- The High Court of Madras held that a suit will be affected by Section 12 A of the Commercial Courts Act if it doesn’t have an “urgent interim relief”.
- Section 12 A hinders filing a commercial suit when pre-institution mediation was not executed.
- Justice M. Sundar noted that interim relief and urgent interim relief are two distinct terms and interim relief requires the fulfillment of pre-litigation mediation unless urgent interim relief is being proved.
- The civil suit was filed by an audio-visual equipment-supplying company seeking relief of 6.3 crore rupees from the defendant.
- The plaintiff demanded repayment for his purchase of equipment like projectors and speakers for the cinema theatre.
- The court sought clarification from the plaintiffs following the recent Supreme Court’s judgment in the Patil Automation Case concerning fulfillment of Sec 12 A of the Commercial Courts Act.
- The case decided that commercial suits filed without completion of pre-institution mediation in absence of urgent interim relief would be rejected under Order VII Rule 11 CPC.
- The plaintiffs contended that the decision delivered in the Patil case shall not bind them as the suit was instituted before the judgment and that urgent interim relief was prayed for. Hence, they are to be exempted from mediation.
- The court rejected the contentions placed and observed that the plaintiff filed the leave to sue application before the Patil case’s judgment was delivered.
- The terms “urgent”, “interim” and “relief” were taken for literal interpretation. Urgent interim relief is a relief that is temporary or provisional and is so imperative that any possible wrong or injury will surpass the exhausting remedy of pre-institution mediation.
- The matter should have required immediate attention so much that the time consumed in exhausting the pre-institution remedy would lead to wrong or injury to the plaintiff which should be prevented.
- The court has laid down a set of parameters that are non-exhaustive to determine if relief is an “urgent interim relief”:
- whether prayer for interim relief is a result of profound thinking of the possibility of the happening
- whether the matters require immediate or prompt action which is of such a nature that exhaustion of pre-institution mediation without intervention could lead to an irreversible situation
- If urgency is caused by the plaintiff’s action, then he can’t take advantage of the same
- High standard is needed to establish the necessity of prompt action by urgency.
- Plaintiff shall have fairground in urging urgency and interim measure
- Actual or apprehended injury or wrong should be so imminent that the plaintiff should satisfy the court that he shall not be made to suffer.
- The court observed that the abovementioned rules were not covered in the present case.
- Since the demand notice by the plaintiff was dormant for five months and he had only approached the court on mere apprehension that the defendant was going to sell his assets. This cannot be a ground to seek urgent interim relief.
- The plaint was therefore rejected by the court and the plaintiff was free to approach the court after exhausting his remedy of pre-institution mediation and settlement under Section 12 of the Commercial Courts Act.
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