Karnataka High Court
M/S Vyshnavi Visions vs Mrs Bhagyashree Jain on 25 September, 2025
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 25TH DAY OF SEPTEMBER, 2025
PRESENT
THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE C M JOSHI
COMAP No.48 OF 2025 C/W
COMAP C.R. NO. 2 OF 2025
IN COMAP NO. 48 OF 2025
BETWEEN:
1 . MRS. BHAGYASHREE JAIN
AGED ABOUT 52 YEARS
WIFE OF MR. RAJESH S. JAIN
RESIDING AT NO. 129
A.K. SWAMYNAGAR, 9TH STREET
KILPAUK, CHENNAI
TAMIL NADU - 600 010.
... APPELLANT
(BY MR. S. SREEVATSA, SENIOR ADVOCATE FOR
MR. MAHADESHWARAN C.N., ADVOCATE)
AND:
1. M/S. VYSHNAVI VISIONS
A REGISTERED PARTNERSHIP FIRM
HAVING ITS REGISTERED OFFICE AT NO. 308
3RD FLOOR, "AHUJA CHAMBERS",
KUMARA KRUPA ROAD
BENGALURU-560 001
REPRESENTED BY ITS
MANAGING PARTNER
MRS. LAKSHMI SINGH
2. MRS. LAKSHMI SINGH
AGED ABOUT 50 YEARS
DAUGHTER OF MR. BALAJI SINGH
WIFE OF MR. B. P. ANAND KUMAR
2
PARTNER OF M/S. VYSHNAVI VISIONS
HAVING ITS REGISTERED OFFICE AT NO. 308
3RD FLOOR, AHUJA CHAMBERS
KUMARA KRUPA ROAD
BENGALURU - 560 001
RESIDING AT:
NO. 402, EMBASSY HABITAT
PALACE CROSS ROAD
BENGALURU - 560 020
3. MR. SIDDHARTH SINGH A. THAKUR
AGED ABOUT 27 YEARS
SON OF MR. B. P. ANAND KUMAR
PARTNER OF M/S. VYSHNAVI VISIONS
HAVING ITS REGISTERED OFFICE AT NO. 308
3RD FLOOR, "AHUJA CHAMBERS"
KUMARA KRUPA ROAD
BENGALURU - 560 001
RESIDING AT:
NO. 402, EMBASSY HABITAT
PALACE CROSS ROAD
BENGALURU - 560 020
4. MRS. VYSHAVI SINGH A. THAKUR
AGED ABOUT 29 YEARS
DAUGHTER OF MR.B.P. ANAND KUMAR
PARTNER OF M/S. VYSHNAVI VISIONS
HAVING ITS REGISTERED OFFICE AT NO. 308
3RD FLOOR, AHUJA CHAMBERS
KUMARA KRUPA ROAD, BENGALURU - 560 001.
RESIDING AT:
NO. 402, EMBASSY HABITAT
PALACE CROSS ROAD
BENGALURU - 560 020.
... RESPONDENTS
(MR. BASAVARAJ V. SABARAD, SENIOR ADVOCATE FOR
MR. SHARAN P. SABARAD, ADVOCATE FOR R-1 & R-2
MR. S.S. NAGANAND, SENIOR ADVOCATE FOR
MRS. SUMANA NAGANAND, ADVOCATE FOR R-3 & R-4)
---
3
THIS COMMERCIAL APPEAL IS FILED UNDER SECTION 13
(1A) OF THE COMMERCIAL COURTS ACT, 2015 PRAYING TO SET-
ASIDE THE COMMON ORDER DATED 10.01.2025 PASSED IN COM.
O.S. NO.1692/2024 ON IA NOS. 1 TO 4 BY TE LXXXVI ADDITIONAL
CITY CIVIL AND SESSIONS JUDGE, AT BANGALORE,
CONSEQUENTLY RESTORE THE COM.OS NO.1692/2024 ON THE
FILE OF LXXXVI ADDITIONAL CITY CIVIL AND SESSIONS JUDGE,
AT BANGALORE BY DISMISSING THE I.A. NO.3 FILED UNDER
ORDER VII RULE 11(a) AND (d) OF CIVIL PROCEDURE CODE AND
ETC.
