Madhya Pradesh High Court
M/S Amarjot Developers And Finance Pvt. ... vs M/S Mpm Homes Development Llp on 23 March, 2026
1 AC-108-2025
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
AC No. 108 of 2025
(M/S AMARJOT DEVELOPERS AND FINANCE PVT. LTD. Vs M/S MPM HOMES DEVELOPMENT LLP AND
OTHERS )
Dated : 23-03-2026
Shri R.S. Chhabra, learned Senior Advocate assisted by Shri Aman Arora -
Advocate for the applicant.
Shri V.K. Jain, learned Senior Advocate assisted by Shri Praveen Kachole -
Advocate for the respondents.
Reserved on : 20.01.2026
Pronounced on : 23.03.2026
This application has been filed under Section 11(6) of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as the 'Act of 1996') for
appointment of Arbitrator with respect to the dispute arising out of sale deed
executed on 26.04.2019 between the applicant and the respondents.
2. The applicant is a Company incorporated under the provisions of the
Companies Act, 1956, its registered office is situated at Khasra No. 84/3/5,
Bicholi Mardana, Grand Exotica Office, Indore. The respondent No. 1 is a
Limited Liability Partnership Firm registered under the provisions of Limited
Liability Partnership Act, 2008 and respondents No. 2 and 3 are the partners of
respondent No. 1 firm. The registered office of respondent No. 1 is situated at
140/2, Musakhedi, Mayur Nagar, Indore.
Facts of the case
3. The applicant executed registered sale deed dated 26.04.2019 thereby
alienating in favour of respondent no. 1 partnership firm, land bearing survey Nos.
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446/2/3, 447/2, 448/1/1/2, 448/1/2, 448/2/1/2, 453/1/1, 453/2/1, 453/1/2, 453/2/3
situated in village Bicholi Hapsi, Tehsil and District Indore admeasuring total
2.225 hectares, for a total sale consideration of Rs. 9,92,20,000/-.
4. It was recorded in clause 2 of the said registered sale deed that part of
the sale consideration was received through RTGS transaction and remaining
amount of the sale consideration shall be paid by way of two cheques of Rs.
2,41,13,900/- each of ICICI bank bearing cheque No. 000086 and 000087 dated
05.08.2019 and 05.11.2019, respectively with a stipulation that on honor of those
cheques, the sale deed shall be considered as valid. As such, out of total aforesaid
sale consideration, the applicant received an amount of Rs. 5,09,92,200/- through
RTGS and balance amount of Rs. 4,82,27,800/-was to be paid in the aforesaid
manner.
5. As there was some dispute between the parties. Thus according to the
averments in the present petition, it was respondents No. 1 and 2 who requested
the applicant that in view of certain circumstances, cheque should not be
presented for encashment and an assurance was given that the balance payment
shall be made shortly. However, on one pretext or the other they continued to
delay the payment of balance sale consideration. In such circumstances,
a Whatsapp communication was sent on 16.06.2022 to one of the partners of
respondent No. 1 firm and respondent No. 2 for settling the balance payment by
20.06.2022. However, instead of settling the accounts, respondent No. 2 called
for a meeting to discuss the amicable timelines for payment of balance sale
consideration as per reply dated 17.07.2022.
6. However, no amicable settlement was arrived at. Resultantly, the
applicant company filed Civil Suit No. RCS-A-1404/2023 against the respondents
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thereby seeking declaration of sale deed dated 26.04.2019 as void along with relief
of permanent injunction and possession of subject land.
7. The respondents filed their written statement in denial of the pleadings
in the plaint. In para 23 of the written statement, present respondents/defendants
raised a plea that there is existence of an arbitration agreement in the sale deed.
Thus, filing of suit was resisted with a plea that plaint is liable to be struck off due
to the existence of arbitration clause in the sale deed dated 26.04.2019.
8. Significantly, the present respondents, apart from raising objection in
the WS, have also filed an application under Section 8 of the Arbitration and
Conciliation Act, 1996 for referral of the matter for arbitration.
9. The present applicant did not object to the application filed by the
respondents under Section 8 of the Act of 1996, rather consented for referral of the
matter for arbitration. In view of the same, the trial Court passed order dated
25.04.2025 whereby the matter was referred for arbitration considering clause 8 of
the sale deed and the application filed by the respondents.
