2025 INSC 1365 1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. OF 2025

[Arising out of SLP (C) No. 4211 of 2025]

HINDUSTAN CONSTRUCTION COMPANY LTD.

THROUGH ITS AUTHORISED SIGNATORY

YOGESH DALAL … APPELLANT(S)

VERSUS

BIHAR RAJYA PUL NIRMAN NIGAM LIMITED

AND OTHERS … RESPONDENT(S)

J U D G M E N T

R. MAHADEVAN, J.

Leave granted.

2.This Appeal is directed against the final judgment and order dated

09.12.2024 passed by the High Court of Judicature at Patna

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in Request Case

No. 53 of 2020, whereby the High Court dismissed the request case filed by the

appellant, Hindustan Construction Company Limited, under Section 11 of the

Arbitration and Conciliation Act, 1996

2

.

1

Hereinafter referred to as “the High Court”

2

For short, “the A&C Act”

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PREFACE

3.Arbitration is often a friend in conferences but a foe in practice. Its raison

d’etre has always been to ease the burden on courts and to ensure the

expeditious resolution of commercial disputes. Yet, this is not its only virtue.

The true advantage of arbitration lies in its freedom and flexibility, with party

autonomy as the cornerstone of the arbitral process.

3.1.Parties enjoy the liberty to determine the strength and composition of the

tribunal, to appoint domain experts as arbitrators, and to design procedures

suited to the nature and complexity of their disputes. This freedom allows them

to bring to the table expertise and insight that even a judge may not be able to

contribute.

3.2.However, parties often embrace arbitration in good times, only to resist or

manipulate it when disputes actually arise – seeking either to wiggle out of

arbitration altogether or to tilt the process unfairly in their favour. In such

situations, judicial intervention becomes inevitable and rightly so to safeguard

fairness and the integrity of the arbitral process.

3.3.The evolution of the judicial role from that of a helicopter parent to that

of a guardian angel of arbitration has been neither smooth nor uniform.

Successive legislative amendments, most notably those of 2015, 2019, and

2021, have sought to curtail judicial interference and recalibrate the delicate

balance between autonomy and oversight. Yet, in practice, arbitration has at

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times become more cumbersome than civil litigation. Parties continue to exploit

every procedural avenue to delay proceedings, i.e., filing a maze of applications

before the arbitral tribunal, the High Court, and even this Court, often on

technical or jurisdictional objections.

3.4.The present case is yet another instance where the fine boundary between

judicial oversight and arbitral independence is tested. At its core, arbitration

remains a creature of contract, founded on the twin pillars of party autonomy

and impartiality. Every act of interpretation whether of the statute or of the

contract must therefore be guided by these two foundational principles.

With this preface, we proceed to the facts of the present case.

FACTUAL MATRIX

4.Respondent No. 1, Bihar Rajya Pul Nirman Nigam Limited

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awarded a

contract to the appellant on 04.03.2014 for the construction of a bridge over

River Sone in the Districts of Aurangabad and Rohtas, Bihar. The contract

contained Clause 25 providing for settlement of disputes through arbitration.

4.1.During execution of the contract, the appellant, by letter dated

18.09.2018, raised a claim before the Deputy Chief Engineer, BRPNNL seeking

compensation for additional costs and losses incurred during the original

contract period, in terms of Clause 25. Receiving no response, the appellant

3

For short, “BRPNNL”

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preferred an appeal on 20.10.2018 before the Managing Director, BRNPPL, and

thereafter, issued a notice dated 14.12.2018 expressing its intention to

commence arbitration. However, the Managing Director failed to appoint an

arbitrator within the prescribed period.

4.2.Consequently, the appellant filed an application under Section 11 of the

A&C Act for appointment of arbitrator. By order dated 02.08.2019 in Request

Case No. 4 of 2019, the Patna High Court appointed Justice P.K. Sinha (Retd.)

as the sole arbitrator. The arbitrator passed an award on 31.12.2021, which was

accepted by the respondents, and the awarded sum was duly paid to the

appellant.

4.3.Thereafter, the appellant once again approached the Deputy Chief

Engineer, BRNPPL under Clause 25, raising fresh claims relating to extension

of time for completion of works and compensation for the additional costs

incurred during the extended period. However, no response was received, and

the appeal to the Managing Director also remained undecided.

4.4.On 10.01.2020, the appellant issued a notice of intention to commence

arbitration and sought appointment of an arbitrator for adjudication of the

aforesaid disputes. As the Managing Director failed to act, the appellant filed

another petition under Section 11 of the A&C Act before the Patna High Court,

being Request Case No. 53 of 2020, for appointment of arbitrator.

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4.5.By judgment dated 18.08.2021, the High Court appointed Justice Shivaji

Pandey (Retd.) as the sole arbitrator to adjudicate all disputes arising out of the

contract dated 04.03.2014.

4.6.Upon completion of pleadings, the parties jointly sought extension of the

mandate under Section 29A of the A&C Act. The arbitrator, by order dated

11.03.2023, extended the mandate for six months. As the extended period was

to expire on 27.08.2023, both parties sought liberty to approach the Court for

further extension. The arbitrator, by order dated 17.06.2023, granted liberty to

approach court under Section 29A (5).

4.7.The Patna High Court, by order dated 13.10.2023, extended the mandate

for a further period of six months. On a subsequent joint request, the arbitrator

again extended time by order dated 17.03.2024, and the High Court, by order

dated 10.05.2024, granted a corresponding extension of six months.

4.8.Despite having consented to arbitration and actively participated in the

proceedings for over three years, the respondents filed Civil Review Application

No. 293 of 2024 before the High Court seeking review of the order dated

18.08.2021. By order dated 04.10.2024, the High Court reviewed its earlier

order and directed the arbitrator not to proceed further with the ongoing

arbitration. The Court further ordered that Request Case No. 53 of 2020 be

listed on 25.10.2024 for appointment of a new arbitrator, pointing out that

Justice Shivaji Pandey had, in the meantime, been appointed as President of the

State Consumer Disputes Redressal Commission, Meghalaya.

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4.9.In compliance with the High Court’s direction, the arbitrator, by order

dated 19.10.2024, suspended the arbitral proceedings sine die until further

orders. The High Court thereafter heard arguments and reserved orders on

22.11.2024, and by judgment dated 09.12.2024, dismissed the appellant’s

Request Case No. 53 of 2020.

4.10.Aggrieved by the aforesaid judgment and order, the appellant has

preferred the present Civil Appeal before this Court.

CONTENTIONS OF THE PARTIES

5.The learned senior counsel for the appellant submitted that the High Court

exceeded its jurisdiction in passing the impugned judgment dated 09.12.2024

thereby reviewing its earlier order dated 18.08.2021 passed under Section 11(6)

of the A&C Act, by which a sole arbitrator had been appointed. That order had

attained finality, having never been challenged by the respondents through any

appeal or other proceedings. Moreover, the A&C Act is a self-contained code

and does not confer any power of review upon the High Court. Hence, the very

act of entertaining a review petition was without jurisdiction.

5.1.It was further submitted that the order dated 04.10.2024 passed in the

review petition had specifically directed that Request Case No. 53 of 2020 be

listed on 25.10.2024 for appointment of a new arbitrator. However, the

impugned judgment went beyond that limited extent and proceeded to dismiss

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Section 11 petition itself, thereby nullifying its own subsisting order and acting

in excess of jurisdiction.

5.2.Without prejudice to the above, it was submitted that the review petition

was hopelessly barred by limitation, having been filed more than three years

after the order of appointment had been passed and fully acted upon by both

sides. Even assuming that a review was maintainable in law, it could not have

been entertained after such an inordinate and unexplained delay.

5.3.The learned senior counsel submitted that Clause 25 of the agreement

contains a valid arbitration clause in writing, clearly manifesting the parties’

intention to refer all or certain disputes arising out of the contract to arbitration.

The language of the clause leaves no ambiguity regarding the parties’ intention

to submit their disputes to an arbitral forum. Consequently, the High Court’s

finding that Clause 25 was not an arbitration clause is misconceived, untenable,

and contrary to the settled position of law.

5.4.It was pointed out that the appellant had duly complied with the pre-

arbitral procedure prescribed under Clause 25 by referring the dispute to the

Deputy Chief Engineer on 15.10.2019, preferring an appeal to the Managing

Director on 12.11.2019, and issuing a notice of arbitration on 10.01.2020. The

High Court thereafter appointed a sole arbitrator by order dated 18.08.2021. The

respondents neither filed an application under Section 16 objecting to

jurisdiction nor raised such a plea in their statement of defence. The arbitration

commenced on 13.09.2021 and proceeded through over seventy sittings and

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three joint applications under Section 29A, reaching the stage of final

arguments, before the respondents belatedly filed the review petition.

5.5.According to the learned senior counsel, in the counter affidavit filed in

the review petition, the respondents for the first time, referred to a Bihar

Government Notification dated 14.08.2019, which substituted Clause 25 of the

Standard Bidding Document to provide for reference to the Bihar Public Works

Contract Disputes Arbitration Tribunal Act, 2008. It was submitted that such

substitution could not operate retrospectively to alter the terms of the contract

dated 04.03.2014.

