Calcutta High Court
J K Engineering Private Limited vs Ane Industries Private Limited on 28 July, 2026
Author: Aniruddha Roy
Bench: Aniruddha Roy
Form J(2)
Sl.No. 01
In The High Court at Calcutta
Ordinary Original Civil Jurisdiction
[Commercial Division]
Original Side
Present:
The Hon'ble Justice Aniruddha Roy
IA NO. GA-COM/3/2025
In CS-COM/834/2024
J K ENGINEERING PRIVATE LIMITED
Vs
ANE INDUSTRIES PRIVATE LIMITED
For plaintiff: Mr. Anirban Ray, Sr. Adv.
Mr. Jayanta Sengupta, Adv.
Mr. Sounak Banerjee, Adv.
Mr. Sanjib Bandyopadhyay, Adv.
Ms. Anamika Karmakar, Adv.
Ms. Jiniya Deb, Adv.
For defendant : Mr. Jayanta Kumar Mitra, Sr. Adv.
Mr. Sarbajit Mukherjee, Adv.
Mr. Asit Kumar De, Adv.
Mr. Sourjya Roy, Adv.
Reserved on : 08.05.2026
Judgment on : 28.07.2026
ANIRUDDHA ROY, J.:
Facts:
1. This is a commercial suit. The defendant has forfeited its right to file
written statement by virtue of operation of law under Rule 1 to Order
VIII of Code of Civil Procedure, 1908 (hereinafter, the Code), as
2amended in view of the promulgation of the Commercial Courts Act,
2015 (hereinafter, C.C. Act).
2. The defendant has filed the instant application with the following
prayers :-
(a) Leave granted under Clause 12 of the Letters Patent, 1865
by order dated 6th January 2025 be revoked;
(b) Leave granted under Section 12A of the Commercial Act,
2015 by order dated 6th January 2025 be revoked;
(c) The suit being barred by limitation be dismissed;
(d) Pending disposal of this application the suit be stayed;
(e) The plaintiff be directed to pay the cost of and incidental to
this application to the defendant;
(f) To pass such further and other order as this Hon’ble Court
may be fit and proper.
3. On February 16, 2026, Mr. Jayanta Kumar Mitra learned Senior
Advocate appearing for the defendant/applicant on instruction
submitted that the point on the ground of law of limitation shall not be
pressed for, at this stage. The order also records the same. The order
dated February 25, 2026 shows that the defendant had concluded
submissions in support of its application on the points of revocation of
dispensation granted by the Court under Section 12A of C.C. Act and/or
revocation of leave granted by the Court under Clause 12 of the Letters
Patent, 1865 (hereinafter, Letters Patent). The plaintiff had previously
filed a suit being CS No.163 of 2016 (hereinafter, the First Suit) before
the non-commercial/regular division on August 18, 2016. The plaintiff
on the same cause of action had filed the second suit being CS No.213
of 2016 (hereinafter, the Second Suit).
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
3
4. Immediately upon filing of the said Second Suit, the plaintiff withdrew
the First Suit on August 19, 2016. The two suits were on the self-same
cause of action between the self-same parties with self-same reliefs.
5. In the second suit, the defendant filed a demurrer application which
travelled upto the stage of appeal. The Hon’ble Division Bench by its
order dated December 03, 2024, at page 38 to the instant application,
disposed of the appeal and permitted the plaintiff to withdraw the suit
and to institute a fresh suit within four weeks with a direction that in
default, the plaintiff should not be entitled to the benefit of Section 14 of
the Limitation Act, 1963.
6. Plaintiff then, pursuant to the direction of the Hon’ble Division Bench
had filed the instant suit, inter alia, praying for leave under Order II
Rule 2 of the Code, Clause 12 of the Letters Patent and leave for
dispensation of requirement for pre-litigation mediation under Section
12A of the C.C. Act.
7. On January 06, 2025, a Coordinate Bench by its order, at page 14 to
the instant application, granted leave to institute the suit without
compliance of the requirement for pre-litigation mediation. Leave was
also granted under Clause 12 of the Letters Patent. The suit was filed on
December 24, 2024 and the instant application was filed on August
11, 2025.
Submissions :
Recalling of the order granting dispensation for pre-litigation mediation :-
8. Mr. Jayanta Kumar Mitra learned Senior Advocate appearing for the
defendant/applicant refers to the provision laid down for pre-litigation
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In CS-COM/834/2024
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mediation under Section 12A of C.C. Act. He submits that it is a clear
bar created by the Statute with regard to filing of a suit which does not
contemplate any interim relief, the same shall not be instituted unless,
the plaintiff exhaust the pre-institution mediation in accordance with
and in such manner as prescribed under Section 12A of the C.C. Act.
9. Mr. Jayanta Kumar Mitra learned Senior Advocate appearing for the
defendant further submits that there is a mechanism prescribed under
the Mediation Rules 2018 framed under the said C.C. Act, which clearly
lays down the process of initiating the mediation process. Proviso to
Section 12A(3) states that the period during which the parties remain
occupied with the pre-institution mediation, such period shall not be
computed for the purpose of limitation under the Limitation Act, 1963.
It further provides that the mediation be completed within three months
of application.
10. Mr. Jayanta Kumar Mitra learned Senior Advocate further submits that
the existence of the said proviso makes it clear that the legislative intent
and mandate was only not to deprive an aggrieved party to force into
this mandatory mediation process at the cost of expiry of any sort of
limitation tenure.
11. Mr. Jayanta Kumar Mitra learned Senior Advocate then draws attention
to the plaint and submits that the plaintiff had all instance was
protected by the Division Bench’s order dated December 03, 2024 and
the plaintiff ought to have applied for the mandatory mediation process
contemplated under Section 12A of C.C. Act which also mandatorily
provided for exclusion of such mediation period. The plaintiff bypassing
IA No.GA-COM/3/2025,
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such mandatory provision made an unfounded excuse. Such contention
of the plaintiff was a camouflage and guise to bypass the statutory
mandate. The falsities of the averments in the plaint are apparent.
12. Referring to the plaint learned Senior Advocate submits that the prayers
in the suit are for money claim, declaration and injunction. The plaintiff
had also prayed for and obtained leave under Order II Rule 2 of the
Code.
13. Mr. Mitra further submits that on a meaningful reading of the plaint it
appears that the alleged dispute between the parties had been existing
since 2016, when the first suit was filed and no application for any
urgent interim relief had been filed or even orally prayed for on behalf of
the plaintiff before filing the instant application by the defendant. He
further submits that unless the suit had been instituted, the defendant
did not have right of audience and only upon institution of the suit, the
defendant got chance to examine the contentions of the plaintiff with
regard to its contemplation for urgent interim relief, as pleaded in
paragraph 43 of the plaint.
14. Mr. Jayanta Kumar Mitra learned Senior Advocate appearing for the
defendant submits that upon the plaint being served on the defendant,
for the first time, it found that there was no contemplation of urgent
relief actually pleaded with proper justification as required under
Section 12A of C.C. Act. The attempt of the plaintiff was just to bypass
the mandatory statutory bar under Section 12A of C.C. Act. Nothing has
been pleaded in the plaint as to how the plaintiff would be prejudiced, if
the mediation is not availed of.
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
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15. Mr. Jayanta Kumar Mitra learned Senior Advocate appearing for the
defendant then submits that in any case where no urgent interim relief
is sought, the plaint must be rejected during the parties to avail of the
mediation process as contemplated under Section 12A of the C.C. Act.
