Holding

The Supreme Court held that the dispute remains arbitrable, the referral court’s scrutiny under Section 11(6A) is confined to the existence of the arbitration agreement, and all contested issues are to be decided by the arbitral tribunal.

Summary

The Bihar State Food and Civil Supplies Corporation entered into contracts with rice millers for paddy procurement and included an arbitration clause. Allegations of massive fraud and misappropriation of public funds led to criminal FIRs, charges under the Penal Code, and recovery proceedings under the Bihar & Orissa Public Demands Recovery Act. The rice millers filed applications under Section 11 of the Arbitration and Conciliation Act seeking appointment of arbitrators, which the High Court allowed. The corporation contended that the pending criminal cases and the Recovery Act barred arbitration and that the applications were barred by limitation and res judicata. The Supreme Court held that the existence of an arbitration agreement makes the dispute arbitrable, that mere criminal allegations do not render the matter non‑arbitrable unless they constitute "serious fraud", and that the referral court’s inquiry under Section 11(6A) is limited to the existence of the arbitration agreement. Consequently, all issues were left for the arbitral tribunal and the appeals were dismissed.

Issues considered

Whether the dispute is non‑arbitrable due to the initiation and pendency of criminal proceedings.
Whether invocation of the Bihar & Orissa Public Demands Recovery Act bars the commencement of arbitration under the Arbitration Act.
Whether the Section 11(6) application is barred by limitation.
Whether the High Court's decision in Sadhna Kumari v. Bihar State Food & Civil Supplies Corporation Ltd. is conclusive and precludes further challenge.
Whether the decision of the Bihar Public Works Contracts Disputes Arbitration Tribunal operates as res judicata.
Whether issues of arbitrability and limitation should be decided by the referral court or left to the arbitral tribunal under Section 11(6A).

Legislation cited

Arbitration and Conciliation Act, 1996s. 11, s. 11(6), s. 11(6A), s. 16, s. 2(3), s. 7, s. 8
Bihar and Orissa Public Demands Recovery Act, 1914
Constitution of India
Contract Act, 1872s. 15, s. 16, s. 17, s. 18
Indian Penal Code, 1860s. 409, s. 420

Subjects

arbitrationarbitrabilitynon‑arbitrabilityserious fraudSection 11Section 11(6A)Recovery ActPDS scamcriminal proceedingslimitationpublic lawcontractual disputecompetence‑competence

Judgment

[2025] 8 S.C.R. 1551 : 2025 INSC 933

The Managing Director Bihar State
Food and Civil Supply Corporation Limited & Anr.
v.
Sanjay Kumar
(Civil Appeal No. 10116 of 2025)
05 August 2025
[Pamidighantam Sri Narasimha* and Manoj Misra, JJ.]

Issue for Consideration
Whether the dispute between the respondents and the appellant
arising out of the agreement incorporating the arbitration clause
has become non-arbitrable in view of the initiation and pendency
of the criminal cases; whether invocation of the Recovery Act by
the appellant-Corporation bars initiation of proceedings under the
Arbitration and Conciliation Act, 1996; whether the application
u/s.11(6), Arbitration Act is barred by limitation; whether the issue
relating to legality and validity of invocation of arbitral proceedings
u/s.11(6) is conclusively decided by the High Court in Sadhna
Kumari v. Bihar State Food & Civil Supplies Corporation Ltd,
against which SLP was dismissed; whether the decision in the
order of Bihar Public Works Contracts Disputes Arbitration Tribunal
operates as res judicata; whether issues no.1 to 5 should be left
to the arbitral tribunal to decide in view of sub-section (6A) of s.11,
Arbitration Act.

Headnotes†
Arbitration and Conciliation Act, 1996 – s.11 – Penal Code,
1860 – ss.420, 409 – PDS scam in the State of Bihar;
misappropriation of more than a thousand crores by the
accused rice-millers, 600 FIRs filed – High Court allowed s.11
petitions filed by the respondents-rice-millers and appointed
arbitrators in several cases – As regards the objection of
non-arbitrability of dispute due to allegations of criminality,
High Court held that the allegations are simple accusations
as against serious allegation of forgery or fabrication and as
such there is no bar – Challenge to – Whether the dispute
between the respondents and the appellant-Corporation arising
out of the agreement incorporating the arbitration clause

* Author
1552 [2025] 8 S.C.R.

Supreme Court Reports

became non-arbitrable in view of the initiation and pendency
of the criminal cases:
Held: No – Mere fact that criminal proceedings can or have been
instituted in respect of the same incident(s) would not per se lead to
the conclusion that the dispute which is otherwise arbitrable ceases
to be so – There is a distinction between “serious fraud” and “fraud
simpliciter” to segregate and exclude disputes involving serious
fraud from arbitrability – Furthermore, Courts exercising jurisdictions
u/s.11(6) and s.8 must follow the mandate of sub-section (6A) to
s.11 and their scrutiny must be “confine(d) to the examination of
the existence of the arbitration agreement” – In the present case,
there is an arbitration agreement – All the issues raised by the
appellant are kept open for being raised and contested before the
arbitral tribunal – Appeals dismissed – Bihar and Orissa Public
Demands Recovery Act, 1914. [Paras 21, 27-30]

Arbitration and Conciliation Act, 1996 – s.11(6), 8, 11 (6A) –
Application u/s.11(6), if opposed on grounds of serious fraud –
Enquiry by referral court – Scope:
Held: Courts exercising jurisdictions u/s.11(6) and s.8 must follow
the mandate of sub-section (6A) to s.11 and their scrutiny must be
“confine(d) to the examination of the existence of the arbitration
agreement”. [Para 27]
Arbitration and Conciliation Act, 1996 – s.11 – Arbitrability in
cases of serious fraud – Principles governing, stated. [Para 21]

Case Law Cited
Cox and Kings Ltd. v. SAP India Pvt. Ltd., 2023 INSC 1051 : [2023]
15 SCR 621; Interplay Between Arbitration Agreements under
Arbitration and Conciliation Act, 1996 and Stamp Act, 1899 [2023]
15 SCR 1081 : (2024) 6 SCC 1; Bihar v. Divesh Kumar Chaudhry
(2018) 16 SCC 817; A. Ayyasamy v. A. Paramasivam and Ors.
[2016] 11 SCR 521 : (2016) 10 SCC 386; Abdul Kadir Shamsuddin
Bubere v. Madhav Prabhakar Oak [1962] 3 SCR 702 : 1961 SCC
OnLine SC 138; N. Radhakrishnan v. Maestro Engineers [2009]
15 SCR 371 : (2010) 1 SCC 72; Swiss Timing Ltd. v. Organising
Committee, Commonwealth Games [2014] 6 SCR 514 : (2014) 6
SCC 677; Meguin Gmbh v. Nandan Petrochem Ltd. (2016) 10 SCC
422; Ameet Lalchand Shah v. Rishabh Enterprises [2018] 6 SCR
1001 : (2018) 15 SCC 678; Rashid Raza v. Sadaf Akhtar [2019]
[2025] 8 S.C.R. 1553

