Delhi District Court
Krishna Kumar vs Pankaj Joshi on 15 December, 2025
BEFORE THE COURT OF SH. SURINDER S. RATHI, DISTRICT JUDGE
(COMM.)-11 CENTRAL, THC, DELHI
CS Comm. No.856/2025
Krishna Kumar
Proprietor of M/s K.K. Bearing & Mill Store
Presently office at
Shop No.19, Property No.1/2/655 and 656 to 658,
Mezzanine Floor, Farash Khana, G.B. Road, Delhi-110006
Earlier at:
Shop No.10, Basement, Shyam Market,
Farash Khana, Delhi-110006 ........Plaintiff
Vs.
Pankaj Joshi
Proprietor of M/s Joshi Enterprises
At 5th, 503, Vasundra Galaxy, Golden Palms,
Scheme No. 136, Niranjanpur, Dewas Naka,
Indore, Madhya Pradesh-452010 .........Defendant
Date of Institution : 28.07.2025
Date of Final Arguments : 15.12.2025
Date of Judgment : 15.12.2025
Decision : Decreed
Judgment
1. This suit seeks recovery of Rs.7,39,203/- alongwith interest @18%
per annum as unpaid dues of goods sold.
Case of the Plaintiff
2. Case of the plaintiff as per original suit is that he is proprietor of M/s
K K Bearing and Mill Store at Farashkhana, Delhi and is in the
business of trading of all kinds of bearings. In the course of business,
the defendant who is proprietor of M/s Joshi Enterprises at Indore,
MP approached the plaintiff in July 2021 for purchase of bearings on
CS Comm No.856/2025 Krishna Kumar Vs. Pankaj Joshi
page 1
credit basis. Defendant and his employees used to place orders by
visiting the plaintiff's place apart from placing orders telephonically.
Goods were sold and supplied as per GST paid invoices. Plaintiff was
maintaining ledger of all the sales made and the payments received.
3. Between 16.07.2021 to 16.03.2024 plaintiff carried out a sale of
Rs.21,49,543/- but defendant paid only Rs.14,10,340/- leaving a debit
balance of Rs.7,39,203/- as on 16.03.2024. These dues were not
cleared by the defendant despite requests on one or the other pretext.
On 18.10.2024 defendant refused to make any payment.
Consequently, plaintiff was constrained to issue legal demand notice
dated 25.10.2024. The same was neither replied nor complied. A
corrigendum notice dated 11.01.2025 was also sent correcting the
debit balance. Thereafter, plaintiff approached Central DLSA for Pre-
Institution Mediation under Section 12A of Commercial Courts
Act, 2015 on 01.02.2025 and Non-Starter Report dated 03.06.2025
was issued. None appeared for defendant despite due service. In this
backdrop the suit in hand was filed for following reliefs:
Prayer:
i) Pass a decree in favour of the plaintiff and against the defendant for a sum of
Rs.7,39,203/-(Rupees Seven Lacs Thirty Nine Thousand Two Hundred Three only)
along with pendente-lite and future interest @18% per annum;
ii) Award the cost of the suit including legal expenses and pleader's fee in favour of
the plaintiff and against the defendant;
(iii) pass any other or further order(s), which this Hon'ble Court may deem fit and
proper in the facts and circumstances of the present case in favour of plaintiff and
against the defendant, in the interest of justice.
4. Summons of the suit was served on defendant on 09.09.2025 by way
of speed post. None appeared on behalf of defendant. No WS was
CS Comm No.856/2025 Krishna Kumar Vs. Pankaj Joshi
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filed within 30 days or even thereafter. The right to file WS was
closed and defence was struck off on 14.10.2025.
5. Upon completion of pleadings following notional issues were
identified by this Court on 14.10.2025:
Notional Issues:
i. Whether plaintiff is entitled to recovery of Rs.7,39,203/- alongwith
interest @18% per annum? OPP
ii. Relief.
