Bombay High Court Appoints Arbitrator in Patkar House Redevelopment Dispute; Holds Forgery Allegations Requiring Evidence Cannot Defeat Prima Facie Arbitration Agreement at Referral Stage
Bombay High Court Appoints Arbitrator in Patkar House Redevelopment Dispute; Holds Mere Forgery Allegation Cannot Defeat Arbitration Where Prima Facie Agreement Exists
Facts
The dispute concerns redevelopment of “Patkar House.” On 18 December 2024, a Development Agreement was allegedly executed between Kiran Narendra Patkar, as Developer, and the owners, namely his father Late Narendra Dattaram Patkar and Respondent No.1, Milan Narendra Patkar. Under the agreement, the Applicant claimed to have received full, exclusive and irrevocable development rights over Patkar House, along with possession for redevelopment. The owners had allegedly agreed not to create third-party rights.
Late Narendra Patkar died on 14 April 2025. The Applicant contended that the rights and obligations under the Development Agreement, including its arbitration clause in Clause 22, continued to bind his estate and legal heirs.
The dispute arose when Respondent No.1 executed a Gift Deed dated 4 February 2026 in favour of Respondent No.2, Sujal Shantinath Mangudkar. The Applicant alleged that this violated the Development Agreement and adversely affected his redevelopment rights. Respondent No.2 thereafter allegedly attempted to enter the property and interfere with the Applicant’s possession and redevelopment rights.
The Applicant invoked arbitration through a notice dated 15 June 2026 under Section 21 of the Arbitration and Conciliation Act and nominated a former Bombay High Court Judge as Sole Arbitrator. The Respondents disputed the Development Agreement and did not consent to the nominated arbitrator.
Kiran Patkar consequently approached the Bombay High Court under Section 11(6) read with Section 11(12)(a) seeking appointment of a Sole Arbitrator.
Issues
The Court identified three principal questions:
- Whether sufficient prima facie material existed to establish an arbitration agreement between the Applicant and Respondent No.1.
- Whether Respondent No.1’s allegations that the Development Agreement was forged and fabricated required the High Court itself to finally decide genuineness before appointing an arbitrator.
- Whether Respondent No.2, who was a non-signatory and claimed independent rights over Shop Nos.1 and 2 under an earlier Gift Deed dated 23 January 2024, could be bound by the arbitration agreement.
Applicant’s Arguments
The Applicant argued that the Respondents had raised a general allegation of fraud and forgery merely to prevent the dispute from being referred to arbitration.
Importantly, his case did not depend solely upon the disputed Development Agreement.
He relied upon the registered Will dated 11 April 2025 of Late Narendra Patkar, which allegedly recorded that both co-owners of Patkar House had entered into the Development Agreement with the Applicant for redevelopment. The Will also referred to consideration payable by the Applicant to the grandchildren.
The Applicant also relied upon recital C of the subsequent Gift Deed dated 4 February 2026, arguing that it referred to the registered Will, which in turn referred to redevelopment by Kiran Patkar.
Accordingly, independent documents subsequent to the Development Agreement corroborated its existence and provided sufficient prima facie material for appointment of an arbitrator.
Respondents’ Arguments
Respondent No.1 completely denied executing the Development Agreement.
She contended that the document was unregistered and insufficiently stamped and alleged that neither she nor her late husband had signed it.
She also relied upon the circumstances surrounding her husband’s health. At the relevant time, Late Narendra Patkar was around 90 years old, frequently hospitalised, bedridden, had undergone partial removal of his foot because of gangrene and had limited mobility. He had studied only up to fourth standard in Marathi medium and was allegedly not sufficiently conversant with English to understand the agreement.
Respondent No.1 therefore alleged that the Development Agreement and arbitration agreement were forged or fabricated.
Respondent No.2 raised an additional objection. She relied upon an earlier registered Gift Deed dated 23 January 2024, under which she claimed ownership of Shop Nos.1 and 2 in Patkar House.
Since that Gift Deed predated the Development Agreement of 18 December 2024, she argued that she had already acquired independent rights in those shops and was neither a signatory nor a person claiming through the parties to the subsequent Development Agreement.
