Legal Updates (March 02 – March 07, 2026)
A complete discharge of the surety does not occur unless the conditions of Section 139 of the Indian Contract Act, 1872 are met, which requires that the creditor’s act or omission impairs the surety’s eventual remedy against the principal debtor. However, sureties are not liable for excess amounts permitted to be withdrawn from cash credit facility of the bank by the principal debtor
The Supreme Court in the case of Bhagyalaxmi Cooperative Bank vs Babaldas Amtharam Patel [Civil Appeal No. 3200 of 2016] dated February 27, 2026, has held that the sureties are not liable for excess amounts permitted to be withdrawn from cash credit facility of the bank by the principal debtor. Essentially, the Court said that under Section 133 of the Indian Contract Act, 1872, when a variance is made in the terms of a contract between a creditor and a principal debtor without the surety’s consent, the surety is discharged from liability only for transactions that are subsequent to such variance. However, the surety remains liable for the original obligation as per the terms of the guarantee contract, they entered into.
The Apex Court held that a complete discharge of the surety does not occur unless the conditions of Section 139 are met, which requires that the creditor’s act or omission impairs the surety’s eventual remedy against the principal debtor. Therefore, a bifurcation of the surety’s liability is not only permissible but statutorily required to separate the original guaranteed liability from the liability arising from subsequent, unconsented variations.
The Court observed that the primary issue was whether the sureties were entitled to a complete discharge under Section 139 or were liable to a limited extent under Section 133 of the Indian Contract Act, 1872. It noted that Section 133 provides that any variance in the terms of the contract between the principal debtor and the creditor, made without the surety’s consent, discharges the surety as to transactions subsequent to the variance.
This principle ensures a surety is not bound to something for which they have not contracted, and the Court affirmed that while a material alteration can discharge a surety, the discharge under Section 133 applies only to transactions post-variance, meaning the surety remains liable for the original obligation.
The Court distinguished this from Section 139, which requires two conditions for a surety’s discharge: (i) the creditor must do an act inconsistent with the surety’s rights or omit a duty owed to the surety, and (ii) this act or omission must impair the surety’s eventual remedy against the principal debtor. In the present case, while the bank’s act of allowing overdrafts was inconsistent with the sureties’ rights, it did not impair their eventual remedy against the principal debtor. The Court also reiterated the established principle that a creditor is not required to exhaust remedies against the principal debtor before proceeding against the surety.
The Court found the High Court’s reasoning that the sureties must be liable for the entire amount or not at all to be erroneous and contrary to the plain reading of Section 133. It observed that the bifurcation of liability, which the High Court deemed impermissible, is in fact mandated by Section 133 to correctly determine the extent of the surety’s liability.
An application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC), is not barred by limitation if its filing is within a fresh limitation period triggered by the issuance of a Recovery Certificate by the Debt Recovery Tribunal (DRT)
The National Company Law Appellate Tribunal (NCLAT) at Principal Bench, New Delhi, in the case of D.N.V Srinivasa Raju Vs IDBI Bank Ltd [Company Appeal (AT) (Insolvency) No.1189 of 2025] dated February 25, 2026, has clarified that an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC), is not barred by limitation if its filing is within a fresh limitation period triggered by the issuance of a Recovery Certificate by the Debt Recovery Tribunal (DRT), which grants a fresh three-year period of limitation from the date of the certificate.
The NCLAT held that the limitation period also gets extended by an acknowledgment of the debt in the corporate debtor’s audited financial statements. An entry reflecting a contingent liability, such as a corporate guarantee, can be construed as an unequivocal acknowledgment of the underlying jural relationship of debtor and creditor, thereby extending limitation under Section 18 of the Limitation Act, 1963.
Further, the Tribunal explained that a written communication from the corporate debtor, such as a letter responding to a settlement offer, which acknowledges the debt, if made before the expiry of the then-subsisting limitation period, gives rise to a fresh period of limitation from the date of the acknowledgment. The computation of the limitation period must also account for the exclusion of the period from March 15, 2020 to February 28, 2022, as directed by the Supreme Court in its suo moto orders concerning the COVID-19 pandemic.
The NCLAT focused on whether the Section 7 application was barred by time. It observed that a fresh three-year limitation period commenced from the date of the DRT’s Recovery Certificate on July 26, 2018, which would ordinarily expire on July 25, 2021. However, applying the Supreme Court’s suo moto order extending limitation periods due to the COVID-19 pandemic, the NCLAT calculated that the limitation period was extended until July 12, 2023, even without considering any acknowledgments.
