Ankhim Holdings Pvt. Ltd vs Zaveri Construction Pvt. Ltd

REPORTABLE 2026 INSC 137 IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 779/2026 (Arising out of SLP (C) No. 11667/2024)

ANKHIM HOLDINGS PVT. LTD. & ANR. …Appellant(s)

VERSUS

ZAVERI CONSTRUCTION PVT. LTD. …Respondent(s)

O R D E R

1. Leave granted.

2. This appeal arises from the judgment and order passed by

the High Court of Bombay dated 12.04.2024 in Commercial

Arbitration Petition (L) No. 30650/2023 by which the petition

filed by the appellants herein before the High Court under

Section 15(2) of the Arbitration and Conciliation Act, 1996

(for short, “the Act, 1996”) came to be disposed of by

substituting the earlier Arbitrator appointed by the High

Court, however, with a rider that the arbitral proceedings

that took place on seven particular dates, i.e., from Signature Not Verified

17.03.2022 to 25.08.2022 could be said to be a nullity as Digitally signed by HARPREET KAUR Date: 2026.02.09 17:36:00 IST Reason: those proceedings were undertaken at the time when the

respondent company was under a moratorium as envisaged under

CIVIL APPEAL NO. 779/2026 2 Section 14 of the IBC, 2016.

3. The short facts giving rise to this appeal may be

summarized as under:-

(i) The appellants and respondent (now under

liquidation) entered into a partnership firm named “M/s

Anmol Alliance” to develop and construct an SRA project

of Andheri Shiv Shakti CHS Limited admeasuring 4514

square metres along with 203 tenements standing thereon

situated at CTS No. 195(pt) and 825(pt), Ambivali Village

at Indira Nagar, Jay Prakash Road, Andheri (West),

Mumbai.

(ii) It appears that disputes cropped up between the

appellants and the respondent. In such circumstances, the

appellants preferred an application under Section 9 of

the Act, 1996, i.e., Commercial Arbitration Petition

No.347/2019 against the respondent. Pursuant to the

filing of Section 9 petition, an interim arrangement was

worked out and based on the same, the parties proceeded

with the project.

(iii) On 09.07.2019, the Bombay High Court passed an

order in Commercial Arbitration Petition No.347/2019

referred to above accepting the minutes of order

recording them as consent terms between the parties.

(iv) The High Court proceeded to appoint Hon’ble Mr.

Justice J.N. Patel (former Chief Justice of the Calcutta

High Court) to act as the Arbitrator to arbitrate the

CIVIL APPEAL NO. 779/2026 3

disputes and differences between the parties.

(v) It appears from the materials on record that on

26.09.2019, the NCLT Mumbai passed an order in Company

Petition (I.B.) No.411/2019 admitting the respondent to

CIRP and imposing a moratorium under Section 14 of the

IBC.

(vi) On 03.11.2020, the appellants filed I.A. No.(L)

6167/2020 under Section 9 of the Act, 1996, before the

High Court whereby they sought to restrain the RP of the

respondent from obstructing the sale of certain flats and

further sought permission to sell those flats in the

light of the consent terms recorded in the order dated

09.07.2019 referred to above. The RP filed its written

submissions to oppose the reliefs which were prayed for

in I.A.(L) 6167/2020 referred to above.

(vii) On 14.10.2021, the appellants preferred one another

Section 9 petition, i.e., I.A. No.(L) 24302/2021 seeking

permission to execute the agreement for sale with respect

to flat numbers 1001, 1302 and 704, respectively.

(viii) On 15.03.2022, the High Court passed an order in

I.A. No.(L) 24302/2021 and I.A. No.(L) 6167/2020

respectively referred to above recording a finding that

the Interim Resolution Professional had become functus

officio and no order for liquidation was passed by the

NCLT.

(ix) The High Court proceeded to dispose of the Section 9

CIVIL APPEAL NO. 779/2026 4

petitions while granting liberty to the appellants herein

to move the applications under Section 17 of the Act,

1996, before the Arbitrator.

