Supreme Court of India
STATE OF UTTAR PRADESH AND ANOTHERversusR.K. PANDEY AND ANOTHER
- Citation
- 2025 INSC 48
- Decided
- 8 January 2025
- Disposal
- Appeal(s) allowed
- Bench
- SANJIV KHANNA
Holding
An arbitral award is unenforceable where the underlying arbitration agreement is not proven to exist and where the arbitrators were unilaterally appointed, rendering the awards void for lack of jurisdiction.
Summary
R.K. Pandey, a former lab assistant of a state‑run medical college, claimed that his superannuation age should be 60 years and sought relief through arbitration, relying on an alleged 1957 arbitration agreement between the municipal board and the Governor of Uttar Pradesh. He unilaterally appointed two arbitrators who issued ex‑parte awards of approximately Rs.46 lakhs against the State and the college principal. The State objected, arguing that no valid arbitration agreement existed and that the awards were barred by limitation. The High Court dismissed the objections on limitation grounds, but the Supreme Court examined whether the arbitration agreement was genuine and whether the unilateral appointment of arbitrators conferred jurisdiction. Finding no authenticated copy of the agreement, no signature by Pandey, and that the arbitration clause required mutual nomination, the Court held the arbitration proceedings were a sham and the awards lacked subject‑matter jurisdiction. Consequently, the Supreme Court set aside both awards as null and void and dismissed the execution proceedings.
Issues considered
- The enforceability of ex‑parte arbitral awards when the existence or authenticity of the underlying arbitration agreement is disputed.
- Whether an arbitration agreement is a prerequisite for jurisdiction under the Arbitration and Conciliation Act, 1996.
- Whether unilateral appointment of an arbitrator by one party, contrary to the arbitration clause, defeats the tribunal's jurisdiction.
- Whether the awards are barred by limitation under the Limitation Act, 1963 and Section 43 of the A&C Act.
- Whether the awards should be declared void for lack of subject‑matter jurisdiction and fraud.
Legislation cited
- Arbitration and Conciliation Act, 1996s. 11, s. 18, s. 34, s. 43, s. 47, s. 7
- Code of Civil Procedure, 1908s. 47
- Limitation Act, 1963s. 3
Subjects
Enforceability of ex-parte awardsAuthenticity of the arbitration agreementEx-parte arbitral awardsAge of superannuationArbitration proceedingsArbitration agreementLack of jurisdictionCertified copy or authenticated copy of official recordsUnilateral appointment of arbitrator by employeeBarred by limitationJurisdictionExecution proceedings
Judgment
[2025] 1 S.C.R. 403 : 2025 INSC 48
State of Uttar Pradesh and Another
v.
R.K. Pandey and Another
(Civil Appeal No. 10212 of 2014)
09 January 2025
[Sanjiv Khanna,* CJI, Sanjay Kumar and
R. Mahadevan, JJ.]
Issue for Consideration
Matter pertains to the enforceability of the ex-parte awards against
the employer-State Government and the principal of the medical
college, when the employer objected the authenticity of the
arbitration agreement relied on by the employee.
Headnotes†
Arbitration and Conciliation Act, 1996 – Ex-parte arbitral
awards – Enforcement by employee, when denial of the
authenticity of the arbitration agreement by employer – Service
dispute by the employee against the State Government and
the government hospital where he was employed as regards
age of superannuation – Writ petition remained pending for 12
years, thereafter was withdrawn – Year before, the employee
initiated arbitration proceedings against the State Government
and the principal of the medical college – Suit for reference
filed which was later withdrawn without any decision on merits
with the two sole arbitrators appointed by the employee, suo
moto taking up the arbitration proceedings and pronouncing
the two awards, for an amount of around Rs.46 lakhs with
interest against the State and the Principal of the Medical
College – Thereafter, employee sought enforcement of ex-parte
awards – Employer objected the authenticity of the arbitration
agreement relied on by employee – However, the courts below
dismissed the objections – Correctness:
Held: Arbitration agreement is sine qua non for arbitration
proceedings, as arbitration fundamentally relies on the principle of
party autonomy-right of parties to choose arbitration as an alternative
to court adjudication – Existence of the arbitration agreement is a
prerequisite for an award to be enforceable in the eyes of law –
* Author
404 [2025] 1 S.C.R.
