SECURITY & FINANCE (P) LTD. & ANR. vs DATTARAYA RAGHAV AGGE & ORS.

The Supreme Court held that Section 35 of the Arbitration Act, 1940 does not prohibit an arbitrator from continuing proceedings after notice of a civil suit is given. The Court clarified that while further proceedings may be rendered invalid, there is no explicit prohibition against the arbitrator continuing the arbitration. The High Court's finding of contempt against the appellants and the arbitrator was erroneous, as conducting an inquiry in good faith does not constitute contempt merely due to the pendency of parallel proceedings.