IN COMAP C.R. NO. 2 OF 2025
BETWEEN:
1. M/S VYSHNAVI VISIONS
A REGISTERED PARTNERSHIP FIRM,
HAVING REGISTERED OFFICE AT NO. 308,
3RD FLOOR, "AHUJA CHAMBERS"
KUMARA KRUPA ROAD
BENGALURU - 560 001
REPRESENTED BY
MANAGING PARTNER
MRS. LAKSHMI SINGH
2. MRS. LAKSHMI SINGH
AGED 50 YEARS
D/O. MR. BALAJI SINGH
W/O. MR. B.P. ANAND KUMAR
PARTNER OF M/S. VYSHNAVI VISIONS
HAVING REGISTERED OFFICE AT NO. 308
3RD FLOOR, "AHUJA CHAMBERS",
KUMARA KRUPA ROAD
BENGALURU 560 001
... CROSS OBJECTORS
(BY MR. BASAVARAJ V. SABARAD, SENIOR ADVOCATE FOR
MR. SHARAN P. SABARAD, ADVOCATE)
AND:
1. MRS BHAGYASHREE JAIN
W/O RAJESH S JAIN
AGED ABOUT 52 YEARS
RESIDING AT 129
AK SWAMYNAGAR, 9TH STREET
KILPAUK, CHENNAI
TAMIL NADU - 600 010
4
2. MR. SIDDHARTH SINGH A. THAKUR
AGED ABOUT 27 YEARS,
PARTNER OF M/S. VYSHNAVI VISIONS
HAVING ITS REGISTERED OFFICE AT NO. 308
3RD FLOOR, "AHUJA CHAMBERS"
KUMARA KRUPA ROAD
BENGALURU - 560 001
RESIDING AT:
NO. 402, EMBASSY HABITAT
PALACE CROSS ROAD
BENGALURU - 560 020
3. MRS. VYSHAVI SINGH A. THAKUR
AGED ABOUT 29 YEARS
D/O MR. B.P. ANAND KUMAR
PARTNER OF M/S. VYSHNAVI VISIONS
HAVING REGISTERED OFFICE AT
NO. 308, 3RD FLOOR
"AHUJA CHAMBERS"
KUMARA KRUPA ROAD
BENGALURU - 560 001
RESIDING AT:
NO. 402, EMBASSY HABITAT
PALACE CROSS ROAD
BENGALURU - 560 020
... RESPONDENTS
(MR. S. SREEVATSA, SENIOR ADVOCATE FOR
MR. MAHADESHWARAN C.N., ADVOCATE FOR R-1
MR. S.S. NAGANAND, SENIOR ADVOCATE FOR
MRS. SUMANA NAGANAND, ADVOCATE FOR R-2 & R-3)
---
THIS COMAP CR. IS FILED UNDER ORDER 41 RULE 22 OF
CODE OF CIVIL PROCEDURE, 1908 R/W SECTION 13 (1-A) OF THE
COMMERCIAL COURTS ACT PRAYING TO SET ASIDE THE
JUDGEMENT AND DECREE DATED 10.01.2025 IN COM OS NO.
1692/2024 ON THE FILE OF LXXXVI ADDITIONAL CITY CIVIL AND
SESSIONS JUDGE, COMMERCIAL COURT, BANGALORE & ETC.
THIS COMMERCIAL APPEAL & COMAP CR. HAVING BEEN
HEARD AND RESERVED FOR JUDGMENT, COMING ON FOR
PRONOUNCEMENT THIS DAY, JUDGMENT WAS PRONOUNCED AS
UNDER:
5
CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
and
HON'BLE MR. JUSTICE C M JOSHI
CAV JUDGMENT
(PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)
1. The appellant in COMAP No.48/2025 [hereinafter 'the plaintiff'] has filed the said appeal impugning the common order dated 10.01.2025 passed by the learned LXXXVI Additional City Civil and Sessions Judge, Bengaluru [Commercial Court] in four interim applications [I.A Nos.1 to 4] filed in Com O.S No.1692/2024 captioned 'Mrs. Bhagyashree Jain v. M/s. Vyshnavi Visions & others'. The plaintiff had filed the abovementioned suit (Com O.S No.1692/2024), inter alia, praying for a decree directing the defendants to pay amount of `10 crores along with interest. Additionally, the plaintiff had also sought for a decree of damages and costs.
2. The plaintiff had filed two applications, being I.A Nos.1 and 2. In I.A No.1, the plaintiff had sought exemption from the provisions of Section 12A of the Commercial Courts Act, 2015 [hereafter 'CC Act'] and in I.A No.2, the plaintiff had sought relief of attachment before judgment under Order XXXVIII Rule 5 of the Code of Civil Procedure, 1908 [the CPC]. The defendants had filed an 6 application, being I.A No.3, under Order VII Rule 11 (a) and (d) of the CPC praying that the plaint be rejected as according to the defendants the disputes involved in the suit could not be considered as commercial disputes under Section 2(1)(c) of the CC Act. In the alternative, the defendants also filed an application - I.A No.4, praying that the plaint be returned.
