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Rajia Begum v. Barnali Mukherjee (With connected appeal Barnali Mukherjee v. Rajia Begum & Ors.)|| Civil Appeal No. (arising out of SLP (C) No. 6013 of 2021) Civil Appeal No. (arising out of SLP (C) No. 20262 of 2021)|| Dated: 2 February 2026
Arbitration is often invoked as a shortcut to avoid civil trials. But what happens when the very document containing the arbitration clause is alleged to be forged? This Supreme Court ruling draws a firm constitutional and contractual boundary, preventing arbitration from being misused as a shield against serious fraud allegations.
Facts in Brief
- One party claimed rights under a partnership deed containing an arbitration clause.
- The opposite party categorically denied execution of the deed, alleging forgery and fabrication.
- Conflicting High Court orders led to one proceeding referring the dispute to arbitration and another refusing appointment of an arbitrator.
- The issue reached the Supreme Court.
The Legal Question
Can a dispute be referred to arbitration when the very existence of the arbitration agreement is seriously disputed on grounds of fraud and forgery?
What the Supreme Court Held
Arbitration is founded on consent.
If the execution of the agreement itself is disputed as forged, the foundational consent necessary for arbitration is absent.
Fraud that goes to the root of the arbitration agreement makes the dispute non-arbitrable.
While mere allegations of fraud do not bar arbitration, serious allegations affecting the existence or validity of the arbitration clause do.
An arbitrator cannot decide its own jurisdiction when the parent document is under serious doubt.
The Kompetenz-Kompetenz principle, also referred to as the doctrine of competence-competence, a cornerstone of arbitration law. Kompetenz-Kompetenz does not extend to situations where the arbitration clause itself may not exist in law.
Civil courts must first determine the existence of the arbitration agreement.
Such disputes fall squarely within the jurisdiction of civil courts and cannot be mechanically referred to arbitration under Sections 8 or 11 of the Arbitration and Conciliation Act, 1996.
Practical Takeaways
- Arbitration cannot be forced where the agreement itself is alleged to be forged.
- Courts must conduct a prima facie judicial inquiry into the existence of the arbitration clause.
- This judgment prevents misuse of arbitration as a tool to bypass civil adjudication in fraud-centric disputes.
Cases Relied Upon
A. Ayyasamy v. A. Paramasivam & Ors., (2016) 10 SCC 386 2. Rashid Raza v. Sadaf Akhtar, (2019) 8 SCC 710 3. Vidya Drolia & Ors. v. Durga Trading Corporation, (2021) 2 SCC 1 4. N.N. Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd., (2021) 4 SCC 379 5. Avitel Post Studioz Ltd. v. HSBC PI Holdings (Mauritius) Ltd., (2021) 4 SCC 713 6. Sushma Shivkumar Daga v. Madhurkumar Ramkrishnaji Bajaj, (2024) 12 SCC 253 7. K. Mangayarkarasi v. N.J. Sundaresan, (2025) 8 SCC 299 8. Managing Director Bihar State Food and Civil Supply Corp. Ltd. v. Sanjay Kumar, (2025) SCC OnLine SC 1604. SBP & Co. v. Patel Engineering Ltd., (2005) 8 SCC 618 10. Deep Industries Ltd. v. ONGC, (2020) 15 SCC 706
Judgment Overruled or Followed
The decision follows and reaffirms the principles laid down in A. Ayyasamy, Rashid Raza, Avitel Post Studioz, Vidya Drolia, and Managing Director Bihar State Food and Civil Supply Corp. Ltd. It does not overrule any earlier precedent but harmonizes and clarifies existing law on arbitrability of fraud-related disputes. The Court distinguishes cases where allegations of fraud were incidental and did not affect the validity or existence of the arbitration agreement.
Auther: Abhijit Banerjee
Advocate-on-Record & Arguing Counsel
Supreme Court of India
(Legal Analysis | Arbitration | February 2026)
Disclaimer: This write up is only for academic purpose and should not be considered as an opinion.
