Delhi High Court
Extramarks Education India Pvt Ltd vs Jay Jalaram Education Trust & Ors on 13 May, 2025
Author: Purushaindra Kumar Kaurav
Bench: Purushaindra Kumar Kaurav
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P. 1096/2024
Date of Decision: 13.05.2025
IN THE MATTER OF:
EXTRAMARKS EDUCATION INDIA PVT LTD
THROUGH ITS AUTHORIZED REPRESENTATIVE:
MR. JAVED ANSARI,
HAVING ITS REGISTERED OFFICE AT:
506, SURYA KIRAN BUILDING, 19 K.G. MARG,
CONNAUGHT PLACE, NEW DELHI- 110001
CORPORATE OFFICE AT:-
09TH TO 14TH FLOOR, URMILA BUSINESS PARK,
A- 95B, SECTOR- 136, NOIDA,
GAUTAM BUDH NAGAR, UTTAR PRADESH-201304
.....Petitioner
(Through: Mr. Zeeshan Hashmi, Mr. Ankit Parashar and Ms. Mitali
Yadav and Mr. Saurav Sapra, Advs.)
versus
JAY JALARAM EDUCATION TRUST
THROUGH ITS
TRUSTEE/CHAIRMAN/SECRETARY/AUTHORISED
SIGNATORY,
ANAND-BORIAVI ROAD, NEAR SK CINEMA,
BORIAVI, DISTRICT, ANAND, GUJARAT-38731 0
ALSO AT:-
SHIVALYA BALASINOR HIGHWAY, POST
MAINPURA, PADAL, KHEDA,
GALTESHWAR, GUJARAT-388235 ....Respondent No.1
Signature Not Verified Signature Not Verified
Signed By:PRIYA Signed
Signing Date:22.05.2025 By:PURUSHAINDRA
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JAY JALARAM INTERNATIONAL SCHOOL
THROUGH ITS PRINCIPAL/ AUTHORISED
REPRESENTATIVE,
SEVALIA-BALASINOR HIGHWAY ROAD,
NR. THERMAL POWER STATION CHOKDI, AT-PADAL.
TA-THASRA, DIST: KHEDA,
GUJARAT-388235 ....Respondent No.2
TAKSHASHILA VIDYALAYA
THROUGH ITS PRINCIPAL/ AUTHORISED
REPRESENTATIVE,
SEVALIA-BALASINOR HIGHWAY ROAD,
AT-PADAL, PO-MENPURA, TA-THASRA,
GUJARAT-388235
Also At:-
ANAND-BORIAVI ROAD, BORIAVI,
GUJRAT-388001 ....Respondent No.3
JAY JALARAM SCHOOL
THROUGH ITS PRINCIPAL/ AUTHORISED
REPRESENTATIVE,
GODHARA - DAHOD HIGHWAY CHOKDI,
AT: PARAVADI, DAHOD ROAD, TA. GODHARA,
DISTRICT PANCH MAHAL,
GUJARAT-389001 ....Respondent No.4
JAY JALARAM INTERNATIONAL SCHOOL
THROUGH ITS PRINCIPAL/ AUTHORISED
REPRESENTATIVE,
ANAND-BORIAVI ROAD, BORIAVI,
GUJRAT-388001 ....Respondent No.5
JAY JALARAM INTERNATIONAL SCHOOL
Signature Not Verified Signature Not Verified
Signed By:PRIYA Signed
Signing Date:22.05.2025 By:PURUSHAINDRA
17:46:04 KUMAR KAURAV
THROUGH ITS PRINCIPAL/ AUTHORISED
REPRESENTATIVE,
ANAND-BORIAVI ROAD, NEAR SK CINEMA,
BORIAVI, DISTRICT, ANAND,
GUJARAT-387310 ....Respondent No. 6
(Through: Mr. Humraz Bir Singh, Adv.)
CORAM:
HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV
JUDGMENT
PURUSHAINDRA KUMAR KAURAV, J. (ORAL)
1. Heard learned counsel for the parties.
2. There seems to be five agreements between the petitioner and
respondent nos. 2, 3, 4, 5 and 6.
3. Loan agreements appeared to have been executed on 12.12.2021,
08.01.2013, 23.05.2015, 05.12.2015 and 05.03.2016. The nature of the
services that were to be rendered are almost similar.
4. During the course of the hearing, learned counsel who appears for the
respondents contends that a common petition for five different agreements is
not maintainable. In addition, he contends that in view of the minutes of the
meeting dated 28.07.2018, the right of arbitration stands acquiescent. He
further submits that, having once had a dispute arise which thereafter
culminated into a settlement, the right of arbitration stood waived.
5. I have considered the aforesaid submissions and have perused the
record.