3. The learned Commercial Court had framed the following four questions for consideration:
"1. Whether the dispute between the parties is a commercial dispute?
2. Whether the plaintiff has made out valid grounds to attach the application schedule properties before judgment?
3. Whether the suit does contemplate any urgent internal relief?
4. Whether the plaint is liable to be rejected for non-compliance of Section 12A of the Commercial Courts Act?
5. What order?"
4. Whilst the learned Commercial Court rejected the contentions of the defendants that the dispute involved between the parties is not a commercial dispute; it accepted the contention that the suit did not contemplate any urgent interim relief and thus, 7 rejected the plaint on account of non-compliance of Section 12A of the CC Act.
5. The plaintiff being aggrieved by the decision of the learned Commercial Court to reject the plaint on account of non-compliance of the provision of Section 12A of the CC Act, has preferred the above captioned appeal (COMAP No.48/2025). The defendants have preferred the cross appeal (COMAP CR. No.2/2025) assailing the impugned order to the extent that the learned Commercial Court has rejected their contention that the disputes involved are not commercial disputes.
6. Given the facts and circumstances, the first and foremost question to be addressed is whether the plaint could be rejected on the ground that the provisions of Section 12A of the CC Act were not complied with.
7. Section 12A of the CC Act is set out below:
"12A. Pre-Institution Mediation and Settlement-
(1) A suit, which does not contemplate any urgent interim relief under this Act, shall not be instituted unless the plaintiff exhausts the remedy of pre-
institution mediation in accordance with such manner and procedure as may be prescribed by rules made by the Central Government.
(2) For the purposes of pre-litigation mediation, the Central Government may, by notification, authorise 8
(i) the Authority, constituted under the Legal Services Authorities Act, 1987 (39 of 1987);
(ii) a mediation service provider as defined under clause (m) of section 3 of the Mediation Act, 2023.
(3) Notwithstanding anything contained in the Legal Services Authorities Act, 1987, (39 of 1987), the Authority or mediation service provider authorised by the Central Government under sub- section (2) shall complete the process of mediation within a period of one hundred and twenty days from the date of application made by the plaintiff under sub-section (1):
Provided that the period of mediation may be extended for a further period of sixty days with the consent of the parties:
Provided further that, the period during which the parties spent for pre-institution mediation shall not be computed for the purposes of limitation under the Limitation Act, 1963 (36 of 1963).
(4) If the parties to the commercial dispute arrive at a settlement, the same shall be reduced into writing and shall be signed by the parties and the mediator.
(5) The mediated settlement agreement arrived at under this section shall be dealt with in accordance with the provisions of sections 27 and 28 of the Mediation Act, 2023."
8. The plain reading of Section 12A of the CC Act indicates that it mandates the plaintiff to exhaust the remedy of pre-institution mediation before instituting a suit "which does not contemplate any urgent interim relief under the CC Act". Indisputably, if a plaintiff 9 seeks urgent interim relief, Section 12A of the CC Act would be inapplicable and it is not mandatory to exhaust the remedy of mediation before instituting any such action.
9. Before proceeding further, it will be relevant to note that the question whether the provisions of Section 12A of the CC Act are mandatory, is no longer res intergra. The Supreme Court in Patil Automation Private Limited and others v. Rakheja Engineers Private Limited: (2022 SCC OnLine SC 1028) had authoritatively held, the provisions of Section 12A of the CC Act are mandatory and when a suit is instituted in violation of the said provisions, the plaint would be liable to be rejected. It follows from the above that the requirement of Section 12A of the CC Act cannot be dispensed with. Thus, the plaintiff's application (I.A No.1 in Com O.S No.1692/2024) seeking dispensation from the provisions of Section 12A of the CC Act, is misconceived.
10. The central question to be addressed is whether the action instituted by the plaintiff in the present case contemplates any 'urgent relief'?
11. The plaintiff in the present case had filed an application (I.A No.2 under Order XXXVIII Rule 5 of the CPC) seeking attachment 10 before judgment. Thus, undisputedly, the plaintiff had sought urgent relief.
12. It is also relevant to examine the case set up by the plaintiff to determine whether the claim for urgent relief is a ruse or a subterfuge to avoid compliance with Section 12A of the CC Act.
