Dhanwant Lal Gupta vs Bharat Sanchar Nigam Ltd.

1. Post nomination by Hon'ble The Chief Justice on 24.2.2026, the matter is before this Court.

2. Heard Sri Krishna Agarawal, learned counsel for the applicant and Sri Ravi Ranjan, learned counsel for the opposite party.

3. Since counter affidavit and rejoinder affidavit have been exchanged between the parties and they do not propose to file any further affidavit, with the consent of the parties, the petition is being decided at the fresh stage.

4. The relief claimed in the present case is to appoint a sole arbitrator, preferably a retired Hon'ble Judge of this Court, for settlement of disputes between the parties in terms of Section 11(4) of the Arbitration and Conciliation Act, 1996.

5. The case of the applicant/petitioner is that the father of the petitioner, namely, Late Chhote Lal Gupta had desired for letting out the subject premises bearing No. 113 (new No. 356/5), Shiv Kuti, Allahabad vide circulate newspaper on 20.6.1996. As per the applicant/petitioner, the opposite party was leased out the demised premises and an agreement to the same stood executed on 18.3.1997 and the monthly rent whereof was Rs. 15,715/-. As per the petitioner dispute and differences stood arose with respect to payment of the rent and the matter travelled to this Court in Arbitration and Conciliation Application under Section 111(4) No. 9 of 2015 (Dhanwant Lal Gupta and others vs. BSNL and others) in which on 9.9.2025 the following order has been passed:- "1. Office has placed on record the consent letter received from the arbitrator.

2. Pursuant to the order passed on 08.08.2019, the proposed arbitrator has given his consent in terms of Section 11 (8) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) to act as an arbitrator.

3. Accordingly, Mr. Justice Ravindra Nath Kakkar, Retd. Judge of this Court, residing at A-7, IV Floor, High Rise Building, Stanley Road, Allahabad, Uttar Pradesh (Mob No.7310434417) is appointed as an arbitrator to enter upon the reference, and adjudicate the dispute in accordance with provisions of Act.

4. The arbitrator shall be entitled to fees, in accordance with the provisions of fourth schedule inserted by Act No.3 of 2016. The expenses shall be borne equally by the parties.

5. The application under Section 11 of the Act thus, stands allowed."

6. However, according to the applicant/petitioner since there exists agreement, the dispute and differences between the parties with respect to the payment of rent and other aspects, so an application came to be preferred for appointment of an arbitrator. As the arbitrator was not appointed the present application under Section 11(6) of the Arbitration and Conciliation Act, 1996 came to be preferred, seeking a direction to appoint a sole arbitrator in terms of the agreement so entered into between the parties. This Court entertained the petition on 8.12.2025 seeking a response. Counter affidavit and rejoinder affidavit have been exchanged.

7. Learned counsel for the petitioner has sub to argue that in view of the agreement so executed between the father of the applicant, namely, Late Chhote Lal Gupta on one hand and the opposite party on the other hand on 18.3.1997, in case of doubts and dispute and differences, the matter is to be referred to the sole arbitrator of Director General P&T and once the arbitrator has not been appointed, thus the circumstances constrained the applicant to approach this Court for appointment of the arbitrator. Submission is that the dispute is arbitrable and within the limitation and thus in view of the existence of the dispute, the matter needs to be referred for arbitration while appointing an arbitrator.

8. Countering the said submission, Sri Ravi Ranjan, learned counsel for the opposite party, on the other hand, submits that there happens to be no privity of contract between the applicant herein and the opposite party, particularly when post demise of the father of the applicant, there is no agreement existing, thus arbitrator cannot be appointed. It is further contended that the property in question which was let out has already been vacated and there is nothing on record to show that who are the legal heirs of the deceased and in case the matter stands referred to arbitration, then it would create complications in that regard. He further submits that even the interest of bank is also involved as the father of the applicant was a borrower and restitution proceedings are also going on in that regard against the earlier award. Reference has also been made to the averments in paragraphs No. 10, 11, 12 of the counter affidavit which are quoted herein under:- "10. That, in reply to the contents of paragraph no. 18 of the affidavit, it is submitted that mere perusal of the award at Item No. 4 it is specifically mentioned that "Executive Authority is directed to ensure the payment of awarded amount subject to production of succession certificate."

