[Cites 9, Cited by 0]
Delhi High Court
Xcept Media Private Limited vs M/S Ethinos Digital Marketing Pvt. Ltd. ... on 19 March, 2026
Author: Subramonium Prasad
Bench: Subramonium Prasad
$~10
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 19th MARCH, 2026
IN THE MATTER OF:
+ CS(COMM) 634/2023
XCEPT MEDIA PRIVATE LIMITED .....Plaintiff
Through: Mr. Nishant Anand, Ms. Gunjan
Bansal, Mr. Tarun Choudhary, Mr.
Yashwant Singh Khatri, Advs.
versus
M/S ETHINOS DIGITAL MARKETING PVT. LTD. & ANR.
.....Defendants
Through: Appearance not given
CORAM:
HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD
JUDGMENT (ORAL)
CS(COMM) 634/2023 & I.A. 17622/2023, I.A. 7274/2024, I.A.
1. I.A. 17623/2023 has been filed by the Plaintiff under Section 12A of
the Commercial Courts Act, 2015, seeking exemption from undergoing pre-
institution mediation and settlement.
2. The Suit is one for recovery of Rs. 6,09,05,795/-.
3. It is the case of the Plaintiff that it is engaged in the business of
Digital Marketing Services since 2016 and provides Digital Marketing
solutions to its customers. The Defendants approached the Plaintiff for
providing campaign services for its clients, namely, M/s Cholamandalam
MS General Insurance.
4. It is stated that on the instructions of the Defendants, the Plaintiffs
rendered its campaign services on a monthly basis to M/s Cholamandalam
MS General Insurance and subsequent invoices were being raised.
5. Paragraph No.8 of the plaint indicates the dates on which the invoices
were raised and the amounts payable under the invoices.
6. It is stated that despite numerous reminders and requests, payments
have not been made by the Defendants to the Plaintiffs and on the date when
the Plaint was filed, a sum of Rs. 6,09,05,795/- was due and payable.
7. Undoubtedly, the present suit is a commercial suit.
8. Though an application under Order XXXVIII Rule 5 was filed, it was
withdrawn on 13.09.2023 with liberty to file a fresh application if the need
so arises, meaning thereby no urgent relief was contemplated.
9. In the opinion of this Court, since no urgent relief was contemplated,
the Plaintiff cannot be exempted from the relief of Section 12A of the
Commercial Courts Act, 2015. In the opinion of this Court, a money suit is
the best suit which should be attempted to be settled through mediation and
which is the purport of Section 12A of the Commercial Courts Act, 2015.
10. It is pertinent to mention that the Apex Court in Patil Automation (P)
Ltd. v. Rakheja Engineers (P) Ltd., (2022) 10 SCC 1 has discussed the
mandatory nature of Section 12A of the CC Act. Relevant portion of the said
judgment reads as under:
"99.1. The Act did not originally contain Section
12-A. It is by amendment in the year 2018 that Section
12-A was inserted. The Statement of Objects and
Reasons are explicit that Section 12-A was
contemplated as compulsory. The object of the 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. The
provision has been contemplated only with reference to
plaintiffs who do not contemplate urgent interim relief.
The legislature has taken care to expressly exclude the
period undergone during mediation for reckoning
limitation under the Limitation Act, 1963. The object is
clear.
99.2. It is an undeniable reality that courts in India
are reeling under an extraordinary docket explosion.
Mediation, as an alternative dispute mechanism, has
been identified as a workable solution in commercial
matters. In other words, the cases under the Act lend
themselves to be resolved through mediation. Nobody
has an absolute right to file a civil suit. A civil suit can
be barred absolutely or the bar may operate unless
certain conditions are fulfilled. Cases in point, which
amply illustrate this principle, are Section 80CPC and
Section 69 of the Partnership Act.
