Kotak Mahindra Bank Through Dattatray Jagtap vs Kaustubh Rajendra Kuwadia
- Court
- Bombay High Court
CNR No : HCBM020256772026
2026:BHC-OS:23816
arbapl25878-2026 & connected-JF.doc
AGK
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION APPLICATION (L) NO.25878 OF 2026
Kotak Mahindra Bank Limited
… Applicant
ATUL
GANESH
KULKARNI
Vs.
Digitally signed by
ATUL GANESH
KULKARNI
Date: 2026.11.04
11:24:15 +0530
Maulin Niranjan Patel
… Respondent
WITH
ARBITRATION APPLICATION (L) NO.25676 OF 2026
Kotak Mahindra Bank Limited
… Applicant
Vs.
Kaustubh Rajendra Kuwadia
… Respondent
WITH
ARBITRATION APPLICATION (L) NO.25703 OF 2026
Kotak Mahindra Bank Limited
… Applicant
Vs.
Ziya Ur Rehman
… Respondent
WITH
ARBITRATION APPLICATION (L) NO.25784 OF 2026
Kotak Mahindra Bank Limited
… Applicant
Vs.
N.V. Srinivas
… Respondent
Ms. Bijal Gogri i/by GNP Legal for the Applicant.
CORAM : AMIT BORKAR, J.
RESERVED ON : OCTOBER 28, 2026.
PRONOUNCED ON : NOVEMBER 4, 2026
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JUDGMENT:
1. Since all the four Arbitration Applications involve common
questions of law and facts, they are being decided by this common
judgment. For the sake of convenience, the facts of Arbitration
Application (Lodging) No. 25878 of 2026 are being stated.
2. The main question which arises in this Application is
whether there can be said to be no arbitration agreement between
the Applicant Bank and the Respondent only because the
Respondent has not put his physical or digital signature on the
Credit Card Application. To decide this question, it will be
necessary to look at Section 7 of the Arbitration and Conciliation
Act, 1996. The terms of the Cardholder Agreement will have to be
considered. The documents produced by the Bank to show that the
Respondent had accepted those terms will be required to be
examined.
3. At the beginning, it is necessary to make clear that the law
does not say that every arbitration agreement must have the
physical or digital signatures of both parties. Therefore, only
because a signature is not found, it cannot be said that there is no
agreement. But this does not mean that a Bank can prepare an
agreement containing an arbitration clause and make it binding
upon a person without showing that the person had accepted its
terms. Some material must be there to show such acceptance. A
person may accept the terms by doing some act, if the written
agreement says that such act will amount to acceptance. In simple
words, the consent of the parties must be found from some record.
This is the main question which has to be considered here.
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4. According to the Applicant Bank, the Respondent had
applied for a Credit Card facility through the Bank's digital
process. The Bank says that when the Respondent made the
application, Application ID 2224882017620 was generated. It says
that the Respondent accepted the terms and conditions relating to
the Credit Card, including the Most Important Terms and
Conditions and the Cardholder Agreement. On this basis, the Bank
issued Credit Card No. 000416644XXXXXX1165. This Card was
connected with Account No. 0009406500006668909 and CRN No.
0000000000657252058. The case of the Bank is that the
Respondent used the Credit Card and took the benefit of the
facility for his personal use. The Bank says that statements of
account were regularly sent to the Respondent. However, the
Respondent did not pay the amount which became due. Therefore,
the Bank is relying upon the Cardholder Agreement and the
statement of account. According to the Bank, Clause 32 of the
Cardholder Agreement contains an arbitration clause. Therefore,
the disputes relating to the Credit Card facility are required to be
referred to arbitration. The Bank has relied upon the affidavit of its
authorised representative, Dattatray Jagtap, which is at pages 99
to 101 of the Application. In paragraph 2 of this affidavit, it is
stated that the Respondent had obtained the Credit Card facility
through digital mode and had agreed to and accepted the terms
and conditions governing the facility, including the MITC and the
Cardholder Agreement. The same thing is again stated in
paragraph 5. It is stated that the Respondent had accepted the
applicable terms and conditions through the digital process of the
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Bank. In paragraph 6, the Bank has stated that the use of the
Credit Card facility by the Respondent can be seen from the
statement of account. However, there is one important statement
made by the Bank in paragraph 7 of the same affidavit. The Bank
has admitted that the original digital application and the electronic
record showing how the Respondent had accepted the terms and
conditions are not available with it. According to the Bank, these
records are with its earlier vendor. The agreement with that vendor
has been terminated and the Bank is in the process of renewing its
arrangement with the vendor. Therefore, the Bank has stated that
it may require some time to obtain these records. It has kept open
its right to produce these records when they become available.