6. To prove his case plaintiff examined himself as PW1 Krishna
Kumar. Vide affidavit Ex.PW1/A he deposed on the lines of plaint
and exhibited following documents:
i. Ledger account is Ex.PW1/1.
ii. Eight invoices are Ex.PW1/2 (Colly.).
iii. Copy of Eight Builties/Transport Receipts are Ex.PW1/3 (Colly.) (OSR).
iv. Legal Notice dated 25.10.2024 is Ex.PW1/4.
v. Postal Receipt dated 11.11.2024 is Ex.PW1/5.
vi. Corrigendum dated 11.01.2025 is Ex.PW1/6.
vii. Postal Receipt dated 23.01.2025 is Ex.PW1/7.
viii. GST of plaintiff is Ex.PW1/8.
ix. GST of defendant is Ex.PW1/9.
x. Non-Starter Report dated 03.06.2025 is Ex.PW1/10.
xi. Affidavit under Order 11 Rule 6 CPC is Ex.PW1/11.
7. None appeared on behalf of defendant for cross-examining PW1.
8. No evidence was led by defendant.
9. I have heard arguments of Sh. Anil Kumar Singh, Ld. Counsel for
plaintiff and have perused the case file carefully. None appeared on
behalf of defendant to argue the case.
10. Now I shall dispose of notional issues framed in this case.
Issue No. 1:
i. Whether plaintiff is entitled to recovery of Rs.7,39,203/- alongwith
interest @18% per annum? OPP
11.To prove its case plaintiff has relied on 8 invoices Ex.PW1/2 colly.
Perusal of these invoices shows that none of them carry due
CS Comm No.856/2025 Krishna Kumar Vs. Pankaj Joshi
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endorsement of receipt nor acknowledgement qua delivery of goods
from the defendant.
12. The onus of proving the delivery of the goods is on the plaintiff and
under the law plaintiff could have proved delivery by any of the
following methods:-
i. Admission by defendant/defendant acknowledges the
delivery.
ii. Endorsement of receipt by the defendant on the invoices.
iii. Filing and proving Form 7 or Form 8 (Bilty) under Carriage
by Road Rules, 2011 to show that plaintiff delivered the
goods to the carrier and is entitled to benefit under Section
39 of Sale of Goods Act, 1930.
iv. By proving on record that the GST claimed to have been
deposited by the plaintiff qua these invoices, defendant took
input tax credit under Section 2 (63) of CGST Act, 2017
and plaintiff is entitled to presumption under Section 16 (2)
of CGST Act, 2017.
v. By issuing notice under Order 11 Rule 5 CPC or Order 12
Rule 8 CPC.
13.It is a settled legal position that plaintiff is entitled to recovery of only
value of such goods which stands duly delivered. The law in regard to
sale and delivery is governed under Sale of Goods Act, 1930,
Carriage by Road Act, 2007 and Carriage by Road Rules, 2011.
The relevant statute which governs sale of movable articles is Section
23 (2), Section 31, Section 33 and Section 39 of Sale of Goods Act,
1930. As far as duty of the seller is concerned, under Sale of Goods
Act (SoGA), 1930 Section 31 of the Act places entire duty on the
seller to ensure that the goods sold are delivered to the buyer. For
ready reference the same is reproduced hereunder:
CS Comm No.856/2025 Krishna Kumar Vs. Pankaj Joshi
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Section 31: Duties of Seller and Buyer
"It is the duty of the seller to deliver the goods and of the buyer to accept and
pay for them, in accordance with the terms of the contract of sale."
14. The term delivery also stands defined under the Statute under Section
33 of Sale of Goods Act, 1930 . The same is reproduced hereunder:
Section 33: Delivery
"Delivery of goods sold may be made by doing anything which the parties
agree shall be treated as delivery or which has the effect of putting the
goods in the possession of the buyer or of any person authorised to hold
them on his behalf."
15. Likewise, standalone invoices do not prove delivery of the goods as
mandated under Section 31, 33 and 39 of Sale of Goods Act unless
there is a physical endorsement of delivery over them or
thEndorsementere is a separate document so as to show that the goods
were actually delivered to defendant or at least delivered to a goods
carrier as provided under Section 23 (2) and Section 39 of Sale of
Goods Act. For ready reference the same are reproduced hereunder:
Section 23 (2) :Delivery to carrier.--
"(2) Where, in pursuance of the contract, the seller delivers the goods to the buyer
or to a carrier or other bailee (whether named by the buyer or not) for the purpose
of transmission to the buyer, and does not reserve the right of disposal, he is
deemed to have unconditionally appropriated the goods to the contract."