10. Consequent to the order of referral for arbitration dated 25.04.2025,
the applicant issued notice dated 14.05.2025 to the respondents whereby name of
an Advocate was proposed for appointment as Sole Arbitrator for adjudication of
the dispute between the parties. However, said notice returned unserved with a
remark 'Not Known'.
11. Again a notice was sent on 23.07.2025 to the respondents on an
address taken from the website of RERA proposing the name of aforesaid person
to act as Arbitrator. However, the respondents did not respond, instead a notice of
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lodging caveat through an Advocate was sent. In view of the above facts, present
application under Section 11 of the Act of 1996 came to be filed.
12. Meanwhile, applicant had also filed application in terms of Section 9
of the Act of 1996 before the concerned Court which was registered as MJC AV
50/2025.
Submissions of the learned counsel for the applicant
13. Learned Senior Counsel for the applicant submits that the sale deed
dated 26.04.2019 (Annexure A/2) contains clause 8 which is an arbitration clause.
However, as the dispute related to payment of balance sale consideration and the
respondents failed to pay the same despite repeated reminders, suit for recovery
was filed wherein not only by way of para 23 of the written statement, the
respondent objected to the maintainability of the suit in view of existence of
arbitration agreement in clause 8 but also an application in terms of the Section 8
of the Act of 1996 was filed for referring the matter to arbitration.
13.1 The learned Senior Counsel submits that a bare perusal of both the
statements i.e. in para 23 of the written statement and para 9 of the application
under Section 8 of the Act of 1996 would show that the respondents clearly stated
that the present dispute is covered under the arbitration clause of the sale deed. He
thus submits that the existence of arbitration clause by the very conduct of the
respondents is established. Learned Senior Counsel submits that although in the
present application, objections have been raised about the existence of arbitration
clause by asserting that the scope of clause 8 of the sale deed would not cover the
present dispute, however in view of the provisions of Section 7(4)(c), the
statement in para 23 and averments of Section 8 application before the trial court,
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even independent of clause 8 will constitute an arbitration agreement. Thus, the
respondents cannot be permitted to approbate and reprobate for resisting the civil
suit by resorting to existence of arbitration clause in the proceedings of the civil
suit and then claim in present proceedings that there is no arbitration clause.
14. Learned Senior Counsel then refers to an application filed under
Section 9 of the Act of 1996 and its reply submitted by the respondents before the
Court concerned and further refers to the appeal filed under Section 37 of the Act
of 1996 by the respondents before this Court challenging the order passed by the
Court in Section 9 application of the applicants. He submits that a perusal of all
these applications would show that the respondents never disputed existence of
arbitration clause. On the contrary they asserted in each and every proceeding
about existence of arbitration clause and even for interim relief they asserted that
remedy lies before the Arbitral Tribunal in terms of Section 17 of the Act of 1996.
He thus submits that the present is a case where there is clear existence of
arbitration agreement and in view of the rival claims by way of plaint and written
statement, existence of a live dispute is also very much there and on top of it, there
is complete disagreement between the parties for appointment of an Arbitrator by
mutual consent. He thus submits that it is a fit case for appointment of an
Arbitrator by this Court by invoking provisions of Section 11 of the Arbitration
and Conciliation Act, 1996.
15. In support of his submissions, learned Senior Counsel has placed
reliance on the judgment of the Hon'ble Apex Court in case of Glencore
International AG vs. Shree Ganesh Metals and Another, 2025 SCC OnLine SC
1815; Visa International Limited vs. Continental Resources (USA) Ltd., (2009) 2
SCC 55; Gas Authority of India Ltd. And Anr. vs. Keti Construction (I) Ltd. And
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Ors., (2007) 5 SCC 38 and; Wagad Infraprojects Pvt. Ltd. vs. Aryavrat Projects
Developers Pvt. Ltd., 2024 SCC OnLine MP 7383 .
Submissions of learned counsel for the respondent
16. Learned Senior Counsel for the respondents while vehemently
opposing the prayer for appointment of Arbitrator submits that clause 8 of the sale
deed is not an arbitration agreement. It is only an agreement agreeing for entering
into an arbitration agreement in future. Thus, based on the same Arbitrator cannot
be appointed.
