International Conveyors Limited vs Ranjit Dash
2022 Latest Caselaw 3134 Cal/2

ORDER SHEET
                                 G.A. No. 1 of 2022
                             CS 257 of 2022
                    IN THE HIGH COURT AT CALCUTTA
                  ORDINARY ORIGINAL CIVIL JURISDICTION
                           Commercial Division

                    INTERNATIONAL CONVEYORS LIMITED
                                   VS.
                              RANJIT DASH

BEFORE:
The Hon'ble JUSTICE ARINDAM MUKHERJEE

Date: 21st December, 2022.

Fox and Mandal For the Plaintiff.

The Court: A bunch of plaints for presentation to institute suits in the

Commercial Division of this Court constituted under Section 7 of the

Commercial Courts Act, 2015 (hereinafter referred to as the said Act) arising

out of commercial disputes as enumerated in Section 2 (c) of the said Act are

appearing in the list under the heading "presentation of plaint" on being filed in

the computer section of this Court. The plaints are listed for being presented

and admitted under the provisions of Rule 4 of Chapter VII of the Original Side

Rules of this Court after dispensation of the formalities under Section 12A of

the said Act as the plaintiffs therein contemplate urgent relief.

Instead of hearing each matter independently, I have heard one of the matters

as all of them involve the same question. In many of the plaints apart from

leave under Section 12A of the said Act, leave under Clause 12 of Letters

Patent, 1865 and Order II Rule 2 of the Code of Civil Procedure, 1908 (in short

CPC) has been also prayed for.

The issue as to dispensation of the formalities under Section 12A of the said

Act has been a concern of several High Courts all over the country be it in the

Commercial Appellate Division or Commercial Division after its introduction

into the said Act by virtue of the amendment dated 3 rd May, 2018. The issue

has fallen for fresh consideration of this Court in view of the judgment of the

Hon'ble Supreme Court reported in 2022 (10) SCC 1 (Patil Automation Pvt. Ltd.

and Ors. vs. Rakheja Engineers Pvt. Ltd.). While the matters were under

consideration a Division Bench of this Court has delivered a judgment on 9 th

December, 2022 in FMAT 360 of 2022 (M/s. Odisha Slurry Pipeline

Infrastructure Ltd. & Anr. Vs. IDBI Bank Ltd. and Ors.)

The issue as to whether leave under Section 12A of the said Act is mandatory

in a case where the plaintiff contemplates urgent interim relief and if so the

mechanism to grant the same or rejection of the plaint on the plaintiff being

unable to establish urgency are, therefor, re-considered in the light of the two

judgments as aforesaid.

Before going into the arguments advanced by the plaintiff it is necessary to

state in brief the procedure of instituting a suit in this Court. This Court is a

Chartered High Court within the meaning of Order XLIX read with Section 120

of CPC. This Court assumes territorial jurisdiction to receive, try and

determine a suit under the provisions of Clause 11 and 12 of the Letters

Patent, 1865. The pecuniary value is fixed from time to time by way of

notification. This Court, therefor, exercises Commercial Division constituted

under Section 7 of the said Act to try a suit of a specified value arising out of

commercial dispute.

In this Court, the procedure as it stands, a plaint arising out of commercial

dispute of specified value is filed in the Computer Section. On being filed

therein, a suit number is allotted. However, allocation of number by the

Computer Section does not amount to institution of the suit. A suit is

instituted only upon the plaint being presented and admitted as envisaged

under the provisions of Rule 4 under Chapter VII of the Original Side Rules of

this Court. At the time of presentation of plaint, the plaintiff can pray for and

obtain leave under Clause 12 of Letters Patent, 1865, Order I Rule 8, Order II

Rule 2 and Order II Rule 4 of CPC by way of oral application without a formal

petition as laid down in Rule 7(a) of Chapter VII of the Original Side Rules.

Rule 7(a) is set out hereunder for convenience:-

"7(a). Special leave to sue or join causes of action. - Every application for special leave to sue, under clause 12 of the Letters Patent, or under Order I rule 8, Order II rule 2 or 4, of the Code, may be made at the time when the plaint is presented, without petition, provided that the grounds, upon which such application is made, are set out with sufficient clearness in the body of the plaint".

At the stage of presentation of plaint there is no procedure for hearing the

defendants who may appear through advocates by finding the matter in the

list.

