IN THE HIGH COURT AT CALCUTTA

ORIGINAL CIVIL JURISDICTION

ORIGINAL SIDE

COMMERCIAL DIVISION

BEFORE :-

THE HON’BLE JUSTICE SHAMPA SARKAR

AP (COM) No.- 262 of 2025

INDRANI SARANGI

vs.

RELIANCE PROJECTS AND

PROPERTY MANAGEMENT SERVICE LIMITED AND ANR.

For the Petitioner : Mr. Diptomoy Talukder. Adv.,

Mr. Siddharth Shroff, Adv.

For the Respondents : Mr. Aniruddha Chatterjee, Adv.

Mr. V.V.V Sastry, Adv.

Ms. Khushi Gupta, Adv.

Judgment Reserved on : 29.01.2026

Judgment Delivered on : 10.02.2026

Judgment Uploaded on : 10.02.2026

Shampa Sarkar, J.

1. The petitioner prays for appointment of an arbitral tribunal, for

settlement of disputes which arose between the petitioner and the

respondent as also the predecessor in interest of the respondent, in respect

of a lease agreement dated July 17, 2003. The petitioner contends that the

lease agreement was executed with Reliance Infocomm Ltd. Subsequently,

the said lease deed was amended on November 10, 2014. Reliance Infratel

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Ltd., (formerly known as Reliance Telecom Infrastructure Ltd.) which

demerged from Reliance Communications Ltd., (formerly Reliance Infocomm

Ltd.) and Reliance Telecom Ltd., (formerly Reliable Internet Services Ltd.),

was incorporated as the lessee in place of Reliance Infocomm Ltd.

2. M/s Reliance Infratel Ltd. (RITL) was admitted into insolvency under

the provisions of the Insolvency and Bankruptcy Code 2016, (in short IBC).

The National Company Law Tribunal, Mumbai, approved the resolution plan

submitted by the respondent No.1 and consequently, the respondent No. 1

had successfully taken over RITL with effect from December 22, 2022.

Pursuant to another scheme of arrangement approved by the Company Law

Tribunal, dated May, 11, 2023, the respondent No.1 transferred its passive

infrastructure business in favour of respondent No. 2. According to the

petitioner, the respondent No. 2 became the owner of the tower on the

leasehold land, which had been originally leased in favour of Reliance

Infocomm Ltd. The petitioner submitted that the expression lessee in the

original agreement dated July 17, 2003, namely, Reliance Infocomm Ltd.

included its successors and assigns. Thus, the agreement and the

arbitration clause were binding on the respondents.

3. Upon execution of the agreement dated July 17, 2003, Reliance

Infocomm Ltd. had taken on lease an open area of 1500 sq. ft. at Anwarpur,

pertaining to RS Dag No.305, Mouza -Bishnupur, J.L. No. 106 under Police

Station- Barasat, District No. 24 Parganas. The said premises was leased

out for creation of a tower and installation of various equipments. The

parties had agreed to certain terms and conditions. The agreement also

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contained an arbitration clause for settlement of disputes through

arbitration. Each party was to appoint an arbitrator and the third arbitrator

was to be appointed by the two appointed arbitrators.

4. The petitioner invoked the arbitration clause, for resolution of various

disputes which arose when certain terms and conditions of the lease

agreement were allegedly violated by the erstwhile lessee and its successors

i.e., the respondents.

5. The petitioner alleged that the deed stipulated that the lease rent

would be enhanced at a rate of 20% every three years. The lease stood

determined on July 31, 2023. Several rounds of discussions had taken place

between the petitioner and the respondent No. 1. Emails were exchanged

with multiple drafts of the newly proposed lease deed. The petitioner made

her best effort to renew the said agreement of 2003, but the respondent No.1

did not come up with any positive response. Consequently, by a letter dated

June 26, 2024, the respondent No. 1 was called upon to vacate the demised

premises. The petitioner sought reimbursement of the expenses incurred on

account of maintaining full-time security personnel and towards payment of

enhanced municipal taxes. By another letter da ted July 2, 2024, the

petitioner informed the respondent No. 1 that, as the lease had expired on

July 31, 2023, the respondent No.1 was liable to pay Rs. 78,000 /- per

month as rent for continued occupation of the property even after expiry of

the lease. The petitioner also communicated that the arrears were payable

from August 1, 2023, till such time the property was not vacated. The

petitioner's husband sent an email on July 16, 2024, to the respondent No.

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1, clarifying that, in the event the respondent No. 1 did not agree to an

enhanced rent, the petitioner would be left with no other option, but to

disconnect the supply of electricity from the property. The respondent No. 1

also filed an application under Section 144 of the Code of Criminal

Procedure 1973, against the petitioner. However, no official copy of the said

application was received either by the petitioner or by the petitioner's agent.

By several letters, the petitioner sought clarification from the respondent No.

1 with regard to the fate of the proposal for renewal and payment of the

outstanding. However, the respondent No. 1 did not send any answer to

such queries. Therefore, the parties sought to resolve the dispute amicably

and a settlement document was executed on July 24, 2024. Both the parties

agreed to withdraw their respective allegations and counter-allegations.