17. The learned Senior Counsel then refers to order passed by the trial
Court on the application filed by the respondent under Section 8 of the Act of
1996 and submits that though it is correct that the trial Court has passed order
dated 25.04.2025 (Annexure A/5), thereby referring matter for arbitration,
however this was only a referral based on clause 8 of the sale deed, which in the
submission of learned Senior Counsel is not at all an arbitration agreement. He
further submits that in any case, the order passed by the trial Court on an
application under Section 8 is not binding upon this Court for the purposes of
deciding Section 11 application. He further submits that Section 7 of the Act of
1996 provides for an arbitration agreement for all or certain disputes. In the
present case, clause 8 would show that it is not for all disputes. Thus, the present
dispute being a dispute of payment of remaining sale consideration will not be
covered under the said clause, thus, the same is not arbitrable. He further submits
that in para 23 of the written statement, what has been asserted is that there is an
arbitration clause in the sale deed and not that the dispute raised before the trial
Court is arbitrable. Even for Section 8 application, same argument is repeated by
the learned Senior Counsel for the respondent.
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18. Learned Senior Counsel for the respondents further submits that in
sale deed (Annexure A/2), two cheques have been referred. However, the fact
remains that those cheques have never been presented by the applicant for
encashment and in absence of presentation of cheques, it cannot be inferred that
on presentation, they would have got dishonored and as such, at present there is no
dispute at all.
19. Learned Senior Counsel in alternate submits that even for the sake of
argument if it is accepted that the respondents requested the applicant not to
present those cheques on promise of payment on a later date, then this promise
and acceptance by the applicant in not presenting the aforesaid cheques for
encashment would constitute a new agreement. Thus, this dispute of non-payment
will be governed by new agreement and for this reason also, clause 8 of the sale
deed will not cover the present dispute because what has to be seen is arbitration
agreement q u a dispute and not for all the dispute in the world between the
parties.
20. Learned Senior Counsel for the respondents further submits that the
entire application for appointment of Arbitrator is based on clause 8 of the
agreement and it is not the case of the applicant that there was a subsequent
arbitration agreement by virtue of statement under para 23 of the written statement
and application filed under Section 8 of the Act of 1996. Thus, the same cannot be
taken into consideration in the present proceedings. In support of his submission,
learned Senior Counsel for the respondents has placed reliance on a judgment of
the Hon'ble Apex Court in case of BGM and M-RPL-JMCT (JV) vs. Eastern
Coalfields Limited., 2025 SCC OnLine SC 1471. He thus submits that the
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present application being bereft of merits deserves to be rejected.
Conclusions of the Court
21. Heard learned counsel for the parties. Perused the case file.
22. The initiation of dispute emanates from sale deed dated 25.04.2025
(Annexure A/2) which contains clause No.2 which provides alienation of subject
land for a total sale consideration of Rs. 9,92,20,000/- out of which an amount of
Rs. 5,09,92,200/- was paid through RTGS and remaining amount of Rs.
4,82,27,800/- was to be paid by two cheques bearing No. 000086 and 000087. The
applicant says that those cheques were never presented for the reason that request
was made by the respondents for not presenting them on promise to pay on a later
date, however the payment was never made. Thus, it is stated that in absence of
complete payment, sale deed remained not valid, in view of clear assertion in the
last part of para 2 of the sale deed which states that sale deed shall be considered
valid only on the honor of above mentioned cheques and this was the genesis of
the dispute.
23. The applicant initially filed suit for declaration of sale deed null and
void, permanent injunction and delivery of possession. This suit was resisted by
the respondents by filing written statement and counter claim. In the written
statement, the respondents stated in para 23 thus :
''23. That, it is pertinent to submit that there exists an Arbitration Clause
enshrined in the Sale Deed dated 26-04-2019 under Clause 8 therein. The said
clause states that if any claim or dispute arises regarding the title and ownership
of Suit Property, the Plaintiff and Defendant No.1 will, mutual agreement,
appoint an Hon'ble retired Justice of M.P. High Court as a sole arbitrator to
adjudicate and resolve the dispute and his decision shall be final. The Plaintiff
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clearly overlooked its responsibilities and obligations enshrined in the Sale
Deed dated 26-04-2019. Therefore, it is respectfully submitted that the present
plaint is liable to be struck off due to the existence of an Arbitration Clause in
the Sale Deed dated 26-04-2019, which is a binding contract on the Plaintiff and
the Defendant No.1.''
24. After filing written statement, respondents filed application under
Section 8 of the Act of 1996, para 9 of the said application reads as under :
''9. That, there have been disputes of possession and diversion involving
State/Government, the plaintiff, defendant and a third person in respect of the
suit properties including the present dispute which has to be referred to and need
to be resolved by the arbitrator in consideration of clause 8 of the sale deed.
