Om Prakash Chaurasia & Anr vs Esha Makin
2026 Latest Caselaw 1594 Del

Delhi High Court

Om Prakash Chaurasia & Anr vs Esha Makin on 19 March, 2026

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                          *         IN THE HIGH COURT OF DELHI AT NEW DELHI
                                                                            Date of Decision : 19.03.2026
                          +         ARB.P. 919/2025
                                    OM PRAKASH CHAURASIA & ANR.                                 .....Petitioners
                                                           Through:       Mr. Onkar Nath, Advocate.

                                                           versus

                                    ESHA MAKIN                                                 .....Respondent
                                                           Through:

                                    CORAM:
                                    HON'BLE MR. JUSTICE HARISH VAIDYANATHAN
                                    SHANKAR

                          %                                JUDGEMENT (ORAL)

                          HARISH VAIDYANATHAN SHANKAR, J.

1. The present Petition, filed under Section 11(6) of the Arbitration and Conciliation Act, 19961, seeks appointment of a Sole Arbitrator in terms of Lease Deed Agreement dated 25.01.20212 to adjudicate the disputes inter se the parties.

2. The material on record indicates that the Arbitration Clause is set out at Clause 49 in the Agreement and the same is reproduced hereunder:

"49. That in case of any dispute or difference arising out of or in relation to this Lease Deed and the Parties fail to amicably resolve the same, then the same shall be resolved and settled with the provision of the Arbitration & Conciliation Act, 1996 or any statutory modification or re-enactments thereof and the Sole Arbitrator shall be appointed mutually by Lessor and the Lessee.

Act

Agreement

The place of Arbitration venue and seed shall be at New Delhi and the proceedings shall be conducted in the English language only."

3. The learned counsel appearing on behalf of the Petitioner draws the attention of this Court to the Section 21 notice dated 31.03.2025, as well as the Reply thereto dated 24.04.2025 issued by the Respondent through its counsel.

4. On the previous dates, this Court had directed the Petitioner for issuance of fresh notice to the Respondent, as service had not been effected. However, it is noted that the address as reflected in the Agreement is identical to the address mentioned in the Reply to the Section 21 notice, the memo of parties, and the address at which service was attempted through speed post and courier.

5. It is further noticed that, as per the speed post tracking report, the remark recorded is "no such person at the said address", whereas the courier report indicates that the "addressee has left without instructions".

6. This Court also takes note of the fact that a Petition under Section 9 of the Act was preferred by the Respondent before the learned Patiala House Courts, wherein the same address of the Respondent is reflected in the memo of parties.

7. This Court further notes that, pursuant to the Order dated 09.02.2026, the Petitioner has also effected service upon the learned counsel who had appeared on behalf of the Respondent in the proceedings before the learned Patiala House Courts.

8. At this juncture, learned counsel for the Petitioner has handed over the copies of e-mail correspondence exchanged between his office and the office of the counsel appearing for the Respondent

before the learned Patiala House Courts.

9. From the e-mail dated 18.03.2026, it transpires that the said counsel has sought discharge from the Section 9 Petition.

10. A subsequent e-mail dated 19.03.2026 at 12:11 A.M. sent by the said counsel, affirms that the address of the Respondent remains the same as reflected in the memo of parties. The said communication also furnishes certain e-mail addresses and contact numbers of the Respondent.

11. Learned counsel for the Petitioner submits that the aforesaid contact details are the same on which service had earlier been attempted, and, by way of abundant caution, the learned counsel for the Petitioner has once again attempted service upon the Respondent through e-mail as well as WhatsApp on the contact details as provided in the e-mail.

12. Learned counsel for the Petitioner further draws the attention of this Court to the Affidavit of Service dated 18.03.2026 filed vide Diary No. 122952/2026 and which is handed over in Court. Let the same be taken on record.

13. In the conspectus of the aforesaid facts and circumstances, this Court is of the view that service upon the Respondent stands duly effected and the Respondent has chosen not to appear before the Court. Therefore, there exists no impediment to the appointment of a learned Sole Arbitrator for adjudication of disputes between the parties.

14. It is, however, directed that the Petitioner shall make all endeavours to effectuate service upon the Respondent before the learned Arbitrator enters into reference and the matter is taken up for

hearing.

