Chhattisgarh High Court has appointed a retired judge to arbitrate a Rs. 11 lakh dispute between Rose Construction and Jayaswal Neco Industries

News Citation : 2026 LN (HC) 238 | 2026:CGHC:16060-DB

April 8, 2026 : The High Court of Chhattisgarh has intervened in a decade-long legal battle between M/s Rose Construction and Jayaswal Neco Industries Limited, providing a definitive path toward resolution. In a recent judgment, a division bench comprising Justice Sanjay K. Agrawal and Justice Sachin Singh Rajput partially set aside a trial court’s decision that had previously dismissed a recovery suit filed by the construction firm.

The dispute traces back to a 2008 work order for an underground tunnel project valued at Rs. 24,00,000. M/s Rose Construction alleged that despite completing the project, Jayaswal Neco Industries failed to pay an outstanding balance of Rs. 11,00,000. This led the proprietor, Sardar Mohammad, to file a civil suit in 2011 seeking the principal amount plus 18% interest. However, the litigation hit a procedural wall when the respondent invoked the Arbitration and Conciliation Act, arguing that the original agreement required all disputes to be settled by an arbitrator rather than a civil court.

In 2017, the 4th Additional District Judge in Raipur agreed with this assessment and rejected the plaint entirely. Upon appeal, the High Court clarified a crucial legal distinction regarding Section 8 of the Arbitration Act. The bench noted that while the trial court was correct in recognizing the arbitration clause, it committed a “grave legal error” by simply dismissing the suit. The justices emphasized that the power to refer parties to arbitration inherently includes the jurisdiction to appoint an arbitrator to ensure the dispute actually reaches a resolution.

Moving to settle the matter, the High Court appointed retired judge Justice Deepak Tiwari as the sole arbitrator. The proceedings will be held in Raipur, finally shifting the focus from procedural technicalities to the merits of the unpaid debt claim. This ruling reinforces the principle that arbitration clauses should serve as a bridge to alternative dispute resolution rather than a trapdoor that ends a party’s pursuit of justice.

Case Reference : In First Appeal No. 421 of 2018, involving M/s Rose Construction versus The Manager M/s Jayaswal Neco Industries Limited, the appellant was represented by Advocate Mr. Sudeep Verma and the respondent was represented by Advocate Mr. Ashish Surana.