13. The plaintiff had made a payment of `10 crores (Rupees ten crores only) to defendant No.1 - which is a partnership firm constituted by defendant Nos.2 to 4 - pursuant to the business proposal to accept the plaintiff as a partner in defendant No.1-firm. The plaintiff claimed that it was agreed between the parties that the amount would be used to purchase immovable property in Navarathna Agrahara Village, Jala Hobli, Bengaluru North Taluk, Bengaluru Urban District [subject property] in the name of defendant No.1 firm after inducting the plaintiff as a partner. The plaintiff claimed that the defendants had failed and neglected to perform their obligations and the plaintiff was constrained to cause a legal notice dated 21.10.2024 to be issued to the defendants making several allegations. The plaintiff claimed that the defendants were engaged in the business of real estate and land development in and around Bengaluru City. She alleged that defendant Nos.2 to 4 had represented that they were negotiating to 11 purchase the subject land with its owners. However, were facing shortage of funds to complete the transaction. In the aforesaid background, they had approached one Mr.Vimal Bhandari who was a relative of the plaintiff with a business proposal to induct the plaintiff as a partner of defendant No.1-firm on the plaintiff making an investment of a sum of `10 crores. It was stated that the said amount was used to purchase the subject property. The plaintiff claimed that she had, based on the said proposal, remitted an amount of `10 crores through banking channels (RTGS) in two transacts of `5 crores each. The first was remitted on 24.02.2004 and the second tranche was remitted on 12.03.2024. The receipt of the said amount was duly acknowledged by defendant Nos.2 to 4. The plaintiff claimed that defendant Nos.2 to 4 had also prepared a draft deed for reconstitution of defendant No.1-firm which was to be registered before purchase of the subject property. The plaintiff claimed that she trusted defendant Nos.2 to 4 at the material time and believed their representations. The plaintiff claimed that subsequently it came to her notice that defendant Nos.2 to 4 had proceeded to purchase the subject property by utilizing the funds paid by her and had registered the subject property. The plaintiff alleges that the defendants had misrepresented to her and had committed an act of breach of trust. She alleges that in order to 12 make illegal gains, defendant Nos.2 to 4 had deceived the plaintiff by diverting the amounts. The plaintiff also alleges that the defendants were guilty of criminal acts of cheating, breach of trust and misappropriation of the amounts with an intent to cause loss to the plaintiff.
14. Defendant No.1 responded to the said notice. The defendants acknowledged that they had received the amount of `10 crores, as stated by the plaintiff and also stated that they intend to repay the same. However, it was denied that the said funds were required to be used to any specific purpose. The defendants claim that the said funds were to be utilized "as and when required for business purpose". The defendants denied that they had made any commitment to induct the plaintiff as a partner. However, it was acknowledged that verbal assurance was made for repayment of the financial assistance.
15. We also consider it relevant to refer the following extracts of the response of defendant No.1 to the said legal notice, which also indicates the scope of the subject disputes:
"3. IN RE TO PARA 2:
I am under instructions to state and clarify that our common friend - Mr.Vimal Bhandari during course of discussions on his own offered to 13 financially assist our client by way of a financial accommodation into the business of our clients. That our clients have a very good relationship with the common friend and based on such relationship, it was agreed to accept such assistance. That our clients transact in real estate deals on a day-to-day basis and as such the immovable property mentioned in your notice may have been one such deal that our clients were engaged in negotiating to purchase. It is further stated and clarified that there was no such proposal of partnership to Mr.Vimal Bhandari since the partnership firm is that of a family nature and includes partners within the same family, the question of inducting a new partner outside the family does not arise. The same is apparent from your notice to the second to fourth of my clients. It is also clarified that the financial assistance was to be used for business purposes of our clients and not specifically to purchase/acquire the immovable property as stated in para 2. Further, our clients had no intention or agreement to induct any new partner in their partnership firm. Therefore, the averments made in Para 2 of your Notice is specifically denied as false and untrue.
5. IN RE TO PARA 43 The averments made is Para 4 are denied as false and baseless. Our clients had no knowledge of any discussions of such terms and did not agree to make Mrs.Bhagyashree Jain a new partner in the partnership firm, whereas, the financial assistance was not to be utilized for any specific purpose but rather to utilize funds as and when required for business purposes.
8. IN RE TO PARAS 7 AND 8:
With regard to the averments made in paras 7 and 8, since our clients are engaged in real estate business, acquisition of properties is considered as regular business. Our client is therefore also in regular business with multiple 14 creditors and as such funds are utilized to meet business expenses of our client. Mere usage of funds does not confer any rights beyond that of repayment to Mrs. Bhagyashree Jain. It is further clarified that the sole aim of our client was only to utilize the financial assistance for business purposes and not any other such specific purpose as stated in Para 8. If your averments were to be accepted, every other person involved in any monetary transactions with our clients would have made such claims but it is not so. It is further denied that our clients have committed an act of misrepresentation and breach of trust with the sole intention, of making illegal gain, unlawful aggrandizement and deceived your client by diverting/ misusing the amounts thereby committing an act of misappropriation of funds.