Digital Supreme Court Reports
On facts, arbitration proceedings were a mere sham and a fraud
played by employee, by self-appointing/nominating arbitrators, who
have passed ex-parte and invalid awards – Clear case of lack of
subject matter jurisdiction – So-called arbitration agreement nowhere
available on the records of either the Municipal Corporation or the
State – Employee did not file the original agreement since he was
not in possession of the same, nor is he a signatory and party to the
arbitration agreement – Hospital and the Governor did not endorse
any such agreement – Arbitration Agreement is not referred to in
the indenture of the transfer executed – No evidence to show the
existence of the arbitration agreement, except a piece of paper,
which is not even a certified copy or authenticated copy of the official
records – Notwithstanding that the claims made by employee were
ex-facie and clearly barred by limitation as per s.3 of the Limitation
Act 1963 rw s.43 they have been allowed – Thus, ex parte awards
set aside and to be treated as null and void and non-enforceable
in law – Impugned judgment set aside. [Paras 20-25]
Case Law Cited
Bilkis Yakub Rasool v. Union of India and Others [2024] 1 SCR 743 :
(2024) 5 SCC 481; Central Organisation of Railway Electrification
v. ECI PIC SMO MCPL (JV), a Joint Venture Company, 2024 INSC
857 – referred to.
List of Acts
Arbitration and Conciliation Act, 1996; Code of Civil Procedure,
1908; Limitation Act 1963.
List of Keywords
Enforceability of ex-parte awards; Authenticity of the arbitration
agreement; Ex-parte arbitral awards; Age of superannuation;
Arbitration proceedings; Arbitration agreement; Lack of jurisdiction;
Certified copy or authenticated copy of official records; Unilateral
appointment of arbitrator by employee; Barred by limitation;
Jurisdiction; Execution proceedings.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 10212 of 2014
From the Judgment and Order dated 28.02.2012 of the High court
of Judicature at Allahabad in FAFO No. 352 of 2012
[2025] 1 S.C.R. 405
State of Uttar Pradesh and Another v. R.K. Pandey and Another
Appearances for Parties
Ankit Goel, Vikas Bansal, Nikhil Sharma, Advs. for the Appellants.
Mrs. Deepika Mishra, Abhishek Misra, Ms. Abha Jain, Jaivir Singh,
Advs. for the Respondents.
Judgment / Order of the Supreme Court
Judgment
Sanjiv Khanna, CJI
Delay condoned.
2. This appeal arises from an order dated 28.02.2012 passed by a
Division Bench of the High Court of Judicature at Allahabad in First
Appeal from Order Defective No. 352/2012.
3. The facts, in brief, are – Respondent no. 1, R.K. Pandey, was
appointed as a Lab Assistant/ Technician in the T.B. Section of Dina
Nath Parbati Bangla Infectious Disease1 Hospital located at Kanpur.
The Municipal Board of Kanpur set up this hospital on the land given
by the Kanpur Improvement Trust in 1944-45.
4. On 17.07.1956, DNPBID Hospital was taken over by the State
Government, that is, the Government of Uttar Pradesh, to establish
a new medical college at Kanpur pursuant to a Resolution dated
17.07.1956 passed by the Administrator of the Municipal Board of
Kanpur and six members of the Board of the hospital. On 29.03.1957,
the State Government accepted the proposal dated 17.07.1956.
5. On 20.06.1961, a transfer deed was executed between the Nagar
Mahapalika of the City of Kanpur and the Governor of the State of Uttar
Pradesh. The said deed has been placed on the record. It states that
in terms of the G.O. dated 29.03.1957, the entire municipal staff of the
hospital, as per the list attached to the indenture, will stand transferred
to the State Government service. The staff will not be unfavourably
placed as regards emoluments or other service conditions, nor shall
they suffer in the matter of emoluments, leave, age of retirement,
and other benefits as compared to the terms of service of the Board.
