Mandatory Means Mandatory – Section 12A Of Commercial Courts Act is Not Optional Merely Because the Government Forgot or Courts Were Unready”: Supreme Court

“No Relief for Ignorance or Delay – A Suit Filed Without Pre-Institution Mediation Is ‘Dead on Arrival’ Post-Patil Automation”: In a powerful reaffirmation of procedural discipline under commercial litigation, the Supreme Court of India emphatically held that non-compliance with Section 12A of the Commercial Courts Act, 2015 renders a plaint liable to rejection under Order VII Rule 11. The ruling reflects the Court’s uncompromising stance: “No plaintiff can bypass the pre-institution mediation merely because the court was unaware or the infrastructure was underdeveloped.”

This case marks a stern reminder that statutory mandates are not subject to convenience, procedural laxity, or administrative delay.

“The Bar of Section 12A Is Not Waivable — It Strikes at the Root of the Jurisdiction to Entertain the Suit”

The Court reiterated its earlier ruling in Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd., declaring:

“Section 12A of the Act is mandatory and any suit instituted violating this mandate must be visited with rejection of the plaint under Order VII Rule 11.”

The plaint filed by the Union of India on 9 August 2019, without urgent interim relief and without undergoing mandatory pre-suit mediation, was challenged. The Court, while refraining from dismissing the suit because it was filed prior to the cutoff date fixed in Patil Automation, clarified that the legal position now admits no ambiguity.

“Once the declaration of law has been made and given prospective effect, suits filed thereafter in breach of Section 12A are liable to be rejected regardless of practical constraints.”

“Lack of Awareness, Legal Advice, or Infrastructure Does Not Excuse a Violation of Law”

In one of the judgment’s most striking observations, the Court rejected the argument that non-availability of mediation centers or lack of knowledge of the law could override a statutory bar:

“Law does not compel an impossible performance. But where performance is possible — ignorance, unreadiness or institutional inertia is no defence.”

The plea that the DLSA or Commercial Courts were not fully operational for mediation in 2019 was dismissed as irrelevant after Patil Automation. The date of filing — not the stage of proceedings or the state of awareness — governs whether the bar applies.

“Timing of Objection Is Irrelevant — A Court Must Act on Its Own to Reject a Legally Barred Suit”

The Court also addressed the contention that the defendant did not raise the Section 12A objection at the earliest opportunity:

“When a suit is barred by any law, the court may reject the plaint even without a formal application. The power under Order VII Rule 11 is not fettered by delay.”

The principle is simple: A court cannot continue with a procedurally void suit merely because the defendant waited to object.

“Urgency Exception Must Not Become a Loophole — Mere Mention of Interim Relief Does Not Save the Suit”

Another critical clarification was on the exception to Section 12A — suits seeking urgent interim relief. The Court cautioned:

“Prayer for urgent interim relief should not be a disguise or mask to wriggle out of and get over Section 12A.”

In the current case, no such interim relief was sought by the Union of India. Therefore, Section 12A applied fully.

“Patil Automation Is Prospective — But the Clock Is Ticking for Plaintiffs Who Ignore It Now”

The Court confirmed that its declaration in Patil Automation would apply only prospectively, i.e., to suits filed on or after 20 August 2022. Thus, the suit filed in 2019 escaped rejection narrowly.

However, this protection is now closed: “Plaintiffs instituting suits after 20 August 2022 must comply with Section 12A. Non-compliance renders the suit incurably defective.”

This serves as a warning: the window of leniency is over. Future plaintiffs will not be spared for procedural ignorance.

The Supreme Court upheld the High Court’s decision to keep the 2019 suit in abeyance and direct pre-institution mediation. But it declared with clarity that going forward, non-compliance with Section 12A is fatal. The ruling is a landmark in aligning Indian commercial litigation with the principles of structured pre-litigation resolution, judicial economy, and strict statutory fidelity.

This judgment, quoting Patil Automation, reminds every litigant and counsel that:

“A right which is conferred and not exercised in the manner prescribed is a right not exercised at all.”

Date of Decision: 14 May 2025