[Cites 16, Cited by 0]
Punjab-Haryana High Court
Ms Gurinder Singh Contractor vs The State Of Punjab And Others on 19 January, 2026
Author: Jasgurpreet Singh Puri
Bench: Jasgurpreet Singh Puri
ARB-374-2025 (O&M) 1
IN THE HIGH COURT OF PUNJAB & HARYANA
AT CHANDIGARH
ARB-374-2025 (O&M)
Date of Decision:19.01.2026
M/s Gurinder Singh Contractor
......Petitioner
Versus
The State of Punjab and others
......Respondents
CORAM: HON'BLE MR. JUSTICE JASGURPREET SINGH PURI
Present:- Mr. R.K. Girdhar, Advocate for the petitioner.
Mr. Somesh Arora, Addl. A.G. Punjab.
*****
JASGURPREET SINGH PURI J.(Oral)
1. The present is a petition filed under Section 11 read with
Section 12 of the Arbitration and Conciliation Act, 1996 (hereinafter
referred to as 'the Act'), seeking appointment of an independent arbitrator
in the present case.
2. Learned counsel for the petitioner submitted that a valid
agreement was entered into between the parties with regard to the work of
construction of Disty and distribution system of Gogron life irrigation
scheme off take at RD 85.200 Km of Kandi Canal State-II and the said
agreement has been annexed with the present petition as Annexure A-1.
He further submitted that in the aforesaid agreement, there exists a valid
arbitration clause i.e. Clause 25(v), wherein it is provided that all disputes
or differences in respect of which the decision is not final and conclusive
shall, at the request of either party made in communication sent through
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registered A.D. post, be referred for arbitration to a sole Arbitrator. He
submitted that a pre-arbitral mechanism has been provided under the
agreement for making claims before the respondents and the said
mechanism has been duly exhausted by the petitioner and with regard to
the same there is no dispute but thereafter when dispute was not settled
between the parties, the petitioner invoked the aforesaid arbitration clause
by issuing a notice to the respondents vide Annexure A-21 dated
22.02.2024. In response thereto, the respondents rejected the claim of the
petitioner by placing reliance upon Clause 25(xvii) of the aforesaid
agreement, which provides that 'neither party shall be entitled to bring a
claim for arbitration, if it is not filed as per the time period already
specified or within six months of the date of the completion of the work
as certified by the Engineer or of the date of abandonment of the work or
breach of contract under any of the clauses etc. He submitted that the
aforesaid rejection of the invocation of the arbitration clause on the basis
of Clause 25(xvii) was not sustainable, in view of the fact that the same is
a matter to be decided by the learned Arbitrator, with regard to the non-
arbitrability of the arbitration clause. He further submitted that there is no
dispute regarding the agreement between the parties, the arbitration clause
contained therein and the issuance of the legal notice under Section 21 of
the Arbitration and Conciliation Act, 1996 to the respondents. So far as
the aforesaid ground, on the basis of which the invocation of the
arbitration clause has been rejected, the same would not constitute a
ground at the stage of reference under Section 11 of the Act for this Court
to non-suit the petitioner on the said issue. Therefore, he submitted that
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this Hon'ble Court may appoint an independent and impartial arbitrator
for adjudicating the dispute which has arisen between the parties.
3. On the other hand, learned State counsel submitted that there
is neither any dispute regarding existence of the aforesaid agreement
between the parties, nor is there any dispute with regard to the aforesaid
arbitration clause contained therein and the service of notice invoking
arbitration clause upon the respondents. He, however, submitted that the
only objection raised by the respondent-State is that under Clause 25 of
the agreement (Annexure A-1), there is Sub-clause (xvii) which provides
that neither party shall be entitled to bring a claim for arbitration if the
same is not filed within six months from the date of completion of the
work as certified by the Engineer or from the date of abandonment of the
work, or breach of contract under any of its clauses. He further submitted
that in the present case, undisputedly, the work was completed in the year
2021 and in furtherance of the same completion certificate was issued on
25.03.2021 and it was after the expiry of the aforesaid period of six
months that the arbitration clause was invoked by the petitioner and since
the invocation was beyond the limitation prescribed under the said clause,
this Court should decline to appoint an Arbitrator under Section 11 of the
Act.
