Gujarat High Court
Jindal Flexifilms Limited vs Mhm Holding Gmbh on 2 January, 2025
Author: Sunita Agarwal
Bench: Sunita Agarwal
NEUTRAL CITATION
C/SCA/13/2025 ORDER DATED: 02/01/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 13 of 2025
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JINDAL FLEXIFILMS LIMITED
Versus
MHM HOLDING GMBH & ORS.
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Appearance:
MR. MIHIR THAKORE, SR. ADV. WITH MR. DHAVAL DAVE, SR. ADV.
WITH MR. ADITYA PANDYA, MR. ARVIND PARIKH, MR. ANIKET
AGGRAWAL FOR J SAGAR ASSOCIATES(8162) for the Petitioner(s) No. 1
MR.ADITYA J PANDYA(6991) for the Petitioner(s) No. 1
MR. R.S.SANJANWALA, SR. ADV. WITH MR. AKSHAY SHARMA AND
AAKSHA SAJNANI FOR SHARDUL AMARCHAND MANGALDAS AND
CO(8426) for the Respondent(s) No. 2
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CORAM:HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE
SUNITA AGARWAL
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 02/01/2025
ORAL ORDER
PER : HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL) The present petition invoking the jurisdiction of this Court under Article 227 of the Constitution of India has been filed by the plaintiff seeking to challenge the judgment and order dated 27.12.2024 passed by the Principal Sr. Civil Judge, Vapi in returning the plaint of the suit sought to be instituted by the petitioner herein, on the premise that the petitioner/plaintiff is not entitled to seek exemption from the statutory mandate under Section 12A of the Commercial Courts Act, 2015 (hereinafter referred to as 'the C.C.Act' 2015').
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2. When the order impugned dated 27.12.2024 was passed by the Commercial Court, the plaint was un-numbered, inasmuch as, the plaintiff had filed a separate application seeking for exemption from invoking pre-institution mediation under Section 12A of the C.C.Act' 2015 before institution of the suit. The said application has been registered as CRMA No. 25/2024 (Exh.1) and decided vide judgment and order dated 27.12.2024 holding that there was no concluded contract between the parties within the meaning of Section 2 of the Indian Contract Act, 1872.
3. We may note, at the outset, that the Commercial Court while dealing with the application seeking exemption from the mandatory provisions under Section 12A, has gone into the averments made in the plaint and the document appended thereto. While considering the plaint averments, the learned Commercial Court has noted that in view of the judgment of the Apex Court in Yamini Manohar vs. T.K.D. Keerthi [(2024) 5 SCC 815], it was required to decide only whether the plaint and the interim application actually discloses a need for an urgent interim relief, as claimed by the plaintiff, or whether the same is only a camouflage or disguise to bypass the statutory mandate of the Legislation.
4. While discussing the plaint averments in order to answer the said question, the Commercial Court seems to have entered into the merits of the claim made by the plaintiff in seeking the relief for specific performance, declaration, mandatory injunction etc.. It is for this reason that the plaintiff has filed the present petition with Page 2 of 20 Uploaded by C.M. JOSHI(HC01073) on Thu Jan 09 2025 Downloaded on : Thu Jan 09 21:17:58 IST 2025 NEUTRAL CITATION C/SCA/13/2025 ORDER DATED: 02/01/2025 undefined the assertion that the Commercial Court has exceeded in its jurisdiction while examining the question of exemption from the mandatory requirement under Section 12A of the C.C.Act' 2015 by entering into the merits of the claim of the plaintiff.
5. We may note that analysing the documents on record and the plaint averments, the Commercial Court has reached at the conclusion that since no agreement was executed between the parties and no terms and conditions were settled in writing between the plaintiff and the defendants as such, no question arises at all for exemption of the plaintiff from mandatory provisions of mediation process as per Section 12A of the C.C.Act' 2015. It was further opined that for any legal contract, a written agreement for the purchase of company is a pre-condition and further in view of the fact that the e-mails and correspondences exchanged between the parties could not give rise to a concluded contract, there existed no legal binding to the parties. It has further proceeded to examine the role of the Commercial Court to construe the correspondences with a view to arriving at a conclusion whether there was a meeting of mind between the parties, which could create a binding contract between them and observed that the Court is not empowered to create a contract between the parties by going outside the clear language used in the correspondences, except in so far as there are some appropriate implications of law to be drawn.
