Calcutta High Court
Greaves Cotton Limited vs United Machinery And Appliances on 12 March, 2026
Author: Debangsu Basak
Bench: Debangsu Basak
2026:CHC-OS:91-DB
OCD-4
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
IN APPEAL FROM AN ORDER PASSED IN ITS
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL APPELLATE DIVISION
AO-COM/1/2026
With CS/2/2015
GREAVES COTTON LIMITED
-Vs-
UNITED MACHINERY AND APPLIANCES
BEFORE:
The Hon'ble JUSTICE DEBANGSU BASAK
-AND-
The Hon'ble JUSTICE MD. SHABBAR RASHIDI
For the Appellant : Mr. Jishnu Saha, Sr. Adv.
Mr. Rajarshi Dutta, Adv.
Mr. Sayak Ranjan Ganguly, Adv.
Ms. Srijani Ghosh, Adv.
Mr. Kripa Karni, Adv.
Ms. Ankita Jha, Adv.
For the Respondent : Mr. Jishnu Chowdhury, Sr. Adv.
Mr. Aritra Basu, Adv.
Mr. Ratul Das, Adv.
Mr. Dwip Raj Basu, Adv.
Mr. Avijit Kar, Adv.
HEARD ON : 12.03.2026 DELIVERED ON : 12.03.2026 DEBANGSU BASAK, J.:-
1. Appeal is at the behest of a defendant in a suit.
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2. Appeal is directed against judgment and order dated March 21,
2024 by which learned Single Judge, dismissed an application
under Section 8 of the Arbitration and Conciliation Act, 1996.
3. Learned senior advocate appearing for the appellant submits that,
the respondent filed a suit being CS/2/2015 on the basis that,
there was an oral agreement between the parties. He draws the
attention of the Court to the averments of the plaint of the suit.
4. Learned senior advocate appearing for the appellant submits that,
the parties entered into an agreement dated January 2, 2007. The
appellant terminated the agreement dated January 2, 2007 by a
letter dated July 3, 2015. Respondent replied to the letter of
termination on July 13, 2015. He points out that, respondent did
not deny the existence of the written agreement dated January 2,
2007 in its reply dated July 13, 2015. He points out that a notice
under Section 21 of the Act of 1996 was issued on July 8, 2015 to
which, the respondent replied in the month of July 2015 itself.
5. Learned senior advocate appearing for the appellant submits that,
the appellant filed an application under Section 11 of the Act of
1996 before the Bombay High Court, which was subsequently
withdrawn with liberty to file afresh on the self same cause of
action. He submits that, subsequently, appellant applied under
Section 8 of the Act of 1996 for referring the dispute involved in
the suit to arbitration. He draws the attention of the Court to the
averments made in the application under Section 8 of the Act of
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1996 and the affidavit-in-opposition filed on behalf of the
respondent.
6. Learned senior advocate appearing for the appellant points out
that, in the affidavit-in-opposition to the application under
Section 8 of the Act of 1996, respondent took a stand that the
appellant did not sign every page of the written agreement. He
submits that, existence of the written agreement was admitted. In
any event, ingredients of Section 7 of the Act of 1996 stood
satisfied. In this regard, he relies upon (2008) 14 Supreme Court
Cases 240 (Great Offshore Limited -Vs- Iranian Offshore
Engineering And Construction Company).
7. Learned senior advocate appearing for the appellant draws the
attention of the Court to the impugned judgment and order. He
submits that, impugned judgment and order proceeded on the
basis of fraud and that a criminal liability was involved. He
submits that so far as the criminal complaint was concerned, the
same was stayed by the High Court. He contends that, in the
facts and circumstances of the present case, there was no issue
of fraud being committed.
8. Relying upon (2009) 8 Supreme Court Case 751 (Mohammed
Ibrahim And Others -Vs- State of Bihar and Another) learned
senior advocate appearing for the appellant submits that, the
appellant did not receive any benefit out of the so called
falsification of the written agreement dated January 2, 2007. He
submits that both the parties executed the agreement dated
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January 2, 2007. The so called discrepancy in the date of the
agreement and the date when the stamp paper was purchased is
of no significance since, the agreement can be predated or
antedated in a given circumstance. Significantly, the parties
signed the agreement. Signature of the respondent was admitted.
Appellant also acknowledged that it signed the agreement and
therefore, according to him, there was a valid agreement dated
January 2, 2007 which contains an arbitration clause.
Consequently, the subject matter of the suit was required to be
referred to arbitration in terms of the arbitration agreement
contained in the agreement dated January 2, 2007. In support of
such contention, he relies upon 2024 SCC OnLine SC 1754 (SBI
General Insurance Co. Ltd -Vs- Krish Spinning) and 2026 SCC
OnLine SC 135 (Rajia Begum -Vs- Barnali Mukherjee).
