AKP Dispute Resolution Digest July 20, 2026

We are delighted to share this month's AKP Dispute Resolution Monthly Digest. Please feel free to write to us with your feedback at info@akandpartners.in.

1.        Arbitration and Mediation

1.1.      Infrastructure and Construction

1.1.1.  Delhi High Court Rules: A fresh copy of the Arbitral Award cannot restart the limitation to challenge the Award

The Hon’ble Delhi High Court has dismissed two connected petitions filed by the Union of India under Section 34 of the Arbitration and Conciliation Act, 1996, challenging a common Arbitral Award dated 22.09.2023, on the ground that they were barred by limitation. The petitions were accompanied by applications seeking condonation of delay in re-filing, but the Court first examined a preliminary objection on limitation raised by the respondent, M/s ISC-YUG (JV). It was undisputed that the Award was pronounced on 22.09.2023 and that the Union of India's counsel collected the signed copy on 09.10.2023. The Union contended that limitation ran only from 18.07.2024, when it separately obtained a "copy to copy" of the Award from the Delhi International Arbitration Centre after execution proceedings had been initiated against it, arguing that its counsel was not authorised to receive the Award on its behalf. Justice Harish Vaidyanathan Shankar rejected this contention, holding that an advocate representing a party in arbitral proceedings is its recognised agent for receipt of the Award unless authority is shown to have been specifically curtailed, and that a belated, self-serving affidavit filed nearly two years later could not displace the admitted factual position. The Court held that limitation under Section 34(3) commenced from 09.10.2023, when counsel received the signed Award, and that the outer limit of three months plus the thirty-day condonable period under the proviso had long expired before the petitions were filed. Relying on Union of India v. Popular Construction Co. and Simplex Infrastructure Ltd. v. Union of India, the Court reiterated that the phrase "but not thereafter" in the proviso to Section 34(3) is an absolute bar excluding Section 5 of the Limitation Act. Distinguishing State of Maharashtra v. ARK Builders (P) Ltd., the Court observed that a party cannot indefinitely postpone limitation by procuring a fresh copy of an Award it already knew of. It noted that permitting such a course would defeat the legislative object of ensuring finality and expedition in arbitral proceedings, and that questions of delay in re-filing become academic once a petition is barred at the threshold under Section 34(3).

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1.2.       Refinery and Petrochemical

1.2.1.  Court cannot re-appreciate evidence or re-interpret contract; Delhi High Court dismisses IOCL’s Challenge

The Delhi High Court has dismissed a petition filed by Indian Oil Corporation Limited under Section 34 of the Arbitration and Conciliation Act, 1996, challenging an award dated 11.03.2019 passed in favour of a consortium of Toyo Engineering Corporation and Larsen & Toubro Limited, arising from an EPCC contract for IOCL's Panipat Naphtha Cracker Project. The Hon’ble Bench held that IOCL's challenge, in substance, sought a re-appreciation of evidence and an alternative interpretation of contractual clauses, which falls outside the limited scope of interference under Section 34. On the price-discount issue, the Tribunal had found that once IOCL granted an extension of time under Clause 4.3.6.0 of the GCC without recording that the extension was for reasons other than a justified delay, the starting date for calculating the price discount under Clause 4.4.2.1 correspondingly advanced, extinguishing IOCL's 10 per cent price-reduction claim. The Court held this was a plausible interpretation of the contract, rejecting IOCL's argument that a conditional extension, coupled with a price-discount stipulation, fell outside Clause 4.4.2.1. The Court also declined to disturb the Tribunal's alternative finding that the price-discount clause was penal under Section 74 of the Indian Contract Act, since IOCL had failed to prove damages, that this was a secondary finding that did not affect the outcome. On jurisdiction, the Court upheld the Tribunal's view that IOCL's deductions from the consortium's bills fell within the second, unnotified category of arbitrable claims under Clause 9.1.0.0 of the GCC, relying on the parenthetical language of the parallel PSU-arbitration clause, Clause 9.4.1.0, to construe the contractto construe the contract harmoniously harmoniously. Since the award arose from an international commercial arbitration, the ground of patent illegality under Section 34(2A) was unavailable to IOCL. The petition, along with connected applications, was dismissed, and the bank guarantees furnished by the respondents were directed to stand discharged after four weeks.

