[Cites 15, Cited by 0]
Punjab-Haryana High Court
Dr Sukhsagar Ratol vs Dr Tanya Mishra Dixit on 11 December, 2025
Author: Jasgurpreet Singh Puri
Bench: Jasgurpreet Singh Puri
ARB-267-2025 -1-
289
IN THE HIGH COURT OF PUNJAB & HARYANA
AT CHANDIGARH
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ARB-267-2025
Date of Decision: 11.12.2025
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Dr. Sukhsagar Ratol
..... Petitioner
Versus
Dr. Tanya Mishra Dixit
..... Respondent
CORAM: HON'BLE MR. JUSTICE JASGURPREET SINGH PURI
Present: Mr. Vaibhav Sharma, Advocate
Ms. Salina Chalana, Advocate
Mr. Harit Narang, Advocate &
Ms. Manveen Narang, Advocate,
for the petitioner.
Ms. Supriya Garg, Advocate
for the respondent.
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JASGURPREET SINGH PURI, J. (ORAL)
1. The present petition has been filed under Section 11(6) of the
Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act')
praying for appointment of an Arbitrator to adjudicate the disputes which
have arisen between the parties.
2. Learned counsel for the petitioner submitted that a Unit
Franchise Agreement dated 17.04.2024 was executed between the petitioner
and the respondent wherein exists a valid arbitration clause i.e. Article 27
(4). He further submitted that the said clause provides that in case any
dispute arises between the parties relating to performance or non-
performance of the rights and obligations set forth herein or the breach,
termination, invalidity or interpretation thereof, the same shall be referred
for arbitration at Chandigarh in accordance with the Act. He further
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submitted that when the dispute arose between the parties, the petitioner
invoked the aforesaid arbitration clause and also proposed the name of an
Arbitrator by issuing a legal notice dated 05.09.2024 to the respondent vide
Annexure P-6 which has been sent through a registered post but the
respondent refused to receive the same. It was thereafter again for the second
time, another legal notice was issued to the respondent vide Annexure P-10
dated 18.03.2025 and this time, the respondent replied to the notice vide
Annexure P-11 dated 06.04.2025 wherein it was so stated that the agreement
is a draft template and nothing contained in the draft template shall be
construed as legal advice and it was further stated in the reply that the
arbitration clause can be invoked only when there is a valid contract between
the parties although the same was signed by both the parties but it was not a
valid contract because it was only a draft template and therefore, the
respondent did not agree for the arbitration mechanism.
3. Learned counsel for the petitioner further submitted that the
aforesaid reasoning given by the respondent in the reply that the agreement
(Annexure P-1) was merely a draft template, although signed by both the
parties, is demolished in view of the fact that the respondent itself terminated
the said Agreement by giving a notice to the petitioner vide Annexure P-5 by
making reference to the aforesaid Agreement and in that notice (Annexure
P-5), the respondent expressly referred to the Agreement dated 17.04.2024
and terminated it, while also mentioning various transactions between the
parties. Therefore, now the respondent is estopped from taking such a plea
that the aforesaid Agreement (Annexure P-1) was not binding upon the
parties because it was only a draft template.
4. On the other hand, Ms. Supriya Garg, learned counsel for the
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respondent submitted that the present petition under Section 11 of the Act is
not maintainable in view of the fact that when an Arbitrator is to be
appointed under Section 11 of the Act, the Court has to see as to whether
there exists a valid arbitration clause in the agreement or not. Since the
aforesaid agreement which has been attached with the present petition vide
Annexure P-1 although signed by both the parties was only a draft template,
it was not binding upon the parties. Therefore, the clause of arbitration
cannot be acted upon. In this regard, she referred to the opening pages of the
aforesaid agreement vide Annexure P-1 in which it has been mentioned that
it is a privileged and confidential draft for discussion purposes only,
although last page of the agreement shows that it has been signed by both
the parties on 17.04.2024. She submitted that considering the aforesaid facts
and circumstances, the present petition may be dismissed.
5. Learned counsel for the respondent has relied upon the
judgment passed by Hon'ble Supreme Court in "PSA Mumbai
International Private Limited Vs. Jawaharlal Nehru Port Trust", (2018)
10 SCC 525 to contend that if the contract is not a valid one and not a
concluded contract, then the Arbitrator cannot be appointed.
