[Cites 18, Cited by 0]
Bombay High Court
Sudhir Joshi S/O Shri Suresh Joshi vs Rajesh Khandelwal And Ors on 16 December, 2025
Author: N. J. Jamadar
Bench: N. J. Jamadar
2025:BHC-AS:55438
-WP13118-2025+.DOC
Santosh
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 13118 OF 2025
Sudhir Joshi s/o Shri Suresh Joshi ...Petitioner
Versus
1. Rajesh Khandelwal ...Respondents
2. TATA Capital Financial Services Limited
3. Shubhankar Marketing Private Limited
SANTOSH AND
SUBHASH
KULKARNI WRIT PETITION NO. 13383 OF 2025
Digitally signed by
SANTOSH SUBHASH
KULKARNI
Date: 2025.12.16 Sudhir Joshi s/o Shri Suresh Joshi ...Petitioner
20:28:46 +0530
Versus
1. Rajesh Khandelwal ...Respondents
2. TATA Capital Financial Services Limited
3. Shubhankar Marketing Private Limited
AND
WRIT PETITION NO. 13288 OF 2025
Sudhir Joshi s/o Shri Suresh Joshi ...Petitioner
Versus
1. Rajesh Khandelwal ...Respondents
2. TATA Capital Financial Services Limited
3. Shubhankar Marketing Private Limited
AND
WRIT PETITION NO. 13384 OF 2025
Sudhir Joshi s/o Shri Suresh Joshi ...Petitioner
Versus
1. Rajesh Khandelwal ...Respondents
2. TATA Capital Financial Services Limited
3. Shubhankar Marketing Private Limited
Mr. Kezar Kharawala, a/w Mr. Pradosh Patil, i/by Lex Juris, for
the Petitioner in all WP.
Mr. Aseem Naphade, a/w Mr. Nikhil Mehta, i/by KMC Legal
Venture, for Respondent No.2.
1/22
::: Uploaded on - 16/12/2025 ::: Downloaded on - 16/12/2025 21:03:31 :::
-WP13118-2025+.DOC
CORAM: N. J. JAMADAR, J.
RESERVED ON: 15th OCTOBER, 2025
PRONOUNCED ON: 16th DECEMBER, 2025
JUDGMENT:
-
1. Rule. Rule made returnable forthwith and, with the
consent of the learned Counsel for the parties, heard finally.
2. The challenge in these petitions is to identical orders
passed by the learned Sole Arbitrator on applications in
Arbitration Proceedings, under Section 16 of the Arbitration and
Conciliation Act, 1996 ("the Act of 1996").
3. There is a prelude to these petitions:
3.1 Shubankar Marketing Private Limited (R3) had availed
financial facilities from TATA Capital Financial Services Limited
(R2). The petitioner claimed that he was a nominal Director of
R3. Alleging default in repayment, R2 had invoked arbitration,
purportedly without serving the notice of invocation of
arbitration upon the petitioner. Mr. Anis Ahmed, the learned
Arbitrator, passed awards on 19th April, 2015.
3.2 The petitioner filed petitions before this Court assailing the
said awards. On 10th May, 2024 in Arbitration Petition No.
(S)35084/2023 and the connecting petitions, Minutes of Order
were executed and the arbitration petitions were disposed in
-WP13118-2025+.DOC
accordance with the terms of the Minutes of Order signed and
tendered by the parties. Under the said Minutes of Order, the
parties agreed that the arbitration awards arising out of
different loan agreements, as indicated in the table below, be set
aside:
Arbitration Case No. Loan Agreement No. Loan Agreement Arbitration Award
Date Date
4150/2014 7000172460 31.12.2012 19.04.2016
4151/2014 700072462 31.12.2012 19.04.2016
TCFSL/16817/2014 7000193654 30.06.2013 30.11.2015
4212/2014 7000172468 31.12.2012 30.12.2015
4213/2014 7000172469 31.12.2012 30.12.2015
4152/2014 7000172464 31.12.2012 19.04.2016
16761/2014 7000152644 04.07.2012 09.04.2015
3.3 The parties further agreed that Mr. Rajesh Khandelwal
(R1) be appointed as the Sole Arbitrator to adjudicate the
disputes between the parties. The issue of limitation was
expressly kept open. The learned Arbitrator, after filing the
respective pleadings, would first consider the issue of limitation
and invocation of the arbitration proceedings relating to each of
the claims as enlisted in the table extracted above as a
preliminary issue and, thereupon, decide the claims depending
on the outcome of the said preliminary issue.