The Managing Director Bihar State Food and Civil
Supply Corporation Limited & Anr. v. Sanjay Kumar

12 SCR 460 : (2019) 8 SCC 710; Avitel Post Studioz Limited v.
HSBC PI Holdings (Mauritius) Limited [2020] 10 SCR 791 : (2021)
4 SCC 713; Deccan Paper Mills v. Regency Mahavir Properties
[2020] 13 SCR 427 : (2021) 4 SCC 786; Booz-Allen & Hamilton Inc
v. SBI Home Finance Ltd. [2011] 7 SCR 310 : (2011) 5 SCC 532;
Vidya Drolia v. Durga Trading Corpn. [2020] 11 SCR 1001 : (2021)
2 SCC 1; National Insurance Co. Ltd. v. M/s Boghara Polyfab Pvt.
Ltd. [2008] 13 SCR 638 : (2009) 1 SCC 267; Shin-Etsu Chemical
Co. Ltd. v. Aksh Optifibre Ltd. [2005] Supp. 2 SCR 699 : (2005)
7 SCC 234 at 267, para 74; SBI General Insurance Co. Ltd. v.
Krish Spinning [2024] 7 S.C.R. 840 : 2024 SCC OnLine SC 1754;
Aslam Ismail Khan Deshmukh v. ASAP Fluids Private Ltd & Anr.
[2024] 12 SCR 108 : (2025) 1 SCC 502; Office for Alternative
Architecture v. Ircon Infrastructure and Services Ltd., 2025 SCC
OnLine SC 1098; Bihar State Food and Civil Supplies Corpn.
Ltd. v. Sadhna Kumari, Review Petition (Civil) D. No. 17336 of
2020 – referred to.
Satyendra Kumar Keshri v. State of Bihar, Crim Misc. No. 52242
of 2013; Sadhna Kumari v. Bihar State Food & Civil Supplies
Corporation Ltd., Request Case No. 8 of 2016 (High Court of
Judicature at Patna) – referred to.

Books and Periodicals Cited
Gary B. Born, International Commercial Arbitration Volume 1, § 6.04
(O) (3rd edn, Kluwer Law International B.V., 2021 – referred to.

List of Acts
Arbitration and Conciliation Act, 1996; Penal Code, 1860; Bihar and
Orissa Public Demands Recovery Act, 1914; Constitution of India.

List of Keywords
PDS scam; Rice-Millers; Alleged fraud by rice-millers;
Misappropriation of money by rice-millers; Fraud simpliciter;
Dispute arbitrable; Allegations of criminality; Objection of non-
arbitrability of dispute; Simple accusations; Not serious allegation
of forgery or fabrication; Serious fraud; Non-arbitrability of dispute;
Disputes involving serious fraud excluded from arbitrability; Dispute
arising out of the agreement incorporating the arbitration clause;
Pendency of the criminal cases; Arbitrability of serious fraud cases;
Non-arbitrability of dispute due to allegations of criminality; Fraud;
1554 [2025] 8 S.C.R.

Supreme Court Reports

Application u/s.11(6) of the Arbitration and Conciliation Act, 1996;
Jurisdictional issues; Paddy; Distribution under PDS schemes;
PDS schemes; Enquiry by referral court; Existence of arbitration
agreement; Arbitral proceedings; Arbitral tribunal; Public money.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 10116 of 2025
From the Judgment and Order dated 03.07.2020 of the High Court
of Judicature at Patna in RC No. 146 of 2019
With
Civil Appeal No(s). 10117, 10118, 10119, 10120, 10121, 10122,
10123, 10124, 10125, 10126, 10127, 10128, 10129, 10130, 10131,
10132, 10133, 10134, 10135, 10136, 10137, 10138, 10139, 10140,
10141, 10142, 10143, 10144, 10145, 10146, 10147, 10148, 10149,
10150, 10151, 10152, 10153, 10154, 10155, 10156, 10157, 10158,
10159, 10160, 10161, 10162, 10163, 10164, 10165, 10166, 10167,
10168, 10169, 10170, 10171, 10172, 10173, 10174, 10175, 10176,
10177, 1078, 10179, 10180, 10181, 10182, 10183, 10184, 10185,
10186, 10187, 10188, 10189, 10190, 10191, 10192, 10193, 10194,
10195, 10196, 10197, 10198, 10199, 10200, 10201, 10202, 10203,
10204, 10205, 10206, 10207, 10208, 10209, 10210, 10211 and
10212 of 2025

Appearances for Parties
Advs. for the Appellants:
Ranjit Kumar, Sr. Adv., Manish Kumar.
Advs. for the Respondent:
Amit Sibal, Rudreshwar Singh, Sr. Advs., Sumeet Singh, Abhiprav
Singh, Ms. Shatakshi Sahay, Shivam Singh, Kumar Avinahs, Ms.
Deepali Singh, Ms. Alka Singh, Kaushik Poddar, Kumar Vikram,
Ms. Arpita Mishra, Ms. Tanishka, Ms. Ishita Singh, Durga Dutt,
Upendra Narayan Mishra, Rohit Priyadarshi, Pradeep Yadav,
Ms. Rashi Verma, Dr. Nirmal Chopra, Ms. Rachitta Rai, Brajesh
Kumar, Prakash Kumar Singh, Vijay Singh, Imran Alam, Vishnu
Kant Pandey, Ashwani Kumar, Rajeev Singh, Shantanu Sagar, Anil
Kumar, Gunjesh Ranjan, Mrs. Divya Mishra, Manoneet Dwivedi,
Prakash Kumarmangalam, Abhishek Kumar Gupta, Shaurya
Vardhan Singh, Ms. Niharika Rai, Ashok Anand, Rakesh Kumar
Singh, Bipin Bihari Singh, Ajay Gupta, Deepak Kumar Singh,
[2025] 8 S.C.R. 1555

The Managing Director Bihar State Food and Civil
Supply Corporation Limited & Anr. v. Sanjay Kumar

Vaibhav Niti, Ms. Madhavi Agrawal, Divyanshu Agrawal, Jairaj
Singh, Madhur Mahajan, B. Srinivas, Neeraj Shekhar, Mrs. Kshama
Sharma, Rajesh Kumar Maurya, Ram Bachan Choudhary, Ujjwal
Ashutosh, Ms. Priya Chakravarty, Ms. Surbhi Singh, Santosh
Kumar - I, Samir Ali Khan, Pranjal Sharma.