6. The Commercial Court has further proceeded to analysis the Page 3 of 20 Uploaded by C.M. JOSHI(HC01073) on Thu Jan 09 2025 Downloaded on : Thu Jan 09 21:17:58 IST 2025 NEUTRAL CITATION C/SCA/13/2025 ORDER DATED: 02/01/2025 undefined correspondences between the parties to record that after negotiation of bargain in the present case, the stage never reached when the negotiations were completed giving rise to a binding contract and, thus, held that from the pleadings, it seems that there was no concluded contract between the parties.
7. Placing these findings of the Commercial Court before us, Mr. Mihir Thakore, the learned senior advocate for the petitioner submitted that the Commercial Court has gone beyond the scope of inquiry at the pre-institution stage, where the plaintiff sought exemption from the mandatory pre-litigation mediation claiming that an urgent interim relief is contemplated in the facts and circumstances of the case.
8. It was submitted that the Apex Court decision in Patil Automation Private Limited and Others vs. Rakheja Engineers Private Limited [(2022) 10 SCC 1] as followed in Yamini Manohar (supra), leave no scope of argument that Section 12A of the C.C.Act' 2015 is mandatory and any suit instituted violating the mandate of Section 12A must be visited with rejection of the plaint under Order VIII Rule 11, CPC. It was held by the Apex Court in Patil Automation Private Limited (supra) that there is no need for filing any application seeking exemption under Section 12A of the C.C.Act' 2015, however, the Court can decide even suo motu whether the requirement of pre-litigation mediation can be dispensed with in the facts and circumstances of the given case by analysing as to whether the suit contemplates an urgent relief. The Page 4 of 20 Uploaded by C.M. JOSHI(HC01073) on Thu Jan 09 2025 Downloaded on : Thu Jan 09 21:17:58 IST 2025 NEUTRAL CITATION C/SCA/13/2025 ORDER DATED: 02/01/2025 undefined contention is that while saying so, the Apex Court in Patil Automation Private Limited (supra) while considering whether the statutory pre-litigation contemplated under Section 12A of the C.C.Act' 2015, as amended by the Amendment Act, 2018 is mandatory, has carved out an exception of those suits which contemplate urgent interim relief.
9. It was argued that in Yamini Manohar (supra) relying on Patil Automation Private Limited (supra), the Apex Court has held that in cases where a suit is instituted without complying with the requirements of Section 12A of the C.C.Act' 2015, the Court is required to examine as to whether the suit "contemplate any urgent interim relief" and in case, where the condition that the plaint "contemplates an urgent interim relief" is satisfied, the suit cannot be rejected and the plaintiff cannot be relegated to pre-institution mediation under Section 12A, as it would result in denial of the relief to the plaintiff. In any case, the examination at the pre- institution stage on the question as to whether the plaint "contemplates an urgent interim relief", is not contingent on whether the Court accedes to the request of the plaintiff for grant of interim relief. The inquiry is to be made from the stand point of the plaintiff as to whether the plaintiff is required an urgent interim relief and the Court is to be satisfied that the plaintiff can ask for an interim relief and the prayer to grant exemption has not been made to simply overcome the bar under Section 12A.