The Tribunal then examined the Corporate Debtor’s financial statements for FY 2019-20, 2020-21, and 2021-22, and found that Note 33 in the statements explicitly mentioned the ‘counter guarantee of Rs.2,265.00 lakhs in favour of Southern Pesticides Corporation Limited’. Thus, relying on Supreme Court precedents, including Asset Reconstruction Co. (India) Ltd. v. Bishal Jaiswal [(2021) 6 SCC 366] and IL and FS Financial Services Ltd. vs. Adhunik Meghalaya Steels P. Ltd. [2025 SCC OnLine NCLAT 569], the Tribunal held that entries in a balance sheet can constitute a valid acknowledgment under Section 18 of the Limitation Act, provided they are examined on a case-by-case basis.
The NCLAT concluded that the mention of the guarantee in the balance sheets, which were prepared within three years of the DRT decree, served as a valid acknowledgment, thereby extending the limitation period.
Further, the Tribunal considered the letters sent by the Corporate Debtor to IDBI Bank, which explicitly referred to IDBI’s settlement offer and stated, “As per your settlement offer, an amount of Rs.30,90,143.28 can be paid upto 31.03.2021. You are, therefore, requested to consider our request favourably and inform the settlement amount”. The NCLAT found this to be a clear acknowledgment of the debt. Since these letters were sent before the expiry of the limitation period, they also provided a fresh period of limitation from their respective dates. Consequently, the NCLAT upheld the NCLT’s order admitting Section 7 application.
When the decision to not classify the account as fraudulent and to remove the red flag was a collective business decision taken by the majority of lenders after due deliberations, forensic audits, and under the purview of the RBI and the Ministry of Finance, a dissent by a few banks does not by itself impute criminality
The Bombay High Court in the case of GTL Limited vs CBI [Writ Petition No. 3631 of 2024] dated February 27, 2026, has held that an offence of cheating, as defined under section 415 of the Indian Penal Code, requires a fraudulent or dishonest intention at the very beginning of the transaction. Thus, the Court ruled that a mere breach of contract or a subsequent failure to keep up a promise is not sufficient to constitute the criminal offence of cheating.
As in the present case, there was no evidence of deception at the inception or any fraudulent act by the petitioner company, the Court said that its inherent power under Section 482 of the Code of Criminal Procedure, should be exercised to quash criminal proceedings to prevent a miscarriage of justice. This power can be used when unimpeachable documents produced by the accused substantially wipe out the allegations in the FIR, even if the investigation is still in progress.
The Court went on to explain that an investigation initiated against ‘unknown’ persons after a lengthy preliminary enquiry, without identifying any specific accused, amounts to a ‘roving and fishing inquiry’. Hence, the continuance of such a criminal proceeding cannot be permitted on the ground that the investigating agency may find the culprits at some future date.
The Court added the alleged loss of public exchequer does not fall within the meaning of wrongful loss in absence of any evidence of intentional and fraudulent act on the part of the petitioner-company. The CBI could not detect any illegal act or deceit in the entire transaction played by any of the directors of the petitioner-company. Their identity is known but there is no allegation against any of them. Hence, the criminal justice system cannot be set in motion in the mere hope of discovering an offender.
The Court observed that it was of considerable importance that the FIR was lodged against ‘unknown’ directors and bank officials, despite the CBI having conducted a Preliminary Enquiry for 18 months and collected 52 documents from which their identities were ascertainable. The Court noted that even at the time of the hearing, the CBI was unable to identify a single accused, which suggested the FIR was lodged for a fishing inquiry.
The Court gave significant weight to the commercial wisdom of the consortium of banks. It noted that the decision to not classify the account as fraudulent and to remove the red flag was a collective business decision taken by the majority of lenders after due deliberations, forensic audits, and under the purview of the RBI and the Ministry of Finance. Thus, the Court stated that such a decision cannot be second-guessed by an investigating agency, and a dissent by a few banks does not by itself impute criminality.
The Court highlighted that the CBI had previously, through a communication dated 5th September 2018, ordered the closure of the matter because the JLF had not classified the account as fraud. The Court also pointed to the bar under Section 17A of the Prevention of Corruption Act, which requires prior approval to investigate public servants (bank officials), and noted that no such approval was obtained.