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1.3.       Real Estate

1.3.1.   The Supreme Court holds that a recovery certificate issued by DRT before the 2016 amendment to the RDB Act cannot be found in an insolvency notice

The Hon’ble Supreme Court has held that a High Court's supervisory jurisdiction under Article 227 of the Constitution cannot ordinarily be invoked to challenge an Arbitral Tribunal's rejection of a jurisdictional objection under Section 16 of the Arbitration and Conciliation Act, 1996, setting aside two orders of the Gauhati High Court that had entertained such a challenge and stayed arbitral proceedings. The Hon’ble Division Bench held that the remedy against rejection of a Section 16 application lies strictly under Section 34, after the final award. The dispute arose from a 1976 partnership deed among the Bezboruah family containing an arbitration clause. After earlier Section 8 proceedings were rejected on the ground that certain corporate respondents were non-signatories, the Supreme Court, on consent, had referred all parties to arbitration and appointed a sole arbitrator. The non-signatory companies, though served, did not contest that reference. Before the Tribunal, they sought deletion of their names as non-signatories, the Ld. The Tribunal rejected the applications, holding that the Hon’ble Supreme Court's reference order left no scope to revisit the issue. The Hon’ble Gauhati High Court entertained a revision petition against this rejection and stayed the arbitral notices. Setting this aside, the Court reiterated that the Act is a self-contained code in which Section 5 restricts judicial intervention, and that interference under Article 227 is confined to a "patent lack of inherent jurisdiction" that "stare[s] one in the face," per Deep Industries and Punjab State Power Corporation. Applying Cox and Kings, the Hon’ble Court held the Ld. Tribunal alone was competent to decide whether the non-signatories were veritable parties. The appeals were allowed, the Hon’ble High Court's orders set aside, and the Ld. Tribunal was directed to independently decide the non-signatories' status and complete the arbitration expeditiously.

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2.        Motor Accident Claims

2.1.     Insurance Sector

2.1.1. Supreme Court holds no fixed formula for computing deceased’s annual income under the Motor Vehicles Act; salaried and self-employed claimants to be assessed differently

The Hon’ble Supreme Court has held that there is no hard and fast formula for computing the annual income of a deceased person or claimant under the Motor Vehicles Act, 1988, while allowing a batch of three connected appeals arising from motor accident claims and enhancing the compensation awarded in each. The lead appeal arose from the death of Mr Manoranjan Pandey, who ran his own construction business, whose annual income the Motor Accident Claims Tribunal assessed from a single ITR, while the High Court of Orissa instead averaged two ITRs, thereby reducing the compensation awarded. The issue before the Court was whether the ITR of the previous year alone, or an average of ITRs across multiple years, ought to be taken as the reference point for assessing a deceased claimant’s annual income. The Court held that ITRs, being statutory documents, are an important reference point, but a bifurcation must be made between salaried and self-employed claimants. For salaried individuals, only the ITR of the preceding year suffices, since the financial impact of a recent promotion is best reflected in that year alone. For self-employed individuals or those running their own business, the average income from up to the previous three years’ ITRs is to be taken, having regard to the nature, geographic location, growth pattern and potential of the business, and factoring in instances of initial negative income and the date on which the ITRs were filed. Applying this test, the Court fixed the deceased’s income at INR 14,00,000/- and enhanced the compensation from INR 1,87,75,150/- awarded by the High Court to INR 1,97,81,505/-. The same principle was applied to enhance the compensation awarded in the two connected appeals, Rajani v. Mukesh and Smt. Rekha v. Dinesh Porwal, decided alongside.

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3.        Debt Recovery Tribunal

3.1.      Industry- Banking and Financial Services

3.1.1.   Supreme Court hold recovery Certificate issued by DRT before the 2016 amendment to the RDB Act cannot be found in an Insolvency Notice