6. With respect to the objection of maintainability of a common petition
for the appointment of arbitrator under various agreements, the same has
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been settled by this Court in the case of petitioner itself vide order dated
01.09.2022 in ARB.P. 1150/2021 titled Extramarks Education India
Private Limited vs. Jhunjhunu Academy & Ors. Paragraph Nos. 5 to 7 of
the aforesaid decision reads as under:
"5. Learned counsel for the petitioner submits that, as is evident from
Agreements dated 01.05.2010, 03.03.2012 and 26.02.2013 signed by the
petitioner variously with respondents No.1 and 2, all three Agreements
have been signed on behalf of the respondents by Mr. Dilip Modi, who is
stated to be the President of respondent No.3/Jhunjhunu Academy Samiti,
Jhunjhunu, Rajasthan, which is stated to be a Trust that owns and controls
respondents Nos.1 and 2.
6. In view of the foregoing, this court is satisfied that having been duly
served and sufficient opportunity having been granted to the respondents
to file their reply, they have deliberately omitted to do so. The respondents
are accordingly set ex-parte.
7. In response to the query as to the commonality between the three
Agreements from which disputes are stated to have arisen, learned counsel
for the petitioner submits that these three Agreements relate to the supply
by the petitioner of Smart Learn Class („SLC‟) software and hardware
which was deployed by the respondents for imparting education in various
subjects to students at various locations. Attention in this behalf is drawn
to a list of schools at which the SLCs were to be deployed under the
umbrella of respondent No.1/Jhunjunu Academy, a copy of which has been
filed along with the petition. It is noticed that this list has again been
signed by Mr. Dilip Modi as Chairman of Jhunjunu Academy Samiti."
7. In the instant case as well, there is a commonality amongst the five
agreements. The dispute essentially relates to the sale, implementation, and
installation of the Hardware, software, and multimedia system accessories
for the purpose of setting up 237 Smart Learn Classes at the premises of the
respondents.
8. In P.R. Shah, Shares & Stock Broker (P) Ltd. v. B.H.H. Securities
(P) Ltd.1, the Supreme Court held that where a common relief is sought
(2012) 1 SCC 594
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against parties who are jointly and severally liable, joint arbitration is legally
permissible notwithstanding the existence of separate arbitration
agreements. It was also held that where Party A has entered into two distinct
arbitration agreements, one with Party B and another with Party C, in
respect of the same subject matter or claim, and where the liability of B and
C is alleged to be joint and several, Party A is entitled to initiate a composite
arbitration proceeding against both B and C. The Court held that the mere
fact that the arbitration agreements are not identical or arise from different
contracts cannot, by itself, defeat the maintainability of a consolidated
arbitration. It was reiterated by the Court that to deny such joint arbitration
solely on the ground of the separateness of the agreements would result in
multiplicity of proceedings, risk of conflicting awards, and manifest
injustice.
9. The respective arbitration clauses in Agreements dated 12.12.2012,
08.01.2013, 05.12.2015, 23.03.2015 and 05.03.2016 are almost similar. The
Arbitration Clause in agreements dated 12.12.2012 and 08.01.2013 is
reproduced herein:-
"If any dispute or difference of any kind whatsoever arise between the
parties in connection with or arising out of this Agreement or any part
thereof, such dispute or difference shall be referred to a sole Arbitrator to
be appointed by mutual consent of the parties. The venue for arbitration
shall be at New Delhi and the Language shall be English. The courts in
New Delhi shall have jurisdiction to entertain all disputes between the
parties and fees of the arbitrator shall be equally shared by both
parties..."
10. The law with respect to the scope and standard of judicial scrutiny
under Section 11(6) of the 1996 Act has been fairly well settled. This Court
as well in the order dated 24.04.2025 in case of ARB.P. 145/2025 titled as
Pradhaan Air Express Pvt Ltd v. Air Works India Engineering Pvt Ltd has
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extensively dealt with the scope of interference at the stage of Section 11.
The Court held as under:-
"9. The law with respect to the scope and standard of judicial scrutiny
under Section 11(6) of the 1996 Act has been fairly well settled. The
Supreme Court in the case of SBI General Insurance Co. Ltd. v. Krish
Spinning, while considering all earlier pronouncements including the
Constitutional Bench decision of seven judges in the case of Interplay
between Arbitration Agreements under the Arbitration & Conciliation
Act, 1996 & the Indian Stamp Act, 1899, In re has held that scope of
inquiry at the stage of appointment of an Arbitrator is limited to the
extent of prima facie existence of the arbitration agreement and nothing
else.
10. It has unequivocally been held in paragraph no.114 in the case of
SBI General Insurance Co. Ltd that observations made in Vidya Drolia
v. Durga Trading Corpn., and adopted in NTPC Ltd. v. SPML Infra Ltd
that the jurisdiction of the referral court when dealing with the issue of
"accord and satisfaction" under Section 11 extends to weeding out ex-
facie non-arbitrable and frivolous disputes would not apply after the
decision of Re: Interplay. The abovenoted paragraph no.114 in the case
of SBI General Insurance Co. Ltd reads as under:-
"114. In view of the observations made by this Court in In
Re: Interplay (supra), it is clear that the scope of enquiry at
the stage of appointment of arbitrator is limited to the
scrutiny of prima facie existence of the arbitration
agreement, and nothing else. For this reason, we find it
difficult to hold that the observations made in Vidya Drolia
(supra) and adopted in NTPC v. SPML (supra) that the
jurisdiction of the referral court when dealing with the issue
of "accord and satisfaction" under Section 11 extends to
weeding out ex-facie non-arbitrable and frivolous disputes
would continue to apply despite the subsequent decision in In
Re: Interplay (supra)."