Undisputedly, according to the defendant, no urgent relief was
contemplated in the plaint inviting the Court to test the contemplation
of the plaintiff. Thus, the plaint is liable to be rejected. In support, he
has relied upon a decision of the Hon’ble Supreme Court In the matter
of: Patil Automation Private Limited and Others vs. Rakheja
Engineering Private Limited reported at (2022) 10 SCC 1.
16. Learned Senior Advocate, Mr. Mitra then submits that under the
provisions of Section 12A of C.C. Act, the suit must mandatorily met
with rejection of the plaint either on the prayer of the defendant or even
suo motu by the Court upon testing the contemplation pleaded in the
plaint. In support, he has relied upon a decision of the Hon’ble Supreme
Court In the matter of: Dhanbad Fuels Private Limited vs. Union of
India and Another reported at (2025) 9 SCC 424.
17. Mr. Jayanta Kumar Mitra learned Senior Advocate then submits that
though under Section 12A of the C.C. Act no leave is required to be
obtained for filing the suit without exhausting the remedy of pre-
institution mediation but in terms of Clause 8 of the High Court at
Calcutta Commercial Court Practice Direction 2021 (hereinafter,
Practice Direction 2021), which became effective from October 13,
2023, leave is required to be obtained.
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
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18. Learned Senior Advocate further submits that the law is now well
settled that the Court has to apply its mind whiling applying the legal
test for not initiating pre-litigation mediation on contemplation of urgent
interim relief by the plaintiff in the light of the provisions laid down
under Section 12A of C.C. Act. Reference has been made to a decision of
the Hon’ble Supreme Court In the matter of: Novenco Building and
Industry A/S vs. Xero Energy Engineering Solutions Private
Limited reported at 2025 SCC OnLine SC 2278.
19. Mr. Mitra, learned Senior Advocate then submits that Rule 6 of the
Practice Direction 2021 provides for forms of pleadings. Rule 6(1) (d) of
the Practice Direction, 2021, inter alia, provides that in the case of a
suit where the plaintiff has exhausted the remedy of pre-litigation
mediation in accordance with Rules prescribed by the Central
Government or that the suit contemplates any urgent interim relief by
reasons whereof, the plaintiff could not exhaust the remedy of pre-
litigation mediation with the brief statements of reasons to that effect.
On a meaningful scrutiny of the averments made in the plaint, it would
be evident that the plaintiff, save and except making a bald statement
has not described any statements of reasons as to why the plaintiff
contemplated an urgent interim relief for which there was no
requirement of pre-litigation mediation as contemplated under Section
12A of C.C. Act.
20. Mr. Mitra learned Senior Advocate submits that contemplation to the
test by a Court cannot be a mere formality, it has to justify the
dispensation and the same has to be evident on the basis of the actions
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and conduct of the plaintiff thereafter, otherwise, just becomes another
creative way of bypassing the statutory mandate by misguiding the
Court, which could not have been the intent of the law framers.
21. In the light of the above, learned Senior Advocate Mr. Mitra submits
that the leave granted by the Coordinate Bench alleging dispensation of
requirement of pre-litigation mediation under Section 12A of C.C. Act
should be revoked and the plaint should be rejected.
Revocation of leave under Clause 12 of the Letters Patent :-
22. Mr. Jayanta Kumar Mitra learned Senior Advocate appearing for the
defendant with reference to the averments made in the plaint and
comparing the same with the documents appended to the plaint
submits that it would be clear that the plaintiff in gross abuse of the
powers of this Court under Letters Patent has elected to file the instant
suit before this Court, with an oblique and mala fide motive to harass
the defendant. A bare perusal of, inter alia, paragraphs 2, 3, 5 and 6 of
the plaint would suggest that the parties allegedly had agreed to and
entered into the terms of the agreement and entered the memorandum
of understanding within the jurisdiction of this Court at 114/1A
Utkalmoni Gopalbandhu Sarani, Kolkata 700 007.
23. Learned Senior Advocate Mr. Mitra submits that it is needless to
mention that the instant suit being a commercial suit, the documents
presented to the suit are required to be filed in terms of Order XI Rule 1
of the Code. A declaration or oath is also required to be filed with the
plaint. As such, in commercial suit all the documents disclosed become
part of the plaint. A prima facie perusal of the memorandum of
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understanding, pleadings in the plaint at page 33 thereof would
suggest otherwise than the averments made in the plaint. He further
submits that it would appear that the memorandum of understanding
had been made and entered into at Chandigarh Road, Punjab on March
26, 2013. The registered office of the defendant had been recorded to be
at Chandigarh Road, Punjab. Plaintiff is represented through its
managing director. Registered office of the plaintiff is recorded to be at
Gangtok, Sikkim, represented through its director, whose address had
also been recorded to be at Gangtok, Sikkim. The memorandum of
understanding was executed for the works to be carried out at Assam.
From Clause (X) at page 37 of the plaint, the banker in-charge of the
transfer for payment was also situated at Nawanshahr, Punjab. The
terms of memorandum of understanding were duly executed by the
representatives of both the parties. Thus, prima facie, the cause of arose
either at Assam or at Punjab but outside the territorial jurisdiction of
this Court.
24. Mr. Mitra, learned Senior Advocate then submits that the address of a
witness in the memorandum of understanding being at Kolkata 700 007
cannot establish the averments alleged at paragraphs 2, 3, 5 and 6 of
the plaint, when the actual memorandum of understanding records
otherwise. He submits that furthermore, the alleged corporate office of
the plaintiff would not appear from any of the documents filed with the
plaint to establish the alleged averments made in paragraphs 10 and 25
of the plaint.
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In CS-COM/834/2024
A.R.,J.
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25. Mr. Jayanta Kumar Mitra learned Senior Advocate submits that it is an
undisputed fact that the recorded office of the defendant is at
Chandigarh Road, Punjab and the recorded office of the plaintiff is at
Gangtok, Sikkim as per the agreement. The works were to be carried out
at Assam. Payments were to be transferred from the bankers of the
defendant at Nawanshahr, Punjab.
26. In view of the above case having been made out in the plaint, Mr.
Jayanta Kumar Mitra learned Senior Advocate for the defendant invites
this Court to examine and peruse the pleadings in the plaint with the
documents produced with the plaint and to determine that granting of
leave under Clause 12 of the Letters Patent by the Coordinate Bench,
whether was justified or lawful.
27. Mr. Jayanta Kumar Mitra learned Senior Advocate for the defendant
further submits that Letters Patent on the one hand empowers this
Chartered High Court to allow the plaintiff to institute the suit before
this Court if part of cause of action arises within the territorial limits of
this Court, even though part arises outside, it also empowers this
Chartered High Court not to grant such leave to the plaintiff and ought
to revoke the leave if already granted in favour of the plaintiff under
Clause 12 of the Letters Patent in an appropriate case where Court finds
that balance of convenience warrants revocation as not to grant leave.
In support, he has relied a series of decisions :-
(a) In the matter of: Madanlal Jalan vs. Madanlal & Ors.
reported at AIR 1949 Cal 495.
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(b) In the matter of: Union of India vs. Kuppuswamy Naicker
reported at AIR 1978 Cal 211.
(c) In the matter of: Parasram Harnandrai vs. Chitandas and
Ors. reported at AIR 1952 Cal 82.
(d) In the matter of: Ultra Engineering vs. Spintex Industry
reported at AIR 1980 Cal 159.
(e) In the matter of: Rooprekha Sales Pvt. Ltd. vs. Navkar
Buildwell Pvt. Ltd. reported at 2015 SCC OnLine Cal
4436.
(f) In the matter of: Mighty Metals Pvt. Ltd. and Anr. vs.
