DANI WOOLTEX CORPORATION & ORS. versus SHEIL PROPERTIES PVT. LTD. & ANR.
[2024] 6 S.C.R. 761, Supreme Court of India, 2024
Outcome: Dismissed (Dismissed)
Segment: Issues
* Author
[2024] 6 S.C.R. 761 : 2024 INSC 433
Dani Wooltex Corporation & Ors. 
v. 
Sheil Properties Pvt. Ltd. & Anr.
(Civil Appeal No. 6462 of 2024)
16 May 2024
[Abhay S. Oka* and Pankaj Mithal, JJ.]
Issue for Consideration
When can the power under clause (c) of sub-section (2) of section 
32 of the Arbitration and Conciliation Act, 1996 be exercised; Is it 
the Arbitral Tribunal’s duty to fix a meeting for hearing; Whether the 
failure of the claimant to request the Arbitral Tribunal to fix a date 
for hearing, per se, is the ground to conclude that the proceedings 
have become unnecessary; Whether abandonment of claim by a 
claimant can be a ground to invoke clause (c) of sub-section (2) 
of section 32.
Headnotes
Arbitration and Conciliation Act, 1996 – Clause (c) of sub-
section (2) of section 32 – When can the power under clause 
(c) of sub-section (2) of section 32 of the Arbitration and 
Conciliation Act, 1996 be exercised:
Held: The power under clause (c) of sub-section (2) of Section 32 
of the Arbitration Act can be exercised only if, for some reason, 
the continuation of proceedings has become unnecessary or 
impossible – Unless the Arbitral Tribunal records its satisfaction 
based on the material on record that proceedings have become 
unnecessary or impossible, the power under clause (c) of sub-
section (2) of Section 32 cannot be exercised – If the said power 
is exercised casually, it will defeat the very object of enacting the 
Arbitration Act. [Para 21(a)]
Arbitration and Conciliation Act, 1996 – Is it the Arbitral 
Tribunal’s duty to fix a meeting for hearing:
Held: It is the Arbitral Tribunal’s duty to fix a meeting for hearing 
even if parties to the proceedings do not make such a request – It 
is the duty of the Arbitral Tribunal to adjudicate upon the dispute 
referred to it – If, on a date fixed for a meeting/hearing, the parties
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remain absent without any reasonable cause, the Arbitral Tribunal 
can always take recourse to the relevant provisions of the Arbitration 
Act, such as Section 25. [Para 21(b)]
Arbitration and Conciliation Act, 1996 – Whether the failure of 
the claimant to request the Arbitral Tribunal to fix a date for 
hearing, per se, is the ground to conclude that the proceedings 
have become unnecessary:
Held: The failure of the claimant to request the Arbitral Tribunal 
to fix a date for hearing, per se, is no ground to conclude that the 
proceedings have become unnecessary. [Para 21(c)]
Arbitration and Conciliation Act, 1996 – Clause (c) of sub-
section (2) of section 32 – Whether abandonment of claim by 
a claimant can be a ground to invoke clause (c) of sub-section 
(2) of section 32:
Held: The abandonment of the claim by a claimant can be a 
ground to invoke clause (c) of sub-section (2) of Section 32 – The 
abandonment of the claim can be either express or implied – The 
abandonment cannot be readily inferred – There is an implied 
abandonment when admitted or proved facts are so clinching that 
the only inference which can be drawn is of the abandonment – 
Only if the established conduct of a claimant is such that it leads 
only to one conclusion that the claimant has given up his/her claim 
can an inference of abandonment be drawn – Even if it is to be 
implied, there must be convincing circumstances on record which 
lead to an
inevitable inference about the abandonment – Only 
because a claimant, after filing his statement of claim, does not 
move the Arbitral Tribunal to fix a date for the hearing, the failure 
of the claimant, per se, will not amount to the abandonment of 
the claim. [Para 21 (d)]
Arbitration and Conciliation Act, 1996 – Clause (c) of sub-
section (2) of section 32 – A part of first appellant’s (D) property 
was permitted to be developed by S under Development 
agreement  – A MOU was also executed between the first 
appellant and M, by which first appellant agreed to sell another 
portion of property to M – Dispute arose – A consensus was 
reached between all the three parties to appoint a Arbitrator – 
Arbitral Tribunal had to deal with claims filed by both S 
and M – M’s claim culminated in an award on 06.05.2017 –
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Dani Wooltex Corporation & Ors. v. Sheil Properties Pvt. Ltd. & Anr.