(x) In pursuance of the order dated 15.03.2022 referred

to above, the appellants herein preferred Section 17

applications on 17.03.2022 before the Arbitrator. The

Arbitrator proceeded to pass an order, scheduling the

hearing for Section 17 applications.

(xi) On 25.03.2022, the respondent preferred an

application under Section 16 of the Act, 1996, seeking to

challenge the jurisdiction of the Arbitral Tribunal on

the ground of the moratorium under Section 14 of the IBC.

(xii) By order dated 29.03.2022, the Arbitral Tribunal

rejected the Section 16 application referred to above,

filed by the IRP of the respondent, seeking stay of the

arbitration proceedings in light of the moratorium

imposed under Section 14 of the IBC.

(xiii) On 29.03.2022, by a separate order, the Arbitral

Tribunal proceeded to pass an order in I.A. No.(L)

24302/2021, permitting the appellants herein to execute

agreements for sale in respect of flat numbers 1001, 1302

and 704 respectively.

(xiv) On 20.04.2022, the Arbitral Tribunal passed an

order in I.A. No.(L) 6167/2020, permitting the appellants

to sell the flat numbers 907 and 908 respectively.

(xv) In pursuance of the orders dated 29.03.2022 and

CIVIL APPEAL NO. 779/2026 5

20.04.2022 respectively, the appellants between July,

2022 and February, 2023 entered into agreements for sale

with third parties for the flat numbers 907, 908, 1001,

1302 and 704 respectively. While we were recording the

facts as aforesaid, the learned counsel appearing for the

appellants brought to our notice that these flats

referred to above have not been sold.

4. On 26.08.2022, the NCLT proceeded to pass an order in

I.A. No.2278/2020 initiating liquidation proceedings against

the respondent.

5. On 24.04.2023, the respondent through the Liquidator

filed a Statement of Defence. On 24.04.2023, the Arbitral

Tribunal passed an order directing the Liquidator to seek

clarification from the High Court in respect of the

continuation of the Arbitration proceedings.

6. On 25.08.2023, the High Court passed an order dismissing

I.A. No.(L) 14336/2023 filed by the Liquidator seeking a

declaration that the disputes between the parties were non-

arbitrable.

7. On 11.10.2023, the Arbitral Tribunal passed an order

terminating the arbitration proceedings.

8. On 01.11.2023, the appellants herein filed Commercial

Arbitration Petition No.30650/2023 before the High Court

seeking appointment of substitute Arbitrator and for extension

of time for passing arbitral award.

CIVIL APPEAL NO. 779/2026 6

9. The High Court by its impugned judgment and order

appointed Hon’ble Mr. Justice R.M. Savant (Retired Judge of

the Bombay High Court) as sole arbitrator to adjudicate the

disputes and differences between the appellants and the

respondent. However, the High Court proceeded to observe the

all proceedings undertaken by the Arbitral Tribunal between

26.09.2019 and 26.08.2022 respectively being hit by the

moratorium could be said to be a nullity.

10. The relevant observations of the High Court read thus:-

“14] The submission of Ms. Singhania, by relying upon Section 12 prescribing timeline for completion of IRP and her submission that the CIRP shall be completed within the period of 180 days and since there is no extension sought by the RP, it has come to end, do not deserve any consideration in light of the proviso to sub section (4) of Section 14. The effect of proviso is crystal clear, that the order of moratorium shall have effect till completion of CIRP, but during the CIRP period, if the adjudicating authority approves the resolution plan under sub section (1) of Section 31, or if it passes the order of liquidation under Section 33, the moratorium shall ceased to have effect, either from the date of such approval or liquidation order, as the case may be.

The order passed by the NCLT on 26.08.2022 clearly indicates that since resolution plan could not be approved, and CoC resolved to liquidate the company, the Liquidator is appointed under Section 34 and a fresh moratorium is declared to have commenced under Section 33 (5).