1 Hereinafter, “DNPBID.”
406 [2025] 1 S.C.R.
Digital Supreme Court Reports
6. After the settlement was executed, the hospital became a unit of
Ganesh Shanker Vidayarthi Memorial2 Medical College, Kanpur.
Thereupon, it is apparent that the employees working in DNPBID
Hospital opted for service under the State Government and had
sent their consent which was accepted. Thereafter, their service
records were sent to the State Government. It was agreed that the
concessions and privileges enjoyed by the staff before the aforesaid
hospital were provincialized and will continue in future and they will
not be put to a disadvantage by the take-over. The Board agreed to
pay Rs.50,000/- keeping in view the liability of the Municipal Board.
7. Vide letter dated 09.01.1997, the Chief Medical Superintendent of
the hospital, now a State Government hospital, informed Respondent
No. 1, R.K. Pandey that he would be superannuating on 31.03.1997.
He was requested to contact the office along with pension papers and
submit the same within one week so that the process can be initiated.
8. In March 1997, Respondent No. 1, R.K. Pandey, filed a writ petition
before the High Court of Judicature at Allahabad claiming that he
should retire at the age of 60 years instead of 58 years, relying upon
the service rules as applicable to the employees of the Municipal
Board of Kanpur.
9. Pursuant to the filing of the writ petition, Respondent No.1, R.K.
Pandey was directed to make a representation. While a representation
was indeed made, it was subsequently rejected observing that the
respondent had been in service of the State Government for 42
years and was availing all pay and allowances, as per the State
Government rules.
10. The State Government filed an affidavit opposing the writ petition inter
alia, stating that Respondent No. 1, R.K. Pandey, having acquired
the status of State Government service was bound and governed
by the rules and regulations of the State Government. It was also
stated that the minimum age for entering the government service is
18 years, and if a government servant retires at the age of 58 years,
he would have completed 40 years of service. In the present case,
Respondent No. 1, R.K. Pandey had completed service of 42 years
of service. In other words, he would be 60 years of age.
2 Hereinafter, “GVSM.”
[2025] 1 S.C.R. 407
State of Uttar Pradesh and Another v. R.K. Pandey and Another
11. No interim order was passed in the writ petition, which remained
pending till it was withdrawn by Respondent No. 1, R.K. Pandey
on 22.04.2009. Consequently, the prayers made in the writ petition
were not granted.
12. Notwithstanding the pendency of the writ petition, on 11.01.2008,
Respondent No. 1, R.K. Pandey, filed an arbitration suit before
the District Judge, Kanpur Nagar, Kanpur, relying upon an
alleged arbitration agreement dated 01.04.1957 between the then
Administrator of the DNBPID Hospital and the Governor of Uttar
Pradesh. The prayer sought was for the dispute regarding Respondent
No. 1, R.K. Pandey’s age of superannuation and the rejection of his
representation dated 03.04.1997 by the Principal of GVSM Medical
College be referred to arbitration. However, the arbitration agreement
was not mentioned either in the writ petition or in the application for
its withdrawal. Subsequently, on 15.02.2008, Respondent No. 1, R.K.
Pandey, withdrew the suit seeking to refer the disputes to arbitration.
13. On 29.11.2008, Respondent No. 1, R.K. Pandey, filed two execution
petitions before the District Judge in Kanpur, seeking to enforce two
separate ex parte awards issued on 15.02.2008 and 25.06.2008
by Advocates Pawan Kumar Tewari and Indivar Vajpayee. These
proceedings were initiated by Respondent No. 1 against the State
Government and the Principal of GSVM Medical College, Kanpur.
14. The first ex-parte award dated 15.02.2008 decreed the claim of
Respondent No. 1, R.K. Pandey for an amount of Rs.26,42,116/- with
interest at the rate of 18 % per annum from 21.01.2008 against the
State of Uttar Pradesh and the Principal GSVM Medical College,
Kanpur. The award states that Respondent No. 1, R.K. Pandey had
appointed/ nominated the Arbitrator and there was non-appointment
by the opposite party and, therefore, Pawan Kumar Tewari, Advocate
had acted as the sole Arbitrator.
