Calcutta High Court
Goodfaith Holdings Private Limited vs M/S. Supreme Wood Products Private … on 29 April, 2025
IN THE HIGH COURT AT CALCUTTA
ORIGINAL SIDE
COMMERCIAL DIVISION
Present:
The Hon'ble Justice Krishna Rao
G.A. No. 2 of 2021
With
G.A. No. 3 of 2021
In
C.S. (COM) No. 312 of 2024
[Old No. C.S. 186 of 2021]
Goodfaith Holdings Private Limited
Versus
M/s. Supreme Wood Products Private Limited
Mr. Suman Dutt, Sr. Adv.
Mr. Ovik Sengupta
Mr. Anil Choudhury
Mr. Aurin Chakraborty
Md. Shah Minhajuddin
... For the plaintiff.
Mr. Nirmalya Dasgupta
Ms. Bhawna Parasramka
2
Ms. Patrali Ganguly
... For the defendant.
Hearing Concluded On : 04.04.2025
Judgment on : 29.04.2025
Krishna Rao, J.:
1. The defendant has filed the present application being G.A. No. 2 of
2021 praying for revocation of leave granted for dispensation of the
requirement of Section 12A of the Commercial Courts Act, 2015.
2. The plaintiff has filed the suit being C.S. (Com) No. 312 of 2024 (Old
No. CS 186 of 2021) against the defendant for recovery of an amount of
Rs. 64,74,333/-. In the suit. the plaintiff has also prayed for leave
under Clause 12 of the Letters Patent, 1865 and leave for dispensation
of compliance of Section 12A of the Commercial Courts Act, 2015.
3. In paragraph 20 of the plaint, the plaintiff has pleaded urgency for
grant of leave for dispensation of compliance of Section 12A of the
Commercial Courts Act, 2015 which reads as follows:
“20. The plaintiff has now come to know that
the defendant and its directors are in the process of
transferring the assets including the share-holding
in their connected companies so as to render the
defendant company a shell company. There is
grave urgency in the matter and as such, the
plaintiff prays for leave for dispensation of
compliance of Section 12A of the Commercial
Courts Act, 2015 to present the instant plaint and
to move an application seeking appropriate
protection of its rights.”
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4. By an order dated 16th September, 2021, this Court has granted leave
under Clause 12 of the Letters Patent, 1865 as well as under Section
12A of the Commercial Courts Act, 2015 which reads as follows:
“The Court: Leave, as prayed for, under
Clause 12 of the Letters Patent, 1865 and for
dispensation of the requirement under Section 12A
of The Commercial Courts Act, 2015 is granted.
The plaint is presented and admitted, subject
to scrutiny by the department and subject to Court
Fees being put in by the Advocate-on-record of the
plaintiff within a week from date.”
5. Section 12A of the Commercial Courts Act, 2015, reads as follows:
“12-A. Pre-Institution Mediation and
Settlement.-(1) A suit, which does not contemplate
any urgent interim relief under this Act, shall not
be instituted unless the plaintiff exhausts the
remedy of pre-institution mediation in accordance
with such manner and procedure as may be
prescribed by rules made by the Central
Government.
(2) The Central Government may, by
notification, authorize the Authorities constituted
under the Legal Services Authorities Act, 1987 (39
of 1987), for the purpose of pre-institution
mediation.
NOTIFICATION
Noti. No. S.O. 3232 (E), dated July 3,
2018.- In exercise of the powers conferred by sub-
section (2) of Section 12-A of the Commercial Courts
Act, 2015, the Central Government hereby
authorizes the State Authority and District
Authority constituted under the Legal Services
Authorities Act, 1987 (39 of 1987), for the purpose
of pre-institution mediation and settlement under
Chapter IIIA of the Commercial Courts Act, 2015.
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(3) Notwithstanding anything contained in the
Legal Services Authorities Act, 1987 (39 of 1987),
the Authority authorised by the Central
Government under sub-section (2) shall complete
the process of mediation within a period of three
months from the date of application made by the
plaintiff under sub-section (1):
Provided that the period of mediation may be
extended for a further period of two months with
the consent of the parties:
Provided further that, the period during which
the parties remained occupied with the pre-
institution mediation, such period shall not be
computed for the purpose of limitation under the
Limitation Act, 1963 (36 of 1963).
(4) If the parties to the commercial dispute
arrive at a settlement, the same shall be reduced
into writing and shall be signed by the parties to
the dispute and the mediator.