The answering defendant, till date, has not got the possession of complete land
from the plaintiff. The said arbitration clause bars the adjudication of the
present dispute by this Hon'ble Court and requires adjudication of dispute by the
Hon'ble retired Justice of M.P. High Court as the sole arbitrator to resolve the
dispute.''
25. It is thus, clear that the respondents not only asserted existence of
arbitration clause but equally they asserted that the present dispute is covered
under the said arbitration clause. The above two paragraphs of WS and section 8
application before the trial court would show that the respondents tried to justify
non-payment by stating that the plaintiff (present applicant) failed to discharge its
obligations under the sale deed. The issue of disputes of possession and diversion
were pleaded. Thus the non-payment was connected with those disputes and thus
the matter was requested to be sent to arbitrator.
26. The learned counsel for the respondents submitted that although
clause 8 is there but the same would not cover the present dispute. Thus, qua
present dispute, there is no arbitration clause. However, while asserting so, he
very conveniently submits that in para 23 of the written statement existence of
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arbitration clause has been mentioned and not that present dispute is covered
under the said clause. Similarly, he argued for application under Section 8 of the
Act of 1996. However, as quoted and analysed above, a bare perusal of para 23
would show that it has clearly been stated that in view of arbitration agreement in
clause 8, this plaint deserves to be struck down which would mean that by conduct
and by express pleading, the respondent intended to decide the matter by referring
it for arbitration.
27. The application filed by the respondents under Section 8 of the Act of
1996 is even more clear. It clearly declares in para 9 that present dispute is
covered under clause 8 of the sale deed (Annexure A/2). The legislature, after
gaining experience of working of the earlier Arbitration Act, consciously inserted
clause (c) in sub-Section 4 of Section 7 of the Arbitration and Conciliation Act,
1996 while defining 'Arbitration Agreement', which provides as under :
'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) x x x
(3) x x x
(4) An arbitration agreement is in writing if it is contained in--
(a) x x x
(b) x x x
(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.'
28. It is thus clear that an exchange of statements of claim and defence in
which the existence of arbitration agreement is alleged by one party and not
denied by the other party would also amount to an arbitration agreement.
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29. In the present case by way of para 23 of the WS and section 8
application before the trial court, existence of arbitration agreement was claimed
by the respondents which was accepted by the applicant. In the Section 8
application, it has expressly been mentioned that the present dispute is covered by
the arbitration agreement. As such, even if, for the sake of arguments, it is
accepted that clause 8 originally did not cover the dispute raised in the civil suit,
however, by subsequent conduct and statement by the respondents a clear intent of
arbitration agreement is forthcoming.
30. The Hon'ble Apex Court in the case Glencore International (supra) in
para 26 and 27 has held as under :
26. Reliance placed on the decision of this Court in NBCC (India) Ltd. v.
Zillion Infraprojects Private Limited, (2024) 7 SCC 174 is also of no avail to
respondent No. 1. Therein, this Court held, in the context of Section 7 (5) of the
Act of 1996, that unless there is conscious acceptance of the arbitration clause
from another document by the parties as a part of their contract, such an
arbitration clause could not be read as a part of the contract between the parties.
Again, this decision has no relevance on the same grounds as noted
hereinbefore.
27. More relevant is the decision of this Court in Govind Rubber Limited v.
Louis Dreyfus Commodities Asia Private Limited, (2015) 13 SCC 477, wherein
this Court observed that a commercial document having an arbitration clause
has to be interpreted in such a manner as to give effect to the agreement rather
than invalidate it. Reference was made to Scrutton on Charter Parties, (17th
Edition, Sweet & Maxwell, London, 1964) in the context of principles relating
to construction of a commercial agreement and it was observed that it has to be
construed according to the sense and meaning as collected in the first place
from the terms used and understood in the plain, ordinary and popular sense. It
was further observed that the Court should, if the circumstances allow, lean in
favour of giving effect to the arbitration clause to which the parties have agreed.
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As in the case on hand, one of the parties therein had not signed the contract
agreement. However, at its request, the other party had changed the terms
mentioned in the contract. Further, as is the case presently, the parties acted
upon the said contract agreement and, in that factual scenario, this Court
observed thus:
"16. On reading the provisions it can safely be concluded that
an arbitration agreement even though in writing need not be signed
by the parties if the record of agreement is provided by exchange of
letters, telex, telegrams or other means of telecommunication.
