Hindustan Construction Company Ltd. vs. Bihar Rajya Pul Nirman Nigam Limited

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REPORTABLE
2025 INSC 1365
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. OF 2025
[Arising out of SLP (C) No. 4211 of 2025]
HINDUSTAN CONSTRUCTION COMPANY LTD.
THROUGH ITS AUTHORISED SIGNATORY
YOGESH DALAL … APPELLANT(S)
VERSUS
BIHAR RAJYA PUL NIRMAN NIGAM LIMITED
AND OTHERS … RESPONDENT(S)
J U D G M E N T
R. MAHADEVAN, J.
Leave granted.
2. This Appeal is directed against the final judgment and order dated
1
09.12.2024 passed by the High Court of Judicature at Patna in Request Case
No. 53 of 2020, whereby the High Court dismissed the request case filed by the
appellant, Hindustan Construction Company Limited, under Section 11 of the
Signature Not Verified
2
Arbitration and Conciliation Act, 1996 .
Digitally signed by
BORRA LM VALLI
Date: 2025.11.28
17:09:25 IST
Reason:
1
Hereinafter referred to as “the High Court”
2
For short, “the A&C Act”

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PREFACE
3. Arbitration is often a friend in conferences but a foe in practice. Its raison
d’etre has always been to ease the burden on courts and to ensure the
expeditious resolution of commercial disputes. Yet, this is not its only virtue.
The true advantage of arbitration lies in its freedom and flexibility, with party
autonomy as the cornerstone of the arbitral process.
3.1. Parties enjoy the liberty to determine the strength and composition of the
tribunal, to appoint domain experts as arbitrators, and to design procedures
suited to the nature and complexity of their disputes. This freedom allows them
to bring to the table expertise and insight that even a judge may not be able to
contribute.
3.2. However, parties often embrace arbitration in good times, only to resist or
manipulate it when disputes actually arise – seeking either to wiggle out of
arbitration altogether or to tilt the process unfairly in their favour. In such
situations, judicial intervention becomes inevitable and rightly so to safeguard
fairness and the integrity of the arbitral process.
3.3. The evolution of the judicial role from that of a helicopter parent to that
of a guardian angel of arbitration has been neither smooth nor uniform.
Successive legislative amendments, most notably those of 2015, 2019, and
2021, have sought to curtail judicial interference and recalibrate the delicate
balance between autonomy and oversight. Yet, in practice, arbitration has at

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times become more cumbersome than civil litigation. Parties continue to exploit
every procedural avenue to delay proceedings, i.e., filing a maze of applications
before the arbitral tribunal, the High Court, and even this Court, often on
technical or jurisdictional objections.
3.4. The present case is yet another instance where the fine boundary between
judicial oversight and arbitral independence is tested. At its core, arbitration
remains a creature of contract, founded on the twin pillars of party autonomy
and impartiality. Every act of interpretation whether of the statute or of the
contract must therefore be guided by these two foundational principles.
With this preface, we proceed to the facts of the present case.
FACTUAL MATRIX
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4. Respondent No. 1, Bihar Rajya Pul Nirman Nigam Limited awarded a
contract to the appellant on 04.03.2014 for the construction of a bridge over
River Sone in the Districts of Aurangabad and Rohtas, Bihar. The contract
contained Clause 25 providing for settlement of disputes through arbitration.
4.1. During execution of the contract, the appellant, by letter dated
18.09.2018, raised a claim before the Deputy Chief Engineer, BRPNNL seeking
compensation for additional costs and losses incurred during the original
contract period, in terms of Clause 25. Receiving no response, the appellant
3
For short, “BRPNNL”

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preferred an appeal on 20.10.2018 before the Managing Director, BRNPPL, and
thereafter, issued a notice dated 14.12.2018 expressing its intention to
commence arbitration. However, the Managing Director failed to appoint an
arbitrator within the prescribed period.
4.2. Consequently, the appellant filed an application under Section 11 of the
A&C Act for appointment of arbitrator. By order dated 02.08.2019 in Request
Case No. 4 of 2019, the Patna High Court appointed Justice P.K. Sinha (Retd.)
as the sole arbitrator. The arbitrator passed an award on 31.12.2021, which was
accepted by the respondents, and the awarded sum was duly paid to the
appellant.
4.3. Thereafter, the appellant once again approached the Deputy Chief
Engineer, BRNPPL under Clause 25, raising fresh claims relating to extension
of time for completion of works and compensation for the additional costs
incurred during the extended period. However, no response was received, and
the appeal to the Managing Director also remained undecided.
4.4. On 10.01.2020, the appellant issued a notice of intention to commence
arbitration and sought appointment of an arbitrator for adjudication of the
aforesaid disputes. As the Managing Director failed to act, the appellant filed
another petition under Section 11 of the A&C Act before the Patna High Court,
being Request Case No. 53 of 2020, for appointment of arbitrator.

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4.5. By judgment dated 18.08.2021, the High Court appointed Justice Shivaji
Pandey (Retd.) as the sole arbitrator to adjudicate all disputes arising out of the
contract dated 04.03.2014.
4.6. Upon completion of pleadings, the parties jointly sought extension of the
mandate under Section 29A of the A&C Act. The arbitrator, by order dated
11.03.2023, extended the mandate for six months. As the extended period was
to expire on 27.08.2023, both parties sought liberty to approach the Court for
further extension. The arbitrator, by order dated 17.06.2023, granted liberty to
approach court under Section 29A (5).
4.7. The Patna High Court, by order dated 13.10.2023, extended the mandate
for a further period of six months. On a subsequent joint request, the arbitrator
again extended time by order dated 17.03.2024, and the High Court, by order
dated 10.05.2024, granted a corresponding extension of six months.
4.8. Despite having consented to arbitration and actively participated in the
proceedings for over three years, the respondents filed Civil Review Application
No. 293 of 2024 before the High Court seeking review of the order dated
18.08.2021. By order dated 04.10.2024, the High Court reviewed its earlier
order and directed the arbitrator not to proceed further with the ongoing
arbitration. The Court further ordered that Request Case No. 53 of 2020 be
listed on 25.10.2024 for appointment of a new arbitrator, pointing out that
Justice Shivaji Pandey had, in the meantime, been appointed as President of the
State Consumer Disputes Redressal Commission, Meghalaya.

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4.9. In compliance with the High Court’s direction, the arbitrator, by order
dated 19.10.2024, suspended the arbitral proceedings sine die until further
orders. The High Court thereafter heard arguments and reserved orders on
22.11.2024, and by judgment dated 09.12.2024, dismissed the appellant’s
Request Case No. 53 of 2020.
4.10. Aggrieved by the aforesaid judgment and order, the appellant has
preferred the present Civil Appeal before this Court.
CONTENTIONS OF THE PARTIES
5. The learned senior counsel for the appellant submitted that the High Court
exceeded its jurisdiction in passing the impugned judgment dated 09.12.2024
thereby reviewing its earlier order dated 18.08.2021 passed under Section 11(6)
of the A&C Act, by which a sole arbitrator had been appointed. That order had
attained finality, having never been challenged by the respondents through any
appeal or other proceedings. Moreover, the A&C Act is a self-contained code
and does not confer any power of review upon the High Court. Hence, the very
act of entertaining a review petition was without jurisdiction.
5.1. It was further submitted that the order dated 04.10.2024 passed in the
review petition had specifically directed that Request Case No. 53 of 2020 be
listed on 25.10.2024 for appointment of a new arbitrator. However, the
impugned judgment went beyond that limited extent and proceeded to dismiss

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Section 11 petition itself, thereby nullifying its own subsisting order and acting
in excess of jurisdiction.
5.2. Without prejudice to the above, it was submitted that the review petition
was hopelessly barred by limitation, having been filed more than three years
after the order of appointment had been passed and fully acted upon by both
sides. Even assuming that a review was maintainable in law, it could not have
been entertained after such an inordinate and unexplained delay.
5.3. The learned senior counsel submitted that Clause 25 of the agreement
contains a valid arbitration clause in writing, clearly manifesting the parties’
intention to refer all or certain disputes arising out of the contract to arbitration.
The language of the clause leaves no ambiguity regarding the parties’ intention
to submit their disputes to an arbitral forum. Consequently, the High Court’s
finding that Clause 25 was not an arbitration clause is misconceived, untenable,
and contrary to the settled position of law.
5.4. It was pointed out that the appellant had duly complied with the pre-
arbitral procedure prescribed under Clause 25 by referring the dispute to the
Deputy Chief Engineer on 15.10.2019, preferring an appeal to the Managing
Director on 12.11.2019, and issuing a notice of arbitration on 10.01.2020. The
High Court thereafter appointed a sole arbitrator by order dated 18.08.2021. The
respondents neither filed an application under Section 16 objecting to
jurisdiction nor raised such a plea in their statement of defence. The arbitration
commenced on 13.09.2021 and proceeded through over seventy sittings and

8
three joint applications under Section 29A, reaching the stage of final
arguments, before the respondents belatedly filed the review petition.
5.5. According to the learned senior counsel, in the counter affidavit filed in
the review petition, the respondents for the first time, referred to a Bihar
Government Notification dated 14.08.2019, which substituted Clause 25 of the
Standard Bidding Document to provide for reference to the Bihar Public Works
Contract Disputes Arbitration Tribunal Act, 2008. It was submitted that such
substitution could not operate retrospectively to alter the terms of the contract
dated 04.03.2014.
5.6. It was submitted that an arbitration clause does not become null and void
merely because the person or authority designated to appoint an arbitrator, has
become ineligible under law. The High Court, therefore, erred in interpreting
Clause 25 to mean that arbitration itself was rendered impossible merely
because the Managing Director, BRNPPL could not act as the appointing
authority.
5.7. It was further submitted that both parties had jointly moved applications
under Section 29A of the A&C Act on multiple occasions seeking extension of
the arbitrator’s mandate. Such conduct clearly demonstrates their
acknowledgment of the arbitral process and their submission to the jurisdiction
of the arbitrator.