Section 39: Delivery to carrier of wharfinger:
"(1) Where, in pursuance of a contract of sale, the seller is authorised or required
to send the goods to the buyer, delivery of the goods to a carrier, whether named
by the buyer or not, for the purpose of transmission to the buyer, or delivery of the
goods to a wharfinger for safe custody, is prima facie, deemed to be a delivery of
the goods to the buyer.
(2) Unless otherwise authorised by the buyer, the seller shall make such contract
with the carrier or wharfinger on behalf of the buyer as may be reasonable
having regard to the nature of the goods and the other circumstances of the case. If
the seller omits so to do, and the goods are lost or damaged in course of transit
or whilst in the custody of the wharfinger, the buyer may decline to treat the
delivery to the carrier or wharfinger, as a delivery to himself, or may hold the
seller responsible in damages.(3) Unless otherwise agreed, where goods are sent
by the seller to the buyer by a route involving sea transit, in circumstances in
which it is usual to insure, the seller shall give such notice to the buyer as may
enable him to insure them during their sea transit and if the seller fails so to do,
the goods shall be deemed to be at his risk during such sea transit."
CS Comm No.856/2025 Krishna Kumar Vs. Pankaj Joshi
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16. To prove delivery by a carrier, copy of Rule 7 and 8 of Carriage by
Road Rules,2011 should have been placed on record. Form 7 as per
Carriage by Road Rules, 2011 is whereunder a seller hands over the
consignment/material/goods to the carrier under endorsement. Form
8 i.e. popularly known as 'Bilty' is whereunder the carrier issues a
receipt in favour of the seller thereby acknowledging the receipt of
goods.
17. Every transport company or a carrier of goods carries out business
under Carriage by Road Act, 2007 whereunder every movable
article as and when booked for transportation shall be done as per
documentation provided under the statute. The term common carrier
is defined in Section 2 (a) of this Act.
Section 2 of Carriage by Road Act. 2007 : Definitions.-
In this Act, unless the context otherwise requires,--
i. "common carrier" means a person engaged in the business of collecting, storing,
forwarding or distributing goods to be carried by goods carriages under a goods
receipt or transporting for hire of goods from place to place by motorised transport
on road, for all persons undiscriminatingly and includes a goods booking company,
contractor, agent, broker and courier agency engaged in the doorto-door
transportation of documents, goods or articles utilising the services of a person,
either directly or indirectly, to carry or accompany such documents, goods or
articles, but does not include the Government;
ii. "consignee" means the person named as consignee in the goods forwarding note;
iii. "consignment" means documents, goods or articles entrusted by the consignor to
the common carrier for carriage, the description or details of which are given in the
goods forwarding note;
iv. "consignor" means a person, named as consignor in the goods forwarding note, by
whom or on whose behalf the documents, goods or articles covered by such
forwarding note are entrusted to the common carrier for carriage thereof;
v. "goods" includes--
i. Containers, pallets or similar articles of transport used to consolidate goods;
and
ii. animals or livestock;
vi. "goods forwarding note" means the document executed under section 8;
vii. "goods receipt" means the receipt issued under section 9;
viii. "person" includes any association or body of persons, whether incorporated or not,
a road transport booking company, contractor and an agent or a broker carrying on
the business of a common carrier;
ix. "prescribed" means prescribed by rules made under this Act;
CS Comm No.856/2025 Krishna Kumar Vs. Pankaj Joshi
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x. "registering authority" means a State Transport Authority or a Regional Transport
Authority constituted under section 68 of the Motor Vehicles Act, 1988 (59 of 1988);
xi. "registration" means the registration granted or renewed under sub-section (5) of
section
18. Section 2 of this Act also defines the specific terms like Consignee
in Section 2(b), Consignment in Section 2 (c) and Consignor in
Section 2 (d). Even the terms "Goods Receipt" issued under Section
9 of this Act also stands defined under Section 2 (g).
Section 9 of Carriage by Road Act, 2007 : Goods Receipt
1. A Common Carrier shall,-
i. in case where the goods are to be loaded by the consignor, on the completion of
such loading; or
ii. in any other case, on the acceptance of the goods by him, issue a goods receipts
in such form and manner as may be prescribed.
