2026 INSC 701 1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. …………..… OF 2026

(ARISING OUT OF SLP (CIVIL) NOS. 7233-7234 OF 2026)

MANASH KAMAL BEZBORUAH ….APPELLANT(S)

VERSUS

M/S BOKAHOLA TEA COMPANY

PRIVATE LIMITED & ORS.

…RESPONDENT(S)

J U D G M E N T

VIJAY BISHNOI, J.

1. Leave Granted.

2. The present appeals have been preferred by the Appellant

challenging the interim order dated 02.09.2025 and order dated

28.01.2026 in CRP/120/2025, passed by the High Court of

Gauhati at Guwahati (hereinafter referred to as “High Court”),

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wherein the High Court vide interim order dated 02.09.2025 stayed

the notice issued by the Arbitral Tribunal (hereinafter referred to

as “the Tribunal”) to Respondent Nos. 1 to 3 and further, vide

order dated 28.01.2026, rejected the preliminary objection raised

by the Appellant regarding the maintainability of a Revision Petition

filed under Article 227 of the Constitution of India.

FACTUAL MATRIX

3. On 19.09.1948, M/s Boloma Tea Company (Respondent No.

5 herein) was constituted as a partnership firm by Late Ram Kamal

Bezboruah, Late Dr. Nil Kamal Bezboruah, Late Indra Kamal

Bezboruah and Shri Dhirendra Nath Bezboruah, each holding a

share of 25%. A fresh partnership deed was subsequently executed

on 28.12.1951 with effect from 01.01.1951, under which Late

Indra Kamal Bezboruah, the Appellant's father, continued to hold

a 25% share in the firm. In 1967, M/s Bokahola Tea Company Pvt.

Ltd. (Respondent No. 1 herein) and M/s Kasojan Tea Company

Pvt. Ltd. (Respondent No. 2 herein) were incorporated under the

Companies Act, 1956. Following the demise of Late Indra Kamal

Bezboruah on 09.04.1967, a fresh partnership deed was executed

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on 28.12.1967 with effect from 10.04.1967, under which the

remaining three partners held equal shares of 33.33% each in the

partnership firm.

4. In 1974, the Appellant, being an IAS Officer, obtained

permission from the Government of India to become a sleeping

partner in the partnership firm. A fresh partnership deed dated

16.11.1976 was executed whereby, Late Dr. Nil Kamal Bezboruah,

Late Ram Kamal Bezboruah and the Appellant were allotted 25%

share each; and Shri Dhirendra Nath Bezboruah and Late Smt.

Kamala Bezboruah were allotted 12.5% share each. Clause 5 of

the partnership deed contained an arbitration clause, providing

that disputes or differences among partners would first be referred

to the other partners and, if unresolved, would be referred to

arbitration before a mutually agreed third party.

5. Late Ram Kamal Bezboruah passed away on 07.08.1989,

whose Legal Representatives are Respondent No. 12 to Respondent

No. 15 herein. Thereafter, on 15.03.1992, Late Smt. Kamala

Bezboruah died and after her death, Late Dr. Amala Bezboruah

was inducted as her Legal Representative in Respondent No. 5 -

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Company. Later, M/s Bokahola Investment Pvt. Ltd. (Respondent

No. 3 herein) was incorporated on 09.06.1995.

6. In July 2012, the Appellant instituted Title Suit No. 38 of

2012 before the Court of Civil Judge (Senior Division), Johrat

(hereinafter referred to as “Trial Court”), seeking various reliefs

including rendition of accounts relating to the affairs of Respondent

companies and reserving a right to claim losses and damages

arising out of alleged mismanagement and financial irregularities.

During the pendency of the suit, an application under Section 8

of the Arbitration and Conciliation Act, 1996 (hereinafter

referred to as “the Act”) was filed by Respondent No. 7 seeking

reference of disputes to arbitration. Subsequently, vide order dated

07.08.2014, the Trial Court rejected the application filed by

Respondent No. 7 under Section 8 of the Act, observing inter alia

that reliefs had been sought against all defendants and that several

defendants (including Respondent Nos. 1 to 3) were not parties to

the partnership deed. The Trial Court further relying on this

Court’s judgment in Sukanya Holdings (P) Ltd. v. Jayesh H.

Pandya And Another, reported in (2003) 5 SCC 531, held that the

suit cannot be split up as some defendants were non-signatories to

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the arbitration agreement but were necessary parties to the suit.

Hence, the Trial Court held that the suit could not be referred to

arbitration under Section 8 of the Act, as all the defendants were

non-signatories to the arbitration agreement contained in the

partnership deed.

7. Aggrieved by the order of the Trial Court dated 07.08.2014,

Respondent No. 7 preferred Civil Revision Petition No.