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5.8. The learned senior counsel emphasized that the impugned judgment was
passed, after more than three years of continuous arbitral proceedings during
which, over seventy sittings were conducted. The appellant alone had incurred
approximately Rs.50 lakhs towards arbitrator’s fees, secretarial expenses, travel,
accommodation, and legal costs. The proceedings had reached the stage of final
arguments when the High Court rendered the impugned judgment, thereby
defeating the very objective of the A&C Act – speedy and cost-effective
resolution of disputes.
5.9. It was further submitted that in their reply to the Section 11 petition, the
respondents had categorically admitted that Clause 25 of the agreement
provided for arbitration. Such admission, coupled with its active participation in
the proceedings, conclusively establishes the existence of a valid arbitration
agreement. The plea of non-arbitrability was raised for the first time only in the
review petition and was initially rejected. The review was allowed only to the
limited extent of substituting the arbitrator since Justice Shivaji Pandey had
been appointed as President, State Consumer Protection Commission,
Meghalaya. Despite this, the High Court subsequently dismissed the Section 11
petition in its entirety.
5.10. It was further contended that unilateral appointment of an arbitrator has
been held to be impermissible in law. Hence, the only option available to the
appellant was to invoke the jurisdiction of the High Court under Section 11(6)
of the A&C Act. The High Court, however, by enforcing a clause of unilateral

10
appointment, acted contrary to the principles laid down by this Court in TRF
4
Ltd v. Energo Engineering Projects Ltd , and Perkins Eastman Architects
5
DPC and another v. HSCC (India) Ltd , which have been affirmed by the
Constitutional Bench in Central Organisation for Railway Electrification v.
6
ECI SPIC SMO MCML (JV) .
5.11. The learned senior counsel submitted that the High Court’s observation
regarding the absence of an express waiver under Section 12(5) of the A&C Act
is misconceived. The effect of Section 12(5) does not negate or curtail the
jurisdiction of the High Court under Section 11 to appoint an independent
arbitrator where the designated authority suffers a disqualification under the
Seventh Schedule. The Court, acting as the appointing authority in place of the
Managing Director named in the clause, does not destroy the arbitration clause;
rather, it preserves it by substituting a neutral appointing mechanism. Otherwise,
PSUs could compel private contractors to waive disqualification criteria,
defeating the purpose of Section 12(5).
5.12. It was also submitted that the same Clause 25 had earlier been invoked
between the very same parties, resulting in an arbitral award that was accepted
and implemented by the respondents. The High Court’s contrary interpretation,
therefore, is inconsistent with the parties’ own conduct and past understanding
of the clause.
4
(2017) 8 SCC 377
5
(2019) SCC OnLine SC 1517
6
(2025) 4 SCC 641

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5.13. According to the learned counsel, having fully participated in the arbitral
proceedings, filed statements of claim and defence, and sought extensions under
Section 29A, the respondents are estopped under Section 4 of the A&C Act
from subsequently challenging the existence or validity of the arbitration
agreement. Reliance was placed on Narayan Prasad Lohia v. Nikunj Kumar
7
Lohia and others . Further reference was placed on Gayatri Project Ltd. v.
8
Madhya Pradesh Road Development Corporation Ltd. , to contend that once
arbitration proceedings are underway, the parties cannot subsequently challenge
the jurisdiction of the arbitral tribunal.
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5.14. The High Court’s reliance on State of Bihar v. Kashish Developers was
said to be misplaced, as that decision preceded the Constitution Bench
judgement in Central Organisation for Railway Electrification v. ECI-SPIC-
10
SMO-MCML (JV) , which overruled the earlier view taken in CORE v. ECI-
11
SPIC-SMO-MCML (JV) , relied upon in Kashish Developers .
5.15. Accordingly, it was prayed that this Court may be pleased to set aside the
impugned judgment dated 09.12.2024, restore the validity of the arbitration
proceedings pursuant to the order dated 18.08.2021, and either appoint a
substitute arbitrator itself or direct the High Court to do so within a time-bound
period.
7
(2002) 3 SCC 572
8
(2025) INSC 698
9
Order dated 04.10.2024 rendered by Patna High Court in C. Rev. No.181 and 182 of 2023
10
(2025) 4 SCC 641
11
(2020) 14 SCC 712

12
6. Per contra, the learned counsel for the respondents submitted that the
present dispute does not merely raise questions on the enforceability of
unilateral appointment but brings to light an uncommon yet valid manifestation
of party autonomy, where the contract explicitly restricts arbitration to a single
prescribed method and thereby excludes all alternate routes to arbitration.
6.1. According to the learned counsel, the specific question, as to whether an
arbitration clause which stipulates the unilateral appointment of an arbitrator by
one party and further provides that no arbitration shall be held if such
appointment cannot be made, can still be said to constitute a valid and subsisting
arbitration agreement, has not been directly adjudicated upon by this Court and
thus requires authoritative determination.
6.2. It was further submitted that Clause 25 of the contract titled “Settlement
of Disputes and Arbitration”, comprises two distinct parts. The first part
provides that upon the emergence of a dispute and compliance with pre-
arbitration steps the Managing Director of the respondent company shall appoint
the arbitrator. The second part, however, goes a step further and stipulates that if
for any reason, such appointment cannot be made, there shall be no arbitration at
all. While it is undeniable that the Constitution Bench in Central Organisation
for Railway Electrification v. ECI SPIC SMO MCML (JV) has held that
unilateral appointment of an arbitrator by one party is unenforceable, the
peculiar feature of the present clause is that it contains a negative covenant that
expressly forecloses arbitration altogether in the event the prescribed mode of

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appointment cannot be followed. This makes the clause substantially different
from the one considered in CORE .
6.3. Adding further, it was submitted that in CORE , Clause 64(3)(b) of the
General Conditions of Contract provided that the arbitration panel would consist
of three retired railway officers, one or more of whom were to be chosen by the
Railways from a panel. There was no stipulation in that clause that arbitration
would not take place if the procedure became invalid or could not be
implemented. In contrast, the present clause clearly records the parties’ intention
that arbitration is contingent upon the appointment of an arbitrator by the
Managing Director, and that failing such appointment, the disputes shall not be
referred to arbitration. Accordingly, the reliance placed by the appellants on
CORE is misplaced.
6.4. The learned counsel submitted that the impugned order rightly follows the
judgment of the Patna High Court in Civil Review No. 181 of 2023, where an
identical clause was considered. The High Court held that by reason of the
substitution of Section 12 by Act 3 of 2016, an arbitration clause enabling
appointment of an arbitrator by an ineligible officer such as the Engineer-in-
Chief or Administrative Head becomes otiose. The Special Leave Petitions
bearing Nos.25109 – 25110 of 2024 challenging that judgment came to be
dismissed by this Court after notice and hearing, thereby affirming the view that
such a clause does not survive in law.

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6.5. It was submitted that Clause 25, on its true construction, operates as a
contingent contract under Section 31 of the Indian Contract Act, 1872. The first
part constitutes a positive covenant for arbitration by an arbitrator appointed by
the Managing Director, while the second part provides that if such appointment
cannot be made, there shall be no arbitration. Upon the unilateral appointment
clause being rendered unenforceable by law, the contingency contemplated in
the first part became impossible, triggering the operation of the second part
under Section 33 of the Contract Act. Consequently, the clause itself dictates
that no arbitration shall take place.
6.6. The learned counsel further submitted that the principle of party
autonomy, as reaffirmed in CORE , remains the foundational norm of arbitration,
subject to statutory limitations and the principle of equality. However, party
autonomy cannot be invoked to rewrite the parties’ agreement. In Vidya Drolia
12
and others v. Durga Trading Corporation , this Court held that the scope and
existence of arbitration depend on the subjective will of the parties as expressed
in the arbitration agreement. If the parties have agreed that arbitration shall not
be held unless a specific mode of appointment is followed, the court cannot
override that consensus. The subjective will of the parties here, clearly recorded
in clause 25, is that arbitration shall be conducted only by an arbitrator
appointed by the Managing Director, otherwise, disputes shall be resolved
12
(2021) 2 SCC 1

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through the courts. To appoint an arbitrator under Section 11 in such a case
would amount to rewriting the contract.
6.7. It was further contended that the two parts of Clause 25 are separable.
The first part, now unenforceable due to the ruling in CORE , can be severed
without affecting the remainder of the clause. The second part, which
independently records the negative covenant against arbitration, remains valid
and binding. The doctrine of severability and the “blue pencil test” as
13
recognized in Shin Satellite Public Co. Ltd v. Jain Studios Ltd , and Beed
14
District Central Cooperative Bank Ltd v. State of Maharashtra and others ,
allow the offending portion to be struck off while giving effect to the surviving
portion that reflects the parties’ intention. Upon such severance, the second part
of Clause 25 stands independently and unambiguously expresses that disputes
shall not be referred to arbitration.
6.8. It was submitted that it is a settled principle that courts cannot rewrite or
modify the terms of a contract. In Venkataraman Krishnamurthy and another
15
v. Lodha Crown Buildmart Private Ltd , this Court held that courts must give
effect to the contract as executed and cannot make a new one, however,
reasonable, if the parties themselves have not agreed to it. Therefore, the relief
sought by the appellants, which effectively seeks to introduce an arbitration
clause contrary to the contract, is legally untenable.
13
(2006) 2 SCC 628
14
(2006) 8 SCC 514
15
(2024) 4 SCC 230

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6.9. The learned counsel further submitted that the State of Bihar has
consciously shifted from ad hoc arbitration to institutional arbitration by
amending Clause 25 of the Standard Bidding Document through Gazette
Notification dated 14.08.2019, substituting it with a provision mandating
reference of disputes to the Bihar Public Works Contract Disputes Arbitration
Tribunal established under the 2008 Act. This policy reform shows that the
respondents never intended for ad hoc arbitration to subsist under earlier
contracts, and the contractual clause under consideration must be construed in
this policy context.
6.10. In view of the foregoing, it was submitted that the arbitration agreement
in the present case has been rendered inoperative and unenforceable by
operation of law. The second part of Clause 25 constitutes a binding negative
covenant reflecting the parties’ express intention to exclude arbitration if the
Managing Director is unable to appoint an arbitrator. Any attempt by the Court
to appoint an arbitrator notwithstanding this stipulation would amount to
rewriting the contract and negating party autonomy. The impugned order,
therefore, correctly concludes that no arbitration agreement exists between the
parties, and the appeal deserves to be dismissed.
7. We have considered the submissions advanced by learned counsel for
both sides and have meticulously examined the materials placed on record.