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10. Considering the above arguments, we may record that in Patil Automation Private Limited (supra) while considering the argument that Section 12A of the C.C.Act' 2015 is mandatory and any suit instituted violating the mandate of Section 12A must be visited with rejection of the plaint under Order VII Rule 11, CPC the Apex Court has deliberated on the legislative intent behind the provision. It was observed that the mediation, as an alternative dispute mechanism, has been identified as a workable solution in the commercial matters. The language used in Section 12A, which includes the word "Shall" certainly goes a long way to assist the Court to hold that the provision is mandatory. Also the procedure for carrying out mediation has been spelt out in the Rules. The parties are free to engage the counsel during the mediation. The expenses, as far as if payable to the Arbitrator is concerned, is limited to one time fee which appears to be reasonable, particularly having regard to the fact that it is to be shared equally. The mediation must be perceived as a new mechanism as an access to justice. A trained mediator can make wonders. Any reluctance on the part of the Court to give Section 12A a mandatory interpretation, would result in defeating the object and intention of the Parliament. It was, thus, held that a definite scheme to effectively deal with the perceived urgent problem of acute clogging of justice delivery system has been brought in by virtue of Section 12A. It is an undeniable reality that the Courts in India are reeling under an extraordinary docket explosion.
11. While saying so, the Apex Court, in the facts of the said case, Page 6 of 20 Uploaded by C.M. JOSHI(HC01073) on Thu Jan 09 2025 Downloaded on : Thu Jan 09 21:17:58 IST 2025 NEUTRAL CITATION C/SCA/13/2025 ORDER DATED: 02/01/2025 undefined has observed that the suit therein do not contemplate urgent interim relief. However, the Court did not delve upon the meaning of the word "contemplate" or "urgent interim relief" to give any guideline for such cases as to what should have been the situation, which contemplates urgent interim relief.
12. On the issue raised before the Apex Court that the word "contemplate" would give rise to a situation where attempt may be made to bypass the statutory mediation under Section 12A by contending that the plaintiff is contemplating urgent interim relief, which in reality is found to be without any basis, the Apex Court has not expressed any opinion or gave a guideline.
13. However, in Yamini Manohar (supra), while dealing with the challenge to the order of the dismissal of the application under Order VII Rule 11, CPC for rejection of the plaint on the premise of non-compliance of the provisions of Section 12A of the C.C.Act' 2015, the Apex Court has noted the observations made in paragraph No. 100 in Patil Automation Private Limited (supra) as under :
"3. This Court in Patil Automation Private Limited and Ors. v. Rakheja Engineers Private Limited has held that Section 12A of the CC Act is mandatory. Pre-litigation mediation is necessary, unless the suit contemplates urgent interim relief. At the same time, the judgment observes:
"100. In the cases before us, the suits do not contemplate urgent interim relief. As to what should happen in suits which do contemplate urgent interim relief or rather the meaning of the word 'contemplate' or urgent interim relief, we need not dwell upon it. The other aspect raised about the word 'contemplate' is that there can be attempts to Page 7 of 20 Uploaded by C.M. JOSHI(HC01073) on Thu Jan 09 2025 Downloaded on : Thu Jan 09 21:17:58 IST 2025 NEUTRAL CITATION C/SCA/13/2025 ORDER DATED: 02/01/2025 undefined bypass the statutory mediation under Section 12-A by contending that the plaintiff is contemplating urgent interim relief, which in reality, it is found to be without any basis. Section 80(2) CPC permits the suit to be filed where urgent interim relief is sought by seeking the leave of the court. The proviso to Section 80(2) contemplates that the court shall, if, after hearing the parties, is satisfied that no urgent or immediate relief need be granted in the suit, return the plaint for presentation to the court after compliance. Our attention is drawn to the fact that Section 12-A does not contemplate such a procedure. This is a matter which may engage attention of the lawmaker. Again, we reiterate that these are not issues which arise for our consideration. In the fact of the cases admittedly there is no urgent interim relief contemplated in the plaints in question."