6. It was agreed that the petitioner would restore the electric supply to

the property, and the respondent No. 1 would clear all dues relating to the

security personnel, etc. By email dated August 8, 2024, the respondent No.1

informed the petitioner of its willingness to withdraw the application under

Section 144 of the Code of Criminal Procedures. The email also provided

some assurances to the petitioner. On September 2, 2024, the respondent

No.1 issued a letter to the petitioner, thereby, agreeing to vacate the

property and remove all telecom equipments. The respondent No. 1 also

requested refund of Rs 90,000/-, being the security deposit made in terms

of the lease agreement. Even after a series of communications and exchange

of letters between the parties, the dispute allegedly remained unresolved.

According to the petitioner, the dispute was with regard to unpaid rents,

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additional expenses incurred by the petitioner, occupational charges for

overstay by the respondents, amongst others . In the above-mentioned

circumstances, a sum of Rs 1,75,13,720/- was due and payable by the

respondent No. 1 to the petitioner, subject to final adjudication by the

competent authority. The petitioner also claimed interest at the rate of 18%

per annum till actual realization of the amount due. As the respondent No. 1

and its agency did not perform its obligations under the lease agreement, by

a notice dated October 1, 2024, the petitioner invoked the arbitration clause

for reference of the dispute to arbitration. Mr. Debashis Bose, a retired IAS

officer, was appointed as an arbitrator. The notice appointing the arbitrator

was duly forwarded to the respondent No. 1.

7. When the respondent tried to remove the telecommunication materials

from the property without settling the dues of the petitioner, the petitioner

filed an application under Section 9 of the Arbitration and Conciliation Act,

1996, (hereinafter referred to as the said Act) before the learned Additional

District Judge, 8

th

Court at Barasat for interim relief. An interim protection

was granted by the learned Civil court, restraining the respondent No.1 from

removing any machinery installed at the property un til the dues were

cleared. The respondent No. 1 preferred an appeal against the said order.

8. The nominated arbitrator accepted his appointment and scheduled a

hearing on October 30, 2024. The hearing was adjourned on that date as

the respondent failed to appear. Thereafter, the respondent No.1, vide a

letter dated October 25, 2024, objected to the unilateral appointment of the

arbitrator. The respondent No. 1 also filed an application under Section 14

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of the said Act, challenging the appointment of the arbitrator. The said

application was registered as AP COM 1050 of 2024. The said application

came up for hearing before this court on December 16, 2024, and by an

order dated December 16, 2024, the AP COM 1050 of 2024 was allowed,

thereby terminating the mandate of the unilaterally appointed arbitrator. AP

COM 1103 of 2024 was filed by the petitioner, seeking appointment of an

arbitrator soon after the respondent No.1 had approached this court for

termination of the mandate of arbitrator. AP COM 1103 of 2024, that is, the

application for appointment of an arbitrator filed by the petitioner was

dismissed by this court on the ground that the notice invoking arbitration

was not proper. Consequent thereupon, the petitioner issued a notice on

February 13, 2025, calling upon th e respondent to concur to the

appointment of an arbitral tribunal for adjudication of the dispute between

the parties.

9. By letter dated 12 March, 2025, the learned advocates for each of the

respondents denied the claims of the petitioner and submitted that the

claims were not arbitrable. No arbitration agreement existed between the

petitioner and either of the respondents.

10. It was submitted by Mr. Diptomoy Talukder, learned advocate for the

petitioner, that this was a fit case for appointment of an arbitral tribunal in

terms of the dispute resolution clause contained in the lease agreement

dated July 17, 2003.

11. Mr. Aniruddha Chatterjee. learned senior advocate appeared on behalf

of respondent No.1 and submitted that the petitioner did not enter into any

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agreement with the respondent No. 1. The dispute emanated from the lease

agreement dated July 17, 2003. The respondent No. 1 was a non-signatory.