Please advise your client that such false threats and acts of intimidation would boomerang upon her if she indulges in any such misadventure as our clients are capable of meeting such threats in a befitting manner.
9. IN RE TO PARA 9:
With regard to the averments made in Para 9, as stated earlier the financial assistance was used for the business purposes by our clients. I am further instructed to state that business activities of my clients including that of alienation, creation of 3rd party rights are within the scope of their business activities and not subject to any control or claim at the instance of your client who is an utter stranger to the business being carried out by our clients and such activities are not subject to any charge as per Revenue Records and as such, our clients are not bound to disclose or seek permission to conduct its business activities with respect to any of the immovable properties owned by our clients.15
11. IN RE TO PARA 11:
I am under instructions from our clients to state that there was no agreement to repay the financial assistance with interest and that no interest rate was fixed. Therefore, the claim for 24% interest is highly arbitrary and does not arise. Moreover, our clients had never agreed to any specific tenure for repayment of the financial assistance. Therefore, the limited timeframe given to our clients for such repayment is also arbitrary.
Wherefore, we call upon you to grant us an accommodation so that we can arrange for funds and make necessary payment.
12. I am further under instructions to clarify that our clients acknowledge the Financial assistance of Rs.10,00,00,000 (Rs. Ten Crores only).
However, this was not a commercial loan or any such other loan. It is also pertinent to emphasize that our clients have no knowledge of any partnership deed and have not prepared any such deed. Therefore, please advise your client that our client has acted in accordance with law as there are no loan agreements or any partnership deeds signed that dictate the terms of purchase of any immovable property from the financial assistance. Even the Encumbrance Certificate does not reflect any charge created on any of the immovable properties by Mrs. Bhagyashree Jain and in spite of that if your client were to initiate proceedings, it will be defended at the cost and consequences of your client. It would also be advisable to settle this dispute amicably as our client has offered to make repayment as stated in Para 11 of this rejoinder."
16. It is contended on behalf of the plaintiff that she became aware that defendant Nos.2 to 4 were negotiating the sale of the subject property to third parties on coming across a public notice 16 issued by the third parties. The plaintiff, thereafter, instituted the aforementioned commercial suit seeking attachment of the subject properties, which the plaintiff claimed were purchased by utilizing the funds remitted by her. She also claimed that she holds a charge over the said property.
17. It is clear from the pleadings as well as the response to the notice that whilst the defendants acknowledged their liability to repay the amount paid by the plaintiff, they did not indicate any timeframe within which they would repay the amount. Further, they disputed any liability to pay interest on the said amount.
18. In the given context, the plaintiff had sought urgent relief by filing an application under Order XXXVIII Rule 5 of the CPC. The learned Commercial Court had rejected the said application by observing that the apprehension of the plaintiff is unreasonable. The relevant extract of the impugned judgement - which was also highlighted by the learned Senior Counsel appearing for defendant Nos.2 to 4 - is set out below:
"... Since the defendants have admitted the receipt of Rs.l0-00 Crores and they have also admitted that they would repay the same in a reasonable time, the apprehension of the plaintiff that the defendants may leave the vicinity by disposing of their properties in order to defraud the plaintiff, in the opinion of the court, is 17 unreasonable. Had the plaintiff initiated a pre- institution mediation, there was a chance of settlement of the dispute between the parties. Instead of that, the plaintiff has rushed to this court by filing the present suit."
19. In our view, the reasoning of the learned Commercial Court to reject the plaint is unsustainable. The question whether the suit involves urgent relief is required to be considered from the standpoint of the plaintiff and not on the basis whether the Court accedes to granting any urgent interim relief. The Division Bench of the Delhi High Court (of which one of us is a party) had in Chandra Kishore Chaurasia v. R A Perfumery Works Private Limited: 2022 SCC OnLine DEL 3529 held as under:
"30. The contention that it would be necessary for the plaintiff to file an application seeking exemption from the provisions of Section 12-A 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 12-A 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 12-A 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 18 instituted without exhaustion of pre-institution mediation, as required under Section 12-A(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 12-A(1) of 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 involve 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 12-A(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 is 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 19 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 12-A(1) of the Commercial Courts Act, 2015."