14. While comparing the provisions of Section 80(2) of the CPC with Section 12A of the C.C.Act' 2015, it was observed therein that Section 12A does not contemplate leave of the Court, as is clear from the language and words used therein. Nor does the provisions necessarily require application seeking exemption. Pleadings on record and oral submissions would be sufficient to examine the requirement of an urgent relief in a given case so as to understand the meaning of the words "a suit which does not contemplate urgent interim relief", under Section 12A of the C.C.Act' 2015. The Apex Court while deliberating on the meaning of the word "contemplate" has proceeded to note as under :-
"6. The words used in Section 12A of the CC Act are - "A suit which does not contemplate any urgent interim relief", wherein the word "contemplate" connotes to deliberate and consider. Further, the legal position that the plaint can be rejected and not entertained reflects application of mind by the court viz. the requirement of 'urgent interim relief'.
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8. Our attention is drawn to the judgment of the High Court of Judicature at Bombay in "Kaulchand H. Jogani v. Shree Vardhan Investment, wherein the following observations have been made:
"31. In my considered view, the proper course would be to assess whether there are elements which prima face indicate that the suit may contemplate an urgent interim relief irrespective of the fact as to whether the plaintiff eventually succeeds in getting the interim relief. In a worst case scenario, where an application for interim relief is presented without there being any justification whatsoever for the same, to simply overcome the bar under Section 12A, the Court may be justified in recording a finding that the suit in effect does not contemplate any urgent interim relief and then the institution of the suit would be in teeth of Section 12A notwithstanding a formal application."
9. The High Court of Delhi in Chandra Kishore Chaurasia v. R.A. Perfumery Works Private Limited observes:
"30. The contention that it would be necessary for the plaintiff to file an application seeking exemption from the provisions of Section 12A of the Commercial Courts Act, 2015, is unmerited. This Court cannot accept the said contention for several reasons.
31. First of all, there is no provision under Section 12A of the Commercial Courts Act, 2015 that requires the plaintiff to make any such application in a suit which involves urgent interim reliefs. As stated above, if the suit involves urgent interim relief, Section 12A of the Commercial Courts Act, 2015 is inapplicable and it is not necessary for the plaintiff to enter into a pre-institution mediation.
32. Second, a suit, which does not contemplate urgent interim relief, cannot be instituted without exhaustion of pre-institution mediation, as required under Section 12A(1) of the Commercial Courts Act, 2015. As noted above, the Supreme Court has held that the said provision is mandatory and it is compulsory for a plaintiff to exhaust the remedy of pre-institution mediation, in accordance with the rules before instituting a suit. The Court has no discretion to exempt a plaintiff from the applicability of Section 12A(1) of Page 9 of 20 Uploaded by C.M. JOSHI(HC01073) on Thu Jan 09 2025 Downloaded on : Thu Jan 09 21:17:58 IST 2025 NEUTRAL CITATION C/SCA/13/2025 ORDER DATED: 02/01/2025 undefined the Commercial Courts Act, 2015. It is not permissible for the court to pass an order contrary to law; therefore, an application seeking exemption from engaging in pre- institution mediation, in a suit that does not urgent interim reliefs, would not lie.
33. This Court also finds it difficult to accept that a commercial court is required to determine whether the urgent interim reliefs ought to have been claimed in a suit for determining whether the same is hit by the bar of Section 12A(1) of the Commercial Courts Act, 2015. The question whether a plaintiff desires any urgent relief is to be decided solely by the plaintiff while instituting a suit. The court may or may not accede to such a request for an urgent interim relief. But that it not relevant to determine whether the plaintiff was required to exhaust the remedy of pre-institution mediation. The question whether a suit involves any urgent interim relief is not contingent on whether the court accedes to the plaintiff's request for interim relief.
34. The use of the words "contemplate any urgent interim relief" as used in Section 12(1) of the Commercial Courts Act, 2015 are used to qualify the category of a suit. This is determined solely on the frame of the plaint and the relief sought. The plaintiff is the sole determinant of the pleadings in the suit and the relief sought.
35. This Court is of the view that the question whether a suit involves any urgent interim relief is to be determined solely on the basis of the pleadings and the relief(s) sought by the plaintiff. If a plaintiff seeks any urgent interim relief, the suit cannot be dismissed on the ground that the plaintiff has not exhausted the pre-institution remedy of mediation as contemplated under Section 12A(1) of the Commercial Courts Act, 2015.
