Supreme Court Weekly Digest: November 21 - 30, 2025

Supreme Court Weekly Digest November 21 - 30, 2025 Acquisition of Land for Industrial Purposes Act, 1997 (Tamil Nadu) - Sections 7(2), 7(4) and 12 - Land Acquisition - Concluded Contract - Payment of Interest – Held, a concluded contract voluntarily entered into between the Government and the landowner/person interested for the determination of compensation under Section 7(2) or Section 7(4) of the 1997 Act is a complete package and excludes itself from the purview of the 1997 Act thereafter - The rights and liabilities of the parties would only be governed by the terms of the contract - Section 12 of the 1997 Act, which speaks of payment of interest from the time of taking possession until compensation is paid or deposited, has no application to a case where an agreement has been entered into between the parties under Section 7 - Once an agreement is finalized, the agreement becomes sacrosanct, and all disputes with respect to the determination of rent and interest would get subsumed within the contract itself - A party to a contract cannot be permitted to have recourse to two different modes (contract and statutory remedy) after having accepted the compensation under the contract without any demur or protest - The High Court committed a fundamental error in invoking Section 12 for the payment of interest from the date of the notice under Section 3(2) of the 1997 Act till the date of the impugned judgment, after giving a clear finding that the agreement was a complete package - The contract voluntarily entered into shall not be disturbed by taking recourse to the statutory provisions which are sought to be excluded by such contract. [Paras 14-25] Government of Tamil Nadu v. P.R. Jaganathan, 2025 LiveLaw (SC) 1126 : 2025 INSC 1332 Arbitration Agreement – Unilateral Appointment Clause – Validity and Severability - Held that a clause in a public-private contract (Clause 25) which mandates unilateral appointment of an arbitrator by an ineligible authority (Managing Director) and further stipulates that "no arbitration shall be held" if such appointment fails, is void ab initio as it violates the principle of nemo judex in causa sua and is contrary to Article 14 of the Constitution - the invalidity of the appointment procedure does not destroy the core agreement to arbitrate - Applying the doctrine of severability, the offending portions, including the negative covenant, must be severed, and the substantive arbitration agreement survives, thereby enabling the court to appoint an independent arbitrator under Section 11(6). [Relied on the Constitution Bench judgment in Central Organisation for Railway Electrification v. ECI SPIC SMO MCML (JV) 2025 4 SCC 641; Para 12] Hindustan Construction Company Ltd. v. Bihar Rajya Pul Nirman Nigam Ltd., 2025 LiveLaw (SC) 1153 : 2025 INSC 1365 Arbitration and Conciliation Act, 1996; Section 11 – Appeal against dismissal of a request case under Section 11 by the High Court - Constitution of India; Articles 14 & 298 – State as Model Litigant - Held that lethargy and indifference by a public authority, where contractual obligations demand prompt responsiveness, falls short of the standards of fairness required of a State entity under Articles 14 and 298 of the Constitution – The State must act as a model litigant – fair, responsive, and transparent in its dealings – Silence or procedural evasion by senior officers is inconsistent with the constitutional trust reposed in public authorities - Public Officers are custodians of public faith, not mere administrators – A stern warning was issued to the then Managing Director of the respondent company for such neglect, cautioning that any repetition may invite adverse remarks or even personal accountability. [Relied on State of Bihar and others v. Kameshwar Prasad Singh and another (2000) 9 SCC 94; Para 11, 15-19] Hindustan Construction Company Ltd. v. Bihar Rajya Pul Nirman Nigam Ltd., 2025 LiveLaw (SC) 1153 : 2025 INSC 1365 Arbitration and Conciliation Act, 1996 - Mother Agreement Prevails over Ancillary Contracts (Novation) - Held that the BSA, being the principal or "mother agreement", defines the long-term commercial relationship, and its arbitration clause (Benin seat) prevails over the different arbitration clauses contained in subsequent, limited-purpose Sales Contracts (with Respondent No. 2) and High Seas Sale Contracts (HSSAs with Respondent No. 3) - There was no clear and unequivocal intention to substitute the BSA with the subsequent contracts; thus, the BSA was not novated - Disputes rooted in obligations under the BSA must be resolved through the arbitration agreed therein (Benin). [Relied on Balasore Alloys Ltd. v. Medima LLC 2020 9 SCC 136; Paras 27-30] Balaji Steel Trade v. Fludor Benin S.A., 2025 LiveLaw (SC) 1132 : 2025 INSC 1342 Arbitration And Conciliation Act, 1996 – Section 11 (Appointment of Arbitrator) -...

Supreme Court Weekly Digest: November 21 - 30, 2025

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