AKP Dispute Resolution Digest June 29, 2026

AK & Partners
Jun 29
5 min read

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 partly sets aside arbitral award in the NHAI highway widening dispute

The Hon'ble Delhi High Court has partly allowed an appeal filed by the National Highways Authority of India (NHAI) challenging an arbitral award passed in favour of a construction company that had been engaged to widen a stretch of national highway connecting Bijni to the West Bengal border in Assam. The underlying dispute arose out of a works contract executed in September 2005. The construction company attributed project delays to NHAI's failure to hand over encumbrance-free land and other impediments, while NHAI blamed the contractor for poor progress, inadequate mobilisation of resources, and prolonged non-performance. The contract was eventually terminated in March 2016. Following arbitration, the tribunal awarded the contractor substantial amounts under several heads, including prolongation overheads, increased rates during the extended contract period, machinery idling and under-utilisation costs, confiscated machinery and materials, work actually executed under the contract, and loss of profit. Before the Hon'ble High Court, NHAI argued that the Engineer's extension-of-time recommendations had consistently recorded delays concurrently attributable to the contractor, and had rejected claims for prolongation and overhead costs, determinations that the contractor never challenged. Accepting this contention, the Court held that the arbitral tribunal could not have allowed prolongation-related claims without first dealing with the effect of those earlier, unchallenged determinations. Accordingly, the Court set aside the portions of the award relating to prolongation overheads, increased rates during the extended period, machinery idling and underutilization costs, and confiscated machinery and materials. However, it upheld the award insofar as it related to compensation for work executed under the contract and loss of profit, finding no ground to interfere with those specific portions.

1.2. Real Estate

1.2.1. Supreme Court holds consumer cannot be forced into arbitration once complaint is admitted under the Consumer Protection Act

The Hon'ble Supreme Court has held that a consumer who has validly invoked the Consumer Protection Act cannot be compelled to go to arbitration merely because the underlying agreement contains an arbitration clause, restoring a homebuyer's long-pending complaint regarding delayed possession of a flat for fresh adjudication on merits. The dispute concerned a claim for compensation for delay in handing over possession of a flat allotted by a cooperative housing society. After becoming a member of society and finalising the allotment agreement, the complainant made full payment but did not receive timely possession. He approached the District Consumer Forum in 2005 seeking compensation for the delay. After the complaint was admitted, the housing society invoked the arbitration clause contained in the agreement, leading to a reference to arbitration that was upheld successively by the State and National Consumer Disputes Redressal Commissions. Before the Hon'ble Supreme Court, it was argued that once a complaint is admitted, the consumer forum is obligated to decide it on merits and cannot be diverted to arbitration solely because of a contractual arbitration clause. Accepting this position, the Court held that the remedy under the Consumer Protection Act is additional to other available remedies in law, and that the mere existence of an arbitration clause does not oust the jurisdiction of consumer fora once invoked. The Court also found that the National Commission had erred in dismissing the matter on the ground that the complainant was no longer a "consumer" after taking possession, clarifying that a claim for delayed compensation survives independently of subsequent possession. The Court restored the proceedings for fresh adjudication before the District Forum and requested that the long-pending matter, dating back over two decades, be decided within one year.

2. PMLA/White Collar

2.1. Food & Beverage

2.1.1. Supreme Court dismisses plea challenging ED search conducted in TASMAC-linked money laundering probe

The Supreme Court has dismissed a plea filed by a businessman challenging the legality of search operations conducted by the Enforcement Directorate (ED) at his residence in 2025, in connection with an alleged money laundering investigation linked to a state-run liquor marketing corporation in Tamil Nadu. The Hon'ble Court upheld an order of the Hon'ble Madras High Court, which had earlier declined to examine the legality of the search on the ground that the Adjudicating Authority had already confirmed attachment proceedings under Section 8 of the Prevention of Money Laundering Act (PMLA), and that the businessman had separately approached the Appellate Tribunal challenging that confirmation. During the hearing, it was argued that the core issue was whether the search complied with Section 17 of the PMLA, which permits search action only after recording reasons to believe that a person has committed money laundering or possesses proceeds of crime, and after obtaining requisite authorisation. It was contended that no such valid authorisation existed, that the businessman was not named in the underlying predicate offence or the Enforcement Case Information Report, and that nothing incriminating beyond mobile phones had been recovered from him. It was further argued that the scope of Section 17, dealing with search and seizure, was distinct from Section 8, which concerns confirmation of attachment, and that compliance with the former could not become irrelevant merely because the latter had been confirmed. The Hon'ble Court was not persuaded to interfere and declined a subsequent request to permit withdrawal of the matter with liberty to raise all objections before the Appellate Tribunal, observing that the High Court's order had already preserved that liberty. The underlying investigation stems from multiple FIRs alleging large-scale corruption within the liquor corporation's operations.

3. Insolvency and Bankruptcy

3.1. Real Estate

3.1.1. Supreme Court rules right to appeal under Section 62 IBC stands extinguished once re-filing window lapses

The Supreme Court has held that an appeal filed under Section 62 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) that is marked defective by the Registry must have its defects cured within 28 (twenty-eight) days, as prescribed under the Supreme Court Rules, 2013 (“SCR”), failing which the right to appeal stands extinguished and no application for condonation of re-filing delay can thereafter be entertained. This decision came in an appeal filed by the liquidator of a corporate debtor under liquidation against Adani Infrastructure and Developers Private Limited, challenging an order of the National Company Law Appellate Tribunal (“NCLAT”). The appellant's appeal was presented seven days beyond the 45-day limitation period prescribed under Section 62(1), IBC, but within the 15-day grace period under Section 62(2). The appeal was, however, marked defective, and after the defects were cured, it came to be re-filed with a further delay of 82 days, well beyond the 28-day window permitted under the SCR. The issue was whether the Court could condone such re-filing delay, particularly since a coordinate Bench had earlier shown leniency to the same appellant in a related proceeding under Section 61 of the IBC before the NCLAT. The Court held that the strict and time-bound scheme of limitation under the IBC leaves no room for condonation beyond the statutorily permitted windows, and that the SCR, being subordinate legislation, cannot be read to override the express timelines engrafted in the IBC. It clarified that the appellant's status as a court-appointed liquidator, and the indulgence shown to him at an earlier stage of the same litigation, did not warrant the invocation of the Court's extraordinary jurisdiction under Article 142 of the Constitution. Holding that no question of condoning the delay arose once both the 60-day filing window and the 28-day re-filing window had lapsed, the Court dismissed the appeal as time-barred without examining its merits.