CRP/185/2015 before the High Court. By judgment and order

dated 01.11.2021, the High Court dismissed the revision petition

and affirmed the Trial Court’s decision, holding that, having regard

to the nature of the reliefs claimed in the suit, the application under

Section 8 of the Act had been rightly rejected. Consequently,

Respondent No. 7 filed SLP(C) No. 10445 of 2022 before this Court

which was later numbered as Civil Appeal No. 13188 of 2024,

wherein this court vide order dated 21.11.2024, with the consent

of the parties, referred the disputes to be decided through

arbitration and further, appointed Justice (Retd.) B.P. Katakey,

former Judge of the Gauhati High Court, as Sole Arbitrator to

adjudicate the disputes between the parties. The order dated

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21.11.2024 passed by this court in Civil Appeal No. 13188 of 2024,

is as follows:

“1. Leave granted.

2. The instant appeal is directed against an order dated

01.11.2021, passed by the Gauhati High Court, whereby the

High Court upheld the order dated 07.08.2014, passed by the

learned Civil Judge at Jorhat in Title Suit No.38/2012,

rejecting the application under Section 8 of the Arbitration and

Conciliation Act, 1996, whereby the dispute between the

parties was sought to be referred to arbitration as per the

Arbitration Agreement, and thus dismissed the Revision

Petition filed by the appellants herein.

3. On the joint request made by learned counsel for the parties,

vide order dated 19.09.2022, the dispute raised in the instant

appeal was referred to the Supreme Court Mediation Centre to

get it resolved amicably.

4. As per the Mediation Report dated 11.01.2024, in spite of

comprehensive mediation sessions between the parties on

different occasions, the parties are not agreeable to arrive at

an amicable settlement.

5. On 08.04.2024, learned counsel for the parties submitted

that they would take further instructions as to whether any

resolution is possible for mediation. In the meantime, learned

counsel for the parties were directed to file brief written

submissions. In deference to the said order, respondent No.1

has filed written submission.

6. Heard learned counsel for the parties and carefully perused

the material placed on record.

7. Both sides seek appointment of a Sole Arbitrator in terms of

Clause 5 of the Partnership Deed dated 16.11.1976, executed

between the parties, which reads as follows:

"5. That R.K. Bezbaruah and N.K. Bezbaruah two of the

partners shall jointly manage the financial affairs and bank

accounts of the firm. Any dispute or difference unless

otherwise agreed, shall be referred to the other partners in the

first instance and if not resolved shall be referred to the

arbitration of mutually agreed third party."

8. On a perusal of the aforesaid Clause, we find that the

parties agreed to arbitrate their dispute or differences as the

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Partnership Deed clearly stipulates that any dispute or

difference unless otherwise agreed, shall be referred to the

other partners in the first instance and if not resolved shall be

referred to the arbitration of mutually agreed third party.

9. We, accordingly, with the consent of learned counsel for the

rival parties, consider it just and appropriate to appoint Justice

(Retd.) B.P. Katakey, a former Judge of the Gauhati High

Court, as the Sole Arbitrator to adjudicate the dispute between

the parties. The Arbitrator appointed by us, will proceed with

the matter, after complying with the provisions of Section 12 of

the Arbitration and Conciliation Act, 1996.

10. Needless to mention, that the fee of the Arbitrator shall be

fixed, in terms of the Fourth Schedule of the Arbitration and

Conciliation Act, 1996 [as amended by the Arbitration and

Conciliation (Amendment) Act, 2015.]

11. Keeping in view the age of respondent No.1, who is stated

to be a 80 year old pensioner, we request the learned

Arbitrator to permit him to appear through virtual mode in the

arbitral proceedings.

12. The Registry is directed to communicate the instant order

to the learned Arbitrator.

13. The appeal stands disposed of in the above terms.

14. As a result, the pending interlocutory applications also

stand disposed of.”

It is pertinent to note here that Respondent Nos. 1 to 3 were

parties to Civil Appeal No. 13188 of 2024 and were served notices

but they did not contest the same.

8. Pursuant, to the consent order of this Court dated

21.11.2024, notices were issued to all the parties and the schedule

of arbitration proceedings was fixed by the Tribunal vide order

dated 23.01.2025. Subsequently, the Appellant filed his statement

of Claims and the Respondent No. 5 to Respondent No. 7 filed their

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Statement of Defence before the Tribunal on 09.03.2025 and

05.05.2025 respectively. Thereafter, Respondent Nos. 1 to 3 filed

separate applications under Order VII Rule 11 read with Order I

Rule 10(2) and Section 151 of the Code of Civil Procedure, 1908

(hereinafter referred to as “CPC”) before the Tribunal seeking

deletion of their names from the array of parties. Since the said

applications are jurisdictional objections filed by Respondent No. 1

to 3 before the Tribunal and hence, should be treated as

applications filed under section 16 of the Act.

9. Later, the Tribunal Vide order dated 09.06.2025 after

considering the Statement of Claim and Statement of Defence filed

by the parties, framed issues for determination in the arbitration

proceedings which included the issue of maintainability of the

proceedings against non-signatories including Respondent Nos. 1

to 3. The relevant extract of the order dated 09.06.2025 is as

follows:

“1. Heard the learned counsel appearing for the claimant and

the Respondent Nos. 1, 2, 3 and 4 on the framing of issues.

