[Cites 30, Cited by 0]
Bombay High Court
State Bank Of India vs Asean International Limited And Ors on 5 January, 2026
2026:BHC-OS:40
Digitally
signed by
RAJESHWARI
RAJESHWARI RAMESH
RAMESH PILLAI
PILLAI Date:
2026.01.05
18:44:53
+0530
3-IA-5085-2022-COMS-237-2021.doc
rrpillai IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
INTERIM APPLICATION NO. 5085 OF 2022
IN
COMMERCIAL SUIT NO. 237 OF 2021
State Bank of India,
a statutory corporation constituted under the
State Bank of India Act, 1955 having its
Corporate Centre at State Bank Bhavan,
Madame Cama Road, Nariman Point,
Mumbai-400 021 and Branch Offices inter alia
at The Arcade, World Trade Centre,Post Box Applicant
(Orig. Defendant No. 1. )
No. 16094, Cuffe Parade,Mumbai-400 005
In the matter between
1. Asean International Limited,
a company incorporated under the laws of
Island of Nevis, having its branch office at
DAFZA, Suite 5EA-824, PO Box 5809,
Dubai, United Arab Emirates
2. Modest & Parson International Private
Limited a company within the provisions of
Companies Act, 2013, having its
Registered office at 20/21 Rex Chambers,
Ground Floor, Walchand Hirachand Marg,
... Plaintiffs
Ballard Estate, Mumbai-400 001
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Versus
1. State Bank of India,
a statutory corporation constituted under
the State Bank of India Act, 1955 having
its Corporate Centre at State Bank
Bhavan, Madame Cama Road, Nariman
Point, Mumbai-400 021 and Branch
Offices inter alia at The Arcade, World
Trade Centre, Post Box No. 16094, Cuffe
Parade. Mumbai-400 005
2. Axis Bank Limited
an existing company within the meaning of
the Companies Act, 2013, having its
registered office at Trishul 3rd Floor,
Opposite Samartheshwar Temple, Law
Garden, Ellis Bridge, Ahmedabad-380
006, Gujarat and Branch office at
Corporate Banking Branch, Axis House,
Ground Floor, Bombay Dyeing Mill
Compound, Wadia International Centre,
Pandurang Budhkar Marg, Worli, Mumbai-
400 025
3. Export Import Bank of India
a corporation established under the
Export-Import Bank of India Act, 1981,
having its head office at Centre One
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Building, Floor 21, World Trade Centre
Complex, Cuffe Parade, Mumbai-400 005
4. ICICI Bank Limited
an existing company within the
Companies Act, 2013, having its
Registered office at Landmark, Race
Course Circle, Alkapuri, Vadodara-390
007, Gujarat and its corporate office at
ICICI Bank Towers, Bandra Kurla
Complex, Mumbai-400 051
5. IL & FS Financial Services Limited
a company existing within the meaning of
the Companies Act, 2013 having its
registered office at IL & FS Financial
Centre, 3rd Floor, Plot No. C-22, G-Block,
Bandra Kurla Complex, Bandra (East),
Mumbai and its branch office at Core 4B,
4th Floor, Indian Habitat Centre, Lodhi
Road, New Delhi-110 003
6. Vijaya Bank
a body corporate constituted under the
Banking Companies (Acquisition and
Transfer of Undertakings Act) 1970,
having its head office at 41/2, Trinity
Circle, M. G. Road, Bengaluru-460 001
and Corporate Banking Branch, Maker
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Chamber IV, Rear Portion, 222, Nariman
Point, Mumbai-400 021
7. Indian Bank
a body corporate constituted under the
Banking Companies (Acquisition and
Transfer of Undertakings Act), 1970,
having its head office at PB No. 5555,
254-260, Avvai Shanmugam Salai,
Royapettah, Chennai 600 014 and Branch
Office at Mumbai Fort Branch, United
India Building, Sir P. M. Road, Mumbai-
400 001
8. Bank of India
a bank constituted under the Banking
Companies (Acquisition and Transfer) of
Undertakings Act), 1970 having its head
office at "Star House", BKC (E), Mumbai-
400 051 and Branch office at Oriental
Building, Ground Floor, 364, D. N. Road,
Fort, Mumbai-400 021
9. Andhra Bank
a bank constituted under the Banking
Companies (Acquisition and Transfer) of
Undertakings Act), 1970 having its head
office at Dr. Pattabhi Bhavan, 5-9-11,
Saifabad, Hyderabad-500 004 and Branch
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Office at Specialised Corporate Finance
Branch, 16B-Eastern House, 169th Floor,
194, NCPA Marg, Nariman Point,
Mumbai-400 021
10. SBICap Trustee Company Limited
a company existing within the meaning of
the Companies Act, 2013 having its
registered office at 202, Maker Tower "E",
Coffee Parade, Mumbai-400 005 and
Branch office at 6th Floor, Apeejay House,
3, Dinshaw Wacha Road, Churchgate,
Mumbai-400 005
11. SBI Overseas Branch, Mumbai
having address at the Arcade, World
Trade Centre, Cuffe Parade, Mumbai-400
005
12. Yudhisthir Khatau
of Mumbai, Indian Inhabitant residing at
Khatau Mansion, Malabar Hills, Mumbai
and having office at Laxmi Building, 6,
Shoorji Vallabhdas Marg, Ballard Estate,
Mumbai
13. Sanjeev Maheshwari
Liquidator of Varun Resources Limited
(now in liquidation) bearing Registration
No.IBBI/IPA-001/IP-P00279/2017-8/10523
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having his address at 3rd, 4th Floor, Vastu
Darshan, B-Wing, Azad Road, Above
Central Bank of India, Andheri (East),
Defendants
Mumbai-400 001
Mr. Nirman Sharma a/w. Mr. Deeshank Doshi and Ms. Dhruva
Sikarwar i/b. M/s. Desai and Diwanji for the Applicant / Org.
Def. No. 1.
Mr. Siddhesh Bhole a/w. Mr. Yakshay Chheda i/b. SSB Legal
and Advisory for Respondent/Original Plaintiff.
Ms. Vidhi Sharma i/b. Indus Law for Defendant No. 4.
Mr. Mohd. Riyaz Khan i/b. Mr. Jamshed Ansari for Defendant
No. 9.
CORAM : GAURI GODSE, J.
