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Indian Judgements

Arbitration Award Partially Set aside: Arbitral Tribunal exceeded its jurisdiction

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The High Court of Delhi dismissed the appeal filed by M/s Bansal Construction Co. (Appellant) against the judgment dated July 30, 2021, of the Commercial Court, which had partially set aside an arbitral award. The High Court affirmed that the Arbitral Tribunal exceeded its jurisdiction by awarding claims that were expressly barred by the General Conditions of Contract (GCC) and the Special Tender Conditions (STC), specifically clauses prohibiting compensation for idle labor/machinery and pre-award interest.

Background

  • Contractual Dispute: The appellant was awarded a railway work contract in 2004, which faced significant delays due to the respondent’s failure to provide necessary materials.
  • Arbitration: Following a dispute over unpaid dues and damages, an Arbitral Tribunal awarded the appellant ₹22,44,464 across seven claims.
  • Section 34 Petition: The respondent challenged this award in the Commercial Court. The District Judge set aside Claim Nos. 1, 4, 5, 7, and 8, and modified the post-award interest from 18% to 12%.

Key Findings of the High Court

The High Court analyzed the appellant’s challenges and upheld the District Judge’s decision based on the following:

  • Claim No. 1 (Arbitration Costs): The Court rejected this claim, citing Clause 64(6) of the GCC, which mandates that parties bear their own arbitration costs.
  • Claim No. 4 (Idle Labor/Machinery): The Court held this claim was rightly set aside. Clause 17A of the GCC allows for time extensions but explicitly bars compensation for delays. Furthermore, Clause 33 of the Special Tender Conditions prohibits claims for idle labor, idle machinery, or business losses.
  • Claim No. 5 (Pre-award Interest): The Court affirmed the rejection of this claim. Clauses 16(3) and 64(5) of the GCC provide a specific, categorical bar against the grant of pre-award interest. Relying on precedents like Garg Builders v. BHEL and Union of India v. Bright Power Projects, the Court reaffirmed that an Arbitrator cannot award interest where the contract expressly prohibits it.
  • Claim No. 7 (Loss of Profit): The Court rejected this claim because Clause 61(3) of the GCC prohibits compensation for loss of profit or advantage that would have been derived had the contract been completed.
  • Claim No. 8 (Interest on Claim No. 4): As this claim was based on the disallowed Claim No. 4 and sought interest in violation of the contract’s bar on pre-award interest, the Court upheld its rejection.

Conclusion

The Court concluded that the Arbitral Tribunal acted contrary to the express terms of the contract. It emphasized that an arbitrator, being a creature of the contract, cannot award damages or interest that the contract explicitly prohibits. Consequently, the appeal was dismissed as being devoid of merit.

2026 DHC 5642

M/S Bansal Construction Co. V. Union of India (D.O.J. 15.07.2026)

2026 DHC 5642 click here to view full text of judgment

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Compassionate release of elderly (above 70 years) and terminally ill prisoners – Directions issued

July 17, 2026 No Comments

The Supreme Court allowed the writ petition, emphasizing that incarceration does not extinguish the fundamental right to life and dignity under Article 21 of the Constitution. The Court directed all States and Union Territories to formulate comprehensive, time-bound policies for the early or compassionate release of elderly (above 70 years) and terminally ill prisoners. These policies must be integrated with the National e-Prisons Portal to ensure transparency, accountability, and the effective involvement of Under Trial Review Committees (UTRCs) and medical boards.

  • The Petition: The National Legal Services Authority (NALSA) filed a petition under Article 32, raising systemic concerns regarding the continued incarceration of elderly and terminally ill prisoners.
  • The Issue: The petition highlighted that prisons are often ill-equipped to provide necessary care for these vulnerable groups, resulting in prolonged suffering and the erosion of human dignity, which constitutes an infringement of Articles 14 and 21 of the Constitution.
  • The Campaign: Between December 2024 and March 2025, NALSA conducted a nationwide Special Campaign, identifying 5,393 prisoners across various States as elderly or terminally ill.
  • Legal Standing: The Court recognized NALSA’s locus standi to act in discharge of its public duty under the Legal Services Authorities Act, 1987, to protect the rights of marginalized sections.