15] In the wake of aforesaid situation, which emerges from the facts placed before me, the moratorium imposed under Section 14 by order dated 26.09.2019, continued to be in operation till 26.08.2022, when it is declared to cease to have its effect and the company is put into fresh moratorium under Section 33(5) of the IBC, by the NCLT.

CIVIL APPEAL NO. 779/2026 7

After this date, the ongoing arbitration proceedings which were in abeyance can continue, but all those which are held between 26.09.2019 and 26.08.2022, are hit by the moratorium, and this remains the position, despite this Court on 15.03.2022 permitting its revival, as it was misled to believe that on 15.03.2022, the IP has become functus officio. It is in fact only on 26.08.2022, the Tribunal appointed the Liquidator and directed him to proceed with the process of liquidation in the manner laid down in Chapter 3 of Part II of the IBC, 2016, when the Interim Application filed by the RP for liquidation of the Corporate Debtor was allowed.

16] It is for the aforesaid reason, the proceedings held by the Arbitral Tribunal on the 7 dates i.e. from 17.03.2022 to 25.08.2022, are liable to be declared as nullity, but needless to state that the proceedings can be revived before the substituted arbitrator, as now there is no embargo in continuing the arbitration proceedings and by conferring the liberty upon the parties to revive its application and by permitting the arbitral tribunal to pass appropriate orders thereupon including application filed under Section 17 by the Petitioner, I deem it appropriate to substitute the Arbitrator who has terminated the proceedings.”

11. In such circumstances referred to above, the appellants

are here before this Court with the present appeal.

SUBMISSIONS ON BEHALF OF THE APPELLANTS :-

12. Mr. Ashim Sood, the learned counsel appearing for the

appellants would submit that the High Court in exercise of its

jurisdiction under Section 15(2) of the Act, 1996, could not

have declared the proceedings undertaken by the Arbitral

Tribunal between 17.03.2022 and 25.08.2022 as a nullity on the

ground that those proceedings were undertaken while the

CIVIL APPEAL NO. 779/2026 8

respondent was under a moratorium under Section 14 of the IBC.

He would submit that all that was required was to substitute

the Arbitrator.

13. He would further submit that the jurisdiction of the High

Court under Section 15(2) of the Act, 1996, is circumscribed

compared to the jurisdiction that may be exercised under

Section 11 of the Act, 1996.

14. Mr. Sood invited our attention to the language employed

under sub-section (2) of Section 15 of the Act, 1996. He laid

much emphasis on the expression “a substitute arbitrator shall

be appointed according to the rules that were applicable to

the appointment of the arbitrator being replaced”.

15. By relying on the expression referred to above, Mr. Sood

would submit that the powers of the Court under Section 15(2)

of the Act must be defined with reference to the Court’s

powers under Section 11 of the Act, 1996.

16. To fortify the aforesaid submission, he placed reliance

on the decision of this Court in the case of Yashwith

Constructions Pvt. Ltd. v. Simplex Concrete Piles India Ltd. &

Anr. reported in (2006) 6 SCC 204.

17. Thereafter, Mr. Sood invited our attention to sub-section

(4) of Section 15 of the Act, 1996. Relying on the same, he

would submit that the plain reading of the provision itself

makes it clear that any order or ruling of the Arbitral

Tribunal prior to the replacement of an Arbitrator under

Section 15 would not be rendered invalid, solely because of

CIVIL APPEAL NO. 779/2026 9

some change in the composition of the Arbitral Tribunal,

unless otherwise agreed between the parties.

18. Mr. Sood submitted that if what has been held by the High

Court is to be given effect, it will have its own implications

in so far as all those flats which have already stood

transferred to the third parties.

19. In the last, Mr. Sood submitted that the High Court in

exercise of its jurisdiction under the Act, 1966, could not

have nullified orders which it had otherwise no jurisdiction

to consider. In this context, the learned counsel relied on

the decision of this Court in Official Trustee v. Sachindra

Nath Chatterjee, reported in 1968 SCC Online SC 103.