She therefore contended that disputes affecting her independent rights could not be referred to arbitration without her consent.
Analysis of the Law
Consent Remains the Foundation of Arbitration
The Court accepted the fundamental proposition that arbitration is based upon consent.
A person cannot be forced into arbitration simply because another party produces a document containing an arbitration clause.
Therefore, where execution itself is disputed and the arbitration agreement is alleged to be forged, the referral court cannot simply ignore the objection.
However, Section 11 does not ordinarily require the Court to conduct a full-fledged trial into signatures, handwriting, physical condition of parties, witnesses and circumstances surrounding execution.
The Court must determine whether there is some prima facie material from which the existence of an arbitration agreement can reasonably be seen.
Independent Documents Supported Prima Facie Existence
The Court found such material in the present case.
Apart from the Development Agreement itself, the Applicant relied upon the registered Will dated 11 April 2025, which allegedly recorded that the co-owners had entered into the Development Agreement for redevelopment of Patkar House.
The Will was particularly relevant because it came into existence after the alleged Development Agreement and referred to the very transaction which Respondent No.1 subsequently claimed never existed.
The subsequent Gift Deed of 4 February 2026 also contained a recital referring to that Will.
The Court considered these significant because they were independent documents that had not been prepared merely for the Section 11 proceedings. They made it difficult to conclude that there was “no material at all” supporting the Development Agreement.
Forgery Allegation Does Not Automatically Defeat Arbitration
The Court drew an important distinction between an allegation of forgery and proof of forgery.
Respondent No.1’s allegations concerning her husband’s age, medical condition, education, lack of English proficiency, disputed signatures and witnesses were serious and required examination.
But they remained disputed facts requiring evidence.
The Court held that refusing appointment merely because forgery was alleged would effectively require it to conduct a trial at the Section 11 stage.
The appropriate balance was to determine whether a real prima facie arbitration agreement existed, while leaving evidence-dependent questions for adjudication by the Tribunal.
The Court summarised the test clearly: an allegation that the arbitration agreement is forged must be considered as a jurisdictional objection, but the Section 11 application need not be rejected merely because such an allegation is raised. The material must make the non-existence of the arbitration agreement so clear that arbitration cannot be allowed to commence. That threshold was not met here.
Unregistered and Insufficiently Stamped Agreement
Respondent No.1 also argued that the Development Agreement was unregistered and insufficiently stamped.
The Court held that this could not conclusively defeat the existence of the arbitration agreement at the Section 11 stage.
Questions concerning registration, proper stamping and the legal consequences flowing from such defects were separate matters and could not transform the limited Section 11 inquiry into a comprehensive adjudication on enforceability of the entire Development Agreement.
Non-Signatory Respondent No.2
The Court separately considered Respondent No.2’s position.
It accepted that merely joining Respondent No.2 in a Section 11 application did not automatically make her a party to the arbitration agreement. Some legal basis was required for binding a non-signatory.
However, whether she was bound by the arbitration clause, whether she claimed through or under the parties, whether disputes concerning her shops arose from the Development Agreement, and the effect of her earlier Gift Deed involved mixed questions of law and fact.
Those questions could appropriately be considered by the Arbitral Tribunal under Section 16.
Crucially, the Court did not hold that Respondent No.2 was bound to arbitrate. Her jurisdictional objection was expressly preserved.
Precedent Analysis
Rajia Begum, 2026 SCC OnLine SC 135
The Respondents relied heavily upon Rajia Begum.
The Supreme Court had held that where the arbitration agreement itself is alleged to be forged or fabricated, the controversy goes to the root of arbitral jurisdiction, because a party can be subjected to arbitration only if it is shown, at least prima facie, that the party consented to arbitration.
Justice Amit Borkar accepted this principle but clarified its limits.
Rajia Begum does not mean that every allegation of forgery automatically stops arbitration. The question is whether the material before the referral court makes it clear that the party could not have entered into the arbitration agreement.
In the present case, the independent Will and subsequent Gift Deed supplied sufficient prima facie material to prevent such a conclusion.
