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JSA Prism | Dispute Resolution | May 2025

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The Supreme Court of India upholds the constitutional validity of the pecuniary jurisdiction of consumer commissions established under the Consumer Protection Act, 2019 basis the value of goods or services paid as consideration

The Supreme Court of India (“Supreme Court”) has in Rutu Mihir Panchal and Ors. vs. Union of India and Ors.[1] held that the determination of the pecuniary jurisdiction of the District, State, and National Consumer Commissions (“Consumer Commissions”) based on the consideration paid for the purchase of goods and services under Sections 34 (1), 47 (1)(a)(i) and 58 (1)(a)(i) of the Consumer Protection Act, 2019 (“2019 Act”) (“Provisions”) is constitutional and not violative of Article 14 of the Constitution of India (“Constitution”).

Brief facts

This judgement deals with questions of law arising out of – (a) Writ Petition under Article 32 of the Constitution (“Writ Petition”)[2]; and (b) Civil Appeal[3] challenging an order passed by the National Consumer Disputes Redressal Commission (“NCDRC”) (“Civil Appeal”). The facts of each case are as follows:

Writ Petition

The husband of Rutu Mihir Panchal (“Petitioner”) purchased a Ford Endeavour (“Vehicle”) from an authorised dealer of Ford India Private Limited for INR 31,19,000 (Indian Rupees thirty-one lakh nineteen thousand). On November 20, 2018, the Vehicle caught fire, leading to the death of the Petitioner’s husband. The Petitioner filed a consumer complaint before the District Consumer Disputes Redressal Commission (“DCDRC”), Vadodara seeking compensation of INR 51,49,00,000 (Indian Rupees fifty-one crore forty-nine lakh) along with interest. Pending the disposal of the complaint, the Petitioner filed the Writ Petition seeking that the Provisions be declared unconstitutional. This was on the basis that the Petitioner was compelled to approach the DCDRC, Vadodara because of the statutory regime under the 2019 Act, i.e., the pecuniary jurisdiction being determined according to the value of the goods or services paid as consideration. It was alleged that the Petitioner could have directly approached the NCDRC under the repealed Consumer Protection Act, 1986 (“1986 Act”) where the pecuniary jurisdiction was based on the compensation claimed.

Civil Appeal

The husband of Gurjeet Kaur Saini (“Appellant”) passed away due to COVID-19. When the Appellant’s claim based on an insurance policy offered by Lions International Club was denied, she filed a consumer complaint before the NCDRC seeking compensation of INR 14,94,00,000 (Indian Rupees fourteen crore ninety-four lakh). The NCDRC rejected the Appellant’s complaint on the ground that the consideration for the insurance policy did not exceed INR 10,00,00,000 (Indian Rupees ten crore) and thus, the NCDRC did not have pecuniary jurisdiction to entertain the complaint.

Before the Supreme Court, the Petitioner/Appellant contended that: (a) the 2019 Act replaced the pecuniary jurisdiction of the Consumer Commissions from the value of compensation claimed under the 1986 Act to the value of consideration paid, which is unconstitutional; (b) the present statutory regime gives rise to an anomalous situation wherein a consumer claiming a large compensation for a lower consideration would be relegated to the district or state commissions whereas a consumer seeking a lower compensation may be entitled to approach the NCDRC even in the event of a higher consideration paid; (c) the new criterion for determining pecuniary jurisdiction is discriminatory since consumers that claim identical compensation but have paid different considerations are treated differently; (d) given that the definition of a ‘consumer’ under the 2019 Act does not discriminate on the basis of consideration paid, the restriction of access to judicial remedies on the basis of consideration paid is illegal and arbitrary; and (e) there is no rational for introducing a new criterion for determining the pecuniary jurisdiction of the Consumer Commissions.

The respondents inter alia contended that the: (a) pecuniary classifications created on the basis of value of goods and services paid as consideration has a rational nexus with the object sought to be achieved, i.e., timely settlement of consumer disputes; and (b) the Provisions are not manifestly arbitrary and were introduced to prevent exaggerated claims.

Issue

Whether empowering the Consumer Commissions to exercise jurisdiction based on the value of the goods or services paid as consideration is violative of Article 14 of the Constitution?

Findings and analysis

The Supreme Court held that the Provisions of the 2019 Act are constitutional for the following reasons:

the Parliament has the legislative competence and power to prescribe limits of pecuniary jurisdiction of courts and tribunals, including the district, state, and national commission;
the test for determining whether a provision of law is violative of Article 14 of the Constitution is founded on 2 (two) principles[4]: (a) the classification must be founded on an intelligible differentia which distinguishes those that are grouped together from others; and (b) the differentia must have a rational relation to the object sought to be achieved by the statute has been satisfied; and
the classification of pecuniary jurisdiction based on value of goods and services on the basis of the amount paid as consideration is valid and has a direct rational nexus to the object of creating a hierarchical structure of judicial remedies.

Apart from upholding the validity of the Provisions, the Supreme Court directed the Central Consumer Protection Council and the Central Consumer Protection Authority to take such measures as may be necessary for survey and review and advise the government about necessary measures for the effective and efficient working of the 2019 Act.