5.6.It was submitted that an arbitration clause does not become null and void

merely because the person or authority designated to appoint an arbitrator, has

become ineligible under law. The High Court, therefore, erred in interpreting

Clause 25 to mean that arbitration itself was rendered impossible merely

because the Managing Director, BRNPPL could not act as the appointing

authority.

5.7.It was further submitted that both parties had jointly moved applications

under Section 29A of the A&C Act on multiple occasions seeking extension of

the arbitrator’s mandate. Such conduct clearly demonstrates their

acknowledgment of the arbitral process and their submission to the jurisdiction

of the arbitrator.

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5.8.The learned senior counsel emphasized that the impugned judgment was

passed, after more than three years of continuous arbitral proceedings during

which, over seventy sittings were conducted. The appellant alone had incurred

approximately Rs.50 lakhs towards arbitrator’s fees, secretarial expenses, travel,

accommodation, and legal costs. The proceedings had reached the stage of final

arguments when the High Court rendered the impugned judgment, thereby

defeating the very objective of the A&C Act – speedy and cost-effective

resolution of disputes.

5.9.It was further submitted that in their reply to the Section 11 petition, the

respondents had categorically admitted that Clause 25 of the agreement

provided for arbitration. Such admission, coupled with its active participation in

the proceedings, conclusively establishes the existence of a valid arbitration

agreement. The plea of non-arbitrability was raised for the first time only in the

review petition and was initially rejected. The review was allowed only to the

limited extent of substituting the arbitrator since Justice Shivaji Pandey had

been appointed as President, State Consumer Protection Commission,

Meghalaya. Despite this, the High Court subsequently dismissed the Section 11

petition in its entirety.

5.10.It was further contended that unilateral appointment of an arbitrator has

been held to be impermissible in law. Hence, the only option available to the

appellant was to invoke the jurisdiction of the High Court under Section 11(6)

of the A&C Act. The High Court, however, by enforcing a clause of unilateral

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appointment, acted contrary to the principles laid down by this Court in TRF

Ltd v. Energo Engineering Projects Ltd

4

, and Perkins Eastman Architects

DPC and another v. HSCC (India) Ltd

5

, which have been affirmed by the

Constitutional Bench in Central Organisation for Railway Electrification v.

ECI SPIC SMO MCML (JV)

6

.

5.11.The learned senior counsel submitted that the High Court’s observation

regarding the absence of an express waiver under Section 12(5) of the A&C Act

is misconceived. The effect of Section 12(5) does not negate or curtail the

jurisdiction of the High Court under Section 11 to appoint an independent

arbitrator where the designated authority suffers a disqualification under the

Seventh Schedule. The Court, acting as the appointing authority in place of the

Managing Director named in the clause, does not destroy the arbitration clause;

rather, it preserves it by substituting a neutral appointing mechanism. Otherwise,

PSUs could compel private contractors to waive disqualification criteria,

defeating the purpose of Section 12(5).

5.12.It was also submitted that the same Clause 25 had earlier been invoked

between the very same parties, resulting in an arbitral award that was accepted

and implemented by the respondents. The High Court’s contrary interpretation,

therefore, is inconsistent with the parties’ own conduct and past understanding

of the clause.

4

(2017) 8 SCC 377

5

(2019) SCC OnLine SC 1517

6

(2025) 4 SCC 641

11

5.13.According to the learned counsel, having fully participated in the arbitral

proceedings, filed statements of claim and defence, and sought extensions under

Section 29A, the respondents are estopped under Section 4 of the A&C Act

from subsequently challenging the existence or validity of the arbitration

agreement. Reliance was placed on Narayan Prasad Lohia v. Nikunj Kumar

Lohia and others

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. Further reference was placed on Gayatri Project Ltd. v.

Madhya Pradesh Road Development Corporation Ltd.

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, to contend that once

arbitration proceedings are underway, the parties cannot subsequently challenge

the jurisdiction of the arbitral tribunal.

5.14.The High Court’s reliance on State of Bihar v. Kashish Developers

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was

said to be misplaced, as that decision preceded the Constitution Bench

judgement in Central Organisation for Railway Electrification v. ECI-SPIC-

SMO-MCML (JV)

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, which overruled the earlier view taken in CORE v. ECI-

SPIC-SMO-MCML (JV)

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, relied upon in Kashish Developers.

5.15.Accordingly, it was prayed that this Court may be pleased to set aside the

impugned judgment dated 09.12.2024, restore the validity of the arbitration

proceedings pursuant to the order dated 18.08.2021, and either appoint a

substitute arbitrator itself or direct the High Court to do so within a time-bound

period.

7

(2002) 3 SCC 572

8

(2025) INSC 698

9

Order dated 04.10.2024 rendered by Patna High Court in C. Rev. No.181 and 182 of 2023

10

(2025) 4 SCC 641

11

(2020) 14 SCC 712

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6.Per contra, the learned counsel for the respondents submitted that the

present dispute does not merely raise questions on the enforceability of

unilateral appointment but brings to light an uncommon yet valid manifestation

of party autonomy, where the contract explicitly restricts arbitration to a single

prescribed method and thereby excludes all alternate routes to arbitration.

6.1.According to the learned counsel, the specific question, as to whether an

arbitration clause which stipulates the unilateral appointment of an arbitrator by

one party and further provides that no arbitration shall be held if such

appointment cannot be made, can still be said to constitute a valid and subsisting

arbitration agreement, has not been directly adjudicated upon by this Court and

thus requires authoritative determination.

6.2.It was further submitted that Clause 25 of the contract titled “Settlement

of Disputes and Arbitration”, comprises two distinct parts. The first part

provides that upon the emergence of a dispute and compliance with pre-

arbitration steps the Managing Director of the respondent company shall appoint

the arbitrator. The second part, however, goes a step further and stipulates that if

for any reason, such appointment cannot be made, there shall be no arbitration at

all. While it is undeniable that the Constitution Bench in Central Organisation

for Railway Electrification v. ECI SPIC SMO MCML (JV) has held that

unilateral appointment of an arbitrator by one party is unenforceable, the

peculiar feature of the present clause is that it contains a negative covenant that

expressly forecloses arbitration altogether in the event the prescribed mode of

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appointment cannot be followed. This makes the clause substantially different

from the one considered in CORE.

6.3.Adding further, it was submitted that in CORE, Clause 64(3)(b) of the

General Conditions of Contract provided that the arbitration panel would consist

of three retired railway officers, one or more of whom were to be chosen by the

Railways from a panel. There was no stipulation in that clause that arbitration

would not take place if the procedure became invalid or could not be

implemented. In contrast, the present clause clearly records the parties’ intention

that arbitration is contingent upon the appointment of an arbitrator by the

Managing Director, and that failing such appointment, the disputes shall not be

referred to arbitration. Accordingly, the reliance placed by the appellants on

CORE is misplaced.

6.4.The learned counsel submitted that the impugned order rightly follows the

judgment of the Patna High Court in Civil Review No. 181 of 2023, where an

identical clause was considered. The High Court held that by reason of the

substitution of Section 12 by Act 3 of 2016, an arbitration clause enabling

appointment of an arbitrator by an ineligible officer such as the Engineer-in-

Chief or Administrative Head becomes otiose. The Special Leave Petitions

bearing Nos.25109 – 25110 of 2024 challenging that judgment came to be

dismissed by this Court after notice and hearing, thereby affirming the view that

such a clause does not survive in law.

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6.5.It was submitted that Clause 25, on its true construction, operates as a

contingent contract under Section 31 of the Indian Contract Act, 1872. The first

part constitutes a positive covenant for arbitration by an arbitrator appointed by

the Managing Director, while the second part provides that if such appointment

cannot be made, there shall be no arbitration. Upon the unilateral appointment

clause being rendered unenforceable by law, the contingency contemplated in

the first part became impossible, triggering the operation of the second part

under Section 33 of the Contract Act. Consequently, the clause itself dictates

that no arbitration shall take place.

6.6.The learned counsel further submitted that the principle of party

autonomy, as reaffirmed in CORE, remains the foundational norm of arbitration,

subject to statutory limitations and the principle of equality. However, party

autonomy cannot be invoked to rewrite the parties’ agreement. In Vidya Drolia

and others v. Durga Trading Corporation

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, this Court held that the scope and

existence of arbitration depend on the subjective will of the parties as expressed

in the arbitration agreement. If the parties have agreed that arbitration shall not

be held unless a specific mode of appointment is followed, the court cannot

override that consensus. The subjective will of the parties here, clearly recorded

in clause 25, is that arbitration shall be conducted only by an arbitrator

appointed by the Managing Director, otherwise, disputes shall be resolved

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(2021) 2 SCC 1

15

through the courts. To appoint an arbitrator under Section 11 in such a case

would amount to rewriting the contract.

6.7.It was further contended that the two parts of Clause 25 are separable.

The first part, now unenforceable due to the ruling in CORE, can be severed

without affecting the remainder of the clause. The second part, which

independently records the negative covenant against arbitration, remains valid

and binding. The doctrine of severability and the “blue pencil test” as

recognized in Shin Satellite Public Co. Ltd v. Jain Studios Ltd

13

, and Beed

District Central Cooperative Bank Ltd v. State of Maharashtra and others

14

,

allow the offending portion to be struck off while giving effect to the surviving

portion that reflects the parties’ intention. Upon such severance, the second part

of Clause 25 stands independently and unambiguously expresses that disputes

shall not be referred to arbitration.

