Gavrill Metal Pvt. Ltd vs Maira Fabricators Pvt. Ltd
2022 Latest Caselaw 1812 Cal/2

                                           1


                            IN THE HIGH COURT AT CALCUTTA
                       ORIDINARY ORIGINAL CIVIL JURISDICTION
                                   ORIGINAL SIDE
                               [COMMERCIAL DIVISION]

BEFORE:
The Hon'ble Mr. Justice Ravi Krishan Kapur

                                   GA 2 of 2022
                                         In
                                 CS No. 130 of 2020

                                Gavrill Metal Pvt. Ltd.
                                         Vs
                              Maira Fabricators Pvt. Ltd.

For the Plaintiff                : Mr. Debmalya Ghosal, Advocate
                                   Mr. Jit Ray, Advocate
                                   Mr. Niladri Khanra, Advocate

For the Defendant                : Mr. Rupak Ghosh, Advocate
                                   Mr. Debraj Saha, Advocate
                                   Mr. Indranil Karfa, Advocate

Heard                            : 09.06.2022, 14.06.2022

Judgment                         : 04.07.2022

Ravi Krishan Kapur, J.:

        1.

This is an application for revocation of the dispensation granted to the

plaintiff for Pre-Institution Mediation and Settlement under Section

12A of the Commercial Courts Act, 2015 (the Act) and for dismissal of

the suit.

2. The application has been filed by the defendant on the grounds that

even though the plaint in this suit was presented as far back as 3

November, 2020, the plaintiff has not filed any application for any

interlocutory relief far less any urgent reliefs. Hence, the dispensation

with compliance of Section 12 A of the Act had been wrongly granted

and is liable to be revoked.

3. The suit was filed on 3 November, 2020. In this suit, the plaintiff has

filed an application being GA No. 1 of 2020 sometime in March 2022,

seeking amendments to the plaint. No other steps whatsoever have

been taken by the plaintiff. It is alleged that the defendant has not

even been served the Writ of Summons. It is also alleged that the plaint

has also not been verified in terms Rule 15 A of Order 6 of the Code of

Civil Procedure, 1908. In this background, the defendant seeks

dismissal of the suit.

4. On behalf of the plaintiff, it is submitted that dispensation with the

requirement of Pre-Institution Mediation and Settlement was sought

for on the grounds that no prescribed procedure for conducting

mediations was operational nor had any Rules for the same been

framed. Thus, there was no question of the plaintiff taking any steps

for mediation.

5. Section 12 A of the Act provides as follows:-

"12 A Pre-Institution Mediation and Settlement. - (1) A suit, which does not contemplate any urgent interim relief under this act, shall not be instituted unless the plaintiff exhausts the remedy of pre-institution mediation in accordance with such manner and procedure as may be prescribed by rules made by the Central Government.

(2) The Central Government may, by notification, authorize the Authorities constituted under the Legal Services Authorities Act, 1987 (39 of 1987), for the purposes of pre- institution mediation.

(3) Notwithstanding anything contained in the Legal Services authorities Act, 1987 (39 of 1987), the authority authorised by Central Government under sub-section (2) shall complete the process of mediation within a period of three months from the date of application made by the plaintiff under sub-section (1):

Provided that the period of mediation may be extended for a further period of two months with the consent of the parties:

Provided further that, the period during which the parties remained occupied with the pre-institution mediation, such period shall not be computed for the purpose of limitation under the Limitation Act, 1963 (36 of 1963).

(4) If the parties to the commercial dispute arrive at a settlement, the same shall be reduced into writing and shall be signed by the parties to the dispute and the mediator.

(5) The settlement arrived at under this section shall have the same status and effect as if it is an arbitral award on agreed terms under sub-section (4) of Section 30 of the Arbitration and Conciliation Act, 1996 (26 of 1996)."

6. In Laxmi Polyfab Pvt. Ltd. and Others vs. Eden Realty Ventures Pvt. Ltd.

and Others (AIR 2021 Cal 190), a Single Judge of this Court has held

the provisions of Section 12 A of the Act to be mandatory, subject to

the exception as contemplated under the section in respect of suits

where the plaintiff seeks urgent interim reliefs.

7. The scheme of Section 12 A is that a commercial dispute under the Act

must receive Pre-Institution Mediation and Settlement. Such Pre-

Institution Mediation and Settlement has to be completed within a

stipulated time period. The provisions for Pre-Institution Mediation

and Settlement are a mechanism for expeditious redressal of

commercial disputes. In fact, Section 12A of the Act debars the plaintiff

from instituting a suit relating to a commercial dispute without

exhausting the remedy of Pre-Institution Mediation and Settlement

unless the plaintiff seeks urgent reliefs.

8. The plaint was presented and admitted on 3 November, 2020. The

dispensation under Section 12 A of the Act was granted on that day.

The only pleading in the plaint (at paragraph 23) is that in view of the

urgent reliefs sought for by the plaintiff, the plaintiff had prayed for

dispensation of compliance with Section 12 A of the Act. Admittedly, no

interlocutory application for urgent reliefs has been filed till date. The

only application filed by the plaintiff is an application for amendment

of the plaint and that also in 2022.

9. The requirement for Pre-Institution Mediation and Settlement under

Section 12 A of the Act is mandatory. It is true that the section permits

dispensation of the requirement for Pre-Institution Mediation and

Settlement under Section 12 A of the Act in cases where a plaintiff

seeks urgent reliefs. However, this is certainly not the case in this suit.

On the contrary, the plaintiff has for more than two years not even filed

an application for interlocutory reliefs. The only pleading in the plaint

is that dispensation under Section 12 A be granted on the ground of

urgent reliefs. There is also no averment in the plaint that Mediation

was not possible in terms of the section. In any event, there is no basis

to such allegation. Accordingly, in my view, the entire basis for

dispensation with the requirement of Section 12 A of the Act is found

to be false.

10. In view of the aforesaid, the dispensation granted to the plaintiff under

Section 12 A of the Act stands revoked.

11. C.S. 130 of 2020 stands dismissed. There shall be an order in terms of

prayer (b) of the Master's Summons.

12. With the aforesaid directions, GA 2 of 2022 also stands allowed.

(Ravi Krishan Kapur)