Holding

Allegations of fraud that go to the very existence of the arbitration agreement render the dispute non‑arbitrable, so the High Court's order referring the matter to arbitration is set aside and the order refusing arbitrator appointment is affirmed.

Summary

The dispute arose from a partnership where Rajia Begum claimed a 50.33% stake based on an Admission Deed dated 17 April 2007, which she alleged was forged. The High Court, in one proceeding, referred the suit to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996, while in another it refused to appoint an arbitrator under Section 11, citing serious doubts about the existence of the arbitration agreement. The Supreme Court examined whether allegations of fraud concerning the arbitration agreement itself render the matter non‑arbitrable. It held that when the arbitration clause is embedded in a document whose authenticity is seriously contested, the dispute is non‑arbitrable and must be decided by the court. Consequently, the order directing arbitration was set aside, and the order refusing arbitrator appointment was affirmed. The Court dismissed Civil Appeal No. 674 of 2026 and allowed Civil Appeal No. 675 of 2026.

Issues considered

Whether disputes can be referred to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996 when the existence of the arbitration agreement is seriously disputed on grounds of forgery and fabrication.
Whether an arbitrator can be appointed under Section 11 of the Act when the arbitration agreement itself is alleged to be forged.

Legislation cited

Arbitration and Conciliation Act, 1996s. 11, s. 8, s. 9
Constitution of Indias. 227

Headnote

Issue for Consideration Whether the disputes can be referred to arbitration or an arbitrator can be appointed when the very existence of arbitration agreement itself is seriously disputed on the allegations of forgery and fabrication; whether in the factual matrix of the case, the disputes to the arbitration u/s.8 of the Arbitration and Conciliation Act, 1996 and correspondingly whether the High Court was justified in declining the appointment of an arbitrator u/s.11 of the 1996 Act. Headnotes† Arbitration and Conciliation Act, 1996 – Impact of fraud on

Subjects

Allegation of fraud is made with regard to arbitration agreementArbitrability in cases involving allegations of serious fraudImpact of fraud on arbitrability of a disputeExistence of arbitration agreement itself is seriously disputed on the allegations of forgery and fabricationDispute non-arbitrableAdmission DeedAdmission Deed foundation of arbitration agreementAdmission Deed not genuineSerious doubt on the genuineness of the Admission DeedExistence of the arbitration agreement under serious doubtDoubtful existence of the arbitration agreementExistence of the arbitration agreement itself is in serious disputeDispute relating to Admission Deed involves serious allegationsAllegations going to the root of the arbitration agreement itselfAllegations of forgery and fabricationNot amenable to arbitrationSupervisory jurisdiction of the High Court under Article 227 of the Constitution

Judgment

[2026] 2 S.C.R. 270 : 2026 INSC 106

Rajia Begum
v.
Barnali Mukherjee
(Civil Appeal No. 674 of 2026)
02 February 2026
[Pamidighantam Sri Narasimha and Alok Aradhe,* JJ.]

Issue for Consideration
Whether the disputes can be referred to arbitration or an arbitrator
can be appointed when the very existence of arbitration agreement
itself is seriously disputed on the allegations of forgery and
fabrication; whether in the factual matrix of the case, the disputes
between the parties could have been referred to the arbitration u/s.8
of the Arbitration and Conciliation Act, 1996 and correspondingly
whether the High Court was justified in declining the appointment
of an arbitrator u/s.11 of the 1996 Act.