2. The goods receipt shall be issued in triplicate and the original shall be given to the
consignor.
3. The goods receipt shall be prime facie evidence of the weight or measure and other
particulars of the goods and the number of packages stated therein.
4. The goods receipt shall include an undertaking by the common carrier about the
liability under Section 10 or Section 11.
19.For ready reference Rule 10 of Carriage by Road Rules, 2011 is
reproduced hereunder:
Rule 10 : Goods forwarding note and goods receipt
i. "Every consignor while booking his goods shall execute a goods forwarding note
as specified under sub-section (1) of section 8, containing details of the goods in
Form 7 and submit it to the common carrier in duplicate.
ii. For the goods of dangerous or hazardous nature, the goods forwarding note shall
be issued on a paper with upper left hand corners printed in red as "expand
goods."
iii. An acknowledged copy of the good forwarding note shall be returned by the
common carrier to the consignor.
iv. Every common carrier on receipt of the goods forwarding note from the consignor
for booking of goods to be transported, shall issue a goods receipt in Form 8.
v. For the goods of dangerous or hazardous nature, the goods receipt shall be issued
on a paper with upper left hand corners printed in red as "Dangerous and
Hazardous goods."
20. Form 7 and 8 of Rules, 2011 are pictorially represented as under:
CS Comm No.856/2025 Krishna Kumar Vs. Pankaj Joshi
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CS Comm No.856/2025 Krishna Kumar Vs. Pankaj Joshi
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21. However, plaintiff is relying on e-way bills as per Rule 138 of CGST
Act, 2017 and bilties as per Form 7 and Form 8 of Carriage by
Road Rules, 2011 promulgated under Carriage by Road Act, 2007
issued by Hariom Roadlines as Ex.PW1/3 colly. In the light of the
same by invocation of statutory provision under Section 39 of Sale of
Goods Act, 1930 plaintiff has discharged the onus of proving the
delivery.
22. It is submitted that the plaintiff had issued a legal notice to the
defendant with corrigendum Ex.PW1/6 dated 11.01.2025 containing
all the necessary facts which remained unreubtted as no reply was
sent.
23. Section 27 of General Clauses Act gives rise to a presumption that
service of notice has been effected when it is sent to the correct
address by registered post. For ready reference the same is reproduced
as under:
Section 27 GC Act: Meaning of Service by Post
"Where any Central Act or Regulation made after the commencement of
this Act authorizes or requires any document to be served by post, whether
the expression "serve" or either of the expressions "give" or "send" or
any other expression is used, then unless a different intention appears, the
service shall be deemed to be effected by properly addressing, pre-paying
and posting by registered post, a letter containing the document and
unless the contrary is proved, to have been effected at the time at which
the letter would be delivered in the ordinary course of post."
24. In case titled Harcharan Singh Vs. Shiv Rani and Ors. 1981 Latest
Caselaw 44 SC Hon'ble Supreme Court held as under:
7. Section 27 of the General Clauses Act, 1897 deals with the
topic-'Meaning of service by post' and says that where any Central Act or
Regulation authorises or requires any document to be served by post,
then unless a different intention appears, the service shall be deemed to
be effected by properly addressing, pre-paying and posting it by
registered post, a letter containing the document, and unless the contrary
is proved, to have been effected at the time at which the letter would be
delivered in the ordinary course of post. The section thus arises a
presumption of due service or proper service if the document sought to
CS Comm No.856/2025 Krishna Kumar Vs. Pankaj Joshi
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be served is sent by properly addressing, pre-paying and posting by
registered post to the addressee and such presumption is raised
irrespective of whether any acknowledgement due is received from the
addressee or not. It is obvious that when the section raises the
presumption that the service shall be deemed to have been effected it
means the addressee to whom the communication is sent must be taken to
have known the contents of the document sought to be served upon him
without anything more......
(Emphasis Supplied)
25. In case titled V. Raja Kumari Vs. P. Subbarama Naidu and Anr.,
2004 Latest Caselaw 628 SC Hon'ble Supreme Court held as under:
Nonetheless the principle incorporated in Section 27 (quoted above) can
profitably be imported in a case where the sender has despatched the notice by
post with the correct address written on it. Then it can be deemed to have been
served on the sendee unless he proves that it was not really served and that he
was not responsible for such non-service.
