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Delhi District Court

Mushahid Ali vs M/S Sumat Prasad And Sons on 16 May, 2026

                        IN THE COURT OF Sh. RAJESH KUMAR GOEL
                            District Judge (Commercial Court) -02,
                                       Central, Tis Hazari

                                                        OMP (COMM.) No. 09/2026
                                                       CNR No. DLCT010075412025
     In the matter of

     MUSHAHID ALI
     s/o Late Mohd Hanif
     Proprietor of
     M/s Prime Packaging India
     WZ 936-A, Masjidwali Gali
     Near Ramesh Nagar Metro Station
     Basai Darapur.
     New Delhi-110015                                                     ......Petitioner

                                                  Versus
     1.               M/S Sumat Prasad & Sons
                      Through its Partner
                      Mr. Sudhir Kumar Jain
                      S/o Prem Chand Jain
                      At 355, Chawri Bazar,
                      Delhi-110006

     2.               Ram Bhaj Mittal
                      Sole Arbitrator
                      Paper Merchant Association (Regd)
                      Kagaz Bhawan,132
                      Gali Batashan, Chawri Bazar,
                      Delhi -110006                                  ......Respondents


                                                 Date of filing of Petition : 09.02.2026
                                                 Date of arguments          : 15.05.2026
         Digitally                               Date of Order              : 16.05.2026
         signed by
         RAJESH
RAJESH   KUMAR
KUMAR    GOEL
         Date:
GOEL     2026.05.18
         11:01:11
         +0530



     Mushahid Ali vs M/s Sumant Prasad & Sons
     OMP (COMM.) No. 09/2026              Date of order 16.05.2026      (Page 1 of 36 )
                Order :

               1.                  Vide this order, I shall dispose of the present
                         petition/objections under section 34 of Arbitration
                         & Conciliation Act, 1996 ( hereinafter referred to as
                         'Act') filled by the petitioner Mushahid Ali against
                         the respondent M/s Sumant Prasad & Sons (R-1)
                         ( herein after referred to as 'Respondent') assailing the
                         award dated 24.06.2019 (hereinafter referred to as
                         "impugned award").

               2.                  The Ld. Arbitrator, who had passed the
                         impugned award, has been arrayed as R-2 by the
                         petitioner. Pertinent to mention that he was not
                         summoned and only the respondent was summoned.
                         The Ld. Arbitrator has already submitted the
                         Arbitral Record.

               3.                  Respondent M/s Sumant Prasad & Sons was
                         the Claimant and Petitioner Mushahid Ali was the
                         respondent before the Arbitral Tribunal.

                      Facts of the case:

               4.                   The brief facts of the case as gleaned from
                         the records are that the petitioner is proprietor of
         Digitally
         signed by
         RAJESH
                         M/s Prime Packaging India and was having business
RAJESH   KUMAR
KUMAR    GOEL
GOEL     Date:
         2026.05.18
         11:01:12
                         dealing with the respondent since February 2018;
         +0530



     Mushahid Ali vs M/s Sumant Prasad & Sons
     OMP (COMM.) No. 09/2026              Date of order 16.05.2026   (Page 2 of 36 )
                          the petitioner used to purchase goods/papers from
                         the respondent; the petitioner used to make the
                         payment to the respondent through RTGS and
                         NEFT only; the petitioner gave three cheques
                         bearing nos. 363183, 641177 and 641180 to the
                         respondent as a security.

               5.                  It is averred that the on 30.06.2018, the
                         respondent presented the cheque no.363183 by
                         misusing the same for the amount of Rs.2,53,503/-
                         which got dishonoured on 02.07.2018 and when the
                         petitioner came to know about this, he contacted the
                         respondent on 09.07.2018 and discussed the matter;
                         the matter got settled between the parties and the
                         petitioner made a payment of Rs.1,53,205/- to the
                         respondent through NEFT dated 09.07.2018 and
                         asked the respondent to return the said security
                         cheque; the respondent assured him that he would
                         return the same to the petitioner, as at that time the
                         said cheque was not traceable in the office of
                         respondent; there are no dues left against the
                         petitioner.

               6.                  It is the further case of the petitioner that later
         Digitally
         signed by
                         on the respondent has also misused the other two
         RAJESH
RAJESH   KUMAR
KUMAR
GOEL
         GOEL
         Date:
         2026.05.18
                         security cheques no.641177 and 641180, against the
         11:01:08
         +0530



     Mushahid Ali vs M/s Sumant Prasad & Sons
     OMP (COMM.) No. 09/2026              Date of order 16.05.2026   (Page 3 of 36 )
                          petitioner and filed complaint case u/s 138 NI Act
                         against the petitioner which is pending adjudication
                         in the court of Ld. JFMC, Central, Tis Hazari It is
                         stated that on 15.01.2026, in the said court of Ld.
                         JFMC, notice of the execution petition filed by the
                         respondent was served on the petitioner and the
                         petitioner was served the copy of the execution
                         petition and the copy of the ex-parte impugned
                         award, which is being challenged by way of the
                         present petition.

               7.                  On being served the notice of the present
                         petitioner, the respondent filed reply thereto taking
                         various objections stating that the present petition
                         is not maintainable as being filed after the
                         prescribed period of 90 days from the date of the
                         impugned award; the present petition has been filed
                         after expiry of a period of more than 6 1/2 years and
                         as such the present petition deserve to be dismissed;
                         present petition is also not maintainable as no
                         plausible/ justified reason has been given in the
                         entire petition for not contesting the arbitration
                         proceedings, in which the impugned award has been
                         passed, despite receiving the notice of the said
         Digitally
         signed by
RAJESH
KUMAR
         RAJESH
         KUMAR
         GOEL
                         Arbitration proceedings as noted by the Ld. Sole
         Date:
GOEL
                         Arbitrator in the impugned award and as such also
         2026.05.18
         11:01:10
         +0530



     Mushahid Ali vs M/s Sumant Prasad & Sons
     OMP (COMM.) No. 09/2026              Date of order 16.05.2026   (Page 4 of 36 )
                          the present objections are liable to be dismissed.

