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  • Gujarat High Court Directs Dissenting Members to Vacate Flats for Society Redevelopment; Holds 75% Consent and Section 41A Requirements Satisfied

    Gujarat High Court Directs Dissenting Members to Vacate Flats for Society Redevelopment; Holds 75% Consent and Section 41A Requirements Satisfied

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 16.09.2026

    Gujarat High Court Directs Dissenting Members to Vacate Flats for Society Redevelopment; Holds 75% Consent and Section 41A Requirements Satisfied

    This Short Article has been prepared & written by Advocate Narendra Singh. The views expressed are based on his interpretation of the law. He can be reached at his email id amitnaren@outlook.com .  

    The Gujarat High Court has directed dissenting members of Amity Co-operative Housing Society Ltd. to hand over peaceful vacant possession of their flats within eight weeks, clearing the way for redevelopment of the nearly five-decade-old residential society in Paldi, Ahmedabad.

    Justice Mauna M. Bhatt, in Amity Co-operative Housing Society Ltd. through its Secretary and Chairman & Ors. v. State of Gujarat & Ors., R/Special Civil Application No. 10596 of 2024, held that the Society had followed the prescribed redevelopment procedure and fulfilled the conditions under Section 41A of the Gujarat Ownership of Flats Act, 1973. The judgment was delivered on 8 April 2025.

    The Court found that 72 out of 81 members had consented to redevelopment, comfortably exceeding the statutory 75% threshold, while the buildings were more than 25 years old and in a dilapidated condition.

    Nearly 50-Year-Old Housing Society Opts for Redevelopment

    • Amity Co-operative Housing Society is a registered society owning approximately 6,825 square yards (5,706.38 sq. metres) of land at Final Plot No. 9/A, Town Planning Scheme No. 6, Paldi, Ahmedabad.
    • A total of 81 flats were constructed on the property during 1974-75, making it one of the older residential societies in the Paldi area.
    • According to the Society, the buildings had deteriorated substantially over time. The record referred to corrosion in RCC slabs, beams, columns and foundations, major structural cracks and bending of balcony slabs, raising concerns over safety.
    • Considering repairs and renovation impracticable, the Society decided to pursue redevelopment. The process had commenced as early as 2016, when an advertisement was published inviting offers from builders and developers.

    Majority Members Approved Redevelopment

    • A General Body Meeting was held on 4 April 2021, followed by another meeting on 26 December 2021, to consider the redevelopment proposal.
    • The Court recorded that 72 out of 81 members consented to redevelopment and accepted the developer’s offer. The consenting members subsequently entered into an MoU with the developer in October 2022.
    • A structural engineer’s report described the buildings as more than 25 years old and unsound, unsafe and unstable.
    • The Ahmedabad Municipal Corporation had also issued a notice dated 1 April 2021 concerning the condition of the buildings. The photographs placed before the Court further supported the Society’s case regarding their dilapidated condition.

    Dissenting Members Object to Developer and MoU Terms

    • Respondent Nos. 6 to 14 opposed the redevelopment.
    • One of their objections was that the General Body meetings had contemplated redevelopment through BTI Infrastructure Developer LLP, whereas the MoU was ultimately entered into with the proprietorship concern Tameer Infrastructure.
    • They also objected to the MoU on the ground that it did not contain provisions for a security deposit and penalty, contending that this was contrary to Rule 23 of the Gujarat Ownership Flats Rules.
    • The developer responded that there had been a change in the constitution of the development entity and that the person undertaking the redevelopment remained connected with the project. It was further argued that neither a security deposit nor a penalty clause was mandatory under Rule 23.

    Section 41A Conditions Fulfilled: Gujarat High Court

    • The High Court found that the statutory requirements for redevelopment had been satisfied.
    • The Court specifically noted that the building was more than 25 years old, its condition was dilapidated, and 72 out of 81 members had consented to redevelopment, thereby satisfying the requirement of consent from not less than 75% of members.
    • The Court also examined the Society’s decision-making process and found that General Body Meetings had been held to discuss redevelopment and the developer’s offer. The majority-approved resolutions were followed by an MoU executed by the consenting members.
    • Accordingly, the Court found no defect in the procedure adopted by the Society for selecting and proceeding with the redevelopment proposal.

    Change in Developer’s Constitution Not Sufficient to Stop Redevelopment

    • The Court was also not persuaded by the dissenting members’ objection concerning the change from BTI Infrastructure Developer LLP to the proprietorship concern undertaking the redevelopment.
    • The judgment records that the Court did not find any material change sufficient to invalidate the redevelopment process and observed that the private respondents had failed to demonstrate a justifiable basis for the objection.

    Bank Guarantee and Penalty Clause Not Mandatory Under Rule 23

    • An important part of the judgment concerns the objections regarding the absence of a bank guarantee/security deposit and penalty clause.
    • The Court relied on an earlier coordinate-bench decision in Ratnamani Co-operative Housing Society Ltd. v. State of Gujarat and observed that providing a bank guarantee is not a mandatory requirement under Rule 23 of the Gujarat Ownership Flats Rules.
    • The MoU in the present case also provided for benefits including accommodation/transport-related arrangements, additional carpet area, gift money and rent.
    • The Court further held that a penalty payment was not mandatory in nature. Concerns relating to the project could also be addressed through project finance requirements and registration with the RERA authority, while the developer had filed an affidavit assuring compliance with the terms and conditions of the MoU.

    Minority Members Cannot Stall Redevelopment Once Statutory Conditions Are Met

    • The High Court referred extensively to the Gujarat High Court’s earlier decision in Rabari Tejmalbhai Gagabhai v. Ratnamani Cooperative Housing Society Ltd..
    • That decision identified the principal requirements under Section 41A for redevelopment, including the age of the building, its ruinous/dilapidated condition where applicable, and consent of at least 75% of members.
    • The earlier Division Bench had also observed that where statutory procedures have been followed, a relatively small group of dissenting members cannot stall redevelopment merely on their own suspicions and notions. Members nevertheless retain the ability to participate constructively and raise legitimate concerns regarding the terms of the Development Agreement.
    • This reasoning supported the Court’s conclusion that the objections of the dissenting members could not prevent redevelopment in the present case after the Society had complied with the statutory framework.

    Article 226 Can Be Used to Facilitate Redevelopment

    • The judgment also referred to Sarojben Kiritbhai Shah v. Ahmedabad Municipal Corporation concerning the High Court’s powers under Article 226 of the Constitution.
    • The precedent rejected the contention that a writ court could not direct non-consenting members to vacate merely because the Gujarat Ownership of Flats Act does not contain a summary eviction mechanism comparable to certain Maharashtra redevelopment laws.
    • Referring to Supreme Court decisions including Binny Ltd. v. V. Sadasivan, (2005) 6 SCC 657 and Dwarka Nath v. Income Tax Officer, 1965 3 SCR 536, the earlier decision recognised the wide remedial jurisdiction available to High Courts under Article 226.

    Dissenting Members Given Eight Weeks to Vacate

    • Having examined the redevelopment process, the Gujarat High Court concluded that the petitioners had followed due procedure and satisfied the conditions necessary to bring the redevelopment within Section 41A of the Gujarat Ownership of Flats Act, 1973.
    • Exercising its extraordinary jurisdiction under Article 226, the Court allowed the petition and directed Respondent Nos. 6 to 14 to hand over peaceful vacant possession within eight weeks from receipt of the order.
    • The Court also requested all private respondents to cooperate with the redevelopment of the Society.

    Why the Judgment Matters for Housing Society Redevelopment

    The ruling reinforces an important principle governing redevelopment of co-operative housing societies in Gujarat: once the requirements prescribed under Section 41A and the applicable redevelopment rules are fulfilled, a minority of dissenting members cannot ordinarily bring an otherwise valid redevelopment process to a standstill merely because they disagree with the majority decision.

    At the same time, the judgment does not eliminate the rights of minority members to challenge genuine statutory violations, fraud, procedural irregularities or deficiencies in a Development Agreement. Rather, the decision rests on the Court’s finding that the statutory conditions and redevelopment procedure had been complied with in this particular case. For housing societies, developers and flat owners, the ruling highlights the importance of maintaining a clear documentary record of General Body Meetings, member consent, structural condition, developer selection, resolutions, MoUs and compliance with the Gujarat Ownership of Flats Act and Rules.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Gujarat High Court

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  • Delhi High Court: MSME Registration Cannot Operate Retrospectively; Pre-Registration Claims Cannot Be Revived Through MSEFC Arbitration

    Delhi High Court: MSME Registration Cannot Operate Retrospectively; Pre-Registration Claims Cannot Be Revived Through MSEFC Arbitration

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 16.09.2026

    Delhi High Court: MSME Registration Cannot Operate Retrospectively; Pre-Registration Claims Cannot Be Revived Through MSEFC Arbitration

    This Short Article has been prepared & written by Arbitrator Shobhit Mallik. The views expressed are based on his interpretation of the law. He can be reached at his email id shobhit.Ica23@gmail.com .

    The Delhi High Court has dismissed an arbitration appeal filed by Shri Krishan Grit Co., holding that the benefits and dispute-resolution mechanism under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) cannot be invoked for claims arising before the enterprise acquired the relevant status as a registered β€œsupplier”.

    Justice Tushar Rao Gedela, in Shri Krishan Grit Co. v. Continental Engineering Corporation, ARB.A.(COMM) 30/2024, upheld the Arbitral Tribunal’s decision that it lacked jurisdiction over the appellant’s claims. The appeal had been filed under Section 37(2)(a) of the Arbitration and Conciliation Act, 1996 against the Tribunal’s order under Section 16.

    The Court relied substantially on the Supreme Court’s decision in Silpi Industries v. Kerala State Road Transport Corporation, (2021) 18 SCC 790 and reiterated that MSME registration operates prospectively rather than retrospectively.

    Dispute Arose From Supply of Aggregates and TMT Steel Bars

    • Shri Krishan Grit Co., a sole proprietorship of Sanjeev Gupta, was engaged in supplying aggregates, variants of aggregates and TMT steel bars for construction and infrastructure projects.
    • The respondent, Continental Engineering Corporation, was described as a foreign company incorporated in Taiwan with a project office registered in India.
    • The appellant claimed that it had supplied aggregates and TMT bars to the respondent under various contractual arrangements, including an MoU dated 9 February 2016, and that disputes subsequently arose over unpaid dues.
    • The appellant initially invoked arbitration under the arbitration clauses contained in purchase orders issued under the MoU. A former Chief Justice of the Andhra Pradesh High Court was appointed sole arbitrator, but those proceedings were terminated because the appellant failed to file its Statement of Claim.

