ARB-139-2025 IN THE HIGH COURT OF PUNJAB AND HARYANA AT 236 SUNIL KUMAR MRS VEENA TANDON AND OTHERS CORAM : HON’BLE MS. JUSTICE LAPITA BANERJI Present : Mr. Mr. Ajit Singh, Advocate for respondent No.1. Mr. Keshav Dogra, Advocate for respondent No.2. Mr. Tushar Wadhwa, Advocate for respondent No.3. Mr. Abhijeet, Advocate for respondents No.4 and 7. Mr. Ankush Thakur, Advocate for respondent No.5. Ms. Sonia Sharma, Advocate for respondent No.6. LAPITA BANERJI, J. Learned counsel appearing on behalf of the petitioner refers to Clause 15 of the Agreement to Sell dated September 06, 2021. The said agreement was signed between the petitioner and all the seven respondents. Clause 15 of the said agreement is reproduced h “15. That in case of default on the part of First Party/Second Party then both the connection with th negotiation failing which, the parties herein shall refer the dis Conciliation Act, 1996, with its statutory modifications, enactments or re 2025 (O&M) IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ARB-139-2025 (O&M) DATE OF DECISION: 14 SUNIL KUMAR Versus MRS VEENA TANDON AND OTHERS HON’BLE MS. JUSTICE LAPITA BANERJI Mr. Sumeet Jain, Advocate for the Mr. Ajit Singh, Advocate for respondent No.1. Mr. Keshav Dogra, Advocate for respondent No.2. Mr. Tushar Wadhwa, Advocate for respondent No.3. Mr. Abhijeet, Advocate for respondents No.4 and 7. Mr. Ankush Thakur, Advocate for respondent No.5. Ms. Sonia Sharma, Advocate for respondent No.6. LAPITA BANERJI, J.(ORAL) Learned counsel appearing on behalf of the petitioner refers to Clause 15 of the Agreement to Sell dated September 06, 2021. The said agreement was signed between the petitioner and all the seven respondents. Clause 15 of the said agreement is reproduced h 15. That in case of default on the part of First Party/Second Party then both the Parties herein shall resolve all disputes in connection with this agreement amicably by mutual negotiation failing which, the parties herein shall refer the dispute for arbitration in accordance with the Arbitration and Conciliation Act, 1996, with its statutory modifications, enactments or re-enactments thereto, before resorting to IN THE HIGH COURT OF PUNJAB AND HARYANA AT 14.07.2026 …PETITIONER …RESPONDENTS HON’BLE MS. JUSTICE LAPITA BANERJI , Advocate for the petitioner. Mr. Ajit Singh, Advocate for respondent No.1. Mr. Keshav Dogra, Advocate for respondent No.2. Mr. Tushar Wadhwa, Advocate for respondent No.3. Mr. Abhijeet, Advocate for respondents No.4 and 7. Mr. Ankush Thakur, Advocate for respondent No.5. Ms. Sonia Sharma, Advocate for respondent No.6. Learned counsel appearing on behalf of the petitioner refers to Clause 15 of the Agreement to Sell dated September 06, 2021. The said agreement was signed between the petitioner and all the seven respondents. Clause 15 of the said agreement is reproduced hereinunder:- 15. That in case of default on the part of First Party/Second herein shall resolve all disputes in agreement amicably by mutual negotiation failing which, the parties herein shall refer the pute for arbitration in accordance with the Arbitration and Conciliation Act, 1996, with its statutory modifications, enactments thereto, before resorting to PRINCE SAINI 2026.07.21 17:35 I attest to the accuracy and integrity of this document ARB-139-2025 Litigation in which case the Court in Gurugram (Gurgaon) will have the Jurisdicti Gurugram (Gurgaon) and the cost of arbitration shall be shared equally by the Parties. 2. It is submitted that the petitioner has paid some consideration to the respondents said agreement. Therefore, he prays for the dispute and differences to be resolved by way of arbitration proceedings pursuant to Clause 15 of the said agreement. 3. Notice of motion was issued on the respondents on March 04, 2025. Several their replies. Thereafter, paper publication was also done. Vide an order dated March 25, 2026, the Coordinate Bench of this Court dated February 03, 2026 proceeded against respondents. opportunity to the respondents to file their replies. 4. Today, replies have been filed 5. Learned counsel appearing on behalf of the respondents submits that the parties did not seek differences between the parties as per Clause 15 of the said agreement. Furthermore, attention of the Court is drawn to paragraph 11 of the judgment of the Apex Court in Trading Corporation concluded contract did not exist between the parties as there was no 2025 (O&M) Litigation in which case the Court in Gurugram (Gurgaon) will have the Jurisdiction. The venue for arbitration shall be Gurugram (Gurgaon) and the cost of arbitration shall be shared equally by the Parties.” It is submitted that the petitioner has paid some consideration to the respondents, but the respondents are now seek said agreement. Therefore, he prays for the dispute