AKP Dispute Resolution Digest November 09, 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
1.1.1. Supreme Court holds “or otherwise” in a contractual clause is an absolute bar on pre-award interest, and an arbitrator cannot act contrary to the contract
The Hon'ble Supreme Court has held that the words “or otherwise” at the end of a contractual clause barring interest are residuary words of extension and cannot be read down by the preceding expressions, and that an arbitrator, being a creature of the contract, acts beyond jurisdiction in awarding pre-reference and pendente lite interest in contravention of such a clause. The dispute was between a contractor and the National Building Construction Corporation. Explaining the statutory position, the Court noted that the power to award pre-award interest under Section 31(7)(a) of the Arbitration and Conciliation Act, 1996 is expressly subject to the words “unless otherwise agreed by the parties”, whereas post-award interest under Section 31(7)(b) is not subject to party autonomy. The Hon'ble Court further held that the rule of ejusdem generis applies only where general words follow a specific class forming a genus, and that phrases joined disjunctively by “or” must be examined independently rather than read in light of one another.
2. PMLA/White Collar
2.1. Indirect Tax
2.1.1. Supreme Court holds suppression of material facts while seeking bail is abuse of process
The Hon'ble Supreme Court has deprecated the practice of pursuing parallel remedies while keeping judicial authorities in the dark, holding that while it may be the right of an accused to challenge his arrest or to seek bail, pursuing both in parallel without adequate disclosure amounts to abuse of the process of law. The appeal was filed by the Senior Intelligence Officer, Directorate General of Service Tax Intelligence, against a judgment of the Karnataka High Court granting bail. The complaint alleged that the proprietor of a trading firm issued invoices without supply of goods, availed fraudulent input tax credit and falsified documents, with intent to evade tax causing a loss of INR 43,08,22,936 (Indian Rupees Forty-Three Crore Eight Lakh Twenty-Two Thousand Nine Hundred Thirty-Six only), in contravention of the Central Goods and Services Tax Act, 2017. Successive bail applications had been rejected by the trial court and the Sessions Court. The Hon'ble Court found that the respondent had suppressed material facts, including the rejection of his fourth bail application and the refusal of the writ court to order his release, and had obtained listing of his petition during the High Court's winter vacation without adequate notice, which it described as an attempt to steal a march. It set aside the part of the High Court's order disposing of the petition, revived the petition before the High Court, and directed that the respondent continue on interim bail on the earlier terms in place of the bail granted by the Single Judge.
3. Insolvency and Bankruptcy
3.1. Banking & Finance
3.1.1. Supreme Court holds that committee of creditors cannot withdraw approved resolution plan due to improved financial position of corporate debtor
The Hon'ble Supreme Court has held that withdrawal of an application under the Insolvency and Bankruptcy Code, 2016 (“IBC”) can be sought only until the Committee of Creditors (“CoC”) approves the resolution plan, and that once the plan is placed before the Adjudicating Authority, neither the application nor the approved plan can be withdrawn. The Court was considering whether the National Company Law Tribunal can permit withdrawal of an application seeking approval of a resolution plan after the CoC has approved it and submitted it to the Adjudicating Authority. The Hon'ble Court held that its ruling in Ebix Singapore (P) Ltd., delivered in the context of withdrawal sought by a successful resolution applicant, applies squarely to the CoC as well. It added that the improved profitability of the corporate debtor alone cannot justify refusing approval of a plan that meets the requirements of Section 30(2) of the IBC.
4. Consumer Law
4.1. Real Estate
4.1.1. Supreme Court holds homebuyer cannot claim both interest on full refund and rent for the same delay, upholds deficiency in service against bank for not verifying construction progress
The Hon'ble Supreme Court has held that a homebuyer cannot claim both interest on the full refund and reimbursement of rent for the same delay by a builder, as this would amount to double compensation for the same default. The appeals arose from an order of the National Consumer Disputes Redressal Commission directing Lodha Healthy Constructions and Developer Private Limited to refund the amount deposited towards an apartment in its “Lodha Bellezza” project in Hyderabad. The Court directed the refund of INR 1,27,34,726 (Indian Rupees One Crore Twenty-Seven Lakh Thirty-Four Thousand Seven Hundred Twenty-Six only) paid by the homebuyer, with simple interest at 12 per cent (twelve per cent) per annum from the respective dates of payment, and separately awarded INR 15,00,000 (Indian Rupees Fifteen Lakh only) in full and final satisfaction of his claims towards rent, mental agony, harassment and litigation expenses. The Court further upheld the finding of deficiency in service against the lending bank and the compensation of INR 2,00,000 (Indian Rupees Two Lakh only) awarded by the Commission, observing that disbursements in 13 (thirteen) tranches matching the payment schedule showed only that the bank paid what was demanded, and not that it verified construction progress before milestone-linked disbursal. The balance of the builder's deposit is to be held in an interest-bearing account pending the outcome of the bank's appeal before the High Court.
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.
For further queries or details, you may contact:
Mr. Anuroop Omkar
Partner, AK & Partners
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