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CDJ 2026 MHC 7040
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| Court : High Court of Judicature at Madras |
| Case No : CRP. No. 5192 of 2026 & CMP. No. 22615 of 2026 |
| Judges: THE HONOURABLE MR. JUSTICE P.B. BALAJI |
| Parties : Rafiq Ahamed & Another Versus M/s. Sundaram Finance Limited, Chennai |
| Appearing Advocates : For the Petitioners: G. Magesh Kumar, Advocate. For the Respondent: M. Arunachalam, Advocate. |
| Date of Judgment : 25-09-2026 |
| Head Note :- |
Civil Procedure Code - Section 115 -
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| Summary :- |
1. Statutes / Acts / Rules / Orders / Regulations, Sections Mentioned:
- Section 115 of the CPC
- Order XXI Rule 66 CPC
- Section 34 of the Arbitration and Conciliation Act, 1996
- Section 47 of the Code of Civil Procedure
- Article 14 of the Constitution of India
- Article 141 of the Constitution of India
- Arbitration and Conciliation Act, 1996
- Code of Civil Procedure (CPC)
2. Catch Words:
- unilateral appointment
- nullity
- enforcement
- execution
- arbitration
- Section 34
- Section 47
- Article 14
- Article 141
3. Summary:
The revision petition challenges an order that attached the petitioners’ properties for sale under Order XXI Rule 66 CPC. The petitioners contend that the arbitral award is a nullity because the arbitrator was appointed unilaterally, rendering the award unenforceable. The respondent argues that such a challenge must be raised under Section 34 of the Arbitration and Conciliation Act and cannot be introduced at the execution stage. The Court examined Supreme Court precedents, notably Bhadra International and CORE II, holding that a lack of inherent jurisdiction due to unilateral appointment makes an award a nullity and can be raised at any stage, including execution. The Court rejected the respondent’s reliance on earlier Madras High Court decisions and affirmed that the executing court erred in refusing the objection. Consequently, the impugned order is set aside and the award declared void.
4. Conclusion:
Petition Allowed |
| Judgment :- |
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(Prayer: This Civil Revision Petition has been filed under Section 115 of the CPC, to set aside the order dated 06.04.2026 in EP. No.3 of 2024 in Arb.No.SSM/SF/94/2021 on the file of the learned Additional District Judge, Chengalpattu.)
1. Award sufferers in arbitration proceedings who were arrayed as Judgment Debtors in execution proceedings, initiated for enforcement of awards, are the revision petitioners, aggrieved by the order dated 06.04.2026, ordering the attached properties of the petitioner being brought for sale under Order XXI Rule 66 CPC.
2. I have heard Mr. G. Magesh Kumar, learned counsel for the revision petitioner and Mr. M Arunachalam, learned counsel for the respondent/ decree holder.
3. Mr. G. Magesh Kumar, learned counsel for the revision petitioner would contend that despite a material objection having been taken before the Executing Court that the award itself is a nullity and cannot be enforced in view of the appointment of the Arbitrator being unilateral in nature, the Executing Court has erroneously rejected the said valid objection and proceeded to order the execution petition. In support of his submissions, Mr.G.Magesh Kumar, learned counsel for the revision petitioner, relying on various decisions, contended that a plea of nullity can be raised at any stage of the proceedings, including enforcement proceedings and since the appointment of Arbitrator was admittedly unilateral, the award itself is rendered a nullity in the eye of law and therefore, cannot be enforced. He prayed for the revision, therefore, being allowed.