RESERVED ON: 8th OCTOBER 2025
PRONOUNCED ON: 5th JANUARY 2026
JUDGMENT:
1. This application is filed by defendant no. 1 for rejection of
the plaint under Order VII Rule 11(a) and (d) of the Civil
Procedure Code, 1908 ("CPC"). Defendant no. 1 has prayed
for rejection of the plaint on the ground that it does not disclose
any cause of action against defendant no.1, the plaint is barred
for non-compliance with the mandatory provision of Section 12-
3-IA-5085-2022-COMS-237-2021.doc
A of the Commercial Courts Act, 2015 ("the said Act") and on
the ground that the suit is barred by limitation.
Facts In Brief In The Plaint:
2. According to the plaintiffs, they supply bunkers to ocean-
going vessels. The plaintiffs have entered into a commercial
agreement under which the orders procured by them were
executed. The plaintiffs have referred to them as 'the Asean
Group'. The suit is filed for a money decree against defendant
nos. 1 to 11, directing them to jointly and severally pay an
amount of Rs. 83,57,70,274/- to plaintiff no. 2, being the
outstanding amount payable to Asean Group Credit Facility.
The plaintiffs have prayed for directing defendant nos. 1 to 11
to jointly and severally pay a sum of USD 6,326,895.05
towards outstanding payable to plaintiff no. 1 towards
outstanding bunker invoices. As per the plaintiff's case,
defendant nos. 1 to 9 are the banking companies and financial
institutions that had advanced funds to Varun Resources
Limited ("Varun") and were members of the Joint Lenders
Forum ("JLF") for restructuring the debts of Varun.
3-IA-5085-2022-COMS-237-2021.doc
3. Defendant no. 10 is the security trustee for defendant nos.
1 to 9 under the debt restructuring documents pertaining to
Varun. Defendant no. 11 is the account bank nominated by
defendant nos. 1 to 10 for the purpose of the debt restructuring
scheme for Varun. Defendant no. 12 is one of the promoters of
Varun's group of companies. Varun is now in liquidation;
hence, defendant no. 13, who is appointed as a Resolution
Professional, is added as a party defendant.
4. The plaintiffs have claimed recovery of monies from the
defendants towards the monies advanced by the plaintiffs and
for the supply of bunker fuel to the vessels of Varun.
Submissions on behalf of the Applicant (Defendant no. 1):
5. The submissions made on behalf of defendant no. 1 for
rejection of the plaint are summarised as under :
(a) The plaintiffs have asserted that they attempted
pre-litigation mediation through a private mediator;
however, that attempt was unsuccessful. Hence, the suit
was filed. According to the learned counsel for
defendant no. 1, a private mediation is not contemplated
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under the said Act, and pre-litigation mediation is
contemplated as per The Commercial Courts (Pre-
Institution Mediation and Settlement) Rules, 2018 ("the
said Rules).
(b) In view of Section 12-A of the said Act, read with
the said Rules, due compliance with the mandate of
Section 12-A of the said Act is through the procedure
as contemplated under the said Rules. Hence, the
plaintiffs' contention that pre-litigation mediation was
attempted; however, the same failed, cannot be termed
as compliance with the mandatory provision under
Section 12-A of the said Act. The plaintiffs relied upon
the mediation failure report dated 23 rd June 2021 issued
by the private mediator. The plaintiffs thus relied on the
non-starter certificate dated 23rd June 2021, issued by
the private mediator, to justify their purported
compliance with Section 12-A. However, addressing a
request for mediation cannot be construed as
compliance with the mandatory provision under Section
12-A of the said Act.
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(c) The suit was registered on 18 th December 2021.
Therefore, the institution of the suit is on 18 th December
2021, and not on the date of filing. The said Rules came
into force before the date of institution of the suit.
Hence, the legal principles settled in the decisions of
Patil Automation Private Limited and Others vs. Rakheja
Engineers Private Limited1 and Dhanbad Fuels Private
Limited vs. Union of India and Another 2 would not apply
to the present case, as the plaintiffs had already
attempted a private pre-litigation mediation. Hence,
according to the learned counsel for defendant no. 1,
the plaint is liable to be rejected for non-compliance with
the provisions of Section 12-A of the said Act.
(d) The suit claim is based on the invoices raised from
2014 to 2019. The second part of the claim is with
respect to the amounts due and payable as per the
Asean Group Credit Facility upto November 2015. The
plaintiffs' attempt to recover the payments from the bank
by this suit is therefore barred by limitation. Plaintiffs
1 (2022) 10 SCC 1
2 2025 SCC OnLine SC 1129
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failed to take any action for recovery of the amounts
within three years from the due dates mentioned in the
invoices, either against Varun or defendant no. 1.
Hence, the claim would not be sustainable in the
present suit as it would be barred by limitation.
(e) The Asean Group Credit Facility Agreement, i.e.,
the Loan agreement dated 29th April 2014, was executed
between Varun and plaintiff no. 2. Under the said
agreement, the amounts disbursed by plaintiff no. 2
were payable by Varun at the end of three years from
the date of execution of the agreement. However, the
plaintiffs failed to recover the amount within three years
of the amount becoming due and payable under the
loan agreement. Accordingly, the claim of plaintiff no. 2
under the loan agreement is also barred by limitation.
(f) Varun was admitted into the Corporate Insolvency
Resolution Process ("CIRP") by the National Company
Law Tribunal ("NCLT"). Hence, the claim, if any, under
the loan agreement would lie before the resolution
professional of Varun and cannot be agitated in this suit.
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(g) Learned counsel for defendant no. 1 relied upon the
decision of this Court in the case of Deepak Raheja Vs
Ganga Taro Vazirani3, to support his submissions that
this court held the compliance with Section 12-A of the
said Act mandatory. This court further observed that on
24th January 2019, the main mediation monitoring
committee approved the mediation scheme for this
Court, which was implemented with effect from 15 th
February 2019. Hence, in the present case, the
plaintiffs' contention that pre-institution mediation was
attempted through private mediation cannot be accepted
as a compliance with the mandatory provision of Section
12-A.
(h) Learned counsel for defendant no. 1 relied upon the
decision of the Delhi High Court in the case of
Renewflex Recycling vs. Facilitation Centre Rohini
Courts and Others4. He submits that a private mediator
is not contemplated under the provisions of the said Act
or the pre-litigation mediation Rules framed under the
3 2021 SCC OnLine Bom 3124
4 2025 SCC OnLine Del 978
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said Act. The parties are obligated to adopt a pre-
litigation mediation process in accordance with the
Rules framed under the Act. The Delhi High Court has
taken the view that it is trite that if a statute prescribes a
particular mode or manner for implementing its
provisions, the same must be done in that manner or not
at all. Hence, the grounds raised by the plaintiffs that
pre-litigation mediation was attempted but the
defendants refused to participate in the mediation
proceedings cannot be accepted as grounds for
compliance under Section 12-A of the said Act.
