Constitution of India — Article 131 — Original jurisdiction — Inter-State river water dispute — Pennaiyar River — Suit between riparian States maintainable. Inter-State River Water Disputes Act, 1956 — Sections 3 & 4 — Failure of negotiation process — Mandatory duty of Central Government to constitute Tribunal — ‘Shall’ in Section 4 imposes obligation. Negotiation at ministerial level unsuccessful — Central Government required to issue notification constituting Water Disputes Tribunal within fixed timeline. Court declines to adjudicate merits — Dispute referred for statutory adjudication — All issues left open before Tribunal.

 Constitution of India — Article 131 — Original jurisdiction — Inter-State river water dispute — Pennaiyar River — Suit between riparian States maintainable.

Inter-State River Water Disputes Act, 1956 — Sections 3 & 4 — Failure of negotiation process — Mandatory duty of Central Government to constitute Tribunal — ‘Shall’ in Section 4 imposes obligation.

Negotiation at ministerial level unsuccessful — Central Government required to issue notification constituting Water Disputes Tribunal within fixed timeline.

Court declines to adjudicate merits — Dispute referred for statutory adjudication — All issues left open before Tribunal.

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FACTUAL BACKGROUND

Parties

• Plaintiff: Tamil Nadu

• Defendant No. 1: Karnataka

• Defendant No. 2: Union of India

River in Dispute

Pennaiyar River — an inter-State river flowing through Karnataka, Tamil Nadu and the Union Territory of Puducherry.

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PLAINTIFF’S GRIEVANCE

Tamil Nadu invoked Article 131 seeking:

• Declaration that Karnataka’s construction of check dams/diversion structures was illegal.

• Permanent injunction restraining further construction.

• Direction to ensure natural flows into Tamil Nadu.

• Mandatory direction to Union of India to act on request for intervention.

Tamil Nadu relied upon the 1892 Agreement between the erstwhile Madras and Mysore States, asserting that prior consent of the lower riparian State was mandatory before undertaking upstream works.

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PROCEDURAL DEVELOPMENTS

1. Suit filed in 2018.

2. Interim relief rejected (2019) as 75% construction completed.

3. Liberty granted to invoke Inter-State River Water Disputes Act, 1956.

4. Tamil Nadu filed complaint under Section 3 of the Act.

5. Negotiation process initiated by Central Government.

6. Multiple meetings held at official and ministerial levels.

7. No consensus reached.

8. Tamil Nadu reiterated demand for Tribunal.

9. Negotiation process postponed indefinitely (Affidavit dated 07.10.2025).

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CORE LEGAL QUESTION

When negotiation under the Inter-State River Water Disputes Act fails, is the Central Government bound to constitute a Tribunal under Section 4?

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STATUTORY FRAMEWORK

Under:

Inter-State River Water Disputes Act, 1956

• Section 3: State may request Central Government to refer dispute.

• Section 4: If Central Government forms opinion that dispute cannot be settled by negotiation, it shall constitute a Tribunal.

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SUPREME COURT’S ANALYSIS

The Court relied on:

T.N. Cauvery Neerppasana Vilaiporulgal Vivasayigal Nala Urimai Padhugappa Sangam v. Union of India

Held therein:

• “May” in draft replaced with “shall” in enacted Section 4.

• Constitution of Tribunal becomes mandatory once negotiation fails.

The Court observed:

• Negotiations attempted at multiple levels.

• No amicable resolution.

• Tamil Nadu unequivocally demanded Tribunal adjudication.

• Ministerial process indefinitely deferred.

Therefore:

A stage had been reached where the Central Government must be held to have formed the opinion that negotiation has failed.

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HOLDING

The Court directed:

• Union of India to issue notification in Official Gazette.

• Constitute a Water Disputes Tribunal.

• Complete this within one month.

The suit was disposed of with all issues left open before the Tribunal.

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RATIO DECIDENDI

Where statutorily mandated negotiations under the Inter-State River Water Disputes Act fail to produce consensus between riparian States, the Central Government is under a mandatory obligation under Section 4 to constitute a Water Disputes Tribunal. The word “shall” admits of no discretion once the statutory conditions are satisfied.

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SIGNIFICANCE

This judgment reinforces:

• Federal dispute resolution mechanism under Article 131.

• Mandatory nature of Section 4 of the 1956 Act.