5. From the above, it is clear that the Bank has not produced
the digital application or the electronic record showing the manner
in which the Respondent had accepted the MITC or the arbitration
clause. The Bank has only given the Application ID. It has not
produced the screen which the Respondent is said to have seen
and accepted. There is no record showing that the Respondent had
clicked or given any confirmation accepting the terms. The
electronic record showing how this acceptance was made is not
placed before the Court. In the same manner, no physical
application bearing the signature of the Respondent has been
produced.
6. It is necessary to look at the statement of account produced
by the Bank. The statement shows the Respondent as the
cardholder. It refers to the Mojo Credit Card ending in 1165 and
the related CRN. It shows the total amount due as Rs.5,46,655.34.
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However, the statement placed before the Court is only a summary
statement. It shows the previous statement dues as Rs.5,46,655.34.
It shows that there were no purchases during the current billing
cycle. The individual transactions through which this outstanding
amount was collected are not shown in this statement. Therefore,
the statement does not give the complete details of the
transactions made through the Credit Card. The above
circumstances show that the Bank has not produced the main
digital record which could show acceptance of the terms by the
Respondent. But the matter cannot be decided only because this
record has not been produced. The terms of the Cardholder
Agreement will have to be considered. In this connection, Clause
1.2 of the Cardholder Agreement explains the meaning of the word
“Applicant”. It includes:
“(i) any person who has signed the Kotak Mahindra Bank
Credit Card application form (ii) any person who has signed
or used the card.”
7. Clause 2.1 of the Cardholder Agreement provides as follows:
“The Cardholder understands that signing the Credit Card
application form and/or applying online for the Card and/or
applying through e-mail for the Card and/or signing on the
reverse of the Card and/or using the Card constitutes
acceptance of the Terms and Conditions of the Cardholder
Agreement as amended from time to time by the Bank, at its
sole discretion.”
8. If Clause 2.1 is read in a simple way, it shows that the Bank
has recognised different methods by which a Cardholder can
accept the terms of the Cardholder Agreement. One method is by
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signing the application form. Another method is by making an
online application. Making an application through e-mail is
recognised. The clause says that signing on the reverse side of the
Card or using the Card will mean acceptance of the terms and
conditions. Thus, according to the terms prepared by the Bank,
putting a physical or digital signature on the application is not the
only way of accepting the terms. The Bank has stated that even use
of the Card will mean acceptance of the Cardholder Agreement.
This part of the agreement has to be given its proper meaning. The
Bank cannot rely upon other clauses of the Cardholder Agreement
and ignore Clause 2.1. If the Bank says that the Respondent had
used the Credit Card, such use will have to be considered along
with the written term which says that use of the Card amounts to
acceptance of the agreement. Clause 32.2 of the Cardholder
Agreement says that disputes arising out of or relating to the
agreement will be referred to arbitration under the Arbitration and
Conciliation Act, 1996. It says that Mumbai will be the venue of
arbitration. Clause 32.3 provides that Clause 32 will continue to
remain in force even after the Cardholder Agreement is
terminated. Therefore, if the Respondent had accepted the
Cardholder Agreement by any of the methods stated in Clause 2.1,
the arbitration clause contained in Clause 32 would become part
of the terms accepted by him.
9. Therefore, the question is not limited to whether the
Respondent had signed the application form or not. The real
question is whether there is sufficient material to show, at least
prima facie, that the Respondent had applied for or used the Credit
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Card and, in that manner, accepted the Cardholder Agreement as
stated in Clause 2.1. It is true that the original digital application
has not been produced. This is an important circumstance. But this
circumstance cannot be considered separately from the other
material produced by the Bank. All the material will have to be
considered together.