The arbitration clause in the said lease agreement was not incorporated by

reference in the amendment agreement. The amendment agreement was

also not signed by respondent No. 1. Under the amendment, the entire

character of the lease agreement dated July 17, 2003 underwent a

substantial change. Two new entities were introduced by the amendment

agreement. Reliance Infratel Ltd. was added as a lessee and it was agreed

between the parties that in case Reliance Infratel Ltd. provided passive

telecom infrastructure services through Reliance Jio Infocomm Ltd, the

lessor would be entitled for additional rent and compensation. Therefore, the

respondent No. 1 was not connected with either the lease agreement or with

the amended lease agreement. Moreover, on May 15, 2018, Reliance Infratel

Ltd. was admitted into a Corporate Insolvency Resolution Process under

Section 7 of the IBC. On May 8, 2019, the Interim Resolution Professional

issued a public announcement inviting claims from cr editors of the

corporate debtor. During the Corporate Insolvency Resolution Process, the

respondent No. 1 submitted a resolution p lan which was subsequently

approved by the NCLT, Mumbai Bench on December 3, 2020.Pursuant to

the implementation of the Resolution Plan, on and from December 22, 2022,

the respondent No. 1 acquired 100% control an d ownership of Reliance

Infratel Ltd. Between May 15, 2018 and December 22, 2022, the Resolution

Professionals ensured payment of the monthly rents to the petitioner. The

petitioner did not submit any claims before the Resolution Professional

8

either towards arrear rent or outstanding dues towards maintenance of the

property, security personnel and municipal taxes. As the tenure of the lease

was to come to an end on and from July 31 , 2023, the petitioner and the

respondent No. 1 had been in constant d ialogue for renewal of the

agreement. However, the renewal did not take place. Even after the expiry of

the agreement, the respondent No. 1 had continued to pay the rentals on a

month-to-month basis and had paid the rent up to September 2024. It was

further submitted that the premises were vacated thereafter.

12. The claim of the petitioner seeking clearance of the arrear dues from

August 2003 would not in any event be recoverable from respondent No. 1.

The respondent No.1 had taken on the property pursuant to the order of the

NCLT, Mumbai, on a clean slate basis. Some of the clauses of the

Resolution Plan were relied upon, which are extracted below: -

“(a) Any stakeholder of the Corporate Debtor, including any

Creditor whether Financial Creditors, Employee s, Workmen,

Government and/or Statutory Authorities, Other Operational

Creditors, shareholders or any other stakeholder and all claims

and liabilities of any nature whatsoever (whether claimed or

unclaimed, admitted or not, due-or-contingent- asserted or um-

asserted, crystallised or uncrystallised, known or unknown,

disputed or undisputed) of the Corporate Debtor for any period

up to the Effective Date towards the Creditors and other

Stakeholders of the Corporate Debtor shall be extinguished and

settled, upon payment of the Total Resolution Amount on the

Effective Date, on and with effect from the NCLT Approval Date;

and

(b) Reliance Communications Limited, Reliance Telecom Limited

or any of their respective Affiliates or shareholders, employees,

workmen, promoters, financial creditors, operational creditors,

contracting counter-parties, Government and/or Statutory

Authorities or any other stakeholders (collectively "Group

Stakeholders") (in each case whether past, existing or future)

and all liabilities of any nature whatsoever (whether claimed or

unclaimed, admitted or not, due or contingent, asserted or un-

asserted, crystallised or uncrystallised, known or unknown,

9

disputed or undisputed) of the Corporate Debtor for any period

up to the Effective Date towards such Group Stakeholders (or

any person claims through or on behalf of them) shall be

extinguished and settled, upon payment of the Total Resolution

Amount on the Effective Date, on and with effect from the NCLT

Approval Date."

13. Mr Chatterjee urged that, the dues for the pre-CIRP period could not

be claimed from the respondent No.1. The resolution professional had paid

all the arrear rents to the petitioner. The claims were not arbitrable as the

debt stood discharged. Even assuming that there were arrear dues, those

stood extinguished after the Resolution Process had been successfully

admitted and effected. The status of the petitioner, was that of a debtor. In

the event the petitioner had any claims for the pre-CIRP period, the same

should have been raised before the Resolution Professional. The petitioner’s

claim could not be revived through arbitration.

14. It was further contended that, the dues between January 2023 to July

2023, were misconceived and not sustainable in law. The respondent No.1

continued to pay rent on a month-to-month basis till September 2024. The

petitioner relied upon a settlement between the parties, which did not

contain any arbitration clause. Moreover, the settlement amounted to

novation of the lease deed and the terms and conditions thereof. The

petitioner was trying to extort money from the respondent No. 1.

15. Mr. V.V.V Shastri, learned Advocate appeared on behalf of the

respondent No. 2. He submitted that the respondent No.2 was neither a

party to the lease agreement nor a party to the amended lease agreement.

The petitioner and respondent No.2 neither had any interaction nor any

business dealing in the entire process. The lease agreement had expired

10

when the respondent No.2 had taken over the passive infrastructure

business. The claims of the petitioner were denied on the grounds that they

were based on a settlement agreement which did not contain any arbitration

clause. Moreover, the settlement agreement resulted in the novation of the

lease agreement, which was executed between the petitioner and Reliance

Infocomm Limited, as also novation of the amended lease agreement by

which Reliance Infratel Ltd. was incorporated as a lessee. He prays that in

the absence of any agreement between the petitioner and the respondents

and especially in view of the fact that there was no arbitration agreement

between the parties, the application must be dismissed.

16. Considered the submissions of the learned Advocates for the

respective parties.

17. The issue before this Court is whether the dispute should be referred

to an arbitral tribunal in terms of the arbitration clause contained in lease

agreement dated July 17, 2003, which was entered into between the

petitioner as a lessor and Reliance Infocomm Ltd. as the lessee. The clause

is quoted below :-

“(g) It is hereby expressly agreed that if at any time there shall

arise any dispute,. doubt or difference or question with regard

to registration of this agreement or in respect of the rights,

duties & liabilities of the parties hereto assigns …………...

present then every dispute doubt difference or question shall be

referred to arbitration as per the provisions of the Arbitration &

Conciliation Act 1996 and title unless framed hereunder Two

arbitrators to be appointed, one by each of the parties and third

to be appointed by the said two arbitrators. The decision of the

Arbitrators shall be final and binding on the parties to this

Deed.”