26. Non-reply of a duly served legal notice is akin to admission of factual
matrix. Law in this regard is well-settled. As per case titled Jayam
Company Vs. T. Ravi Chandaran 2003 (3) RCR (Cr.) 154 Madras
presumption is drawn against defendant that they have admitted the
contents of the legal notice.
27.In another case titled as Metropolis Travels & Resorts (I) Pvt. Ltd.
Vs. Sumit Kalra and Ors., 2002 Latest Caselaw 714 Del wherein it
was observed that :
"13. There is another aspect of the matter which negates the argument of the
respondent and that is that the appellant served a legal notice on the
respondent vide Ex. PW1/3. No rely to the same was given by the respondent. But in spite of the same, no adverse inference was drawn against the defendant. This court in the case of Kalu Ram Vs. Sita Ram 1980 RLR 44 observed that service of notice having been admitted without reservation and that having not been replied in that eventuality, adverse inference should be drawn because he kept quite over the notice and did not send any reply. Observations of Kalu Ram's case (supra) apply on all force to the facts of this case. In the case in hand also despite receipt of notice, respondent did not care to reply nor refuted the averments of demand of the amount on the basis of the invoices/ bills in question. But the Ld. Trial court failed to draw inference against the respondent".
(Emphasis Supplied) CS Comm No.856/2025 Krishna Kumar Vs. Pankaj Joshi page 10
28.Ld. Counsel for plaintiff has also relied upon case titled as Krishan Kumar Aggarwal Vs. Life Insurance Corporation 2010 Latest Caselaw 3344 Del wherein Hon'ble DFor ready reference the same is reproduced as under:elhi High Court observed that:
"65. No explanation has been rendered by the respondent as to why letter dated 23rd August, 2008 and the legal notice send by the appellant were not repudiated or even replied. Despite due receipt, the respondent did not bother to even send any response to the letter dated 23 rd August, 2008 or the legal notice, the contents whereof would be deemed to have been admitted. In the judicial precedents reported in Rakesh Kumar Vs. Hindustan Everest Tool Ltd. MANU/SC0396/1988: (1988) 2 SCC 165 & Hirallal Kapur Vs. Prabhu Chaudhary MANU/SC/0189/1988 : (1988) 2 SCC 172 it was held by the Supreme Court that a categorical assertion by the landlord in a legal notice if not replied to and controverted, can be treated as an admission by a tenant.
"66. In a Division Bench proceedings of this court reported in Metropolis Travels and Resorts Vs. Sumit Kalra MANU/DE/0562/2002 : 98 (2002) DLT 573 (DB), no adverse inference was drawn against the respondent for failure to reply the legal notice on consideration of the facts and circumstances of the case. Reference was made to proceedings reported in Kalu Ram Vs. Sita Ram wherein it had been observed that service of notice being admitted without reservation and that having not been replied, in that eventuality, adverse inference should be drawn".
(Emphasis Supplied)
29. As per judgments of Division Bench of Hon'ble High Court of Delhi, plaintiff has been successful in showing on record that non-reply of legal notice by the defendant calls for drawing of presumption as to correctness of the facts contained therein.
30. The evidence in this case is primarily documentary. The documents relied upon by the plaintiff are the documents maintained by a company in the ordinary course of its business. Though the exceptions cannot be ruled out, but generally taking a judicial notice of the business, these documents can be considered to be duly executed in due course of the business and capable of binding the parties into a contractual relationship.
CS Comm No.856/2025 Krishna Kumar Vs. Pankaj Joshi page 11
31. The pleadings in the plaint and annexed documents have remained unrebutted, unchallenged and uncontroverted. In the absence of any plausible denial, documentary evidence and no defence at all, on behalf of defendant, defendant has not been able to put any dent on the merits of the plaintiff's claim and case of the plaintiff is deemed to be admitted. On the basis of pleadings, evidence led and the documents exhibited plaintiff has discharged the onus of proving his case successfully.
32. A strong exception is taken over the conduct of the defendant of not participating in Pre-Institution Mediation despite issuance of notice.
