Gundecha Estates Pvt. Ltd. v. IIFL Finance Ltd. & Ors., Interim Application (L) No.16800 of 2025 in Comm Suit (L) No.8617 of 2025, decided by the Bombay High Court (Commercial Division), 17 July 2025
Main Issue
Whether the Commercial Suit was liable to be rejected under Order VII Rule 11 CPC for non-compliance with the mandatory pre-institution mediation under Section 12A of the Commercial Courts Act, 2015, on the ground that no “urgent interim relief” was made out. (paras 1, 12, 45)
Plaintiff’s Case
The Plaintiff sought declarations that the Indenture of Mortgage (31 March 2022) and Assignment Agreement (29 June 2024) were void and prayed for urgent interim relief alleging collusion between defendants, which became apparent from a letter dated 13 May 2024 and failed settlement talks. (paras 35–37, 45)
Defendants’ Case
Defendants argued there was no urgency: the Plaintiff had knowledge of the mortgage since September 2023 and of the assignment since August 2024, yet filed the suit in March 2025. Settlement talks cannot bypass Section 12A. The plaint was cleverly drafted to avoid mandatory mediation. (paras 7–9, 15–18, 53–54)
Findings
The Court held that failure of settlement talks does not establish urgency; the 10–16 month delay negated any imminent threat. Alleged collusion was unsupported. The additional affidavit could not cure defects in the plaint. (paras 47, 50, 53–56)
Final Order
The plaint was rejected under Order VII Rule 11 CPC for non-compliance with Section 12A. Liberty was granted to file afresh after mediation. No order as to costs. (paras 59–62)