Gayatri Balasamy v. ISG Novasoft Technologies Ltd

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Published on: 04th March 2026

Authored by: Ayasha Rashid Momin
Savitribai Phule Pune University.
  • Justice Sanjiv Khanna (Chief Justice of India),
  • Justice R. Gavai,
  • Justice Sanjay Kumar
  • Justice Augustine George Masih
  • Justice V. Viswanathan – Dissenting opinion Date of judgement: April 30, 2025

Facts:

  • On April 2006 gayatri balasamy join the company ISG novasoft Technologies , as vice president at the department merger and acquisitions integration strategy.
  • 24 July 2006 she was resignation the company and reason is CEO of company sexual harass her.
  • The resignation of balasamy was not accepted for three
  • She filled the charge against the company CEO under the Tamil Nadu Prohibition of Harassment of Women Act 1998.
  • And ISG also claims against her defamation and
  • In this Arbitral tribunal in favor of Balasamy and 2 core compensation provided to
  • But she challenges the award in madras high court and madras HC again order in her favors and additionally 6 core means a total of 3.6 core compensation ordered.
  • But 8 2019 divisional bench reduce the compensation of 50000.
  • The case eventually comes before the Supreme Court of India. Before the three- bench judge.
  • Party dissatisfied by the decision of compensation so comes and appeals against the award for increasing the compensation.
  • The national highways authority challenged the compensation increment they argue that court can only cancel the unfair award it does not have legal power to
  • Here is he legal question included so the court referred the case five bench og
  • Hence balasamy appealed in the SC with a Special Leave In the initial days, it is heard by three judge benches, but when the question arises arbitral award then it is heard by the five benches of judges.
  • The court analyzed Section 34, including its explanation, provisos, and related sections like 5, 31, 33, 37, and 48.
  • Case comparison between the international arbitration laws under the UNCITRAL Model Law and the New York Convention.

Issue:

  • Mainly in this dispute legal question of law is involved which is “Does a court have power to modify an award under the section –34?
  • Whether the Indian court can modify an arbitral award under section 34 and 37 of Arbitration and Conciliation Act 1996? if they are restricted solely to setting it aside.
  • Whether the High Court increasing the arbitral award compensation was permissible under the “setting aside” award?
  • Whether the principle of minimum judicial intervention, as per the Arbitration Act, allows for judicial modification?
  • If the power to modify exists, can it only be exercised when the award is severable
  • Whether the judgment in Project Director NHAI v. M. Hakeem laid down the correct law by prohibiting modification?

Argument:

Favour Arguments:

  • Greater include the lesser:
    1. Section 34 allows setting aside to avoid modification and
    2. It must include less power to
    3. This is based upon the legal maxim omne majus continent in se
  • Justice and Efficiency:
  • Denying the party for modification is face to party. It increases the cost and delays in justice.
  • Statutory Interpretation: The term of recourse is broad and should include varying an award to align it with law or contract.
  • International Practice:
  • In international there several other countries allow to vary the arbitral
  • Several countries follow the UNCITRAL model to modify the

Past Judicial Precedents:

  1. Point out the past judgment where courts modify the arbitral award
  2. The Supreme Court and High Court have already modified the past award by adjusting interest rates or correcting specific findings.

Arguments Opposing:

  • Legislative Intent:
    • In 1940 act the word modification mentioned in law but in 1996 omitted the power of modify
  • Section 34 includes the word modification for

2)  UNCITRAL Model Law:

  • The UNCITRAL model does not replace the arbitral
  • They exclude the court power on arbitral tribunal

3)   Appellate vs. Supervisory Jurisdiction:

  1. Modification needs to merit and review the award, which automatically turns into the appeal against the act.

4)  Enforcement Risks:

  1. The New York Conventions will see the court order except for the arbitral award because modifying award becomes unenforceable, according to the New York Conventions.

5)  Concept of Annulment

Judgement:

  • Modification of arbitral award is limited to power to court under special SC also modify the award carefully without effects to using hi invoking power under article 142 of the constitution.
  • Court also modifies the post-award in past some special
  • Court clarified that by the provision to Section 34(2)(a)(iv). Severance is permissible when valid or invalid are legal and practically can be made separable.
  • P.C. Section 151 cannot be used for the modifying of the award. It will be contrary to expressing the power of section 34.
  • The court also does not modify the award by setting aside course of action under Section 34(4) will have to be adopted as discussed in the judgment.
  • The court held that under section 34 court can only decide if the process was unfair or not means the procedural irregularities, jurisdictional errors and if the public policy
  • Courts can modify an award to correct manifest clerical, computational, or typographical errors appearing on the face of the record.
  • The Court held that while Hakeem was correct in limiting merits-based modification, it did not account for the inherent power to sever or correct patent errors
  • In dissent, justice for K.V. Viswanathan held court cannot modify the arbitrational award under section He disagrees to the other judges which says SC have power to modify the award use art.142 it was impermissible for courts to modify or alter the post- award interest.

Ratio Decidendi:

The Above judicial decision is based on the following rules and principal of laws:

  • The limited power of modification held by the depends upon section 34, but court only set aside and remits the award does not alter it according to NHAI vs M.Hkeem case.
  • Principal of Omne Majus Continet in se Mius menas the greater contains the less it is said that court have greater power to set aside the award lesser power to alter and
  • The Court held that the modification is permissible only when the valid or invalid legal point of law will separable here the court use the test od Severability and
  • Use the clerical and computational errors here the court rectify the manifest errors apparent on the face of the record, such as mistakes like mathematical and other to prevent the complete annulment of an otherwise sound award.
  • Use the article 142 of constitution of India in exceptional cases SC have power to modify an award.
  • Doctrine of Merger and the New York Convention, which merge the Indian and New York Conventions.

Original commentary:

  • Sc introduced the four elements where the judicial modification is permissible that is severability, manifest errors, post- award interest and article 142 powers.
  • In severability held that paratactically or legally the award valid and in valid part may be able to separate and which is invalid ground they may modify it.
  • Correct the errors which are clerical, Computational or typographical which is face the apparent on the face of the record.
  • Post award interest suggests the court adjust the interest to confirm the award is fair and does not overlap any other laws and contrary to statutory norms.
  • Article 142 clarify that the SC may use its constitutional power to do fair and complete justice provide in special cases.
  • Under the NEW YORK CONVENTION, foreign courts enforce the arbitral It applies to the globally.
  • Justice v.viswanathan provide the dissenting view he is arguing that:
    1. The act 1996 the word modify was present, but it is excluded in present act
    2. The judiciary ignores the parliament’s change to prevent the court from
    3. The modification of the Award is just the supervisory method which directly affects the time and cost of trails.

Implications:

  • The Arbitrator must draft the award very carefully because the court cannot accept and reject the whole award.
  • The court only modifies the tribunal of award, which is not valid and may be
  • The company who does the contract rethinks and adds the clause if dispute arises we both agree on the arbitral award without going to court.
  • The Court has some restraint to modify and alter the arbitral award they cannot change it if they want; they will very specifically ground
  • The parliament needs to amend an act to clarify the limit of

Conclusion:

The four judges have believed courts have the power to modify the award in some exceptional cases to maintain efficiency. In many cases, there is a need to fix the small query. Mistake and gaps without changing the whole award. But the minority judge said that the law is written for the court with limited interference. When the court changes and modifies the award, then the process of arbitration award is going to be very slow, hence the arbitral things and process can disturb. The legal system depends on having clear, set rules rather than judge making the decision in each case. Solve the problems it really mentioned in the laws can judge change or not change any award. If change, then which ground is included in the dispute.

 

Citation:

 

 

 

 

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