Suit Kept in Abeyance as Court Emphasizes Mandatory Pre-Institution Mediation Under Commercial Courts Act
In a significant ruling, the Bombay High Court, presided over by Justice Milind N. Jadhav, has directed the parties involved in the commercial dispute between Oram Realty Pvt Ltd and Piramal Sunteck Realty Pvt Ltd to engage in mediation, underlining the mandatory nature of Section 12-A of the Commercial Courts Act, 2015. This section mandates pre-institution mediation unless urgent interim relief is warranted.
The dispute centers around Oram Realty's claim for recovery of over Rs. 18.58 crores from Piramal Sunteck, pertaining to civil construction work completed on a project in Navi Mumbai. The suit, filed by Oram Realty, bypassed the pre-institution mediation process, citing urgency. However, the court found no substantial evidence of urgency that would justify such bypassing.
Justice Jadhav, referencing multiple Supreme Court judgments, underscored the importance of mediation in resolving commercial disputes efficiently and cost-effectively. The court observed that while Oram Realty bypassed the mediation requirement, the alleged urgency did not meet the threshold required to dispense with this mandatory step. The court cited the Supreme Court's decision in "Patil Automation Pvt. Ltd. Vs. Rakheja Engineers Pvt. Ltd." to emphasize that non-compliance with Section 12-A could lead to the rejection of the plaint under Order VII Rule 11 of the Civil Procedure Code.
Instead of dismissing the suit, the court opted to place it in abeyance, urging both parties to explore mediation within a stipulated timeframe of three months, extendable by two months with mutual consent. This decision reflects the court's inclination to uphold legislative intent while allowing parties a chance to resolve their differences without further litigation.
This ruling serves as a reminder of the judiciary's commitment to enforcing statutory mandates aimed at reducing litigation burdens and promoting amicable dispute resolution.
Bottom line:-
Section 12-A of the Commercial Courts Act, 2015 mandates pre-institution mediation unless urgent interim relief is contemplated. Non-compliance does not automatically result in dismissal of the suit but may lead to abeyance of the proceedings for mediation.
Statutory provision(s): Commercial Courts Act, 2015 Section 12-A, Civil Procedure Code, 1908 Order VII Rule 11
Oram Realty Pvt Ltd v. Piramal Sunteck Realty Pvt Ltd, (Bombay) : Law Finder Doc id # 2918762