4. The decisions that have been relied on by the learned counsel for the petitioner, are as hereunder:-
* Perkins Eastman Architects DPC & Anr vs. HSCC (India) Ltd., reported in (2020) 20 SCC 760;
* Electrosteel Steels Ltd. vs. Ispat Carrier Pvt. Ltd., reported in (2025) 7 SCC 773;
* Bhadra International (India) Pvt. Ltd. & Ors. vs. Airports Authority of India, reported in 2026 SCC OnLine SC 7;
* Mahavir Prasad Gupta and Sons vs. Govt. NCT of Delhi, reported in, 2025 SCC OnLine Del 4241;
* Satnam Singh Ahuja and Others vs. Karvy Financial Services Ltd., reported in 2026 SCC OnLine Bom 1769;
* Cholamandalam Investment and Finance Company Ltd. vs. Amrapali Enterprises and Another, reported in 2023 SCC OnLine Cal 605;
* L & T Finance Ltd vs. Sangeeta Bhansali (Borrower) and Another, reported in 2026 SCC OnLine Bom 218; and
* Srei Equipment Finance Limited vs. Sadhan Mandal, reported in 2023 SCC OnLine Cal 831.
5. Per contra, Mr.M.Arunachalam, learned counsel for the respondent/ decree holder, would contend that the petitioners were not entitled to raise the issue of unilateral appointment of Arbitrator as a defence in an application filed under Order XXI Rule 66 CPC. His primordial submission is that the appointment of an Arbitrator, unilaterally, is a ground of challenge under Section 34 of the Arbitration and Conciliation Act, 1996 and the said plea can only be raised as a defence, either before the Arbitrator or as a ground under Section 34 of the Act, and not in enforcement or execution proceedings, as in the present case.
6. In support of his submissions, he has relied on the following decisions:-
1. Satish Karthikeyan vs. Axis Bank Limited, reported in, MANU/TN/6192/2024;
2. Sundaram Finance Limited vs. S M Thangaraj and Ors., reported in, 2025 SCC OnLine Mad 5428;
3. M/s. Sriram Transport Finance Company Ltd vs. Prabu and Anr, reported in, 2026 SCC OnLine Mad 6901;
4. Dhurandhar Prasad Singh vs. Jai Prakash University and Others, reported in, (2001) 6 SCC 534;
5. Hira Lal Patni vs. Sri Kali Nath, reported in, 1961 SCC OnLine SC 42;
6. Central Organisation for Railway Electrification vs. ECI SPIC SMO MCML (JV) A Joint Venture Company, reported in, (2025) 4 SCC 641.
7. It is his further submission that the objection relating to unilateral arbitration can be waived by the parties and therefore, it cannot be raised for the first time in execution proceedings, especially since the Execution Court cannot go behind the decree and decide whether there has been a waiver or not. Mr.M.Arunachalam, learned counsel for the respondent, further stated that even after being served in the execution proceedings, the objection that was taken in the counter in the Execution Petition was that the petitioner was never aware of the award being passed and came to know about the award only after receipt of notice in the Execution Proceedings. It is therefore his submission that at least when the petitioner claimed to have received notice of the award for the first time, they could have challenged the award by filing an application under Section 34, which admittedly has not been done.
8. Pointing out to the decision of the Hon’ble Supreme Court in Bhadra International (India) Pvt. Ltd. and Others vs. Airports Authority of India and Central Organisation for Railway Electrification vs. ECI SPIC SMO MCML (JV) A Joint Venture Company (hereinafter referred to as “CORE II”), Mr.M Arunachalam, learned counsel for the respondent, would endeavour to put across his point of view that the Hon’ble Supreme Court did not, in both these decisions, deal with permissibility of a plea of unilateral appointment as an objection in execution proceedings. He would also attempt to interpret the ratio in Bhadra’s case (referred herein supra), by contending that “at any stage of the proceedings” is to be understood and mean only proceedings in arbitration and cannot be extended to execution proceedings. Mr.M.Arunachalam, learned counsel for the respondent, would therefore state that the Executing Court has not committed any error warranting any interference in revision.
9. I have heard both sides and carefully perused the cases relied on by the parties on either side. I have also gone through the impugned order.
10. For better understanding, it would be relevant to trace the history of the plea of unilateral appointment of Arbitrator being taken as a defence in arbitral proceedings.
11. The Hon’ble Supreme Court in TRF Ltd. vs. Energo Engg. Projects Ltd., reported in, (2017) 8 SCC 377, Perkins Eastman Architects DPC and Another vs. HSCC (India) Ltd and in CORE II’s case (referred herein supra) held that unilateral appointment was not proper and proceedings or an award passed by such unilaterally appointed arbitrators cannot be valid in the eye of law, and in fact, a nullity.