    Supplier Subsequently Approached MSEF Council

    • After termination of the earlier arbitration, Shri Krishan Grit Co. approached the Micro and Small Enterprises Facilitation Council (MSEFC).
    • Following unsuccessful conciliation, the Council referred the dispute to the Delhi International Arbitration Centre (DIAC) under Section 18(3) of the MSMED Act. DIAC thereafter appointed a former Delhi High Court judge as sole arbitrator.
    • Continental Engineering challenged the Tribunal’s jurisdiction under Section 16 of the Arbitration and Conciliation Act.
    • On 13 September 2021, the Arbitral Tribunal allowed that application and held that it had no jurisdiction and that the arbitration proceedings initiated by the appellant were not maintainable.

    Core Question: Can MSME Registration Cover Earlier Transactions?

    • The principal question before the Delhi High Court was whether claims pertaining to 2016 and 2017-18 could be maintained under the MSMED Act when the appellant’s relevant registration in Delhi was obtained only on 26 February 2019.
    • The appellant sought to rely upon another MSME registration relating to its manufacturing unit at Sikar, Rajasthan, for which it claimed registration from 20 October 2016.
    • It argued that the location of registration should not matter and that the mere fact of being registered as an enterprise should be sufficient to maintain the claims. It further contended that the effect of the Rajasthan and Delhi registrations required evidence and could not be decided summarily.
    • The High Court rejected this argument.

    Supreme Court’s Silpi Industries Ruling Governs the Issue

    • The Court extensively considered Silpi Industries v. Kerala SRTC.
    • In Silpi Industries, the Supreme Court held that an entity cannot obtain MSME registration after entering into contracts and completing supplies and then retrospectively claim the statutory benefits available under the MSMED Act.
    • The Delhi High Court noted that registration is prospective and applies to supplies of goods or services subsequent to registration; it cannot retrospectively transform earlier transactions into transactions covered by the MSMED Act.
    • The appellant attempted to argue that the relevant observations in Silpi Industries were merely obiter dicta. Justice Gedela expressly rejected that contention, finding that the observations represented a clear principle of law laid down by the Supreme Court.
    • The High Court consequently stated that the law was settled that only claims arising after registration of an entity as a micro or small enterprise would be maintainable under the MSMED Act framework.

    β€œSupplier” Status Arises Upon Registration

    • The Court also examined Sections 2(n), 8 and 18 of the MSMED Act.
    • Section 2(n) defines a β€œsupplier” as a micro or small enterprise that has filed the prescribed memorandum with the authority referred to in Section 8.
    • On a conjoint reading of these provisions, the High Court held that it is upon the requisite registration that a party acquires the status of a β€œsupplier” for purposes of the MSMED Act and becomes entitled to the benefits conferred by the legislation.
    • Accordingly, the Court held that a supplier can seek reference of disputes to arbitration under Section 18 only in respect of claims arising after such registration.

    MSEFC Jurisdiction Is Linked to Location of Supplier

    • The judgment also contains an important finding concerning the territorial jurisdiction of Micro and Small Enterprises Facilitation Councils.
    • Examining Sections 18(4) and 18(5), the High Court held that only the MSEFC where the supplier is located has jurisdiction either to arbitrate the dispute itself or refer it to an arbitration institution or alternative dispute resolution centre.
    • The Court further held that the MSMED Act contemplates separate competent authorities for different States and does not contemplate an overlap in their territorial jurisdiction.
    • Thus, in the present circumstances, the Delhi MSEFC could exercise jurisdiction in accordance with Section 18 only in relation to the supplier located within its jurisdiction. The separate question, however, was whether the appellant’s 2019 Delhi registration could bring earlier claims within the MSMED Act.
    • The Court answered that question against the appellant.

    Claims Pre-Dated Delhi MSME Registration

    • The appellant’s manufacturing unit was stated to have been registered in Rajasthan in connection with manufacturing activity, while its subsequent Delhi registration was in the category of services.
    • The disputed claims arose in 2016 and 2017-18, but the appellant invoked the Delhi MSEFC on the strength of a Delhi registration obtained in 2019.
    • The High Court held that such claims fell foul of the principle laid down in Silpi Industries because they related to a period prior to the appellant’s registration in Delhi.
    • The Tribunal had also recorded specific dates on which the supplies of TMT bars, sand and aggregates were completed. Those transactions were completed well before the relevant 2019 registration on which the appellant had relied before the Delhi MSEFC.

    Rajasthan MSME Certificate Did Not Rescue the Claims

    • The High Court also rejected the attempt to rely upon the Rajasthan MSME certificate.
    • The Arbitral Tribunal had found that the Rajasthan certificate related to an enterprise situated at Neem Ka Thana, Sikar, Rajasthan, and concerned β€œmanufacturing activity”, whereas the claimant before the Tribunal was Shri Krishan Grit Co. having its registered office at Narayana, New Delhi, whose certificate related to β€œservices.”
    • The Tribunal also found that the Delhi entity had signed the MoU and supplied the material.
    • Justice Gedela held that the Tribunal had reached a definite factual conclusion on the issue, which could not be interfered with within the limited scope of a Section 37 appeal. The Court referred in this context to C & C Constructions Ltd. v. IRCON International Ltd., 2025 SCC OnLine SC 218.
    • The High Court further observed that the appellant’s Statement of Claim itself had relied upon the Delhi registration dated 26 February 2019, rather than the Rajasthan registration.

    Delhi HC Says Earlier Contrary View Cannot Survive Silpi Industries

    • The appellant relied upon M/s Ramky Infrastructure Pvt. Ltd. v. Micro and Small Enterprises Facilitation Council & Anr., 2018 SCC OnLine Del 9671 to contend that MSME registration was not a sine qua non for arbitration concerning claims arising before registration.
    • The High Court rejected the reliance, holding that the Supreme Court’s authoritative pronouncement in Silpi Industries laid down the law to the contrary.

    Earlier Abandoned Arbitration Was Another Barrier

    • The Court also examined another significant aspect of the dispute.
    • Before approaching the MSEFC, the appellant had already invoked contractual arbitration concerning the same claims. A sole arbitrator had entered upon the reference, but the appellant failed to file its Statement of Claim, resulting in termination of those proceedings with costs.
    • The Tribunal held that the appellant could not abandon those proceedings and subsequently initiate another arbitration concerning the same subject matter after obtaining MSME registration. It described the course adopted as impermissible β€œforum hunting.”
    • The High Court noted that it was undisputed that the claims in the previous arbitration were the same as those raised in the subsequent proceedings and that the earlier proceedings had been terminated because of the appellant’s failure to file its Statement of Claim.
    • Referring to Harshbir Singh Pannu v. Jaswinder Singh, 2025 SCC OnLine SC 2742, the Court observed that an aggrieved party has appropriate remedies against termination of arbitration proceedings. Having failed to avail those remedies, the appellant could not reopen the abandoned claims merely by subsequently obtaining registration under the MSMED Act.

    Delhi High Court Dismisses Appeal

    • The Delhi High Court ultimately found no reason to interfere with the Arbitral Tribunal’s jurisdictional decision.
    • The Court held that the appellant’s claims pre-dated its relevant Delhi MSME registration and could not retrospectively be brought within the special dispute-resolution framework of the MSMED Act. The Tribunal’s view concerning the earlier abandoned arbitration was also upheld.
    • Accordingly, the Court held that the appeal was β€œunmerited” and dismissed it.

    Why the Judgment Matters for MSMEs

    The judgment carries important implications for businesses seeking recovery of delayed payments through the MSEFC mechanism.

    An enterprise obtaining MSME registration after contracts have been performed cannot, merely by virtue of that subsequent registration, retrospectively bring historical transactions within the statutory benefits of the MSMED Act.

    The timing of the supplier’s registration, the period during which supplies were made, and the territorial jurisdiction of the relevant MSEFC can therefore become decisive jurisdictional questions.

    The ruling also demonstrates that subsequent MSME registration cannot ordinarily be used as a procedural route to reopen the same claims after an earlier arbitration has been abandoned without pursuing the remedies available against its termination.

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    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Delhi High Court

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  • Bombay HC Quashes Upa-Lokayukta Order Cancelling 1984 Mutation Entry; Holds Recommendatory Powers Cannot Replace Statutory Appellate Jurisdiction

    Bombay HC Quashes Upa-Lokayukta Order Cancelling 1984 Mutation Entry; Holds Recommendatory Powers Cannot Replace Statutory Appellate Jurisdiction

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 16.09.2026

    Bombay HC Quashes Upa-Lokayukta Order Cancelling 1984 Mutation Entry; Holds Recommendatory Powers Cannot Replace Statutory Appellate Jurisdiction

    This Short Article has been prepared & written by Advocate Madhumita Jha. The views expressed are based on her interpretation of the law. She can be reached at her email id jhamadhumita27@gmail.com .  

    ​​​The Bombay High Court, Nagpur Bench, has set aside an order of the Upa-Lokayukta, Maharashtra, which had recommended cancellation of a decades-old mutation entry and recovery of possession of agricultural land, holding that the Upa-Lokayukta had exceeded the jurisdiction available under the Maharashtra Lokayukta and Upa-Lokayuktas Act, 1971.

    Justice Pravin S. Patil, deciding Rajendra s/o Bhagirath Bansile & Ors. v. The Up Lok-Ayukta, Maharashtra State & Anr., Writ Petition No. 5794 of 2013, 2026:BHC-NAG:11956, held that while the Upa-Lokayukta possesses recommendatory jurisdiction, such powers cannot be exercised as a substitute for the statutory powers vested in authorities under the Maharashtra Land Revenue Code.

    The Court ultimately restored Mutation Entry No. 97 relating to Survey No. 84/3, Gat No. 216, in favour of the petitioners.

    Dispute Over Agricultural Land and Mutation Entry

    • The petitioners claimed to be co-owners of agricultural land bearing Gat No. 216, Old Survey No. 84/3, situated at village Pimpalgaon (Chilamkha), Tahsil Deulgaon Raja, District Buldhana.
    • According to them, Bhagirath Ramdas Bansile, father of the first two petitioners, had been cultivating and possessing approximately 5.05 hectares of land out of Survey No. 84/3, with his name appearing in the crop statement since 1973-74.
    • In March 1989, the land was partitioned between Bhagirath Bansile and his four sons, following which their names were mutated in the revenue records. Petitioners 3 to 5 subsequently purchased 3.05 hectares through a registered sale deed dated 5 February 2009 and their names were also entered in the revenue records.

    Complaint Before Upa-Lokayukta Questioned 1984 Revenue Entry

    • The controversy began when the second respondent lodged a complaint before the Upa-Lokayukta on 7 August 2009.
    • The complaint alleged, among other things, that certain lands had wrongly been reflected as Occupant Class-I instead of Class-II, and that the sale in favour of some of the petitioners had been effected without obtaining the Collector’s permission or depositing the alleged unearned income.
    • It was further alleged that Survey No. 84/3 had not been allotted to Bhagirath Bansile during consolidation proceedings in 1984 and that the Consolidation Officer had allegedly extended undue favour by causing the land to be mutated in his name.
    • Following the complaint, the Upa-Lokayukta initiated an inquiry and sought reports from revenue officers.