4. I have heard the learned counsels for the parties.
5. The aforesaid two clauses of the agreement, pertaining to
arbitration, are required to be reproduced as under:-
25(v) "All disputes or differences in respect of which
the decision is not final and conclusive shall, at the
request of either party made in communication sent
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through registered A.D. post, be referred for
arbitration to a sole Arbitrator."
25(xvii) "Neither party shall be entitled to bring a
claim for arbitration, if it is not filed as per the time
period already specified or within six months of the
following:-
a) Of the date of completion of the work as
certified by the Engineer or
b) Of the date of abandonment of the work or
breach of contract under any of its clauses, or
c) Of its non-commencement or non resumption
of work within 10 days of written notice for commencement
or resumption as applicable, or
d) Of the cancellation, termination or
withdrawal of the work from the Contractor in whole or in
part and / or revision for closure of the contract, or
e) Of receiving an intimation from the Engineer
that the final payment due or recover from the Contractor
had been determined, for the purpose of payment/adjustment
whichever is the latest. If the matter is not referred to
arbitration within the period prescribed above, all the rights
and claims of either party under the contract shall be
deemed to have been forfeited and absolutely barred by the
time for arbitration and even for civil litigation."
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6. It was so stated by the learned State counsel that the work
stood completed on 13.03.2021 and therefore, the invocation of the
arbitration clause is barred under Clause 25(xvii) of the agreement. On
the other hand, learned counsel for the petitioner submitted that the said
clause pertains only to the issue as to whether the dispute is arbitrable or
non-arbitrable, which can only be decided by the learned Arbitrator.
7. The law in this regard, relating to the scope of the provisions
of Section 11 of the Arbitration and Conciliation Act, 1996, has been dealt
with in detail by Hon'ble Supreme Court in SBI General Insurance
Company Limited v. Krish Spinning, 2024 SCC Online SC 1754, as well
as in "Interplay between Arbitration Agreements under Arbitration and
Conciliation Act, 1996 and Stamp Act, 1899, In Re" (2024) 6 SCC 1.
Therefore, the law with regard to scope of Section 11 of the Act is no
longer res integra. The relevant portion of the judgment 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
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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.
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
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proceedings. Accordingly, the "other issues" also
include examination and impounding of an 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,
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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 "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."
8. 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
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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 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
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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 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 11 of
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
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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."
9. Recently, the Hon'ble Supreme Court in Office for
Alternative Architecture v. Ircon Infrastructure and Services Ltd., 2025
SCC Online SC 1098, observed that whether a matter falls under the
excepted category or not cannot be considered at the time of the reference
stage under Section 11 of the Act. The relevant portion of the aforesaid
judgment is reproduced as under :-
6.The short question that falls for our
consideration is whether while exercising power under
Section 11 of the 1996 Act, the Court has to confine its
consideration as to the existence of an arbitration agreement
between the parties. If so, whether it would be permissible,
while exercising jurisdiction under Section 11, to hold that
some of the claims raised are non-arbitrable or fall within
excepted category.
7. Sub-section (6A) of Section 11, which was
inserted by Act 3 of 2016, with effect from 23.10.2015, makes
it clear that while considering an application under sub-
section (4) or sub-section (5) or sub-section (6), the Supreme
Court or the High Court, as the case may be, shall,
notwithstanding any judgment, decree or order of any Court,
confine to the examination of the existence of an arbitration
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agreement.
8. Act 33 of 2019 omitted sub-section (6A) but
the amending Act has not been notified thus far. In
consequence, sub-section (6A) of Section 11 of the 1996 Act
remains in the statute book.