Rajasthan Financial Corporation reported at 2011 SCC
OnLine Cal 2113.
28. Mr. Jayanta Kumar Mitra learned Senior Advocate for the defendant
submits that the choice of forum by the plaintiff in the instant suit, is
not a natural form and the same has put the defendant in difficulty to
contest the instant suit. More so, the suit filed by the defendant arising
out of the same transactions and/or same cause of action against the
plaintiff is pending before the jurisdictional Court at Punjab, therefore,
trial of the instant suit before this Court would not be in favour of the
balance of convenience of either of the parties. Inasmuch as, the
memorandum of understanding was executed by and between the
parties at Punjab where the defendant has instituted its suit and the
same is pending in Punjab.
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
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29. In view of the above submissions, Mr. Mitra, learned Senior Advocate
prays for revocation of leave granted by the Coordinate Bench under
Clause 12 of the Letters Patent.
30. Mr. Anirban Ray, learned Senior Advocate appearing for the plaintiff
opposing the instant application submits that, case of the plaintiff for
dispensation of compliance of Section 12A of C.C. Act is based on the
fact that the plaintiff had instituted the Second Suit before this Court,
inter alia, praying for similar reliefs as had been sought for. In the first
suit, plaintiff obtained a judgment upon admission under an order
dated February 07, 2019 at page 12 to the affidavit-in-opposition filed
by the plaintiff, the said judgment on admission was vacated due to the
dismissal of the said second suit. Hence, the plaintiff apprehends that
the defendant having suffered an earlier judgment may become wary
and deal with their assets to defeat the claim of the plaintiff.
31. The said judgment upon admission was challenged and finally travelled
upto to the Hon’ble Division Bench. The Hon’ble Division Bench
disposed of the appeal on December 03, 2024 granting liberty to the
plaintiff herein to institute the instant suit as a commercial suit within a
period of four weeks from the date of the said order and if the suit is
instituted within four weeks, the plaintiff would get the benefit of
Section 14 of the Limitation Act. The order dated December 03, 2024 is
available at page 44 to the affidavit-in-opposition.
32. Mr. Anirban Ray, learned Senior Advocate appearing for the plaintiff
submits that the plaint contains averments that there was urgency
involved in the instant suit, especially in view of the fact that the
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In CS-COM/834/2024
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plaintiff had already obtained a judgment upon admission against the
defendant on the self-same cause of action in the second suit on
February 07, 2019. The plaintiff had further averred in paragraphs 21,
25, 33, 34, 35 and 42 on the urgency involved to institute this suit as
the defendant was invading the rights of the plaintiff regarding the
machineries and equipments forming subject-matter of the instant suit.
He further submits that, moreover when the Hon’ble Division Bench
granted liberty to the plaintiff to institute the present suit within a
stipulated time, the leave was granted upon considering the
contemplation of urgency to institute the instant suit for an interim
relief. The plaintiff, therefore, had contemplated urgent interim relief
which were required to be passed in the instant suit, especially, in view
of the fact that the defendant had been aware of the claims of the
plaintiff in the instant suit and having suffered a judgment upon
admission, there was every chance that the defendant would dispose of
its assets to frustrate the claims of the plaintiff. Therefore, the plaintiff
had sought for leave for dispensation of the compliance of pre-litigation
mediation under Section 12A of the C.C. Act.
33. The plaint also pleads that part of the cause of action arose outside the
territorial limit of this Court. Hence, leave as prayed for in the plaint
under Clause 12 of the Letters Patent had been granted by the
Coordinate Bench and the plaint had been admitted.
34. Mr. Anirban Ray, learned Senior Advocate appearing for the plaintiff
submits that apart from relying upon the averments made in the plaint,
it was orally submitted on behalf of the plaintiff that for dispensation of
IA No.GA-COM/3/2025,
In CS-COM/834/2024
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compliance of the requirement for pre-litigation mediation under Section
12A of C.C. Act, an urgent interim relief was also contemplated.
35. The plaintiff had already obtained judgment upon admission in the
second suit on the self-same cause of action against the defendant on
February 07, 2019. Ultimately, the said judgment was set aside holding
that the suit should not have been filed and proceeded with in the
regular division and the suit should be proceeded before the commercial
division. On this ground, the said suit was dismissed. Since the
defendant was aware of the decretal claim, the plaintiff at the time of
institution of the instant suit contemplated an urgent interim relief with
apprehension that the defendant might deal with its properties in the
meantime. Furthermore, the Hon’ble Division Bench in its order dated
December 03, 2024 granted liberty to the plaintiff to institute the suit.
Once the Hon’ble Division Bench granted liberty to institute the suit, it
is sufficient within the meaning of Section 12A of the C.C. Act that
sufficient urgency was contemplated and as such on mere asking the
requirement for pre-litigation mediation should be dispensed with as the
suit was required to be filed within a specific time granted by the
Hon’ble Division Bench on an urgent basis. Thus, liberty to institute the
instant suit had already been granted by the Hon’ble Division Bench
which not only construed urgency for the plaintiff to institute the suit
but also it was based on the contemplation of the plaintiff for urgent
relief.
36. Referring to the judgment of the Hon’ble Supreme Court In the matter
of: Yamini Monohar vs. T.K.D. Keerthi reported at (2024) 5 SCC
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815, it was clarified that the urgent interim relief has to be considered
holistically from the stand point of the plaintiff and its contemplation of
such urgency. The contemplation used not as pre perception of the
Court but that of the plaintiff. The said judgment has also clarified that
refusal of interim relief at the interim stage, when the plaint is taken up
for admission, would not justify dismissal of the commercial suit under
Order VII Rule 11 of the Code. The same proposition of law had also
been laid down by the Hon’ble Division Bench In the matter of: Patil
Automation Private Limited and Others (supra).
37. Mr. Anirban Ray, learned Senior Advocate appearing for the plaintiff
submits that in the event, the plaint upon examination demonstrates an
urgency from the stand point of the plaintiff, there is no fetter or
justification in compliance of pre institution mediation process as
contemplated under Section 12A of C.C. Act. The Court ought to infer
the urgency on the basis of the averments made in the plaint,
documents annexed thereto and the facts stated in the plaint.
38. Mr. Anirban Ray, learned Senior Advocate appearing for the plaintiff
then refers to the judgment In the matter of: Dhanbad Fuels Private
Limited (supra), with specific reference to paragraphs 44 and 50 of the
report, it has been submitted that the law had proceeded one step
further while clarifying the test under Section 12A is not whether the
prayer for urgent interim relief actually comes to be allowed or not but
whether on an examination of the nature and the subject-matter of the
suit and the cause of action pleaded in the plaint, the prayer for urgent
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interim relief by the plaintiff should not said to be contemplable when
the matter is seen from the stand point of the plaintiff.
39. In the matter of: Dhanbad Fuels Private Limited (supra), the
Hon’ble Supreme Court had held that pleadings on record and also oral
submissions would be sufficient in ordinary course to demonstrate the
urgent interim relief from the stand point of the plaintiff since the act
does not contemplate filing of any application for the prayer for
dispensation of the pre-litigation mediation. In view of the observations
made by the Hon’ble Supreme Court In the matter of: Dhanbad Fuels
Private Limited (supra), according to Mr. Ray, the observations made
In the matter of: Patil Automation Private Limited and Others
(supra) which is a prior judgment had been diluted.
