Supreme Court Weekly Digest March 24 - 31, 2026

Arbitration Act, 1940 – Section 2(a) and Section 39 – Absence of Arbitration Agreement – Jurisdiction of State Government – The Supreme Court upheld the High Court's decision setting aside an arbitral award, holding that there was neither a valid arbitration agreement nor informed consent by the Municipal Council to resolve disputes through arbitration - Noted that Clause 22 of the contract, which provided for dispute referral to the Collector with subsequent appeals to the Divisional Commissioner and the State Government, constituted a departmental dispute-resolution mechanism and not an "arbitration agreement". Bharat Udyog Ltd. v. Ambernath Municipal Council, 2026 LiveLaw (SC) 291 : 2026 INSC 288 Arbitration – Jurisdiction – Excepted Matters – Rule of Law – Section 28 of the Indian Contract Act, 1872 – Section 9 of the Code of Civil Procedure, 1908 – The Supreme Court held that one party to a contract cannot be the sole arbiter to decide whether the other party committed a breach when liability is disputed. Such an interpretation violates the fundamental principle that no party shall be a judge in its own cause - Supreme Court clarified that while certain matters may be "excepted" from arbitration, they cannot be "excluded" from judicial remedy entirely, as a vacuum in legal remedies is opposed to the Rule of Law. ABS Marine Services v. Andaman and Nicobar Administration, 2026 LiveLaw (SC) 287 : 2026 INSC 274 Bail – Cancellation of Bail – Dowry Death – Sections 103(1) and 80 of the Bharatiya Nyaya Sanhita, 2023 (BNS) – Appeal by the mother of the deceased challenging the High Court's order granting bail to the husband of the deceased – The deceased died within 1.5 years of marriage in suspicious circumstances with multiple external and internal injuries – Allegations of dowry harassment and threats by the accused prior to the death – High Court granted bail primarily noting the absence of criminal antecedents and the period of custody – Held: The High Court adopted a "mechanical approach" and failed to consider the gravity of the offence and the nature of the accusations – While criminal antecedents are a factor, they cannot outweigh the seriousness of a crime like dowry death where circumstantial evidence strongly points toward the accused – The Supreme Court emphasized that an appellate court can interfere with a bail order if relevant materials were ignored or the gravity of the offence was not considered. [Relied on P v. State of M.P., (2022) 15 SCC 211; Paras 14-27] Lal Muni Devi v. State of Bihar, 2026 LiveLaw (SC) 298 Central Excise Act, 1944 – Section 11A(1) Proviso – Extended Period of Limitation – Suppression of Facts – Revenue Neutrality – The Revenue invoked the extended period of five years alleging suppression of actual use of Naphtha - held that "suppression" requires a deliberate act to escape payment of duty - Where the assessee is a Public Sector Undertaking receiving subsidies from the Central Government, any excise duty paid would be reimbursed as a subsidy, making the entire exercise "revenue neutral" - In cases of revenue neutrality where no benefit is derived by the assessee from evading duty, the extended period of limitation cannot be invoked. [Relied on Steel Authority of India v. Collector of Central Excise (1996) 5 SCC 484; State of Haryana v. Dalmia Dadri Cement Limited 1987 Supp SCC 679; Pushpam Pharmaceuticals Company v. Collector of Central Excise (1995) Supp 3 SCC 462; Nirlon Limited v. Chief Commissioner of Excise (2015) 14 SCC 798; Paras 38-45, 52-54, 56-58] Rashtriya Chemicals and Fertilizers Ltd. v. Commissioner of Central Excise and Service Tax, 2026 LiveLaw (SC) 295 : 2026 INSC 285 Central Excise Act, 1944 – Section 5A – Exemption Notifications (No. 75/84-CE and No. 4/97-CE) – Naphtha used in the manufacture of Fertilizer – Interpretation of "Intended Use" – The Supreme Court held that when an exemption notification is conditioned on the "intended use" of a product, the benefit is attracted if the goods are used for the purpose and with the intention of manufacturing the specified product (fertilizer/ammonia) – Noted that the mere fact that a fraction of the procured Naphtha was used for generating electricity (steam), a portion of which was used in a chemical plant or supplied to the electricity board, does not disentitle the assessee from the exemption - Once eligibility for exemption is established, the notification must be construed liberally. Rashtriya Chemicals and Fertilizers Ltd. v. Commissioner of Central Excise and Service Tax, 2026 LiveLaw (SC) 295 : 2026 INSC 285 Code of Civil Procedure, 1908 – Order XXI Rules 97-101 – Execution of Decree – Obstruction by Third Party – Abuse of Process – Re-litigation – Res Judicata – Appellants obtained a decree for specific performance and initiated execution - Respondents 1-3 (third parties) filed objections under...

Supreme Court Weekly Digest March 24 - 31, 2026

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