12. Subsequently in CORE II’s case, the Hon’ble Supreme Court again reiterated that unilateral appointment of an Arbitrator was void and violative of Article 14 of the Constitution of India. Though Mr.M.Arunachalam, learned counsel for the respondent, would contend that the said constitutional Bench decision in CORE II’s case was only related to a public-private contract and it is in such context that the Hon’ble Supreme Court held that a clause pertaining to a unilaterally appointed Arbitrator is void, and the same ratio cannot be extended to contracts between private parties as in the present case, I am unable to see such fanciful arguments coming to the rescue of the respondents, even though as rightly contended by Mr.M.Arunachalam, learned counsel for the respondent, the Hon’ble Supreme Court was concerned with a dispute between a public authority and private party.
13. On a careful reading of the judgment, I do not see the character of parties to the dispute in that case having any material bearing on the ultimate ratio laid down by the Hon’ble Supreme Court. Though he invited my specific attention to the separate judgment penned by Hon’ble Mr.Justice P. S. Narasimha, concurring with the majority view in the said case, and contended that no advance declaration can be given that all unilateral appointment of Arbitrators are void per se and the said judgment, not being conflicting or a minority view, but only supplementing the judgment of the majority, it would be binding on this Court in view of the mandate of Article 141 of Constitution of India, here again I am unable to countenance such arguments. Neither the majority view nor the supplementing view has laid down the proposition that unilateral appointment of arbitrator in a contract between private parties is not per se void. A decision is only an authority for what it actually decides. Thus, I am unable to accept Mr.Arunchalam’s arguments that since the Hon’ble Supreme Court was only deciding an issue between a public authority and private party and there being no finding insofar as contracts between private parties, a unilateral appointment of Arbitrator clause is not per se void. The Hon’ble Supreme Court has not said so and was only answering the question that arose before it in the facts of the said case.
14. In fact, more recently in Bhadra’s case, (referred herein supra) after discussing the entire case law on the subject, the Hon’ble Supreme Court concluded that, in arbitration, the parties vest jurisdiction in the Tribunal by exercising their consent, in furtherance of a valid arbitration agreement and therefore, an Arbitrator who lacks jurisdiction cannot make an award on the merits and consequently, held that an objection to the inherent lack of jurisdiction can be taken at “any stage of proceedings”.
15. Though, Mr.M.Arunachalam, learned counsel for the respondent, strenuously attempted to interpret the phrase “any stage of the proceedings” to restrict it to only “during the course of Arbitration or post award by a challenge laid under Section 34 of the Arbitration and Conciliation Act, 1996”, I am unable to see any merit in such arguments. In Electrosteel’s case, (referred herein supra) the issue did not pertain to unilateral arbitration. However, a plea was taken that the award itself was a nullity in view of the disputes having been settled under a resolution plan. The Hon’ble Supreme Court, held that such plea of nullity can be contested at any stage of the proceedings and upheld the objections under Section 47 of the Code of Civil Procedure.
16. In Mahavir Prasad Gupta’s case, (referred herein supra), the Delhi High Court held that an award passed by a sole Arbitrator appointed unilaterally is unenforceable and that a plea can be raised at any stage of the proceedings and even in collateral proceedings. In fact, the Division Bench of the Delhi High Court held that the award would be a nullity and the Execution Court can certainly refuse to enforce the award since the Tribunal lacked inherent jurisdiction.
17. Even though several decisions have been relied on by the learned counsel for the petitioners, some of them relate to challenge made under Section 34 of the Arbitration and Conciliation Act, 1996. As there is no quarrel with regard to the said settled legal position that an objection relating to unilateral appointment of an aAbitrator can be raised in a Section 34 application, post award, I do not see any useful purpose in referring and discussing these decisions in the present case.
