In Vijay v. Havells India Ltd. (FAO(COMM) 46/2025, decided 01.07.2026 — 2026:DHC:5196-DB), a Division Bench of the Delhi High Court dismissed an appeal against the rejection of a counter-claim under Order VII Rule 11 CPC. The plaintiff had itself skipped mediation by invoking the urgent-interim-relief exception; the defendant's counter-claim, filed without mediation, was nonetheless thrown out. The Bench rejected both extremes argued before it:
- Rejected: that a counter-claim is never a “suit” and so falls outside Section 12A.
- Rejected: that every counter-claim must always undergo a fresh mediation, whatever happened before.
- Adopted: a purposive “meaningful opportunity” test. If the counter-claimed disputes had formed part of, or were capable of being meaningfully addressed in, an earlier Section 12A mediation, the mandate may be treated as fulfilled; for a non-settlement report, para 18 ties this to the defendant having disclosed its claims there. If not, independent compliance is ordinarily required.
The judgment matters for three reasons. It states, at Division Bench level in Delhi, a general approach to the differing decisions in Sanjana Agarwal, Anil Kumar Pitti and Aditya Birla Fashion — though it does not overrule Aditya Birla (para 25 calls it “distinct”), and Pitti was not itself a counter-claim case. It creates an asymmetry on its facts: a plaintiff's urgency exemption does not shelter the defendant. And its test, sensible in principle, invites satellite litigation about what was “disclosed” in a confidential mediation. This article examines each and assesses where the ruling will and will not apply.
Statutory and precedential backdrop
Section 12A, inserted by the 2018 amendment, bars institution of a commercial suit that “does not contemplate any urgent interim relief” unless the plaintiff first exhausts pre-institution mediation. The process runs three months, extendable by two, and that period is excluded in computing limitation under the Limitation Act, 1963. The text speaks only of a “suit” and a “plaintiff”; it says nothing about counter-claims. The Supreme Court has since shaped the mandate in four decisions (see also our note on Section 12A and continuing IP infringement):
| Decision | Proposition relevant here |
|---|---|
| Patil Automation (P) Ltd. v. Rakheja Engineers (P) Ltd., (2022) 10 SCC 1 | Section 12A is mandatory; a non-compliant plaint must be rejected under Order VII Rule 11, even suo motu; effective from 20.08.2022. |
| Yamini Manohar v. T.K.D. Keerthi (2023) | A prayer for urgent interim relief must have real substance; it cannot be a device to avoid mediation. |
| Dhanbad Fuels Pvt. Ltd. v. Union of India, 2025 INSC 696 (15.05.2025) | Reaffirmed that the mandate is compulsory. Non-compliant suits filed before 20.08.2022 are kept in abeyance and referred to time-bound mediation rather than rejected; suits filed on or after that date must be rejected, on application or suo motu. |
| Novenco Building & Industry A/S v. Xero Energy, 2025 INSC 1256 (27.10.2025) | Urgency is assessed from the plaint, from the plaintiff's standpoint and not on the merits; continuing infringement carries inherent urgency, and delay alone does not defeat it. |
On the CPC side, Order VIII Rule 6A(2) gives a counter-claim the effect of a cross-suit, and Rule 6A(4) treats it as a plaint governed by the rules applicable to plaints. That is the doctrinal bridge by which Order VII Rule 11 — and, the courts now hold, Section 12A — reaches a counter-claim. Rule 6C lets the plaintiff seek exclusion of a counter-claim for independent trial.
A legislative change is pending in the background. The Mediation Act, 2023 (Section 64 read with the Ninth Schedule) substitutes Section 12A to allow mediation through mediation service providers, not only Legal Services Authorities. The 2023 Act has been brought into force only in part, so practitioners should confirm the notification status of that substitution, as at the date they rely on it, before relying on either text.
Facts, procedural history and the question framed
The plaintiffs (Havells India Ltd. and others) sued the appellant in a commercial suit without pre-institution mediation, relying on the urgent-interim-relief exception. On 27.05.2024 the court appointed a Local Commissioner, and inspections took place on 01.06.2024 and 17.06.2024.