However, arbitral proceedings based on claim filed by S did 
not proceed – First Appellant filed an application invoking 
the Arbitral Tribunal power under Clause (c) of sub-section 
(2) of section 32 of the Arbitration Act contending that S had 
abandoned arbitral proceedings – Following, the Arbitral 
Tribunal terminated arbitral proceedings – However, the Single 
Judge of the High Court directed the tribunal to continue with 
the proceedings – Propriety:
Held: The question is whether S abandoned its claim filed before 
the Arbitrator – S had regularly attended meetings held to hear 
M’s claim – During the period during which the claim of M was 
heard, at no stage, the Arbitrator suggested that the claim of S 
could be heard simultaneously – On the contrary, from the conduct 
of the parties and the Arbitrator, an inference can be drawn that 
M’s claim was given priority – In any case, there is no express 
abandonment – Even if it is to be implied, there must be convincing 
circumstances on record which lead to an inevitable inference 
about the abandonment – In the facts of the case, there was no 
abandonment either express or implied – In a case where the 
claim is abandoned, the Arbitrator can take the view that it would 
be unnecessary to continue the proceedings based on the already 
abandoned claim – In this case, the inference of the abandonment 
has been drawn by the
Arbitrator only on the grounds that S did not 
challenge the M award and took no steps to convene the meeting 
of the Arbitral Tribunal – The failure to challenge the award on M’s 
claim will not amount to abandonment of the claim filed by S – In 
the claim submitted by S, a prayer was made in the alternative for 
passing an award in terms of money against the first appellant – 
Therefore, there was absolutely no material on record to conclude 
that S had abandoned its claim or, at least, the claim against the 
first appellant. [Para 20]
Case Law Cited
NRP Projects Pvt. Ltd. & Anr. v. Hirak Mukhopadhyay & Anr., 2012 
SCC OnLine Cal 10496; Kothari Developers v. Madhukant S Patel, 
Arbitration Petition (L) No.29362 of 2022; Lalitkumar V Sanghavi 
& Anr. v. Dharamdas V Sanghavi & Ors. [2014] 3 SCR 558 : 2014 
(7) SCC 255; Godrej and Boyce Manufacturing Company Limited 
v. Municipal Corporation of Greater Mumbai & Ors. [2023] 6 SCR 
56 : 2023 SCC Online 592 – referred to.
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List of Acts
Arbitration and Conciliation Act, 1996.
List of Keywords
Exercise of power under clause (c) of sub-section (2) of section 
32 of the Arbitration and Conciliation Act, 1996; Abandonment of 
claim; Arbitral proceeding becoming unnecessary and impossible; 
Express and implied abandonment of claim; Absence in arbitral 
proceedings; Fixing of date of hearing by Arbitral Tribunal.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No.6462 of 2024
From the Judgment and Order dated 03.07.2023 of the High Court 
of Judicature at Bombay in ARBP No.472 of 2021
Appearances for Parties
Nakul Divan, Sr. Adv., Gaurav Agarwal, Mahesh Agarwal, Rishi 
Agrawala, Ankur Saigal, Gaurav Mehta, Ms. S. Lakshmi Iyer, Vikrant 
Shetty, Ms. Vidisha Swarup, Ms. Tansi Fotedar, Ms. Soumil Jhanwar, 
E. C. Agrawala, Advs. for the Appellants.
Shekhar Naphade, Sr. Adv., Vikas Mehta, Farah Hashmi, Ms. 
Aishwarya Dash, Prashant Pratap, Adith Nair, Vinayak Sharma, Sahil 
Gandhi, Ruben Vakil, Advs. for the Respondents.
Judgment / Order of the Supreme Court
Judgment
Abhay S. Oka, J.
1.	
Leave granted.
2.	
In this appeal, the issue involved is about the legality and validity of 
the order of termination of the arbitral proceedings under clause (c) of 
sub-section (2) of Section 32 of the Arbitration and Conciliation Act, 
1996 (for short, ‘the Arbitration Act’) passed by the Arbitral Tribunal.