Section 7(4)(c) provides that there can be an arbitration agreement
in the exchange of statements of claims and defence in which
the existence of the agreement is alleged by one party and not
denied by the other. If it can be prima facie shown that the parties
are at ad idem, then the mere fact of one party not signing the
agreement cannot absolve him from the liability under the
agreement. In the present day of e-commerce, in cases of internet
purchases, tele purchases, ticket booking on internet and in standard
forms of contract, terms and conditions are agreed upon. In such
agreements, if the identity of the parties is established, and there is
a record of agreement it becomes an arbitration agreement if there
is an arbitration clause showing ad idem between the
parties. Therefore, signature is not a formal requirement under
Section 7(4)(b) or 7(4)(c) or under Section 7(5) of the Act.
...........
23. It is clear that for construing an arbitration agreement, the intention of the parties must be looked into. The materials on record which have been discussed hereinabove make it very clear that the appellant was prima facie acting pursuant to the sale contract issued by the respondent. So, it is not very material whether it was signed by the second respondent or not."
31. The Hon'ble Apex Court in the case of Visa International Limited (supra) in para 15 and 16 has held as under :
''15. In M. Dayanand Reddy Vs. A.P. Industrial Infrastructure Corp. Ltd. & Ors., (1993) (3) SCC 137 the legal position has been further clarified when this Court in clear and categorical terms held:
"An arbitration clause is not required to be stated in any particular form. If the intention of the parties to refer the dispute to arbitration can be clearly ascertained from the terms of the agreement, it is immaterial whether or not the expression `arbitration' or `arbitrator' or arbitrators' has been used in the agreement."Signature Not Verified Signed by: SREEVIDYA Signing time: 3/24/2026 11:21:51 AM
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16. The Court is required to decide whether the existence of an agreement to refer the dispute to arbitration can be clearly ascertained in the facts and circumstances of the case. This, in turn, may depend upon the intention of the parties to be gathered from the correspondence exchanged between the parties and the surrounding circumstances.''
32. In case of Gas Authority of India Ltd. (supra) , the Hon'ble Apex Court in para 14 has held as under :
''14. It may be noted that the four contracts (A), (B), (C) and (D) were awarded on different dates in quick succession between 10.2.1995 and 1.11.1995 and related to various construction works in Petro-Chemical Complex, Dibiyapur, District Etawah (U.P.). The terms of the agreement have to be understood in a broad commonsense manner. The material placed on record before the learned Single Judge shows that the discussion which took place in the meetings held between the representatives of appellant no.1 and representatives of respondent no.1 were not confined to the dispute relating to a single contract, but they related to disputes concerning all the four contracts. It will not be proper to segregate or compartmentalize the correspondence exchanged between the parties as if a particular letter was confined to a particular contract alone. The correspondence exchanged between the parties is not like evidence in a suit or trial where a piece of evidence given in a particular suit or trial cannot be read or taken into consideration in another suit or trial. The stand of the appellant right from the beginning was that all the disputes should be referred to a single arbitrator, which will be cost effective, economical and quick. There can be no doubt this stand was very reasonable. Appellant no.1 had sent a panel on 16.2.1999, which was reiterated in the communication dated 15.11.1999. In these circumstances, respondent no.1 was not at all entitled to nominate Brig. Nardip Singh (Retd.) as an arbitrator which it chose to do subsequently on 10.12.1999. We do not find anything wrong on the part of the appellant when it intimated vide letter dated 15.11.1999 that a panel had already been sent earlier on 16.2.1999 for appointment of a single arbitrator for resolution of all the disputes between the parties.''
33. It has also to be considered that the respondents also contested the case filed by the applicant under Section 9 of the Act of 1996 in which a stand was taken by them that the proper remedy for the applicant is to file Section 17 application before the Arbitral Tribunal who is proposed to be appointed. However, in the present proceedings, the respondents are asserting that there is no arbitration agreement. As such, the respondent is trying to approbate and reprobate from its stand as per its convenience in different proceedings. This Signature Not Verified Signed by: SREEVIDYA Signing time: 3/24/2026 11:21:51 AM 14 AC-108-2025 aspect was considered by the Division Bench of this Court in the case of Wagad Infraprojects (supra). The Court in para 16 to 26 has held as under :
16. Normally all amendments are to be liberally allowed, however when a party seeks to withdraw an unequivocal admission made whereby a legal right has accrued to the opposite party by lapse of time, such an amendment cannot be permitted. (B.K. Narayana Pillai v. Parameswaran Pillai, (2000) 1 SCC 712).