Headnotes†
Arbitration and Conciliation Act, 1996 – Impact of fraud
on arbitrability of a dispute – Present appeals arise from a
partnership dispute in which Respondent no.1 (in CA No.675 of
2026) claimed entry into the firm relying on an Admission Deed,
and as foundation of arbitration agreement, whose execution
is denied and is alleged to be forged by the Appellant therein –
High Court on the same factual foundation involving the same
alleged arbitration agreement, has in one proceeding directed
the parties to resolve their disputes through arbitration and
in another proceeding, declined to appoint an arbitrator on
the ground, that the existence of the arbitration agreement is
itself in serious doubt – Challenge to:
Held: When an allegation of fraud is made with regard to arbitration
agreement itself, such a dispute is generally recognised as a
dispute, which is in the realm of non-arbitrability and the court
will examine it, as a jurisdictional issue only to enquire whether
the dispute has become non-arbitrable due to one or the other
reason – In the present case, admission Deed is not genuine – There
exists substantial and cogent material which casts serious doubt

* Author
[2026] 2 S.C.R. 271

Rajia Begum v. Barnali Mukherjee

on the genuineness of the Admission Deed – Arbitration clause
does not exist independently but is embedded in the document
whose existence is seriously disputed – The dispute relating to the
Admission Deed involves serious allegations going to the root of
the arbitration agreement itself and is not amenable to arbitration
at this stage – Arbitration is founded upon consent – A party may
be bound by the arbitral process only if it is first shown, even at a
prima facie level, that such a party had agreed to submit disputes
to arbitration – Where the arbitration agreement itself is alleged to
be forged or fabricated, the disputes cease to be merely contractual
and strikes at the very root of arbitral jurisdiction – A controversy
of this nature falls squarely within the category of disputes that
are generally recognized as non-arbitrable – Order passed by the
High Court allowing the respondent no.1’s application u/s.8 of the
Act referring the dispute in Suit to be resolved through arbitration
is unsustainable and is quashed and set aside – Order of the High
Court rejecting the respondent no.1’s application u/s.11 of the Act
for the appointment of arbitrator warrants no interference and is
affirmed. [Paras 15, 16, 20, 24]

Fraud – Arbitration and Conciliation Act, 1996 – Impact of
fraud on arbitrability of a dispute:
Held: Mere allegation of fraud simpliciter may not be a ground to
nullify the arbitration agreement between the parties, but where
the court finds that there are serious allegations of fraud which
make a case of criminal offence or where the allegations of fraud
are so complicated, which need to be decided on the basis of
voluminous evidence, the court can sidetrack the arbitration
agreement and proceed with the suit – Court can proceed with
the suit in cases where the fraud is alleged against the arbitration
provision itself or is of a such a nature which permeates the entire
contract, including the agreement to arbitrate, meaning thereby in
those cases where fraud goes to the validity of the contract itself
which contains an arbitration clause or the validity of the arbitration
clause itself. [Para 12]

Constitution of India – Article 227 – Arbitration and Conciliation
Act, 1996:
Held: Both the Trial Court and the First Appellate Court had
concurrently held that the allegations of fraud in the present
case were serious and that the respondent no.1 had failed to
272 [2026] 2 S.C.R.

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produce the original Admission Deed or a certified copy thereof,
as required u/s.8(2) of the Act – The aforesaid findings were not
perfunctory, but were grounded in the material on record and in
the statutory requirements – Supervisory jurisdiction of the High
Court under Article 227 of the Constitution is not an appellate
jurisdiction in disguise, and it does not permit reappreciation
of evidence – High Court, while exercising jurisdiction under
Article 227 of the Constitution, was not justified in dislodging
the concurrent findings and directing reference of the dispute to
arbitration, particularly when the very existence of the arbitration
agreement was under serious doubt – Conversely, the High Court
was correct in dismissing the respondent no.1’s application u/s.11
of the 1996 Act – When the existence of the arbitration agreement
itself is in serious dispute and requires adjudication, appointment
of an arbitrator would be premature and legally impermissible.
[Paras 21-23]