It is also relevant to mention here that against the aforesaid award dated 15.04.2022 after duly receiving copy of the arbitral award, Dhanwant Lal Gupta had challenged the aforesaid arbitral award before the Commercial Court, Prayagraj by way of filing of an application under Section 34 of Arbitration and Conciliation Act, 1996. The respondent department have duly appeared in the aforesaid proceeding and filed their reply and thereafter at the time of final arguments, the applicant withdrew the application from Commercial Court, Prayagraj, which was voluntarily withdrawn by the applicants during the course of hearing. Therefore, the arbitral award attained finality and has been stands binding on both the parties. It is further submitted that after the knowledge of demise of Chhotey Lal Gupta, the respondent department demanded succession certificate for payment of lease rent to the successors of the original landlord. It is also relevant to mention here that till date the applicants have yet not obtained the succession certificate from the competent court but wants to get lease rent of the premises from the respondent department, for which present application for appointment of arbitrator under Clause 6 of the agreement dated 18.03.1997 has been filed by the applicants, which is not maintainable, as the subject matter was between Chhotey Lal Gupta and respondent department not with the present applicants.

It will also be relevant to mention here that once the award has been passed and attained finality, the same cannot be reopened or referred through arbitration between the same parties. 11. That, in reply to the contents of paragraph no. 19 of the affidavit, it is submitted that the facts mentioned in preceding paragraphs of this counter affidavit regarding challenging the award dated 15.04.2022 by filing of application under Section 34 of the Arbitration and Conciliation Act, 1996 before the Commercial Court, Prayagraj and subsequently the same has been withdrawn by the applicants, but the same has not been disclosed by the applicants. So far as the pendency of Execution Petition No. 14 of 2025 before the Commercial Court Prayagraj is concerned, the department has filed their objection. Apart from it, an impleadment application has been filed on behalf of Indian Bank erstwhile Allahabad Bank as defendant no.2 because of the fact that Chhotey Lal Gupta, father of the decree holder Dhanwant Lal Gupta being Managing Director of M/s. Vidya Packaging Industries Private Limited had availed financial assistance from the applicant bank in his life time and the property in question under i.e. House No. 356/113 Shivkuti, Prayagraj was also mortgaged by him to the bank and the bank was not a party in the arbitral proceedings, but its direct legitimate legal interest was involved in the aforesaid proceedings.

The Assistant General Manager, Indian Bank has also intimated the Assistant General Manager (Planning), Bharat Sanchar Nigam Limited vide its letter dated 26.11.2025 regarding payment of arrears of rent amount of the premises in question, wherein the bank has taken symbolic objection of the secured assets i.e. House No. 356/113, Shivkuti, Prayagraj and SA No. 13 has already been dismissed by the Hon'ble D.R.T. Allahabad. As such, the mortgager or his legal claimants have no right regarding said property in any manner (Para 8 and 9 of the letter). 12. That, in reply to the contents of paragraph no. 20 of the affidavit, it is incorrect to suggest that the department has not reply to the letters mentioned in para under reply. It is submitted here that letter dated 15.03.2024 is addressed to some bank not pertain to respondent department. The department has already replied relevant letters vide reply dated 28.03.2025 and 31.7.2025."

9. In rejoinder, Sri Krishna Agarawal has relied upon the judgements of the Hon'ble Apex Court in Rahul Verma and others vs. Rampat Lal Verma and others; Petition for Special Leave to Appeal (C) No. 4330 of 2025, decided on 21.2.2025 and V.K. John vs. S. Mukanchand Bothra and Huf (died) represented by LRS. and others; Civil Appeal No. Nill of 2026 'Special Leave Petition (Civil) No. 16162 of 2023'. According to it the applicant herein is the legal heir and the questions which the counsel for the opposite party is raising can be raised before the arbitrator in that regard and the same cannot be raised at this stage once an application u/s 11 of the Act, 1996 is being decided.

