SLP(C) Nos. 7455-7456/2023

REVISED

ITEM NO.17 COURT NO.7 SECTION IV-B

S U P R E M E C O U R T O F I N D I A

RECORD OF PROCEEDINGS

Petition for Special Leave to Appeal (C) Nos. 7455-7456/2023

(Arising out of impugned final judgment and order dated 23-01-2023

in ARBC No. 216/2021 23-01-2023 in ARBC No. 220/2021 passed by the

High Court Of Punjab & Haryana At Chandigarh)

CAREER INSTITUTE EDUCATIONAL SOCIETY Petitioner(s)

VERSUS

OM SHREE THAKURJI EDUCATIONAL SOCIETY Respondent(s)

(FOR ADMISSION and I.R.)

Date : 24-04-2023 These matters were called on for hearing today.

CORAM :

HON'BLE MR. JUSTICE SANJIV KHANNA

HON'BLE MR. JUSTICE M.M. SUNDRESH

For Petitioner(s)

Mr. Rajive Bhalla, Sr. Adv.

Mr. Amit Aggarwal, Adv.

Mr. Sumeir Ahuja, Adv.

Mr. Deepak Samota, Adv.

Mr. Yajur Bhalla, Adv.

Mr. Jaisurya Jain, Adv.

Mr. Ashish Vajpayee, Adv.

Ms. Akansha Gulati, Adv.

Ms. Ragini Sharma, Adv.

Mr. Shubham Bhalla, AOR

For Respondent(s)

Ms. Pinki Aggarwal, Adv.

UPON hearing the counsel the Court made the following

O R D E R

We do not find any merit in the present special leave

petitions and hence, the same are dismissed.

However, we would like to record some reasons for dismissal of

the present special leave petitions.

Digitally signed by

BABITA PANDEY

Date: 2023.05.06

13:58:19 IST

Reason:

Signature Not Verified

SLP(C) Nos. 7455-7456/2023

The judgment in Vidya Drolia & Ors. vs. Durga Trading

Corporation¹ did not examine and decide the issue of effect of

unstamped or under-stamped underlying contract on the arbitration

agreement. As this issue and question has not been decided in Vidya

Drolia (supra), the decision is not a precedent on this question.

Vidya Drolia (supra) did refer to the judgment in the case of

Garware Wall Ropes Limited vs. Coastal Marine Constructions and

Engineering Limited², but in a different context, as is evident

from paragraphs 146 and 147.1 of the judgment in Vidya Drolia

(supra), which are reproduced below:

“146. We now proceed to examine the question, whether

the word "existence" in Section 11 merely refers to

contract formation (whether there is an arbitration

agreement) and excludes the question of enforcement

(validity) and therefore the latter falls outside the

jurisdiction of the court at the referral stage. On

jurisprudentially and textualism it is possible to

differentiate between existence of an arbitration

agreement and validity of an arbitration agreement.

Such interpretation can draw support from the plain

meaning of the word "existence". However, it is

equally

possible,

jurisprudentially

and

on

contextualism, to hold that an agreement has no

existence if it is not enforceable and not binding.

Existence of an arbitration agreement presupposes a

valid agreement which would be enforced by the court

by relegating the parties to arbitration. Legalistic

and plain meaning interpretation would be contrary to

the contextual background including the definition

clause and would result in unpalatable consequences.

A reasonable and just interpretation of "existence"

requires understanding the context, the purpose and

the relevant legal norms applicable for a binding and

enforceable arbitration agreement. An agreement

evidenced in writing has no meaning unless the

parties can be compelled to adhere and abide by the

terms. A party cannot sue and claim rights based on

an unenforceable document. Thus, there are good

reasons to hold that an arbitration agreement exists

only when it is valid and legal. A