State of Sikkim vs Chhabil Dass Agarwal S/o Late Deepchand Agarwal

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(Sikk) 13

THE HIGH COURT OF SIKKIM: GANGTOK
BISWANATH SOMADDER, BHASKAR RAJ PRADHAN
State of Sikkim – Appellant
Versus
Chhabil Dass Agarwal S/o Late Deepchand Agarwal – Respondent

Advocate Appeared:
For the Appellant :Mr. Zangpo Sherpa, Additional Advocate General with Mr. Mohan Sharma, Advocate and Mr. Sujan Sunwar, Assistant Government
For the Respondent:Mr. Rohan Batra, Mr. Dhruv Sethi and Mr. Hemlal Manger, Advocates

Table of Content
1. factual background and procedural trajectory of the arbitration dispute. (Para 1 , 2 , 3 , 15)
2. contentions regarding contractual interpretation and limitation periods. (Para 4 , 19 , 20 , 21 , 28)
3. commercial court's analysis on patent illegality and public policy foundations. (Para 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14)
4. scope of section 37 appellate jurisdiction in arbitration matters. (Para 16 , 17 , 18)
5. court's final assessment on contract breach, escalation, and dismissal of appeal. (Para 22 , 23 , 24 , 25 , 26 , 27 , 29 , 30)

Judgment :

Bhaskar Raj Pradhan, J.

This is an appeal under section 37 of the Arbitration and Conciliation Act, 1996 (the Arbitration Act).

2. The facts pertinent for disposal of the present appeal can be briefly summarised as under:

(i) The appellants and Chhabil Dass Agarwal (the respondent) had entered into a contract agreement dated 24.02.2004 for construction of 2x5MVA, 66/11KV substation with LILO from Phodong 66KV S/S and Meyong- C-Power House at Mangan. The work had to be completed within four months but due to several factors, it could be done only on 18.02.2008. The work value was initially for Rs.7,79,33,000. Admittedly