Delhi District Court
Mahesh Sharma vs M/S Sbi Cards And Payment Service Ltd on 23 February, 2026
IN THE COURT OF SH. AKBAR SIDDIQUE
DISTRICT JUDGE-04, NORTH DISTRICT
ROHINI COURTS : DELHI
CS No 50/2022
In the matter of :-
Mr. Mahesh Sharma
H.No. 1440, Janta Flat,
GTB Nagar Enclave Nand Nagri
New Delhi-110093
...Petitioner
Versus
M/s SBI Cards and Payment Services Ltd.
Unit 401 & 402, 4th Floor,
Aggarwal Millennium Tower,
E 1,2,3, Netaji Subash Place, Wazirpur,
New Delhi-110034
... Respondent
JUDGMENT/23.02.2026
Vide this Judgment, I shall decide the application u/s 34 of the
Arbitration and conciliation Act, 1996 filed by petitioner, to set
aside the Ex-Parte Arbitral Award dated 24.08.2022, passed by the
Sole Arbitrator, Sh. Susheel Bhartiya, Advocate, thereby praying
for following prayers in the aforesaid application: –
i. Set aside the Ex-Parte Arbitral Award dated 24.08.2022,
thereby awarding an amount of ₹ 1,46,330.84/- alongwith
interest @18% per annum w.e.f. 10.05.2022 till the
realization of full payment.
ii. Cost of the litigation
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1. BRIEF FACTS OF THE CASE AS PER THE
PETITIONER1.1. The Petitioner availed a credit card facility from the
Respondent/ Claimant and for the said facility even
executed a Cardholder Agreement. It is further the case of
the petitioner that he did not have any bargaining power in
context to the Agreement that the Petitioner was made to
execute, despite the same even the copy of the Agreement
was not furnished to the Petitioner. The petitioner was
subsequently issued a credit card bearing no
0005172527725356458 by the respondent.
1.2. The Petitioner since the very beginning has been
prompt in paying any and all credit card bills and also
ensured that the Petitioner did not owe any liabilities
towards the Respondent. Accordingly, the payments of all
the bills are cleared by the petitioner.
1.3. The Respondent’s case is that it has raised demands
through email(s)/ phone(s)/ message(s) but the Petitioner
has failed to clear the dues of the Respondent. It is most
imperative that the Petitioner has not received any
communication/notice on behalf of the Respondent
regarding any pending payments/dues for the credit card
issued by the Respondent. Further, it is as case of petitioner
that no single telephonic call or message has been
conveyed to the Petitioner regarding the pending dues for
the credit card. The Petitioner has not received any letter/
communication at its registered address, where the arbitral
award has also been served upon the petitioner.
1.4. It is the case of petitioner that t he Respondent in the
present case has not even issued any invocation notice
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which is mandatory under the provisions of Section 21 of
the A&C Act, 1996 for commencement of the arbitration
proceedings, as such the same is mandatory under law.
1.5. The Petitioner was only made aware of any such
proceedings pertaining to the credit card when the
impugned arbitral award was delivered at its residential
address, barring that the said proceedings were not in the
knowledge of the Petitioner and the impugned award has
been passed Ex-Parte. The Arbitral Award bears an e- mail
id [email protected] for the Petitioner but the same
does not belong to Petitioner. It is noteworthy that the
Petitioner does not bear any e-mail account in his name.
Also, no communication has been received by the
petitioner at his residential address.
1.6. It is the case of petitioner that the Respondent,
thereafter, invoked arbitration against the Petitioner for
recovery of the amount of Rs. 1,46,330.84/- and appointed
Sh. Susheel Bhartiya as a Sole Arbitrator in defiance of
catena of judgments and the applicable law as laid down
by the Hon’ble Supreme Court of India, wherein it has been
categorically been held that no party shall be permitted to
unilaterally appoint an Arbitrator, as the same would defeat
the purpose of unbiased adjudication of the dispute
between the parties. It is imperative to state that the
Petitioner was unaware of any such invocation and
subsequent appointment of the Ld. Sole Arbitrator also the
appointment has been made unilaterally by the
Respondent/ Claimant.
1.7. The Ld. Sole Arbitrator accepted the appointment
after receiving the notice through e-mail from the
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Respondent. The Petitioner was accordingly proceeded
Ex-Parte on 13.06.2022. The notice of hearing was issued
to the petitioner through email, though the petitioner does
not bear any such email on which such notice was sent.