The appellant then filed a counter-claim founded on those inspections and on the parties' commercial relationship, alleging that the plaintiffs' actions went beyond the order of 27.05.2024. It did not initiate Section 12A mediation first; this was undisputed. On the plaintiffs' Order VII Rule 11 application, the District Judge (Commercial Court) rejected the counter-claim by order dated 25.01.2025, relying principally on Aditya Birla Fashion. The appeal, FAO(COMM) 46/2025, was reserved on 04.05.2026 and dismissed on 01.07.2026.
The Bench framed one question (para 3): whether a defendant filing a counter-claim in a pending commercial suit must independently comply with Section 12A, and if not, when the requirement may be regarded as satisfied.
Two features of the facts drive the critique below. First, no pre-institution mediation of any kind had been undertaken (paras 6, 31, 34). Second, the counter-claim was not a free-standing grievance: para 5 records that it was founded on the inspections under the 27.05.2024 order and on the commercial relationship, alleging that the plaintiffs' actions were contrary to, and beyond the scope of, that order.
Rival submissions
| Issue | Appellant (counter-claimant) | Respondents (plaintiffs) | Court's answer |
|---|---|---|---|
| Is a counter-claim a “suit” under Section 12A? | No; Parliament amended much of the CPC through the CC Act but left Order VIII Rules 6A–6C untouched. | Yes; it is a cross-action with the essentials of a suit. | Yes (para 27). |
| Effect of not seeking exclusion under Rule 6C | The counter-claim stays part of one proceeding (Satyender v. Saroj, (2022) 17 SCC 154; Jag Mohan Chawla, (1996) 4 SCC 699). | Not addressed separately. | Implicitly irrelevant. |
| Timelines | Five months of mediation can outrun the 120-day outer limit for the written statement, defeating the counter-claim. | — | Rejected: Rule 6A does not tie the counter-claim to the written statement, and limitation is excluded during mediation (paras 29–30). |
| Prior precedent | Aditya Birla misreads the scheme; Sanjana Agarwal and Pitti are distinguishable. | Aditya Birla governs. | A middle path; Aditya Birla “distinct” (para 25). |
| Mootness | — | The issue forming the subject of the counter-claim already stood framed in CS(COMM) 294/2024, so the appeal was substantially academic (para 12(i)). | Not expressly decided. |
| Fairness of a fresh mediation | — | Mediation here would be the first chance to mediate the rival claims, since the suit itself bypassed it. | Accepted (paras 31, 34). |
The respondents' last point is closest to the Bench's reasoning (paras 31, 34). On that reading, the plaintiff's urgency exemption is not a reason to excuse the defendant; it is the reason the rival claims have never yet been exposed to mediation. The Bench does not itself discuss the exemption in those terms.
The ratio decidendi: a “meaningful opportunity” test
The ratio is that Section 12A applies to counter-claims in principle, but is treated as fulfilled where the counter-claimed disputes had already formed part of, or were capable of being meaningfully addressed in, an earlier Section 12A mediation, so that the parties had a genuine opportunity to attempt settlement of them (paras 16–18, 27, 33). The Bench built it in four moves:
- Classification. A counter-claim is a cross-suit with “many of the incidents of an independent suit”, so it falls within “suit” in Section 12A (para 27).
- Purpose over form. Section 12A is not a box-ticking participation rule; it exists to give parties a real opportunity to settle identified disputes before adversarial litigation, as Patil Automation stressed (paras 16, 19).
- The test. The material question is whether the counter-claimed disputes “had formed part of, or were capable of being meaningfully addressed during” the earlier mediation (para 17).
- Outcome matrix. Where mediation ends in settlement, the question of a later counter-claim “ordinarily would not arise”, save where claims were expressly reserved. Where it ends in a non-settlement report and the defendant had disclosed its claims, a further round “may not be necessary”. Where the defendant had not disclosed its proposed claims, or no mediation was undertaken, compliance “would continue to be required” (para 18).
On the facts, no mediation had ever occurred, so the counter-claimed disputes had never been exposed to the process. The rejection was upheld “albeit for reasons partly differing” from the trial court's (para 36).