• Limited judicial role once statutory forum is triggered.

• Deference to specialized adjudicatory mechanism.

• Strengthening of cooperative federalism within constitutional structure.

The Court consciously refrained from adjudicating merits of water allocation, leaving all substantive questions to the Tribunal.

Service Law — Disciplinary Proceedings — Charge of fabrication of medical certificate — Handwritten document — No handwriting expert examination — Finding based solely on doctor’s denial — Perverse finding — Interference in judicial review justified. Judicial Review — Scope — Findings based on no evidence or perverse appreciation — Court can interfere even in disciplinary matters. Forgery — Graver the charge, greater the need for caution — Failure to compare disputed and admitted signatures or refer to expert — Charge not proved. Punishment — Mandatory dismissal for forgery under rules — Not attracted when charge itself not established — Reinstatement with full consequential benefits.

 Service Law — Disciplinary Proceedings — Charge of fabrication of medical certificate — Handwritten document — No handwriting expert examination — Finding based solely on doctor’s denial — Perverse finding — Interference in judicial review justified.

Judicial Review — Scope — Findings based on no evidence or perverse appreciation — Court can interfere even in disciplinary matters.

Forgery — Graver the charge, greater the need for caution — Failure to compare disputed and admitted signatures or refer to expert — Charge not proved.

Punishment — Mandatory dismissal for forgery under rules — Not attracted when charge itself not established — Reinstatement with full consequential benefits.

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FACTUAL BACKGROUND

• Appellant appointed as Court Attender in 1998.

• Absent from duty: 03.08.2017 to 07.08.2017.

• Submitted explanation with medical certificate dated 07.08.2017.

• Salary for absence period deducted.

• Matter initially closed by Presiding Officer.

• Later, doctor summoned; denied issuing certificate.

• Disciplinary proceedings initiated.

• Charges:

  1. Unauthorized absence.

  2. Submission of fabricated medical certificate.

Appellant dismissed from service on 13.11.2018.
High Court upheld dismissal.
Appeal before Supreme Court.

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CORE ISSUE

Whether the finding that the appellant fabricated the medical certificate was legally sustainable and whether dismissal from service was justified.

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SUPREME COURT’S ANALYSIS

I. Charge of Unauthorized Absence

• Explanation submitted within 13 days.

• Salary already deducted.

• Matter originally kept aside by Presiding Officer.

• Not independently serious enough to warrant dismissal.

Court did not dwell much on Charge I.

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II. Alleged Fabrication of Medical Certificate

This was the central issue.

Key Undisputed Facts:

• Doctor admitted appellant consulted him.

• Doctor admitted giving tablets.

• Certificate was:

  • Fully handwritten.

  • On doctor’s letterhead.

  • Bearing doctor’s rubber stamp.

• Doctor denied signature on certificate.

• Doctor claimed blank letterhead may have been misused.

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III. Crucial Defect in Inquiry

The Court emphasized:

When forgery is alleged, caution must be greater.

The Inquiry Officer:

• Did not compare admitted and disputed signatures properly.

• Did not refer matter to handwriting expert.

• Relied solely on doctor's oral denial.

The Supreme Court examined original records and noted:

• Rubber stamp identical.

• Even admitted signatures of doctor were not identical among themselves.

• Disputed signature broadly similar.

In such circumstances, the Court held:

Failure to seek expert opinion rendered the finding perverse.

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PRINCIPLE LAID DOWN

“Graver the charge — greater the need for caution and circumspection.”

When dismissal is mandatory upon proof of forgery, the standard of care in establishing forgery must be correspondingly higher.

A disciplinary authority cannot:

• Conclude forgery merely on oral denial,

• Ignore available objective verification tools,

• Avoid handwriting expert examination in a handwritten document case.

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SCOPE OF JUDICIAL REVIEW REITERATED

The Court reaffirmed:

• Judicial review is limited.

• However, where findings are:

  • Based on no evidence, or

  • Perverse, or

  • Such that no reasonable person would reach,

Courts can interfere.

Reliance placed on settled principles from service jurisprudence.

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PECULIAR FACTUAL ASPECTS NOTED

The Court highlighted:

• Initial closure of matter.

• Salary deduction already imposed.

• Doctor’s earlier statement recorded behind appellant’s back.

• October absence (trigger for reopening) not shown as unauthorized.

