Tag: state instrumentality.

Supreme Court: Arbitrator Cannot Rewrite Contracts, Upholds IRCTC’s Catering Policy
28Jan By The Legal ChamberNo Comments
Supreme Court

Supreme Court: Arbitrator Cannot Rewrite Contracts, Upholds IRCTC’s Catering Policy

The Supreme Court held that an arbitral award which contravenes binding government policy circulars—incorporated into the parties' contracts—is patently illegal and in conflict with the public policy of India under Section 34(2A) of the Arbitration and Conciliation Act, 1996. An arbitrator cannot rewrite contractual terms that reflect such policy. Facts Of The Case: The case arose from contracts for catering services on premium Indian Railways trains (Rajdhani, Shatabdi, Duronto). The Railway Board initially increased meal tariffs in 2013 but simultaneously introduced a cheaper "combo meal" to replace the second regular meal on long journeys. This combo meal was swiftly discontinued days later, and caterers were directed to serve a second regular meal instead, but were to be reimbu...
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Supreme Court Backs Discom: Upholds Right to Encash Bank Guarantee in Delayed Solar Project
29Sep By The Legal ChamberNo Comments
Supreme Court

Supreme Court Backs Discom: Upholds Right to Encash Bank Guarantee in Delayed Solar Project

The Supreme Court held that the Power Purchase Agreement's explicit terms govern the parties' rights. The encashment of the performance bank guarantee was valid as the developer failed to seek an extension under the contractual mechanism or issue a mandatory Force Majeure notice. Regulatory commissions cannot rewrite the contractual risk allocation or grant remedies outside the agreed framework. Facts Of The Case: The dispute arose from a Power Purchase Agreement (PPA) executed between Chamundeshwari Electricity Supply Company Ltd. (CESC) and Saisudhir Energy Pvt. Ltd. for a 10 MW solar power project. The PPA stipulated that the developer was to achieve the Commercial Operation Date (COD) within 12 months, preceded by fulfilling certain Conditions Precedent within 240 days. A critical pr...
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Supreme Court Quashes Decree Against Odisha Corp, Clarifies Law on Interest for Pre-1992 Transactions
5Sep By The Legal ChamberNo Comments
Supreme Court

Supreme Court Quashes Decree Against Odisha Corp, Clarifies Law on Interest for Pre-1992 Transactions

The Supreme Court held that the suit against the State Financial Corporation was not maintainable due to non-compliance with the mandatory notice under Section 80 CPC. The decree was declared a nullity as it erroneously applied the Interest on Delayed Payments Act, 1993, to a pre-enactment transaction and fastened liability without privity of contract. Execution proceedings were quashed. Facts Of The Case: In 1985, Respondent No. 1, M/s. Vigyan Chemical Industries, supplied raw materials to Respondent No. 2, an industrial unit. Due to a loan default, the Appellant, Odisha State Financial Corporation (OSFC), took possession of Respondent No. 2's unit in 1987 under the State Financial Corporations Act, 1951. In 1988, Respondent No. 1 filed a recovery suit for its unpaid dues. OSFC was impl...
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Clarifying Jurisdiction: Supreme Court Reaffirms Exclusive Power of MP Arbitration Tribunal for Public Works
28Aug By The Legal ChamberNo Comments
Supreme Court

Clarifying Jurisdiction: Supreme Court Reaffirms Exclusive Power of MP Arbitration Tribunal for Public Works

The Supreme Court upheld the exclusive jurisdiction of the Madhya Pradesh Arbitration Tribunal over disputes arising from state works contracts, as per the MP Madhyastham Adhikaran Adhiniyam, 1983. It ruled that a private arbitration clause in a concession agreement cannot override this statutory mandate, rendering such arbitration non-est in law. Facts Of The Case: The dispute arose from a Concession Agreement dated 05.01.2012 between Umri Pooph Pratappur Tollways Pvt. Ltd. (Appellant) and the Madhya Pradesh Road Development Corporation (Respondent) for the development of a state highway on a BOT (Toll + Annuity) basis. Following alleged breaches and delays attributed to the Respondent, the Appellant first initiated proceedings in 2018 before the Madhya Pradesh Arbitration Tribunal, a s...
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Supreme Court Split Verdict: When Can Schools Be Held Accountable Under Article 226?
6Jun By The Legal ChamberNo Comments
Supreme Court

Supreme Court Split Verdict: When Can Schools Be Held Accountable Under Article 226?

The Supreme Court examined whether Air Force Schools qualify as a "State" under Article 12 or an "authority" amenable to writ jurisdiction under Article 226 of the Constitution. The majority held that despite partial government control and funding, the schools lacked pervasive state dominance, relegating disputes to private contract law. However, the dissenting opinion emphasized their public function, deep administrative control by the Indian Air Force, and indirect public funding, making them subject to writ jurisdiction. The split verdict clarifies the distinction between regulatory control and pervasive state authority in educational institutions Facts Of The Case: The case involved two civil appeals before the Supreme Court concerning the Air Force School, Bamrauli, Allahabad. In Ci...
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