FACTUAL ASPECTS
3.	
A brief reference to the
factual aspects will be necessary to 
appreciate the issue. The first appellant, Dani Wooltex Corporation, 
is a partnership firm that owned certain land in Mumbai. The first
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Dani Wooltex Corporation & Ors. v. Sheil Properties Pvt. Ltd. & Anr.
respondent, Sheil Properties (for short, ‘Sheil’), a private limited 
company, was engaged in real estate development. The second 
respondent, Marico Industries (for short, ‘Marico’), is also a limited 
company in the consumer goods business. A part of the first 
appellant’s property was permitted to be developed by Sheil under 
the Development Agreement dated 11th August 1993 (for short, ‘the 
Agreement’). A Memorandum of Understanding (MOU) was executed 
by and between the first appellant and Marico, by which the first 
appellant agreed to sell another portion of its property to Marico. 
Under the MOU, Marico was given the benefit of a certain quantity of 
FSI/TDR. Marico issued a public notice inviting objections, to which 
Sheil submitted an objection and stated that any transaction between 
the first appellant and Marico would be subject to the Agreement. The 
dispute between the first appellant and Sheil led Sheil to institute a 
suit (Suit no.2541 of 2006) for the specific performance of the MOU 
as modified by the alleged consent terms. The first appellant and 
Marico were parties to the said suit. Marico also filed a suit (Suit 
no.2116 of 2011) against the first appellant herein, and Sheil was 
also made a party defendant to the suit. A consensus was reached 
amongst the three parties, and a senior Member of the Bar was 
appointed as the sole Arbitrator. The order of
appointment of the 
sole Arbitrator was passed on 13th October 2011 in the suit filed by 
Marico. The order records that the dispute in the suit was referred 
to the arbitration. On 17th November 2011, the suit filed by Sheil 
was disposed of by referring the dispute in the said suit to the same 
sole Arbitrator. Thus, the Arbitral Tribunal had to deal with the claims 
filed by Sheil and Marico, both against the first appellant. Both Sheil 
and Marico filed their respective statements of claim. It appears that 
the arbitral proceeding based on Marico’s claim was heard earlier, 
culminating in an award on 6th May 2017. For whatever reasons, the 
arbitral proceeding based on the claim filed by Sheil did not proceed.
4.	
The first appellant addressed a communication to the Arbitral Tribunal 
on 26th November 2019, followed by another communication dated 7th 
January 2020 requesting the Arbitral Tribunal to dismiss the claim of 
Sheil on the ground that the company had abandoned the claim. In 
response, the Arbitral Tribunal fixed a meeting on 11th March 2020. 
As Sheil did not attend the meeting, the next meeting was fixed 
on 18th March 2020. The meeting scheduled for 18th March 2020 
was not held. Due to the COVID-19 pandemic, the next meeting
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could be held only on 12th August 2020, when the Arbitral Tribunal 
directed the first appellant to file a formal application for dismissal 
of the claim of Sheil and permitted Sheil to file a reply. Accordingly, 
on 27th August 2020, the first appellant filed an application invoking 
the Arbitral Tribunal’s power under clause (c) of sub-section (2) of 
Section 32 of the Arbitration Act. The contention raised by the first 
appellant in the said application was that Sheil’s conduct of not taking 
any steps for eight years shows that the said company abandoned 
the arbitral proceedings. Sheil filed an affidavit and specifically 
contended that no ground was made out to act under Section 32(2)
(c) of the Arbitration Act. Sheil also raised other factual contentions 
and denied the allegation of abandonment. 
5.	
The Arbitral Tribunal passed an order on 1st December 2020 
terminating the arbitral proceedings in the exercise of power under 
Section 32(2)(c) of the Arbitration Act. The Arbitral Tribunal relied 
upon a decision of the Calcutta High Court in the case of NRP 
Projects Pvt. Ltd. & Anr. v. Hirak Mukhopadhyay & Anr1. Sheil 
filed an application before the High Court of Judicature at Bombay to 
challenge the legality and validity of the order of the Arbitral Tribunal 
by taking recourse to Section 14(2) of the Arbitration Act. By the 
impugned judgment and order, the learned Single Judge set aside 
the order of
termination of the proceedings passed by the Arbitral 
Tribunal and directed the Arbitral Tribunal to continue the proceedings. 
