SCO.LR | 2026 | Volume 3 | Issue 2

Volume 3 Issue 2 of Supreme Court Observer Law Reports (SCO.LR) is here!

With the Court on Holi break last week, this edition covers five bonus judgements from February 2026. This includes: 

• Grant of 2G licences
• Delay in adjudicating proceedings 
• Insolvency proceedings clashing with the Companies Act
• “Change in law” clause under contracts
• Discharge of surety in contracts

As always, the verdicts are readily available on our SCO.LR page with mindmaps to assist your reading experience.

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The Supreme Court Observer Law Reports 

SCO.LR | Volume 3 | Issue 2 

Bonus judgements from February 2026

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Delay in Granting Relief by Writ Courts

Mahendra Prasad Agarwal v Arvind Kumar Singh​

10 February 2026

Citations: ​2026 INSC 175​ | 2026 SCO.LR 3(2)[1]

Bench: Justices P.S. Narasimha and Alok Aradhe

The Supreme Court held that writ courts must not resort to repetitive orders that postpone effective relief by using phrases such as “consider” or “reconsider”. Courts should decide rights through clear and enforceable directions.

In 2000, the Uttar Pradesh government stopped financial assistance to non-aided colleges. The respondents, appointed as private college lecturers in 1993, challenged the policy. They sought sanctioned posts and salaries from the state. The Allahabad High Court remitted the matter to the Director of Education on three occasions (2010, 2013 and 2023). It refrained from stating whether the lecturers had a legal entitlement to claim financial aid. The respondents filed contempt applications against the authorities. Meanwhile, the department rejected their claim. The government reiterated the policy in May 2025. 

The Supreme Court held that a relief must follow claims of rights that are legal and justified. It observed that if the High Court had been clear about the existence of a right, the government would have had to comply, appeal or face contempt. The Court stated that the “consider jurisprudence” pattern is counterproductive and keeps litigation alive without resolving the controversy. It directed the lecturers to challenge the May 2025 Order and directed the High Court to adjudicate on their challenge in a clear and categorical manner. It barred any further remand to the authorities. 

Keywords/phrases: Uttar Pradesh policy barring financial aid to private colleges—Writ petition under Article 226—Matter remitted to authorities with directions to “consider/reconsider”—Absence of clear finding on entitlement—Pattern of “consider jurisprudence”—High Court barred from remanding matter to authorities. 

Read the Judgement here.

MIND MAP

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Reservation Price For Grant of 2G Licences 

Union of India v Sistema Shyam Teleservices

20 February 2026 

Citations: 2026 INSC 174 | 2026 SCO.LR 3(2)[2]

Bench: Justices P.V. Sanjay Kumar and K.V. Chandran

The Supreme Court held that permission granted to licensees to continue operations on quashed 2G licenses was in the interest of the general public and not to benefit the licensees. 

On 2 February 2012, the Supreme Court declared the allotment of 2G spectrum illegal in Centre for Public Interest Litigation v Union of India (CPIL). The Court permitted licensees to continue operations for four months pending a new auction. The Department of Telecommunications (DoT) requested several extensions, and the auction eventually took place in November 2012. However, no bids were received. On 15 February 2013, the Supreme Court ruled that all licensees operating after CPIL must pay the government-fixed reserve price, regardless of their auction participation. The DoT then directed the respondent to pay within 15 days. On appeal, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) held that the payment obligation began only on 15 February 2013. The respondent subsequently paid a revised amount to the DoT.

The Supreme Court set aside the TDSAT judgment, ruling that the payment obligation began on 2 February 2012. It held that the operators received a “lease of life” despite the quashing of their licenses.

Keywords/phrases: Centre for Public Interest Litigation v Union of India (CPIL)—Quashing of 2G Licences—Extension of operations on quashed licences—Benefit for the general public—Payment of reserved price—Effective from 2 February 2012—TDSAT judgement set aside

Read the Judgement here. 

MIND MAP

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Validity of Insolvency Proceedings vis-à-vis Scheme of Arrangement

Omkara Assets Reconstruction v Amit Chaturvedi

24 February 2026

Citations: 2026 INSC 189 | 2026 SCO.LR 3(2)[3]

Bench: Justices Sanjay Kumar and K.V. Chandran

The Supreme Court held that pending proceedings with respect to Scheme of Arrangement (SOA) under the Companies Act, 2013 cannot bar the initiation of Corporate Insolvency Resolution Proceedings (CIRP) under the Insolvency and Bankruptcy Code (IBC), 2016. 

The appellant–a financial creditor, instituted proceedings against the respondent–a corporate debtor, under Section 7 of IBC for the recovery of a default since 2003 in the Company Law Tribunal. The respondents resisted the claim, submitting that proceedings related to SOA are pending before the Punjab and Haryana High Court. The Tribunal rejected this submission, concluding that the SOA was defunct due to gross delay and allowed the IBC proceedings to resume. On appeal, the Company Law Appellate Tribunal put the IBC proceedings on hold pending disposal of proceedings at the Punjab and Haryana High Court. The appellant approached the Supreme Court. 

