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Arbitration: High Court Sets Aside Severable Arbitral Award for Relief Beyond Scope

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This judgment arises from a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 by the National Highways Authority of India (NHAI) challenging an arbitral award dated May 4, 2023. The dispute originated from a consultancy contract awarded for the design, construction, and maintenance of a cable-stayed bridge across the river Chambal in Kota, Rajasthan, which suffered a collapse during construction in December 2009. Although NHAI initially issued a show-cause notice and deliberated on imposing penalties, it ultimately chose to have the project completed through the same joint venture consultant without executing a formal supplementary agreement altering original terms.

When disputes regarding unpaid dues and operational/maintenance (O&M) charges arose, the matter went to arbitration, resulting in the tribunal awarding claims for both the construction period (Claim No. 1) and O&M charges extending past the award date (Claim No. 2), alongside costs. Upon review, the High Court of Delhi partly allowed NHAI’s petition. It upheld Claim No. 1 and rejected limitation challenges, but it set aside Claim No. 2 on the grounds that the tribunal had granted relief beyond the prayers and scope of submission (by awarding charges for future services not yet rendered) and violated principles of natural justice and Section 18 of the Act by relying on unaddressed material/financial implications obtained behind NHAI’s back. Invoking the doctrine of severability under Section 34(2)(a)(iv), the invalid portion of the award was cleanly severed and set aside.

  • Background and Contractual Scope: NHAI engaged the respondent joint venture for a consultancy contract spanning four phases—code/design establishment, proof checking, construction supervision, and Operation & Maintenance (O&M)—for a cable-stayed bridge in Kota, Rajasthan.
  • The Incident and Continuation of Work: Following an accident on December 24, 2009, that damaged the under-construction bridge, NHAI constituted a Committee of Experts and issued a show-cause notice, but never took penal or termination steps to their logical conclusion. Instead, NHAI elected to continue utilizing the consultant’s services for the extended project timeline.
  • Arbitral Tribunal’s Decision: The arbitral tribunal ruled in favor of the claimant, granting Claim No. 1 for the construction period (INR 5,39,38,987 and USD 12,74,174.17 with interest) and Claim No. 2 for O&M charges (awarding USD 60,769 and INR 5,16,82,887 after certain deductions).
  • Core Contentions of NHAI:
    • The tribunal failed to adjudicate core liability regarding the 2009 bridge collapse.
    • The tribunal granted relief beyond the scope of prayers by awarding O&M payments for future services extending up to November 2023.
    • The tribunal violated natural justice and Section 18 of the Act by relying on an e-mail regarding the financial implications of employing an unqualified expert (Sh. Sunil Bohra) submitted behind NHAI’s back without granting an opportunity to rebut.
    • The claims were barred by limitation, having arisen from a 2012 executive committee decision.
  • Court’s Analysis and Findings:
    • Fixing Responsibility: The court found NHAI’s argument ill-founded because NHAI never took its penal/termination proceedings to a logical conclusion and continued work under original terms.
    • Limitation: The court rejected the limitation plea, holding that the cause of action crystallized when NHAI finally rejected the remaining claims on April 21, 2020, making the invocation of arbitration on January 26, 2021, timely.
    • Relief Beyond Scope and Natural Justice Breach: The court agreed that granting O&M charges for future periods post-dating the award violated Section 34(2)(a)(iv). Furthermore, relying on unvetted financial data submitted via e-mail without letting NHAI respond breached Section 18 and attracted the bar outlined in Ssangyong Engineering.
  • Final Order: Exercising the inherent and statutory power of severability under the proviso to Section 34(2)(a)(iv) and recent Supreme Court jurisprudence (Gayatri Balasamy v. ISG Novasoft Technologies Ltd.), the court severed and set aside the award exclusively as it related to Claim No. 2, while leaving the rest of the award intact, thus partly allowing the petition.