A creditor cannot be forced to elect its remedy or apportion its claim between the principal debtor and the guarantor. A financial creditor is entitled to initiate and maintain simultaneous CIRP under the IBC
The Supreme Court in the case of ICICI Bank Ltd vs Era Infrastructure (India) Ltd [Civil Appeal No. 6094 of 2019] dated February 26, 2026, has held that a financial creditor is entitled to initiate and maintain simultaneous Corporate Insolvency Resolution Processes (CIRPs) under the Insolvency and Bankruptcy Code, 2016, against both the principal debtor and its corporate guarantor(s) for the same debt. This right stems from the principle of co-extensive liability of the surety as enshrined in Section 128 of the Indian Contract Act, 1872, which is not contradicted by the IBC.
The Apex Court held that a creditor cannot be forced to elect its remedy or apportion its claim between the principal debtor and the guarantor. The Court affirmed that the legal framework, particularly Section 60(2) of the IBC, envisages the possibility of concurrent proceedings and that any apprehension of unjust or double enrichment is addressed by existing regulatory safeguards that mandate the updating and revision of claims by the creditor and the Resolution Professional.
The Court observed that the question of whether simultaneous proceedings can be maintained is no longer res integra and is squarely covered by the decision in BRS Ventures Investments Ltd. v. SREI Infrastructure Finance Ltd. [(2025) 1 SCC 456]. The Court noted that Section 60(2) of the IBC itself contemplates separate or simultaneous insolvency proceedings against a corporate debtor and its guarantor. This provision, which requires that an application against a guarantor be filed before the same NCLT where the debtor’s CIRP is pending, implicitly permits concurrent proceedings.
The Court reiterated that while recovery is not the primary object of the IBC, it is central to the insolvency resolution process. It observed that if an application under Section 7 or 9 meets the statutory requirements of ‘debt’ and ‘default’, its admission is inevitable, irrespective of the applicant’s motive, such as recovery. While acknowledging the discretionary power of the Adjudicating Authority under Section 7(5)(a) as held in Axis Bank Ltd. v. Vidarbha Industries Power Ltd. [(2022) 8 SCC 352], the Court clarified that this discretion cannot be exercised arbitrarily and that admission should be the ordinary course unless there are good reasons not to.
On the doctrine of election of claims, the Court found no merit in the argument that a financial creditor must be compelled to elect its claim, i.e., to claim a part of the debt from the principal debtor and the rest from the guarantor. It observed that forcing a creditor to elect would defeat the purpose of a guarantee, as the guarantor’s liability is co-extensive with the principal debtor. The Court pointed out that the IBC contains no express provision for such an election, and imposing such a restriction would be an unwarranted judicial limitation on a statutory right.
On the apprehension of double enrichment, the Court addressed the concern that allowing simultaneous proceedings could lead to a creditor recovering more than its due. It found this apprehension to be far-fetched and observed that sufficient safeguards already exist within the IBC framework to prevent such an outcome. Specifically, Regulation 12A of the CIRP Regulations, 2016, obligates a creditor to update its claim upon satisfaction from any source, and Regulation 14 requires the Resolution Professional to revise the admitted claims based on new information.
Lastly, while acknowledging the submissions urging the Court to lay down guidelines for group insolvency and simultaneous proceedings, the Court declined to do so. It observed that the IBC is a well-researched policy framework and that venturing into laying down modalities would amount to judicial exploration and encroaching upon the legislative domain.
Any unencumbered asset of the Corporate Debtor w.r.t. which no claim was lodged during CIRP, could not be interfered with after the resolution plan had been approved and implemented
Emphasising the principle of finality of an approved resolution plan and the ‘clean slate’ doctrine, as established by the Supreme Court in Ghanashyam Mishra & Sons (P) Ltd. Vs Edelweiss Asset Reconstruction Co. Ltd. [(2021) 9 SCC 657], the National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, in the case of Mangalam Global Enterprise Limited vs Catalyst Trusteeship Limited [Company Appeal (AT) (Insolvency) No. 114 of 2025] dated March 02, 2026, has held that once a resolution plan is approved by the Adjudicating Authority, all claims which are not part of the plan stand extinguished. This ensures that the successful resolution applicant can start with a ‘fresh slate’ without the threat of ‘surprise claim’.