20. In such circumstances referred to above, the learned

counsel prayed that there being merit in the appeal, the same

may be allowed appropriately.

SUBMISSIONS ON BEHALF OF THE SBI :-

21. Mr. Tushar Mehta, the leaned Solicitor General assisted

by the learned counsel, Mr. Sanjay Kapur appeared for the

State Bank of India. According to Mr. Mehta, the flats

referred to above were mortgaged with the Bank. In such

circumstances, Mr. Mehta would submit that the interest of the

Bank be protected.

22. At this stage, Mr. Sood, on instructions from his client,

made a statement that the flats which have been referred to

above were never mortgaged with the State Bank at any point of

CIVIL APPEAL NO. 779/2026 10

time. There was no charge of the Bank over those flats.

SUBMISSIONS ON BEHALF OF THE OFFICIAL LIQUIDATOR :-

23. We also heard Mr. Santosh Kumar, the learned counsel

appearing for the Liquidator. According to the learned counsel

for the Liquidator, no error, not to speak of any error of law

could be said to have been committed by the High Court in

passing the impugned order.

24. He would submit that the High Court is justified in

taking the view that all the proceedings/transactions which

took place between 17.03.2022 and 25.08.2022, i.e., during the

moratorium period could be said to be a nullity.

25. He seeks to rely upon the provisions of Section 14(4) of

the IBC including the proviso to sub-section (1) of Section 23

of the IBC.

ANALYSIS :-

26. Having heard the learned counsel appearing for the

parties and having gone through the materials on record, the

only question that falls for our consideration is whether the

High Court was justified in saying that the proceedings held

by the Arbitral Tribunal on the seven relevant dates, i.e.,

from 17.03.2022 to 25.08.2022 were liable to be declared as

nullity on the premise that those proceedings were undertaken

during the period of moratorium under Section 14 of the IBC.

CIVIL APPEAL NO. 779/2026 11

27. We must look into the provisions of Section 15 of the

Act, 1996. Section 15 reads thus:-

“15. Termination of mandate and substitution of arbitrator.—(1) In addition to the circumstances referred to in section 13 or section 14, the mandate of an arbitrator shall terminate—

(a) where he withdraws from office for any reason; or

(b) by or pursuant to agreement of the parties.

(2) Where the mandate of an arbitrator terminates, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced.

(3) Unless otherwise agreed by the parties, where an arbitrator is replaced under sub-section (2), any hearings previously held may be repeated at the discretion of the arbitral tribunal. (4) Unless otherwise agreed by the parties, an order or ruling of the arbitral tribunal made prior to the replacement of an arbitrator under this section shall not be invalid solely because there has been a change in the composition of the arbitral tribunal.”

28. A bare perusal of Section 15 referred to above indicates

that Section 15(2) is not a standalone provision and should be

read with Section 15(3) and Section 15(4) respectively.

29. Section 15(2) states that when mandate of an arbitrator is

terminated under Section 14, a substitute arbitrator has to be

appointed. It further states that such an appointment must be

made according to the rules that were made applicable to the

appointment of the arbitrator being replaced.

30. Further, Section 15(3) provides the course of action

after the arbitrator has been replaced under sub-section (2).

The essential ingredients of the provision are thus:-

CIVIL APPEAL NO. 779/2026 12

i. Any hearing previously held may be repeated; ii. The repetition of the hearing is at the discretion

of the arbitral tribunal;

iii. However, such repetition of the hearing is subject

to the agreement between the parties;

If the parties agree for repetition of hearing, the term

“may” transforms into “shall”. Whereas, if the parties agree

for non-repetition of hearing, the term “may” transforms into

“shall not”. In case the parties fail to arrive at a

conclusion, the arbitral tribunal would decide whether the

hearing already conducted before his substitution would be

repeated.

31. With a view to dispel any doubt and lend clarity, we deem

it appropriate to state that the parties can come to an

agreement on the question of re-hearing either prior to the

stage of substitution being reached or after the arbitrator

has been substituted.