2. The Arbitral Tribunal, upon hearing the learned counsel

appearing for the claimant as well as the learned counsel

appearing for the Respondent Nos. 1, 2, 3 and 4, and upon

consideration of the pleadings of the parties in the Statement

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of Claim and the Statement of Defence filed, framed the

following issues for determination:

(a) Whether the Respondent No. 2 is a partnership

registered under the Indian Partnership Act, 1932?

If not, whether the claims of the claimant are barred

under Section 69 of the said Act?

(b) Whether the claims of the claimant are barred by

the law of limitation?

(c) Whether the arbitration proceedings against the

Respondent Nos. 5 to 15 are maintainable, they

being non-signatories and not parties to the

partnership deed?

(d) Whether the arbitration clause in Clause 5 of the

partnership deed is valid and binding and the

disputes raised by the claimant fall within its scope,

as against the Respondent Nos. 5, 6, 7, 8 and 9?

(e) Whether the Respondent No. 3 has the authority

to file the Statement of Defence on behalf of the

Respondent Nos. 2 and 4?

(f) Whether the Respondent No. 2 partnership firm

stood automatically dissolved on 01.08.2009 on the

death of Late Dr. Nil Kamal Bezboruah, there being

no other partners other than the claimant? If so,

whether the claimant became the sole owner of the

partnership business to the exclusion of other legal

heirs of Dr. Nil Kamal Bezboruah?

(g) Whether the claimant is the sole successor to the

25% share of Late Indra Kamal Bezboruah in the

Respondent No. 2 partnership firm? If not, whether

the other legal heirs of Indra Kamal Bezboruah,

including his daughters, are necessary parties and

entitled to share therein?

(h) Whether the claimant, a partner of the

Respondent No. 2 partnership firm, is entitled to

rendition of accounts and the comprehensive audit

of the assets, accounts and functioning of

Respondent No. 2 as well as of Respondent Nos. 5,

6 and 7?

(i) Whether the claims of oppression and

mismanagement against Respondent Nos. 5, 6 and

7 are beyond the scope of arbitration and whether

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such claims lie exclusively before the statutory

forums under the Companies Act, 2013?

(j) Whether the claimant could prove the allegations

including but not limited to the allegations of

oppression, mismanagement, fraud,

misappropriation, suppression of accounts,

diversion of profits, etc. against the concerned

respondents, as alleged in the Statement of Claim?

If so, whether the claimant is entitled to an award?

(k) Whether the claims of the claimant relating to

alleged mismanagement, suppression of accounts

and diversion of profits, etc. are barred by waiver or

acquiescence because of the delay and the past

conduct of the claimant?

(l) Whether Respondent Nos. 3 and 4 fraudulently

and mala fidely violated the Status Quo Order dated

03.08.2012 and are jointly and severally liable to

return the amount of Rs. 1,83,32,000/ - with

interest, withdrawn in violation of the Status Quo

Order dated 03.08.2012 passed in Misc. Case No.

25 of 2012 in T.S. No. 38 of 2012?

(m) Whether Respondent Nos. 8 and 9 have failed in

their duty as professional Chartered Accountants

and auditors functioning on behalf of the claimant

and other partners/shareholders and not only for

Late Dr. Nil Kamal Bezboruah and Respondent Nos.

3 and 4, and have assisted and facilitated Late Dr.

Nil Kamal Bezboruah and Respondent Nos. 3 to 7 in

the manipulation of accounts and in conducting

fraud on Respondent No. 2?

(n) Whether the parties are entitled to interest and

cost as prayed for?

(o) To what relief(s) the parties are entitled to?...”

10. Subsequently, the Tribunal Vide order dated 04.08.2025,

while deciding the maintainability of arbitration proceedings

against non-signatories to the partnership deed, rejected the

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applications filed by Respondent Nos. 1 to 3, seeking deletion of

their names. The Tribunal held that the Supreme Court referring

all the parties to dispute to arbitration left no scope for the Tribunal

to reconsider whether non-signatories could be subjected to

arbitration. The relevant extract of the order dated 04.08.2025

passed by the Tribunal is as follows:

“16. Law relating to the application of the doctrine of 'Group of

Companies' is, therefore, no longer res integra. There cannot

be two opinions that a non -signatory company can be

impleaded to single composite arbitration by invoking the

'Group of Companies' doctrine on certain circumstances. It is

always not necessary that a company for being impleaded in

an arbitration proceeding has to be a signatory to an

arbitration agreement between the claimant and other

respondents in such arbitration proceeding. As discussed

above, the respondent Nos. 5, 6 and 7 did not contest the plea

taken by Sri Krishore Kamal Bezboruah, respondent No. 4, in

the SLP filed before the Hon'ble Supreme Court for invoking the

doctrine of 'Group of Companies'. By the aforesaid order

passed by the Hon'ble Supreme Court, it was not left to the

Arbitral Tribunal to decide whether the non-signatory is bound

by the arbitration agreement. The contention that the

respondent Nos. 5, 6 and 7 are also subjected to the Civil Suit

at the same time, is not acceptable in view of the aforesaid

order passed by the Hon'ble Supreme Court referring all the

disputes or differences for arbitration.”