17. Petitioner has contended that by virtue of an addendum dated 25.01.2016 executed between the parties the clause pertaining to arbitration was deleted.
However, it was the Petitioner Company itself who by a subsequent communication dated 18.05.2016, once again reiterated the existence of the arbitration clause. This was disputed by respondents by their communication dated 01.06.2016. In response to which, the stand of the Petitioner themselves was that the addendum was invalid for the reason that same did not have the approval of the client MPRDC.
18. Petitioner kept on insisting that the arbitration clause continued to exist and was not deleted. Thereafter, on reiteration of the respondent that arbitration clause had been omitted, Petitioner filed an application under Section 11 of the Act for appointment of Arbitral Tribunal. Subsequently, both parties nominated their own arbitrator to the Arbital Tribunal and proceedings commenced.
19. Petitioner not only reiterated its stand that the addendum dated 25.01.2016 deleting the arbitration clause was not operative and the arbitration clause continued to exists, it even invoked arbitration, reiterated its stand for referring disputes to arbitration and then approached the High Court for appointment of an Arbitral Tribunal and even submitted its claim before the Arbitral Tribunal and thereafter continued to participate in arbitration proceeding. Petitioner never raised any objection either before the Arbitral Tribunal or at the time of filing its objections under Section 34 of the Act that the arbitration agreement stood deleted. On the contrary, Petitioner at all stages negated the contention of the respondent that the arbitration clause stood deleted. Since 25.01.2016 till 26.09.2024, for nearly 9 years, the categorical stand of the Petitioner had been that the Arbitration clause exists and Petitioner has all along acted upon the Arbitration Clause without a demur.
20. The contention of the Petitioner was that the addendum is not operable because the requisite prior permission of the Client MPRDC was not obtained. The operability of the addendum dated 25.01.2016 is a question of fact. Petitioner has throughout unequivocally admitted that there was a valid and subsisting Arbitration Agreement. Petitioner cannot be now permitted to withdraw the admission made particularly when the Respondent has acceded to the stand and the Arbitral Tribunal constituted and the arbitration proceedings culminating in an Arbitral Award without a demur from the Petitioner. Looked at from another angle, we may note that there is no standard format for an arbitration agreement. Parties can agree to settlement of the disputes through the process of arbitration after the disputes have arisen.
21. Reference may be had to the Section 7 of the Arbitration and Conciliation Signature Not Verified Signed by: SREEVIDYA Signing time: 3/24/2026 11:21:51 AM 15 AC-108-2025 Act which reads as under:-- "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. (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."
22. Even if the contentions of the Petitioner were to be accepted that the original arbitration agreement stood deleted, subsequent conduct of Petitioner of reiterating the existence of an Arbitration Agreement and repeatedly requesting for referring the disputes to arbitration and the acceptance by the Respondents would amount to an Arbitration Agreement in terms of Section 7 of the Act.
23. Conduct of the Petitioner as noticed hereinabove clearly establishes that there was a valid and subsisting arbitration agreement between the parties and thus, the contention of the Petitioner that Arbitral Tribunal inherently lacked jurisdiction cannot be sustained and accordingly Petitioner cannot be permitted to amend the objection under Section 34 of the Act at this belated stage and withdraw the admission made.
24. Reliance placed by learned Senior counsel for Petitioner on the judgment of Supreme Court in Hindustan Zinc Limited (supra) is misplaced for the reason that in the said case the Supreme Court was considering the issue of constitution of the Arbitral Tribunal by one of the parties to the dispute. Said case pertained to reference of the disputes to the Statutory Arbitration Mechanism under Section 86 of the Electricity Act and the Supreme Court held that the State Commission could not both decide the disputes itself and also refer the same to an arbitrator. Said judgment is not applicable to the factual matrix of the present case.
25. Reliance placed on the judgment of State of Chhatisgarh v. Sal Udyog Private Ltd. (2022) 2 SCC 275 is misplaced for the reason that though a plea of inherent lack of jurisdiction could be taken by a subsequent amendment to the Signature Not Verified Signed by: SREEVIDYA Signing time: 3/24/2026 11:21:51 AM 16 AC-108-2025 objections under Section 34 of the Act, however, in the factual matrix of the present case, as noticed hereinabove, Petitioner cannot be permitted to amend the objections and resile from an unequivocal admission that there exists a valid arbitration agreement between the parties. Said judgment is also not applicable to the facts of the present case.
