Facts of the Case

Although the underlying recovery suit included a claim for GST on unpaid dues, this case is not about any GST law question — it turns entirely on the Commercial Courts Act, 2015. The Respondent (Plaintiff before the Trial Court) is an interior-design and renovation contractor who carried out work for the Petitioner (Defendant) in 2021. After a price dispute, the Plaintiff first filed a recovery suit (CS (COMM) No. 418/2021) for about Rs. 29.36 lakh. That suit was withdrawn after a settlement dated 04.03.2022, following which further work was executed and a fresh invoice for the balance amount went unpaid. The Plaintiff then filed a second suit for recovery of Rs. 8,85,460 (plus applicable GST and interest at 18% p.a.), along with an application under Order XXXIX Rules 1 and 2 CPC read with Order XXXVIII Rule 5 CPC for attachment before judgment. The Defendant applied under Order VII Rule 11 CPC to reject the plaint for failure to first undergo pre-institution mediation under Section 12A of the Commercial Courts Act, 2015, relying on the Supreme Court's ruling in Patil Automation v. Rakheja Engineers. The Trial Court dismissed that application, holding that a suit seeking urgent interim relief is exempt from the mandatory mediation requirement. The Defendant filed this revision petition against that order.

Issues Involved

  1. Whether Section 12A of the Commercial Courts Act, 2015 mandatorily required pre-institution mediation even where the plaintiff had sought urgent interim relief (attachment before judgment).
  2. Whether the plaintiff was required to seek a separate exemption from the court before invoking the urgent-relief carve-out.

Petitioner's Arguments

  • The plaintiff's application for attachment before judgment was a camouflage created by clever drafting to bypass Section 12A, since the suit was in substance a simple recovery suit.
  • The defendant's assets far exceeded the amount claimed, so there was no genuine urgency justifying interim relief, and the plaint should have been rejected for non-compliance with Section 12A.

Respondent's Arguments

  • The plaintiff had filed an application for urgent interim relief under Order XXXIX Rules 1 & 2 read with Order XXXVIII Rule 5 CPC along with the plaint, which by itself took the suit outside Section 12A.
  • Whether the court eventually grants the interim relief is irrelevant; what matters is that urgent relief was contemplated and pleaded at the time of filing.

Court Order / Findings

  • The Delhi High Court held that whether a suit involves urgent interim relief is to be determined solely from the pleadings and reliefs sought by the plaintiff, following the Division Bench ruling in Chandra Kishore Chaurasia v. RA Perfumery Works.
  • It is the plaintiff alone who decides whether to seek urgent interim relief; the court's eventual decision on whether to grant that relief does not retroactively make Section 12A applicable.
  • There is no requirement in Section 12A for a plaintiff to separately apply for exemption from pre-institution mediation.
  • Since the plaintiff had sought attachment before judgment along with the plaint, the suit was outside the mandatory mediation requirement, and the Trial Court's rejection of the Order VII Rule 11 application was upheld.
  • The revision petition was dismissed as devoid of merit.

Important Clarification

The GST component in the suit was simply part of the amount claimed as recoverable dues — the Court was never asked to, and did not, decide any question of GST law. The substantive ruling here concerns civil procedure: a plaintiff seeking urgent interim relief in a commercial suit need not exhaust pre-institution mediation under Section 12A of the Commercial Courts Act before filing.

Sections Involved

  • Commercial Courts Act, 2015 — Section 12A (pre-institution mediation)
  • Code of Civil Procedure, 1908 — Order VII Rule 11, Order XXXIX Rules 1 & 2, Order XXXVIII Rule 5

Decision – In Favour of

Disposed of in favour of the Respondent/Plaintiff; the Defendant's revision petition challenging maintainability of the suit was dismissed. No GST liability or amount was adjudicated.

Case Details

Court: High Court of Delhi at New Delhi  |  Case No.: C.R.P. 150/2023  |  Coram: Hon'ble Ms. Justice Jyoti Singh  |  Date: 31 May 2023

Link to Download the Order

Click here to view/download the full order

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.