15. It was held therein that when a plaint is filed under the C.C.Act' 2015 with a prayer for urgent interim relief, the Commercial Court should examine the nature and the subject matter of the suit, the cause of action and the prayer for interim relief. The prayer for interim relief should not be a disguise or mask to Page 10 of 20 Uploaded by C.M. JOSHI(HC01073) on Thu Jan 09 2025 Downloaded on : Thu Jan 09 21:17:58 IST 2025 NEUTRAL CITATION C/SCA/13/2025 ORDER DATED: 02/01/2025 undefined wriggle out of and get over Section 12A of the C.C.Act' 2015. The facts and circumstances of the case have to be considered holistically from the stand point of the plaintiff. The plaintiff, however, does not have absolute choice to decide whether to resort to the procedure under Section 12A of the C.C.Act' 2015 and right to paralyse Section 12A of the C.C.Act' 2015 by making prayer for urgent interim relief. The Commercial Courts have a role albeit a limited one to check whether the prayer for urgent interim relief is camouflage or a disguise to bypass the statutory mandate of pre-litigation mediation and when the deception and falsity is apparent or established, the Court may reject the plaint. The words "contemplate any urgent interim relief" has been explained in paragraph No.12 as under :-
"12. The words 'contemplate any urgent interim relief' in Section 12A(1) of the CC Act, with reference to the suit, should be read as conferring power on the court to be satisfied. They suggest that the suit must "contemplate", which means the plaint, documents and facts should show and indicate the need for an urgent interim relief. This is the precise and limited exercise that the commercial courts will undertake, the contours of which have been explained in the earlier paragraph(s). This will be sufficient to keep in check and ensure that the legislative object/intent behind the enactment of section 12A of the CC Act is not defeated."
16. The observations in paragraph Nos. 10 and 11 of Yamini Manohar (supra) are also required to be extracted for ready reference:-
"10. We are of the opinion that when a plaint is filed under the CC Act, with a prayer for an urgent interim relief, the commercial court should examine the nature and the subject matter Page 11 of 20 Uploaded by C.M. JOSHI(HC01073) on Thu Jan 09 2025 Downloaded on : Thu Jan 09 21:17:58 IST 2025 NEUTRAL CITATION C/SCA/13/2025 ORDER DATED: 02/01/2025 undefined of the suit, the cause of action, and the prayer for interim relief. The prayer for urgent interim relief should not be a disguise or mask to wriggle out of and get over Section 12A of the CC Act. The facts and circumstances of the case have to be considered holistically from the standpoint of the plaintiff. Non-grant of interim relief at the ad-interim stage, when the plaint is taken up for registration/admission and examination, will not justify dismissal of the commercial suit under Order VII, Rule 11 of the Code; at times, interim relief is granted after issuance of notice. Nor can the suit be dismissed under Order VII, Rule 11 of the Code, because the interim relief, post the arguments, is denied on merits and on examination of the three principles, namely, (i) prima facie case, (ii) irreparable harm and injury, and (iii) balance of convenience. The fact that the court issued notice and/or granted interim stay may indicate that the court is inclined to entertain the plaint.
11. Having stated so, it is difficult to agree with the proposition that the plaintiff has the absolute choice and right to paralyze Section 12A of the CC Act by making a prayer for urgent interim relief. Camouflage and guise to bypass the statutory mandate of pre-litigation mediation should be checked when deception and falsity is apparent or established. The proposition that the commercial courts do have a role, albeit a limited one, should be accepted, otherwise it would be up to the plaintiff alone to decide whether to resort to the procedure under Section 12A of the CC Act. An 'absolute and unfettered right' approach is not justified if the pre-institution mediation under Section 12A of the CC Act is mandatory, as held by this Court in Patil Automation Private Limited (supra)."