26. Further reliance placed on the judgment of Sushil Kumar Mehta v. Gobind Ram Bohra (1990) 1 SCC 193) to contend that defect of jurisdiction cannot be cured by consent or waiver, is also not applicable to the facts of the present case. The present case is not one where respondents had been contending the existence and validity of an Arbitration agreement and Petitioner consented or waived its objections to the same. In the present case, the Petitioner itself, despite denial by the respondent, had been time and again reiterating the existence and validity of the original arbitration agreement. Petitioner cannot be permitted to blow hot and cold with regard to the existence of the arbitration agreement. Consequently, said judgment also does not further the case of the Petitioner.''
34. As such, parties cannot be allowed to approbate and reprobate as per their convenience and in derogation of their own pleadings.
35. In the present case, the pleadings of the parties are such that they not only establish existence of an arbitration agreement but also the fact that the dispute sought to be raised by the applicant and even by the respondent is covered under the said arbitration agreement.
36. In view of the clear provisions of Section 7 (4) (c) of the Arbitration and Conciliation Act, 1996, even the statement of defence and its acceptance would constitute an arbitration agreement and in the present case the same is very much there. Hence, it is hereby held that existence of arbitration agreement is there and the present dispute is covered by the said arbitration agreement.
37. From the pleadings of the respective parties, it is also clear that the parties have failed to appoint arbitrator by mutual consent, rather there is no agreement about existence of arbitration clause. As such, there is no possibility of appointment of Arbitrator by mutual consent. Thus, the parties have failed to Signature Not Verified Signed by: SREEVIDYA Signing time: 3/24/2026 11:21:51 AM 17 AC-108-2025 appoint Arbitrator by mutual consent.
38. As regards the reliance as placed by the learned Senior Counsel on the case of BGM (supra) , the said case is not going to help the respondent for two reasons, first in the considered view of this court the arbitration agreement in clause 8 of the sale deed is not an agreement for agreeing to enter into an arbitration agreement in future but it clearly provides that in case of delay in resolution of dispute the parties can appoint by mutual consent a retired judge of the High Court for resolution of dispute. The term 'consent' is used qua appointment of arbitrator and not for arbitration itself. Second, the respondents themselves filed section 8 application in the civil suit and specifically stated that the present dispute is covered under the arbitration clause. 39. The Hon'ble Apex Court in the case of Jagdish Chander v. Ramesh Chander , (2007) 5 SCC 719 has set out parameters for constituting a clause as an arbitration clause which includes intention of the parties to enter into arbitration agreement which has to be gathered from the terms of the agreement. The Hon'ble Apex Court held in para 8 as under:
''8. This Court had occasion to refer to the attributes or essential elements of an arbitration agreement in K.K. Modi v. K.N. Modi [(1998) 3 SCC 573] , Bharat Bhushan Bansal v. U.P. Small Industries Corpn. Ltd. [(1999) 2 SCC 166] and Bihar State Mineral Development Corpn. v. Encon Builders (I) (P) Ltd. [(2003) 7 SCC 418] In State of Orissa v. Damodar Das [(1996) 2 SCC 216] this Court held that a clause in a contract can be construed as an "arbitration agreement" only if an agreement to refer disputes or differences to arbitration is expressly or impliedly spelt out from the clause. We may at this juncture set out the well-settled principles in regard to what constitutes an arbitration agreement:
(i) The intention of the parties to enter into an arbitration agreement shall have to be gathered from the terms of the agreement. If the terms of the agreement clearly indicate an intention on the part of the parties to the agreement to refer their disputes to a private tribunal for adjudication and a willingness to be bound by the decision of such tribunal on such disputes, it is arbitration agreement.
While there is no specific form of an arbitration agreement, the words used should disclose a determination and obligation to go to arbitration and not merely contemplate the possibility of going for arbitration. Where there is Signature Not Verified Signed by: SREEVIDYA Signing time: 3/24/2026 11:21:51 AM 18 AC-108-2025 merely a possibility of the parties agreeing to arbitration in future, as contrasted from an obligation to refer disputes to arbitration, there is no valid and binding arbitration agreement.
