Introduction
The judgment rendered by the High Court of Jammu and Kashmir and Ladakh at Jammu in RP No. 115/2022 in CFA No. 18/2014, titled Union of India vs. D. Khosla & Co., decided on 17th October 2025, is a landmark ruling on the scope of review jurisdiction under Order XLVII Rule 1 CPC and the doctrine of merger in the context of arbitration disputes. The case arose from a construction contract dispute and culminated in a nuanced judicial examination of whether errors apparent on the face of record can justify a review, and whether a High Court judgment merges with a Supreme Court order dismissing an SLP.
Background of the Case
The Union of India filed a review petition seeking review of a judgment dated 09.05.2022 passed in CFA No. 18/2014. In that earlier judgment, this Court had set aside the Arbitrator’s award with respect to several contractor claims — specifically Claim Nos. (1), (2), (4), (8), (15), and (16) — finding them contrary to the specific terms and conditions of the contract. However, in a contradictory move, the Court simultaneously remitted those very claims back to the Arbitrator for fresh adjudication.
The Union of India argued that this amounted to an error apparent on the face of record, warranting a review under Order XLVII Rule 1 CPC.
Respondent’s Objection: Doctrine of Merger
The respondent-contractor, represented by Advocate Sourabh Malhotra, raised a preliminary objection. He argued that the judgment dated 09.05.2022 had merged with the order of the Hon’ble Supreme Court dated 14.07.2022, passed in SLP(C) No. 10816/2022, which dismissed the SLP filed by the respondent-contractor. He relied upon the Supreme Court’s judgment in V. Senthur and Another vs. M. VijayKumar and Another to contend that once the Supreme Court dismisses an SLP filed against a judgment, the High Court is not competent to review that judgment, even if valid grounds exist.
Court’s Analysis: Permissible Grounds for Review
Justice Sanjeev Kumar, authoring the judgment, reiterated that there are three permissible grounds on which a review petition may be entertained under Order XLVII Rule 1 CPC:
- Discovery of new and important evidence — which must be relevant, material, and not available at the time of judgment despite due diligence.
- Mistake or error apparent on the face of record — the error must be obvious and self-evident, not requiring elaborate reasoning. A wrong decision on merits is not equivalent to an apparent error on record.
- Any other sufficient reason — this must be read ejusdem generis with the above two grounds and cannot be interpreted as granting a blanket license for re-litigation.
The Court emphasized that review proceedings are not an appeal in disguise and must remain strictly confined to the scope and ambit of Order XLVII Rule 1 CPC.
Claim-Wise Analysis of Errors on Record
Claim No. 1: The Court had earlier held that the Arbitrator awarded Claim No. 1 without reference to Clause 11 of the contract, which clearly stated that any change in design/construction due to variation of soil strata is the contractor’s own responsibility, with no extra payment. Setting aside the award under Clause 11 and simultaneously remitting it for fresh adjudication was a clear contradiction — an error apparent on the face of record.
Claim No. 2: The Court in CFA No. 18/2014 had found Claim No. 2 contrary to Clause 3.2 of the contract, which stipulated that lump-sum quoted rates covered trench excavation and span excavation. Remitting this claim to the Arbitrator despite such a clear finding amounted to an oversight and an apparent error on record.
Claim Nos. 4 & 8: Claim No. 4 was found contrary to Clause 11(b) and Claim No. 8 was found contrary to Clause 17(g) of the contract. Despite these express findings, both claims were remitted back to the Arbitrator — a decision without any legal justification.
Claim Nos. 15 & 16 (Interest): The Arbitrator had awarded 18% interest per annum, which this Court had reduced to 6% per annum in the judgment under review. Since the interest issue had been conclusively determined, there was no warrant to remit it back to the Arbitrator. This further established an inadvertent error in para (52) of the original judgment.
Rejection of the Merger Doctrine Plea
The Court thoroughly examined the doctrine of merger and rejected the respondent’s objection. Relying on Kunhayammed vs. State of Kerala and V. Senthur’s case, the Court held:
- The Supreme Court had dismissed the SLP without reasons and without even issuing notice to the Union of India.
- A non-speaking dismissal of an SLP does not attract the doctrine of merger, meaning the High Court’s judgment does not stand substituted by the Supreme Court’s order.
- Only when the Supreme Court dismisses an SLP with reasons amounting to a declaration of law under Article 141 of the Constitution does the principle of binding precedent apply — but even then, the doctrine of merger is not attracted.
- The net result of the SLP dismissal was simply that the High Court judgment was not interfered with — nothing more, nothing less.
The Court, therefore, confirmed that the judgment dated 09.05.2022 remained open to review on permissible grounds.
Final Order and Recast of Para (52)
Finding merit in the review petition, the Court allowed the same and recalled the judgment dated 09.05.2022 to the extent of Claim Nos. (1), (2), (4), (8), (15) & (16). The operative portion of the original judgment — para No. (52) — was recast as follows:
“For determination of claims of the contractor, i.e., Claim Nos. 1, 2, 4, 8, 15 & 16 shall be deemed to have been set aside and only Claim No. 13 shall be remitted back to the Arbitrator for fresh adjudication.”
The Court further clarified that since the Arbitrator had already entered upon a fresh reference and adjudicated all claims pursuant to the earlier judgment, any adjudication pertaining to Claims Nos. 1, 2, 4, 8, 15, and 16 would be beyond jurisdiction and competence — and therefore a nullity.
Key Legal Takeaways
- A High Court retains the power to review its own judgment even after an SLP against it is dismissed by the Supreme Court, provided the dismissal is non-speaking and does not amount to a declaration of law under Article 141.
- The doctrine of merger does not apply merely because the Supreme Court dismisses an SLP, whether with or without reasons.
- Remitting claims to an Arbitrator after expressly holding them to be contrary to the contract’s specific terms constitutes an error apparent on the face of record, justifying exercise of review jurisdiction.
- Arbitrators have no jurisdiction to adjudicate claims that fall outside the terms of the contract — any award on such claims is a nullity.
- Review jurisdiction is not appellate in nature and must be exercised within strict and well-defined parameters.
Conclusion
The judgment in Union of India vs. D. Khosla & Co. reinforces the settled principle that judicial review is not a second bite at the apple, but the courts must also correct glaring inadvertent errors before they cause injustice. The ruling offers important clarity on the interplay between the doctrine of merger, the scope of review under CPC, and the limits of arbitral jurisdiction in public contract disputes. For practitioners in arbitration law and government contracts, this judgment is an essential reference poi