Conclusion

The classifications set forth in the Provisions (which have been further revised by the Consumer Protection (Jurisdiction of the District Commission, the State Commission and the National Commission) Rules, 2021) prescribe a reasonable and rationale determination of the pecuniary jurisdiction of consumer courts. These Provisions prevent consumers from approaching Consumer Commissions solely on the basis of self-assessed claims for damages.

This Prism has been prepared by:

Farhad Sorabjee
Partner

Pratik Pawar
Partner

Shanaya Cyrus Irani
Partner

Siddhesh Pradhan
Principal Associate

Meher Mistri
Associate

Jatin Asrani
Junior Associate

For more details, please contact [email protected].

[1] 2025 SCC OnLine SC 974

[2] Writ Petition (Civil) No. 282 of 2021

[3] Civil Appeal No. 5670 of 2025 arising out of SLP (C) No. 1738 of 2022

[4] State of West Bengal vs. Anwar Ali Sarkar (1952) 1 SCC 1

Tags Access To Justice, Consumer Law, Consumer Protection Act 2019, India Law Update, JSA, Judicial Update, Legal Clarity, Pecuniary Jurisdiction, Regulatory Reform, SC Judgment, Supreme Court

JSA Prism | Dispute Resolution | May 2025

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Supreme Court clarifies scope of modification of arbitral awards under the Arbitration and Conciliation Act, 1996

On April 30, 2025, a 5 (five) judge constitution bench of the Hon’ble Supreme Court of India (“Supreme Court”) in Gayatri Balasamy vs. M/s. ISG Novasoft Technologies Limited[1] held that the courts possess a limited power to modify arbitral awards under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”). The Supreme Court further clarified that this power is not absolute and may only be exercised in specific circumstances, such as when the arbitral award is severable, to correct clerical or computational errors, or to modify post-award interest. However, the Supreme Court stated that such power is always subject to the express statutory framework and legislative intent and cautioned that it may not be exercised to rewrite the award or to conduct a merits-based evaluation.

Brief facts

In the present case , the Supreme Court referred a pivotal legal question to a 5 (five) judge constitution bench viz. whether courts possess the authority to modify arbitral awards under Sections 34 and 37 of the Arbitration Act. The brief facts leading to the lead reference are as follows:

Gayatri Balasamy (“Appellant”) joined ISG Novasoft Technologies Limited (“Respondent”) as Vice President (M&A Integration Strategy) in April 2006. Just a few months into her tenure, she resigned in July 2006, alleging sexual harassment by the Respondent’s CEO, Krishna Srinivasan. The Appellant’s resignation was not accepted, and over the following year, the Respondent issued 3 (three) termination letters to the Appellant.
In response, the Appellant filed criminal complaints against the CEO of the Respondent and another company executive. The Respondent countered with criminal complaints of defamation and extortion against the Appellant. The dispute escalated and was eventually referred by the Supreme Court to arbitration.
The arbitral tribunal awarded the Appellant INR 2,00,00,000 (Indian Rupees two crore) as compensation, but the Respondent challenged the arbitral award before the Hon’ble Madras High Court (“Madras HC”). It was the case of the Appellant before the Madras HC that several of the Appellant’s claims were not considered.
In 2014, a single-judge bench of the Madras HC modified the arbitral award under Section 34 of the Arbitration Act and granted an additional compensation of INR 1,60,00,000 (Indian Rupees one crore sixty lakh).
However, in 2019, the Division Bench of the Madras HC acting under Section 37 of the Arbitration Act reduced this additional amount and modified it to INR 50,000 (Indian Rupees fifty thousand), finding the earlier increase excessive.
Dissatisfied by the judgment of the Division Bench of the Madras HC, the Appellant appealed the same before the Supreme Court via a special leave petition. The Supreme Court recognised that the Appellant’s case raised a significant legal issue and was referred to a larger bench due to conflicting judicial opinions by the Supreme Court in the past. Accordingly, the appeal was referred to a 5 (five) judge bench to clarify the legal position on the court’s power to modify arbitral awards under Sections 34 and 37 of the Arbitration Act.

Key issue

Are Indian courts jurisdictionally empowered to modify an arbitral award under Sections 34 and 37 of the Arbitration Act? If so, to what extent?

Legal provision

Section 34 of the Arbitration Act reads as follows:

Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3).
An arbitral award may be set aside by the Court only if—
- the party making the application establishes on the basis of the record of the arbitral tribunal that—
  - a party was under some incapacity, or
  - the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
  - the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
  - the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
    Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or

- - the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or
- the Court finds that—
  - the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
  - the arbitral award is in conflict with the public policy of India.
    (2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award:
    Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.
    …”. [explanations omitted]

Analysis and findings

By a majority of 4:1, the Supreme Court held that courts have a limited power to modify awards under Sections 34 and 37 of the Arbitration Act. The decision was centred around the following issues:

severability of arbitral awards;
hardship of parties;
correction of clerical or typographical errors;
variation of interest; and
exercise of powers under Article 142 of the Constitution for modification of awards.