33. Not only Pre-Institution Mediation is mandatory on account of its promulgation and inclusion in Commercial Courts Act 2015 by way of Commercial Court Amendment Act, 2018 whereby Chapter 3 and Section 12A were introduced. For ready reference Section 12A of Commercial Courts Act, 2015 is reproduced hereunder:
Section 12A CC Act, 2015: Pre-Institution Mediation and Settlement
(l) A suit, which does not contemplate any urgent interim relief under this Act, shall not be instiluted 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, authorise the Authorities constituted under the Legal Services Authorities Act. 1987, for the purposes of pre institution mediation.
(3) Notwithstanding anything contained in the Legal Services Authorities Act, 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 (l ): 19 of 1987 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 thc purpose of limitation under the Limilation Act, 1963.
CS Comm No.856/2025 Krishna Kumar Vs. Pankaj Joshi page 12 (4) lf 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 26 or 1996 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."*
34. Parliament in its wisdom even promulgated PIMS Rules, 2018.
Hon'ble Supreme Court in celebrated jugement of Patil Automation Limited Vs. Rakheja Engineering Private Ltd. (2022) Latest Caselaw 645 SC has already ruled that carrying out preinstitution mediation is not optional or directory but is rather mandatory. For ready reference relevant paras of Patil Automation Judgment are reproduced hereunder:
43. "Section 12A cannot be described as a mere procedural law. Exhausting pre-
institution mediation by the plaintiff, with all the benefits that may accrue to the parties and, more importantly, the justice delivery system as a whole, would make Section 12A not a mere procedural provision. The design and scope of the Act, as amended in 2018, by which Section 12A was inserted, would make it clear that Parliament intended to give it a mandatory flavour. Any other interpretation would not only be in the teeth of the express language used but, more importantly, result in frustration of the object of the Act and the Rules"...........
58. A perusal of the Act and the Rules reveal the existence of a complete Code. Mediation contemplated under Section 12A and the Rules, may not succeed in every case. To begin with, the figures may not be reassuring but even if success does not elude the Mediator, in a few of the cases, a good part of the object of the Legislature, would stand achieved.
72. The Act did not originally contain Section 12A. It is by amendment in the year 2018 that Section 12A was inserted. The Statement of Objects and Reasons are explicit that Section 12A was contemplated as compulsory. The object of the Act and the Amending Act of 2018, unerringly point to at least partly foisting compulsory mediation on a plaintiff who does not contemplate urgent interim relief...... The object is clear. It is an undeniable reality that Court in India are reeling under an extraordinary docket explosion. Mediation, as an Alternative Dispute Mechanism, has been identified as a workable solution in commercial matters. In other words, the cases under the Act lend themselves to be resolved through mediation. Nobody has an absolute right to file a civil suit. A civil suit can be barred absolutely or the bar may operate unless certain conditions are fulfilled. A trained Mediator can work wonders. Mediation must be perceived as a new mechanism of access to justice.........
CS Comm No.856/2025 Krishna Kumar Vs. Pankaj Joshi page 13 The fact that the mediation can become a non-starter, cannot be a reason to hold the provision not mandatory.
84. Having regard to all these circumstances, we would dispose of the matters in the following manner. We declare that Section 12A of the Act is mandatory and hold that any suit instituted violating the mandate of Section 12A must be visited with rejection of the plaint under Order 7 Rule 11. This power can be exercised even suo moto by the Court as explained earlier in the judgment. We, however, make this declaration effective from 20.08.2022 so that concerned stakeholders become sufficiently informed. Still further, we however direct that in case 95 plaints have already been rejected and no steps have been taken within the period of limitation, the matter cannot be reopened on the basis of this declaration. Still further, if the order of rejection of the plaint has been acted upon by filing a fresh suit, the declaration of prospective effect will not avail the plaintiff. Finally, if the plaint is filed violating Section 12A after the jurisdictional High Court has declared Section 12A mandatory also, the plaintiff will not be entitled to the relief.
(Emphasis Supplied)
35. Despite the statutory promulgation and strict interpretation of the same by Hon'ble Supreme Court it is surprising to observe that defendant appears to be having scant regard for the law as promulgated by the Parliament or the judgment passed by Hon'ble Supreme Court which is itself a law under Article 141 of Constitution of India. The above legal position mandates every citizen and corporation to strictly follow the same.