               8.                   The petitioner has challenged the impugned
                         award on the basis of certain grounds as mentioned
                         in the petition and the same were reiterated during
                         the arguments as well. Similarly, the respondent in
                         its reply to the present petition has raised certain
                         contentions which were reiterated by the Ld.
                         Counsel for the respondent during the argument. For
                         the sake of brevity, the averments made in the
                         pleadings i.e petition and reply filed thereto and the
                         arguments made are not being produced separately
                         as it would be reproduction of the contentions. That
                         being so, this court would be considering the
                         respective contentions of the parties raised by way
                         of the present petition and reply and also during
                         arguments.

               9.                   The petitioner has challenged the impugned
                         award, mainly on the following grounds and Ld.
                         Counsel for the petitioner has also argued on the
                         same lines:

                              i.            The impugned Award has been passed by Ld.
                                            Sole Arbitrator, who was unilaterally
                                            appointed by the respondent, without any
         Digitally
         signed by
                                            consent of the petitioner and hence, not
RAJESH   RAJESH
         KUMAR                              sustainable.
KUMAR    GOEL
         Date:
GOEL     2026.05.18
         11:01:09
         +0530                ii.           There was no valid arbitration agreement
     Mushahid Ali vs M/s Sumant Prasad & Sons
     OMP (COMM.) No. 09/2026              Date of order 16.05.2026   (Page 5 of 36 )
                                             between the parties as the petitioner never
                                            consented to the terms and conditions
                                            regarding arbitration as mentioned on the
                                            Invoices.

                              iii.          The petitioner was never served with any
                                            notice of appointment of Arbitrator and also
                                            about the proceedings initiated by the Arbitral
                                            Tribunal.

                              iv.           The impugned Award is illegal, erroneous,
                                            against public policy, biased, against basic
                                            tenets of rules of justice and is enforceable.

                              v.            The petitioner was never served with the copy
                                            of impugned award and he has only been
                                            served with the copy of the same           on
                                            15.01.2026, before the court of Ld. JFMC.

                              vi.           Ld. Counsel for the petitioners has placed
                                            reliance on       the   following   judicial
                                            pronouncements:-

                                            (a)     M/s Taipack Limited & Others Vs Ram
                                                    Kishore Nagar Mal, 2007 DHC 573

                                            (b)     Kotak Mahindra Bank Ltd vs Narendra
                                                    Kumar Prajapat, 2023 DHC 3705 DB

                                            (c)     M/s Supreme Infrastructure India Limited
                                                    vs Freyssinet Memard Pvt. Ltd , 2025 DHC
                                                    3483


               10.                   Here it is pertinent to mention that in the
                         present petition a number of judgments have been
                         referred to by the petitioner but copies of the same
                         have not been placed on record except the copies of
         Digitally
         signed by
         RAJESH
                         the judgements as noted in the last preceding
RAJESH   KUMAR
KUMAR
                         paragraph.
         GOEL
         Date:
GOEL     2026.05.18
         11:01:09
         +0530



     Mushahid Ali vs M/s Sumant Prasad & Sons
     OMP (COMM.) No. 09/2026              Date of order 16.05.2026       (Page 6 of 36 )
                11.                    The respondent has contested the present
                         petition raising following contentions which were
                         reiterated by the Ld. Counsel for the respondent
                         during the arguments also:-
                               i.       The present petition is hopelessly time barred as
                                        the notice of the Arbitral proceedings was issued
                                        at both the addresses of the petitioner, but despite
                                        service the petitioner failed to appear before the
                                        Arbitral Tribunal.

                               ii.      In the entire petition, the petitioner has not denied
                                        his address of Ramesh Nagar on which he was
                                        served the notice of the Arbitration proceedings;
                                        the petitioner has not explained his non
                                        appearance before the Arbitral Tribunal despite
                                        service.

                               iii.     The copy of the impugned award was duly sent to
                                        the petitioner at his Ramesh Nagar address also
                                        vide speed post but the present petition is filed in
                                        the year 2026 which is beyond the period of
                                        limitation.

                               iv.      The Ld. Arbitrator (R-2) was appointed by the
                                        Paper Merchant Association (Regd) in accordance
                                        with its rules and regulations and the Ld.
                                        Arbitrator was fully competent to adjudicate and
                                        pass the award.

                               v.       There was a valid arbitration agreement between
                                        the petitioner and the respondent by virtue of the
                                        terms and condition as mentioned in the invoices
                                        vide which the material were supplied to the
                                        petitioner by the defendant; the petitioner never
                                        raised any objection to the said terms and
         Digitally
                                        conditions therefore, the invoice constitute a
RAJESH
         signed by
         RAJESH
         KUMAR
                                        contract between the petitioner and the
KUMAR
GOEL
         GOEL
         Date:                          respondent.
         2026.05.18
         11:01:09
         +0530



     Mushahid Ali vs M/s Sumant Prasad & Sons
     OMP (COMM.) No. 09/2026              Date of order 16.05.2026      (Page 7 of 36 )
                                vi.      The petitioner did not make the payment of the
                                        outstanding amount; the cheques in question were
                                        issued by the petitioner in discharge of his legal
                                        liability and not as a security.