The findings rendered by the majority judgment and the minority judgment regarding each of these issues are summarised below:

Issue	Majority view “The limited power under Section 34 allows the court to vary or modify the award”	Minority view “…what is sought to be done is virtual mutilation of the fabric and not just the ironing out of the creases”
Severability [concurrence]	Authority to sever the invalid portion of the award from the valid portion is inherent in the jurisdiction to set aside an award. Modification and setting aside have different consequences – one is alteration, the other is annulment.	The consistent view has been that if claims falling foul of Section 34 of the Arbitration Act are not inseparably intertwined with the good portion of the award, the award can be severed. The power to set aside will include the power to partially set aside.
Hardship of parties [dissent]	Denying courts the power to modify awards would impose significant hardship, escalate costs and lead to unnecessary delays. This would defeat the objective of arbitration as parties would be compelled to undergo extra rounds of arbitration, in addition to the stages of challenge under Sections 34 and 37 of the Arbitration Act and special leave petition.	Recommencement of proceedings being expressly contemplated in the statute, the same cannot be brushed aside on the grounds of hardship of parties. When parties agree to arbitrate, they consciously agree with open eyes to step out of the normal judicial process and submit to being governed by the Arbitration Act.
Errors [concurrence]	Courts under Section 34 of the Arbitration Act possess the authority to rectify computational, clerical or typographical errors “as well as other manifest errors, provided that such modification does not necessitate a merits-based evaluation”. Court must have no uncertainty or doubt in this regard – if the error is not apparent on the face of the record, the court cannot modify.	Courts under Section 34 of the Arbitration Act can invoke the power to correct computational errors, clerical or typographical errors or any other errors of similar nature “without modifying, altering or adding to the original award” – hence, a limited exception to M Hakeem’s judgement[2] is made.
Interest [dissent]	For pendente lite interest, court may set aside the award of interest or remand the matter to the arbitrators. For post-award interest, courts will retain the power to modify the interest rate. Courts may increase or decrease the post-award interest, but only where there are compelling and well-founded reasons to do so.	Court under Section 34 of the Arbitration Act cannot modify the interest. The correct course would be to remit the matter to the arbitrator to make course correction. If the matter comes to court again and the grounds for setting aside are still present, there would be no choice but to set aside the award.
Article 142 of the Constitution [dissent]	This power should not be exercised where the effect would be to rewrite or modify the award on merits. However, the power can be exercised where required and necessary to bring the dispute to an end.	This power cannot be used to supplant substantive law, as express statutory provisions cannot be ignored and what cannot be achieved directly cannot be achieved indirectly. The power cannot be exercised as it will derogate from the core aspects of the Arbitration Act and breach a pre-eminent prohibition in the Arbitration Act.

Conclusion

The majority view of the Supreme Court affirms that Indian courts possess a limited power to modify arbitral awards under Sections 34 and 37 of the Arbitration Act. This power is not absolute but is confined to specific circumstances, such as when the arbitral award is severable, to correct clerical or computational errors, or to adjust post-award interest rates that are unreasonable or conflict with statutory or contractual benchmarks. The Supreme Court made it clear that such modifications do not entail a review on merits, thereby preserving the sanctity and finality of arbitral awards, except in cases where statutory grounds for intervention exist.
The majority emphasised that the statutory framework under Section 34 of the Arbitration Act restricts judicial intervention to procedural irregularities, jurisdictional errors, and public policy violations, and does not permit a wholesale merits review of the arbitral tribunal’s findings. The Supreme Court distinguished between setting aside and modification, stating that while setting aside annuls the award, modification is a narrower power exercised only to correct apparent and severable errors. This approach seeks to strike a balance between upholding arbitral autonomy and ensuring that manifest errors do not go unaddressed.
Importantly, the Supreme Court clarified that remand to the arbitral tribunal under Section 34(4) of the Arbitration Act is discretionary and should be reserved for curable defects, such as gaps in reasoning. Direct modification by the court is permissible only for non-substantive corrections, such as computational slips, to avoid unnecessary delays and procedural complications. The Supreme Court also recognised the uniform application of Section 34 of the Arbitration Act across all arbitrations, refusing to carve out exceptions for statutory arbitrations unless expressly provided by legislation.
Further, the majority view of the Supreme Court held that under Article 142 of the Constitution, the Supreme Court is empowered to ‘do complete justice’ in any case. However, the minority view noted that this extraordinary power must be exercised sparingly and in harmony with the statutory scheme of the Arbitration Act. Article 142 of the Constitution cannot be invoked to override explicit legislative intent or to rewrite arbitral awards on merits, thus ensuring that the principle of party autonomy and the limited role of courts in arbitration are respected. The Supreme Court’s nuanced approach preserves the integrity of the arbitral process while allowing to correct clear and severable errors, reinforcing both judicial restraint and ‘complete justice’.