(emphasis in original)
20. In Yamini Manohar v. T.K.D Keerthi: (2024) 5 SCC 815, the Supreme Court had noted the above decision of the Delhi high Court and had observed as under:
"10. We are of the opinion that when a plaint is filed under the CC Act, with a prayer for an urgent interim relief, the commercial court should examine the nature and the subject-matter of the suit, the cause of action, and the prayer for interim relief. The prayer for urgent interim relief should not be a disguise or mask to wriggle out of and get over Section 12-A of the CC Act. The facts and circumstances of the case have to be considered holistically from the standpoint of the plaintiff. Non- grant of interim relief at the ad interim stage, when the plaint is taken up for registration/admission and examination, will not justify dismissal of the commercial suit under Order 7 Rule 11 of the Code; at times, interim relief is granted after issuance of notice. Nor can the suit be dismissed under Order 7 Rule 11 of the Code, because the interim relief, post the arguments, is denied on merits and on examination of the three principles, namely : (i) prima facie case, (ii) irreparable harm and injury, 20 and (iii) balance of convenience. The fact that the court issued notice and/or granted interim stay may indicate that the court is inclined to entertain the plaint.
11. Having stated so, it is difficult to agree with the proposition that the plaintiff has the absolute choice and right to paralyse Section 12-A of the CC Act by making a prayer for urgent interim relief. Camouflage and guise to bypass the statutory mandate of pre-litigation mediation should be checked when deception and falsity is apparent or established. The proposition that the commercial courts do have a role, albeit a limited one, should be accepted, otherwise it would be up to the plaintiff alone to decide whether to resort to the procedure under Section 12-A of the CC Act. An "absolute and unfettered right" approach is not justified if the pre- institution mediation under Section 12-A of the CC Act is mandatory, as held by this Court in Patil Automation [Patil Automation (P) Ltd. v. Rakheja Engineers (P) Ltd., (2022) 10 SCC 1 : (2023) 1 SCC (Civ) 545] .
12. The words "contemplate any urgent interim relief" in Section 12-A(1) of the CC Act, with reference to the suit, should be read as conferring power on the court to be satisfied. They suggest that the suit must "contemplate", which means the plaint, documents and facts should show and indicate the need for an urgent interim relief. This is the precise and limited exercise that the commercial courts will undertake, the contours of which have been explained in the earlier paragraph(s). This will be sufficient to keep in check and ensure that the legislative object/intent behind the enactment of Section 12-A of the CC Act is not defeated.
21. The Supreme Court rejected the contention that the Commercial Courts would not have a role in examining whether the suit contemplates any urgent relief and partially set aside the said 21 decision. However, the Supreme Court accepted the view that the case will have to be considered holistically from the standpoint of the plaintiff and non grant of any interim relief will not justify dismissal of the commercial suit under Order VII Rule 11 of the CPC. The Supreme Court clarified that it did not agree with the view that "the plaintiff has any absolute choice and right to paralyse Section 12A of the CC Act by making a prayer for urgent interim relief". In this regard the Supreme Court observed that "the Commercial Courts do have a role, albeit a limited one".
22. It is apparent from the above that the decision on the merits of an application for urgent ad-interim / interim relief is not material in determining whether the suit contemplates any urgent interim relief. The Commercial Court may, after examining the plaintiff's request of urgent relief, reject the same on several grounds including that the plaintiff has not set up a strong prima facie case; the facts do not present a case of irreparable loss or damage; or balance of convenience is not in favour of the plaintiff. For the purposes of examining the plaintiff's application for interim relief, the Commercial Court would necessarily have to examine the plaintiff's case as well as the defence set up by the defendants on a prima facie basis. However, rejection of any application for 22 interim relief does not necessarily lead to the conclusion that the case set up by the plaintiff does not involve any urgent interim relief.
23. The plaint may be rejected under Order VII Rule 11 of the CPC for failure on the part of the plaintiff to exhaust the remedy of pre-institution of mediation only in a case where the court comes to a conclusion that the plea for urgent interim relief has been raised with a mala fide intention to overcome the mandatory provisions of Section 12A of the CC Act, or that the urgent relief is a subterfuge to avoid the provisions of Section 12A of the CC Act; and the issue involved does not contemplate any urgent relief.
24. In Dhanbad Fuels Private Limited v. Union of India and Another: 2025 SCC OnLine SC 1129, the Supreme Court has summarized its conclusions as under:
"62. In light of the aforesaid discussion, we summarise our findings as under:
a. The decision of this Court in Patil Automation (supra) lays down the correct position of law as regards Section 12A of the 2015 Act by holding it to be mandatory in nature.
b. As held in paragraph 104 of the decision in Patil Automation (supra), the declaration of the mandatory nature of Section 12A of the 2015 Act relates back to the date of the Amending Act.