                               vii.     The impugned award does not suffer from any
                                        patent illegality and violation of natural justice,
                                        rather the same is fully legal and sustainable in
                                        the eyes of law.


               12.                   I have perused the record and heard the Ld.
                         Counsel for the petitioner and the respondent. I have
                         also gone through the case laws cited at the bar by
                         the Ld. Counsel for the petitioner.


                       Whether the present petition is within limitation or not?

               13.                   The petitioner has assailed the impugned
                         award which is dated 24.06.2019; the present
                         petition was filed on 09.02.2026, so, on the face of
                         it one can say that the same is barred by limitation.
                         Ld. Counsel for the petitioner, pointed out that the
                         Arbitral Tribunal was supposed to supply the signed
                         copy of the award, but it was never supplied. He
                         submitted that the petitioner received the copy of
                         the impugned award on 15.01.2026 only. before the
                         Court of Ld. JFMC. Therefore, the present petition

         Digitally
                         is within the period of limitation.
         signed by
         RAJESH
RAJESH   KUMAR
KUMAR    GOEL
         Date:
GOEL     2026.05.18
         11:01:10
         +0530



     Mushahid Ali vs M/s Sumant Prasad & Sons
     OMP (COMM.) No. 09/2026              Date of order 16.05.2026     (Page 8 of 36 )
                14.                 Ld. Counsel for the respondent stated that the
                         petitioner was proceeded exparte as he did not join
                         the proceedings despite the service of the notice
                         issued by the Arbitral Tribunal. One of the
                         addresses of the petitioner i.e Ramesh Nagar, was
                         the same as furnished by the petitioner in the
                         present proceedings also, therefore, the petitioner
                         has no right to say that the petitioner was never
                         served the copy of the impugned award, as the copy
                         of the same was supplied through speed post.


               15.                 Since the determination of the preliminary
                         issue of limitation goes to the root of the matter,
                         therefore, firstly, I would be deciding the issue
                         regarding the limitation.

               16.                 Before proceeding further, it is relevant to
                         refer to Section 34(3) of the A&C Act, which reads
                         as under:--
                                     "An application for setting aside may not be made
                                      after three months have elapsed from the date on
                                      which the party making that application had
                                      received the arbitral award or, if a request had been
                                      made under section 33, from the date on which that
                                      request had been disposed of by the arbitral
                                      tribunal.

         Digitally
         signed by                   Provided that if the Court is satisfied that the
                                     applicant was prevented by sufficient cause from
         RAJESH
RAJESH   KUMAR
KUMAR    GOEL
GOEL     Date:
         2026.05.18
         11:01:13
                                     making the application within the said period of
         +0530



     Mushahid Ali vs M/s Sumant Prasad & Sons
     OMP (COMM.) No. 09/2026              Date of order 16.05.2026     (Page 9 of 36 )
                                       three months it may entertain the application within
                                      a further period of thirty days, but not thereafter."


               17.                 A plain reading of Section 34(3) of the Act,
                         shows that the statutory period of limitation for
                         filing the Objections under Section 34 of the Act,
                         against the Award is three months. As per the
                         Proviso to the Section, an extended period of 30
                         days is available and the Court has powers to
                         condone the delay provided, sufficient cause is
                         shown for not filing the petition within the statutory
                         period.

               18.                 The Limitation Period of 3 months plus 30
                         days is inelastic and inflexible, and any delay of
                         even one day beyond this period cannot be
                         condoned by the Court as has been held by the
                         Hon'ble Supreme Court of India in the case of
                         Union of India vs. Popular Construction, (2001) 8 SCC
                         470 and Simplex Infrastructure Ltd. vs. Union of India
                         2019 (2) SCC 455.

               19.                 Here I may also refer to the provisions of
                         Section 31 of the Act, as pressed into service by the
                         Ld. Counsel for the petitioner. Under Section 31 of
         Digitally
         signed by
         RAJESH
                         the Act, there is a legal requirement of signing the
RAJESH   KUMAR
KUMAR
                         arbitral award by a sole arbitrator, or the members
         GOEL
         Date:
GOEL     2026.05.18
         11:01:11
         +0530



     Mushahid Ali vs M/s Sumant Prasad & Sons
     OMP (COMM.) No. 09/2026              Date of order 16.05.2026     (Page 10 of 36 )
                          of a Tribunal. Section 31 provides that:
                                      "31. Form and contents of arbitral award.--(1) An
                                      arbitral award shall be made in writing and shall
                                      be signed by the members of the Arbitral
                                      Tribunal.
                                (2) For the purposes of sub-section (1), in arbitral
                               proceedings with more than one arbitrator, the signatures
                               of the majority of all the members of the Arbitral
                               Tribunal shall be sufficient so long as the reason for any
                               omitted signature is stated.
                                                   ***

(4) The arbitral award shall state its date and the place of arbitration as determined in accordance with Section 20 and the award shall be deemed to have been made at that place.

(5) After the arbitral award is made, a signed copy shall be delivered to each party."

20. Section 31(1) of the Act is couched in mandatory terms, and provides that an arbitral award shall be made in writing. An award takes legal effect only after it is signed by the Arbitrator, which gives it authentication. The legal requirement under sub-section (5) of Section 31 of the Act is the delivery of a copy of the award signed by the members of the arbitral tribunal / arbitrator, and not any copy of the award. On a harmonious construction of Section 31(5) read with Section 34(3) of the Act, the period of limitation prescribed for filing objections would commence only from the Digitally date when the signed copy of the award is delivered signed by to the party making the application for setting aside RAJESH RAJESH KUMAR KUMAR GOEL Date:

GOEL     2026.05.18
         11:01:09
         +0530



Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 11 of 36 ) the award.(Dakshin Haryana Bijli Vitran Nigam Ltd. v. Navigant Technologies (P) Ltd., (2021) 7 SCC 657 and Union of India v. Tecco Trichy Engineers & Contractors, (2005) 4 SCC 239).