The Supreme Court held that a Section 7 insolvency proceeding is independent and remains unaffected by other pending legal proceedings as the IBC has an overriding effect. It clarified that in cases of conflict between proceedings, the IBC prevails over the Companies Act.

Keywords/phrases: Corporate Insolvency Resolution Proceedings (CIRP)–Scheme of Arrangement (SOA)–Proceedings under Section 7 of IBC–Recovery amount–Pending proceedings related to Scheme of Arrangement (SOA)–SOA defunct–IBC proceedings override Companies Act—No stay on IBC proceedings 

Read the Judgement here. 

MIND MAP

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Compensation Upon ‘Change in Law’

WB State Electricity v Adhunik Power

27 February 2026

Citation: 2026 INSC 202 | 2026 SCO.LR 3(2)[4]

Bench: Chief Justice Surya Kant and Justices B.V. Nagarathna and Joymalya Bagchi

The Supreme Court held that cancellation of coal block allocation pursuant to its decision in Manohar Lal Sharma v Principal Secretary (2014) amounts to a “change in law”. While granting compensation on this ground, it clarified that procurements made prior to the change in law will not be covered.

A power purchase agreement between the parties included a “change in law” clause. This provided compensation to restore the affected party to the same economic position as if the “change in law” had never occurred. The respondent’s coal block in Ganeshpur, Jharkhand, stood cancelled after the Manohar Lal Sharma decision. Their bid to secure coal block allocation also failed after the Coal Mines (Special Provision) Act, 2015 came into force. The Central Electricity Regulatory Commission granted compensation only to meet the shortfall incurred prior to the change, due to non-operationalisation of the Ganeshpur coal block. It held that the cancellation did not amount to a “change in law”. The Appellate Tribunal for Electricity (APTEL) awarded compensation on both grounds of non-operationalisation and change in law.

The Supreme Court set aside the APTEL order to the extent that it granted compensation to meet the shortfall pending operationalisation. It held that the cancellation and change in allocation of coal blocks did amount to a change in law, giving rise to grounds for compensation for losses incurred post-2014. The Court found that although the source of coal was not stipulated in the agreement, the conclusion that “captive coal block” referred to the one in Ganeshpur was “irresistable” from surrounding correspondence. It clarified that the immunity extended to the appellant in case of escalation in coal price due to procurement from alternative sources was not applicable in case of change in law.

Keywords/phrases: Power purchase and supply agreement—Manohar Lal Sharma v Principal Secretary (2014)—Coal Mines (Special Provision) Act, 2015—Cancellation of captive coal block—”Change in law” clause—Surrounding correspondence used to interpret agreement—Compensation granted on grounds of “change in law”—Denied for shortfall incurred prior to change.

Read the Judgement here.

MIND MAP

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Discharge of Surety on Variance of Contract

Bhagyalaxmi Co-operative Bank v Babaldas Amtharam Patel

 27 February 2026

 Citations: 2026 INSC 205 | 2026 SCO.LR 3 (2)[5]

 Bench: Justices B.V. Nagarathna and Ujjal Bhuyan

The Supreme Court held that under Section 133 of the Indian Contract Act, 1872, a surety is discharged only for transactions made after a variance is made to the contract without the surety’s consent. It observed that the liability of the surety continues for the amount originally guaranteed and for transactions prior to such variance.

Bhagyalaxmi Co-operative Bank granted a cash credit facility of ₹4 lakh to Darshak Trading Company. Babaldas Amtharam Patel and another stood as sureties for the loan. When the borrower defaulted, the Bank filed a suit before the Board of Nominees for recovery with interest. The Board decreed the claim only against the borrower and dismissed the suit against the sureties. On appeal, the Gujarat State Co-operative Tribunal held the sureties liable for ₹4 lakh with interest. The Gujarat High Court set aside the Tribunal’s order holding that the sureties would either be liable for the entire loan amount or not at all.

The Supreme Court held that permitting the borrower to withdraw amounts in excess of the sanctioned limit constituted a variance in the terms of the contract between the creditor and the principal debtor. It noted that sureties will not be liable for the excess amounts withdrawn beyond the sanctioned limits. The Court set aside the High Court decision and observed that the sureties are liable only to the extent of ₹4 lakh with interest, the amount for which they had agreed to stand as guarantors.

Keywords/phrases: Section 133 Indian Contract Act 1872 – Variance in terms of contract – Discharge of surety – Liability of surety for transactions prior to variance – Section 139 Contract Act – Impairment of surety’s remedy – Cash credit facility – Guarantor liability – Liability limited to amount guaranteed

Read the Judgement here.

MIND MAP