(i) There is no privity of contract between the plaintiffs
and defendant no. 1. The suit claim is in two parts. First,
with respect to the bunker charges, i.e., the supply of
fuel, and second, with respect to the Asean Group
Credit Facility. Hence, for lack of privity, the suit does
not disclose any cause of action against defendant no.
1. Hence, the plaint is liable to be rejected also on the
ground that there is no cause of action against
defendant no. 1.
3-IA-5085-2022-COMS-237-2021.doc
Submissions on behalf of the plaintiffs:
6. The submissions made on behalf of the plaintiffs are
summarised as under:
a) Learned counsel for the plaintiffs relied upon the various
pleadings in paragraphs 17 to 20, 24 to 34 and 40 to 48
to support his submissions that there is sufficient cause
of action against all the defendants to maintain the
present suit for recovery of the amounts due and payable
to the plaintiffs. The relevant averments in the plaint show
a continuous supply of fuel to Varun, on the assurance
given by defendant nos. 1 to 9 under the credit facility
restructuring agreement executed for Varun's debts.
b) When plaintiff no. 2 inquired about the payments of the
dues, defendant no. 12 represented that the lenders of
Varun, being defendant nos. 1 to 9, have constituted the
JLF, who would soon take the remedial measures.
Hence, plaintiff no. 1 continued to supply bunkers.
Plaintiff no. 2 executed a loan agreement with Varun and
advanced money.
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c) Defendant no. 12, who was the director of Varun at the
relevant time, forwarded the minutes of the JLF meetings
approving corrective plans and incremental funding to be
utilised for the repayment of the credit extended to the
plaintiffs. On the request of defendant nos. 1 to 11, along
with defendant no. 12, the plaintiffs' representative
attended the JLF meetings scheduled on 27 th June 2014
and 1st September 2014. Accordingly, defendant nos. 1 to
9 agreed to make disbursements into the Trust and
Retention Account in accordance with RBI guidelines
under Corporate Debt Restructuring ("CDR"). The
plaintiffs have relied upon the minutes of the meetings to
support these pleadings.
d) Relying upon the representations of defendant nos. 1 to 9
that the plaintiffs would be paid their dues in priority in the
manner set out in the amended and restated Master
Restructuring Agreement ("MRA") and the Trust and
Retention Account Agreement, the plaintiffs continued to
supply bunkers to Varun. These defendants made all the
representations during the JLF meetings held on 27 th
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June 2014 and 1st September 2014, and under the
amended MRA. However, defendant nos. 1 to 11 failed to
implement the restructuring package and received a large
amount of money from the revenue generated from the
operation of the fleet of vessels of Varun. In the absence
of bunker supply by plaintiff no. 1 and financial assistance
by plaintiff no. 2, Varun would not have been in a position
to generate revenue. Thus, it was an obligation on the
part of defendant nos. 1 to 11 to release payments to the
plaintiffs in accordance with the priorities set out in the
agreements.
e) On 21st May 2019, plaintiff no. 1 received a copy of
Miscellaneous Application No. 1410 of 2019, dated 10 th
April 2019, filed by Mauritius Commercial Bank before the
NCLT, Mumbai, in Company Petition No. 247 of 2017.
The contents of the said miscellaneous application
revealed that the claim was filed against the defendants
herein, Varun group of entities, its directors and
defendant no. 13, i.e. liquidator of Varun, Reserve Bank
of India and plaintiff no. 1. From the contents of the said
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miscellaneous application it transpired that defendant no.
1 was required under the amended MRA and TRA
agreement to maintain the Trust Account and an
overdraft account. It further revealed that in breach of the
amended MRA and TRA agreements and with an
intention to divert and siphon money from Varun to Varun
Asia Pte Limited ("Varun Asia"), i.e. one of the group of
entities of Varun, the amount payable as per the priority
list was not disbursed by defendant no. 1.
f) The contents of the said miscellaneous application
revealed that defendant no. 1 misappropriated funds from
Varun Resources Limited to Varun Asia Pte Limited. In
view of the facts revealed from the contents of the said
application, the plaintiffs realised that by committing
breach of the restructuring agreements the total revenue
of Varun as stated in the statement of profit and loss
accounts for the period ending 31 st March 2016 was
shown as Rs. 342.87 crores, for the period ending 31 st
March 2017 was shown as Rs.259.97 crores and as on
30th June 2017 was shown as Rs. 3.75 crores.
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g) Accordingly, the plaintiffs contend that, as of March 2016,
Varun generated revenue that could have been routed
through the TRA to repay the outstanding bunker dues, in
accordance with the order of priority set out in the
agreements. However, in violation of the terms and
conditions of the TRA agreements, defendant no. 1
siphoned the amounts to Varun without the consent of
the other lenders. Accordingly, on 6th December 2019,
the plaintiffs initiated pre-litigation mediation proceedings
against defendants nos. 1 to 12. However, defendant
nos. 1 to 12 refused to participate in the mediation, the
mediation process was rendered infructuous, and the
learned mediator issued a non-starter certificate.
h) The plaintiffs relied upon the MRA agreement dated 29 th
June 2015 and the TRA agreement dated 24 th September
2015. Under clause 4.3 of the TRA agreement, the order
of priority for withdrawals from the member Funds Sub
Account was prescribed. The distribution of the sub-
accounts referred to the amounts due and payable to the
plaintiffs. Hence, in view of the order of priority, it was
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defendant no. 1's obligation to inform the plaintiffs about
the funds available for payments due to the credit of both
plaintiffs.
i) On 14th June 2017, the Insolvency Petition of Varun was
admitted by the NCLT. On 21 st May 2019, the
miscellaneous application was filed by the Mauritius
Commercial Bank before the NCLT. Thus, based on the
information received on 21st May 2019 from the
miscellaneous application, the plaintiffs learned of the
revenue available under the TRA and MRA agreements.
Until then, the plaintiffs were unaware of the funds
available for release to their credit under the order of
priority set out in the TRA agreement. Hence, this suit is
filed for the recovery of money due on the invoices of
plaintiff no. 2, and the monies advanced by plaintiff no. 2
to Varun are covered under Article 113 of the Schedule to
the Limitation Act, 1963. The suit is therefore well within
the limitation period, and the pleadings and cause of
action would warrant a trial. The plaint, therefore, cannot
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be rejected at the threshold on the ground that it is barred
by limitation.
j) Based on the plaintiffs' knowledge of the revenue
available under the TRA and MRA agreements, a right to
sue defendant no. 1 accrued in favour of the plaintiffs on
21st May 2019. Hence, defendant no. 1 is under an
obligation to release funds from the revenue generated
by Varun to the plaintiffs under the MRA and TRA
agreements, which set out these plaintiffs in the order of
priority for such releases. Hence, in view of the terms and
conditions of the TRA and MRA, the plaintiffs have the
right to sue defendant no. 1. Therefore, it cannot be
construed that, because there is no privity of contract with
the plaintiffs, there is no cause of action to maintain the
suit. Even otherwise, any dispute on the cause of action
pleaded by the plaintiffs would not mean that there is no
cause of action for rejection of the plaint at the threshold.