10. The legal position on this question has been explained by the
Supreme Court in Govind Rubber Ltd. v. Louis Dreyfus
Commodities Asia (P) Ltd. , (2015) 13 SCC 477. In paragraph 12,
the Supreme Court observed:
“There may not be any dispute with regard to the settled
proposition of law that an agreement even if not signed by
the parties can be spelt out from correspondence exchanged
between the parties. However, it is the duty of the court to
construe correspondence with a view to arrive at the
conclusion whether there was any meeting of mind between
the parties which could create a binding contract between
them. It is necessary for the court to find out from the
correspondence as to whether the parties were ad idem to
the terms of contract.”
11. The above observation makes it clear that an agreement does
not become non-existent only because it has not been signed. The
Court has to look at the material available and find out whether
the parties had agreed to the terms. In paragraph 13 of the same
judgment, the Supreme Court referred to Rukmanibai Gupta v.
Collector , (1980) 4 SCC 556, and quoted the following observation
from paragraph 6 of that judgment:
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“Arbitration agreement is not required to be in any particular
form. What is required to be ascertained is whether the
parties have agreed that if disputes arise between them in
respect of the subject-matter of contract such dispute shall be
referred to arbitration, then such an arrangement would
spell out an arbitration agreement.”
12. The principle coming from these observations is that the
Court has to find out what the parties had intended. The Court
need not insist upon only one particular form of agreement when
the law recognises other ways by which an agreement can be
recorded. But this does not mean that consent of a party can be
assumed without any material. There must still be some record
from which it can be seen that the parties had agreed that their
disputes would be referred to arbitration. In paragraph 14 of
Govind Rubber , the Supreme Court reproduced Section 7 of the
Arbitration and Conciliation Act, 1996. The relevant provision
reads as follows:
“7. Arbitration agreement.— (1) In this Part, ‘arbitration
agreement’ means an agreement by the parties to submit to
arbitration all or certain disputes which have arisen or which
may arise between them in respect of a defined legal
relationship, whether contractual or not.
(2) An arbitration agreement may be in the form of an
arbitration clause in a contract or in the form of a separate
agreement.
(3) An arbitration agreement shall be in writing.
(4) An arbitration agreement is in writing if it is contained
in— (a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams or other means
of telecommunication which provide a record of the
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agreement; or
(c) an exchange of statements of claim and defence in
which the existence of the agreement is alleged by one party
and not denied by the other.
(5) The reference in a contract to a document containing
an arbitration clause constitutes an arbitration agreement if
the contract is in writing and the reference is such as to
make that arbitration clause part of the contract.”
13. If Section 7 is read, it can be seen that a signed document is
one method by which an arbitration agreement can be recorded.
But the law does not say that this is the only method. Section 7(4)
(b) recognises an exchange of letters or other means of
telecommunication, provided they give a record of the agreement.
Section 7(4)(c) recognises an exchange of statements of claim and
defence where one party says that an arbitration agreement exists
and the other party does not deny it. Section 7(5) recognises a
situation where a written contract refers to another document
containing an arbitration clause and, by such reference, that clause
becomes part of the contract.
14. The Supreme Court explained this position in paragraph 15
of Govind Rubber in the following words:
“A perusal of the aforesaid provisions would show that in
order to constitute an arbitration agreement, it need not be
signed by all the parties. Section 7(3) of the Act provides
that the arbitration agreement shall be in writing, which is a
mandatory requirement. Section 7(4) states that the
arbitration agreement shall be in writing, if it is a document
signed by all the parties. But a perusal of clauses (b) and (c)
of Section 7(4) would show that a written document which
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may not be signed by the parties even then it can be
arbitration agreement. Section 7(4)(b) provides that an
arbitration agreement can be culled out from an exchange of
letters, telex, telegrams or other means of
telecommunication which provide a record of the
agreement.”
15. The Supreme Court has made a clear difference between the
requirement that an arbitration agreement must be in writing and
the requirement of a signature. The agreement must be in writing.