• Sequence of events indicated irregular handling.

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FINAL DECISION

1. High Court judgment set aside.

2. Dismissal order dated 13.11.2018 set aside.

3. Appellate order dated 08.01.2021 set aside.

4. Appellant reinstated forthwith.

5. All consequential benefits granted.

6. Full arrears payable.

7. Implementation within 3 weeks.

Appeal allowed. No costs.

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SIGNIFICANCE OF THE JUDGMENT

This decision is important for:

• Service law jurisprudence on forgery charges.

• Standards of proof in disciplinary proceedings.

• Requirement of expert evidence in handwriting disputes.

• Reinforcement of proportionality and fairness.

• Protection against perverse findings.

It establishes that even within limited judicial review, courts will intervene when disciplinary findings are unsupported by reliable evidence.

Consumer Protection Act, 1986 — Section 12 — Agricultural seed failure — Inspection report showing 50% pod development and semi-development in remaining pods — Excess rainfall — No complete deficiency in service — Compensation modified. Seed quality — Mixed species 8–10% — Semi-development of pods — Impact on market price — Vis major (excess rainfall) considered — Liability apportioned. National Commission — Restoration of District Forum’s order — Supreme Court partly allowing appeals — Setting aside finding of deficiency of service — Equitable adjustment of compensation.

 Consumer Protection Act, 1986 — Section 12 — Agricultural seed failure — Inspection report showing 50% pod development and semi-development in remaining pods — Excess rainfall — No complete deficiency in service — Compensation modified.

Seed quality — Mixed species 8–10% — Semi-development of pods — Impact on market price — Vis major (excess rainfall) considered — Liability apportioned.

National Commission — Restoration of District Forum’s order — Supreme Court partly allowing appeals — Setting aside finding of deficiency of service — Equitable adjustment of compensation.

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FACTUAL MATRIX

• Respondent-farmers purchased groundnut seeds (TAG 37A) on 15.06.2013.

• Alleged crop failure after 100–120 days.

• Complaint lodged before Deputy Director (Agriculture).

• Inspection Committee constituted.

• District Forum allowed complaints and awarded compensation.

• State Commission set aside District Forum’s order.

• National Consumer Disputes Redressal Commission restored District Forum’s order.

• Appeals filed before the Supreme Court.

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KEY FINDINGS FROM INSPECTION REPORT (09.10.2013)

The Committee found:

1. 8–10% plants of different species (seed mixture).

2. 50% pods fully developed, remaining 50% semi-developed.

3. Crop ripening timeline: 100–110 days.

4. Excess rainfall during July–August.

5. Possibility of:

   • 20–25% general shortfall due to rains,

   • 40–50% shortfall in TAG37A variety.

6. Infection by Tika disease.

7. Good germination overall.

8. Adequate irrigation and soil fertility.

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CORE ISSUE

Whether there was deficiency in service attributable to the seed producer/distributor, justifying full compensation as awarded by the District Forum and restored by the NCDRC.

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SUPREME COURT’S ANALYSIS

I. Semi-Development ≠ Complete Failure

The Court emphasized:

• 50% pods were completely developed.

• Remaining 50% semi-developed.

• Therefore, not total crop failure.

This contradicted the District Forum’s assumption of complete deficiency.

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II. Role of Excess Rainfall (Vis Major)

The inspection report acknowledged:

• Heavy rainfall during relevant period.

• Significant arboreal growth.

• Yield shortfall attributable partly to climatic conditions.

Thus, liability could not be wholly fastened on appellants.

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III. Deficiency of Service — Not Absolute

The Court inferred:

• Some irregularity (semi-development, species mixture).

• But also natural causes.

• Therefore, finding of complete deficiency of service was unsustainable.

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FINAL DIRECTIONS

1. 50% of compensation deposited pursuant to interim order (02.08.2021) to be released to farmers with accrued interest.

2. Remaining 50% refunded to appellants with accrued interest.

3. Findings regarding deficiency of service set aside.

4. Appeals allowed in part.

5. Parties to bear own costs.

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RATIO DECIDENDI

Where an expert inspection report establishes partial yield (50% full development) and attributes shortfall partly to natural causes such as excess rainfall, a finding of complete deficiency in service under the Consumer Protection Act is unsustainable. Compensation may be equitably apportioned.

