Published on: December 10, 2023 at 15:46 IST
Court: Supreme Court of India
Citation: Patil Automation (P) Ltd. V. Rakheja Engineers (P) Ltd., (2022)
Honourable Supreme Court of India has held that Section 12A of the Commercial Court Act, 2015 is mandatory in nature and any commercial suit instituted violating the mandate of Section 12A of the Act must be visited with rejection of the plaint under Order VII Rule 11. It is further held that exhausting pre-institution mediation as enumerated under Section 12A of the Commercial Court Act, 2015 by parties benefits the justice delivery system as a whole.
48. As far as the views expressed in Kailash (supra), that is a case which dealt with a purely provision and the Court found that the power of the Court to allow filing of a written statement beyond the time, is not taken away. The absence of penal consequences was invoked. The most important aspect is that the proviso is in the domain of the procedural law. In contrast, Section 12A cannot be described as a mere procedural law. Exhausting pre-institution mediation by the plaintiff, with all the benefits that may accrue to the parties and, more importantly, the justice delivery system as a whole, would make Section 12A not a mere procedural provision.
The design and scope of the Act, as amended in 2018, by which Section 12A was inserted, would make it clear that Parliament intended to give it a mandatory flavour. Any other interpretation would not only be in the teeth of the express language used but, more importantly, result in frustration of the object of the Act and the Rules. In this connection, in the Judgment reported in Sharif-ud-Din (supra), it has been held that, if the object of the law is defeated by non-compliance with the provision, then, it would be regarded as mandatory.
The right to institute the Suit in a plaintiff who does not contemplate urgent interim relief in a commercial matter under the Act, is clearly conditioned by the fulfilment of certain conditions as provided in Section 12A. This cannot be likened to allowing a party to file his written statement. Bearing in mind the object also, the conclusion is inevitable that the right of suit itself will fructify only when the conditions in Section 12A are fulfilled. Treating the provision as procedural, also, the result cannot be different. Any other view would remove the basis for treating Section 80(1) of the CPC as mandatory.
Drafted By Abhijit Mishra