40. Mr. Anirban Ray, learned Senior Advocate appearing for the plaintiff in
further support of his contention has placed reliance on a judgment of
this Court dated November 07, 2025 In the matter of: Berger Paints
India Limited vs. GPHP Holdings Pvt. Ltd. rendered in IA GA
(COM)/3/2025 in CS(COM)/48/2025. He has further referred to a
judgment of the Hon’ble Supreme Court In the matter of: Novenco
Building and Industry A/S (supra), with a specific reference to
paragraph 20 of the report.
41. Mr. Anirban Ray, learned Senior Advocate appearing for the plaintiff
then submits that the plaintiff having contemplable urgency pleaded the
same in the plaint supported by the documents appended thereto, the
Coordinate Bench adjudicated the pleadings of the plaintiff and after
being satisfied with the contemplation for urgency, the Coordinate
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Bench allowed the dispensation for the pre-litigation mediation as
provided under Section 12A of C.C. Act and the leave was granted on
January 06, 2025.
42. Mr. Anirban Ray, learned Senior Advocate appearing for the plaintiff
further submits that the defendant had accepted the direction of the
Hon’ble Division Bench dated December 03, 2024 in pursuance whereof
the instant suit had been filed. The direction of the Hon’ble Division
Bench had attained finality to institute the present suit. The issue is,
therefore, barred by the principle of res judicata and/or constructive res
judicata in the instant application. In support, he has relied upon a
decision of the Hon’ble Apex Court In the matter of: Puja Ferro Alloys
P. Ltd. vs. State of Goa & Ors. reported at (2025) SCC OnLine SC
326.
43. Mr. Ray further submits that the Coordinate Bench while granting the
dispensation had exercised its discretion with application of mind and
reasons. The reasons are supported from the case pleaded in the plaint.
Hence, the leave granted to the plaintiff for dispensation of the
requirement for pre-litigation mediation as provided under Section 12A
of C.C. Act should not be recalled and/or revoked.
44. Mr. Ray learned Senior Advocate for the plaintiff then addressed the
Court on the next issue raised by the defendant for revocation of leave
under Clause 12 of the Letters Patent. Mr. Ray at the threshold submits
that for the purpose of adjudication of an application for revocation of
leave granted under Clause 12 of the Letters Patent, the averments
made in the plaint are only to be looked into and the same should be
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taken as true and correct. On a plain and meaningful reading of the
plaint case, it appears that MoU dated March 26, 2013 was executed at
the corporate office of the plaintiff at Gopalbandhu Sarani within the
territorial limit of this Court. Plaintiff has also pleaded in the plaint in
the respective paragraphs that part of cause of action had arisen
outside the territorial limit of this Court. This is sufficient for granting
leave under Clause 12 of the Letters Patent and to maintain the suit
before this Court.
45. Mr. Anirban Ray, learned Senior Advocate appearing for the plaintiff
further submits that an issue pertaining to the territorial jurisdiction
should be taken in the written statement as part of substantive defense
and cannot be summarily decided in an application for revocation of
leave granted under Clause 12 of the Letters Patent except in clear
cases wherefrom it can be inferred that the jurisdiction of this Court has
been wrongfully invoked and in a mala fide manner under the Letters
Patent. In support, he has relied upon a decision of the Hon’ble
Supreme Court In the matter of: Isha Distribution House Pvt. Ltd.
vs. Aditya Birla Nuvo Ltd. & Anr. reported at (2019) 12 SCC 205.
46. Insofar as the submissions of the defendant on forum convenience is
concerned, Mr. Ray, learned Senior Advocate submits that the
application is bereft of any particulars. The submissions which have
been made orally do not find place in the application. The defendant has
not stated who are the witnesses and what should be the number of
witnesses for the defendant to depose. It is also not the case of the
defendant that the witnesses are all located at Punjab where the
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defendant had instituted the suit or at Assam where the execution of
works had been taken place. The civil court where the defendant had
instituted the suit, according to the defendant is the competent forum
but no supporting material has been produced by the defendant in this
regard. Hence, the prayer for revocation of leave on the ground of forum
convenience is baseless, devoid of any material and no cognizance shall
be taken of the same. Inasmuch as, the contentions of the defendant for
forum convenience is barred by law of res judicata as the issue to the lis
had already been decided by another Coordinate Bench whiling hearing
the second suit when the defendant had filed a demurrer application
being GA 2998 of 2016, which was dismissed on contest and it was
decided on merit by a judgment dated November 22, 2017. The said
judgment had attained its finality.
47. Mr. Ray, learned Senior Advocate for the plaintiff then submits that the
plaintiff was not required to take any leave under Clause 12 of the
Letters Patent while instituting the instant suit in the commercial
division of this Court under the said Practice Direction of 2021. The
leave was prayed for and obtained for abundant caution. The Practice
Direction of 2021 framed by this Court had duly notified in October
2023 which categorically indicates that in the event of there being a
conflict in terms of Rules framed by this Court in comparison with the
provisions of the Code, as amended with the promulgation of C.C. Act,
the provisions of the Code as amended under the C.C. Act would
prevail. In the light of the above submissions, learned Senior Advocate,
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
20
Mr. Ray has prayed for dismissal of the instant application as the same
is devoid of any merit.
48. In reply to the submissions made on behalf of the plaintiff while
distinguishing the judgment in the In the matter of: Rahul S. Shah
vs. Jinendra Kumar Gandhi and Ors., reported at (2021) 6 SCC
418, Mr. Jayanta Kumar Mitra learned Senior Advocate appearing for
the defendant submits that the ratio in the matter would not apply in
the facts of the instant case. The judgment primarily deals with a
scenario when the parties were at an execution stage. After the decree
has been passed there was no scope for application of Section 12A of
C.C. Act.
49. While distinguishing the judgement In the matter of: Berger Paints
India Limited (supra) learned Senior Advocate, Mr. Mitra submits that
the judgment did not consider the provision under Rule 6 (1) (d) and
Rule 8 of the Practice Directions 2021 wherein, it has been specifically
provided that in case of any leave under Section 12A of C.C. Act, a brief
statement of the reasons to the effect why the plaintiff could not
exhaust the remedy for pre-institution mediation has to be stated.
Paragraph 43 of the plaint does not state such reason. Moreover, the
said judgment had not considered the judgment of the Hon’ble Supreme
Court In the matter of: Dhanbad Fuels Private Limited (supra) and
In the matter of: Noven Building and Industry A/S (supra).
Therefore, the ratio would not apply in the facts of the instant case.
50. The judgement in In the matter of: Srigopal Yarn Trading Pvt. Ltd.
& Anr. Vs. Mahalaxmi Enterprise & Ors., reported at 2025 (9) SCC
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
21
424 Would have no application in the facts of the instant case as the
judgment has not considered two judgments of the Hon’ble Supreme
Court In the matter of: Dhanbad Fuels Private Limited (supra) and
In the matter of: Noven Building and Industry A/S (supra).
51. Mr. Jayanta Kumar Mitra learned Senior Advocate appearing for the
defendant further submits that in passing the said judgment In the
matter of: Srigopal Yarn Trading Pvt. Ltd. & Anr., (supra), reliance
has been placed on the judgment of the Hon’ble Division Bench
reported at 2023 SCC OnLine Cal 2443. The judgment of the Hon’ble
Division Bench has no application in the facts of the instant case as the
said judgment was delivered before the said Practice Directions of 2021
was enforced, which become effective on November 20, 2023.
52. Inasmuch as, the view taken in the said judgment by the Hon’ble
Division Bench was contrary to the observations of the Hon’ble Supreme
Court In the matter of: Dhanbad Fuels Private Limited (supra) and
In the matter of Yamini Monohar (supra). Learned Senior Advocate
Mr. Mitra then submits that contemplation for urgent relief would not
depend on the history of a previous litigation between the same parties.