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8. Apparently, there was an express agreement dated 04.03.2014 between
Respondent No.1 and the appellant for award of the contract for construction of
a bridge over River Sone in the Districts of Aurangabad and Rohtas. Clause 25
thereof provided for settlement of disputes through arbitration. The appellant’s
claim for additional costs / losses incurred during the original contract period,
raised under Clause 25, was adjudicated and settled by an arbitral award dated
31.12.2021, which the respondents did not challenge. However, the respondents
seriously resisted the appellant’s claim for the extended period of the contract.
8.1. The appellant’s request before the Deputy Chief Engineer, as required
under Clause 25, and the subsequent appeal before the Managing Director, were
not considered. The appellant’s notice of intention to commence arbitration and
request for appointment of an arbitrator for adjudication of disputes relating to
the extended period of the contract were also kept pending without any progress.
Consequently, the appellant invoked Section 11 of the A&C Act by filing
Request Case No. 53 of 2020 seeking appointment of an arbitrator.
8.2. By judgment dated 18.08.2021, the High Court of Patna appointed Justice
Shivaji Pandey (Retd.) as the sole arbitrator to adjudicate all disputes arising out
of the contract dated 04.03.2014. Arbitration proceedings commenced; evidence
was adduced; and arguments on the side of the appellant were concluded by
30.07.2023. Meanwhile, both parties jointed sought an extension of time under
Section 29A (3) of the A&C Act, which the arbitrator granted by extending the
mandate for a further six months. Subsequently, the High Court extended the

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mandate of the arbitrator on two more occasions – vide order dated 13.10.2023
in Request Case No. 79 of 2023 and order dated 10.05.2024 in Request Case
No. 59 of 2024.
8.3. Thereafter, the respondents filed Civil Review Application No. 293 of
2024 seeking review of the order dated 18.08.2021, stating inter alia that Justice
Shivaji Pandey had been appointed as President of the Meghalaya State
Consumer Protection Commission. By order dated 04.10.2024, the High Court
directed the arbitrator not to proceed with the arbitration and posted the request
case for appointment of a new arbitrator. However, the High Court dismissed
the request case, by the impugned judgment dated 09.12.2024.
9. In the given backdrop, the issues that fall for consideration in the present
appeal are as follows:
(i) Whether the High Court possessed the jurisdiction to review or recall
its earlier order passed under Section 11(6) of the A&C Act, and whether the
exercise of such power was valid in law.
(ii) Whether a valid and subsisting arbitration agreement existed between
the parties within the meaning of Section 7 of the A&C Act, and whether clause
25 of the contract satisfies the statutory requirements of a binding arbitration
clause.

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(iii) whether the joint application filed by both parties, seeking extension
of the arbitrator’s mandate under Section 29A constitutes an express or implied
waiver of the ineligibility under Section 12(5), and Section 4 of the Act.
10. Before proceeding further, it is apposite to look into the relevant
provisions of the Arbitration and Conciliation Act, 1996, as follows:
“ 2. Definitions . – (1) In this Part, unless the context otherwise requires, –
(b) “arbitration agreement” means an agreement referred to in section 7;
4. Waiver of right to object .—A party who knows that—
(a) any provision of this Part from which the parties may derogate, or
(b) any requirement under the arbitration agreement,
has not been complied with and yet proceeds with the arbitration without stating
his objection to such non-compliance without undue delay or, if a time limit is
provided for stating that objection, within that period of time, shall be deemed to
have waived his right to so object.
5. Extent of judicial intervention. —Notwithstanding anything contained in any
other law for the time being in force, in matters governed by this Part, no
judicial authority shall intervene except where so provided in this Part.
7. Arbitration agreement .—(1) In this Part, “arbitration agreement” means an
agreement by the parties to submit to arbitration all or certain disputes which
have arisen or which may arise between them in respect of a defined legal
relationship, whether contractual or not.
(2) An arbitration agreement may be in the form of an arbitration clause in a
contract or in the form of a separate agreement.
(3) An arbitration agreement shall be in writing.
(4) An arbitration agreement is in writing if it is contained in—
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams or other means of telecommunication
[including communication through electronic means] which provide a record of
the agreement; or
(c) an exchange of statements of claim and defence in which the existence of
the agreement is alleged by one party and not denied by the other.

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(5) The reference in a contract to a document containing an arbitration clause
constitutes an arbitration agreement if the contract is in writing and the
reference is such as to make that arbitration clause part of the contract.
….
11. Appointment of arbitrators. —(1) A person of any nationality may be an
arbitrator, unless otherwise agreed by the parties.
(2) Subject to sub-section (6), the parties are free to agree on a procedure for
appointing the arbitrator or arbitrators.
(3) Failing any agreement referred to in sub-section (2), in an arbitration with
three arbitrators, each party shall appoint one arbitrator, and the two appointed
arbitrators shall appoint the third arbitrator who shall act as the presiding
arbitrator.
(3A) The Supreme Court and the High Court shall have the power to designate,
arbitral institutions, from time to time, which have been graded by the Council
under section 43-I, for the purposes of this Act:
Provided that in respect of those High Court jurisdictions, where no graded
arbitral institution are available, then, the Chief Justice of the concerned High
Court may maintain a panel of arbitrators for discharging the functions and
duties of arbitral institution and any reference to the arbitrator shall be deemed
to be an arbitral institution for the purposes of this section and the arbitrator
appointed by a party shall be entitled to such fee at the rate as specified in the
Fourth Schedule:
Provided further that the Chief Justice of the concerned High Court may, from
time to time, review the panel of arbitrators.
(4) If the appointment procedure in sub-section (3) applies and—
(a) a party fails to appoint an arbitrator within thirty days from the receipt of a
request to do so from the other party; or
(b) the two appointed arbitrators fail to agree on the third arbitrator within
thirty days from the date of their appointment,
[the appointment shall be made, on an application of the party, by the arbitral
institution designated by the Supreme Court, in case of international commercial
arbitration, or by the High Court, in case of arbitrations other than
international commercial arbitration, as the case may be].
(5) Failing any agreement referred to in sub-section (2), in an arbitration with
a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days
from receipt of a request by one party from the other party to so agree the
appointment shall be made, on an application of the party in accordance with
the provisions contained in sub-section (4).

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(6) Where, under an appointment procedure agreed upon by the parties,—
(a) a party fails to act as required under that procedure; or
(b) the parties, or the two appointed arbitrators, fail to reach an agreement
expected of them under that procedure; or
(c) a person, including an institution, fails to perform any function entrusted to
him or it under that procedure,
the appointment shall be made, on an application of the party, by the arbitral
institution designated by the Supreme Court, in case of international commercial
arbitration, or by the High Court, in case of arbitrations other than
international commercial arbitration, as the case may be to take the necessary
measure, unless the agreement on the appointment procedure provides other
means for securing the appointment.
(6B) The designation of any person or institution by the Supreme Court or, as
the case may be, the High Court, for the purposes of this section shall not be
regarded as a delegation of judicial power by the Supreme Court or the High
Court.
(8) The arbitral institution referred to in sub-sections (4), (5) and (6), before
appointing an arbitrator, shall seek a disclosure in writing from the prospective
arbitrator in terms of sub-section (1) of section 12, and have due regard to—
(a) any qualifications required for the arbitrator by the agreement of the
parties; and
(b) the contents of the disclosure and other considerations as are likely to secure
the appointment of an independent and impartial arbitrator.
…
12. Grounds for challenge. —(1) When a person is approached in connection
with his possible appointment as an arbitrator, he shall disclose in writing any
circumstances,—
(a) such as the existence either direct or indirect, of any past or present
relationship with or interest in any of the parties or in relation to the subject-
matter in dispute, whether financial, business, professional or other kind, which
is likely to give rise to justifiable doubts as to his independence or impartiality;
and
(b) which are likely to affect his ability to devote sufficient time to the
arbitration and in particular his ability to complete the entire arbitration within
a period of twelve months.
Explanation1.—The grounds stated in the Fifth Schedule shall guide in
determining whether circumstances exist which give rise to justifiable doubts as
to the independence or impartiality of an arbitrator.
Explanation 2.—The disclosure shall be made by such person in the form
specified in the Sixth Schedule.