3.4 Arbitration proceedings commenced before the learned
Arbitrator. The petitioner filed first application under Section 16
of the Act of 1996 raising the grounds, inter alia, that the
-WP13118-2025+.DOC
petitioner was a nominal Director of R3 Company and had no
control over the affairs or day to day activities of R3, and the
petitioner had not received any notice invoking the arbitration.
The said application came to be rejected by the sole
Arbitrator.
4. While the said first application was awaiting adjudication,
the petitioner filed his written statement and, simultaneously,
filed an application seeking leave of the Tribunal to file the
second application under Section 16 of the Act of 1996, as
recorded by the learned Arbitrator in the minutes of the arbitral
meeting held on 8th February, 2025.
5. The substance of the second application was that in the
statement of claim filed in the respective proceedings by the
claimants - R2, it was asserted that the claimant had issued
sanction letter and a Master Loan-cum-Hypothecation-cum-
Guarantee Agreement, qua each of the transactions. However,
no such agreement was annexed to the statement of claim.
What was annexed was the Master Loan-cum-Hypothecation-
cum-Guarantee Agreement No.7000172460 pertaining to
Arbitration No.A1. No separate sanction letter was annexed with
the statement of claim in each of the proceedings. The sanction
letter was the same as was annexed with the claim in
-WP13118-2025+.DOC
Arbitration Proceeding No.A1. The petitioner, thus, asserted
that there was no arbitration agreement as such and, therefore,
the arbitral proceeding was not tenable.
6. The Claimant - R2 resisted the application by filing reply.
It was, inter alia, contended that the application was not tenable
as it was barred by limitation. Thereupon, the petitioner filed an
application for condonation of delay of 124 days in filing the
second application.
7. By the impugned order, the learned Arbitrator was
persuaded to dismiss the applications. The learned Arbitrator
was of the view that, the issue of absence of separate sanction
letter and agreement containing the arbitration clause, in
respect of each of the transactions, was a mixed question of law
and fact and, therefore, warranted adjudication after the parties
adduced evidence. It was, inter alia, observed that the petitioner
did not dispute the execution of the Master Loan-cum-
Hypothecation-cum-Guarantee Agreement in the capacity of a
guarantor. At no point of time, the petitioner had denied the
execution of the transaction documents and the Master Loan-
cum-Hypothecation-cum-Guarantee Agreement dated 31st
December, 2012. The learned Arbitrator, thus, while dismissing
the second application under Section 16 of the Act of 1996, gave
-WP13118-2025+.DOC
liberty to the petitioner to raise the issues, that were raised in
the said application, at an appropriate stage in the arbitral
proceedings.
8. Being aggrieved, the petitioner has invoked the writ
jurisdiction.
9. I have heard Mr. Kezer Kharawala, the learned Counsel for
the petitioner, and Mr. Aseem Naphade, the learned Counsel for
Respondent No.2 - claimant, in all petitions. The learned
Counsel took the Court through the pleadings and material on
record including the orders passed by the learned Arbitrator.
10. Mr. Kharawala, the learned Counsel for the petitioner,
submitted that the learned Arbitrator committed grave
jurisdictional error in returning a finding that the issue of
jurisdiction was required to be determined after the parties
adduced evidence. Laying emphasis on the provisions contained
in Section 16 of the Act of 1996, Mr. Kharawala would urge that
it empowers the Arbitral Tribunal to rule on its own jurisdiction.