11. Ex-facie frivolity and dishonesty are the issues, which have been
held to be within the scope of the Arbitral Tribunal which is equally
capable of deciding upon the appreciation of evidence adduced by the
parties. While considering the aforesaid pronouncements of the Supreme
Court, the Supreme Court in the case of Goqii Technologies (P) Ltd. v.
Sokrati Technologies (P) Ltd., however, has held that the referral Courts
under Section 11 must not be misused by one party in order to force
other parties to the arbitration agreement to participate in a time-
consuming and costly arbitration process. Few instances have been
delineated such as, the adjudication of a non-existent and malafide claim
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through arbitration. The Court, however, in order to balance the limited
scope of judicial interference of the referral Court with the interest of the
parties who might be constrained to participate in the arbitration
proceedings, has held that the Arbitral Tribunal eventually may direct
that the costs of the arbitration shall be borne by the party which the
Arbitral Tribunal finds to have abused the process of law and caused
unnecessary harassment to the other parties to the arbitration.
12. It is thus seen that the Supreme Court has deferred the adjudication
of aspects relating to frivolous, non-existent and malafide claims from
the referral stage till the arbitration proceedings eventually come to an
end. The relevant extracts of Goqii Technologies (P) Ltd. reads as
under:-
"20. As observed in Krish Spg. [SBI General Insurance Co.
Ltd. v. Krish Spg., (2024) 12 SCC 1 : 2024 SCC OnLine SC
1754 : 2024 INSC 532] , frivolity in litigation too is an aspect
which the referral court should not decide at the stage of
Section 11 as the arbitrator is equally, if not more, competent
to adjudicate the same.
21. Before we conclude, we must clarify that the limited
jurisdiction of the referral courts under Section 11 must not
be misused by parties in order to force other parties to the
arbitration agreement to participate in a time consuming and
costly arbitration process. This is possible in instances,
including but not limited to, where the claimant canvasses the
adjudication of non-existent and mala fide claims through
arbitration.
22. With a view to balance the limited scope of judicial
interference of the referral courts with the interests of the
parties who might be constrained to participate in the
arbitration proceedings, the Arbitral Tribunal may direct that
the costs of the arbitration shall be borne by the party which
the Tribunal ultimately finds to have abused the process of
law and caused unnecessary harassment to the other party to
the arbitration. Having said that, it is clarified that the
aforesaid is not to be construed as a determination of the
merits of the matter before us, which the Arbitral Tribunal
will rightfully be equipped to determine."
13. In view of the aforesaid, the scope at the stage of Section 11
proceedings is akin to the eye of the needle test and is limited to the
extent of finding a prima facie existence of the arbitration agreement and
nothing beyond it. The jurisdictional contours of the referral Court, as
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meticulously delineated under the 1996 Act and further crystallised
through a consistent line of authoritative pronouncements by the
Supreme Court, are unequivocally confined to a prima facie examination
of the existence of an arbitration agreement. These boundaries are not
merely procedural safeguards but fundamental to upholding the
autonomy of the arbitral process. Any transgression beyond this limited
judicial threshold would not only contravene the legislative intent
enshrined in Section 8 and Section 11 of the 1996 Act but also risk
undermining the sanctity and efficiency of arbitration as a preferred
mode of dispute resolution. The referral Court must, therefore, exercise
restraint and refrain from venturing into the merits of the dispute or
adjudicating issues that fall squarely within the jurisdictional domain of
the arbitral tribunal. It is thus seen that the scope of enquiry at the
referral stage is conservative in nature. A similar view has also been
expressed by the Supreme Court in the case of Ajay Madhusudan Patel
v. Jyotrindra S. Patel".
11. So far as objection with respect to waiver of the arbitration right is
concerned, the same can be raised before the concerned arbitrator.
12. In view of the fact that disputes have arisen between the parties and
there is an arbitration clause in the contract, Ms. Shilpa Ohri, Advocate
(Mobile No. 9871900539 email ID [email protected] ) is
appointed as the sole Arbitrator.
13. The arbitration would take place under the aegis of the Delhi
14. International Arbitration Centre (DIAC) and would abide by its rules
and regulations. The learned Arbitrator shall be entitled to fees as per the
Schedule of Fees maintained by the DIAC.
15. The learned arbitrator is also requested to file the requisite disclosure
under Section 12 (2) of the Act within a week of entering on reference.
16. The registry is directed to send a receipt of this order to the learned
arbitrator through all permissible modes, including through e-mail.
17. All rights and contentions of the parties in relation to the
claims/counter-claims are kept open, to be decided by the learned Arbitrator
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on their merits, in accordance with law.
18. Accordingly, the instant petition stands disposed of
PURUSHAINDRA KUMAR KAURAV, J
MAY 13, 2025/aks/mj
Click here to check corrigendum, if any
Signed By:PRIYA Signed
Signing Date:22.05.2025 By:PURUSHAINDRA
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