This Prism is prepared by:

Varghese Thomas
Partner

Divyam Agarwal
Partner

Fatema Kachwalla
Partner

Aniket Aggarwal
Senior Associate

Virgil Braganza
Senior Associate

For more details, please contact [email protected]

[1] Special Leave Petition (Civil) Nos. 15336 of 2021

[2] Project Director, National Highways No. 45 E and 220 National Highways Authority of India Vs. M. Hakeem and Anr., (2021) 9 SCC 1

Tags Delhi HC, Delhi High Court, Dispute Resolution, Disputes, JSA, JSA Prism, Leading Law Firm, Leading Lawyer, Leading Lawyers, Legal Updates, Newsletter

JSA Prism | Dispute Resolution | May 2025

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The Supreme Court of India holds that non-service of an arbitration notice under Section 21 of the Arbitration and Conciliation Act, 1996 does not limit the arbitral tribunal’s jurisdiction to implead a person as a party to the arbitration proceedings

The Supreme Court of India (“Supreme Court”) has in Adavya Projects Private Limited vs. M/s. Vishal Structurals Private Limited and Ors.[1] inter alia clarified that issuing a notice under Section 21[2] of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) is mandatory as it fixes the date of commencement of arbitration, determines limitation, and is a pre-requisite for a petition seeking appointment of an arbitrator[3]. However, mere non-service of the arbitration notice upon a person does not deprive the jurisdiction of the arbitral tribunal under Section 16[4] of the Arbitration Act to determine whether they are a party to the arbitration agreement and to implead them.

Brief facts

Adavya Projects Private Limited (“APPL”) and Vishal Structurals Private Limited (“VSPL”) executed a limited liability partnership agreement (“LLP Agreement”) to form a limited liability partnership namely Vishal Capricorn Energy Services LLP (“LLP”) to carry out oil and gas sector projects. The LLP Agreement envisaged that the director of VSPL, Mr. Kishore Krishnamoorthy (“Kishore”), would be the chief executive officer of the LLP. Clause 40 of the LLP Agreement provided for dispute resolution through arbitration.

In 2013, APPL and VSPL executed a supplementary agreement and a memorandum of understanding for undertaking a project through the LLP (“Project”).

In 2018, disputes arose when APPL sought information from VSPL to audit the accounts of the LLP in relation to the Project. APPL issued demand notices calling VSPL to pay monies towards reconciliation of the accounts of the LLP.

Eventually, APPL invoked the arbitration clause of the LLP Agreement by issuing a notice of arbitration to VSPL. APPL then filed an application under Section 11 of the Arbitration Act before the Delhi High Court (“Delhi HC”) seeking appointment of an arbitrator to adjudicate the disputes between the parties. VSPL was named as the only respondent in the petition. The Delhi HC appointed an arbitrator to adjudicate the disputes between APPL and VSPL arising out of the LLP Agreement.

APPL filed its statement of claim before the arbitrator and named VSPL, the LLP and Kishore as parties to the arbitration. The LLP and Kishore filed an application under Section 16 of the Arbitration Act challenging the jurisdiction of the arbitral tribunal contending that the arbitration agreement contained in Clause 40 of the LLP Agreement does not bind the LLP, which is a creature of the LLP Agreement, and Kishore, as he was not a party to the LLP Agreement in his individual capacity.

The arbitral tribunal allowed the Section 16 application (“Section 16 Order”) and held that arbitration proceedings against the LLP and Kishore were not maintainable since – (a) the notice of arbitration under Section 21 of the Arbitration Act was not served upon the LLP and Kishore; and (b) the Delhi HC did not refer the LLP and Kishore to arbitration while allowing APPL’s Section 11 application. The arbitral tribunal also rejected APPL’s prayer in its application under Section 23(3)[5] of the Arbitration Act seeking to bring on record a detailed memo of parties which named the LLP and Kishore as parties and also seeking to amend its prayer in its statement of claim to include the LLP and Kishore.

APPL filed an appeal under Section 37(2)(a) of the Arbitration Act assailing the Section 16 Order before the Delhi HC.

By an order dated July 8, 2024, the Delhi HC dismissed this appeal and upheld the Section 16 Order (“Impugned Order”).

Being aggrieved by the Impugned Order, APPL filed the present proceedings before the Supreme Court.

Issues

Whether service of a notice under Section 21 of the Arbitration Act and joinder in a Section 11 application are pre-requisites to implead a person/entity as a party to the arbitration proceedings?
What is the relevant inquiry that the arbitral tribunal must undertake when determining its own jurisdiction under Section 16 of the Arbitration Act?

Findings and analysis

The Supreme Court allowed the appeal and inter alia held the following:

A notice invoking arbitration under Section 21 of the Arbitration Act is mandatory for determining the limitation period and for filing a Section 11 application. Mere failure to issue an arbitration notice or implead certain persons who are parties to an arbitration agreement in a Section 11 application, would not denude the arbitral tribunal’s jurisdiction to implead them as parties during the arbitral proceedings.
The decision of the Delhi HC in Alupro Building Systems Private Limited vs. Ozone Overseas Private Limited[6] is overruled to the extent that it provides that non-service of a notice on a party nullifies the jurisdiction of the arbitral tribunal.
In an application under Section 16 of the Arbitration Act, the arbitral tribunal must determine whether a non-signatory is a party to an arbitration agreement in line with the provisions of Section 7[7] of the Arbitration Act. For this exercise, the arbitral tribunal has to consider the ratio in the Constitution Bench judgment in Cox and Kings Ltd. vs. SAP India Private Limited.[8], wherein it was held that non-signatories can be impleaded to an arbitration if their conduct shows that they are veritable parties to the arbitration agreement.