The objection in regard to the existence of an Arbitration
Agreement is required to be determined by the Arbitral Tribunal,
when its jurisdiction is questioned on the count of absence of
Arbitration Agreement, either way. Without arriving at a positive
finding that, the Arbitral Tribunal has the jurisdiction, the
-WP13118-2025+.DOC
learned Arbitrator could not have side stepped the issue by
observing that the issue raised by the petitioner warranted
adjudication after the parties adduced evidence. The impugned
order is, thus, patently perverse. Therefore, this Court can
legitimately intervene in exercise of the supervisory jurisdiction
lest, the petitioner would be rendered remediless and made to
undergo the arbitral proceedings when ex facie there is no
Arbitration Agreement between the parties, in respect of the
transactions in question.
11. Mr. Kharawala laid emphasis on the fact that the sanction
letter qua each of the transactions in question and the
purported agreement containing the arbitration clause are not
annexed. In the absence thereof, the arbitration proceedings is
simply not properly constituted. In the face of such
incontrovertible facts, the learned Arbitrator could not have
assumed jurisdiction where none exists.
12. To lend support to aforesaid submissions, Mr. Kharawala
placed strong reliance on the judgment in the case of Interplay
between Arbitration Agreements under Arbitration and
Conciliation Act, 1996 and Stamp Act, 1899, in RE 1, wherein it
was emphasised that the Arbitration Act is a self-contained
1 (2024) 6 Supreme Court Cases 1.
-WP13118-2025+.DOC
code, inter alia, with respect to matters dealing with
appointment of arbitrators, commencement of arbitration,
making of an award and challenges to the arbitral award, as well
as execution of such awards. And that, the Arbitral Tribunal is
obligated to decide on the challenge to its jurisdiction.
13. Mr. Kharawala would further urge that there is an
essential distinction between the jurisdictional and admissibility
issues. The Arbitrator lost sight of this essential distinction. The
petitioner was questioning the jurisdiction of the Arbitral
Tribunal to continue with the arbitral proceeding for want of
arbitration agreement and had not raised the issue of
admissibility of the documents. Thus, the learned Arbitrator
could not have held that the issues raised by the petitioner
warranted adjudication after the parties adduced evidence as if
the petitioner had raised admissibility issues. To lend support
to these submissions, a very strong reliance was placed by Mr.
Kharawala on the judgment of the Supreme Court in the case of
Bharat Sanchar Nigam Limited and another vs. Nortel Networks
India Private Limited2, wherein the Supreme Court elucidated
the distinction between the jurisdictional and admissibility
issues.
2 2021(5) SCC 738.
-WP13118-2025+.DOC
14. Mr. Kharawala further submitted that in the peculiar facts
of the case an exceptional situation has arisen. And, therefore,
this Court would be justified in interdicting the arbitral
proceedings. Reliance was placed on a Division Bench judgment
of this Court in the case of Hindustan Petroleum Corporation
Limited vs. Om Construction3, wherein this Court, after an
elaborate analysis of the previous precedents, expounded the
scope of interference in arbitral proceedings under Articles 226
and 227 of the Constitution of India.
15. Per contra, Mr. Naphade, the learned Counsel for R2 -
claimant, would submit that the instant second application
under Section 16 before the learned Arbitrator was filed with an
oblique motive to delay the disposal of the arbitration
proceedings. After having obtained an order, albeit by consent,
of quashing and setting aside the earlier awards on an express
understanding that each of the arbitration proceedings would be
taken to its logical conclusion, save and except the issue of
limitation and invocation of arbitration on which the learned
Arbitrator was to rule, it was not open to the petitioner to again
file an application under Section 16 of the Act of 1996,
especially, when the first application was sub-judice.
3 2023 SCC Online Bom 2219.
-WP13118-2025+.DOC
16. Mr. Naphade would urge that the first application
questioning the jurisdiction of the Arbitral Tribunal was
dismissed by the learned Arbitrator and the said order has not
been challenged. The instant second application was also devoid
of substance as the transaction documents executed by the
petitioner in each of the transactions contained a clause that
the borrower and guarantor confirmed that the terms and
conditions of the Master Loan-cum-Hypothecation-cum-
Guarantee Agreement would be applicable to the loan facility
granted pursuant to the application in each of the transactions.
Master Loan-cum-Hypothecation-cum-Guarantee Agreement, in
turn, contains the arbitration clause to resolve all the disputes.
The said Master Loan-cum-Hypothecation-cum-Guarantee
Agreement governed each of the distinct loan agreements.