The NCLAT ruled that since the Respondent No. 1 in the present case has failed to file its claim regarding the purported lien over the Fixed Deposits (FD) during the Corporate Insolvency Resolution Process (CIRP), any such claim was extinguished upon the approval of the resolution plan. Consequently, the FD, being an unencumbered asset of the Corporate Debtor, could not be interfered with after the plan had been approved and implemented.
The NCLAT Clarified that the approved plan could not be altered based on claims that were not pursued in time. Therefore, the Successful Resolution Applicant (SRA – Mangalam Global Enterprise Limited) for the Corporate Debtor (H.M. Industrial Private Limited) was entitled to the liquidation of the FD and the transfer of its proceeds. The NCLAT therefore, directed Bank of Baroda to liquidate the FD and transfer the amount with accrued interest to the Appellant.
The Tribunal observed that while the Information Memorandum did not list the FD individually, it reflected a consolidated amount for FDRs under ‘Current Investment’ in the balance sheet. Further, an affidavit from Bank of Baroda (Respondent No. 2) confirmed the existence of the Rs. 42 lakh FD. Based on a holistic view of the Information Memorandum and the bank’s affidavit, the NCLAT concluded that the FD was indeed an asset of the Corporate Debtor.
The Tribunal gave significant weight to an affidavit filed by Bank of Baroda, which unequivocally stated that the bank had not created any lien on the said FD and was merely its custodian. Also, a physical examination of the FD receipt showed that the columns designated for ‘Lien Noted on’ and ‘Lien Cancelled on’ were left blank, indicating no lien was ever marked. The Tribunal thus concluded that Respondent No. 1 had failed to provide any document to prove that a lien or charge was created on the FD, making its claim untenable.
The NCLAT distinguished the FD from margin money, and noted that the FD was not drawn in favour of the bank but in the joint names of the Corporate Debtor and the Debenture Trustee. It was never earmarked for a specific purpose, such as security for a Letter of Credit or Bank Guarantee, and was not placed in a trust-like structure. Therefore, it remained an asset of the Corporate Debtor and could not be treated as margin money.
Payment made for legitimate and documented managerial services rendered in the ordinary course of business to maintain the company as a going concern cannot be deemed fraudulent under Section 66 without strict proof of malafide intent, especially when similar claims for other periods have been admitted
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, in the case of Rakshit Dhirajlal Doshi vs Chirag Shah [Company Appeal (AT) (Insolvency) No. 1855 of 2025] dated March 03, 2026, has held that to classify a transaction as fraudulent or wrongful trading under Section 66 of the Insolvency and Bankruptcy Code, 2016 (IBC), there must be cogent and conclusive evidence demonstrating a deliberate intent to defraud creditors; a mere presumption or suspicion is not sufficient.
The NCLAT held that the payments made for legitimate and documented managerial services rendered in the ordinary course of business to maintain the company as a going concern cannot be deemed fraudulent under Section 66 without strict proof of malafide intent, especially when similar claims for other periods have been admitted.
However, any withdrawal made with the knowledge that the company’s insolvency is imminent or inevitable, particularly if cleared after the commencement of the CIRP, can be directed to be refunded to the corporate debtor’s account, added the Tribunal.
The Tribunal observed that establishing a case for fraudulent or wrongful trading under Section 66 of the IBC requires a high burden of proof, which must be of an unimpeachable nature and beyond reasonable doubt. Mere suspicion or presumption of fraud is insufficient to attract the provisions of Section 66 IBC.
The NCLAT noted that the Resolution Professional had admitted the appellants’ remuneration claims of Rs. 54.36 lakhs for the period FY 2020-2021, which was supported by records like the IBBI Claims Portal and the Transaction Audit Report (TAR). Further, ledger entries clearly showed that salaries for FY 2019-2020 were due and paid accordingly.
Now, since the respondent did not deny that managerial services were rendered or allege any falsification of records, the NCLAT found it unjustified to treat the remuneration for 2019-2020 as fraudulent when similar remuneration for a subsequent period was accepted as legitimate.
The Tribunal found the respondent’s argument regarding the proximity of the withdrawal date to the insolvency commencement date to be factually incorrect. Bank statements revealed that the withdrawal of Rs. 21.64 lakhs occurred on March 31, 2021, more than 15 months before the CIRP began, which negated the inference of last-minute siphoning of funds. However, regarding a separate withdrawal of Rs. 2 lakhs via a cheque (cleared after CIRP admission), the NCLAT opined that the appellant likely knew insolvency was imminent, and thus this amount should be refunded.
