Arbitration and Conciliation Act, 1996 – Section 34 & 37 – Scope of interference – International Commercial Arbitration – EPC contractor SEPCO obtained arbitral award of ~₹995 crores against GMRKE Ltd. – Single Judge dismissed GKEL’s Section 34 challenge – Division Bench allowed appeal under Section 37, set aside award and Single Judge’s order, holding Tribunal rewrote contract, ignored “No Waiver” and “No Oral Modification” clauses, recorded mistaken facts, applied common law termination contrary to contract, and treated Performance Guarantee Test as completed despite failure of Unit Characteristics Test – Also found Tribunal discriminatory in accepting SEPCO’s claims without notices but rejecting GKEL’s counterclaims for lack of notices – Supreme Court upheld Division Bench – Held: Scope of interference under Sections 34/37 is narrow, but award violative of Sections 18 and 28(3), contrary to fundamental policy of Indian law and shocking to conscience, can be set aside – Appeal dismissed [Paras 59–63, 83–124].

Arbitration – Setting Aside of Arbitral Award – Section 37 of the Arbitration and Conciliation Act, 1996 – Arbitral Tribunal passed an award in favour of SEPCO awarding approximately INR 995 Crores – High Court Single Judge rejected challenge under Section 34 – Division Bench allowed appeal under Section 37 and set aside both the award and Section 34 Judgment – Supreme Court upheld the decision – Held: Arbitral Tribunal committed jurisdictional errors, modified contract terms, violated natural justice, and acted contrary to fundamental policy of Indian law – Justifies setting aside of entire award [Paras 1, 3, 14, 41, 116, 123–125]

Contract Interpretation – EPC Contract – Tribunal interpreted emails and Jinan Agreement as waiver of contractual notice clauses despite express “No Oral Modification” and “No Waiver” provisions – Tribunal relied on equitable estoppel based on informal communication – Held: Tribunal acted without jurisdiction by overriding explicit contractual terms – Such reasoning not supported by evidence – Discriminatory and contrary to Section 28(3) of the 1996 Act [Paras 10, 17–18, 25, 84–86, 90–95, 99, 103, 121]

Natural Justice – Discriminatory Treatment by Arbitral Tribunal – SEPCO awarded claims despite failure to give contractual notice – GMRKE’s counterclaims rejected for same reason – Tribunal relied on unpleaded estoppel to favour SEPCO – No opportunity given to GMRKE to respond – Held: Tribunal violated Section 18 and Section 34(2)(a)(iii) – Discrimination shocked the conscience of the Court – Arbitral Award rightly set aside [Paras 20–21, 104–107, 114, 116–121]

Estoppel and Waiver – Unpleaded Grounds – Tribunal held waiver of notice arose from March 2012 communications – SEPCO never pleaded waiver or estoppel for that period – Tribunal created its own theory without giving GMRKE chance to present evidence – Held: Violated audi alteram partem – Application of estoppel failed to meet test under Rock Advertising and Indian Evidence Act – Invalid under law [Paras 10, 20–21, 86–87, 99–100, 105]

Performance Guarantee Test – Milestone Conditions Ignored – Tribunal awarded INR 255 Crores to SEPCO for successful completion of Performance Guarantee Test – However, Unit Characteristic Test (precondition) for Unit 1 had failed – Held: Tribunal rewrote milestone conditions – Awarded amounts contractually not due – Violation of contract and public policy under Section 34(2)(b)(ii) – Division Bench right in interfering [Paras 12, 37, 102–103, 120]

Notice Requirement – Contractual Condition Precedent – Amended CWEETC Agreement mandated written notices for claims – Tribunal excused SEPCO’s failure to serve notices while penalizing GMRKE for same – Held: Tribunal's selective waiver approach undermined equality and violated Section 18 – Tribunal cannot override express condition precedent without written modification per contract [Paras 10, 17, 87–88, 107, 121]

Judicial Review – Scope under Sections 34 and 37 – Limited but Not Toothless – Supreme Court reiterated that courts do not sit in appeal over awards – However, they must intervene when there is perversity, jurisdictional error, or violation of public policy – Division Bench rightly found that Single Judge failed to apply correct test – Tribunal's findings failed Wednesbury Reasonableness – Reappreciation was warranted [Paras 57–73, 114, 122–123]

