Supreme Court recently in Patil Automation (P) Ltd. v. Rakheja Engineers (P) Ltd., (2022) 10 SCC 1 held that Section 12A of the Commercial Courts Act, 2015 (which prescribes that a suit shall not be instituted unless the plaintiff exhausts the remedy of pre-institution mediation) 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 flavor. 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.
Thus, SC in no uncertain terms declared that Section 12A is mandatory and held that any suit instituted violating the mandate of Section 12A must be visited with rejection of the plaint under Order 7 Rule 11. It further held that this power could be exercised even suo motu by the court. However, this declaration made effective from 20-8-2022 so that all the stakeholders concerned could then become sufficiently informed.