1.8. The Impugned Ex-Parte Award was passed against
the petitioner on 24.08.2022 and surprisingly the said
award was sent to the petitioner at his residential address.
2. CASE OF THE RESPONDENT
2.1. The respondents have been vehemently opposing
the present application u/s 34 of the Arbitration and
conciliation Act stating therein that the Arbitral Award
dated 24.08.2022, thereby awarding an amount of ₹
1,46,330.84/- along with interest @18% per annum w.e.f
10.05.2022 till the realization of full payment was rightly
passed against the petitioner.
2.2. The respondent further submitted that petitioner
approached the respondent for availing credit card facility
provided by the respondent. Further the petitioner
defaulted in payment for the facility availed as and when
demanded by the respondent. After continuous default by
the petitioner the respondent invoked the arbitration clause
and set the arbitration proceedings into motion in which
Mr. Susheel Bhartiya was appointed as Ld. Arbitrator vide
notice dated 10.05.2022 and the same was also intimated
to the petitioner on his email [email protected].
2.3. Despite service the applicant chooses not to appear
which resulted into an ex-parte award against him.
2.4. The applicant utilizes the services of the respondents
and when the time approach for the payment of the due
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amount the petitioner not to chooses not to appear before
the Arbitral Tribunal.
2.5. During the course of hearing respondent moved an
application under Section 151 of Code of Civil Procedure
for appropriate orders. Further, the respondent submitted
that with the development of new law being applicable to
present dispute, it is expedient in the interest of justice and
fairness that the dispute between the parties be resolved
through de novo application of process of law under the
Arbitration and Conciliation, Act 1996.
3. ANALYSIS AND CONCLUSION
3.1. The present application filed u/s 34 is against an ex-
parte award wherein thereby awarding an amount of ₹
1,46,330.84/- along with interest @18% per annum w.e.f
10.05.2022 till the realization of full payment was passed
against the applicant/petitioner by the Ld. Sole Arbitrator.
3.2. It is a settled principle of law that there has to be
limited or zero interference in the award passed by the
Arbitral Tribunal only in certain cases enshrined under
section 34, such as patently illegality and public policy of
India, an interference is warranted and interference is
required if the award is so perverse that it shock the
conscience of the court.
3.3. The Hon’ble Supreme Court in the case of ‘Sutlej
Construction Ltd. v. State (UT of Chandigarh) reported in
(2018) 1 SCC 718′ has held that when it comes to setting
aside of an award under the public policy ground, it would
mean that the award should shock the conscience of the
court and would not include what the court thinks is unjust
on the facts of the case seeking to substitute its view for
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that of the arbitrator to do what it considers to be “justice.
Relevant paragraph is extracted below: –
“10. We are not in agreement with the
approach adopted by the learned Single Judge.
The dispute in question had resulted in a
reasoned award. It is not as if the arbitrator has
not appreciated the evidence. The arbitrator
has taken a plausible view and, an in our view,
as per us the correct view, that the very
nature of job to be performed would imply that
there has to be an area for unloading and that
too in the vicinity of 5 km as that is all that the
appellant was to be paid for. The route was
also determined. In such a situation to say that
the respondent owed no obligation to make
available the site cannot be accepted by any
stretch of imagination. The unpreparedness
of the respondent is also apparent from the fact
that even post-termination it took couple of
years for the work to be carried out, which was
meant to be completed within 45 days. The
ability of the appellant to comply with its
obligations was interdependent on the
respondent meeting its obligations in time to
facilitate appropriate areas for unloading of
the earth and for its compacting. At least it is
certainly a plausible view.
11. It has been opined by this Court that
when it comes to setting aside of an award
under the public policy ground, it would mean
that the award should shock the conscience of
the Court and would not include what the
Court thinks is unjust on the facts of the case
seeking to substitute its view for that of the
arbitrator to do what it considers to be
“justice”.
12. The approach adopted by the learned
Additional District Judge, Chandigarh was,
thus, correct in not getting into the act of re-
appreciating the evidence as the first appellate
court from a trial court decree. An arbitrator is
a chosen Judge by the parties and it is on
limited parameters can the award be
interfered
with.
13. The learned Single Judge ought to have
restrained himself from getting into the
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meanderings of evidence appreciation and
acting like a second appellate court. In fact,
even in second appeals, only questions of law
are to be determined while the first appellate
court is the final court on facts. In the present
case, the learned Single Judge has, thus,
acted in the first appeal against objections
dismissed as if it was the first appellate court
against a decree, passed by the trial court.”