Tribunal Exceeded Mandate – Modification of Contract – Tribunal held SEPCO had common law right of termination and awarded claims post demobilization – Agreement contained exclusive termination clauses excluding common law remedies – Held: Tribunal exceeded jurisdiction by resurrecting repudiatory breach rights excluded by contract – Violated Section 28(3) and fundamental policy of Indian law [Paras 12, 38, 121]

Bias – Single Judge Erred in Dismissing Challenge – GMRKE alleged bias and procedural irregularity by Tribunal – Single Judge dismissed without proper reasoning – Held: Single Judge's findings were perverse – GMRKE could not have anticipated tribunal’s discriminatory award – Division Bench rightly found procedural irregularity and natural justice violations [Paras 22, 40, 101, 117–118]

International Commercial Arbitration – Seat in India – Substantive Law of England – Tribunal and Indian Courts bound by 1996 Act – Held: Despite English law governing substance, award must comply with Indian public policy due to Indian seat – Tribunal’s errors reviewable under Indian law – SEPCO's reliance on Indian precedents confirms applicability [Paras 75–83]

Waiver Must be Unequivocal – Mere Emails Insufficient – Tribunal relied on 2012 emails as waiver of notice – Contract explicitly required written and signed modification – No unequivocal words or conduct proven – Held: Tribunal misapplied waiver and estoppel – Failed test of deliberate relinquishment – Contrary to ICA Sections 62 & 63 and settled law [Paras 29–34, 84–86, 99]

Decision: Appeal dismissed – Arbitral Award and Section 34 Judgment rightly set aside by High Court Division Bench – Held: Tribunal violated express contractual terms, principles of equality, and natural justice – Discrimination in application of notice condition and rewriting of contract shocked conscience of Court – Entire Arbitral Award unsustainable – No severance possible – No costs [Paras 115–125]

Insolvency and Bankruptcy Code, 2016 – Resolution Plan – Concurrent Findings – Appeals under Section 62 lie only on a question of law – NCLT and NCLAT concurrently upheld JSW’s plan with minor modification regarding EBITDA – Held: Appeals not maintainable in absence of statutory grounds under Section 61 – Concurrent findings not to be disturbed unless perverse, arbitrary or contrary to statute [Paras 87-96].

IBC – Clause Permitting CoC to Extend Implementation Period – Validity – Clause authorising CoC to extend effective date of implementation by 66% majority not open-ended – No renegotiation or withdrawal of plan involved – Distinguished from Ebix Singapore and Amtek Auto – Held: Such discretion to CoC permissible to address exigencies – Delay not attributable to JSW or CoC but due to litigation, ED attachments and interim orders – Plan validly implemented on 26.03.2021 [Paras 97-128].

IBC – Compliance with IBBI (CIRP) Regulations – Priority of OCs – Resolution Plan submitted when Regulation 38 mandated only liquidation value to OCs – Subsequent amendment (05.10.2018) providing priority complied with via addendum – Ex gratia payment of Rs. 350 crores to OCs beyond entitlement – Later amendment (27.11.2019) inapplicable as prospective – No contravention of law – Promoters cannot raise issue not agitated by OCs [Paras 130-143].

IBC – Upfront Infusion of Funds – CCDs as Equity – JSW infused Rs. 8,450 crore by compulsorily convertible debentures – CCDs mandatorily convertible into equity treated as equity instruments in law (Narendra Kumar Maheshwari, IFCI Ltd.) – Upfront commitment fulfilled – Commercial wisdom of CoC paramount and non-justiciable [Paras 144-152].

IBC – Distribution of EBITDA – NCLT directed distribution based on NCLAT Essar – NCLAT relying on SC Essar held EBITDA not distributable absent provision in RfRP – CoC initially opposed distribution, later took contrary stand in affidavit post-review – Held: RfRP silent, no such claim permissible after plan approval – EBITDA to remain with corporate debtor – Finality of resolution plan cannot be unsettled [Paras 153-171, 185-190].

IBC – Classification of Contingent Creditors – Jaldhi – Claim based on foreign arbitral awards – Withdrawn execution petitions before Calcutta High Court – Awards not deemed decrees under Section 49 of Arbitration Act – Stand of creditor inconsistent – CoC’s commercial wisdom in classifying as contingent creditor upheld – Non-justiciable [Paras 172-180].