    SDO Had Already Ordered Regularisation in 2013

    • During the pendency of the Upa-Lokayukta proceedings, the Sub-Divisional Officer, Buldhana, by an order dated 24 May 2013, granted permission for regularisation of the land in the petitioners’ names and forwarded the matter to the Tahsildar, Deulgaon Raja for further action.
    • The revenue authorities also placed this development before the Upa-Lokayukta.
    • Nevertheless, on 7 August 2013, the Upa-Lokayukta passed the impugned order recommending cancellation of the mutation entries in favour of the petitioners and steps for recovery of possession.
    • The petitioners consequently approached the Bombay High Court.

    Three-Year Limitation Under Section 8(5)

    • One of the central issues before the High Court concerned Section 8(5) of the Maharashtra Lokayukta and Upa-Lokayuktas Act, 1971.
    • The provision distinguishes between a complaint involving a β€œgrievance” and one involving an β€œallegation.”
    • Under Section 8(5), a complaint involving an allegation cannot be investigated if it is made after three years from the date on which the complained-of action is alleged to have taken place. The statutory proviso permitting consideration of sufficient cause applies to the period concerning a β€œgrievance,” rather than providing a similar extension for an allegation beyond the prescribed three-year period.
    • The Act defines an β€œallegation” in relation to a public servant to include assertions involving abuse of position to obtain gain or favour, improper or corrupt motives, corruption or lack of integrity. A β€œgrievance,” on the other hand, concerns a claim of injustice or undue hardship resulting from maladministration.

    Complaint Was an β€œAllegation”, Not Merely a β€œGrievance”: High Court

    • After examining the complaint, the High Court held that it fell within the category of an β€œallegation.”
    • The complaint accused the authorities of extending undue favour to Bhagirath Bansile while effecting the revenue entry. Consequently, the applicable limitation period was three years from the complained-of action.
    • The impugned Mutation Entry No. 97 was dated 30 April 1984, whereas the complaint before the Upa-Lokayukta was lodged only on 7 August 2009.
    • The High Court therefore found that the complaint was prima facie barred by limitation and held that, in view of the mandate of Section 8(5), the Upa-Lokayukta could not investigate the complaint.

    Upa-Lokayukta Has Recommendatory, Not Appellate, Jurisdiction

    • The second major issue concerned the nature and extent of the Upa-Lokayukta’s powers.
    • The State relied upon the Supreme Court’s decision in Additional Tahsildar & Anr. v. Urmila G. & Ors., (2023) 20 SCC 642, contending that the Lokayukta/Upa-Lokayukta exercises recommendatory jurisdiction.
    • The High Court accepted the principle that the Upa-Lokayukta can make recommendations to the competent authorities. However, Justice Patil emphasised that a Lokayukta or Upa-Lokayukta cannot act as an appellate authority over decisions of competent forums created under other statutes.
    • Where a statute creates its own appeal or revision mechanism, an aggrieved party must pursue those statutory remedies.
    • The Court succinctly observed that β€œRecommendatory powers cannot take place of statutory powers.”

    Upa-Lokayukta Effectively Exercised Land Revenue Powers

    • Although the impugned order was styled as a recommendation under Section 12 of the 1971 Act, the High Court examined its substance rather than merely its title.
    • The Court found that the Upa-Lokayukta had directed the Collector, Buldhana, to cancel Mutation Entry No. 97, forfeit the land to the Government and initiate disciplinary proceedings against the concerned officers.
    • According to the High Court, this demonstrated that the Upa-Lokayukta had effectively exercised powers of an appellate authority under the Maharashtra Land Revenue Code.
    • The Court consequently held that the order was unsustainable in law because the Upa-Lokayukta had exceeded the limits of its statutory jurisdiction.

    Failure to Consider SDO’s Regularisation Order

    • The High Court also took note of the fact that the SDO’s 24 May 2013 regularisation order had been brought to the notice of the Upa-Lokayukta before the impugned order was passed.
    • Despite this, the Upa-Lokayukta’s order did not consider the regularisation decision, even though the High Court regarded it as a fact capable of materially affecting the decision.
    • Thus, apart from the jurisdictional and limitation issues, the Court found that relevant factual and legal aspects had not been appropriately considered.

    Bombay High Court Restores Mutation Entry

    Allowing the writ petition, the Bombay High Court:

    1. quashed and set aside the Upa-Lokayukta’s order dated 7 August 2013 in Case No. ULA/COM/104/2010 (T-15); and
    2. directed restoration of Mutation Entry No. 97 concerning Survey No. 84/3, Gat No. 216, Mouza Pimpalgaon Chilamkha, Taluka Deulgaon Raja, District Buldhana, in favour of the petitioners.

    The Court made no order as to costs.

    Significance of the Judgment

    The judgment draws a clear institutional boundary around the powers of the Lokayukta and Upa-Lokayukta. Their statutory role may include investigation and recommendations, but that role cannot be transformed into an appellate or supervisory jurisdiction over authorities exercising powers under separate enactments.

    The ruling is also significant on limitation under Section 8(5) of the Maharashtra Lokayukta and Upa-Lokayuktas Act, 1971. Where a complaint falls within the statutory category of an β€œallegation,” the High Court’s reasoning confirms the importance of the prescribed three-year period. Accordingly, the case reinforces two distinct safeguards: statutory limitation on the investigation of stale allegations and jurisdictional limits on recommendatory authorities interfering with decisions governed by separate statutory appeal or revision mechanisms.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Bombay High Court

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  • Karnataka High Court: Magistrate Must Apply Mind to Specific Allegations Before Taking Cognizance Against an Accused

    Karnataka High Court: Magistrate Must Apply Mind to Specific Allegations Before Taking Cognizance Against an Accused

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 16.09.2026

    Karnataka High Court: Magistrate Must Apply Mind to Specific Allegations Before Taking Cognizance Against an Accused

    This Short Article has been prepared & written by Advocate G Sridharamurthy. The views expressed are based on his interpretation of the law. He can be reached at his email id sriadv3@gmail.com . 

    The Karnataka High Court has quashed criminal proceedings against a police officer after finding that the complaint and sworn statement failed to disclose his involvement in the alleged custodial offences and that the Magistrate had taken cognizance without properly applying his mind to the allegations concerning the petitioner.

    In Meer Shariff Ali v. B.N. Shivanna, Criminal Petition No. 2054/2013, Justice R. Devdas allowed a petition under Section 482 of the Code of Criminal Procedure, 1973, seeking quashing of proceedings pending before the IX Additional Chief Metropolitan Magistrate, Bangalore. The order was passed on 2 December 2019.

    Background of the Case

    • The petitioner, Meer Shariff Ali, was a police officer who approached the High Court seeking quashing of proceedings in C.C. No. 42390/2010.
    • The proceedings originated from a private complaint filed by respondent B.N. Shivanna in PCR No. 3977/2004 before the Chief Metropolitan Magistrate.
    • The complainant alleged that he had been detained by police officers at Upparpet Police Station and subjected to custodial mistreatment. It was further alleged that signatures were obtained on blank papers and that money was demanded. The private complaint was presented on 5 March 2004, while the complainant’s sworn statement was recorded much later, on 26 July 2010, with a further statement recorded on 2 September 2010.

    Petitioner Claimed He Was Added as an Afterthought

    • The petitioner argued that he had been arrayed as Accused No. 10 as an afterthought. His counsel pointed out that his name appeared to have been added by hand in the complaint.
    • More importantly, it was argued that neither the body of the complaint nor the sworn statement contained any specific allegation connecting him with the alleged acts committed while the complainant was in custody.
    • The petitioner further submitted that, at the relevant time, he was serving as the Station House Officer at Jeevanbhimanagar Police Station, whereas the alleged custodial acts had occurred at Upparpet Police Station. On this basis, it was contended that the Magistrate had failed to apply his mind before taking cognizance against him.
    • The respondent, on the other hand, argued that the petitioner had filed the final report and had also been involved in the investigation.

    High Court Examines Complaint and Sworn Statement

    • The High Court closely examined the original allegations and found that the body of the complaint specifically named Accused Nos. 1 to 9.
    • The allegations concerning creation of documents, obtaining signatures and writings on blank documents, and extracting a confession were directed against various officers among Accused Nos. 1 to 9.
    • Crucially, the High Court observed that the petitioner’s name did not appear even once in the body of the complaint.
    • The Court noted that the complainant’s sworn statement substantially reiterated the written complaint. Towards the end of that statement, however, it was alleged that approximately four months after the complainant was produced before the Court, the petitioner summoned him to the police station and demanded β‚Ή1 lakh as a bribe, allegedly because the petitioner had authority to submit the final report.

    Magistrate Had Taken Cognizance of Several IPC Offences

    The Magistrate had taken cognizance for offences punishable under:

    Sections 167, 193, 194, 120B, 330 and 331 read with Section 149 of the Indian Penal Code, 1860.

    • The High Court observed that while taking cognizance, the Magistrate had simply recorded that the complainant had reiterated the allegations of the complaint in his sworn statement.
    • This approach did not satisfy the High Court.

    β€œNo Whisper” of Petitioner’s Involvement in Alleged Custodial Offences

    • Justice R. Devdas held that the Magistrate had not applied his mind while taking cognizance insofar as the petitioner was concerned.
    • The Court considered it significant that the alleged offences had occurred while the complainant was in custody at Upparpet Police Station, whereas the petitioner was the Station House Officer at Jeevanbhimanagar Police Station at the relevant time.
    • The High Court further found that there was not even a single sentence in the complaint or sworn statement explaining how the petitionerβ€”who was stationed at Jeevanbhimanagar and had submitted the final report after investigationβ€”was involved in the alleged acts committed against the complainant while he was in custody at Upparpet Police Station.
    • The Court therefore concluded that the complainant had not made out a case against the petitioner and that the Magistrate had failed to properly apply his mind while taking cognizance of the alleged offences against him.

    Karnataka High Court Quashes Proceedings

    • Allowing the petition, the High Court quashed the cognizance taken by the IX Additional Chief Metropolitan Magistrate against Meer Shariff Ali as well as all further proceedings in C.C. No. 42390/2010 insofar as they concerned the petitioner.
    • The relief was therefore specific to the petitioner; the judgment should not be read as adjudicating the allegations against the other accused police officers.

    Why the Judgment Is Significant

    The decision underscores an important principle governing criminal cognizance: the mere inclusion of a person’s name as an accused is not by itself sufficient where the complaint and supporting material fail to disclose how that person participated in the alleged offences.

    The order also demonstrates the role of the High Court’s inherent jurisdiction under Section 482 CrPC in preventing continuation of criminal proceedings where the material placed before the Magistrate does not disclose a case against a particular accused. At the same time, the judgment is fact-specific.