Court’s Reasoning

  • Constitutional Mandate: The Court reiterated that even lawful imprisonment cannot justify “cruel, inhuman or degrading treatment”. Incarceration that causes avoidable physical suffering, without serving a legitimate penological purpose, is constitutionally impermissible.
  • Systemic Failure: While an advisory for terminally ill prisoners has existed since 2010, the Court noted that its implementation has been uneven and dependent on individual initiative rather than systemic compliance.
  • Separation of Powers: The Court acknowledged that while prison management is a State subject, the judiciary is duty-bound to intervene when legislative or executive inaction results in persistent violations of fundamental rights.
  • International Norms: The Court drew upon international standards, such as the UNODC Handbook on Prisoners with Special Needs and the Nelson Mandela Rules, noting that they provide normative support for compassionate release mechanisms.

Directions Issued

  • Policy Formulation: States/UTs must notify a comprehensive release policy within three months, in consultation with State Legal Services Authorities.
  • Definitions and Medical Boards: Policies must include a uniform definition of “terminal illness” and mandate the formation of independent Medical Boards for objective assessment.
  • Digital Integration: The entire application process must be integrated into the National e-Prisons Portal to allow for unique tracking, automated alerts, and transparent monitoring.
  • Role of UTRCs: Under Trial Review Committees are to be tasked with the periodic review of these vulnerable cases to recommend bail, parole, or remission.
  • Technical Support: The Union of India is directed to provide the necessary digital infrastructure and software support to ensure compliance.

Compliance: States and the Union of India must file compliance affidavits within six months.

2026 INSC 713

National Legal Services Authority v. Union of India & Ors.  (D.O.J. 16.07.2026)

2026 INSC 713 click here to view full text of judgment

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Second Appeal: Interference in findings of fact

July 17, 2026 No Comments

The Supreme Court allowed the appeal and set aside the High Court’s judgment, restoring the First Appellate Court’s original order. The Court ruled that the High Court exceeded its limited jurisdiction under Article 226 by setting aside findings of fact that were arrived at by a competent civil court after a proper appreciation of evidence. Furthermore, the Court emphasized that the High Court violated the principles of natural justice, specifically audi alteram partem, by deciding the writ petition ex parte without notifying or hearing the appellants, whose property rights were directly impacted by the decision.

  • Background: The case originated from a suit for partition and separate possession of properties originally belonging to one Basayya. The plaintiffs (daughters) claimed a share, while the defendants (the granddaughter and purchasers) contested the claim, asserting the properties were self-acquired by the son, Basalingaiah.
  • Lower Court Findings: The Trial Court dismissed the suit, finding that the plaintiffs failed to prove the properties were ancestral. The First Appellate Court concurred that the plaintiffs failed to prove their right to the properties; however, it included observations in Paragraph 24 questioning the validity of certain sale deeds and affirming the ownership and possession of the defendant (Basamma).
  • High Court Intervention: Respondent No. 1 (a purchaser) filed a writ petition challenging only the observations in Paragraph 24 of the First Appellate Court’s judgment. The High Court allowed the petition, setting aside those findings after dispensing with the notice to the appellants.

Court’s Reasoning

  • Limited Scope of Certiorari: The Supreme Court reiterated that High Courts, when exercising writ jurisdiction under Article 226, do not act as courts of appeal and cannot reweigh evidence or disturb findings of fact reached by a competent lower court, provided those findings are based on relevant material.
  • Jurisdictional Overreach: The High Court wrongly concluded that the First Appellate Court’s findings were without evidence, when in fact, the lower court had based its conclusions on pleadings, mutation entries, sale deeds, and the conduct of the parties.
  • Violation of Natural Justice: The Court underscored that the appellants were necessary parties to the writ petition. By deciding the matter ex parte without allowing the appellants to be heard, the High Court committed a clear violation of the doctrine of audi alteram partem, causing prejudice to the appellants whose ownership and possession rights were under challenge.

Orders Passed

  • The judgment of the High Court was set aside.
  • The judgment of the First Appellate Court was restored in its entirety.

The respondents were granted liberty to pursue other legal remedies within three months, with the Court clarifying that limitation periods would not bar such adjudication on the merits.

2026 INSC 712

Basamma & Anr. v. Goparappa and Ors. (D.O.J. 16.07.2026)

2026 INSC 712 click here to view full text of judgment

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Service Law: Compassionate Appointment – Employer cannot rely on its own administrative delays

July 17, 2026 No Comments

The Supreme Court allowed the appeal, setting aside the High Court’s judgment that had upheld the denial of a compassionate appointment. The Court ruled that an employer cannot rely on its own administrative delays—specifically, failing to process an application for medical retirement filed before the employee reached the age of 55—to later reject a dependent’s claim for compassionate appointment on the grounds that the employee crossed the age threshold while the application was pending.