6.8.It was submitted that it is a settled principle that courts cannot rewrite or

modify the terms of a contract. In Venkataraman Krishnamurthy and another

v. Lodha Crown Buildmart Private Ltd

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, this Court held that courts must give

effect to the contract as executed and cannot make a new one, however,

reasonable, if the parties themselves have not agreed to it. Therefore, the relief

sought by the appellants, which effectively seeks to introduce an arbitration

clause contrary to the contract, is legally untenable.

13

(2006) 2 SCC 628

14

(2006) 8 SCC 514

15

(2024) 4 SCC 230

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6.9.The learned counsel further submitted that the State of Bihar has

consciously shifted from ad hoc arbitration to institutional arbitration by

amending Clause 25 of the Standard Bidding Document through Gazette

Notification dated 14.08.2019, substituting it with a provision mandating

reference of disputes to the Bihar Public Works Contract Disputes Arbitration

Tribunal established under the 2008 Act. This policy reform shows that the

respondents never intended for ad hoc arbitration to subsist under earlier

contracts, and the contractual clause under consideration must be construed in

this policy context.

6.10.In view of the foregoing, it was submitted that the arbitration agreement

in the present case has been rendered inoperative and unenforceable by

operation of law. The second part of Clause 25 constitutes a binding negative

covenant reflecting the parties’ express intention to exclude arbitration if the

Managing Director is unable to appoint an arbitrator. Any attempt by the Court

to appoint an arbitrator notwithstanding this stipulation would amount to

rewriting the contract and negating party autonomy. The impugned order,

therefore, correctly concludes that no arbitration agreement exists between the

parties, and the appeal deserves to be dismissed.

7.We have considered the submissions advanced by learned counsel for

both sides and have meticulously examined the materials placed on record.

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8.Apparently, there was an express agreement dated 04.03.2014 between

Respondent No.1 and the appellant for award of the contract for construction of

a bridge over River Sone in the Districts of Aurangabad and Rohtas. Clause 25

thereof provided for settlement of disputes through arbitration. The appellant’s

claim for additional costs / losses incurred during the original contract period,

raised under Clause 25, was adjudicated and settled by an arbitral award dated

31.12.2021, which the respondents did not challenge. However, the respondents

seriously resisted the appellant’s claim for the extended period of the contract.

8.1.The appellant’s request before the Deputy Chief Engineer, as required

under Clause 25, and the subsequent appeal before the Managing Director, were

not considered. The appellant’s notice of intention to commence arbitration and

request for appointment of an arbitrator for adjudication of disputes relating to

the extended period of the contract were also kept pending without any progress.

Consequently, the appellant invoked Section 11 of the A&C Act by filing

Request Case No. 53 of 2020 seeking appointment of an arbitrator.

8.2.By judgment dated 18.08.2021, the High Court of Patna appointed Justice

Shivaji Pandey (Retd.) as the sole arbitrator to adjudicate all disputes arising out

of the contract dated 04.03.2014. Arbitration proceedings commenced; evidence

was adduced; and arguments on the side of the appellant were concluded by

30.07.2023. Meanwhile, both parties jointed sought an extension of time under

Section 29A (3) of the A&C Act, which the arbitrator granted by extending the

mandate for a further six months. Subsequently, the High Court extended the

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mandate of the arbitrator on two more occasions – vide order dated 13.10.2023

in Request Case No. 79 of 2023 and order dated 10.05.2024 in Request Case

No. 59 of 2024.

8.3.Thereafter, the respondents filed Civil Review Application No. 293 of

2024 seeking review of the order dated 18.08.2021, stating inter alia that Justice

Shivaji Pandey had been appointed as President of the Meghalaya State

Consumer Protection Commission. By order dated 04.10.2024, the High Court

directed the arbitrator not to proceed with the arbitration and posted the request

case for appointment of a new arbitrator. However, the High Court dismissed

the request case, by the impugned judgment dated 09.12.2024.

9.In the given backdrop, the issues that fall for consideration in the present

appeal are as follows:

(i) Whether the High Court possessed the jurisdiction to review or recall

its earlier order passed under Section 11(6) of the A&C Act, and whether the

exercise of such power was valid in law.

(ii) Whether a valid and subsisting arbitration agreement existed between

the parties within the meaning of Section 7 of the A&C Act, and whether clause

25 of the contract satisfies the statutory requirements of a binding arbitration

clause.

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(iii) whether the joint application filed by both parties, seeking extension

of the arbitrator’s mandate under Section 29A constitutes an express or implied

waiver of the ineligibility under Section 12(5), and Section 4 of the Act.

10.Before proceeding further, it is apposite to look into the relevant

provisions of the Arbitration and Conciliation Act, 1996, as follows:

“2. Definitions. –(1) In this Part, unless the context otherwise requires, –

(b) “arbitration agreement” means an agreement referred to in section 7;

4. Waiver of right to object.—A party who knows that—

(a) any provision of this Part from which the parties may derogate, or

(b) any requirement under the arbitration agreement,

has not been complied with and yet proceeds with the arbitration without stating

his objection to such non-compliance without undue delay or, if a time limit is

provided for stating that objection, within that period of time, shall be deemed to

have waived his right to so object.

5. Extent of judicial intervention. —Notwithstanding anything contained in any

other law for the time being in force, in matters governed by this Part, no

judicial authority shall intervene except where so provided in this Part.

7. Arbitration agreement.—(1) In this Part, “arbitration agreement” means an

agreement by the parties to submit to arbitration all or certain disputes which

have arisen or which may arise between them in respect of a defined legal

relationship, whether contractual or not.

(2) An arbitration agreement may be in the form of an arbitration clause in a

contract or in the form of a separate agreement.

(3) An arbitration agreement shall be in writing.

(4) An arbitration agreement is in writing if it is contained in—

(a) a document signed by the parties;

(b) an exchange of letters, telex, telegrams or other means of telecommunication

[including communication through electronic means] which provide a record of

the agreement; or

(c) an exchange of statements of claim and defence in which the existence of

the agreement is alleged by one party and not denied by the other.

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(5) The reference in a contract to a document containing an arbitration clause

constitutes an arbitration agreement if the contract is in writing and the

reference is such as to make that arbitration clause part of the contract.

….

11. Appointment of arbitrators.—(1) A person of any nationality may be an

arbitrator, unless otherwise agreed by the parties.

(2) Subject to sub-section (6), the parties are free to agree on a procedure for

appointing the arbitrator or arbitrators.

(3) Failing any agreement referred to in sub-section (2), in an arbitration with

three arbitrators, each party shall appoint one arbitrator, and the two appointed

arbitrators shall appoint the third arbitrator who shall act as the presiding

arbitrator.

(3A) The Supreme Court and the High Court shall have the power to designate,

arbitral institutions, from time to time, which have been graded by the Council

under section 43-I, for the purposes of this Act:

Provided that in respect of those High Court jurisdictions, where no graded

arbitral institution are available, then, the Chief Justice of the concerned High

Court may maintain a panel of arbitrators for discharging the functions and

duties of arbitral institution and any reference to the arbitrator shall be deemed

to be an arbitral institution for the purposes of this section and the arbitrator

appointed by a party shall be entitled to such fee at the rate as specified in the

Fourth Schedule:

Provided further that the Chief Justice of the concerned High Court may, from

time to time, review the panel of arbitrators.

(4) If the appointment procedure in sub-section (3) applies and—

(a) a party fails to appoint an arbitrator within thirty days from the receipt of a

request to do so from the other party; or

(b) the two appointed arbitrators fail to agree on the third arbitrator within

thirty days from the date of their appointment,

[the appointment shall be made, on an application of the party, by the arbitral

institution designated by the Supreme Court, in case of international commercial

arbitration, or by the High Court, in case of arbitrations other than

international commercial arbitration, as the case may be].

(5) Failing any agreement referred to in sub-section (2), in an arbitration with

a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days

from receipt of a request by one party from the other party to so agree the

appointment shall be made, on an application of the party in accordance with

the provisions contained in sub-section (4).

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(6) Where, under an appointment procedure agreed upon by the parties,—

(a) a party fails to act as required under that procedure; or

(b) the parties, or the two appointed arbitrators, fail to reach an agreement

expected of them under that procedure; or

(c) a person, including an institution, fails to perform any function entrusted to

him or it under that procedure,

the appointment shall be made, on an application of the party, by the arbitral

institution designated by the Supreme Court, in case of international commercial

arbitration, or by the High Court, in case of arbitrations other than

international commercial arbitration, as the case may be to take the necessary

measure, unless the agreement on the appointment procedure provides other

means for securing the appointment.

(6B) The designation of any person or institution by the Supreme Court or, as

the case may be, the High Court, for the purposes of this section shall not be

regarded as a delegation of judicial power by the Supreme Court or the High

Court.

(8) The arbitral institution referred to in sub-sections (4), (5) and (6), before

appointing an arbitrator, shall seek a disclosure in writing from the prospective

arbitrator in terms of sub-section (1) of section 12, and have due regard to—

(a) any qualifications required for the arbitrator by the agreement of the

parties; and

(b) the contents of the disclosure and other considerations as are likely to secure

the appointment of an independent and impartial arbitrator.

