Jammu & Kashmir High Court
Adarsh Nagar vs Tehsil Katra on 3 July, 2026
Author: Rajnesh Oswal
Bench: Rajnesh Oswal
2026:JKLHC-JMU:1887
HIGH COURT OF JAMMU &KASHMIR AND LADAKH
AT JAMMU
...
Arb P No.26/2025
Reserved on: 29.05.2026
Pronounced on: 03.07.2026
Uploaded on: 03.07.2026
Whether the operative part or full
Judgment is pronounced: Full
M/s Chenab Machinery and Engineering
Pvt. Ltd. IID Center, Govindsar,
Industrial Area, Kathua through its
Director, Vijay Aggarwal, Age 38 years
S/o Sh Sunder Lal Aggarwal R/o 51-
Adarsh Nagar, Bhiwani, Haryana.
.......Petitioner(s)
Through: Mr. Anil Khajuria, Advocate
Versus
Shri Mata Vaishno Devi Shrine Board
Katra through its Chief Executive Officer,
Tehsil Katra, District Reasi,
......Respondent(s)
Through: Mr. Atul Verma, Advocate vice
Mr. Adarsh Sharma, Sr. Adv.
CORAM: HON'BLE MR JUSTICE RAJNESH OSWAL, JUDGE
JUDGMENT
1. This petition is filed by the petitioner under Section 14(2) of the
Arbitration and Conciliation Act, 1996 (for short “the Act”) for
termination of the mandate of the Sole Arbitrator, appointed vide
order dated 10th November 2023 in AP No. 14/2022 titled “M/s
Chenab Machinery & Engineering Pvt. Ltd. v. Shri Mata Vaishno
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Devi Shrine Board, Katra”, and for the consequential appointment of
another independent arbitrator.
2. The disputes arose between the parties regarding the contract awarded
to the petitioner for the manufacture, supply, erection, testing, and
completion of a 2 Km modular shelter shed between RD 2/800 and
RD 5/100 on the Tarakote Marg of Shri Mata Vaishno Devi Ji Shrine
from Katra to Adhkawari. This necessitated the filing of Arbitration
Petition No. 14/2022, which was disposed of vide order dated 10 th
November 2023, whereby the Sole Arbitrator was appointed to
adjudicate the disputes between the parties. Upon entering upon the
reference, the learned Arbitrator issued notice to the parties, following
which the petitioner filed its statement of claim in June 2024, and the
respondent filed its statement of defence in September 2024.
3. The petitioner submits that they were duly represented by counsel
before the learned Arbitrator. However, on August 17, 2024, when an
office colleague of the petitioner’s engaged counsel appeared, the
learned Arbitrator refused to record her presence. The learned
Arbitrator further declined to disclose the next date of hearing on the
pretext that she had not filed a Vakalatnama and was therefore
unauthorized to appear. Consequently, despite the matter being
scheduled for September 7, 2024, the colleague was barred from
participating. The petitioner further urges that on September 9, 2024,
an associate of the petitioner’s counsel appeared before the learned
Arbitrator and received the statement of defense; however, even on
that date, the next hearing date was not conveyed to him. It is also
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asserted by the petitioner that the learned Arbitrator had not engaged
any Assistant, from whom the dates in the matter could be obtained
and when the learned Arbitrator was contacted on phone, he would
feel offended and not answer calls.
4. Subsequently, on October 21, 2024, the petitioner received a
communication dated October 17, 2024, from the learned Arbitrator,
conveying the termination (closure) of the arbitral proceedings under
Section 32(2)(c) of the Arbitration and Conciliation Act, 1996.
Notably, the formal termination order was passed by the Arbitrator on
October 5, 2024 on account of absence of the parties. The petitioner
made an endeavor to move an application to recall the said
termination order, but the learned Arbitrator could not be approached
and later did not accept the application sent to the learned Arbitrator
on his e-mail account.
5. Upon service of notice, the respondent caused its appearance and filed
reply/objections. The primary contention of the respondent is that the
petitioner remained absent for three consecutive hearings, i.e.
September 21, 2024, September 28, 2024, and October 5, 2024.
Consequently, the learned Arbitrator invoked the provisions of
Section 32(2)(c) of the Arbitration and Conciliation Act, 1996. The
respondent submits that as a corollary, the mandate of the Arbitrator
stands automatically terminated by operation of law, and no formal
termination under Section 14 is required unless a dispute arises
regarding the Arbitrator’s conduct, bias, or inability to act, which is
not the case here. Furthermore, it is contended that the appropriate
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remedy for the petitioner, if any, is to challenge the termination order
passed under Section 32(2)(c) of the Act before a competent court.
