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TMI Blog2023 (10) TMI 1374X X X X Extracts X X X X X X X X Extracts X X X X ..... poses of Pre-Institution Mediation - In the present case, the appellant has not made his claim in terms of the notification of July 03, 2018 before the District Legal Services Authorities (DLSA) but had approached the DHCMCC(S) which held the proceedings on three occasions and the defendant/respondent despite service did not appear, resulting in Non-starter report being submitted by the DHCMCC. This report was not accepted by the learned DJ as the report is not that of DLSA. The issue which falls for consideration is whether the learned DJ was right in rejecting the plaint only on the ground that the appellant has approached DHCMCC(S) and not DLSA, by invoking the provisions of Order VII Rule 11(d). It is true that the provisions of the Section 12-A of the CCA specifies Pre-Institution Mediation as mandatory, in the sense that any litigation must be preceded by an attempt on the part of the parties to settle their inter se dispute, but the fact that the appellant had invoked the process of mediation before the DHCMCC(S) under the aegis of the Delhi High Court and the defendant/respondent did not appear in the proceedings, resulting in a Non-starter report would surely be construed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, 2022. The respondent/defendant was served by publication in the newspapers. She was proceeded ex parte vide order dated February 23, 2023 and her right to file written statement was closed as she did not appear and did not make any request for extension of time to file the written statement beyond the period of thirty days from the date of service. 5. It was in this background that the appellant had filed an application under Order VIII Rule 10 CPC for passing a decree in his favour. It was during the hearing on that application that a query was put by the learned DJ whether the Non-starter report dated March 05, 2020 issued by the DHCMCC(S) is valid, as the Center is not authorised for Pre-Institution Mediation under Section 12-A (2) CCA. 6. The case of the appellant on this issue was that the DHCMCC(S) is attached to the High Court of Delhi and the report of the centre is treated as a valid report. The other argument was that the judgment of the Supreme Court in Patil Automation Pvt. Ltd. Ors. Vs. Rakheja Engineers Pvt. Ltd., (2022) 10 SCC 1, which is effective from August 20, 2022 shall not be applicable to a suit filed prior to August 20, 2022 on the ground of non-compliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posite party. If the opposite party does not appear, non-starter report will be issued in Form-3, Schedule-I of the Rules framed by the Central Government. If the opposite party appears and agrees for mediation, the Authority shall refer the parties to a Ld. Mediator/Institution empaneled by it. Depending upon the success or failure of the mediation, the mediator will issue the appropriate certificate in the Form prescribed under Rules framed by the Central Government. (v) If the pre-institution mediation is a success, the settlement shall have the effect of an arbitral award in terms of Section 30 of Arbitration Conciliation Act 1996, as provided under Section 12A (5) CCA. 9. When the appeal was listed before this Court on July 20, 2023, we had passed the following order: The short issue which arises for consideration is whether the learned District Judge could have rejected the suit of the appellant herein only on the ground that plaintiff/appellant herein had initiated pre-litigation mediation before the Delhi High Court Mediation and Conciliation Centre (DHCMCC) and not before an authority contemplated under Section 12A of the Commercial Courts Act, 2015. The submission of lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose and it is settled position of law whenever there is a conflict between substantial justice and hyper-technicality then the substantial justice should be preferred. f) Another submission of the learned counsel for the appellant is that, under Section 12-A of the CCA, DHCMCC(S) is an appropriate centre for the purposes of Pre-Institution Mediation. He also states that DHCMCC(S) follows Delhi High Court Mediation and Conciliation Rules, 2004, which lays down the procedure for Mediation and Conciliation which was made by the High Court of Delhi following the principles of nature justice. g) He also states that the proposed amendment to Mediation Bill of 2021 recognises the court-annexed mediation centres like the DHCMCC(S) as one of the Centres/Institutions for pre-institution mediation under Section 12-A of the CCA. In support of this submissions, he has annexed Section 3(1) of the proposed Mediation Bill, wherein, he lays importance on or mediation centre annexed to a court or tribunal or such other forum shall be deemed to be a mediation service provider recognised by the Council . He also states that the Mediation Act, 2023, in Section 40 has brought court-annexed medic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Authorities Act, 1987 (39 of 1987); or (ii) a mediation service provider as defined under clause (l) of section 3 of the Mediation Act, 2021. ... m) He states that by approaching the DHCMCC for pre-Institution Mediation appellant has in full, effective and valid compliance of Section 12-A of the CCA, sought settlement of dispute. According to him, there can be various other scenarios, which can be considered as full, effective and valid compliance of Section 12-A of the CCA, which the impugned judgment completely loses sight of: i. If before filing of the suit, parties themselves engage in extensive settlement talks, but the settlement talks fail and there is sufficient material put on record to demonstrate pre-institution mediation talks; ii. If before filing of the suit, parties engage in settlement talks with assistance of a person known to both the parties who acts as a mediator, but the settlement talks fail; iii. If before filing of the suit, parties engage in settlement talks with the assistance of an independent/third-party mediator, but the settlement talks fail; iv. If before filing of the suit, one party makes a proposal to other party to engage in settlement talks for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommercial Courts (Pre-Institution of Mediation and Settlement) Rules, 2018 as contemplated under sub-section 21A read with sub-section (1) of Section 12-A of the CCA. 13. The sub-section 2 of Section 12-A mandate the Central Government may by notification authorise the authorities constituted under the Legal Services Authorities Act, 1987 for the purposes of Pre-Institution Mediation. 14. In the present case, the appellant has not made his claim in terms of the notification of July 03, 2018 before the District Legal Services Authorities ('DLSA', for short) but had approached the DHCMCC(S) which held the proceedings on three occasions and the defendant/respondent despite service did not appear, resulting in Non-starter report being submitted by the DHCMCC. This report was not accepted by the learned DJ as the report is not that of DLSA. 15. The issue which falls for consideration is whether the learned DJ was right in rejecting the plaint only on the ground that the appellant has approached DHCMCC(S) and not DLSA, by invoking the provisions of Order VII Rule 11(d). It is true that the provisions of the Section 12-A of the CCA specifies Pre-Institution Mediation as mandatory, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government: Provided that the bodies referred to in clauses (b), (c) and (d) shall be deemed to be mediation service providers recognised by the Council. (2) The mediation service provider shall be recognised by the Council in the manner as may be specified. 19. So, the DHCMCC(S) being a court-annexed mediation centre though under the Mediation Act, 2023 and not under the CCA Act, we are of the view that there has been a compliance of the spirit underlying Section 12A of the CCA. The issue can be seen from another perspective as the respondent had neither appeared before the DHCMCC(S) nor before the learned District Judge, despite service, the likelihood of effective pre-litigation mediation to be undertaken under the aegis of DLSA is highly unlikely as the respondent/defendant will not appear making it a futile exercise. 20. We must state here that, in Patil Automation Pvt. Ltd. (supra), the Supreme Court has held pre-institution mediation is mandatory, but has not said that the same need to be undertaken under the aegis of the Legal Services Authority though we must state that, Section 12-A stipulates so. 21. The submission made by the learned counsel for the appellant as noted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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