…

12. Grounds for challenge.—(1) When a person is approached in connection

with his possible appointment as an arbitrator, he shall disclose in writing any

circumstances,—

(a) such as the existence either direct or indirect, of any past or present

relationship with or interest in any of the parties or in relation to the subject-

matter in dispute, whether financial, business, professional or other kind, which

is likely to give rise to justifiable doubts as to his independence or impartiality;

and

(b) which are likely to affect his ability to devote sufficient time to the

arbitration and in particular his ability to complete the entire arbitration within

a period of twelve months.

Explanation1.—The grounds stated in the Fifth Schedule shall guide in

determining whether circumstances exist which give rise to justifiable doubts as

to the independence or impartiality of an arbitrator.

Explanation 2.—The disclosure shall be made by such person in the form

specified in the Sixth Schedule.

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(2) An arbitrator, from the time of his appointment and throughout the arbitral

proceedings, shall, without delay, disclose to the parties in writing any

circumstances referred to in sub-section (1) unless they have already been

informed of them by him.

(3) An arbitrator may be challenged only if—

(a) circumstances exist that give rise to justifiable doubts as to his independence

or impartiality, or

(b) he does not possess the qualifications agreed to by the parties.

(4) A party may challenge an arbitrator appointed by him, or in whose

appointment he has participated, only for reasons of which he becomes aware

after the appointment has been made.

(5) Notwithstanding any prior agreement to the contrary, any person whose

relationship, with the parties or counsel or the subject-matter of the dispute,

falls under any of the categories specified in the Seventh Schedule shall be

ineligible to be appointed as an arbitrator:

Provided that parties may, subsequent to disputes having arisen between them,

waive the applicability of this sub-section by an express agreement in writing.

14. Failure or impossibility to act.—(1) The mandate of an arbitrator shall

terminate and he shall be substituted by another arbitrator, if—

(a) he becomes de jure or de facto unable to perform his functions or for other

reasons fails to act without undue delay; and

(b) he withdraws from his office or the parties agree to the termination of his

mandate.

(2) If a controversy remains concerning any of the grounds referred to in clause

(a) of sub-section (1), a party may, unless otherwise agreed by the parties, apply

to the Court to decide on the termination of the mandate.

(3) If, under this section or sub-section (3) of section 13, an arbitrator

withdraws from his office or a party agrees to the termination of the mandate of

an arbitrator, it shall not imply acceptance of the validity of any ground referred

to in this section or sub-section (3) of section 12.

15. Termination of mandate and substitution of arbitrator.—(1) In addition to

the circumstances referred to in section 13 or section 14, the mandate of an

arbitrator shall terminate—

(a) where he withdraws from office for any reason; or

(b) by or pursuant to agreement of the parties.

23

(2) Where the mandate of an arbitrator terminates, a substitute arbitrator shall

be appointed according to the rules that were applicable to the appointment of

the arbitrator being replaced. (3) Unless otherwise agreed by the parties, where

an arbitrator is replaced under sub-section (2), any hearings previously held

maybe repeated at the discretion of the arbitral tribunal.

(4) Unless otherwise agreed by the parties, an order or ruling of the arbitral

tribunal made prior to the replacement of an arbitrator under this section shall

not be invalid solely because there has been a change in the composition of the

arbitral tribunal.

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.

(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.

18. Equal treatment of parties.—The parties shall be treated with equality and

each party shall be given a full opportunity to present his case.

29A. Time limit for arbitral award.—

…

24

(3) The parties may, by consent, extend the period specified in sub-section (1)

for making award for a further period not exceeding six months.

…

(5) The extension of period referred to in sub-section (4) may be on the

application of any of the parties and may be granted only for sufficient cause

and on such terms and conditions as may be imposed by the Court.

(6) While extending the period referred to in sub-section (4), it shall be open to

the Court to substitute one or all of the arbitrators and if one or all of the

arbitrators are substituted, the arbitral proceedings shall continue from the

stage already reached and on the basis of the evidence and material already on

record, and the arbitrator(s) appointed under this section shall be deemed to

have received the said evidence and material.

(7) In the event of arbitrator(s) being appointed under this section, the arbitral

tribunal thus reconstituted shall be deemed to be in continuation of the

previously appointed arbitral tribunal.

(8) It shall be open to the Court to impose actual or exemplary costs upon any

of the parties under this section.

(9) An application filed under sub-section (5) shall be disposed of by the Court

as expeditiously as possible and endeavour shall be made to dispose of the

matter within a period of sixty days from the date of service of notice on the

opposite party.

34. Application for setting aside arbitral award. (1) Recourse to a Court

against an arbitral award may be made only by an application for setting aside

such award in accordance with sub-section (2) and sub-section (3)

…”

10.1.The above provisions make it clear that the Arbitration and Conciliation

Act, 1996 embodies a legislative policy of party autonomy, limited judicial

intervention, and procedural self-sufficiency. Section 5 expressly restricts

judicial interference except as provided under the Act, reflecting the pro-

arbitration intent of the legislature. Once the parties have agreed to resolve their

25

disputes through arbitration, and such agreement satisfies the requirements of

Section 7, the Court’s role becomes largely facilitative – confined to enabling,

not obstructing, the arbitral process.

10.2.Section 11 delineates the mechanism for the appointment of arbitrators

and underscores the neutrality of the arbitral process by empowering the High

Courts and this Court to intervene only where the parties or the designated

authorities fail to act. Importantly, sub-section (6) confers a default power upon

the Court to secure such appointment when the agreed procedure breaks down,

while Section 11(8) reinforces independence and impartiality through

mandatory disclosures under Section 12(1).

10.3.Section 12(5) renders persons having relationships enumerated in the

Seventh Schedule ineligible for appointment as arbitrators, subject only to an

express written waiver executed after the disputes have arisen. This provision

marks a deliberate shift from presumed consent to conscious post-dispute

waiver, thereby strengthening the integrity of arbitral appointments.

10.4.Similarly, Sections 14 and 15 contemplate situations where an arbitrator

becomes de jure or de facto unable to act, or withdraws for any reason. In such

cases, the statute ensures continuity through substitution under Section 15(2),

thereby preserving the validity of prior proceedings. Section 18, often hailed as

the Magna Carta of Arbitration, guarantees equal treatment of parties. Section

29A further reinforces expedition and procedural discipline by imposing time

limits for completion of arbitral proceedings, while empowering the Court,

26

within the contours of the Act, to extend or substitute the tribunal, set terms, and

impose exemplary costs to prevent frustration of the process.

10.5.Section 34, read with Section 16, provides for challenges to the award on

limited grounds, including the validity of the arbitration agreement, but not

midstream, thus ensuring continuity of proceedings until an award is rendered.

11.Issue No. 1

Whether the High Court had jurisdiction to review its earlier order passed

under Section 11(6) of the A&C Act, and whether such exercise of power

was valid in law.

11.1.The issue goes to the very foundation of the legislative policy underlying

the Arbitration and Conciliation Act, 1996, which was enacted to promote

expedition, party autonomy, and finality in arbitral proceedings, while keeping

judicial intervention to a minimum. The Statement of Objects and Reasons of

both the 1996 Act and the 2015 Amendment clearly reflect the intention to

facilitate a fair and efficient arbitral process and to “minimize the supervisory

role of courts in the arbitral process”.

11.2.In Bharat Sanchar Nigam Limited and another v. Nortel Networks

India Pvt. Ltd

16

, this Court reiterated that “the legislative policy of the 1996 Act

is to minimize the supervisory role of courts in the arbitral process and to

16

(2021) 5 SCC 738

27

ensure that arbitration proceedings are conducted expeditiously without

unnecessary interference”.

11.3.The insertion of Section 11(6-A) through the 2015 Amendment

reaffirmed the limited nature of judicial scrutiny at the appointment stage,

restoring the position that courts must confine themselves to a prima facie

determination of the existence of an arbitration agreement, curtailing the wider

inquiry recognized in SBP & Co. v. Patel Engineering Ltd. and another

17

.

11.4.Section 5 of the A&C Act begins with a non-obstante clause that

expressly restricts judicial intervention only to situations enumerated under the

Act. The statute identifies specific points for court involvement – principally

under Sections 8, 9, 11, 29A, 34 and 37 – beyond which judicial interference is

prohibited.

11.5.In the seven-Judge Bench decision in Interplay Between Arbitration

Agreements under Arbitration and Conciliation Act, 1996 and Stamp Act,

1899, In re

18

, this Court reaffirmed that the role of the referral court under

Section 11 is confined to a prima facie examination of the existence of an

arbitration agreement. All other questions including validity, enforceability, and

jurisdiction are matters for the arbitral tribunal under Section 16. The Court

further emphasized that the Arbitration Act is a self-contained code governed by

the principle that what is not expressly permitted under the Act is deemed

prohibited. The following passages from Interplay highlight that minimal

17

(2005) 8 SCC 618

18

(2024) 6 SCC 1

28

judicial intervention is the governing principle and that referral courts must

avoid undertaking detailed fact-finding or adjudication at the Section 8 or

Section 11 stage:

“88. One of the main objectives behind the enactment of the Arbitration Act was

to minimise the supervisory role of Courts in the arbitral process by confining it

only to the circumstances stipulated by the legislature. For instance, Section 16

of the Arbitration Act provides that the Arbitral Tribunal may rule on its own

jurisdiction “including ruling on any objection with respect to the existence or

validity of the arbitration agreement”. The effect of Section 16, bearing in view

the principle of minimum judicial interference, is that judicial authorities

cannot intervene in matters dealing with the jurisdiction of the Arbitral

Tribunal. Although Sections 8 and 11 allow Courts to refer parties to

arbitration or appoint arbitrators, Section 5 limits the Courts from dealing

with substantive objections pertaining to the existence and validity of

arbitration agreements at the referral or appointment stage. A Referral Court

at Section 8 or Section 11 stage can only enter into a prima facie

determination. The legislative mandate of prima facie determination ensures

that the Referral Courts do not trammel the Arbitral Tribunal's authority to

rule on its own jurisdiction.

