Calcutta High Court
Progility Technologies Private ... vs Food Corporation Of India on 17 November, 2022
1
OD-7
CS/197/2018
IN THE HIGH COURT AT CALCUTTA
(Ordinary Original Civil Jurisdiction)
ORIGINAL SIDE
[COMMERCIAL DIVISION]
PROGILITY TECHNOLOGIES PRIVATE LTD.
Vs.
FOOD CORPORATION OF INDIA
BEFORE :
The Hon'ble JUSTICE KRISHNA RAO
Heard On : 07.11.2022
Order On : 17.11.2022
Appearance:
Mr. Rajarshi Dutta, Adv.
Ms. Mudrika Khaitan, Adv.
...For the plaintiff.
Mr. Devajyoti Barman, Adv.
...For the defendant.
ORDER
The plaintiff has filed the instant suit against the defendant for recovery
of money along with interest.
The defendant has raised a preliminary objection with regard to
maintainability of suit in terms of section 12A of the Commercial Courts Act,
2015, as the plaintiff has filed the instant suit without exhausting the remedy
of pre-institution mediation.
Learned Counsel for the defendant submits that the plaintiff has filed the
instant suit before this Court on 10th September, 2018 i.e. after the
implementation of Commercial Courts Act, 2015 directly without complying the
mandatory provision of section 12A of the Commercial Courts Act, 2015.
Learned Counsel for the defendant further contended that the plaintiff
has also not prayed for any urgent interim relief and thus Section 12A is
mandatorily provide for pre-institution mediation but the plaintiff has not
complied with and prayed for rejection of plaint.
Learned Counsel for the defendant relied upon the judgment reported in
2020 Supreme (Cal) 562 (Terai Overseas Private Limited & Ors. -versus-
Kejriwal Sugar Agencies Private Limited & Ors.) and submits that the
Coordinate Bench of this Court has not granted leave to the plaintiff under
Section 12A of the Commercial Courts Act,2015 as the suit was filed after the
implementation of the Act of 2015.
Learned Counsel for the plaintiff had also relied upon the judgment
reported in 2021 Supreme (Cal) 72 (M/s Dhanbad Fuels Ltd. -versus- Union of
India & Ors.) and submits that the Coordinate Bench of this Court had directed
the plaintiff to approach the District Legal Aid Services Authority, West Bengal
in accordance with the Standard Operating Procedure (SOP) dt. 11th December,
2020, mandatorily, within two weeks from date. In case of default, the Learned
Court below shall be at liberty to pass such orders in the suit for non-
compliance of the order of Court.
Per contra, Learned Counsel for the plaintiff submits that though the
Commercial Courts Act, 2015 come into force with effect from 31st December,
2015, but only on 11th December, 2020 Standard Operating Procedure for Pre-
Institution Mediation and Settlement was notified and thus there was no scope
for the plaintiff to exhaust the remedy of Pre-institution mediation.
Learned Counsel for the plaintiff submits that in the similar
circumstance case, the Coordinate Bench of this Court in the case reported in
2021 SCC Online Cal 1458 (Dredging and Desiltation Company Pvt. Ltd. -
versus- Mackintosh Burn and Northern Consortium and Others) held that the
plaintiff cannot be non-suited due to the absence of the infrastructure under
Section 12A of the Act of 2015 at the time of institution of the suit.
Learned Counsel for the plaintiff further submits that the Coordinate
Bench of this Court in the case reported in 2021 SCC Online Cal 1457 (Laxmi
Polyfab Pvt. Ltd -versus- Eden Realty Ventures Pvt. Ltd. and Anr.) held that
Section 12A of the Act of 2015 is mandatory. In respect of the suits filed upto
December 11, 2020, the plaintiff cannot be non-suited for non-compliance as
requisite infrastructure under Section 12A was not notified.
