Bombay High Court Says Judicial Machinery's Error Cannot Prejudice Litigant, Restores ₹2.04 Crore Suit

The Bombay High Court on 7 August held that a litigant cannot be made to suffer for an error attributable to the Court or its machinery and must be restored to the position it would have occupied had the error not occurred.

A Division Bench of Justices Madhav J. Jamdar and Pravin S. Patil made the observation while restoring a Rs. 2.04 crore recovery suit filed by supplier and commission agent Jivaraj Ravaji Gandhi against Solapur Jilha Dudh Utpadak va Prakriya Sangh Maryadit, Solapur and other cooperative societies engaged in milk processing and manufacture of cattle-feed ingredients. The judges held:

“Accordingly, where a party has been disadvantaged by reason of an act of the Court or its machinery particularly when the action of Chairman of Malshiras Taluka Legal Services Committee, who is the senior-most Judicial Officer of said Taluka has resulted into a disadvantage to the Appellant/Plaintiff, it is incumbent upon the Court to undo such prejudice and restore the party to the position he would have occupied but for such act. The maxim 'actus curiae neminem gravabit' thus operates as a constant reminder that the Court's authority must be exercised not to the disadvantage of litigants, but in furtherance of justice. After all, to err is human, and when an inadvertent omission is brought to the Court's attention, it becomes the Court's solemn duty to ensure that no party suffers on account of such mistake. In such circumstances, the Court is obliged to restore the party to the very position he would have occupied had the error not occurred.”

The suit had been rejected over alleged non-compliance with the mandatory pre-institution mediation requirement under Section 12A of the Commercial Courts Act, 2015. The dispute arose after Gandhi claimed to have supplied goods under five purchase orders issued pursuant to tenders floated by the cooperative societies in 2020 and 2021. Gandhi raised 48 invoices totalling Rs. 2,04,24,712, which allegedly remained unpaid.

Before filing the recovery suit, Gandhi approached the Malshiras Taluka Legal Services Committee on 29 April 2023 by filing the prescribed application for pre-institution mediation and paying the Rs. 1,000 fee.

After the first mediation notice did not lead to proceedings, Gandhi sought reissuance of the notice on 18 October 2023. The fresh notice was served on 25 October for mediation on 30 October, but the societies did not appear. The Committee issued a non-starter report on 11 December 2023. Gandhi thereafter filed the commercial suit on 6 January 2024.

The societies subsequently sought rejection of the plaint under Order VII Rule 11 of the Code of Civil Procedure, 1908, arguing that the mandatory final notice under Rule 3(3) of the Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018 had not been issued.

On 21 August 2025, the District Judge-1, Malshiras accepted the objection and rejected the plaint. Gandhi then approached the Bombay High Court by way of a Commercial First Appeal challenging the rejection.

Gandhi argued that its obligation ended with filing the mediation application and paying the prescribed fee. The societies, however, contended that in the absence of the final notice, the mandatory mediation process remained incomplete.

The High Court held that while pre-institution mediation under Section 12A of the Commercial Courts Act is mandatory, Gandhi had fulfilled its obligation by applying for mediation and paying the prescribed fee. It held that issuing further notices, including the final notice, was the responsibility of the Legal Services Authority.

The Bench also held that Gandhi could not be penalised for the Committee's omission, particularly since the Committee was headed by the senior-most Judicial Officer of the taluka. It further held that a lapse attributable to the judicial machinery cannot be held against a party and noted that the societies remained unwilling to mediate even during the appeal.

Accordingly, the High Court allowed the appeal and set aside the 21 August 2025 order. It rejected the application seeking rejection of the plaint and restored the recovery suit before the District Judge, Malshiras, with no order as to costs.

Appearances for appellant (Jivaraj Ravaji Gandhi): Advocates Dr. Santosh Shah, Darshana Kalamkar, Paras Shah, Swapnil Chile and Prithviraj Patil.

Appearances for respondents (Solapur Jilha Dudh Utpadak va Prakriya Sangh Maryadit Solapur & Ors.): Advocates Sarang Aradhye, Dnyaneshwari Utpat and Shantanu Gurav.