    The High Court’s conclusion was based particularly on the absence of allegations connecting Meer Shariff Ali with the custodial acts alleged to have occurred at a different police station and the Magistrate’s failure to separately examine the material against him.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Karnataka High Court

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  • Supreme Court: Developer Cannot Be Penalised for NOIDA’s Failure to Provide Promised 45-Metre Access Road

    Supreme Court: Developer Cannot Be Penalised for NOIDA’s Failure to Provide Promised 45-Metre Access Road

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 15.09.2026

    Supreme Court: Developer Cannot Be Penalised for NOIDA’s Failure to Provide Promised 45-Metre Access Road

    This Short Article has been prepared & written by Advocate Narendra Singh. The views expressed are based on his interpretation of the law. He can be reached at his email id amitnaren@outlook.com .  

    The Supreme Court has dismissed appeals filed by the New Okhla Industrial Development Authority (NOIDA) and upheld the grant of β€œZero Period” benefit to M/s Sunshine Trade Tower Pvt. Ltd., holding that a development authority cannot deny contractual and policy relief to a developer when its own failure to provide adequate and legitimate access materially prevents development of the allotted commercial plot.

    In New Okhla Industrial Development Authority & Ors. v. M/s Sunshine Trade Tower Private Limited & Anr., Civil Appeal Nos. 10900-10902 of 2025, 2026 INSC 975, a Bench comprising Justices Pamidighantam Sri Narasimha and Alok Aradhe upheld the Allahabad High Court judgment granting Zero Period benefit to the developer. The Supreme Court delivered its judgment on 8 September 2026.

    The Court importantly held that a policy such as NOIDA’s Zero Period Policy should not be interpreted in the same manner as a statute. Its provisions must instead be construed in light of the policy’s purpose and broader objective.

    β‚Ή133.86 Crore Commercial Plot Allotted in Noida

    • The dispute arose from a scheme launched by NOIDA on 22 September 2011 for allotment of commercial plots to builders and developers.
    • Sunshine Trade Tower emerged as the successful developer, following which a lease deed dated 11 January 2012 was executed for Plot No. 5-A, Sector 94, Noida, for a total consideration of approximately β‚Ή133.86 crore. Possession was handed over on the same date.
    • Under the approved site plan, the commercial plot had a 45-metre-wide Front Road and a 24-metre-wide Side Road. The developer was to construct a commercial complex comprising facilities such as shopping malls, showrooms, retail outlets, hotels, restaurants and offices.
    • The developer, however, claimed that proper construction could not proceed because the 45-metre Front Road was encroached upon while the 24-metre Side Road was sandy, unpaved and non-motorable.

    NGT Order Also Stopped Construction Near Okhla Bird Sanctuary

    • Another obstacle emerged in September 2013 when the National Green Tribunal directed stoppage of construction within 10 kilometres of the Okhla Bird Sanctuary.
    • Since Sunshine Trade Tower’s plot was located within approximately 600 metres of the sanctuary boundary, construction was stopped.
    • The restriction continued until the Central Government issued a notification on 19 August 2015 specifying the relevant eco-sensitive limits. Even after removal of this restriction, however, the developer contended that full-fledged construction remained impossible because the 45-metre road continued to be encroached and the 24-metre road remained incomplete.

    What Is NOIDA’s β€˜Zero Period Policy’?

    • NOIDA formulated its Zero Period Policy on 28 March 2016 to deal with projects that could not progress because of circumstances beyond the developer’s control.
    • Among other situations, Clause 5 contemplated relief where possession and lease had been completed but there was no access road to the allotted land, preventing construction or development.
    • The policy also provided for rescheduling instalments falling within the Zero Period and stipulated that penal interest would not be charged for the relevant period.
    • Sunshine consequently sought Zero Period benefits both for the NGT restraint and for NOIDA’s failure to provide proper access roads.
    • NOIDA initially granted limited benefit relating to the NGT restriction but did not accept the developer’s wider claim concerning access to the plot.

    NOIDA’s Own Tehsildar Found 45-Metre Road Blocked

    • A crucial piece of evidence was a report submitted by NOIDA’s Tehsildar on 14 February 2019.
    • The report found that the land earmarked for the 45-metre road fell in Khasra No. 684, was recorded as Abadi land, had not been acquired by NOIDA and continued to be occupied by villagers.
    • The Tehsildar consequently recorded that the access road to the commercial plot was blocked.
    • Despite this report, NOIDA rejected the developer’s request for Zero Period benefit, maintaining that adequate access was available.

    UPRERA Also Recorded NOIDA’s Failure to Provide 45-Metre Road

    • The dispute subsequently reached UPRERA. Although the developer’s complaint was rejected as not maintainable and it was asked to pursue other statutory remedies, UPRERA’s technical inspection recorded important factual findings.
    • It found that the 24-metre road was completed only in 2020, nearly eight years after allotment, while the promised 45-metre road had still not been constructed because of existing habitation.
    • UPRERA recorded that NOIDA had failed to provide the 45-metre-wide approach road contemplated under the lease arrangement.

    State Government Partly Granted Relief

    • The matter thereafter went through revisional proceedings before the Uttar Pradesh Government.
    • In its second revisional order dated 14 September 2022, the State Government found that the 45-metre road was blocked by encroachment and that its non-availability affected the project’s commercial viability.
    • It granted the developer waiver of penal interest and a one-year COVID-related extension and directed NOIDA to take consequential steps.
    • The State Government specifically recognised that the commercial project had been designed on the assumption that the 45-metre road would constitute the principal access/frontage. Its absence meant that the project’s layout and commercial attractiveness would have to be reconsidered.

    NOIDA Raised β‚Ή100.39 Crore Demand

    • The dispute continued, and NOIDA ultimately issued a demand notice dated 23 February 2024 seeking payment of approximately β‚Ή100.39 crore towards principal and premium, without interest.
    • The developer challenged this demand as well as NOIDA’s refusal to sanction its revised building plan before the Allahabad High Court.
    • The High Court held that the cumulative circumstances prevented adequate access to the plot and concluded that Sunshine Trade Tower was entitled to Zero Period benefit.
    • It directed NOIDA to make a fresh calculation after granting Zero Period relief, raise a revised demand, and thereafter approve the revised building plan subject to statutory formalities.
    • NOIDA challenged that judgment before the Supreme Court.

    NOIDA: Some Access Was Available, So Zero Period Could Not Apply

    • Before the Supreme Court, NOIDA argued that Clause 5 of the Zero Period Policy should be interpreted strictly.
    • According to the Authority, relief was available only where there was absolutely no physical access to the allotted land and construction was therefore impossible.
    • NOIDA maintained that Sunshine had some access through the 24-metre road and portions of the 45-metre road and had even undertaken construction activity. It also contended that the developer’s own excavation contributed to the delay in completion of the side road.
    • The developer countered that the real issue was not whether it could somehow physically reach the property from one corner, but whether the commercial project could be developed in accordance with the sanctioned plan.
    • The promised 45-metre road was the project’s principal frontage. Its permanent non-availability required fundamental alterations to the building’s frontage, orientation, setbacks, entry and exit points and overall configuration.

    Supreme Court: Policy Cannot Be Interpreted Like a Statute

    • Rejecting NOIDA’s narrow construction, the Supreme Court laid down an important principle concerning interpretation of government and development policies.
    • The Court held that provisions of a policy such as the Zero Period Policy β€œare not to be interpreted like the provisions of a statute.”
    • Instead, courts must consider both the immediate purpose of the particular clause and the broader objective of the policy.
    • The Supreme Court found that Clause 5 was intended to ensure that a developer received easy, effective and legitimate access to the allotted property so that construction could meaningfully proceed.
    • The mere fact that the developer could somehow obtain limited access could therefore not absolve NOIDA of its obligation.
    • The Court held that where adequate access had not been provided for reasons attributable to NOIDA, Zero Period benefit could not be denied merely because β€œsome access was available.”

    Supreme Court Finds NOIDA Failed to Provide Promised 45-Metre Road

    • The Supreme Court examined five important official documents: the Tehsildar’s report, UPRERA order, Additional CEO’s inspection report, State Government’s revisional order and Deputy Collector’s report.
    • The cumulative effect of these documents, the Court said, left β€œno doubt” that the 45-metre Front Road was never made available to Sunshine by NOIDA.
    • The Court further observed that NOIDA, as the statutory development authority, possessed the means to remove encroachments and open the access road but had failed to do so.

    Frontage Is Not Merely an Architectural Issue

    • The judgment contains significant observations concerning the commercial importance of frontage, accessibility and elevation in real-estate development.
    • The Supreme Court observed that frontage and elevation are not merely architectural aesthetics; they are important determinants of a property’s commercial value and marketability.
    • For commercial developments in particular, visibility and accessibility directly affect footfall, branding and business prospects.
    • Uncertainty concerning frontage can therefore affect project viability, investor confidence and the expectations of purchasers and commercial occupants.

    Changing From 45-Metre to 24-Metre Frontage Fundamentally Affected Project

    • Applying those principles, the Court observed that Sunshine’s original sanctioned plan treated the 45-metre road as the project’s principal frontage.
    • Since that road could no longer realistically be provided, the 24-metre Side Road would have to become the new frontage.
    • This was not a minor internal modification. It required reconsideration of setbacks, building orientation, entry and exit points, permissible configuration and other planning parameters.
    • The Court held that changing the frontage from 45 metres to 24 metres directly affected the development potential and commercial attractiveness of the property.

    Developer Cannot Be Made Liable for NOIDA’s Own Failure

    • The Supreme Court ultimately held that Sunshine could neither be expected to proceed under the original site plan nor be burdened with liability arising from NOIDA’s failure to provide the promised 45-metre road.
    • It characterised NOIDA’s denial of Zero Period relief and its continuing refusal to sanction a revised site plan as β€œunreasonable and untenable in law.”

    Supreme Court Dismisses NOIDA’s Appeals

    • Finding no error in the Allahabad High Court’s judgment, the Supreme Court dismissed all three civil appeals filed by NOIDA and upheld the relief granted to Sunshine Trade Tower.
    • The Court did not find it necessary to examine the developer’s additional pleas concerning discrimination or comparison with other similarly situated developers.
    • The developer also gave a statement before the Supreme Court that the project would be completed within four years from approval of the revised site plan and that amounts due would be paid in eight instalments.
    • The Supreme Court directed NOIDA to take note of this statement and issue necessary directions for commencement of the project with revised schedules. No order as to costs was passed.

    Why the Judgment Matters

    The ruling is significant for real-estate developers dealing with government development authorities. It establishes that policy benefits cannot necessarily be denied through an excessively literal interpretation when the very purpose of the policy would thereby be defeated.

    More importantly, where a statutory authority promises infrastructure forming an essential component of an allotment and sanctioned development plan, it cannot ordinarily impose financial consequences upon the developer for delays materially attributable to the authority’s own failure.