Ld. Counsel for the plaintiff further relied upon the judgment reported in
2022 SCC Online SC 1028 (Patil Automation Private Limited and Others -
versus- Rakheja Engineers Private Limited) wherein the Hon'ble Supreme Court
held that :
"92. Having regard to all these circumstances, we would dispose of the
matters in the following manner. We declare that Section 12A of the Act is
mandatory and hold that any suit instituted violating the mandate of Section
12A must be visited with rejection of the plaint under Order VII Rule 11. This
power can be exercised even suo moto by the court as explained earlier in the
judgment. We, however, make this declaration effective from 20.08.2022 so that
concerned stakeholders become sufficiently informed. Still further, we however
direct that in case plaints have been already rejected and no steps have been
taken within the period of limitation, the matter cannot be reopened on the basis
of this declaration. Still further, if the order of rejection of the plaint has been
acted upon by filing a fresh suit, the declaration of prospective effect will not
avail the plaintiff. Finally, if the plaint is filed violating Section 12A after the
jurisdictional High Court has declared Section 12A mandatory also, the plaintiff
will not be entitled to the relief.
93. In Civil Appeal arising out of SLP (C) No. 14697 of 2021 taking note of
the fact that it is a case where the appellant would have succeeded and the
plaint rejected, it is also necessary to order the following. The written statement
filed by the appellant shall be treated as the application for leave to defend filed
within time within the meaning of Order XXXVII and the matter considered on
the said basis. While we disapprove of the reasoning in the impugned orders we
decline to otherwise interfere with the orders and the two appeals shall stand
disposed of accordingly. In Civil Appeal arising out of SLP (C) No. 5737 of 2022,
we set aside the order directing payment of costs of Rs. 10,000/-. The petition
for permission to file SLP in SLP (C) Diary No. 29458 of 2021 and the said SLP
shall stand disposed of as already indicated in the judgment."
Learned Counsel for the plaintiff submits that the plaintiff has filed the
instant suit on 10th September, 2018 and at the time of filing of the instant suit
no infrastructure under Section 12A was notified and accordingly the judgment
reported in the case of Patil Automation Private Limited and Ors. (supra) and
Luxmi Polyfab Private Ltd. (supra) is squarely applicable in the instant case.
Heard, the Learned Counsel for the respective parties perused the plaint,
documents and the judgment relied by the parties.
Admittedly, the plaintiff has filed the instant suit on 10.09.2018 and at
the time of filing of the instant suit, no infrastructure in terms of Section 12A
was notified. The object of the Act of 2015 is to ensure expeditious and speedy
disposal of commercial dispute. Expedition and Speed in disposing of the
commercial dispute is attained, in the wisdom of the legislature, by a pre-
institution mediation. Section 12A (1) of the Act of 2015 distinguishes suits
filed under the Act of 2015 in two categories. It treats the two categories of
suits differently. Suits are categorized into two on the basis of need of the
plaintiff to obtain urgent relief. One category is suit where the plaintiff does not
seek urgent relief. In such category, Section 12A of the Act of 2015 debars the
plaintiff from instituting a suit unless the plaintiff exhausts the remedy of pre-
institution mediation. The provision of Sub-Section (1) of Section 12A of the Act
of 2015 are such that, a plaintiff is obliged to approach the appropriate
authority for a pre-institution mediation, unless he seeks urgent interim relief,
in respect of a commercial dispute, to approach the court for resolution of the
commercial dispute. Section 12A of the Act of 2015 prescribes an obligation on
the plaintiff to undertake the pre-institution mediation and vests a
corresponding right on the defendant. Failure of the plaintiff to exhaust pre-
institution mediation, unless he seeks urgent relief in a commercial dispute,
gives a corresponding right to the defendant to claim that such suit could not
have been instituted by the plaintiff.
In the instant case, admittedly the plaintiff has not exhausted the pre-
institution mediation as provided under Section 12A of the Act of 2015 but in
the Government has notified the Standard Operation Procedure for Pre-
Institution Mediation and Settlement on 11.12.2020 i.e. much after the suit
filed by the plaintiff. The Coordinate Bench of this Court in the case of Laxmi
Polyfab Private Limited (supra) held that the suits filed upto the 11.12.2020,
the plaintiff cannot be non-suited for non-compliance of the requisite
infrastructure under Section 12A was not notified.
Similarly, in the case of Patil Automation Private Limited and Ors.
(supra), the Hon'ble Supreme Court while holding that Section 12A of the Act is
mandatory but it has been clarified that the said mandatory will be effective
from 20.08.2022 and thus the suit filed by the plaintiff is covered under the
judgments referred above.
In view of the above, this Court finds no merit in the submission made by
the Counsel for the defendant. Accordingly, the suit filed by the plaintiff being
CS 197 of 2018 is maintainable.
(KRISHNA RAO, J.)
p.d