23c. As held in paragraph 113.1 of the decision in Patil Automation (supra), any suit which is instituted under the 2015 Act without complying with Section 12A is liable to be rejected under Order VII Rule 11. However, this declaration applies prospectively to suits instituted on or after 20.08.2022.
d. A suit which contemplates an urgent interim relief may be filed under the 2015 Act without first resorting to mediation as prescribed under Section 12A of the 2015 Act.
e. Unlike Section 80(2) of the CPC, leave of the court is not required to be obtained before filing a suit without complying with Section 12A of the 2015 Act.
f. The test for "urgent interim relief" is if on an examination of the nature and the subject-matter of the suit and the cause of action, the prayer of urgent interim relief by the plaintiff could be said to be contemplable when the matter is seen from the standpoint of the plaintiff.
g. Courts must also be wary of the fact that the urgent interim relief must not be merely an unfounded excuse by the plaintiff to bypass the mandatory requirement of Section 12A of the 2015 Act.
h. Even if the urgent interim relief ultimately comes to be denied, the suit of the plaintiff may be proceeded with without compliance with Section 12A if the test for "urgent interim relief" is satisfied notwithstanding the actual outcome on merits. i. Suits instituted without complying with Section 12A of the 2015 Act prior to 20.08.2022 cannot be rejected under Order VII Rule 11 on the ground of non-compliance with Section 12A unless they fall within the exceptions stipulated in paragraph 113.2 and 113.3 of the decision in Patil Automation (supra).
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j. In suits instituted without complying with Section 12A of the 2015 Act prior to 20.08.2022 which are pending adjudication before the trial court, the court shall keep the suit in abeyance and refer the parties to time-bound mediation in accordance with Section 12A of the 2015 Act if an objection is raised by the defendant by filing an application under Order VII Rule 11, or in cases where any of the parties expresses an intent to resolve the dispute by mediation."
Therefore, in case where the plaintiff pleads urgent relief, the court must consider the same from the standpoint of the plaintiff. The scope of consideration by the court is confined to examining whether the plaintiff's need is genuine and bona fide or that the urgent relief is prayed only for the purpose of overcoming provision of Section 12A of the CC Act.
25. In the present case, there is no dispute that the plaintiff had paid a sum of `10 crores to the defendants. It is also not in dispute that the said amount was utilized for purchasing the subject property. There is also material to indicate that the defendants were attempting to transfer the subject property.
26. It is also material to note that the defendants are disputing that they have no liability to pay interest on the said amount. They claim that the plaintiff has merely advanced them `10 crores which 25 the defendants acknowledge that they will repay. However, according to them, the plaintiff neither entitled to any return on the funds lent nor any other benefit. Prima facie, we find it difficult to accept the defence set up by the defendants that the payment is merely a friendly accommodation. It is hard to accept that the plaintiff would part with the huge amount of `10 crores on account of business relationship between the defendants and one of the relatives of the plaintiff.
27. It is also clear from the averments that the defendants accept that they are liable to repay the amount paid by the plaintiff. However, they have not indicated any timeframe for repaying the amount of `10 crores. The facts, as emerging from the averments are that the plaintiff had paid funds to the defendants that had been utilized for purchase of subject property which the defendants are in the process of alienating. Clearly from the standpoint of the plaintiff, she would be justified in seeking the urgent relief to protect the assets which were purchased from her funds to ensure that she does not suffer any loss. It is also material to note that the disputes between the parties were yet to be adjudicated. Thus, the urgent relief sought by the plaintiff must also be viewed in the context of her assertion that she had made payments of `10 crores on a 26 representation that she would be inducted as a partner in defendant No.1-firm and that the funds contributed by her would be utilized for purchasing the subject property. However, it transpires that the defendants have utilized the money for purchase of the subject property but, the plaintiff is excluded from any participation in the said property. The Commercial Court may finally, after trial, either accept the averments made in the plaint or may reject the same. However, when the court considers the plaintiff's need for urgent relief, it must bear in mind the case set up by the plaintiff.
28. The impugned order insofar as it rejects the plaint is manifestly erroneous and in our view liable to be set aside.
29. Insofar as the application of the plaintiff under Order XXXVIII Rule 5 of the CPC is concerned, the learned Commercial Court had noted that the defendants had acknowledged that they would repay the amount of `10 crores. We may also note that the learned Senior Counsel for the defendants had repeatedly submitted that the answering defendants acknowledge the liability to repay the amount of `10 crores but dispute any claim for interest on the said amount. The defendants have built edifice of the defence on the basis that the amount paid by the plaintiff, the recovery of which is sought, was been acknowledged as payable by them. However, 27 the defendants neither indicated any timeframe for repayment of their debt nor provided details of the assets which would be sufficient to satisfy the said debt which they acknowledge. It is also relevant to note that the defendants' claim that the transaction in question is not a commercial transaction. In our view, since there is no dispute that a sum of `10 crores is repayable, the defendants cannot be permitted to alienate their property without indicating the manner and the sources from which they intend, to discharge their debt. In our view, it is essential to protect the interest of the plaintiff that the defendants be restrained from alienating the assets without discharging their admitted debt.