89. Section 5 is of aid in interpreting the extent of judicial interference under

Sections 8 and 11 of the Arbitration Act. Section 5 contains a general rule of

judicial non-interference. Therefore, every provision of the Arbitration Act

ought to be construed in view of Section 5 to give true effect to the legislative

intention of minimal judicial intervention.

92. The Arbitration Act is a self-contained 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. [Pasl Wind Solutions (P) Ltd.v.GE Power Conversion (India) (P) Ltd.,

(2021) 7 SCC 1 : (2021) 3 SCC (Civ) 702; Kandla Export Corpn. v. OCI Corpn.,

(2018) 14 SCC 715 : (2018) 4 SCC (Civ) 664] When a self-contained code sets

out a procedure, the applicability of a general legal procedure would be

impliedly excluded. [Subal Paul v.Malina Paul, (2003) 10 SCC 361] Being a

self-contained and exhaustive code on arbitration law, the Arbitration Act

carries the imperative that what is permissible under the law ought to be

performed only in the manner indicated, and not otherwise. Accordingly,

matters governed by the Arbitration Act such as the arbitration agreement,

appointment of arbitrators and competence of the Arbitral Tribunal to rule on

its jurisdiction have to be assessed in the manner specified under the law. The

corollary is that it is not permissible to do what is not mentioned under the

29

Arbitration Act. Therefore, provisions of other statutes cannot interfere with

the working of the Arbitration Act, unless specified otherwise.

94. The Arbitration Act represents the principles of modern arbitration, which

seeks to give effect to the mutual intention of the parties to resolve their disputes

by a neutral third-party Arbitral Tribunal, whose decision is final and binding

on all the parties. Arbitration law allows the parties to design arbitral

procedures, which ensures efficiency and expediency of the arbitration process.

One of the reasons that business and commercial entities prefer arbitration is

because it obviates cumbersome judicial processes, which can often prove

expensive, complex and interminable. Most legal jurisdictions have also

recognised and adopted legal approaches that favour arbitration at both the

domestic and international level. In the process, national courts have given

effect to principles such as the separability presumption and jurisdictional

competence of the Arbitral Tribunal. Modern arbitration law does not

completely restrict the role of national courts in the arbitration process, but

gives priority to the Arbitral Tribunal to decide on disputes and issues

pertaining to arbitration agreements as well as the substantive rights of the

parties. The Arbitration Act reflects these aspects of modern arbitration law. It

is the duty of this Court to interpret the Arbitration Act in a manner which

gives life to the principles of modern arbitration in India.”

11.6.This position was reaffirmed in Central Organisation for Railway

Electrification v. ECI SPIC SMO MCML (JV)

19

, wherein, this Court reiterated

that proceedings under Section 11 are strictly facilitative and not adjudicatory in

nature, and that issues relating to validity or jurisdiction must be left to the

arbitral tribunal. The following paragraphs are pertinent in this regard:

“H. Necessity of maintaining the principle of minimum judicial interference

165. In Interplay Between Arbitration Agreements under A&C Act, 1996 & Stamp Act,

1899, In re [Interplay Between Arbitration Agreements under A&C Act, 1996 &

Stamp Act, 1899, In re, (2024) 6 SCC 1, para 92] a seven-Judge Bench of this Court

emphasised the importance of minimal judicial interference by the courts at the

Section 11 stage. This Court held that the scope of the proceedings under Section 11

must be confined to the existence of an arbitration agreement. The Court further

observed : (SCC pp. 87-88, paras 165-67)

19

(2025) 4 SCC 641

30

“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 [Duro Felguera, S.A. v.

Gangavaram Port Ltd., (2017) 9 SCC 729 : (2017) 4 SCC (Civ) 764], 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 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. …

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 mini-trial 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.

167. Section 11(6-A) uses the expression “examination of the existence of an

arbitration agreement”. The purport of using the word “examination”

connotes that the legislature intends that the Referral Court has to inspect or

scrutinise the dealings between the parties for the existence of an arbitration

agreement. Moreover, the expression “examination” does not connote or imply

a laborious or contested inquiry. On the other hand, Section 16 provides that

the Arbitral Tribunal can “rule” on its jurisdiction, including the existence

and validity of an arbitration agreement. A “ruling” connotes adjudication of

disputes after admitting evidence from the parties. Therefore, it is evident

that the Referral Court is only required to examine the existence of

arbitration agreements, whereas the Arbitral Tribunal ought to rule on its

jurisdiction, including the issues pertaining to the existence and validity of

an arbitration agreement.”

31

The Constitution Bench held that the nature of objections to the jurisdiction of an

Arbitral Tribunal on the basis that stamp duty has not been paid or is inadequate

cannot be decided on a prima facie basis. [Interplay Between Arbitration Agreements

under A&C Act, 1996 & Stamp Act, 1899, In re, (2024) 6 SCC 1, para 207] Hence, it

was observed that objections of such a kind will require a detailed consideration of

evidence and submissions and a finding as to the law as well as the facts.

166. At the Section 11 stage, a referral court only has to determine the existence of

arbitration agreement. The validity of the arbitration clause providing for the

procedure for appointment of arbitrators will require the referral court to enter into

a detailed consideration of evidence and render a finding as to law and facts. This

issue should be left to be decided by the Arbitral Tribunal in view of the doctrine of

competence-competence. The Arbitral Tribunal is competent to rule on its

jurisdiction, including the issue of validity of the arbitration clause for violating the

equality principle under the Arbitration Act.

(Emphasis Supplied)

Thus, the entire scheme of the Act strongly discourages any mid-way judicial

intervention, especially by way of review, as it would run contrary to both the

text and the spirit of the statute.

11.7.Although the power exercised by the High Court under Section 11 is

judicial in nature post - SBP & Co. case, its scope remains narrow. Once an

arbitrator is appointed, the arbitral process must proceed unhindered. There is no

statutory provision for review or appeal from an order under Section 11, which

reflects a conscious legislative choice.

11.8.While High Courts, as courts of record, do possess a limited power of

review, such power is extremely circumscribed in matters governed by the

Arbitration Act. It may be exercised only to correct an error apparent on the face

32

of the record or to address a material fact that was overlooked. It cannot be used

to revisit findings of law or reappreciate issues already decided.

11.9.In Grindlays Bank Ltd v. Central Government Industrial Tribunal and

others

20

, this Court drew a clear distinction between procedural review and

review on merits, holding that the latter is impermissible unless expressly

provided. Applied to the Arbitration Act, this means that review is available

only to cure a patent or procedural error – not to reopen interpretation of the

arbitration agreement.

11.10. Referring to the aforesaid decision in Bharat Heavy Electricals Limited

v. Jyothi Turbopower Services Private Limited

21

, in which, one of us

(R. Mahadevan, J.) was a member, the Madras High Court held that while a

Tribunal has no inherent power to undertake a review on merits, it nonetheless

possesses the inherent procedural power to recall an order terminating the

proceedings. It cannot be that a constitutional court of record lacks such power,

to presume otherwise would amount to a constitutional fallacy. The Court

further observed that the A&C Act, 1996 is a complete code in itself and is

premised on minimal judicial intervention in arbitral proceedings. The following

paragraphs are apposite:

“18. The learned Arbitrator has also opined that an order under Section 25(a)

of the said Act cannot be construed to be an award as there is no decision on

merit and thus, it may not be possible to maintain an appeal under Section 34 of

the said Act (reliance was placed on the decision of the Division Bench of the

Delhi High Court in ATV Projects India vs. IOC & another, (2013) 200 DLT

20

(1980) supp SCC 420

21

2016 SCC OnLine Mad 4029 : 2016-3-L.W. 683

33

553). The learned Arbitrator thus opined that since a party cannot be without a

remedy, what should be the remedy in such a situation needed to be examined.

The Tribunal, while accepting that there cannot be any power of review inherent

in character, that proposition would apply to decision on merits. However, with

respect to procedural review, the implied power is available with the Tribunal to

deal with petitions similar to the ones in the present case. The observations

made by the Hon'ble Supreme Court in Grindlays Bank Ltd. vs. the Central

Govt. Industrial Tribunal, reported in AIR 1981 SC 806, in latter part of para 13

were specifically referred to, which are once again extracted as under:

''13. ....... Furthermore, different considerations arise on review. The

expression 'review' is used in the two distinct senses, namely (1) a

procedural review which is either inherent or implied in a Court or

Tribunal to set aside a palpably erroneous order passed under a

misapprehension by it, and (2) a review on merits when the error sought

to be corrected is one of law and is apparent on the face of the record. It

is in the latter sense that the Court in Patel Narshi Thakershi case (AIR

1970 SC 1273) held that no review lies on merits unless a statute

specifically provides for it. Obviously when a review is sought due to a

procedural defect, the inadvertent error committed by the Tribunal must

be corrected ex debito justitiae to prevent the abuse of its process, and

such power inheres in every Court or Tribunal.''