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SIGNIFICANCE

This judgment underscores:

• Courts must carefully analyze scientific inspection reports.

• Agricultural disputes require consideration of climatic factors.

• Vis major cannot be ignored in seed quality cases.

• Compensation must be proportionate to proven deficiency.

• Consumer fora cannot assume total failure when evidence shows partial productivity.

Criminal Law — Circumstantial Evidence — Last seen theory — Delay in lodging FIR — Accused in custody at relevant time — Chain of circumstances not complete — Benefit of doubt granted. Evidence Act, 1872 — Section 27 — Discovery statement — Custody requirement — Statement not made while in police custody — Inadmissible under Section 27 — However admissible as conduct under Section 8. Evidence Act — Section 8 — Conduct — Knowledge of place of recovery — Weak corroborative circumstance — Cannot by itself sustain conviction. DNA Evidence — Partial match with biological parents — Establishes death — Does not establish guilt of accused in absence of complete chain. Section 106 Evidence Act — Failure to explain — Cannot substitute prosecution’s burden — Applies only when foundational facts established. Faulty Investigation — Serious interpolation in arrest memo — Doubt regarding timeline — Accused entitled to benefit of doubt.

 Criminal Law — Circumstantial Evidence — Last seen theory — Delay in lodging FIR — Accused in custody at relevant time — Chain of circumstances not complete — Benefit of doubt granted.

Evidence Act, 1872 — Section 27 — Discovery statement — Custody requirement — Statement not made while in police custody — Inadmissible under Section 27 — However admissible as conduct under Section 8.

Evidence Act — Section 8 — Conduct — Knowledge of place of recovery — Weak corroborative circumstance — Cannot by itself sustain conviction.

DNA Evidence — Partial match with biological parents — Establishes death — Does not establish guilt of accused in absence of complete chain.

Section 106 Evidence Act — Failure to explain — Cannot substitute prosecution’s burden — Applies only when foundational facts established.

Faulty Investigation — Serious interpolation in arrest memo — Doubt regarding timeline — Accused entitled to benefit of doubt.

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CORE ISSUE

Whether the three circumstances relied upon by the High Court —

1. Last seen together theory,

2. Recovery of bones at the instance of the accused, and

3. DNA match with biological parents —

formed a complete chain pointing only to the guilt of the accused stepfather.

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FACTUAL BACKGROUND

• Deceased: 6-year-old girl.

• Accused: Stepfather.

• Date of quarrel: 05.10.2018.

• Alleged disappearance: Around 05–06.10.2018.

• Missing FIR registered: 11.10.2018.

• Alleged recovery at accused’s instance: 13.10.2018.

• Conviction based entirely on circumstantial evidence.

The Court described the investigation as “botched” and riddled with inconsistencies.

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ANALYSIS OF CIRCUMSTANCES

I. Last Seen Together Theory — Failed

Key infirmities:

• Accused arrested on 06.10.2018 (possibly 05.10.2018 — interpolation noticed).

• Missing complaint registered only on 11.10.2018.

• FIR stated child missing at 9:00 PM on 06.10.2018 — after arrest.

• No immediate complaint by mother or grandparents.

• Police accompanied family on day of quarrel but made no inquiry.

• Neighbour (PW8) volunteered “last seen” information only after 7 days.

Court held:

The last seen theory “fails miserably.”

The arrest timeline alone destroyed the prosecution narrative.

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II. Section 27 Recovery — Legally Defective

Legal Requirement

Under Section 27 Evidence Act:

• Statement must be made while accused is in police custody.

• Only portion distinctly connected with discovery admissible.

Here:

• Statement recorded at 10:30 AM on 13.10.2018.

• Arrest shown at 22:00 hrs same day.

• Accused not in custody at time of statement.

Thus Section 27 not attracted.

The Court relied on:

• Jaffar Hussain Dastagir v. State of Maharashtra

• Durlav Namasudra v. Emperor

However, applying:

• Dharam Deo Yadav v. State of U.P.

• Ramkishan Mithanlal Sharma v. State of Bombay

The Court held:

Even if not admissible under Section 27, recovery could be admissible as conduct under Section 8.

But:

Conduct evidence under Section 8 is weak and only corroborative.

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III. DNA Evidence — Limited Probative Value

• Vertebrae and teeth matched DNA of biological parents.