We may note here that I.A. no.180843 of 2023 reveals that on 26th 
July, 2023, the learned sole Arbitrator informed the parties of his 
unwillingness to continue as the sole Arbitrator.
SUBMISSIONS
6.	
Mr Nakul Divan, the learned senior counsel appearing for the first 
appellant, pointed out that the learned Single Judge of the High Court 
of Judicature at Bombay in her judgment dated 13th January 2023 in 
the case of Kothari Developers v. Madhukant S Patel2 held that 
the Arbitral Tribunal was entitled to invoke its power under Section 
32(2)(c) of the Arbitration Act if it is proved that the proceedings have 
become unnecessary due to the claimant’s inaction. He submitted 
1	
2012 SCC OnLine Cal 10496
2	
Arbitration Petition (L) No.29362 of 2022
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Dani Wooltex Corporation & Ors. v. Sheil Properties Pvt. Ltd. & Anr.
that Section 14 of the Arbitration Act does not empower the Court 
to second-guess the Arbitral Tribunal, especially when the decision 
of the Arbitral Tribunal is based on the appreciation of facts and a 
plausible view has been taken. The learned senior counsel further 
pointed out that the Arbitral Tribunal attempted to ensure Sheil’s 
participation in Marico’s arbitration. After the award in the case of 
Marico, Sheil declined to attend the meeting held on 11th March 
2020 by the Arbitral Tribunal. It is submitted that there is nothing on 
record to indicate that the arbitration based on Sheil’s claim was to 
proceed after Marico’s arbitration, and there is no material placed 
on record to that effect. He submitted that the Arbitral Tribunal had 
rendered a finding of fact on the stand taken by Sheil, which cannot 
be disturbed by the Court. He submitted that Sheil’s plea that it was 
awaiting the decision in the Marico arbitration could not be accepted 
as the Arbitral Tribunal never indicated that the arbitration based on 
Sheil’s claim would proceed only after the Marico arbitration was 
over. He submitted that Sheil took no interest in moving the Arbitral 
Tribunal for a long time since 2012. He submitted that the word 
“unnecessary” used in Section 32(2)(c) of the Arbitration Act will 
have to be widely or liberally interpreted. 
7.	
Mr Shekhar Naphade, the learned senior
counsel appearing for Sheil, 
contended that without recording a positive finding that it is either 
unnecessary or impossible to continue the proceedings, the power 
under Section 32(2)(c) of the Arbitration Act cannot be exercised. 
Relying upon the decision on this Court in the case of Lalitkumar V 
Sanghavi & Anr. v. Dharamdas V Sanghavi & Ors.3, the learned 
senior counsel submitted that the Court, while exercising the power 
under Section 14(2) of the Arbitration Act, is required to go into the 
issue of the legality of the termination of mandate by the Arbitral 
Tribunal. He submitted that the abandonment cannot be inferred. 
He relied upon a decision of this Court in the case of Godrej and 
Boyce Manufacturing Company Limited v. Municipal Corporation 
of Greater Mumbai & Ors4. He submitted that suits filed by Marico 
and Sheil were separate suits, and, therefore, arbitral proceedings 
were also separate. Marico and Sheil had not sought any relief 
3	
[2014] 3 SCR 558 : (2014) 7 SCC 255
4	
[2023] 6 SCR 56 : 2023 SCC Online 592
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against each other. However, as there was an overlap between the 
two references concerning the enforceability of the consent terms, 
the parties agreed to proceed with Sheil’s reference after Marico’s 
reference was decided. He further submitted that after preliminary 
directions were issued on 8th November 2011 regarding the filing of 
pleadings, no further directions were issued by the sole Arbitrator in 
the reference of Sheil. He submitted that the decision of the Calcutta 
High Court in the case of NRP Projects Pvt. Ltd.1 is confined to the 
facts of the case before it. He submitted that Marico’s reference took 
six years, and that is the reason for postponing Sheil’s reference. The 
learned senior counsel would, therefore, submit that the interference 
made by the High Court in the arbitral proceedings under Section 
14 of the Arbitration Act was certainly justified. 
CONSIDERATION OF SUBMISSIONS
8.	