In the facts of the present case, the LLP and Kishore, despite being non-signatories, had through their conduct, consented to perform contractual obligations under the LLP Agreement and thus, the Supreme Court found them to be parties to the arbitral proceeding.

Conclusion

By the present decision, the Supreme Court has held that the arbitral tribunal is the master of its own jurisdiction under Section 16 of the Arbitration Act and its jurisdiction to implead parties to an arbitration proceeding is based solely on determining whether such person/persons is/are a party to the arbitration agreement. Even the issuance of the mandatory arbitration notice under Section 21 of the Arbitration Act is not a prerequisite for the arbitral tribunal to exercise its jurisdiction to determine the parties to an arbitral proceeding. This decision shows the continuous effort of the judiciary in reposing faith in arbitral tribunals and recognising arbitration as an effective means of dispute resolution.

This Prism is prepared by:

Farhad Sorabjee
Partner

Dhirendra Negi
Partner

Shanaya Cyrus Irani
Partner

Tanya Tiwari
Principal Associate

Siddhesh Pradhan
Principal Associate

Isha Singhal
Associate

Meher Mistri
Associate

Jatin Asrani
Junior Associate

For more details, please contact [email protected]

[1] 2025 SCC OnLine SC 806

[2] Section 21 of the Arbitration Act provides that arbitral proceedings commence on the date a party (respondent) receives a claimant’s request seeking reference of a dispute to arbitration. The request for reference is commonly known as notice of arbitration.

[3] Section 11 of the Arbitration Act.

[4] Section 16 of the Arbitration Act provides that the arbitral tribunal may rule upon its own jurisdiction.

[5] Section 23(3) of the Arbitration Act provides that if the arbitral tribunal considers it appropriate, it may allow any party to supplement or amend their claim, during the course of the arbitral proceedings.

[6] 2017 SCC OnLine Del 7228

[7] Section 7 of the Arbitration Act specifies what constitutes an arbitration agreement.

[8] (2024) 4 SCC 1

Tags Arbitration Act, Dispute Resolution, Disputes, JSA, JSA Prism, Leading Law Firm, Leading Lawyers, Legal Updates, Supreme Court

Divyam Agarwal | On Powers of Court to Modify Arbitral Awards

Our Partner, Divyam Agarwal, recently participated in a distinguished panel discussion on the television programme “Legally Speaking with Tarun Nangia.” The topic of this insightful discussion was “On Powers of Court to Modify Arbitral Awards,” an area of significant relevance and interest within the legal community in the wake of Constitution Bench decision in Gayatri Balasamy v. ISG Novasoft Technologies Ltd. This episode was broadcast on NewsX and is now available for viewing online.

Divyam was honoured to share the panel with:

Mr. Justice Sanjay Kishan Kaul, Former Judge, Supreme Court of India
Mr. Arvind Varma, Senior Advocate
Dr. Sanjeev Gemawat, Group General Counsel, Essar Group
Mr. Kartik Seth, Advocate

Mr. Tarun Nangia moderated the panel.

We invite you to watch this engaging discussion through the link provided below, where you will gain valuable insights into the nuances of arbitral awards and court powers.

Tags Arbitral Awards, Arbitration Law, Arvind Varma, Dispute Resolution, Divyam Agarwal, India Legal Community, JSA Thought Leadership, Justice Sanjay Kishan Kaul, Kartik Seth, Legal Insights, Legal Panel, Legally Speaking, NewsX, Powers of Court, Sajeev Gemawat, Tarun Nangia

JSA successfully represented its client before the Hon’ble Bombay High Court for suspension of the Look Out Circular issued by Serious Fraud Investigation Office and obtained interim relief to travel abroad

The Hon’ble Bombay High Court (“High Court”) vide its order dated April 29, 2025, granted interim relief to its client, who filed a Writ Petition challenging a Look Out Circular (“LOC”) barring him from leaving India. The LOC was issued at the behest of the Serious Fraud Investigation Office (“SFIO”) in connection with an ongoing investigation into the affairs of IL&FS. Earlier, JSA succeeded in securing permission for the client to travel overseas for two months, with the LOC suspended during that period, subject to compliance with conditions imposed by the High Court. In the subsequent application, the client sought a suspension of the LOC for 6 months to enable travel abroad for both business and personal reasons.

The SFIO, through its counsel, confirmed that the applicant had complied with the previous conditions imposed by the Court. Accordingly, the High Court, comprising of Hon’ble Ms. Justice R. M. Dere and Hon’ble Dr. Justice N. K. Gokhale, allowed the interim application on the following terms:

The LOC against the client stands suspended for six months, to facilitate overseas travel.
For every overseas trip during this duration, the client must furnish a full itinerary, including addresses and contact details, to SFIO at least 48 hours prior to departure, via electronic means and inform SFIO within 48 hours of returning to India after each trip.
The Immigration Authorities at all departure points are directed to permit the client to travel, even if their systems have not yet been updated, and regardless of whether SFIO has separately informed immigration.