This is compulsory. But it is not necessary that it must have the
signatures of the parties in every case. What is necessary is that
there must be some written record showing that the parties had
agreed to the terms.
16. In paragraph 16 of Govind Rubber , the Supreme Court has
explained this position:
“On reading the provisions it can safely be concluded that an
arbitration agreement even though in writing need not be
signed by the parties if the record of agreement is provided
by exchange of letters, telex, telegrams or other means of
telecommunication. Section 7(4)(c) provides that there can
be an arbitration agreement in the exchange of statements of
claims and defence in which the existence of the agreement
is alleged by one party and not denied by the other. If it can
be prima facie shown that the parties are at ad idem, then
the mere fact of one party not signing the agreement cannot
absolve him from the liability under the agreement. In the
present day of e-commerce, in cases of internet purchases,
tele purchases, ticket booking on internet and in standard
forms of contract, terms and conditions are agreed upon. In
such agreements, if the identity of the parties is established,
and there is a record of agreement it becomes an arbitration
agreement if there is an arbitration clause showing ad idem
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between the parties. Therefore, signature is not a formal
requirement under Section 7(4)(b) or 7(4)(c) or under
Section 7(5) of the Act.”
17. The above observation is relevant to the present matter. The
Supreme Court has recognised that, in the present time,
agreements can be made through electronic methods and standard
terms and conditions. A person may accept such terms even
without signing a printed document. However, the Supreme Court
has made it clear that the identity of the parties must be
established and there must be a record of the agreement. Both
these requirements have to be satisfied. Only because the Bank has
prepared a document containing an arbitration clause, it cannot
automatically become binding upon the Respondent. There must
be some material connecting the Respondent with that document
and showing that he had accepted its terms.
18. In paragraph 17 of Govind Rubber , the Supreme Court
observed:
“We are of the opinion that a commercial document having
an arbitration clause has to be interpreted in such a manner
as to give effect to the agreement rather than invalidate it.”
19. This principle has to be kept in mind while deciding the
present matter. If the parties have agreed to refer their disputes to
arbitration, the Court should not reject such agreement by insisting
upon a form which the law does not require. But the Court cannot
create an arbitration agreement on behalf of the parties when
there is no material showing their consent. The intention of the
parties has to be found from the documents and their conduct. The
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Court cannot put its own intention in place of the intention of the
parties.
20. The facts of Govind Rubber need to be noticed. In that case,
there was a sales contract containing the terms of the transaction.
The appellant had issued a purchase order and had requested a
change in the payment terms. This request was accepted. The
Supreme Court considered an e-mail dated 27 August 2008, by
which the appellant had acknowledged the change in the payment
terms. Thus, actual correspondence between the parties was
available. The conduct of the appellant was according to the sales
contract. It was in these circumstances that the Supreme Court
held in paragraph 23:
“It is clear that for construing an arbitration agreement, the
intention of the parties must be looked into. The materials
on record which have been discussed hereinabove make it
very clear that the appellant was prima facie acting pursuant
to the sale contract issued by the respondent. So, it is not
very material whether it was signed by the second
respondent or not.”
21. The facts in Govind Rubber are not the same as the facts of
the present case. In that case, correspondence and an e-mail
showing the conduct of the parties were available before the
Court. Here, the Bank has not produced the digital application or
the electronic record showing that the Respondent had accepted
the terms. However, the principle laid down in Govind Rubber is
not limited only to correspondence between commercial parties.
Paragraph 16 of that judgment refers to internet purchases, tele
purchases, ticket bookings and standard form contracts. Therefore,
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the same principle can apply to a Credit Card facility. But the
identity of the cardholder and some record showing acceptance of
the terms must be available, at least prima facie.
22. The next question is how far this Court is required to
examine the matter while deciding an Application under Section
11 of the Arbitration Act. The Bank has relied upon A.P. Power
Generation Corpn. Ltd. v. Tecpro Systems Ltd. , (2026) 3 SCC 491.