15. The second ex parte Award dated 25.06.2008 passed by Indivar
Vajpayee awarded an amount of Rs.20,00,000/- along with interest
at the rate of 9% per annum with effect from 11.02.2008 in favour
of Respondent No. 1, R.K. Pandey, and against the opposite party,
viz. the State of Uttar Pradesh and the Principal of GSVM Medical
College, Kanpur. The Award states that Respondent No. 1 had
appointed Indivar Vajpayee as an Arbitrator on 25.06.2008, albeit the
opposite party had not appointed an Arbitrator and, hence Indivar
Vajpayee acted as the sole Arbitrator.
408 [2025] 1 S.C.R.
Digital Supreme Court Reports
16. The appellant on receiving notice in the execution petition filed viz.
the Award given by Indivar Vajpayee, filed objections against the two
awards under Section 34 of the Arbitration and Conciliation Act, 1996.3
One of the issues raised before the executing court concerned the
existence of the arbitration agreement, purportedly dated 01.04.1957,
which Respondent No. 1, R.K. Pandey, relied upon. This agreement
was claimed to have been executed and signed on behalf of the
Administrator of the Municipal Board and the Additional Secretary
of the Government of Uttar Pradesh.
17. The authenticity of this document was denied. Notably, this document
or the arbitration agreement is not reflected in the transfer deed
executed on 20.06.1961. Furthermore, the purported arbitration
agreement was neither mentioned in the writ petition filed by
Respondent No. 1, R.K. Pandey, in March 1997, nor referenced in
any correspondence or related documents until Respondent No. 1,
R.K. Pandey, filed a petition under Section 11 of the A&C Act, for
the appointment of an arbitrator on 11.01.2008. By this petition,
Respondent No. 1, R.K. Pandey, had prayed for the appointment
of an arbitrator. As recorded above, the said petition was dismissed
as withdrawn on 15.02.2008, which was also the date on which the
first award for Rs.20,00,000/- with interest at the rate of 18 % per
annum was passed by Pawan Kumar Tewari, Advocate. The second
Award by Indivar Vajpayee dated 25.06.2008 is also pursuant to the
appointment of an arbitrator by Respondent No. 1, R.K. Pandey
without recourse to court proceedings.
18. The objections filed by the appellants under Section 34 of the
A&C Act were dismissed by the trial court on the ground that
they were barred by limitation and had been filed beyond the
condonable period. Interestingly, during the pendency of the said
objections, a query had been raised as to the existence of the
arbitration agreement dated 01.04.1957, which was relied upon by
Respondent No. 1, R.K. Pandey. In a reply given by the Municipal
Corporation/Mahanagar Palika to the Advocate appointed by District
Government Counsel (Civil), Kanpur Nagar, it was stated that the
photocopy furnished of the agreement was not clear and there
was no such agreement available on the record. Hence, it was
3 Hereinafter, “A&C Act.”
[2025] 1 S.C.R. 409
State of Uttar Pradesh and Another v. R.K. Pandey and Another
not possible to verify the said document. The purported agreement
dated 01.04.1957 is not signed and executed by Respondent
No. 1, R.K. Pandey, and a copy of the agreement is not marked
to him. The authenticity of the agreement cannot be established
as it is not available on the record of the Municipal Board. The
State Government, as is evident, has denied the existence of any
such agreement.
19. The impugned judgment passed by the Division Bench of the High
Court of Judicature at Allahabad dismissed the intra court appeal on
the grounds that the objections itself were barred by limitation and
beyond the condonable period.