    The judgment also recognises the commercial reality that access and frontage are integral to the viability of a commercial real-estate project.

    The existence of some physical means of reaching a plot is not necessarily equivalent to providing the effective and legitimate access contemplated by the allotment and sanctioned plan.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Supreme Court

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  • Supreme Court: High Court Cannot Refuse Appointment of Arbitrator by Deciding Limitation at Pre-Reference Stage

    Supreme Court: High Court Cannot Refuse Appointment of Arbitrator by Deciding Limitation at Pre-Reference Stage

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 15.09.2026

    Supreme Court: High Court Cannot Refuse Appointment of Arbitrator by Deciding Limitation at Pre-Reference Stage

    This Short Article has been prepared & written by Arbitrator Shobhit Mallik. The views expressed are based on his interpretation of the law. He can be reached at his email id shobhit.Ica23@gmail.com .

    The Supreme Court has held that an objection concerning limitation is a jurisdictional issue involving mixed questions of fact and law and must ordinarily be decided by the arbitral tribunal under Section 16 of the Arbitration and Conciliation Act, 1996, rather than by the High Court at the pre-reference stage under Section 11.

    In M/s Uttarakhand Purv Sainik Kalyan Nigam Limited v. Northern Coal Field Limited, SLP (C) No. 11476 of 2018, a Bench comprising Justices Indu Malhotra and Ajay Rastogi set aside a High Court order which had refused appointment of an arbitrator on the ground that the contractor’s claims were barred by limitation.

    The Supreme Court held that, under the post-2015 framework of Section 11(6A), the Court’s scrutiny at the appointment stage is confined to the existence of an arbitration agreement, while limitation and other jurisdictional objections are matters for the arbitral tribunal.

    Dispute Arose From Security Services Contract

    • The dispute originated from an agreement dated 21 December 2010 between Uttarakhand Purv Sainik Kalyan Nigam Limited, the contractor, and Northern Coal Field Limited (NCL).
    • Under the agreement, the contractor was required to provide round-the-clock security services on a need basis at agreed contractual rates. The agreement contained an arbitration clause requiring disputes arising out of or in connection with the contract to be referred to a sole arbitrator.
    • Disputes subsequently arose concerning payments under the contract and deductions of security amounts from running bills.
    • On 29 May 2013, the contractor issued a legal notice demanding approximately β‚Ή1.43 crore along with interest from NCL.

    Arbitration Invoked in March 2016

    • The contractor invoked arbitration through a notice dated 9 March 2016, calling upon NCL to nominate a sole arbitrator in accordance with the arbitration clause.
    • NCL did not respond. A further notice dated 30 May 2016 proposed the appointment of a retired Additional District Judge as sole arbitrator, but this notice also received no response.
    • Consequently, on 20 September 2016, the contractor approached the High Court under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of a sole arbitrator.
    • The High Court, however, rejected the application. It concluded that the contractor’s claims were barred by limitation and, therefore, declined to appoint an arbitrator.
    • The contractor then approached the Supreme Court.

    Supreme Court Examines Impact of 2015 Arbitration Amendment

    • The Supreme Court noted that under Section 21 of the Arbitration Act, arbitral proceedings commence when a request to refer the dispute to arbitration is received by the respondent.
    • Since the contractor invoked arbitration on 9 March 2016β€”after the 2015 Amendment Act came into force on 23 October 2015β€”the amended Section 11 governed the case.
    • This distinction became central to the Supreme Court’s decision.
    • The Court explained that the 2015 amendment significantly altered the scope of judicial scrutiny at the stage of appointment of an arbitrator.

    Earlier Law Allowed Wider Examination at Section 11 Stage

    • Before the 2015 amendment, the Supreme Court’s seven-Judge Constitution Bench decision in SBP & Co. v. Patel Engineering Ltd., (2005) 8 SCC 618 permitted broader judicial scrutiny under Section 11.
    • The appointing court could consider not only whether a valid arbitration agreement existed but also threshold questions concerning jurisdiction, including whether the claim was a dead or time-barred claim or whether the transaction had already been concluded through satisfaction of mutual rights and obligations.
    • That approach was subsequently followed in decisions including National Insurance Co. v. Boghara Polyfab (P) Ltd., (2009) 1 SCC 267 and Union of India v. Master Construction Co., (2011) 12 SCC 349.

    Section 11(6A) Restricts Court’s Inquiry

    • The Supreme Court explained that the 2015 Amendment Act inserted Section 11(6A) to substantially restrict judicial intervention at the pre-reference stage.
    • Section 11(6A), as applicable to the dispute, required the Supreme Court or High Court dealing with an appointment application to confine itself to examining the existence of the arbitration agreement.
    • The Court held that the non-obstante clause contained in Section 11(6A) had legislatively overridden the broader approach adopted in Patel Engineering and Boghara Polyfab.
    • The Supreme Court also relied upon Duro Felguera S.A. v. Gangavaram Port Ltd., (2017) 9 SCC 729, where it had been held that at the Section 11(6A) stage, the Court β€œneed only look into” the existence of the arbitration agreement.

    Kompetenz-Kompetenz Principle Favours Arbitral Tribunal Deciding Its Own Jurisdiction

    • The judgment places significant emphasis on the Kompetenz-Kompetenz principle, embodied in Section 16 of the Arbitration Act.
    • Under this principle, an arbitral tribunal has competence to rule on its own jurisdiction, including jurisdictional objections concerning the existence or validity of the arbitration agreement.
    • The Supreme Court explained that the principle is intended to minimise judicial intervention and prevent the arbitral process from being obstructed at the threshold merely because one party raises a preliminary objection.
    • The Court further observed that the underlying legislative policy of the Arbitration Act favours party autonomy and minimal judicial intervention. Once the tribunal is constituted, issues and objections falling within its jurisdiction should ordinarily be decided by the tribunal itself.

    Limitation Is for the Arbitrator to Decide

    • The most important finding of the judgment concerns limitation.
    • The Supreme Court held that the issue of limitation is a jurisdictional issue and a mixed question of fact and law.
    • Accordingly, where the existence of the arbitration agreement is not disputed, the High Court should not decide limitation while considering an application for appointment of an arbitrator under Section 11. The issue should instead be left for determination by the arbitral tribunal under Section 16.
    • The Court relied upon ITW Signode India Ltd. v. Collector of Central Excise, (2004) 3 SCC 48, where limitation was recognised as involving a question of jurisdiction.
    • It also referred to NTPC v. Siemens Atkein Gesell Schaft, (2007) 4 SCC 451 and Indian Farmers Fertilizers Cooperative Ltd. v. Bhadra Products, (2018) 2 SCC 534, in support of the proposition that limitation may be adjudicated by the arbitral tribunal under Section 16.
    • If the tribunal concludes that a claim is dead or barred by limitation, it can decide the objection accordingly. If the jurisdictional plea is rejected and an award ultimately follows, the aggrieved party retains the statutory remedy of challenging the award under Section 34 of the Arbitration Act.

    High Court Order Set Aside

    • Applying these principles, the Supreme Court set aside the High Court’s order dated 11 January 2018, which had refused to appoint an arbitrator on limitation grounds.
    • The Court expressly directed that the issue of limitation be decided by the arbitral tribunal.
    • With the consent of the parties, the Supreme Court appointed Justice (Retd.) A.M. Sapre, former Judge of the Supreme Court, as the sole arbitrator, subject to the statutory declarations concerning independence and impartiality under Section 12 and the timeline prescribed under Section 29A.

    Singrauli Held to Be Seat of Arbitration

    • The Court also addressed the contractual stipulation that arbitration would take place at Singrauli, Madhya Pradesh.
    • It held that, consequently, the seat of arbitration was Singrauli, subject to modification by consent of the parties. The arbitrator was nevertheless given liberty to conduct proceedings at another convenient venue if required.
    • The parties were directed to share arbitration costs equally, with the arbitrator’s fees governed by the Fourth Schedule to the Arbitration Act.

    Key Legal Principle

    The ruling establishes, in the statutory context considered by the Court, that once the existence of an arbitration agreement is undisputed, the Section 11 court should not undertake a detailed adjudication of limitation. Limitation, being a mixed question of fact and law and a jurisdictional issue, should be decided by the arbitral tribunal under Section 16.

    The decision is an important exposition of the legislative objective behind the 2015 amendment: restrict judicial interference at the pre-reference stage and allow the arbitral tribunal to decide threshold and jurisdictional objections under the Kompetenz-Kompetenz principle. It is equally important that the Supreme Court did not hold that the contractor’s β‚Ή1.43 crore claim was within limitation.

    It only held that the High Court was not the proper forum to finally determine that objection at the Section 11 appointment stage; the limitation defence was left open for adjudication by the arbitrator.

    Connected Matter

    Supreme Court Restores β‚Ή2,782 Crore Arbitral Award in Delhi Airport Metro Dispute; Warns Courts Against Re-Appreciating Evidence Under Sections 34 and 37

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Supreme Court

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  • Bombay HC Grants Regularisation to Nine ONGC Workers After 10 Years of Service; Modifies CGIT’s 240-Day Permanency Award

    Bombay HC Grants Regularisation to Nine ONGC Workers After 10 Years of Service; Modifies CGIT’s 240-Day Permanency Award

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 15.09.2026

    Bombay HC Grants Regularisation to Nine ONGC Workers After 10 Years of Service; Modifies CGIT’s 240-Day Permanency Award

    This Short Article has been prepared & written by Advocate Madhumita Jha. The views expressed are based on her interpretation of the law. She can be reached at her email id jhamadhumita27@gmail.com .  

    Mumbai, 9 September 2026: The Bombay High Court has granted significant relief to nine long-serving workers of Oil & Natural Gas Corporation Ltd. (ONGC), holding that they cannot be denied regularisation after having continuously served the public sector undertaking for more than two decades following a selection process through the Employment Exchange.

    Justice Sandeep V. Marne, in Oil & Natural Gas Corporation Ltd. v. Central Government Industrial Tribunal-II & Anr., Writ Petition No. 13673 of 2025, partly allowed ONGC’s petition but modified, rather than set aside, the Central Government Industrial Tribunal’s award. The judgment bears neutral citation 2026:BHC-AS:37194.

    The High Court held that the workers should be treated as being in regular service of ONGC from the date on which each completed 10 years of service, with consequential benefits to be granted within eight weeks.

    CGIT Had Granted Permanency After 240 Days

    • The dispute originated from the employment of Field Operators/Assistant Rigmen by ONGC for its offshore exploration and production operations.
    • In 2000-01, ONGC sought candidates through the Employment Exchange for fixed-tenure engagements. Candidates were required to possess prescribed technical qualifications and were subjected to a written test, interview and medical examination before appointment. Their engagement was nevertheless expressly structured as fixed-term employment.
    • In 2008, a total of 79 workmen raised an industrial dispute seeking regularisation. During the lengthy proceedings, 55 were appointed on a regular basis through recruitment exercises, while 15 dropped out due to retirement, death or resignation. The dispute eventually survived in respect of nine workers.
    • On 24 April 2025, CGIT-II, Mumbai held that the nine employees were entitled to permanency and directed ONGC to make them permanent from the date of completion of 240 days of service, together with financial benefits.
    • ONGC challenged that award before the Bombay High Court.

