The petitioner, who is the defendant in Regular Civil Suit No.545- A/2020 pending before the 6th District Judge, Indore, has invoked the supervisory jurisdiction of this Court under Article 227 of the Constitution of India, assailing the order dated 01.09.2025 passed by the Trial Court, whereby the petitioner's application under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter "the Act of 1996") was dismissed.

2. This petition represents the second round of litigation between the parties. The respondent/plaintiff instituted the aforesaid suit seeking declaration, specific performance, recovery of money, rendition of accounts and consequential reliefs. The petitioner initially filed an application under Order VII Rule 11 of CPC for rejection of the plaint, which was partially Signature Not Verified Signed by: GEETA PRAMOD Signing time: 06-02-2026 11:25:52 NEUTRAL CITATION NO. 2026:MPHC-IND:3496 2 MP-5500-2025 allowed by the Trial Court vide judgement and decree dated 20.01.2021. The respondent challenged the same in First Appeal No.156/2021, which was partially allowed by this Court vide order dated 26.10.2023, setting aside the order dated 20.01.2021 and remanding the matter to the Trial Court for fresh decision, with the specific direction that all objections except those relating to court fees and territorial jurisdiction shall remain open for consideration by the Trial Court.

3. Pursuant to the remand, the petitioner filed the subject application under Section 8 of the Act of 1996 on 20.12.2023, contending that the dispute is governed by an arbitration clause contained in the Memorandum of Understanding (MOU) dated 02.04.2005, which constitutes the principal agreement between the parties. It was urged that subsequent MOUs dated 01.04.2011 and 03.04.2014 are ancillary to the principal transaction, forming part of a composite and interconnected commercial arrangement with a common purpose, and thus the arbitration clause in the principal MOU ought to govern the entire dispute. The respondent opposed the application, relying primarily on the later MOUs dated 01.04.2011 and 03.04.2014, which do not contain an arbitration clause.

4. Learned Trial Court, vide impugned order dated 01.09.2025, dismissed the application under Section 8 of the Act of 1996, holding that no arbitration clause exists in the MOUs relied upon by the respondent/plaintiff, and apparently treating the later MOUs as superseding or standalone documents.

5. Learned counsel for the petitioner submits that Section 8 of the Act Signature Not Verified Signed by: GEETA PRAMOD Signing time: 06-02-2026 11:25:52 NEUTRAL CITATION NO. 2026:MPHC-IND:3496 3 MP-5500-2025 of 1996 is mandatory in character once the existence of a valid arbitration agreement is prima facie established and the subject matter is arbitrable. He contends that the Trial Court erred in not appreciating the composite nature of the transaction. The MOU dated 02.04.2005 is the foundational/principal agreement containing the arbitration clause, and all subsequent transactions/MOUs executed towards fulfillment of the same commercial objective are inextricably linked thereto. Reliance is placed on Ameet Lalchand Shah & Others Vs. Rishabh Enterprises and Another [(2018) 15 SCC 678], wherein the Apex Court extended the arbitration clause in the principal/mother agreement to ancillary agreements in a composite transaction involving multiple interconnected documents. Further reliance is placed on P. R. Shah, Shares and Stock Brokers (P) Ltd. Vs. B.H.H. Securities (P) Ltd. & Ors. [(2012) 1 SCC 594], emphasizing avoidance of multiplicity of proceedings and the efficacy of arbitration in interconnected disputes. It is further argued that the Trial Court's reliance on Gujarat Composite Limited Vs. A. Infrastructure Limited & Ors. [( 2023) 7 SCC 193] and B. L. Kashyap and Sons Ltd. v. Mist Avenue Private Ltd. [2023 SCC OnLine Del 3518] was misplaced. I n Gujarat Composite (supra) , the Apex Court declined reference under Section 8 where the suit involved non- signatories and reliefs partly falling outside the arbitration clause. Similarly, in B.L. Kashyap (supra), the Delhi High Court held that an arbitration clause perishes upon novation by a subsequent agreement lacking such a clause. In the present case, however, the later MOUs do not evince novation but rather supplement the principal transaction without extinguishing the original Signature Not Verified Signed by: GEETA PRAMOD Signing time: 06-02-2026 11:25:52 NEUTRAL CITATION NO. 2026:MPHC-IND:3496 4 MP-5500-2025 arbitration agreement.