22
(2) An arbitrator, from the time of his appointment and throughout the arbitral
proceedings, shall, without delay, disclose to the parties in writing any
circumstances referred to in sub-section (1) unless they have already been
informed of them by him.
(3) An arbitrator may be challenged only if—
(a) circumstances exist that give rise to justifiable doubts as to his independence
or impartiality, or
(b) he does not possess the qualifications agreed to by the parties.
(4) A party may challenge an arbitrator appointed by him, or in whose
appointment he has participated, only for reasons of which he becomes aware
after the appointment has been made.
(5) Notwithstanding any prior agreement to the contrary, any person whose
relationship, with the parties or counsel or the subject-matter of the dispute,
falls under any of the categories specified in the Seventh Schedule shall be
ineligible to be appointed as an arbitrator:
Provided that parties may, subsequent to disputes having arisen between them,
waive the applicability of this sub-section by an express agreement in writing.
14. Failure or impossibility to act.—(1) The mandate of an arbitrator shall
terminate and he shall be substituted by another arbitrator, if—
(a) he becomes de jure or de facto unable to perform his functions or for other
reasons fails to act without undue delay; and
(b) he withdraws from his office or the parties agree to the termination of his
mandate.
(2) If a controversy remains concerning any of the grounds referred to in clause
(a) of sub-section (1), a party may, unless otherwise agreed by the parties, apply
to the Court to decide on the termination of the mandate.
(3) If, under this section or sub-section (3) of section 13, an arbitrator
withdraws from his office or a party agrees to the termination of the mandate of
an arbitrator, it shall not imply acceptance of the validity of any ground referred
to in this section or sub-section (3) of section 12.
15. Termination of mandate and substitution of arbitrator. —(1) In addition to
the circumstances referred to in section 13 or section 14, the mandate of an
arbitrator shall terminate—
(a) where he withdraws from office for any reason; or
(b) by or pursuant to agreement of the parties.

23
(2) Where the mandate of an arbitrator terminates, a substitute arbitrator shall
be appointed according to the rules that were applicable to the appointment of
the arbitrator being replaced. (3) Unless otherwise agreed by the parties, where
an arbitrator is replaced under sub-section (2), any hearings previously held
maybe repeated at the discretion of the arbitral tribunal.
(4) Unless otherwise agreed by the parties, an order or ruling of the arbitral
tribunal made prior to the replacement of an arbitrator under this section shall
not be invalid solely because there has been a change in the composition of the
arbitral tribunal.
16. Competence of arbitral tribunal to rule on its jurisdiction. —(1) The arbitral
tribunal may rule on its own jurisdiction, including ruling on any objections
with respect to the existence or validity of the arbitration agreement , and for
that purpose,—
(a) an arbitration clause which forms part of a contract shall be treated as an
agreement independent of the other terms of the contract; and
(b) a decision by the arbitral tribunal that the contract is null and void shall not
entail ipso jure the invalidity of the arbitration clause.
(2) A plea that the arbitral tribunal does not have jurisdiction shall be raised
not later than the submission of the statement of defence; however, a party
shall not be precluded from raising such a plea merely because that he has
appointed, or participated in the appointment of, an arbitrator.
(3) A plea that the arbitral tribunal is exceeding the scope of its authority shall
be raised as soon as the matter alleged to be beyond the scope of its authority is
raised during the arbitral proceedings.
(4) The arbitral tribunal may, in either of the cases referred to in sub-section (2)
or sub-section (3), admit a later plea if it considers the delay justified.
(5) The arbitral tribunal shall decide on a plea referred to in sub-section (2) or
sub-section (3) and, where the arbitral tribunal takes a decision rejecting the
plea, continue with the arbitral proceedings and make an arbitral award.
(6) A party aggrieved by such an arbitral award may make an application for
setting aside such an arbitral award in accordance with section 34.
18. Equal treatment of parties.—The parties shall be treated with equality and
each party shall be given a full opportunity to present his case.
29A. Time limit for arbitral award. —
…

24
(3) The parties may, by consent, extend the period specified in sub-section (1)
for making award for a further period not exceeding six months.
…
(5) The extension of period referred to in sub-section (4) may be on the
application of any of the parties and may be granted only for sufficient cause
and on such terms and conditions as may be imposed by the Court.
(6) While extending the period referred to in sub-section (4), it shall be open to
the Court to substitute one or all of the arbitrators and if one or all of the
arbitrators are substituted, the arbitral proceedings shall continue from the
stage already reached and on the basis of the evidence and material already on
record, and the arbitrator(s) appointed under this section shall be deemed to
have received the said evidence and material.
(7) In the event of arbitrator(s) being appointed under this section, the arbitral
tribunal thus reconstituted shall be deemed to be in continuation of the
previously appointed arbitral tribunal.
(8) It shall be open to the Court to impose actual or exemplary costs upon any
of the parties under this section.
(9) An application filed under sub-section (5) shall be disposed of by the Court
as expeditiously as possible and endeavour shall be made to dispose of the
matter within a period of sixty days from the date of service of notice on the
opposite party.
34. Application for setting aside arbitral award. (1) Recourse to a Court
against an arbitral award may be made only by an application for setting aside
such award in accordance with sub-section (2) and sub-section (3)
…”
10.1. The above provisions make it clear that the Arbitration and Conciliation
Act, 1996 embodies a legislative policy of party autonomy, limited judicial
intervention, and procedural self-sufficiency. Section 5 expressly restricts
judicial interference except as provided under the Act, reflecting the pro-
arbitration intent of the legislature. Once the parties have agreed to resolve their

25
disputes through arbitration, and such agreement satisfies the requirements of
Section 7, the Court’s role becomes largely facilitative – confined to enabling,
not obstructing, the arbitral process.
10.2. Section 11 delineates the mechanism for the appointment of arbitrators
and underscores the neutrality of the arbitral process by empowering the High
Courts and this Court to intervene only where the parties or the designated
authorities fail to act. Importantly, sub-section (6) confers a default power upon
the Court to secure such appointment when the agreed procedure breaks down,
while Section 11(8) reinforces independence and impartiality through
mandatory disclosures under Section 12(1).
10.3. Section 12(5) renders persons having relationships enumerated in the
Seventh Schedule ineligible for appointment as arbitrators, subject only to an
express written waiver executed after the disputes have arisen. This provision
marks a deliberate shift from presumed consent to conscious post-dispute
waiver, thereby strengthening the integrity of arbitral appointments.
10.4. Similarly, Sections 14 and 15 contemplate situations where an arbitrator
becomes de jure or de facto unable to act, or withdraws for any reason. In such
cases, the statute ensures continuity through substitution under Section 15(2),
thereby preserving the validity of prior proceedings. Section 18, often hailed as
the Magna Carta of Arbitration, guarantees equal treatment of parties. Section
29A further reinforces expedition and procedural discipline by imposing time
limits for completion of arbitral proceedings, while empowering the Court,

26
within the contours of the Act, to extend or substitute the tribunal, set terms, and
impose exemplary costs to prevent frustration of the process.
10.5. Section 34, read with Section 16, provides for challenges to the award on
limited grounds, including the validity of the arbitration agreement, but not
midstream, thus ensuring continuity of proceedings until an award is rendered.
11. Issue No. 1
Whether the High Court had jurisdiction to review its earlier order passed
under Section 11(6) of the A&C Act, and whether such exercise of power
was valid in law.
11.1. The issue goes to the very foundation of the legislative policy underlying
the Arbitration and Conciliation Act, 1996, which was enacted to promote
expedition, party autonomy, and finality in arbitral proceedings, while keeping
judicial intervention to a minimum. The Statement of Objects and Reasons of
both the 1996 Act and the 2015 Amendment clearly reflect the intention to
facilitate a fair and efficient arbitral process and to “minimize the supervisory
role of courts in the arbitral process”.
11.2. In Bharat Sanchar Nigam Limited and another v. Nortel Networks
16
India Pvt. Ltd , this Court reiterated that “ the legislative policy of the 1996 Act
is to minimize the supervisory role of courts in the arbitral process and to
16
(2021) 5 SCC 738

27
ensure that arbitration proceedings are conducted expeditiously without
unnecessary interference ”.
11.3. The insertion of Section 11(6-A) through the 2015 Amendment
reaffirmed the limited nature of judicial scrutiny at the appointment stage,
restoring the position that courts must confine themselves to a prima facie
determination of the existence of an arbitration agreement, curtailing the wider
17
inquiry recognized in SBP & Co. v. Patel Engineering Ltd. and another .
11.4. Section 5 of the A&C Act begins with a non-obstante clause that
expressly restricts judicial intervention only to situations enumerated under the
Act. The statute identifies specific points for court involvement – principally
under Sections 8, 9, 11, 29A, 34 and 37 – beyond which judicial interference is
prohibited.
11.5. In the seven-Judge Bench decision in Interplay Between Arbitration
Agreements under Arbitration and Conciliation Act, 1996 and Stamp Act,
18
1899, In re , this Court reaffirmed that the role of the referral court under
Section 11 is confined to a prima facie examination of the existence of an
arbitration agreement. All other questions including validity, enforceability, and
jurisdiction are matters for the arbitral tribunal under Section 16. The Court
further emphasized that the Arbitration Act is a self-contained code governed by
the principle that what is not expressly permitted under the Act is deemed
prohibited. The following passages from Interplay highlight that minimal
17
(2005) 8 SCC 618
18
(2024) 6 SCC 1

