Significance of Section 12A – Mediation First

Very recently, we had the fortune to appear in a matter before the Hon’ble Division Bench of the Hon’ble High Court at Calcutta consisting of Hon’ble Justice Soumen Sen and Hon’ble Justice Biswaroop Chowdhury, which was reported across various legal platforms, wherein their Lordships focused on the importance of availing the relief granted under section 12 A of the Commercial Courts Act, 2015 before institution of a commercial suit.

The real grievance in our case was when a commercial suit was filed by the respondent/plaintiff in the said matter before the Learned Rajarhat Commercial Court, before filing an application under section 12 A of the Commercial Courts Act, 2015 and without even stating the urgency for filing such suit in the averments of the plaint, which is a prerequisite for filing a commercial suit, if at all the same is opted to be filed without taking leave under section 12 A of the said Act. An ad-interim order of injunction was nevertheless obtained by the respondent/plaintiff without seeking leave under section 12 A of the said Act or even serving a copy of the same upon us, the appellant/defendant no.1.

Being aggrieved by the interim order passed by the Learned Commercial Court at Rajarhat, we preferred an appeal against such order before the Hon’ble Division Bench of the Hon’ble High Court at Calcutta consisting of the Hon’ble Justice Soumen Sen and Hon’ble Justice Biswaroop Chowdhury.

While admitting our appeal and setting aside the interim order passed by the Learned Court below, the Hon’ble Division Bench of the Hon’ble High Court at Calcutta consisting of the Hon’ble Justice Soumen Sen and Hon’ble Justice Biswaroop Chowdhury very precisely laid down the importance of availing the option of the relief available under section 12 A of the Commercial Courts Act, 2015. Their Lordships, inter alia, emphasized on the interpretation of “urgent interim relief” which need to be looked into by the Courts while granting an order of interim injunction in favour of a party filing the suit and why filing of the same cannot wait for a period of 3 months as enumerated under section 12A(3) of the Commercial Court Act, 2015, by availing the option of Mediation as provided by section 12 A of the Commercial Courts Act, 2015. Their Lordships while explaining the above issue relied upon a judgment being Gavrill Metal Pvt. Ltd. v. Maira Fabricators Pvt. Ltd., 2023 SCC Online Cal 2443 and Sristi Infrastructure Development Corporation Limited v. Sarga Hotel Private Limited & Ors., MANU/WB/1688/2024 passed by Hon’ble Justice I.P. Mukherji, and Patil Automation Private Limited & Ors. v. Rakheja Engineers Private Limited, (2022) 10 SCC 1 passed by the Apex Court, which deals with the exact same issue. 

Their Lordships further went on to emphasize the role of the courts in looking into the fulfilment of the ‘Trinity Tests’ by the plaintiff while being granted the interim order of injunction, failing which the parties to the suit can be highly prejudiced by an interim order otherwise obtained.

The interim order passed by the Learned Commercial Court of Rajarhat was accordingly set aside and the appeal was disposed of by the Hon’ble High Court at Calcutta, inter alia directing the Learned Court below to decide the Injunction Application on merits.

Author: Ms. Ayantika Saha, Advocate View a copy of the Order:

Order Copy - Section 12A.pdf

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