Case Note & Summary
The civil revision petition was filed by M/s. P.A.Sea Impex, the defendant in a commercial suit, challenging the order of the Commercial Court, Egmore, Chennai, which dismissed their application for rejection of the plaint. The respondent, M/s. Fumigation Services Private Limited, had filed a suit on 11.01.2021 before the Commercial Court seeking recovery of Rs.17,38,348/- with interest at 18% per annum. The petitioner-defendant filed an application under Order VII Rule 11 of the CPC read with Section 12-A of the Commercial Courts Act, 2015, seeking rejection of the plaint on the ground that the plaintiff had not undergone mandatory pre-institution mediation as required under Section 12-A. The Commercial Court dismissed the application, leading to the present revision. The petitioner argued that Section 12-A is mandatory and relied on the Supreme Court's decision in M/s. Patil Automation Private Limited v. Rakheja Engineers Private Limited, which declared Section 12-A mandatory but made the declaration effective from 20.08.2022. The petitioner contended that the cut-off date is subject to three exceptions recognized in Patil Automation and that the Madras High Court in Arvind Gupta v. Punjab National Bank had already declared Section 12-A mandatory, so the plaint should be rejected even if filed before 20.08.2022. The High Court examined the Patil Automation judgment and noted that the Supreme Court explicitly made the declaration effective from 20.08.2022, with three exceptions: (i) plaints already rejected and not reopened, (ii) cases where the defendant has filed written statement and participated in trial, and (iii) cases where issues have been framed. The court found that the suit was filed on 11.01.2021, well before the cut-off date, and none of the exceptions applied. The court held that the Patil Automation judgment is binding and the cut-off date must be respected. The High Court also noted that the Arvind Gupta judgment was rendered before Patil Automation and cannot override the Supreme Court's declaration. Consequently, the court dismissed the civil revision petition, upholding the Commercial Court's order and confirming that the plaint is not liable to be rejected for non-compliance with Section 12-A.
Headnote
A) Commercial Law - Pre-Institution Mediation - Section 12-A of Commercial Courts Act, 2015 - Mandatory Nature - Cut-off Date - The Supreme Court in Patil Automation declared Section 12-A mandatory but made the declaration effective from 20.08.2022. The court held that suits filed before that date are not liable to be rejected for non-compliance, subject to three exceptions: (i) plaints already rejected and not reopened, (ii) cases where the defendant has already filed written statement and participated in trial, and (iii) cases where the court has already framed issues. The present suit was filed on 11.01.2021, before the cut-off date, and none of the exceptions applied. Hence, the plaint cannot be rejected. (Paras 4-6) B) Commercial Law - Pre-Institution Mediation - Section 12-A of Commercial Courts Act, 2015 - Binding Precedent - High Court Judgment - The petitioner relied on a judgment of the Madras High Court in Arvind Gupta v. Punjab National Bank, which declared Section 12-A mandatory. However, the Supreme Court in Patil Automation is the binding precedent and its cut-off date applies. The High Court judgment cannot override the Supreme Court's declaration. Therefore, the plaint filed before 20.08.2022 is not liable to be rejected. (Paras 3-6)
Issue of Consideration
Whether a plaint filed before 20.08.2022 can be rejected for non-compliance with mandatory pre-institution mediation under Section 12-A of the Commercial Courts Act, 2015, in light of the cut-off date fixed in Patil Automation case and the exceptions thereto.
Final Decision
The civil revision petition is dismissed. The order of the Commercial Court, Egmore, Chennai dated 04.11.2023 in I.A.No.3/2023 in COS No.1644/2022 is upheld. No costs. Consequently, the connected miscellaneous petition is closed.
Law Points
- Section 12-A of Commercial Courts Act is mandatory but declaration effective from 20.08.2022
- exceptions to cut-off date not applicable
- plaint filed before cut-off date not liable to be rejected
