Rajneesh Verma Sole Proprietor Of M/S Indo Tex vs M/S Level 4
- Court
- Delhi High Court
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
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Judgment pronounced on: 16.10.2026
# CNR No. DLHC010443932026
ARB.P. 1672/2026
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RAJNEESH VERMA SOLE
PROPRIETOR OF M/S INDO TEX .....Petitioner
Through: Mr. Sahil Ahuja, Mr. Anubhav Tyagi,
Mr. Kuldeep Jauhari and Ms. Palak
Garg, Advs.
versus
M/S LEVEL 4 .....Respondent
Through: Ms. Kriti Sharma and Mr. Narender
Singh, Advs.
CORAM:
HON'BLE MR. JUSTICE SACHIN DATTA
JUDGMENT
IA No.25643/2026 ( Exemption from filing typed and translated copy of
documents)
1. Allowed, subject to all just exceptions.
2. Application stands disposed of.
ARB.P. 1672/2026
3. The present petition has been filed by the petitioner under Section
11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter “ the A&C
Act ”) seeking appointment of a Sole Arbitrator to adjudicate the disputes
between the parties arising out of the supply of fabric material by the
petitioner to the respondent.
4. The petitioner is the sole proprietor of M/s Indo Tex, and is engaged
in the business of sale of fabric material. The respondent is a sole
ARB. P. 1672/2026 Page 1 of 6
Signature Not Verified
Digitally Signed
By:ABHISHEK THAKUR
Signing Date:16.10.2026
20:42:07
proprietorship concern of one Mr. Harish Kumar Sharma, engaged in a
similar line of business. It is the case of the petitioner that between
September, 2019 and August, 2021, fabric material was supplied by the
petitioner to the respondent on credit, under challan nos. CH-388/19-20
dated 09.09.2019, CH-407/19-20 dated 16.09.2019, CH-649/19-20 dated
23.12.2019, CH-352/20-21 dated 18.12.2020, CH-398/20-21 dated
31.12.2020, CH-422/20-21 dated 08.01.2021, CH-676/20-21 dated
20.03.2021 and CH-162/21-22 dated 12.08.2021, and the corresponding tax
invoices; and that the said transactions were recorded in a running and non-
mutual ledger account maintained by the petitioner.
5. Each of the aforesaid challans bears the following printed stipulation:-
“Any dispute regarding this invoice will be settled through arbitration of
Delhi Hindustani Mercantile Association at Delhi/Delhi Court according
to its Rules & Regulations.”
6. According to the petitioner, the last payment against the said account
was made by the respondent on 14.09.2024, and a sum of Rs.19,88,360/-
remains outstanding. For recovery thereof, the petitioner instituted a suit,
being CS (Comm.) No. 326/2026, before the learned District Judge
(Commercial Court)-02, Central District, Tis Hazari Courts, Delhi, claiming
the said sum along with interest @12% per annum.
7. In the said suit, the respondent moved an application under Section 8
of the A&C Act, seeking reference of the disputes to arbitration on the
strength of the aforesaid arbitration clause. Upon the petitioner conveying no
objection thereto, the said application came to be allowed vide order dated
16.07.2026, leaving both parties free to invoke the arbitration clause in
accordance with law.
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Digitally Signed
By:ABHISHEK THAKUR
Signing Date:16.10.2026
20:42:07
8. Thereafter, the petitioner issued a notice dated 23.07.2026 under
Section 21 of the A&C Act, invoking the arbitration clause and calling upon
the respondent to concur in the appointment, as Sole Arbitrator, of an
arbitrator empanelled with the Delhi Hindustani Mercantile Association, or
to suggest its own nominee. The respondent having failed to concur in the
appointment of an arbitrator, the present petition came to be filed on
14.08.2026.
9. Learned counsel for the respondent has opposed the present petition
on the ground of limitation. It is contended that the claims sought to be
referred arise out of challans/invoices of the period 2019 to 2021, and are
hopelessly barred by limitation.
10. The existence of the arbitration agreement between the parties is not
in dispute. Indeed, it was at the instance of the respondent itself, upon its
application under Section 8 of the A&C Act, that the parties came to be
relegated to arbitration.