28
judicial intervention is the governing principle and that referral courts must
avoid undertaking detailed fact-finding or adjudication at the Section 8 or
Section 11 stage:
“88. One of the main objectives behind the enactment of the Arbitration Act was
to minimise the supervisory role of Courts in the arbitral process by confining it
only to the circumstances stipulated by the legislature. For instance, Section 16
of the Arbitration Act provides that the Arbitral Tribunal may rule on its own
jurisdiction “including ruling on any objection with respect to the existence or
validity of the arbitration agreement”. The effect of Section 16, bearing in view
the principle of minimum judicial interference, is that judicial authorities
cannot intervene in matters dealing with the jurisdiction of the Arbitral
Tribunal. Although Sections 8 and 11 allow Courts to refer parties to
arbitration or appoint arbitrators, Section 5 limits the Courts from dealing
with substantive objections pertaining to the existence and validity of
arbitration agreements at the referral or appointment stage. A Referral Court
at Section 8 or Section 11 stage can only enter into a prima facie
determination. The legislative mandate of prima facie determination ensures
that the Referral Courts do not trammel the Arbitral Tribunal's authority to
rule on its own jurisdiction.
89. Section 5 is of aid in interpreting the extent of judicial interference under
Sections 8 and 11 of the Arbitration Act. Section 5 contains a general rule of
judicial non-interference. Therefore, every provision of the Arbitration Act
ought to be construed in view of Section 5 to give true effect to the legislative
intention of minimal judicial intervention.
92. The Arbitration Act is a self-contained code inter alia with respect to matters
dealing with appointment of arbitrators, commencement of arbitration, making
of an award and challenges to the arbitral award, as well as execution of such
awards. [Pasl Wind Solutions (P) Ltd.v.GE Power Conversion (India) (P) Ltd.,
(2021) 7 SCC 1 : (2021) 3 SCC (Civ) 702; Kandla Export Corpn. v. OCI Corpn.,
(2018) 14 SCC 715 : (2018) 4 SCC (Civ) 664] When a self-contained code sets
out a procedure, the applicability of a general legal procedure would be
impliedly excluded. [Subal Paul v.Malina Paul, (2003) 10 SCC 361] Being a
self-contained and exhaustive code on arbitration law, the Arbitration Act
carries the imperative that what is permissible under the law ought to be
performed only in the manner indicated, and not otherwise . Accordingly,
matters governed by the Arbitration Act such as the arbitration agreement,
appointment of arbitrators and competence of the Arbitral Tribunal to rule on
its jurisdiction have to be assessed in the manner specified under the law. The
corollary is that it is not permissible to do what is not mentioned under the

29
Arbitration Act. Therefore, provisions of other statutes cannot interfere with
the working of the Arbitration Act, unless specified otherwise.
94. The Arbitration Act represents the principles of modern arbitration, which
seeks to give effect to the mutual intention of the parties to resolve their disputes
by a neutral third-party Arbitral Tribunal, whose decision is final and binding
on all the parties. Arbitration law allows the parties to design arbitral
procedures, which ensures efficiency and expediency of the arbitration process.
One of the reasons that business and commercial entities prefer arbitration is
because it obviates cumbersome judicial processes, which can often prove
expensive, complex and interminable. Most legal jurisdictions have also
recognised and adopted legal approaches that favour arbitration at both the
domestic and international level. In the process, national courts have given
effect to principles such as the separability presumption and jurisdictional
competence of the Arbitral Tribunal. Modern arbitration law does not
completely restrict the role of national courts in the arbitration process, but
gives priority to the Arbitral Tribunal to decide on disputes and issues
pertaining to arbitration agreements as well as the substantive rights of the
parties. The Arbitration Act reflects these aspects of modern arbitration law. It
is the duty of this Court to interpret the Arbitration Act in a manner which
gives life to the principles of modern arbitration in India.”
11.6. This position was reaffirmed in Central Organisation for Railway
19
Electrification v. ECI SPIC SMO MCML (JV) , wherein, this Court reiterated
that proceedings under Section 11 are strictly facilitative and not adjudicatory in
nature, and that issues relating to validity or jurisdiction must be left to the
arbitral tribunal. The following paragraphs are pertinent in this regard:
“H. Necessity of maintaining the principle of minimum judicial interference
165. In Interplay Between Arbitration Agreements under A&C Act, 1996 & Stamp Act,
1899, In re [Interplay Between Arbitration Agreements under A&C Act, 1996 &
Stamp Act, 1899, In re, (2024) 6 SCC 1, para 92] a seven-Judge Bench of this Court
emphasised the importance of minimal judicial interference by the courts at the
Section 11 stage. This Court held that the scope of the proceedings under Section 11
must be confined to the existence of an arbitration agreement. The Court further
observed : (SCC pp. 87-88, paras 165-67)
19
(2025) 4 SCC 641

30
“165. The legislature confined the scope of reference under Section 11(6-A) to
the examination of the existence of an arbitration agreement. The use of the
term “examination” in itself connotes that the scope of the power is limited to
a prima facie determination. Since the Arbitration Act is a self-contained code,
the requirement of “existence” of an arbitration agreement draws effect from
Section 7 of the Arbitration Act. In Duro Felguera [Duro Felguera, S.A. v.
Gangavaram Port Ltd., (2017) 9 SCC 729 : (2017) 4 SCC (Civ) 764], this
Court held that the Referral Courts only need to consider one aspect to
determine the existence of an arbitration agreement — whether the underlying
contract contains an arbitration agreement which provides for arbitration
pertaining to the disputes which have arisen between the parties to the
agreement. Therefore, the scope of examination under Section 11(6-A) should
be confined to the existence of an arbitration agreement on the basis of Section
7. Similarly, the validity of an arbitration agreement, in view of Section 7,
should be restricted to the requirement of formal validity such as the
requirement that the agreement be in writing. This interpretation also gives
true effect to the doctrine of competence-competence by leaving the issue of
substantive existence and validity of an arbitration agreement to be decided
by Arbitral Tribunal under Section 16. …
166. The burden of proving the existence of arbitration agreement generally
lies on the party seeking to rely on such agreement. In jurisdictions such as
India, which accept the doctrine of competence-competence, only prima facie
proof of the existence of an arbitration agreement must be adduced before
the Referral Court. The Referral Court is not the appropriate forum to
conduct a mini-trial by allowing the parties to adduce the evidence in regard
to the existence or validity of an arbitration agreement. The determination of
the existence and validity of an arbitration agreement on the basis of evidence
ought to be left to the Arbitral Tribunal. This position of law can also be
gauged from the plain language of the statute.
167. Section 11(6-A) uses the expression “examination of the existence of an
arbitration agreement”. The purport of using the word “examination”
connotes that the legislature intends that the Referral Court has to inspect or
scrutinise the dealings between the parties for the existence of an arbitration
agreement. Moreover, the expression “examination” does not connote or imply
a laborious or contested inquiry. On the other hand, Section 16 provides that
the Arbitral Tribunal can “rule” on its jurisdiction, including the existence
and validity of an arbitration agreement. A “ruling” connotes adjudication of
disputes after admitting evidence from the parties. Therefore, it is evident
that the Referral Court is only required to examine the existence of
arbitration agreements, whereas the Arbitral Tribunal ought to rule on its
jurisdiction, including the issues pertaining to the existence and validity of
an arbitration agreement. ”

31
The Constitution Bench held that the nature of objections to the jurisdiction of an
Arbitral Tribunal on the basis that stamp duty has not been paid or is inadequate
cannot be decided on a prima facie basis. [Interplay Between Arbitration Agreements
under A&C Act, 1996 & Stamp Act, 1899, In re, (2024) 6 SCC 1, para 207] Hence, it
was observed that objections of such a kind will require a detailed consideration of
evidence and submissions and a finding as to the law as well as the facts.
166. At the Section 11 stage, a referral court only has to determine the existence of
arbitration agreement. The validity of the arbitration clause providing for the
procedure for appointment of arbitrators will require the referral court to enter into
a detailed consideration of evidence and render a finding as to law and facts. This
issue should be left to be decided by the Arbitral Tribunal in view of the doctrine of
competence-competence. The Arbitral Tribunal is competent to rule on its
jurisdiction, including the issue of validity of the arbitration clause for violating the
equality principle under the Arbitration Act.
(Emphasis Supplied)
Thus, the entire scheme of the Act strongly discourages any mid-way judicial
intervention, especially by way of review, as it would run contrary to both the
text and the spirit of the statute.
11.7. Although the power exercised by the High Court under Section 11 is
judicial in nature post - SBP & Co. case, its scope remains narrow. Once an
arbitrator is appointed, the arbitral process must proceed unhindered. There is no
statutory provision for review or appeal from an order under Section 11, which
reflects a conscious legislative choice.
11.8. While High Courts, as courts of record, do possess a limited power of
review, such power is extremely circumscribed in matters governed by the
Arbitration Act. It may be exercised only to correct an error apparent on the face

32
of the record or to address a material fact that was overlooked. It cannot be used
to revisit findings of law or reappreciate issues already decided.
11.9. In Grindlays Bank Ltd v. Central Government Industrial Tribunal and
20
others , this Court drew a clear distinction between procedural review and
review on merits, holding that the latter is impermissible unless expressly
provided. Applied to the Arbitration Act, this means that review is available
only to cure a patent or procedural error – not to reopen interpretation of the
arbitration agreement.
11.10. Referring to the aforesaid decision in Bharat Heavy Electricals Limited
21
v. Jyothi Turbopower Services Private Limited , in which, one of us
(R. Mahadevan, J.) was a member, the Madras High Court held that while a
Tribunal has no inherent power to undertake a review on merits, it nonetheless
possesses the inherent procedural power to recall an order terminating the
proceedings. It cannot be that a constitutional court of record lacks such power,
to presume otherwise would amount to a constitutional fallacy. The Court
further observed that the A&C Act, 1996 is a complete code in itself and is
premised on minimal judicial intervention in arbitral proceedings. The following
paragraphs are apposite:
“ 18. The learned Arbitrator has also opined that an order under Section 25(a)
of the said Act cannot be construed to be an award as there is no decision on
merit and thus, it may not be possible to maintain an appeal under Section 34 of
the said Act (reliance was placed on the decision of the Division Bench of the
Delhi High Court in ATV Projects India vs. IOC & another, (2013) 200 DLT
20
(1980) supp SCC 420
21
2016 SCC OnLine Mad 4029 : 2016-3-L.W. 683