and differences to be resolved by way of arbitration proceedings pursuant to Clause 15 of the said Notice of motion was issued on the respondents on March 04, 2025. Several adjournments were granted since the respondents did not file their replies. Thereafter, paper publication was also done. Vide an order dated March 25, 2026, the Coordinate Bench of this Court dated February 03, 2026 directing that respondents Nos. 1, 2, 3, and 5 proceeded against ex parte and allowed participation of the said Vide order dated July 03, 2026, this Court opportunity to the respondents to file their replies. Today, replies have been filed on behalf of the respondents. Learned counsel appearing on behalf of the respondents the parties did not seek to amicably resolve differences between the parties as per Clause 15 of the said agreement. , attention of the Court is drawn to paragraph 11 of the of the Apex Court in Vidya Drolia Trading Corporation reported in 2021(2) SCC 1 ontract did not exist between the parties as there was no Litigation in which case the Court in Gurugram (Gurgaon) on. The venue for arbitration shall be Gurugram (Gurgaon) and the cost of arbitration shall be It is submitted that the petitioner has paid some consideration now seeking to resile from the said agreement. Therefore, he prays for the dispute and differences to be resolved by way of arbitration proceedings pursuant to Clause 15 of the said Notice of motion was issued on the respondents on March 04, adjournments were granted since the respondents did not file their replies. Thereafter, paper publication was also done. Vide an order dated March 25, 2026, the Coordinate Bench of this Court recalled the order respondents Nos. 1, 2, 3, and 5 be allowed participation of the said 2026, this Court gave last opportunity to the respondents to file their replies. on behalf of the respondents. Learned counsel appearing on behalf of the respondents to amicably resolve the disputes and differences between the parties as per Clause 15 of the said agreement. , attention of the Court is drawn to paragraph 11 of the Vidya Drolia and others Vs. Durga 2021(2) SCC 1 to submit that a ontract did not exist between the parties as there was no free PRINCE SAINI 2026.07.21 17:35 I attest to the accuracy and integrity of this document ARB-139-2025 consent. Unless there is consideration paid as per the 1872 and the contract is entered the contract will be void and 6. In the present case, the facts are distinguishable between the parties not a landlord reference. There is no allegation that the said contract was entered into between the parties part of the petitioner petitioner. Therefore, the decision in to the facts of the present case. 7. He in question i.e. the subject matter of dispute has already been mortgaged. The proceedings against the said property are pending before the l Debts Recovery Tribunal, therefore, the a proceeded with. He refers to paragraph No.82 of the and the same is reproduced hereinafter: “82. An interesting and relevant exposition, when assertions claiming repudiation, rescission or ‘accord and satisfaction’ are made by a party opposing reference, is to found in Damodar Valley Corporation v. K.K. Kar, (1974) 1 SCC 141 which had referred to Union of India v. Kishorilal Gupta & Bros., AIR 1959 Supreme Court 1362 2025 (O&M) consent. Unless there is consideration paid as per the and the contract is entered into without coercion or undue influence, the contract will be void and unenforceable. In the present case, the facts are distinguishable between the parties is regarding an agreement of sale not a landlord-tenant dispute that was the subject matter of the case under reference. There is no allegation that the said contract was entered into arties as a result of force, undue part of the petitioner. Also a part of the consideration has been herefore, the decision in Vidya Drolia to the facts of the present case. He also relies on the said judgment to submit that the property in question i.e. the subject matter of dispute has already been mortgaged. The proceedings against the said property are pending before the l Recovery Tribunal, therefore, the agreement proceeded with. He refers to paragraph No.82 of the and the same is reproduced hereinafter:- 82. An interesting and relevant exposition, when assertions claiming repudiation, rescission or ‘accord and satisfaction’ are made by a party opposing reference, is to found in Damodar Valley Corporation v. K.K. Kar, (1974) 1 SCC 141 which had referred to an earlier judgment of this Court in Union of India v. Kishorilal Gupta & Bros., AIR 1959 Supreme Court 1362 to observe: “11. After a review of the relevant case law, Subba Rao, J., as he then was, speaking for the majority enunciated consent. Unless there is consideration paid as per the Indian