LegalAware
LegalAware.ai
EMPOWERING LEGAL AWARENESS

Food Corporation of India v. Pratap Kundu

Civil Appeal · 2019 INSC 1305Decided 29 Nov 2019
Civil Appeal No. 9127 of 2019
Justice Ashok Bhushan · Justice M.R. Shah

Background

A transport contractor (Pratap Kundu) was engaged by the Food Corporation of India (FCI) to supply casual labour at its Bikna Depot, under a contract that gave him 471% above the scheduled rate for most items but, for the item covering casual labour wages, said rates would instead follow the outcome of a then-pending Supreme Court case. After the Supreme Court in 2010 fixed specific wage rates for the casual labourers (to be paid directly to them), the contractor nevertheless claimed he was entitled to be reimbursed at the higher 471% rate for those same wages, and also to a share of "profit" on the contract. The Calcutta High Court partly sided with him and sent the matter back to FCI's Chairman for recalculation, prompting cross-appeals by both FCI and the contractor to the Supreme Court.

Decision Breakdown

The Supreme Court held that because the contract itself said casual-labour wage rates would "abide by the decision" of the pending Supreme Court case, the contractor was bound by the wage rates actually fixed by the Court in 2010, and could not additionally claim 471% above those rates, allowing that would result in unjust enrichment far beyond what he had even paid the labourers himself. The Court agreed with the High Court that the 2010 judgment did not leave open any separate "profit" entitlement for the contractor, and struck down that part of the High Court's direction. FCI's appeal was partly allowed (confirming wages must follow the 2010 Supreme Court rate and rejecting the profit claim, while remanding only the mechanical recalculation of exact differential amounts to the FCI Chairman), and the contractor's cross-appeal was dismissed.

Lesson Learnt

When a commercial contract expressly makes a payment term conditional on the outcome of pending litigation, a party cannot later claim a more favourable rate under a different clause of the same contract once that litigation is decided: the specific, litigation-linked term governs.

Official source (sci.gov.in)View Judgment (PDF)

More rulings in Arbitration & Commercial Law

Arbitration & Commercial LawSupreme Court of India

Modern Asset v. KNK Constructions Private Limited

The Supreme Court held that an arbitration clause survives termination of the underlying contract (the "doctrine of separability") and that, at the Section 11 reference stage, courts only check for the prima facie existence of an arbitration agreement: deeper questions about the effect of the resolution plan are for the arbitrator. It confirmed that while the IBC's "clean slate" principle extinguishes creditors' claims against the insolvent company once a resolution plan is approved, it does not extinguish the claims the company itself (through its SRA) may have against its own debtors, since the Resolution Professional had not raised a counter-claim on KNK's behalf during the insolvency process. However, noting the inequity of letting KNK recover fresh dues on the same contract while Modern Asset's own claim had been wiped out to 0.72 %, and following its own recent precedent in Ujaas Energy, the Court modified the High Court's order: Modern Asset may raise its extinguished claim in the arbitration solely as a set-off against any amount it is found to owe KNK, but cannot use it to claim any fresh recovery.

Decided 8 Oct 2026Read case
Arbitration & Commercial LawDelhi High Court

S And P Infrastructure Developers (Pvt) Ltd vs. National Highways Authority of India

The Court held that the Joint Registrar's order overlooked an earlier ruling of this Court (M/s URC Construction (P) Ltd. v. Airports Authority of India) establishing that an instrument must be stamped at or before execution, with any delay attracting penalty, not just a top-up payment. Since the Joint Registrar's order was not in line with the Indian Stamp Act, 1899, the Court set it aside. The decree holder's counsel then sought to withdraw the petition with liberty to refile once the stamp duty issue was properly resolved, which the Court granted.

Decided 8 Oct 2026Read case
Arbitration & Commercial LawSupreme Court of India

Shubham Equipment Private Limited & Anr. v. Rothwell Water Company Limited & Ors.

The Supreme Court held that the Licence Agreement, the JVA, and the MoU each covered different subject matter (technology licensing, the joint venture company, and logistics services respectively), so the JVA and MoU's own arbitration clauses, providing for arbitration in Mumbai under Indian law, governed the disputes arising under them, not the Licence Agreement's Korea clause. Both agreements also contained "entire agreement" clauses showing they were meant to stand independently. The Court restricted itself to the limited inquiry required at the reference stage under Section 11(6-A), whether an arbitration agreement prima facie exists, and left deeper questions, including whether a non-signatory subsidiary (RBIPL) could be bound, to the arbitrator. It allowed the petitions and appointed a former Chief Justice of the Bombay High Court as the sole arbitrator.

Decided 8 Oct 2026Read case
Arbitration & Commercial LawDelhi High Court

M/S Redcliffe Lifetech Pvt Ltd vs. Connect and Heal Primary Care Pvt. Ltd.

Since the dispute was resolved, the petitioner's counsel sought leave to withdraw the petition rather than continue with it. The Court granted leave and dismissed the petition as withdrawn, along with any pending applications.

Decided 7 Oct 2026Read case
Arbitration & Commercial LawDelhi High Court

M/S Redcliffe Lifetech Pvt. Ltd. vs. Lifespan Wellness Private Limited

The Court reiterated that at the stage of appointing an arbitrator under Section 11, it need only check whether an arbitration agreement exists on its face, not decide the merits of the dispute. Finding the arbitration clause undisputed, the Court appointed a named advocate as sole arbitrator under the aegis of the Delhi International Arbitration Centre (DIAC), leaving all other objections (including arbitrability and jurisdiction) to be decided by the arbitrator.

Decided 7 Oct 2026Read case
Arbitration & Commercial LawDelhi High Court

M/S. Keshari Multi Functional Complex Pvt Ltd vs. Rail Land Development Authority

Because the awarded amount was already deposited pursuant to the earlier stay order, the Court held nothing further survived for consideration in the present enforcement petition. It disposed of the petition, giving the decree holder liberty to refile later after paying the proper stamp duty (and any penalty) under the Indian Stamp Act, 1899.

Decided 7 Oct 2026Read case