33
553). The learned Arbitrator thus opined that since a party cannot be without a
remedy, what should be the remedy in such a situation needed to be examined.
The Tribunal, while accepting that there cannot be any power of review inherent
in character, that proposition would apply to decision on merits. However, with
respect to procedural review, the implied power is available with the Tribunal to
deal with petitions similar to the ones in the present case. The observations
made by the Hon'ble Supreme Court in Grindlays Bank Ltd. vs. the Central
Govt. Industrial Tribunal, reported in AIR 1981 SC 806, in latter part of para 13
were specifically referred to, which are once again extracted as under:
''13. ....... Furthermore, different considerations arise on review. The
expression 'review' is used in the two distinct senses, namely (1) a
procedural review which is either inherent or implied in a Court or
Tribunal to set aside a palpably erroneous order passed under a
misapprehension by it, and (2) a review on merits when the error sought
to be corrected is one of law and is apparent on the face of the record. It
is in the latter sense that the Court in Patel Narshi Thakershi case (AIR
1970 SC 1273) held that no review lies on merits unless a statute
specifically provides for it. Obviously when a review is sought due to a
procedural defect, the inadvertent error committed by the Tribunal must
be corrected ex debito justitiae to prevent the abuse of its process, and
such power inheres in every Court or Tribunal.''
“ 27. We reject the plea of the learned counsel for the petitioner that on
termination of proceedings under Section 25(a) of the said Act, the Arbitrator
becomes functus officio, as he is a persona designata. Both the methods of
appointment of Arbitrator are possible, i.e. by consent or through the process of
Court. The position would not be different in the two situations. It is not as if
there is a better sanctity to the appointment of an Arbitrator which enlarges the
power if he is appointed by mutual consent, while there are abridged powers if
he is not appointed by the Court.”
“ 29. We are also in agreement with the views of both the Calcutta and Delhi
High Courts and in view of the aforesaid finding, that the remedy under Article
226 of the Constitution of India is not really available as the aforesaid is the
appropriate remedy. The invocation of jurisdiction of this Court by the
petitioner is, in turn, predicated on a belief that either of the parties aggrieved
have to approach this Court under its extraordinary writ jurisdiction. However,
we have already explained the remedy available and any further challenge to an
order which may be passed in such application would, in turn, depend on the
fate of it. The said Act is a complete code in itself and the basis is that there
should not be periodic judicial intervention in arbitration proceedings. Were a
favourable order to be passed commencing arbitration proceedings, the option
would only be to challenge the award, if so advised, under Section 34 of the said

34
Act. Similarly, if the application was to be dismissed, the position would really
be no different.”
11.11. The decisions such as Municipal Corporation of Greater Mumbai and
22
another v. Pratibha Industries Ltd. and others , and Mohd. Anwar & others v.
23
Pushpalata Jain & others , illustrate this narrow window, where review was
permitted only because the earlier orders had been passed in ignorance of
fundamental facts. These cases are confined to procedural lapses, not to re-
examining matters of law.
11.12. By contrast, in the present case, the High Court reopened the issue of
interpretation of the arbitration clause based solely on a subsequent judgment.
Such an exercise falls squarely outside the scope of review jurisdiction. Even
assuming that a review was maintainable, it was filed after an unexplained delay
of nearly three years and was not founded on any error apparent on the face of
the record or any suppression of material fact.
11.13. Once the Section 11 order had attained finality, the only remedies
available to the respondents were to approach this Court under Article 136 or to
raise objections under Section 16 before the arbitral tribunal. Having chosen
neither route, and having participated in the arbitral proceedings, including joint
applications under Section 29A, they were estopped from reopening the matter
through review. A later judgment cannot revive a concluded cause of action.
22
(2019) 3 SCC 203
23
SLP (C) No. 4820 of 2021 dated 05.04.2021

35
11.14. As emphasized in BSNL v. Nortel Networks (India) (P) Ltd (supra) ,
courts must resist “attempts to re-enter through the back door what the statute
has shut through the front door”. Section 11 is intended to trigger arbitration, not
to create multiple stages of judicial reconsideration.
11.15. For the reasons discussed above, this Court is of the considered view
that the High Court did not have the jurisdiction to reopen or review its earlier
order passed under Section 11(6) of the A&C Act. Once the appointment was
made, the court became functus officio and could not sit in judgment over the
very issue it had already settled. The review order cuts against the grain of the
Act, undermines the principle of minimal judicial interference, and effectively
converts the review into an appeal in disguise. Such an exercise cannot stand.
Accordingly, this issue is answered in the negative.
12. Issue No.2
Whether a valid and subsisting arbitration agreement exists between the
parties within the meaning of Section 7 of the A&C Act, and whether
Clause 25 of the agreement satisfies the statutory requirements of an
arbitration clause.
12.1. Section 7 of the A&C Act defines an “arbitration agreement” and
stipulates the manner in which it may be proved. While sub-section (3)
mandates that such an agreement must be in writing, Section 7(4)(c)

36
significantly widens the evidentiary scope by recognizing a valid arbitration
agreement even where it is evidenced through an exchange of statements of
claim and defence, provided that one party asserts the existence of such an
agreement and the other does not deny it.
12.2. This formulation derived from Article 7(2) of the UNCITRAL Model
Law, reflects a liberal legislative design that places primacy on the parties’
intention to arbitrate rather than on formalistic requirements. What matters is the
meeting of minds, not the mode in which that understanding is recorded.
12.3. This Court has consistently adopted a purposive interpretation of Section
7(4)(c). In S.N. Prasad, Hitek Industries (Bihar) Ltd. v. Monnet Finance Ltd.
24
and others , it was held that the expression “statement of claim and defence” is
not confined to pleadings before an arbitral tribunal, but extends to judicial
proceedings where the existence of an arbitration agreement is asserted, but not
specifically disputed.
25
12.4. Likewise, in State of West Bengal v. Sarkar & Sarkar , this Court
reiterated that active participation in arbitral proceedings without objection may
itself constitute sufficient evidence of a valid and subsisting arbitration
agreement. Similarly, in Mahanagar Telephone Nigam Limited v. Canara
26
Bank and others , it was held that even without a formally executed arbitration
24
(2011) 1 SCC 320
25
(2018) 12 SCC 736
26
(2020) 12 SCC 767

37
clause, a valid arbitration agreement can be inferred from the conduct of parties,
including participation in arbitration and exchange of pleadings without denial.
12.5. These authorities make it abundantly clear that the true test lies not in
technical formality, but in intention. Where parties have acted on a shared
understanding to arbitrate, they are estopped from subsequently denying the
existence of such an agreement.
12.6. Applying these principles to the present case, the record unequivocally
demonstrates the existence of an arbitration agreement between the parties.
Pursuant to Clause 25 of the contract, arbitral proceedings were formally
commenced on 13.09.2021. More than seventy hearings were conducted before
the sole arbitrator, during which both parties actively participated, filed
pleadings, paid fees, and incurred substantial costs.
12.7. It is also significant to note that in an earlier dispute between the same
parties, arising from the same contractual framework, arbitration had been
invoked under Section 11, and the respondents had accepted the resulting award
without protest. Such consistent conduct fortifies the conclusion that both
parties intended to, and indeed did, submit their disputes to arbitration.
12.8. These circumstances collectively establish a clear meeting of minds and
constitute compelling evidence of a valid and subsisting arbitration agreement
within the meaning of Section 7(4)(c). Having invoked and participated in the
arbitral process, the respondents cannot now be permitted to resile from its
earlier position.

38
12.9. Clause 25 of the agreement reads as follows:
“Except where otherwise provided in the contract all questions and disputes
relating to the meaning of the specifications, design, drawings and instructions
here-in-before mentioned and as to the quality of workmanship or materials
used on the work or as to any other question, claim right matter or thing
whatsoever in any way arising out of or relating to contract, designs, drawings,
specifications, estimates, instructions, orders or these conditions or otherwise
concerning the works or the execution or failure to execute the same whether
arising during the progress of the work or after the cancellation, termination,
completion or abandonment thereof shall be dealt with as mentioned
hereinafter.
(i) If the Agency considered any work demanded of him to be outside the
requirements of the contract, or dispute any drawings, record or decision given
in writing by the Engineer-in-charge on any matter in connection with or arising
out of the contract or carrying out of the contract or carrying out of the work, to
be unacceptable, he shall promptly within 7 days request the Dy. Chief Engineer
in writing for written instruction or decision. Thereupon, the Dy. Chief Engineer
shall give his written instructions or decision within a period of fifteen days from
the receipt of the Agency’s letter.
If the Dy. Engineer fails to give his instructions or decision in writing within the
aforesaid period or if the Agency is dissatisfied with the instructions or decision
of the Dy. Chief Engineer, the Agency may, within 15 days of the receipt of Dy.
Chief Engineer decision, appeal to the Managing Director who shall afford an
opportunity to the Agency to be heard, if the latter so desires, and to offer
evidence in support of his appeal. The Managing Director shall give his decision
within 30 days of receipt of Agency’s appeal. If the Agency is dissatisfied with
this decision the Agency shall within a period of 30 days from receipt of the
decision, give notice to the Managing Director for appointment of arbitrator
failing which the said decision shall be final binding and conclusive and not
referable to adjudication by the arbitrator.
ii) Except where the decision has become final, binding and conclusive in terms
of Sub Para (i) above disputes or difference shall be referred for adjudication
through arbitrator appointed by Managing Director, the administrative head of
the aid Bihar Rajya Pul Nigam Ltd. If the arbitrator so appointed is unable or
unwilling to act or resign his appointment or vacates his office due to any
reason whatsoever another sole arbitrator shall be appointed in the manner
aforesaid. Such persons shall be entitled to proceed with the reference from the
stage at which it was left by his predecessor.
It is a term of this contract that the party invoking arbitration shall give a list of
disputes with amounts claimed in respect of each such dispute along with the
notice for appointment of arbitrator and giving reference to the rejection by the
Managing Director of the appeal.