32. At this stage, we must look into the dictum as laid by

this Court in Yashwith Constructions Pvt. Ltd. (supra). In the

said case, this Court held that under Section 15(2) of the

Act, 1996, the appointment of the substitute Arbitrator must

be in accordance with the original agreement or provision

applicable to the appointment of the Arbitrator at the initial

stage.

33. We quote the relevant observations made by this Court in

Yashwith Constructions Pvt. Ltd. (supra):- CIVIL APPEAL NO. 779/2026 13

“4. In our view, the learned Chief Justice and the Division Bench have rightly understood the scope of Section 15 of the Act. When the arbitrator originally appointed in terms of the arbitration agreement withdrew for health reasons, the Managing Director, as authorised originally by the arbitration agreement, promptly appointed a substitute arbitrator. It is true that in the arbitration agreement there is no specific provision authorising the Managing Director to appoint a substitute arbitrator if the original appointment terminates or if the originally appointed arbitrator withdraws from the arbitration. But, this so-called omission in the arbitration agreement is made up by the specific provision contained in Section 15(2) of the Act. The withdrawal of an arbitrator from the office for any reason is within the purview of Section 15(1)(a) of the Act. Obviously, therefore, Section 15(2) would be attracted and a substitute arbitrator has to be appointed according to the rules that are applicable for the appointment of the arbitrator to be replaced. Therefore, what Section 15(2) contemplates is an appointment of the substituted arbitrator or the replacing of the arbitrator by another according to the rules that were applicable to the appointment of the original arbitrator who was being replaced. The term “rules” in Section 15(2) obviously referred to the provision for appointment contained in the arbitration agreement or any rules of any institution under which the disputes were referred to arbitration. There was no failure on the part of the party concerned as per the arbitration agreement, to fulfil his obligation in terms of Section 11 of the Act so as to attract the jurisdiction of the Chief Justice under Section 11(6) of the Act for appointing a substitute arbitrator. Obviously, Section 11(6) of the Act has application only when a party or the person concerned had failed to act in terms of the arbitration agreement. When Section 15(2) says that a substitute arbitrator can be appointed according to the rules that were applicable for the appointment of the arbitrator originally, it is not confined to an appointment under any statutory rule or rule framed under the Act or under the scheme. It only means that the appointment of the substitute arbitrator must be done according to the original agreement or provision applicable to the appointment of the arbitrator at the initial stage. We are not in a position to agree with the contrary view taken by

CIVIL APPEAL NO. 779/2026 14

some of the High Courts.”

(Emphasis supplied)

34. Since the appointment in the case at hand was made in

terms of the Act, 1996, the original provision applicable to

the appointment of the arbitrator would be Section 11 of the

Act, 1996.

35. The position of law as regards Section 11 is well

settled. It affords the Court with a very limited scope

essentially requiring the Court only to make prima facie

finding that an arbitration agreement exists.

36. The High Court could be said to have travelled beyond its

vested jurisdiction including by subsuming jurisdictions

expressly made unavailable to it including Section 37 of the

Act, 1996.

37. Having regard to the plain language of sub-section (2) and

sub-section (4) of Section 15 respectively referred to above,

we are in agreement with the submission of Mr. Sood, the

learned counsel appearing for the appellants that the High

Court exceeded in its jurisdiction while taking the view that

the proceedings held by the Arbitral Tribunal between

17.03.2022 and 25.08.2022 are a nullity because of the

operation of moratorium.