99.3. The language used in Section 12-A, which
includes the word "shall", certainly, goes a long way
to assist the Court to hold that the provision is
mandatory. The entire procedure for carrying out the
mediation, has been spelt out in the Rules. The parties
are free to engage counsel during mediation. The
expenses, as far as the fee payable to the mediator, is
concerned, is limited to a one-time fee, which appears
to be reasonable, particularly, having regard to the
fact that it is to be shared equally. A trained mediator
can work wonders.
99.4. Mediation must be perceived as a new
mechanism of access to justice. We have already
highlighted its benefits. Any reluctance on the part of
the Court to give Section 12-A, a mandatory
interpretation, would result in defeating the object and
intention of Parliament. The fact that the mediation
can become a non-starter, cannot be a reason to hold
the provision not mandatory. Apparently, the value
judgment of the lawgiver is to give the provision, a
modicum of voluntariness for the defendant, whereas,
the plaintiff, who approaches the court, must,
necessarily, resort to it. Section 12-A elevates the
settlement under the Act and the Rules to an award
within the meaning of Section 30(4) of the Arbitration
Act, giving it meaningful enforceability. The period
spent in mediation is excluded for the purpose of
limitation. The Act confers power to order costs based
on conduct of the parties.
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 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.
xxx
104. On the findings we have entered, the impugned
orders must be set aside and the applications under
Order 7 Rule 11 allowed. This would mean that the
plaints must be rejected. Necessarily, this would
involve the loss of the court fee paid by the plaintiffs in
these cases. They would have to bring a fresh suit, no
doubt after complying with Section 12-A, as permitted
under Order 7 Rule 13. Moreover, the declaration of
law by this Court would relate back to the date of the
Amending Act of 2018."
11. Further, the Apex Court in Yamini Manohar v. T.K.D. Keerthi, (2024)
5 SCC 815, while considering an application under Section 12A of the CC
Act, has observed as under:
"5. Section 12-A of the CC Act does not
contemplate leave of the court, as is clear from the
language and words used therein. Nor does the
provision necessarily require an application seeking
exemption. An application seeking waiver on account
of urgent interim relief setting out grounds and reasons
may allay a challenge and assist the court, but in the
absence of any statutory mandate or rules made by
the Central Government, an application per se is not
a condition under Section 12-A of the CC Act;
pleadings on record and oral submissions would be
sufficient.
6. The words used in Section 12-A of the CC Act are
-- "A suit which does not contemplate any urgent
interim relief", wherein the word "contemplate"
connotes to deliberate and consider. Further, the legal
position that the plaint can be rejected and not
entertained reflects application of mind by the court
viz. the requirement of "urgent interim relief".
xxx
10. We are of the opinion that when a plaint is filed
under the CC Act, with a prayer for an urgent interim
relief, the commercial court should examine the nature
and the subject-matter of the suit, the cause of action,
and the prayer for interim relief. The prayer for
urgent interim relief should not be a disguise or mask
to wriggle out of and get over Section 12-A of the CC
Act. The facts and circumstances of the case have to be
considered holistically from the standpoint of the
plaintiff. Non-grant of interim relief at the ad interim
stage, when the plaint is taken up for
registration/admission and examination, will not justify
dismissal of the commercial suit under Order 7 Rule 11
of the Code; at times, interim relief is granted after
issuance of notice. Nor can the suit be dismissed under
Order 7 Rule 11 of the Code, because the interim
relief, post the arguments, is denied on merits and on
examination of the three principles, namely : (i) prima
facie case, (ii) irreparable harm and injury, and (iii)
balance of convenience. The fact that the court issued
notice and/or granted interim stay may indicate that
the court is inclined to entertain the plaint.
xxx
12. The words "contemplate any urgent interim
relief" in Section 12-A(1) of the CC Act, with
reference to the suit, should be read as conferring
power on the court to be satisfied. They suggest that
the suit must "contemplate", which means the plaint,
documents and facts should show and indicate the
need for an urgent interim relief. This is the precise
and limited exercise that the commercial courts will
undertake, the contours of which have been
explained in the earlier paragraph(s). This will be
sufficient to keep in check and ensure that the
legislative object/intent behind the enactment of
Section 12-A of the CC Act is not defeated."
