacks substantial connection with the underlying dispute.
## Factual and Procedural Background:
The history of the dispute traces back to 18.08.2016, when the plaintiff initially instituted a civil suit before the regular non-commercial division of the High Court. On the very next day, 19.08.2016, the plaintiff withdrew the initial suit and filed a second suit on the self-same cause of action between identical parties seeking identical reliefs. In this second action, the plaintiff secured a judgment upon admission on 07.02.2019. However, the defendant filed a demurrer application which eventually escalated to the appellate stage. On 03.12.2024, the Division Bench disposed of the appeal by setting aside the judgment upon admission, observing that the dispute was commercial in nature and ought not to have proceeded before the regular non-commercial division. The Division Bench permitted the plaintiff to withdraw the second suit with liberty to institute a fresh commercial suit within four weeks, specifying that failure to do so within the stipulated timeframe would deprive the plaintiff of the benefit of exclusion of time under Section 14 of the Limitation Act, 1963.
Pursuant to the directions of the Division Bench, the plaintiff presented a fresh commercial suit on 24.12.2024. Along with the suit, the plaintiff sought leave under Order II Rule 2 of the Code of Civil Procedure, 1908, leave under Clause 12 of the Letters Patent, 1865 for invoking territorial jurisdiction, and dispensation with the requirement of mandatory pre-institution mediation under Section 12A of the Commercial Courts Act, 2015. On 06.01.2025, a Coordinate Bench granted ex-parte leave under Clause 12 of the Letters Patent and dispensed with the pre-institution mediation requirement, thereby admitting the suit. Subsequently, on 11.08.2025, the defendant filed an interlocutory application seeking revocation of the leave granted under Clause 12 of the Letters Patent, revocation of the dispensation granted under Section 12A of the Commercial Courts Act, 2015, and dismissal of the suit.
The commercial contract in dispute was a memorandum of understanding dated 26.03.2013. The registered office of the plaintiff was located in Gangtok, Sikkim, while the registered office of the defendant was situated in Chandigarh Road, Punjab. The execution of the contracted works was to take place entirely in Assam, and the financial banking transfers associated with the contract were routed through a bank in Nawanshahr, Punjab. The plaintiff asserted jurisdiction in Calcutta on the premise that negotiations occurred at its corporate office situated within local limits and that one witness to the agreement had an address in Kolkata. Meanwhile, the defendant had already instituted a civil suit arising out of the same contractual transaction against the plaintiff, which remained pending before the jurisdictional court in Punjab.
## Dispute Before the Court
The core legal questions requiring adjudication centered on whether the plaintiff had legitimately bypassed the statutory mandate of pre-institution mediation and whether the High Court ought to retain territorial jurisdiction over the suit.
The defendant argued that Section 12A of the Commercial Courts Act, 2015 creates an absolute statutory bar against instituting a commercial suit without exhausting pre-litigation mediation unless the suit genuinely contemplates urgent interim relief. The defendant contended that the suit was primarily a money claim where no urgent interim relief had been formally applied for or granted since 2016. The defendant asserted that the plaintiff used the plea of urgency as a mere camouflage and guise to bypass the mandatory statutory process. On the issue of jurisdiction, the defendant urged that the contract was executed in Punjab, the works were performed in Assam, payments originated from Punjab, and both parties had registered offices outside West Bengal. Relying on the doctrine of forum conveniens, the defendant maintained that compelling it to defend the action in Calcutta caused severe hardship, especially when a related proceeding was pending in Punjab.
Conversely, the plaintiff contended that the contemplation of urgency must be assessed holistically from the standpoint of the plaintiff at the time of filing. The plaintiff highlighted that having previously obtained a judgment upon admission that was later set aside on technical jurisdictional grounds, it possessed a legitimate apprehension that the defendant would dissipate or alienate assets to defeat the claim if forced into mediation. Furthermore, the plaintiff argued that the strict four-week timeline imposed by the Division Bench on 03.12.2024 necessitated immediate filing without waiting for mediation. Regarding territorial jurisdiction, the plaintiff maintained that part of the cause of action arose within the local limits where contractual negotiations occurred, and that averments in the plaint must be accepted as true at the initial stage without forcing a revocation of leave.
## Reasoning and Analysis of the Court
In analyzing the first issue regarding pre-institution mediation, the Court examined the statutory mandate under Section 12A of the Commercial Courts Act, 2015 alongside Rule 8 of the High Court Commercial Court Practice Directions, 2021. The Court observed that Section 12A imposes a mandatory requirement that non-compliance with ordinarily renders a plaint institutionally defective, leading to rejection under Order VII Rule 11 of the Code of Civil Procedure, 1908. However, an explicit statutory exception exists where a suit contemplates urgent interim relief.
The Court referred to authoritative precedents of the Supreme Court of India to establish the precise legal standard applicable to Section 12A. In Patil Automation Private Limited and Others vs. Rakheja Engineering Private Limited [(2022) 10 SCC 1], the Supreme Court established the mandatory nature of pre-institution mediation. This standard was further refined in Yamini Manohar vs. T.K.D. Keerthi [(2024) 5 SCC 815] and Dhanbad Fuels Private Limited vs. Union of India and Another [(2025) 9 SCC 424], where the Apex Court clarified that the test under Section 12A is not whether an urgent interim relief is ultimately granted on merits, but whether, upon a holistic examination of the plaint, documents, and oral submissions, a prayer for urgent interim relief was genuinely contemplable from the standpoint of the plaintiff.