17. From an exhaustive reading of the law laid down by the Apex Court in Patil Automation Private Limited (supra) and Yamini Manohar (supra), it is pertinent to note that when the plaint is presented before the Commercial Court under the C.C.Act' 2015 without adhering to the provisions of Section 12A of the C.C.Act' 2015, it is required to :-
(i) examine in exercise of its suo motu powers as to whether the Page 12 of 20 Uploaded by C.M. JOSHI(HC01073) on Thu Jan 09 2025 Downloaded on : Thu Jan 09 21:17:58 IST 2025 NEUTRAL CITATION C/SCA/13/2025 ORDER DATED: 02/01/2025 undefined suit itself contemplated "any urgent interim relief" and then decide as to whether the mandatory requirement of Section 12A of the C.C.Act, 2015 can be relaxed,
(ii) the Commercial Court should examine the nature and subject matter of the suit, the cause of action and the prayer for interim relief to ascertain as to whether the prayer for urgent interim relief is a disguise or mask to wriggle out of and get over Section 12A of the C.C.Act, 2015,
(iii) the facts and circumstances of the case have to be considered holistically from the stand point of the plaintiff,
(iv) non-grant of interim relief at the ad-interim stage, i.e. at the time of registration/admission and examination of the plaint, will not justify dismissal by the Commercial Court under Order VII Rule 11, CPC, inasmuch as, interim relief may be granted after issuance of notice,
(iv) the suit cannot be dismissed under Order VII Rule 11, CPC on the ground of non-compliance of Section 12A of the C.C.Act' 2015, because the interim relief has been denied on merits.
18. In its precise and limited exercise of powers, the Commercial Court will be required to examine from the reading of the plaint as a whole and the prayers made therein that the suit must contemplate an urgent interim relief, if filed without complying with the provisions of Section 12A of the C.C.Act' 2015. The word "contemplate" as explained by the Apex Court should be read as conferring powers on the Court to be satisfied about the requirement of an urgent interim relief and the plaint documents Page 13 of 20 Uploaded by C.M. JOSHI(HC01073) on Thu Jan 09 2025 Downloaded on : Thu Jan 09 21:17:58 IST 2025 NEUTRAL CITATION C/SCA/13/2025 ORDER DATED: 02/01/2025 undefined and facts should show and indicate the need for an interim relief.
19. However, while making such an inquiry, the Commercial Court in its limited exercise of powers with the idea to keep check that the legislative intent behind the enactment of Section 12A of the C.C.Act' 2015 is not defeated, can not enter into the merits of the relief sought by the plaintiff to examine as to whether the plaintiff is entitled to any relief either in the nature of interim relief or final relief. The plaint cannot be rejected or returned in the manner as has been done in the present case where the Commercial Court having gone through the plaint averments and the documents on record, has even gone to the extent of holding that there does not exist any binding contract between the parties and has proceeded to observe that no contract took place between the plaintiff and the defendants, and consequently the Court is not inclined to grant any urgent interim relief to the plaintiff. The line which was required to be drawn by the Commercial Court at the time of making inquiry as to whether the mandatory requirement of Section 12A can be exempted at the time of registration of the plaint, has been crossed by it. The inquiry made by the Commercial Court at the pre-institution stage by making observations on the merits of the claim of the plaintiff, in fact, resulted into denial of any relief to the plaintiff, at the pre- institution stage itself.