- 1Does the counter-claim itself seek urgent interim relief?yes →Section 12A not triggeredStatutory exception; not argued or decided in Vijay
- 2Did the parties undergo any Section 12A mediation before the counter-claim?no →Independent mediation requiredVijay itself: no mediation ever held (paras 31, 34)
- 3How did that mediation end?settled →Fresh claim ordinarily does not ariseUnless claims expressly reserved (para 18, obiter)
- 4Failed or non-starter: did the defendant disclose the counter-claimed disputes in that mediation?yes →Further mediation may not be necessaryPara 18; Sanjana Agarwal line (paras 20–22)
- ↳Not disclosed→Independent mediation requiredNon-disclosure: para 18; Anil Kumar Pitti line (paras 23–24)
Read as a decision path, the test puts the decisive weight on the fourth question: whether the defendant disclosed the counter-claimed disputes in the earlier mediation. That is also where the judgment is most open to criticism. Para 17 also speaks of disputes “capable of being meaningfully addressed”, and the Bench does not say which formulation controls where a defendant never appeared.
Critical analysis
The judgment is right on classification and right to reject a mechanical rule. It is less convincing on fairness, remedy and administrability, and on these points it leaves questions the Supreme Court may eventually have to answer.
What the Bench gets right
Classification is sound. Order VIII Rule 6A(2) and (4) make a counter-claim a cross-suit governed by the rules for plaints. Once Patil Automation tied Section 12A to Order VII Rule 11, it was hard to argue that a cross-suit escapes the same gate. Parliament's silence on Rules 6A–6C proves little; Section 12A did not need to amend them to bite.
Purpose over ritual. Refusing to demand a second mediation of disputes already mediated avoids pure duplication — faithful to the CC Act's speed objective and to Sanjana Agarwal.
The timeline argument was met on Rule 6A, not on limitation. Rule 6A fixes the cut-off for the cause of action; it does not require the counter-claim to travel with the written statement (para 29). The Bench adds (para 30) that mediation time is excluded for limitation, but that point is imprecise: Section 12A(4) excludes mediation time in computing limitation under the Limitation Act, 1963, whereas the 120-day outer limit for a written statement is a procedural timeline under Order VIII Rule 1, not a limitation period. Para 29 therefore carries the weight. Practitioners should note, though, that Ashok Kumar Kalra v. Wing Cdr. Surendra Agnihotri, (2020) 2 SCC 394, ordinarily closes the door to counter-claims after issues are framed, so the practical window is narrower than para 29 suggests.
Where the reasoning is vulnerable
1. The asymmetry problem. The Bench records that the parties have “not undergone” pre-institution mediation (para 26) and that the plaintiff sued under the urgency exemption (para 31). The plaintiff obtained its inspection order and Local Commissioner without mediating; the defendant, whose counter-claim is founded on those inspections and the commercial relationship (para 5), must mediate first. The Bench does not address whether this is fair. It is arguable that it is not, because the burden of the plaintiff's exemption falls on the defendant. The counter-argument, which the Bench in substance accepts (paras 31, 34), is that the counter-claim is the first occasion on which the rival claims could be mediated.
2. “Pre-institution” mediation in the middle of litigation. Section 12A's purpose is to keep a dispute out of court. Once the main suit is pending on the same relationship, that purpose cannot be served — the parties are already adversaries before the same judge. The purposive reasoning in paras 16–19 arguably points to court-referred mediation under Section 89 and Order X Rule 1A CPC, not to rejection.
3. Rejection is a blunt remedy for a counter-claim. A rejected plaint can be re-presented under Order VII Rule 13. A rejected counter-claim may be harder to re-present, because a counter-claim is ordinarily to be filed before issues are framed (Ashok Kumar Kalra), and issues may have been framed by the time mediation concludes (the respondents said the relevant issue was already framed, para 12(i), though the Bench did not decide the point). The defendant is pushed into a separate suit — the multiplicity counter-claims exist to prevent. Dhanbad Fuels adopts an abeyance-and-refer model, but only for suits filed before 20.08.2022; for later filings, such as this counter-claim, it confirms rejection as the rule. The case for abeyance here is therefore one of principle and analogy, not binding authority, and the Bench did not consider it.
4. The urgency exception was never examined for the counter-claim itself. A counter-claim alleging overreach in executing an interim order may well seek urgent relief, such as restoration of seized goods. After Yamini Manohar and Novenco, urgency is assessed on the substance of the pleading, from the claimant's standpoint. Had such urgency been genuinely pleaded, Section 12A would not have applied. The judgment records no such plea, so the point remains open.