(5) The settlement arrived at under this section
shall have the same status and effect as if it is an
arbitral award on agreed terms under sub-section
(4) of section 30 of the Arbitration and Conciliation
Act, 1996 (26 of 1996).].”
6. In the case of Laxmi Polyfab Pvt. Ltd. Vs. Eden Realty Ventures Pvt.
Ltd. and Another reported in 2021 SCC OnLine Cal 1457, the
Coordinate Bench of this Court has laid down that:
“51. Section 12A of the Act of 2015 although
being procedural in nature has a public purpose.
The public purpose is to have commercial disputes
within the meaning of the Act of 2015 disposed of
expeditiously through mediation at the pre-
institution stage. A mandatory pre-institution
mediation will not only expedite the resolution of a
commercial dispute within the meaning of the Act of
2015 on an amicable platform but will also
facilitate and face up the time of a congested
Commercial Division or a Commercial Court to
devote time and energy to the disposal of the
5pending suits. Section 12A of the Act of 2015 if
construed as mandatory achieves twin objects of
expeditious disposal and freeing up time and space
for the Court.
52. The object of the Act of 2015 is to ensure
expeditious and speedy disposal of a commercial
dispute. Expedition and speed in disposing of a
commercial dispute is attained, in the wisdom of
the legislature, by a pre-institution mediation.
Section 12A(1) of the Act of 2015 distinguishes
suits filed under the Act of 2015 into two
categories. It treats the two categories of suits
differently. Suits are categorized into two on the
basis of need of the plaintiff to obtain urgent
interim relief. One category is a suit where the
plaintiff does not seek urgent interim relief. In such
category Section 12A of the Act of 2015 debars the
plaintiff from instituting a suit unless the plaintiff
exhausts the remedy of pre-institution mediation.
The provisions of Sub-Section (1) of Section 12A of
the Act of 2015 are such that, a plaintiff is
obligated to approach the appropriate authority for
a pre-institution mediation, unless he seeks urgent
interim relief, in respect of a commercial dispute, to
approach the Court for resolution of the commercial
dispute. Section 12A of the Act of 2015 prescribes
an obligation on the plaintiff to undertake the pre-
institution mediation and vests a corresponding
right on the defendant. The defendant enjoys the
right of a pre-institution mediation and in the
default of the plaintiff not going for pre-institution
mediation, then having a suit against the
defendant by such defaulting plaintiff, being barred
by law. Failure of the plaintiff to exhaust pre-
institution mediation, unless, he seeks urgent relief,
in a commercial dispute, gives a corresponding
right to the defendants to claim that, such suit
could not have been instituted by the plaintiff. Such
failure of the plaintiff will result in the dismissal of
the suit if allowed to be instituted. The other
category of suits under Section 12A of the Act of
2015 is a suit where the plaintiff seeks urgent
interim reliefs.
53. The two categories of suits under Section
12A of the Act of 2015 are treated differently. In
6the category of suits where the plaintiff does not
seek urgent interim relief, the plaintiff is statutorily
required to exhaust pre-institution mediation,
whereas a plaintiff seeking urgent interim relief is
not required to do so. In a suit where the plaintiff
does not seek urgent interim reliefs, limitation is
extended or kept in abeyance, as one may perceive
it, till the conclusion of the statutorily mandated
period of mediation while in the other category no
such benefit is extended.”
7. The Hon’ble Division Bench of this Court in the case of Gavrill Metal
Pvt. Ltd. Vs. Maira Fabricators Pvt. Ltd. reported in 2023 SCC
OnLine Cal 2443 held that:
“14. The section stipulates three months’ time
from the date of the application of the plaintiff
which can be further increased by two months with
the consent of parties for completion of the
mediation process. Take the example of a suit for
recovery of money lent and advanced. The
defendant debtor has huge debts in the market.
Several claims of creditors against him are
pending. When the plaintiff is contemplating filing
of the suit against him, he is in the process of
transferring his immovable property so as to defeat
the claim of the defendant as well as other
creditors. Immediately with the filing of the suit, the
plaintiff needs to move an interim application and
obtain an order restraining the defendant from
transferring the property and for the property to be
taken possession of by a receiver to be appointed
by the court.
15. Now, if the plaintiff is to undergo
mediation compulsorily, the defendant might keep
it pending for three months. For three months the
plaintiff would be unable to institute the suit and
hence, unable to obtain any relief. In the meantime,
the defendant could be successful in transferring
the property, thus defeating the claim of the
plaintiff. Hence, the justification for the exception in
Section 12A that in suits contemplating urgent
reliefs pre-litigation mediation could not be
required.
