Calcutta High Court holds that Section 12A of the Commercial Courts Act, 2015 is not mandatory where the underlying suit does not qualify as a “commercial dispute” under the Act. The decision upholds the lower court’s finding and clarifies that mandatory pre-institution mediation does not apply universally to all money suits. This judgment reaffirms settled precedent, providing binding authority for subordinate courts in West Bengal and serving as persuasive authority elsewhere.
Summary
| Category | Data |
|---|---|
| Case Name | CO/4251/2024 of PAULAMI BHATTACHARYA Vs M/S. LABTECHNOLOGIES |
| CNR | WBCHCA0590952024 |
| Date of Registration | 10-12-2024 |
| Decision Date | 01-09-2025 |
| Disposal Nature | DISMISSED |
| Judgment Author | HON’BLE JUSTICE HIRANMAY BHATTACHARYYA |
| Court | Calcutta High Court |
| Bench | Court No. 6 |
| Precedent Value | Binding on subordinate courts under Calcutta High Court; persuasive for others |
| Type of Law | Civil Procedure / Commercial Courts Act |
| Questions of Law |
|
| Ratio Decidendi | The Calcutta High Court ruled that the Commercial Courts Act, 2015—including Section 12A’s pre-institution mediation requirements—does not apply to suits that are not “commercial disputes” as defined by the Act. Therefore, a suit for recovery of money that does not fall within the ambit of “commercial dispute” cannot be dismissed for non-compliance with Section 12A. The trial court’s order rejecting the defendant’s Order 7 Rule 11 application was correct and required no interference. This clarification affirms the limited and specific scope of Section 12A. |
| Facts as Summarised by the Court | The defendant applied for rejection of the plaint under Order 7 Rule 11 CPC, arguing that since the suit was a commercial suit, Section 12A of the Commercial Courts Act (pre-institution mediation) was mandatory and not complied with. The trial court rejected the application, holding that the suit—being for recovery of Rs. 2,15,159/-—was not covered by the Commercial Courts Act. The High Court agreed with this view. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts in West Bengal |
| Persuasive For | High Courts of other states and Supreme Court |
| Follows | Approach that only “commercial disputes” as defined under the Act attract Section 12A |
What’s New / What Lawyers Should Note
- Clarifies that Section 12A of the Commercial Courts Act, 2015 is not mandatory for all suits; it applies exclusively to “commercial disputes” under the Act.
- Applications for rejection of plaint under Order 7 Rule 11 CPC premised solely on non-compliance with Section 12A will fail if the underlying suit is not a commercial dispute.
- Lawyers should carefully evaluate whether a suit qualifies as a commercial dispute before raising Section 12A objections.
Summary of Legal Reasoning
- The High Court examined whether Section 12A of the Commercial Courts Act applies to all money recovery suits.
- It noted the trial court’s finding that the impugned suit for Rs. 2,15,159/- was not a “commercial dispute” as defined in the Act.
- The High Court accepted the reasoning that the Commercial Courts Act, particularly Section 12A, is not universally applicable but is contingent on the nature of the dispute.
- As such, the absence of pre-institution mediation under Section 12A did not warrant rejection of the plaint under Order 7 Rule 11 CPC.
- The Court found no cause to interfere with the trial court’s rejection of the defendant’s application.
Arguments by the Parties
Petitioner (Defendant):
- Argued that the suit was a commercial suit.
- Submitted that mandatory pre-institution mediation under Section 12A of the Commercial Courts Act was not complied with.
- Contended that the plaint should be rejected under Order 7 Rule 11 CPC due to this non-compliance.
Respondent (Plaintiff):
The order records only the findings and submissions of the petitioner; submissions of the respondent are not detailed in the judgment.
Factual Background
The defendant challenged the maintainability of a money recovery suit for Rs. 2,15,159/- before the City Civil Court at Calcutta, contending that it was a commercial suit requiring compliance with Section 12A of the Commercial Courts Act, 2015. The City Civil Court rejected the application under Order 7 Rule 11 CPC. On further challenge, the High Court affirmed the trial court’s decision, holding that the suit was not a “commercial dispute.”
Statutory Analysis
The Court interpreted Section 12A of the Commercial Courts Act, 2015, concluding that its mandatory pre-institution mediation requirement applies only to suits that fall within the Act’s definition of “commercial dispute.” The Court adopted a narrow reading, restricting Section 12A’s application to disputes expressly covered by the Act.
Alert Indicators
- Precedent Followed – The decision reaffirms the settled position that Section 12A applies only to commercial disputes as defined in the Act.
Citations
No external legal citations or report numbers are provided in the judgment text.