Judgment / Order of the Supreme Court

Judgment

Pamidighantam Sri Narasimha, J.

Contents*
I. Introduction. ........................................................................... 11
II. Facts. .................................................................................... 12
III. Issue. .................................................................................... 25
IV. Submissions. ......................................................................... 26
V. Principles governing arbitrability in cases involving allegations
of serious fraud. .................................................................... 26
VI. Scope .................................................................................... 34

1. Leave granted.

I. Introduction.
2. These appeals arise out of the final judgment and order passed by
the High Court of Judicature at Patna allowing applications under
Section 11 of the Arbitration and Conciliation Act, 19961 and appointing
arbitrators in several cases.
2.1 Substantial arguments were centred around the issue of
arbitrability in cases of serious fraud. We have considered this
issue and laid down the principles that govern this issue. We
have also considered the stage at which such questions are to
be raised while considering an application under Section 11 of

1 Hereinafter referred to as the ‘Arbitration Act.’
* Ed. Note: Pagination as per the original Judgment.
1556 [2025] 8 S.C.R.

Supreme Court Reports

the Arbitration and Conciliation Act. Before we deal with these
issues the necessary facts are as follows.

II. Facts.
3. The appellant, Bihar State Food and Civil Supplies Corporation2,
undertook the work of procurement of paddy from the farmers in
the State of Bihar under a scheme evolved by the Food Corporation
of India3. The scheme provided that the paddy procured by the
Corporation from the farmers has to be converted into rice and the
rice shall in turn be purchased by the FCI for distribution under PDS
schemes. In furtherance of the scheme the appellant entered into
agreements with various rice millers across the state for custom
milling of paddy procured from the farmers. As per the agreement
various quantities of paddy were allotted to the rice millers and they
were to deliver rice quantified at 67% of the paddy supplied to them.
Relevant clauses of the agreement including clause 16 relating to
arbitration, which is the basis for filing applications under Section
11 of the Arbitration Act is as follows:-
“15. The second party agrees that in case, any amount
found recoverable on account of default, loss, damage on
the part of the second party, the said recoverable amount
with interest will be recovered as Land Revenue under
Bihar & Orissa Public Demands Recovery Act, 1914, by
instituting Certificate case before the concerned District
Certificate Officer.
16. In case of disputes both parties agree to settle the
issue(s) on mutual discussions. Failure to reach agreement
the matter will be referred to Arbitrator. It has been also
agreed that the Arbitrator will be District Collector of the
concerned District whose decision shall be final, concerning
the dispute referred to him.”
4. It is evident from the above that under Clause 15, the agreement
contemplated recovery of dues as land revenue under the Bihar and
Orissa Public Demands Recovery Act, 19144. Further, under Clause

2 Hereinafter referred to as the ‘Corporation’.
3 Hereinafter referred to as the ‘FCI’.
4 Hereinafter referred to as the ‘Recovery Act’.
[2025] 8 S.C.R. 1557

The Managing Director Bihar State Food and Civil
Supply Corporation Limited & Anr. v. Sanjay Kumar

16, if an attempt to settle disputes through mutual discussions fails,
then dispute will be referred to arbitration.
5. Within a year of entering into the contracts, the Corporation realised
that the respondents have failed to supply the agreed amount of
milled rice and, therefore, initiated proceedings under the Recovery
Act as contemplated under Clause 15 of the agreement. Challenging
the legality and validity of initiation of the recovery proceedings, the
respondents filed Writ Petitions under Article 226 of the Constitution
challenging the demand notices issued under the Recovery Act.
These petitions came to be disposed of by the High Court by its
orders dated 22.07.2014 and 23.07.2014 by holding that there is a
parallel remedy of arbitration provided under the agreement.
6. Dissatisfied with the orders passed by the Single Judge, the
respondents approached the Division Bench of the High Court by
filing the Writ Appeals. The Division Bench disposed of the appeals
by its order dated 17.04.2015, affirming the decision of the Single
Judge by holding as under:
“If it is well established that even in cases of such nature
this Court certainly can interfere. However, one peculiar
situation that emerges in these cases is that apart from
enabling provision, i.e. Clause-15, the agreements
contained Clauses 16 that provided for conciliation or
Arbitration. It reads as under:-
16. In case of disputes both parties agree
to settle the issue(s) on mutual discussion.
Failure to reach agreement the matter will be
referred to Arbitrator. It has been also agreed
that the Arbitrator will be District Collector of
the concerned District whose decision shall be
final, concerning the dispute referred to him.
From a perusal of this, it becomes clear that if there exists
the dispute between the parties, the recourse must be had
to conciliation, as a first step and, if that does not fructify,
the steps need to be taken to get the dispute resolved
through Arbitration. It is a different matter that the Collector
is the named Arbitrator in all these cases.
1558 [2025] 8 S.C.R.

Supreme Court Reports

Once the parties have agreed to a particular mode of
resolution of dispute, that too, those covered by Arbitration
and Conciliation Act, 1996, the question of entertaining
the writ petition, in relation to that very dispute, does not
arise. The plea of the appellants that the arbitration by the
Collector may not be effective, can be certainly agitated
before the proper forum, but not in the writ petition. Such
a course would invariably be available in the process of
availing the remedy of arbitration, but not outside the same.
The Learned Single Judge has taken correct view of
the matter in refusing to entertain the writ petitions after
taking note of the existence of clauses providing for
arbitration. The interests of the appellants have already
been adequately protected by stipulating time for the
concerned authorities to take action in the event of any
representations in terms of Clause 16 being made.”
(emphasis supplied)

7. Review Petitions filed against the above referred order by the
respondents were also dismissed by the Division Bench. Subsequently,
the Enforcement Directorate also initiated proceedings against the
respondents under the PMLA.
8. In the meanwhile, it is alleged by the appellants that a massive fraud
by rice millers leading to a huge loss of more than a thousand crores
to the public exchequer came to light. The Corporation initiated
criminal proceedings by filing almost 1200 FIRs against the rice
millers situated across the State of Bihar. The relevant extract from
an FIR in one of the cases is extracted below for ready reference:5
“In context of aforesaid subject, it is to say that, Mr.
Sanjay Kumar, age about 40 years, Proprietor, Sanjay
Rice Mill, Dubhvaliya, S/o- Mr. Avadh Bihari Sao R/o-
VillageDubhvalia, P.S.- Bagha-2, Dist.- West Champaran
in Procurement Year 2012-13 executing the Deed of
Agreement, for milling procured total 11090.80 quintal
paddy, of which 67 % C.M.R. (Rice) is total 7430.83600

