KAMAL GUPTA & ANR. versus M/S L.R BUILDERS PVT. LTD. & ANR. ETC.

Citation: [2025] 9 S.C.R. 137 · Decided: 13-08-2025 · Supreme Court of India · Bench: PAMIDIGHANTAM SRI NARASIMHA · Disposal: Appeal(s) allowed

cites 1 · see the full citation network in Lexace

Judgment (excerpt)

[2025] 9 S.C.R. 137 : 2025 INSC 975
Kamal Gupta & Anr. 
v. 
M/s L.R Builders Pvt. Ltd. & Anr. Etc.
(Civil Appeal No(s). 10639-10643 of 2025)
13 August 2025
[Pamidighantam Sri Narasimha and  
Atul S. Chandurkar,* JJ.]
Issue for Consideration
Whether it is permissible for a non-signatory to an agreement 
leading to arbitration proceedings to remain present in such 
arbitration proceedings; after appointment of an arbitrator u/s.11(6), 
Arbitration and Conciliation Act, 1996, whether it is permissible for 
the Court in such disposed of proceedings to issue any further 
ancillary directions concerning the arbitration proceedings that have 
commenced pursuant to appointment of the arbitrator.
Headnotes†
Arbitration and Conciliation Act, 1996 – ss.35, 42A – Oral 
family settlement entered into between ‘PG’ and ‘KG’ was 
reduced in a Memorandum of Understanding/Family Settlement 
Deed which was not signed by son of ‘KG’ (‘RG’) – Disputes 
arose, proceedings u/s.11(6) were filed for appointment of a 
sole arbitrator – ‘RG’, a non-signatory to the agreement filed 
application seeking intervention – Arbitrator appointed – 
Eventually, application for intervention was also allowed and 
‘RG’ and other non-signatory intervenors were permitted to 
be present, either personally or through counsel during the 
arbitration – Challenge to:
Held: The permission granted to ‘RG’, a non-signatory to remain 
present in all proceedings before the sole arbitrator is without 
jurisdiction and beyond the scope of the Act – When the arbitration 
proceedings can take place only between parties to an arbitration 
agreement and s.35 does not make the arbitral award to be passed 
binding on non-signatories to such agreement, there is no legal 
right conferred by the Act that would enable a non-party to the 
agreement to remain present in arbitration proceedings between 
signatories to the agreement – The parties to the agreement being 
bound by the terms of the agreement and the sole arbitrator being 
* Author
138
[2025] 9 S.C.R.
Supreme Court Reports
required to resolve the disputes between parties to the agreement, 
a non-signatory to the agreement would be a stranger to such 
arbitration proceedings – A stranger cannot be permitted to remain 
present in the arbitration proceedings especially when the award to 
be passed would not be binding on such stranger – The arbitrator, 
the arbitral institution and the parties to the arbitration agreement 
have to maintain confidentiality of all arbitral proceedings  – 
Permitting a stranger to the arbitration proceedings to remain 
present and observe the said proceedings would result in breach 
of the provisions of s.42A – The remedy, if any, to a party who is 
not a signatory to the agreement is available u/s.36 of the Act if 
such award is sought to be enforced against him. [Paras 13, 14]
Arbitration and Conciliation Act, 1996 – ss.11(6), 5 – After 
appointment of an arbitrator u/s.11(6), whether it is permissible 
for the Court in such disposed of proceedings to issue 
any further ancillary directions concerning the arbitration 
proceedings that have commenced pursuant to appointment 
of the arbitrator:
Held: No – The sole arbitrator having been appointed u/s.11(6) on 
22.03.2024, nothing further was required to be done in exercise 
of jurisdiction u/s.11(6) thereafter – The prayer made by ‘RG’ 
and other intervenors to permit them to remain present in the 
arbitration proceedings before the sole arbitrator was not liable 
to be entertained as such request went beyond the scope of 
s.11(6) – s.151, CPC could not have been invoked in this regard – 
The Court had become functus officio after the sole arbitrator was 
appointed and the proceedings u/s.11(6) had been disposed of – 
s.5 also precluded the Court from entertaining such request which 
does not find place in Part-I of the Act – Moreover, the impugned 
direction runs counter to s.42A – Applications filed by ‘RG’ and 
other non-signatory companies in the disposed of proceedings 
were misconceived – The attempt on their behalf to re-open the 
proceedings amounted to an abuse of the process of law – It 
was an error to entertain the same on merits – Order passed on 
the various interim applications, set aside – Costs imposed on 
respondents – Code of Civil Procedure, 1908 – s.151. [Paras 23, 24]
Case Law Cited
In Re: Interplay between Arbitration Agreements under the 
Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 
1899, 2023 INSC

Excerpt shown. Read the full judgment & AI analysis in Lexace.