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18. In the said agreement, Reliance Infocomm Ltd. was the lessee and the

expression included its successors and assigns. The relevant portion is

quoted below:-

“THIS LEASE AGREEMENT is made and entered into at Kolkata on

this 17th day of July, 2003 BETWEEN MRS. INDRANI SARANGI, wife

of Mr. Kalyan Sarangi, residing at BE-246, Sector - I, Salt Lake City,

Kolkata - 700064, hereinafter called the "LESSOR" (which expression

shall unless it be repugnant to the contract or meaning thereof shall

include the successor in Title and assigns) of the FIRST PART and

RELIANCE INFOCOM LTD., a Company incorporated under the

provisions of the Indian Companies Act, 1956 and having their

Registered Office at Avadeah Home, 3rd Floor, Preetam Nagar, Elite

Bridge, Ahmed - 380 006 and Circle Office at Reliance House, 34,

Chowringhee Road, Kolkata - 700071, hereinafter called "LESSEE"

which expression shall include their successor and assigns] of the

SECOND PART represented by Gandhi Sircar as its Constituted

Attorney.”

19. The lease was for a period of 20 years, with a 20% increase in the

lease rental every three years. The renewal clause is quoted below:-

“8 (f) It is hereby agreed occupier and tenants that the term of

the lease shall be 20 years with a 20% escalation in lease rental

adhoc every 3 years period.”

20. It is an admitted position that Reliance Infratel Limited stepped into

the shoes of the lessee. Reliance Infratel Ltd., (formerly known as Reliance

Telecom Infrastructure Ltd.) had demerged from Reliance Communications

Ltd., (formerly Reliance Infocomm Ltd.) and Reliance Telecom Ltd., (formerly

Reliable Internet Services Ltd.). In the amendment agreement, it was stated

that the lessee i.e., Reliance Infocomm Limited, intended to share its active

telecommunication infrastructure installed at the demised premise with

Reliance Jio Infocomm Limited or RJIL, who will be the customer of the

lessee and who in turn may have to set up additional antennas and other

equipments and the lessor had agreed to such clause on the terms and

12

conditions set forth in the amendment agreement. The relevant portion

thereof is quoted below:-

“B. The Lessee intends to share its passive Telecommunication

Infrastructure installed at the said Demised Premises with

Reliance Jio Infocomm Limited or RJIL (who will be the

Customer of Lessee) who in turn may have to set up additional

Antennas and other equipment’s (“Customer Telecom

Equipments”) and the LESSOR has agreed for the same on the

terms and conditions set forth herein below.

C) In the above premises, parties agree to amend princ ipal

agreement by executing this 1

st

Amendment to record the

amended terms and conditions in the Principal Agreement.”

21. The parties agreed that the terms and conditions in the amendment,

would become an integral part of the principal agreement with effect from

the date of execution of the amendment agreement dated November 10,

2014. It also provided that the amendment agreement and the principal

agreement shall be read and construed as one and the same document and

the first amendment shall be considered to be a part of the principal

agreement. The terms and conditions of the principal agreement would

remain unchanged and shall be in full force and effect, except as amended

by the amended agreement dated November 10, 2014. The parties also

agreed that the clauses of the principal agreement which were not in conflict

with any of the clauses of the amendment shall continue to apply with full

effect. Therefore, prima facie, the amendment agreement cannot be said to

be a separate agreement, distinct and severable from the lease agreement of

2003. By the amendment agreement, certain clauses were incorporated in

the existing agreement and a new entity was incorporated as the lessee. The

relevant portions are quoted below:-

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“RELIANCE INFRATEL LIMITED fo rmerly known as Reliance Telecom

Infrastructure Limited, demerged from Reli ance Communications

Limited (formerly Reliance Infocomm Limited) and Reliance Telecom

Limited (formerly Reliable Internet Services Limited respectively) a

company incorporated and registered under the Companies Act, 1955

and having its registered office at H Block, First Floor. Dhirubhai

Ambani Knowledge City. Navi Mumbai- 400 710 and Circle office at

Reliance House, 3

rd

Floor, 34, Chowringhee Road, Kolkata - 700071

(hereinafter referred to as LESSEE: which expression shall include its

permitted successors and assigns)”

22. Reliance Infratel Ltd., (formerly known as Reliance Telecom

Infrastructure Ltd.) which demerged from Reliance Communications Ltd.,

(formerly Reliance Infocomm Ltd.) and Reliance Telecom Ltd., (formerly

Reliable Internet Services Ltd.) became the lessee. Reliance Infratel Limited

was admitted into the CIRP under the provisions of the IBC and the

respondent No.1 as the successful resolution applicant, had taken over

Reliance Infratel Limited.

