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The two recent judgments of the Hon’ble Supreme Court of India illustrate how parties may fatally compromise otherwise valid claims by either invoking an inappropriate legal remedy or doing so belatedly. The selection of the correct and competent remedy—within the prescribed period of limitation—is of foundational importance in any litigation strategy. Where multiple remedies appear available, the election of one over another may, in certain circumstances, preclude or render infructuous the subsequent invocation of a more appropriate remedy.
1. HPCL Bio-Fuels Ltd. v. Shahaji Bhanudas Bhad, 2024 SCC OnLine SC 3190
Factual Background
In 2012–2013, Hindustan Petroleum Corporation Limited (“HPCL”) issued several purchase orders to a sole proprietorship, Shahaji Bhanudas Bhad (“SBB”), for capacity enhancement works at the Lauriya and Sugauli facilities. SBB raised invoices aggregating ₹38.18 crores. HPCL made payments totalling ₹19.02 crores, leaving a balance of ₹18.12 crores disputed between the parties. Despite exchanges of correspondence—including SBB’s demand on 02.02.2014 and HPCL’s refusal on 04.02.2014—the dispute remained unresolved.
SBB issued a notice invoking arbitration on 09.07.2016 and filed an application under Section 11 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) before the Bombay High Court on 16.02.2018. Before the application was adjudicated, SBB also issued a demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016 (“IBC”), and subsequently withdrew the Section 11 application on 01.10.2018 without seeking liberty to file afresh.
Thereafter, SBB pursued insolvency proceedings before the NCLT, which were ultimately dismissed by the NCLAT, and the dismissal was affirmed by the Supreme Court on 15.07.2022, with a general liberty to pursue remedies in accordance with law.
Relying on this liberty, SBB filed a fresh Section 11 application before the Bombay High Court on 09.12.2022. The High Court appointed a sole arbitrator, holding that Section 14 of the Limitation Act, 1963, applied since the insolvency proceedings constituted prosecuting a remedy before a “wrong forum.”
Decision of the Supreme Court
The Supreme Court set aside the High Court’s order, holding inter alia:
Withdrawal of the first Section 11 application without liberty barred a second application on the same cause of action. The Court applied the principles underlying Order XXIII Rule 1 CPC to Section 11 proceedings.
The first notice invoking arbitration was issued on 09.07.2016. Limitation expired in August 2019. A fresh Section 11 petition filed in December 2022 was hopelessly barred.
For Section 14(2) to apply, the earlier and subsequent proceedings must be “for the same relief.”
The Court highlighted substantive differences between insolvency and recovery proceedings, holding the remedies fundamentally distinct.
Although Section 5 applies to Section 11 applications, the Court held that SBB had consciously abandoned the correct remedy and pursued an inappropriate one despite clear indications of a pre-existing dispute. These circumstances did not warrant condonation.
The liberty granted while dismissing the IBC proceedings did not revive an otherwise time-barred or legally untenable remedy.
2. IRCTC Ltd. v. Brindavan Food Products, 2025 (6) Arb LR 89 (SC)
This case involved a challenge to an arbitral award passed in favour of Brindavan Food Products (“BFP”), a catering contractor under a Master License Agreement (“MLA”) with Indian Railway Catering and Tourism Corporation (“IRCTC”).
The MLA expressly required the caterer’s tariffs and menu to conform to Railway Board policies and circulars issued from time to time. At the time of bid submission on 27.06.2013, a 1999 circular governed the pricing regime. However, before award of the contract on 17.01.2014 and thereafter, the Railway Board issued:
BFP challenged the 2013 and 2014 circulars through a writ petition, which the Delhi High Court dismissed in 2019, permitting BFP to pursue arbitration. The arbitral tribunal awarded:
The Single Judge partially set aside the award; the Division Bench reinstated it; and the matter ultimately reached the Supreme Court.
The Supreme Court set aside the award in its entirety, holding:
The MLA unequivocally subordinated contract terms to Railway Board policies. Once the 2013 and 2014 circulars remained unchallenged and in force, they were binding on both parties. Failure of BFP to succeed in its writ petition proved fatal.
The Court endorsed that though two meals were identical, the tariff for the second meal was mandated to be lower. Parties had no discretion to deviate from the policy.
Relying on Clause 8.1 of the MLA, the Court held that reintroduction of the welcome drink that was already contemplated in the bid document could not give rise to any claim for additional amount. The arbitrator ignored explicit contractual terms, amounting to patent illegality.
The award violated express policy directions and contract terms, thereby attracting the “patent illegality” and public policy of India violation ground under Section 34 of the Arbitration Act.
Conclusion
These two judgments reinforce critical principles:
In the HPCL case, arbitration was the correct remedy from the outset. Pursuing insolvency proceedings despite a clear pre-existing dispute rendered the IBC petition untenable and caused fatal delay in invoking arbitration.
In the IRCTC case, the contract itself gave primacy to Railway Board circulars. Without setting aside the circulars, the contractor could not succeed on claims contrary to them.
Whether electing the wrong forum (HPCL) or failing to first invalidate adverse policy (IRCTC), errors in legal strategy can extinguish substantive rights.
A careful analysis of available remedies, their legal preconditions, and limitation implications is indispensable before initiating any proceeding. Even when multiple remedies exist, strategic sequencing and timeliness often determine the outcome more than the merits themselves.