9. Learned senior advocate appearing for the appellant submits that,
the issue as to the genuineness of the arbitration agreement can
be taken up as a preliminary issue in the arbitration. In support
of such contention, he relies upon an order dated February 20,
2026 passed by the Hon’ble Supreme Court in Special Leave
Petition (Appeal) (C) No./16022/2025 (Salson Liquors Private
Limited -Vs- United Spirits Limited).
10. Learned senior advocate appearing for the respondent submits
that, there was a distributorship agreement entered into in 2007.
He submits that, the respondent was constrained to file a suit
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seeking damages and other reliefs from the appellant. Such suit
was filed on January 3, 2015.
11. Learned senior advocate appearing for the respondent draws the
attention of the Court that, the so called agreement dated
January 2, 2007 was not terminated till July 3, 2015, which is
subsequent to the filling of the suit. He refers to the reply of the
respondent dated July 13, 2015. He submits that a copy of the
agreement dated January 2, 2007 was sought for by the reply
dated July 13, 2015. A copy of such agreement was not made
over to the respondent.
12. Learned senior advocate appearing for the respondent submits
that, the appellant approached the High Court of Judicature at
Bombay under Section 11 of the Act of 1996 being Arbitration
Application no.1733/2015. Such application was subsequently
withdrawn. He draws the attention of the Court to the annexure
to the application under Section 11 of the Act of 1996 filed by the
appellant before the Hon’ble High Court at Bombay. He submits
that, the copy of the agreement dated January 2, 2007 annexed
to such application contains signature of the respondent on all
pages. Signature of the appellant was not appearing only on the
last page of such documents. He points out that, a copy of the
application under Section 11 of the Act of 1996 was served upon
his client under cover of a letter dated October 1, 2015.
13. Learned senior advocate appearing for the respondent submits
that, the so called written agreement dated January 2, 2007
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sought to be introduced by way of the application under Section 8
of the Act of 1996, is a product of fabrication and forgery. He
refers to the date of the stamp paper. He submits that, an
application for forensic examination of the purported document
dated January 2, 2007 is pending before the learned Single
Judge.
14. Learned senior advocate appearing for the respondent relies upon
(2020) 4 Supreme Court Cases 41 (New Era Fabrics Limited –
Vs- Bhanumati Keshrichand Jhaveri and Others) for the
proposition that, interpolated documents cannot be relied upon.
On such proposition, he relies upon 2024 (3) ICC 310 (Deb
Kumar Bose -Vs- Prithudipti Maity and Ors.) and also 2006
SCC OnLine Del 777 (GE Countrywide Consumer Financial
Services Ltd. -Vs- Prabhakar Kishan Khandare and Anr).
15. In a suit for damages and other reliefs, the appellant applied
under Section 8 of the Act of 1996 for referring the subject matter
of the suit to arbitration in view of the arbitration clause
contained in the agreement dated January 2, 2007.
16. According to the appellant, agreement dated January 2, 2007 was
entered into between the parties which contain an arbitration
clause. Appellant applied under Section 11 of the Act of 1996
before the Hon’ble High Court at Bombay being Arbitration
Application no.1733/2015 in which, the appellant disclosed the
agreement dated January 2, 2007. From the version of the
agreement dated January 2, 2007, which is relied upon by the
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respondent, on the basis of the service copy of such application
on the respondent, it appears that, none of the pages of such
agreement was signed by the appellant. However, learned senior
advocate appearing for the appellant draws the attention of the
Court to the soft copy of the application under Section 11 of the
Act of 1996 filed before the Hon’ble High Court at Bombay by his
client which contains the signature of the appellant on the last
page of such agreement.
17. In the application under Section 8 of the Act of 1996, the
appellant disclosed a document dated January 2, 2007 which
contains the signature of both the parties on all the pages of the
agreement. At the very minimum, there is discrepancy with
regard to the signature in the document dated January 2, 2007
disclosed before the Hon’ble High Court at Bombay by the
appellant under Section 11 of the Act of 1996 and before this
Court under Section 8 of the Act of 1996.
18. According to the appellant, it derived no benefit out of the
signature of the appellant incorporated in that document,
assuming that it was done so subsequent to the disclosure of
such document under Section 11 of the Act of 1996. We are to
consider such contention of the appellant in light of the
ramification under Section 8 of the Act of 1996, conduct of the
parties in disclosing the documents before two different High
Courts and the criminal liability, if any, on such activity.