21. Coming back to the present case, it is evident that the Arbitral Tribunal has issued the notice to the petitioner at the two addresses of the petitioner i.e 'Ramesh Nagar' address and 'Mohan Garden' address. The tracking report indicates that the petitioner was duly served upon at the 'Ramesh Nagar' address. It is nowhere the case of the petitioner that the 'Ramesh Nagar' address of the petitioner does not belong to the petitioner. Rather, in the present petition also the same address has been given by the petitioner. Thus, the contention of the petitioner that he was never served the notice of the arbitration proceedings being devoid of merits stands rejected.

22. Having said so, here I may mention that the consequences of non appearance of the petitioner before the Arbitral Tribunal despite the service would have been to proceed exparte against the Digitally petitioner which course had taken place in the signed by RAJESH RAJESH KUMAR KUMAR GOEL Date:

present case also. Even if the petitioner was exparte GOEL 2026.05.18 11:01:13 +0530 Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 12 of 36 ) as he did not join the arbitral proceedings, it did not absolve the Arbitral Tribunal from sending the signed copy of the impugned award.

23. In the present case, it was claimed by the respondent that the copy of the impugned award was sent to the petitioner through a speed post and my attention was drawn towards the postal receipts. Prima facie, from the said postal receipts, one can say that the copy of the impugned award might have been sent but there is nothing on record suggesting that the copy of the impugned award was actually a signed copy and was served upon the petitioner. The tracking record in this regard is missing. There is no acknowledgment from the side of the petitioner. So, it has not demonstrated that the signed copy of the impugned award was duly served upon the petitioner.

24. In these circumstances, the stand of the petitioner that he received the copy of the impugned award on 15.01.2026, before the court of Ld. JFMC when the notice of the execution petition was served upon him, has to be accepted. In paragraph 4 of the Digitally signed by present petition, it has been categorically pleaded by RAJESH RAJESH KUMAR KUMAR GOEL GOEL Date:

2026.05.18 the petitioner that he had received the copy of the 11:01:11 +0530 Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 13 of 36 ) impugned award on 15.01.2026 before the Court of Ld. JFMC. While replying the said averments, the respondent simply stated "that contents of para no.4 of the objections need no reply being the matter of record, however, anything contrary to the record shall specifically and vehemently denied". Meaning thereby, principally, the respondent has not denied the fact that the copy of the impugned award was served upon the petitioner before the court of Ld. JFMC on 15.01.2026. Nothing has been brought on record contrary to the said claim of the petitioner. The present petition has been filed on 09.2.2026 which is well within the period of limitation as provided under the law. Therefore, the contention of the respondent that the present petition is barred by limitation is bereft of merits and the same is accordingly, stands rejected.
Whether there exist arbitration agreement between the parties or not?

25. Section 7 of the Act defines an arbitration agreement which reads as under:-

"7. Arbitration agreement. -- Digitally RAJESH signed by RAJESH KUMAR (1) In this Part, "arbitration agreement" means an KUMAR GOEL GOEL Date:
agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may 2026.05.18 11:01:10 +0530 Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 14 of 36 ) 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."

26. There are a plethora of judgments on the existence of a valid arbitration agreement. In this regard help can be taken from the decisions of the cases reported as Mahanagar Telephone Nigam Ltd. vs. Canara Bank & Ors., AIR 2019 SC 4449 , K.K.Modi vs. K.N. Modi & Ors., (1998) 3 SCC 573 , Punjab State vs. Digitally signed by RAJESH Dinanath,(2007) 5 SCC 28, Scholar Publishing House Pvt. RAJESH KUMAR KUMAR Ltd. vs. Khanna Traders, 2013 (5) ILR (DEL) 3343. , Motilal GOEL Date:

GOEL     2026.05.18
         11:01:12
         +0530



Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 15 of 36 ) Oswal Securities Ltd. vs. Rakshank Kapoor, 2019 SCC OnLine Del. 11438 , M/s Inspiration Cloths & U v. Yash Traders: A.P. No. 408/2008, decided on 22.12.2014 etc.

27. For the sake of brevity, I am avoiding reproducing the observations made by Hon'ble Courts in the above mentioned judgments, however for ascertaining whether there exist a valid arbitration agreement between the parties or not, would depend upon certain factors such as:-

arbitration agreement need not be in any particular form; what is required to be ascertained is the intention of the parties to settle their disputes through arbitration; an arbitration agreement can be derived from exchange of letters, telex, telegram or other means of communication, including through electronic means; arbitration agreement is to be construed according to the general principles of construction of statutes, statutory instruments, and other contractual documents; if the documents on record show that the parties were ad idem, and had actually reached an agreement upon all material terms, then it would be construed to be a binding contract; if on a reading of the document as a whole, Digitally signed by RAJESH KUMAR RAJESH KUMAR GOEL if it can fairly be deduced from the words actually Date:
GOEL used herein, that the parties had agreed to 2026.05.18 11:01:09 +0530 Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 16 of 36 ) arbitration;essential attribute of an arbitration agreement is that it must be expressly or impliedly spelt out from a clause in the agreement that there is an agreement to refer their disputes/differences to arbitration.

