Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(SC) 1855

SUPREME COURT OF INDIA
J.B. PARDIWALA, K.V. VISWANATHAN, JJ.
Urban Infrastructure Real Estate Fund – Petitioner
Versus
Neeklanth Realty Private Limited & Ors. – Respondents
Special Leave Petition (Civil) No. 26660 of 2025 With Special Leave Petition (Civil) No. 26661 OF 2025 (Diary No. 36228 of 2025) And Special Leave Petition (Civil) No. 26662 of 2025 (Diary No. No. 36232 of 2025)
Decided On : 15-09-2025

Advocates appeared:
For the Petitioner(s): Mr. Neeraj Kishan Kaul, Sr. Adv. M/S. K J John And Co, AOR Mr. Amarjit Singh Bedi, Adv. Mr. Aditya Bapat, Adv. Ms. Surekha Raman, Adv. Mr. Shreyash Kumar, Adv. Mr. Sidharth Nair, Adv. Mr. Harshit Singh, Adv. Mr. Yashwant Sanjenbam, Adv. Ms. Ira Mahajan, Adv.

An interim award on limitation resolved via demurrer does not preclude further examination based on evidence, as limitation is a mixed question of law and fact.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 34 and 37 - Limitation Act, 1963 - Interim award on limitation decided on basis of demurrer - Arbitrator erred in foreclosing the limitation issue permanently - Question of limitation is mixed law and fact, requiring evidence - Decision on demurrer does not bar re-examination of limitation - Rule of law mandates fair resolution and preventing stale claims - Appeals dismissed. (Paras 1, 12, 131-138)

(B) Party Autonomy - Scope limited by principles of natural justice and mandatory statutory provisions - Arbitration agreements must not contravene fundamental principles, particularly Limitation. (Paras 19-20)

Table of Content
1. factual basis of the dispute (Para 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10)
2. court's analysis on issues raised (Para 12 , 13 , 59 , 60 , 61 , 62 , 63 , 64)
3. summary of petitioner's submissions (Para 15 , 16 , 17 , 18 , 19 , 20)
4. ratio decidendi on limitation issue (Para 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54 , 55 , 56 , 57 , 58 , 67)
5. conclusion and order for next steps (Para 138 , 139)

JUDGMENT :

J.B. PARDIWALA, J.:

For the convenience of exposition, this judgment is divided into the following parts: -

INDEX
A.	FACTUAL MATRIX
	I. The Interim Award.
	II. The Decision of the Single Judge under Section 34 of the Act, 1996
	III. The Impugned Decision.
B.	SUBMISSIONS ON BEHALF OF THE PETITIONER
C.	ISSUES FOR DETERMINATION
D.	ANALYSIS
	I. Whether the Preliminary Issue on the question of limitation decided on demurrer, could have been foreclosed by the arbitrator?
	a. The definition, scope and nature of the term “demurrer”.
	b. The legal position in the United States
	i. Demurrer to Evidence
	ii. Demurrer to Declaration or Pleading
	c. The legal position as understood in Indian jurisprudence.
	i. Some decisions employing the concept of demurrer and the contours thereof.
	ii. Deciding the issue of Limitation on demurrer and its similarity with an application under Order VII Rule 11(d) of the CPC
	iii. Decision of the Privy Council in Kanhaya Lal v. The National Bank of India and that of the Calcutta High Court in Angelo Brothers.
II.	Whether the Doctrine of Party Autonomy can be utilised to adopt a procedure which has the consequence of infringing Section 3 of the LIMITATION ACT , 1963?
III.	Whether the Interim Award warranted interference by the court under Section 34 of the Act, 1996?
E.	CONCLUSION

1. After hearing the learned Counsel appearing for the Petitioner at length, and upon a threadbare examination of the reasoning assigned by the High Court, we ordered dismissal of the Special Leave Petitions. However, considering the nature of the issues involved, we thought it appropriate to assign reasons for the same by a separate judgment. The order dated 15.09.2025 reads thus: -

2. Heard Mr.Neeraj Kishan Kaul, the learned Senior counsel appearing for the petitioner at length.

3. We find no good ground to interfere with the impugned order passed by the High Court.

3. The Special Leave Petitions are, accordingly, dismissed.

4. Reasons to follow by a separate order.”

2. These petitions arise from the common judgment and order dated 02.04.2025 passed by the High Court of Judicature at Bombay in the Commercial Appeal Nos. 37, 38 and 40 of 2020 respectively (hereinafter, the “impugned decision”) by which the High Court dismissed the appeal filed by the petitioner herein under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter, the “Act, 1996”) and thereby, affirmed the common judgment and order dated 04.12.2019 passed by a Single Judge of the High Court interfering with the interim award dated 27.08.2019 and holding that the preliminary issue of limitation decided on the basis of demurrer would not preclude the Arbitral Tribunal from further examining the same on the basis of evidence and other materials on record, if tendered and if so warranted.

A. FACTUAL MATRIX

3. The Urban Infrastructure Real Estate Fund or UIREF (hereinafter, the “petitioner”) is a private equity fund based in Mauritius incorporated as a public company. The Neelkanth Realty Private Limited (hereinafter, the “respondent no. 1 company”) is a private limited company incorporated under the COMPANIES ACT , 2013. The respondent nos. 2, 7 and 8 respectively are the Directors of the respondent no. 1 company, whereas the respondent nos. 3 to 6 respectively are the legal representatives of the original respond