6. Per contra, learned counsel for the respondent supports the impugned order and prays for dismissal of the petition.

7. Heard learned counsel for the parties at length and perused the record.

8. Section 8 of the Act of 1996 mandates that where a judicial authority is seized of an action in a matter which is the subject of an arbitration agreement, it shall refer the parties to arbitration unless it finds that the agreement is null and void, inoperative, or incapable of being performed. Post the 2015 Amendment, the scope of judicial examination at this stage is limited to a prima facie determination of the existence of the arbitration agreement. The core issue is whether the arbitration clause in the MOU dated 02.04.2005 extends to the disputes arising from the interconnected transactions evidenced by the subsequent MOUs dated 01.04.2011 and 03.04.2014. Indian jurisprudence recognizes that in cases of composite transactions involving a principal/mother agreement and ancillary/supplementary agreements executed for a common commercial purpose, the arbitration clause in the principal agreement can cover disputes under the ancillary agreements, particularly where the performance of one is dependent on or intertwined with the others. This principle finds support in Ameet Lalchand Shah (supra), where the Apex Court held that in a single commercial project executed through multiple interconnected agreements, the arbitration clause in the main agreement binds the parties across the composite transaction. The impugned order appears to have proceeded Signature Not Verified Signed by: GEETA PRAMOD Signing time: 06-02-2026 11:25:52 NEUTRAL CITATION NO. 2026:MPHC-IND:3496 5 MP-5500-2025 mechanically by focusing solely on the absence of an express arbitration clause in the later MOUs, without adequately examining the inter- connectivity, common purpose, and whether the principal MOU dated 02.04.2005 governs the overarching relationship. The distinction drawn by the petitioner between the present facts and those in Gujarat Composite (supra) (involving non-signatories and non-arbitrable reliefs) and B.L. Kashyap (supra) (clear novation extinguishing the prior clause) is prima facie tenable and warrants deeper consideration.

9. Vide impugned order, the Trial Court has held that any objection regarding arbitration has not been taken by the defendant at any point of time, whereas, the defendant must have filed the said objection within the stipulated time in the light of Article 119 of the Limitation Act, 1963 . Relevant part of the impugned order reads as under :-

10. In the earlier round of litigation, this Court vide order dated 26.10.2023 passed in F.A. No.156/2021 has specifically dealt with the issue regarding applicability of arbitration clause, which has been overlooked by the Trial Court while deciding the matter afresh thereby, committed grave error in passing the impugned order. Relevant part of the said order reads as Signature Not Verified Signed by: GEETA PRAMOD Signing time: 06-02-2026 11:25:52 NEUTRAL CITATION NO. 2026:MPHC-IND:3496 6 MP-5500-2025 under :-

11. In view of the mandate of Section 8 of the Act of 1996 and the settled principles on composite transactions, the Trial Court ought to have referred the parties to arbitration upon prima facie satisfaction of the existence of the arbitration agreement in the principal document, leaving detailed adjudication on issues such as scope, applicability to subsequent MOUs, and arbitrability to the arbitral tribunal under Section 16 of the Act.

NEUTRAL CITATION NO. 2026:MPHC-IND:3496 7 MP-5500-2025

12. Consequently, the petition succeeds. The impugned order dated 01.09.2025 passed by the 6th District Judge, Indore, in RCS No.545-A/2020 is hereby set aside. The application under Section 8 of the Act of 1996 is allowed. The matter is remanded to the Trial Court with the direction to refer the parties to arbitration in accordance with law, after affording them an opportunity of hearing if necessary on any residual procedural aspects.

13. With the aforesaid, present petition stands disposed of.

14. Let a copy of this order be transmitted to the concerned Trial Court forthwith for information and necessary compliance.

(ALOK AWASTHI) JUDGE gp Signature Not Verified Signed by: GEETA PRAMOD Signing time: 06-02-2026 11:25:52