28. Intention of the parties and Consensus ad idem between them are the most important elements for invoking arbitration clauses by any of the parties to the dispute.

29. Coming to the case at hand, in the present case Arbitral Tribunal appears to have assumed the jurisdiction on the basis of one of the terms and conditions as printed on the invoices which is as under:-

" In case of any dispute the Judgment of the Arbitrator/Tribunal or any other appointed by the PAPER MERCHANT ASS. (REGD). Delhi will be final and binding on both the parties as governed by the rules of the Association".

30. Here it is pertinent to refer to a few judicial authorities on the issue under consideration. In the case of Parmeet Singh Chatwal and Ors. vs. Ashwani Sahani, MANU/DE/0442/2020 which was decided by our own Hon'ble High Court, it was observed:-

Digitally signed by RAJESH RAJESH KUMAR KUMAR GOEL GOEL Date:
2026.05.18 11:01:10 "22. The legal position that follows is that what is +0530 Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 17 of 36 ) required to be ascertained is the intention of the parties to settle their disputes through arbitration. The essential attribute of an arbitration agreement is that it must be expressly or impliedly spelt out from a clause in the agreement that there is an agreement to refer their disputes/differences to arbitration.
23. I may only note that on facts the learned Arbitral Tribunal in the Award does not record any finding of fact regarding the intention of parties to agree to settle their disputes through arbitration. The award merely concludes the existence of an arbitration clause without giving any reasons.

Xxxxxxxxx

25. A perusal of the above invoice shows that it is not clear as to whether the petitioner who is the proprietor of the said Mahima Exports has signed the invoice or it has been signed on his behalf by some other entity. That apart, the manner of signing indicates that the person is only signing receipt of the goods rather than agreeing to the arbitration agreement between the parties. In my opinion, the manner in which the signatures have been affixed on the invoice does not indicate an intent on the part of the petitioner agreeing to settle their disputes through arbitration.

The so called Arbitration Clause is reproduced in a small font at the bottom of the invoice. It is doubtful if the petitioner even noticed that he was signing a document which has an Arbitration Clause. It is not possible to conclude that the parties were ad idem.

Further I may note that as per the said alleged arbitration clause, the disputes are to be settled by Delhi Hindustani Mercantile Association. The Association claims to be registered presumably under the Societies Registration Act. It has to act through authorised persons for the purpose of conducting arbitration. There is nothing to show the composition Digitally signed by or status of this Association. There is nothing to show RAJESH RAJESH KUMAR how the arbitral tribunal will be constituted by the said KUMAR GOEL GOEL Date:

2026.05.18 Delhi Hindustani Mercantile Association. There is no 11:01:13 +0530 consensus indicated in the arbitration clause of the Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 18 of 36 ) composition of the arbitral tribunal.
In my opinion, apart from the fact that there is no consensus for Arbitration, the clause itself is vague. It is not possible to accept the plea of the respondent that the parties have agreed to refer the disputes to arbitration of the said Delhi Hindustani Mercantile Association. Hence, the findings of the learned Arbitrators in the impugned order are clearly erroneous and contrary to the settled legal position"
31. Here it would also be apposite to refer to the observations made by Hon'ble High Court in another case of Priknit Retails Ltd & Ors Vs Aneja Agencies, 2018 SCC OnLine Del 13424 which are as under:-
"27. Mere fact, that the delivery of goods had been accepted, would not imply that petitioner no.1 had also agreed to the arbitration clause. As stated above, the said agreement is inchoate inasmuch as the blanks were never filled in. Further, the agreement remained unsigned. The contention, that petitioner no.1 had not disputed the invoices would necessarily mean that petitioner no.1 had also agreed to the arbitration agreement, is unmerited. This is so because in order to communicate its acceptance to the arbitration clause, petitioner no.1 would require acknowledgement of the goods in the form as indicated in the invoices and further also affix its signatures. Admittedly, petitioner no.1 has neither signed the arbitration agreement nor communicated its acceptance to the same.
28. It is well settled that the arbitration agreement is a separate and an independent agreement, although it may be embodied in as a clause in the main agreement. In the present Digitally case, the respondent seems to have RAJESH signed by RAJESH KUMAR acknowledged this distinction and, therefore, KUMAR GOEL GOEL Date: had provided a separate receipt at the bottom of the invoice. This was separate from the main 2026.05.18 11:01:11 +0530 Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 19 of 36 ) invoice. This receipt-cum-arbitration agreement was not executed by the parties and, thus, it is not possible to accept that an arbitration agreement existed between the parties.
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34. In order to ascertain whether an agreement exists between the parties, it is necessary to establish that there was consensus ad idem between the parties. In the present case, it is not possible to accept that petitioner no.1 had accepted the arbitration clause printed at the bottom of the invoice, as the same was neither filled in nor signed by petitioner no.1. It is also not possible to accept that petitioner no.1 had agreed to the arbitration clause"

32. In another case of M/s Haetampuria Tax Fab Daksh Enterprises, 2022 DHC 004962, the aforesaid case of Priknit Retails Ltd & Ors (supra), was referred to and it was observed that such type of conditions as mentioned in the invoices or delivery challan cannot be considered as an arbitration agreement as there is no statement that the parties had agreed that the dispute would be referred to arbitration or to accept that the arbitral award is final and binding. In para 14, it was further held as under:-

"14. In the present case there is no contemporaneous material to indicate that the parties had agreed that the disputes would be referred to arbitration. The appellant merely relies on the invoices and the Delivery Challan. As stated above, the invoice does not record any arbitration Digitally signed by RAJESH agreement. The Delivery Challan is a unilateral RAJESH KUMAR KUMAR GOEL Date:
document, which is issued for the purpose of GOEL 2026.05.18 11:01:09 +0530 recording the delivery of goods. As an instrument, Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 20 of 36 ) it does not embody the terms of the contract between the parties. Thus, unilaterally including a clause in the printed Delivery Challan would not constitute an agreement between the parties merely because the counter party had accepted the delivery of the goods".