38. In Interplay Between Arbitration Agreements under

Arbitration and Conciliation Act, 1996 & Stamp Act, 1899, In

re, (2024) 6 SCC 1, a five-Judge Bench of this Court held

that:-

CIVIL APPEAL NO. 779/2026 15

“92. The Arbitration Act is a self-contained code inter alia with respect to matters dealing with appointment of arbitrators, commencement of arbitration, making of an award and challenges to the arbitral award, as well as execution of such awards. [ Pasl Wind Solutions (P) Ltd. v. GE Power Conversion (India) (P) Ltd., (2021) 7 SCC 1 : (2021) 3 SCC (Civ) 702; Kandla Export Corpn. v. OCI Corpn., (2018) 14 SCC 715 : (2018) 4 SCC (Civ) 664]. When a self-contained code sets out a procedure, the applicability of a general legal procedure would be impliedly excluded. [Subal Paul v. Malina Paul, (2003) 10 SCC 361]. Being a self-contained and exhaustive code on arbitration law, the Arbitration Act carries the imperative that what is permissible under the law ought to be performed only in the manner indicated, and not otherwise. Accordingly, matters governed by the Arbitration Act such as the arbitration agreement, appointment of arbitrators and competence of the Arbitral Tribunal to rule on its jurisdiction have to be assessed in the manner specified under the law. The corollary is that it is not permissible to do what is not mentioned under the Arbitration Act. Therefore, provisions of other statutes cannot interfere with the working of the Arbitration Act, unless specified otherwise.”

(Emphasis supplied)

39. We may refer to the decision in Hindustan Construction

Co. Ltd. v. Bihar Rajya Pul Nirman Nigam Ltd., reported in

2025 SCC OnLine SC 2578, wherein while dealing with an

application seeking review of appointment of arbitrator made

after extending the mandate of the arbitrator twice, the High

Court directed the arbitrator not to continue the arbitral

proceedings. This was in view of the fact that the arbitrator

was appointed as a President of the State Consumer Dispute

Redressal Commission. The Court held that when an arbitrator

is unable to act owing to recusal, the proper course would be

to invoke Section 15(2) and appoint a substitute arbitrator to

CIVIL APPEAL NO. 779/2026 16

continue from the existing stage of the proceedings. The

observations of the Court succinctly capture that substitution

preserves continuity, and prior proceedings remain valid

unless either party objects. The observations read thus:-

“16. Once the High Court had accepted the existence of a valid arbitration agreement and appointed an arbitrator, its later interference on the same question of the validity of Clause 25 amounted, in substance, to an appeal disguised as supervisory review. If the arbitrator had become unable to act owing to recusal or disqualification, the proper course was to invoke Section 15(2) and appoint a substitute arbitrator to continue from the existing stage of the proceedings.

17. Sections 15(1) and 15(2) clearly provide that an arbitrator's mandate terminates upon withdrawal or by agreement of the parties, and that a substitute arbitrator must be appointed following the same procedure as the original appointment. The judgments in Yashwith Constructions (P) Ltd. v. Simplex Concrete Piles (India) Ltd.36, ACC Ltd. v. Global Cements Ltd.37, and Union of India v. Pradeep Vinod Construction Company38, reaffirm that such substitution preserves continuity, and prior proceedings remain valid unless either party objects. In light of the same, the High Court's decision to suspend the arbitration altogether, instead of ordering substitution, was contrary to settled law. The exercise of jurisdiction therefore calls for correction under Article 136 of the Constitution. Accordingly, the impugned judgment and order of the High Court is set aside.”

(Emphasis supplied)

40. The aforesaid dictum of law makes it clear that where the

Act, 1996, provides procedures for assailing orders, or

prohibits such orders of a Tribunal from being assailed, then

no alternate procedure can be adopted by a court whose

jurisdiction derives from a provision of the Act, 1996,

itself. Section 37 of the Act, 1996, provides for appeals

CIVIL APPEAL NO. 779/2026 17

against orders under Section 17 of the Act, 1996, and also

against orders accepting pleas under Section 16 of the Act,

1996, though orders rejecting Section 16 applications are not

subject to judicial interference under the Act, 1996.