36. Mediation is one of the pivotal alternate Dispute Resolution Mechanism which finds recognition in Section 89 CPC as it was reintroduced in the 2002 Amendment. Gauging the success of its inclusion the Parliament decided to make it mandatory for Commercial Courts at a pre-institution stage with an aim to elevate India's position in the Ease of Doing Business, a report prepared by World Bank for ranking investment friendly countries. Out of the 10 components of Ease of Doing Business one of the component is time taken by the countries in "enforcement of contracts". While India's dismal ranking of 161 in 2014 has now reached a somewhat respectable position at 63 rank but in the enforcement of contract CS Comm No.856/2025 Krishna Kumar Vs. Pankaj Joshi page 14 component which pertains to time taken by the country in resolving commercial disputes our country still ranks at poorly 171 out of 191 countries.
37. In a similar case recently Hon'ble High Court of Delhi in case titled Maxwell Partnership Firm Regards Vs. National Insuranace Company Ltd. And Anr. in I.A. No. 9893/2024 on 03.05.2024. Hon'ble High Court was pained to observe that the defendant in the cited case, despite being a flagship Government owned insurance company did not participate in the Pre-Institution Mediation proceedings. For ready reference the relevant paras are reproduced hereunder:
9. A perusal of the report would show that the insurance company has failed to appear in thepre-litigation mediation as well. Such conduct on behalf of the Insurance Company is contrary to the spirit of Section 12A of the Commercial Courts Act, to say the least. The Plaintiff has already borne 25% of the court fees in the first round as the same could not be returned in terms of decicion in Patil Automation Private Limited & Ors. v. Rakheja Engineers Private Limited ((2022) 10 SCC OnLine SC 1028). Due to the mediation being a non-starter, it has been compelled to again file the present suit. The entire purpose of pre-litigation mediation has been defeated by the Insurance company.
10. The non-appearance of parties in mediation proceedings carries significant legal ramifications,as provided by various legal provisions.
Under the Punjab and Haryana High Court Mediation Rules (Rule 12), parties are mandated to attend mediation sessions, whether in person, through legal representatives, or by means of power of attorney holders. Failure to comply with this requirement may lead to the Mediator or other parties to seek court intervention. Upon finding unjustified absence, the Court can impose costs or initiate contempt proceedings against the parties. Similarly, Rule 13 of the Delhi High Court Mediation Conciliation Rules stipulates that deliberate or wilful non-attendance warrants Court intervention, with the Court empowered to issue appropriate directions. The said Rule is extracted hereinbelow:
"12. Consequences of Non-Attendance: If a party deliberately or willfully fails to attend a session, the other party or mediator/conciliator may apply to the Court. The Court may issue directions based on the case's facts and circumstances"
11. This principle is also prevalent in Rule 14 of the Telangana High Court Mediation Rules 2015 and Rule 13 of the Karnataka Civil Procedure (Mediation) Rules, 2005 wherein it is elucidated that failure to attend CS Comm No.856/2025 Krishna Kumar Vs. Pankaj Joshi page 15 mediation due to deliberate acts may result in judicial intervention and the issuance of necessary directives. The same has been emphasized in the case of Smt Amalapooh Mary & Ors. v. Sri V Ravindra & Ors. (WP51491/2016) wherein it was held that if the party is absent in the mediation proceedings, the Court could impose costs.
21. In terms of Rule 13 of Mediation Rules, 2005, the Court has the power to direct a party to appearbefore the mediator, in the event of a Court finding that a party is absenting himself before the mediator without sufficient reason, costs could be imposed on such a party. The quantum of costs that could be imposed by the Court is at the discretion of the Court, which the Court could decide upon and impose depending on the nature of the matter.
