Forgery Allegations that Strike at the Arbitration Agreement: Reference/Appointment Must Fail Where the Clause Is Embedded in a Disputed Document
1. Introduction
Rajia Begum v. Barnali Mukherjee (2026 INSC 106, decided on 02-02-2026) concerns a partnership dispute
in which Rajia Begum claimed induction into a firm (M/s RDDHI Gold) and relied on an alleged
deed of admission and retirement dated 17.04.2007 (“Admission Deed”). The opposite side, led by
Barnali Mukherjee, denied the document’s execution and alleged it was forged/fabricated.
The case presented an unusual procedural inconsistency: on the same factual foundation and the same alleged arbitration agreement,
the High Court (i) in one stream declined interim relief under Section 9 because the arbitration agreement was not even
prima facie shown, but (ii) in another stream later referred a civil suit to arbitration under Section 8 (via Article 227),
while also (iii) separately declining appointment of an arbitrator under Section 11 until existence of the agreement was determined.
Core issue: Can a court refer parties to arbitration (Section 8) or appoint an arbitrator (Section 11)
when the very existence of the arbitration agreement is seriously disputed on allegations of
forgery/fabrication of the underlying instrument containing the arbitration clause?
2. Summary of the Judgment
-
The Supreme Court held that where the arbitration clause is contained in a document whose genuineness/existence is itself under grave doubt
(alleged forged Admission Deed), the dispute goes to the root of arbitral jurisdiction and is
not amenable to arbitration “at this stage”.
-
The Court set aside the High Court’s order dated 24.09.2021 (Article 227) which had referred the civil suit to arbitration under Section 8.
-
The Court affirmed the High Court’s order dated 11.03.2021 rejecting Section 11 appointment as premature while existence of the arbitration agreement remained seriously disputed.
-
The Court stressed that the earlier High Court order dated 04.05.2018 (Section 9 stream), which had found the Admission Deed’s existence doubtful and was allowed to attain finality,
was a relevant consideration and could not be ignored in later Section 8/11 analysis on the same foundational question.
3. Analysis
3.1 Precedents Cited (and their role in the decision)
A. Ayyasamy v. A Paramasivam & Others, (201 6) 1 0 SCC 386
This decision anchors the modern Indian approach that fraud allegations do not automatically oust arbitration.
However, it recognizes an exception where (i) there are serious allegations of fraud amounting to criminal offence, or
(ii) the fraud is so complicated that it requires voluminous evidence, or crucially,
(iii) the fraud is alleged against the arbitration provision itself or permeates the entire contract including the agreement to arbitrate.
In Rajia Begum, the Court relied on this framework to classify the dispute not as “fraud in performance” but as an attack on the very consent to arbitrate.
The judgment uses Avitel to sharpen the “serious fraud” inquiry into two working tests, including the most decisive here:
whether the plea permeates the entire contract and above all the arbitration agreement, rendering it void—i.e., a clear case where the court finds that a party
cannot be said to have entered into the agreement relating to arbitration at all.
Because the arbitration clause in this case was not independent but “embedded” in the disputed Admission Deed, the Court treated the forgery allegation as a
jurisdictional objection that prevents referral/appointment at the threshold.
The Court invoked this recent restatement (notably stating that fraud with respect to the arbitration agreement “stands on a different footing” and is generally in the realm of
non-arbitrability). It was used to justify the Court’s approach: when the arbitration agreement is alleged to be forged,
a court must examine the issue as a gateway/jurisdictional question before compelling arbitration.
Rashid Raza v. Sadaf Akhtar, (201 9) 8 SCC 710
Though not elaborated at length in the reasoning, it appears through the Managing Director restatement as the source of the “two tests.”
Its first test—whether the arbitration agreement itself cannot be said to exist—directly supports the outcome: a forged clause is not a clause at all.
Vidya Drolia & Ors. v. Durga Trading Corporation, (2021) 2 SCC 1
While the Court did not extract Vidya Drolia, the decision’s broader influence is visible in the Court’s insistence on
consent as the foundation of arbitration and the court’s limited but real duty at the referral stage to ensure that an arbitration agreement
prima facie exists before sending parties to the arbitral tribunal.
SBP & Co. v. Patel Engineering Ltd. and Anr. (2 005) 8 SCC 618
Cited for the proposition that Section 11 is not a mechanical exercise: appointment requires satisfaction regarding the existence of an arbitration agreement.
Here, the Court used that logic to approve the High Court’s refusal to appoint an arbitrator while the Admission Deed’s genuineness remained unresolved.
Deep Industries Ltd. v. Oil and Natural Gas Corporation Ltd. & Anr., (2020) 15 SCC 706; Bhaven Construction v. Executive Engineer, Sardar Sarovar Narmada Nigam Ltd., (2022) 1 SCC 75
These cases are relevant to Article 227 discipline: supervisory jurisdiction is narrow and should not become an appellate reassessment of facts.
The Supreme Court’s setting aside of the High Court’s Article 227 interference aligns with the restraint emphasized in these authorities.
ITI Ltd. v. Siemens Public Communications Network Ltd., (2002) 5 SCC 510; Nirma Ltd. v. Lurgi Lentjes Energietechnik GMBH, (2002) 5 SCC 520
Though not discussed in detail, these are typically relied upon for the architecture of arbitral law remedies and court intervention limits; here they sit in the background of
the Court’s insistence that courts must still ensure a jurisdictional minimum: a real arbitration agreement.