• Skull and other bones did not match.

• Saree wrapping not identified.

• Corpus delicti not fully recovered.

• No time of death established.

Court held:

DNA established death of child.

It did not establish:

• When death occurred,

• Who caused it,

• That accused alone committed offence.

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IV. Section 106 Evidence Act — Misapplied

High Court relied on failure of accused to explain recovery location.

Supreme Court clarified:

Section 106 applies only when prosecution first establishes foundational facts.

Here:

• Chain incomplete,

• Timeline doubtful,

• Arrest suspicious,

• No proof of custody during crucial period.

Hence Section 106 cannot fill evidentiary gaps.

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CRITICAL INVESTIGATIVE DEFECTS

1. Interpolation in arrest memo.

2. Contradictory arrest dates.

3. No inquiry into missing child despite earlier police involvement.

4. FIR delayed.

5. No attempt to establish time of death.

6. No conclusive corpus delicti.

7. Section 27 statement legally defective.

The Court noted:

“If the investigation had been half as good as the preparation of the State Counsel, the mystery could have been unravelled.”

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LEGAL PRINCIPLES REAFFIRMED

1. Suspicion cannot replace proof.

2. Circumstantial evidence must form complete chain.

3. Each circumstance must:

   • Be proved,

   • Be consistent only with guilt,

   • Exclude every other hypothesis.

4. Section 8 conduct evidence is corroborative, not substantive.

5. Section 27 requires custody.

6. DNA alone cannot prove guilt without linkage evidence.

7. Benefit of doubt must go to accused.

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RATIO DECIDENDI

Where circumstantial evidence consists only of (i) doubtful last seen theory, (ii) recovery not satisfying Section 27 requirements, and (iii) DNA establishing death but not linking accused to homicide, the chain of circumstances remains incomplete. Conviction cannot be sustained and accused is entitled to benefit of doubt.

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FINAL ORDER

• Conviction set aside.

• Appeal allowed.

• Accused to be released forthwith (if not required in any other case).

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SIGNIFICANCE

This judgment is important for:

• Clarifying scope of Section 27 custody requirement.

• Distinguishing Section 8 conduct from Section 27 discovery.

• Limiting overreliance on DNA evidence in absence of connecting facts.

• Reinforcing strict standards in circumstantial evidence cases.

• Reiterating burden of prosecution despite Section 106.

Arbitration and Conciliation Act, 1996 — Section 11 (pre-2015 regime) — Scope of power — Judicial determination of existence and validity of arbitration agreement — Finality under Section 11(7) — Binding effect at Section 34 stage — Reopening impermissible — SBP & Co. followed. Arbitration and Conciliation (Amendment) Act, 2015 — Section 11(6A) — Prospective application — Limited scrutiny confined to “existence” post-amendment — Contrast drawn with pre-amendment regime. Res Judicata vs Precedent — Conceptual distinction — Section 11 order operates as res judicata inter partes, not as precedent in rem — Section 34 Court erred in treating earlier Section 11 order as non-binding. Section 34 — Award set aside on ground of non-existence of arbitration clause — Impermissible where Section 11 court had already appointed arbitrator in pre-amendment regime and order attained finality. Result — High Court and Commercial Court orders set aside — Matters remitted for adjudication on other grounds — Time-bound disposal directed.

 Arbitration and Conciliation Act, 1996 — Section 11 (pre-2015 regime) — Scope of power — Judicial determination of existence and validity of arbitration agreement — Finality under Section 11(7) — Binding effect at Section 34 stage — Reopening impermissible — SBP & Co. followed.

Arbitration and Conciliation (Amendment) Act, 2015 — Section 11(6A) — Prospective application — Limited scrutiny confined to “existence” post-amendment — Contrast drawn with pre-amendment regime.

Res Judicata vs Precedent — Conceptual distinction — Section 11 order operates as res judicata inter partes, not as precedent in rem — Section 34 Court erred in treating earlier Section 11 order as non-binding.

Section 34 — Award set aside on ground of non-existence of arbitration clause — Impermissible where Section 11 court had already appointed arbitrator in pre-amendment regime and order attained finality.

Result — High Court and Commercial Court orders set aside — Matters remitted for adjudication on other grounds — Time-bound disposal directed.