18. Coming to the decisions relied on by Mr.M.Arunachalam, learned counsel for the respondent, in Dhurandhar Prasad Singh’s case, (referred herein supra), the Hon’ble Supreme Court held that under Section 47 CPC, the powers of the Executing Court are narrow and microscopic and an objection to executability can be permitted only when there is a complete lack of inherent jurisdiction, rending the decree void ab initio. I do not see how this decision is in any manner aiding the respondent/decree holder, since there can be no quarrel with regard to the powers of the Executing Court while deciding a Section 47 petition. However, in view of the discussion already made herein above, when the appointment of arbitrator was unilateral in nature and in fact admitted to be so, by the respondent themselves, it clearly rocks the very foundation of the arbitration proceedings. The entire arbitral proceedings are rendered a nullity and non est in the eye of law. Therefore, the arbitral tribunal did not have the very jurisdiction to proceed with the arbitration proceedings in the first place. In such circumstances, the case would squarely fall within the ambit of “lack of inherent jurisdiction”, in which event the Executing Court can certainly entertain an objection to the executability of the award/ decree.
19. Though even in CORE II’s case, the Hon’ble Supreme Court held that Arbitral Tribunals constituted prior to 08.11.2024, pursuant to unilateral clauses stood saved from being automatically declared as null and void in execution proceedings, the impugned award in the present case is after 08.11.2024 and therefore, the exception carved out in CORE II’s case also does not help the respondent in any manner. In so far as Satish Karthikeyan’s case (referred herein supra), Sundaram Finance’s case (referred herein supra) and Sriram’s case (referred herein supra), the view of the Madras High Court consistently was that, without a challenge made under Section 34 of the Arbitration and Conciliation Act, 1996, an objection regarding unilateral appointment of arbitrator cannot be raised in execution proceedings. However, in view of the later decision in Bhadra (referred herein supra), after considering the constitutional bench judgment in CORE II (referred herein supra), the view taken by the Madras High Court can no longer be considered good law.
20. It is now settled by the Apex Court that the arbitrator’s ineligibility can be challenged at any stage, including execution proceedings or enforcement proceedings as the award itself is non est and does not have any recognition in law and consequently does not carry enforceability. Thus, when an Arbitrator who renders a decision, lacked the very jurisdiction to make the award on merits, then such an award is clearly one passed by the tribunal without having any jurisdiction. Even act of parties cannot cure such inherent lack of jurisdiction and in such circumstances, it was very well open to the petitioners to raise the objection with regard to unilateral appointment of Arbitrator, even at the stage of enforcement, during the Execution Proceedings.
21. Even with regard to the arguments of Mr.Arunachalam, learned counsel that an opportunity was there to the petition to challenge the award after coming to know about the same in the Execution Proceedings and having not filed a Section 34 petition, the right of the petition to raise the issue of unilateral appointment of Arbitrator in the Execution Petition is lost, I am unable to accept this line of argument. Admittedly, when the award is nullity, consequent to the appointment of the Arbitrator being unilateral, the plea of nullity can be raised at any stage of the proceeding including the Execution Proceeding. Therefore, the absence of a challenge under Section 34 will not forfeit the right of the petitioner/ award sufferer to raise the objection in the Execution Proceeding/ enforcement stage.
22. The Executing Court has rejected the objections of the petitioners on the ground that there was no proof that the Arbitrator was appointed unilaterally and without the consent of the Judgment Debtor. However, it is an admitted position that the Arbitrator in the present case was appointed unilaterally and therefore, the findings of the Executing Court are liable to be interfered with.
23. In fine, this Civil Revision Petition is allowed and the impugned order dated 06.04.2026 in EP No. 3 of 2024 is set aside. In view of the aforesaid discussion, the award dated 21.02.2022 in Arbitration Case No. VKT/SF/94/2021 is declared to be void and non est in the eye of law. This revision petition being allowed, however, will not come in the way of the respondent to initiate appropriate proceedings to recover the monies that may be lawfully due and payable to them, in a manner known to law. Consequently, connected Miscellaneous Petition is also closed. No costs.
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