(emphasis supplied)
12. The Apex Court in Novenco Building & Industry v. Xero Energy
Engineering Solutions (P) Ltd., 2025 SCC OnLine SC 2278 and more
particularly Paragraph Nos.21 to 25 of the said Judgment which read as
under:
"21. Thus, the question whether a suit
„contemplates any urgent interim relief‟ needs to be
examined on the touchstone of the aforementioned
criteria. The issue which arises for consideration in
this appeal is whether a suit alleging continuing
infringement of patent and design rights, accompanied
by a prayer for interim injunction, can be said to
contemplate urgent relief within the meaning of Section
12A of the Act, notwithstanding certain delay in its
institution.
22. The subject matter of the present action is
continuing infringement of intellectual property. Each
act of manufacture, sale, or offer for sale of the
infringing product constitutes a fresh wrong and
recurring cause of action. It is well settled in law that
mere delay in bringing an action does not legalise an
infringement and the same cannot defeat the right of
the proprietor to seek injunctive relief against the
dishonest user5. The appellant has pleaded that Xero
Energy, its former distributor, has dishonestly
appropriated its proprietary designs and patents to
manufacture and market identical fans under
deceptively similar name. The accompanying material
demonstrates that such infringing activity is continuing
and causing immediate and irreparable harm to the
appellant's business reputation, goodwill and
proprietary rights.
23. From the standpoint of the appellant, each day
of continuing infringement aggravates injury to its
intellectual property and erodes its market standing.
The urgency, therefore, is inherent in the nature of the
wrong and does not lie in the age of the cause but in
the persistence of the peril. The court cannot be
unmindful of the fact that intellectual property disputes
are not confined to the private realm. When imitation
masquerades as innovation, it sows confusion among
consumers, taints the market place and diminishes
faith in the sanctity of the trade. The public interest,
therefore, becomes the moral axis upon which the
urgency turns. Therefore, the public interest element,
need to prevent confusion in the market and to protect
consumers from deception further imparts a colour of
immediacy to the reliefs sought.
24. The appellant's prayer for injunction cannot be
characterised as mere camouflage to evade mediation.
It is a real grievance founded on the continuing nature
of infringement and irreparable prejudice likely to be
caused by the delay. The court must look beyond time
lag and evaluate the substance of the plea for interim
protection. The insistence of pre-institution mediation
in a situation of ongoing infringement, in effect, would
render the plaintiff remediless allowing the infringer to
continue to profit under the protection of procedural
formality. Section 12A of the Act was not intended to
achieve such kind of anomalous result.
25. The learned Single Judge as well as the
Division Bench of the High Court erred in construing
the test for urgent relief enumerated in Section 12A of
the Act, in as much as the courts have proceeded to
examine the entitlement of the appellant to urgent relief
based on the merits of the case rather than looking at
the urgency as is evident from the plaint and the
documents annexed thereto from the standpoint of the
plaintiff. The High Court has proceeded on the premise
that lapse of time between the appellant's discovery of
infringement and filing of suit negated the element of
urgency. Such an approach, in our considered view, is
contrary to the principles laid down by the decisions of
this Court. The High Court has also failed to take into
account that the present action is one of the continuous
infringement of intellectual property."
13. In view of the aforesaid judgments, this Court is inclined to dispose of
the present suit and direct the parties to approach a mediation institution for
the purpose of pre-institution mediation.
14. Liberty is granted to the Plaintiffs to file a fresh suit, in case the
mediation fails.
15. Needless to state that the merit of Section 14 of the Limitation Act,
1963 is always available to the Plaintiffs between the time the suit was filed
and the date on which the suit is disposed of.
16. Accordingly, the present suit is disposed of in the aforesaid terms.
Pending Application(s), if any, also stand disposed of.
SUBRAMONIUM PRASAD, J
MARCH 19, 2026
Prateek