The NCLAT also dismissed the argument that routing funds through a sister concern was inherently fraudulent, stating it can be a standard business practice and requires specific pleading and proof of fraudulent intent. Similarly, the inability to pay statutory dues during financial distress does not automatically prove a dishonest design to defraud creditors when paying for legitimate managerial services.
Finally, the NCLAT criticized the Adjudicating Authority for interchangeably using the terms ‘preferential transaction’ and ‘fraudulent transaction’. It emphasized that these are distinct concepts under the IBC (governed by Section 43 and Section 66, respectively), each requiring different elements of proof and having different consequences.
A procedural defect, such as the failure to file a Statement of Truth as mandated by Order VI Rule 15A of the CPC in a commercial suit, is a curable irregularity. When a suit has been fully tried on its merits and a conclusive finding on the rights and liabilities of the parties has been reached based on evidence, the suit cannot be dismissed solely on account of such a rectifiable procedural defect
The Delhi High Court in the case of Shashi Garg vs Renu Garg [RFA (COMM) 17/2024] dated February 24, 2026, has held that a procedural defect, such as the failure to file a Statement of Truth as mandated by Order VI Rule 15A of the CPC in a commercial suit, is a curable irregularity. When a suit has been fully tried on its merits and a conclusive finding on the rights and liabilities of the parties has been reached based on evidence, the suit cannot be dismissed solely on account of such a rectifiable procedural defect.
This is particularly so when the defect does not affect the jurisdiction of the court or cause any prejudice to the opposing party, added the Court, while clarifying that the correct course of action is to afford the defaulting party an opportunity to rectify the defect, and thereafter, the court should proceed to pass a decree in accordance with its findings on the merits of the case.
The Court observed that the central issue was the dismissal of a suit on a procedural technicality after a full trial on merits had been concluded in the Plaintiff’s favour. The Court acknowledged that Order VI Rule 15A of the CPC is couched in mandatory terms to ensure procedural discipline in commercial disputes. However, it emphasized the legal principle that procedural law is merely a ‘handmaid of justice’ and a defect of form should not be allowed to defeat substantial rights, unless it goes to the root of jurisdiction or causes irremediable prejudice.
The Court noted that the District Judge had conducted a meticulous examination of evidence, including ledger accounts, invoices, and witness testimonies, and had arrived at a conclusive finding that the Plaintiff was entitled to recover a principal sum of Rs. 29.64 Lakh. In these circumstances, dismissing the suit for a curable defect, especially when it was originally not a commercial suit, would amount to elevating procedure over substance.
Judicial review by NCLT/ NCLAT and courts is strictly confined to the limited grounds specified in the IBC, primarily concerning procedural compliance and legality under Sections 30(2) and 61(3) of the IBC, and does not extend to the merits of a commercial decision
The Supreme Court in the case of Torrent Power vs Ashish Arjunkumar Rathi [Civil Appeal Nos. 11746-11747 of 2024] dated February 27, 2026, has held that the commercial wisdom of the Committee of Creditors (CoC) in evaluating and approving a resolution plan is paramount and non-justiciable. Essentially, judicial review by adjudicating authorities (NCLT, NCLAT) and courts is strictly confined to the limited grounds specified in the Insolvency and Bankruptcy Code, 2016 (IBC), primarily concerning procedural compliance and legality under Sections 30(2) and 61(3) of the IBC, and does not extend to the merits of a commercial decision.
The Court held that a ‘material irregularity’ under Section 61(3)(ii) of the IBC cannot be attributed to a Resolution Professional (RP) when the RP is acting solely on the express instructions of the CoC. The process of seeking clarifications from resolution applicants to remove ambiguities in their plans, without altering the fundamental commercial terms or the net present value of the offer, does not constitute an impermissible modification of the plan but is a valid exercise within the scope of the CoC’s evaluation process.
The Court cautioned that that unsuccessful bidders will always try to spin commercial decisions of the CoC as procedurally faulty in order to secure a second shot through litigation by filing applications or making representations. Thus, from an ex-post perspective, excessive judicial review in the CIRP carries significant economic costs that run counter to the objects of IBC.