The issue or dispute as to the correctness of the cause of
action cannot be made the subject matter of rejection of
the plaint under Order VII Rule 11 of the CPC.
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k) The pleadings in paragraph 82 reveal the cause of action
as contemplated under Article 113 of the Schedule to the
Limitation Act, 1963, read with Section 10 of the
Limitation Act. Hence, the cause of action pleaded in
paragraphs 67, 68, and 69 establishes the plaintiffs' right
to sue defendant no. 1. The cause of action pleaded for
suing defendant no. 1 supports the plaintiff's contention
that the suit is well within the limitation.
l) According to the plaintiffs, defendant no. 1 was under an
obligation to release funds to the plaintiffs under clauses
2.4 and 4.3 of the TRA agreement. As per clause 4.3,
amounts should have been paid to the plaintiffs as per
order of priority, and defendant no.1 was under an
obligation to maintain the accounts and release revenue
in favour of the plaintiffs by adhering to the order of
priority mentioned under the TRA agreement. At the
meeting held with JLF on 1 st September 2014, these
plaintiffs were assured of the release of funds towards
their dues; hence, the plaintiffs continued to advance
monies to Varun and supply bunkers to enable Varun to
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generate revenue to comply with the debt restructuring
agreement in respect of Varun. Under clause (5) of the
TRA agreement, JLF assured the plaintiffs of the release
of funds. Accordingly, based on these assurances, the
plaintiffs intervened to support Varun in generating
revenue. Based on the facts revealed on 21 st May 2019,
the plaintiffs have the right to sue all these defendants.
m) To support his submissions, learned counsel for the
plaintiffs relied upon the decision of the Hon'ble Apex
Court in the case of Geetha D/o. Late Krishna and others
vs. Nanjundaswamy and Others5. He submits that the
Hon'ble Apex Court held that in an application under
Order VII Rule 11, the plaint cannot be rejected in part.
He submits that all the arguments raised for rejection of
the plaint pertain only to defendant no. 1. Hence, the
plaint cannot be rejected in its entirety at the threshold.
n) Learned counsel for the plaintiffs also relied upon the
decision in the case Shakti Bhog Food Industries Limited
vs. Central Bank of India and Another 6 to support his
5 2023 SCC OnLine SC 1407
6 (2020) 17 SCC 260
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submissions that the expression "when the right to sue
accrues" is distinct from the expression used in other
Articles in the First division of the Schedule to the
Limitation Act, 1963. He submits that, as held by the
Hon'ble Apex Court, the expression used in Article 113 is
distinct from the expression used in other Articles dealing
with suits, such as the limitation provided under Article
58, when the right to sue "first" accrues. Learned counsel
for the plaintiffs, therefore, submits that the expression
used in Article 113, "when the right to sue accrues",
should cover the plaintiffs' claim for recovering the
amount based on the cause of action as pleaded in the
suit.
o) Learned counsel for the plaintiffs relied upon the decision
in the case of Indian Evangelical Lutheran Church Trust
Association vs. Sri Bala & Co. 7 to support his submissions
that the suit claim would be within the limitation period in
view of Article 113 of the Limitation Act. According to the
learned counsel for the plaintiffs, there is a distinction
7 2025 SCC OnLine SC 48
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between a lack of cause of action and a defective cause
of action. He submits that all the objections raised for
rejection of the plaint on the ground of no cause of action
would amount to raising a dispute on the merits of the
cause of action. Hence, according to the learned counsel
for the plaintiffs, in the facts and circumstances of the
present case, the plaint cannot be rejected on any
ground.
p) To support his submissions, learned counsel for the
plaintiffs relied upon the decision of this court in the case
of Diyashree Tuyenkar and Another vs. Vinod
Vishwanath Tuyenkar and Others8 and in the case of
Pratul Chemicals Pvt. Ltd. Through its Director, Ashok
Gulrajani and Others vs. Alphagam Coatings Solutions
Pvt. Ltd. Represented by Dhanajai S. Pai and Others 9.
On a similar proposition, on the objection of no cause of
action, learned counsel for the plaintiffs relied upon the
decision of the Hon'ble Apex Court in the case of K.
Paramasivam vs. Karur Vysya Bank Ltd. and Another 10.
8 (2024) SCC OnLine Bom 165
9 (2023) SCC OnLine Bom 1184
10 (2022) SCC OnLine SC 1163
3-IA-5085-2022-COMS-237-2021.doc
q) Learned counsel for the plaintiffs thus submitted that the
prayers for recovery of the amount are made against
defendant nos. 1 to 11 jointly and severally. Hence, the
plaint cannot be rejected on the ground that it would not
be maintainable so far as defendant no. 1 is concerned.
r) So far as the objection on the ground of non-compliance
with the mandatory requirement of Section 12-A is
concerned, the law is well settled. The decision of Patil
Automation was made after the present suit was filed. As
held by the Hon'ble Apex Court, in the decision of Patil
Automation, only if the plaint is filed after the jurisdictional
High Court has declared Section 12-A mandatory, the
plaint can be rejected for non-compliance. The
declaration of mandate was made effective from 20 th
August 2022, as held by the Hon'ble Apex Court in the
decision of Patil Automation. Hence, the present suit,
filed before the declaration that made Section 12-A
mandatory, cannot be rejected at the threshold.
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Points For Consideration:
7. Whether the plaint in the present suit can be rejected at
the threshold on the grounds that (i) the suit is barred by law for
non-compliance with Section 12A of the said Act, (ii) there is no
cause of action against defendant no. 1, and (iii) the suit is
barred by the law of limitation.
Legal Position:
8. In Patil Automation, the Apex Court held that Section 12-A
of the said Act is mandatory and that any suit instituted in
violation of its mandate can be rejected under Order VII Rule
11 of the CPC. However, this declaration takes effect on 20 th
August 2022. The Apex Court further held that, if the plaint is
filed violating Section 12-A after the jurisdictional High Court
has declared Section 12-A mandatory, the plaintiff will not be
entitled to the relief. The Division Bench of this Court in Deepak
Raheja held that Section 12-A of the said Act is mandatory,
and a commercial suit which does not contemplate any urgent
interim relief cannot be instituted unless the plaintiff exhausts
the remedy of pre-institution mediation in accordance with such
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manner and procedure as may be prescribed by rules. The
decision in Deepak Raheja was pronounced on 1st October
2021. Thus, this Court has declared Section 12-A mandatory
on 1st October 2021. Therefore, in view of the legal principles
settled in Patil Automation, by the Apex Court, any plaint filed
in this court after 1st October 2021, violating Section 12-A of the
said Act, the plaintiff will not be entitled to the relief.