(ii) Even if the words "arbitration" and "Arbitral Tribunal (or arbitrator)" are not used with reference to the process of settlement or with reference to the private tribunal which has to adjudicate upon the disputes, in a clause relating to settlement of disputes, it does not detract from the clause being an arbitration agreement if it has the attributes or elements of an arbitration agreement. They are: (a) The agreement should be in writing. (b) The parties should have agreed to refer any disputes (present or future) between them to the decision of a private tribunal. (c) The private tribunal should be empowered to adjudicate upon the disputes in an impartial manner, giving due opportunity to the parties to put forth their case before it. (d) The parties should have agreed that the decision of the private tribunal in respect of the disputes will be binding on them.
(iii) Where the clause provides that in the event of disputes arising between the parties, the disputes shall be referred to arbitration, it is an arbitration agreement. Where there is a specific and direct expression of intent to have the disputes settled by arbitration, it is not necessary to set out the attributes of an arbitration agreement to make it an arbitration agreement. But where the clause relating to settlement of disputes, contains words which specifically exclude any of the attributes of an arbitration agreement or contains anything that detracts from an arbitration agreement, it will not be an arbitration agreement. For example, where an agreement requires or permits an authority to decide a claim or dispute without hearing, or requires the authority to act in the interests of only one of the parties, or provides that the decision of the authority will not be final and binding on the parties, or that if either party is not satisfied with the decision of the authority, he may file a civil suit seeking relief, it cannot be termed as an arbitration agreement.
(iv) But mere use of the word "arbitration" or "arbitrator" in a clause will not make it an arbitration agreement, if it requires or contemplates a further or fresh consent of the parties for reference to arbitration. For example, use of words such as "parties can, if they so desire, refer their disputes to arbitration" or "in the event of any dispute, the parties may also agree to refer the same to arbitration" or "if any disputes arise between the parties, they should consider settlement by arbitration" in a clause relating to settlement of disputes, indicate that the clause is not intended to be an arbitration agreement. Similarly, a clause which states that "if the parties so decide, the disputes shall be referred to arbitration" or "any disputes between parties, if they so agree, shall be referred to arbitration" is not an arbitration agreement. Such clauses merely indicate a desire or hope to have the disputes settled by arbitration, or a tentative arrangement to explore arbitration as a mode of settlement if and when a dispute arises. Such clauses require the parties to arrive at a further agreement to go to arbitration, as and when the disputes arise. Any agreement or clause in an agreement requiring or contemplating a further consent or consensus before a reference to arbitration, is not an arbitration agreement, but an agreement to enter into an arbitration agreement in future.'' Signature Not Verified Signed by: SREEVIDYA Signing time: 3/24/2026 11:21:51 AM 19 AC-108-2025
39. In fact, para 32 of BGM (supra) goes against the respondent which holds as under :
''32. As it is not the case of the Appellant that parties at any later stage have agreed to refer the disputes to arbitration, in our view, the High Court was justified in rejecting the application seeking appointment of an arbitrator. Issue
(ii) is decided in the aforesaid terms.''
40. In the present case, even if it is accepted that arbitration clause originally did not cover the dispute, then also, at a later stage i.e. by way of application under Section 8 of the Act of 1996 as well as para 23 of the written statement of the respondents and on this Section 8 application, consent by the present applicant created arbitration agreement for the purposes of the present dispute.
41. As such, in the present case not only that the terms of agreement clearly provide for arbitration as it says that in case of a dispute, a Retired High Court Judge will act as an Arbitrator and his decision shall be final and binding upon all. But also this agreement was fortified by filing application under Section 8 and by asserting in para 23 of the written statement about existence of arbitration clause and the pleadings in said application and WS firmly established that even the present dispute is covered under the said arbitration agreement. As such, the aforecited judgment will also not come to rescue the respondents. In view of the above analysis, the present is a fit case for exercise of the jurisdiction under Section 11 of the Act of 1996.
42. Accordingly, the name of Hon'ble Shri Justice Ishwar Sahai Shrivastav (Retd. Judge of High Court of M.P.) is proposed for appointment as the Sole Arbitrator for resolution of dispute between the parties.
Signature Not Verified Signed by: SREEVIDYA Signing time: 3/24/2026 11:21:51 AM20 AC-108-2025
43. Let a declaration in terms of Section 11(8) read with Section 12(1) of the Arbitration & Conciliation Act, 1996 in the prescribed form as contained in sixth Schedule of the Act be obtained from the proposed Arbitrator by the Principal Registrar of this Court before the next date of hearing.
List the matter on 31.03.2026.
(PAVAN KUMAR DWIVEDI) JUDGE vidya Signature Not Verified Signed by: SREEVIDYA Signing time: 3/24/2026 11:21:51 AM