“27. We reject the plea of the learned counsel for the petitioner that on

termination of proceedings under Section 25(a) of the said Act, the Arbitrator

becomes functus officio, as he is a persona designata. Both the methods of

appointment of Arbitrator are possible, i.e. by consent or through the process of

Court. The position would not be different in the two situations. It is not as if

there is a better sanctity to the appointment of an Arbitrator which enlarges the

power if he is appointed by mutual consent, while there are abridged powers if

he is not appointed by the Court.”

“29. We are also in agreement with the views of both the Calcutta and Delhi

High Courts and in view of the aforesaid finding, that the remedy under Article

226 of the Constitution of India is not really available as the aforesaid is the

appropriate remedy. The invocation of jurisdiction of this Court by the

petitioner is, in turn, predicated on a belief that either of the parties aggrieved

have to approach this Court under its extraordinary writ jurisdiction. However,

we have already explained the remedy available and any further challenge to an

order which may be passed in such application would, in turn, depend on the

fate of it. The said Act is a complete code in itself and the basis is that there

should not be periodic judicial intervention in arbitration proceedings. Were a

favourable order to be passed commencing arbitration proceedings, the option

would only be to challenge the award, if so advised, under Section 34 of the said

34

Act. Similarly, if the application was to be dismissed, the position would really

be no different.”

11.11. The decisions such as Municipal Corporation of Greater Mumbai and

another v. Pratibha Industries Ltd. and others

22

, and Mohd. Anwar & others v.

Pushpalata Jain & others

23

, illustrate this narrow window, where review was

permitted only because the earlier orders had been passed in ignorance of

fundamental facts. These cases are confined to procedural lapses, not to re-

examining matters of law.

11.12. By contrast, in the present case, the High Court reopened the issue of

interpretation of the arbitration clause based solely on a subsequent judgment.

Such an exercise falls squarely outside the scope of review jurisdiction. Even

assuming that a review was maintainable, it was filed after an unexplained delay

of nearly three years and was not founded on any error apparent on the face of

the record or any suppression of material fact.

11.13. Once the Section 11 order had attained finality, the only remedies

available to the respondents were to approach this Court under Article 136 or to

raise objections under Section 16 before the arbitral tribunal. Having chosen

neither route, and having participated in the arbitral proceedings, including joint

applications under Section 29A, they were estopped from reopening the matter

through review. A later judgment cannot revive a concluded cause of action.

22

(2019) 3 SCC 203

23

SLP (C) No. 4820 of 2021 dated 05.04.2021

35

11.14. As emphasized in BSNL v. Nortel Networks (India) (P) Ltd (supra),

courts must resist “attempts to re-enter through the back door what the statute

has shut through the front door”. Section 11 is intended to trigger arbitration, not

to create multiple stages of judicial reconsideration.

11.15. For the reasons discussed above, this Court is of the considered view

that the High Court did not have the jurisdiction to reopen or review its earlier

order passed under Section 11(6) of the A&C Act. Once the appointment was

made, the court became functus officio and could not sit in judgment over the

very issue it had already settled. The review order cuts against the grain of the

Act, undermines the principle of minimal judicial interference, and effectively

converts the review into an appeal in disguise. Such an exercise cannot stand.

Accordingly, this issue is answered in the negative.

12.Issue No.2

Whether a valid and subsisting arbitration agreement exists between the

parties within the meaning of Section 7 of the A&C Act, and whether

Clause 25 of the agreement satisfies the statutory requirements of an

arbitration clause.

12.1.Section 7 of the A&C Act defines an “arbitration agreement” and

stipulates the manner in which it may be proved. While sub-section (3)

mandates that such an agreement must be in writing, Section 7(4)(c)

36

significantly widens the evidentiary scope by recognizing a valid arbitration

agreement even where it is evidenced through an exchange of statements of

claim and defence, provided that one party asserts the existence of such an

agreement and the other does not deny it.

12.2.This formulation derived from Article 7(2) of the UNCITRAL Model

Law, reflects a liberal legislative design that places primacy on the parties’

intention to arbitrate rather than on formalistic requirements. What matters is the

meeting of minds, not the mode in which that understanding is recorded.

12.3.This Court has consistently adopted a purposive interpretation of Section

7(4)(c). In S.N. Prasad, Hitek Industries (Bihar) Ltd. v. Monnet Finance Ltd.

and others

24

, it was held that the expression “statement of claim and defence” is

not confined to pleadings before an arbitral tribunal, but extends to judicial

proceedings where the existence of an arbitration agreement is asserted, but not

specifically disputed.

12.4.Likewise, in State of West Bengal v. Sarkar & Sarkar

25

, this Court

reiterated that active participation in arbitral proceedings without objection may

itself constitute sufficient evidence of a valid and subsisting arbitration

agreement. Similarly, in Mahanagar Telephone Nigam Limited v. Canara

Bank and others

26

, it was held that even without a formally executed arbitration

24

(2011) 1 SCC 320

25

(2018) 12 SCC 736

26

(2020) 12 SCC 767

37

clause, a valid arbitration agreement can be inferred from the conduct of parties,

including participation in arbitration and exchange of pleadings without denial.

12.5.These authorities make it abundantly clear that the true test lies not in

technical formality, but in intention. Where parties have acted on a shared

understanding to arbitrate, they are estopped from subsequently denying the

existence of such an agreement.

12.6.Applying these principles to the present case, the record unequivocally

demonstrates the existence of an arbitration agreement between the parties.

Pursuant to Clause 25 of the contract, arbitral proceedings were formally

commenced on 13.09.2021. More than seventy hearings were conducted before

the sole arbitrator, during which both parties actively participated, filed

pleadings, paid fees, and incurred substantial costs.

12.7.It is also significant to note that in an earlier dispute between the same

parties, arising from the same contractual framework, arbitration had been

invoked under Section 11, and the respondents had accepted the resulting award

without protest. Such consistent conduct fortifies the conclusion that both

parties intended to, and indeed did, submit their disputes to arbitration.

12.8.These circumstances collectively establish a clear meeting of minds and

constitute compelling evidence of a valid and subsisting arbitration agreement

within the meaning of Section 7(4)(c). Having invoked and participated in the

arbitral process, the respondents cannot now be permitted to resile from its

earlier position.

38

12.9.Clause 25 of the agreement reads as follows:

“Except where otherwise provided in the contract all questions and disputes

relating to the meaning of the specifications, design, drawings and instructions

here-in-before mentioned and as to the quality of workmanship or materials

used on the work or as to any other question, claim right matter or thing

whatsoever in any way arising out of or relating to contract, designs, drawings,

specifications, estimates, instructions, orders or these conditions or otherwise

concerning the works or the execution or failure to execute the same whether

arising during the progress of the work or after the cancellation, termination,

completion or abandonment thereof shall be dealt with as mentioned

hereinafter.

(i) If the Agency considered any work demanded of him to be outside the

requirements of the contract, or dispute any drawings, record or decision given

in writing by the Engineer-in-charge on any matter in connection with or arising

out of the contract or carrying out of the contract or carrying out of the work, to

be unacceptable, he shall promptly within 7 days request the Dy. Chief Engineer

in writing for written instruction or decision. Thereupon, the Dy. Chief Engineer

shall give his written instructions or decision within a period of fifteen days from

the receipt of the Agency’s letter.

If the Dy. Engineer fails to give his instructions or decision in writing within the

aforesaid period or if the Agency is dissatisfied with the instructions or decision

of the Dy. Chief Engineer, the Agency may, within 15 days of the receipt of Dy.

Chief Engineer decision, appeal to the Managing Director who shall afford an

opportunity to the Agency to be heard, if the latter so desires, and to offer

evidence in support of his appeal. The Managing Director shall give his decision

within 30 days of receipt of Agency’s appeal. If the Agency is dissatisfied with

this decision the Agency shall within a period of 30 days from receipt of the

decision, give notice to the Managing Director for appointment of arbitrator

failing which the said decision shall be final binding and conclusive and not

referable to adjudication by the arbitrator.

ii) Except where the decision has become final, binding and conclusive in terms

of Sub Para (i) above disputes or difference shall be referred for adjudication

through arbitrator appointed by Managing Director, the administrative head of

the aid Bihar Rajya Pul Nigam Ltd. If the arbitrator so appointed is unable or

unwilling to act or resign his appointment or vacates his office due to any

reason whatsoever another sole arbitrator shall be appointed in the manner

aforesaid. Such persons shall be entitled to proceed with the reference from the

stage at which it was left by his predecessor.

It is a term of this contract that the party invoking arbitration shall give a list of

disputes with amounts claimed in respect of each such dispute along with the

notice for appointment of arbitrator and giving reference to the rejection by the

Managing Director of the appeal.

39

It is also a term of this contract that no person other than a person appointed by

such Managing Director or administrative head of the Nigam as aforesaid

should act as arbitrator and if for any reason that is not possible, the matter

shall not be referred to arbitrator at all.