11. The objection founded upon limitation does not detain this court.
Section 11(6A) of the A&C Act enjoins this court to “confine to the
examination of the existence of an arbitration agreement”. A seven-Judge
Bench of the Supreme Court in In Re: Interplay between Arbitration
Agreements under the Arbitration and Conciliation Act, 1996 and the
Indian Stamp Act, 1899 , (2024) 6 SCC 1, has held that the referral court’s
examination is confined to a prima facie determination of the existence of an
arbitration agreement and does not entail a laborious or contested enquiry.
12. With specific reference to limitation, the Supreme Court in SBI
General Insurance Co. Ltd. v. Krish Spinning , (2024) 12 SCC 1, has
observed that the referral court must confine its enquiry to whether the
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Digitally Signed
By:ABHISHEK THAKUR
Signing Date:16.10.2026
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petition under Section 11(6) has itself been filed within the period of three
years prescribed therefore; and that it “must not conduct an intricate
evidentiary enquiry” into whether the claims are time-barred, that question
being one for determination by the arbitrator.
13. In the present case, arbitration was invoked vide notice dated
23.07.2026 and the present petition has been instituted in 2026 itself. The
present petition is, therefore, within the period of limitation prescribed under
the Limitation Act, 1963. Whether the claims themselves are barred by
limitation – having regard, inter alia , to the running account pleaded by the
petitioner and the payments stated to have been made there against – is a
mixed question of fact and law, which falls to be determined by the learned
Sole Arbitrator.
14. Upon this court indicating that the objection as to limitation shall be
decided by the learned Arbitrator at the outset, learned counsel for the
respondent, very fairly, has consented to the present petition being allowed
and to the appointment of an independent Sole Arbitrator.
15. Learned counsel for the respondent further submits that the arbitration
be conducted under the aegis of the Delhi International Arbitration Centre
(hereinafter “ DIAC ”), in place of the Delhi Hindustani Mercantile
Association; the said proposal is not opposed on behalf of the petitioner.
16. The stipulation in an arbitration agreement as to the institution under
whose aegis the arbitration is to be conducted is a matter of contract between
the parties, which is always open to them to vary by mutual consent. Where
such consent is arrived at in the course of hearing and is recorded in the
order of the court, the arbitration agreement stands modified pro tanto . In
Shaf Broadcast (P) Ltd. v. Doordarshan , (2019) 10 SCC 447, the Supreme
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Court, at the request of the counsel for all the parties made at the time of
hearing, appointed a Sole Arbitrator in modification of an arbitration clause
which stipulated a three-member arbitral tribunal. The modification
presently agreed upon is of a narrower compass, inasmuch as it leaves the
seat of arbitration at Delhi undisturbed, and is solely confined to the
institution under whose aegis the arbitration is to be conducted.
17. In view of the above, and having regard to the consensus arrived at
between the parties, there is no impediment in appointing an independent
Sole Arbitrator. Accordingly, the petition is allowed, and with the consent of
the parties, Mr. Nikhil Aradhe, Advocate (Mobile No. +91 9406712068), is
appointed as the Sole Arbitrator to adjudicate the disputes between the
parties.
18. The learned Sole Arbitrator may proceed with the arbitration
proceedings subject to furnishing to the parties requisite disclosures as
required under Section 12 of the A&C Act; and in the event there is any
impediment to the appointment on that count, the parties are given liberty to
file an appropriate application in this court.
19. The arbitration shall take place under the aegis of, and in accordance
with the rules of DIAC.
20. It is specifically recorded that the objection of the respondent that the
claims of the petitioner are barred by limitation shall be decided by the
learned Sole Arbitrator at the outset, as a preliminary issue, in accordance
with law.
21. All other rights and contentions of the parties in relation to the
claims/counter-claims are kept open, to be decided by the learned Sole
Arbitrator on their merits, in accordance with law. Needless to say, nothing
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Digitally Signed
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Signing Date:16.10.2026
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in this order shall be construed as an expression of opinion of this court on
the merits of the case.
22. The present petition, along with the pending application, stands
disposed of in the above terms.
SACHIN DATTA, J
OCTOBER 16, 2026 / sd
ARB. P. 1672/2026 Page 6 of 6
Signature Not Verified
Digitally Signed
By:ABHISHEK THAKUR
Signing Date:16.10.2026
20:42:07