39
It is also a term of this contract that no person other than a person appointed by
such Managing Director or administrative head of the Nigam as aforesaid
should act as arbitrator and if for any reason that is not possible, the matter
shall not be referred to arbitrator at all.
It is also a term of this contract that if the Agency does not make any demand for
appointment of arbitrator in respect of any claims in writing as aforesaid within
45 days of receiving the intimation from the Engineer-in-Charge that the final
bill is ready for payment, the claim of the Agency shall be deemed to have been
waived and absolutely barred and the B.R.P.N.N.L. TD shall be discharged and
released of all liabilities under the contract in respect of these claims.
The arbitration shall be conducted in accordance with the provisions of the
Arbitration and Conciliation Act, 1996 (26 of 1996) or any statutory
modifications or re-enactment thereof and the rules made thereunder and for the
time being in force shall apply to the arbitration proceedings under this clause.
It is also a term of the contract that if any fees are payable to the arbitrator
these shall be paid equally by both the parties.
It is also a term of the contract that the arbitrator shall be deemed to have
entered on the reference on the date he issues notice to both the parties calling
them to submit their statement of claims and counter statement of claims. The
venue of the arbitration shall be such place as may be fixed by the arbitrator in
his sole discretion. The fees, if any, of the arbitrator shall, if required to be paid
before the award is made and published, be paid half and half by each of the
parties. The cost of the reference and of the award (including the fees, if any, of
the arbitrator) shall be in the discretion of the arbitrator who may direct to any
by whom and in what manner such costs or any part thereof shall be paid and
fix or settle the amount of costs to be so paid.
All arbitration shall be held at PATNA and at no other place.”

A plain reading of Clause 25 reveals two components: (i) an unequivocal
mandate that disputes “shall be referred to arbitration”, and (ii) a procedural
stipulation that vests exclusive power in the Managing Director to appoint the
arbitrator and forecloses arbitration altogether if such appointment is not made.
While the first component clearly evidences a binding intention to arbitration,
the latter imposes an arbitrary and exclusionary condition, incompatible with the
fundamental principles of neutrality and equality that underpin the arbitral
process.

40
12.10. This Court has consistently distinguished between the existence of an
arbitration agreement and the validity of the appointment procedure. In TRF Ltd
(supra) and Perkins Eastman Architects DPC (supra) , it was held that while a
named authority may be ineligible to act as arbitrator, such ineligibility does not
invalidate the arbitration agreement itself.
12.11. This principle was reaffirmed in Central Organisation for Railway
27
Electrification v. ECI SPIC SMO MCML (JV) , and conclusively settled by
28
the Constitution Bench in CORE II v. ECI SPIC SMO MCML (JV) , wherein,
it was held that unilateral appointment clauses in public-private contracts violate
Article 14 and offend the principle of nemo judex in causa sua . The Constitution
Bench observed in paragraph 164 as follows:
“Unilateral appointment clauses in a public-private contract fail to provide the
minimum level of integrity required in authorities performing quasi-judicial
functions such as arbitral tribunals. Therefore, a unilateral appointment clause
is against the principle of arbitration, that is, impartial resolution of disputes
between parties. It also violates the nemo judex rule which constitutes the public
policy of India in the context of arbitration. Therefore, unilateral appointment
clauses in public-private contracts are violative of Article 14 of the Constitution
for being arbitrary, in addition to being contrary to the equality principle under
the Arbitration Act.”
12.12. Accordingly, the portion of Clause 25 that vests exclusive appointment
power in one party and forecloses arbitration in default of such appointment
must be severed as void and unenforceable. However, the substantive agreement
to arbitrate survives by virtue of the doctrine of severability.
27
(2020) 14 SCC 712
28
(2025) 4 SCC 641

41
12.13. The legal position is now settled. In Offshore Infrastructures Ltd. v.
29
Bharat Petroleum Corporation Ltd. , this Court held that even where a clause
contains an otherwise defective unilateral appointment mechanism, the Court
may sever the offending portion and exercise its power under Section 11(6) to
appoint an independent arbitrator, thereby giving effect to the parties’ genuine
intention to arbitrate. The following paragraphs are pertinent in this regard:
“19.  The Respondent contends that once the arbitration clause referred to in the
GCC has become obsolete and non-operative, it would render the entire
arbitration mechanism non-existent therefore the Appellant cannot file an
application for appointment of arbitrator.
20.  We are not persuaded by this submission of the Counsel for Respondent. The
very existence of the arbitration clause in the GCC referring to all disputes to
arbitrator is the core part of contract. Merely because the procedure to appoint
an arbitrator provided in the clause has become inoperative due to subsequent
changes in statutory provisions, would not mean that the core of the contract
referring the dispute for adjudication to arbitrator would be rendered
nugatory. The amendment in the statute has been enacted with the legislative
intent to enforce neutrality of the arbitrator and bring impartiality in
arbitration proceedings by virtue of Section 12(5) of the 1996 Act. It cannot be
justified to literally interpret the clause in the contract in a manner or at the
cost of the entire arbitration mechanism itself being abandoned. The
arbitration agreement must be interpreted in a purposive manner, but not
literally so as to enable the parties to pursue the intended dispute redressal
mechanism of contract. Therefore, it cannot be said that non-operation of
arbitration clause in GCC will result into forgoing of entire arbitration
mechanism and rendering the Appellant disentitled for seeking appointment of
arbitrator . The Appellant is, therefore, entitled to file application under section
11(6) of the 1996 Act for appointment of arbitrator and thereby the power is
vested with the court to appoint an arbitrator upon filing of such application.”
The Court further cautioned that refusing to sever such clauses would
effectively confer on the dominant party a “nuclear veto” to defeat arbitration
29
2025 SCC OnLine SC 2147

42
altogether– a result wholly inconsistent with the pro-arbitration policy of the Act
and violative of Article 14.
12.14. The present contract, being a public -private contract, must withstand
not only conventional contractual scrutiny but also constitutional scrutiny. As
held in CORE II , arbitral appointments in public contracts must satisfy the
requirements of fairness, equality, and non-arbitrariness under Article 14.
12.15. The sub-clause in Clause 25 which provides that “if for any reason the
matter shall not be referred to arbitration” is vague, uncertain, and arbitrary. The
expression “for any reason” confers an unguided and absolute veto, particularly
objectionable in a public contract. Such a clause fails the test of manifest
arbitrariness and violates Section 18 of the Act, which mandates equal treatment
of parties.
12.16. In light of the above discussion, the following propositions emerge:
(i) The parties’ conduct clearly demonstrates their intention to arbitrate,
satisfying the requirement of Section 7(4)(c);
(ii) Clause 25, in its substantive form, constitutes a valid arbitration
agreement;
(iii) The unilateral and exclusionary appointment mechanism is void and
severable; and
(iv) This Court is empowered under Section 11(6) to cure the defect and
appoint an independent arbitrator.

43
12.17. Accordingly, it is held that a valid and subsisting arbitration agreement
exists between the parties. Clause 25, when read in its entirety and construed in
accordance with the doctrine of severability, satisfies the statutory requirements
of an arbitration clause under Section 7 of the Act. The contrary finding of the
High Court is unsustainable in law and is liable to be set aside.
13. Issue No. 3
Whether the joint application filed by both parties, seeking extension of the
arbitral mandate under Section 29A amounts to an express or implied
waiver under Section 4 read with the proviso to Section 12(5) of the Act.
13.1. Waiver is a foundational principle of arbitration, rooted in party
autonomy and fairness in conduct. Arbitration, being adversarial in nature,
inevitably results in a winning and a losing side. The legislative rationale in
codifying waiver is to ensure that parties do not secure a second bite at the
cherry after an unfavourable outcome. Parties are not permitted to sleep over
their rights. This statutory policy is in harmony with the scheme of minimal
judicial intervention, where the grounds for interference with an arbitral award
are narrow, and waiver operates as a significant bar to belated objections.
13.2. Though waiver, acquiescence, and estoppel are often discussed together
in arbitral jurisprudence, they occupy distinct conceptual spaces. Waiver is the
intentional relinquishment of a known right; acquiescence arises from passive
acceptance or delay; and estoppel precludes a party from resiling from a

44
representation on which the other has relied. The Act, however, incorporates
only the doctrine of waiver – presuming parties to be conscious of their conduct
and its consequences. The Act elevates silence to waiver by importing an
element of intent, thereby preventing parties from approbating and reprobating.
A party who has actively participated or consented to continuation of the
proceedings cannot later challenge the same process merely because the result is
adverse. The legislative design thus discourages tactical objections and
multiplicity of proceedings.
13.3. Section 12(5), read with the Seventh Schedule, introduces a mandatory
disqualification for certain categories of persons from acting as arbitrators, such
as employees, consultants, advisors, or those having financial or professional
ties with a party. By the 2015 Amendment, the provision came to embody the
twin pillars of independence and impartiality in arbitration. The proviso to
Section 12(5) creates a narrow exception: such ineligibility may be waived only
through an express agreement in writing, and only after disputes have arisen.
The deliberate use of this phrase reflects a conscious legislative choice to
exclude any notion of implied or inferred waiver.
13.4. In contrast, Section 4 embodies the broader principle of waiver by
conduct – where a party, knowing of any non-compliance with the Act or the
arbitration agreement, proceeds with the arbitration without timely objection.
Rooted in party autonomy, Section 4 prevents parties from raising tactical or
belated objections after having substantially participated. Thus, while Section