5 First Information Report No. 198/16, Police Station Bagha, West Champaran, Bihar (26.05.2016).
[2025] 8 S.C.R. 1559

The Managing Director Bihar State Food and Civil
Supply Corporation Limited & Anr. v. Sanjay Kumar

quintal, which was to be deposited by him by the last date of
31.12.2013 determined by the Government of India. But by
him only 2970.00 quintal C.M.R. (Rice) is deposited in the
godown of Food Corporation of India. Repeatedly warning
was given to Mr. Sanjay Kumar for depositing rice, but by
him rice is not deposited. By him against total 4460.83600
quintal C.M.R. (Rice) @ Rs. 2165.56 per quintal costing
total Rs. 9660208.00 [Ninety Six Lakh, Sixty Thousand, Two
Hundred & Eight] by the date of 20.05.2016 total 13, 00,
000.00/- [Thirteen Lakh] rupees through Bank Demand Draft
is deposited. Thus rest amount of Rs. 8360208.00/- [Eighty
Three Lakh, Sixty Thousand, Two Hundred & Eight] are
defalcated under criminal conspiracy and heavy damage
is caused to the governmental amount. At the same time,
up to date of recovery at the rate of 8 % the amount of
interest is also recoverable.”
9. Upon completion of investigation, chargesheets came to be filed in the
year 2016, whereunder the respondents were charged for committing
offences under Sections 420 and 409, IPC. The relevant portion from
one such chargesheet is extracted hereinbelow for ready reference:6
“This informant Shahnawaz Ahmed Niyazi son of Md.
Niyazuddin resident of Anand Bazar, Cantt Patna present
District Manager, Kaimur State Food Corporation, vide
office number 577 dated 7.06.2016 on this basis, F.I.R
against M/s Shiv Shanti Rice Mill through its proprietor
namely Abhishek Kumar son of Shiv Prasahan Ray village -
Panchpokhari P.S.- Kudra, District -kaimur on charges
of fraudulently embezzling government rice worth Rs
67,83,705.40. found accused, the investigation so far into
the case to be true based on the statement of informant,
supervision, and available evidences near the incident site.
This case has been found true under section 420/409 IPC
against the accused Abhishek Kumar son of Shiv Prasahan
Ray, village-panchpokhari, P.S.- Kudra, District-Kaimur, the
charge sheet received is true and order has been given
to submit the charge sheet to senior officer […]”

6 Final Report, Chief Judicial Magistrate, Kaimur Bhabua, Bihar (18.12.2016).
1560 [2025] 8 S.C.R.

Supreme Court Reports

10. Pending disposal of criminal proceedings, large number of applications
filed by the rice-millers were considered and disposed of by the High
Court. Some of the orders were challenged before this Court in State
of Bihar v. Divesh Kumar Chaudhry7, decided on 28.02.2017, this
Court recording the nature of the crime passed the following order:
“2. It has been stated by Mr Sidharth Luthra, learned Senior
Counsel appearing for the State/Corporation, that a sum
of rupees fifteen hundred crores in all has been allegedly
misappropriated by the accused for which 600 FIRs have
been filed. According to the case of the State, agreements
for milling of paddy were entered into with different rice mills
in pursuance of which paddy was handed over for milling
but the rice from the milled paddy was not returned or was
returned partly. Thus, there is misappropriation to a huge
extent. In such circumstances, grant of anticipatory bail/
bail will seriously hamper the investigation/trial resulting
in huge loss to the State.
3. Our attention has been drawn to the deed of agreement.
Clause 3 thereof provides for furnishing of bank guarantee
for the value of paddy, which is taken for milling, or for
pledging of the immovable property of the value of the
paddy. There is also provision in Clause 12 that in case of
default of the terms of the agreement, the bank guarantee
can be forfeited and legal action initiated for recovery of
the amount from the mortgaged immovable property.
[…]
4.3. The investigation will be completed within a period
of three months.
4.4. All the accused will be tried only at five places viz.
Patna, Gaya, Chhapra, Darbhanga and Purnia by officers
of the appropriate rank determined by the High Court
within one week from today. The High Court may specify
the area of jurisdiction of the said five courts by a public
order. If required by the High Court, the State Government
may sanction extra strength of officers with requisite

7 (2018) 16 SCC 817
[2025] 8 S.C.R. 1561

The Managing Director Bihar State Food and Civil
Supply Corporation Limited & Anr. v. Sanjay Kumar

infrastructure so that normal work of courts is not disturbed
on account of the special arrangement for these cases.
4.5. The officers posted will deal with these cases
exclusively. If free from their work, any other work may
be assigned to the said officers.
4.6. The authorities concerned will be at liberty to encash
the bank guarantee(s) after holding that there is a breach
of terms of the agreement which decision will be subject
to appropriate remedies of the parties.
4.7. If not otherwise encashed, the bank guarantee will be
kept alive till the trial is over. However, deposits/furnishing
of bank guarantees will be abide by further orders of the
trial court, interim or final.
4.8. If any amount is deposited by the accused, the
said amount will be adjusted in the amount of the bank
guarantee, which is to be furnished by the accused.
4.9. The accused will surrender their passports to the
respective courts within a period of four weeks from today
and will not leave the country without prior permission from
the court concerned.”
11. It is evident from the above that this Court recorded that the PDS
scam in the State of Bihar involves misappropriation of more than
a thousand crores by the accused rice-millers, against whom some
600 FIRs have been filed. Having considered the matter in detail,
this Court passed orders in certain bail applications and further
directed that the investigation should be completed within a period
of 3 months. This Court has also directed that all the accused will
be tried only at 5 places i.e. at Patna, Gaya, Chhapra, Darbhanga
and Purnia for effective conduct of the trials. The High Court was
directed to identify and post officers of appropriate rank within one
week for conduct of trial. There was also a direction to increase
the strength of the officers and provide necessary infrastructure. All
these directions indicate that there is public element involved in the
conduct of trial efficiently and with integrity.
12. It is also important to mention that, considering the enormity and
magnitude of the public money involved, the High Court directed
1562 [2025] 8 S.C.R.