He further submits that leave that was granted by the Hon’ble Division
Bench to the plaintiff to file the suit and not for dispensation of
requirement under Section 12A of C.C. Act. There cannot be any
question of res judicata as the defendant was not heard while leave was
granted under Section 12A of C.C. Act.
53. Mr. Jayanta Kumar Mitra learned Senior Advocate appearing for the
defendant further submits that the recorded address of the plaintiff has
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
22
been mentioned in the agreement. A close perusal of the MoU, it
appears that the recorded address of the defendant is at Nawanshahr,
Punjab. The recorded address of the plaintiff at Sikkim and the MoU
was executed at Nawanshahr at Punjab. Stamp paper of the MoU also
suggests the same. Therefore, the forum at Punjab is not a convenient
forum for the parties, where the suit filed by the defendant is pending is
an absurd submission made on behalf of the plaintiff. The case made
out in the plaint along with the documents appended to the plaint
would show that admittedly the work was executed at Assam. The
defendant is at Punjab and the suit filed by the defendant is also
pending at Punjab, therefore, in all likelihood the balance of
convenience for the parties cannot be considered to be at Kolkata and
not Punjab.
54. The balance of convenience is clearly in favour of revocation of the leave
granted under Clause 12 of the Letters Patent. The transfer of the
instant suit to the convenient forum to be tried on merit is otherwise
warranted if the transfer placed otherwise does not inherently lack
jurisdiction.
55. To distinguish the judgment In the matter of: Isha Distribution
House Pvt. Ltd. (supra), learned Senior Advocate Mr. Mitra submits
that in the instant case petition for revocation of leave under Clause 12
of the Letters Patent was filed without filing the written statement by the
defendant. Whereas in the judgment, the plea was taken in the written
statement for revocation of leave, the defendant had not challenged the
jurisdiction of this Court but the defendant contends that the balance of
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
23
convenience warrants the suit to be transferred before the Civil Court at
Punjab where the same can be tried along with the suit filed by the
defendant, since the Civil Court at Punjab is a competent court having
jurisdiction.
56. In the matter of: Rikhab Chand Jain vs. Union of India reported at
2025 SCC OnLine SC 2510, Mr. Mitra submits that it was a judgment
rendered in writ jurisdiction and not under Letters Patent. The question
in the judgment whether the writ jurisdiction could be extended without
exhausting alternative remedy and not the question of revocation of
leave.
Decision :
57. After considering the rival submissions of the parties and on perusal of
the materials on record, this Court proceed to deal with the instant
application filed by the defendant.
Plea under Section 12A of C.C. Act :-
58. Section 12A of C.C. Act provides that a suit, which does not
contemplate any urgent interim relief under the Act, shall not be
instituted unless the plaintiff exhausts the remedy of pre-institution
mediation in the manner and mode prescribed under the procedure. The
provision further makes it clear that the period during which the parties
remain occupied with the pre-institution mediation, such period shall
not be computed for the purpose of limitation to institute a suit. The
provision imposses a clear bar, which is mandatory in nature, that the
plaintiff must exhaust the remedy of pre-institution mediation but the
exception is if the plaintiff contemplates an urgent interim relief.
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
24
However, the Section does not specify for dispensation of the
requirement of pre-institution mediation in the event, the plaintiff
contemplates an urgent relief. Rule 8 of the Practice Directions, 2021
provides for leave of Court for institution of suits without exhausting the
remedy of pre-institution mediation. The Practice Directions of 2021 has
been framed by this Court in due exercise of its power provided under
the C.C. Act. Rule 8 states that in the case of a suit under the C.C. Act
which contemplates any urgent relief by reasons of which the plaintiff
seeks to institute such suit without exhausting the remedy of pre-
institution mediation in terms of Section 12A of C.C. Act, the Court
shall be empowered to receive, try and determine such suit only upon
the leave of the Court having been first obtained. The Rule further
provides in the event the Court not being satisfied that the suit
contemplates any urgent relief which would justify the dispensation
with the necessity of the plaintiff exhausting the remedy of pre-
institution mediation, the Court shall be entitled to return the plaint
and directed the plaintiff to comply with the requirement of pre-
institution mediation within the meaning of C.C. Act.
59. On harmonious reading of Section 12A with Rule 8 of the Practice
Directions, 2021, makes it clear that from the statements made in the
plaint and on the basis of the submissions made on behalf of the
plaintiff, if the Court is satisfied that the contemplation of the plaintiff is
there for any urgent interim relief, the Court has ample authority and
discretion to dispense with the formality required for pre-institution
mediation and the Court is empowered to receive the plaint, try and
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
25
determine the suit. The Court must arrive at its satisfaction with the
case made out in the plaint and then shall use its power and discretion
judiciously.
60. It is the settled proposition now that the provision under Section 12A of
C.C. Act is a mandatory provision and the provision under C.C Act
should be read, construed and interpreted strictly. Liberal construction
has no role to play. If a suit is instituted in violation of the mandate
contained under Section 12A of C.C. Act must be visited with rejection
of the plaint.
61. In the recent judgment of the Hon’ble Supreme Court In the matter of:
Novenco Building and Industry A/S (supra) where the action
concerned related to continuing infringement of intellectual property
rights, the Hon’ble Supreme Court after considering all the previous
judgments on the field, namely, In the matter of: Patil Automation
Private Limited and Others (supra), In the matter of: Yamini
Monohar (supra), and In the matter of: Dhanbad Fuels Private
Limited (supra) had observed as under :-
“17. The scope and ambit of Section 12A of the Act
which makes pre-institution mediation mandatory for
commercial disputes, except where the suit
‘contemplates any urgent interim reliefs’, has been
considered in three recent decisions of this
Court. In Patil Automation Pvt. Ltd. v. Rakheja
Engineers Pvt. Ltd. a two-Judge Bench of this Court
dealt with a case where a suit for recovery of money
was filed without adherence to Section 12A of the Act.
It was held that Section 12A of the Act is mandatory
and any suit instituted in violation of the mandate
contained in Section 12A of the Act must be visited
with rejection of the plaint.
18. In Yamini Manohar (supra), another two-Judge
Bench of this Court laid down the criteria to judgeIA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
26
whether the plaint contains a prayer for urgent
interim relief, by taking into account the subject
matter of the suit, the cause of action and the prayer
for interim relief. It was further held that the facts
and circumstances of the case have to be considered
holistically from the standpoint of the plaintiff and
the prayer for urgent interim relief should not be a
disguise or mask to wriggle out of and get over Section
12A of the Act. The scope and ambit of the words
‘contemplate any urgent interim relief’
in Section12A of the Act, with reference to the suit,
were also considered and it was held that the plaint,
documents, and facts should show and indicate the
need for urgent interim relief. It was further held that
this is the precise and limited exercise that the
Commercial Courts will undertake.
19. In DHANBAD FUELS (P) LTD. v. UOI, another two-
Judge Bench of this Court held that the test under
Section 12A is not whether the prayer for urgent
interim relief actually comes to be allowed or not, but
whether on examination of the nature and the ( 2025)
SCC Online SC 1129 subject-matter of the suit and the
cause of action, the prayer for urgent interim relief by
the plaintiff could be said to be contemplable when the
matter is seen from the standpoint of the plaintiff. It
has been further held that the interim relief must not
merely be an unfounded excuse by the plaintiff to
bypass the mandatory requirement of Section 12A of
the Act.