Therefore, the learned Arbitrator was wholly within his rights in
dismissing the applications which were apparently misconceived
and, mala fide, submitted Mr. Naphade.
17. To start with, it is necessary to note that, the execution as
such of the Master Loan-cum-Hypothecation-cum-Guarantee
Agreement is not in dispute. The Schedule-A appended to
the said Master Loan-cum-Hypothecation-cum-Guarantee
Agreement, inter alia, provided that the facility amount not
-WP13118-2025+.DOC
exceeding Rs.77,15,000/- was to be extended thereunder.
Incontrovertibly the petitioner had signed the said Master Loan-
cum-Hypothecation-cum-Guarantee Agreement, along with
another Director of R3. The Master Loan-cum-Hypothecation-
cum-Guarantee Agreement contains the following dispute
resolution mechanism:
"23. ARBITRATION:
All disputes, differences and/or claims arising out of this Loan
Agreement or as to the construction, meaning or effect hereof or
as to the rights and liabilities shall be settled by arbitration to
to be held in Mumbai in accordance with the Arbitration in and
Conciliation Act 1996, or any statutory of the parties parties
hereunder shall amendments thereof and shall be referred to a
person to be appointed by the Lander. In the event of death,
refusal, neglect, Inability, or incapability of the person so
appointed to act as an Arbitrator, the Lender may appoint a new
arbitrator. The award of the arbitrator shall be final and binding
on all parties concerned.
24. JURISDICTION:
Subject to the provisions of clause 23 above, any suit, petition,
inference or other filing permitted or required to be made
pursuant to the Arbitration and Conciliation Act, 1996 in
respect of the matters arising out of this Agr Agreement
including, without limitation, a petition for appointment of an
arbitrator of arbitrators under section 11 of the Arbitration and
Conciliation Act, 1996 shall be instituted only in competent
courts at Mumbal."
18. It would be contextually relevant to note, at this stage
itself, the stipulation in the Loan-cum-Hypothecation-cum-
Guarantee Agreement;
"We confirm that the terms and condition of the Master
Agreement would be applicable to the loan facility granted
pursuant to this application. We further confirm that the
Assets mentioned in this application shall be deemed to be
hypothecated in favour of the Lender in accordance with the
-WP13118-2025+.DOC
Master Agreement. The Guarantor also hereby confirms that
the Loan Facility if granted under this application shall be
guaranteed by the Guarantor on the terms of the Master
Agreement."
19. Incontrovertibly, the aforesaid transactional documents in
each of the cases for a loan amount of Rs.15,43,000/-, each,
aggregating to Rs.77,15,000/- (as stipulated in the Master Loan-
cum-Hypothecation-cum Guarantee Agreement) has been
executed by the petitioner.
20. In the backdrop of the aforesaid facts, it is necessary to
keep in view of the remit of the jurisdiction to interdict the
arbitral proceedings. Under the provisions of Section 16 of the
Act of 1996, the Arbitral Tribunal is empowered to rule on its
own jurisdiction. Section 16 of the Act of 1996 reads as
under:
"Section 16. Competence of arbitral tribunal to rule on its
jurisdiction.-- (1) The arbitral tribunal may rule on its own
jurisdiction, including ruling on any objections with respect to
the existence or validity of the arbitration agreement, and for
that purpose,--
(a) an arbitration clause which forms part of a contract shall be
treated as an agreement independent of the other terms of the
contract; and
(b) a decision by the arbitral tribunal that the contract is null
and void shall not entail ipso jure the invalidity of the
arbitration clause.
(2) A plea that the arbitral tribunal does not have jurisdiction
shall be raised not later than the submission of the statement
of defence; however, a party shall not be precluded from raising
such a plea merely because that he has appointed, or
participated in the appointment of, an arbitrator.
-WP13118-2025+.DOC
(3) A plea that the arbitral tribunal is exceeding the scope of
its authority shall be raised as soon as the matter alleged to be
beyond the scope of its authority is raised during the arbitral
proceedings.
(4) The arbitral tribunal may, in either of the cases referred to
in sub-section (2) or sub-section (3), admit a later plea if it
considers the delay justified.