It is also a term of this contract that if the Agency does not make any demand for

appointment of arbitrator in respect of any claims in writing as aforesaid within

45 days of receiving the intimation from the Engineer-in-Charge that the final

bill is ready for payment, the claim of the Agency shall be deemed to have been

waived and absolutely barred and the B.R.P.N.N.L. TD shall be discharged and

released of all liabilities under the contract in respect of these claims.

The arbitration shall be conducted in accordance with the provisions of the

Arbitration and Conciliation Act, 1996 (26 of 1996) or any statutory

modifications or re-enactment thereof and the rules made thereunder and for the

time being in force shall apply to the arbitration proceedings under this clause.

It is also a term of the contract that if any fees are payable to the arbitrator

these shall be paid equally by both the parties.

It is also a term of the contract that the arbitrator shall be deemed to have

entered on the reference on the date he issues notice to both the parties calling

them to submit their statement of claims and counter statement of claims. The

venue of the arbitration shall be such place as may be fixed by the arbitrator in

his sole discretion. The fees, if any, of the arbitrator shall, if required to be paid

before the award is made and published, be paid half and half by each of the

parties. The cost of the reference and of the award (including the fees, if any, of

the arbitrator) shall be in the discretion of the arbitrator who may direct to any

by whom and in what manner such costs or any part thereof shall be paid and

fix or settle the amount of costs to be so paid.

All arbitration shall be held at PATNA and at no other place.”

A plain reading of Clause 25 reveals two components: (i) an unequivocal

mandate that disputes “shall be referred to arbitration”, and (ii) a procedural

stipulation that vests exclusive power in the Managing Director to appoint the

arbitrator and forecloses arbitration altogether if such appointment is not made.

While the first component clearly evidences a binding intention to arbitration,

the latter imposes an arbitrary and exclusionary condition, incompatible with the

fundamental principles of neutrality and equality that underpin the arbitral

process.

40

12.10. This Court has consistently distinguished between the existence of an

arbitration agreement and the validity of the appointment procedure. In TRF Ltd

(supra) and Perkins Eastman Architects DPC (supra), it was held that while a

named authority may be ineligible to act as arbitrator, such ineligibility does not

invalidate the arbitration agreement itself.

12.11. This principle was reaffirmed in Central Organisation for Railway

Electrification v. ECI SPIC SMO MCML (JV)

27

, and conclusively settled by

the Constitution Bench in CORE II v. ECI SPIC SMO MCML (JV)

28

, wherein,

it was held that unilateral appointment clauses in public-private contracts violate

Article 14 and offend the principle of nemo judex in causa sua. The Constitution

Bench observed in paragraph 164 as follows:

“Unilateral appointment clauses in a public-private contract fail to provide the

minimum level of integrity required in authorities performing quasi-judicial

functions such as arbitral tribunals. Therefore, a unilateral appointment clause

is against the principle of arbitration, that is, impartial resolution of disputes

between parties. It also violates the nemo judex rule which constitutes the public

policy of India in the context of arbitration. Therefore, unilateral appointment

clauses in public-private contracts are violative of Article 14 of the Constitution

for being arbitrary, in addition to being contrary to the equality principle under

the Arbitration Act.”

12.12. Accordingly, the portion of Clause 25 that vests exclusive appointment

power in one party and forecloses arbitration in default of such appointment

must be severed as void and unenforceable. However, the substantive agreement

to arbitrate survives by virtue of the doctrine of severability.

27

(2020) 14 SCC 712

28

(2025) 4 SCC 641

41

12.13. The legal position is now settled. In Offshore Infrastructures Ltd. v.

Bharat Petroleum Corporation Ltd.

29

, this Court held that even where a clause

contains an otherwise defective unilateral appointment mechanism, the Court

may sever the offending portion and exercise its power under Section 11(6) to

appoint an independent arbitrator, thereby giving effect to the parties’ genuine

intention to arbitrate. The following paragraphs are pertinent in this regard:

“19. The Respondent contends that once the arbitration clause referred to in the

GCC has become obsolete and non-operative, it would render the entire

arbitration mechanism non-existent therefore the Appellant cannot file an

application for appointment of arbitrator.

20. We are not persuaded by this submission of the Counsel for Respondent. The

very existence of the arbitration clause in the GCC referring to all disputes to

arbitrator is the core part of contract. Merely because the procedure to appoint

an arbitrator provided in the clause has become inoperative due to subsequent

changes in statutory provisions, would not mean that the core of the contract

referring the dispute for adjudication to arbitrator would be rendered

nugatory. The amendment in the statute has been enacted with the legislative

intent to enforce neutrality of the arbitrator and bring impartiality in

arbitration proceedings by virtue of Section 12(5) of the 1996 Act. It cannot be

justified to literally interpret the clause in the contract in a manner or at the

cost of the entire arbitration mechanism itself being abandoned. The

arbitration agreement must be interpreted in a purposive manner, but not

literally so as to enable the parties to pursue the intended dispute redressal

mechanism of contract. Therefore, it cannot be said that non-operation of

arbitration clause in GCC will result into forgoing of entire arbitration

mechanism and rendering the Appellant disentitled for seeking appointment of

arbitrator. The Appellant is, therefore, entitled to file application under section

11(6) of the 1996 Act for appointment of arbitrator and thereby the power is

vested with the court to appoint an arbitrator upon filing of such application.”

The Court further cautioned that refusing to sever such clauses would

effectively confer on the dominant party a “nuclear veto” to defeat arbitration

29

2025 SCC OnLine SC 2147

42

altogether– a result wholly inconsistent with the pro-arbitration policy of the Act

and violative of Article 14.

12.14. The present contract, being a public -private contract, must withstand

not only conventional contractual scrutiny but also constitutional scrutiny. As

held in CORE II, arbitral appointments in public contracts must satisfy the

requirements of fairness, equality, and non-arbitrariness under Article 14.

12.15. The sub-clause in Clause 25 which provides that “if for any reason the

matter shall not be referred to arbitration” is vague, uncertain, and arbitrary. The

expression “for any reason” confers an unguided and absolute veto, particularly

objectionable in a public contract. Such a clause fails the test of manifest

arbitrariness and violates Section 18 of the Act, which mandates equal treatment

of parties.

12.16. In light of the above discussion, the following propositions emerge:

(i)The parties’ conduct clearly demonstrates their intention to arbitrate,

satisfying the requirement of Section 7(4)(c);

(ii)Clause 25, in its substantive form, constitutes a valid arbitration

agreement;

(iii)The unilateral and exclusionary appointment mechanism is void and

severable; and

(iv)This Court is empowered under Section 11(6) to cure the defect and

appoint an independent arbitrator.

43

12.17. Accordingly, it is held that a valid and subsisting arbitration agreement

exists between the parties. Clause 25, when read in its entirety and construed in

accordance with the doctrine of severability, satisfies the statutory requirements

of an arbitration clause under Section 7 of the Act. The contrary finding of the

High Court is unsustainable in law and is liable to be set aside.

13.Issue No. 3

Whether the joint application filed by both parties, seeking extension of the

arbitral mandate under Section 29A amounts to an express or implied

waiver under Section 4 read with the proviso to Section 12(5) of the Act.

13.1.Waiver is a foundational principle of arbitration, rooted in party

autonomy and fairness in conduct. Arbitration, being adversarial in nature,

inevitably results in a winning and a losing side. The legislative rationale in

codifying waiver is to ensure that parties do not secure a second bite at the

cherry after an unfavourable outcome. Parties are not permitted to sleep over

their rights. This statutory policy is in harmony with the scheme of minimal

judicial intervention, where the grounds for interference with an arbitral award

are narrow, and waiver operates as a significant bar to belated objections.

13.2.Though waiver, acquiescence, and estoppel are often discussed together

in arbitral jurisprudence, they occupy distinct conceptual spaces. Waiver is the

intentional relinquishment of a known right; acquiescence arises from passive

acceptance or delay; and estoppel precludes a party from resiling from a

44

representation on which the other has relied. The Act, however, incorporates

only the doctrine of waiver – presuming parties to be conscious of their conduct

and its consequences. The Act elevates silence to waiver by importing an

element of intent, thereby preventing parties from approbating and reprobating.

A party who has actively participated or consented to continuation of the

proceedings cannot later challenge the same process merely because the result is

adverse. The legislative design thus discourages tactical objections and

multiplicity of proceedings.

13.3.Section 12(5), read with the Seventh Schedule, introduces a mandatory

disqualification for certain categories of persons from acting as arbitrators, such

as employees, consultants, advisors, or those having financial or professional

ties with a party. By the 2015 Amendment, the provision came to embody the

twin pillars of independence and impartiality in arbitration. The proviso to

Section 12(5) creates a narrow exception: such ineligibility may be waived only

through an express agreement in writing, and only after disputes have arisen.

The deliberate use of this phrase reflects a conscious legislative choice to

exclude any notion of implied or inferred waiver.

13.4.In contrast, Section 4 embodies the broader principle of waiver by

conduct – where a party, knowing of any non-compliance with the Act or the

arbitration agreement, proceeds with the arbitration without timely objection.

Rooted in party autonomy, Section 4 prevents parties from raising tactical or

belated objections after having substantially participated. Thus, while Section

45

12(5) demands an express post-dispute written waiver, Section 4 covers all other

situations involving informed inaction or acquiescence.