10. I have heard the submissions so made across the Bar and perused the records carefully.

11. Plainly and simply, the bone of contention between the parties is whether the dispute and differences which is alleged to have occurred is arbitrable or not. As the matter of fact earlier also the dispute and differences stood arisen with relation to the payment of rent and the ancillary aspects and the very same applicant, who is before this Court today, had preferred Arbitration and Conciliation Application u/s 111(4) of the Act bearing No. 9 of 2015 in which an arbitrator was appointed. Further the Court finds that there happens to be an agreement between the father of the applicant and the opposite party dated 18.3.1997, providing for arbitration.

12. The question is whether the legal heir being the son can be said to be a party to the arbitration being a legal heir, post demise of the signatory of the agreement. The answer to the same would obviously be the provision contained under Section 2(g) of the Act, 1996 which deals with legal representation:-

"2(g) "legal representative" means a person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased, and, where a party acts in a representative character, the person on whom the estate devolves on the death of the party so acting."

13. Furthermore the said question came up for consideration before the Hon'ble Apex Court in the case of Rahul Verma (supra) wherein in paragraphs No. 7, 8, 9, 10 and 11 the following was observed:- " 7. Having gone through the materials on record, two questions fall for our consideration: (i) Whether the legal heirs of a deceased partner in a partnership firm, being non-signatories to the partnership deed and in the absence of their explicit consent, can still be bound by the arbitration agreement prescribed therein? (ii) Whether the right to sue for the rendition of accounts survive to the legal heirs of the deceased partner, entitling them to invoke the arbitration clause in the partnership deed? 8. The decision in the case of Ravi Prakash Goel v. Chandra Prakash Goel & Anr., reported in (2008) 13 SCC 667, squarely covers the facts of the present case. This Court held that an arbitration agreement does not cease to exist on the death of any party and the arbitration agreement can be enforced by or against the legal representatives of the deceased. The Court emphasized on the definition of a 'legal representative' under Section 2(1)(g) of the Act of 1996 to hold that an arbitral agreement and the award is enforceable by or against the legal representatives of the deceased.

The relevant observations are reproduced hereinbelow:- "18. It is clear from Section 40 of the Arbitration Act that an arbitration agreement is not discharged by the death of any party thereto and on such death it is enforceable by or against the legal representatives of the deceased, nor is the authority of the arbitrator revoked by the death of the party appointing him, subject to the operation of any law by virtue of which the death of a person extinguishes the right of action of that person. 19. Section 2(1)(g) defines "legal representative" which reads thus: "2. (1)(g) 'legal representative' means a person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased, and, where a party acts in a representative character, the person on whom the estate devolves on the death of the party so acting;" 20. The definition of "legal representative" became necessary because such representatives are bound by and also entitled to enforce an arbitration agreement. Section 40 clearly says that an arbitration agreement is not discharged by the death of a party.

The agreement remains enforceable by or against the legal representatives of the deceased. In our opinion, a person who has the right to represent the estate of the deceased person occupies the status of a legal person (sic representative). Section 35 of the 1996 Act which imparts the touch of finality to an arbitral award says that the award shall have binding effect on the "parties and persons claiming under them". Persons claiming under the rights of a deceased person are the personal representatives of the deceased party and they have the right to enforce the award and are also bound by it. The arbitration agreement is enforceable by or against the legal representative of a deceased party provided the right to sue in respect of the cause of action survives.

xxx 27. We are of the opinion that in view of the provisions of Section 46 read with Section 48 of the Partnership Act as well as Section 40 of the Arbitration and Conciliation Act, 1996, the application for appointment of an arbitrator under the arbitration clause of the partnership deed was liable to be allowed and the learned Chief Justice has erred in overlooking the said provisions. While right to sue for rendition of accounts of partnership firm survives on the legal representative of a deceased partner, he is also entitled to invoke the arbitration clause contained in the partnership deed.

xxx 29. As already stated, it was not legally essential to specifically make a mention that the partners included their legal heirs, representatives, assigns or legatees, etc. and the arbitration clause could be invoked by the appellant as the legatee as well as the legal heir/legal representative of the deceased Dulari Devi particularly where the dispute had arisen during her lifetime. The appellant's claim in the instant case is based on the will as well as being a legal heir of the deceased Dulari Devi. The appellant, in our opinion, possessed a legal and enforceable right to invoke arbitration clause and move application under Section 11 of the Arbitration Act before the High Court for appointment of arbitrator. The word "party" as used in the partnership deed does not exclude inclusion of legal heirs, legal representatives, etc. as being canvassed by the respondents. Thus, in our opinion, in view of the provisions of Sections 40 and 46 of the Partnership Act read with Section 40 of the Arbitration Act, the appellant has a legal right to commence arbitration by moving an application under Section 11 of the Arbitration Act in the High Court as in our view, the right to sue survives on him as legal representative of the deceased Dulari Devi and he is entitled to invoke Clause 13 of the partnership deed.