The provision under Rule 7 (a) under Chapter VII of the Original Side Rules

have been made to enable the plaintiff to present the plaint and have it

admitted upon applying and obtaining the leave under Clause 12 of Letters

Patent, leave under Order I Rule 8, Order II Rule 2 and Order II Rule 4 of CPC

as the case may be without a petition so that the suit is instituted under the

provisions of Section 26 and Order IV Rule 1 of the CPC. This also takes care

of a situation that no petition can be filed without the plaint being presented

and admitted as the suit is not instituted till such time even though a suit

number is allotted to it and it appears in the list under the heading

"presentation of plaint". Any petition filed before the plaint is presented and

admitted is not born even though a number has been allotted to it and may

also be appearing in the list under any heading for which at the time of

presentation f plaint there is no petition on board wherein an order can be

made. This procedure is, however, different as in the case of institution of suit

in the Subordinate Courts in West Bengal as the provisions of Section 26,

Order VI read with the provisions of Rule 41, 42, 43 and 44 of the West Bengal

Civil Rules and Orders are followed therein. In the Subordinate Courts once

the plaint is presented and entered in the prescribed register, the plaintiff can

file a petition. Following this procedure a petition for leave under Section 80 (2)

or Order II Rule 2 is filed and moved as the suit is instituted when the plaint is

presented before the officer authorized for such purpose.

It has been argued on behalf of the plaintiff that no leave under the provisions

of Section 12A of the said Act is necessary for instituting a suit where the

plaintiff contemplates urgent interim relief unlike those suits wherein no

urgent interim relief is contemplated. It is also contended that a suit which

does not contemplate any urgent interim relief and one wherein plaintiff

contemplates an urgent interim relief belonged to two different grades. In the

first case in view of the provisions of Section 12A (1) of the said Act a suit can

be instituted only after exhausting the remedy of pre-institution mediation

while in the latter case, the plaintiff can directly institute the suit citing

urgency and also can file an application therein for urgent interim relief. To

draw an analogy, it is submitted on behalf of the plaintiff that the provisions of

Section 12 A of the said Act is akin to Order XXXIX Rule 3 of CPC. Order

XXXIX Rule 3 of CPC provides for a direction to be given by Court to give notice

in all cases in general to the opposite party except in cases where it appears to

Court that the object of granting injunction would be defeated by the delay.

It is also argued that in a suit arising out of commercial disputes where the

plaintiff contemplates urgent interim relief, there is no mandate to present a

plaint by first obtaining the leave under Section 12A of the said Act and then

file an application therein say for injunction. The legislative intent according to

the plaintiff is also clear for which no provision has been made as under

Section 12A (1) of the said Act for suits wherein urgent interim relief is

contemplated. In absence of any specific provision on the contrary the section

being silent with regard to suits contemplating urgent interim relief it should

be read and construed according to the plaintiff that there is no provision for

pre-institution mediation in case of such suits. The automatic conclusion is as

submitted by the plaintiff that no leave under Section 12A of the said Act is

necessary for suits wherein urgent interim relief is contemplated.

The plaintiff by relying upon the judgment reported in Patil Automation (supra)

has submitted that the Hon'ble Supreme Court in that case was considering a

series of suits wherein no urgent interim reliefs were contemplated. The

Hon'ble Supreme Court, according to the plaintiff in that perspective has held

that provisions of Section 12A as mandatory. This principle cannot be

borrowed in case of suits wherein urgent interim relief is contemplated. The

judgment in Patil Automation (supra) according to the plaintiff therefor cannot

be a guideline or made applicable to suits where urgent interim relief is

contemplated.

The plaintiff also refers to the Division Bench judgment in M/S. Odisha Slurry

(Supra) and submits that in a suit wherein urgent interim relief is

contemplated, there is no necessity to obtain leave under Section 12A of the

said Act. In support of such contention, the plaintiff has relied upon a

judgment reported in FAO (COMM) 128/2021 in the High Court of Delhi

(Chandra Kishore Chaurasia vs. R.A. Perfumery Works Pvt. Ltd.) although a

learned Single Judge of this Court in the judgment reported in AIR 2021

Calcutta 190 [Laxmi Polyfab Pvt. Ltd vs. Eden Realty Ventures Pvt. Ltd. & Anr.]

has held that provisions of Section 12A is mandatory in respect of suits filed in

Commercial Division of this Court after 11 th December, 2020 which has been

considered in Patil Automation (supra) and approved.