IBC – Pre-CIRP Dues – Medi & Darcl – Payments made during CIRP adjusted against services rendered – No CoC approval for pre-CIRP dues – Must be treated only under resolution plan – Appeals dismissed [Paras 181-184].

IBC – Section 32A Immunity – Corporate debtor’s liability for pre-CIRP offences ceases after plan approval – ED attachments and prosecutions could not continue once management changed – Delay due to pendency of such proceedings not attributable to JSW – Implementation valid [Paras 105-123, 116-118].

Decision: Appeals dismissed – NCLAT order dated 17.02.2020 upholding resolution plan of JSW Steel Limited affirmed – Implementation of plan on 26.03.2021 valid – Contingent claims, EBITDA demands, and objections of ex-promoters rejected – Section 32A immunity reiterated – Resolution Plan attained finality [Paras 185-192].

Motor Accident Compensation – Quantum – Future Medical Expenses – Income Assessment – Pillion rider (aged 20) rendered paraplegic (C4–5 fracture) after being run over by car driven rashly – Liability not in dispute; appeal limited to (i) acceptance of medical bills and (ii) income for loss of earning capacity – Insurance company’s objection to bills from Goa rejected; Court accepts verification and directs ₹20 lakhs towards medical expenses beyond HC award; no interest if paid within 4 months – Monthly income reasonably fixed at ₹5,000 (2001) for a B.Com final-year student enrolled with ICAI; 40% future prospects and multiplier 18 applied as per Pranay Sethi – Loss of income computed at ₹15,12,000; total compensation recalculated at ₹40,34,356 with 9% interest from filing till realisation – Additional ₹20 lakhs for medical expenses payable within 4 months, failing which 9% interest from judgment date – Appeal allowed with modification [Paras 2–6].

Insurance Bills – Verification & Place of Treatment – Objection that bills were from Goa/Bengaluru and not Delhi rejected; insurer with nationwide presence cannot plead inability to verify – Justified relocation to Goa due to pneumonia and adverse climate in Delhi – Directed tabulated bills; ₹21 lakhs verified as genuine; net ₹20 lakhs ordered (after HC’s additional ₹1 lakh) towards medical expenses incurred over two decades of 100% disability [Paras 2–3].

Income Determination – Prospective Career – Minimum wages for a “skilled worker” in 2001 (₹3,352/₹3,339) not appropriate proxy for a graduate on track for CA – Court fixes ₹5,000 p.m. (2001) as reasonable; adds 40% future prospects; applies multiplier 18 per Pranay Sethi; computes loss of income at ₹15,12,000 [Para 4–5].

Recalculation of Award – High Court components retained (₹14 lakhs under conventional heads; medical expenses ₹11,22,356) – Total compensation fixed at ₹40,34,356 with 9% interest from petition till realisation – Direction to pay within four months [Para 5].

Additional Direction – ₹20 lakhs towards future medical expenses payable within 4 months; no interest if paid in time; otherwise 9% from judgment date [Para 6].

Decision: Appeal allowed – Award enhanced and directions issued regarding payment timelines and interest.

Motor Accident Compensation – Determination of Income – Appellant, 23-year-old loader, lost right leg in lorry accident (01.12.2015) – Tribunal fixed income at ₹9,000 p.m., assessed 85% disability, applied multiplier 18, awarded ₹19,35,400 under various heads – High Court reduced income to ₹8,000 relying on Workmen’s Compensation Act ceiling, further considering only 60% thereof, thereby reducing award to ₹10,41,022 – Supreme Court: High Court erred in importing Workmen’s Compensation Act parameters into MV Act claim – Once claimant elected remedy under MV Act, insurer cannot seek application of Workmen’s Compensation Act provisions – Tribunal’s award restored [Paras 3–6].

Future Prospects – Appellant argued addition of 40% for future prospects (Pranay Sethi) – Court held not permissible since claimant had not appealed against Tribunal award, only insurer’s appeal considered by High Court – Hence no enhancement beyond Tribunal’s award [Para 6.1].

Decision: Appeal allowed – High Court’s judgment dated 23.01.2020 set aside – Tribunal’s award of ₹19,35,400 restored – No further addition for future prospects permitted.