(5) The arbitral tribunal shall decide on a plea referred to in
sub-section (2) or sub-section (3) and, where the arbitral
tribunal takes a decision rejecting the plea, continue with the
arbitral proceedings and make an arbitral award.
(6) A party aggrieved by such an arbitral award may make an
application for setting aside such an arbitral award in
accordance with section 34."
21. When the Arbitral Tribunal accepts the plea referred to in
sub-clause (2) or sub-clause (3) of Section 16 of the Act of 1996
and holds that it has no jurisdiction, an appeal is provided
under Section 37 of the Act of 1996. Conversely, where the
Arbitral Tribunal repels the objections to its jurisdiction, it shall
continue with the arbitral proceedings and make an arbitral
award. A party aggrieved by such an arbitral award has the
remedy of filing an application to set aside such an arbitral
award in accordance with Section 34 of the Act of 1996.
22. At this juncture, it is necessary to note the foundational
principle of minimal interference enshrined in Section 5 of the
Act of 1996. It provides that notwithstanding anything
contained in any other law, for the time in force in matters
-WP13118-2025+.DOC
covered by Part-I, no judicial authority shall intervene except as
provided in Part-I.
23. Keeping in view the aforesaid provisions, the scope of
interference in exercise of writ jurisdiction is required to be
appreciated. The legal regime enshrined by the Act of 1996 was
directed towards the consolidation of the law governing the
Arbitration. The Act of 1996 is thus a self-contained code. In
order to achieve the object of speedy disposal of the arbitration
matters by the Arbitral Tribunals, which are the forums of the
dispute redressal chosen by the parties, the Act of 1996
prescribes time limits for the disposal of such matters and even
the Applications and Appeals preferred against the orders
passed thereunder.
24. The minimal judicial intervention is emphasized by
incorporating a non-obstante clause in Section 5 of the Act of
1996, which provides that notwithstanding anything contained
in any other law for the time being in force, in matters governed
by Part -I of the Act of 1996, no judicial authority shall intervene
except where so provided in the said Part. Section 37 of the Act
of 1996 provides a limited right of Appeal against specified
judgments and orders only. The legislative intent becomes more
clear in Sub-section (3) of Section 37, which interdicts a Second
-WP13118-2025+.DOC
Appeal against an order passed under Section 37 of the Act of
1996. Thus, the determination under Section 16 of the Act of
1996 by the Arbitrator, has to follow the discipline envisaged by
the said section, which provides a mechanism of challenge
under Section 34 of the Act of 1996.
25. This brings to the fore the limits of exercise of the writ
jurisdiction, premised on the pristine proposition that the legal
regime under an enactment cannot override the constitutional
guarantee and right. The question was elaborately considered by
a Three Judge Bench of the Supreme Court in the case of Deep
Industries Limited Vs Oil and Natural Gas Corporation Limited &
Anr,4 wherein the Supreme Court after adverting to the relevant
provisions of the Act of 1996 and the previous pronouncements
including the Seven Judge Bench Judgment of the Supreme
Court in the case of SBP & Co Vs Patel Engineering Ltd And
Anr,5 expounded the legal position as under:
"17. This being the case, there is no doubt whatsoever that if
petitions were to be filed under Articles 226/227 of the
Constitution against orders passed in appeals under Section
37, the entire arbitral process would be derailed and would not
come to fruition for many years. At the same time, we cannot
forget that Article 227 is a constitutional provision which
remains untouched by the non-obstante clause of Section 5 of
the Act. In these circumstances, what is important to note is
that though petitions can be filed under Article 227 against
judgments allowing or dismissing first appeals under Section
4 (2020) 15 SCC 706.
5 (2005) 8 SCC 618.
-WP13118-2025+.DOC
37 of the Act, yet the High Court would be extremely
circumspect in interfering with the same, taking into account
the statutory policy as adumbrated by us herein above so that
interference is restricted to orders that are passed which are
patently lacking in inherent jurisdiction.
18. ... ... ...
19. ... ... ...