23. It is an admitted position that the respondent No.1 was running the

business from the demised premises and paying the rent. The resolution

professional was also paying the rent to the petitioner. It is also an admitted

position that the respondent No.1 had transferred its passive infrastructure

business in favour of the respondent No.2 and the respondent No.2 was

running the tower which was installed in the lease hold premises. The

possibility of RJIL operating the tower is also mentioned in the amendment

agreement. Therefore, the fact that the respondents had entered into the

property, and used the same to operate the tower and equipments as a part

of their telecom business, is, prima facie, available from the records.

Moreover, the series of correspondence between the petitioner and the

respondent No.1 further indicate that the issue of renewal of the lease deed

14

was being contemplated and deliberated upon by the parties, but the parties

did not come to an agreement. It is also alleged by the petitioner that the

respondent No. 2 continued to enjoy the property and occupied the same

after the expiry of the lease deed, on account of which the petitioner was

entitled to enhanced rent as per the terms of the deed of 2003 and the

renewal clause. The petitioner also claims occupational charges as the

property was being occupied by the respondents even after the lease had

expired. Further claims were in respect of payments made to security

personnel, torwards property tax etc. The respondent No.1 also claimed

return of the security deposit which was originally paid to the lessor. The

question of return of security money to the respondent No.1 would only

arise, if the respondent No. 1 considered itself to be entitled to the money

deposited by the original lessee. The resolution plan was approved in

December 2022, but records reveal that the respondent No.1 occupied the

premises and the lease was determined upon expiry of its term in July 2023.

The respondent No.2 took over the passive infrastructure business in May

2023 but the premises were occupied upto September 2024. Thus, whether

all debts were extinguished when the Respondent No.1 came into the picture

or not, is a triable issue.

24. Moreover, such issues touch the question of jurisdiction of the arbitral

tribunal and arbitrability of the dispute. They must be raised before the

learned tribual. Further, whether the arbitration clause could be invoked

against the respondents who are non-signatories to the lease deed is also an

issue to be decided by the learned tribunal. Prima facie, it appears that the

15

respondents had also acted on the basis of the lease deed and came in

possession of the demised premises on the basis of the same.

25. The law as to whether non-signatories can be bound by an arbitration

agreement has been developed by the Hon’ble Apex Court. Some of the

decisions are discussed below.

26. In Ajay Madhusudan Patel v. Jyotrindra S. Patel, reported in

(2025) 2 SCC 147, the Hon’ble Apex Court held as follows:-

“123. … The intention of the parties to be bound by an

arbitration agreement can be gauged from the circumstances

that surround the participation of the non-signatory party in

the negotiation, performance, and termination of the

underlying contract containing such agreement .

The Unidroit Principle of International Commercial Contract,

2016 [Unidroit Principles of International Commercial

Contracts, 2016, Article 4.3.] provides that the subjective

intention of the parties could be ascertained by having regard

to the following circumstances:

(a) preliminary negotiations between the parties;

(b) practices which the parties have established between

themselves;

(c) the conduct of the parties subsequent to the conclusion of

the contract;

(d) the nature and purpose of the contract;

(e) the meaning commonly given to terms and expressions in

the trade concerned; and

(f) usages.

***

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126. Evaluating the involvement of the non-signatory party in

the negotiation, performance, or termination of a contract is

an important factor for a number of reasons. First, by being

actively involved in the performance of a contract, a non-

signatory may create an appearance that it is a veritable party

to the contract containing the arbitration agreement; second,

the conduct of the non-signatory may be in harmony with the

conduct of the other members of the group, leading the other

party to legitimately believe that the non-signatory was a

veritable party to the contract; and third, the other party has

legitimate reasons to rely on the appearance created by the

non-signatory party so as to bind it to the arbitration

agreement.

***

127. … The nature or standard of involvement of the non -

signatory in the performance of the contract should be such

that the non-signatory has actively assumed obligations or

performance upon itself under the contract. In other words,

the test is to determine whether the non-signatory has a

positive, direct, and substant ial involvement in the

negotiation, performance, or termination of the contract. Mere

incidental involvement in the negotiation or performance of

the contract is not sufficient to infer the consent of the non-

signatory to be bound by the underlying contrac t or its

arbitration agreement. The burden is on the party seeking

joinder of the non-signatory to the arbitration agreement to

prove a conscious and deliberate conduct of involvement of

the non-signatory based on objective evidence.”

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27. In the matter of Chloro Controls India (P) Ltd. v. Severn Trent

Water Purification Inc., reported in(2013) 1 SCC 641, the Hon’ble Apex

Court held as follows:-

“70. Normally, arbitration takes place between the persons who

have, from the outset, been parties to both the arbitr ation

agreement as well as the substantive contract underlining

(sic underlying) that agreement. But, it does occasionally

happen that the claim is made against or by someone who is not

originally named as a party. These may create some difficult

situations, but certainly, they are not absolute obstructions to

law/the arbitration agreement. Arbitration, thus, could be

possible between a signatory to an arbitration agreement and a

third party. Of course, heavy onus lies on that party to show

that, in fact and in law, it is claiming “through” or “under” the

signatory party as contemplated under Section 45 of the 1996

Act. Just to deal with such situations illustratively, reference

can be made to the following examples in Law and Practice of

Commercial Arbitration in England (2

nd

Edn.) by Sir Michael J.

