Tag: Contract Law

Arbitration Award Final: Supreme Court Dismisses MMTC’s Post-Decree Objections
17Jan By The Legal ChamberNo Comments
Supreme Court

Arbitration Award Final: Supreme Court Dismisses MMTC’s Post-Decree Objections

This Supreme Court judgment reaffirms that objections to the execution of an arbitral award under Section 47 of the CPC are maintainable only within a very narrow compass, limited to grounds of jurisdictional infirmity or voidness. The Court emphasized that allegations of fraud or breach of fiduciary duty by a party’s own officers, raised after the award has attained finality, do not constitute such grounds unless they render the award a nullity. The business judgment rule protects decisions that fall within a range of reasonableness. Facts Of The Case: The dispute arose from a Long Term Agreement (LTA) dated 07.03.2007 between MMTC Limited and Anglo American Metallurgical Coal Pvt. Limited for the supply of coking coal. The agreement included an option for MMTC to extend the con...
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Clarity in Tender Documents is Key: Supreme Court Quashes Bid Rejection Over Ambiguous Term
16Jan By The Legal ChamberNo Comments
Supreme Court

Clarity in Tender Documents is Key: Supreme Court Quashes Bid Rejection Over Ambiguous Term

The Supreme Court held that a tender condition must be explicitly stated. The rejection of a bid for not submitting a solvency certificate from a District Magistrate was invalid, as the tender notice did not specify this requirement. Authorities cannot reject a bid on grounds not stated in the tender documents. Facts Of The Case: The dispute arose from a tender floated by the Krishi Utpadan Mandi Parishad (Mandi Parishad) to lease a banquet hall and terrace lawn for ten years. The appellant, Kimberley Club Pvt. Ltd., submitted its bid alongside other parties, including the fifth respondent, who emerged as the successful bidder. The Mandi Parishad rejected the appellant's technical bid on a specific ground: the 'haisiyat praman patra' (solvency certificate) it submitted was issued b...
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Arbitrator’s Inaction for 4 Years Leads to Award Being Quashed: Supreme Court Ruling
16Jan By The Legal ChamberNo Comments
Supreme Court

Arbitrator’s Inaction for 4 Years Leads to Award Being Quashed: Supreme Court Ruling

In appeals arising from a delayed and unworkable arbitral award, the Supreme Court held that inordinate and unexplained delay in pronouncement can vitiate an award if it explicitly and adversely impacts its findings, rendering it contrary to public policy or patently illegal under Section 34 of the Arbitration Act. The Court further clarified that such an unworkable award, which fails to resolve disputes and irreversibly alters parties' positions, is liable to be set aside, and in exceptional circumstances, the Court may exercise its jurisdiction under Article 142 of the Constitution to do complete justice. Facts Of The Case: The case originated from a Joint Development Agreement (JDA) dated 17.12.2004 between respondent landowners and a developer (later amalgamated into the ...
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Supreme Court Dismisses Arbitration Petition Due to Limitation Issues
29Dec By The Legal ChamberNo Comments
Supreme Court

Supreme Court Dismisses Arbitration Petition Due to Limitation Issues

The Supreme Court dismissed the petition for appointment of an arbitrator under Section 11(5) of the Arbitration and Conciliation Act, 1996. The Court held that the underlying claim for recovery of money was hopelessly barred by limitation, rendering the appointment of an arbitrator untenable in law. Facts Of The Case: The case involves a dispute arising from a partnership deed containing an arbitration clause. The petitioner, residing in the UK, entered into a partnership with the respondent on 20.09.2014, succeeding an earlier partnership involving the petitioner’s sister. The petitioner alleged that he paid substantial sums amounting to Rs. 2.31 crores, relying on a clause entitling him to 75% of profits from a property purchased on 04.05.2016, but received nothing. The partnership wa...
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Supreme Court Denies Specific Performance for Deal Breaching Construction Laws
27Dec By The Legal ChamberNo Comments
Supreme Court

Supreme Court Denies Specific Performance for Deal Breaching Construction Laws

The Supreme Court held that an agreement mandating construction violating building laws is void and unenforceable. The illegality rendered specific performance impossible under Section 12 of the Specific Relief Act, as the unlawful object was essential to the contract. The Court affirmed that contracts contravening statutory provisions cannot be severed to remove their core illegal purpose. Facts Of The Case: The appellant, Canara Bank, entered into an agreement with the respondent, K.L. Rajgarhia, on 27.12.1984 for the purchase of residential flats to be constructed on a plot in East of Kailash, Delhi. The total consideration was ₹32,07,500, of which approximately 90% (₹28,86,750) was paid upfront. The agreement stipulated the construction and delivery of eight flats and a basement with...
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When a Contract Becomes Void: Supreme Court Explains the Limits of Specific Performance
25Dec By The Legal ChamberNo Comments
Supreme Court