Chapter V of the Arbitration Act contains provisions regarding the 
conduct of arbitral proceedings. If parties do not agree on the 
timelines for filing statements of claim and defence, under sub-
section (1) of Section 23, the Arbitral Tribunal has the power to 
determine the timelines for filing pleadings. Sub-section (4) of Section 
23, incorporated with effect from 23rd October 2015, provides that 
the filing of pleadings (statements of claim and defence) shall be 
completed within six months from the date the
learned Arbitrator or 
all the learned Arbitrators, as the case may be, receive notice of 
their appointment in writing.
9.	
After the pleadings are complete, the next stage is of hearing. Sub-
section (2) of Section 24 provides that parties shall be given sufficient 
advance notice of any hearing or meeting of the Arbitral Tribunal for 
inspections of documents, goods or other property. 
10.	 The issue of the parties’ default is dealt with in Section 25 of the 
Arbitration Act. Section 25 reads thus: 
“25. Default of a party.—Unless otherwise agreed by the 
parties, where, without showing sufficient cause,— 
(a)	 the claimant fails to communicate his statement 
of claim in accordance with sub-section (1) of 
section 23, the arbitral tribunal shall terminate 
the proceedings;
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Dani Wooltex Corporation & Ors. v. Sheil Properties Pvt. Ltd. & Anr.
(b)	 the respondent fails to communicate his statement of 
defence in accordance with sub-section (1) of section 
23, the arbitral tribunal shall continue the proceedings 
without treating that failure in itself as an admission 
of the allegations by the claimant and shall have the 
discretion to treat the right of the respondent to file 
such statement of defence as having been forfeited.
(c)	
a party fails to appear at an oral hearing or to 
produce documentary evidence, the arbitral 
tribunal may continue the proceedings and make 
the arbitral award on the evidence before it.”
(emphasis added)
Clause (a) of Section 25 of the Arbitration Act provides that on the 
failure of the claimants to communicate the statement of claim in 
accordance with sub-section (1) of Section 23, the Arbitral Tribunal 
shall terminate the proceedings. Clause (b) of Section 25 provides 
that if the respondent fails to communicate his statement of defence 
in accordance with sub-section (1) of Section 23, the Arbitral Tribunal 
shall continue the proceedings. Clause (c) of Section 25 provides that 
if a party fails to appear at an oral hearing or to produce documents, 
the Arbitral Tribunal may continue the proceedings and make the 
arbitral award on the basis of whatever evidence is available with it. 
The power to terminate arbitral proceedings on the claimant’s default 
to file a statement of claim is
the only provision under the Arbitration 
Act to terminate the arbitral proceedings apart from Section 32.
11.	 The Arbitration Act has two provisions for terminating an Arbitrator’s 
mandate. Sections 14 and 15 are the relevant sections. The 
Arbitrator is empowered to withdraw from his office, which terminates 
his mandate. However, the arbitral proceedings continue by the 
arbitrator’s substitution. 
12.	 The order of termination passed by the learned Arbitrator, in this 
case, gives an impression that he was of the view that unless 
parties move the Arbitral Tribunal with a request to fix a meeting 
or a date for the hearing, the Tribunal was under no obligation to 
fix a meeting or a date for hearing. The appointment of the Arbitral 
Tribunal is made with the object of adjudicating upon the dispute 
covered by the arbitration clause in the agreement between the
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parties. By agreement, the parties can appoint an Arbitrator or 
Arbitral Tribunal. Otherwise, the Court can do so under section 11 
of the Arbitration Act. An Arbitrator does not do pro bono work. For 
him, it is a professional assignment. A duty is vested in the learned 
Arbitrator or the Arbitral Tribunal to adjudicate upon the dispute and 
to make an award. The object of the Arbitration Act is to provide 
for an efficient dispute resolution process. An Arbitrator who has 
accepted his appointment cannot say that he will not fix a meeting 
to conduct arbitral proceedings or a hearing date unless the parties 
request him to do so. It is the duty of the Arbitral Tribunal to do 
so. If the claimant fails to file his statement of claim in accordance 
with Section 23, in view of clause (a) of Section 25, the learned 
Arbitrator is bound to terminate the proceedings. If the respondent 
to the proceedings fails to file a statement of defence in accordance 
with Section 23, in the light of clause (b) of Section 25, the learned 
Arbitrator is bound to proceed further with the arbitral proceedings. 