20. The legal test distilled from the aforesaid
decisions for the purposes of rejection of the plaint
and for adjudication of interim relief can be culled out
as follows:
(i) Section 12A mandatorily requires pre-
institution mediation for commercial suits, non-
compliance of which would ordinarily render the
plaint institutionally defective.
(ii) A plaintiff can be exempted from the
requirement of Section 12A only when the plaint
and the documents attached with it clearly show
a real need for urgent interim intervention. A
wholesome reading of the plaint and the
material annexed to the plaint ought to disclose
the need for urgent relief.
(iii) The court must look at the plaint, pleadings
and supporting documents to decide whether
urgent interim relief is genuinely contemplated.
The court may also look for immediacy of the
peril, irreparable harm, risk of losing
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
27
rights/assets, statutory timelines, perishable
subject-matter, or where delay would render
eventual relief ineffective.
(iv) A proforma or anticipatory prayer for urgent
relief used as a device to skip mediation will be
ignored and the court can require the parties to
comply with Section 12A of the Act.
(v) The court is not concerned with the merits of
the urgent relief, but if the relief sought seems to
be plausibly urgent from the standpoint of the
plaintiff the court can dispense with the
requirement under Section 12A of the Act.”
62. Hon’ble Supreme Court In the matter of: Dhanbad Fuels Private
Limited (supra) specifically in its paragraphs 49 and 50 had observed
that the test under Section 12A of C.C. Act is not whether the prayers
for urgent interim relief actually comes to be allowed or not but whether
on an examination of the nature and subject-matter of the suit and
cause of action, the prayer for urgent relief by the plaintiff could be
said to be contemplable when the matter is seen from the stand point
of the plaintiff. It has been further observed by the Hon’ble Supreme
Court that the pleadings on record and also oral submissions would be
sufficient in ordinary course to demonstrate the urgent interim relief
from the stand point of the plaintiff since the provision does not
contemplate filing of any application praying for dispensation. In the
light of the said settled position of law if the provision under Section
12A of C.C. Act is read and examined, it also appears to this Court that
the expression “contemplate” has not been clarified by any further
expression or instance or situation or any state of affairs with regard to
the subject matter of the plaint. Therefore, it is the perspective which
has to be seen through the eyes of the plaintiff, as the case made out in
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
28
the plaint and then the discretion of the Court shall have to be
exercised with application of mind.
63. On a mindful reading of the order dated January 06, 2025, annexure-A
at page 15 to the application, it appears that the Coordinate Bench had
inter alia, observed as under :-
“As regards Section 12A of the Commercial Courts Act,
counsel for the plaintiff submits that initially the
plaintiff has filed the suit in the non-commercial
division, now, in terms of the order passed by the
Hon’ble Division Bench, the plaintiff has filed the
present suit before this Court and the claim of the
plaintiff is aware by the defendant and there is every
apprehension that the defendant will alienate the
assets if the plaintiff will go for the mediation in the
meantime.”
64. Since neither Section 12A of C.C. Act nor the Practice Procedure, 2021
specify or define what should be the grounds and/or causes to be
stated in the plaint contemplating an urgent interim relief, in absence of
such statutory prescription the perception for contemplating urgent
interim relief praying for dispensation of pre-institution mediation
would largely depend on the exercise of judicial discretion of the Court
by reading the statements made in the plaint and by considering the
submissions on behalf of the plaintiff from the stand point of the
plaintiff for granting dispensation for pre-litigation mediation.
65. From the observations of the Coordinate Bench, quoted above, this
Court finds that the Coordinate Bench had considered the pleading for
contemplation of urgent relief pleaded by the plaintiff from the
perspective how the plaintiff thought it and from the stand point of the
plaintiff. The urgent relief ultimately may be granted or rejected that
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
29
would not have any relevance while considering the prayer for
dispensation of requirement of pre-mediation litigation. In absence of
any application on record, as the same is also not a requirement for
praying for dispensation of the requirement for pre-institution
mediation under Section 12A of C.C. Act, the oral submissions would
also be of an important and relevant consideration for the Court. The
Practice Procedure of 2021 under Rule 8 thereof speaks for leave of
Court is required for institution of suits without exhausting the remedy
of pre-institution mediation. The same also does not provide for filing of
any application showing sufficient cause. On a meaningful reading of
the averments made in the instant plaint, it can safely be held that
sufficient and reasonable averments are there to contemplate an urgent
interim relief. Therefore, consideration of the prayer for leave for
dispensation of the requirement of pre-institution mediation by the
Coordinate Bench was justified. On a close reading of the plaint, this
Court also finds that it is not in derogation of the forms of pleadings
prescribed under Rule 6 of the Practice Direction 2021. On a
meaningful reading of the plaint, it shows that the relevant materials
are present in the plaint in terms of Rule 6 of the Practice Direction,
2021. This Court also finds that on reading of the instant plaint a
possible and plausible view can be taken by the Court for granting leave
for dispensation of pre-institution mediation.
66. On reading of the said order of the Coordinate Bench dated January 06,
2025, it appears to this Court that from the stand point of the plaintiff,
as the case is pleaded in the plaint, the Coordinate Bench has taken a
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
30
plausible and possible view by exercising its discretion and granted the
dispensation for pre-institution mediation.
67. In view of the forgoing reasons and discussions, this Court is also of the
considered opinion and view that there is no further scope to hold other
than what has been held by the Coordinate Bench in its order dated
January 06, 2025. Therefore, the dispensation granted to the plaintiff
for pre-institution mediation stands.
Revocation of leave under Clause 12 of Letters Patent :-
68. Clause 12 of the Letters Patent, inter alia, provides that in all other
cases except a suit for land, if the cause of action has arisen, either
wholly or in case the leave of Court shall have been first obtained, in
part, within the local limits of the ordinary original jurisdiction of this
Court, a suit can be instituted with leave of Court before this Chartered
High Court. The moment leave is granted after the Court is satisfied
that part of cause of action in the suit has arisen within the local limits
of this High Court and part outside, this Chartered High Court is vested
with the jurisdiction to entertain, try and adjudicate such suit.
69. On a meaningful reading of the provisions under Clause 12 of the
Letters Patent, this Court finds that in allowing or refusing leave or
maintain or revoking leave, this Chartered High Court would have to
consider the balance of convenience and inconvenience in connection
with choosing of forum by the plaintiff. If the balance is definitely in
favour of the defendant, the Court applying the doctrine of forum
convenience.
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
31
70. In the matter of: Madanlal Jalan (supra) a Coordinate Bench of this
Court had observed as under :-
8. In our Court the practice is to present the plaint:
before the Master with a note that the leave under cl.
12 is asked for. The plaint is scrutinised by the
Master. Formerly the Master used to give the leave but
eventually in 1907 it was held that the giving of leave
was not a mere ministerial act but was a judicial act
which must be done by the Judge and could not be
delegated to the Master. Thenceforth the Master after
scrutinising the plaint places it before the Judge. The
Judge is supposed to consider the matter and use his
discretion. In practice however, the Judge gives leave
as a matter of course if the Master finds that a part of
the cause of action arose in Calcutta. Although in
practice it has become a mechanical process yet it
cannot be denied that in law the Judge must be taken
to have exercised his discretion. No serious harm,
however, is done because the Defendant can always
apply for revocation of the leave. Thus leave is granted
by the Judge ex parte. At that stage the only material
placed before the Court is the plaint. From the cause
title the Court comes to know of the respective
occupations and places of residence of the parties.