30. In the cross appeal, the question to be examined is whether the dispute involved is a commercial dispute. The term 'dispute' is defined in the Black's Law Dictionary as "an assertion of a right, claim, or demand on one side, met by contrary claims or allegations on the other".
31. The dispute would arise where an assertion is made by a party is denied and contested. Before proceeding to address the question whether the dispute involved in the suit is a commercial dispute, it will be necessary to recount the scope of the dispute. As noted above, it is the plaintiff's case that she had paid amount of 28 `10 crores as a part of the commercial transaction where it was represented that she would be inducted as a partner in defendant No.1-firm and the amount would be utilized to purchase the subject property. Thus, according to the plaintiff, she would have a share in the assets and business of defendant No.1-firm which would include the subject property. According to the defendants, the amount of `10 crores paid by the plaintiff is a friendly accommodation. It is obvious that the question whether the dispute is a commercial dispute within the meaning of Section 2 (1) of the CC Act cannot be determined merely on the basis of the defence put up by the defendants. The dispute would essentially be assertions made by the plaintiff, which are denied. Since the plaintiff has set up a case of making payments on a representation that she would be inducted as a partner in defendant No.1-firm and the amounts will be spent for purchasing the subject property for profit in the course of business, the contention that the said dispute does not fall within the scope of Section 2(1) of the CC Act is unsustainable.
32. It is also relevant to refer to the response of the defendants to the legal notice sent by the plaintiff. In response to the plaintiff's notice that defendants 2 to 4 had approached her with a proposal to induct her as a partner in defendant No.1-firm on her investing a 29 sum of `10 crores for purchasing the subject property, the defendants had replied by stating that the plaintiff had on her own offered financial assistance and since they had very good relationship with the common friend, they agreed to accept the assistance.
33. We also consider it apposite and set out the following averments made in the defendants reply notice sent by their advocate on their behalf. The advocate for the defendants further proceeded to state that the defendants "transact in real estate deals on a day-to-day basis and as such, the immovable property mentioned in the notice may have been one such deal that they were engaged in negotiating to purchase". Additionally, it was stated that "the financial assistance was intended to be used for their business purposes of her clients and not specifically for the purchase/acquire the immovable property" in the legal notice. Additionally, it was asserted that "since they are engaged in the real estate business, the acquisition of properties is considered as regular business. They claimed that they are, therefore, "also in regular business with multiple creditors and as such funds are utilized to meet their business expenses of her client. The sole aim of her client was only to utilize the financial assistance for business purpose and not for any specific transaction". 30
34. It is apparent from the above that although the defendants claim that they had accepted the amount as mere accommodation, their response to the legal notice clearly admits that they accepted the amount paid by the plaintiff for the purpose of their business. It is further claimed that, they in the regular course of business with multiple creditors, utilize such funds for meeting the business expenses. In our view, although it is necessary to examine in detail the defence raised by the defendants, the case set up by the plaintiff and the defendants' stand, which circumscribes the dispute, clearly indicates that the dispute involved is a commercial dispute. It relates to the allegations that the funds were contributed to join a partnership firm and to purchase assets which was to be used for business purpose. Even according to the defendants, the funds were accepted for utilizing the same for the purpose of its business.
35. In the aforesaid view, the contention that the dispute involved is not a commercial dispute, is rejected. We find no ground to interfere with the decision of the learned Commercial Court in rejecting the applications filed by the defendants.
36. Prima facie, it appears that an appeal against rejection of the application under Order VII Rule 11 (a) and (d) of the CPC would 31 not be maintainable under Section 13(1A) of the CC Act. However, no such objection was raised on behalf of the plaintiff and no submissions were made by either parties. We, therefore, refrain from examining this question.
37. The appeal preferred by the plaintiff is allowed and the impugned order which directs return of the plaint is set aside. The Com.CR No.2 of 2025 is rejected. The commercial suit is restored before the learned Commercial Court for further proceedings. Both the parties are directed to appear before the learned Commercial Court on 23.10.2025 without waiting for a notice from the Court.
Sd/-
(VIBHU BAKHRU) CHIEF JUSTICE Sd/-
(C M JOSHI) JUDGE AHB