5. A forum question was left unasked. To the extent the counter-claim complains of how the Local Commissioner's inspections were carried out, such grievances may be incidental to the suit itself. Order XXVI Rule 10 objections to the Commissioner's report, Section 95 CPC compensation for an injunction obtained on insufficient grounds, and costs under Sections 35 and 35A CPC are remedies within the same suit, without any Section 12A question. To that extent the choice of a counter-claim invited the objection — though the judgment does not record that the counter-claim was confined to such grievances.
6. The test collides with mediation confidentiality. Asking whether a defendant “disclosed” its claims in mediation requires a court to look inside a confidential process. Mediation communications are protected by the Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018 and general mediation confidentiality; the Mediation Act, 2023 will add statutory protection only once its relevant provisions are in force. Courts will need to confine the inquiry to the record — the application, notices, the reference note (as in Pitti) and the mediator's report. A defendant who raised its claims only orally may be unable to prove it.
7. The threshold of “disclosure” is undefined. Pitti holds that where the other side invoked mediation on its own claim and its reference note described the claimant's competing claim only as “unmerited”, that did not amount to the claimant's exhaustion of Section 12A for its own claim (as extracted at para 23 of Vijay). Vijay asks whether the defendant “disclosed its own claims”. Neither says how particular the disclosure must be — a heading, a quantified figure, or documents.
Reconciling Sanjana Agarwal, Anil Kumar Pitti and Aditya Birla Fashion
The reconciliation is only partly successful. Pitti (itself not a counter-claim case) is consistent with the new test, but Sanjana Agarwal and Aditya Birla arose on materially similar facts and reached opposite conclusions, and Vijay does not say why.
| Case | Prior mediation | What happened in it | Holding | Fit with Vijay |
|---|---|---|---|---|
| Aditya Birla Fashion v. Saroj Tandon, CM(M) 459/2023 (Manoj Jain, J., 02.09.2024) | Initiated by plaintiff | Non-starter; defendant did not appear | Counter-claims need their own mediation; but counter-claim filed 21.02.2022, before the Patil cut-off, so not rejected | Its invariable rule is rejected (para 15) yet called “distinct” (para 25) |
| Sanjana Agarwal v. Namoshivai Apparels, RFA(COMM) 212/2023 (DB) | Initiated by plaintiff | Non-starter; defendant did not appear | No second round where both claims arise from the same transactions; plaintiff had also conceded the point | Endorsed (paras 20–22) |
| Anil Kumar Pitti v. Comsol Energy, RFA(COMM) 479/2025 (DB) | Invoked by the defendant on its own claim; the claimant then sued without mediating | Reference note mentioned the claimant's competing claim only as “unmerited” | Not exhaustion for the claimant's own Rs 3.8 crore claim (not a counter-claim case) | Endorsed (paras 23–24) |
| Vijay v. Havells (DB, 01.07.2026) | None; urgency exemption | — | Independent compliance required | — |
Three observations follow.
The Sanjana/Aditya Birla contradiction is unresolved. In both, the plaintiff mediated and the defendant stayed away. Sanjana excused the counter-claim; Aditya Birla would have required fresh mediation. Vijay endorses the first and describes the second as arising in a “distinct factual context” (para 25) without identifying the distinguishing fact. The better reading is that Aditya Birla's categorical proposition no longer represents Delhi law, though the Bench stops short of saying so, its actual outcome having turned on prospectivity. An express statement would have spared trial courts the uncertainty.
The disclosure criterion does not explain Sanjana. A defendant who never appeared disclosed nothing. Sanjana survives only on the alternative limb — disputes “capable of being meaningfully addressed” because they arose from the same five invoices. Which limb controls is therefore critical: para 17 speaks of disputes that “had formed part of, or were capable of being meaningfully addressed”, while para 18 asks whether the defendant “disclosed” its claims, and the Bench does not reconcile the two.
This produces a perverse incentive. On the Sanjana reading, a defendant who ignores the plaintiff's mediation notice may later counter-claim without mediating, while a defendant like Vijay, who was never offered mediation, may not. Rewarding the party who boycotted the statutory process sits uneasily with the purposive rationale the Bench invokes.
