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Judgment
Sanjib Banerjee, CJ
This appeal arises out of a matter in a commercial suit and the principal issue raised has been decided by a recent Supreme Court judgment delivered on August 17, 2022 and reported at 2022 SCC Online SC 1028 (Patil Automation Private Limited v. Rakheja Engineers Private Limited).
The question that arose before the Supreme Court was whether Section 12A of the Commercial Courts Act, 2015 was mandatory in the sense that a commercial suit within the meaning of the relevant expression in the said Act could not be instituted without resorting to the process of mediation contemplated thereunder. The issue has been answered in the following words at paragraph 92 of the judgment:
“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.”
What is relevant from the paragraph quoted above is that the Supreme Court’s dictum is to apply prospectively from August 20, 2022. However, certain exceptions were indicated pertaining to matters where the plaints had already been rejected and no steps were taken within the period of limitation or where the plaints had been rejected and a fresh suit had been instituted thereupon.
In the present case, the order impugned has rejected the plaint and has permitted the appellant herein to avail of the process of mediation before approaching court by way of a further commercial suit, if necessary. Clearly, this situation is not covered by the exceptions to prospective overruling as indicated in paragraph 92 of the Supreme Court judgment.
As a consequence, the order impugned herein is set aside to the extent that it rejects the plaint. However, no further steps would be taken in the suit till such time that the plaintiff avails of the mechanism of mediation. It is only upon the unsuccessful mediation that the plaintiff may pursue the suit in accordance with law. The appellant herein should take effective steps for initiation of the mediation process within four weeks from date, failing which this order will be ineffective and the rejection of the plaint as directed by the order impugned will stand.
It is recorded that this order has not been objected to by the defendant.
F.A. No. 1 of 2021 is disposed of by modifying the impugned order as indicated above.
There will, however, be no order as to costs.