45
12(5) demands an express post-dispute written waiver, Section 4 covers all other
situations involving informed inaction or acquiescence.
30
13.5. In Bharat Broadband Network Ltd. v. United Telecoms Ltd , this Court
held that once a person falls within the disqualifications of the Seventh
Schedule, he becomes de jure ineligible to act as an arbitrator. The appointment
is void ab initio and the mandate terminates automatically under Section 14(1)
(a). The Court emphasized that such disqualification is absolute and capable of
being waived only through an express post-dispute written agreement.
13.6. This position was reiterated in Ellora Paper Mills Ltd. v. State of
31
Madhya Pradesh , where the Court held that mere participation in arbitration
proceedings does not amount to waiver of statutory ineligibility. While these
decisions do not directly address Section 29A, the legislative intent behind the
phrase “express agreement in writing” remains unambiguous: implied waiver,
acquiescence, or estoppel cannot cure Section 12(5) ineligibility.
13.7. Conversely, in Quippo Construction Equipment Ltd. v. Janardan
32
Nirman Private Limited , this Court held that failure to object or non-
participation, resulting in an ex parte award, amounts to a deemed waiver under
Section 4. The governing principle is that objections may be raised at any stage,
but not after a party has, through conduct or delay, waived its right.
30
(2019) 5 SCC 755
31
(2022) 3 SCC 1
32
(2020) 18 SCC 277

46
13.8. In the present case, the respondents had ample opportunity to object.
Instead, both parties jointly moved for extension under Section 29A, not once
but thrice. This leads directly to the interplay between Sections 4, 12(5) and
29A.
13.9. Section 29A empowers courts to extend the mandate of an arbitral
tribunal, either on a party’s application or upon sufficient cause. Its object is to
prevent termination of proceedings by efflux of time and to ensure continuity. A
joint application under Section 29A stands on a distinct footing from ordinary
acts of participation such as filing pleadings. When both parties jointly seek an
extension, they signify continued consent and confidence in the tribunal. Under
Section 29A(5), even a single party may apply; the other is free to oppose. The
Court may, in its discretion, extend the mandate with or without substituting the
arbitrator.
13.10. Thus, when a party joins in seeking extension under Section 29A despite
having the opportunity to object or seek termination, it signifies a higher degree
of consent. However, such consent cannot be equated with an express written
waiver under Section 12(5). The statutory language is categorical: only an
express written post-dispute waiver can cure Seventh Schedule ineligibility.
13.11. Reconciling Sections 4, 12(5) and 29A
 Section 12(5) addresses inherent ineligibility – a structural defect
affecting jurisdiction.
 Section 4 governs procedural waiver by conduct.

47
 Section 29A concerns extension of mandate, where joint invocation
indicates consent but not an express written waiver.
The harmonious construction lies in recognizing that only Seventh Schedule
disqualifications attract the stringent waiver regime of Section 12(5). In all other
cases viz. , procedural lapses, delays, or non-jurisdictional irregularities, Section
4 applies. Accordingly, a joint application under Section 29A amounts to a valid
waiver under Section 4, save in cases of statutory ineligibility under Section
12(5). Any contrary view would render Section 4 redundant and distort the
legislative design.
13.12. Where the disqualification under Section 12(5) is attracted, the language
being plain and mandatory, a joint application merely seeking extension,
without an informed written waiver, cannot cure ineligibility. Conversely, where
no such disqualification exists, the conduct of the parties, especially in jointly
invoking Section 29A, constitutes waiver under Section 4.
13.13. In conclusion, Section 12(5) protects impartiality; Section 4 regulates
procedural conduct; and Section 29A ensures continuity of proceedings. In the
present case, since no Seventh Schedule disqualification is attracted, the High
Court’s reliance on the rigours of Section 12(5) was misplaced. Viewed through
the lens of Section 4, the respondents’ conduct clearly amounts to waiver by
participation and consent.

48
Application of Kashish Developers
14. In the present case, the respondents have placed considerable reliance on
the fact that the decision in Kashish Developers, which was referred to by the
High Court in the impugned judgment, stands “affirmed” on account of the
dismissal of the Special Leave Petition. However, the circumstances in Kashish
Developers involved an appointment made without affording the State an
opportunity to oppose it. Whereas, the present matter arose after extensive
pleadings, objections, and participation by both parties. The two cases are
therefore factually distinct, and such reliance cannot justify revisiting or
unsettling the earlier appointment order.
14.1. It is necessary to restate the well-settled legal position regarding the
precedential value of orders dismissing Special Leave Petitions. A non-speaking
dismissal of an SLP signifies only that this Court, in its discretion under Article
136, has declined to interfere. It does not amount to approval of the reasoning of
the subordinate forum. The doctrine of merger does not apply to such
dismissals. This position has been consistently affirmed by this Court, including
33
in Kunhayammed and others v. State of Kerala and another ; and
34
P. Singaravelan and others v. District Collector, Tiruppur and others .
33
(2000) 6 SCC 359
34
(2020) 3 SCC 133

49
14.2. Similarly, in State of Uttar Pradesh and others v. Atul Kumar Dwivedi
35
and others , after reviewing earlier authorities, this Court reiterated that
dismissal of an SLP at the threshold without reasons does not elevate the
underlying judgment to binding precedent unless accompanied by an express
declaration of law under Article 141.
14.3. Accordingly, the respondents’ reliance on the supposed “affirmation” of
Kashish Developers is wholly misconceived. A non-speaking dismissal of an
SLP neither endorses the reasoning of the judgment challenged nor transforms it
into binding precedent. At best, such a decision has persuasive value; its only
legal effect is to bring finality to the dispute between the parties in that
particular case.
CONCLUSION
15. In the present case, the High Court had itself appointed the arbitrator in
2021 under Section 11(6) of the Act. Both parties participated fully, and more
than seventy hearings took place. The High Court also extended the arbitrator’s
mandate twice under Section 29A. At that stage, the High Court could not, by
invoking its jurisdiction under Articles 226 and 227, retrospectively invalidate
its own appointment order on the strength of a subsequent interpretation of a
similar clause in another matter. Such an approach undermines certainty, dilutes
the sanctity of judicial orders, and erodes confidence in the arbitral process.
35
(2022) 11 SCC 578

50
16. Once the High Court had accepted the existence of a valid arbitration
agreement and appointed an arbitrator, its later interference on the same
question of the validity of Clause 25 amounted, in substance, to an appeal
disguised as supervisory review. If the arbitrator had become unable to act
owing to recusal or disqualification, the proper course was to invoke Section
15(2) and appoint a substitute arbitrator to continue from the existing stage of
the proceedings.
17. Sections 15(1) and 15(2) clearly provide that an arbitrator’s mandate
terminates upon withdrawal or by agreement of the parties, and that a substitute
arbitrator must be appointed following the same procedure as the original
appointment. The judgments in Yashwith Constructions (P) Ltd v. Simplex
36 37
Concrete Piles (India) Ltd. and another , ACC Ltd v. Global Cements Ltd. ,
38
and Union of India v. Pradeep Vinod Construction Company , reaffirm that
such substitution preserves continuity, and prior proceedings remain valid
unless either party objects. In light of the same, the High Court’s decision to
suspend the arbitration altogether, instead of ordering substitution, was contrary
to settled law. The exercise of jurisdiction therefore calls for correction under
Article 136 of the Constitution. Accordingly, the impugned judgment and order
of the High Court is set aside.
36
(2006) 6 SCC 204
37
(2012) 7 SCC 71
38
(2020) 2 SCC 464

51
18. On the facts of this case, restarting the arbitral process de novo would be
both inequitable and inefficient. It is just and proper that the progress already
made be preserved. Therefore, the High Court is directed to appoint a substitute
arbitrator within two weeks from the date of receipt of this judgment. The newly
appointed arbitrator shall continue the proceedings from the stage at which they
were interrupted and endeavour to conclude them within one year, subject to
any further extension under Section 29A by mutual consent.
19. At this juncture, we are also constrained to take note of the conduct of the
respondent company, a public sector undertaking, which is far from satisfactory.
Despite repeated notices in appeal and requests for the appointment of an
independent arbitrator, the Managing Director chose to remain silent, thereby
compelling the appellant to seek judicial intervention. Such indifference by a
public authority, where contractual obligations demand prompt responsiveness,
falls short of the standards of fairness required of a State entity under Articles
14 and 298 of the Constitution.
19.1. As held in State of Bihar and others v. Kameshwar Prasad Singh and
39 40
another and Urban Improvement Trust, Bikaner v. Mohan Lal , the State
must act as a model litigant – fair, responsive, and transparent in its dealings.
Silence or procedural evasion by senior officers is inconsistent with the
constitutional trust reposed in public authorities. It is unfortunate that such
39
(2000) 9 SCC 94
40
(2010) 1 SCC 512

52
apathy had to be defended before a constitutional court as an administrative
prerogative.
19.2. Although this is a fit case for imposing costs, we refrain from doing so,
but issue a stern warning to the then Managing Director of the respondent
company, BRPNNL. Public Officers are custodians of public faith, not mere
administrators. Any repetition of such neglect may invite adverse remarks or
even personal accountability. The officer is advised to reflect upon the
responsibilities of public office and ensure that such indifference does not recur.
20. With the aforesaid directions and observations, this appeal is allowed.
There shall be no order as to costs.
21. Pending application(s), if any, stand disposed of.

.…………………………J.
[J.B. PARDIWALA]
.…………………………J.
[R. MAHADEVAN]
NEW DELHI;
NOVEMBER 28, 2025.