Himachal Pradesh High Court: Camouflage To Bypass Statutory Mandate Of Pre-Litigation Mediation Should Be Checked When Deception Is Apparent

The Himachal Pradesh High Court observed that camouflage to bypass the statutory mandate of pre-litigation mediation should be checked when deception and falsity is apparent or established.

The Court observed thus in an Application filed under Order VII, Rule 11(d) read with Section 151 of the Civil Procedure Code, 1908 (CPC), seeking rejection of a plaint.

A Single Bench of Justice Ajay Mohan Goel enunciated, “Hon’ble Supreme Court has also held that non-grant of interim relief at the ad-interim stage when the plaint is taken up for registration/admission and examination, will not justify dismissal of the Commercial Suit under Order VII, Rule 7 of the CPC. Camouflage to bypass the statutory mandate of pre-litigation mediation should be checked when deception and falsity is apparent or established.”

The Bench reiterated that when a plaint is filed under the Commercial Courts Act, with a prayer for urgent interim relief, the Commercial Court is duty bound to examine the nature and subject matter of the suit, the cause of action and the prayer for interim relief.

Advocate Guruswamy Natraj appeared for the Non-Applicant/Plaintiff while Senior Advocate Rajiv Jiwan appeared for the Applicants/Defendants.

Contentions

The senior counsel for the Applicants argued that as the subject matter of the suit constitutes a commercial dispute as defined under Section 2(c) (xvii) of the Commercial Courts Act, 2015 (CCA), it was mandatory upon the Plaintiff/Non-Applicant to comply with pre-institution mediation as provided under Section 12A(1) and in this case as the Plaintiff did not exhaust the said remedy, therefore, the plaint is liable to be rejected on the said ground. He argued that the only exception to the above mandatory compliance is when the party has prayed for an urgent relief and the party can demonstrate before the Court that in light of the fact that it is urging the Court to grant urgent relief, it is not in the peculiar facts of that case, required to go for a pre-litigation mediation in terms of the provisions of the Act. He submitted that a perusal of the plaint demonstrates that herein the alleged cause arose in favour of the Defendant in the month of April, 2023 when the first Cease and Desist notice was issued and since then the Plaintiff has been sending such kind of notices or reminders to Defendant No.2 and as the Plaintiff approached the Court after a lapse of two years as from the date when the cause of action accrued, without demonstrating any sufficient cause so as to seek any urgent interim relief, the bypassing of the mandatory requirement of pre-litigation mediation cannot be condoned and the plaint deserves to be rejected under Order VII, Rule 11 of the CPC.

On the other hand, the counsel for the Plaintiff submitted that a perusal of the plaint clearly demonstrates that when the suit was filed by the Plaintiff along with an application under Order XXXIX, Rules 1 and 2 of the CPC praying for interim relief, the fact situation necessitated the Plaintiff to approach the Court to seek urgent relief in light of the conduct of the Applicant/Defendant No.2 who was flagrantly violating the trademark of the Plaintiff and as in this regard the last cause of action arose in the month of December, 2024, as is clearly spelled out in the plaint, and thereafter, as the Plaintiff immediately approached the Court by way of the suit as well as the application for urgent relief, the Plaintiff was not obliged to resort to the pre-litigation mediation and, therefore, as there is no merit in the application, the same be dismissed.

Court’s Observations

The High Court after hearing the arguments from both sides, noted, “The Court has to ascertain and satisfy itself that the prayer for urgent relief should not be a guise or mask to wriggle out of and get over Section 12A of the Act. … Therefore, now, in the facts as they stand narrated hereinabove, this Court has to adjudicate as to whether the plaintiff was justified in the facts of the case in bypassing the pre-litigation mediation as is envisaged under Section 12-A of the Act or not.”

The Court said that the compliance of Section 12A of the Act is mandatory and it is the duty of the Courts to ensure the compliance of the said provision and also to ensure that in the garb of urgent relief, Plaintiff does not circumvent the provisions of Section 12A of the Act.

“A perusal of the application filed by the plaintiff for the grant of urgent relief demonstrates that besides giving the chronological narration of the facts as well as the narration of the cause, as to how according to the plaintiff, the trademark of the plaintiff is being infringed by the defendants, in the backdrop of the fact that the plaintiff itself alleges in the plaint that the infringement was being done by the defendants, since the month of April, 2023, there is no whisper in the application as to what necessitated the plaintiffs to seek urgent relief, by bypassing the statutory provisions of Section 12A of the Act”, it added.

The Court clarified that it is not suggesting that the Plaintiff should have prayed for exemption for doing away with the mandate of Section 12A of the Act, however, as the suit filed is a Commercial Suit and Section 12A is a mandatory provision contained in the Commercial Courts Act, it ought to have been mentioned in the application as to what was the urgency, which was necessitating the filing of the application for urgent relief, at the stage, when the Suit was filed without resorting to pre-litigation mediation.

“The application is completely silent on this aspect of the matter. … Therefore, in the facts of this case, this Court is of the considered view that the plaintiff could not have done away with the mandatory pre-institution mediation in settlement, as is contemplated under Section 12A of the Act”, it further added.

The Court also remarked that the act of the Plaintiff in this case of bypassing the provisions of Section 12A of the Act, cannot be condoned and the non-grant of urgent relief to the Plaintiff has not weighed with the Court while passing the Order.

“This Court is alive to the fact that what has to be examined is whether urgent relief application was a bonafide application or just a camouflage to bypass Section 12A of the Act. In this case, the application was filed just to bypass Section 12A of the Act”, it concluded.

Accordingly, the High Court allowed the Application and rejected the Plaint.

Cause Title- Zydus Wellness Products Ltd. v. Karnal Foods Pack Cluster Limited and Others (Neutral Citation: 2025:HHC:29474)

Appearance:

Non-Applicant: Advocates Guruswamy Natraj, Shradha Karol, and Vaibhav Chauhan.

Applicants: Senior Advocate Rajiv Jiwan, Advocates Yug Singhal, Prashant Sharma, Aditi Sharma, and Praveen Chandel.

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