LexM/S GAYATRI PROJECT LIMITED versus MADHYA PRADESH ROAD DEVELOPMENT CORPORATION LIMITED
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[2025] 5 S.C.R. 2534 : 2025 INSC 698 M/s Gayatri Project Limited v. Madhya Pradesh Road Development Corporation Limited (Civil Appeal No. 6856 of 2025) 15 May 2025 [J.B. Pardiwala* and R. Mahadevan, JJ.] Issue for Consideration 1. Whether an arbitral award rendered under the Arbitration and Conciliation Act, 1996 (hereinafter “Act, 1996”), where the arbitration proceedings ought to have been governed by the M.P. Madhyastham Adhikaran Adhiniyam, 1983 (hereinafter “MP Act, 1983”), can be set aside solely on the ground of lack of jurisdiction, even when no such plea was raised before the arbitral tribunal in terms of Section 16(2) of the Act, 1996? 2. Whether the decision of this Court in M.P. Road Development Authority & Anr v. L.G. Chaudhary Engineers & Contractors reported in (2018) 10 SCC 826 can be said to be per incuriam for not considering the Court’s ruling in Lion Engineering? In other words, is there a conflict between the decisions in Lion Engineering and L.G. Chaudhary (II), particularly on when a plea of lack of jurisdiction may be raised under the Act, 1996? Headnotes† Arbitration and Conciliation Act, 1996 – M.P Madhyastham Adhikaran Adhiniyam, 1983 – Arbitral award cannot be set aside solely on the ground of jurisdiction if no objection was raised under Section 16(2) of the Arbitration and Conciliation Act, 1996: The appellant executed a “works contract” dated 12.12.2005 with the respondent for “Rehabilitation and Strengthening of Khargone- Barwani Road (SH-26) Project Road No.19” & “Rehabilitation and Strengthening of Khargone-Bistan Road (SH-31) Project Road No.20” in the State of Madhya Pradesh – Clause 67.3 of the * Author [2025] 5 S.C.R. 2535 M/s Gayatri Project Limited v. Madhya Pradesh Road Development Corporation Limited “General Conditions of Contract” read with Clause 67.4 of the “Conditions of Particular Application” provided for arbitration as the means for resolution of disputes between the Parties – The arbitration agreement mandated that the tribunal shall comprise of three members, one to be appointed by each party and the two coarbitrators had to nominate the presiding arbitrator – The disputes arose between the parties from 06.08.2010 onwards in relation to the appellant’s right to be reimbursed additional cost incurred by it on account of introduction of subsequent legislation on increase in entry tax on High-Speed Diesel under Clause 70.8 of the Particular Conditions of Contract – The appellant invoked arbitration under Clause 67.4 vide its notice dated 06.08.2010 and the Tribunal stood constituted on 24.09.2010 – The Tribunal passed a unanimous award dated 08.07.2011 in favour of the appellant for a sum of Rs.1,03,55,187 (i.e. Rs.1.04 Crore) – As is evident from Para 1.19 of the Award quoted above, the quantification of this amount was in-fact recommended by the Engineer and had been admitted by the respondent – The Tribunal also awarded future interest at the rate of 10% p.a. from the date of the award till the date of actual payment as per para 3.1 – As of 17.02.2025, the amount payable by the respondent to the appellant stands at Rs.2,44,63,775 – The respondent challenged the award before the Civil Court under Section 34 of the Arbitration Act vide a petition filed on 30.09.2011 – The same came to be allowed holding that the Arbitral Tribunal did not jurisdiction in view of M.P Madhyastham Adhikaran Adhiniyam, 1983 – The order passed by the Commercial Court and 19th Additional Sessions Judge, Bhopal (M.P.) came to be challenged by way of appeal before the High Court under Section 37 of the Act, 1996 – The appeal came to be dismissed – Hence, the present Appeal before this Court. Held: It was noted that the decision in M.P. Road Development Authority & Anr v. L.G. Chaudhary Engineers & Contractors (2018) 10 SCC 826 elucidated how the courts are expected to deal with the various issues that may arise insofar as the pending proceedings that were inadvertently initiated under the Arbitration and Conciliation Act, 1996 and any awards already passed thereunder are concerned – M.P. Road Development Authority v. L.G. Chaudhary, (2018) 10 SCC 826 was referred to wherein it was held that an arbitral award cannot be set aside solely on the ground of jurisdiction if no objection was raised under Section 16(2) of the 2536 [2025] 5 S.C.R. Supreme Court Reports Arbitration and Conciliation Act, 1996 – However, other challenge
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