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19. Contemporaneously, respondent did not accept that there was a
written agreement dated January 2, 2007. The first reference to
the written agreement dated January 2, 2007 appears from the
letter of termination dated July 3, 2015 issued by the appellant.
Response to such letter of termination is by the respondent by its
letter dated July 13, 2015 where the respondent requests for a
copy of the agreement dated January 2, 2007. Appellant did not
make over such copy to the respondent pursuant to the letter
dated January 13, 2015. Second reference to the agreement
dated January 2, 2007 is in the notice under Section 21 of the
Act of 1996. In the reply thereto, the respondent also does not
acknowledge that there was a written agreement between the
parties.
20. Written agreement dated January 2, 2007 is disclosed by the
appellant for the first time in its application under Section 11 of
the Act of 1996. There are discrepancies between the disclosure
under Section 11 of the Act of 1996 as contended on behalf of the
appellant and by the respondent. Softcopy of the appellant
contains the signature of the appellant on the last page of the
agreement while, the service copy does not contain any signature
of the respondent on any of the pages.
21. In the application under Section 8 of the Act of 1996, the
appellant discloses the agreement dated January 2, 2007
containing signatures of both the parties on all the pages. The
stamp paper of the agreement dated January 2, 2007 is the same
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as that of the agreement disclosed by the appellant before the
Hon’ble High Court of Bombay.
22. There is an issue as to when the signatures of the appellant
appeared in the document dated January 2, 2007. Signatures of
the appellant was not available on all the pages of that document,
at least when it was produced before the High Court of Judicature
at Bombay under Section 11 of the Act of 1996. These facts, in
our view, raises serious questions as to the genuineness of the
agreement dated January 2, 2007.
23. Arbitration clause is embedded in the agreement dated January
2, 2007.
24. On the issue of impact of fraud on arbitrability, Rajia Begum
(supra) is of the following view:
“12. The legal position with regard to the impact of fraud on
arbitrability of a dispute under the Act is well delineated by
decisions of this Court. A two-Judge Bench of this Court held that
mere allegation of fraud simpliciter may not be a ground to nullify
the arbitration agreement between the parties, but where the
court finds that there are serious allegations of fraud which make
a case of criminal offence or where the allegations of fraud are so
complicated, which need to be decided on the basis of voluminous
evidence, the court can sidetrack the arbitration agreement and
proceed with the suit. It has further been held that the court can
proceed with the suit in cases where the fraud is alleged against
the arbitration provision itself or is of a such a nature which
permeates the entire contract, including the agreement to
arbitrate, meaning thereby in those cases where fraud goes to the
validity of the contract itself which contains an arbitration clause
or the validity of the arbitration clause itself.
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13. The aforesaid principle was referred to with approval, by
another two-Judge Bench of this Court and two working tests
were laid down for determining serious allegations of fraud,
which would render the subject matter of an agreement non-
arbitrable namely, (1) does this plea permeate the entire contract
and above all, the agreement of arbitration, rendering it void, or
(2) whether the allegations of fraud, touch upon the internal
affairs of the parties, inter se having no Implication in the public
domain. It was further held that the first test is satisfied only
when it can be said that the arbitration clause or agreement itself
cannot be said to exist in a clear case in which the court finds that
the party against whom breach is alleged cannot be said to have
entered into the agreement relating to arbitration at all. Thus, in a
case where plea is taken with regard to nonexistence of an
arbitration clause or agreement, the same would amount to
serious allegation of fraud and would render the subject matter of
an agreement non-arbitrable.
25. SBI General Insurance Co. Ltd. (supra) amongst others,
notices the differences between an exercise undertaken
under Section 11 and Section 8 of the Act of 1996. It is of
the following view:
“109. The difference between Sections 8 and 11 respectively of
the Act, 1996 is also evident from the scope of these provisions.
Some of these differences are:
1. while Section & empowers any ‘Judicial authority’ to refer the
parties to arbitration, under Section 11, the power to refer has
been exclusively conferred upon the High Court and the Supreme
Court.
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ii. Under Section 37, an appeal lies against the refusal of the
Judicial authority to refer the parties to arbitration, whereas no
such provision for appeal exists for a refusal under Section 11.
ili. The standard of scrutiny provided under Section 8 is that of
prima facie examination of the validity and existence of an
arbitration agreement. Whereas, the standard of scrutiny under
Section 11 is confined to the examination of the existence of the
arbitration agreement.
iv. During the pendency of an application under Section 8,
arbitration may commence or continue and an award can be
passed. On the other hand, under Section 11, once there is failure
on the part of the parties in appointing the arbitrator as per the
agreed procedure and an application is preferred, no arbitration
proceedings can commence or continue.”
