2024 (3) TMI 584 - HC - Indian Laws

Seeking exemption from pre-litigation mediation, as required by Section 12-A of the Commercial Courts Act, 2015 - Proceedings u/s 138 of the Negotiable Instruments Act, 1881 - suit for recovery alongwith interest and future interest - HELD THAT - The plaintiff s case here is predicated only on the fact that it has already undertaken efforts to settle the disputes between parties. Appellant refers to in paragraph 3 of the application, wherein it is stated that the parties were also referred to mediation. However, I do not find this case to be supported by the documents annexed to the application. There is no report of any mediation centre stating that mediation has failed. The orders of the learned Judicial Magistrate, Chandigarh, annexed to the application, also demonstrate only that the parties submitted before the Court that there was chance of compromise, but the attempt was ultimately found to be futile. In the present case, there is no record that an attempt has been made in mediation, and that no urgent relief is sought. Pre-litigation mediation was therefore mandatory. The application is consequently dismissed, and the plaint is also rejected under Order VII Rule 11 of the Code of Civil Procedure, 1908. The suit is accordingly dismissed.

Summary

Issues involved: Application seeking exemption from pre-litigation mediation under Section 12-A of the Commercial Courts Act, 2015.

Summary of Judgment:

Issue 1: Exemption from Pre-Litigation Mediation
1. The plaintiff filed a suit for recovery of a specific amount, not seeking urgent interim relief, but requested exemption from pre-institution mediation due to a failed attempt at settlement during proceedings under the Negotiable Instruments Act.
2. The plaintiff relied on a Division Bench judgment to argue against the necessity of fresh mediation after a prior attempt, although not in the prescribed manner.
3. Section 12-A of the Act mandates pre-institution mediation, as held in the Supreme Court case of Patil Automation, effective from a specified date.
4. The Court emphasized the importance of pre-litigation mediation in commercial disputes, highlighting its benefits and the mandatory nature of Section 12-A.
5. Since there was no record of a mediation attempt and no urgent relief sought, pre-litigation mediation was deemed mandatory, leading to the dismissal of the application and rejection of the plaint under Order VII Rule 11.

Final Decision:
The application seeking exemption from pre-litigation mediation was dismissed, and the plaint was rejected under Order VII Rule 11. The suit was consequently dismissed, with the plaintiff having the option to file a fresh suit after complying with Section 12-A of the Act.