State of Jharkhand v. The Indian Builders Jamshedpur; 2025 INSC 1388 - Bharat Drilling - Referred To Larger Bench - Excepted Or Prohibitory Clauses
Arbitration and Conciliation Act - Bharat Drilling & Foundation Treatment Pvt. Ltd. v. State of Jharkhand is not an authority for the proposition that an excepted clause or a prohibited claim in a contract applies only to the employer and not to the Arbitral Tribunal - Referred to larger bench - The approach adopted in Bharat Drilling (supra) is not in tune with the principles laid down by this Court in the recent decisions of Cox and Kings Ltd. v. SAP India Private Ltd. and In Re: Interplay Between Arbitration Agreements Under Arbitration and Conciliation Act, 1996 and Stamp Act, 1899- Applicability of excepted or prohibitory clauses would primarily depend upon the agreement between the parties, which alone is the guiding principle for the Arbitral Tribunal - Contractual clauses that limit claims are founded on freedom to contract. They are agreements that crystalise informed choices of parties. Explaining the incorporation of party autonomy in the statutory scheme of the Act
Case Info
Case Details
- Case name: State of Jharkhand v. The Indian Builders Jamshedpur
- Neutral citation: 2025 INSC 1388
- Coram: Justice Pamidighantam Sri Narasimha; Justice Atul S. Chandurkar
- Judgment date: December 05, 2025
Caselaws and Citations
- Bharat Drilling & Foundation Treatment Pvt. Ltd. v. State of Jharkhand and Ors: (2009) 16 SCC 705
- Board of Trustees for the Port of Calcutta v. Engineers-De-Space-Age: (1996) 1 SCC 516
- Pam Developments Private Limited v. State of West Bengal: (2024) 10 SCC 715
- Central Organisation for Railway Electrification (CORE): 2024 INSC 857; 2024 SCC OnLine SC 3219
- Cox and Kings Ltd. v. SAP India Private Ltd.: 2024 4 SCC 1
- In Re: Interplay Between Arbitration Agreements Under Arbitration and Conciliation Act, 1996 and Stamp Act, 1899: 2023 SCC OnLine SC 1666
- Additional cases cited within Pam Developments (by proposition references):
- State of Orissa v. G.C. Roy: (1992) 1 SCC 508
- State of Orissa v. N.C. Budharaj: (2001) 2 SCC 721
- Union of India v. Krafters Engg. & Leasing (P) Ltd.: (2011) 7 SCC 279
- Madnani Construction Corpn. (P) Ltd. v. Union of India: (2010) 1 SCC 549
- Tehri Hydro Development Corpn. Ltd. v. Jai Prakash Associates Ltd.: (2012) 12 SCC 10
- Union of India v. Ambica Construction (First): (2016) 6 SCC 36
- Ambica Construction v. Union of India (Second): (2017) 14 SCC 323
- Raveechee & Co. v. Union of India: (2018) 7 SCC 664
- Reliance Cellulose Products Ltd. v. ONGC Ltd.: (2018) 9 SCC 266
- State of U.P. v. Harish Chandra: (1999) 1 SCC 63
- Sayeed Ahmed & Co. v. State of U.P.: (2009) 12 SCC 26
- Union of India v. Saraswat Trading Agency: (2009) 16 SCC 504
- Sree Kamatchi Amman Constructions v. Railways: (2010) 8 SCC 767
- Union of India v. Bright Power Projects (India) (P) Ltd.: (2015) 9 SCC 695
- Delhi Airport Metro Express (P) Ltd. v. DMRC: (2022) 9 SCC 286
- Jaiprakash Associates Ltd. v. Tehri Hydro Development Corpn. (India) Ltd.: (2019) 17 SCC 786
- Oriental Structural Engineers (P) Ltd. v. State of Kerala: (2021) 6 SCC 150
- Central Bank of India v. Ravindra: (2002) 1 SCC 367
- Central Coop. Bank Ltd. v. S. Kamalaveni Sundaram: (2011) 1 SCC 790
Statutes/Laws Referred
- Arbitration and Conciliation Act, 1996: Sections 34, 37, 31(7)
- Stamp Act, 1899
- Interest Act, 1978: Section 3
- Principles of party autonomy and minimum judicial interference under the Arbitration Act
Key Contract Clauses Quoted
- Clause 4.20.2: “No claim for idle labour, idle machinery, etc. on any account will be entertained…”
- Clause 4.20.4: “No claim shall be entertained for business loss or any such loss.”
Yet another Arbitration matter referred to larger bench 😀 https://t.co/SdbSa01kbl pic.twitter.com/MKpIU26Pir
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