Competition Law – Anti-Competitive Agreement – Section 3(3)(b) – Federation boycott – Kerala Film Exhibitors Federation (KFEF) found to have engaged in anti-competitive conduct by threatening distributors and boycotting Crown Theatre for dealing independently – CCI held KFEF and its office bearers guilty – Appeal against COMPAT’s order that set aside penalties on two office-bearers on natural justice grounds – Held: CCI’s notice dated 10.06.2015 satisfied legal requirements, and principles of natural justice were complied with – Penalties restored [Paras 1-3, 37-43, 68].

Due Process – Show-Cause Notice – Section 27 and Regulation 48 – Whether second show-cause notice is mandatory before imposition of penalty – Held: No requirement for separate penalty notice under the Act or Regulations – Furnishing of DG Report and oral hearing suffice – Appellate Tribunal erred in reading additional procedural safeguards into the statute [Paras 15, 35, 52-57].

Section 48 – Liability of Office Bearers – Federation deemed a company under Section 48 – President and General Secretary (Respondent Nos. 2 and 3) held liable for KFEF’s anti-competitive conduct – They failed to prove lack of knowledge or due diligence – Monetary penalties and behavioural remedies imposed – Directions disassociating them from KFEF restored [Paras 41-43, 64-66].

Proportionality – Doctrine of Proportionality – Penalties of 10% of average income not disproportionate – Behavioural remedy barring participation in KFEF’s governance for 2 years justified in light of repeat offences and prior penalty in Case No. 45/2012 – Held: Penalty not shocking or excessive – Consistent with legislative intent to make CCI an effective regulator unlike defunct MRTP Commission [Paras 47-51, 64-66].

Natural Justice – No Violation – DG Report named Respondent Nos. 2 and 3 as key decision-makers – Respondents were issued notice, given opportunity to reply, submit income documents, and were heard – COMPAT’s finding of procedural violation was incorrect – Violation of natural justice not established [Paras 39-41, 66-67].

Freedom of Association – Article 19(1)(c) – Challenge to personal liability of office-bearers under Article 19(1)(c) rejected – Reasonable restrictions under Article 19(4) justified to curb unethical and anti-competitive practices – CCI’s powers under Section 27 not unconstitutional [Para 67].

Decision: Appeal allowed – COMPAT’s order set aside insofar as it interfered with penalty and behavioural remedies – CCI’s full order dated 08.09.2015 restored – Disassociation of Respondent Nos. 2 and 3 from KFEF to take effect from 01.12.2025 for 2 years – Compliance to be reported within 3 months [Para 68].

Civil Procedure – Summary Suit – Leave to Defend – High Court allowed defendant to file reply to summons for judgment without prior leave to defend under Order XXXVII Rule 3(5) CPC – Held: Permitting reply without prior leave undermines the summary nature of Order XXXVII proceedings – Order suffers from serious procedural defect and is unsustainable – Impugned order set aside [Paras 6, 7, 9].

Civil Procedure – Order XXXVII CPC – Procedure Mandate – Summary suits under Order XXXVII require strict compliance with sequence of steps – Entry of appearance, filing of summons for judgment, and leave to defend must precede filing of written statement or reply – Deviation from mandated procedure strikes at the root of Order XXXVII scheme [Paras 6, 7].

Delay – Condonation of Delay in Filing Leave to Defend – Application for condonation of delay in seeking leave to defend pending before High Court – Supreme Court held that mere pendency or wrong provision invoked cannot justify bypassing procedural compliance – No opinion expressed on merits of delay or entitlement to decree [Paras 8, 9].

Procedural Law – Distinction Between Regular and Summary Suit – Allowing reply in summary suit without leave equates it with ordinary suit, thereby nullifying the purpose of Order XXXVII – Procedural safeguard is integral to summary disposal – Order set aside while preserving rights of both parties to pursue appropriate remedies [Paras 9, 10].

Banking Law – Leasehold Plot – Validity of mortgage and e-auction sale of leasehold property allotted by DDA – Mortgage without prior permission of Lieutenant Governor held void – DDA’s rights of pre-emption and unearned increase ignored – Recovery Officer and Bank failed to disclose material encumbrances in auction proclamation – E-auction notice dated 27.09.2012 and sale held on 09.11.2012 declared illegal for violation of Rule 53 Second Schedule, Income-tax Act and Rule 16 of 1962 Rules – High Court erred in applying res judicata – Fresh cause of action arose when auction violated lease terms – Auction purchaser found bona fide and entitled to restitution – Bank directed to refund full deposit with 9% interest – Appeal allowed; auction and sale certificate quashed [Paras 18-27, 28-32].