Arbitration and Conciliation Act, 1996 – s.9 – Appellant (in
CA No.675 of 2026), respondent no.2 and respondent no.3,
constituted a partnership firm – Respondent no.1 issued
notice to the appellant and relied upon an Admission Deed as
the source of her induction into the firm and as foundation of
arbitration agreement – Appellant denied the execution of the
Admission Deed and stated that Admission Deed is a forged
and fabricated document – Respondent no.1 applied to the
Trial Court u/s.9, 1996 Act, allowed by Trial Court – Appeal
filed by the appellant, allowed by High Court – Appeal filed by
respondent no.1, dismissed by Supreme Court and the order
of the High Court rejecting the application of the respondent
no.1 u/s.9 of the Act, attained finality – Appellant filed civil
suit inter alia seeking a declaration that the ‘Admission Deed’
is a forged document; respondent no.1 filed application u/s.8
to refer the suit to arbitration – Application dismissed by Trial
Court – Appeal thereagainst also dismissed – Revision filed by
respondent no.1 – Allowed by High Court, orders of the Trial
Court and First Appellate Court set aside, and the dispute in
Suit was referred to be resolved through arbitration – Parallelly,
respondent no.1 had filed petition u/s.11 for the appointment
of an arbitrator – Dismissed by High Court:
Held: Findings in s.9 proceedings are undoubtedly prima facie in
nature, such findings, when they attain finality, cannot be ignored
[2026] 2 S.C.R. 273

Rajia Begum v. Barnali Mukherjee

in subsequent proceedings founded on the very same issue – The
prima facie satisfaction recorded by the High Court regarding the
doubtful existence of the arbitration agreement was, therefore, a
relevant consideration while examining applications u/ss.8 and 11
of the Act. [Para 19]

Case Law Cited
A. Ayyasamy v. A Paramasivam & Others, 2016 INSC 948 : [2016]
11 SCR 521; Rashid Raza v. Sadaf Akhtar, 2019 INSC 1002 : [2019]
12 SCR 460; Vidya Drolia & Ors. v. Durga Trading Corporation,
2020 INSC 697 : [2020] 11 SCR 1001; N.N. Global Mercantile
Pvt. Ltd. v. Indo Unique Flame Ltd. [2021] 4 SCR 933 : (2021)
4 SCC 379; Avitel Post Studioz Ltd. & Ors. v. HSBC PI Holdings
(Mauritius) Ltd., 2024 INSC 242 : [2024] 3 SCR 971; Sushma
Shivkumar Daga & Anr. v. Madhurkumar Ramkrishnaji Bajaj &
Ors. 2023 INSC 1081 : [2023] 15 SCR 909; K. Mangayarkarasi
& Anr. v. N.J. Sundaresan & Anr., 2025 INSC 687 : [2025] 5 SCR
1199; ITI Ltd. v. Siemens Public Communications Network Ltd.,
2002 INSC 282 : [2002] 3 SCR 1122; Nirma Ltd. v. Lurgi Lentjes
Energietechnik GMBH, 2002 INSC 23 : [2002] 3 SCR 911; Deep
Industries Ltd. v. Oil and Natural Gas Corporation Ltd. & Anr.,
2019 INSC 1299 : [2019] 17 SCR 995; Bhaven Construction v.
Executive Engineer, Sardar Sarovar Narmada Nigam Ltd. 2021
INSC 9 : [2021] 1 SCR 1; SBP & Co. v. Patel Engineering Ltd.
and Anr., 2005 INSC 526 : [2005] Supp. 4 SCR 688; Managing
Director Bihar State Food and Civil Supply Corporation Limited
and Another v. Sanjay Kumar, 2025 INSC 933 : [2025] 8 SCR
1551 – referred to.

List of Acts
Arbitration and Conciliation Act, 1996; Constitution of India.

List of Keywords
Allegation of fraud is made with regard to arbitration agreement;
Arbitrability in cases involving allegations of serious fraud; Impact
of fraud on arbitrability of a dispute; Existence of arbitration
agreement itself is seriously disputed on the allegations of
forgery and fabrication; Dispute non-arbitrable; Admission Deed;
Admission Deed foundation of arbitration agreement; Admission
Deed not genuine; Serious doubt on the genuineness of the
274 [2026] 2 S.C.R.