Even if the claimant, after filing a statement of claim, fails to appear 
at an oral hearing or fails to produce documentary evidence, the 
learned Arbitrator is expected to continue the proceedings as 
provided in clause (c) of Section 25. Thus, he can proceed to make 
an award in such a case.
13.	 On a conjoint reading of Sections 14
and 15, it is apparent that an 
Arbitrator always has the option to withdraw for any reason. Therefore, 
he can withdraw because of the parties’ non-cooperation in the 
proceedings. But in such a case, his mandate will be terminated, 
not the arbitral proceedings.
14.	 Now, we come to Section 32 of the Arbitration Act, which reads thus:
“32. Termination of proceedings.— (1) The arbitral 
proceedings shall be terminated by the final arbitral award 
or by an order of the arbitral tribunal under sub-section (2). 
(2) The arbitral tribunal shall issue an order for the 
termination of the arbitral proceedings where— 
(a)	 the claimant withdraws his claim, unless the 
respondent objects to the order and the arbitral 
tribunal recognises a legitimate interest on 
his part in obtaining a final settlement of the 
dispute,
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Dani Wooltex Corporation & Ors. v. Sheil Properties Pvt. Ltd. & Anr.
(b)	 the parties agree on the termination of the 
proceedings, or 
(c)	 the arbitral tribunal finds that the continuation 
of the proceedings has for any other reason 
become unnecessary or impossible.
(3) Subject to section 33 and sub-section (4) of section 
34, the mandate of the arbitral tribunal shall terminate with 
the termination of the arbitral proceedings.”
(emphasis added)
Section 32 provides for the termination of the arbitral proceedings 
in the following contingencies:
a.	
On making final arbitral award;
b.	
On the Claimant withdrawing his claim as provided under clause 
(a) of sub-section (2) of Section 32;
c.	
Parties agreeing on termination of arbitral proceedings as 
provided under clause (b) of sub-section (2) of Section 32; or
d.	
When the Arbitral Tribunal finds that the continuation of 
proceedings has become unnecessary or impossible for any 
other reason, as provided under clause (c) of sub-section (2) 
of Section 32.
15.	 Therefore, clause (c) of sub-section (2) of Section 32 can be invoked 
for reasons other than those mentioned in sub-section (1) of Section 32 
and clauses (a) and (b) of sub-section (2) of Section 32. Under clause 
(c), the mere existence of a reason for terminating the proceedings 
is not sufficient. The reason must be such that the continuation 
of the proceedings has become unnecessary or impossible. In a 
given case, when a claimant files
a claim and does not attend the 
proceedings, clause (a) of Section 25 comes into operation, resulting 
in the learned Arbitrator terminating the proceedings. If, after filing 
a claim, the claimant fails to appear at an oral hearing or fails to 
produce documentary evidence, it cannot be said that the continuation 
of proceedings has become unnecessary. If the claimant fails to 
appear at an oral hearing after filing the claim, in view of clause (c) 
of Section 25, the learned Arbitrator can proceed with the arbitral 
proceedings. The fact that clause (c) of Section 25 enables the
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Arbitral Tribunal to proceed in the absence of the claimant shows 
the legislature’s intention that the claimant’s failure to appear after 
filing the claim cannot be a ground to say that the proceedings have 
become unnecessary or impossible.
16.	 Therefore, if the party fails to appear for a hearing after filing a 
claim, the learned Arbitrator cannot say that continuing the arbitral 
proceedings has become unnecessary. Abandonment by the claimant 
of his claim may be grounds for saying that the arbitral proceedings 
have become unnecessary. However, the abandonment must 
be established. Abandonment can be either express or implied. 
Abandonment cannot be readily inferred. One can say that there is an 
implied abandonment when admitted or proved facts are so clinching 
and convincing that the only inference which can be drawn is of the 
abandonment. Mere absence in proceedings or failure to participate 
does not, per se, amount to abandonment. Only if the established 
conduct of a claimant is such that it leads only to one conclusion 
that the claimant has given up, his/her claim can an inference of 
abandonment be drawn. Merely because a claimant, after filing his 
statement of claim, does not move the Arbitral Tribunal to fix a date 
for the hearing, it cannot be said that the claimant has abandoned 
his claim. The reason is that the Arbitral Tribunal has a duty to fix a 
date for a hearing. If the parties remain absent,
the Arbitral Tribunal 
can take recourse to Section 25.