Contract Act, without coercion or undue influence, In the present case, the facts are distinguishable. The contract agreement of sale in the present case and tenant dispute that was the subject matter of the case under reference. There is no allegation that the said contract was entered into undue influence or coercion on the . Also a part of the consideration has been paid by the Vidya Drolia (supra) is not applicable also relies on the said judgment to submit that the property in question i.e. the subject matter of dispute has already been mortgaged. The proceedings against the said property are pending before the learned greement of sale could not be proceeded with. He refers to paragraph No.82 of the Vidya Drolia (supra) 82. An interesting and relevant exposition, when assertions claiming repudiation, rescission or ‘accord and satisfaction’ are made by a party opposing reference, is to found in Damodar Valley Corporation v. K.K. Kar, (1974) 1 SCC 141 an earlier judgment of this Court in Union of India v. Kishorilal Gupta & Bros., AIR 1959 “11. After a review of the relevant case law, Subba Rao, J., as he then was, speaking for the majority enunciated PRINCE SAINI 2026.07.21 17:35 I attest to the accuracy and integrity of this document ARB-139-2025 2025 (O&M) the following principles: “(1) An arbitration clause is a collateral term of a contract as distinguished from its substantive terms; but none the less it is an integral part of it; (2) however comprehensive the terms of an arbitration clause may be, the existence of the contr is a necessary condition for its operation; it perishes with the contract; (3) the contract may be non est in the sense that it never came legally into existence or it was void ab initio; (4) though the contract was validly executed, the parties may pu never existed and substitute a new contract for it solely governing their rights and liabilities thereunder; (5) in the former case, if the original contract has no legal existence, the arbitration clause also cannot operate, fo along with the original contract, it is also void; in the latter case, as the original contract is extinguished by the substituted one, the arbitration clause of the original contract perishes with it; and (6) between the two falls many categories “of disputes in connection with a contract, such as the question of repudiation, frustration, breach etc. In those cases it is the performance of the contract that has come to an end, but the contract is still in existence for certain purposes in respect of disputes arising under it or in connection with it. As the contract subsists for certain purposes, the arbitration clause operates in respect of these purposes.” In those cases, as we have stated earlier, it is the performance of the contract that has come to but the contract is still in existence for certain purposes in respect of disputes arising under it or in connection with it. We think as the contract subsists for certain purposes, the arbitration clause operates in respect of these purposes.” ples: “(1) An arbitration clause is a collateral term of a contract as distinguished from its substantive terms; but none the less it is an integral part of it; (2) however comprehensive the terms of an arbitration clause may be, the existence of the contract is a necessary condition for its operation; it perishes with the contract; (3) the contract may be non est in the sense that it never came legally into existence or it was void ab initio; (4) though the contract was validly executed, the parties may put an end to it as if it had never existed and substitute a new contract for it solely governing their rights and liabilities thereunder; (5) in the former case, if the original contract has no legal existence, the arbitration clause also cannot operate, for along with the original contract, it is also void; in the latter case, as the original contract is extinguished by the substituted one, the arbitration clause of the original contract perishes with it; and (6) between the two falls sputes in connection with a contract, such as the question of repudiation, frustration, breach etc. In those cases it is the performance of the contract that has come to an end, but the contract is still in existence for certain purposes in utes arising under it or in connection with it. As the contract subsists for certain purposes, the arbitration clause operates in respect of these purposes.” In those cases, as we have stated earlier, it is the performance of the contract that has come to an end but the contract is still in existence for certain purposes in respect of disputes arising under it or in connection with it. We think as the contract subsists for certain purposes, the arbitration clause operates in respect of PRINCE SAINI 2026.07.21 17:35 I attest to the accuracy