Dhanbad Fuels Private Limited vs Union Of India 2025 INSC 696 - S. 12A Commercial Courts Act - Pre Litigation Mediation - Order VII Rule 11 CPC

Commercial Courts Act - Section 12A - Section 12A is mandatory in nature - The declaration of the mandatory nature of Section 12A of the 2015 Act relates back to the date of the Amending Act- Referred to Patil Automation Private Limited v. Rakheja Engineers Private Limited (2022) 10 SCC 1 - A suit which contemplates an urgent interim relief may be filed under the 2015 Act without first resorting to mediation as prescribed under Section 12A of the 2015 Act- leave of the court is not required to be obtained before filing a suit without complying with Section 12A of the 2015 Act- The test for “urgent interim relief” : If on an examination of the nature and the subject-matter of the suit and the cause of action, the prayer of urgent interim relief by the plaintiff could be said to be contemplable when the matter is seen from the standpoint of the plaintiff.- The urgent interim relief must not be merely an unfounded excuse by the plaintiff to bypass the mandatory requirement of Section 12A of the 2015 Act- Even if the urgent interim relief ultimately comes to be denied, the suit of the plaintiff may be proceeded with without compliance with Section 12A if the test for “urgent interim relief” is satisfied notwithstanding the actual outcome on merits. (Para 62)

Code of Civil Procedure 1908 - Order VII Rule 111 ; Commercial Courts Act - Section 12A - Any suit which is instituted under the 2015 Act without complying with Section 12A is liable to be rejected under Order VII Rule 11 -If the suit is instituted on or after the date of the decision in Patil Automation (supra), i.e., 20.08.2022, without complying with Section 12A of the 2015 Act, then it must meet with rejection under Order VII Rule 11, either on an application by the defendant or suo motu by the court - If the suit was instituted prior to 20.08.2022 without complying with Section 12A of the 2015 Act, and the same does not fall within one of the exceptional categories, then it would be open to the court to keep the suit in abeyance and direct the parties to explore the possibility of mediation in accordance with the 2015 Act, the PIMS Rules and the 2020 SOP. (Para 62-63)

Code of Civil Procedure 1908 - Order VII Rule 11 - No time period within which the plaint may be rejected has been stipulated. The power to reject a plaint, thus, can be exercised at any stage of the suit. (Para 39)

Legal Maxims - Lex non cogit ad impossibilia - law does not compel an impossible performance. (Para 49)

Interpretation of Statutes -Any declaration of the correct position of the law goes back to the day of the inception of the law itself, as the courts merely discover the correct position of law by applying settled legal principles and not legislate a new legal position- But Courts, while declaring an interpretation of the law, may declare it to be operative only prospectively so as to prevent chaos which may ensue as a result of the unsettling of the transactions which may have taken place before such declaration. (Para 48)

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