20. While the learned Additional Solicitor General is correct
in stating that this statement of the law does not directly apply
on the facts of the present case, yet it is important to notice
that the seven-Judge Bench has referred to the object of the
Act being that of minimizing judicial intervention and that this
important object should always be kept in the forefront when a
227 petition is being disposed of against proceedings that are
decided under the Act.
21. ... ... ...
22. One other feature of this case is of some importance. As
stated herein above, on 09.05.2018, a Section 16 application
had been dismissed by the learned Arbitrator in which
substantially the same contention which found favour with the
High Court was taken up. The drill of Section 16 of the Act is
that where a Section 16 application is dismissed, no appeal is
provided and the challenge to the Section 16 application being
dismissed must await the passing of a final award at which
stage it may be raised under Section 34. What the High Court
has done in the present case is to invert this statutory scheme
by going into exactly the same matter as was gone into by the
arbitrator in the Section 16 application, and then decided that
the two year ban was no part of the notice for arbitration
issued on 02.11.2017, a finding which is directly contrary to the
finding of the learned Arbitrator dismissing the Section 16
application. For this reason alone, the judgment under appeal
needs to be set aside."
(emphasis supplied)
26. In the case of Punjab State Power Corporation Limited Vs
Emta Coal Limited And Anr6 further explaining the import of the
observations in paragraph 17 in the case of Deep Industries
(supra) (extracted above), the Supreme Court cautioned against
6 (2020) 17 SCC 93.
-WP13118-2025+.DOC
the purported misuse of the said expression of law, in the
following words:
"4. We are of the view that a foray to the writ court from a
Section 16 application being dismissed by the arbitrator can
only be if the order passed is so perverse that the only possible
conclusion is that there is a patent lack in inherent
jurisdiction. A patent lack of inherent jurisdiction requires no
argument whatsoever--it must be that perversity of the order
that must stare one in the face.
5. Unfortunately, the parties are using this expression
which is in our judgment in Deep Industries Ltd (Supra), to go
to the Article 227 Court in matters which do not suffer from a
patent lack of inherent jurisdiction. This is one of them.
Instead of dismissing the writ petition on the ground stated,
the High Court would have done well to have referred to our
judgment in Deep Industries (Supra) and dismiss the Article
227 petition on the ground that there is no such perversity in
the order which leads to patent lack of inherent jurisdiction.
The High Court ought to have discouraged similar litigation by
imposing heavy costs. The High Court did not choose to do
either of these two things."
(emphasis supplied)
27. The issue again came up for consideration before a Three
Judge Bench of the Supreme Court in Bhaven Construction
Through Authorised Signatory Premjibhai K. Shah Vs Executive
Engineer, Sardar Sarovar Narmada Nigam Limited & Anr, 7
wherein the sole Arbitrator had rejected an Application of the
Respondent No.1 therein and held that the sole Arbitrator had
jurisdiction to adjudicate the dispute. After adverting to the
judgment of the Supreme Court in the case of Nivedita Sharma
Vs Cellular Operators Association of India, 8 the Supreme Court
7 (2022) 1 SCC 75.
8 (2011) 14 SCC 337.
-WP13118-2025+.DOC
enunciated that, it is prudent for a judge to not exercise
discretion to allow judicial interference beyond the procedure
established under the enactment. This power needs to be
exercised in exceptional rarity, wherein one party is left
remediless under the statute or a clear "bad faith" is shown by
one of the parties. This high standard set by the Supreme Court
is in terms of the legislative intention to make the Arbitration fair
and efficient.
28. With reference to the decision in the case of Deep
Industries (supra), the Supreme Court further observed that
Section 16 of the Act of 1996 necessarily mandates that the
issue of jurisdiction must be dealt first by the Tribunal before
the Court examines the same under Section 34. The Respondent
No.1 was, therefore, not left remediless, and has statutorily been
provided a chance of Appeal.
29. In the case of Hindustan Petroleum Corporation Ltd.
(supra), on which reliance was placed by Mr. Kharawala, a
Division Bench of this Court, after adverting to the aforesaid and
other pronouncements, observed that the law on the aspect of
judicial interference appears to be very clear -- the High Court,
in exercise of its writ jurisdiction under Articles 226 and 227 of
the Constitution of India, should not interfere in orders passed
-WP13118-2025+.DOC
by the Arbitral Tribunals or Courts in arbitration proceedings,
except in the exceptional circumstances mentioned in the
aforesaid judgments. In the view of the Division Bench, that
regime was in keeping with the provisions of Section 5 of the
Arbitration Act which limits the interference of the judicial
authorities in arbitration matters.