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Admission Deed; Existence of the arbitration agreement under
serious doubt; Doubtful existence of the arbitration agreement;
Existence of the arbitration agreement itself is in serious dispute;
Dispute relating to Admission Deed involves serious allegations;
Allegations going to the root of the arbitration agreement itself;
Allegations of forgery and fabrication; Not amenable to arbitration;
Supervisory jurisdiction of the High Court under Article 227 of
the Constitution.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 674 of 2026
From the Judgment and Order dated 11.03.2021 of the High Court
at Calcutta in AP No. 350 of 2018
With
Civil Appeal No. 675 of 2026

Appearances for Parties
Advs. for the Appellant(s):
Siddhartha Dave, Shailesh Madiyal, Sr. Advs., Aakash Sirohi,
Indra Lal, Subhojit Seal, Sunando Raha, Sk Sayan Uddin,
Ms. Manishitha Bhattacharjee, Aviral Saxena.
Advs. for the Respondent(s):
Siddhartha Dave, Shailesh Madiyal, Sr. Advs., Subhojit Seal,
Sunando Raha, Aviral Saxena, Aakash Sirohi, Indra Lal.

Judgment / Order of the Supreme Court

Judgment

Alok Aradhe, J.

Leave granted.
2. The present appeals arise from a partnership dispute in which
appellant claims entry into the firm by virtue of a document whose
execution is stoutly denied and is alleged to be forged. The High
Court on the same factual foundation involving the same alleged
arbitration agreement, has in one proceeding directed the parties
to resolve their disputes through arbitration and whereas in another
[2026] 2 S.C.R. 275

Rajia Begum v. Barnali Mukherjee

proceeding, declined to appoint an arbitrator on the ground, that
the existence of an arbitration agreement is itself in serious doubt.
A common issue namely, whether the disputes can be referred
to arbitration or an arbitrator can be appointed when the very
existence of arbitration agreement itself is seriously disputed on
the allegations of forgery and fabrication, arises for consideration
in these appeals.

(i) NARRATION OF FACTS
3. The appellant, Barnali Mukherjee, in the appeal @ SLP (C) No.
20262 of 2021 (appellant), Aftabuddin (respondent no.2) and Raihan
Ikbal (respondent no.3), constituted a partnership firm styled as ‘M/s
RDDHI Gold’ (firm) by virtue of partnership deed dated 01.12.2005.
Rajia Begum (respondent no.1) claims that the respondent nos.2 and
3 executed a power of attorney on 17.04.2007 empowering her to
manage the affairs of the firm on their behalf pursuant to which she
executed a deed of admission and retirement (Admission Deed) by
which respondent nos.2 and 3 retired from the firm.
4. The appellant contends that the business of the reconstituted
partnership firm was absorbed and taken over by a company named
‘RDDHI Gold Pvt. Ltd.’ (company) pursuant to the absorption deed
dated 27.02.2011. On 02.10.2016, the respondent no.1 issued a
notice to the appellant asserting that, on the basis of the aforesaid
Admission Deed dated 17.04.2007, she had acquired an interest
to the extent of 50.33% in the erstwhile partnership firm and that
respondent nos.2 and 3 had retired as partners in 2007 itself.
The appellant by reply dated 21.11.2016, categorically denied the
execution of the Admission Deed by her or by the other respondents
and further denied the very induction of the respondent no.1 in the
firm as a partner at any point in time. Thus, the appellant took a
stand that the Admission Deed is a forged and fabricated document,
concocted by the respondent no.1.

(ii) APLICATION UNDER SECTION 9 OF THE ACT
5. The respondent no.1 applied to the Trial Court under Section 9 of
the Arbitration and Conciliation Act, 1996 (Act), for preservation of
the subject matter of dispute and for appointment of receiver for the
Company which came to be allowed by the Trial Court. The High
276 [2026] 2 S.C.R.

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Court, by an order dated 04.05.2018, allowed the appeal filed by
the appellant inter alia finding that the very existence/execution of
the ‘Admission Deed’ is in dispute and, in view of the availability
of cogent material which would indicate the non-existence of the
Admission Deed, it would not be prudent on the part of the Court
exercising jurisdiction under Section 9 of the Act, to accord interim
protection to the respondent no.1 who has failed to demonstrate
the existence of an arbitration agreement in a prima facie manner.
Aggrieved by the order of the High Court dated 04.05.2018, the
respondent no.1 preferred an Appeal to this Court which came to be
dismissed. Thus, the said order of the High Court dated 04.05.2018,
rejecting the application of the respondent no.1 under Section 9 of
the Act, attained finality between the parties.