6. Heard learned counsel appearing for the parties and perused the record
on the file.
7. Vide order dated November 10, 2023, the application preferred by the
petitioner for the appointment of an arbitrator was disposed of,
whereby the sole arbitrator was appointed to adjudicate the disputes
between the parties and pass an award in accordance with law.
8. After the Arbitrator entered reference, the petitioner filed its statement
of facts, followed by the respondent’s submission of its statement of
defence.
9. As recorded in the learned Arbitrator’s order (Annexure II to the
petition), the petitioner failed to appear on the scheduled dates of
hearing, i.e. September 21, 2024, September 28, 2024, and October 5,
2024. Consequently, the arbitral proceedings were closed in terms of
Section 32(2)(c) of the Act. For the sake of clarity and convenience,
the provisions of Section 32(2)(c) of the Act are reproduced
hereinbelow:
“32. Termination of proceedings.
……
(2) The arbitral tribunal shall issue an order for the
termination of the arbitral proceedings where
…..
(c) the arbitral tribunal finds that the continuation of the
proceedings has for any other reason become
unnecessary or impossible.”
10. Section 32(2)(c) allows an arbitrator to terminate arbitral proceedings
if “the continuation of the proceedings has for any reason become
unnecessary or impossible”. The phrase “unnecessary or impossible”
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signifies circumstances which render performance of adjudicatory
function futile or incapable to be performed. They concern
involuntary circumstances beyond the arbitrator’s control, not matters
that can be voluntarily waived.
11. In “Dani Wooltex Corpn. v. Sheil Properties (P) Ltd., (2024) 7
SCC 1″, the Hon’ble Apex Court has examined in detail the power of
Arbitrator to terminate the proceedings in terms of section 32 of the
Act. The relevant paras are extracted as under:
10. The issue of the parties’ default is dealt with in Section 25
of the Arbitration Act. Section 25 reads thus:
“25. Default of a party.–Unless otherwise agreed by the
parties, where, without showing sufficient cause–
(a) the claimant fails to communicate his statement of claim
in accordance with sub-section (1) of Section 23, the Arbitral
Tribunal shall terminate the proceedings;
(b) the respondent fails to communicate his statement of
defence in accordance with sub-section (1) of Section 23, the
Arbitral Tribunal shall continue the proceedings without
treating that failure in itself as an admission of the allegations
by the claimant and shall have the discretion to treat the right
of the respondent to file such statement of defence as having
been forfeited.
(c) a party fails to appear at an oral hearing or to produce
documentary evidence, the Arbitral Tribunal may continue
the proceedings and make the arbitral award on the evidence
before it.”
25.1. The power under clause (c) of sub-section (2) of
Section 32 of the Arbitration Act can be exercised only if,
for some reason, the continuation of proceedings has
become unnecessary or impossible. Unless the Arbitral
Tribunal records its satisfaction based on the material on
record that proceedings have become unnecessary or
impossible, the power under clause (c) of sub-section (2)
of Section 32 cannot be exercised. If the said power is
exercised casually, it will defeat the very object of
enacting the Arbitration Act;
25.2. It is the Arbitral Tribunal’s duty to fix a meeting for
hearing even if parties to the proceedings do not make such a
request. It is the duty of the Arbitral Tribunal to adjudicate
upon the dispute referred to it. If, on a date fixed for a
meeting/hearing, the parties remain absent without any
reasonable cause, the Arbitral Tribunal can always take
recourse to the relevant provisions of the Arbitration Act,
such as Section 25;
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25.3. The failure of the claimant to request the Arbitral
Tribunal to fix a date for hearing, per se, is no ground to
conclude that the proceedings have become unnecessary; and
25.4. The abandonment of the claim by a claimant can be
a ground to invoke clause (c) of sub-section (2) of Section
32. The abandonment of the claim can be either express
or implied. The abandonment cannot be readily inferred.
There is an implied abandonment when admitted or
proved facts are so clinching that the only inference which
can be drawn is of the abandonment. Only if the
established conduct of a claimant is such that it leads only
to one conclusion that the claimant has given up his/her
claim can an inference of abandonment be drawn. Even if
it is to be implied, there must be convincing
circumstances on record which lead to an inevitable
inference about the abandonment. Only because a
claimant, after filing his statement of claim, does not
move the Arbitral Tribunal to fix a date for the hearing,
the failure of the claimant, per se, will not amount to the
abandonment of the claim.
(emphasis added)
12. In the present case, both the parties had filed their claims before the
learned Arbitrator, and once the same were filed, the learned
Arbitrator could not have resorted to provisions contained in section
32(2)(c) of the Act to terminate the proceedings, in view of the
judgment of the Hon’ble Apex Court as referred to above, particularly
when he was not of the view that there was an abandonment of the
claim on the part of petitioner. Accordingly, the order of termination
of proceedings is not sustainable in the eyes of law and the same is set
aside.
