Supreme Court: Suit Can Be Proceeded Without Section 12A Commercial Courts Act Compliance Even If Urgent Interim Relief Is Denied

The Supreme Court held that a Plaintiff’s Suit can be proceeded without compliance of Section 12A of the Commercial Courts Act, 2015 (CCA) even if the urgent interim relief is denied.

The Court held thus in a Civil Appeal preferred against the Judgment of the Calcutta High Court, which disposed of the Revision Application.

The two-Judge Bench of Justice J.B. Pardiwala and Justice R. Mahadevan observed, “The test for “urgent interim relief” is if on an examination of the nature and the subject-matter of the suit and the cause of action, the prayer of urgent interim relief by the plaintiff could be said to be contemplable when the matter is seen from the standpoint of the plaintiff. … Even if the urgent interim relief ultimately comes to be denied, the suit of the plaintiff may be proceeded with without compliance with Section 12A if the test for “urgent interim relief” is satisfied notwithstanding the actual outcome on merits.”

The Bench emphasised that the Courts must be wary of the fact that the urgent interim relief must not be merely an unfounded excuse by the Plaintiff to bypass the mandatory requirement of Section 12A of the 2015 Act.

Senior Advocate Vikas Singh appeared for the Appellant while Additional Solicitor General (ASG) Archana Pathak Dave appeared for the Respondents.

Reasoning

The Supreme Court in the above context of the case, said, “… the test under Section 12A is not whether the prayer for the urgent interim relief actually comes to be allowed or not, but whether on an examination of the nature and the subject-matter of the suit and the cause of action, the prayer of urgent interim relief by the plaintiff could be said to be contemplable when the matter is seen from the standpoint of the plaintiff.”

The Court added that the urgent interim relief must not be merely an unfounded excuse by the Plaintiff to bypass the mandatory requirement of Section 12A of the 2015 Act.

“As we have discussed, factors like forfeiture of court fees, ambiguity over the applicability of Section 14 of the Limitation Act, unsettling of settled cases, etc. were a few other reasons which weighed with the Court in arriving at its decision of according prospectivity to the judgment. Thus, we find it difficult to accept the argument advanced by the appellant that the plaint must be rejected for the reason that the suit has not made substantial progress after its institution”, it further held.

The Court also noted that the mediation proceedings must be completed within the time frame stipulated by Section 12A of the CCA and the PIMS Rules, that is, within a period of three months and extendable by two more months, if the need so arises.

Accordingly, the Apex Court dismissed the Appeal and directed the Registry to circulate a copy of the Judgment to all High Courts.

Cause Title- M/s Dhanbad Fuels Private Limited v. Union of India & Anr. (Neutral Citation: 2025 INSC 696)

Click here to read/download the Judgment