The Allahabad High Court has dismissing an appeal and held that pre-institution mediation under Section 12A (1) of Commercial Court Act, 2015 is necessary only when urgent relief is not claimed in the suit.
A single-judge bench of Justice Vipin Chandra Dixit passed this order while hearing an appeal filed by Ashok Kumar Katiyar.
The first appeal from order has been filed on behalf of defendant-appellant against the order dated 28.08.2023, passed by Commercial Court, Kanpur Nagar, in Commercial Suit by which temporary injunction was granted in favour of plaintiffs on the application filed under Order 39 rule 1 & 2 read with Section 151 C.P.C.
The defendant-appellant was restrained to interfere in peaceful possession of plaintiffs respondents over property in village Barsaitpur Tehsil & District Kanpur Nagar. The defendant was also restrained from interfering in the operation of the petrol pump, its bank account and to maintain status quo in respect of suit property.
The facts of the case are that the defendant-appellant was the owner and in possession of property in village Barsaitpur Tehsil & District Kanpur Nagar. The defendant-appellant has sold 700 sq yards (585.27 sq meter) land of the aforesaid property to the plaintiff along with petrol pump through registered sale deed on 24.02.2020. The possession of the petrol pump had already been handed over by the defendant appellant to the plaintiff-respondent no 1 on 19.10.2019. A memorandum of undertaking was executed between the parties on 27.06.2019. It was agreed between the parties that the plaintiff-respondent no 1 will pay Rs 6,25,00,000 to the defendant-appellant as sale consideration. The plaintiff no 1 had already paid Rs 1,00,00,000 at the time of execution of memorandum of undertaking and the remaining amount was agreed to pay at the time of execution of sale deed.
It was also agreed that the defendant-appellant will transfer petrol pump to the plaintiff no 1 after completing formalities with Hindustan Petroleum. The defendant-appellant had sent legal notice to the plaintiff no 1 in the month of December 2019 admitting therein that he received Rs 2,23,00,000 and Rs 4,02,00,000 is still outstanding. The sale deed in respect of petrol pump as well as suit property was executed by defendant-appellant in favour of plaintiff-respondent no 1 on 24.02.2020 and possession was also handed over to the plaintiff-respondent no 1.
The petrol pump is being run by plaintiff, but defendant appellant has failed to complete the formalities for transfer of petrol pump in favour of plaintiff and demanding extra Rs 1,00,00,000, whereas, entire sale consideration has already been paid by the plaintiff at the time of execution of sale deed.
The plaintiffs-respondents have filed suit for injunction seeking direction that the defendant-appellant may be directed to transfer the petrol pump in pursuance of sale deed dated 24.02.2020 in favour of plaintiff after completing formalities with Hindustan Petroleum.
It is further prayed in the suit that the defendant appellant and his agents may be restrained from interfering in peaceful possession of plaintiff-respondent no 1 in respect of suit property. The plaintiffs-respondents have also moved an application for interim injunction under Order 39 rules 1 & 2 read with Section 151 C.P.C. The trial court after considering the fact that petrol pump along with suit property has already been purchased by plaintiff-respondent no 1 through registered sale deed on 24.02.2020 and he is in possession over the same, has granted ex-parte injunction in favour of plaintiffs respondents by order dated 28.08.2023, which is impugned in the appeal.
The Court observed,
It is admitted fact that the plaintiff no 1 has purchased the suit property through registered sale deed dated 24.02.2020 and is in possession over the same. The petrol pump in question is operated by the plaintiffs. As per memorandum of undertaking, the defendant is required to transfer the petrol pump in favour of plaintiff no 1 after completing formalities with Hindustan Petroleum. The defendant has not made any efforts to complete the formalities with Hindustan Petroleum to transfer the petrol pump in favour of plaintiff no 1.
The trial court after recording its satisfaction that prima-facie case is in favour of plaintiffs has passed an ex-parte interim injunction in favour of plaintiffs vide order dated 28.08.2023.
So far as pre-litigation mediation and settlement is concerned, the defendant-appellant has not taken any such ground in the memo of appeal.
From the bare perusal of Section 12A (1) of Commercial Court Act, it is apparent that it is applicable where urgent interim relief is not required. Records show that the defendant was interfering in the functioning of the petrol pump and there was an urgent need for an interim injunction.
Section 12A(1) provides that pre-institution mediation is mandatory, where in the suit there is no urgent interim relief is required, but in the case, as the defendant is interfering in operation of petrol pump and there was an urgent need of interim relief, the provisions of Section 12A are not attracted in the case.
“Since the interim injunction was granted by the trial court is ex-parte, the defendant-appellant has a remedy to file an application for vacating / recalling of ex-parte injunction order under Order 39 Rule 4 C.P.C. Statutory remedy is available to the defendant-appellant to approach the trial court by filing an application for vacating the ex-parte order.
From a bare perusal of Order 39 rule 4 C.P.C, it is apparent that the defendant has a remedy to move application for setting aside the ex-parte order. Since, the appellant has a statutory remedy under Order 39 Rule 4 C.P.C to file such application for setting aside the ex-parte injunction order, the appeal on behalf of defendant-appellant is not maintainable and is liable to be dismissed,” the Court further observed while dismissing the appeal.