After considering Patil Automation (supra) and Odisha Slurry (supra) I am

unable to accept the contention of the plaintiff. Patil Automation (supra)

though considered suits wherein no urgent interim relief is contemplated but in

no uncertain terms without differentiating between the two categories of suits

one in which urgent interim relief is contemplated and the other wherein such

urgent interim relief is not contemplated has held that the provisions of section

12A of the said Act is mandatory. M/S Odisha Slurry (supra) follows Patil

Automation (supra) and makes no departure therefrom. Looking at the matter

from another angle just because there is no stipulation in the said Act for suits

contemplating urgent interim relief it can automatically mean that the

provisions of Section 12A is not applicable to such suits. In the said Act if

there is no affirmative words in respect of such suits there is no express

nugatory Terms for the same the statute cannot be interpreted in that form and

manner. Moreover, in Section 7 of the said Act the word used is "all suits"

which means all suits arising out of commercial dispute without segregating

suits on the basis of urgent relief. The interpretation sought to be given by the

plaintiff will frustrate the whole basis and object of the said Act. It is at the

same time correct that in a case where urgent interim relief is contemplated

delay that may be caused to comply with the pre-institution mediation may

defeat the plaintiff's cause. It is also a matter of concern to find that pre-

institution mediation to be a fruitless venture as the defendant does not

deposit the mediation cost which may be intentional only to delay the

proceedings.

This also brings us to the meaning of the word "contemplate" as used in section

12A (1) of the said Act. In Patil Automation (supra) the Hon'ble Supreme Court

has considered the meaning of this word by referring to the word

"contemplation of bankruptcy" as in Black's Law Dictionary. It will appear

therefrom that contemplation has to be factually backed up to establish that

the plaintiff should not be made to comply with the pre-institution mediation

as the time that may spend for the same may defeat the plaintiff's cause. It is

also necessary to give the defendant(s) a chance to controvert the plaintiff's

contemplation for which the factual basis is required, otherwise the object of

the said Act will be frustrated at the hands of some irresponsible litigants. At

the stage of presentation of plaint or when an application for urgent relief is

moved without notice, the defendant(s) may not have an opportunity to object

but on the returnable date of the plaintiff's application for urgent relief, the

defendant can avail such opportunity. It will be also open to the defendant to

seek revocation of leave under Section 12A of the said Act. It is, therefor,

necessary for the plaintiff to elucidate the grounds of urgency as pleaded in the

body of the plaint in its first application as it is often seen that the plaint is not

annexed to the application and it takes time to serve the writ of summons

unless the provisions of Order XXXIX Rule 3 is asked to be complied with on

the passing of ex parte ad-interim orders.

In such a case the plaintiff has to approach the Court and seek dispensation of

the formalities under Section 12A of the said Act in a manner similar to the

procedure followed like in the case of Section 80 (2) of CPC. This dispensation

can be granted by applying the principles analogous to those as in Rule 7 (a) of

Chapter VII of Original Side Rules on the grounds for such dispensation being

set out in the body of the plaint with sufficient clearness till the rules for the

Commercial Division of this Court is made.

In the light of the discussion as hereinabove, it is necessary to provide for a

procedure for presentation and admission of plaint in respect of suits arising

out of Commercial dispute and intended to file in the Commercial Division of

this Court in case of suits where urgent interim relief is contemplated till the

rules for this purpose are framed. The following should be the procedure till

the rules are framed:

1. In a suit wherein the plaintiff contemplates an urgent interim relief shall

set out the grounds on which leave is sought for under Section 12A of

the Commercial Courts Act, 2015 with sufficient clearness in the body of

the plaint so that dispensation of formalities under Section 12A of the

Commercial Courts Act, 2015 can be granted by following the principles

analogous to those for Special Leave to sue as contained in Rule 7(a) of

Chapter VII of the Original Side Rules of this Court.

2. A plaint containing such grounds for urgent interim relief on being filed

in the Computer Section of this Court shall appear in the list under the

heading "Presentation of Plaint" with a separate suit number allotted

thereto distinguishing it to be a suit in the Commercial Division. The

plaint will be presented as if an application for leave under Section 12A

of the Commercial Courts Act, 2015 has been made at the time of

presentation without petition on the grounds stated therein.

3. The Court at its discretion, on being satisfied shall grant leave under

Section 12A of the Commercial Courts Act, 2015 for institution of the

suit.

4. At the stage of presentation the defendant(s) shall have no right of

audience.

6. Only after the plaint is presented and admitted in the manner as

aforesaid, the plaintiff shall have the right to move an application for urgent

interim relief. In the said application, the plaintiff shall have to elucidate

the grounds with sufficient clarity for the Court to consider the factual basis

behind the contemplation of the plaintiff for urgent interim relief.

7. In the event the Court finds that factual basis set out by the plaintiff

does not contemplate urgent interim relief, the Court will be free to reject

the plaint and/or dismiss the suit even without any application from the

side of the defendant(s).

There shall, however, be no order as to costs.

Urgent photostat certified copy of this judgment and order, if applied for, be

supplied to the parties on priority basis after compliance with all necessary

formalities.

(ARINDAM MUKHERJEE, J.) M.H