LexM/S DHANBAD FUELS PRIVATE LIMITED versus UNION OF INDIA & ANR
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[2025] 6 S.C.R. 431 : 2025 INSC 696 M/s Dhanbad Fuels Private Limited v. Union of India & Anr. (Civil Appeal No. 6846 of 2025) 15 May 2025 [J.B. Pardiwala* and R. Mahadevan, JJ.] Issue for Consideration Issue arose whether, due to non-compliance with s.12A of the Commercial Courts Act, 2015, a suit should be dismissed u/Ord. VII r.11 CPC, or whether it should be kept in abeyance, directing the parties to first explore the possibility of settlement by instituting mediation; and whether the High Court erred in passing the impugned order, keeping the suit in abeyance and sending the parties to mediation as per the PIMS Rules and the 2020 SOP. Headnotes† Commercial Courts Act, 2015 – s.12A – Pre-institution mediation and settlement – Pre-institution mediation, if mandatory – Prospective effect to declaration in Patil Automation’s case – Money suit by respondent Union of India in commercial court for recovery of certain sum from appellant – No urgent interim relief prayed for – Preliminary objection by appellant as regards maintainability of the suit without availing the remedy of pre-institution mediation u/s.12A – Interim application by appellant u/Ord.VII r.11 seeking rejection of plaint – Commercial court declining to reject the plaint, directed post-institution mediation – In revision application, the High Court directed the suit be kept in abeyance and parties to attend mediation – Correctness: Held: Approach adopted by High Court in keeping the suit in abeyance and referring the parties to mediation, strikes a perfect balance between the mandatory nature of s.12A as well as the prospective applicability of the consequence of non-compliance with s.12A as held in Patil Automation’s case – Decision of this Court in Patil Automation’s case lays down the correct position of law as regards s.12A by holding it to be mandatory in nature, which * Author 432 [2025] 6 S.C.R. Supreme Court Reports relates back to the date of the Amending Act; and that any suit which is instituted under the 2015 Act without complying with s.12A is liable to be rejected u/Ord.VII r.11, however, this declaration applies prospectively to suits instituted on or after the date of the decision in Patil Automation’s case, i.e., 20.08.2022 – Suits instituted without complying with s.12A of the 2015 Act prior to 20.08.2022 cannot be rejected u/Ord.VII r.11 on the ground of non-compliance with s.12A unless they fall within the exceptions stipulated in Patil Automation’s case – In suits instituted without complying with s.12A prior to 20.08.2022 which are pending adjudication before the trial court, the court shall keep the suit in abeyance and refer the parties to time-bound mediation in accordance with s.12A if an objection is raised by the defendant by filing an application u/Ord.VII r.11, or where any of the parties expresses an intent to resolve the dispute by mediation – Respondent does not fall under any of the exceptions and it cannot be said that bar of s.12A would continue to apply to the money suit filed by respondents despite there being a prospective declaration in Patil Automation’s case – Money suit was filed by the respondents much prior to the decision in Patil Automation’s case and it is squarely protected by the prospective ruling – Harmoniously construing observations in Patil Automation’s case, it is clear that while s.12A is held to be mandatory from the date of inception of the provision itself, the consequence of rejection for non-compliance is only made applicable prospectively – Trial court and High Court did not commit any error in refusing to reject the plaint – Mediation proceedings to be completed within the time frame stipulated by s.12A and the PIMS Rules – Pre-Institution Mediation and Settlement Rules, 2018 – Code of Civil Procedure, 1908 – Ord.VII r.11. [Paras 46, 47, 58, 59, 62, 64] Commercial Courts Act, 2015 – s.12A – Expression “urgent interim relief” – Construction of: Held: Suit which contemplates an urgent interim relief may be filed under the 2015 Act without first resorting to mediation – Unlike s.80(2) CPC, leave of the court not required to be obtained before filing a suit without complying with s.12A – Test for “urgent interim relief” is 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
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