In paragraph 13, the Supreme Court explained that the enquiry of
the Court under Section 11(6-A) is limited to finding out whether
an arbitration agreement exists. The Supreme Court noticed that
under Section 16, the Arbitral Tribunal has the power to decide
objections relating to its own jurisdiction and the existence and
validity of the arbitration agreement. In paragraph 14, the
Supreme Court held:
“The legislative policy under the 1996 Act strongly favours
minimal judicial intervention at the pre-arbitral stage. A long
line of precedents, such as Duro Felguera, S.A. v.
Gangavaram Port Ltd. [Duro Felguera, S.A. v. Gangavaram
Port Ltd, (2017) 9 SCC 729 : (2017) 4 SCC (Civ) 764] , the
Constitution Bench decision in Interplay Between Arbitration
Agreements under Arbitration Act, 1996 & Stamp Act, 1899,
In re [Interplay Between Arbitration Agreements under
Arbitration Act, 1996 & Stamp Act, 1899, In re, (2024) 6
SCC 1] , and SBI General Insurance Co. Ltd. v. Krish Spg.
[SBI General Insurance Co. Ltd. v. Krish Spg., (2024) 12 SCC
1 : (2025) 3 SCC (Civ) 567] have authoritatively settled that
the enquiry under Section 11 is confined to a prima facie
determination of the existence of an arbitration agreement
and no further. The referral court is required to undertake
only a prima facie determination of the existence of an
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arbitration agreement [Goqii Technologies (P) Ltd. v. Sokrati
Technologies (P) Ltd., (2025) 2 SCC 192 : (2025) 1 SCC
(Civ) 47] , and refrain from entering into contentious factual
or legal issues related to authority, capacity, arbitrability,
maintainability, or merits of claims.”
23. The above principle means that this Court is not required to
conduct a full trial while deciding an Application under Section 11.
This Court need not finally decide whether every transaction made
through the Credit Card was authorised, whether the amount
claimed by the Bank is correct, or whether the Respondent is liable
to pay the amount demanded. These matters can be considered by
the Arbitral Tribunal on the basis of evidence. But the limited
nature of the enquiry does not mean that the Court should accept
whatever the Bank says without looking at the documents. The
Court must still examine whether there is material which shows, at
least prima facie, that an arbitration agreement exists. In
paragraph 17 of A.P. Power Generation , the Supreme Court stated:
“Beyond the prima facie enquiry, it should be the discipline
of the referral court to refrain from undertaking a detailed
enquiry on basis of evidence to arrive at a finding of fact in
the nature of a “proof”.”
24. The Supreme Court thereafter referred to paragraphs 165 to
167 of Interplay Between Arbitration Agreements under
Arbitration Act, 1996 & Stamp Act, 1899, In re , (2024) 6 SCC 1. In
paragraph 165, the Supreme Court explained that the word
"examination" used in Section 11(6-A) means a prima facie
examination. The existence of the arbitration agreement has to be
considered with reference to Section 7. It was explained that
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formal validity includes the requirement that the agreement must
be in writing. The other questions relating to its actual existence
and validity can be decided by the Arbitral Tribunal under Section
16. Paragraph 166 of Interplay is important in this connection. It
states:
“The burden of proving the existence of arbitration
agreement generally lies on the party seeking to rely on such
agreement. In jurisdictions such as India, which accept the
doctrine of competence-competence, only prima facie proof
of the existence of an arbitration agreement must be
adduced before the Referral Court. The Referral Court is not
the appropriate forum to conduct a mini-trial by allowing the
parties to adduce the evidence in regard to the existence or
validity of an arbitration agreement. The determination of
the existence and validity of an arbitration agreement on the
basis of evidence ought to be left to the Arbitral Tribunal.
This position of law can be gauged from the plain language
of the statute.”
25. Paragraph 167 states:
“Section 11(6-A) uses the expression “examination of the
existence of an arbitration agreement”. The purport of using
the word “examination” connotes that the legislature intends
that the Referral Court has to inspect or scrutinise the
dealings between the parties for the existence of an
arbitration agreement. Moreover, the expression
“examination” does not connote or imply a laborious or
contested inquiry.”
26. These observations have to be read together. The Court
should not conduct a mini-trial. But at the same time, it has to look
at the dealings between the parties and examine whether an
arbitration agreement exists. The party relying upon the
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arbitration agreement has to place some material before the Court.