(iii) APPLICATION UNDER SECTION 8 OF THE ACT
6. The appellant, on 16.05.2018, filed a civil suit bearing No.71/2018
before the competent civil court seeking the relief of declaration and
injunction against the respondent no.1 inter alia seeking a declaration
that the ‘Admission Deed’ is a forged document. The respondent
no.1, in the said suit, preferred an application to the Trial Court
under Section 8 of the Act, to refer the suit to arbitration, owing
to the existence of an arbitration agreement between the parties
in respect of disputes concerning the ‘Admission Deed’. The said
application preferred by the respondent no.1, under Section 8 of
the Act, came to be dismissed by the Trial Court vide order dated
06.09.2018 which inter alia held that the allegations of fraud relating
to the validity of the impugned Admission Deed were complicated
in nature and that the respondent no.1 had failed to produce either
the original Admission Deed or a certified copy thereof.
7. The respondent no.1 preferred an appeal against the said Order
dated 06.09.2018, before the Additional District Judge, who also
dismissed the appeal in terms of the order dated 25.09.2020. Being
aggrieved, the respondent no.1 further preferred a revision under
Article 227 of the Constitution to the High Court, which by order
dated 24.09.2021 set aside the orders of the Trial Court and the First
Appellate Court, and allowed the revision filed by the respondent
no.1 by referring the dispute in Suit No.71/2018 to be resolved
through arbitration.
[2026] 2 S.C.R. 277

Rajia Begum v. Barnali Mukherjee

(iv) APPLICATION UNDER SECTION 11 OF THE ACT
8. Parallelly, when the aforesaid proceedings under Sections 8 and 9
were ongoing, the respondent no.1 had also filed a petition under
Section 11 of the Act before the High Court, seeking appointment
of an arbitrator for resolving the disputes between the parties
which had arisen in terms of the arbitration clause contained in
the ‘Admission Deed’. The High Court dismissed the petition filed
by the respondent No.1, under Section 11 of the Act, by order
dated 11.03.2021, inter alia holding that it would not be expedient
to appoint an arbitrator till such time that the issue regarding the
existence of an arbitration agreement between the parties has
been answered finally. In the appeal @ SLP (c) No.6013 of 2021,
the respondent no.1 has challenged the judgment and order dated
11.03.2021 by which her application under Section 11 of the Act
has been dismissed. In the appeal @ SLP (C) No.20262 of 2021,
the appellant has assailed the judgment dated 24.09.2021 by
which petition filed by the respondent no.1 under Article 227 was
allowed and the title suit filed by the appellant was referred to
arbitration.

(v) SUBMISSIONS
9. The learned counsel for respondent no.1 submitted that the
observations made by the High Court while deciding an appeal,
arising out of an order under Section 9 of the Act, are only for the
purposes of deciding the appeal and it has been clarified that the
views expressed in the order are tentative and should not prejudice
the respondent no.1 in any other proceeding. Alternatively, it is
contended that prima facie observation on the existence of arbitration
agreement made in an appeal, arising out of an order under Section
9 of the Act, cannot affect the jurisdiction of the Court under Section
11 of the Act. It is urged that the dispute pertains to allegations of
fraud challenging the arbitration agreement itself, is arbitrable and
well within the jurisdiction of the arbitrator. It is submitted that the
High Court, in exercise of supervisory powers under Article 227,
has rightly set aside the orders passed by the Trial Court and the
Appellate Court. It is, therefore, contended that the dispute be
referred to the arbitration by appointing an arbitrator and the order
dated 24.09.2021 passed by the High Court under Article 227 be
278 [2026] 2 S.C.R.