9. In Patil Automation, one of the arguments was that there
is no institution of the suit within the meaning of Section 12-A
until the court admits the plaint and registers it in the suit
register. Thus, it was argued that the presentation of the plaint
may not amount to the institution of the suit for the purposes of
Order IV Rule 1 of the CPC and Section 12-A of the said Act;
hence, if there is non-compliance with Section 12-A before the
institution of the suit, the plaint must be rejected. However, the
Apex Court observed that, in the facts of the case, this question
did not arise and that it may not be necessary to explore the
matter further. However, on the distinction between the
presentation of a plaint and the institution of a suit, the Apex
Court observed that Section 3(2) of the Limitation Act, 1963,
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provides that for the purpose of the Limitation Act, a suit is
instituted in the ordinary case when the plaint is presented to
the proper officer. In the case of a pauper, the suit is instituted
when his application to leave to sue as a pauper is made. The
Apex Court referred to sub-rule (3) of Rule 1 of Order IV, which
was inserted by Act 46 of 1999 with effect from 1 st July 2002.
10. The judgment of the High Court of Madras in Olympic
Cards Ltd. v. Standard Chartered Bank11, was referred to by
the Apex Court. In the facts before the Madras High Court, the
question arose whether there was an abandonment or
withdrawal of the suit within the meaning of Order XXIII Rule 1
of the CPC, which would operate as a bar to the filing of a fresh
suit. The Madras High Court held that the plaint, which does
not comply with the Rules contained in Orders IV and VII, is not
a valid plaint. It is held that only when the court admits the
plaint, registers it, and enters it in the suit register it can be said
that the suit is validly instituted. In the context of Order XXIII
Rule 1 of the CPC, it was held by the Madras High Court that
any abandonment before the registration of a suit would not
11 2012 SCC OnLine Mad 5133
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constitute withdrawal or abandonment of suit within the
meaning of Order XXIII Rule 1 of CPC, to operate as a legal
bar for a subsequent suit of the very same nature.
11. For understanding the distinction between the words 'filed'
and 'instituted' in the context of Section 12-A of the said Act, it
is necessary to understand the object of Section 12-A and the
well-settled legal principles concerning the said provision and
the provision of Order VII Rule 11 of the CPC, as explained in
various decisions. In Patil Automation, the Apex Court
discussed the regime under Order VII, Rule 11 of the CPC and
observed that Order VI addresses various aspects of what is to
be pleaded in a plaint, the documents that should accompany
it, and other details. The Apex Court considered the scheme of
Orders IV, V and VII of the CPC, and held that, since a
summons is to be issued in a duly instituted suit, in a case
where the plaint is barred under Order VII Rule 11(d), the stage
begins at that time when the court can reject the plaint under
Order VII Rule 11, where the court is satisfied after hearing the
plaintiff before it invokes its power besides giving reasons
under Order VII Rule 12. It is held that in a clear case, where
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on allegations in the suit, it is found that the suit is barred by
any law, and where the plaintiff in a suit under the said Act
does not plead circumstances to take his case out of the
requirement of Section 12-A, the plaint should be rejected
without issuing summons.
12. In Patil Automation, while discussing the aspect of "does
not contemplate urgent interim relief", the Apex Court referred
to the provision of Section 80 of the CPC and observed as
under:
"100. In the cases before us, the suits do not contemplate
urgent interim relief. As to what should happen in suits
which do contemplate urgent interim relief or rather the
meaning of the word "contemplate" or urgent interim relief,
we need not dwell upon it. The other aspect raised about the
word "contemplate" is that there can be attempts to bypass
the statutory mediation under Section 12-A by contending
that the plaintiff is contemplating urgent interim relief, which
in reality, it is found to be without any basis. Section
80(2)CPC permits the suit to be filed where urgent interim
relief is sought by seeking the leave of the court. The
proviso to Section 80(2) contemplates that the court shall, if,
after hearing the parties, is satisfied that no urgent or
immediate relief need be granted in the suit, return the plaint
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for presentation to the court after compliance. Our attention
is drawn to the fact that Section 12-A does not contemplate
such a procedure. This is a matter which may engage
attention of the lawmaker. Again, we reiterate that these are
not issues which arise for our consideration. In the fact of
the cases admittedly there is no urgent interim relief
contemplated in the plaints in question."
13. In Patil Automation, while discussing the objects of
Section 12-A, the Apex Court observed that the object of the
said Act and the Amending Act of 2018 unerringly point to at
least partly foisting compulsory mediation on a plaintiff who
does not contemplate urgent interim relief and that the
legislature has taken care to expressly exclude the period
undergone during mediation for reckoning limitation under the
Limitation Act, 1963.
14. The Apex Court in Dhanbad Fuels (P) Ltd. observed that
the aim and object of Section 12-A are to ensure that, before a
commercial dispute is filed in court, alternative means of
resolution are adopted, so that only genuine cases come
before the courts. The said procedure has been introduced to
decongest the regular courts. The Apex Court referred to the
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legal principles settled in Patil Automation, with respect to the
regime under Order VII Rule 11 of the CPC, the scheme of
Orders IV, V, and VII of the CPC, and the conclusions
regarding the mandatory character of Section 12-A of the said
Act. The Apex Court in Dhanbad Fuels also discussed the
power of the Court to reject the plaint, which is held to be a
drastic measure, as it terminates a civil action at the threshold,
and therefore must be exercised strictly in accordance with the
conditions enumerated under Order VII Rule 11 of the CPC.
The Apex Court held that the use of the word "shall" in Order
VII Rule 11 of the CPC denotes that the courts are under an
obligation to reject the plaint if the conditions specified therein
are satisfied.