11. Aggrieved by the order passed by the Tribunal, Respondent

Nos. 1 to 3 filed a Civil Revision Petition bearing CRP/120/2025,

under Article 227 of the Constitution of India before the High Court.

The High Court passed an interim impugned order dated

02.09.2025, stayed the notices issued to the Respondent Nos. 1 to

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3. The relevant extract of the impugned interim impugned order is

as follows:

“After going through the materials available in the case record,

at this stage, this Court is of the opinion that the notice issued

to M/s Bokahola Tea Company Private Limited, M/s Kasojan

Tea Company Private Limited and M/s Bokahola Investment

Private Limited needs to be stayed.

Accordingly, the notice issued to the petitioners shall be stayed

till returnable date.

The further proceeding before the learned Arbitrator shall

continue.

List after 4 (four) weeks.”

12. Furthermore, the High Court Vide impugned order dated

28.01.2026, rejected the Appellant's preliminary objection

regarding maintainability of the revision petition. The High Court

observed that the Tribunal had wrongly passed the order dated

04.08.2025 as the Apex Court's order did not discuss anything

regarding invoking the "Group of Companies" doctrine to bring the

non-signatory parties within the ambit of the arbitral proceedings.

Further, the High Court placing reliance on this Court's judgments

in Deep Industries Ltd. v. Oil and Natural Gas Corporation Ltd.

and Another reported in (2020) 15 SCC 706, and Punjab State

Power Corporation Limited v. Emta Coal Limited and Another

reported in (2020) 17 SCC 93, held that where the Tribunal's

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rejection order suffers from a "patent lack of inherent jurisdiction",

the supervisory jurisdiction of the High Court under Article 227 of

the Constitution cannot be ousted. The relevant extract of

impugned order is as follows:

“23. The petitioners have impugned the order passed by the

arbitral tribunal on the ground of lack of inherent jurisdiction

as well as on the ground of alleged perversity in the impugned

order to the extent that the tribunal has observed that by the

order of the Apex Court, passed in the Special Leave Petition

(Civil) No. 10445/2022, it has left nothing for the arbitral

tribunal to decide as to whether a non-signatory is bound by

arbitration agreement or not. However, since the petitioners

have raised the plea that the Apex Court has referred only

those parties who had appeared before it in the aforesaid SLP

and had consented to referring the matter to the arbitration

and since prima facie, it appears that in the order of the Apex

Court, it has not discussed anything regarding invoking the

doctrine of group of companies to bring the petitioners within

the ambit of the arbitral proceeding, hence, this Court, in the

light of the observations made by the Apex Court in its

judgments discussed in paragraphs 21 and 22 of this order,

is of considered opinion that it does not lack jurisdiction, under

Article 227 of the Constitution of India, to examine the

contention raised by the petitioners as to whether the

dismissal of the prayer regarding jurisdiction of the arbitral

tribunal to subject the petitioners to the arbitral proceeding

suffers from a patent lack of inherent jurisdiction or not, or

whether it is perverse or not.

24. Since the petitioners have raised the plea of lack of

inherent jurisdiction, as well as of perversity on the part of

arbitral tribunal in passing the impugned order and since

same cannot be totally negated at this stage, the jurisdiction

of this Court under Article 227 of the Constitution of India to

examine the said issues is not ousted.

25. In view of the discussion made and reasons stated in the

foregoing paragraphs, the objection raised by the respondent

No. 1 regarding maintainability of the instant civil revision

petition is rejected.”

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13. Aggrieved, the Appellant preferred the instant appeals before

this Court. During the pendency of the present appeals, this Court,

by order dated 16.02.2026, issued notice and condoned the delay

in filing. This Court further stayed the operation of the interim

impugned order as well as the impugned order passed by the High

Court, and also stayed all further proceedings before the High

Court. The relevant portion is reproduced hereinunder:

“1. Delay condoned.

2. Issue notice, returnable on 20.04.2026.

3. Dasti service, in addition, is permitted.

4. In the meantime, the orders of the High Court dated

02.09.2025 and 28.01.2026 shall remain stayed. There shall be

a stay of further proceedings in the High Court.”

14. Furthermore, Respondent Nos. 1 to 3 filed I.A. No. 76430 of

2026 seeking exemption from participating in the arbitral

proceedings. This Hon’ble Court, by order dated 19.03.2026,

allowed the said application and directed the parties to approach

the Arbitral Tribunal for adjournment of the proceedings beyond

20.04.2026. This Court further directed the learned Arbitrator to

consider such a request for adjournment. The relevant portion is

reproduced hereinunder:

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“4. Having heard the learned counsel appearing for the parties,

we are of the view that parties shall make a request to the

learned Arbitrator to adjourn the proceedings beyond

20.04.2026.