Supreme Court Reports

maintained. In support of the aforesaid submissions, reliance has
been placed on the decisions of this Court1.
10. On the other hand, learned senior counsel for the appellant submitted
that the Admission Deed is forged and fabricated document and there
is no privity of contract between the parties. It is submitted that the
High Court in its order dated 04.05.2018 has categorically recorded
a finding that the Admission Deed is not a genuine document. It
is submitted that the material on record does not indicate that the
respondent no.1 has acted as a partner since 2007 till date. It is
contended that the Admission Deed is a manufactured and a forged
document. It is argued that the High Court erred in interfering with
the orders passed by the Trial Court and the Appellate Court in
exercise of powers under Article 227 of the Constitution of India. In
support of the aforesaid submissions, reliance has been placed on
the decisions of this Court2.

(vi) ISSUE
11. We have bestowed our consideration upon rival submissions and
have carefully traversed the record placed before us. The central
question which emerges for our determination is whether in the
factual matrix of the case, the disputes between the parties could
have been referred to the arbitration under Section 8 of the Act and
correspondingly whether the High Court was justified in declining the
appointment of an arbitrator under Section 11 of the Act.

(vii) IMPACT OF FRAUD ON ARBITRABILITY
12. The legal position with regard to the impact of fraud on arbitrability
of a dispute under the Act is well delineated by decisions of this
Court. A two-Judge Bench of this Court3 held that mere allegation

1 A. Ayyasamy v. A Paramasivam & Others (2016) 10 SCC 386; Rashid Raza v. Sadaf Akhtar (2019) 8
SCC 710; Vidya Drolia & Ors. v. Durga Trading Corporation (2021) 2 SCC 1; N.N. Global Mercantile
Pvt. Ltd. v. Indo Unique Flame Ltd. (2021) 4 SCC 379; Avitel Post Studioz Ltd. & Ors. v. HSBC PI
Holdings (Mauritius) Ltd. (2021) 4 SCC 713; Sushma Shivkumar Daga & Anr. v. Madhurkumar
Ramkrishnaji Bajaj & Ors. (2024) 12 SCC 253; K. Mangayarkarasi & Anr. v. N.J. Sundaresan & Anr.
(2025) 8 SCC 299; ITI Ltd. v. Siemens Public Communications Network Ltd. (2002) 5 SCC 510;
Nirma Ltd. v. Lurgi Lentjes Energietechnik GMBH (2002) 5 SCC 520; Deep Industries Ltd. v. Oil
and Natural Gas Corporation Ltd. & Anr. (2020) 15 SCC 706 and Bhaven Construction v. Executive
Engineer, Sardar Sarovar Narmada Nigam Ltd. (2022) 1 SCC 75.
2 A. Ayyasamy (supra); Vidya Drolia & Ors. (supra); SBP & Co. v. Patel Engineering Ltd. and Anr.
(2005) 8 SCC 618 and Deep Industries Ltd. (supra).
3 A. AYYASAMY v. A. PARAMASIVAM AND OTHERS (supra)
[2026] 2 S.C.R. 279

Rajia Begum v. Barnali Mukherjee

of fraud simpliciter may not be a ground to nullify the arbitration
agreement between the parties, but where the court finds that there
are serious allegations of fraud which make a case of criminal offence
or where the allegations of fraud are so complicated, which need
to be decided on the basis of voluminous evidence, the court can
sidetrack the arbitration agreement and proceed with the suit. It has
further been held that the court can proceed with the suit in cases
where the fraud is alleged against the arbitration provision itself or
is of a such a nature which permeates the entire contract, including
the agreement to arbitrate, meaning thereby in those cases where
fraud goes to the validity of the contract itself which contains an
arbitration clause or the validity of the arbitration clause itself.
13. The aforesaid principle was referred to with approval, by another
two-Judge Bench of this Court4 and two working tests were laid down
for determining serious allegations of fraud, which would render the
subject matter of an agreement non-arbitrable namely, (1) does this
plea permeate the entire contract and above all, the agreement of
arbitration, rendering it void, or (2) whether the allegations of fraud,
touch upon the internal affairs of the parties, inter se having no
implication in the public domain. It was further held that 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.
Thus, in a case where plea is taken with regard to non-existence
of an arbitration clause or agreement, the same would amount to
serious allegation of fraud and would render the subject matter of
an agreement non-arbitrable.
14. Recently, a two-Judge Bench of this Court in Managing Director
Bihar State Food and Civil Supply Corporation Limited5 (to
which one of us P.S. Narasimha, J. was a party) took note of the
previous decisions of this Court6 and restated the principles governing