3.4. The scope of interference with an arbitral award
under Section 34 of the Act has been considered and
discussed by Hon’ble Supreme Court in a judgment
rendered in the case of ‘MMTC Ltd. v. Vedanta Ltd.
reported in (2019) 4 SCC 163′. Paragraph nos. 11 to 14 of
the said judgment are extracted below:
“11. As far as Section 34 is concerned, the
position is well-settled by now that the Court
does not sit in appeal over the arbitral award
and may interfere on merits on the limited
ground provided under Section 34(2)(b)(ii) i.e. if
the award is against the public policy of India. As
per the legal position clarified through decisions
of this Court prior to the amendments to the 1996
Act in 2015, a violation of Indian public policy,
in turn, includes a violation of the fundamental
policy of Indian law, a violation of the interest of
India, conflict with justice or morality, and the
existence of patent illegality in the arbitral
award. Additionally, the concept of the
“fundamental policy of Indian law” would
cover compliance with statutes and judicial
precedents, adopting a judicial approach,
compliance with the principles of natural justice,
and Wednesbury reasonableness. Furthermore,
“patent illegality” itself has been held to mean
contravention of the substantive law of India,
contravention of the 1996 Act, and contravention
of the terms of the contract.
12. It is only if one of these conditions is met that
the Court may interfere with an arbitral award
in terms of Section 34(2)(b)(ii), but such
interference does not entail a review of the merits
of the dispute, and is limited to situations where
the findings of the arbitrator are arbitrary,
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capricious or perverse, or when the conscience of
the Court is shocked, or when the illegality is not
trivial but goes to the root of the matter. An
arbitral award may not be interfered with if the
view taken by the arbitrator is a possible view
based on facts.
13. It is relevant to note that after the 2015
Amendment to Section 34, the above position
stands somewhat modified. Pursuant to the
insertion of Explanation 1 to Section 34(2), the
scope of contravention of Indian public policy
has been modified to the extent that it now means
fraud or corruption in the making of the award,
violation of Section 75 or Section 81 of the Act,
contravention of the fundamental policy of
Indian law, and conflict with the most basic
notions of justice or morality.
Additionally, sub-section (2-A) has been inserted
in Section 34, which provides that in case of
domestic arbitrations, violation of Indian public
policy also includes patent illegality appearing
on the face of the award. The proviso to the same
states that an award shall not be set aside
merely on the ground of an erroneous application
of the law or by re- appreciation of evidence.
14. As far as interference with an order made
under Section 34, as per Section 37, is
concerned, it cannot be disputed that such
interference under Section 37 cannot travel
beyond the restrictions laid down under Section
34. In other words, the court cannot undertake an
independent assessment of the merits of the
award, and must only ascertain that the exercise
of power by the court under Section 34 has not
exceeded the scope of the provision. Thus, it is
evident that in case an arbitral award has been
confirmed by the court under Section 34 and by
the court in an appeal under Section 37, this
Court must be extremely cautious and slow to
disturb such concurrent findings.”
3.5. Applying above principles on the present case. As
per the respondent the petitioner was never served with
Section 21 Notice for invocation of Arbitration and further,
the arbitrator was appointed unilaterally without any notice
to the petitioner. Thereafter, notice of the first hearing was
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also served upon the petitioner on 10.05.2022 through
email [email protected]. After unilateral appointment
of arbitrator, on 13.06.2022, on the day of first hearing the
petitioner was proceeded Ex-Parte.
3.6. On 26.07.2022, Ex-Parte evidence was led by the
respondent.
3.7. On 24.08.2022, the Ld. Arbitrator passed Ex-parte
award against the petitioner thereby awarding an amount
of ₹ 1,46,330.84/- along with interest @18% per annum
w.e.f 10.05.2022 till the realization of full payment.
3.8. The facts adumbrated above signifies that the
arbitrator was appointed unilaterally and no opportunity
was given to the petitioner. The notice under Section 21
and intimation of first hearing was sent to petitioner on
[email protected] which does not belong to petitioner
and surprisingly Impugned Ex-Parte Award was sent to
house address of the petitioner. The non-service of Section
21 notice for invocation of arbitration at the house address
of petitioner clearly shows the patent illegality in the entire
process of invocation of arbitration. Thereafter, the
unilateral appointment of arbitrator is against the public
policy of India.
3.9. The seminal question which arises for consideration
of this Court is Whether impugned Award is to set aside
holding that the Learned Sole Arbitrator was unilaterally
appointed by the Respondent and the Award by a person
ineligible to be appointed as an arbitrator under Section
12(5) of the Act read with the Seventh Schedule of the Act
was against the public policy of India?
