Kotak could not produce the card application, yet Bombay HC finds an arbitration agreement
Justice Amit Borkar held that a missing signature does not mean there is no arbitration agreement, because the cardholder terms drawn up by the bank treat use of the card as acceptance. He appointed a sole arbitrator in four card-default disputes and left every question of proof to the tribunal.
Kotak Mahindra Bank told the Bombay High Court that it could not produce the digital application through which a cardholder had supposedly accepted its terms. The records, it said, were with a former vendor. On 4 November 2026 Justice Amit Borkar still found that an arbitration agreement existed, and appointed a sole arbitrator in four card-default disputes.
The judge relied on a clause in the bank’s own Cardholder Agreement, under which using the card amounts to accepting its terms. He held that a missing signature, physical or digital, does not by itself mean there is no arbitration agreement.
He also made clear that the bank was not excused from proving its case. Every question about the card, the transactions and the amount owed was left to the arbitrator.
Four card defaults, one judgment
Kotak Mahindra Bank Limited filed four applications under Section 11 of the Arbitration and Conciliation Act, 1996. The respondents are Maulin Niranjan Patel, Kaustubh Rajendra Kuwadia, Ziya Ur Rehman and N.V. Srinivas.
The applications raised common questions, so Justice Borkar decided them together and stated the facts of Mr Patel’s case, Arbitration Application (L) No. 25878 of 2026. The judgment records an appearance only for the bank, through Ms Bijal Gogri instructed by GNP Legal.
A credit card and no signed form
The bank said Mr Patel applied for a credit card through its digital process, which generated an Application ID. It said he accepted the Most Important Terms and Conditions and the Cardholder Agreement, was issued a card, used it for personal purposes and stopped paying.
Clause 32 of the Cardholder Agreement contains the arbitration clause. Clause 32.2 refers disputes to arbitration under the 1996 Act, with Mumbai as the venue. Clause 32.3 keeps it alive after the agreement ends.
The bank relied on an affidavit of its authorised representative, Dattatray Jagtap. He swore that the respondent obtained the card digitally, accepted the terms and used the facility.
The bank’s records sit with a vendor
Paragraph 7 of the same affidavit contained an admission. The original digital application, and the electronic record of how the terms were accepted, were not with the bank. They were with its earlier vendor, whose agreement had been terminated, and the bank said it needed time to get them back.
The court noted that the bank had given only the Application ID. It had not produced the screen the respondent allegedly saw, any record of a click or confirmation, or a signed physical form.
The statement of account was a summary. It named Mr Patel as cardholder of a Mojo credit card ending 1165 and showed Rs 5,46,655.34 as the previous statement dues, with no purchases in the current cycle. The individual transactions behind that figure were not shown.
An earlier order of 7 October 2026 had directed the bank to produce a copy of the application bearing the respondent’s physical or digital signature.
What clause 2.1 says about acceptance
The Cardholder Agreement defines an applicant to include anyone who signed the application form, and anyone who signed or used the card. Clause 2.1 then lists the ways of accepting the terms: signing the form, applying online or by e-mail, signing the back of the card, or using the card.
“using the Card constitutes acceptance of the Terms and Conditions of the Cardholder Agreement” (para 7)
On the bank’s own wording, the judge reasoned, a signature on the application is not the only route to acceptance. The bank could not rely on other clauses and ignore clause 2.1. If the respondent used the card, that use had to be read with the clause that treats it as acceptance.
Section 7 and the signature question
Justice Borkar framed the main question this way:
“whether there can be said to be no arbitration agreement between the Applicant Bank and the Respondent only because the Respondent has not put his physical or digital signature on the Credit Card Application” (para 2)
He began with Section 7. An arbitration agreement must be in writing, but the section recognises routes other than a document signed by both parties: an exchange of letters or other telecommunication, an exchange of claim and defence, and a reference to another document containing the clause.
The bank leaned on Govind Rubber Ltd v. Louis Dreyfus Commodities Asia (P) Ltd, (2015) 13 SCC 477. The Supreme Court there held that a party’s failure to sign does not absolve it where a record shows the parties were of one mind. It listed internet purchases, tele purchases, ticket bookings and standard forms as examples.
What Govind Rubber did and did not cover
In Govind Rubber, e-mails showed the buyer acting on the sales contract. Here the bank produced no digital application and no electronic record of acceptance. Justice Borkar still held that the principle reaches a credit card facility.
Two conditions, however, must be met. The identity of the cardholder must be established and there must be a record of the agreement, at least prima facie.
“Some material must be there to show such acceptance.” (para 3)
A bank cannot draft an arbitration clause and make it binding on a customer without showing he accepted it. Equally, the court said, it cannot insist on a form that the law does not require.
How deep a Section 11 court may look
The bank cited A.P. Power Generation Corpn. Ltd v. Tecpro Systems Ltd, (2026) 3 SCC 491, which confines a Section 11 court to a prima facie finding that an arbitration agreement exists. Questions of authority, arbitrability and merits go to the tribunal under Section 16.
The judge also drew on the Constitution Bench’s decision on arbitration agreements and the Stamp Act, reported at (2024) 6 SCC 1. It places the burden of showing the agreement on the party relying on it, but bars a mini-trial.
Read together, he said, the Section 11 court must scrutinise the dealings between the parties without conducting a laborious inquiry. The limited enquiry cannot be used to avoid Section 7, and a bare statement that an agreement exists will not do in every case.
Three circumstances that tipped it
The first was the written Cardholder Agreement itself, with clause 2.1 on acceptance by use and clause 32.2 on arbitration. The second was the statement of account, which tied the card and its outstanding balance to the respondent’s name.
The third was the authorised representative’s sworn statement that the respondent obtained and used the card. The statement showed a balance against the same card and account, even without transaction details.
The vendor explanation counted for little. It might show why the bank could not produce the records, the judge said, but it could not prove consent. Together, the three circumstances gave prima facie support that the facility was obtained and used.
Objection to the arbitrator, and the RBI argument
The respondent had objected by e-mail to the sole arbitrator the bank proposed. The court held that this was neither a denial nor an admission of the agreement. No written defence denying the Cardholder Agreement was before it, so Section 7(4)(c) was not applied.
The bank also pointed to RBI material on digital lending and said the dues were public money. The court said digital-lending directions may explain digital methods but cannot prove that a particular customer accepted a particular arbitration clause. Public money does not remove the need for consent.
What the arbitrator must still decide
The judge said that the earlier direction to produce a signed application did not mean no agreement could exist without one. His finding was limited to a prima facie agreement for Section 11 purposes.
The genuineness of the digital applications, actual use of the cards, authority for individual transactions, correctness of the statements and the amounts claimed were left open under Section 16. The respondents may raise every such objection before the tribunal.
The arbitrator may call for the vendor-held records, the complete transaction history and the record of delivery and activation of the card. If the bank does not produce them when asked, the tribunal is free to consider the effect of that failure.
Order
Mr Shadab Jan, Advocate, was appointed sole arbitrator in each of the four applications, for disputes under the Cardholder Agreement, including claims and counterclaims. The bank’s advocates are to send him a copy of the order within one week.
The arbitrator is requested to send the Section 11(8) disclosure under Section 12(1) within two weeks of receiving the order. The parties are to appear before him for directions on the conduct of the arbitration.
Arbitral costs and fees are to be borne equally by the parties in the first instance, subject to any final award on costs. The findings are for Section 11 only and are not final findings on the merits of the claims or defences.