15. In Dhanbad Fuels, the Apex Court discussed the legal
principles settled in Yamini Manohar Vs. T.K.D. Keerthi 12, and
held that in the absence of any statutory mandate or rules
made by the Central Government, an application per se is not a
condition for seeking a waiver under Section 12-A of the 2015
Act. The word "contemplate" connotes to deliberate and
12 (2024) 5 SCC 815
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consider. Further, the legal position that the plaint can be
rejected and not entertained reflects application of mind by the
court as regards the requirement of "urgent interim relief". The
Court further observed that the prayer of urgent interim relief
should not act as a disguise to get over the bar contemplated
under Section 12-A. However, at the same time, the Court
observed that the mere non-grant of the interim relief at the ad
interim stage, when the plaint is taken up for admission and
examination, would not justify the rejection of the plaint under
Order VII Rule 11 of CPC. Further, even if after the conclusion
of arguments on the aspect of interim relief, the same is denied
on merits, that would not by itself justify the rejection of the
plaint under Order VII Rule 11. It is held that the facts and
circumstances of the case have to be considered holistically
from the standpoint of the plaintiff. Thus, that the test under
Section 12-A is held to be not whether the prayer for the urgent
interim relief actually comes to be allowed or not, but whether
on an examination of the nature and the subject-matter of the
suit and the cause of action, the prayer of urgent interim relief
by the plaintiff could be said to be contemplable when the
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matter is seen from the standpoint of the plaintiff. It is also held
that the urgent interim relief must not be merely an unfounded
excuse by the plaintiff to bypass the mandatory requirement of
Section 12-A of the said Act.
16. In the exercise of the powers conferred by sub-section (2)
of Section 21-A read with sub-section (1) of Section 12-A of the
said Act, the Central Government has notified the Commercial
Courts (Pre-Institution Mediation and Settlement) Rules of
2018. In Renewflex Recycling, the Delhi High Court held that
the legal framework under Section 12-A envisages and
bestows a legal sanctity to the "settlement" arrived at by the
parties contemplated under sub-section (4) of Section 12-A of
the said Act by deeming the same to be an arbitral
award. Thus, pre-institution mediation and settlement under
Section 12-A must be conducted in accordance with the
manner and procedure prescribed by the said Rules and not
through a private mediation process.
17. In Geetha Krishna, the Apex Court followed the legal
principles settled in Sejal Glass Ltd. v. Navilan Merchants (P)
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Ltd .13 and Madhav Prasad Aggarwal v. Axis Bank Ltd.14
holding that the relief of rejection of plaint in exercise of powers
under Order VII Rule 11(d) of the CPC cannot be pursued only
in respect of one of the defendants. It is held by the Apex Court
that the plaint has to be rejected as a whole or not at all, in
exercise of power under Order VII Rule 11( d) of the CPC. In
Sejal Glass Ltd., an application was filed by the defendants
under Order VII Rule 11(d) of the CPC stating that the plaint
disclosed no cause of action. The Apex Court held that it is not
permissible to reject the plaint qua any particular portion of a
plaint, including against some of the defendants, and continue
the same against the others. It is held that if the plaint survives
against certain defendants and/or properties, Order VII Rule
11(d) of the CPC will have no application at all, and the suit as
a whole must then proceed to trial.
18. In Shakti Bhog Food Industries Ltd., it was held that the
cause of action for filing a suit consists of a bundle of facts, and
that the factum of the suit being barred by limitation is ordinarily
a mixed question of fact and law. In Indian Evangelical
13 (2018) 11 SCC 780
14 (2019) 7 SCC 158
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Lutheran Church Trust Association, the Apex Court held that a
"right to sue" means the right to seek relief by means of legal
procedure when the person suing has a substantive and
exclusive right to the claim asserted by him and there is an
invasion of it or a threat of invasion. It is held that when the
right to sue accrues, it depends, to a large extent, on the facts
and circumstances of a particular case, keeping in view the
relief sought and that the use of the phrase "right to sue" is
synonymous with the phrase "cause of action" and would be in
consonance when one uses the word "arises" or "accrues" with
it.
19. In Diyashree Tuyenkar, this Court held that when the
claim is made for rejection of the plaint that it does not disclose
the cause of action, it is the duty of the court to read the plaint
in a meaningful manner. It is held that the terms "absence of
cause of action" and "defective cause of action" are two
different aspects, and there is a difference between non-
disclosure of cause of action, which comes within the scope of
Order VII Rule 11 and a defective cause of action, has to be
decided during the trial. In Pratul Chemicals Pvt. Ltd., this
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Court held that it is the bounden duty of the Court to ascertain
the material mentioned in the plaint along with the other
documents and, on a meaningful reading of it, to arrive at a
conclusion whether it discloses a cause of action or whether
the suit is barred by any law. It is thus held that the basic
question to be decided while dealing with the application filed
under Order VII Rule 11 of the CPC is whether a real cause of
action has been set out in the plaint or something purely
illusory has been stated with a view to getting out of Order VII
Rule 11 of the CPC.
20. In the decision of K. Paramasivam, relied upon by the
learned counsel for the plaintiff, the issue pertained to a right
or cause of action to the lender to proceed against the principal
borrower, as well as the guarantor and the obligation of the
guarantor being co-extensive and coterminous with that of the
principal borrower to defray the debt, as predicated in section
128 of the Contract Act. However, the Apex Court examined
the cause of action in light of the proceedings under the
Insolvency and Bankruptcy Code.
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21. For understanding the distinction between the words 'filed'
and 'instituted' in the context of Section 12-A of the said Act, it
is necessary to understand the purpose and effect of the
remedy provided for mediation and settlement. As per the
second proviso to sub-section (3) of Section 12-A of the said
Act, the period during which the parties remain occupied with
the pre-institution mediation is excluded for the computation of
the period of limitation under the Limitation Act. Section 3(2) of
the Limitation Act, 1963, provides that for the purpose of the
Limitation Act, a suit is instituted in the ordinary case when the
plaint is presented to the proper officer. In the case of a
pauper, the suit is instituted when his application to leave to
sue as a pauper is made. As per sub-section (5) of Section 12-
A, the settlement arrived under the said Section is given the
status and effect of an arbitral award under sub-section (4) of
Section 30 of the Arbitration and Conciliation Act 1996. Thus,
unlike as held by the Madras High Court, that any
abandonment before the registration of a suit would not
constitute withdrawal or abandonment of suit within the
meaning of Order XXIII Rule 1 of CPC, to operate as a legal
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bar for a subsequent suit, institution of a suit under the said Act
would mean presentation of the plaint under sub-rule (1) of
Rule 1 of Order IV of the CPC. In the context of Section 12-A of
the said Act, exhausting the remedy of pre-institution mediation
and settlement is before filing of a suit and not its registration.
Thus, the word "institution" in Section 12-A of the said Act
means the filing of a suit by presenting the plaint and the
documents in the registry or before the Court or such officer
appointed in that behalf and not before registration of the suit.
