Authority: Supreme Court of India

Order Date: 24 September 2026

Case Overview

  • Parties: Appellant – RITES Ltd; Respondents – M/S Director, Uttar Pradesh Technical Education & Ors. (including the contractor, Respondent No.2).
  • Background: RITES Ltd was appointed as a consultant by the State of Uttar Pradesh, Department of Technical Education, to monitor performance of a construction contract awarded to Respondent No.2.
  • Arbitration: Disputes arose during contract execution; Respondent No.2 initiated arbitration, impleading RITES as the sole respondent. RITES sought to implead the State of Uttar Pradesh as the principal employer; the application was allowed.
  • Arbitral Award: The Arbitral Tribunal issued an award dated 24‑09‑2002 in favour of Respondent No.2 for Rs 12,52,190. Although the State was impleaded, the Tribunal directed that the award amount be paid by RITES.
  • High Court Proceedings:
  • Single Judge upheld the award but shifted liability to the State (order dated 05‑02‑2010).
  • The State appealed under Section 37 of the Arbitration and Conciliation Act; the Division Bench allowed the appeal in part and directed RITES to pay the award amount.
  • Pending Issues: The award amount of Rs 12,52,190 had already been deposited, but the decree holder could not withdraw any amount pending disposal of the Section 34 and Section 37 applications. The Supreme Court noted the need for interim orders to balance interests.

Final Outcome

  • The Supreme Court dismissed the appeal, upholding the arbitration award as confirmed by both the Single Judge (Section 34) and the Division Bench (Section 37).
  • The Court held that RITES Ltd and the State Government of Uttar Pradesh have joint and several liability towards the decree holder (Respondent No.2).
  • The Court refrained from expressing an opinion on the inter‑se liability between RITES and the State, leaving it to the parties to settle among themselves.
  • Respondent No.2 is entitled to withdraw the deposited amount along with all accrued interest upon filing the requisite application with the High Court.
  • No order as to costs was made.
  • Any pending interlocutory applications, if any, are disposed of.

Topics: Arbitration Award, Joint Liability