    ONGC: Fixed-Term Employees Cannot Claim Permanency

    • ONGC argued that the workers were consciously engaged on fixed tenure because oil exploration was uncertain and manpower requirements could not be predicted permanently.
    • It relied substantially upon the Constitution Bench judgment in Secretary, State of Karnataka v. Umadevi (3), (2006) 4 SCC 1, contending that long service by itself cannot create a right to regularisation where appointments do not conform to the constitutional requirements governing public employment under Articles 14 and 16 of the Constitution.
    • ONGC further argued that granting permanency merely after completion of 240 days effectively amounted to the Tribunal creating posts on ONGC’s establishment, which an industrial adjudicator could not do.

    ONGC Also Questioned Application of Industrial Disputes Act to Offshore Rigs

    • A significant jurisdictional argument was raised by ONGC.
    • It contended that the workers were deployed on oil rigs located beyond 12 nautical miles from the Indian coastline, and therefore the Industrial Disputes Act, 1947 did not apply to them. ONGC relied upon the Supreme Court judgment in Aban Loyd Chiles Offshore Ltd. v. Union of India, (2008) 11 SCC 439.
    • The Bombay High Court firmly rejected this contention.
    • The Court noted that the workers’ appointments were made in Mumbai and that decisions concerning their service conditions were also taken in Mumbai. Disciplinary proceedings concerning employees working on the rigs were conducted within Indian territory under Indian law.
    • The High Court therefore held that ONGC’s objection to the applicability of the Industrial Disputes Act and the CGIT’s jurisdiction was baseless.

    Aban Loyd Judgment Distinguished

    • The Court specifically distinguished Aban Loyd Chiles Offshore.
    • It observed that the Supreme Court case concerned the applicability of customs duty to spare parts required for oil rigs situated outside territorial waters but within India’s Exclusive Economic Zone. In that case, the Supreme Court had held customs duty applicable by virtue of extension of Indian territory to designated areas in the EEZ.
    • The Bombay High Court held that this principle had no application to the present industrial dispute concerning workers who were merely deployed on offshore rigs while their appointments and service-related decisions were made in Mumbai.

    Workers Were Not β€˜Backdoor Entrants’: High Court

    • A crucial finding in favour of the workers was that their appointments could not be characterised as classic β€œbackdoor entries.”
    • ONGC itself admitted that the workers had been sponsored by the Employment Exchange. Eligibility requirements were prescribed, and the candidates underwent a written test, interview and medical fitness examination before being selected.
    • The High Court therefore observed that their appointments could, at the highest, be characterised as irregular rather than appointments completely dehors the constitutional scheme of public employment.
    • The Court further noted that the nine employees had continued working without any real break for over a quarter of a century. Repeated issuance of fresh fixed-tenure appointment orders did not, in the Court’s view, constitute an actual break in their service.

    25 Years of Continuous Service Showed Continuing Need for Workers

    • The High Court attached considerable importance to the factual reality of the employment relationship.
    • It observed that the nine workers had remained in continuous service for over 25 years, making it difficult to accept that their engagement was exclusively for a short-term or specific project or that ONGC had no continuing requirement for their services.
    • The evidence instead suggested that the workers had become an asset to ONGC and had continued to work in adverse conditions on offshore oil rigs for more than two decades.
    • The Court also rejected the contention that the workers had lost their right to seek regularisation merely because they had participated in subsequent regular recruitment exercises. Their participation in such selection processes did not estop them from pursuing their pending claim.

    High Court Applies Exception Under Paragraph 53 of Umadevi

    • While recognising the general rule laid down in Umadevi (3) against regularising appointments made outside the constitutional scheme, the High Court relied upon the important exception recognised in paragraph 53 of that judgment.
    • Paragraph 53 contemplates consideration of regularisation in cases involving irregular, as distinguished from illegal, appointments of duly qualified persons who have served for 10 years or more, subject to the conditions explained by the Supreme Court.
    • In the present case, the High Court noted that the workers were qualified and had undergone a selection process after sponsorship through the Employment Exchange.
    • Their continued engagement for over 25 years also gave rise, in the Court’s assessment, to an inference regarding ONGC’s continuing requirement for their services.
    • Accordingly, the Court held that the benefit of regularisation could not be denied to them.

    Industrial Tribunal Cannot Grant Permanency Merely After 240 Days

    • The High Court, however, did not fully approve the CGIT’s award.
    • It held that the Tribunal had erred in directing that the workers be made permanent merely upon completion of 240 days of service.
    • The Court reasoned that such a direction would effectively amount to creation of posts on the establishment of ONGC, a power that an industrial adjudicator does not possess in relation to a State instrumentality.
    • The Court relied upon Municipal Council Tirora v. Tulsidas Baliram Bindhade, 2016 (6) Mh.L.J. 867, where it had been held that completion of 240 days by itself cannot confer a right to permanency in the absence of the necessary legal conditions concerning posts and recruitment.
    • The High Court also referred to Maharashtra State Road Transport Corporation v. Casteribe Rajya P. Karmachari Sanghatana, (2009) 8 SCC 556 and Hari Nandan Prasad v. Employer I/R to Management of FCI, (2014) 7 SCC 190, while considering the applicability of Umadevi principles to industrial adjudication involving government entities and instrumentalities.

    Regularisation From Completion of 10 Years, Not 240 Days

    • The Court ultimately struck a balance between the constitutional restrictions governing public employment and the peculiar facts of the workers’ long-standing engagement.
    • It held that while permanency merely upon completion of 240 days was legally impermissible, the nine workers could receive the benefit of regularisation after completing 10 years of service, applying the exception recognised in Umadevi.
    • The Court also rejected ONGC’s contention that such relief necessarily amounted to impermissible retrospective regularisation. Since the industrial reference itself had been made in 2008 and the workers would complete 10 years around or after 2011, the Court observed that the relief would operate after the reference and could not, in that sense, be characterised as retrospective.

    Bombay High Court Modifies CGIT Award

    • Accordingly, the High Court partly allowed ONGC’s writ petition and modified the CGIT award dated 24 April 2025.
    • Instead of granting permanency from completion of 240 days, the Court directed that all nine workers be treated as being in regular service of ONGC with effect from the date on which they completed 10 years of service from their initial engagements.
    • ONGC was further directed to grant them all consequential benefits within eight weeks. No order as to costs was passed.

    Key Legal Principles Emerging From the Judgment

    The judgment draws an important distinction between illegal/backdoor appointments and irregular appointments. While long continuation alone does not create a right to regularisation, employees who entered service through a genuine selection mechanism and whose appointments are irregular rather than illegal may, in appropriate circumstances, fall within the Umadevi paragraph 53 framework.

    At the same time, the judgment makes clear that completion of 240 days does not automatically create a right to permanency in a State instrumentality, particularly where doing so would effectively require an industrial adjudicator to create posts.

    The decision is also significant for offshore employment disputes. Merely because employees are physically deployed on offshore installations beyond 12 nautical miles does not, on the facts of this case, displace Indian labour law where their appointments and service conditions are fundamentally administered within India.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Bombay High Court

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  • Dismissal of Criminal Complaint for Non-Prosecution Results in Acquittal; Revision Under Section 397 CrPC Not Maintainable

    Dismissal of Criminal Complaint for Non-Prosecution Results in Acquittal; Revision Under Section 397 CrPC Not Maintainable

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 15.09.2026

    Dismissal of Criminal Complaint for Non-Prosecution Results in Acquittal; Revision Under Section 397 CrPC Not Maintainable

    This Short Article has been prepared & written by Advocate G Sridharamurthy. The views expressed are based on his interpretation of the law. He can be reached at his email id sriadv3@gmail.com . 

    The Karnataka High Court has held that where a criminal complaint is dismissed for non-prosecution and the dismissal consequentially results in the acquittal of the accused, the appropriate remedy is an appeal and not a revision petition under Section 397 of the Code of Criminal Procedure, 1973 (CrPC).

    Justice Ravi V. Hosmani, deciding three connected criminal petitions filed by Ziaulla Sheriff, set aside orders of the Bengaluru Sessions Courts which had entertained revision petitions and restored the criminal proceedings. The High Court dismissed those revision petitions as not maintainable, while reserving liberty to the complainants to avail other remedies in accordance with law.

    The decision bears neutral citation 2026:KHC:40564 and arose from Criminal Petition Nos. 1117, 1116 and 1118 of 2019.

    Background of the Case

    • The connected petitions arose from private criminal complaints in which Ziaulla Sheriff was an accused. According to the petitioner, the complainants failed to appear despite being given sufficient opportunities. The trial court consequently dismissed the complaints for non-prosecution, resulting in consequential orders of acquittal.
    • Instead of challenging the acquittal orders through appeals, the complainants approached the District/Sessions Court by filing revision petitions under Section 397 CrPC.
    • Those revision petitions were allowed and the criminal proceedings were restored. The accused therefore approached the Karnataka High Court under Section 482 CrPC, challenging the revisional orders.

    Accused Argues Appeal, Not Revision, Was the Proper Remedy

    • The principal argument advanced on behalf of Ziaulla Sheriff was that dismissal of the complaints for non-prosecution had resulted in his acquittal.
    • Therefore, once an order of acquittal had come into existence, the complainants could not circumvent the appellate remedy by filing revision petitions under Section 397 CrPC.

    The petitioner relied upon three precedents:

    V.K. Bhat v. G. Ravi Kishore & Anr., (2016) 13 SCC 243; S. Rama Krishna v. S. Rami Reddy (Dead) by LRs & Ors., (2008) 5 SCC 535; and Prakash v. Raju, 2025 SCC OnLine Kar 11067.

    It was also argued that the underlying dispute was essentially civil in nature but had been given a criminal colour, and that resort to revision instead of appeal demonstrated an attempt to prolong the proceedings and constituted abuse of process.

    Complainants Defend Restoration of Criminal Proceedings

    • The complainants opposed the petitions, contending that the trial court had dismissed the proceedings merely because of their non-appearance and had not decided the complaints on merits.
    • Accordingly, once sufficient cause for non-appearance was demonstrated, the revisional court was justified in setting aside the dismissal and restoring the proceedings.
    • Alternatively, it was argued that if the High Court found the revisions not maintainable, liberty should be granted to pursue the appropriate appellate remedy.