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CORE ISSUE

Whether, in arbitral proceedings commenced prior to 23.10.2015 (pre-2015 Amendment regime), the Section 34 Court could reopen the question of existence and validity of an arbitration clause after an arbitrator had been appointed under Section 11 and the appointment order had attained finality.

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FACTUAL MATRIX (Common Thread in Both Appeals)

• Contracts between appellant-contractor and Rajasthan Housing Board.

• Clause 23 provided for dispute resolution by an Empowered Standing Committee.

• Section 11 applications filed in 2014.

• High Court appointed retired High Court Judges as sole arbitrators (pre-2015 Amendment).

• Awards passed in 2015–2016.

• Section 34 Courts set aside awards holding Clause 23 was not an arbitration clause.

• High Court affirmed Section 34 orders.

• Appeals before Supreme Court.

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LEGAL FRAMEWORK

I. Pre-2015 Legal Position — SBP Regime

The Court relied extensively on:

SBP & Co. v. Patel Engineering Ltd.

Seven-Judge Bench held:

• Section 11 power is judicial, not administrative.

• Chief Justice/designate must decide:

  • Existence of arbitration agreement,

  • Validity,

  • Jurisdictional aspects,

  • Live claim.

• Section 11(7) gives finality.

• Such determination binds:

  • Arbitrator,

  • Section 34 Court,

  • Appellate Courts,

  • Except via appeal under Article 136.

Thus, once an arbitrator was appointed, existence/validity of arbitration clause could not be reopened.

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II. Reinforcement by Later Authority

The Court also relied on:

State of West Bengal v. Sarkar & Sarkar

Held:

• Arbitrator cannot re-examine validity of arbitration clause when Section 11 order has attained finality.

• Jurisdictional findings under Section 11 are binding.

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III. Post-2015 Contrast — Limited Inquiry

The Court clarified that had the proceedings commenced after 23.10.2015, the outcome could have differed.

Referred to:

In re: Interplay Between Arbitration Agreements under A&C Act & Stamp Act

Post-amendment position:

• Section 11(6A) limits court to examining “existence” only.

• Inquiry is prima facie.

• Substantive validity left to arbitral tribunal under Section 16.

• No finality comparable to SBP regime.

But Section 26 of 2015 Amendment makes amendments prospective.

Since present arbitrations commenced before 23.10.2015, SBP regime governed.

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RES JUDICATA vs PRECEDENT — KEY CLARIFICATION

The Commercial Court reasoned that Section 11 order had no “precedential value”.

The Supreme Court held this was a fundamental conceptual error.

Distinction:

Precedent	Res Judicata
Operates in rem	Operates in personam
Binds future cases generally	Binds same parties
Concerned with legal principle	Concerned with finality between parties

Relied on:

State of Rajasthan v. Nemi Chand Mahela

Canara Bank v. N.G. Subbaraya Setty

Holding:

• Section 11 order operates as res judicata inter partes.

• Correctness of decision irrelevant unless jurisdictional nullity.

• Commercial Court wrongly treated issue as precedent question instead of finality issue.

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SUPREME COURT’S CONCLUSION

1. Section 11 order (2014) impliedly held Clause 23 to be an arbitration clause.

2. Respondents did not challenge appointment.

3. Order attained finality.

4. Under SBP regime:

   • Existence and validity stood conclusively decided.

5. Section 34 Court had no jurisdiction to reopen that issue.

6. High Court erred in affirming Section 34 Court.

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OPERATIVE DIRECTIONS

• High Court judgments dated 20.02.2020 set aside.

• Matters remitted to Commercial Court, Jaipur.

• Section 34 applications to be heard on other grounds only.

• Disposal directed within three months.

• Parties to bear own costs.

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RATIO DECIDENDI

In arbitral proceedings commenced prior to the 2015 Amendment, an order appointing an arbitrator under Section 11 necessarily entails a judicial determination of the existence and validity of the arbitration agreement. Such determination attains finality under Section 11(7) and operates as res judicata inter partes. The issue cannot be reopened at the Section 34 stage.

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SIGNIFICANCE OF THE JUDGMENT

This decision:

• Reinforces doctrinal clarity between SBP regime and post-2015 regime.

• Reasserts binding effect of pre-amendment Section 11 determinations.

• Clarifies difference between precedent and res judicata in arbitration jurisprudence.

• Protects finality of Section 11 orders in legacy arbitrations.