Supreme Court Reports

the constitution of a Special Investigation Team (SIT) at the state-
level for focussed and concerted action. Concerned about the fact
that misappropriation of large amounts in one financial year could
not have taken place without a larger conspiracy at the higher level
within the Corporation itself, the High Court directed monitoring of the
case under the guidance of the Additional Director General, CID. The
relevant portion of the order dated 10.03.2017 in Satyendra Kumar
Keshri v. State of Bihar 8 is extracted hereinbelow for ready reference.
“2. There are at least 1202 criminal cases pending
throughout the State of Bihar in its every District, having
common features, all based on allegation of large scale
bungling and misappropriation of public property in the
matter of procurement of paddy and supply of Customized
Milled Rice (CMR).
3. Considering the enormity and magnitude of public money
involved, which is said to have been misappropriated
and bungled, while hearing this application, I intended to
consider possibility of constituting a Special Investigating
Team at the State level for more focused and concerted
investigation into all the cases. 4. The allegations made
in all these First Information Reports are almost identical
and show involvement of the personnel of Bihar State
Food & Civil Supplies Corporation, State Government
Officials/personnel, Rice Mill Owners and other persons
connected in the said transactions. This Court had noticed
that despite the fact that the allegations in all such cases
were Identical in nature, the cases are being investigated
by the concerned police Officers on case to case basis.
Being of the view that misappropriation of this magnitude
Involving more than one thousand crores (nearly 1500
crores) in one financial year could not have taken place
simultaneously, through different transactions, throughout
the State of Bihar, without there being a larger conspiracy
at some higher level, by order, dated 08,02.2017, I had
observed that investigation into all the cases should be
monitored under the guidance of the Additional Director

8 Crim Misc. No. 52242 of 2013.
[2025] 8 S.C.R. 1563

The Managing Director Bihar State Food and Civil
Supply Corporation Limited & Anr. v. Sanjay Kumar

General, Criminal Investigation Department, Bihar, Mr.
Binay Kumar. In the said order, dated 08.02.2017, the
Additional Director General, C.I.D. was asked to report
to this Court to suggest a tentative team, which he
would like to constitute for carrying out the exercise of
monitoring all investigations in all such cases, so that it
could be convenient for the Court to pass appropriate
order constituting Special Investigation Team for the said
limited purpose.
5. In compliance with the said order, dated 15.02.2017,
Mr. Binay Kumar, Additional Director General, C.I.D, Bihar
has filed a detailed affidavit. From the said affidavit it is
evident that out of said 1202 cases at least 9 involve
misappropriation of Government property worth more
than Rs. 8 crores; 18, between 8 crores to five crores; 55,
between 5 crores to 3 crores; 261, between 3 crores to 1
crore and 854, one crore and below. It also appears from
the said affidavit that at least 9 cases are being investigated
by Economic Office Unit of the State of Bihar.”
13. Before we refer to the initiation of proceedings under Section 11 of the
Arbitration Act in the year 2019, from which the present appeals arise,
it is necessary to mention that similar applications under Section 11
of the Arbitration Act were filed by some rice millers and they came
to be allowed by the High Court on 19.04.2017 in Sadhna Kumari v.
Bihar State Food & Civil Supplies Corporation Ltd.9 The decision of
the High Court allowing the Section 11 applications was challenged
by the Corporation by filing Special Leave Petitions (SLPs) before
this Court. By its order dated 29.01.2018, this Court dismissed the
SLPs10. However, we are informed that the appellants filed Review
Petitions11 against the said order dated 29.01.2018 and the same are
pending consideration before this Court. In fact, there is a direction
by this Court on 15.10.2020 that the Review Petitions should be
listed after disposal of the present batch of appeals.

9 Request Case No. 8 of 2016 (High Court of Judicature at Patna).
10 Special Leave to Appeal (C) No. 450 of 2018.
11 Bihar State Food and Civil Supplies Corpn. Ltd. v. Sadhna Kumari, Review Petition (Civil) D. No. 17336
of 2020.
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14. Similarly, some of the respondents had previously filed applications
requesting appointment of an arbitrator, and the High Court referred
the dispute to the Bihar Public Works Contracts Disputes Arbitration
Tribunal. The Tribunal dismissed the reference on jurisdictional
grounds on 25.09.2019. The appellant contends that these orders
have become final as they were not been challenged under Section
34 of the Arbitration Act.
15. All the above-referred facts span over a period of six years,
commencing from the time when agreements were executed in the
year 2013 and culminate with the filing of the present applications
under Section 11 of the Arbitration Act in the year 2019.
16. Impugned Order: By way of the impugned order dated 03.07.2020,
the High Court allowed all the Section 11 petitions filed by the
respondents. The High Court held that it is undisputed that the
agreements, including the arbitration clauses, were entered into
freely by both the parties. At the outset, the High Court considered
and rejected the argument of limitation advanced by appellant on
the ground that while cause of action commenced from the issuance
of a demand notice under the Recovery Act in 2015, arbitration was
invoked only in the year 2019. The High Court relied on one of its
previous orders passed in the case of other rice-millers titled Sadhna
Kumari v. State of Bihar, to reject the argument. The High Court also
noted that its previous order appointing arbitrator was affirmed by
this Court vide its order dated 29.01.2018 in Bihar State Food & Civil
Supplies Corporation Ltd v. Sadhna Kumari. In the impugned order,
the High Court reiterated the same position and held that detailed
arguments on limitation can be looked into by the arbitrator.
17. As regards the objection of non-arbitrability of dispute due to
allegations of criminality, the Court felt the allegations are simple
accusations as against serious allegation of forgery or fabrication and
as such there is no bar. The High Court also held that arbitration as
a remedy cannot be foreclosed due to the pendency of proceedings
under the Recovery Act as there was no conflict between the two
laws. It observed that while Recovery Act operating an independent
field provides for a mechanism for determining and recovering a
public debt, arbitration, on the other hand deals with a resolution
of wide range of disputes arising out of a contract. The High Court
also held that mere issuance of a notice under the Recovery Act
[2025] 8 S.C.R. 1565

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cannot lead to the conclusion that claims made thereunder are public
debts and subject to exclusive consideration under Recovery Act.
It therefore held that courts should not be hasty in concluding that
remedy under one law operates in derogation of a remedy under
another. Even if there is any conflict, the High Court held that the
Arbitration Act would override the Recovery Act since the former is
a central legislation.
18. The High Court also stated that the omission on the part of the rice-
millers to file an application under Section 8 of the Arbitration Act
during the certificate proceedings does not amount to a waiver of the
arbitration clause. It was held that powers under Section 11 operate
independently of the conditions flowing from Section 8. Lastly, the
High Court also held that attempting settlement of disputes through
mutual discussion is not a pre-condition for invoking the arbitration
under clause 16 of the agreement.
19. We have heard Mr. Ranjit Kumar, learned senior counsel appearing
for the appellant and Mr. Amit Sibal, learned senior counsel appearing
on behalf of the respondents-Rice Millers. The submissions of the
learned counsels can broadly be divided into four parts, though
there are two other incidental submissions which may not have a
direct bearing on our final decision. The broad submissions can be
formulated as the following issues:

III. Issue.
I. Whether the dispute between the respondents and the appellant
arising out of the agreement incorporating the arbitration clause
has become non-arbitrable in view of the initiation and pendency
of the criminal cases.
II. Whether invocation of the Recovery Act by the appellant-
Corporation bars initiation of proceedings under the Arbitration
Act.
III. Whether the application under Section 11(6) of the Arbitration
and Conciliation Act, 1996 is barred by limitation.
IV. Whether the issue relating to legality and validity of invocation of
arbitral proceedings under Section 11(6) is conclusively decided
by the High Court in Sadhna Kumari v. Bihar State Food & Civil
Supplies Corporation Ltd, against which SLP was dismissed.
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V. Whether the decision in the order of Bihar Public Works Contracts
Disputes Arbitration Tribunal operates as res judicata.
VI. Whether issues no. 1 to 5 should be left to the arbitral tribunal
to decide in view of sub-section (6A) of Section 11 of the Act.

IV. Submissions.
20. Mr. Ranjit Kumar and Mr. Amit Sibal have extensively argued on
the issue of arbitrability, rather on non-arbitrability of the disputes
as contended by Mr. Ranjit Kumar. They referred to a number of
precedents on the issue of fraud or serious fraud involved in the
dispute and also the subject matter for arbitration.

V. Principles governing arbitrability in cases involving
allegations of serious fraud.
21. In view of our decision, it is unnecessary to delve deep on this
issue, but sufficient to restate the law on the subject. The position
of law as it applies to initiation of arbitral proceedings in the teeth
of allegations of criminality involved in the dispute, where criminal
proceedings are either pending or to be initiated is considered in
several decisions of this Court.12 In A. Ayyasamy v. A. Paramasivam
and Ors.13, this Court has considered the matter in detail and laid
down certain principles. As the relevant portions of the decision in
Ayyasamy (supra) have been extracted in the subsequent decisions
of this Court in Ameet Lalchand Shah v. Rishabh Enterprises14,
Rashid Raza v. Sadaf Akhtar,15 and Avitel Post Studioz Limited v.
HSBC PI Holdings (Mauritius) Limited16, we are of the opinion that
our judgment need not be burdened by extracting excerpts from the
judgment all over again. Instead, we seek to restate the principles
as follows:-

12 Abdul Kadir Shamsuddin Bubere v. Madhav Prabhakar Oak, 1961 SCC OnLine SC 138; N.
Radhakrishnan v. Maestro Engineers, 2010 (1) SCC 72; Swiss Timing Ltd. v. Organising Committee,
Commonwealth Games 2014 (6) SCC 677; Meguin Gmbh v. Nandan Petrochem Ltd., (2016) 10 SCC
422; A. Ayyasamy v. A. Paramasivam and Ors (2016) 10 SCC 386; Ameet Lalchand Shah v. Rishabh
Enterprises, (2018) 15 SCC 678; Rashid Raza v. Sadaf Akhtar, (2019) 8 SCC 710; Avitel Post Studioz
Limited v. HSBC PI Holdings (Mauritius) Limited, (2021) 4 SCC 713; Deccan Paper Mills v. Regency
Mahavir Properties, 2021 (4) SCC 786.
13 (2016) 10 SCC 386
14 (2018) 15 SCC 678
15 (2019) 8 SCC 710
16 (2021) 4 SCC 713
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I. Access to justice for enforcement of rights and obligations is
assured by the usual proceedings in the ordinary tribunals.17 It is
for this reason that Section 28 of the Indian Contract Act, 1872
while prohibiting agreements in restraint of legal proceedings
saves resolution of disputes through contract, i.e., by arbitration.
The conduct of arbitration is governed by the Arbitration and
Conciliation Act, 1996.
II. The limits of dispute resolution through arbitration are statutorily
incorporated in the Arbitration Act itself. Section 2(3) provides
that, “This part shall not affect any other law for the time being in
force by virtue of which certain disputes may not be submitted to
arbitration.”18 Disputes that shall not be submitted to arbitration
have been recognized in a large number of decisions of this
Court.19 Of these, for the present purpose we are concerned
with disputes which shall not be submitted to arbitration due
to application and operation of criminal laws to the dispute in
question.
III. Same set of facts may lead to civil and criminal proceedings.
A civil dispute could involve questions of coercion (section 15
of Contract Act), undue influence (section 16 of Contract Act),
fraud (section 17 of Contract Act), misrepresentation (section
18 of Contract Act) for example, and such disputes can be
adjudicated as civil proceedings for determination of civil or
contractual liabilities between the parties. The same set of facts
could have their co-relatives in criminal law. The mere fact that
criminal proceedings can or have been instituted in respect of

17 Section 9 of the CPC and Cox and Kings Ltd. v. SAP India Pvt. Ltd. [2023 INSC 1051].
18 It is important to note that the statutory incorporation of the limits of dispute resolution through arbitration
is not noticed in many judicial precedents. However, it is true that categories of cases that are not
arbitrable are not enumerated in Section 2(3) of the Act. The position as noticed in Ayyasamy is as
follows, “it has to be kept in mind that in so far as the statutory scheme of the Act is concerned, it does not
specifically exclude any category of cases as non-arbitrable. Such categories of non-arbitrable subjects
are carved out by the courts, keeping in mind the principle of common law that certain disputes which
are of public nature, etc. are not capable of adjudication and settlement by arbitration and for resolution
of such disputes, i.e. public fora are better suited than a private forum of arbitration…” See Para 25
Ayyasamy (supra).
19 Booz-Allen & Hamilton Inc v. SBI Home Finance Ltd., 2011 (5) SCC 532; Vidya Drolia v. Durga Trading
Corpn. (2021) 2 SCC 1; and National Insurance Co. Ltd. v. M/s Boghara Polyfab Pvt. Ltd. (2009) 1 SCC
267.
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the same incident(s) would not per se lead to the conclusion
that the dispute which is otherwise arbitrable ceases to be so.20
IV. The reason for permitting submission of such disputes to
arbitration is well explained in Swiss Timing21 as, “To shut out
arbitration at the initial stage would destroy the very purpose
for which the parties had entered into arbitration. Furthermore,
there is no inherent risk of prejudice to any of the parties in
permitting arbitration to proceed simultaneously to the criminal
proceedings. In an eventuality where ultimately an award is
rendered by the Arbitral Tribunal, and the criminal proceedings
result in conviction rendering the underlying contract void, the
necessary plea can be taken on the basis of the conviction
to resist the execution/enforcement of the award. Conversely,
if the matter is not referred to arbitration and the criminal
proceedings result in an acquittal and thus leaving little or
no ground for claiming that the underlying contract is void or
voidable, it would have the wholly undesirable result of delaying
the arbitration [...].”
V. For an important policy consideration, our Court has drawn
a distinction between “serious fraud” and “fraud simpliciter”
to segregate and exclude disputes involving serious fraud
from arbitrability22. Disputes involving serious fraud may not
be submitted to arbitration as explained, to some extent in
Ayyasamy (supra) as they, “are very serious allegations of
fraud which make a virtual case of criminal offence or where
allegations of fraud are so complicated that it becomes absolutely
essential that such complex issues can be decided only by the
civil court on the appreciation of the voluminous evidence that
needs to be produced, the court can sidetrack the agreement

