% 01.03.2024 I.A. No. 803/2024 (seeking exemption from pre-litigation mediation)

1. This is an application by which the plaintiff seeks exemption from pre-litigation mediation, as required by Section 12-A of the Commercial Courts Act, 2015 ["the Act"],

2. This suit has been filed for recovery of an amount of Rs. 6,13,07,075/-, including principal amount of Rs.3,51,27,626/- and interest thereupon, and for future interest. No urgent interim relief is sought. However, Ms. Kaveeta Wadia, learned counsel for the plaintiff, seeks exemption from pre-institution mediation, on the ground that the parties made an attempt to settle the matter in mediation, in the course of proceedings under Section 138 of the Negotiable Instruments Act, 1881, but were unsuccessful.

This is a digitally signed order.

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3. Ms. Wadia relies upon the judgment of a Division Bench of this Court in Amit Walia v. Shweta Sharma [2023 SCC OnLine Del 6779] to submit that once mediation has taken place, albeit not in the manner prescribed under Section 12-A of the Act, the Court may not be required to relegate the matter to fresh mediation.

4. Section 12-A of the Act reads as follows:

[Emphasis supplied.]

5. This provision has been held to be mandatory in the judgment of Supreme Court in Patil Automation (P) Ltd. v. Rakheja Engineers (P) CS(COMM) 899/2023 Page 2 of 5 This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/03/2024 at 22:46:33 Ltd. [(2022) 10 SCC 1], which has been further explained in an order dated 13.10.2023 in Yamini Manohar v. T.K.D. Keerthi [2023 SCC OnLine SC 1382].

6. In Patil Automation [supra], the Court has examined the purpose behind the requirement for pre-institution mediation, and held that any suit instituted, violating the mandate under Section 12-A of the Act, must be visited with the rejection of the plaint, which power can be exercised suo moto. This declaration has been made effective from 20.08.2022. The present suit was instituted well after the said date.

7. In Yamini Manohar [supra], the Supreme Court has examined the exception, which is applicable in case the plaintiff seeks an urgent interim relief. The said exception is not applicable in the present case, as no urgent interim relief is contemplated.

8. The plaintiff's case here is predicated only on the fact that it has already undertaken efforts to settle the disputes between parties. Ms. Wadia 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.

9. I am of the view that this position renders the present case distinguishable from the facts in Amit Walia [supra], cited by Ms. Wadia. That judgment was rendered in a case where mediation had taken place CS(COMM) 899/2023 Page 3 of 5 This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/03/2024 at 22:46:34 under the aegis of Delhi High Court Mediation and Conciliation Centre. The Court held that this would be sufficient compliance with Section 12- A, even though the mediation had not taken place before the District Legal Services Authority, as required under the Act.

10. As explained by the Supreme Court in Patil Automation [supra], mediation is a potent tool for settlement of disputes, and is mandatory as a pre-litigation exercise in commercial disputes. Paragraphs 99.3 and 99.4 of the judgement explain the rationale thus:

[Emphasis supplied.]

11. The upshot of this discussion is that, 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.

12. The application is consequently dismissed, and the plaint is also CS(COMM) 899/2023 Page 4 of 5 This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/03/2024 at 22:46:34 rejected under Order VII Rule 11 of the Code of Civil Procedure , 1908. The suit is accordingly dismissed.

13. Needless to say, the plaintiff will be at liberty to institute a fresh suit, in accordance with law, after compliance with Section 12-A of the Act.

PRATEEK JALAN, J MARCH 1, 2024 Ssc/ CS(COMM) 899/2023 Page 5 of 5 This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/03/2024 at 22:46:34