9. The statement of objects and reasons of the
2015 amendment with reference to insertion of sub-section
(6A) in Section 11 of the 1996 Act, reads thus:
"(iii) an application for appointment of an
Arbitrator shall be disposed of by the High
Court or the Supreme Court, as the case may be,
as expeditiously as possible and an endeavour
should be made to dispose of the matter within a
period of 60 days.
(iv) to provide that while considering any
application for appointment of Arbitrator, the
High Court or the Supreme Court shall examine
the existence of a prima facie arbitration
agreement and not other issues."
10.The significance of the use of the expression
"not other issues" in the statement of objects and reasons of
the 2015 amendment was noticed by a seven-Judge bench of
this Court in In Re: Interplay Between Arbitration
Agreements under the Arbitration and Conciliation Act, 1996
and the Indian Stamp Act, 18995, and it was observed:
"209. The above extract indicates that the
Supreme Court or High Court at the stage of the
appointment of an Arbitrator shall 'examine the
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existence of 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."
11. Relying on the above observations made by this
Court in In Re: Interplay (supra), a three-judge bench of
this Court in "SBI General Insurance Co. Ltd. v. Krish
Spinning" observed:-
"114. ....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 v. Durga
Trading Corporation (supra) and adopted in
'NTPC v. SPML Infra Limited (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)".
Emphasis Supplied
12. As the above decision has been rendered by a
three-Judge bench of this Court after considering the seven-
Judge bench decision of this Court in In Re: Interplay
(supra), we are of the view that the respondent cannot profit
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from certain observations made by a two-Judge bench of this
Court in Emaar (supra). In our view, therefore, the High
Court fell in error in bisecting the claim of the appellant into
two parts, one arbitrable and the other not arbitrable, when
it found arbitration agreement to be there for settlement of
disputes between the parties. The correct course for the High
Court was to leave it open to the party to raise the issue of
non-arbitrability of certain claims before the arbitral
tribunal, which, if raised, could be considered and decided
by it.
10. Therefore, the law settled by Hon'ble Supreme Court is that
the reference court under Section 11 of the Act is only required to
examine prima facie existence of an arbitration clause. Whether the
subject matter is arbitrable or not, falls within the exclusive domain of the
arbitrator and not within the scope of the High Court at the stage of
reference under Section 11 of the Act.
11. The aforesaid Clause 25(xvii) provides for limitation. In
other words, as per learned State counsel, the subject matter of the dispute
would be non-arbitrable. This aspect, as to whether it is arbitrable or non-
arbitrable, lies within the scope of the arbitrator and not within the scope
of this Court at the stage of reference under Section 11 of the Act. This
becomes more clear from the fact that, so far as the aforesaid Clause
25(v), which is the basic clause providing for arbitration, is concerned,
the same is not in dispute. Therefore, this Court is satisfied that there is a
prima facie existence of the arbitration clause, and all the essential
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conditions for the appointment of an arbitrator under Section 11 of the Act
remain satisfied.
12. In view of the aforesaid facts and circumstances, the present
petition is allowed. Hon'ble Ms. Justice Jaishree Thakur (Retd.), resident
of House No.36, Sector 8-A, Chandigarh, Mobile No.9814125236, Email:
[email protected], is nominated as the Sole Arbitrator to
adjudicate the dispute between the parties, subject to compliance of
statutory provisions including Section 12 of the Act.
13. Parties are directed to appear before learned Arbitrator on
date, time and place to be fixed and communicated by learned Arbitrator
at her convenience.
14. Fee shall be paid to 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
Hon'ble Ms. Justice Jaishree Thakur (Retd.).
17. The respondent-State shall be at liberty to raise any objection
pertaining to the arbitrability or non-arbitrability of the dispute before the
learned Arbitrator at any appropriate stage and in accordance with law.
(JASGURPREET SINGH PURI)
JUDGE
19.01.2026
shweta
Whether speaking/reasoned : Yes/No
Whether reportable : Yes/No
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