This principle was reaffirmed in Novenco Building and Industry A/S vs. Xero Energy Engineering Solutions Private Limited [2025 SCC OnLine SC 2278], which summarized that courts must examine if there exists a plausible urgency or risk of losing rights or assets, rather than assessing the final merits of the interim relief. Applying these principles, the Court held that the apprehension of asset alienation expressed by the plaintiff—given the prior litigation history where a judgment upon admission had been recorded—constituted a plausible and reasonable basis for contemplating urgent interim relief. Consequently, the ex-parte order dispensing with pre-institution mediation was affirmed as a valid exercise of judicial discretion.
Turning to the second issue regarding Clause 12 of the Letters Patent, 1865, the Court undertook a detailed evaluation of discretionary territorial jurisdiction. Under Clause 12, where only a part of the cause of action arises within the ordinary original civil jurisdiction of the High Court, the court possesses discretion to grant, refuse, or subsequently revoke leave to sue. The Court reviewed the landmark decision in Madanlal Jalan vs. Madanlal & Ors. [AIR 1949 Cal 495], which formulated the foundational principles governing revocation of leave under Clause 12. The principles establish that the court must consider the balance of convenience of both parties and may apply the doctrine of forum conveniens to revoke leave if the balance is overwhelmingly in favor of the defendant, even in the absence of bad faith by the plaintiff.
The Court also considered Ultra Engineering vs. Spintex Industry [AIR 1980 Cal 159] and Mighty Metals Pvt. Ltd. and Anr. vs. Rajasthan Financial Corporation [2011 SCC OnLine Cal 2113], which emphasized that genuine hardship and lack of territorial nexus justify revoking leave. Upon scrutinizing the material on record, the Court observed that the primary elements of the transaction occurred far outside Calcutta: the registered office of the plaintiff was in Sikkim, the registered office of the defendant was in Punjab, the memorandum of understanding was executed in Punjab, the works were executed in Assam, and payments were processed in Punjab.
Furthermore, the defendant had already instituted a civil suit in Punjab arising from the same transaction. The Court noted that under company law mandates, corporate records are maintained at registered offices. While the plaintiff would have to transport records from Sikkim regardless of whether the trial occurred in Calcutta or Punjab, the defendant—having no place of business in West Bengal—would suffer extreme hardship in transporting witnesses and records from Punjab to Calcutta. Balancing the convenience of both sides, the Court held that Calcutta was not the natural or convenient forum, and that trying the suit in Punjab alongside or before the jurisdictional court would serve the ends of justice.
## Final Decision of the Court
The Court disposed of the interlocutory application by granting partial relief to the applicant defendant. The Court refused to recall or revoke the order granting dispensation from pre-institution mediation under Section 12A of the Commercial Courts Act, 2015, holding that the dispensation was lawfully granted based on the plaintiff's contemplable urgency.
However, the Court allowed the application regarding territorial jurisdiction and revoked the leave previously granted under Clause 12 of the Letters Patent, 1865 on the ground of forum conveniens. The Court directed that the plaint be returned to the plaintiff along with the original court fees paid, upon retaining a certified photostat copy of the plaint on record. The plaintiff was granted liberty to present the plaint before the competent jurisdictional commercial court in Punjab where the defendant's suit was pending. The Court noted that because the defendant had forfeited its right to file a written statement by operation of law under Order VIII Rule 1 of the Code of Civil Procedure, 1908 as amended by the Commercial Courts Act, 2015, the suit would proceed from its present stage before the transferee commercial court as an undefended suit. Connected interlocutory applications were disposed of, and interim orders were vacated with liberty to re-apply before the appropriate court in Punjab.
## Point of Law Settled
This judgment reaffirms and clarifies two crucial procedural standards in commercial litigation:
First, in evaluating compliance with Section 12A of the Commercial Courts Act, 2015, the test for dispensing with pre-institution mediation is subjective-objective, measured strictly from the standpoint of the plaintiff at the time of filing. The Court is not required to adjudicate whether interim relief will be granted on merits, but whether the plaintiff had a plausible and non-illusory reason to contemplate urgent intervention to protect its rights or assets.
Second, the judgment reaffirms that ex-parte leave granted under Clause 12 of the Letters Patent, 1865 is subject to judicial review under the doctrine of forum conveniens. Even if a minuscule or formal part of the cause of action is shown to arise within the territorial limits of a Chartered High Court, the court retains inherent discretion to revoke leave if the balance of convenience heavily favors the defendant and litigating in that forum imposes undue hardship without a substantial nexus to the core transaction.
Title of the Case: JK Engineering Private Limited Vs ANE Industries Private Limited
Date of Judgment: 28.07.2026
Case Number: IA NO. GA-COM/3/2025 In CS-COM/834/2024
Neutral Citation: Not Available
Name of Court: In The High Court at Calcutta (Ordinary Original Civil Jurisdiction - Commercial Division)
Name of Hon'ble Judge: Hon'ble Justice Aniruddha Roy
Written By:Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
Disclaimer: Readers are advised not to treat this as a substitute for legal advice as it may contain errors in perception, interpretation, and presentation .
### Headnote of the Judgment:
In JK Engineering Private Limited Vs ANE Industries Private Limited (IA NO. GA-COM/3/2025 In CS-COM/834/2024), the High Court at Calcutta considered an application to recall Section 12A Commercial Courts Act, 2015 pre-litigation mediation dispensation and revoke Clause 12 Letters Patent, 1865 leave. The Court affirmed the Section 12A dispensation, holding that urgency must be assessed holistically from the plaintiff's standpoint. However, the Court revoked Clause 12 leave applying the doctrine of forum conveniens, as the contract was executed in Punjab, works were performed in Assam, and both corporate offices were outside West Bengal. The plaint was ordered to be returned for presentation before the jurisdictional Commercial Court in Punjab to proceed as an undefended suit.
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