22. While deciding the mandatory character of Section 12-A
of the said Act and the interpretation of the expression "a suit
which does not contemplate any urgent interim relief" the legal
principles that emerge from the decisions of the Hon'ble Apex
Court, as discussed in the above paragraphs for considering
rejection of the plaint under Order VII Rule 11 of the CPC, are
summarised as follows:
a) The declaration that Section 12-A of the said Act is
mandatory and that any suit instituted in violation of its
mandate must be visited with rejection under Order VII
Rule 11 is made effective from 20 th August 2022, or after
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the jurisdictional High Court has declared Section 12-A
mandatory. The Division Bench of this Court in Deepak
Raheja on 1st October 2021 declared Section 12-A
mandatory. Therefore, suits filed in this court after 1 st
October 2021, in violation of the mandate under Section
12-A of the said Act, may be rejected under Order VII
Rule 11 of the CPC, subject to the conditions enumerated
under Section 12-A.
b) Institution of a suit under the said Act would mean
presentation of the plaint under sub-rule (1) of Rule 1 of
Order IV of the CPC. In the context of Section 12-A of the
said Act, exhausting the remedy of pre-institution
mediation and settlement is before filing of a suit and not
its registration.
c) The pre-institution mediation and settlement under
Section 12-A must be conducted in accordance with the
manner and procedure prescribed by the said Rules and
not through a private mediation process.
d) Order V Rule 1 declares that when a suit has been duly
instituted, a summons may be issued to the defendant to
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answer the claim on a date specified therein. Even if the
trial court issues a summons, the plaint is liable to be
rejected at any stage if any of the conditions enumerated
under Order VII Rule 11 of the CPC are satisfied.
e) Order VI of the CPC addresses various aspects of what
must be pleaded in a plaint, the documents that should
accompany it, and other details. Since a summons is to
be issued in a duly instituted suit, in a case where the
plaint is barred under Order VII Rule 11, the stage begins
at that stage, when the court can exercise the power
under Order VII Rule 11 suo motu and reject the plaint
after hearing the plaintiff, provided the conditions
enumerated under Order VII Rule 11 of the CPC are
strictly adhered to.
f) On reading of the plaint and the supporting documents, if
it is found that the suit is barred by any law, as would be
the case, where the plaintiff in a suit under the said Act
does not plead circumstances to take his case out of the
requirement of Section 12-A, the plaint can be rejected
without issuing summons.
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g) The object of the said Act and the Amending Act of 2018
is to partly impose compulsory exhaustion of the remedy
of mediation and settlement on a plaintiff who does not
seek urgent interim relief. In the absence of any statutory
mandate or rules, an application per se is not a condition
for seeking a waiver from the compliance under Section
12-A of the said Act. Therefore, the pleadings in the plaint
and the supporting documents on record and the oral
submissions would be sufficient for examining whether
the suit contemplates any urgent interim relief for not
exhausting the remedy of pre-institution mediation.
h) The legal position that the plaint can be rejected at the
threshold reflects the court's application of mind to the
requirement of "urgent interim relief" and to whether the
prayer for urgent interim relief is not in disguise to
circumvent the bar contemplated under Section 12-A.
However, mere non-grant of the interim relief at the ad
interim stage, when the plaint is taken up for admission
and examination, would not justify the rejection of the
plaint under Order VII Rule 11 of the CPC. Further, even
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if after the conclusion of arguments on the aspect of
interim relief, the same is denied on merits, that would
not by itself justify the rejection of the plaint under Order
VII Rule 11. Therefore, when a plaint is filed under the
said Act, with a prayer for an urgent interim relief, the
Commercial Court has to examine the nature and the
subject-matter of the suit, the cause of action, and the
prayer for interim relief to find out whether the prayer for
urgent interim relief is not in disguise to wriggle out of and
get over Section 12-A of the said Act. Hence, the facts
and circumstances of the case must be considered
holistically from the plaintiff's standpoint.
i) The words "contemplate any urgent interim relief" in
Section 12-A(1) of the said Act, with reference to the suit,
should be read as conferring power on the court to be
satisfied, which means the plaint, documents and facts
should show and indicate the need for an urgent interim
relief.
j) It is not permissible to reject the plaint qua any particular
portion of a plaint, including against some of the
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defendants, and continue the same against the others. If
the plaint survives against certain defendants and/or
properties, Order VII Rule 11 (a) or (d) of the CPC will
have no application at all, and the suit as a whole must
then proceed to trial.
k) The cause of action for filing a suit consists of a bundle of
facts, and the factum of the suit being barred by limitation
is ordinarily a mixed question of fact and law. A "right to
sue" means the right to seek relief by means of legal
procedure when the person suing has a substantive and
exclusive right to the claim asserted by him, and there is
an invasion of it or a threat of invasion. When the right to
sue accrues, it depends, to a large extent, on the facts
and circumstances of a particular case, keeping in view
the relief sought and that the use of the phrase "right to
sue" is synonymous with the phrase "cause of action" and
would be in consonance when one uses the word "arises"
or "accrues" with it.
l) There is a difference between non-disclosure of cause of
action, which comes within the scope of Order V Rule 11
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and a defective cause of action, which has to be decided
during the trial.
m) On a meaningful reading of the plaint, the basic question
to be decided while dealing with the application filed
under Order VII Rule 11 of the Code is whether a real
cause of action has been set out in the plaint or
something purely illusory has been stated with a view to
getting out of Order VII Rule 11 of the CPC.
n) In the amendments made applicable to the commercial
division and commercial courts, the provision of Order VII
Rule 11 of the CPC are not amended, and thus the legal
principles for rejection of the plaint in Order VII Rule 11 of
the CPC would also apply to the suits filed in the
commercial courts and commercial division. The power of
the Court to reject the plaint is a drastic measure, as it
terminates a civil action at the threshold, and therefore
must be exercised strictly in accordance with the
conditions enumerated under Order VII Rule 11 of the
CPC.
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Analysis and Conclusions:
23. The suit is filed for the recovery of an amount against
defendant nos. 1 to 11. The plaintiffs contended that amounts
are due and payable to plaintiff no. 1 on account of the supply
of fuel, as per bunker invoices raised by plaintiff no. 1, and for a
loan advanced by plaintiff no. 2. The plaintiffs rely upon the
terms and conditions of the MRA and TRA agreements that the
outstanding dues of the Asean Group Credit Facility would be
payable to them as per the priority set out in the said
agreements.
24. A perusal of the terms and conditions of the MRA and
TRA agreements reveals that the plaintiffs' names are listed as
beneficiaries for the purpose of releasing funds from revenue
generated by Varun. The plaintiffs further pleaded that
defendant no. 12, i.e., the director of Varun, represented that
defendant nos. 1 to 9 had constituted a Joint Lenders Forum,
i.e. JLF, under the guidelines of the Reserve Bank of India.