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16. The legislature, in my opinion, has used
the expression “contemplated” to express the
intention that an interim relief may be required at
the time of filing of the suit or may be required any
time the defendant expresses an intention to do
some act to defeat the decree to be passed.
17. So, the test, in my opinion, is not whether
an urgent interim relief is immediately required but
whether the averments in the plaint point to a
situation where even before expiry of three months,
the plaintiff may have the need to obtain interim
relief.”
8. In the case of Shristi Infrastructure Development Corporation
Limited Vs. Sarga Hotel Private Limited and Another reported in
2024 SCC OnLine Cal 7817 , the Hon’ble Division Bench of this Court
held that:
“31. Say the plaint discloses a simple money
suit, but it is likely that on notice of it, the
defendant might start disposing of some of his
assets to defeat the decree that might be passed
against him. So, the plaintiff may “contemplate” the
urgent relief of an attachment bef9ore judgment but
need not plead it in the plaint, as the cause of
action has not arisen at the time of instruction of
the suit.
32. please note the working of 12A(1(. The
legislature does not mention “plaint”. It uses the
word “suit”. It employs the word “contemplation”.
Hence it avoids such words as “averments or
statements in the plaint”. In other words, the
legislature does not say that from the statements or
averments in the plaint urgent reliefs obtained by
the plaintiff should be apparent. I would interpret
the Section as suggesting that if at the time of
presentation of the plaint before the judge from the
averment in the plaint and an affidavit of be filed
by the plaintiff it would appear that in the
contemplation of the plaintiff a situation for urgent
relief might arise in the period when mediation has
to be undergone, the court may allow the plaintiff to
institute the suit without mediation.”
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9. Recently another Division Bench of this Court in the case of Asa
International India Microfinance Ltd. Vs. Northern ARC Capital
Ltd. & Anr. passed in FMAT No. 3 of 2025 dated 17th January,
2025 taking into consideration of the judgments in the case of Gavrill
Metal Pvt. Ltd. (supra) and Shristi Infrastructure Development
Corporation Limited (supra) and held that:
“10. In this context, the legislative intent of
the phrase “an urgent relief” and the expression
“contemplate” are to be understood and applied.
11. Contemplation thus would not mean an
instant immediacy but the prejudice and the
irreparable loss and injury that the plaintiff is likely
to suffer if the plaintiff is made to wait for pre-
litigation mediation. The Court has to examine
whether the facts and circumstances justify a
genuine apprehension as opposed to a camouflage
of an irreparable injury the plaintiff is likely to
suffer.
16. Pre suit correspondence and conduct
between the parties can be indicative of existence
of genuine apprehension in the mind of the plaintiff
since any further delay might cause irreparable
and irretrievable prejudice to the plaintiff as there
might be every likelihood of the assets and
properties being dissipated or alienated”
10. It is the admitted fact that though the plaintiff has obtained leave for
dispensation of requirement of Section 12A of the Commercial Courts
Act, 2015 as per statement made in para 20 of the plaint but the
plaintiff has neither prayed for any urgent relief in the suit nor has filed
any application for grant of urgent relief. After admission of the plaint,
writ of summons was served upon the defendant and on receipt of writ
of summons, immediately the defendant has filed the present
9application. After receipt of the application filed by the defendant, the
plaintiff has filed an application being G.A. No. 3 of 2021 for grant of
interim relief.
11. The plaintiff affirmed the plaint on 10th September, 2021 and the same
was admitted on 16th September, 2021, subject to scrutiny by the
department. Writ of summons were issued on 28th September, 2021.
The defendant has filed the present application on 11th November,
2021. After receipt of the present application, the plaintiff has filed an
application for interim relief on 22nd November, 2021 i.e. about more
than two months. The plaintiff has moved the said application before
this Court on 24th November, 2021 but this Court finds that the
defendant has already filed an application for revocation of leave and
the plaintiff has filed an application for interim relief after two months,
accordingly, this Court passed an order for exchange of affidavits. This
Court finds that after 24th November, 2021, the applications were listed
on 8th November, 2024 i.e. after the period of two years and in between
the plaintiff has not chosen to move the application for interim relief.
