Urgency in Seeking Injunction Can Justify Skipping Pre-Institution Mediation Under Section 12A CCA: Delhi High Court Upholds Possession Suit and Interim Restraint

“When Interim Relief Is Urgent and Credible, Mediation Can’t Be a Mandatory Hurdle”— Delhi High Court upheld a trial court's refusal to reject a civil suit despite absence of pre-institution mediation under Section 12A of the Commercial Courts Act, 2015, and also confirmed an interim injunction restraining creation of third-party interest in a high-value commercial tenancy dispute involving rent arrears of nearly ₹60 lakh.

Justice Girish Kathpalia held:
“The apprehension of the plaintiff that the defendant may surreptitiously walk out of the subject property after creating third party interest cannot be a sham or illusory... urgency of interim relief justified exemption from pre-institution mediation.”

Background: Possession Suit Over Commercial Property Triggers Procedural Challenge Under Section 12A CCA

The dispute arose out of a commercial tenancy where Daruk Hospitality Pvt. Ltd., the tenant, had leased the ground floor of property no.2, Community Centre, East of Kailash, New Delhi from Hexa Estate Pvt. Ltd. The landlord filed a suit for possession, rent arrears, and mesne profits, citing non-payment of rent. The tenant, in turn, filed an application under Order VII Rule 11 CPC for rejection of the plaint, arguing that the suit was non-maintainable due to non-compliance with the mandatory pre-institution mediation process under Section 12A of the Commercial Courts Act.

The trial court had not only dismissed this rejection plea but also granted interim injunction under Order XXXIX Rule 1 and 2 CPC, restraining the tenant from creating third-party interest in the property.

“Real and Not Illusory Urgency Exists When Rs. 60 Lakh in Arrears and Bailiff Already Appointed”: Court Affirms Interim Restraint

The tenant argued that urgency cannot be assumed merely because interim relief was sought. However, the Court rejected this line, holding that “urgency must be real”, and in the present case, it clearly was.

The Court noted that the landlord had already obtained orders under Order XV-A and Order XXXIX Rule 10 CPC for payment of arrears, and the tenant failed to deposit the rent, leading to execution proceedings. The Court recorded:

“The petitioner/defendant did not pay or deposit the arrears of rent... the bailiff has already been appointed pertaining to the lease of the mezzanine floor... for the ground floor, execution is still continuing.”

Further, Justice Kathpalia held:

“Apprehension of the respondent/plaintiff that the petitioner/defendant surreptitiously would walk out of the subject property after creating third-party interest cannot be treated as sham or illusory.”

“When Exemption from Mediation Is Already Granted and Unchallenged, It Attains Finality”: No Scope for Re-litigating Section 12A Objection

A vital fact influencing the Court’s decision was that the trial court had already granted exemption from pre-institution mediation through a separate order dated 07.09.2024, which remained unchallenged. The Court emphasized:

“That order, having admittedly not been challenged, has attained finality... That also would be a relevant factor to justify rejection of application under Order VII Rule 11 CPC.”

Therefore, the petitioner’s renewed objection under Section 12A was legally impermissible.

“Plaint Rejection Can’t Be Based on Defendant’s Allegations—Only Contents of the Plaint Matter”: Court Clarifies Order VII Rule 11 Scope

Apart from the Section 12A argument, the tenant had also raised a plea of enhancement of ‘fit out period’ and payment until July 2024, but the Court refused to consider such contentions at this stage, stating:

“The trial court has to confine itself to the plaint only and not traverse through the defence to the suit while considering application under Order VII Rule 11 CPC.”

 “No Infirmity in Trial Court Order”—Delhi High Court Upholds Interim Injunction and Suit Continuance

Justice Kathpalia concluded with categorical affirmation of the trial court’s approach:

“I am unable to find any infirmity in the impugned order, so the same is upheld. Consequently, the present petition and the accompanying applications are dismissed.”

This ruling reinforces that urgent need for protection of property rights, especially when significant arrears exist and execution is ongoing, can justify waiver of pre-institution mediation under Section 12A of the CCA. It also reiterates the strict limitations of Order VII Rule 11, cautioning defendants from using it to prematurely derail otherwise maintainable civil suits.

Date of Decision: 22 September 2025