Supreme Court Calls Pre-Litigation Mediation Plea 'Dilatory Tactic', Restores ₹12.5 Lakh Recovery Suit

Calling the respondents' reliance on mandatory pre-litigation mediation a “dilatory tactic,” the Supreme Court restored a Rs. 12.5 lakh commercial recovery suit filed by Divya A. Nichani against Dipti D. Palchi and others over an unpaid loan. Invoking its powers under Article 142 of the Constitution, the court held that the requirement of pre-litigation mediation under Section 12A of the Commercial Courts Act “shall be deemed to have failed” in the facts of the case. A bench of Chief Justice...

Right To Seek Arbitration Ends Once Written Statement Stage Is Closed: Karnataka High Court

The Karnataka High Court has reiterated that a defendant cannot seek reference to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996 after its right to file a written statement in a commercial suit has been closed, dismissing an appeal filed by real estate developer Bhagyalakshmi Homes LLP. A Division Bench of Chief Justice Vibhu Bakhru and Justice C.M. Poonacha upheld the Commercial Court's order rejecting the developer's plea to refer the dispute to arbitration. “It is...

Pre-Litigation Mediation Mandate Cannot Be Used To 'Cold-Storage' Urgent Commercial Suits: Telangana High Court

The Telangana High Court has recently observed that mandatory pre-litigation mediation cannot be used to stall urgent commercial suits. Section 12A of the Commercial Courts Act, it said, cannot “cold-storage urgent claims.” Nor can it be used for “arm-twisting” a plaintiff seeking interim protection. A Division Bench of Justice Moushumi Bhattacharya and Justice Gadi Praveen Kumar dismissed a revision plea, upholding an order of the Commercial Court which exempted Ras Al Khaimah Investment...

Part-Payments Extend Limitation Period, Delhi High Court Revives Federal Bank's Recovery Suit

The Delhi High Court has revived Federal Bank's recovery suit against a borrower, holding that part-payments made by a borrower extend the limitation period and cannot be ignored while computing delay. Setting aside a Commercial Court order that had dismissed the suit as time-barred, a Bench of Justices Anil Kshetarpal and Amit Mahajan said courts must recompute the limitation from the date of the last payment if payments are made within time. “Once part-payments within limitation are admitted...

Disputes From Residential Real-Estate Development Can Be Commercial If Profit Oriented: Calcutta High Court

The Calcutta High Court has recently observed that a real estate development agreement can qualify as a commercial dispute even if the project is residential in nature and even if both parties are not engaged in the business.Justice Shampa Sarkar said the agreement, when read as a whole, showed that the property was meant to be commercially exploited. “The cumulative effect of the agreement was that the parties jointly agreed to put the property to commercial use, thereby earning from the...

Summary Judgment Is 'Exceptional In Nature', Must Be Used With Prudence In Commercial Cases: Delhi High Court

The Delhi High Court has set aside a summary decree passed by a Commercial Court, holding that disputes over rent and consultancy fees could not have been decided without a full trial. A division bench of Justices Anil Kshetarpal and Amit Mahajan said the power of summary judgment under Order XIII-A of the Civil Procedure Code is “exceptional in nature” and must be exercised with prudence. The court said, “The provision does not contemplate dispensation of trial merely because documents...

No Appeal If Commercial Court Refuses To Return Plaint For Lack of Jurisdiction: Karnataka High Court

On 29 January, the Karnataka High Court dismissed an appeal filed by Trinetramilan Product Protection Solutions Pvt. Ltd., a packaging company, ruling that parties cannot immediately challenge a Commercial Court's decision to retain jurisdiction over a dispute. The Division Bench of Chief Justice Vibhu Bakhru and Justice C.M. Poonacha was hearing an appeal filed by Trinetramilan against a suit by Milan Packaging. It held that an appeal under Section 13(1A) of the Commercial Courts Act,...

Suit For Specific Performance Of Agreement To Sell Shops Used For Business Is Commercial Dispute: Rajasthan High Court

The Rajasthan High Court has recently held that a suit seeking specific performance of an agreement to sell shops that were already being used for business cannot be tried by a regular civil court and must be placed before a Commercial Court. Justice Sanjeet Purohit, while dismissing an appeal against a trial court order, made it clear that once a dispute falls within the Commercial Courts Act, the civil court lacks jurisdiction to try the suit. The Court held, “When facts establish that the...

Nearly 9 In 10 Pre-Institution Mediation Cases In 2024–25 Recorded As Non-Starter, Government Data Shows

Nearly nine out of ten applications filed for mandatory pre-institution mediation under the Commercial Courts Act were recorded as “non-starter” in 2024–25, according to data shared by the Ministry of Law and Justice in Parliament. The data was placed before the Rajya Sabha in a written reply by Minister of State (Independent Charge) for Law and Justice Arjun Ram Meghwal. It shows that 59,568 applications were received for pre-institution mediation during the year. Of these, 52,730...

Commercial Courts Act | Institution Of Suit Means Presentation, Not Registration, For Mandatory Mediation: Bombay High Court

The Bombay High Court has held that the requirement of pre-institution mediation under Section 12-A of the Commercial Courts Act does not apply where a suit was instituted before the provision was declared mandatory, even if the suit was registered after that date. The court clarified that, for the purposes of Section 12-A, a suit is instituted when the plaint is presented before the court and not when it is subsequently registered by the registry. A Single Judge Bench of Justice Gauri...

Commercial Court Cannot Dismiss Non-Commercial Suit; Must Return Plaintiff: Delhi High Court

The Delhi High Court has held that when a commercial court finds that a dispute does not qualify as a “commercial dispute” under the Commercial Courts Act, it cannot dismiss the suit on that ground and must instead return the plaint so that the litigant can approach the appropriate civil court. A Division Bench of Justice Anil Kshetarpal and Justice Amit Mahajan set aside a Commercial Court order that had dismissed a recovery suit filed by former employee Pramod Kumar against Gannon...

Suit Liable To Dismissal Cannot Be Transferred To Commercial Division: Calcutta High Court

The Calcutta High Court has dismissed a 25-year-old suit between Tractel Tirfor India Pvt. Ltd. and Tractel International S.A.S., holding that the case was never legally pending and therefore could not have been transferred to the court's commercial division. A Division Bench of Justices Debangsu Basak and Md. Shabbar Rashidi ruled on January 21 that the failure to lodge a writ of summons, which is mandatory under the High Court's Original Side Rules, rendered the suit liable to dismissal in...