  • The Scheme: The respondent-company’s “Scheme for Compassionate Appointment” allows for such appointments when an employee retires on medical grounds due to incapacitation before reaching the age of 55.
  • Initial Application: Appellant No. 2 (the father) applied for voluntary retirement on medical grounds on July 22, 2015, supported by a certificate from a Civil Surgeon certifying permanent incapacitation. At this time, he was under 55 years of age.
  • Company Inaction: Despite the appellant sending reminders on November 6, 2015, and December 1, 2015, the company did not process the application or demand a Medical Board certificate before the appellant turned 55 on December 10, 2015.
  • Rejection: The company only requested a Medical Board certificate on February 3, 2016, after the appellant had already crossed the age of 55. Following the submission of this certificate, the company accepted the retirement but later rejected the son’s (Appellant No. 1) application for compassionate appointment, arguing that the retirement occurred after the age of 55.

Court’s Reasoning

  • Duty of Fair Administration: While compassionate appointment cannot be granted contrary to the Scheme, the employer is obligated to administer the scheme fairly and within a reasonable timeframe.
  • Prevention of Unfair Advantage: The Court emphasized that an authority cannot take advantage of its own default. By failing to communicate the requirement for a specific Medical Board certificate while the employee was still under 55, the company could not rely on the resulting delay to defeat the claim.
  • Invalidation of Technical Construction: The Court noted that the High Court’s reliance on the date of the Medical Board certificate was erroneous, as it ignored the employer’s delay in communicating that requirement. The purpose of the age condition is to identify incapacitation, not to allow the employer to defer processing until the condition expires to justify rejection.

Directions Issued

The Supreme Court set aside the High Court’s judgment and the respondent-company’s rejection communication, directing the company to:

  • Grant compassionate appointment to Appellant No. 1 in accordance with the Scheme.
  • Provide necessary age relaxation if the appellant exceeded the upper age limit during the pendency of the legal proceedings.
  • Issue the appointment order within eight weeks from the receipt of the judgment.

Release any admissible unpaid dues to Appellant No. 2 within the same eight-week timeframe.

2026 INSC 710

Rahul S/o. Ramnarayan Madankar & Anr. v. The New India Assurance Company Limited & Ors. (D.O.J. 16.07.2026)

2026 INSC 710 click here to view full text of judgment

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Condonation of Delay: Lack of diligence – No relief

July 17, 2026 No Comments

In this judgment dated July 13, 2026, the Delhi High Court dismissed the appeal filed by Pradeep Sharma against a trial court judgment that had decreed a suit against him for Rs. 8,43,580. The Court refused to condone a 176-day delay in filing the appeal, noting that the explanation provided regarding the appellant’s wife’s medical condition did not constitute “sufficient cause” for the long delay and did not excuse the appellant’s lack of diligence. Furthermore, the Court observed that the appellant failed to comply with previous court orders requiring the deposit of 50% of the decretal amount, leading to the vacation of an interim protection order. Upon reviewing the case on its merits, the Court found no grounds for interference with the trial court’s decision.

  • Background: The appellant challenged a decree passed on August 28, 2024, by the Commercial Court, which had ordered the payment of Rs. 8,43,580. The trial court had previously rejected the appellant’s defense that a cheque was stolen, citing lack of evidence and improbable actions by the appellant.
  • Court’s Observations on Delay:
    • Under the Commercial Courts Act, 2015, the prescribed time for filing an appeal is 60 days.
    • The Court emphasized that condoning delay in commercial appeals is an “exception and not the rule,” as the law aims for the “speedy resolution of disputes”.
    • The Court found that the appellant’s explanation for the delay—the hospitalization of his wife in late 2024—did not cover the entire period of the delay and was not a genuine cause sufficient to disguise a lack of diligence.
  • Compliance and Merits:
    • The appellant failed to deposit 50% of the decretal amount as directed by the court on May 21, 2025, resulting in the vacation of the interim order.
    • After examining the merits of the case, the Court concluded that there were no valid grounds to interfere with the trial court’s judgment.
  • Outcome: The appeal was dismissed, and the respondent was granted the liberty to pursue execution of the decree according to law.

2026 DHC 5687

Pradeep Sharma v. Anil Chandel (D.O.J. 13.07.2026)

2026 DHC 5687 click here to view full text of judgment

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