20 Avitel Post Studioz Limited v. HSBC PI Holdings (Mauritius) Limited, (2021) 4 SCC 713, para 43.
21 2014 (6) SCC 677. Also see similar reasoning by Justice B.N. Srikrishna in the context of Section 45
of the Arbitration Act in Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd; (2005) 7 SCC 234 at 267,
para 74.
22 The position in our country is different from global practices which do not draw such distinction as
noticed by Gary B. Born in his Book commentary where he was observed “Indian courts have adopted
a comparable, albeit less expansive, treatment of fraud claims, at least in a domestic context. The
Indian Supreme Court has held that at least some claims of “serious fraud,” in a domestic setting, are
nonarbitrable, while claims of “ordinary” fraud are arbitrable. The Indian approach, although undesirable
from a policy perspective and out-of-step with that of most national courts, is arguable consistent with
the Convention’s treatment of the nonarbitrability doctrine” See Gary B. Born, International Commercial
Arbitration Volume 1, § 6.04 (O) (3rd edn, Kluwer Law International B.V., 2021).
[2025] 8 S.C.R. 1569

The Managing Director Bihar State Food and Civil
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by dismissing the application under Section 8 and proceed with
the suit on merits […]”
VI. “Serious allegations of fraud” is to be understood in the context
of facts. In Rashid Raza (supra)23 this Court laid down two
tests. The first test is satisfied only when it can be said that the
arbitration clause or agreement itself cannot be said to exist
in a clear case in which the court finds that the party against
whom breach is alleged cannot be said to have entered into the
agreement relating to arbitration at all. The second test can be
said to have been met in cases in which allegations are made
against the State or its instrumentalities of arbitrary, fraudulent,
or mala fide conduct, thus necessitating the hearing of the
case by a writ court in which questions are raised which are
not predominantly questions arising from the contract itself or
breach thereof, but questions arising in the public law domain.
VII. Disputes involving allegations of serious fraud need more
clarity so that there is certainty about the availability of the
remedy. At least one instance of serious fraud will be where
disputes involving allegations having criminal law implications
transcend inter se disputes between the contracting parties
and attain public implications, where the ramifications could
directly or indirectly affect non-parties and impact, integrity
in governance, accountability in public service, distribution
of essential commodities, safety and security of the nation
for example. Consideration of such disputes have public law
implications and shall ‘not be submitted to arbitration’.24

23 (2019) 8 SCC 710, para 4; as subsequently affirmed in Avitel Post Studioz Ltd & Ors. v. HSBC PI
Holdings (Mauritius) Ltd; (2021) 4 SCC 713, para 35 at pg. 753.
“35. After these judgments, it is clear that “serious allegations of fraud” arise only if either
of the two tests laid down are satisfied, and not otherwise. The first test is satisfied only
when it can be said that the arbitration clause or agreement itself cannot be said to exist in
a clear case in which the court finds that the party against whom breach is alleged cannot
be said to have entered into the agreement relating to arbitration at all. The second test
can be said to have been met in cases in which allegations are made against the State
or its instrumentalities of arbitrary, fraudulent, or mala fide conduct, thus necessitating the
hearing of the case by a writ court in which questions are raised which are not predominantly
questions arising from the contract itself or breach thereof, but questions arising in the public
law domain.”
24 See: A. Ayyasamy v. A. Paramasivam and Ors.; (2016) 10 SCC 386 para 25, Rashid Raza v. Sadaf
Akhtar; (2019) 8 SCC 710 para 4, Avitel Post Studioz Limited v. HSBC PI Holdings (Mauritius) Limited,
(2021) 4 SCC 713, para 35.
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VIII. Arbitral Tribunal will be within its jurisdiction to consider
allegations of fraud even with respect to the specific terms
or clauses in the contract as an arbitration agreement stands
independent of the contract and continue to bind and govern
the parties even if the contract is terminated or challenged
and this question is no more res integra. There is however an
exception, the following is its articulation25.
IX. However, the allegations of fraud with respect to the arbitration
agreement itself stand on a different footing. This position is
generally recognized as a dispute which is in the realm of
non-arbitrability26. In such cases, the arbitral tribunal will not
examine the allegation of fraud but will consider the submission
only for the purpose of examining exclusion of jurisdiction. This
principle, in its application, can be seen in the judgment of this
Court in Avitel.27
X. The burden of proof is on the party who raises the plea.28
XI. When a plea of non-arbitrability is raised, the Court will examine
it as a jurisdictional issue only to enquire if the dispute has
become non-arbitrable due to one or the other reason as
indicated by us hereinabove.
22. Though we have referred in detail to the facts of the case and
have formulated the general principles of non-arbitrability on the
basis of the decisions referred to by Mr. Ranjit Kumar and Mr. Amit
Sibal learned senior counsels, there is a fundamental barrier that
would disable us from applying the said principles to the facts of
the present case.