4 AVITEL POST STUDIOZ LIMITED AND OTHERS v. HSBC PI HOLDINGS (MAURITIUS) LTD. (supra)
5 Managing Director Bihar State Food and Civil Supply Corporation Limited and Another v. Sanjay
Kumar, 2025 SCC OnLine SC 1604
6 A. Ayyasamy (supra), Lalchand Shah v. Rishabh Enterprises (2018) 15 SCC 678, Rashid Raza v.
Sadaf Akhtar (2019) 8 SCC 710 and Avitel Post Studioz Limited And Others (supra)
280 [2026] 2 S.C.R.

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arbitrability in cases involving allegations of serious fraud. The relevant
extract of para 21 of the decision in Managing Director (supra) is
extracted below:-
“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. In A. Ayyasamy v. A. Paramasivam,
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
Enterprises, Rashid Raza v. Sadaf Akhtar, and Avitel Post
Studioz Limited v. HSBC PI Holdings (Mauritius) Limited, 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:—

XXX XXX XXX
VI. “Serious allegations of fraud” is to be understood in
the context of facts. In Rashid Raza (supra) 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.

XXX XXX XXX
[2026] 2 S.C.R. 281

Rajia Begum v. Barnali Mukherjee

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.”
15. Thus, it is evident that when an allegation of fraud is made with regard
to arbitration agreement itself, such a dispute is generally recognised
as a dispute, which is in the realm of non-arbitrability and the court
will examine it, as a jurisdictional issue only to enquire whether the
dispute has become non-arbitrable due to one or the other reason.

(viii) ANALYSIS
16. In the backdrop of the aforesaid well settled legal position, we may
advert to the facts of the case in hand. At the heart of the controversy
lies the Admission Deed which is relied upon by respondent no.1 as
the source of her induction into the firm and as foundation of arbitration
agreement. On a prime facie consideration of the material placed
on record, we find that there exists substantial and cogent material
which casts serious doubt on the genuineness of the Admission
Deed. The following circumstances are of particular relevance: -
“(i) Respondent No.2, Aftabuddin, is the husband of the
respondent no. 1. While the Admission Deed records that
Respondent Nos.2 and 3 retired from the partnership on
17.04.2007, the respondent No.1 herself admits that her
husband continued to function as a partner of the firm
from 2005 till 2010. This admission is wholly inconsistent
with the recitals of the document relied upon by the
respondent No.1.
(ii) The Admission Deed does not find mention in any
contemporaneous documentary record for nearly nine
years and surfaced for the first time only on 02.10.2016,
when the respondent No.1 issued a legal notice asserting
a 50.33% stake in the firm. The complete absence of the
document from the documentary trail prior thereto is a
circumstance that cannot be lightly brushed aside.
282 [2026] 2 S.C.R.