Mustill:

‘1. The claimant was in reality always a party to the contract,

although not named in it.

2. The claimant has succeeded by operation of law to the rights

of the named party.

3. The claimant has become a party to the contract in

substitution for the named party by virtue of a statutory or

consensual novation.

4. The original party has assigned to the claimant either the

underlying contract, together with the agreement to arbitrate

18

which it incorporates, or the benefit of a claim which has

already come into existence.”

28. In the matter of Cox & Kings Ltd. v. SAP (India) (P) Ltd.,reported in

(2025) 1 SCC 611, the Hon’ble Apex Court held as follows:-

“31.

****

169. In case of joinder of non-signatory parties to an arbitration

agreement, the following two scenarios will prominently emerge :

first, where a signatory party to an arbitration agreement seeks

joinder of a non-signatory party to the arbitration agreement;

and second, where a non-signatory party itself seeks invocation

of an arbitration agreement. In both the scenarios, the referral

court will be required to prima facie rule on the existence of the

arbitration agreement and whether the non -signatory is a

veritable party to the arbitration agreement. In view of the

complexity of such a determination, the referral court should

leave it for the Arbitral Tribunal to decide whether the non-

signatory party is indeed a party to the arbitration agreement on

the basis of the factual evidence and application of legal

doctrine. The Tribunal can delve into the factual, circumstantial,

and legal aspects of the matter to decide whether its jurisdiction

extends to the non-signatory party. In the process, the Tribunal

should comply with the requirements of principles of natural

justice such as giving opportunity to the non-signatory to raise

objections with regard to the jurisdiction of the Arbitral

Tribunal. This interpretation also gives true effect to the

doctrine of competence-competence by leaving the issue of

determination of true parties to an arbitration agreement to be

decided by the Arbitral Tribunal under Section 16.”

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29. Reference is also made to the decisions of Adavya Projects Pvt. Ltd.

vs M/s Vishal StructuralsPvt. Ltd. &Ors. reported in 2025 INSC 507 and

ASF Building Private Limited v ShapoorjiPallonji and Company Private

Limited reported in 2025 INSC 616.

The relevant portions from Adavya Projects (supra) is quoted below:-

“24. As briefly stated above, the determination of who is a party

to the arbitration agreement falls within the domain of the

arbitral tribunal as per Section 16 of the ACA. Section 16

embodies the doctrine of kompetenz-kompetenz, i.e., that the

arbitral tribunal can determine its own jurisdiction. The

provision is inclusive and covers all jurisdictional questions,

including the existence and validity of the arbitration

agreement, who is a party to the arbitration agreement, and the

scope of disputes referrable to arbitration under the

agreement.23 Considering that the arbitral tribunal’s power to

make an award that binds the parties is derived from the

arbitration agreement, these jurisdictional issues must

necessarily be decided through an interpretation of the

arbitration agreement itself. Therefore, the arbitral tribunal’s

jurisdiction must be determined against the touchstone of the

arbitration agreement.”

30. In the decision of the Hon’ble Supreme Court in ASF BuildtechPvt.

Ltd. (supra) it was decided that the issues of joinder, non-joinder, mis-

joinder etc. are also within the domain of the learned Arbitrator. The

relevant portions are quoted below:-

20

“113. It is well within the jurisdiction of the Arbitral Tribunal to

decide the issue of joinder and non-joinder of parties and to

assess the applicability of the Group of Companies Doctrine.

Neither in Cox and Kings (I) (supra) nor in Ajay Madhusudhan

(supra), this Court has said that it is only the reference courts

that are empowered to determine whether a non -signatory

should be referred to arbitration. The law which has developed

over a period of time is that both 'courts and tribunals' are fully

empowered to decide the issues of impleadment of a non -

signatory and Arbitral Tribunals have been held to be preferred

forum for the adjudication of the same.

114. In the case of Ajay Madhusudhan (supra), this Court,

placing reliance on Cox and Kings (I) (supra), has expressly held

that Section 16 is an inclusive provision which comprehends all

preliminary issues touching upon the jurisdiction of the arbitral

tribunal and the issue of determining parties to an arbitration

agreement goes to the very root of the jurisdictional competence

of the arbitral tribunal.

115. The case of Ajay Madhusudhan (supra) also recognizes that

the legal relationship between the signatory and non-signatory

assumes significance in determining whether the non-signatory

can be taken to be bound by the Arbitration Agreement. This

Court also issued a caveat that the 'courts and tribunals should

not adopt a conservative approach to exclude all persons or

entities who are otherwise bound by the underlying contract

containing the arbitration agreement through their conduct and

their relationship with the signatory parties. The mutual intent

of the parties, relationship of a non- signatory with a signatory,

commonality of the subject matter, the composite nature of the

transactions and performance of the contract are all factors that

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signify the intention of the non-signatory to be bound by the

arbitration agreement'.

