Supreme Court upholds impugned finding on Order XXXVIII Rule 5 CPC but erases two contentious directions after respondents' statement

A bench of Chief Justice Sanjiv Khanna and Justice Sanjay Kumar heard an appeal by the National Highways Authority of India challenging an impugned judgment dated 18.10.2024 that had decided three issues arising from SLP(C) No. 25334/2024. The Court granted leave and examined, in particular, the applicability of Order XXXVIII Rule 5 of the Code of Civil Procedure, 1908 to the facts of the case and certain observations and directions recorded in the impugned judgment.

The Supreme Court declined to interfere with the impugned judgment on the first issue relating to Order XXXVIII Rule 5 CPC, observing that it did not find "any good ground and reason to interfere with the impugned judgment." The Court, however, qualified its decision by allowing the appellant the opportunity to seek fresh relief if the factual matrix changed: The Court, in its reasoning, observed: "The first issue pertains to the applicability of Order XXXVIII Rule 5 of the Code of Civil Procedure, 1908, in the facts and circumstances of the present case. On the said issue/aspect, we do not find any good ground and reason to interfere with the impugned judgment. However, we clarify that, in case there is any change in the facts and circumstances, it would be open to the appellant, National Highways Authority of India, to move a fresh application and satisfy the Court that the conditions mentioned in Order XXXVIII Rule 5 CPC are fulfilled." The Court further clarified that this conclusion "shall not have any bearing on the execution proceedings" said to have been filed by NHAI.

Separately, the Court treated the second and third issues (recorded in paragraphs 28.1.7 to 28.1.9 and 28.2.1 to 28.3 of the impugned judgment) as erased and set aside the directions and observations recorded therein. The bench recorded that this course was taken "in view of the statement made by the learned Senior Advocate appearing for the respondent, M/s. IRB Ahmedabad Vadodara Super Express Tollways Pvt. Ltd." and noted a similar statement by the Senior Advocate for IRB Infrastructure Developers Limited. The order emphasised that the erasure was procedural: the direction to erase those paragraphs "shall not be treated as an expression of opinion by this Court on the merit of the rival pleas and contentions of the parties, which may be raised before the appropriate forum." The appeal was disposed of and pending applications were ordered to stand disposed.

Background The dispute arose from litigation between the National Highways Authority of India (appellant) and M/s IRB Ahmedabad Vadodara Super Express Tollways Pvt. Ltd. (respondent) concerning issues that the impugned judgment of 18.10.2024 had resolved in three parts. The principal legal contest pertained to whether Order XXXVIII Rule 5 CPC applied on the facts before the court; the appellant challenged that finding before the Supreme Court. The respondent, through its Senior Advocate, made an intervening statement before this Court which led to the Supreme Court erasing and setting aside certain directions and observations contained in specified paragraphs of the impugned judgment.

The Supreme Court reviewed the matter on leave granted, upheld the impugned court's conclusion on the first issue without interfering, and preserved the appellant's right to approach the Court afresh if material facts changed and the statutory conditions under Order XXXVIII Rule 5 CPC could be satisfied. The Court recorded that its act of erasing specified paragraphs was not an endorsement of any party's substantive position and did not express any opinion on the merits, leaving open the parties' rights to raise their contentions before the appropriate forum. The final result: the appeal was disposed of and all pending applications stood disposed.

Case No.: 2025 INSC 283 (arising out of SLP(C) No. 25334/2024) Case Title: National Highways Authority of India v. M/s IRB Ahmedabad Vadodara Super Express Tollways Pvt. Ltd. Appearances: For the Petitioner(s): Not indicated in the judgment For the Respondent(s): Not indicated in the judgment