41. Following the dictum as laid in Interplay (supra), it

would be impermissible for a court acting under Section 15(2)

to adopt a procedure whereby it exercises jurisdiction barred

to it by the Act, 1996 as has occurred in the present case:

(i) the High Court has set aside an order rejecting an

application under Section 16 – which the Act, 1996, does not

countenance in any provision; (ii) the High Court has set

aside Section 17 orders but not in a proceeding under Section

37; and (iii) the High Court has set aside further procedural

orders, which again is not a power vested in any court

exercising jurisdiction under the Act, 1996.

42. We also find merit in the submission of Mr. Sood that the

High Court is not empowered to nullify orders which it had no

jurisdiction to consider. In this context, we may refer to and

rely upon the decision of this Court in Official Trustee

(supra). The relevant observations read thus:-

“15. From the above discussion it is clear that before a Court can be held to have jurisdiction to decide a particular matter it must not only have jurisdiction to try the suit brought but must also have the authority to pass the orders sought for. It is not sufficient that it has some jurisdiction in relation to the subject-matter of the suit. Its jurisdiction must include the power to hear and decide the questions at issue, the authority to hear and decide the particular controversy that has arisen between the parties…

CIVIL APPEAL NO. 779/2026 18

x x x x

17.[…]The jurisdiction conferred on the court under Section 34 is a limited jurisdiction. Under that provision, the court has not been conferred with overall jurisdiction in matters arising under a Trust deed. The statute has prescribed what the court can do and inferentially what it cannot do.

From the fact that the court has been conferred power to grant only certain reliefs it follows as a matter of law that the court has been prohibited from granting any other relief.[…]

X x x x

29. From whatever angle we may examine the validity of the order made by Ramfry, J., it appears clear to us, that the said order was outside the jurisdiction of the learned judge. It was not merely a wrong order, or an illegal order, it was an order which he had no competence to make. It is not merely an order that he should not have passed but it is an order that he could not have passed and therefore a void order.”

(Emphasis supplied)

43. There is no doubt that the High Court assumed and

exercised power which has clearly not been conferred by the

Act, 1996, more particularly, wherein the statute itself

envisages minimal judicial intervention.

44. We are of the view that the proper and legal course for

the High Court acting under Section 15(2) of the Act, 1996,

should have been to appoint a substitute arbitrator to

continue from the existing stage of the proceedings. The

impugned part of the judgment rendered by the High Court could

be said to have resulted in a situation where the arbitration

proceedings would have to be restarted de novo and the same

would have a direct impact on the sale of flats made pursuant

CIVIL APPEAL NO. 779/2026 19

to the Section 17 orders of the Tribunal. This could be both

inequitable and inefficient. This Court has time and again

said that the object of speedy resolution of disputes by

arbitration would best be subserved by a substitute arbitrator

continuing at the point at which the earlier arbitrator has

left off. [See: Hindustan Construction Co. Ltd. v. Bihar Rajya

Pul Nirman Nigam Ltd., 2005 SCC OnLine SC 2578; Shailesh

Dhairyawan v. Mohan Balkrishna Lulla, (2016) 3 SCC 619]

45. For all the foregoing reasons, we are of the view that

the part of the impugned order by which the High Court

declared the proceedings undertaken between 17.03.2022 and

25.08.2022 as a nullity deserves to be interfered with.

46. In the result, this appeal succeeds in part. The impugned

order to the extent it says that the proceedings held by the

Arbitral Tribunal on the seven dates, i.e., from 17.03.2022 to

25.08.2022, are a nullity is hereby set aside.

47. Considering the long lapse of time and also the fact that

third party rights have been created (home buyers rights have

come into play) we, in exercise of our jurisdiction under

Article 142 of the Constitution of India declare these

transactions to be lawfully valid.

48. The impugned judgment and order of the High Court stands

modified to the aforesaid extent.

49. The appeal stands disposed of accordingly.

CIVIL APPEAL NO. 779/2026 20

50. Pending application(s), if any, also stand disposed of.

………………………………………….J. (J.B. PARDIWALA)

………………………………………….J. (K.V. VISWANATHAN)

NEW DELHI;

FEBRUARY 04, 2026.

CIVIL APPEAL NO. 779/2026