MR. AMRISH GUPTA v. LATE GURCHAIT SINGH CHEEMA & Ors.

Judgment

#1. This hearing has been done through hybrid mode. Signature Not Verified Signed By:KAPIL KUMAR Signing Date:29.01.2026 11:17:55 FAO (OS) (COMM) 182/2022

#2. The present appeal has been filed by the appellant under Section 13 of the Commercial Courts Act, 2015 read with Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 (hereinafter referred as ‘A&C Act,1996’), challenging the impugned judgment dated 18th April 2022, passed by the learned Single Judge of this Court in O.M.P. (COMM.) No. 68 of 2021, titled Amrish Gupta v. Gurchait Singh Chima (Deceased) through his Legal Representative and widow Mrs. Daljeet Kaur Chima (hereinafter referred to as the “impugned judgment”). Factual Background

#3. The present appeal arises out of arbitral proceedings concerning an Agreement to Sell (hereinafter referred as ‘The Agreement’) dated 07th August 2014, purportedly executed between the Appellant, Mr. Amrish Gupta, and the Respondent, Late Mr. Gurchait Singh Chima, who is now represented through his legal heir and widow, Smt. Daljeet Kaur Chima.

#4. The dispute pertains to an immovable property bearing No. B-II/46, Mohan Cooperative Industrial Estate, New Delhi, comprising a plot of land measuring approximately 2390 sq. yards along with superstructures constructed thereon (hereinafter referred as “the subject property”).

#5. According to the Respondent, the Agreement to Sell dated 07th

August 2014 was negotiated and executed through Mr. Surinder Kumar Wadhwa, who acted as the duly authorised General Power of Attorney holder and representative of the Respondent. Under the said Agreement, the total sale consideration for the subject property was fixed at ₹11 crores. Out of the said consideration, a sum of ₹3 crores was paid on 07th August 2014, and the balance amount of ₹8 crores was payable upon the Appellant furnishing a Conveyance Deed in favour of the Respondent after conversion Signature Not Verified Signed By:KAPIL KUMAR Signing Date:29.01.2026 11:17:55 FAO (OS) (COMM) 182/2022 of the property into freehold. The Respondent asserts that the entire sale consideration stood paid in accordance with the terms of the Agreement.

#6. The Appellant, however, disputes the execution of the Agreement and has consistently asserted that his signatures appearing on the said document are forged and that the Agreement is fabricated. According to the Appellant, no transaction of sale was ever agreed upon between the parties.

#7. After the execution of the Agreement, the Respondent addressed a letter dated 24th January, 2017 calling upon the Appellant to complete the transaction and execute the Sale Deed in terms of the Agreement. In response thereto, the Appellant, by his reply dated 07th February, 2017, denied having entered into any agreement for sale of the subject property and asserted that the Agreement relied upon by the Respondent was false and fabricated.

#8. The Agreement contained an arbitration clause providing for reference of disputes to arbitration. The relevant clause reads as under: “That any dispute arising out of or in connection with this agreement shall be referred to sole Arbitration of Mr. Vineet Malhotra, Advocate, Flat No. 30, 8th Floor, Dakshineshwar, 10, Barakhamba Road, New Delhi, whose decision shall be final and binding on the parties. The proceedings shall be held in accordance with the provisions of the Arbitration and Conciliation Act, 1996.”

#9. The named Arbitrator declined to enter upon the reference. Thereafter, the Respondent proposed the appointment of another Arbitrator, which was not agreed to by the Appellant. In these circumstances, the Respondent approached this Court by filing a petition under Section 11 of the A&C Act,1996, being ARB. P. No. 325/2017. By an order dated 12th October, 2017, this Court appointed Justice Manmohan Sarin (Retd.), former Signature Not Verified Signed By:KAPIL KUMAR Signing Date:29.01.2026 11:17:55 FAO (OS) (COMM) 182/2022 Judge of this Court, as the Sole Arbitrator to adjudicate the disputes between the parties.