15. At this stage, it is apposite to note that the legal position governing the scope and standard of judicial scrutiny under Section 11(6) of the Act is no longer res integra. A three-Judge Bench of the Hon'ble Supreme Court in SBI General Insurance Co. Ltd. v. Krish Spinning3, after taking into consideration the authoritative pronouncement of the seven-Judge Bench in Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re4, comprehensively delineated the contours of judicial intervention at the stage of Section 11of the Act. The excerpt of Krish Spg (supra) reads as under:-

"(c) Judicial interference under the 1996 Act

110. The parties have been conferred with the power to decide and agree on the procedure to be adopted for appointing arbitrators. In cases where the agreed upon procedure fails, the courts have been vested with the power to appoint arbitrators upon the request of a party, to resolve the deadlock between the parties in appointing the arbitrators.

111. Section 11 of the 1996 Act is provided to give effect to the mutual intention of the parties to settle their disputes by arbitration in situations where the parties fail to appoint an arbitrator(s). The parameters of judicial review laid down for Section 8 differ from those prescribed for Section 11. The view taken in SBP & Co. v. Patel Engg. Ltd., (2005) 8 SCC 618 and affirmed in Vidya Drolia v. Durga Trading Corpn., (2021) 2 SCC 1 that Sections 8 and 11, respectively, of the 1996 Act are complementary in nature was legislatively overruled by the introduction of Section 11(6-A) in 2015. Thus, although both these provisions intend to compel parties to abide by their mutual intention to arbitrate, yet the scope of powers conferred upon the courts under both the sections are different.

112. The difference between Sections 8 and 11, respectively, of the 1996 Act is also evident from the scope of these provisions. Some of these differences are:

112.1. While Section 8 empowers any "judicial authority" to refer the parties to arbitration, under Section 11, the power to refer has

(2024) 12 SCC 1

(2024) 6 SCC 1

been exclusively conferred upon the High Court and the Supreme Court.

112.2. Under Section 37, an appeal lies against the refusal of the judicial authority to refer the parties to arbitration, whereas no such provision for appeal exists for a refusal under Section 11. 112.3. The standard of scrutiny provided under Section 8 is that of prima facie examination of the validity and existence of an arbitration agreement. Whereas, the standard of scrutiny under Section 11 is confined to the examination of the existence of the arbitration agreement.

112.4. During the pendency of an application under Section 8, arbitration may commence or continue and an award can be passed. On the other hand, under Section 11, once there is failure on the part of the parties in appointing the arbitrator as per the agreed procedure and an application is preferred, no arbitration proceedings can commence or continue.

113. The scope of examination under Section 11(6-A) is confined to the existence of an arbitration agreement on the basis of Section

7. The examination of validity of the arbitration agreement is also limited to the requirement of formal validity such as the requirement that the agreement should be in writing.

114. The use of the term "examination" under Section 11(6-A) as distinguished from the use of the term "rule" under Section 16 implies that the scope of enquiry under Section 11(6-A) is limited to a prima facie scrutiny of the existence of the arbitration agreement, and does not include a contested or laborious enquiry, which is left for the Arbitral Tribunal to "rule" under Section 16. The prima facie view on existence of the arbitration agreement taken by the Referral Court does not bind either the Arbitral Tribunal or the Court enforcing the arbitral award.

115. The aforesaid approach serves a twofold purpose -- firstly, it allows the Referral Court to weed out non-existent arbitration agreements, and secondly, it protects the jurisdictional competence of the Arbitral Tribunal to rule on the issue of existence of the arbitration agreement in depth.

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117. In view of the observations made by this Court in Interplay Between Arbitration Agreements under the Arbitration Act, 1996 & the Stamp Act, 1899, In re, (2024) 6 SCC 1, 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 inVidya Drolia v. Durga Trading Corpn., (2021) 2 SCC 1 and adopted inNTPC Ltd. v. SPML Infra Ltd., (2023) 9 SCC 385 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 inInterplay Between Arbitration Agreements under the Arbitration Act, 1996 & the Stamp Act, 1899, In re, (2024) 6 SCC

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119. The question of "accord and satisfaction", being a mixed question of law and fact, comes within the exclusive jurisdiction of the Arbitral Tribunal, if not otherwise agreed upon between the parties. Thus, the negative effect of competence-competence would require that the matter falling within the exclusive domain of the Arbitral Tribunal, should not be looked into by the Referral Court, even for a prima facie determination, before the Arbitral Tribunal first has had the opportunity of looking into it.

