Case Name: Kotak Mahindra Bank Limited v. Maulin Niranjan Patel & Connected Matters
Case Number: Arbitration Application (L) No. 25878 of 2026, along with Arbitration Application (L) Nos. 25676, 25703 and 25784 of 2026.
Date of Judgment: 4 November 2026.
Date of Hearing: 28 October 2026 (Date on which judgment was reserved).
Court: High Court of Judicature at Bombay – Ordinary Original Civil Jurisdiction.
Quorum: Hon’ble Mr. Justice Amit Borkar (Single Judge Bench).
Facts of the Case
Kotak Mahindra Bank Limited made an approach to the Bombay High Court through arbitration applications filed against the four respondents, one of them being Maulin Niranjan Patel, to appoint a sole arbitrator for resolving the dispute that arose from credit card agreements. The Bank claimed that the respondents applied for the credit cards via the digital application process; accepted the Most Important Terms and Conditions (MITC) and the Cardholder Agreement; and used the credit cards for their personal dealings. According to the Bank, the respondents did not repay the outstanding dues. The outstanding amount with respect to Patel was ₹5,46,655.34. Clause 32.2 of the Cardholder Agreement made provisions of arbitration of any dispute arising under the agreement. But the Bank could not produce the original digital application or the electronic records evidencing the respondents’ acceptance of the agreement. This is because the Bank claimed that these records were available only with the former service provider. This raises the question of whether an arbitration agreement can be proved without a signed application evidencing acceptance by credit card.
Legal matters:
- Whether an arbitration agreement can be there in view of Section 7 of Arbitration and Conciliation Act, 1996, without the physical or digital signature of the parties.
- Whether the use of the credit card could constitute acceptance of the Cardholder Agreement when the agreement provides that such use is an acceptable form of acceptance of the same.
- Whether the Bank had provided sufficient written evidence for establishing the presence of an arbitration agreement at the prima facie stage.
- Whether the High Court, in exercising its jurisdiction under Section 11, could consider the authenticity of the digital application and actual use of the credit card in detail.
- Whether the non-presentation of the original digital application and e-acceptance of the same could preclude the case from going to arbitration.
- Whether issues of the authenticity of the agreement, transactions through the credit card and the liability of the respondent would be decided by the High Court or the Arbitral Tribunal.
Legal Provisions:
- Section 7: (Arbitration and Conciliation Act, 1996): Defines what an arbitration agreement is, and makes it obligatory for the same to be in writing, though not necessarily signed physically or digitally all the time.
- Section 7(2): Accepts an arbitration clause in a contract or a separate agreement.
- Section 7(3): Stipulates that an arbitration agreement must be in writing.
- Section 7(4)(a): Accepts an arbitration agreement in a document signed by the parties.
- Section 7(4)(b): Accepts an agreement established through an exchange of letters, telecommunication, or any other form of communication that leaves behind a writing record.
- Section 7(4)(c): Accepts an arbitration agreement in the case its existence is alleged in the pleadings, and is not disputed by the other party.
- Section 7(5): Allows an arbitration clause from another document to form part of the contract if the document referred to in the contract includes such a clause.
- Section 11: Appointment of Arbitrators: Gives power to the Court to appoint an arbitrator and to determine prima facie whether there is an arbitration agreement.
- Section 16: Competence of Arbitral Tribunal: Gives powers to the Arbitral Tribunal to determine
- Section 12(1): Requires a proposed arbitrator to disclose circumstances that may raise justifiable doubts regarding their independence or impartiality.
Arguments:
Applicant: According to the Bank, the respondents had applied for credit cards using digital mode, had agreed upon the Cardholder Agreement and had utilized the credit services. It referred to Clause 2.1 which states that the use of the credit card signifies the acceptance of the agreement, and Clause 32.2 which mentions arbitration. The bank further argues that Section 7 of the Act does not mandate any physical or digital signature and consent may be implied from conduct. It is contended that the earlier digital application record was not available because they were with the erstwhile service provider.
Respondent: The Respondents opposed the appointment of the sole arbitrator. The Bank had not been able to provide the original applications and records showing that they accepted the terms of the Cardholder Agreement. It could not be assumed from this that the respondents had given their consent to such an appointment. The Court made it clear that the objections of the respondents to the appointment of the proposed arbitrator were neither an admission nor a denial of the existence of the arbitration agreement. As no specific statement of defence was submitted to deny the arbitration agreement, the Court had to decide if the Bank’s documentation, account statements and affidavit would suffice to establish such an agreement prima facie. There is no record of any defence for the overdue credit card dues.
Analysis:
The Bombay High Court looked into whether the absence of a signed application would render an arbitration agreement invalid. Section 7 of Arbitration and Conciliation Act, 1996 mandates the agreement to be in writing and does not mandate a signature in all cases, the Court observed. The Court noted that Clause 2.1 and 32.2 of the Cardholder Agreement stipulated that use of the credit card would imply acceptance of the terms of the agreement, including the arbitration clause. The Court felt that the agreement, the account statement, and the affidavit of the authorized representative of the Bank were sufficient to prove the existence of the agreement prima facie in the absence of the digital application. The Court relied on Govind Rubber Ltd. v. Louis Dreyfus Commodities Asia (P) Ltd., wherein the Court held that consent can be established by acts, and A.P. Power Generation Corpn. Ltd. v. Tecpro Systems Ltd. and In Re: Interplay Between Arbitration Agreements under the Arbitration Act, 1996 & Stamp Act, 1899. Thus, it was clear that the explanation offered by the Bank on the absence of record keeping and the digital lending system proposed by RBI as well as the argument related to the matter of public funds would not be able to prove any consent by themselves.
Conclusion:
According to the Bombay High Court, neither a physical nor a digital signature is necessary to prove an arbitration agreement under Section 7. As Clause 2.1 acknowledged the use of credit cards as consent, the applications were admitted by the Court and Mr. Shadab Jan, Advocate, was appointed as the sole arbitrator by it. Yet, it was left to the Arbitral Tribunal to consider the veracity of the digital applications, actual usage of the credit cards, power of transactions and the liability incurred from these transactions. Hence, the Court made it clear that absence of a signature does not amount to fatality, but written consent with prima facie evidence is critical.
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WRITTEN BY; Krittika Sengupta