Our disputes team comprised Lead Partner, Varghese Thomas, Partner, Hormuz Mehta and Senior Associate, Virgil Braganza.

Tags Bombay High Court, Client Representation, Court Ruling, High Court Order, ILFS, India Litigation, Interim Relief, JSA Dispute Alert, Legal Advisory, Legal Victory, LOC Suspension, Look Out Circular, Overseas Travel, SFIO, White Collar Investigation, Writ Petition

JSA successfully defends UltraTech Cement Limited before the High Court of Karnataka in seeking stay on disconnection of electricity supply on the pretext of recovery of alleged electricity dues

JSA successfully defended UltraTech Cement Limited (“UltraTech”) before the Division Bench of the Hon’ble Karnataka High Court against the Distribution Licensee’s Writ Appeal, in effect, securing stay on recovery of alleged electricity dues and disconnection of electricity supply by the Distribution Licensee.

The dispute emanated because, after 18 years of the operation of UltraTech’s Bulk Terminal (cement packing unit) as an ‘Industrial’ Unit, Mangalore Electricity Supply Company Limited (“MESCOM”) i.e., the Distribution Licensee, issued a Demand Notice alleging ‘Commercial Use’ and demanded UltraTech to pay the differential of ‘Commercial’ and ‘Industrial’ tariff retrospectively. In absence of such payment, MESCOM threatened to disconnect electricity supply at UltraTech’s Bulk Terminal.

UltraTech filed a Writ Petition before the Ld. Single Judge, Hon’ble High Court of Karnataka seeking the Demand Notice to be quashed. JSA represented UltraTech. UltraTech inter alia contended that all along UltraTech’s Bulk Terminal was billed under ‘Industrial’ tariff category, there being NO change in circumstances, it was not open for MESCOM to unilaterally and retrospectively raise a demand for the differential of ‘Commercial’ and ‘Industrial’ tariff from UltraTech. Alongside highlighting the fact that Bulk Terminal has NOT been specifically categorized under any particular tariff category by the Karnataka Electricity Regulatory Commission, UltraTech also highlighted the Disconnection Notice is time barred in view of Section 56(2) of the Electricity Act, 2003.

By Order dated 08.08.2024, Ld. Single Judge, Hon’ble High Court of Karnataka passed a favourable interlocutory order in favour of UltraTech, directing MESCOM not to take any coercive action against UltraTech either qua the Demand Notice (i.e., recovery of the differential of ‘Commercial’ and ‘Industrial’ tariff) or Disconnection Notice.

Aggrieved by Order dated 08.08.2024 passed by the Ld. Single Judge, Hon’ble High Court of Karnataka, MESCOM filed a Writ Appeal before the Ld. Division Bench, Hon’ble High Court of Karnataka. JSA represented UltraTech and successfully defended UltraTech.

By Judgment dated 04.04.2025, Ld. Division Bench, Hon’ble High Court of Karnataka dismissed MESCOM’s Writ Appeal and did NOT interfere the interlocutory order passed in UltraTech’s favour by Ld. Single Judge, Hon’ble High Court of Karnataka. By virtue of this Judgment, the direction to MESCOM not to take any coercive action against UltraTech either qua the Demand Notice (i.e., recovery of the differential of ‘Commercial’ and ‘Industrial’ tariff) or Disconnection Notice remains intact.

The interlocutory order by the Ld. Single Judge, as upheld by the Division Bench provides necessary relief to UltraTech, an industrial consumer, alongside keeping in check the whimsical unilateral and arbitrary decision making by Distribution Licensee (here MESCOM).

Our disputes team comprised Lead Partner Poonam Verma Sengupta, Partner, Prasanth V.G., Principal Associate, Saunak Kumar Rajguru and Associate, Pradyumn Amit Sharma.

Tags Dispute Resolution, Electricity Act, Electricity Law, High Court Victory, Industrial Tariff, JSA deal, Karnataka High Court, Legal Update, Legal Victory, Power Sector, Tariff Dispute, Ultratech Cement, Writ Appeal Dismissed

JSA Brief | March 2025

This edition of the JSA Brief showcases JSA authored articles, updates & newsletters and achievements such as deals and events in all practice area over the preceding month (March 2025).

To read further details, click here or refer to the below document.

For more details, please contact [email protected]

*In case the document is not visible on the device you are using, please click the link above.

Tags Articles, Deal Making, Events, JSA, JSA Prism, Legal Updates, Newsletters, Publications, Recognitions

JSA Prism | Dispute Resolution | April 2025

Please click here to download the document.

Supreme Court of India holds that an arbitration agreement will be governed by Indian law where foreign location is not the seat but is only the venue of arbitration, and the substantive contract is governed by Indian law

In a recent judgment, the Supreme Court of India (“Supreme Court”) in Disortho S.A.S vs. Meril Life Sciences Private Limited[1] has exercised jurisdiction under section 11 (6) of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) and appointed a sole arbitrator, wherein the dispute settlement clause in the contract, provided for disputes to be settled by arbitration in Bogota DC, Colombia, in accordance with the rules of the Arbitration and Conciliation Centre of the Chamber of Commerce of Bogota DC.