116. Recently, a coordinate bench of this Court in Adavya

Projects Pvt. Ltd. v. Vishal StrcturalsPvt. Ltd., 2025 INSC 507,

also held that an arbitral tribunal under Section 16 of the Act,

1996 has the power to implead the parties to an arbitr ation

agreement, irrespective of whether they are signatories or non-

signatories, to the arbitration proceedings. This Court speaking

through. P.S. Narasimha J. observed that since an arbitral

tribunal's jurisdiction is derived from the consent of the parties

to refer their disputes to arbitration, any person or entity who is

found to be a party to the arbitration agreement can be made a

part of the arbitral proceedings, and the tribunal can exercise

jurisdiction over him. Section 16 of the Act, 1996 which

empowers the arbitral tribunal to determine its own jurisdiction,

is an inclusive provision that covers all jurisdiction question

including the determination of who is a party to the arbitration

agreement, and thus, such a question would be one which falls

within the domain of the arbitral tribunal. It further observed

that, although most national legislations do not expressly

provide for joinder of parties by the arbitral tribunal, yet an

arbitral tribunal can direct the joinder of a person or entity,

even if no such provision exists in the statute, as long as such

person or entity is a party to the arbitration agreement.

Accordingly, this Court held that since the respondents therein

were parties to the underlying contract and the arbitration

agreement, the arbitral tribunal would have the power to

implead them as parties to the arbitration proceedings in

exercise of its jurisdiction under Section 16 of the Act, 1996.

The relevant observations read as under: -

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"24. As briefly stated above, the determination of who is

a party to the arbitration agreement falls within the

domain of the arbitral tribunal as per Section 16 of the

ACA. Section 16 embodies the doctrine of kompetenz -

kompetenz, i.e., that the arbitral tribunal can determine

its own jurisdiction. The provision is inclusive and covers

all jurisdictional questions, including the existence and

validity of the arbitration agreement, who is a party to

the arbitration agreement. and the scope of disputes

referrable to arbitration under the agreement.

Considering that the arbitral tribunal's power to make an

award that binds the parties is derived from the

arbitration agreement, these jurisdictional issues must

necessarily be decided through an interpretation of the

arbitration agreement itself. Therefore, the arbitral

tribunal's jurisdiction must be determined against the

touchstone of the arbitration agreement.”

31. The scope of the referral court is limited to the, prima facie,

satisfaction as to the existence of an arbitration agreement or an arbitration

clause. No deeper probe or mini trial is permissible at this stage. The facts

relating to the dispute which arose between the parties , and the

communication between the parties, prima facie, indicate that, even after

expiry of the lease, the respondents were continuing to use the property, run

their business from the property, and rents were also paid. Under such

circumstances, the respondents appear to have derived some right of user of

the property from the original lessee. The respondent No.2 also appears to

be connected to the demised premises, through the original deed of 2003,

23

and was thus using the premises. The passive telecom infrastructure was

shared by the respondent No. 2.

32. In the matter of Aslam Ismail Khan Deshmukh v. Asap Fluids Pvt.

Ltd. &Anr. reported in (2025) 1 SCC 502, the Hon’ble Apex Court held as

follows:-

“51. It is now well-settled law that, at the stage of Section 11

application, the referral Courts need only to examine whether

the arbitration agreement exists — nothing more, nothing less.

This approach upholds the intention of the parties, at the time

of entering into the agreement, to refer all disputes arising

between themselves to arbitration. However, some parties might

take undue advantage of such a limited scope of judicial

interference of the referral Courts and force other parties to the

agreement into participating in a time-consuming and costly

arbitration process. This is especially possible in instances,

including but not limited to, where the claimant canvasses

either ex facie time-barred claims or claims which have been

discharged through “accord and satisfaction”, or cases where

the impleadment of a non-signatory to the arbitration agreement

is sought, etc.”

33. The referral court only gives legal meaning to the doct rine of

competence-competence. In the decision of SBI General Insurance Co. Ltd.

vs Krish Spinning reported in 2024 SCC Online SC 1754, the Hon’ble

Apex Court held as follows:-

“94. A seven-Judge Bench of this Court, in In Re : Interplay

Between Arbitration Agreements under the Arbitration and

Conciliation Act, 1966 and the Indian Stamp Act, 1899 reported

in 2023 INSC 1066, speaking eruditely through one of us,

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DrDhananjaya Y. Chandrachud, Chief Justice of India,

undertook a comprehensive analysis of Sections 8 and 11

respectively of the Act, 1996 and, inter alia, made poignant

observations about the nature of the power vested in the Courts

insofar as the aspect of appointment of arbitrator is concerned.