Applicability: where the ruling will and will not bite
The ruling binds Delhi's commercial courts and single judges and is persuasive elsewhere; it bites hardest in suits filed under the urgency exemption, which are common in IP and interim-injunction practice.
| Scenario | Likely result under Vijay | Confidence |
|---|---|---|
| Suit filed under urgency exemption; counter-claim seeks no urgent relief | Fresh Section 12A mediation required; rejection under Order VII Rule 11 if skipped | High — the facts of Vijay |
| Same, but the counter-claim genuinely seeks urgent interim relief | Section 12A should not apply, by its own text read with Yamini Manohar and Novenco | Moderate — not decided |
| Plaintiff mediated; defendant appeared and set out its claims; non-settlement report | Second mediation may not be necessary | Moderate to high — para 18 |
| Plaintiff mediated; defendant did not appear; claims arise from the same transactions | Probably excused, following Sanjana; but the disclosure limb cuts the other way | Low — contested |
| Plaintiff mediated; counter-claim raises a different transaction or relief | Fresh mediation required | High — Pitti, para 33 |
| Plaintiff mediated; the reference only described the defendant's claim as unmerited | Not exhaustion | High — Pitti |
| Mediation settled; defendant later counter-claims | Question ordinarily does not arise, unless the claim was expressly reserved | Moderate — para 18, obiter |
| Counter-claim adds new parties who never mediated | Fresh mediation likely required as to them | Moderate — follows from the test |
| Plea of set-off used only as a defence | Not addressed; a pure defence is not an instituted claim | Open |
| Counter-claim instituted before 20.08.2022 | Not to be rejected; Patil is prospective, as Aditya Birla itself held | High |
Beyond Delhi. Other High Courts are free to prefer either Aditya Birla's categorical rule or Vijay's purposive one. Absent a Supreme Court ruling squarely on counter-claims, divergence across jurisdictions is likely.
Statutory change. If the Mediation Act, 2023 substitution of Section 12A is notified, mediation through registered service providers will widen the routes to compliance. The core question in Vijay — whether a counter-claim must independently comply — would remain unchanged.
Possible further review. The judgment raises a substantial question of law on Section 12A's reach, with differing approaches within the Delhi High Court. It is a plausible candidate for a special leave petition, which would let the Supreme Court settle both the counter-claim question and the remedy (rejection or abeyance).
Practice guidance
The safest course for any defendant is to treat Section 12A as applying to its counter-claim unless the record already proves that the same disputes were mediated.
For defendants and counter-claimants
- Appear and put your claims in writing. On receiving a mediation notice, set out your own claims — quantified and with key documents. Silence or a boycott now carries risk.
- Start your own mediation early. If the suit was filed under the urgency exemption, initiate Section 12A mediation as soon as the counter-claim is in view; limitation is excluded during the process.
- File before issues are framed. Ashok Kumar Kalra makes later filing discretionary and difficult.
- Plead genuine urgency with substance. Where the counter-claim needs urgent relief, seek exemption applying Yamini Manohar and Novenco.
- Consider remedies within the suit. If the grievance is really about execution of the plaintiff's interim order, use objections to the Commissioner's report, Section 95 CPC compensation and costs before framing a separate counter-claim.
- Ask for abeyance in the alternative. Facing an Order VII Rule 11 application, ask for the counter-claim to be held in abeyance pending mediation, arguing by analogy from Dhanbad Fuels — but expect rejection to be the default for filings after 20.08.2022.
For plaintiffs
- Draft the mediation application to cover the whole relationship, not just your claim. That strengthens the case that any counter-claim was “capable of being addressed”.
- Remember that a Section 12A objection to a counter-claim is a sword with costs: rejection may simply produce a separate suit.
For courts
- Confine the disclosure inquiry to the documentary record — application, notices, reference note, non-starter or failure report — and do not probe confidential mediation communications.
- Where rejection would push the defendant into a separate suit, weigh court-referred mediation with the counter-claim held in abeyance.
Conclusion
Vijay v. Havells is a principled middle path that gets the doctrine right and the consequences only half right. It correctly holds that a counter-claim is a “suit” within Section 12A, and correctly refuses to demand ritual repetition of mediation already undergone.
Its weaknesses lie in application. It lets a plaintiff's urgency exemption become the defendant's burden; it prefers rejection where abeyance and court-referred mediation would better serve the statute's purpose; and it leaves the Sanjana/Aditya Birla conflict and the meaning of “disclosure” unsettled.
Until the Supreme Court speaks to counter-claims directly, the prudent rule for practitioners is simple: mediate the counter-claim, or be ready to prove from the record that its disputes were already on the mediation table.