Brief facts

Disortho S.A.S (“Disortho”), a Colombian company, and Meril Life Sciences Private Limited (“Meril”), an Indian company, entered into an International Exclusive Distributor Agreement (“Contract”) for distribution of medical products in Colombia.

The Contract specified that it would be governed and construed in accordance with the laws of India, and all matters arising in consequence of the Contract would be subject to the jurisdiction of the Courts in Gujarat, India.

The dispute settlement clause in the Contract required disputes to be resolved through conciliation, failing which by arbitration to be conducted at Bogota DC, Colombia, in accordance with the Rules of the Arbitration and Conciliation of the Chamber of Commerce of Bogota DC.

When disputes arose between the parties, Disortho filed an arbitration petition under Section 11(6) of the Arbitration Act, before the Supreme Court seeking the appointment of an arbitrator. Meril opposed the petition on jurisdictional grounds contending that Indian Courts do not have jurisdiction.

Decision of the Supreme Court

The Supreme Court considered judicial precedents which discussed various legal systems which come into play in such trans-border arbitrations, viz., the law governing the substantive contract; the law governing the arbitration agreement; the law governing the performance of the arbitration agreement and the law governing the procedural aspects of arbitration.

As regards determining the law that governs the arbitration agreement, the Supreme Court considered the principles laid down by the UK Supreme Court in Enka Insaat Ve Sanayi AS and OOO Insurance Company Chubb[2] and held that the conclusions set out therein, including, that where the law governing the arbitration agreement is not specified, the law governing the substantive contract will generally apply to the arbitration agreement, which is part of the substantive contract, and that the choice of a different country as the seat of the arbitration is not, without more, sufficient to negate an inference that law governing the substantive contract was intended to apply to the arbitration agreement, state the correct legal position, except on aspects where Courts in India have taken a different view.

Interpreting the clauses in the Contract, based on principles laid down in various earlier judgements, the Supreme Court concluded that the seat of arbitration has not been expressly designated by the parties and Bogota DC is only the venue for arbitration. The Supreme Court further held that since the Contract stipulated that it would be governed and construed in accordance with the laws of India, and that all matters arising in consequence of the Contract would be subject to the jurisdiction of the Courts in Gujarat, India, it has jurisdiction over matters relating to the appointment of the arbitrator. The Supreme Court held that the designation of Bogota DC as the venue for arbitration and choice of the Rules of the Arbitration and Conciliation of the Chamber of Commerce of Bogota DC will not take away the jurisdiction expressly conferred on the Indian courts.

Noting that the Contract does not expressly identify a separate law governing the arbitration agreement, the Supreme Court held that by implication, Indian law governs the arbitration agreement. The Supreme Court further held that use of the premises of the arbitration centre at Bogota DC for the arbitration proceedings, will not imply that Colombian law will govern the arbitration agreement. The Supreme Court also held that the applicability of Colombian law is limited to the arbitration proceedings and matters relating to the award.

Conclusion

The judgement is an addition to the earlier judgements of the Supreme Court, wherein the Supreme Court had discussed the complexity involved in interpretation, when different legal systems come into play in contracts involving parties from different jurisdictions. The judgement underscores the importance of carefully drafting arbitration clauses, especially in international contracts, to avoid jurisdictional ambiguities.

This Prism is prepared by:

Vinod Kumar
Partner

Saibarath
Senior Associate

For more details, please contact [email protected]

[1] Arbitration Petition No.48 of 2023

[2] (2020) UK SC 38. This judgement followed the principles of Sulamerica Cia Nacional De Seguros S.A. and others Vs Enesa Engenharia S.A and Others (2012) EWCA Civ 638

Tags Delhi HC, Delhi High Court, Dispute Resolution, Disputes, JSA, JSA Prism, Leading Law Firm, Leading Lawyer, Leading Lawyers, Legal Updates

JSA Successfully Represented Resolution Professional of Smaaash Entertainment (“Corporate Debtor”) in Securing Relief Against Obstruction of Corporate Debtor’s Operations

JSA successfully represented Mr. Bhrugesh Amin (“RP”), Resolution Professional of the Corporate Debtor, before the Hon’ble National Company Law Tribunal, Mumbai (“NCLT”), in obtaining injunctive relief against the erstwhile promoters in using domain name and other social media accounts containing brand name “SMAAASH”. The Resolution Professional was constrained to file an Application under Section 19 read with Section 60(5) of the Insolvency and Bankruptcy Code, 2016, and Rule 11 of the NCLT Rules, 2016, inter-alia, seeking:

injunction against the erstwhile promoters and its related party from using of the brand name “SMAAASH” in domain name, social media accounts et al;
transfer the domain “smaaash.com” back to the Corporate Debtor, even though the said domain name was not created by the Corporate Debtor. Accepting the contentions advanced by the Resolution Professional, the Hon’ble NCLT held that:
- The Hon’ble NCLT has jurisdiction under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 to decide the disputes relating to violation of trademarks since such disputes are connected with the insolvency resolution of the Corporate Debtor.
- Domain name falls within the definition of ‘mark’ under Section 2(zb) of the Trade Marks Act, 1999. Hence, using of the domain name with brand name “SMAAASH” amounts to infringement of the Corporate Debtor’s Trade Mark.
- Having possession of domain name “www.smaaash.com” by the erstwhile promoters and its related party (even though the said domain name is not owned by the Corporate Debtor) amounts to “cyber-squatting”. Thus, the Corporate Debtor is entitled to a relief of not only an injunction from usage of domain name but also the relief of transfer of domain name in favour of the Corporate Debtor. By the Order, the Hon’ble NCLT ensured that the brand name “SMAAASH” and associated digital assets of the Corporate Debtor are protected, allowing the RP to manage the business effectively without obstruction. The Order lays down the principles regarding the jurisdiction of the Hon’ble Tribunal’s in resolving disputes relating to intellectual property and digital assets of the Corporate Debtor.

Our Dispute team comprised of Lead Partner, Varghese Thomas, Partner, Kunal Kaul and Fatema Kachwalla & Senior Associate, Virgil Braganza.

Tags Brand Protection, Corporate Insolvency, Corporate Law, Cyber Squatting, Digital Assets, Domain Disputes, Ibc, Insolvency And Bankruptcy, Intellectual Property, JSA Deal Alert, Judicial Precedent, Legal Advisory, NCLT, Resolution Professional, section 60, SMAAASH, Tech Law, Trademark Law

JSA successfully defends PTC India Financial Services Ltd. before the Telangana High Court in a Writ Petition challenging rejection of One Time Settlement Proposals submitted by promoter in relation to the CIRP of the corporate debtor

JSA has successfully advised and represented PTC India Financial Services Ltd. (“PFS”) before the Telangana High Court in a Writ Petition under Article 226 of Constitution of India filed by Mandava Holdings Private Limited (“MHPL/Petitioner”) against – (i) PFS, (ii) Reserve Bank of India and (iii) Rungta Mines Limited (Successful Resolution Applicant). MHPL, being a promoter of NSL Nagapatnam Power and Infratech Limited (“Corporate Debtor”), an entity undergoing Corporate Insolvency Resolution Process (“CIRP”), proposed various One Time Settlement (“OTS”) offers to PFS, which were rejected. Aggrieved by it, MHPL preferred a Writ Petition, seeking a Writ of Mandamus in the nature of a direction that PFS rejected MHPL’s OTS in violation of the Reserve Bank of India Framework for Compromise Settlements and Technical Write-offs dated 8 June 2023 (“RBI Framework”).

The Telangana High Court by Judgment dated 24 December 2024 rejected the Writ Petition (“Judgment”). The High Court’s Judgment assumes significance as it reaffirms the following important principles:

Once a resolution plan has been duly approved by the Committee of Creditors (“CoC”), it becomes binding upon all stakeholders, including inter alia the creditors and the resolution applicant, and such resolution plan cannot be withdrawn under Section 12A of the Insolvency and Bankruptcy Code, 2016 (“Code”).
Any decision of withdrawal of insolvency application under Section 12A of the Code post the admission of CIRP is subject to the approval of the CoC in the manner prescribed in the said provision.
The commercial wisdom of the CoC assumes a position of superiority to all the stakeholders and the CoC itself is bound by its approval of Resolution Plan and cannot be allowed to resile from its decision.
The Code is comprehensive and self-contained in nature, and adjudicates all disputes arising out of, or concerning insolvency of a corporate debtor. As such, Writ Jurisdiction of the High Court cannot be invoked under Article 226 of the Constitution of India.

An appeal impugning the Judgment was filed by MHPL before the Division Bench of the Telangana High Court. However, the Divion Bench also disposed of the Appeal against the Judgment and directed MHPL to pursue its remedies before the NCLT Hyderabad, where the CIRP qua the Corporate Debtor is ongoing.

Our Disputes Team comprised Lead Partner, Sidharth Sethi, Partner, Shreya Sircar, and Associate, Kunal Saini.

The matter was argued by Mr. Niranjan Reddy, Senior Advocate, who was assisted by our team.

Matter value – INR 671 crores.

Judgement Date – 24^th December 2024.

Tags CIRP, Commercial Wisdom, Committee Of Creditors, Corporate Law, Dispute Resolution, Financial Law, Ibc, Insolvency And Bankruptcy, JSA Deal Alert, Legal Advisory, Legal Update, OTS, Rbi Framework, Resolution Plan, Telangana High Court, Writ Jurisdiction

New Filters: Dispute Resolution and Arbitration

The Supreme Court of India upholds the constitutional validity of the pecuniary jurisdiction of consumer commissions established under the Consumer Protection Act, 2019 basis the value of goods or services paid as consideration

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Supreme Court clarifies scope of modification of arbitral awards under the Arbitration and Conciliation Act, 1996

The Supreme Court of India holds that non-service of an arbitration notice under Section 21 of the Arbitration and Conciliation Act, 1996 does not limit the arbitral tribunal’s jurisdiction to implead a person as a party to the arbitration proceedings

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Supreme Court of India holds that an arbitration agreement will be governed by Indian law where foreign location is not the seat but is only the venue of arbitration, and the substantive contract is governed by Indian law

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