High Court Rejects Commercial Suit for Non-Compliance with Mandatory Pre-Institution Mediation
Bombay High Court says compliance with Section 12-A of the Commercial Courts Act, 2015 is mandatory unless urgent interim relief is sought. Bald or unsubstantiated assertions of urgency cannot justify exemption from pre-institution mediation.
Mumbai, September 20, 2025: In a significant ruling, the Bombay High Court, presided over by Justice Jitendra Jain, has rejected the plaint filed by M/s Kamla Landmarc Real Estate Holding Private Limited and others due to non-compliance with Section 12-A of the Commercial Courts Act, 2015, which mandates pre-institution mediation unless urgent interim relief is required. The decision emphasizes the importance of adhering to legislative frameworks designed to streamline the resolution of commercial disputes.
The case revolved around a development agreement executed in 1995 between a federation of societies and a real estate developer, with further agreements and disputes arising over the years regarding the assignment of development rights. The plaintiffs sought relief following an alleged breach of the assignment agreement dated March 2010. They claimed urgency due to potential third-party rights being created by the defendants.
Justice Jain examined the submissions and found that the plaintiffs failed to demonstrate any bona fide urgent interim relief to justify exemption from the mandatory pre-institution mediation process. The Court noted that the plaintiffs did not move for urgent relief immediately after filing the suit, highlighting a lack of genuine urgency. The judgment underscored that bald assertions of urgency, without specific pleadings and demonstrable facts, cannot justify exemption from mediation under Section 12-A.
The ruling referenced several precedents, including decisions by the Supreme Court and other High Courts, reinforcing the necessity of the pre-litigation mediation process as a crucial step in the commercial litigation landscape. The Court clarified that the rejection of the plaint was solely based on non-compliance with Section 12-A and did not address the merits of the suit or the issue of limitation.
The judgment serves as a reminder of the legislative intent behind the Commercial Courts Act, which aims to promote early settlement of disputes and reduce the burden on courts through alternative dispute resolution mechanisms. The decision is expected to influence how commercial disputes are approached, particularly in ensuring compliance with statutory requirements before instituting suits.
Legal experts anticipate that this ruling will encourage parties involved in commercial disputes to engage in mediation as a constructive avenue for dispute resolution, fostering a culture of amicable settlements and preserving business relationships. The plaintiffs, if they choose to file a fresh suit, will need to comply with the mediation process, as outlined in the Act, before proceeding with litigation.
This case is a landmark in reinforcing the procedural rigor required in commercial litigation and highlights the judiciary's role in maintaining the integrity of legislative frameworks designed to enhance the ease of doing business in India.
M/s. Kamla Landmarc Real Estate Holding Private Limited, (Bombay) : Law Finder Doc Id # 2781202