25 Interplay Between Arbitration Agreements; (2024) 6 SCC 1.
26 Ayyasamy (supra), para 25; It is explained that the Court can do so in cases “where there are serious
allegations of forgery/fabrication of documents in support of the plea of fraud or where fraud is alleged
against the arbitration provision itself or is of such a nature that permeates the entire contract, including
the agreement to arbitrate, meaning thereby in those cases where fraud goes to the validity of
the contract itself of the entire contract which contains the arbitration clause or the validity of the
arbitration clause itself…”
27 Avitel (supra); “54.1. That there is no such fraud as would vitiate the arbitration clause in the SSA
entered into between the parties as it is clear that this clause has to be read as an independent clause.
Further, any finding that the contract itself is either null and void or voidable as a result of fraud or
misrepresentation does not entail the invalidity of the arbitration clause which is extremely wide […]”
28 Ayyasamy (supra), para 45.1.
[2025] 8 S.C.R. 1571

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VI. Re: Issue No.6: Scope of enquiry by the referral court when
an application under Section 11(6) of the Act is opposed on the
grounds of serious fraud.
23. Section 11 of the Act has perhaps been the only provision which
would have been interpreted and re-interpreted by the Supreme
Court for the longest time ever. After two decades of its interpretation
commencing from 1996, Parliament intervened and supplied sub-
section (6A) to Section 11 of the Act as per which the consideration
by a referral court shall be confine(d) to the examination of the
existence of an arbitration agreement.
24. Even after the introduction of sub-section (6A), it took almost a
decade for us to have clarity and certainty till the seven judges bench
decision of this Court in the case of Interplay Between Arbitration
Agreements under Arbitration and Conciliation Act, 1996 and Stamp
Act, 1899, In Re29 was delivered.
25. In the seven judges bench decision, this Court considered in detail
the separability of the arbitration agreement from the contract, the
empowerment of the arbitral tribunal to examine its own competence
and finally the limits of referral courts scrutiny. The relevant portions
are as under:
“165. The legislature confined the scope of reference under
Section 11(6-A) to the examination of the existence of an
arbitration agreement. The use of the term “examination”
in itself connotes that the scope of the power is limited to
a prima facie determination. Since the Arbitration Act is a
self-contained code, the requirement of “existence” of an
arbitration agreement draws effect from Section 7 of the
Arbitration Act. In Duro Felguera [Duro Felguera, S.A. v.
Gangavaram Port Ltd., (2017) 9 SCC 729 : (2017) 4 SCC
(Civ) 764] , this Court held that the Referral Courts only
need to consider one aspect to determine the existence
of an arbitration agreement — whether the underlying
contract contains an arbitration agreement which provides
for arbitration pertaining to the disputes which have arisen
between the parties to the agreement. Therefore, the
scope of examination under Section 11(6-A) should be
confined to the existence of an arbitration agreement on

29 (2024) 6 SCC 1.
1572 [2025] 8 S.C.R.

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the basis of Section 7. Similarly, the validity of an arbitration
agreement, in view of Section 7, should be restricted to the
requirement of formal validity such as the requirement that
the agreement be in writing. This interpretation also gives
true effect to the doctrine of competence-competence by
leaving the issue of substantive existence and validity of
an arbitration agreement to be decided by Arbitral Tribunal
under Section 16. We accordingly clarify the position of law
laid down in Vidya Drolia [Vidya Drolia v. Durga Trading
Corpn., (2021) 2 SCC 1 : (2021) 1 SCC (Civ) 549] in the
context of Section 8 and Section 11 of the Arbitration Act.
166. The burden of proving the existence of arbitration
agreement generally lies on the party seeking to rely on
such agreement. In jurisdictions such as India, which
accept the doctrine of competence-competence, only prima
facie proof of the existence of an arbitration agreement
must be adduced before the Referral Court. The Referral
Court is not the appropriate forum to conduct a mini-trial
by allowing the parties to adduce the evidence in regard to
the existence or validity of an arbitration agreement. The
determination of the existence and validity of an arbitration
agreement on the basis of evidence ought to be left to the
Arbitral Tribunal. This position of law can also be gauged
from the plain language of the statute.
167. Section 11(6-A) uses the expression “examination
of the existence of an arbitration agreement”. The
purport of using the word “examination” connotes that
the legislature intends that the Referral Court has to
inspect or scrutinise the dealings between the parties
for the existence of an arbitration agreement. Moreover,
the expression “examination” does not connote or
imply a laborious or contested inquiry. [ P. Ramanatha
Aiyar, The Law Lexicon (2nd Edn., 1997) 666.] On the
other hand, Section 16 provides that the Arbitral Tribunal
can “rule” on its jurisdiction, including the existence and
validity of an arbitration agreement. A “ruling” connotes
adjudication of disputes after admitting evidence from
the parties. Therefore, it is evident that the Referral Court
is only required to examine the existence of arbitration
agreements, whereas the Arbitral Tribunal ought to rule
on its jurisdiction, including the issues pertaining to the
[2025] 8 S.C.R. 1573

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Supply Corporation Limited & Anr. v. Sanjay Kumar

existence and validity of an arbitration agreement. A similar
view was adopted by this Court in Shin-Etsu Chemical
Co. Ltd. v. Aksh Optifibre Ltd. [Shin-Etsu Chemical Co.
Ltd. v. Aksh Optifibre Ltd., (2005) 7 SCC 234].”
26. The above referred decision is followed in subsequent decisions of
this Court in SBI General Insurance Co. Ltd. v. Krish Spinning30, Aslam
Ismail Khan Deshmukh v. ASAP Fluids Private Ltd & Anr.31 and Office
for Alternative Architecture v. Ircon Infrastructure and Services Ltd.32
27. The curtains have fallen. Courts exercising jurisdictions under Section
11(6) and Section 8 must follow the mandate of sub-section (6A), as
interpreted and mandated by the decisions of this Court and their
scrutiny must be “confine(d) to the examination of the existence of
the arbitration agreement ”.
28. We have examined the matter in detail. There is an arbitration
agreement. The matter must end here. While we agree with Mr.
Ranjit Kumar submissions that his client has much to say, let all that
be said before the arbitral tribunal. It is, as we have said elsewhere,
just as necessary to follow a precedent as it is to make one.
29. All the issues raised by Mr. Ranjit Kumar, senior counsel are kept
open for being raised and contested before the arbitral tribunal. The
issues that we have not taken up and left it to the arbitral tribunal
are jurisdictional issues, involving barring of the arbitral proceedings
due to limitation or for the reason that they are non-arbitrable. These
issues shall be taken up as preliminary issues and the arbitral tribunal
will consider them after giving opportunity to all the parties.
30. In view of the above discussions, the appeals stand dismissed. There
shall be no order as to costs.

Result of the case: Appeals dismissed.

†
Headnotes prepared by: Divya Pandey

30 2024 SCC OnLine SC 1754
31 (2025) 1 SCC 502
32 2025 SCC OnLine SC 1098