Further, the Court explained that the IBC is premised on the recognition that delay and uncertainty are value-destructive in distressed situations. When commercial decisions taken by the CoC are subjected to expansive judicial scrutiny, resolution timelines lengthen, transaction costs rise, and the going-concern value of the Corporate Debtor erodes. The consequence therefore is not merely delay, but a tangible loss of economic value for all stakeholders.
The Court observed that an appeal to the Supreme Court under Section 62 of the IBC is permissible only on a question of law. The grounds for an appeal to the NCLAT against an approved resolution plan are strictly limited by Section 61(3) of the IBC. As far as the appellants’ primary ground regarding ‘material irregularity’ by the RP under Section 61(3)(ii) is concerned, the Court found this ground was not made out because the RP acted strictly on the instructions of the CoC when seeking clarifications.
The Court explained that to hold that the RP’s actions, directed by the CoC, constitute a material irregularity would be to conflate the distinct statutory roles of the RP and the CoC and indirectly subject the CoC’s decisions to judicial review, contrary to the IBC’s scheme.
Where a contract contains an express and unambiguous clause prohibiting the payment of interest on amounts payable to the contractor, the arbitrator lacks jurisdiction to award such interest, either directly or indirectly under the guise of ‘compensation’ or ‘financing charges’
The Supreme Court in the case of Union of India vs Larsen & Turbo Limited [Special Leave Petition (Civil) No. 14989 of 2023] dated February 27, 2026, has held that pre-award and post-award interest operate in distinct fields and a contractual bar applicable to the former cannot, by implication, be extended to the latter, and thus, any exclusion of post-award interest must be explicit and unambiguous. The Court explained that under the Arbitration and Conciliation Act, 1996, an arbitral tribunal’s power to grant pre-award or pendente lite interest is circumscribed by the terms of the contract between the parties, as mandated by Section 31(7)(a).
Where a contract contains an express and unambiguous clause prohibiting the payment of interest on amounts payable to the contractor, the arbitrator lacks jurisdiction to award such interest, either directly or indirectly under the guise of ‘compensation’ or ‘financing charges’, added the Court, while pointing out that an award granting such interest is contrary to the contract and is liable to be set aside.
The Apex Court emphasised that the grant of post-award interest is governed by Section 31(7)(b) of the 1996 Act and is not subject to party autonomy unless explicitly and unambiguously excluded by the contract. A contractual bar on pre-award or pendente lite interest does not, by implication, extend to post-award interest.
The arbitral tribunal is justified in awarding post-award interest in the absence of an express contractual prohibition. However, the rate of such interest is subject to judicial review and can be modified by the court if it is found to be excessive, unsubstantiated, or not in consonance with the principle of just compensation, explained the Court.
On ‘Pre-award and Pendente Lite Interest’, the Court observed that contractual bar is absolute, and analysed Clause 16(3) of the GCC, which states, ‘no interest will be payable upon the Earnest Money and Security Deposit or amounts payable to the Contractor under the Contract’, and Clause 64(5), which bars interest on an award for any period until the date the award is made. The Court further observed that Section 28(3) and Section 31(7)(a) of the 1996 Act subordinate the arbitrator’s discretion to the contractual provisions governing interest.
The Court rejected the respondent’s argument that the principle of ejusdem generis should apply to Clause 16(3), which would limit the interest bar only to sums like earnest money or security deposits. The Court clarified that the expression “amounts payable to the contractor under the contract” is independent and distinct, and the use of the word ‘or’ means it must be read disjunctively from earnest money and security deposit.
The Court went on to hold that awarding interest under the guise of ‘compensation’ or ‘financing charges’ is an attempt to circumvent the express contractual bar. Since the parties are governed by the contract, the Arbitral Tribunal, being a creature of the contract, cannot go beyond its terms. The Court noted that the Tribunal itself rejected a direct claim for interest but then proceeded to award interest indirectly in Claims 1, 3, and 6, which was a serious error.
On Post-award Interest, the Court observed that post-award interest is governed by a distinct legal regime under Section 31(7)(b) of the Act, which operates independently of the principles applicable to pre-award interest. The Court emphasised that Clause 64(5) of the GCC only bars interest ‘till the date on which the award is made’ and does not prohibit interest for the period subsequent to the award. Further, the Court found no other provision in the GCC that expressly bars post-award interest. In the absence of such an explicit and unambiguous exclusion, the statutory mandate under Section 31(7)(b) must prevail.