20. At the pre-institution stage, as per the law laid down by the Apex Court in Yamini Manohar (supra), the Commercial Court could Page 14 of 20 Uploaded by C.M. JOSHI(HC01073) on Thu Jan 09 2025 Downloaded on : Thu Jan 09 21:17:58 IST 2025 NEUTRAL CITATION C/SCA/13/2025 ORDER DATED: 02/01/2025 undefined not have gone into the merits of the claim for grant of urgent interim relief. The only issue required to be examined at the pre- institution stage by the Commercial Court, was as to whether the plaintiff requires an urgent relief by consideration of the facts and circumstances of the case from the stand point of the plaintiff. What could go against the plaintiff at the time of consideration of the prayer for interim relief was not required to be examined while analyising the plaint averments, documents on record and the prayer made in the suit. The Commercial Court was required to only ascertain as to whether the prayer for interim relief is a camouflage or disguise to wriggle out of or bypass the statutory mandate of pre-litigation mediation under Section 12A of the C.C.Act' 2015. Though the plaintiff has no absolute and unfettered right to approach the Commercial Court without adhering to the pre-institution mediation under Section 12A of the C.C.Act' 2015 which is held mandatory by the Apex Court in Patil Automation Private Limited (supra), but where the plaintiff seeks exemption, the Commercial Court has no jurisdiction to enter into the merits of the prayer for interim relief. Non-grant of interim relief at the ad- interim stage or even after issuance of notice is not relevant for the purposes of the limited inquiry to be made by the Commercial Court under Section 12 of the C.C.Act' 2015 to keep a check that the legislative mandate is followed in its true letter and spirit.
21. The only limited scope of examination in the exercise of powers conferred under Section 12A of the C.C.Act' 2015 is that the Court should be satisfied that the prayer for interim relief has not Page 15 of 20 Uploaded by C.M. JOSHI(HC01073) on Thu Jan 09 2025 Downloaded on : Thu Jan 09 21:17:58 IST 2025 NEUTRAL CITATION C/SCA/13/2025 ORDER DATED: 02/01/2025 undefined been made simply to overcome the bar under Section 12A of the C.C.Act' 2015 and the interim relief application is not presented without any justification whatsoever. The inquiry is not contingent whether the Court accedes the plaintiff's request.
22. In this scenario, we are of the considered opinion that in the instance case, when the plaintiff has sought for an urgent relief at the time of presentation of the plaint and made an application stating that in case the interim relief is not granted on an urgent basis, the whole purpose of filling the suit would be frustrated, the Commercial Court could not have returned the plaint, when it has not been able to satisfy itself that the prayer for urgent interim relief is a camouflage to bypass the statutory requirement of Section 12A of the C.C.Act' 2015. Inspite of making the inquiry within the limited scope of its powers under Section 12A of the C.C.Act' 2015, the Commercial Court has proceeded to enter into the merits of the case of the plaintiff to examine and hold that since there was no concluded contract, no interim relief can be granted. This inquiry made by the Commercial Court for arriving at the conclusion to return the plaint for non-compliance of the statutory mandate of Section 12A of the C.C.Act' 2015 at the pre- institution stage, is in transgression of its limited jurisdiction in exercise of powers conferred by the said provision.
23. We are, therefore, of the considered opinion that the Trial Court has committed an error of jurisdiction in dealing with the prayer of the plaintiff for grant of exemption from the mandatory Page 16 of 20 Uploaded by C.M. JOSHI(HC01073) on Thu Jan 09 2025 Downloaded on : Thu Jan 09 21:17:58 IST 2025 NEUTRAL CITATION C/SCA/13/2025 ORDER DATED: 02/01/2025 undefined requirement of Section 12A of the C.C.Act' 2015.
24. This apart, we may record that the defendants have put in appearance before us through the learned senior advocate Mr. R. S. Sanjanwala assisted by the learned advocate Mr. Akshay Mishra, who has vehemently argued the case of the defendants before us. It was sought to be submitted that the reliefs claimed in the suit are not admissible in view of various communications between the parties and the stage at which the suit was filed. The submission is that, at the most, even if the claim of the plaintiff is accepted, it could be only a money claim in view of the correspondence dated 09.09.2024, whereunder the plaintiff had asked for the Break Fee and nothing beyond that.