20. We have narrated the facts in detail as they are peculiar, and
intervention by this Court is necessary to prevent any attempt to
enforce the so-called awards, which are null and void ab initio for
several reasons. This Court in its decision in Bilkis Yakub Rasool
v. Union of India and Others,4 observes that fraud and justice
never dwell together, and a litigant should not be able to benefit
from a fraud practiced with an intention to secure him an illegal
benefit. In the present case, the so-called arbitration agreement is
nowhere available on the records of either the Municipal Corporation
or the State of Uttar Pradesh. Respondent No. 1, R.K. Pandey,
did not file the original agreement since he was not in possession
of the same, nor is he a signatory and party to the arbitration
agreement. An arbitration agreement is sine qua non for arbitration
proceedings, as arbitration fundamentally relies on the principle
of party autonomy; - the right of parties to choose arbitration as
an alternative to court adjudication. In this sense, ‘existence’ of
the arbitration agreement is a prerequisite for an award to be
enforceable in the eyes of law. No doubt, Section 7 of the A&C
Act, which defines the ‘arbitration agreement’, is expansive and
includes an exchange of statements of claim and defence in which
the existence of the agreement is alleged by one party and not
denied by the other party, albeit the existence of the arbitration
agreement is not accepted by either the Municipal Corporation or
the Appellant, the State of Uttar Pradesh. The Arbitration Agreement
is not referred to in the indenture of the transfer executed later
4 [2024] 1 SCR 743 : (2024) 5 SCC 481
410 [2025] 1 S.C.R.
Digital Supreme Court Reports
on 20.06.1961. There is no evidence to show the existence of the
arbitration agreement, except a piece of paper, which is not even
a certified copy or an authenticated copy of the official records.
How and from where RK Pandey, Respondent No. 1, got a copy
of the agreement, and that too nearly 10 years after his retirement
and filing of a writ petition remains unknown.
21. The arbitration agreement, as propounded, is between the Municipal
Corporation and Development Board, Kanpur, and the appellant, the
Governor of the State of Uttar Pradesh. For the sake of reference,
the arbitration agreement is reproduced:
“This Arbitration Agreement made on the First April,
One Thousand Nine Hundred Fifty Seven between the
Municipal and Development Board Kanpur (hereinafter
called the Board) of the one part and the Governor of
Uttar Pradesh (hereinafter, called the Government) of
the other part.
It is mutually agreed by the and between the parties as
follows:
All disputes or difference whatsoever which shall if any
time arise between the parties including the employees
of Provincialized DN Bangla I.D. Hospital, Kanpur,
hereto touching or concerning the resolution passed
by the Managing Committee of the said Hospital at the
meeting held on 17.07.1956, which was accepted by the
Government, shall be referred to the Arbitrators nominated
by the Principal GSVM Medical College, Kanpur and
the administrator of the Board or employees of the said
provincialized Hospital for arbitration under the Arbitration
Act. Any statutory modification of re-enactment thereof and
the rules made thereunder for the time being enforced
shall apply to the Arbitration proceedings. If one party
nominates the arbitrator and refers the dispute to the
nominated arbitrator for adjudication in writing notice to
the other party and the other party fails to nominate the
arbitrator within 10 days then the arbitrator nominated by
the First Party shall be final and act as a sole arbitrator.
The award of the arbitrators/sole arbitrator shall be final
and binding on the parties.
[2025] 1 S.C.R. 411
State of Uttar Pradesh and Another v. R.K. Pandey and Another
This agreement signed by the administrator on behalf of
the Board and the Additional Secretary of the Government
of UP on behalf of the Government.
M.A. Quraishi, I.C.C.
Administrator
Municipal & Development Board
Kanpur
G.P. Pandey, Addl. Secretary to the Govt. of UP”
The agreement postulates that each party, that is, the Municipal and
Development Board, Kanpur, and the Governor of Uttar Pradesh,
may nominate an arbitrator for adjudication by giving written notice
to the other party. In the event the other party fails to nominate an
arbitrator within ten days, the arbitrator nominated by the first party
shall act as the sole arbitrator. It was not the case of Respondent
No. 1, R.K. Pandey that the Municipal and Development Board,
Kanpur, or the Governor of Uttar Pradesh has invoked the arbitration
clause. The unilateral appointment of the arbitrator by Respondent
No. 1, R.K. Pandey is, therefore, contrary to the arbitration clause
as propounded by him.