2026 DHC 6216

National Highways Authority of India v. The Louis Berger Group Inc. JV with M/s. COWI A/S (D.O.J. 03.08.2026)

2026 DHC 6216 click here to view full text of judgment

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Supreme Court Judgment Summary 15th Sep, 2026

September 18, 2026 No Comments

Supreme Court Judgment Summary 15th Sep, 2026

A Definitive Review on Disability Pension Rights for Ex-Servicemen

This landmark batch of appeals brought by the Union of India challenged various orders passed by the Armed Forces Tribunal (AFT) and High Courts, which had granted the disability element of service pensions to ex-servicemen. These former personnel had been assessed by Release Medical Boards (RMB) as having disabilities that were “Neither Attributable Nor Aggravated” (NANA) by military service. The Supreme Court addressed the core tension between the protective, beneficial jurisprudence established in Dharamvir Singh v. Union of India (governed by the Entitlement Rules 1982) and the restrictive framework introduced by the subsequent Entitlement Rules 2008. Crucially, the Court undertook a deep constitutional and administrative review of the legitimacy of the 2008 rules, evaluating whether they possessed binding legal force and whether they could dilute established beneficial entitlements.

2026 INSC 993 : Union of India & Ors. v. Col. NC Isaac (Retd.) and Connected Appeals (D.O.J. 15.09.2026)

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Setting Aside Ineligible Selection to Protect Merit

September 18, 2026 No Comments

The Supreme Court of India dismissed the civil appeal filed by Sunita Lahu Panchpande, upholding the Bombay High Court’s judgment that had set aside her appointment as an Anganwadi Supervisor in Nashik District. The appellant, who originally served as an Anganwadi Sevika in Jalgaon District, applied for and was appointed to the post in Nashik despite an express restriction in the advertisement and the governing Government Resolution (G.R.) dated November 17, 2001, mandating that applicants must possess ten years of work experience specifically within Nashik District. Although the Divisional Commissioner had erroneously issued a clarification stating that experience from other districts was acceptable, the Supreme Court ruled that a subordinate administrative official cannot issue clarifications contrary to statutory G.R.s and recruitment advertisements. Citing the doctrine that appointments made in disregard of advertised qualifications amount to a fraud on the public, the Supreme Court affirmed the High Court’s order directing the appointment of the eligible wait-listed candidate (the sixth respondent) in her place, while acknowledging the compassionate observation permitting the appellant’s accommodation in her home district.

  • Core Issues Addressed: The Supreme Court evaluated whether a candidate lacking the mandatory territorial work experience stipulated in a recruitment advertisement and government resolution can retain public employment based on an erroneous administrative clarification.
  • Mandatory Territorial Eligibility: A conjoint reading of the 2001 Government Resolution and the specific conditions of the advertisement clearly established that applicants must have accumulated their ten years of qualifying experience as an Anganwadi Sevika within the same district (Nashik).
  • Incompetence of Administrative Clarifications: The Divisional Commissioner lacked the legal authority to issue a clarification that ran completely contrary to the explicit text of the 2001 G.R.; any genuine doubt ought to have been referred back to the State Government.
  • Fraud on Public Aspirants: Reaffirming the principle laid down in Tripura Sundari Devi, the Court emphasized that appointing ineligible candidates in violation of advertised terms without an express relaxation clause constitutes a fraud on public candidates who possessed better qualifications but refrained from applying.
  • Final Outcome: The appeal was dismissed, the High Court’s judgment was upheld, the sixth respondent was awarded the rightful appointment with benefits to be disbursed within two months, and the appellant was granted time until September 30, 2026, to transition out of the post.

2026 INSC 1002

Sunita Lahu Panchpande v. The District Collector & Ors. (D.O.J. 16.09.2026)

2026 INSC 1002 click here to view full text of judgment

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Acquittal Under NDPS Act Due to Flawed Sampling and Unproven Contraband

September 18, 2026 No Comments

The Supreme Court of India allowed the criminal appeals filed by the appellants Abdul Rajik and Govind, setting aside the concurrent judgments of the Trial Court and the High Court of Madhya Pradesh which had convicted them under Section 8 read with Section 20 of the Narcotic Drugs and Psychotropic Substances (NDPS) Act, 1985. The appellants had been sentenced to rigorous imprisonment for 10 years and 8 years respectively, following allegations that they were caught carrying charas. The Supreme Court held that the prosecution fundamentally failed to establish an unbroken chain of custody for the seized samples, pointing out severe lapses, including the total non-compliance with Section 52-A of the NDPS Act (drawing samples without a Magistrate), missing entries in the malkhana register regarding the exit of samples, a silent carrier constable, and an unexplained five-day delay before the samples reached the Forensic Science Laboratory (FSL). Consequently, the FSL report became untrustworthy, and with no other reliable scientific proof that the recovered material was actually charas, the Court granted the appellants the benefit of the doubt and acquitted them.

