Commercial Courts Reaffirm Balanced Approach to Section 12A: Urgency in Redevelopment Disputes Examined.


15 October 2025 Property Law >> Personal Law  

In a recent decision, the Bombay High Court reiterated that a plaint cannot be rejected under Order VII Rule 11(d) of the Code of Civil Procedure, 1908, merely on the ground of non-compliance with Section 12A of the Commercial Courts Act, 2015, if the plaintiff’s case demonstrates a genuine need for urgent interim relief. The order, delivered in a redevelopment dispute, underscores the importance of examining such urgency from the standpoint of the plaintiff rather than through a rigid procedural lens.

The case arose from a suit seeking specific performance of redevelopment agreements executed between a developer and a co-operative housing society. The plaintiff prayed for a mandatory injunction directing several society members to execute and register Permanent Alternate Accommodation Agreements (PAAA) and to vacate their respective flats to enable redevelopment. The plaintiff also sought the appointment of a Court Receiver to secure possession for execution of the project.

 

 

Two defendants, represented by separate counsel, issued interim applications for rejection of the plaint under Order VII Rule 11(d) CPC, contending that the suit was barred for non-compliance with the mandatory requirement for pre-institution mediation under Section 12A of the Commercial Courts Act. They thus contended that the plaintiff's plea for urgent relief was a mere façade to circumvent the statutory mandate. Relying on the Supreme Court's decisions in Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd. and Yamini Manohar v. T.K.D. Keerthi, they submitted that only those cases involving genuine and demonstrable urgency could be exempted from pre-institution mediation.

The defendants also pointed out various grounds of substantive dispute, inter-alia, on the issue of execution of the supplementary redevelopment agreement without approval by the general body, and exclusion of one member's flat from the redevelopment scheme, contending that the presence of such disputes reflected absence of any immediate urgency.

The plaintiff, in rebuttal, relied on the pleadings showing that out of 158 society members, 134 had already vacated and received hardship compensation. The developer had incurred substantial expenditure exceeding Rs. 35 crores, obtained the Intimation of Disapproval (IOD), and was prevented from commencing construction only due to the non-cooperation of a few members. Citing judgments such as Daman Singh v. State of Punjab and Chirag Infra Projects Pvt. Ltd. v. Vijay Jwala CHS, counsel for the plaintiff argued that once a society collectively resolves to redevelop, individual members cannot obstruct implementation based on personal disagreements.

On examination, the Court held that the question was not whether interim relief would ultimately be granted but whether such relief was genuinely contemplated from the plaintiff’s standpoint. Referring to the precedents of Patil Automation, Yamini Manohar, and Dhanbad Fuels Pvt. Ltd., the Court has reaffirmed that Section 12A’s exemption applies in cases where urgent interim relief is reasonably contemplated, even if such a relief is later declined on merits. The question thus would have to be confined to whether the averments and the documents show a bona fide claim of urgency.

It further noticed that the redevelopment was at an advanced stage, major financial commitments were made, and the delay on account of non-cooperative members affected other residents and the developer. Such facts were thus established to show that the suit did contemplate urgent interim relief from the plaintiff's perspective. The applications under Order VII Rule 11(d) were thus rejected, confirming that the plaint was maintainable notwithstanding non-compliance with Section 12A.

The decision underlines the pragmatic approach of the judiciary to the balancing of statutory compliance with the urgent realities facing commercial and redevelopment disputes. In light of this emphasis on the plaintiff's perspective and motive for seeking urgent relief, the Court made sure that procedural formalities did not inhibit substantive justice, particularly in cases where delay means increased costs for all concerned. The matter has been directed to be listed again on November 10, 2025, for further consideration on the plaintiff’s request for interim relief.


Section 12, COMMERCIAL COURTS ACT - 2015  

COMMERCIAL COURTS ACT, 2015