When a Contract Becomes Void: Supreme Court Explains the Limits of Specific Performance

The Supreme Court held that an agreement to sell flats, which was contingent upon construction violating building bye-laws and the master plan, was unlawful and void under Section 23 of the Indian Contract Act. The Court ruled that specific performance cannot be granted for an illegal contract, and courts cannot rewrite or sever its essential, unlawful terms to make it enforceable. Facts Of The Case: In December 1984, Canara Bank entered into an agreement with K.L. Rajgarhia to purchase residential flats to be constructed on his plot in East of Kailash, Delhi, for ₹32,07,500. The bank paid approximately 90% of the consideration upfront. The agreement specified the construction and sale of eight flats and a basement, with completion required within 18 months. When the defendant failed to ...
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Supreme Court Rules Insurance Company Liable for Worker Compensation Alongside Employer
25Dec By The Legal ChamberNo Comments
Supreme Court

Supreme Court Rules Insurance Company Liable for Worker Compensation Alongside Employer

The Supreme Court held that under the Employee’s Compensation Act, 1923, an insurer can be made a party and held jointly and severally liable for compensation if the employer's liability is covered by the insurance policy. The Court clarified that Section 19 of the Act empowers the Commissioner to determine the liability of the insurer, ensuring the workman's remedy is effective and not illusory. Facts Of The Case: The case originated from a claim filed by a workman (the second respondent), who was employed as a driver by the appellant, Alok Kumar Ghosh. The workman suffered a disabling injury due to an accident arising out of and in the course of his employment. He filed for compensation under the Workmen’s Compensation Act, 1923, against both his employer (the appellant) and The New In...
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Supreme Court Clarifies: Licensee Must Pay Arrears, Not Liquidated Damages, at Interim Stage
4Dec By The Legal ChamberNo Comments
Supreme Court

Supreme Court Clarifies: Licensee Must Pay Arrears, Not Liquidated Damages, at Interim Stage

In a suit for eviction under a lapsed license agreement, the Supreme Court ruled that the trial court cannot grant liquidated damages as an interim measure under Order XXXIX Rules 1 & 2 CPC. However, it upheld the application of Order XV-A CPC (Bombay Amendment), directing the licensee to pay ascertained arrears and ongoing license fees with annual increments, failing which the defense can be struck off. Facts Of The Case: The case originated from a Leave and License Agreement executed on 08.10.2013 between the appellant licensors and the respondent licensee for 36 months, from 01.11.2013 to 31.10.2016, with a 7% annual increase in license fee. Clause 19 stipulated liquidated damages of Rs. 10,000 per day if the licensee failed to vacate upon expiry. After the license period lapsed, ...
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Supreme Court Quashes Chhattisgarh’s Tender Rule, Upholds “Level Playing Field” for Businesses
29Nov By The Legal ChamberNo Comments
Supreme Court

Supreme Court Quashes Chhattisgarh’s Tender Rule, Upholds “Level Playing Field” for Businesses

The Supreme Court struck down a tender condition requiring prior supply experience within Chhattisgarh as violative of Articles 14 and 19(1)(g) of the Constitution. The condition was held arbitrary for creating an artificial barrier, restricting competition, and offending the doctrine of a level playing field without a rational nexus to the tender's object. Facts Of The Case: The appellant, Vinishma Technologies Pvt. Ltd., a company with experience supplying Sports Kits to various other states, challenged specific eligibility conditions in three tender notices issued by the State of Chhattisgarh for the supply of Sports Kits to government schools. The company was aggrieved by condition no. 4, which required bidders to have supplied sports goods worth at least Rs. 6.00 crores to Sta...
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Supreme Court Upholds Level Playing Field, Strikes Down Arbitrary Tender Clause
27Nov By The Legal ChamberNo Comments
Supreme Court

Supreme Court Upholds Level Playing Field, Strikes Down Arbitrary Tender Clause

The Supreme Court struck down a tender condition requiring prior supply experience within Chhattisgarh as violative of Articles 14 and 19(1)(g) of the Constitution. The condition was held arbitrary for creating an artificial barrier, restricting competition, and offending the doctrine of a level playing field without a rational nexus to the tender's object. Facts Of The Case: The appellant, Vinishma Technologies Pvt. Ltd., a company with experience supplying Sports Kits to several other states, challenged specific eligibility conditions in three tender notices issued by the State of Chhattisgarh for the supply of Sports Kits to government schools. The company was aggrieved by condition no. 4, which required bidders to have supplied sports goods worth at least Rs. 6.00 crores to state gov...
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