12. In the case of Yamini Manohar Vs. T.K.D. Keerthi reported in (2024)
5 SCC 815, the Hon’ble Supreme Court held that:
“10. We are of the opinion that when a plaint
is filed under the CC Act, with a prayer for an
urgent interim relief, the commercial court should
examine the nature and the subject-matter of the
suit, the cause of action, and the prayer for interim
relief. The prayer for urgent interim relief should
not be a disguise or mask to wriggle out of and get
10over Section 12-A of the CC Act. The facts and
circumstances of the case have to be considered
holistically from the standpoint of the plaintiff. 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 7 Rule 11 of the Code;
at times, interim relief is granted after issuance of
notice. Nor can the suit be dismissed under Order 7
Rule 11 of the Code, because the interim relief, post
the arguments, is denied on merits and on
examination of the three principles, namely : (i)
prima facie case, (ii) irreparable harm and injury,
and (iii) 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.
11. Having stated so, it is difficult to agree
with the proposition that the plaintiff has the
absolute choice and right to paralyse Section 12-A
of the CC Act by making a prayer for urgent interim
relief. Camouflage and guise to bypass the
statutory mandate of pre-litigation mediation
should be checked when deception and falsity is
apparent or established. The proposition that the
commercial courts do have a role, albeit a limited
one, should be accepted, otherwise it would be up
to the plaintiff alone to decide whether to resort to
the procedure under Section 12-A of the CC Act. An
“absolute and unfettered right” approach is not
justified if the pre-institution mediation under
Section 12-A of the CC Act is mandatory, as held
by this Court in Patil Automation.
12. The words “contemplate any urgent
interim relief” in Section 12-A(1) of the CC 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, the contours of
which have been explained in the earlier
paragraph(s). This will be sufficient to keep in
check and ensure that the legislative object/intent
behind the enactment of Section 12-A of the CC Act
is not defeated.”
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13. The plaintiff has filed the present case for recovery of money. As per
pleadings, the defendant lastly paid the amount to the plaintiff on 20th
July, 2020. The cheque issued by the defendant dated 1st September,
2020 was dishonored. After dishonor of cheque, the plaintiff issued
notice to the defendant on 22nd September, 2020. On 14th October,
2020, the defendant by its reply denied the claim of the plaintiff. After
the period of one year from denial of the claim of the plaintiff by the
defendant, the plaintiff has filed the present suit.
14. In paragraph 20 of the plaint, the plaintiff has made an averment with
regard to urgency on the ground that the plaintiff came to know that
the defendant is in process of transferring the assets including the
shareholding in its connected companies. The plaintiff has not made
any prayer for urgent relief either in the plaint or by way of separate
application immediately after filing of the suit. The plaintiff has filed an
application for interim relief after receipt of notice of the present
application filed by the defendant i.e. after the period of more than two
months from the date of filing of the application.
15. As per pleading in the plaint, the cause of action arose in the month of
October, 2020 and the suit was filed on 10th September, 2021 and the
plaint was presented and admitted on 16th September, 2021. On the
same day, the plaintiff has obtained leave for dispensation of the
requirement of Section 12A of the Commercial Courts Act, 2015 but the
plaintiff has not prayed for any urgent interim relief. In the case of
Yamini Manohar (supra), the Hon’ble Supreme Court held that when
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a plaint is filed under the Commercial Courts Act, 2015 with a prayer
for an urgent relief, the Commercial Court should examine the nature
and the subject-matter of the suit, the cause of action and the prayer of
interim relief. In the case in hand, the suit filed by the plaintiff is for
recovery of money, cause of action arose in the month of October, 2020,
the plaintiff has filed suit in the month of September, 2021 but no
urgent relief is prayed for.
16. Recently, in the case of Asa International India Microfinance Ltd.
(supra), the Hon’ble Division Bench of this Court also held that pre suit
correspondence and conduct between the parties can be indicative of
existence of genuine apprehension in the mind of the plaintiff that any
further delay might cause further irreparable loss and injury to the
plaintiff but in the present case such apprehension is missing as the
plaintiff has not prayed for any urgent relief.
17. Considering the pleadings and the documents, this Court finds that
suit filed by the plaintiff does not contemplate any urgent interim relief
thus, the dispensation of the requirement under Section 12A of the
Commercial Courts Act, 2015 granted on 16th September, 2021, is
hereby revoked.
18. G.A. No. 2 of 2021 is allowed. Consequently, G.A. No. 3 of 2021 and
C.S. (Com) No. 312 of 2024 (Old C.S. No. 186 of 2021) are
dismissed.
(Krishna Rao, J.)
