Case Note & Summary
The matter concerned an Interim Application filed by Defendant No.1 seeking rejection of the plaint under Order 7 Rule 11 of the Code of Civil Procedure, 1908 read with Section 151 CPC on the ground that the Plaintiffs failed to exhaust the mandatory pre-litigation mediation under Section 12A of the Commercial Courts Act, 2015. The Plaintiffs, a co-operative housing society and its members, had filed a commercial suit against the developer and municipal authorities seeking declaration of undivided rights and share in FSI/TDR of a larger layout, injunctions against construction and utilization of their FSI, conveyance of land, and alternatively compensation of Rs.500 crores. The Plaintiffs alleged that the developer had committed breaches under the Maharashtra Ownership Flats Act, 1963 by utilizing their FSI and encroaching upon their share. Defendant No.1 argued that the suit was not maintainable because pre-litigation mediation was mandatory and the mere inclusion of urgent interim relief prayers could not be used to bypass the statutory requirement. The Applicant pointed out that the Plaintiffs had filed the suit in March 2023 but did not move for interim reliefs for two and a half years, indicating absence of genuine urgency. The Plaintiffs opposed the application, arguing that the suit contemplated urgent interim relief as it was filed along with an Interim Application and detailed pleadings of urgency due to ongoing construction consuming their FSI. They contended that the enquiry under Order 7 Rule 11 must be restricted to plaint averments and that post-filing conduct was irrelevant. They also argued that MOFA violations gave rise to a continuous cause of action, so delay did not negate urgency. The court heard extensive arguments citing precedents from the Supreme Court and High Courts on the interpretation of Section 12A. The final decision and operative directions were not included in the provided judgment excerpt.
Headnote
A) Commercial Courts Act - Pre-Litigation Mediation - Section 12A - Mandatory requirement and urgent interim relief exception - The suit involved declaration of undivided rights, share in FSI/TDR, injunction against construction, and compensation of Rs.500 crores. Defendant No.1 sought rejection of plaint for failure to exhaust mandatory pre-litigation mediation under Section 12A. The court examined whether the suit contemplated urgent interim relief within the meaning of Section 12A to exempt it from mediation. The provision requires plaint, documents and facts to indicate need for urgent interim relief from the standpoint of plaintiff. (Paras 1-5) B) Commercial Courts Act - Urgent Interim Relief Exception - Section 12A - Interpretation of 'contemplate any urgent relief' - Applicant argued that mere inclusion of urgent interim relief prayer cannot be a disguise to bypass mediation; plaintiff's conduct of not moving interim application for 2.5 years showed no genuine urgency. Respondent argued that urgency must be assessed from plaint averments and that interim application was filed with suit and urgency pleaded. The court was to determine if post-filing conduct could be considered. (Paras 5-8) C) Civil Procedure - Rejection of Plaint - Order 7 Rule 11 CPC - Scope of enquiry - Applicant relied on decisions that post-filing conduct indicates lack of urgency; respondent relied on IIFL Finance, Warna Sugar and Gavrill Metal to argue enquiry restricted to plaint averments. The issue was whether post-filing conduct can be considered for rejection under Order 7 Rule 11. (Paras 6-8) D) Civil Procedure - Continuous Cause of Action - MOFA violations - Respondent argued that breach of MOFA obligations gives rise to continuous cause of action and continuous wrong, so delay in filing suit does not negate urgency when infringement continues. Relied on Sushama Tulsidas and Buildcon Sethia. (Para 7) E) Commercial Courts Act - Pre-Litigation Mediation - Section 12A - Effect of non-compliance - Applicant sought dismissal of suit for non-compliance with mandatory mediation; respondent contended that exception applies. Court had to decide maintainability of suit. No final order was stated in the provided text. (Paras 1-8)
Issue of Consideration
Whether the suit is liable to be rejected under Order 7 Rule 11 of CPC read with Section 151 CPC for non-compliance with mandatory pre-litigation mediation under Section 12A of the Commercial Courts Act, 2015, when the suit allegedly contemplates urgent interim relief.
Law Points
- Section 12A Commercial Courts Act
- 2015 mandates pre-litigation mediation except where suit contemplates urgent interim relief
- 'Contemplate urgent relief' means plaint documents facts show need from standpoint of plaintiff
- Mere inclusion of urgent interim relief prayer cannot be a disguise to bypass mediation
- Post-filing conduct is irrelevant for Order 7 Rule 11 rejection of plaint
- Continuous cause of action in MOFA obligations may negate delay
- Enquiry under Order 7 Rule 11 restricted to plaint averments