6. I have heard the learned counsels for the parties.
7. The petitioner has attached the aforesaid Unit Franchise
Agreement dated 17.04.2024 vide Annexure P-1 and a perusal of the same
would show that the same has been signed by both the parties although on
the top of the agreement it has been mentioned that it is a privileged and
confidential draft for discussion purposes only. Thereafter, as per Annexure
P-5, the respondent issued a notice to the petitioner for termination of the
aforesaid contract. Since a dispute arose between the parties, the petitioner
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has invoked the aforesaid arbitration clause by issuing a legal notice dated
05.09.2024 vide Annexure P-6 but the respondent refused to receive the
same. In the second legal notice dated 18.03.2025 (Annexure P-10), the
respondent gave a reply in which he stated that although the agreement is
signed by both the parties but it is not a valid contract between both the
parties and therefore, arbitration clause cannot be invoked.
8. The law pertaining to the aforesaid facts and circumstances has
been settled by Hon'ble Supreme Court in "SBI General Insurance
Company Limited Vs. Krish Spinning", 2024 SCC Online SC 1754 and
also another judgment of Hon'ble Supreme Court in "Interplay between
Arbitration Agreements under Arbitration and Conciliation Act, 1996 and
Stamp Act, 1899, In Re" (2024) 6 SCC 1 and therefore, the law is no longer
res integra. The relevant portion of the aforesaid judgment of Hon'ble
Supreme Court passed in SBI General Insurance Company Limited's case
(Supra) is reproduced as under:-
"110. 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.
111. 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
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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.
112. The aforesaid approach serves a two-fold purpose - firstly,
it allows the referral court to weed out nonexistent 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.
113. Referring to the Statement of Objects and Reasons of the
Arbitration and Conciliation (Amendment) Act, 2015, it was
observed in In Re: Interplay (supra) that the High Court and
the Supreme Court at the stage of appointment of arbitrator
shall examine the existence of a prima facie arbitration
agreement and not any other issues. The relevant observations
are extracted hereinbelow:
"209. The above extract indicates that the Supreme Court
or High Court at the stage of the appointment of an
arbitrator shall "examine the existence of a prima facie
arbitration agreement and not other issues". These other
issues not only pertain to the validity of the arbitration
agreement, but also include any other issues which are a
consequence of unnecessary judicial interference in the
arbitration proceedings. Accordingly, the "other issues"
also include examination and impounding of an
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unstamped instrument by the referral court at the Section
8 or Section 11 stage. The process of examination,
impounding, and dealing with an unstamped instrument
under the Stamp Act is not a timebound process, and
therefore does not align with the stated goal of the
Arbitration Act to ensure expeditious and time-bound
appointment of arbitrators.[...]
(Emphasis supplied)
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).
115. The dispute pertaining to the "accord and satisfaction" of
claims is not one which attacks or questions the existence of the
arbitration agreement in any way. As held by us in the
preceding parts of this judgment, the arbitration agreement,
being separate and independent from the underlying substantive
contract in which it is contained, continues to remain in
existence even after the original contract stands discharged by
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"accord and satisfaction"
116. 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."
9. The relevant paragraphs of the aforesaid judgment passed in
Interplay between Arbitration Agreements under Arbitration and
Conciliation Act, 1996 and Stamp Act, 1899, In Re Case (Supra) are also
reproduced as under:-
"120. In view of the above discussion, we formulate our
conclusions on this aspect. First, the separability presumption
contained in Section 16 is applicable not only for the purpose of
determining the jurisdiction of the Arbitral Tribunal. It
encapsulates the general rule on the substantive independence
of an arbitration agreement. Second, parties to an arbitration
agreement mutually intend to confer jurisdiction on the arbitral
tribunal to determine questions as to jurisdiction as well as
substantive contractual disputes between them. The separability
presumption gives effect to this by ensuring the validity of an
arbitration agreement contained in an underlying contract,
notwithstanding the invalidity, illegality, or termination of such
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contract. Third, when the parties append their signatures to a
contract containing an arbitration agreement, they are
regarded in effect as independently appending their signatures
to the arbitration agreement. The reason is that the parties
intend to treat an arbitration agreement contained in an
underlying contract as distinct from the other terms of the
contract; and Fourth, the validity of an arbitration agreement,
in the face of the invalidity of the underlying contract, allows
the Arbitral Tribunal to assume jurisdiction and decide on its
own jurisdiction by determining the existence and validity of the
arbitration agreement. In the process, the separability
presumption gives effect to the doctrine of competence-
competence.