13.5.In Bharat Broadband Network Ltd. v. United Telecoms Ltd

30

, this Court

held that once a person falls within the disqualifications of the Seventh

Schedule, he becomes de jure ineligible to act as an arbitrator. The appointment

is void ab initio and the mandate terminates automatically under Section 14(1)

(a). The Court emphasized that such disqualification is absolute and capable of

being waived only through an express post-dispute written agreement.

13.6.This position was reiterated in Ellora Paper Mills Ltd. v. State of

Madhya Pradesh

31

, where the Court held that mere participation in arbitration

proceedings does not amount to waiver of statutory ineligibility. While these

decisions do not directly address Section 29A, the legislative intent behind the

phrase “express agreement in writing” remains unambiguous: implied waiver,

acquiescence, or estoppel cannot cure Section 12(5) ineligibility.

13.7.Conversely, in Quippo Construction Equipment Ltd. v. Janardan

Nirman Private Limited

32

, this Court held that failure to object or non-

participation, resulting in an ex parte award, amounts to a deemed waiver under

Section 4. The governing principle is that objections may be raised at any stage,

but not after a party has, through conduct or delay, waived its right.

30

(2019) 5 SCC 755

31

(2022) 3 SCC 1

32

(2020) 18 SCC 277

46

13.8.In the present case, the respondents had ample opportunity to object.

Instead, both parties jointly moved for extension under Section 29A, not once

but thrice. This leads directly to the interplay between Sections 4, 12(5) and

29A.

13.9.Section 29A empowers courts to extend the mandate of an arbitral

tribunal, either on a party’s application or upon sufficient cause. Its object is to

prevent termination of proceedings by efflux of time and to ensure continuity. A

joint application under Section 29A stands on a distinct footing from ordinary

acts of participation such as filing pleadings. When both parties jointly seek an

extension, they signify continued consent and confidence in the tribunal. Under

Section 29A(5), even a single party may apply; the other is free to oppose. The

Court may, in its discretion, extend the mandate with or without substituting the

arbitrator.

13.10. Thus, when a party joins in seeking extension under Section 29A despite

having the opportunity to object or seek termination, it signifies a higher degree

of consent. However, such consent cannot be equated with an express written

waiver under Section 12(5). The statutory language is categorical: only an

express written post-dispute waiver can cure Seventh Schedule ineligibility.

13.11. Reconciling Sections 4, 12(5) and 29A

Section 12(5) addresses inherent ineligibility – a structural defect

affecting jurisdiction.

Section 4 governs procedural waiver by conduct.

47

Section 29A concerns extension of mandate, where joint invocation

indicates consent but not an express written waiver.

The harmonious construction lies in recognizing that only Seventh Schedule

disqualifications attract the stringent waiver regime of Section 12(5). In all other

cases viz., procedural lapses, delays, or non-jurisdictional irregularities, Section

4 applies. Accordingly, a joint application under Section 29A amounts to a valid

waiver under Section 4, save in cases of statutory ineligibility under Section

12(5). Any contrary view would render Section 4 redundant and distort the

legislative design.

13.12. Where the disqualification under Section 12(5) is attracted, the language

being plain and mandatory, a joint application merely seeking extension,

without an informed written waiver, cannot cure ineligibility. Conversely, where

no such disqualification exists, the conduct of the parties, especially in jointly

invoking Section 29A, constitutes waiver under Section 4.

13.13. In conclusion, Section 12(5) protects impartiality; Section 4 regulates

procedural conduct; and Section 29A ensures continuity of proceedings. In the

present case, since no Seventh Schedule disqualification is attracted, the High

Court’s reliance on the rigours of Section 12(5) was misplaced. Viewed through

the lens of Section 4, the respondents’ conduct clearly amounts to waiver by

participation and consent.

48

Application of Kashish Developers

14.In the present case, the respondents have placed considerable reliance on

the fact that the decision in Kashish Developers, which was referred to by the

High Court in the impugned judgment, stands “affirmed” on account of the

dismissal of the Special Leave Petition. However, the circumstances in Kashish

Developers involved an appointment made without affording the State an

opportunity to oppose it. Whereas, the present matter arose after extensive

pleadings, objections, and participation by both parties. The two cases are

therefore factually distinct, and such reliance cannot justify revisiting or

unsettling the earlier appointment order.

14.1.It is necessary to restate the well-settled legal position regarding the

precedential value of orders dismissing Special Leave Petitions. A non-speaking

dismissal of an SLP signifies only that this Court, in its discretion under Article

136, has declined to interfere. It does not amount to approval of the reasoning of

the subordinate forum. The doctrine of merger does not apply to such

dismissals. This position has been consistently affirmed by this Court, including

in Kunhayammed and others v. State of Kerala and another

33

; and

P. Singaravelan and others v. District Collector, Tiruppur and others

34

.

33

(2000) 6 SCC 359

34

(2020) 3 SCC 133

49

14.2.Similarly, in State of Uttar Pradesh and others v. Atul Kumar Dwivedi

and others

35

, after reviewing earlier authorities, this Court reiterated that

dismissal of an SLP at the threshold without reasons does not elevate the

underlying judgment to binding precedent unless accompanied by an express

declaration of law under Article 141.

14.3.Accordingly, the respondents’ reliance on the supposed “affirmation” of

Kashish Developers is wholly misconceived. A non-speaking dismissal of an

SLP neither endorses the reasoning of the judgment challenged nor transforms it

into binding precedent. At best, such a decision has persuasive value; its only

legal effect is to bring finality to the dispute between the parties in that

particular case.

CONCLUSION

15.In the present case, the High Court had itself appointed the arbitrator in

2021 under Section 11(6) of the Act. Both parties participated fully, and more

than seventy hearings took place. The High Court also extended the arbitrator’s

mandate twice under Section 29A. At that stage, the High Court could not, by

invoking its jurisdiction under Articles 226 and 227, retrospectively invalidate

its own appointment order on the strength of a subsequent interpretation of a

similar clause in another matter. Such an approach undermines certainty, dilutes

the sanctity of judicial orders, and erodes confidence in the arbitral process.

35

(2022) 11 SCC 578

50

16.Once the High Court had accepted the existence of a valid arbitration

agreement and appointed an arbitrator, its later interference on the same

question of the validity of Clause 25 amounted, in substance, to an appeal

disguised as supervisory review. If the arbitrator had become unable to act

owing to recusal or disqualification, the proper course was to invoke Section

15(2) and appoint a substitute arbitrator to continue from the existing stage of

the proceedings.

17.Sections 15(1) and 15(2) clearly provide that an arbitrator’s mandate

terminates upon withdrawal or by agreement of the parties, and that a substitute

arbitrator must be appointed following the same procedure as the original

appointment. The judgments in Yashwith Constructions (P) Ltd v. Simplex

Concrete Piles (India) Ltd. and another

36

, ACC Ltd v. Global Cements Ltd.

37

,

and Union of India v. Pradeep Vinod Construction Company

38

, reaffirm that

such substitution preserves continuity, and prior proceedings remain valid

unless either party objects. In light of the same, the High Court’s decision to

suspend the arbitration altogether, instead of ordering substitution, was contrary

to settled law. The exercise of jurisdiction therefore calls for correction under

Article 136 of the Constitution. Accordingly, the impugned judgment and order

of the High Court is set aside.

36

(2006) 6 SCC 204

37

(2012) 7 SCC 71

38

(2020) 2 SCC 464

51

18.On the facts of this case, restarting the arbitral process de novo would be

both inequitable and inefficient. It is just and proper that the progress already

made be preserved. Therefore, the High Court is directed to appoint a substitute

arbitrator within two weeks from the date of receipt of this judgment. The newly

appointed arbitrator shall continue the proceedings from the stage at which they

were interrupted and endeavour to conclude them within one year, subject to

any further extension under Section 29A by mutual consent.

19.At this juncture, we are also constrained to take note of the conduct of the

respondent company, a public sector undertaking, which is far from satisfactory.

Despite repeated notices in appeal and requests for the appointment of an

independent arbitrator, the Managing Director chose to remain silent, thereby

compelling the appellant to seek judicial intervention. Such indifference by a

public authority, where contractual obligations demand prompt responsiveness,

falls short of the standards of fairness required of a State entity under Articles

14 and 298 of the Constitution.

19.1.As held in State of Bihar and others v. Kameshwar Prasad Singh and

another

39

and Urban Improvement Trust, Bikaner v. Mohan Lal

40

, the State

must act as a model litigant – fair, responsive, and transparent in its dealings.

Silence or procedural evasion by senior officers is inconsistent with the

constitutional trust reposed in public authorities. It is unfortunate that such

39

(2000) 9 SCC 94

40

(2010) 1 SCC 512

52

apathy had to be defended before a constitutional court as an administrative

prerogative.

19.2.Although this is a fit case for imposing costs, we refrain from doing so,

but issue a stern warning to the then Managing Director of the respondent

company, BRPNNL. Public Officers are custodians of public faith, not mere

administrators. Any repetition of such neglect may invite adverse remarks or

even personal accountability. The officer is advised to reflect upon the

responsibilities of public office and ensure that such indifference does not recur.

20.With the aforesaid directions and observations, this appeal is allowed.

There shall be no order as to costs.

21.Pending application(s), if any, stand disposed of.

.…………………………J.

[J.B. PARDIWALA]

.…………………………J.

[R. MAHADEVAN]

NEW DELHI;

NOVEMBER 28, 2025.