and integrity of this document ARB-139-2025 Ref J. in Kishorilal Gupta & Bros. to observe that he had only disagreed with the majority on the effect of settlement on the arbitration clause, as he had held that arbitration clause did survive to set an ‘accord and satisfaction’. It was further observed that this principle laid down by Sarkar, J. that ‘accord and satisfaction’ does not put an end to the arbitration clause, was not disagreed to by the m (6) seems to be laying the weight on to the views of Sarkar, J. These decisions were under the A Arbitration Act specifically incorporates principles of separation and competence arbitral tribunal to rule on its own jurisdiction 8. At paragraph No.82 of the said judgment relying on Valley Corporation Vs. K.K. Kar, claiming rescission, repudiation of a contract ha is no dispute with regard to such principles. However, in the considered opinion of the Court the case on merits. The same has got nothing to do with the existence of the arbitration clause therein relates line of the said paragraph categorical incorporates the principles of separation and competence and empowers the arbitral tribunal to adjudicate on its own jurisdiction. Therefore, the question whether or not the has to be decided by the learned Arbitrator. 2025 (O&M) Reference was also made to the minority judgment of Sarkar, J. in Kishorilal Gupta & Bros. to observe that he had only disagreed with the majority on the effect of settlement on the arbitration clause, as he had held that arbitration clause did survive to settle the dispute as to whether there was or was not an ‘accord and satisfaction’. It was further observed that this principle laid down by Sarkar, J. that ‘accord and satisfaction’ does not put an end to the arbitration clause, was not disagreed to by the majority. On the other hand, proposition (6) seems to be laying the weight on to the views of Sarkar, J. These decisions were under the A Arbitration Act specifically incorporates principles of separation and competence-competence a arbitral tribunal to rule on its own jurisdiction At paragraph No.82 of the said judgment relying on Valley Corporation Vs. K.K. Kar, (1974) 1 SCC 141 claiming rescission, repudiation of a contract ha is no dispute with regard to such principles. However, in the considered opinion of the Court, these principles are only relevant while considering erits. The same has got nothing to do with the existence of the arbitration clause and invocation of arbitration proceedings. The discussion to the position of law under the Arbitration Act, 1940. Last line of the said paragraph categorically notes that the 1996 Act specifically incorporates the principles of separation and competence and empowers the arbitral tribunal to adjudicate on its own jurisdiction. Therefore, the question whether or not the ‘Agreement for S has to be decided by the learned Arbitrator. Page 5 of 7 erence was also made to the minority judgment of Sarkar, J. in Kishorilal Gupta & Bros. to observe that he had only disagreed with the majority on the effect of settlement on the arbitration clause, as he had held that arbitration clause did tle the dispute as to whether there was or was not an ‘accord and satisfaction’. It was further observed that this principle laid down by Sarkar, J. that ‘accord and satisfaction’ does not put an end to the arbitration clause, was not On the other hand, proposition (6) seems to be laying the weight on to the views of Sarkar, J. These decisions were under the Arbitration Act, 1940. The Arbitration Act specifically incorporates principles of competence and empowers the arbitral tribunal to rule on its own jurisdiction.” (Emphasis supplied) At paragraph No.82 of the said judgment relying on Damodar (1974) 1 SCC 141, the principles for claiming rescission, repudiation of a contract have been enumerated. There is no dispute with regard to such principles. However, in the considered these principles are only relevant while considering erits. The same has got nothing to do with the existence of the and invocation of arbitration proceedings. The discussion to the position of law under the Arbitration Act, 1940. Last notes that the 1996 Act specifically incorporates the principles of separation and competence and empowers the arbitral tribunal to adjudicate on its own jurisdiction. Therefore, the Sale’ is capable of execution PRINCE SAINI 2026.07.21 17:35 I attest to the accuracy and integrity of this document ARB-139-2025 9. It is of utmost relevance to note judgment which “Before we part, the conclusions reached, with respect to question no.1, are: 2025 (O&M) It is of utmost relevance to note which is reproduced hereinafter:- Before we part, the conclusions reached, with respect to question no.1, are: a. Sections 8 and 11 of the Act have the same ambit