xx xx xx
165. The legislature confined the scope of reference under
Section 11(6-A) to the examination of the existence of an
arbitration agreement. The use of the term "examination" in
itself connotes that the scope of the power is limited to a prima
facie determination. Since the Arbitration Act is a
self-contained code, the requirement of "existence" of an
arbitration agreement draws effect from section 7 of the
Arbitration Act. In Duro Felguera (supra), this Court held that
the referral courts only need to consider one aspect to
determine the existence of an arbitration agreement - whether
the underlying contract contains an arbitration agreement
which provides for arbitration pertaining to the disputes which
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have arisen between the parties to the agreement. Therefore,
the scope of examination under Section 11(6-A) should be
confined to the existence of an arbitration agreement on the
basis of Section 7. Similarly, the validity of an arbitration
agreement, in view of Section 7, should be restricted to the
requirement of formal validity such as the requirement that the
agreement be in writing. This interpretation also gives true
effect to the doctrine of competence-competence by leaving the
issue of substantive existence and validity of an arbitration
agreement to be decided by arbitral tribunal under Section 16.
We accordingly clarify the position of law laid down in Vidya
Drolia (supra) in the context of Section 8 and section 11of the
Arbitration Act.
166. The burden of proving the existence of arbitration
agreement generally lies on the party seeking to rely on such
agreement. In jurisdictions such as India, which accept the
doctrine of competence-competence, only prima facie proof of
the existence of an arbitration agreement must be adduced
before the referral court. The referral court is not the
appropriate forum to conduct a minitrial by allowing the
parties to adduce the evidence in regard to the existence or
validity of an arbitration agreement. The determination of the
existence and validity of an arbitration agreement on the basis
of evidence ought to be left to the arbitral tribunal. This
position of law can also be gauged from the plain language of
the statute."
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10. Therefore, it is a settled proposition of law that at the time of
reference under Section 11 of the Act, the Court is not to conduct mini trial.
Although, it is correct that the Court is to see prima facie existence of the
arbitration clause and also the agreement but with regard to the validity of
the agreement, if any, which is so agitated, cannot be gone into by this Court
under Section 11 of the Act. The agreement was signed by both the parties,
however, it is the case of the learned counsel for the respondent that it was
only a draft template. This issue can be dealt with only by learned Arbitrator
at the time of arbitration proceeding and not by this Court under Section 11
of the Act. There is a prima facie existence of the arbitration clause i.e.
Article 27(4). The invocation of the arbitration clause by issuing a notice to
the respondent under Section 21 of the Act is also not in dispute.
11. So far as the aforesaid judgment passed by Hon'ble Supreme
Court in PSA Mumbai International Private Limited (supra) which is so
relied upon by learned counsel for the respondent is concerned, the same is
not applicable and distinguishable in the present case because in that case
there was no concluded contract.
12. In view of the aforesaid facts and circumstances, the present
petition is allowed. Ms. Aakansha Sawhney, Advocate, resident of House
No.# 1728, Sector 33-D, Chandigarh, Mobile No.9888177209, Email id.
[email protected], is nominated as the Sole Arbitrator to
adjudicate upon the dispute between the parties, subject to compliance of
statutory provisions including Section 12 of the Act.
13. Parties are directed to appear before the learned Arbitrator on
date, time and place to be fixed and communicated by the learned Arbitrator
at her convenience.
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14. Fee shall be paid to the learned Arbitrator in accordance with
the Fourth Schedule of the Arbitration Act, as amended.
15. Learned Arbitrator is also requested to complete the
proceedings as per the time limit prescribed under Section 29-A of the Act.
16. A request letter alongwith a copy of the order be sent to Ms.
Aakansha Sawhney, Advocate.
11.12.2025 (JASGURPREET SINGH PURI)
Bhumika JUDGE
1. Whether speaking/reasoned: Yes/No
2. Whether reportable: Yes/No
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