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(iii) The record further discloses that even after 17.04.2007,
the respondent no.1 role in relation to the firm was not
that of a partner but was confined to that of a guarantor
for financial facilities availed by the firm. This is evident
from several contemporaneous documents, including
banking correspondent, promissory notes, hypothecation
agreements, and letters addressed to Allahabad Bank
between 2009 and 2010, all of which consistently portray
Respondent Nos.2 and 3 as continuing partners of
firm.”
17. It is also of significance that, in proceedings under Section 9 of the
Act, the High Court, by order dated 04.05.2018, had recorded a prima
facie finding that the existence of the Admission Deed was doubtful
and declined to grant interim protection. The relevant extract of the
order reads as under: -
“Even without considering such aspect of the matter,
the order impugned cannot be sustained on the simple
ground that it was the admitted case of the respondent
herein that for a period of more than ten years after the
purported execution of the document of April 17, 2007
she had not been allowed any access to the partnership
business or its books of accounts or given a share of its
profits. If a party had not been diligent enough to protect
her interest for a period of ten years, the party could not
have come to court and expected any positive order by
way of interim measure.
Since it is evident that the court of the first instance in
the present case failed to take relevant considerations
into account while coming to an unreasoned tentative
finding that the purported deed of April 17, 2007 had been
executed by the parties, such order cannot be sustained.”
18. The Special Leave Petition filed against the said order was dismissed
by this Court, thereby lending finality to the said prima facie
assessment between the parties, in the absence of any subsequent
change in circumstances.
19. While findings in Section 9 proceedings are undoubtedly prima facie
in nature, such findings, when they attain finality, cannot be ignored
[2026] 2 S.C.R. 283

Rajia Begum v. Barnali Mukherjee

in subsequent proceedings founded on the very same issue. The
prima facie satisfaction recorded by the High Court regarding the
doubtful existence of the arbitration agreement was, therefore, a
relevant consideration while examining applications under Sections 8
and 11 of the Act.
20. The cumulative effect of the aforesaid circumstances lends
considerable credence to contention of the appellant that the
Admission Deed is not genuine. At the very least, the Admission
Deed is under grave cloud of doubt, requiring a detailed and full-
fledged inquiry. In the present case, arbitration clause does not exist
independently but is embedded in the document whose existence is
seriously disputed. Arbitration, it bears reiteration, is founded upon
consent. A party may be bound by the arbitral process only if it is
first shown, even at a prima facie level, that such a party had agreed
to submit disputes to arbitration. Where the arbitration agreement
itself is alleged to be forged or fabricated, the disputes ceases to be
merely contractual and strikes at the very root of arbitral jurisdiction.
A controversy of this nature falls squarely within the category of
disputes that are generally recognized as non-arbitrable.
21. Both the Trial Court and the First Appellate Court had concurrently
held that the allegations of fraud in the present case were serious
and that the respondent no.1 had failed to produce the original
Admission Deed or a certified copy thereof, as required under
Section 8(2) of the Act. The aforesaid findings were not perfunctory,
but were grounded in the material on record and in the statutory
requirements.
22. The supervisory jurisdiction of the High Court under Article 227 of
the Constitution is not an appellate jurisdiction in disguise, and it
does not permit reappreciation of evidence. The High Court, while
exercising jurisdiction under Article 227 of the Constitution, was not
justified in dislodging the concurrent findings and directing reference
of the dispute to arbitration, particularly when the very existence of
the arbitration agreement was under serious doubt.
23. Conversely, the High Court was correct in dismissing the respondent
no.1’s application under Section 11 of the Act. When the existence
of the arbitration agreement itself is in serious dispute and requires
adjudication, appointment of an arbitrator would be premature and
legally impermissible.
284 [2026] 2 S.C.R.

Supreme Court Reports

(ix) CONCLUSION
24. For the reasons aforesaid, we hold as follows:
(i) The dispute relating to the Admission Deed dated 17.04.2007
involves serious allegations going to the root of the arbitration
agreement itself and is not amenable to arbitration at this stage.
(ii) The order dated 24.09.2021 passed by the High Court allowing
the respondent no.1’s application under Section 8 of the Act is
unsustainable and is hereby quashed and set aside.
(iii) The order dated 11.03.2021 passed by the High Court rejecting
the respondent no.1’s application under Section 11 of the Act
warrants no interference and is accordingly affirmed.
25. In the result, the appeal @ SLP (C) No. 6013 of 2021 is dismissed
whereas the appeal @ SLP (C) No. 20262 of 2021 is allowed. There
shall be no order as to costs.

Result of the case: CA No.674 of 2026 is dismissed and CA No.675
of 2026 is allowed.

†
Headnotes prepared by: Divya Pandey