The Delhi High Court clarified that the statutory requirement of pre-institution mediation under Section 12A of the Commercial Courts Act can be dispensed with where the suit seeks genuine urgent interim relief, especially in cases of continuing intellectual-property infringement. The judgment refines the test for exemption and underscores the primacy of the plaintiff’s urgency over procedural formalities.
Background & Facts
The Dispute
The plaintiff, Asian Hotels North Limited (AHNL), a listed hospitality company, sought a mandatory injunction directing defendant No.2, DBS Bank India Ltd., to hand over the original title documents (the “Security Documents”) of the Hyatt Regency Hotel, Bhikaji Cama Place, New Delhi (the “Subject Property”). The plaintiff alleged that DBS was illegally retaining the documents on behalf of defendant No.1, Exclusive Capital Limited, whose claimed debt of Rs 1,59,66,05,228 was a fraction of the Subject Property’s value of over Rs 1,000 crore.
Key Facts
- 30.01.2026: AHNL issued Non-Convertible Debentures (NCDs) worth Rs 300 crore, secured by a charge on the Subject Property in favour of Vistra ITCL India Limited (Debenture Trustee).
- 07.05.2026: Debenture Trustee issued a letter demanding immediate deposit of the original title deeds.
- 24.01.2026: Inter-Corporate Loan Agreement (ICL Agreement) dated 14.12.2022 between Exclusive Capital (borrower) and Clover Media Private Limited (lender) was executed; loan amount Rs 60 crore.
- 28.12.2022: Original Assignment Agreement executed, assigning the debt to Exclusive Capital.
- 01.02.2024: Assignment Agreement transferred the debt from Clover Media to VSJ Investments Pvt. Ltd. (defendant No.4).
- 31.12.2024: AHNL entered a One-Time Settlement (OTS) with VSJ, paying Rs 70 crore; VSJ issued a No-Dues Certificate.
- 17.04.2025: Registrar of Companies issued a Memorandum of Satisfaction of Charge confirming extinguishment of the charge on the Subject Property.
- 07.01.2026: Interim order in the earlier ECL Suit directed DBS to retain the title deeds.
- 07.05.2026: Debenture Trustee’s notice reiterated the need for immediate release of the deeds.
- 29.05.2026: Application for exemption from pre-institution mediation (I.A. 9594/2026) filed.
- 03.08.2026: Judgment delivered.
Procedural History
- 07.01.2026: Ad-interim order in CS(COMM) 1360/2025 directing DBS to hold the title deeds.
- 29.05.2026: Plaintiff filed I.A. 9594/2026 seeking exemption from Section 12A.
- 03.08.2026: Court delivered the present judgment, granting exemption and ordering release of the deeds.
Parties' Positions
- Plaintiff (AHNL): Argues that the dispute is a continuing infringement of IP rights, that the urgency is real, and that pre-institution mediation would defeat its commercial interests.
- Defendant No.1 (Exclusive Capital): Claims the exemption is a ruse, contends the ICL Agreement is forged, and insists mediation is mandatory.
- Defendant No.2 (DBS Bank India Ltd.): Maintains it is merely a security trustee and should retain the documents pending resolution of the underlying claim.
Relief Sought
The plaintiff sought:
- Exemption from pre-institution mediation under Section 12A.
- Mandatory injunction directing DBS to deliver the original title deeds to AHNL.
- Permission to deposit the full claimed amount of Rs 1,59,66,05,228 as cash security.
The Legal Issue
Does a commercial suit that alleges a continuing infringement of intellectual-property rights and seeks urgent interim relief satisfy the statutory test for exemption from the mandatory pre-institution mediation requirement under Section 12A of the Commercial Courts Act, 2015?
Arguments Presented
For the Plaintiff
- Relied on Yamini Manohar v. T.K.D. Keerthi (2024) and Novenco Building & Industry A/S v. Xero Energy Engg. Solutions (2024) that urgency must be assessed from the plaintiff’s standpoint and that a continuing cause of action justifies exemption.
- Submitted that the NCD issuance on 30.01.2026 created an immediate need for the title deeds to avoid default.