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3.10. It is a well-settled position in law that unilateral
appointment of an arbitrator by one of the parties to the
dispute is impermissible and invalid being contrary to the
scheme of the Act. Section 12(5) of the Act read with the
Seventh Schedule of the Act lays down that appointment
of any person as an arbitrator that gives rise to justifiable
doubts as their independence or impartiality, is ineligible
to act as an arbitrator. When the power to appoint an
arbitrator is exercised unilaterally, such an appointment is
null and void and an award rendered by an ineligible
arbitrator would be unenforceable.
3.11. The Hon’ble Supreme Court has settled the law this
aspect in TRF Limited v. Energo Engineering Projects
Limited (2017) 8 SCC 377, wherein it has been
categorically held by the Supreme Court that a person who
is ineligible to be an arbitrator cannot nominate any other
person as the arbitrator:
“54. In such a context, the fulcrum of the
controversy would be, can an ineligible
arbitrator, like the Managing Director, nominate
an arbitrator, who may be otherwise eligible and
a respectable person. As stated earlier, we are
neither concerned with the objectivity nor the
individual respectability. We are only concerned
with the authority or the power of the Managing
Director. By our analysis, we are obligated to
arrive at the conclusion that once the arbitrator
has become ineligible by operation of law, he
cannot nominate another as an arbitrator. The
arbitrator becomes ineligible as per prescription
contained in Section 12(5) of the Act. It is
inconceivable in law that person who is
statutorily ineligible can nominate a person.
Needless to say, once the infrastructure
collapses, the superstructure is bound to
collapse. One cannot have a building without the
plinth. Or to put it differently, once the identity
of the Managing Director as the sole arbitrator is
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lost, the power to nominate someone else as an
arbitrator is obliterated. Therefore, the view
expressed by the High Court is not sustainable
and we say so.”
3.12. The Constitution bench of Hon’ble Supreme Court
in the case of Central Organisation for Railway
Electrification v. ECI SPIC SMO MCML (JV) A Joint
Venture Co. 2024 SCC OnLine SC 3219, („CORE‟), while
upholding the judgments of TRF (supra) and Perkins
(supra) has conclusively held that a clause allowing
unilateral appointment of an arbitrator gives justifiable
doubts as to the independence and impartiality of the sole
arbitrator. The Supreme Court further held that unilateral
appointment clauses in public private contracts are
violative of Article 14 of the Constitution of India:
“129. Equal treatment of parties at the stage of
appointment of an arbitrator ensures
impartiality during the arbitral proceedings. A
clause that allows one party to unilaterally
appoint a sole arbitrator is exclusive and hinders
equal participation of the other party in the
appointment process of arbitrators. Further,
arbitration is a quasi-judicial and adjudicative
process where both parties ought to be treated
equally and given an equal opportunity to
persuade the decision-maker of the merits of the
case. An arbitral process where one party or its
proxy has the power to unilaterally decide who
will adjudicate on a dispute is fundamentally
contrary to the adjudicatory function of arbitral
tribunals.
168. In the present reference, we have upheld the
decisions of this Court in TRF (supra) and
Perkins (supra) which dealt with situations
dealing with sole arbitrators. Thus, TRF (supra)
and Perkins (supra) have held the field for years
now. However, we have disagreed with
Voestalpine (supra) and CORE (supra) which
dealt with the appointment of a three-member
arbitral tribunal. We are aware of the fact that
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giving retrospective effect to the law laid down
in the present case may possibly lead to the
nullification of innumerable completed and
ongoing arbitration proceedings involving
three-member tribunals. This will disturb the
commercial bargains entered into by both the
government and private entities. Therefore, we
hold that the law laid down in the present
reference will apply prospectively to arbitrator
appointments to be made after the date of this
judgment. This direction only applies to three-
member tribunals.
J. Conclusion 169. In view of the above
discussion, we conclude that:
a. The principle of equal treatment of parties
applies at all stages of arbitration proceedings,
including the stage of appointment of arbitrators;
b. The Arbitration Act does not prohibit PSUs
from empanelling potential arbitrators. However,
an arbitration clause cannot mandate the other
party to select its arbitrator from the panel
curated by PSUs;
c. A clause that allows one party to unilaterally
appoint a sole arbitrator gives rise to justifiable
doubts as to the independence and impartiality of
the arbitrator. Further, such a unilateral clause is
exclusive and hinders equal participation of the
other party in the appointment process of
arbitrators;
d. In the appointment of a three-member panel,
mandating the other party to select its arbitrator
from a curated panel of potential arbitrators is
against the principle of equal treatment of
parties. In this situation, there is no effective
counterbalance because parties do not participate
equally in the process of appointing arbitrators.