17.	 Now, coming to the facts of the case, we must note here that Sheil and 
Marico had filed separate suits. In the suit filed by Marico, an order was 
passed on 13th October 2011, referring the dispute involved therein 
to the sole Arbitrator. Similarly, in the suit filed by Sheil, the order of 
reference to the learned Arbitrator was passed on 17th November 
2011. Therefore, by two separate orders, two arbitral proceedings 
were ordered to be initiated. In one proceeding, the claimant was 
Marico. The first appellant and Sheil were the respondents. In the 
other, Sheil was the claimant. The first appellant and Marico were 
the respondents. In fact, in the minutes of the preliminary meeting 
dated 8th November 2011, it is noted that the learned Arbitrator 
issued directions to Marico and Sheil to file their statements of claim. 
Therefore, even the learned Arbitrator proceeded on the footing that 
there were two distinct claimants and claims. They were directed to 
file their statements of claim in the respective arbitral proceedings.
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Dani Wooltex Corporation & Ors. v. Sheil Properties Pvt. Ltd. & Anr.
After that, on 20th December 2011, the learned Arbitrator granted 
an extension of time to complete the pleadings. Both the claimants 
filed their respective statements of claim. The learned Arbitrator first 
conducted arbitral proceedings in which the claimant was Marico. 
Paragraph 10 of the award dated 6th May 2017 made on Marico’s 
claim is very relevant, which reads thus:
“10. The 2nd Respondent has also filed a reply to the 
Statement of Claim. However, no evidence was led by 
the 2nd Respondent (either documentary or oral) nor 
was any argument addressed by the 2nd Respondent to 
me, although the 2nd Respondent was present at all 
hearings of this arbitration.”
(emphasis added)
The respondent no.2 before the Arbitral Tribunal was Sheil, as can be 
seen from the cause title of the award. Thus, Sheil was represented 
throughout before the Arbitral Tribunal during the hearing of the 
claim of Marico. Therefore, it cannot be said that the first respondent 
herein (Sheil) remained absent. On the contrary, it was present at all 
hearings. Nothing is placed on record to show that simultaneously 
with the arbitral proceedings based on the claim of Marico, any 
meeting or date was fixed by the learned Arbitrator for hearing the 
claim of Sheil. The first meeting on Sheil’s claim was fixed on 11th 
March 2020 when COVID-19 pandemic had already set in.
18.	 The application made by the
first appellant under Section 32(2)(c) 
of the Arbitration Act, in short, raised the following contentions: 
a.	
Sheil did not bother to pursue its claim for eight years after 
filing the statement of claim;
b.	
Sheil did not attend the meeting of 11th March 2020;
c.	
Sheil attended the next meeting held on 12th August 2020 and 
informed the learned Arbitrator that it wished to press its claim 
and
d.	
Sheil has abandoned its claim.
19.	 Sheil filed an affidavit in reply to the said application filed by the 
first appellant. In the reply, a contention has been raised that the 
reference filed by Marico was taken up first and therefore, till the
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award was made on 6th May 2017, there was no requirement on 
the part of Sheil to take any further steps. The affidavit of evidence 
of Mr. Sanjay Patel was affirmed on 16th April 2017 and was kept 
ready. Sheil has pleaded that there was a requirement to change its 
advocate. After Sheil engaged the services of M/s. Markand Gandhi & 
Co., its senior partner fell ill and died on 1st May 2018. As regards the 
meeting held on 11th March 2020, Sheil claimed that it had deputed 
one Mr Utsav Ghosh to attend the meeting. He reached late after 
the meeting dispersed.
20.	 The question is whether Sheil abandoned its claim filed before the 
learned Arbitrator. As stated earlier, Sheil regularly attended meetings 
held to hear Marico’s claim. During the period during which the claim 
of Marico was heard, at no stage, the learned Arbitrator suggested 
that the claim of Sheil could be heard simultaneously. On the contrary, 
from the conduct of the parties and the learned Arbitrator, an inference 
can be drawn that Marico’s claim was given priority. Two meetings 
were convened in March 2020 in connection with Sheil’s claim. In 
March 2020, the COVID-19 was spreading its wings in our country. 
