What Section 12A requires
Under Section 12A of the Commercial Courts Act, 2015, a commercial suit that does not seek urgent interim relief cannot be filed until the plaintiff has first exhausted pre-institution mediation. Mediation is conducted through the Legal Services Authority, and is to be completed within the period the Act provides, which may be extended once with the parties' consent.
Which disputes it covers
The Act applies to commercial disputes of a specified value of three lakh rupees or more, including disputes over sale of goods, supply of services, distribution, franchise, construction, partnership, technology and many other business transactions. Claims of lower value, and non-commercial money claims such as personal loans, go to the ordinary civil court.
Mandatory, not optional
In Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd. (2022), the Supreme Court held that Section 12A is mandatory, and that a suit filed without first exhausting mediation must be rejected under Order VII Rule 11 of the Code of Civil Procedure.
The exception for urgent relief
Where the plaintiff genuinely needs urgent interim relief, such as an injunction against the sale of goods or the transfer of assets, the suit may be filed directly. In Yamini Manohar v. T.K.D. Keerthi (2023), the Supreme Court held that the court may examine whether the claim for urgent relief is genuine or merely a device to bypass mediation.
Limitation is protected
The time spent in pre-institution mediation is excluded when computing the limitation period for filing the suit, so a claimant does not lose the right to sue by first going to mediation.
Frequently asked questions
Is a cheque bounce complaint subject to pre-institution mediation?
No. A complaint under Section 138 of the Negotiable Instruments Act is a criminal proceeding and is not governed by Section 12A.
About the author
Advocate Vivekanand
Founder & Principal Advocate, Vivekanand Law Firm · MA (English), MBA, LL.B., Author. Full profile
This article is general legal information, not legal advice. It does not create an advocate–client relationship. Legal provisions referred to should be verified for your specific situation and the date of the events concerned.