Himachal Pradesh High Court: The present application was filed under Order VII Rule 11(c) read with Section 151 of the Civil Procedure Code, 1908 (‘CPC’), the applicants-defendants had prayed for rejection of the plaint, on the ground that the plaint was barred by law. Ajay Mohan Goel, J., stated that there was no whisper in the entire application of any urgency to do away with the mandatory provision of the Section 12-A of the Commercial Courts Act, 2015 (‘the Act’). There was no mention in the plaint regarding the fact that if the plaintiff waited from December 2023 to June 2024 for filing the suit, then why the plaintiff could not resort to the Pre-Institution Mediation and Settlement. Further, it was also not mentioned as to what urgency necessitated doing away with the mandatory statutory provision.
Thus, the Court stated that the present suit did not contemplate any urgent interim relief and filing of the application under Order 39, Rule 1 and 2 of the CPC was just an act to wriggle out of and get over Section 12-A of the Act. Since, the civil suit could not have been filed without resorting to the Pre-Institution Mediation and Settlement in terms of Section 12-A of the Act, the Court allowed the present application and rejected the plaint.
Background
The defendants submitted that the subject matter of the suit constituted a “commercial dispute”, as defined under Section 2(c)(xvii) of the Act. Therefore, the plaintiff was mandatorily required to comply with Pre-Institution Mediation, as enunciated under Section 12-A(1) of the Act, and the only exception were the cases where urgent relief was involved.
The defendants stated that as per the law declared by the Supreme Court, mere filing of an application for interim relief was not sufficient and a Commercial Court was obliged to holistically examine and scrutinize the nature, subject-matter and cause of action to affirm the genuineness in the urgency. Further, the plaintiff had sought an exemption from complying the Pre-Institution Mediation on account of seeking urgent injunctive relief, whereas perusal of the plaint along with documents demonstrated that there was no urgency to allow the plaintiff to do away with the provisions of Section 12-A (1) of the Act. Therefore, the plaint was liable to be rejected.
Analysis, Law, and Decision
The Court after perusal of the Section 12-A(1) of the Act, stated that the provision demonstrated that a suit which did not contemplate any urgent relief under the Act should not be instituted unless the plaintiff had exhausted the remedy of Pre-Institution Mediation in a manner and procedure as prescribed by the rules made by the Central Government.
The Court referred to Patil Automation (P) Ltd v. Rakheja Engineers (P) Ltd., (2022) 10 SCC 1 and Yamini Manohar v. T.K.D. Keerthi, (2024) 5 SCC 815 and stated that there was no iota of doubt that Section 12-A of the Act was mandatory. It was manifestly clear that the power could be exercised suo motu by the Court while dealing with the Commercial Civil Suit and when a plain was filed under the Act for urgent relief, the Commercial Court should examine the nature and subject matter of the suit. The Court stated that the cause of cause of action and the prayer for interim relief and 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 Act.
The Court noted that in the present case, the cause of action accrued in the plaintiff’s favour on or about July/August 2022, when the plaintiff received information about the infringement of its patents and design by the defendants and thereafter, on 14-10-2022, when plaintiff terminated the Distributor Agreement. On 23-12-2022, the cause of action was further renewed when the plaintiff issued Cease-and-Desist notice and the same continued when despite knowledge of the patents and design of the plaintiff, the defendants continued to make, use offer for sale and sell at various physical and online portals its product. It further arose in December 2023, when the technical expert confirmed that defendants were regularly carrying out the business by infringing the patents and design of the plaintiff by soliciting business within the territorial jurisdiction of this Court.
Further, on the issue of urgency, the Court noted that it was stated in the plaint that the plaintiff would suffer and will continue to suffer irreparable loss if the Court did not intervene and the plaintiff would also lose out on substantial market and sales due to defendants’ act of unfair competition by misappropriating the plaintiff’s technology. The Court stated that there was no whisper in the entire application of any urgency to do away with the mandatory provision of the Section 12-A of the Act.
The Court stated that there was no mention in the plaint regarding the fact that if the plaintiff waited from December 2023 to June 2024 for filing the suit, then why the plaintiff could not resort to the Pre-Institution Mediation and Settlement as was emphasized in Section 12-A of the Act. Further, it was also not mentioned as to what urgency necessitated doing away with the mandatory statutory provision.
Thus, the Court stated that the present suit did not contemplate any urgent interim relief and filing of the application under Order 39, Rule 1 and 2 of the CPC was just an act to wriggle out of and get over Section 12-A of the Act. Since, the civil suit could not have been filed without resorting to the Pre-Institution Mediation and Settlement in terms of Section 12-A of the Act, the Court allowed the present application and rejected the plaint.
[Novenco Building & Industry A/S v. Xero Energy Solutions (P) Ltd., 2024 SCC OnLine HP 4266, decided on 28-08-2024]
Advocates who appeared in this case :
For the Plaintiff: Neeraj Gupta, Senior Advocate, with Shradha Karol, Vineet Rohilla, Rohit Rongi, Vaibhav Singh and Aastha Kohli, Advocates.
For the Defendants: Shadan Farasat, Kush Sharma, Aman Naqvi and Pranav Dhawan, Advocates.