Moreover, the dispute referable to arbitration had already arisen during the lifetime of Dulari Devi which is also well settled that where a dispute is referable to arbitration, the parties cannot be compelled to take recourse to in the civil courts." (Emphasis supplied) 9. In Jyoti Gupta v. Kewalsons & Ors., reported in 2018 SCC OnLine Del 7942, the High Court of Delhi also held that an arbitration agreement does not stand discharged on the death of a partner and it can be enforced by the legal heirs of the deceased-partner. It categorically held that merely because the arbitration agreement refers to the disputes between 'partners', it cannot bar the legal heirs from seeking their remedies by virtue of the arbitration agreement. The relevant observations are reproduced hereinbelow:- "12. A reading of the above judgments would clearly show that it is no longer res integra that upon death of a partner, the arbitration agreement between the partners shall survive and can be enforced by the legal heirs of the deceased partner. Whether upon the death of a partner, the surviving partners were under an obligation to induct one of the legal heirs of the deceased partner or not into the partnership as also whether such decision can be challenged by the legal heirs, and in case the legal heirs accept the decision of the surviving partners not to induct any legal heirs of the deceased partner into the partnership, what would be the effect, are all questions to be determined by the Arbitral Tribunal constituted in terms of the arbitration agreement between the parties.

Further, merely because the arbitration agreement refers to the disputes between 'partners', the same cannot debar or take away the right of enforcement of such an arbitration agreement vested in the legal heirs of the deceased partner in view of Section 40 of the Act." (Emphasis supplied) 10. It is a well-established position of law that the term 'partners' extends to and would include their legal heirs, representatives, assigns or legatees, etc. Persons claiming under the rights of a deceased person are the representatives of the deceased party, and therefore, both the parties to the agreement and their legal heirs are entitled to enforce an arbitral award and are bound by it. In light of Section 40 of the Act of 1996 the existence of an arbitration agreement is not affected by the death of a party to the arbitration agreement. As a consequence, the right to sue for rendition of account also survives, ensuring that the legal representatives can assert or defend claims arising from the partnership agreement. 11.Applying the above exposition of law in the facts of the present case, since the legal heirs of the deceased partner, namely, Sampat Lal Verma, have stepped into the shoes of the deceased, clause 15 of the partnership agreement will operate to bind both the petitioners and the respondents."

14. Similar is the situation in the case of V.K. John (supra). Thus it can be very well said that the applicant herein comes within the purview and ambit of legal representative.

15. As regards the submissions so raised by learned counsel for the opposite party, that already execution proceedings are going on, orders have been passed from time to time at the instance of the bank against the original borrower, these are the questions which rests with the merit of the matter. These can be very well raised before the arbitrator as each and every contention remains open to be raised by the rival parties.

16. I have heard the submission so made across the bar and perused the record.

17. Apparently, there happens to be an arbitration clause and the dispute itself is arbitrable. It is also admitted to the parties that the dispute is also subsisting.

18. Accordingly, the Court proposes the name of Hon'ble Mr. Justice Arun Tandon (Retd.) for being appointed as an arbitrator. His address is '3, Patrika Marg, Civil Lines, Allahabad, Mob No. 9415214462.'

19. Let the consent of Hon'ble Mr. Justice Arun Tandon (Retd.) be obtained by the office in terms of the provisions contained in Section 11(8) read with Section 12(1) of the Act by sending a letter to him.

20. The application stands disposed of.

21. In case, the proposed arbitrator does not give his consent or makes disclosure in terms of sub-section (1) of Section 12, the application will be listed before the Court for limited purpose for proposing name of arbitrator. The aribtrator shall be entitled to fee and expenses as per IVth Schedule of the Act.

(Vikas Budhwar,J.)

May 7, 2026

Vandana