33. Reverting to the present case, in my considered opinion, and in light of the aforesaid legal position, the contention of the Petitioner that no existing agreement to refer disputes arising out of the commercial relationship between the parties to arbitration existed, is well founded. The Respondent has sought to invoke the arbitration clause solely on the basis of certain terms and conditions printed on the invoices. It is a matter of record that invoices, bills, and delivery challans are primarily issued for the supply and delivery of goods pursuant to purchase orders placed by one party upon another. Such invoices, bills, or delivery challans cannot, by themselves, be construed as constituting a complete agreement between the parties for the adjudication of all disputes that may arise between them. Ordinarily, the terms and conditions governing a contract are settled at the stage when the offer is made and accepted. The Digitally signed by RAJESH KUMAR RAJESH KUMAR GOEL supply of goods is merely a subsequent event. Date:

GOEL While, in certain circumstances, the terms and 2026.05.18 11:01:08 +0530 Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 21 of 36 ) conditions mentioned in invoices may be relevant for determining limited issues, the same would not be sufficient to infer the existence of a binding arbitration agreement between the parties.

34. Moreover, the arbitration clause printed on the invoices does not demonstrate that the Petitioner had ever, in clear and unequivocal terms, agreed to refer disputes to arbitration. As noted earlier, the clause in question merely refers to the binding nature of the decision or judgment of the tribunal. It nowhere records that the parties had mutually agreed that any dispute arising between them would be referred to arbitration. Although it may be contended that the clause, when read in its entirety, creates an impression of the existence of an arbitration agreement because it refers to the binding effect of the tribunal's decision, such a reference by itself is insufficient. The binding nature of an award or judgment constitutes only one component of an arbitration clause; it does not amount to a complete arbitration agreement, particularly when the essential elements relating to the reference of disputes and the parties' obligation Digitally signed by RAJESH KUMAR RAJESH KUMAR GOEL to submit to arbitration are absent.The clause in Date:

GOEL question, therefore, does not reflect any definitive or 2026.05.18 11:01:13 +0530 Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 22 of 36 ) conscious agreement between the parties to arbitrate their disputes. In my considered opinion, the essential ingredients of a valid arbitration agreement are clearly lacking in the present case.

35. An arbitration agreement necessarily contemplates a mutual understanding between the parties to submit all or certain disputes, whether existing or future, arising out of a defined legal relationship, contractual or otherwise, to arbitration. Such an agreement may either form part of a contract as an arbitration clause or exist as a separate agreement. However, for any valid agreement to come into existence, there must be consensus ad idem between the parties, which is conspicuously absent in the present matter.

36. In the case of K.K. Modi v. K.N. Modi, (1998) 3 SCC 573, Hon'ble Supreme Court spelt out the requirements of a valid arbitration clause in the following terms:-

17. Among the attributes which must be present for an agreement to be considered as an arbitration agreement are:
(1) The arbitration agreement must contemplate that the decision of the tribunal will be binding on the parties to the Digitally signed by agreement, (2) that the jurisdiction of the tribunal to decide the rights of RAJESH RAJESH KUMAR KUMAR GOEL GOEL Date:
2026.05.18 parties must derive either from the consent of the parties or 11:01:12 +0530 from an order of the court or from a statute, the terms of Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 23 of 36 ) which make it clear that the process is to be an arbitration, (3) the agreement must contemplate that substantive rights of parties will be determined by the agreed tribunal, (4) that the tribunal will determine the rights of the parties in an impartial and judicial manner with the tribunal owing an equal obligation of fairness towards both sides, (5) that the agreement of the parties to refer their disputes to the decision of the tribunal must be intended to be enforceable in law and lastly, (6) the agreement must contemplate that the tribunal will make a decision upon a dispute which is already formulated at the time when a reference is made to the tribunal.

37. In another case of Jagdish Chander v. Ramesh Chander, (2007) 5 SCC 719 : 2007 SCC OnLine SC 570 at page 724, Honble Supreme Court set out the well-settled principles in regard to what constitutes an arbitration agreement as under:

(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 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 Digitally signed by tribunal which has to adjudicate upon the disputes, in RAJESH RAJESH KUMAR a clause relating to settlement of disputes, it does not KUMAR GOEL GOEL Date:
2026.05.18 detract from the clause being an arbitration agreement 11:01:11 +0530 Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 24 of 36 ) 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 Digitally signed by event of any dispute, the parties may also agree to RAJESH RAJESH KUMAR refer the same to arbitration" or "if any disputes arise KUMAR GOEL GOEL Date:

2026.05.18 between the parties, they should consider settlement 11:01:08 +0530 by arbitration" in a clause relating to settlement of Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 25 of 36 ) 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.
38. In view of the aforesaid legal position laid down by the Hon'ble Apex Court, and in light of the foregoing discussion, it is evident that, in the present case, no valid arbitration agreement exists between the parties.