Mortgage – Leasehold property allotted by statutory authority – Mortgage created without written consent of Lieutenant Governor – Held: Mortgage void ab initio; Bank cannot claim lawful security interest [Paras 5, 18-19].

Debt Recovery – Auction under RDDBFI Act – Recovery Officer bound to disclose encumbrances and statutory dues in proclamation – Failure to mention DDA’s unearned increase claim vitiates sale [Paras 23-27].

Res Judicata – Earlier writ petition withdrawn on Bank’s undertaking that auction would be subject to lease conditions – Not decided on merits – Fresh cause of action arose upon breach of undertaking – High Court erred in dismissing subsequent writ as barred [Paras 28-29].

Restitution – Innocent auction purchaser caught in illegal sale – Restitution a moral imperative – Bank, having auctioned what it never lawfully possessed, must refund money with interest [Paras 30-32].

Decision – Appeal allowed – High Court order dated 11.08.2014, e-auction notice dated 27.09.2012, auction dated 09.11.2012, and confirmation/sale certificate dated 08.07.2013 and 12.07.2013 quashed – Bank directed to refund entire deposit with 9% interest to auction purchaser within one month [Para 32-33].

Insolvency Law – Transfer of Partnership Share – Appellant inducted as partner after father’s death; creditors initiated insolvency (1975); official receiver executed transfer deed (1983) in favour of respondent based on alleged offer/acceptance (Ex.P4, Ex.P6) – District Court (2004) found documents fabricated, cancelled transfer, restored appellant’s share – High Court (2011) reversed relying on S.37, holding acts of receiver saved – Held: High Court erred; once order dated 04.01.1983 allowing transfer was set aside and matter remanded, transfer deed had no legal foundation – Section 37 protects only duly concluded acts, not those based on fabricated documents – Appellate court must give reasons when reversing fact findings; here, High Court failed in its duty under Santosh Hazari principles – District Court’s detailed factual findings restored – Appeals by appellants allowed; connected appeals by respondents dismissed [Paras 19-27].

Insolvency – Section 37, Provincial Insolvency Act – Annulment wipes out insolvency retrospectively but saves only valid and duly concluded sales/acts of receiver – Transfer based on fabricated documents not “duly made” – Sale deed dated 11.03.1983 cannot be protected [Paras 17-23].

Evidence – Fabricated documents – District Court meticulously analysed contradictions, failure to produce originals, improbabilities, and concluded Ex.P4 offer and Ex.P6 acceptance were concocted – Findings binding absent proper reappreciation by appellate court [Paras 20-22].

Appellate Jurisdiction – High Court reversed District Court findings without analysis of evidence – Error of law; appellate court must engage with trial court reasoning and give independent reasons when reversing findings [Paras 24-25].

Decision – Appeals (CA Nos. 12048-12049/2018) allowed – High Court judgment set aside – District Court’s order dated 16.02.2004 restored – Connected appeals (CA Nos. 12050-12053/2018) dismissed [Paras 27-29].

Service Law – Lecturer Appointment – Rule Applicability – Appellant selected as Lecturer in History in 2006 under Assam Government Aided Junior College Management Rules, 2001 – Age condonation granted by Government for 2 years 7 months – Appointment approved and 18 years of continuous service rendered – High Court Division Bench wrongly applied Rule 19(iv) of Assam Secondary Education (Provincialisation) Service Rules, 2003 to aided post, quashing appointment – Held: 2003 Rules not applicable to aided colleges at the time of advertisement – Appointment validly made under 2001 Rules – Orders of Division Bench and Review dismissed as illegal – Appellant entitled to reinstatement with continuity but no back wages [Paras 2, 3, 5, 6, 7].

Education Law – Distinction Between Aided and Provincialised Institutions – 2001 Rules governed appointments in aided junior colleges pre-provincialisation – 2003 Rules under 1977 Act apply only post-provincialisation and cannot retrospectively invalidate appointments in aided institutions – High Court erred in conflating rules applicable to distinct statutory regimes [Paras 2, 3, 6].

Reinstatement – Break in Service – Appellant removed after review dismissal – Supreme Court directs reinstatement within 4 weeks without treating intervening period as break in service – Continuity of service for all purposes except back wages allowed [Para 7].