Court Must Scrutinise Invocation Of Expression 'Urgent Interim Relief' By Litigants U/S 12A Of Commercial Courts Act: Delhi High Court

The Delhi High Court has held that the expression “contemplates urgent interim relief” under Section 12A of the Commercial Courts Act 2015 though not defined under the statute, demands a rigorous scrutiny of commercial suits bypassing mandatory mediation to ensure that the benefit of exemption under the provision is not misused by unscrupulous litigants.For context, Section 12A mandates mediation before the institution of a commercial suit.Sub-section (1) thereof carves out an exception in suits where the plaintiff “contemplates urgent interim relief”.The legislative intent behind this set-up is to foster a culture of amicable settlement and reduce unnecessary litigation.However, stating that there is a growing pattern among parties to circumvent the statutory requirement of pre-institution mediation, the Court said extensive judicial scrutiny is necessary into the question whether the suit indeed contemplates an urgent interim relief.At the outset, Justice Purushaindra Kumar Kaurav pointed out that the expression “contemplates urgent interim relief” remains undefined in the provision. Thus, the central question before the bench was whether a simple assertion of urgent interim relief is sufficient for a litigant to fall in the exception or the same is tempered by some pragmatic considerations.The Court in its 44-page judgment said that at first blush, the expression may indicate requiring only the existence of an urgent interim relief and nothing more. However, the Court said, such an existence of urgency must be proved beyond plain assertions. It observed,“The phrase “contemplate any urgent interim relief” demands an elevated level of scrutiny as it is not a box to be checked at the plaintiff's sole discretion. To strike a balance, though the urgency is viewed from the plaintiff's perspective, but further scrutiny of the legitimacy of claim for exemption, by the Court, is crucial. This check-and-balance prevents abuse of process.”The Court said its role in such cases is somewhat akin to a sentinel at the door of the Commercial Court— it checks the plaintiff's “urgent” ticket. If the ticket (the claim of urgency) is valid, entry without mediation is allowed; if the ticket lacks genuineness, the plaintiff is rerouted to the mediation door.The Court then proceeded to break down the expression word by word and ascertain its meaning.The word “contemplates”, it said, is not to be construed as a mere ornamental language, but a term connoting that the plaintiff must, at the time of institution of the suit, “has anticipated or reasonably foreseen” the need for an urgent interim relief. “It entails a conscious application of mind to the factual substratum of the case, where the cause of action is so inherently exigent that any delay caused by the mediation process would cause irreparable prejudice. Such contemplation necessitates…that the cause of action is so pervaded by exigency that the procedural detour of mediation would occasion grave and irreparable prejudice. The urgency contemplated must, therefore, be neither speculative nor presumptive, but must be anchored in specific factual predicates, discernible ex facie from the pleadings, cause of action as also the conduct of the plaintiff.”The term “urgent”, the Court said, captures a situation of critical immediacy and exigency, where the plaintiff is genuinely precluded from awaiting the outcome of the mediation mechanism due to the impending risk of irretrievable harm. “In the determination of urgency, time is of utmost essence…the invocation of urgency must transcend mere perfunctory allusions, and instead find expression through averments in the pleadings, which, when subjected to judicial scrutiny, disclose a bona fide and imminent necessity for protective relief at the threshold stage,” said the Court. The words “interim relief”, it further held, pertain to an interlocutory remedy aimed at preserving the substratum of the dispute, protecting legal and forestalling irreversible injury before the lis attains final adjudication. “A bald or mechanical assertion of urgency, bereft of evidentiary underpinning, is insufficient to invoke the statutory exemption. Courts must remain vigilant against attempts to circumvent the legislative intent through superficial pleas of urgency, and are duty-bound to assess whether the claimed exigency withstands the rigours of judicial scrutiny as a bona fide invocation of the proviso rather than a stratagem to evade compliance with the mandatory pre-institution mediation framework,” it said.The Court cautioned that the term "urgent" contemplates a narrow class of situations wherein the plaintiff is confronted with such imminent and irreparable peril to their rights or interests that adherence to the pre-institution mediation process would be not only unreasonable or unjust but might also defeat the ends of justice. “The narrow scope of exemption could also be understood from an inherent understanding that all interim reliefs...

Court Must Scrutinise Invocation Of Expression 'Urgent Interim Relief' By Litigants U/S 12A Of Commercial Courts Act: Delhi High Court

Kapil Dhyani

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