#10. The Arbitral Tribunal, upon completion of pleadings and after a detailed consideration of oral evidence, documentary material, and expert testimony led by both parties, rendered an arbitral award dated 17th October,

#2020. By the said award, the Tribunal allowed the claim for specific performance of the Agreement dated 07th August, 2014, along with consequential reliefs, and rejected the defences and objections raised by the Appellant.

#11. Challenging the arbitral award, the Appellant filed a petition under Section 34 of the A&C Act,1996, being O.M.P. (COMM.) No. 68/2021, before the learned Single Judge of this Court. Vide judgment dated 18th April, 2022, the learned Single Judge dismissed the Petition under Section 34 of the A&C Act,1996, holding that the arbitral award did not suffer from patent illegality, perversity, or jurisdictional infirmity, and that no ground for interference was made out within the limited scope of Section 34 of the A&C Act,1996.

#12. Aggrieved by the judgment dated 18th April, 2022 passed by the learned Single Judge, the Appellant has instituted the present appeal under Section 37 of the A&C Act, 1996, seeking setting aside of the impugned judgment as well as the arbitral award dated 17th October, 2020. Submissions on behalf of parties

#13. On behalf of the Appellant, Mr. Ravi Gupta, learned Senior Counsel, assails the impugned order primarily on the ground that the Agreement dated 07th August, 2014 is a forged and fabricated document. It is submitted that Signature Not Verified Signed By:KAPIL KUMAR Signing Date:29.01.2026 11:17:55 FAO (OS) (COMM) 182/2022 the underlying transaction was never intended to be a sale of immovable property but was merely a loan transaction negotiated through one Mr. Wadhwa.

#14. It was further submitted that out of the alleged consideration of ₹12 crores, a sum of ₹1 crore was admittedly returned by the Appellant, which, according to him, conclusively indicates the nature of the arrangement as a loan. Learned Senior Counsel further contends that there was never any consensus between the parties regarding the appointment of an Arbitrator and submits that, from the inception, the Appellant consistently took the position that the Agreement was a forged and non-existent document.

#15. Reliance is also placed upon the decision of the Supreme Court in The Managing Director Bihar State Food And Civil Supply Corporation Limited & Anr. V. Sanjay Kumar, 2025 SCC OnLine SC 1604 where the question as to whether forgery can be considered by the Arbitrator or not has been discussed in detail. Reference is made to paragraphs 21(III), 21(V), 21(VI), 21(VII), 21(IX), 21(X) and 21(XI) of the said judgment to submit that allegations of forgery and “serious fraud” fall within the exception to arbitrability. It is urged that in matters where the very existence of the arbitration agreement is disputed on the ground of forgery, the arbitral tribunal lacks jurisdiction to proceed. The said paragraphs are extracted below: “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 Signature Not Verified Signed By:KAPIL KUMAR Signing Date:29.01.2026 11:17:55 FAO (OS) (COMM) 182/2022 have their co-relatives in criminal law. The 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. 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 arbitrability. 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 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 contracting parties and attain public implications, where indirectly affect the ramifications could directly or governance, integrity nonparties accountability in public service, distribution of essential commodities, safety and security of the nation for example. inter se disputes between transcend impact, Signature Not Verified Signed By:KAPIL KUMAR Signing Date:29.01.2026 11:17:55 FAO (OS) (COMM) 182/2022 Consideration of such disputes have public law implications and shall ‘not be submitted to arbitration’ 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-arbitrability. 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. X. The burden of proof is on the party who raises the plea. 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.”

#16. Learned Senior Counsel also submits that the present case is not one of mere fraud simpliciter, but involves allegations of serious fraud going to the root of the agreement itself, thus attracting the proviso 2 to Section 36(3) of A&C Act, 1996, as introduced by the 2021 amendment with retrospective effect from 2015. It is contended that such disputes must necessarily be adjudicated by a civil court and not by an arbitrator.