22. In view of Rule 13 of the Mediation Rules, 2005, it is no longer permissible for either counsel orthe party in a proceeding to refuse participation in mediation proceedings, if at all a party were to absent himself, the Court could impose costs as also repeated costs until the party were to appear and participate in the mediation proceedings. The Court is not powerless to issue appropriate directions to the parties to attend the Mediation infact it is the bounden duty of the Court to issue necessary directions so that all the parties participate in the mediation process in terms of the Mediation Rules, 2005.
xxx xxx xxx 43.3. In terms of Paragraph 36 of the Afcon's Judgment, there is no requirement to obtain consent of either lawyers appearing for the parties or of the parties themselves.
xxx xxx xxx 43.4. In the event of any of the parties not presenting themselves before the Mediation Centre or the Lok- adalat, the Court could exercise powers under Rule 13 of the Karnataka Civil Procedure (Mediation) Rules 2005 and impose such costs as it may deem fit to compel the attendance of the parties before the Mediator so appointed. "
14. In essence, the obligation to attend mediation is of paramount importance as theentire purpose of the enactment of the provision, as a mandatory step to be taken before commencing litigation, would otherwise be defeated. Especially in the case of organisations which have a public character, effective participation in pre-litigation mediation is essential. If mediation has to be taken seriously and with a result oriented approach, institutions with a public character including government departments etc., ought to participate through proper appearance of officials or duly authorised persons. Any non-participation ought to invite consequences in law.
16. Let the written statement to the plaint be filed within 30 days. Along with thewritten statement, the Defendants shall also file an affidavit of admission/denial of the documents of the Plaintiffs, without which the written statement shall not be taken on record. In view of the conduct of the Defendant through the previous litigation and non-attendance in the mediation proceedings, non-appearance despite service of advance copy, the Defendants are shall deposit costs of Rs. 5 lakhs with the worthy Registrar General of this Court, as a pre-condition to file the written CS Comm No.856/2025 Krishna Kumar Vs. Pankaj Joshi page 16 statement. If the costs are not deposited, the Written statement would not be liable to be taken on record.
(Emphasis Supplied)
38. In the light of the above, the defendant is burdened with cost of Rs.25,000/- for its non-participation in Pre-Institution Mediation to be deposited with Advocates' Welfare Fund, Delhi Bar Association.
Interest
39.The interest is payable as per Section 34 CPC. For ready reference, Section 34 CPC is reproduced hereunder:
Section 34 CPC: Interest
(i)"Where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate not exceeding 6% per annum as the Court deems reasonable on such principal sum from the date of the decree to the date of payment, or to such earlier date as the court thinks fit.
(ii).Provided that where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed 6% per annum but shall not exceed the contractual rate or interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalized banks in relation to commercial transactions.
Explanation (i) In this sub-section, "nationalized bank" means a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970.
Explanation (ii) For the purposes of this section, a transaction is a commercial transaction, if it is connected with the industry, trade or business of the party incurring the liability.
Where such a decree is silent with respect to the payment of further interest (on such principal sum) from the date of the decree to the date of the payment or other earlier date, the Court shall be deemed to have refused such interest, and a separate suit therefore shall not lie.
(Emphasis Supplied)
40. Section 34 CPC provides that plaintiff will be entitled the interest at the rate at which Court finds reasonable. For a general suit, the rate of interest prescribed is 6% and for commercial suit, the Parliament promulgates that rate of interest may increase from 6% to a rate which CS Comm No.856/2025 Krishna Kumar Vs. Pankaj Joshi page 17 is found reasonable. Plaintiff is accordingly entitled to only the rate at which RBI has issued Circular for Commercial suits.
41. As far as the interest is concerned, rate applicable to Commercial transaction shall be payable. As per RBI notification dated 30.08.2022 issued vide Press Release no.2022-2023/794 whereby advisory issued by RBI to Schedule Commercial banks of accepting deposit rates @ 9.05% per annum.
Relief
42. In view of the above, suit of the plaintiff stands decreed with cost for a sum of Rs.7,39,203/- with 9% interest pendentelite and till realization. Pre-suit interest is not sought. Plaintiff's Lawyer's fees is assessed as Rs.25,000/-.
43. File be consigned to Record Room after due compliance.
Digitally signed by SURINDER S RATHI SURINDER Date: S RATHI 2025.12.23 14:09:05 +0530 (SURINDER S. RATHI) District Judge, Commercial Court -11 Central District, THC Delhi/15.12.2025
CS Comm No.856/2025 Krishna Kumar Vs. Pankaj Joshi page 18