Some of the relevant observations made by this Court in In Re :

Interplay (supra) are extracted hereinbelow:

“179. […] However, the effect of the principle of competence-

competence is that the arbitral tribunal is vested with the power

and authority to determine its enforceability. The question of

enforceability survives, pending the curing of the defect which

renders the instrument inadmissible. By appointing a tribunal

or its members, this Court (or the High Courts, as the case may

be) is merely giving effect to the principle enshrined in Section

16. The appointment of an arbitral tribunal does not necessarily

mean that the agreement in which the arbitration clause is

contained as well as the arbitration agreement itself are

enforceable. The arbitral tribunal will answer precisely these

questions.

xxxxxxxxx

185. The corollary of the doctrine of competence-competence is

that courts may only examine whether an arbitration agreement

exists on the basis of the prima facie standard of review. The

nature of objections to the jurisdiction of an arbitral tribunal on

the basis that stamp-duty has not been paid or is inadequate is

such as cannot be decided on a prima facie basis. Objections of

this kind will require a detailed consideration of evidence and

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

Obligating the court to decide issues of stamping at the Section

8 or Section 11 stage will defeat the legislative intent underlying

the Arbitration Act.

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186. The purpose of vesting courts with certain powers under

Sections 8 and 11 of the Arbitration Act is to facilitate and

enable arbitration as well as to ensure that parties comply with

arbitration agreements. The disputes which have arisen between

them remain the domain of the arbitral tribunal (subject to the

scope of its jurisdiction as defined by the arbitration clause).

The exercise of the jurisdiction of the courts of the country over

the substantive dispute between the parties is only possible at

two stages:

a. If an application for interim measures is filed under Section 9

of the Arbitration Act; or

b. If the award is challenged under Section 34.

Issues which concern the payment of stamp-duty fall within the

remit of the arbitral tribunal. The discussion in the preceding

segments also make it evident that courts are not required to

deal with the issue of stamping at the stage of granting interim

measures under Section 9.

* * *

* * *

117. By referring disputes to arbitration and appointing an

arbitrator by exercise of the powers under Section 11, the

referral court upholds and gives effect to the original

understanding of the contracting parties that the specified

disputes shall be resolved by arbitration. Mere appointment of

the arbitral tribunal doesn't in any way mean that the referral

court is diluting the sanctity of “accord and satisfaction” or is

allowing the claimant to walk back on its contractual

undertaking. On the contrary, it ensures that the principal of

arbitral autonomy is upheld and the legislative intent of

minimum judicial interference in arbitral proceedings is given

full effect. Once the arbitral tribunal is constituted, it is always

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open for the defendant to raise the issue of “accord and

satisfaction” before it, and only after such an objection is

rejected by the arbitral tribunal, that the claims raised by the

claimant can be adjudicated.

135. The existence of the arbitration agreement as contained in

Clause 13 of the insurance policy is not disputed by the

appellant. The dispute raised by the claimant being one of

quantum and not of liability, prima facie, falls within the scope

of the arbitration agreement. The dispute regarding “accord and

satisfaction” as raised by the appellant does not pertain to the

existence of the arbitration agreement, and can be adjudicated

upon by the arbitral tribunal as a preliminary issue.”

34. In M.R. Engineers and Contractors Pvt. Ltd. Vs. Som Datt

Builders Ltd. reported in (2009) 7 SCC 696, it was held that if reference to

a document in a contract showed that the document was not intended to be

incorporated in its entirety, such reference would not make the arbitration

clause in the document referred, as a part of the contract. There must be a

special reference to the arbitration clause so as to make it applicable. A

general reference to another contract would not be sufficient. Prima facie, in

the present case, the parties to the proceeding accepted the entirety of the

principal agreement and agreed that the amendment agreement would be

co-existing, co-extensive and co-terminus with the principal agreement

dated July 17, 2003. Here, in my prima facie view, some portions of the

principal agreement were amended and the remaining portions were adopted

by the parties to the amendment agreement. The emails/letters

demonstrate, prima facie, connection of the respondents with the lessor.

Lastly, the plea of novation, jurisdiction etc. will also be decided by the

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learned arbitral tribunal. In view of the settled law laid down by the Hon’ble

Supreme Court in Vidya Drolia v. Durga Trading Corporation reported in

(2021) 2 SCC 1, a plea of novation is a matter falling squarely within the

jurisdiction of the arbitral tribunal under Section 16. The issue being

triable, this Court cannot adjudicate the same at the reference stage.

35. Under such circumstances, the application is allowed. Mr. Chayan

Gupta, learned Advocate, Bar Library Club will act as the petitioner’s

nominee. Mr. Anuj Singh, learned Advocate, Bar Library Club (M-

9830202752) will act as the respondent’s nominee and Mr. Anirban Ray,

learned Advocate will act as the presiding arbitrator. The appointment is

subject to compliance of section 12 of the Arbitration and Conciliation Act,

1996. The learned arbitral tribunal shall fix the remuneration in terms of

the schedule of the Act. All points are left open to be decided by the learned

Tribunal.

Urgent Photostat certified copies of this judgment, if applied for, be

supplied to the parties upon fulfilment of requisite formalities.

(Shampa Sarkar, J.)