VidhiSangh

Supreme Court of India · 11/03/2019

M/S ICOMM TELE LTD. versus PUNJAB STATE WATER SUPPLY & SEWERAGE BOARD & ANR.

[2019] 2 S.C.R. 984 · 2019 INSC 341

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Summary

The Supreme Court struck down a State water board’s arbitration clause requiring a 10% claim deposit, refundable only in proportion to the amount awarded with the rest forfeited to the opponent. Equal application did not cure its arbitrariness: it burdened all claims before any finding of frivolousness and could penalize even a successful claimant.

Issues

  1. Whether the claim-deposit and proportionate-forfeiture clause violated Article 14.
  2. Whether commercial-contract and earlier deposit-clause precedents foreclosed the challenge.

Provisions considered

Held

Result

Appeal allowed; High Court judgment set aside; clause 25(viii) of the notice inviting tender struck down, leaving the remaining parts of clause 25 intact.

Judgment PDF: Supreme Court of India, [2019] 2 S.C.R. 984.