The Hon’ble Supreme Court has dismissed an appeal filed by HDFC Bank Limited, holding that a recovery certificate issued by a Debts Recovery Tribunal (“DRT”) under the pre-amended Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (“RDB Act”) does not constitute a “decree or order” for the purpose of issuing an insolvency notice under Section 9(2) of the Presidency Towns Insolvency Act, 1909 (“Insolvency Act”). Justices Dipankar Datta and Satish Chandra Sharma delivered the ruling in an appeal that had remained pending since 2010, during which the original respondent passed away and was substituted by his legal representatives. The dispute traced back to a consortium loan availed by Beautiful Diamonds Ltd. for its diamond business, upon default of which the Appellant-Bank obtained a recovery certificate for over INR 14.74 crore from the DRT, Mumbai in 2004, and thereafter issued an insolvency notice against the original respondent. This director had furnished a personal guarantee. The High Court of Judicature at Bombay had held that no insolvency notice could be issued based on a recovery certificate, relying on the Supreme Court’s earlier ruling in Paramjeet Singh Patheja v. ICDS Ltd., which held that an arbitral award is not a “decree or order” within the meaning of Section 9. The Bank argued that Section 19(22A) of the RDB Act, inserted in 2016, deems a recovery certificate to be a decree of the Court for initiating insolvency proceedings, and that the DRT, having all the trappings of a civil court, ought to be treated at par with one even for the earlier period. The Court rejected this submission, holding that the insertion of Section 19(22A) was itself a legislative recognition that no such equivalence existed before the amendment, and that the amendment, not having been given retrospective effect, could not aid the Bank. Reiterating that the rights and liabilities of parties are to be judged as on the date of institution of proceedings, the Court held that the wider ratio in Paramjeet Singh Patheja that the Insolvency Act, given its grave civil consequences, must be strictly construed and that an insolvency notice is not a mode of enforcing a debt continued to apply with full force, and accordingly dismissed the appeal.

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4.        Negotiable Instrument Act

4.1.       Industry- Media and Entertainment

4.1.1.  Delhi High Court holds pending Section 138 complaints survive a subsequent settlement where the Consent Terms reserve the complainant’s right to prosecute on default

The Hon’ble Delhi High Court has dismissed a batch of twenty-one petitions filed by actor Rajpal Naurang Yadav and his wife, Radha Rajpal Yadav, comprising seven criminal revision petitions challenging their conviction and fourteen petitions under Section 482 Cr.P.C. challenging their sentence and seeking quashing of the underlying complaints, arising out of seven dishonoured cheques issued towards repayment of a loan for the production of the film ‘Ata Pata Laapata’.  The seven complaints arose from cheques issued pursuant to a loan agreement and three supplementary agreements executed between 2010 and 2012. During the pendency of the complaints, the parties entered into a Consent Agreement in April 2013 restructuring the liability at INR 10.40 crore, secured by fresh post-dated cheques, which culminated in a consent decree of this Court in January 2016. The petitioners contended that this settlement subsumed the earlier cause of action and rendered the original complaints unmaintainable, relying on the Supreme Court’s ruling in Gimpex (P) Ltd. v. Manoj Goel. Separately, the seven revision petitions challenging the conviction had been filed after a delay of 1,894 days, which the petitioners sought to attribute to incorrect legal advice. The Court declined to condone the delay in the revision petitions, holding that the explanation offered was unsupported by the record – the petitioners’ own pleadings filed in 2019. A subsequent writ petition in 2022 showed they had consciously confined their challenge to the sentence and that a litigant cannot be permitted to throw the entire blame on his counsel to escape the consequence of over five years’ inaction. On the merits, the Court held Gimpex (P) Ltd. to be inapplicable, since the complainant had never instituted fresh complaints on the settlement cheques and no parallel prosecutions arose; Clause 6 of the Consent Agreement itself expressly permitted the complainant to continue the pending complaints in the event of default, and since the petitioners admittedly defaulted, that contingency never arose. The Court also rejected the plea of double jeopardy founded on the petitioner’s earlier detention in civil prison in execution of the money decree, holding that civil imprisonment for non-payment of a decretal debt is not punishment for an offence and does not bar simultaneous criminal prosecution. Taking into account a further INR 2.25 crore paid by the petitioner during the pendency of the present proceedings, the Court modified the sentence, upheld the conviction, and declined to extend the benefit of probation given the petitioner’s conduct before the Court.

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Disclaimer

The note is prepared for knowledge dissemination and does not constitute legal, financial or commercial advice. AK & Partners or its associates are not responsible for any action taken based on its contents.

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Mr. Anuroop Omkar

Partner, AK & Partners

info@akandpartners.in