    Karnataka High Court Examines Supreme Court and High Court Precedents

    • The High Court examined the judgments in V.K. Bhat, S. Rama Krishna and Prakash and found that they established a clear principle concerning the nature of an order dismissing a criminal complaint for non-prosecution.
    • The Court held that such dismissal β€œwould consequentially result in acquittal of accused” and is therefore an appealable order.
    • Consequently, a revision petition under Section 397 CrPC against such an order would not be maintainable.
    • This distinction was decisive. The High Court did not need to enter into the merits of the underlying criminal allegations because the revisional proceedings themselves had been pursued through an incorrect statutory remedy.

    Revision Cannot Substitute Statutory Appeal Against Acquittal

    • The ruling reinforces an important aspect of criminal procedure: the legal character and consequence of the trial court’s order determine the appropriate remedy, rather than merely the terminology used to describe the dismissal.
    • Where dismissal of a complaint for non-prosecution has the legal consequence of acquitting the accused, the complainant must pursue the remedy available against the acquittal. A revision under Section 397 cannot be used as a substitute for the prescribed appellate route.
    • On this ground alone, the High Court held that all three petitions filed by the accused deserved to be allowed.

    Revisional Orders Set Aside

    • Applying the above principle, the Karnataka High Court set aside three revisional orders:
    • the order dated 5 September 2018 in Criminal Revision Petition No. 400/2017; the order dated 5 September 2018 in Criminal Revision Petition No. 401/2017; and the order dated 23 October 2018 in Criminal Revision Petition No. 430/2017.
    • The corresponding revision petitions were dismissed as not maintainable.

    Liberty Granted to Complainants to Pursue Other Remedies

    • Importantly, the High Court did not permanently foreclose the complainants from pursuing remedies available under law.
    • Referring particularly to the approach followed in Prakash v. Raju, the Court reserved liberty to avail other remedies in accordance with law.
    • Thus, the judgment is principally a ruling on the maintainability of revision proceedings, rather than a final adjudication of the merits of the underlying allegations.

    Key Legal Principle

    The legal principle emerging from the judgment can be stated as:

    Where dismissal of a criminal complaint for non-prosecution consequentially results in acquittal of the accused, the order is appealable. A revision petition under Section 397 CrPC challenging such an acquittal is not maintainable, and the complainant must pursue the remedy available in appeal or such other remedy as may be permissible in law.

    The ruling also underlines that a revisional court cannot restore proceedings through a revision where the statutory scheme requires the acquittal order to be challenged through the appropriate appellate mechanism.

    Why the Judgment Matters

    The judgment provides useful guidance in private-complaint proceedings where complaints are dismissed because of the complainant’s absence. The procedural distinction between an appeal against acquittal and a criminal revision is substantive because the jurisdiction, statutory requirements and scope of scrutiny differ.

    The Karnataka High Court’s decision confirms that litigants cannot choose revision merely because the original dismissal occurred on account of non-prosecution rather than after a full trial on merits. What matters is that the dismissal resulted in acquittal.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Karnataka High Court

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  • Madras High Court Directs Payment of β‚Ή3.52 Crore Land Acquisition Compensation to Purchaser

    Madras High Court Directs Payment of β‚Ή3.52 Crore Land Acquisition Compensation to Purchaser

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 14.09.2026

    Madras High Court Directs Payment of β‚Ή3.52 Crore Land Acquisition Compensation to Purchaser

    This Short Article has been prepared & written by Advocate Narendra Singh. The views expressed are based on his interpretation of the law. He can be reached at his email id amitnaren@outlook.com .  

    The Madras High Court has allowed a writ petition filed by M/s RK Dhayu Real Estates LLP and directed the Tamil Nadu land acquisition authorities to release the compensation payable for land acquired out of a larger property purchased from the Sahara Group.

    The petitioner had challenged the proceedings dated 1 August 2024 refusing to disburse the land acquisition compensation and sought payment of the amount assessed at β‚Ή3,52,35,674, along with interest.

    Property Purchased From Sahara Group Under Supreme Court Monitoring

    • The dispute concerned property originally belonging to M/s Sahara City Homes, measuring a total extent of 69.5025 acres.
    • The judgment records that, because the Sahara Group owed money to various investors and proceedings were pending before the Supreme Court, sale of Sahara properties was being undertaken under the supervision of the Apex Court, with sale proceeds required to be deposited into a specially designated account.
    • RK Dhayu Real Estates LLP purchased the property through five registered sale deeds dated 6 January 2023, after obtaining concurrence in the context of the Supreme Court proceedings. The petitioner deposited nearly β‚Ή45 crore into the special account, and a compliance affidavit was filed before the Supreme Court regarding the transaction.

    2.5437 Acres Had Already Been Acquired by Highways Department

    • Out of the total 69.5025 acres purchased by RK Dhayu, approximately 2.5437 acres had already been acquired by the Tamil Nadu State Highways Department.
    • As a result, although the petitioner had paid consideration for the full extent of 69.5025 acres, it could not obtain possession and enjoyment of the acquired portion.
    • The sale deed itself contained a clause enabling the petitioner to receive the compensation fixed in respect of the acquired land.

    Sahara Group Assigned Compensation Rights to RK Dhayu

    1. A significant factor before the High Court was a communication dated 7 July 2024 issued by a representative of the Sahara Group to the Special Land Acquisition Officer.
    2. The communication recorded that the entire sale consideration had been received from RK Dhayu Real Estates LLP and deposited in the SEBI-Sahara Refund Account in accordance with the Supreme Court’s directions.
    3. More importantly, Sahara expressly confirmed that it had assigned all rights, including the right to claim compensation in respect of the subject property, in favour of RK Dhayu Real Estates LLP.
    4. The Sahara representative further stated that RK Dhayu was legally entitled to receive the compensation, that Sahara had no objection to such payment, and that Sahara would not itself make any claim for the compensation. The communication also contained an undertaking to indemnify the authorities against any loss arising from disbursement to RK Dhayu.

    Land Acquisition Authorities Refused Payment

    1. Despite the authorization and no-objection from Sahara, the Deputy Tahsildar issued proceedings dated 1 August 2024 refusing to release the compensation to RK Dhayu.
    2. The State’s concern was that the petitioner was not the awardee in the original land acquisition proceedings and that the relevant revenue records continued to reflect names of several entities connected with the Sahara Group.
    3. The authorities were also apprehensive because the broader Sahara matter remained under Supreme Court monitoring and involved claims of investors across India.
    4. The respondents therefore feared that disbursing the compensation directly to RK Dhayu could expose them to future disputes and contemplated referring the matter for determination of apportionment.

    High Court Finds Sale Was Properly Conducted Under Supreme Court Supervision

    • Justice N. Anand Venkatesh rejected the apprehension of the authorities after examining the documents placed on record.
    • The Court found that the entire sale transaction had taken place under the direct monitoring of the Supreme Court. It noted that the compliance affidavit filed before the Apex Court specifically referred to the sale in favour of RK Dhayu and confirmed that the entire consideration had been deposited into the designated special account.
    • The High Court therefore held that there was no difficulty in concluding that the sale in favour of the petitioner had been validly completed with proper disclosure before the Supreme Court.

    Purchaser Cannot Be Left Without Either Land or Compensation

    • The Court also took note of the practical consequence of the acquisition.
    • RK Dhayu had paid consideration for the entire 69.5025-acre property, but approximately 2.5437 acres were unavailable to it because they had already been acquired by the Highways Department.
    • The Court therefore observed that the only meaningful way of compensating the purchaser for that portion was to permit it to receive the land acquisition compensation fixed by the Highways Department.

    Sahara’s No-Objection Removed Any Real Risk to Authorities

    • The High Court further relied on the Sahara Group’s express no-objection and assignment of compensation rights.
    • The Court observed that the same representative who was involved when the sale deed was executed had issued the subsequent communication confirming that RK Dhayu could receive the entire compensation amount.
    • In these circumstances, payment of the compensation to the petitioner would not, in the Court’s view, expose the respondents to any genuine hardship or future liability.
    • The Court also noted that the sale deed itself contained a specific clause enabling the petitioner to receive the compensation and that the transaction had been disclosed in the compliance affidavit filed before the Supreme Court.

    Authorities Directed to Pay Compensation Within Six Weeks

    • The Madras High Court accordingly allowed the writ petition and directed the respondents to hand over the entire compensation amount to RK Dhayu Real Estates LLP within six weeks from receipt of a copy of the order.
    • The petitioner’s Senior Counsel also filed a memo containing the bank account details into which the compensation was to be credited, and the Court directed the first respondent to make payment into that account.
    • The Court clarified that if any dispute arose in the future concerning the compensation, the respondents would not be held responsible and such dispute would have to be handled by the petitioner.

    Significance of the Judgment

    The ruling is important in situations where land is acquired before or around the time of a subsequent property sale and the purchaser has expressly acquired the seller’s right to receive compensation.

    The judgment demonstrates that land acquisition authorities cannot refuse payment merely because the purchaser was not the original awardee where the documentary record clearly establishes:

    • a valid sale of the larger property,
    • an express assignment of compensation rights,
    • a no-objection from the original owner,
    • payment of the full sale consideration, and
    • judicial supervision of the underlying transaction.

    The case is also notable because the property formed part of the Sahara Group’s assets under Supreme Court monitoring, yet the Madras High Court found that this circumstance did not prevent release of compensation where the sale and payment structure had been properly disclosed before the Apex Court.

    Key Takeaway

    The Madras High Court effectively held that where a purchaser has paid for the entire property, a portion of that property has already been acquired by the Government, and the original owner has expressly assigned its compensation rights and given a no-objection, the purchaser cannot be denied the corresponding land acquisition compensation merely because it was not the original awardee. Accordingly, RK Dhayu Real Estates LLP succeeded in the writ petition, and the State authorities were directed to release the entire compensation amount within six weeks.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Madras High Court

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  • Supreme Court Restores β‚Ή2,782 Crore Arbitral Award in Delhi Airport Metro Dispute; Warns Courts Against Re-Appreciating Evidence Under Sections 34 and 37

    Supreme Court Restores β‚Ή2,782 Crore Arbitral Award in Delhi Airport Metro Dispute; Warns Courts Against Re-Appreciating Evidence Under Sections 34 and 37

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 14.09.2026

    Supreme Court Restores β‚Ή2,782 Crore Arbitral Award in Delhi Airport Metro Dispute; Warns Courts Against Re-Appreciating Evidence Under Sections 34 and 37

    This Short Article has been prepared & written by Arbitrator Shobhit Mallik. The views expressed are based on his interpretation of the law. He can be reached at his email id shobhit.Ica23@gmail.com .

    In a major ruling on the limits of judicial interference with arbitral awards, the Supreme Court ruled in favour of Delhi Airport Metro Express Pvt. Ltd. (DAMEPL) and set aside the Delhi High Court Division Bench judgment that had interfered with an arbitral award of β‚Ή2,782.33 crore plus interest in DAMEPL’s favour against Delhi Metro Rail Corporation Ltd. (DMRC).

