The present case pertains to an appeal being filed at the Hon’ble Supreme Court against an order of the Delhi High Court wherein an application under Order VII, Rule 11 of the Code of Civil Procedure filed by the petitioner - Yamini Manohar, defendant in C.S. (Comm.) No. 205/2022 was dismissed.

When the matter was brought before the Hon’ble Supreme Court, significant remarks were made by the division bench comprising of Justices Sanjiv Khanna and SVN Bhatti, regarding the approach the Commercial Courts should take with respect to prayer for urgent interim relief.

1. The Court stated that there is no need to file an application seeking waiver of the pre-litigation mediation and that the court must decide the same on the basis of the facts and circumstances mentioned in the pleadings of the suit.
2. Court stated 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 11 of the Code; sometimes, interim relief is granted post issuance of notice. Further, the court stated that the suit can also not be dismissed under Order VII, Rule 11 of the Code, because the interim relief, post the arguments, is denied on merits and on examination of the three principles, namely- prima facie case, irreparable harm and injury, and balance of convenience. The fact that the court issued notice and/or granted interim stay may indicate that the court is inclined to entertain the plaint."
3. The Court stated that commercial courts need to take a comprehensive assessment of the nature, subject matter, cause of action and prayer for interim relief. This process will ensure that the interim application made before the court is genuine and not just a way to escape the pre-litigation mediation condition contemplated under section 12A. Court further rejected the notion of an ‘absolute and unrestricted right’ of the plaintiff to paralyze Section 12A and asserted that section 12A empowers the court to make assessments based on plaintiff’s submissions, documents and the factual matrix of the case.

Towards the end, it was emphasized that the prayer for urgent interim relief should not be a disguise or mask to wriggle out of and get over Section 12A of the Commercial Courts Act. Camouflage and guise to bypass the statutory mandate of pre-litigation mediation should be checked when deception and falsity is apparent or established. It was further asserted that commercial courts do have a role, albeit a limited one, and the same should be accepted, otherwise it would be up to the plaintiff alone to decide whether to resort to the procedure under Section 12A of the Commercial Courts Act. It was clarified that the words ‘contemplate any urgent interim relief’ in Section 12A(1) of the Commercial Courts Act, with reference to the suit, should be read as conferring power on the court to be satisfied. They suggest that the suit must “contemplate”, which means the plaint, documents and facts should show and indicate the need for an urgent interim relief. This is the precise and limited exercise that the commercial courts will undertake. This will be sufficient to keep in check and ensure that the legislative object/intent behind the enactment of section 12A of the Commercial Courts Act is not defeated.

By - Zeb Hassan