5. If any such request is made, the learned Arbitrator shall take

the same into consideration.

6. The Interlocutory Application No. 76430/2026 stands

allowed accordingly.”

SUBMISSIONS ON BEHALF OF APPELLANT

15. Mr. Abir Phukan, the learned counsel appearing for the

Appellant submitted that the Respondent No. 1 to 3 are veritable

parties to the disputes evidenced by the inter-party relations,

commonality in subject matter and their incorporation being

through borrowings from the partnership firm (Respondent No. 5).

Further relying on the Constitution Bench judgment in Cox and

Kings Ltd. v. SAP India Pvt. Ltd. and Another, reported in 2024

(4) SCC 1, the counsel argued that non-signatories can be referred

to arbitration when there is a direct relationship, commonality of

subject matter, composite transactions, and conduct

demonstrating an intention to bind them.

16. The learned counsel for the Appellant submitted that the

Respondent No. 1 to 3, are estopped from challenging the arbitral

reference made via this Court's consent order dated 21.11.2024.

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The Respondent No. 1 to 3 chose not to appear or object despite

being served on multiple occasions. Further, the learned counsel

for the Appellant submitted that the High Court’s interference

under Article 227 of the Constitution to stay the arbitral

proceedings constitutes an abuse of process. Relying on the 101st

Report of the Law Commission of India , the counsel noted that

allowing appeals against the rejection of a Section 16 of the Act,

jurisdictional challenge defeats the statutory scheme, as the proper

remedy is to apply for setting aside of the award under Section 34

of the Act. It is further argued that no perversity existed in the

Arbitral Tribunal's order to warrant interference; and in support of

the same, the learned counsel cited Associate Builders v. Delhi

Development Authority, reported in (2015) 3 SCC 49 and Punjab

State Power Corpn. Ltd. (supra) to emphasize that patent lack of

inherent jurisdiction must "stare one in the face". Additionally, M/s

Tarini Prasad Mohanty v. M/s Sunflag Iron and Steel Company

Limited, reported in 2026 INSC 566, was cited to argue that

minimal interference in writ jurisdiction at an interim stage is

imperative.

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17. The learned counsel for the Appellant further argued that the

High Court without giving any specific reasoning as to perversity or

inherent lack of jurisdiction in the order dated 04.08.2025 of the

Tribunal, mechanically decided the maintainability of the Revision

Petition filed under Article 227 of the Constitution. In addition to

this he also highlighted that the Tribunal has already framed the

issues for determination of the proceedings which are pending

adjudication. The learned Counsel for the appellant after apprising

relevant facts of the case and legal position has prayed for setting

aside the interim order dated 02.09.2025 and order dated

28.01.2026 passed by the High Court.

SUBMISSIONS ON BEHALF OF RESPONDENT NO. 1 TO 3.

18. Mrs. Madhavi Diwan, learned Senior Counsel appearing for

the Respondents submitted that the Appellant's own prior stand

belies any mutual intention to refer Respondent Nos. 1 to 3 to

arbitration. In earlier civil proceedings, the Appellant had explicitly

argued that these Respondents were not parties to the arbitration

agreement. The learned Senior Counsel further highlighted that, in

the earlier Civil Revision Petition preferred by Respondent No. 7,

the High Court relying on the submission of the Appellant that

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Respondent No. 1 to 3 are not parties to the agreement and citing

Sukanya Holdings (P) Ltd. (supra), dismissed the revision

petition. Having secured favorable orders on this premise, the

Appellant cannot now approbate and reprobate by claiming they

are veritable parties.

19. The learned Senior Counsel submitted that Respondent Nos.

1 to 3 do not fulfill the test of a "veritable party" laid out in Cox and

Kings (supra), nor did they show any mutual intention to be

bound. Further, this Court's consent order dated 21.11.2024 was

only intended to bind the parties who came forward and gave

consent. It was argued that Respondent No. 7 had no authority or

Board Resolution to consent on behalf of Respondent Nos. 1 to 3.

20. The learned Senior Counsel submitted that the Tribunal's

assumption of jurisdiction over non-signatories based on mere

non-appearance before the Supreme Court falls squarely within the

"narrow band of perversity". To justify the High Court's interference

under Article 227 due to a patent lack of inherent jurisdiction, the

Senior Counsel relied on Deep Industries (supra), and Punjab

State Power Corporation Ltd. (supra). In view of the above

submissions the learned Senior Counsel has prayed that the

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Respondent Nos. 1 to 3 are not veritable parties and hence they

should be removed from the arbitration proceedings.

ANALYSIS

21. Having considered the rival submissions advanced by both

sides and the material available on record, the sole question that

arises for our consideration in the present appeals is whether the

High Court was justified in passing the impugned order holding

that a revision petition under Article 227 of the Constitution of

India is maintainable against an order of the Arbitral Tribunal.

22. Before adverting to the legal positioning present case, it is

imperative to outline the statutory scheme and object of the Act.