120. By referring disputes to arbitration and appointing an arbitrator by exercise of the powers under Section 11, the Referral Court upholds and gives effect to the original understanding of the contracting parties that the specified disputes shall be resolved by arbitration. Mere appointment of the Arbitral Tribunal does not in any way mean that the Referral Court is diluting the sanctity of "accord and satisfaction" or is allowing the claimant to walk back on its contractual undertaking. On the contrary, it ensures that the principle of arbitral autonomy is upheld and the legislative intent of minimum judicial interference in arbitral proceedings is given full effect. Once the Arbitral Tribunal is constituted, it is always open for the defendant to raise the issue of "accord and satisfaction"

before it, and only after such an objection is rejected by the Arbitral Tribunal, that the claims raised by the claimant can be adjudicated.

121. Tests like the "eye of the needle" and "ex facie meritless", although try to minimise the extent of judicial interference, yet they require the Referral Court to examine contested facts and appreciate prima facie evidence (however limited the scope of enquiry may be) and thus are not in conformity with the principles of modern arbitration which place arbitral autonomy and judicial non-interference on the highest pedestal.

122. Appointment of an Arbitral Tribunal at the stage of Section 11 petition also does not mean that the Referral Courts forego any scope of judicial review of the adjudication done by the Arbitral Tribunal. The 1996 Act clearly vests the national courts with the power of subsequent review by which the award passed by an arbitrator may be subjected to challenge by any of the parties to the arbitration.

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126. The power available to the Referral Courts has to be construed in the light of the fact that no right to appeal is available against any order passed by the Referral Court under Section 11 for either appointing or refusing to appoint an arbitrator. Thus, by delving

into the domain of the Arbitral Tribunal at the nascent stage of Section 11, the Referral Courts also run the risk of leaving the claimant in a situation wherein it does not have any forum to approach for the adjudication of its claims, if its Section 11 application is rejected.

127. Section 11 also envisages a time-bound and expeditious disposal of the application for appointment of arbitrator. One of the reasons for this is also the fact that unlike Section 8, once an application under Section 11 is filed, arbitration cannot commence until the Arbitral Tribunal is constituted by the Referral Court. This Court, on various occasions, has given directions to the High Courts for expeditious disposal of pending Section 11 applications. It has also directed the litigating parties to refrain from filing bulky pleadings in matters pertaining to Section 11. Seen thus, if the Referral Courts go into the details of issues pertaining to "accord and satisfaction" and the like, then it would become rather difficult to achieve the objective of expediency and simplification of pleadings.

128. We are also of the view that ex facie frivolity and dishonesty in litigation is an aspect which the Arbitral Tribunal is equally, if not more, capable to decide upon the appreciation of the evidence adduced by the parties. We say so because the Arbitral Tribunal has the benefit of going through all the relevant evidence and pleadings in much more detail than the Referral Court. If the Referral Court is able to see the frivolity in the litigation on the basis of bare minimum pleadings, then it would be incorrect to doubt that the Arbitral Tribunal would not be able to arrive at the same inference, most likely in the first few hearings itself, with the benefit of extensive pleadings and evidentiary material."

(emphasis supplied)

16. The decision in Krish Spinning (supra) thus unequivocally reiterates that the Referral Court, while exercising jurisdiction under Section 11 of the Act, is required to confine itself to a prima facie examination of the existence of a valid Arbitration Agreement and nothing beyond. The Court's role is facilitative and procedural, namely, to give effect to the parties' agreed mechanism of dispute resolution when it has failed, without embarking upon an adjudication of contentious factual or legal issues, which are reserved for the Arbitral Tribunal.

17. It is submitted that dispute between the parties is stated to be approximately of Rs. 10,50,000/-.

18. Accordingly, this Court requests Mr. Abhishek Grover, Advocate (Mobile No. : 9871804549), to enter into reference as a Sole Arbitrator to adjudicate the disputes between the parties.

19. The arbitration would take place under the aegis of the 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.

20. The learned Arbitrator is also requested to file the requisite disclosure under Section 12 (2) of the Act within a week of entering of reference.

21. The parties shall share the learned Arbitrator's fee and arbitral costs equally.

22. The Registry is directed to send a receipt of this order to the learned arbitrator through all permissible modes, including through e- mail.

23. All rights and contentions of the parties in relation to the claims/counter-claims are kept open, to be decided by the learned Arbitrator on their merits, in accordance with law.

24. Needless to say, nothing in this order shall be construed as an expression of opinion of this Court on the merits of the controversy between the parties.

25. Accordingly, the present Petition, along with pending application(s), if any, stands disposed of.

HARISH VAIDYANATHAN SHANKAR, J.

MARCH 19, 2026/JYH/va/jk