22. Another intriguing aspect is the delay in relying on the arbitration
agreement and initiating arbitration proceedings. Respondent No. 1,
R.K. Pandey, himself filed the writ petition in 1997 concerning the
same dispute. The writ petition had remained pending till 22.04.2009,
when it was withdrawn. It is during the pendency of the petition,
that the steps for initiation of arbitration were taken on 11.01.2008
by Respondent No.1, R.K. Pandey, by filing a suit for reference in
terms of Section 11 of the A&C Act. However, the petition was later
withdrawn without any decision on merits with the two sole arbitrators
appointed by Respondent No. 1, R.K. Pandey, suo moto taking up
the arbitration proceedings and pronouncing the two awards, the
first dated 15.02.2008 for an amount of Rs.26,42,116/- with interest
at the rate of 18% per annum, and the second dated 25.06.2008
for an amount of Rs.20,00,000/- along with interest at the rate of
nine percent per annum with effect from 11.02.2008, against the
Appellants, the State of Uttar Pradesh and the Principal of GSVM
Medical College, Kanpur. Notwithstanding that the claims made by
Respondent No. 1, R.K. Pandey, were ex-facie and clearly barred
412 [2025] 1 S.C.R.
Digital Supreme Court Reports
by limitation as per Section 3 of the Limitation Act 1963 read with
Section 43 of the A&C Act, they have been allowed.
23. A 5-Judge Constitution Bench of this Court in Central Organisation
of Railway Electrification v. ECI PIC SMO MCPL (JV), a Joint
Venture Company 5 has observed that equity applies at the stage
of appointment of arbitrators, though the A&C Act recognizes
the autonomy of parties to decide on all aspects of arbitration.
The enactment lays down a procedural framework to regulate
the composition of the arbitral tribunal and conduct of arbitration
proceedings. It is only then that the arbitral tribunals, which have the
backing of courts, can act objectively and exercise their discretion
in a judicial manner, without caprice and in accordance with the
principles of law and rules of natural justice. This is the core of the
alternate dispute redressal mechanism, which is also the core of
Section 18 of the A&C Act and is a non-derogable and mandatory
provision. It is only then the arbitrators are vested with the power to
resolve the dispute under the law. This judgment also observed that
the unilateral appointment of arbitrators has a direct effect on the
conduct of arbitral proceedings. Arbitration, which is quasi-judicial,
requires a standard of behaviour of arbitrators, which is impartial
and independent, no less stringent than that demanded of judges. In
fact, arbitrators are expected to uphold a higher standard, as court
decisions are subject to the collective scrutiny of an appeal, while an
arbitration award typically enjoys greater acceptability, recognition,
and enforceability.
24. We have made our observations in the context of Section 47 of the
Code of Civil Procedure, 1908, which even at the stage of execution,
permits a party to object to the decree, both on the grounds of fraud,
as well as lack of subject matter jurisdiction. It is apparent that
the arbitration proceedings were a mere sham and a fraud played
by Respondent No.1, R.K. Pandey, by self-appointing/nominating
arbitrators, who have passed ex-parte and invalid awards. To reiterate,
Respondent No. 1, R.K. Pandey, is not a signatory to the purported
arbitration agreement. Moreover, the parties thereto, DNPBID
Hospital and the Governor of Uttar Pradesh, do not endorse any
5 2024 INSC 857
[2025] 1 S.C.R. 413
State of Uttar Pradesh and Another v. R.K. Pandey and Another
such agreement. From the cumulative facts and reasons elucidated
above, this is a clear case of lack of subject matter jurisdiction.
25. Accordingly, we allow the present appeal and set aside the two ex
parte Awards dated 15.02.2008 and 25.06.2008. Both the Awards
shall be treated as null and void and non-enforceable in law.
Resultantly, the judgment passed, and the subject matter of the
appeal shall be treated as set aside. The execution proceedings
shall stand dismissed. The appellants will be entitled to costs of the
entire proceedings as per the law.
Result of the case: Appeal allowed.
†
Headnotes prepared by: Nidhi Jain
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