Ajay Madhusudan Patel v. Jyotrindra S. Patel, (2025) 2 SCC 147
This Supreme Court authority was central to the Court’s approach.
It establishes that the Section 11(6) inquiry is confined to the existence of an arbitration agreement, while objections concerning existence and validity that depend upon evidence should ordinarily be left to the Arbitral Tribunal, which can rule upon its own jurisdiction.
The Court applied this principle to Respondent No.1’s forgery and execution objections.
SBI General Insurance Co. Ltd. v. Krish Spg., (2024) 12 SCC 1
The judgment referred to Krish Spg. for cautioning referral courts against entering the Arbitral Tribunal’s domain at the Section 11 stage.
An elaborate examination by the Court could leave a claimant remediless and undermine the statutory objective of expeditious disposal of Section 11 proceedings.
Cox & Kings Ltd. v. SAP India (P) Ltd., (2024) 4 SCC 1
For Respondent No.2’s non-signatory objection, the Court relied upon the principles in Cox & Kings, as subsequently explained in Ajay Madhusudan Patel.
Although the referral court may prima facie examine whether a non-signatory is a veritable party to the arbitration agreement, the complexity of such determination generally makes the Arbitral Tribunal the appropriate forum, including under Section 16.
Court’s Reasoning
The Court ultimately found that the Applicant had established a prima facie arbitration agreement with Respondent No.1.
Respondent No.1’s denial created a genuine factual controversy, but the material did not make non-existence of the agreement sufficiently clear to reject arbitration without evidence.
The registered Will and subsequent Gift Deed meant that the Applicant’s case was not based merely upon an isolated disputed Development Agreement.
Accordingly, a final determination regarding signatures, forgery, health and capacity of Late Narendra Patkar, witnesses and genuineness of execution would effectively amount to conducting a trial at the Section 11 stage.
The Court therefore held that these matters should remain open before the Tribunal.
Similarly, Respondent No.2’s non-signatory status and earlier ownership claims were not finally determined. The Tribunal was directed to consider whether she was bound by the arbitration agreement and the extent, if any, to which claims against her were arbitrable.
Conclusion
The Bombay High Court allowed the Section 11 application and appointed Mr. Ranjeev Carvalho, Advocate, as Sole Arbitrator to adjudicate disputes between the Applicant and Respondent No.1 arising from the Development Agreement dated 18 December 2024.
Importantly, the Court expressly left open before the Arbitrator all objections concerning:
- existence and execution of the Development Agreement;
- alleged forgery and fabrication;
- genuineness, validity and enforceability;
- stamping and registration;
- title and redevelopment rights;
- effect of the earlier Gift Deed; and
- whether Respondent No.2, as a non-signatory, was bound by the arbitration agreement.
The Applicant’s pending Section 9 petition was converted into an application under Section 17, to be decided by the Arbitral Tribunal. The parties were initially directed to bear arbitral costs and fees equally, subject to the final award on costs.
The Respondents sought a stay of the judgment, but the Court rejected the request for stay.
Case Details
Case: Kiran Narendra Patkar v. Milan Narendra Patkar & Anr.
Court: High Court of Judicature at Bombay, Ordinary Original Civil Jurisdiction, Commercial Division
Case Number: Commercial Arbitration Application (L) No. 23278 of 2026 with Commercial Arbitration Petition (L) No. 23009 of 2026
Neutral Citation: 2026:BHC-OS:19040
Judge: Justice Amit Borkar
Reserved On: 21 August 2026
Date: 27 August 2026
Subject: Section 11 appointment of arbitrator arising from Patkar House Development Agreement dated 18 December 2024.
Key Issue: Whether allegations that the Development Agreement and arbitration clause were forged required final determination by the High Court before appointment of an arbitrator.
Arbitrator Appointed: Mr. Ranjeev Carvalho, Advocate.
Result: Application allowed. Sole Arbitrator appointed; forgery, execution, validity, stamping, title and non-signatory objections left open for determination by the Arbitral Tribunal under Section 16. Section 9 petition converted into a Section 17 application; request to stay the judgment rejected