#17. It is further argued that the dispute is purely private in nature, involving no public law implications, and therefore the reasoning of the Hon’ble Supreme Court on public-interest exceptions, as discussed in Sanjay Kumar (supra), does not assist the Respondent. Learned Senior Counsel also points out that parallel criminal proceedings between the parties are pending investigation, which, according to him, further demonstrates that the genuineness of the disputed document cannot be presumed for the purpose of upholding the arbitral award.

#18. Per contra, on behalf of the Respondent, Mr. Singhal, learned Counsel, submits that the Appellant’s plea of forgery is a mere afterthought and stands completely contradicted by his own conduct during the arbitral Signature Not Verified Signed By:KAPIL KUMAR Signing Date:29.01.2026 11:17:55 FAO (OS) (COMM) 182/2022 proceedings. He relies upon the cross-examination of the Respondent’s witness, Mr. Surinder Kumar Wadhwa, conducted on 09th May, 2018, wherein the Appellant put specific questions premised on the existence of the Agreement, including the terms concerning payment of ₹3 crores at the time of execution and the nature of the buyer–seller relationship between the parties. It is argued that such questions could not have been put unless the Appellant accepted the existence of the document.

#19. Learned Counsel further submits that even at the stage of Section 11 of the A&C Act, 1996, proceedings, although the Appellant raised allegations of forgery, the learned Single Judge, while appointing the Arbitrator, found no basis to hold the arbitration agreement vitiated. The learned Arbitrator, in the Order dated 17th October, 2020, is stated to have dealt with the allegations of forgery in detail. Attention is drawn to the learned Single Judge’s impugned order, wherein the fact that the Appellant signs his name in two different styles i.e. one beginning with a capital ‘G’ and the other with a small ‘g’ has been noted, supporting the Respondent’s case that the signatures on the Agreement were indeed those of the Appellant.

#20. Reliance is also placed on the report of the Economic Offences Wing dated 28th September, 2020, wherein the following finding has been arrived at: “Further complainant Mr. Amrish Gupta have been confronted with different types of signatures and asked that why didn’t he disclose this fact earlier. He didn’t reply satisfactorily but he accepted signing in two different ways. It is pertinent to mention here that Mr. Amrish Gupta denied entire Agreement to Sells and other transfer documents related to sale of his entire four (4) properties and alleged that he did not sign these documents.” Signature Not Verified Signed By:KAPIL KUMAR Signing Date:29.01.2026 11:17:55 FAO (OS) (COMM) 182/2022

#21. Learned Counsel further refers to the conclusion recorded in paragraph 16.17 of the cancellation report under Section 173 CrPC, which reads as under: “16.17. Conclusion in respect of property no. B-II/46, Mohan Cooperative Industrial Estate, Mathura Road, New Delhi As per the detailed further investigation carried out w.r.t. the question i.e. B-II/46, Mohan Cooperative Industrial Estate, Mathura Road, New Delhi, it is established from the forensic opinion and records of IT Department of the contemporary period, the Agreement to Sell dt. 07.08.2014 was executed by the complainant itself by using his second type (‘g’) of signatures. Moreover, he is unable to provide any documents in favour of his alleged version of loan transactions from Late Gurchait Singh Chima. No document to show the deduction of any TDS on the interest amount or payment of interest was provided ‘by the. Complainant. Admittedly, the complainant is the beneficiary of Rs.11 Crores. Whereas, Late Sh. Gurchait Singh Chima has been a real victim out of this transaction. Otherwise also, complainant never stated about any inducement by Late Sh. Gurchait Singh Chima or by any other person. Further, the property in question is still in possession of complainant and he has not delivered the property to Late Mr. Gurchait Singh Chima as per ATS even after getting the full consideration. There was no loss caused to the complainant, whereas Late Gurchait Singh Chima suffered a loss of Rs. 11 more as he paid the some to the complainant as per the ATS and neither the property was given to him nor his amount was returned”