with respect to judicial interference. b. Usually, subject matter arbitrability cannot be decided at the stage of Sections 8 it’s a clear case of deadwood. c. The Court, under Sections 8 matter to arbitration or to appoint an arbitrator, as the case may be, unless a party has established a prima facie (summary findings) case of non arbitration agreement, by summarily portraying a strong case that he is entitled to such a finding d. The Court should refer a matter if the validity of the arbitration agreement cannot be determined on a prima facie basis, as laid down above, i.e., ‘when in doubt, do refer’. e. The scope of the Court to examine validity of an arbitration agreement includes only: a. Whether the arbitration agreement was in writing? or b. Whether the arbitration agreement was contained in exchange of letters, telecommunication etc? c. Whether the core contractua arbitration agreement were fulfilled? d. On rare occasions, whether the subject dispute is arbitrable?” [Emphasis supplied] paragraph No.173 of the said Before we part, the conclusions reached, with respect to of the Act have the same ambit with respect to judicial interference. b. Usually, subject matter arbitrability cannot be Sections 8 or 11 of the Act, unless it’s a clear case of deadwood. ions 8 and 11, has to refer a matter to arbitration or to appoint an arbitrator, as the case may be, unless a party has established a prima facie (summary findings) case of nonexistence of valid arbitration agreement, by summarily portraying a that he is entitled to such a finding. The Court should refer a matter if the validity of the arbitration agreement cannot be determined on a prima facie basis, as laid down above, i.e., ‘when in doubt, do e. The scope of the Court to examine the prima facie validity of an arbitration agreement includes only: a. Whether the arbitration agreement was in writing? or b. Whether the arbitration agreement was contained in exchange of letters, telecommunication etc? c. Whether the core contractual ingredients qua the arbitration agreement were fulfilled? d. On rare occasions, whether the subject matter of [Emphasis supplied] PRINCE SAINI 2026.07.21 17:35 I attest to the accuracy and integrity of this document ARB-139-2025 10. After perusing the material on record, th opinion with regard between the parties the Arbitration and Conciliation Act, 1996 by appointing Chief Justice (Retd.), House No.79, Sector Address-C-44, LGF, Neeti Bagh, New Delhi No.9888824752. 11. Liberty is granted to the parties to raise all claims, counter claims, defences, pleas etc. before the Learned Arbitrator. 12. Needless to mention that all the parties shall remain open for determination in the arbitral proceedings and any observation made hereinabove will not be binding on the learned Arbitrator. 13. A request letter along with a copy of this order be sent to M.M. Kumar, Chief Justice (Retd.). 14. With the directions aforesaid 15. Connected JULY 14, 2026 Prince Whether speaking/reasoned : Whether reportable : 2025 (O&M) After perusing the material on record, th opinion with regard to the existence of a valid arbitration agreement between the parties. Therefore, it allows the petition under Section 11 the Arbitration and Conciliation Act, 1996 by appointing Chief Justice (Retd.), House No.79, Sector 44, LGF, Neeti Bagh, New Delhi No.9888824752. Liberty is granted to the parties to raise all claims, counter claims, defences, pleas etc. before the Learned Arbitrator. Needless to mention that all the questions arising between the parties shall remain open for determination in the arbitral proceedings and any observation made hereinabove will not be binding on the learned A request letter along with a copy of this order be sent to M.M. Kumar, Chief Justice (Retd.). With the directions aforesaid, ARB Connected application(s), if any, shall also stand , 2026 Whether speaking/reasoned : Yes/No Whether reportable : Yes/No After perusing the material on record, this Court is of the firm to the existence of a valid arbitration agreement . Therefore, it allows the petition under Section 11(5) of the Arbitration and Conciliation Act, 1996 by appointing Mr. M.M Kumar, Chief Justice (Retd.), House No.79, Sector-16-A, Chandigarh/Second 44, LGF, Neeti Bagh, New Delhi-110049, Mobile Liberty is granted to the parties to raise all claims, counter claims, defences, pleas etc. before the Learned Arbitrator. questions arising between the parties shall remain open for determination in the arbitral proceedings and any observation made hereinabove will not be binding on the learned A request letter along with a copy of this order be sent to Mr. ARB-139-2025 is disposed of. shall also stand disposed of. (LAPITA BANERJI) JUDGE PRINCE SAINI 2026.07.21 17:35 I attest to the accuracy and integrity of this document