The Act is a Code in itself. This phrase is not merely perfunctory,

but has definite legal consequences. One such consequence is

stated under the non-obstante clause given in Section 5 of the Act,

which limits the extent of judicial intervention unless explicitly

contemplated under the Act. This provision was included to uphold

the intention of the legislature to adopt the UNCITRAL Model Law

and Rules to reduce excessive judicial interference. Fur ther,

Section 16 of the Act gives effect to the doctrine of kompetenz-

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kompetenz, empowering the Arbitral Tribunal to rule on its own

jurisdiction. In the usual course of an arbitral proceeding, the Act

provides for a mechanism to challenge an Arbitral Award under

Section 34 of the Act.

23. In the present case, initially a suit was instituted by the

Appellant due to mismanagement of funds in Respondent No. 5,

wherein Respondent No. 7 filed an application under section 8 of

the Act seeking initiation of arbitration proceedings, which was

rejected by the Trial Court and the rejection was further upheld by

the High Court in revision petition. Subsequently, Respondent No.

7 approached this Court by filing Civil Appeal No. 13188 of 2024,

wherein this court on the basis of the consent of the parties to

arbitrate the disputes, appointed an arbitrator to decide the matter

through arbitration. Respondent No. 1 to 3 were also parties to the

said SLP but never contested the same. It is imperative to note here

that, Respondent No. 1 to 3, never sought modification or review of

the order passed by this Court at any point of time.

24. Thereafter, during arbitration proceedings, Respondent Nos.

1 to 3 filed applications under Order VII Rule 11 read with Order I

Rule 10(2) and Section 151 of CPC before the Tribunal seeking

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deletion of their names from the array of parties. This application

being in the nature of challenge to the jurisdiction of the Tribunal,

should be treated as an application filed under Section 16 of the

Act. The Tribunal in view of this Court’s consent order dated

21.11.2024 passed in Civil Appeal No. 13188 of 2024, of referring

the parties to arbitration, rejected the said applications. The order

was later challenged by Respondent Nos. 1 to 3 by filing an Revision

Petition before the High Court under Article 227 of the Constitution

of India, wherein the High Court while rejecting the objections filed

by Appellant held that, the Revision Petition filed under Article 227

of the Constitution of India is maintainable. It is to be noted that

while passing the impugned order dated 28.01.2026 the High court

has not recorded any specific finding as to perversity or any patent

lack of inherent jurisdiction in the order dated 04.08.2025 passed

by the Tribunal

25. Ordinarily, the power of the High Courts under Article 227 of

the Constitution of India to exercise supervisory jurisdiction over

all courts and tribunals within their territorial jurisdiction forms

part of the basic structure of the Constitution and cannot be

abrogated or excluded by legislation. Consequently, although

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Section 5 of the Act restricts judicial intervention, except as

expressly provided under the Act, such restriction cannot curtail or

oust the constitutional jurisdiction of the High Courts under Article

227 of the Constitution of India. At the same time, it is imperative

to note that the Act was enacted with the objective of ensuring the

expeditious resolution of disputes through arbitration, with

minimal judicial interference and without the supervisory

involvement of traditional courts, except to the limited extent

expressly contemplated under the Act.

26. The Constitution Bench in SBP & Co. v. Patel Engineering

Ltd. and Another, reported in (2005) 8 SCC 618, stating that the

Act mandates minimal judicial intervention, has explicitly

disapproved the approach of High Courts correcting orders of an

Arbitral Tribunal under Article 226 or 227 of the Constitution of

India during the pendency of arbitral proceedings. The relevant

portion of the said judgment is extracted hereinbelow:

45. It is seen that some High Courts have proceeded on the

basis that any order passed by an Arbitral Tribunal during

arbitration, would be capable of being challenged under Article

226 or 227 of the Constitution. We see no warrant for such an

approach. Section 37 makes certain orders of the Arbitral

Tribunal appealable. Under Section 34, the aggrieved party

has an avenue for ventilating its grievances against the award

including any in-between orders that might have been passed

23

by the Arbitral Tribunal acting under Section 16 of the Act. The

party aggrieved by any order of the Arbitral Tribunal, unless

has a right of appeal under Section 37 of the Act, has to wait

until the award is passed by the Tribunal. This appears to be

the scheme of the Act. The Arbitral Tribunal is, after all, a

creature of a contract between the parties, the arbitration

agreement, even though, if the occasion arises, the Chief

Justice may constitute it based on the contract between the

parties. But that would not alter the status of the Arbitral

Tribunal. It will still be a forum chosen by the parties by

agreement. We, therefore, disapprove of the stand adopted by

some of the High Courts that any order passed by the Arbitral

Tribunal is capable of being corrected by the High Court under

Article 226 or 227 of the Constitution. Such an intervention by

the High Courts is not permissible.