    The Supreme Court strongly cautioned against courts effectively sitting in appeal over arbitral awards by reassessing facts and evidence and then characterising their disagreement with the arbitrator as “perversity” or “patent illegality”. The Court emphasised that the Arbitration and Conciliation Act, 1996 is founded upon the principle of minimal judicial interference with arbitration.

    Dispute Arising From Delhi Airport Metro Express Line

    • The dispute arose from the Airport Metro Express Line (AMEL) project connecting New Delhi Railway Station with Dwarka Sector 21 through Indira Gandhi International Airport.
    • DMRC proposed to develop the approximately 22.7-km project through a public-private partnership. A consortium comprising Reliance Energy Limited, later renamed Reliance Infrastructure Limited, and Construcciones y Auxiliar de Ferrocarriles, S.A. was selected, following which DMRC and DAMEPL entered into a Concession Agreement dated 25 August 2008.
    • Under the arrangement, DMRC was responsible for civil works, while DAMEPL was responsible for various systems including rolling stock, power supply, overhead equipment, signalling and other operational infrastructure. Commercial operations commenced on 23 February 2011.

    Structural Defects Led to Termination Dispute

    • DAMEPL subsequently raised concerns regarding defects in the viaduct and bearings. A joint inspection process followed, and DAMEPL eventually stopped operations on 8 July 2012.
    • On 9 July 2012, DAMEPL issued a notice requiring DMRC to cure the defects within 90 days. It subsequently issued a termination notice dated 8 October 2012, alleging that the defects had not been cured within the stipulated period and that DMRC was consequently in default under the Concession Agreement.
    • DMRC invoked arbitration on 23 October 2012. The Airport Metro Line later resumed operations at a reduced speed, but DAMEPL eventually ceased operations and handed the line over to DMRC.

    Arbitral Tribunal Found DMRC in Breach

    • The Arbitral Tribunal was principally required to decide whether DAMEPL’s termination of the Concession Agreement was valid.
    • The Tribunal undertook a detailed examination of the structural defects and the remedial measures undertaken by DMRC. It found, among other things, 1,551 cracks across 367 girders, representing about 72% of the girders examined. It concluded that effective steps had not been taken within the stipulated 90-day cure period and held that DMRC was in breach of the Concession Agreement.
    • The Tribunal also examined other alleged defects, including twists in girders and gaps involving structural components, and concluded that the defects had neither been cured nor had effective remedial steps been taken within the stipulated period. It therefore upheld DAMEPL’s termination notice.

    Tribunal Awards β‚Ή2,782.33 Crore Plus Interest to DAMEPL

    • Following its finding that DAMEPL validly terminated the Concession Agreement due to a DMRC event of default, the Tribunal considered DAMEPL’s claim for termination payment.
    • DAMEPL had sought approximately β‚Ή3,470 crore. In calculating the amount payable, the Tribunal determined β‚Ή611.95 crore to qualify as “Equity”, calculated “Adjusted Equity” at β‚Ή983.02 crore and ultimately awarded β‚Ή2,782.33 crore along with further interest as termination payment payable by DMRC to DAMEPL.

    Single Judge Refused to Interfere Under Section 34

    • DMRC challenged the award before the Delhi High Court under Section 34 of the Arbitration and Conciliation Act, 1996.
    • A Single Judge dismissed DMRC’s challenge on 6 March 2018, holding that the Tribunal’s findings concerning facts, law and interpretation of the Concession Agreement fell within the arbitrators’ domain.
    • The Single Judge also recognised the fundamental principle that where two views are possible and the view adopted by the Tribunal is plausible, a court exercising Section 34 jurisdiction cannot substitute its own interpretation merely because it prefers another view.

    Delhi High Court Division Bench Partly Set Aside Award

    • DMRC thereafter approached the Division Bench under Section 37 of the Arbitration Act.
    • The Division Bench reversed the Single Judge and partly set aside the arbitral award. It found fault with the Tribunal’s reasoning concerning the termination date, the effect of the Commissioner of Metro Railway Safety’s certificate and the calculation of Adjusted Equity.
    • The High Court concluded that the award suffered from perversity, irrationality and patent illegality. It consequently set aside the Tribunal’s conclusions concerning the validity of the termination notice and treatment of β‚Ή611.95 crore as Equity, which resulted in the β‚Ή2,782.33 crore award being set aside.
    • DAMEPL then approached the Supreme Court.

    Supreme Court Explains the Narrow Scope of β€œPatent Illegality”

    1. The Supreme Court used the dispute to reiterate the narrow limits within which courts can interfere with arbitral awards.
    2. It held that patent illegality must be an illegality that goes to the root of the matter. Every error of law committed by an arbitral tribunal cannot automatically be characterised as patent illegality, nor can an erroneous application of law by itself justify setting aside an award.
    3. Most importantly, the Court held that courts cannot re-appreciate evidence in order to conclude that an award suffers from patent illegality because a court exercising jurisdiction under Section 34 does not sit as an appellate court over the arbitrator.
    4. Interference may nevertheless be permissible where the arbitrator adopts a view that is not even a possible view, interprets the contract in a manner that no fair-minded or reasonable person could adopt, travels beyond the contract, gives no reasons, bases conclusions on no evidence, ignores vital evidence, or considers documents not supplied to the other party.

    Supreme Court Flags β€œDisturbing Tendency” of Courts Setting Aside Awards

    • One of the most significant observations in the judgment concerns excessive judicial scrutiny of arbitral awards.
    • The Supreme Court noted a β€œdisturbing tendency” of courts to dissect and reassess factual aspects of arbitration disputes, reach their own conclusions and thereafter label the award perverse or patently illegal.
    • Such an approach, the Court warned, would undermine the object of the Arbitration and Conciliation Act, which is to preserve minimal judicial interference with arbitral awards.
    • This observation has significant implications for arbitration jurisprudence because it reinforces the distinction between judicial review of an award and an appeal on the merits of the dispute.

    Interpretation of Contract Is Primarily for the Arbitrator

    • The dispute also involved the interpretation of Article 29.5.1 of the Concession Agreement concerning the period available to DMRC to cure the alleged defects.
    • The Arbitral Tribunal interpreted the provision to mean that DMRC had 90 days from the cure notice dated 9 July 2012 to cure the defects. The Supreme Court held that this represented a possible interpretation of the contractual provision.
    • Even assuming that another interpretation could also have been adopted, the Court refused to interfere because construction of the Concession Agreement was within the domain of the Arbitral Tribunal.
    • The ruling therefore reinforces the proposition that a court cannot substitute its preferred contractual interpretation for a plausible interpretation adopted by the arbitrator.

    CMRS Safety Certificate Did Not Justify Setting Aside Award

    • DMRC relied heavily upon the certificate issued by the Commissioner of Metro Railway Safety (CMRS) permitting resumption of operations.
    • DMRC argued that the certificate demonstrated that the defects had been rectified and that the Tribunal had improperly disregarded important evidence.
    • The Supreme Court, however, distinguished between the statutory question of whether the Metro Line was sufficiently safe to resume passenger operations and the contractual question before the Tribunalβ€”whether DMRC had breached the Concession Agreement and whether the defects had been cured within the contractually prescribed period.
    • The Supreme Court ultimately rejected the Division Bench’s conclusion that the Tribunal’s treatment of the CMRS certificate rendered the award patently illegal. It emphasised that the arbitrator is the judge of the quality as well as quantity of evidence, and a court under Section 34 cannot reassess that evidence as though exercising appellate jurisdiction.

    β‚Ή611.95 Crore β€œAdjusted Equity” Finding Also Protected From Re-Appreciation

    • Another important issue concerned the Tribunal’s treatment of β‚Ή611.95 crore as Equity for determining the termination payment.
    • The Delhi High Court Division Bench had found the Tribunal’s approach flawed and had interfered with the calculation. However, the Supreme Court examined the contractual framework governing termination payment and Adjusted Equity and concluded that the Division Bench had exceeded the permissible limits of judicial review.
    • The Court’s approach once again emphasised that interpretation of contractual provisions and evaluation of evidence primarily belong to the arbitral tribunal unless the resulting view crosses the stringent threshold for interference under Section 34.

    Sections 34 and 37 Do Not Permit an Appeal on Merits

    1. The judgment assumes particular importance because the proceedings had travelled through both Section 34 and Section 37 of the Arbitration Act.
    2. The Supreme Court made it clear that the narrow scope of interference applicable to Section 34 cannot be enlarged merely because the matter reaches the appellate stage under Section 37.
    3. The underlying principle remains that arbitration is intended to provide finality to disputes and that judicial intervention must remain confined to the grounds expressly permitted by the Arbitration and Conciliation Act.
    4. The Court noted that one of the principal objectives of the 1996 Act is to minimise the supervisory role of courts in arbitration, with Section 5 expressly restricting judicial intervention except where the Act provides otherwise.

    Supreme Court Restores DAMEPL’s Victory

    • Ultimately, the Supreme Court allowed DAMEPL’s appeal and set aside the Delhi High Court Division Bench judgment.
    • DMRC’s connected appeal arising out of SLP (C) No. 8311 of 2019 was dismissed. The Supreme Court also declined to interfere with the Tribunal’s award of interest, noting that it had been granted in accordance with the terms of the Concession Agreement.
    • The result effectively restored the arbitral award in DAMEPL’s favour, including the β‚Ή2,782.33 crore termination payment along with further interest.

    Why the Judgment Is Significant for Arbitration Law

    • The decision is an important authority on the limits of the expressions β€œpatent illegality”, β€œperversity” and β€œpublic policy” when courts review domestic arbitral awards.
    • The judgment makes clear that disagreement with an arbitrator’s factual assessment is not enough. Nor is the availability of a better or alternative interpretation of the contract sufficient to justify judicial interference.
    • The threshold is substantially higher: the defect must fall within the limited statutory grounds contemplated by Section 34.
    • This distinction is crucial because permitting courts to reassess evidence, contractual interpretation and factual conclusions would effectively transform proceedings under Sections 34 and 37 into ordinary appealsβ€”something the statutory arbitration framework deliberately seeks to prevent.

    Key Takeaway

    The Supreme Court’s ruling establishes a strong principle of arbitral finality and judicial restraint:

    Courts cannot re-appreciate evidence or substitute their own interpretation merely because another view is possible and then characterise the arbitral award as β€œpatently illegal” or β€œperverse”. Patent illegality must go to the root of the matter, and judicial interference must remain within the narrow boundaries prescribed by Section 34 of the Arbitration and Conciliation Act.

    On the outcome, DAMEPL succeeded before the Supreme Court, while DMRC’s challenge failed. The Delhi High Court Division Bench judgment was set aside and the Tribunal’s award in favour of DAMEPL stood restored.

    Connected Matter

    Supreme Court: High Court Cannot Refuse Appointment of Arbitrator by Deciding Limitation at Pre-Reference Stage

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Supreme Court

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