From the body of the plaint the Court gathers the
cause of action on which the suit is founded. The
Court has to exercise its discretion in the matter of
giving or refusing leave only on these materials. The
question of bona fides or mala fides of the Plaintiff in
seeking to file the suit in this Court will not usually be
apparent from the plaint. Therefore the discretion of
the Court at this stage cannot, of necessity, be based
on a consideration of the motives of the Plaintiff. It
must, at this initial stage at any rate, be exercised on
a consideration of convenience having regard to the
respective occupations and places of residence of the
parties and the facts constituting the cause of action,
and the extent of the part of the cause of action which
is alleged to have arisen within jurisdiction. If it finds
that the Defendant resides at a distance and the
material facts mainly took place outside so that the
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
32
bulk of the witnesses of the Defendant will be resident
outside the jurisdiction and only an insignificant part
of the cause of action arose within jurisdiction, the
Court may in its discretion refuse the leave. This
refusal must mainly, if not solely, be based on a
consideration of convenience, for, as I have said, at
this stage at any rate the Court will not usually have
any material bearing on the motives of the Plaintiff,
unless of course the degree of inconvenience itself or
the insignificance of the part of the cause of action
shown to have arisen within Jurisdiction by itself
suggests bad motive. To hold otherwise will mean that
the discretion undoubtedly given to the Court under cl.
12 is to be exercised only on a consideration of the
extent of the part of the cause of action that arises
within, irrespective of the inconvenience, however
great, to which a Defendant may be put. I see no
reason to so limit the discretion of this Court.
9. It is said that under the Code the Plaintiff has the
unfettered choice of forum and mere inconvenience of
the Defendant is not considered as a ground for
restricting the Plaintiff’s right to file his suit in any
Court of his choice within whose jurisdiction a part of
the cause of action arose. That is undoubtedly the
position under the Code and the Court will not under
the Code lightly interfere with the Plaintiff’s choice.
But there are safeguards provided in the Code by way
of transfer or stay of the suit. Some of those
safeguards may be available to this Court in exercise
of its Ordinary Original Civil Jurisdiction [Mahindra
Chandra v. Lal Mohon]. These safeguards however
come into play after the suit has been filed in a
particular Court. Because the Code has directly given
an unfettered right to the Plaintiff to file his suit in
any Court where a part of his cause of action arose the
Court will not subsequently indirectly take it away by
applying the safeguards except in the case of gross
abuse. That is why balance of convenience which is
short of abuse may not under, the Code be enough to
induce the Court to stay the suit. That is also the
principle underlying the cases relied on by Mr. Ghose
which insists that some element of Injustice, bad faith
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
33
or ill will is necessary to induce the Court to stay a
suit. In Snow White Food Products v. The Punjab
Vanaspatila, I have applied these principles in an
application for injunction restraining a Plaintiff from
proceeding with a suit outside jurisdiction. In those
cases where the Plaintiff is free to file his suit in a
Court of his choice, stay or injunction or transfer will
not be granted only on the ground of balance of
convenience. The position is quite different, however,
where leave of Court is necessary before a suit can be
filed.
10. Cl. 12 interposes a safeguard in favour of the
Defendant at an earlier stage by investing the Court
with a discretion to grant or refuse leave to sue, in
addition to the other safeguards which will be
available at a later stage. That the safeguards
provided by the Code which are to be operative after
the institution of the suit are to be applied only in
case of abuse does not appear to me to be any reason
why the Court should ignore or limit the additional
safeguard provided under cl. 12. If I am right in
thinking as I do that the discretion given under cl. 12
is in the nature of an initial safeguard I must hold
that this discretion must be based on circumstances
then available. It is not limited to a mere
consideration of the extent of the part of the cause of
action that arose within jurisdiction and questions of
convenience, so far as they are apparent from the
plaint, the only material which is, at this stage,
available to the Court, must be taken into
consideration. If this is so when leave is granted ex
parte, should the position be different when the
Defendant, after service of the Writ of Summons,
makes a substantive application complaining of
inconvenience and hardship and prays for revocation
of the leave? If our practice had been to give leave
under cl. 12 on an application by the Plaintiff on
notice to the Defendant, as it is or was in Madras, the
Defendant would have had a chance, before the suit
was received and admitted, to make out a case of
inconvenience. Should a Defendant in our Court be
deprived of that chance and be put in a worse position
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
34
because our practice is to give leave ex parte If
questions of convenience are to be taken into
consideration at the time leave is to be granted why
should it not be considered when the Defendant
applies for its revocation? I see no logic in
differentiating between the two stages. The question,
in my opinion, is the same at both stages, namely,
should the Court allow the Plaintiff to proceed with
his claim in this Court? The principles on which the
answer to that question should be formulated must,
therefore, be the same at both stages. I have
endeavoured to show that according to our practice of
giving leave ex parte, the main, if not the sole,
consideration at that time can only be one of
“convenience which may be apparent from the plaint.
As an application for revocation of leave is in the
nature of a review or reconsideration, logically the
Court is called upon to decide the same question on
the same considerations of convenience, although in
the light of fuller materials. When I say that the
question of convenience should be considered, I mean
convenience of both parties. I agree with Mr. Khaitan
that on an application for revocation a greater onus
should not be put upon the Defendant by reason of an
ex parte accomplished fact. In my opinion the Court
should not on an application for revocation start with
a presumption in favour of maintaining the leave but
should apply an unfettered mind to all the facts and
circumstances and submissions, presented before it as
if it were considering the question for the first time. It
remains to be seen whether the views I have just
expressed find any support from judicial decisions or
whether they militate against any of them.
**** **** **** ****
* *** **** **** ****
25. On a consideration of the legal principles
established by the judicial decisions mentioned above
it seems to me that balance of convenience is a
material consideration in the exercise of discretion
under cl. 12. From these judicial authorities the
following propositions may, I think, be enunciated:
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
35
(a) that an application lies for revoking leave
granted under cl. 12 of the Letters Patent;
(b) that such an application should be made at
an early stage of the suit and delay and
acquiescence may be a bar to such an
application;
(c) that if the application depends on difficult
questions of law or fact the Court should not
revoke leave on a summary application but
should decide the question at the trial;
(d) that if the Defendant shows clearly that no
part of the cause of action arose within
jurisdiction, the leave should be revoked as a
matter of course;
(e) that if only a part of the cause of action arose
within jurisdiction, then it is a question of
discretion for the Court to give or refuse leave or
where leave has already been granted to revoke
or maintain the leave;
(f) that assignment is a very important part of
the cause of action in a suit by the assignee;
(g) that in giving or refusing leave or maintaining
or revoking leave the Court will ordinarily take
into consideration the balance of convenience
and may, if the balance is definitely in favour of
the Defendant, apply the doctrine of forum
conveniens;
(h) that the Court may refuse leave or revoke
leave on the ground of balance of convenience
although there be no evidence of bad faith or
abuse of process on the part of the Plaintiff;
(i) that if the cause of action is founded on an
assignment within jurisdiction of a negotiable
instrument, the Court will, in recognition of the
principle of negotiability, insist on a far greater
degree of balance of convenience in favour of the
Defendant and will more readily give or maintain
leave than in other cases of assignment;
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
36
(j) that if the Court is satisfied that the suit has
been filed mala fide for the purpose of harassing
or oppressing the Defendant or might result in
injustice the Court should in all cases readily
refuse leave or if leave has already been granted
revoke the leave as a matter of course.”
71. The law is also well settled as to the tests applicable for revocation of
leave under Clause 12 of the Letters Patent and one such test is that
where only a part of cause of action has arisen within the territorial
limits of this High Court and part outside then it is a question of
discretion for the Court to grant or to refuse or to revoke or maintain
the leave, if already granted. Taking into consideration the balance of
convenience and the balance if is definitely in favour of defendant, the
Court should apply the doctrine of forum convenience.