A mere statement that an agreement exists will not be sufficient in
every case. The Court has to see whether there is some written
record showing that the parties had agreed to refer their disputes
to arbitration.
27. The Bank has relied upon these principles and has argued
that this Court should not make a detailed enquiry into the manner
in which the Respondent accepted the terms through the digital
process. This argument is correct to the extent that this Court is
not required to finally decide whether every digital record is
genuine or whether the Bank's claim is correct. However, before
asking the Court to refer the dispute to arbitration, the Bank must
show some material which prima facie establishes that an
arbitration agreement exists. The limited enquiry under Section 11
cannot be used as a reason to avoid the requirement of Section 7.
28. When these principles are applied to the present case, the
first circumstance which requires consideration is that the Bank
has produced the written Cardholder Agreement. The arbitration
clause is contained in Clause 32.2. The Bank has produced the
MITC containing Clause 2.1. This clause does not say that only a
signature on the application can amount to acceptance. It provides
that making an online application, applying through e-mail,
signing on the reverse of the Card or using the Card will amount to
acceptance of the terms and conditions. Therefore, the written
terms themselves recognise that the Cardholder may accept the
agreement by his conduct, namely, by using the Credit Card.
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29. The second circumstance is that the Credit Card and the
account are connected with the name of the Respondent. The
statement of account refers to the Respondent, the Credit Card
ending in 1165 and the CRN relating to the facility. It shows an
outstanding amount of Rs.5,46,655.34. It shows that this amount
was carried forward as the previous statement dues. It is true that
the copy produced before the Court does not show the individual
transactions. Even then, it is a statement maintained by the Bank
in relation to the very Credit Card which, according to the Bank,
was issued to the Respondent.
30. The third circumstance is the affidavit of the authorised
representative of the Bank. In paragraphs 2, 5 and 6 of the
affidavit, he has stated on oath that the Respondent obtained the
Credit Card facility through the digital process of the Bank,
accepted the terms and conditions and used the facility. The
affidavit gives the Application ID and refers to the statement of
account. These statements have not been made only in the
Arbitration Application. They have been repeated on oath in the
supporting affidavit. The Court has considered the fact that the
Bank has not produced the electronic record showing acceptance
of the terms. The Bank has explained that the records are with its
earlier vendor and that the agreement with the vendor has been
terminated. This explanation may show why the Bank is unable to
produce those records at present. But this explanation cannot
prove that the Respondent had given his consent. The Bank cannot
establish an arbitration agreement only by saying that the
electronic records are with a vendor and may be produced later.
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The Bank has to rely upon the material which is placed before the
Court. However, the Bank's case is not based only on the
Application ID or on the statement that the digital records may be
produced later. The Bank has relied upon Clause 2.1 of the written
Cardholder Agreement and the statement of account relating to
the Respondent's Credit Card. Clause 2.1 says that use of the Card
amounts to acceptance of the Cardholder Agreement. The
authorised representative of the Bank has stated on oath that the
Respondent used the Card. The statement of account, though it
does not give the detailed transactions, shows an outstanding
amount against the same Card and account. When all these
materials are considered together, they give prima facie support to
the Bank's case that the Credit Card facility was obtained and used
by the Respondent.
31. It is true that the statement of account does not show the
individual transactions. For this reason, the statement cannot
decide the final liability of the Respondent. The Bank may have to
produce the detailed statement, transaction records and other
supporting documents before the Arbitral Tribunal. But at this
stage, while considering the Application under Section 11, the
Court is not deciding the amount payable or whether every entry
in the statement is correct. The limited question is whether there is
prima facie material to show that the Respondent accepted the
written Cardholder Agreement containing the arbitration clause.
For this limited purpose, the statement of account, the affidavit of
the authorised representative and Clause 2.1, when read together,
are sufficient. The Court is aware that the statement made by the
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Bank that the Respondent used the Card does not finally prove
that every transaction was made by the Respondent or with his
authority. The Respondent will be free to raise before the Arbitral
Tribunal any objection regarding issue of the Card, its delivery, its
actual use, unauthorised transactions, correctness of the account
or applicability of the terms and conditions. The Bank will have to
prove these matters by producing proper evidence. Nothing stated
in this order will prevent the Respondent from raising such
objections before the Tribunal.