46. The object of minimising judicial intervention while the

matter is in the process of being arbitrated upon, will certainly

be defeated if the High Court could be approached under

Article 227 or under Article 226 of the Constitution against

every order made by the Arbitral Tribunal. Therefore, it is

necessary to indicate that once the arbitration has commenced

in the Arbitral Tribunal, parties have to wait until the award is

pronounced unless, of course, a right of appeal is available to

them under Section 37 of the Act even at an earlier stage.

27. Furthermore, this Court in the case of Deep Industries

(supra), has held that the High Court under article 227 can only

deal with orders of the Tribunal wherein there is patent lack of

inherent jurisdiction. The relevant portion of the said judgment is

extracted hereinbelow:

“17. This being the case, there is no doubt whatsoever that if

petitions were to be filed under Articles 226/227 of the

Constitution against orders passed in appeals under Section

37, the entire arbitral process would be derailed and would

not come to fruition for many years. At the same time, we

cannot forget that Article 227 is a constitutional provision

which remains untouched by the non obstante clause of

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Section 5 of the Act. In these circumstances, what is important

to note is that though petitions can be filed under Article 227

against judgments allowing or dismissing first appeals under

Section 37 of the Act, yet the High Court would be extremely

circumspect in interfering with the same, taking into account

the statutory policy as adumbrated by us hereinabove so that

interference is restricted to orders that are passed which are

patently lacking in inherent jurisdiction.”

28. Subsequently, a three Judge Bench of this Court in the case

of Punjab State Power Corpn. Ltd. (supra) clarified as to what

would be categorised as ‘Patent lack in inherent jurisdiction’. The

primary parameter is that the Order passed should be so perverse

that the only possible conclusion is that there is a patent lack in

inherent jurisdiction. A patent lack requires no argument

whatsoever, it must be the perversity of the Order that must stare

one in the face. Further, while addressing the misuse of Article 227

of the Constitution of India petitions in arbitral proceedings, this

Court directed that High Courts, upon considering the objections

raised, should promptly dismiss petitions under Article 227

wherever no patent lack of inherent jurisdiction is made out. The

relevant portion of the said judgment is extracted hereinbelow:

“4. We are of the view that a foray to the writ court from a

Section 16 application being dismissed by the arbitrator can

only be if the order passed is so perverse that the only possible

conclusion is that there is a patent lack in inherent jurisdiction.

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A patent lack of inherent jurisdiction requires no argument

whatsoever — it must be the perversity of the order that must

stare one in the face.

5. Unfortunately, the parties are using this expression which

is in our judgment in Deep Industries Ltd. [Deep Industries Ltd.

v. ONGC, (2020) 15 SCC 706] , to go to the Article 227 Court in

matters which do not suffer from a patent lack of inherent

jurisdiction. This is one of them. Instead of dismissing the writ

petition on the ground stated, the High Court would have done

well to have referred to our judgment in Deep IndustriesLtd.

[Deep Industries Ltd. v. ONGC, (2020) 15 SCC 706] and

dismiss the Article 227 petition on the ground that there is no

such perversity in the order which leads to a patent lack of

inherent jurisdiction. The High Court ought to have

discouraged similar litigation by imposing heavy costs. The

High Court did not choose to do either of these two things.”

29. Recently, this Court in M/s Tarini Prasad Mohanty (supra),

has emphasized that while exercising writ jurisdiction under

Articles 226 and 227 of the Constitution of India, courts must

strictly keep in mind the statutory scheme of the Arbitration Act.

Specifically, since the Act already provides for a final statutory

remedy under Section 34 and clearly mandates minimal judicial

interference while arbitral proceedings are still ongoing, courts

must respect this legislative intent and limit their intervention

accordingly.

“22. Besides the well settled parameters to be borne in mind

while exercising jurisdiction under Articles 226 and 227 of the

Constitution, it is also necessary to be mindful of the statutory

scheme of the concerned enactment from which the impugned

order arises. If the enactment besides providing for a statutory

26

remedy [herein, Section 34] also expects minimal judicial

interference prior to the culmination of the arbitral proceedings

[herein, Section 5], the said factor would be of relevance while

considering the exercise of jurisdiction. In other words the

threshold to be satisfied before exercising discretion under

Articles 226 and 227 of the Constitution in the light of such

legislative intent would be higher. As held in Re: Interplay

(supra), the non-obstante clause in Section 5 of the A and C Act

must take precedence over any other law for the time being in

force. It would have to be demonstrated that notwithstanding the

availability of an alternate remedy at the conclusion of the

proceedings, such challenge cannot await the final adjudication

of the proceedings and despite the Civil Appeal arising out of SLP

(C) No.27534 of 2025 Page 33 of 39 statutory expectation of

minimal interference, intervention in exercise of writ jurisdiction

at an interim stage is imperative. We may clarify that our

observations are as regards the ‘entertainability’ of a writ

petition under Articles 226 and 227 of the Constitution and not

with regard to its ‘maintainability’. This Court in M/s Godrej Sara

Lee Ltd. Vs. The Excise and Taxation Officer-cum-Assessing

Authority and others has succinctly explained these concepts as

under :-

“4 …In a long line of decisions, this Court has made it

clear that availability of an alternative remedy does not

operate as an absolute bar to the “maintainability” of

a writ petition and that the rule, which requires a party

to pursue the alternative remedy provided by a statute,

is a rule of policy, convenience and discretion rather

than a rule of law. Though elementary, it needs to be

restated that “entertainability” and “maintainability”