Defendant no. 12 further represented that JLF would take
remedial measures to address the financial stress faced by
Varun. Thus, based on the representation made by defendant
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no. 12, plaintiff no. 1 continued assistance to Varun for the
supply of bunkers, which were essential for the completion of
repairs and maintenance of the vessels of Varun, which had
been dry docked. Hence, plaintiff no. 1 supplied bunkers to
enable Varun to resume the operation of vessels.
25. The plaintiffs have further pleaded that Defendant no. 12
assured them that the JLF would be informed of their dues.
Accordingly, JLF held various meetings to formulate and
finalise restructuring agreements for Varun in accordance with
the guidelines of the Reserve Bank of India. Defendant no. 12,
who is the ex-director of Varun, had supplied the minutes of the
meeting of JLF. From the minutes of the meeting, it transpired
that defendant no. 12 had informed JLF that the plaintiffs had
agreed to provide the additional credit to Varun, enabling him
to generate funds. Thus, it is the plaintiffs' contention that,
based on the assurances given by defendant nos. 1 to 12, they
continued to provide assistance to Varun.
26. It is argued on behalf of defendant no. 1 that the plaintiffs'
pleadings show that defendant no. 12 had assured that the
plaintiff's inter-corporate deposit would be repaid at the first
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instance, along with the outstanding bunker invoices from the
new loan, which was promised to be sanctioned by defendant
nos. 1 to 12. Therefore, the pleadings, according to defendant
no. 1, show that the cause of action is against defendant no. 12
and not against defendant no. 1.
27. However, a correct reading of the pleadings shows that,
under the agreements entered into by defendant nos. 1 to 12,
the plaintiffs are referred to as creditors and beneficiaries of the
Asean Group Credit Facility under the MRA and TRA. A
perusal of the copies of the agreements produced with the
plaint reveals the plaintiffs' names as creditors entitled to the
funds on a priority basis. Defendant no. 1 is shown in the
agreements as the 'Lead Bank and the Account Bank', and
defendant no. 10 is shown as 'the Security Trustee'. The
plaintiffs have pleaded the cause of action on the basis of
information received by them on 21 st May 2019 from a copy of
the miscellaneous application filed by the Mauritius
Commercial Bank with the NCLT. Thus, according to the
plaintiffs, the contents of the miscellaneous application
revealed that, although funds were available, they were not
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released in favour of the plaintiffs, even though they were
shown on the priority list to receive the funds.
28. Thus, according to the plaintiffs, based on the assurance
given by defendant no. 12 through JLF, and as agreed in the
MRA and TRA agreements, the plaintiffs are entitled to sue the
defendants to recover amounts due to them from Varun. The
plaintiffs have pleaded that their representative attended the
meetings of JLF and that they were also provided with the
minutes of those meetings, which recorded that, once cash
flow began, their dues would be paid.
29. Thus, the question whether the plaintiffs' cause of action
is sustainable or defective presents a triable issue that
warrants trial and cannot be decided at this stage. Based on
the averments in the plaint and the supporting documents, the
cause of action is pleaded for recovering amounts from
defendant nos. 1 to 11, as these defendants acted as trustees
of the revenue generated by Varun. According to the plaintiffs
Varun was able to generate revenue because of the financial
assistance provided by plaintiff no. 2 and supply of bunkers by
plaintiff no. 1. Hence, the plaintiffs' claim for recovering amount
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from defendant nos. 1 to 11 is based on this cause of action
pleaded against defendant nos.1 to 11, in view of the terms
and conditions agreed between defendant nos. 1 to 11 with
Varun. Hence, the plaint cannot be rejected on the ground that
there is no cause of action. The cause of action is also pleaded
against defendant no. 1, as the lead bank and the Account
Bank responsible for releasing funds to the plaintiffs in
accordance with the priority set out in the agreements.
30. As to the objection that the suit is barred by limitation, the
plaintiffs have pleaded that the cause of action arose on 21 st
May 2019, based on the miscellaneous application filed before
the NCLT. The plaintiffs learnt that revenue was available in
the sub-account maintained by defendant no. 1 for the release
of funds to the Asean Group Credit Facility, based on the
cause of action pleaded in paragraph 43. According to the
plaintiffs, the suit filed on 18 th December 2021 is well within the
limitation in view of Article 113 of the Limitation Act, 1963. As
per the law settled by the Hon'ble Apex Court in the decisions
relied upon by the learned counsel for the plaintiffs, they would
be entitled to lead evidence to support their plea that the suit
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for recovery of amount against defendant nos. 1 to 11 would be
covered under Article 113 read with Section 10 of the Limitation
Act, 1963 or any other article of the schedule to the Limitation
Act. Thus, even the issue of limitation warrants a trial and
cannot be decided at this stage.
31. So far as the objection on the non-compliance of Section
12-A is concerned, the suit was filed much prior to the law
declared by the Hon'ble Apex Court in the decision of Patil
Automation that the compliance under Section 12-A of the said
Act is mandatory. This Court in Deepak Raheja declared
Section 12-A mandatory on 1st October 2021. Therefore, in
view of the legal principles settled in Patil Automation, by the
Apex Court, any plaint filed in this court after 1 st October 2021,
violating Section 12-A of the said Act, the plaintiff will not be
entitled to the relief. In the present case, the suit was presented
(filed) on 31st July 2021 and registered on 18 th December 2021.
Thus, it was filed before Section 12-A was declared mandatory
by this Court and registered after the declaration. Therefore, in
view of the well-established legal principles as discussed in the
above paragraphs, the plaint in the present case, cannot be
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rejected on the ground of non-compliance with the mandatory
requirement under Section 12-A of the said Act. Therefore,
none of the grounds enumerated under Order VII Rule 11 of
the CPC are satisfied in the facts of the present case, for
rejection of the plaint at the threshold.
32. It is a common experience of this Court that applications
under Order VII Rule 11 of the CPC are routinely filed. It is
unfortunate that, despite the well-settled legal principles on the
mandatory character of Section 12-A of the said Act and the
circumstances under which the bar applies, as well as the well-
established legal principles under Order VII Rule 11 of the
CPC, applications are routinely filed for rejection of the plaint,
thereby delaying the decision in suits filed under the said Act.
Such attempts by the defendant to routinely file an application
with no substance on any of the grounds for rejection of the
plaint at the threshold defeats the very object of the
Commercial Courts Act, namely, the speedy disposal of suits.
33. For the reasons recorded above, the application is
rejected.
[GAURI GODSE, J.]