32. It is necessary to notice the stand of the Respondent as stated
in the Application. In paragraph 16, the Bank has stated that after
the statement of claim and the application under Section 17 were
served by e-mail, the Respondent objected to the appointment of
the proposed sole arbitrator. He did not agree to the name
suggested by the Bank. This shows that the Respondent did not
agree to the appointment of that particular arbitrator. However,
this objection does not mean that the Respondent has denied the
existence of an arbitration agreement. At the same time, it cannot
be treated as an admission by the Respondent that such an
agreement exists. No separate statement of claim and defence, or
written defence by the Respondent denying the existence of the
Cardholder Agreement, has been placed before this Court.
Therefore, Section 7(4)(c), which refers to an exchange of
statements of claim and defence, cannot be applied only because
the Respondent sent an e-mail objecting to the proposed arbitrator.
The finding in the present case is not based on any admission by
the Respondent under Section 7(4)(c). It is based on the written
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Cardholder Agreement, Clause 2.1 of that Agreement, the
statement of account and the affidavit filed by the Bank.
33. The Bank has relied upon the RBI material relating to digital
lending. It has submitted that the Credit Card facility was provided
through a digital process. The Bank has stated that the amount
claimed is public money and that non-payment of such dues affects
the interest of the Bank and the public at large. These submissions
have been considered. The regulatory directions relating to digital
lending may regulate the manner in which a Bank carries on its
digital lending activities. They may explain the use of digital
methods. But these directions by themselves cannot prove that a
particular customer accepted a particular arbitration clause. The
existence of the arbitration agreement must still be examined
under Section 7 of the Arbitration Act. In the same way, only
because the Bank says that public money is involved, the
requirement of consent cannot be ignored. An arbitration
agreement must come from an agreement between the parties.
34. The earlier order dated 7 October 2026 recorded that the
main document showing acceptance by the Respondent had not
been produced. Therefore, the Bank was directed to produce a
copy of the application showing the physical or digital signature of
the Respondent. That direction was made on the basis of the
material which was then available before the Court. However, after
considering Section 7 and the Cardholder Agreement as a whole, it
is necessary to make clear that a physical or digital signature is not
the only method of acceptance recognised by law. The earlier
direction to produce a signed application cannot be understood to
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mean that an arbitration agreement can never exist unless such
signature is produced. As explained by the Supreme Court in
Govind Rubber , an agreement may be established through another
written record showing the consent of the parties.
35. In the present case, the Bank has not produced the signed
application or the digital audit trail. However, Clause 2.1 of the
Cardholder Agreement provides that use of the Card amounts to
acceptance of its terms. The Bank has produced a statement of
account connected with the Respondent and the particular Credit
Card. Its authorised representative has stated on oath that the
Respondent obtained and used the facility. After considering all
these materials together, the Court finds that there is prima facie
material to show that the Respondent accepted the Cardholder
Agreement by using the Credit Card. Therefore, the absence of a
physical or digital signature on the application does not prevent
the Bank from seeking reference of the dispute to arbitration. This
finding does not mean that the Bank is free from its duty to prove
the complete facts before the Arbitral Tribunal. The Bank has
stated that the original digital records are with its vendor. The
Arbitral Tribunal may require the Bank to produce those records,
the complete transaction history, the record showing delivery and
activation of the Card and any other relevant material. If the Bank
does not produce such records even when it is asked to do so, the
Tribunal will be free to consider the effect of such failure. This
Court is not giving any final finding about the amount due or the
liability of the Respondent for each transaction.
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36. The Supreme Court, in paragraph 19 of A.P. Power
Generation , has again stated that once the Court referring the
matter to arbitration is satisfied that an arbitration agreement
prima facie exists, a detailed examination of the evidence must be
left to the Arbitral Tribunal. The same approach is required in the
present case. This Court has examined the written agreement and
the material available only to the extent required to find out
whether an arbitration agreement prima facie exists. Any
examination of the digital process and the individual transactions
would go beyond the limited enquiry required under Section 11.