- Highlighted that the parties had already undergone pre-institution mediation (Non-Starter Report dated 13.11.2025) which failed, making a fresh mediation redundant.
For the Defendants
- Cited Patil Automation (P) Ltd. v. Rakheja Engineers (P) Ltd. (2022) to argue that Section 12A is mandatory and cannot be bypassed by a mere claim of urgency.
- Asserted that the ICL Agreement was forged, rendering the underlying transaction void and that the plaintiff’s claim was a façade to avoid mediation.
- Emphasised that the claim of Rs 1,59,66,05,228 was purely monetary and could be adjudicated without interim relief.
The Court's Analysis
The Court first reiterated the statutory language of Section 12A(1), which makes pre-institution mediation a condition precedent for instituting a commercial suit, except where the plaint “contemplates any urgent interim relief”. It then applied the three-part test distilled from Yamini Manohar and Novenco Building:
- Prima facie case - The plaintiff must show a strong case beyond a mere allegation.
- Irreparable injury - The injury must be of a nature that cannot be compensated by damages.
- Balance of convenience - The equilibrium must favour the plaintiff.
"The court must look at the plaint, pleadings and supporting documents to decide whether urgent interim relief is genuinely contemplated."
The Court observed that the present suit involved continuous infringement of patents and designs, each act of manufacture constituting a fresh wrong. Such continuing infringement satisfies the “continuing cause of action” doctrine, making delay irrelevant. The issuance of Rs 300 crore NCDs on 30.01.2026 and the Debenture Trustee’s notice of 07.05.2026 created a real and imminent threat of default, satisfying the irreparable injury prong.
The Court further noted that the parties had already undergone mediation (Non-Starter Report, 13.11.2025) which failed, and that requiring a fresh mediation would defeat the purpose of the urgent relief sought. Consequently, the statutory mandate of Section 12A could be dispensed with.
The Court also rejected the defendants’ forgery allegation, finding that multiple judicial orders (Substitution Judgment 23.12.2024, CJM order 16.05.2025, ASJ order 29.11.2025) had already upheld the validity of the ICL Agreement, and that the plaintiff’s documentary evidence (emails, No-Dues Certificate, Memorandum of Satisfaction of Charge) established a prima facie case.
Finally, the Court held that the balance of convenience lay with the plaintiff: the subject property’s value (~Rs 1,000 crore) dwarfed the claimed debt, and the plaintiff was ready to deposit the entire claim as cash security, thereby safeguarding the defendant’s monetary interest.
The Verdict
The Delhi High Court granted exemption from pre-institution mediation under Section 12A and ordered:
- Defendant No.2/DBS Bank India Ltd. to release the original title deeds and security documents of the Subject Property to the plaintiff.
- The plaintiff to deposit the full crystallised claim of Rs 1,59,66,05,228 with the Registrar General within four weeks of the order.
- The deposited amount to be kept in an interest-bearing Fixed Deposit Receipt (FDR) with a nationalised bank, to be released in accordance with the final judgment.
- DBS to comply with the deed-release direction within one week of proof of deposit. The order is interim and does not prejudice the final determination of the suit.
What This Means For Similar Cases
Urgent Interim Relief Overrides Mediation Requirement
- Courts will scrutinise the plaint and annexures to ascertain genuine urgency before insisting on mediation.
- A prior failed mediation (Non-Starter Report) can be a strong factor in favour of exemption.
Continuing Cause of Action Recognised
- In IP infringement or any repeatable wrong, each act creates a fresh cause of action; delay does not defeat urgency.
- Plaintiffs can rely on the “continuing infringement” doctrine to demonstrate irreparable injury.
Cash Security Can Substitute Physical Documents
- Offering to deposit the full disputed amount as cash security satisfies the monetary interest of the opposite party.
- This approach can persuade courts to dispense with mediation while protecting the defendant’s claim.
Practical takeaways for practitioners:
- Draft plaints with clear factual matrices showing ongoing injury and attach all relevant correspondence.
- If mediation has already been attempted and failed, expressly cite the Non-Starter Report.
- Be prepared to offer cash security to neutralise the defendant’s monetary concerns.
- Cite Yamini Manohar and Novenco Building when arguing for exemption under Section 12A.