of a writ petition are distinct concepts. The fine but real

distinction between the two ought not to be lost sight

of. The objection as to “maintainability” goes to the root

of the matter and if such objection were found to be of

substance, the courts would be rendered incapable of

even receiving the lis for adjudication. On the other

hand, the question of “entertainability” is entirely

within the realm of discretion of the high courts, writ

remedy being discretionary. A writ petition despite

being maintainable may not be entertained by a high

court for very many reasons or relief could even be

refused to the petitioner, despite setting up a sound

legal point, if grant of the claimed relief would not

further public interest….””

27

30. Therefore, this is a settled position of law that the High Court

must exercise extreme circumspection while invoking its

supervisory jurisdiction under Article 227 of the Constitution of

India in matters challenging an Arbitral Tribunal’s rejection of an

application under Section 16 of the Act. In the absence of such a

manifest jurisdictional defect, judicial interference at the

interlocutory stage would be unwarranted and contrary to the

legislative policy of minimal court intervention in arbitral

proceedings. Orders passed by the Tribunal on an application

under Section 16 of the Act are ordinarily amenable to challenge

only under Section 34 of the Act upon the conclusion of the arbitral

proceedings and the passing of the final award. It is always safe for

the High Courts that, before entertaining revision petitions under

Article 227 of the Constitution of India against the Orders passed

by the Arbitral Tribunal, while exercising powers under Section 16

of the Act, it should record a prima facie finding regarding the

patent lack of inherent jurisdiction and that too after providing an

opportunity of hearing to the rival party/parties.

31. In the present case, the Arbitral Tribunal, while considering

the applications filed under Order VII Rule 11 read with Order I

28

Rule 10(2) and Section 151 of CPC by Respondent Nos. 1 to 3

seeking deletion of their names from the array of parties on the

ground that they are non-signatories to the arbitration agreement,

the Tribunal referring to the consent order dated 21.11.2024, had

rejected the application. The Constitutional Bench of this Court in

Cox and Kings Ltd. (supra) has laid down that the determination

of whether a non-signatory is a veritable party to an arbitration

agreement is a complex inquiry involving factual, circumstantial,

and legal aspects. In cases involving the joinder of non-signatory

parties, the referral court is only required to prima facie rule on the

existence of the arbitration agreement, leaving the intricate

determination of whether the non-signatory is indeed bound by the

agreement to the Arbitral Tribunal. This interpretation gives true

effect to the doctrine of kompetenz-kompetenz enshrined under

Section 16 of the Act, which empowers the Arbitral Tribunal to rule

on its own jurisdiction. Therefore, the Arbitral Tribunal possessed

the absolute competence to decide the question as to whether

Respondent Nos. 1 to 3 were veritable parties to the arbitration

agreement, notwithstanding their non-signatory status and hence

29

the order of the Tribunal in the present case ought not have been

challenged by filing an Article 227 Petition before the High Court.

32. At the same time, it is also pertinent to mention that

Respondent Nos. 1 to 3 were parties to the earlier Civil Appeal filed

before this Court, but they did not contest the same. Even if they

felt that there was any discrepancy in the order passed by this

court which might cause prejudice as to parties to the proceedings,

they ought to have filed for modification of the order or a review but

they failed to do so. Respondent Nos. 1 to 3 cannot now come before

us with a dispute which they could have been raised at an earlier

occasion. This practice unnecessarily resulted in another round of

litigation, which could have been avoided. These types of practices

must be avoided by parties to an arbitration proceedings, as these

multiple judicial interventions create unnecessary delay in

proceedings, which ultimately destroys the object with which the

Act was introduced.

CONCLUSION

33. In view of the detailed analysis above, we hold that the High

Court was not justified in entertaining the challenge under Article

227 of the Constitution and staying the arbitral proceedings. The

30

remedy against the rejection of a Section 16 of the Act application

strictly lies under Section 34 of the Act after the pronouncement of

the final award. Hence, we deem it appropriate to set aside both the

impugned orders of the High Court and dismiss the revision

petition before the High Court.

34. However, since the Tribunal had already framed relevant

issues with respect to the jurisdictional objections raised by

Respondent Nos. 1 to 3 regarding their non-signatory status, we

deem it appropriate to direct the Tribunal to decide the status of

Respondent Nos. 1 to 3 with respect to the arbitration proceedings

independently uninfluenced by the decision of this Court and

complete the arbitration proceedings expeditiously in accordance

with law.

35. The appeals are disposed of in the above terms. Pending

application(s), if any, shall also stand disposed of.

.………………………, J.

(K.V. Viswanathan)

………………………., J.

(VIJAY BISHNOI)

NEW DELHI;

JULY 14, 2026.