The process of appointing arbitrators in CORE
(supra) is unequal and prejudiced in favour of the
Railways;
e. Unilateral appointment clauses in public-
private contracts are violative of Article 14 of the
Constitution;
f. The principle of express waiver contained
under the proviso to Section 12(5) also applies to
situations where the parties seek to waive the
allegation of bias against an arbitrator appointed
unilaterally by one of the parties. After the
disputes have arisen, the parties can determine
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whether there is a necessity to waive the nemo
judex rule; and
g. The law laid down in the present reference will
apply prospectively to arbitrator appointments to
be made after the date of this judgment. This
direction applies to three-member tribunals.”
3.13. Thus, a unilateral appointment of the sole arbitrator
or the presiding arbitrator by a party to the arbitrations
seated in India is strictly prohibited and considered as null
and void since its very inception. Resultantly, any
proceedings conducted before such unilaterally appointed
Arbitral Tribunal are also nullity and cannot result into an
enforceable award. Any award passed by the unilaterally
appointed Arbitral Tribunal is against public policy of India
and can be set aside under Section 34 Arbitration and
Conciliation Act, 1996.
3.14. I have the profit of referring to the judgment of
Hon’ble Delhi High Court in the case of M/s MAHAVIR
PRASAD GUPTA AND SONS versus GOVT OF NCT OF
DELHI, FAO(COMM) 170/2023, decided on 31.05.2025.
The Hon’ble Court held that:
84. In view of the above discussion, the legal
position on the unilateral appointment of the
Sole and Presiding Arbitrator is summarized as
under:
a) Mandatory Requirement: Any arbitration
agreement providing unilateral appointment of
the sole or presiding arbitrator is invalid. A
unilateral appointment by any party in the
arbitrations seated in India is strictly prohibited
and considered as null and void since its very
inception. Resultantly, any proceedings
conducted before such unilaterally appointed
Arbitral Tribunal are also nullity and cannot
result into an enforceable award being against
Public Policy of India and can be set aside
under Section 34 of the Act and/or refused to be
enforced under Section 36 of the Act.
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3.15. Coming to case in hand, keeping in view the
judgments of Hon’ble Supreme Court and Hon’ble High
Court of Delhi, following points emerge for the
consideration of this Court’
a) The notice Under Section 21 of Arbitration and
Conciliation, Act 1996 was never served on the petitioner
and it was sent on the email [email protected], despite
having the house address of the petitioner which is signifies
that no opportunity was given to the petitioner.
b) After that the respondent appointed Sole Arbitrator
unilaterally, which is against the mandate of law as
adumbrated above.
c) The petitioner was proceeded Ex-Parte and no opportunity
was given to petitioner to participate in the proceedings,
which clearly is against the public policy of India as
adumbrated under Section 34 of Arbitration and
Conciliation Act, 1996.
d) Keeping in view the above discrepancies, the Ex-parte
Award dated 24.08.2022 can alone be set aside on the
ground of unilateral appointment of arbitrator.
e) The respondent filed application under Section 151 stating
therein that the proceedings be allowed de novo in the light
of change of law with respect to appointment of arbitrator
is also considered by this court. This court is of the opinion
that this application cannot be decided in the present
proceedings as the challenge before this court is the Ex-
Parte Award dated 24.08.2022 and this court can only
decide the sustainability of impugned Award within the
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parameters of Section 34 of Arbitration and Conciliation
Act, 1996.
f) As adumbrated above, the unilateral appointment of
arbitrator is against the public policy of India and further,
no opportunity to participate in the proceeding was given to
petitioner which is patently illegal and goes to the root of
the case. The impugned Ex-Parte Award 24.08.2022 is
against the public policy of India, is according, set aside.
All pending applications are disposed of.
g) The respondent shall be at liberty to take steps to pursue its
claims in accordance with law.
h) No order as to cost.
Digitally signed
Announced in the open court AKBAR
by AKBAR
SIDDIQUE
SIDDIQUE Date:
on 23.02.2026 2026.02.23
16:22:25 +0530
(AKBAR SIDDIQUE)
DJ-04, North District,
Rohini Courts, Delhi
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