25. A dispute has also been raised with regard to the jurisdiction of the Court at Vapi by submitting that the main relief in the suit is about acquisition of the defendant No.1 Company, which is a German Company and is amenable to the German laws. The defendant Nos. 3 and 4 impleaded in the suit are trustees of the defendant No.1 Company based at Germany and the only defendant No.2 which is a subsidiary of defendant No.1, is a company based at Vapi. It was a case of merger and acquisition and sale of shareholdings by the Vendors. Invitation to offer given by the PWC (M&A Advisor) dated 3.6.2024 at page No. '47' of the paper book of the present petition clearly contemplates that nothing in the said communication shall create any binding obligation to enter into any agreement with vendors (shareholders) or PWC (M&A advisor) and Page 17 of 20 Uploaded by C.M. JOSHI(HC01073) on Thu Jan 09 2025 Downloaded on : Thu Jan 09 21:17:58 IST 2025 NEUTRAL CITATION C/SCA/13/2025 ORDER DATED: 02/01/2025 undefined nothing in the letter shall constitute an offer to sell or an invitation to purchase or tender for the company or any of its businesses, shareholdings or assets. The invitation to offer was with regard to the intended disposal of the shareholdings of the vendors in defendant No.1 Company and its direct and indirect subsidiaries. The letter dated 03.06.2024 clearly communicated that it shall be governed by and construed in accordance with the German law and the plaintiff (to whom the offer was given) irrevocably submit to the exclusive jurisdiction of the Courts of Frankfurt am Main, Gernamy.
26. It is vehemently argued by the learned Senior Counsel for the respondent/defendant that from the stand point of the above, the Civil Court at Vapi has no territorial jurisdiction to try the suit and further when the vendors had already entered into the agreement with the third party to sell shares on 8/9-11-2024 and the same was communicated to the plaintiff on 13 th November, 2024 and further that the plaintiff itself had demanded Break Fee of Euro 9 million by communication dated 14th November, 2024 (page '426' of the paper book), the plaint is liable to be rejected on the sole ground of being beyond territorial jurisdiction of the Courts at Vapi. Even otherwise the plaintiff is not entitled to any interim relief, inasmuch as, it could be only a money decree claim, at the best, if all claims of the plaintiff are accepted without demurrer.
27. Taking note of the above, we find that serious disputed questions of fact and law have been raised by the contesting Page 18 of 20 Uploaded by C.M. JOSHI(HC01073) on Thu Jan 09 2025 Downloaded on : Thu Jan 09 21:17:58 IST 2025 NEUTRAL CITATION C/SCA/13/2025 ORDER DATED: 02/01/2025 undefined parties. It would, therefore, be proper that the Commercial Court shall examine the issues pertaining to its jurisdiction as agitated by the defendant before us and also whether the plaintiff is entitled for any interim relief or not. We may also note that the Commercial Court has returned the plaint without registration of the suit. We, therefore, direct the Commercial Court to register the suit immediately and leave it open for the defendant to file an application assailing the jurisdiction of the Court to entertain the suit.
28. The interim application filed by the plaintiff and the application for rejection of the suit, if any, filed by the defendant raising the issue of jurisdiction, shall be decided simultaneously though albeit by two separate orders. We may also clarify that even in case the defendant fails to file any application raising the issue of jurisdiction of the Commercial Court, it would be incumbent for the Commercial Court to determine its own jurisdiction before entering into the merits of the interim relief application filed by the plaintiff.
29. All the issues raised by the parties on the merits of their respective claims have been left open and the Commercial Court is required to examine the matter independently without being influenced by any of the observations made hereinbefore, which are confined to the scope of the inquiry under Section 12A of the C.C.Act' 2015.
Page 19 of 20 Uploaded by C.M. JOSHI(HC01073) on Thu Jan 09 2025 Downloaded on : Thu Jan 09 21:17:58 IST 2025 NEUTRAL CITATION C/SCA/13/2025 ORDER DATED: 02/01/2025 undefined
30. With the above observations and directions, the present petition filed under Article 227 of the Constitution of India stands disposed of.
(SUNITA AGARWAL, CJ ) (PRANAV TRIVEDI,J) C.M. JOSHI/cmjoshi Page 20 of 20 Uploaded by C.M. JOSHI(HC01073) on Thu Jan 09 2025 Downloaded on : Thu Jan 09 21:17:58 IST 2025