Unilateral appointment of Ld. Arbitrator

39. This brings me to the objection raised by the Petitioner that the Tribunal which rendered the impugned award was appointed unilaterally by the Respondent. A unilateral appointment refers to a situation where an arbitrator is appointed solely by one party without obtaining the consent or Digitally signed by concurrence of the other party. In several RAJESH RAJESH KUMAR KUMAR agreements, particularly those drafted by the GOEL Date:

GOEL     2026.05.18
         11:01:08
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Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 26 of 36 ) dominant party, dispute resolution clauses are incorporated providing for appointment of the arbitrator by the very party that has drafted the agreement. In such circumstances, the other party generally possesses little or no bargaining power to negotiate or seek modification of the contractual terms of agreement.

40. It is true that the Arbitration and Conciliation Act,1996 recognizes the autonomy of the parties to choose their own Arbitrator in terms of their Agreement but it is also true that the said Act also countenances that fairness, transparency and impartiality are the virtues which are equally important incidents for consideration in the appointment of the Arbitrator. The autonomy conferred on the parties is not unbridled and any appointment of the Arbitrator has to meet the prerequisite of his neutrality and impartiality which are the bedrock on which the foundation of arbitration rests.

41. Unilateral appointment of the Arbitrator can be challenged u/s 12 of the Act, which is as under:-

Digitally signed by "12. Grounds for challenge.- [(1) When a person is RAJESH RAJESH KUMAR approached in connection with his possible appointment as KUMAR an arbitrator, he shall disclose in writing any GOEL Date:
GOEL     2026.05.18
         11:01:12
         +0530             circumstances,-
Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 27 of 36 )
(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.

Explanation 1.- 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.] (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 Digitally parties.

signed by RAJESH RAJESH KUMAR KUMAR GOEL Date:

(4) A party may challenge an arbitrator GOEL 2026.05.18 11:01:11 +0530 appointed by him, or in whose Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 28 of 36 ) appointment he has participated, only for reasons of which he becomes aware after the appointment has been made.

2[(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]"

42. Section 12 of Act has referred to the schedule V, VI and VII of the Act. Section 12 read with Schedules V and Schedule VII of the Act read with S. 12(1)(b) specify the categories of persons who can or cannot be appointed as arbitrators. The grounds on which the eligibility of the arbitrator can be challenged, are primarily governed by Section 12 read with the Vth, VIth and the VIIth Schedule.

43. The Fifth Schedule, read with Section 12(1)

(a) of the Act, lists the various instances and circumstances that create justifiable doubts in the mind with respect to the independence and impartiality of the sole arbitrator or the panel of arbitrators appointed. It broadly discusses the Digitally signed by conditions when the arbitrator is doubted for its RAJESH RAJESH KUMAR KUMAR GOEL GOEL Date:

2026.05.18 impartiality or being biased towards one of the 11:01:12 +0530 Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 29 of 36 ) parties or the relationships of the arbitrator with the other parties.

44. The Fifth Schedule read with Section 12(2) of the Act, provides specifically that the Arbitrator at 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 been informed of them by him.

45. The Sixth Schedule of the Act, provides the format in which the said Declaration is to be given. It provides that the past or present relationship or interest in any of the parties or any relationship to the subject matter in dispute has to be disclosed. It is also required to state if it had any financial business or professional association of any kind which was likely to give rise to justifiable doubts as to their independence. Thus, to ensure the sanctity of an arbitral proceeding, Section 12 of the Act, 1996 read with Schedule VI underlines the importance of disclosure to maintain the independence and impartiality of an Arbitrator. Digitally signed by RAJESH RAJESH KUMAR KUMAR GOEL GOEL Date: 46.

2026.05.18 Unlike the Fifth Schedule, the Seventh 11:01:10 +0530 Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 30 of 36 ) Schedule read with Section 12(5) of the Act, relates to instances which directly result in the "ineligibility" of a person from being appointed as an arbitrator and de jure disqualify him from being appointed as an arbitrator unless the parties had expressly waived the applicability of the provision in writing after the agreement was entered into.

47. In the case of HRD Corporation (Marcus Oil and Chemical Division) v. GAIL (India) Limited (Formerly Gas Authority of India Limited) (2018) 12 SCC 471, the Hon'ble Apex Court had explained the scope of Schedules V and VII in the context that Section 12 of the Arbitration and Conciliation Act, 1996. It has been observed that if a person falls in any of the categories as specified in the Seventh Schedule, he becomes ineligible to act as Arbitrator and the ineligibility goes to the root of the appointment, making such Arbitrator de jure ineligible to be an Arbitrator. It was further observed that Items 1 to 19 of the Fifth Schedule are identical with the aforesaid items in the Seventh Schedule. The only reason that these items also appear in the Fifth Schedule is for purposes of disclosure by the arbitrator, as unless Digitally RAJESH signed by RAJESH KUMAR the proposed arbitrator discloses in writing his KUMAR GOEL Date:

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involvement in terms of Items 1 to 34 of the Fifth Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 31 of 36 ) Schedule, such disclosure would be lacking in material particulars, in which case the parties would be put at a disadvantage as such information is often within the personal knowledge of the arbitrator alone. It is for this reason that it appears that Items 1 to 19 also appear in the Fifth Schedule.

48. Further, while analyzing the impact of appointment procedures wherein one contracting party is in a comparatively more dominating position, Hon'ble High Court of Delhi in Margo Networks (P) Ltd. v. Railtel Corpn. of India Ltd, 2023 SCC OnLine Del 3906 , CMM Infraprojects Ltd. v. IRCON International Ltd, 2021 DHC 2578 , Pankaj Mittal v. Union of India Order dated 16.12.2021 passed in ARB.P. 607/2021, has observed that the arbitration appointment procedure under which "the scales are tipped in favour of the respondent" would inherently be in contravention with the object of Section 12 (5) read with Seventh Schedule of the Act, 1996.