#22. It is further submitted by learned counsel for the Respondent that the scope of the present appeal under Section 37 of the A&C Act, 1996, is limited and does not permit a re-appreciation of factual disputes or a fresh determination on allegations of forgery, particularly when the Arbitrator has already adjudicated the issue and the learned Single Judge has examined the matter in detail. Signature Not Verified Signed By:KAPIL KUMAR Signing Date:29.01.2026 11:17:55 FAO (OS) (COMM) 182/2022 Analysis and Findings

#23. In order to appreciate the scope of the present appeal, reference may be made to Section 37 of the A&C Act, 1996, which reads as under: “Section 37: Appealable orders. 37. (1) 1[Notwithstanding anything contained in any other law for the time being in force, an appeal] shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:— 2[(a) refusing to refer the parties to arbitration under section 8; (b) granting or refusing to grant any measure under section 9; (c) setting aside or refusing to set aside an arbitral award under section 34.] (2) Appeal shall also lie to a court from an order of the arbitral tribunal— (a) accepting the plea referred to in sub-section (2) or sub-section (3) of section 16; or (b) granting or refusing to grant an interim measure under section 17.”

#24. The first and foremost question that arises for consideration in this Appeal is whether the learned Single Judge committed any error in upholding the jurisdiction of the Arbitral Tribunal to adjudicate upon the plea of forgery raised by the appellant.

#25. The principal objection of the appellant is founded on an alleged absence of consensus ad idem, premised on the denial of having written or signed the Agreement. On this basis, it is contended that the appellant never entered into the contract at all and, consequently, never consented to the arbitration clause contained therein. It is argued that the present case involves “serious fraud” in as much as the Arbitration Agreement itself is alleged not to exist, thereby ousting arbitral jurisdiction and necessitating adjudication by a civil court. Signature Not Verified Signed By:KAPIL KUMAR Signing Date:29.01.2026 11:17:55 FAO (OS) (COMM) 182/2022

#26. This submission, however, proceeds on an erroneous understanding of the law governing arbitrability of disputes involving allegations of fraud and forgery. The jurisprudence on this issue has undergone a marked evolution, and it is no longer the law that a mere allegation of fraud or forgery ipso facto renders a dispute non-arbitrable.

#27. The Arbitral Tribunal squarely addressed this objection at the threshold. Upon consideration of the pleadings and evidence, the Arbitral Tribunal rejected the plea that allegations of forgery rendered the dispute non-arbitrable, upon consideration of the judgments of the Supreme Court, in the following terms: “In view of the foregoing discussion and analysis, it is held that the plea of lack of jurisdiction of the Arbitral Tribunal deserves to be rejected and the issue of execution of the Agreement to Sell, asserted by claimant and denied by respondent can be conveniently decided with sufficient evidence available on record.”

#28. The Tribunal noted that the appellant had participated fully in the arbitral proceedings, had not disputed the existence of the arbitration clause at the inception, and had raised the plea of non-arbitrability only after leading evidence on merits.

#29. The learned Single Judge, while exercising jurisdiction under Section 34 of the A&C Act, 1996, independently examined this objection and affirmed the Tribunal’s conclusion. The learned Single Judge correctly noted that the arbitration clause had never been independently assailed as forged or fabricated, and that the plea of absence of consent was, in substance, a factual defence to be tested on evidence rather than a jurisdictional bar. The Court further held that the appellant, having failed to Signature Not Verified Signed By:KAPIL KUMAR Signing Date:29.01.2026 11:17:55 FAO (OS) (COMM) 182/2022 invoke Section 16 of the A&C Act, 1996 at the appropriate stage and having participated in the proceedings without protest, had waived his right to object to jurisdiction under Section 4 of the A&C Act, 1996.

#30. The learned Single Judge also relied upon the settled position of law as expounded by the Supreme Court in A. Ayyasamy v. A. Paramasivam