30. The position in law which thus emerges is that, ordinarily,
the challenge to an order determining the jurisdiction of the
Arbitral Tribunal must be through the regime envisaged by
Section 16 and Section 34 of the Act of 1996. A Writ Petition can
be entertained by the High Court only in cases of patent lack of
inherent jurisdiction. In that category also, the lack of
jurisdiction should be such that it does not warrant any
investigation and becomes so glaringly evident that no other
inference is plausible. An exceptionally rare situation which
justifies the exercise of plenary jurisdiction may also arise where
in view of the order passed by the Arbitrator, one of the parties is
left completely remediless or "bad faith" is clearly exhibited by
one of the parties. Barring these exceptional situations, the Writ
Court will be well advised not to interdict the arbitral process by
adhering to the principle of minimal interference and non break-
ability of the arbitral process.
-WP13118-2025+.DOC
31. Whether the petitioner has succeeded in making out such
a rare case as to cross the jurisdictional impediment? Mr.
Kharawala would urge that, in the case at hand, an exceptional
case is made out as the learned Arbitrator cannot be said to
have ruled on its jurisdiction. Instead, the leaned Arbitrator
kept the issues raised by the petitioner open for consideration,
at an appropriate stage, in the arbitral proceedings. Such an
approach, according to Mr. Kharawala, is ex facie perverse.
32. I find it difficult to accede to the aforesaid submissions of
Mr. Kharawala. The learned Arbitrator has indeed kept the
issues raised by the petitioner open for consideration as he was
of the view that those issues warranted adjudication post
recording of evidence. However, that does not imply that the
learned Arbitrator has not ruled on the issue of jurisdiction.
After an elaborate consideration, the learned Arbitrator had
noted the recitals in the Master Loan-cum-Hypothecation-cum-
Guarantee Agreement and the fact that there was no denial of
the execution of the Master Loan-cum-Hypothecation-cum-
Guarantee Agreement as well as the transaction documents.
The challenge was essentially on the ground that the sanction
letter and the agreement qua each of the transactions did not
contain separate arbitration clause. In that backdrop, the
-WP13118-2025+.DOC
learned Arbitrator held that whether the Master Loan-cum-
Hypothecation-cum Guarantee Agreement would govern the
jural relations between the parties to the arbitration proceedings
would warrant determination after the parties lead evidence.
33. The objection to the jurisdiction was premised primarily
on absence of evidence to prove the existence of the arbitration
agreement qua each of the separate transactions. In contrast, it
was the claim of R2 - claimant that the Master Loan-cum-
Hypothecation-cum-Guarantee Agreement governed the
separate transactions; the aggregate value of financial facility
extended thereunder was the same as was provided for in the
Master Loan-cum-Hypothecation-cum-Guarantee Agreement,
which indisputably contains the arbitration clause and was
executed by the petitioner also.
34. In these circumstances, the submission on behalf of the
petitioner that the learned Arbitrator committed a jurisdictional
error in not ruling on its own jurisdiction, which the Arbitrator
is obligated to do, cannot be readily acceded to. In the aforesaid
backdrop, this Court finds it difficult to accede to the
submission on behalf of the petitioner that in the facts of the
case, a situation of exceptional rarity has arisen or the
continuation of the arbitral proceedings has the propensity to
-WP13118-2025+.DOC
leave the petitioner remediless or claimant has shown clear bad
faith. The impugned order neither suffers from such patent
inherent lack of jurisdiction nor can it be said to be so perverse
as to stare in the face. Resultantly, it cannot be said that the
petitioner has succeeded in making out such an exceptional
case as would warrant interference in the arbitral process.
Hence, the petitions deserve to be dismissed.
35. The petitions stand dismissed with costs.
36. Rule discharged.
[N. J. JAMADAR, J.]