N.N. Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd., (2021) 4 SCC 379; Sushma Shivkumar Daga & Anr. v. Madhurkumar Ramkrishnaji Bajaj & Ors., (2024) 12 SCC 253; K. Mangayarkarasi & Anr. v. N.J. Sundaresan & Anr., (2025) 8 SCC 299
These were cited by counsel; the Court’s ratio does not turn on them. The decisive line is instead drawn from the “serious fraud / non-existence of arbitration agreement”
authorities (A. Ayyasamy, Avitel, Managing Director Bihar State Food...).
Lalchand Shah v. Rishabh Enterprises, (2018) 15 SCC 6 78
This authority appears through the Managing Director restatement as part of the Court’s fraud-arbitrability lineage.
Its significance here is confirmatory: Indian arbitration law generally favors reference, but not at the cost of assuming an agreement that may not exist.
3.2 Legal Reasoning
-
Arbitration is founded on consent; consent must be shown at least prima facie.
The Court emphasized that a party can be bound to arbitrate only if it is first shown, even at a prima facie level, that it agreed to submit disputes to arbitration.
If the containing document is alleged to be forged, the court cannot treat arbitration as a default route.
-
Forgery/fabrication allegations directed at the arbitration agreement are jurisdictional.
The Court treated a plea of “non-existence” of the arbitration agreement (because the deed itself may be forged) as qualitatively different from disputes about
contractual performance. This places the dispute within the “serious fraud” category that makes the matter generally non-arbitrable at the threshold.
-
On facts, the Admission Deed was under a “grave cloud of doubt”.
The Court relied on multiple circumstances: the internal inconsistency in respondent no.1’s own position about her husband’s continuing partnership role,
the deed surfacing only after about nine years, and contemporaneous banking/financial documents depicting her not as partner but as guarantor and depicting others as partners.
-
Procedural finality of the Section 9 prima facie finding mattered.
Although Section 9 findings are prima facie, the Court held that once the High Court’s Section 9 order (04.05.2018) attained finality (SLP dismissed),
it could not be ignored in later proceedings on the same foundational question—especially absent any change in circumstances.
-
Section 8(2) compliance (document production) supported refusal to refer.
The Trial Court and First Appellate Court had found that respondent no.1 failed to produce the original Admission Deed or a certified copy, strengthening the refusal to refer.
-
Article 227 is supervisory, not appellate.
The Supreme Court faulted the High Court for dislodging concurrent findings and effectively reappreciating the record while exercising Article 227 jurisdiction.
-
Section 11 appointment was correctly refused as premature.
If existence of the arbitration agreement itself requires adjudication, appointing an arbitrator would improperly presume jurisdiction.
3.3 Impact
-
Sharper gateway scrutiny where the arbitration clause is embedded in an allegedly forged instrument.
The judgment reinforces that “kompetenz-kompetenz” does not compel courts to refer disputes when the very agreement to arbitrate is plausibly non-existent.
-
Practical weight of finalized prima facie findings across arbitral stages (Section 9 → Section 8/11).
While not framed as formal res judicata, the Court’s reasoning signals that a concluded prima facie determination on the same issue
(existence/genuineness of the arbitration agreement) is a significant factor, limiting inconsistent outcomes across proceedings.
-
Constraint on Article 227 in arbitration matters.
By setting aside the High Court’s Article 227 interference with concurrent findings, the decision strengthens the message that supervisory jurisdiction cannot be used to
“override” fact-based determinations in referral disputes.
-
Litigation strategy consequence.
Parties asserting arbitration on the basis of disputed documents must be prepared to meet an early burden: produce the instrument (Section 8(2) discipline) and establish
prima facie authenticity. Mere reliance on a clause in a contested document is unlikely to suffice.
4. Complex Concepts Simplified
- Section 8 (Reference to arbitration)
-
When a civil suit is filed despite an arbitration clause, a party may ask the court to send the dispute to arbitration. The court must be satisfied that an arbitration agreement
exists and covers the dispute.
- Section 11 (Appointment of arbitrator)
-
If parties cannot agree on an arbitrator, the court may appoint one. But the court cannot appoint an arbitrator if the arbitration agreement itself is seriously in doubt.
- Section 9 (Interim measures)
-
Courts may grant interim protection (like preservation of property) in support of arbitration. However, interim relief presupposes at least a prima facie arbitration agreement.
- “Prima facie” finding
-
A tentative assessment based on the material then available, not a final trial-like decision. Yet, if such an order attains finality and the same question recurs on the same facts,
it remains highly relevant.
- Serious fraud affecting arbitrability
-
Not all fraud allegations block arbitration. But if the allegation is that the arbitration agreement itself is forged (so there was never consent), the court treats it as a
jurisdictional bar to reference/appointment.
- Article 227 (Supervisory jurisdiction)
-
A High Court can correct jurisdictional errors and grave procedural injustice of subordinate courts. It cannot act like an appellate court to re-weigh evidence and substitute
plausible factual conclusions with its own.
5. Conclusion
Rajia Begum v. Barnali Mukherjee consolidates a clear threshold rule: where the arbitration clause is contained in a document whose execution/existence is
seriously disputed on allegations of forgery, the dispute strikes at the root of consent and thus arbitral jurisdiction; courts should not compel arbitration under Section 8
nor appoint an arbitrator under Section 11 until the existence of the arbitration agreement is credibly established.
The decision is equally significant institutionally: it discourages inconsistent outcomes across Section 9/8/11 streams on the same foundational facts and reasserts that
Article 227 cannot be used to unsettle concurrent factual findings in arbitration referral disputes.