The second meeting in March 2020 was admittedly not held. In any 
case, there is no express abandonment. Even if it is to be implied, 
there must be convincing circumstances on record which lead to 
an inevitable inference about the abandonment. In
the facts of the 
case, there was no abandonment either express or implied. In a 
case where the claim is abandoned, the learned Arbitrator can take 
the view that it would be unnecessary to continue the proceedings 
based on the already abandoned claim. In this case, the inference 
of the abandonment has been drawn by the learned Arbitrator only 
on the grounds that Sheil did not challenge the Marico award and 
took no steps to convene the meeting of the Arbitral Tribunal. The 
failure to challenge the award on Marico’s claim will not amount to 
abandonment of the claim filed by Sheil in January 2012. In the claim 
submitted by Sheil, a prayer was made in the alternative for passing 
an award in terms of money against the first appellant. Therefore, 
we hold that there was absolutely no material on record to conclude 
that Sheil had abandoned its claim or, at least, the claim against 
the first appellant. Till the award dated 6th May 2017 was passed 
in Marico’s claim, Sheil’s representative was always present at all 
hearings till the passing of the award. After the award, the learned 
Arbitrator never convened a meeting to deal with Sheil’s claim until
[2024] 6 S.C.R. 
775
Dani Wooltex Corporation & Ors. v. Sheil Properties Pvt. Ltd. & Anr.
11th March 2020. Hence, the finding of the learned Arbitrator that 
there was abandonment of the claim by the first appellant is not 
based on any documentary or oral evidence on record. The finding 
is entirely illegal. Such a finding could never have been rendered on 
the material before the Arbitral Tribunal. Thus, the learned Arbitrator 
committed illegality. 
21.	 To conclude,
a.	
The power under clause (c) of sub-section (2) of Section 32 of 
the Arbitration Act can be exercised only if, for some reason, 
the continuation of proceedings has become unnecessary or 
impossible. Unless the Arbitral Tribunal records its satisfaction 
based on the material on record that proceedings have become 
unnecessary or impossible, the power under clause (c) of sub-
section (2) of Section 32 cannot be exercised. If the said power 
is exercised casually, it will defeat the very object of enacting 
the Arbitration Act;
b.	
It is the Arbitral Tribunal’s duty to fix a meeting for hearing even 
if parties to the proceedings do not make such a request. It is 
the duty of the Arbitral Tribunal to adjudicate upon the dispute 
referred to it. If, on a date fixed for a meeting/hearing, the 
parties remain absent without any reasonable cause, the Arbitral 
Tribunal can always take recourse to the relevant provisions of 
the Arbitration Act, such as Section 25;
c.	
The failure of the claimant to request the
Arbitral Tribunal to fix 
a date for hearing, per se, is no ground to conclude that the 
proceedings have become unnecessary; and
d.	
The abandonment of the claim by a claimant can be a ground 
to invoke clause (c) of sub-section (2) of Section 32. The 
abandonment of the claim can be either express or implied. 
The abandonment cannot be readily inferred. There is an 
implied abandonment when admitted or proved facts are so 
clinching that the only inference which can be drawn is of the 
abandonment. Only if the established conduct of a claimant 
is such that it leads only to one conclusion that the claimant 
has given up his/her claim can an inference of abandonment 
be drawn. Even if it is to be implied, there must be convincing 
circumstances on record which lead to an inevitable inference
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[2024] 6 S.C.R.
Digital Supreme Court Reports
about the abandonment. Only because a claimant, after filing 
his statement of claim, does not move the Arbitral Tribunal to 
fix a date for the hearing, the failure of the claimant, per se, 
will not amount to the abandonment of the claim.
22.	 Therefore, for the reasons recorded above, we concur with the 
view taken by the learned Single Judge. The appeal is, accordingly, 
dismissed with no order as to costs. As the learned sole Arbitrator 
has withdrawn from the proceedings, the parties shall take necessary 
steps to get the substituted Arbitrator appointed in accordance with 
law.
Headnotes prepared by: Ankit Gyan
Result of the case: 
Appeal dismissed.