After considering the entire material, the Court holds that only
because the Credit Card Application does not bear the physical or
digital signature of the Respondent, it cannot be held that no
arbitration agreement exists. Section 7 does not say that a
signature is the only method by which consent can be recorded. In
the present case, Clause 2.1 of the Cardholder Agreement
recognises use of the Card as acceptance of the agreement. The
statement of account and the affidavit of the Bank's authorised
representative provide prima facie material showing such use.
Therefore, Clause 32.2, which contains the arbitration clause, is
prima facie shown to form part of the agreement governing the
Credit Card facility.
37. The Court accordingly records a finding that, for the purpose
of Section 11 of the Arbitration and Conciliation Act, 1996, a
prima facie arbitration agreement exists between the Applicant
Bank and the Respondent. However, the questions regarding
genuineness of the digital application, actual use of the Credit
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Card, authority for the individual transactions, correctness of the
statement of account and the amount payable are left open for
decision by the Arbitral Tribunal under Section 16 of the Act. The
Respondent will be free to raise all these objections before the
Tribunal. The Tribunal shall decide them independently after
considering the pleadings and the evidence produced before it.
38. In the aforesaid circumstances, the present Application under
Section 11 of the Act, is deserved to be disposed of in terms of the
following order:
A) Mr. Shadab Jan, Advocate of this court is hereby
appointed as the Sole Arbitrator to adjudicate upon the
disputes and differences arising between the Applicants and
the Respondents in relation to the cardholder Agreement
Agreement in each of the four Arbitration Application,
including the claims and counterclaims arising therefrom;
Office Address:- 1701, OneInfinity, Cawasji Patel Street, Fort,
Mumbai – 400 001.
Email: [email protected].
B) A copy of this Order will be communicated to the
Learned Sole Arbitrator by the Advocates for the Applicant
within a period of one week from today. The Applicant shall
provide the contact and communication particulars of the
parties to the Arbitral Tribunal along with a copy of this
Order;
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C) The Learned Sole Arbitrator is requested to forward the
statutory Statement of Disclosure under Section 11(8) read
with Section 12(1) of the Act to the Advocates for the
Applicant so as to enable them to file the same in the
Registry of this Court. The Registry of this Court shall retain
the said Statement on the file of this Applicant and a copy of
the same shall be furnished by the Advocates for the
Applicant to the Advocates for the Respondent;
D) The Learned Sole Arbitrator is requested to forward the
statutory Statement of Disclosure under Section 11(8) read
with Section 12(1) of the Act to the parties within a period
of two weeks from receipt of a copy of this Order;
E) The parties shall appear before the Learned Sole
Arbitrator on such date and at such place as indicated, to
obtain appropriate directions with regard to conduct of the
arbitration including fixing a schedule for pleadings,
examination of witnesses, if any, schedule of hearings etc. At
such meeting, the parties shall provide a valid and functional
email address along with mobile and landline numbers of the
respective Advocates of the parties to the Arbitral Tribunal.
Communications to such email addresses shall constitute
valid service of correspondence in connection with the
arbitration;
F) All arbitral costs and fees of the Arbitral Tribunal shall
be borne by the parties equally in the first instance, and shall
be subject to any final Award that may be passed by the
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Tribunal in relation to costs.
39. All questions relating to the genuineness of the digital
applications, actual use of the Credit Cards, authority for the
individual transactions, correctness of the statements of account
and the amounts claimed by the Applicant Bank are expressly kept
open. The respective Respondents shall be at liberty to raise all
such objections before the Arbitral Tribunal. The Arbitral Tribunal
shall decide the same independently, in accordance with law and
on the basis of the pleadings and evidence placed before it.
40. The findings recorded in the common judgment are only for
the limited purpose of deciding the Applications under Section 11
of the Arbitration and Conciliation Act, 1996. They shall not be
treated as final findings on the merits of the claims or the defences
of the parties.
41. All actions required to be taken pursuant to this order shall
be taken upon receipt of a downloaded copy as available on this
Court’s website.
(AMIT BORKAR, J.)
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