Case Note & Summary
The appellant, a partnership firm, filed a commercial suit for recovery of its claim amount after attempting pre-institution mediation. The appellant submitted an application in Form 1 under Rule 3(1) of the Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018, along with the prescribed fee, to the District Legal Services Authority (DLSA), Malshiras. The DLSA issued a first notice returnable on 8 June 2023, but the respondents did not appear. At the appellant’s instance, a second notice was issued returnable on 30 October 2023, which was served on the respondents on 25 October 2023. Again, the respondents failed to appear. The DLSA, without issuing any final notice as contemplated under Rule 3(3) of the said Rules, treated the mediation as a 'non-starter' and issued a non-starter report on 11 December 2023. Thereafter, the appellant instituted Commercial Suit No. 1 of 2024 before the Commercial Court at Malshiras. The respondents entered appearance and filed an application under Order VII Rule 11 of the Code of Civil Procedure, 1908, seeking rejection of the plaint on the ground of non-compliance with Rule 3(3) of the 2018 Rules, specifically that the DLSA had not issued a final notice before closing the mediation. The trial court allowed the application and rejected the plaint by order dated 21 August 2025, holding that the mandatory requirement of Rule 3(3) was violated. Aggrieved, the appellant filed the present Commercial First Appeal before the High Court. Before the High Court, the appellant contended that there was substantial compliance with the Rules since two notices were issued and the failure to issue a final notice was the fault of the DLSA and not the appellant; that the respondents could not take advantage of their own wrong in not participating; that the suit should be restored or the matter sent back for mediation, as held in Patil Automation, Deepak Raheja, and Kapil Goel; and that rejecting the plaint would cause severe prejudice, including loss of court fees and limitation barring a fresh suit. The respondents argued that Rule 3(3) is mandatory and its breach vitiates the pre-institution mediation process; that the law as settled in Patil Automation and Dhanbad Fuels requires strict compliance with Section 12A of the Commercial Courts Act, 2015; that the statutory procedure must be followed in the specified manner, relying on Taylor v. Taylor; and that non-compliance entailed rejection of the plaint. The Court reserved judgment on 8 May 2026 and pronounced it on 7 August 2026. The full reasoning and final decision of the High Court are not included in the provided excerpt.
Issue of Consideration
Whether the Commercial Court correctly rejected the plaint under Order VII Rule 11 of CPC for non-compliance with Rule 3(3) of the Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018, where the applicant had filed an application for pre-institution mediation and the DLSA failed to issue final notice before treating the mediation as non-starter.
Law Points
- Section 12A of Commercial Courts Act
- 2015 is mandatory
- Order VII Rule 11 CPC allows rejection for non-compliance
- Rule 3(3) of Commercial Courts (Pre-Institution Mediation and Settlement) Rules
- 2018 mandates final notice before non-starter report
- doctrine of substantial compliance
- maxim actus curiae neminem gravabit
- strict compliance with statutory procedure
- Taylor v. Taylor principle
Case Details
2026 LawText (BOM) (08) 45
Commercial First Appeal No. 23 of 2025
Madhav J. Jamdar, Pravin S. Patil
Dr. Santosh Shah, Ms. Darshana Kalamkar, Mr. Paras Shah, Mr. Swapnil Chile, Mr. Prithviraj Patil, Mr. Sarang Aradhye, Ms. Dnyaneshwari Utpat, Mr. Shantanu Gurav
Jivaraj Ravaji Gandhi Through Its Partner Hiralal Maniklal Gandhi
Solapur Jilha Dudh Utpadak Va Prakriya Sangh Maryadit Solapur & Ors.
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Nature of Litigation
Commercial dispute for recovery of a claim amount, where the plaintiff's suit was rejected at the threshold for alleged non-compliance with the pre-institution mediation mandate.
Remedy Sought
Appellant (original plaintiff) appealed to set aside the trial court's order rejecting the plaint and sought restoration of the commercial suit.
Filing Reason
The trial court rejected the plaint on the ground that the plaintiff failed to comply with Rule 3(3) of the Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018, specifically that no final notice was issued by the DLSA before issuing the non-starter report.
Previous Decisions
The Commercial Court (District Judge-1, Malshiras) by order dated 21.08.2025 allowed the respondents' application under Order VII Rule 11 CPC and rejected the plaint.
Issues
Whether the requirement of a final notice under Rule 3(3) of the Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018 is mandatory and non-compliance vitiates the pre-institution mediation process irrespective of the plaintiff having taken steps to invoke mediation.
Whether, in the facts where the DLSA failed to issue the final notice, the suit should be dismissed or the matter should be remitted for mediation or the suit restored.
Submissions/Arguments
Appellant argued that there was substantial compliance as the DLSA issued two notices; the failure to issue final notice was the DLSA's error, not the plaintiff's, and the plaintiff should not be penalized for court’s mistake (actus curiae neminem gravabit). The respondents cannot benefit from their own non-participation. Reliance was placed on Patil Automation (distinguishing complete non-compliance), Deepak Raheja, and Kapil Goel to contend that the suit should be restored or sent back to mediation. Rejecting the plaint would cause irreparable prejudice by resetting limitation and forfeiting court fees.
Respondent countered that Rule 3(3) is mandatory and its breach renders the pre-institution process unlawful. Section 12A of the Commercial Courts Act, 2015, as interpreted in Patil Automation and Dhanbad Fuels, requires strict compliance; the plaint was rightly rejected. The statutory procedure must be followed exactly, and the authority's lapse does not excuse non-compliance. The principle in Taylor v. Taylor was invoked: when a statute prescribes a particular manner, that manner alone must be adhered to, and any deviation vitiates the proceedings.
Judgment Excerpts
the Plaint came to be rejected primarily on the ground that the Plaintif failed to comply with Rule 3(3) of the Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018
the Authority conducting the Pre-Institution Mediation was required to issue a Final Notice to the opposite party/Defendants as contemplated under Rule 3(3) of the said Rules
Procedural History
Appellant filed application for pre-institution mediation before DLSA; DLSA issued first notice on 29.04.2023, returnable 08.06.2023; Respondents did not appear; Appellant requested reissuance; DLSA issued second notice on 21.10.2023, returnable 30.10.2023, delivered to Respondents on 25.10.2023; Respondents again did not appear; DLSA issued non-starter report on 11.12.2023; Appellant filed Commercial Suit No. 1 of 2024 before Commercial Court, Malshiras; Respondents filed application under Order VII Rule 11 CPC for rejection of plaint; Trial Court allowed application and rejected plaint vide order dated 21.08.2025; Appellant preferred Commercial First Appeal No. 23 of 2025 before High Court of Bombay.
Acts & Sections
- Code of Civil Procedure, 1908: Order VII Rule 11, Section 80
- Commercial Courts Act, 2015: Section 12A
- Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018: Rule 3, Rule 3(1), Rule 3(3)