  • Core Issues Addressed: The Supreme Court examined the validity of convictions under the NDPS Act concerning the integrity of link evidence, the absolute necessity of maintaining a secure chain of custody for seized contraband samples, and the legal consequences of failing to comply with Section 52-A of the NDPS Act.
  • Breach in Link Evidence and Custody: The prosecution failed to prove the safe transit of the samples from the malkhana to the FSL. Crucially, the forwarding letter from the Superintendent of Police was dated December 1, 2004, whereas the FSL recorded receipt on December 6, 2004, leaving an unexplained five-day gap with zero evidence as to whose custody the samples remained in during this period.
  • Non-Compliance with Section 52-A: The investigating officer completely omitted the mandatory statutory safeguard of drawing representative samples in the presence of an Executive or Judicial Magistrate, which severely dented the integrity of the seizure and sampling process.
  • Exclusion of the FSL Report: Due to the shattered chain of custody and procedural flaws, the FSL report (Exhibit P-46) lost its evidentiary value and had to be discarded. Furthermore, the informal spot-testing method (burning a small piece of the substance) was deemed unscientific and insufficient to prove the material was charas.
  • Final Outcome: The appeals were allowed, the judgments of conviction and sentences were set aside, and the appellants were acquitted of all charges with their bail bonds discharged.

2026 INSC 1001

Abdul Rajik v. State of M.P. (D.O.J. 16.09.2026)

2026 INSC 1001 click here to view full text of judgment

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The Finality of Tax Settlements: Barring Reassessment After ITSC Orders

September 18, 2026 No Comments

The Supreme Court of India dismissed the civil appeal filed by the Revenue (Income Tax Department), upholding the judgment of the Delhi High Court which had quashed a reassessment notice and order issued against the respondent-assessee, M/s. Omaxe Limited. The core controversy revolved around whether the Assessing Officer (AO) retained the jurisdiction to reopen a concluded assessment under Section 148 of the Income Tax Act, 1961, to disallow housing project deductions under Section 80IB(10) after the Income Tax Settlement Commission (ITSC) had already passed a final settlement order under Section 245D(4). The Supreme Court ruled that Chapter XIX-A of the Income Tax Act is a self-contained code. Once an application for settlement is admitted and a final order is issued, it attains absolute finality under Section 245-I, and the regular assessment machinery cannot be invoked to bypass this conclusiveness. The Court clarified that if the Revenue wishes to challenge a settlement order on grounds of fraud or misrepresentation, its sole exclusive remedy is to approach the ITSC directly under Section 245D(6)—not to initiate parallel reassessment proceedings.

  • Core Issue Addressed: The Supreme Court examined whether an Assessing Officer can independently issue a reassessment notice under Section 148 to disallow deductions (such as under Section 80IB(10)) that were part of the total income considerations during a concluded proceeding before the Settlement Commission.
  • Exclusive Jurisdiction of the ITSC: The Court reaffirmed that upon the admission of a settlement application, the ITSC assumes exclusive jurisdiction over the case for that assessment year, placing the regular assessment machinery under statutory abeyance pursuant to Section 245F(2).
  • Conclusiveness of Settlement Orders: Under Section 245-I, orders passed by the ITSC under Section 245D(4) are final and conclusive on the matters stated therein, barring the Revenue from splitting an assessment to re-litigate items through standard reassessment channels.
  • Exclusive Remedy for Fraud or Misrepresentation: If the Revenue discovers that a settlement order was obtained through misrepresentation or concealment, Section 245D(6) provides the exclusive statutory pathway to declare the settlement void by moving the ITSC directly, a route the Revenue unsuccessfully attempted and exhausted in this very case.
  • Final Outcome: The appeal filed by the Revenue was dismissed, confirming that the regular tax authorities cannot initiate parallel reassessments once an ITSC settlement order has attained finality.

2026 INSC 1000

Assistant Commissioner of Income Tax & Another v. M/s. Omaxe Limited (D.O.J. 16.09.2026)

2026 INSC 1000 click here to view full text of judgment

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