49. Here it is also opposite to refer to the case of V oestalpine Schienen GMPH v. Delhi Metro Rail Corporation Limited, (2017) 4 SCC 665, wherein it was Digitally RAJESH signed by RAJESH KUMAR held that under Section 12(5) of the Act, 1996, KUMAR GOEL Date:

GOEL     2026.05.18
         11:01:10
         +0530
                         notwithstanding              any      prior     agreement        to     the

Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 32 of 36 ) 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. It was further observed that the validity of an appointment procedure which clearly contemplates appointment of an arbitrator by only one party without any counterbalancing of that power by giving the other contracting party any say in the choice of arbitrator to be appointed, would also fall foul of Section 12 (5) read with Seventh Schedule of the Act, 1996. It would be apposite to highlight that the Apex Court disapproved of a Panel of Arbitrators from which the other party may select an arbitrator as it "created room for suspicion".

50. In another case of Perkins Eastman Architects DPC Vs. HSCC (India) Ltd" reported as (2020) 20 SCC

760. it was held:-

"21. But, in our view that has to be the logical deduction from TRF Ltd. [TRF Ltd. v. Energo Engg. Projects Ltd., (2017) 8 SCC 377 : (2017) 4 SCC (Civ) 72] Para 50 of the decision shows that this Court was concerned with the issue, "whether the Managing Director, after becoming ineligible by operation of Digitally law, is he still eligible to nominate an arbitrator" The ineligibility referred to therein, was as a result of signed by RAJESH RAJESH KUMAR KUMAR GOEL GOEL Date:
2026.05.18 operation of law, in that a person having an interest in 11:01:07 +0530 the dispute or in the outcome or decision thereof, Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 33 of 36 ) must not only be ineligible to act as an arbitrator but must also not be eligible to appoint anyone else as an arbitrator and that such person cannot and should not have any role in charting out any course to the dispute resolution by having the power to appoint an arbitrator. The next sentences in the paragraph, further show that cases where both the parties could nominate respective arbitrators of their choice were found to be completely a different situation. The reason is clear that whatever advantage a party may derive by nominating an arbitrator of its choice would get counter-balanced by equal power with the other party. But, in a case where only one party has a right to appoint a sole arbitrator, its choice will always have an element of exclusivity in determining or charting the course for dispute resolution. Naturally, the person who has an interest in the outcome or decision of the dispute must not have the power to appoint a sole arbitrator. That has to be taken as the essence of the amendments brought in by the Arbitration and Conciliation (Amendment) Act, 2015 (3 of 2016) and recognised by the decision of this Court in TRF Ltd. v. Energo Engg. Projects Ltd., (2017) 8 SCC 377 ."

51. Thus, applying the above principles of law in the present case, it becomes imperative to analyse the validity of the procedure of the appointment of the arbitrator and whether the same was clearly in contravention of the Scheme of the Act or not ?

52. In the present case, the contractual relationship between the parties is stated to have arisen through the supply of goods under various Digitally invoices issued by Respondent. The impugned signed by award places reliance upon the alleged arbitration RAJESH RAJESH KUMAR KUMAR GOEL Date:

GOEL     2026.05.18
         11:01:12
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Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 34 of 36 ) clause contained in those invoices. Although this Court has already expressed the view that the said clause cannot be construed as an arbitration clause or a valid arbitration agreement, even assuming, for the sake of argument, that it constitutes such an agreement, the impugned award would nevertheless be unsustainable. The alleged arbitration condition contained in the invoices provided only for reference of disputes to the arbitration of the Association, without conferring any role whatsoever upon the Petitioner in the appointment of the Arbitrator. From the record, as well as from the impugned award itself, it is evident that Respondent is a member of the said Association, and that the Arbitral Tribunal came to be constituted solely at the instance and request of Respondent through the Association.

53. A cumulative reading of the aforesaid clause clearly reveals that the procedure for appointment of the Arbitrator was entirely "one-sided" in nature, with the exclusive power to determine and appoint the Arbitrator vested solely in Respondent, being a member of the Association. Such unilateral Digitally signed by RAJESH KUMAR RAJESH KUMAR GOEL appointment of an Arbitrator or Tribunal has Date:

GOEL consistently been disapproved and prohibited by 2026.05.18 11:01:13 +0530 Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 35 of 36 ) judicial pronouncements, irrespective of whether the Arbitrator so appointed is shown to be biased or prejudiced. In the present case, the constitution of the Tribunal was admittedly unilateral, with no participation whatsoever by the Petitioner in the appointment process. Such an appointment is squarely hit by Section 12(5) read with the Seventh Schedule of the Act. Consequently, the impugned award is liable to be set aside on this ground alone.

54. In view of the aforesaid discussion and findings, the impugned award dated 24.06.2019 cannot be sustained in law and is accordingly liable to be set aside. Consequently, the impugned award dated 24.06.2019 is hereby set aside, and the present petition stands allowed and disposed of accordingly.

55. File be consigned to record room, as per rules.

56. The Arbitration Record be sent back.

                                                           RAJESH Digitally
                                                                  by RAJESH
                                                                            signed

                                                           KUMAR KUMAR      GOEL
                                                                  Date: 2026.05.18
                                                           GOEL   11:01:36 +0530


                                                     (Rajesh Kumar Goel)

District Judge (Commercial)-02 Central, Tis Hazari Courts 16.05.2026 Announced in the Open Court today i.e: 16.05.2026 (digitally signed on 18.05.2026) Mushahid Ali vs M/s Sumant Prasad & Sons OMP (COMM.) No. 09/2026 Date of order 16.05.2026 (Page 36 of 36 )