13. It now remains to be considered whether to remit the matter to the
sole Arbitrator appointed earlier or to appoint a substitute Arbitrator.
Learned counsel for the respondent has submitted that the respondent
would have no objection if substitute Arbitrator is appointed.
14. In Harshbir Singh Pannu and another v. Jaswinder Singh, 2025
SCC OnLine SC 2742, the Hon’ble Supreme Court has held as under:
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415. A conspectus of our legal discussion is as under:–
(I) Section 32 of the Act, 1996 is exhaustive and covers all
cases of termination of arbitral proceedings under the Act,
1996. The power of the arbitral tribunal to pass an order to
terminate the proceedings under the scheme of the Act, 1996
lies only in Section 32(2).
(II) Sections 25, 30 and 38 of the Act, 1996 respectively,
only denote the circumstances in which the tribunal would be
empowered to take recourse to Section 32(2) and thereby,
terminate the proceedings.
(III) The use of the expression “the mandate of the Arbitral
Tribunal shall terminate” in Section 32 of the Act, 1996 and
its omission in Section(s) 25, 30 and 38 of the said Act,
cannot be construed to mean that the nature of termination
under Section 32(2) is distinct from a termination under the
other aforesaid provisions of the Act, 1996.
(IV) The expression “mandate of the Arbitral Tribunal” is
merely descriptive of the function entrusted to the tribunal,
namely, the authority and duty to adjudicate the disputes
before it. It refers to the obligation of the arbitral tribunal to
administer the arbitration by conducting the proceedings in
order to adjudicate upon the disputes referred to it.
(V) Irrespective of whether the proceedings are terminated on
account of the passing of a final award, or by the withdrawal
of claims, or on account of default by the claimant, or the
intervention of any impossibility in the continuation of the
proceedings, the legal effect remains the same, inasmuch as
the arbitral tribunal thereafter stands divested of its authority
to act in the reference.
(VI) The common thread that runs across Sections 25, 30, 32
and 38 of the Act, 1996 respectively is that although the
arbitral proceedings may get terminated for varied reasons,
yet the consequence of such termination remains the same
i.e., the arbitral reference stands concluded and the authority
of the tribunal stands extinguished.
(VII) There is a clear distinction between a procedural review
and a review on merits. The arbitral tribunal possesses the
inherent procedural power to recall an order terminating the
proceedings as such power is merely to correct an error
apparent on the face of the record or to address a material fact
that was overlooked. It does not tantamount to revisiting the
findings of law or reappreciating the substantive issues
already decided.
(VIII) Where an arbitral tribunal passes an order for
terminating the proceedings under the Act, 1996, the
appropriate remedy available to the parties would be to
first file an application for recall of such order before the
arbitral tribunal itself. The arbitral tribunal would then
in turn be required to examine whether the order does or
does not deserve to be recalled.
(IX) If a favourable order is passed for recommencing
arbitration proceedings, the only option available to a party
aggrieved therefrom, would be to participate in the
proceedings and thereafter, challenge the final award under
Section 34 of the Act, 1996.
(X) If, however, the recall application is dismissed, the
party aggrieved therefrom, would be empowered to
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The court would then in turn examine whether the
mandate of the arbitrator stood legally terminated or not.
If it finds that the proceedings were not terminated in
accordance with the law, it would be empowered to either
set-aside the order of termination of proceedings and
remand the matter to the arbitral tribunal, or, if the
circumstances so require, proceed to appoint a substitute
arbitrator in terms of Section 15 of the Act, 1996.
(Emphasis added)
15. In the present case, the petitioner claims to have filed an application
for recalling of order dated 05.10.2024 by e-mail, as the Arbitrator
could not be approached earlier. This fact has not been disputed by the
respondents, and as such, in absence of denial of this fact, the same is
deemed to have been admitted by the respondent. Under the normal
circumstances, the matter ought to have been remitted to the learned
Arbitrator but as the Arbitrator has not taken the cognizance of the
application for recalling of order dated 05.10.2024 and respondent too
has consented for substitution of Arbitrator, I deem it proper to
terminate the mandate of earlier Arbitrator and appoint Sh. Shobha
Ram Gandhi, Former District and Sessions Judge, as substitute sole
Arbitrator sole to settle the dispute between the parties in accordance
with law. Registry to inform the learned Arbitrator accordingly.
(Rajnesh Oswal)
Judge
Jammu
03.07.2026
Ajaz Ahmad, Secy
Whether approved for reporting? Yes
