Whether A Commercial Suit Is Urgent Enough To Skip Pre-Institution Mediation Is For Court To Decide: Calcutta High Court

The Calcutta High Court has ruled that whether a commercial suit can bypass mandatory pre-institution mediation under the Commercial Courts Act depends on the court's assessment of whether the case genuinely requires urgent interim relief.

The assessment must be based on the pleadings and the reasons placed before the court by the party seeking the exemption.

Justice Aniruddha Roy observed, "Since neither Section 12A of C.C. Act nor the Practice Procedure, 2021 specify or define what should be the grounds and/or causes to be stated in the plaint contemplating an urgent interim relief, in absence of such statutory prescription the perception for contemplating urgent interim relief praying for dispensation of pre-institution mediation would largely depend on the exercise of judicial discretion of the court by reading the statements made in the plaint and by considering the submissions on behalf of the plaintiff from the stand point of the plaintiff for granting dispensation for pre-litigation mediation."

The court made the ruling in a plea by J.K. Engineering against ANE Industries Pvt Ltd. over a memorandum of understanding executed on March 26, 2013. After earlier proceedings culminated in a Division Bench order on December 3, 2024 permitting a fresh commercial suit, the plaintiff instituted the present suit on December 24, 2024, obtaining leave on January 6, 2025 dispensing with pre institution mediation.

The defendant sought revocation of both the dispensation and the leave under Clause 12, contending that no urgent interim relief was pleaded and that Punjab was the appropriate forum. The plaintiff argued that urgency existed because it apprehended dissipation of assets after an earlier judgment in its favour had been set aside on technical grounds.

The court held that the plaintiff's pleadings and submissions were sufficient to justify dispensation from pre institution mediation. It said that the existence of urgent interim relief is a matter of judicial discretion in the absence of any statutory prescription.

The court, however, found that the balance of convenience overwhelmingly favoured Punjab.

Holding that while the plaintiff would have to produce records from its registered office in Sikkim in any event, the defendant had no place of business in West Bengal and would suffer significant hardship in defending the suit there, the Court said:

"The plaintiff in any event has to produce the records either before this Court or before the jurisdictional Court at Punjab from its registered office at Sikkim. If the instant suit is tried before the same court and/or the court of competent jurisdiction at a nearer place at Punjab which is nearer to the Court where the suit filed by the defendant is pending, then it would be convenient for parties to produce their respective records and witnesses there, undoubtedly."

The court further held that despite forfeiting its right to file a written statement, the defendant could still seek revocation of leave on the ground of forum convenience under Clause 12 of the Letters Patent.

Accordingly, the Court revoked the leave granted under Clause 12 while maintaining the dispensation from pre institution mediation and directed that the plaint be returned for presentation before the competent court in Punjab.

For Plaintiff: Anirban Ray, Sr. Adv., Jayanta Sengupta, Sounak Banerjee, Sanjib Bandyopadhyay, Anamika Karmakar, Jiniya Deb, Advocates 

For Defendant: Jayanta Kumar Mitra, Sr. Adv., Sarbajit Mukherjee, Asit Kumar De, Sourjya Roy, Advocates