26. Prima facie examination on fraud and existence of an
arbitration agreement is required to be undertaken under
Section 8 of the Act of 1996. In assessing the impact of
fraud on arbitrability, a Court is required to answer the
issue as to whether the plea of fraud permeated the entire
contract and above all the agreement of arbitration
rendering void or whether the allegation of fraud touch upon
the internal affairs of the parties inter se in implication in
the public domain.
27. In the facts and circumstances of the present case, prima
facie, the genuineness of the agreement dated January 2,
2007 was rightly raised by the respondent. Documents
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disclosed before the Hon’ble High Court at Bombay and
before this Hon’ble Court are at a variance. No explanation
appears in the application under Section 8 of the Act of 1996
as to the reasons for such variance. Variances are of such
nature as to justifiably raise doubts as to the existence of
the agreement itself. The arbitration clause is embedded in
the agreement dated January 2, 2007. Where the
genuineness of the agreement dated January 2, 2007 which
carries that arbitration clause is in question, relying upon
such arbitration clause to refer the disputes to arbitration,
in terms of Section 8 of the Act of 1996 was rightly
disallowed by the learned Single Judge.
28. It is the contention of the appellant that, ingredients of
Section 7 of the Act of 1996 stood satisfied by virtue of the
agreement dated January 2, 2007.
29. Great Offshore Limited (supra) is of the view that, under
Section 7 of the Act of 1996 there is no requirement that the
arbitration agreement be an original, does not require the
parties to stamp the agreement, does not require the parties
to sign every page of the agreement and that an agreement is
in writing if it is contained in an exchange of letters, telex,
telegrams or other means of telecommunication which
provides a record of the agreement.
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30. In the facts and circumstances of the present case, as noted
above, the document which contained the arbitration
agreement is suspect.
31. Mohammed Ibrahim & Ors. (supra) considers Section 464
of the Indian Penal Code and is of the following view:
“14. An analysis of Section 464 of the Penal Code shows that
it divides false documents into three categories:
1. The first is where a person dishonestly or
fraudulently makes or executes a document with the
intention of causing it to be believed that such document
was made or executed by some other person, or by the
authority of some other person, by whom or by whose
authority he knows it was not made or executed.
2. The second is where a person dishonestly or
fraudulently, by cancellation or otherwise, alters a
document in any material part, without lawful authority,
after it has been made or executed by either himself or
any other person.
3. The third is where a person dishonestly or
fraudulently causes any person to sign, execute or alter a
document knowing that such person f could not by reason
of (a) unsoundness of mind; or (b) intoxication; or (c)
deception practised upon him, know the contents of the
document or the nature of the alteration.
In short, a person is said to have made a “false document”, if
(i) he made or executed a document claiming to be someone else
or authorised by someone else; or (ii) he altered or tampered a
document; or (iii) he obtained a g document by practising
deception, or from a person not in control of his senses.”
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32. Mohammed Ibrahim & Ors. (supra) is of the view that if a
person is said to make a false document, if he alters or
tampers with a document. In the present case, there are
alterations of the agreement dated January 2, 2007 as
disclosed before the High Court at Bombay and before the
learned Single Judge.
33. In the case of New Era Fabrics Limited (supra) the
Supreme Court found, prima facie that, there was an issue
of perjury involved. It found that there were modifications
made in the balance-sheet of the company. Supreme Court,
therefore, directed initiation of proceedings under Sections
193 and 199 of the Indian Penal Code, 1872.
34. A co-ordinate Bench in Deb Kumar Bose (supra) found a
Will to be interpolated and held that the Will stood vitiated
due to such interpolation subsequent to the execution of the
Will.
35. The Delhi High Court in GE Countrywide Consumer
Financial Services Ltd. (supra) took a stringent view on the
issue of interpolation and imposed punitive costs.
36. Learned Single Judge proceeded to disallow the application
under Section 8 of the Act of 1996 filed on behalf of the
appellant on the ground of serious allegation of fraud being
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made out. We find no ground to interfere with the impugned
judgment and order dated March 21, 2024.
37. AO-COM/1/2026 along with all connected applications are
dismissed without any order as to costs.
38. Learned advocate appearing for the appellant submits that
there subsists an interim order directing the suit not to be
transferred to the undefended suit. He seeks continuation of
such stay for a limited period.
39. Since we disposed of the appeal on merits and since we find
that, there is a serious issue with regard to the manipulation
of a document, we are not minded to extend the subsisting
order of stay any further. The prayer, therefore, is
considered and refused.
(DEBANGSU BASAK, J.)
40. I agree.
(MD. SHABBAR RASHIDI, J.)
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