72. In the matter of: Mighty Metals Pvt. Ltd. and Anr. (supra) a
Coordinate Bench had observed as under :
“The defendant has also relied on a judgment reported
at AIR 1999 Cal 179 (Hindusthan Zinc Ltd v. Gujarat
NRE Coke Ltd) where a Division Bench held that since
a global tender had been issued which envisaged the
performance of the work in Rajasthan and the tenders
were scrutinised in Rajasthan, the petitioner in that
case could not have challenged the decision to reject
the petitioner’s offer in the writ jurisdiction of this
court since the rejection took place in Rajasthan. The
defendant has next referred to a judgment reported at
(2010) 3 CHN 26 (Assam Company Ltd v. The State of
Andhra Pradesh) where the leave granted under Clause
12 of the Letters Patent was revoked on the grounds
that the plaintiff’s cause of action had no nexus with
this court and it would have been overwhelmingly
inconvenient for the defendants in that action to
contest at the trial. Paragraph 33 of the report has
been relied on:
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
37
“33. In any event, it is obvious that this Court has no
nexus with the subject matter of the suit. Since the
averments in a plaint have to be taken to be true and
correct for the purpose of assessing a point of demurer
as the present one, the incredible case run in the
plaint of the first plaintiff’s association with the
transactions, improbable as it is, has to be accepted at
this stage. But to accept that the situs of the first
plaintiff (even that is unclear; since the plaint does not
aver that the First plaintiff has its registered office
within jurisdiction) and it having allegedly made funds
available to the other plaintiffs to enable the then
plaintiffs to discharge their obligations under the
memorandum of understanding as the basis for
instituting the suit in this Court, would amount to
doing violence with the accepted principles for
founding a suit in a particular forum, Further, the
facts here are such that the usual principle that the
defendant has to show overwhelming inconvenience to
dislodge a plaintiff from his chosen forum, would not
apply. The facts here are such that the inconvenience
is obvious and the onus would be on the plaintiff to
demonstrate otherwise. The memorandum of
understanding was executed in Hyderabad, the
projects were to be implemented in the State of Andhra
Pradesh and the memorandum of settlement was
entered into in Hyderabad. The plaintiffs’ reliance on
the judgment reported at AIR 1978 Cal 397 (Sanjay
Trading Company v. Dal Chemical N.V.) that the
plaintiff as dominus litus must enjoy the choice of
forum is inappropriate on the facts obtaining in the
present case.”
The judgment was affirmed in appeal by an order
dated July 23, 2010 in APOT No. 117 of 2010, APO No.
69 of 2010 (Assam Company Ltd v. The State of
Andhra Pradesh). Only the costs awarded were reduced
in appeal.
In support of the argument that it would be
inconvenient for it to contest the trial in this court, the
defendant has referred to a judgment reported at AIR
1980 Cal 159 (Ultra Engineering Industries P. Ltd v.
Spintex Industries Pvt. Ltd) where the leave under
Clause 12 of the Letters Patent was revoked on the
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
38
consideration that it would cause genuine hardship to
the defendant to defend the suit in this court.”
73. In the light of the settled position of law, as discussed above, the duty of
this Court is also to consider whether the defendant in the instant suit
will suffer any inconvenience if the instant suit is proceeded before this
Court.
74. Admittedly, the work was executed at Assam. The defendant has
already filed a suit before the Civil Court at Punjab where the defendant
carries on business. The plaintiff admittedly carries on its business at
Sikkim. Only a part of cause of action pleaded in the plaint with regard
to the negotiation and the execution of MoU, according to the plaint
case, arose within the territorial jurisdiction of this Court. The
registered office of the plaintiff is at Sikkim and the plaintiff carries on
its business from its alleged corporate office within the territorial limit of
this Court, whereas admittedly, the defendant does not have any place
of business in West Bengal and carries on its business at Punjab. The
law under the Companies Act, is also statutorily mandates that all the
records of the company shall be kept at its registered office, which is
Sikkim for the plaintiff, in the instant case. Therefore, from the point of
convenience and/or inconvenience to proceed with the instant suit or to
defend the suit filed by the defendant at Punjab, the plaintiff in any
event has to produce its records from its registered office at Sikkim, be
it before this Court or the Civil Court at Punjab, where the suit filed by
the defendant is pending. However, since the defendant has no place of
business admittedly, as pleaded in the plaint in West Bengal, the
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
39
defendant has to produce all its records and its witnesses from its
registered office at Punjab before this Court. Weighing the situation,
this Court finds that it would definitely be inconvenient for the
defendant to defend the instant suit before this Court and in that case
the defendant may be handicapped in contesting the instant suit and
shall suffer immense hardship.
75. On the contrary, the Civil Court at the district of Punjab where the suit
filed by the defendant is pending, if that Court has commercial division
and/or the jurisdictional commercial division in that district of Punjab,
would be a convenient forum for trying the instant suit. The plaintiff in
any event has to produce the records either before this Court or before
the jurisdictional Court at Punjab from its registered office at Sikkim. If
the instant suit is tried before the same court and/or the court of
competent jurisdiction at a nearer place at Punjab which is nearer to
the Court where the suit filed by the defendant is pending, then it would
be convenient for parties to produce their respective records and
witnesses there, undoubtedly.
76. In the instant case, the defendant has forfeited its right to file written
statement by operation of law. In absence of written statement since the
plea of territorial jurisdiction has been taken by the defendant through
the instant application for revocation of leave granted under Clause 12
of the Letters Patent on the ground of forum convenience, such a
substantive plea can be accepted for adjudication. This Court is vested
with the authority and jurisdiction under Clause 12 of the Letters
Patent to revoke the leave on the ground of forum convenience.
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
40
Therefore, the ratio decided In the matter of: Isha Distribution House
Pvt. Ltd. (supra), would not apply in the facts and circumstances of the
instant case.
77. It is needless to mention that since the instant suit is a commercial
suit, the same shall have to be tried by strictly following the provisions
laid down under the C.C. Act and following the relevant amended
provisions of the Code, as amended in light of the promulgation of the
C.C. Act. The instant suit shall have to be tried, wherever it is, as an
undefended suit, as the defendant has forfeited its right to file
written statement under the law.
78. In view of the foregoing reasons and discussions, leave granted by the
Coordinate Bench under Clause 12 of the Letters Patent in its order
dated January 06, 2024 stands revoked.
79. The plaint filed in the instant suit shall be returned to the plaintiff along
with the court fees upon leaving a photostat copy of the plaint duly
certified by the learned Advocate on record for the plaintiff, which shall
be kept in the records of this Court. If the requirements of law demands
the plaintiff to pay necessary court fees and/or further court fees for
filing the plaint before the jurisdictional commercial court at Punjab
where the suit filed by the defendant is pending, the plaintiff shall pay
such ad valorem court fees and the suit shall proceed from its
present stage and status as it stands today but as undefended suit.
80. With the above observations and directions, the instant application
being IA No.GA-COM/3/2025 stands disposed of.
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
41
81. Consequently, the connected applications IA No.GA-COM/4/2025 and
IA No.GA-COM/5/2026 also stand disposed of and interim order if any,
passed stands vacated. However, the plaintiff shall be at liberty to file
identical applications with the self-same relief before the jurisdictional
commercial court where the plaint shall be presented at Punjab.
(Aniruddha Roy, J.)
IA No.GA-COM/3/2025,
In CS-COM/834/2024
A.R.,J.
