Authority: High Court of Sikkim, Gangtok (Single Bench: Hon'ble Mr. Justice Bhaskar Raj Pradhan)

Order Date: 26 June 2026 (judgment pronounced)

Case Overview

  • Parties: Petitioner – M/s Yuksom Breweries Limited (represented by Mr. Prem Shankar Gupta); Respondents – M/s Thomas Enterprises and Mr. N. L. Thomas.
  • Nature of Petition: Writ Petition (Civil) under Article 227 of the Constitution challenging the Commercial Court order dated 08‑July‑2025 in Commercial Suit Case No. 01 of 2021.
  • Procedural History:
  • Money Suit No. 03 of 2016 filed on 18‑Aug‑2016 in District Court, Namchi; final judgment on 30‑Jul‑2018.
  • RFA No. 04 of 2018 filed, disposed by Division Bench on 01‑Nov‑2021, directing transfer of the money suit to the Commercial Court under the Commercial Courts Act, 2015.
  • Commercial Court disposed of Commercial Case (Money Suit) No. 02 of 2022 on 29‑Mar‑2022, holding pre‑institution mediation mandatory under Section 12A.
  • Writ Petition (C) No. 21 of 2022 withdrawn; Commercial Appeal No. 01 of 2023 set aside the 29‑Mar‑2022 order on 31‑Jul‑2024, restoring the suit for trial.
  • Due to pecuniary jurisdiction issues, Commercial Court registered Commercial Suit Case No. 01 of 2021 on 13‑Dec‑2024, issued notice returnable by 05‑Feb‑2025, and finally disposed the suit on 08‑Jul‑2025 directing compliance with Section 12A.
  • Legal Issue: Whether Section 12A of the Commercial Courts Act, 2015 – mandating pre‑institution mediation – is applicable to a suit originally instituted in 2016, i.e., before the provision became effective.
  • Statutory Provision: Section 12A, Commercial Courts Act, 2015 (inserted on 3 May 2018), made pre‑institution mediation mandatory unless urgent interim relief is sought.
  • Relevant Precedents:
  • Patil Automation Private Ltd. & Ors. v. Rakheja Engineers Private Ltd. – held Section 12A mandatory; suits non‑compliant to be rejected under Order VII Rule 11 CPC.
  • M/s Dhanbad Fuels Private Ltd. v. Union of India & Anr. (2025 INSC 696) – declared Section 12A to operate prospectively from 20‑Aug‑2022; suits filed before that date are exempt unless they fall within specific exceptions.

Final Outcome

  • The High Court held that Section 12A, though mandatory, applies prospectively from 20‑Aug‑2022 and therefore does not govern the present suit filed on 18‑Aug‑2016.
  • Consequently, the impugned order dated 08‑July‑2025 is set aside.
  • Commercial Suit Case No. 01 of 2021 is restored to the Commercial Court for disposal as per law.
  • As the suit does not seek urgent interim relief, the Commercial Court may keep the suit in abeyance and direct the parties to explore mediation under the Commercial Courts Act, 2015, the Post‑Institution Mediation Settlement Rules, and the 2020 Standard Operating Procedure.
  • The petition is disposed with the above directions.

Topics: Section 12A, Pre‑institution Mediation, Commercial Court Jurisdiction