Rohit Srivastava And Another vs Party(s)

Rohit Srivastava And Another Versus .....Applicant(s) .....Opposite Party(s) Counsel for Applicant(s) Counsel for Opposite Party(s) : Aditya Tewari : Rajesh Chandra Mishra Court No. - 7 HON'BLE JASPREET SINGH, J.

1. Heard learned counsel for the petitioner and Sri Rajesh Chandra Mishra, learned counsel for the respondents.

2. By means of the instant petition, the petitioner seeks appointment of the sole Arbitrator in terms of Section 11(6) of the Arbitration and Conciliation Act, 1996.

3. The contention of the learned counsel for the petitioner is that the petitioner and the respondents had entered into a mortgage agreement with deposit of title deed and in furtherance thereof a sum of rupees seven lacs was advanced by the petitioner to the respondents which was to be repaid in terms of the said mortgage. The said deed of mortgage also contained an arbitration clause indicating that in case of any dispute the same shall be referred to a sole Arbitrator.

4. It is the case of the petitioner that the respondents did not deposit the title deed in terms of the said mortgage nor returned the money and in such circumstances the petitioner had no option but to invoke the arbitration clause and by means of the notice dated 19.7.2024 the petitioner recalled the outstanding amount and also invoked the arbitration clause suggesting the name of a retired District and Sessions Judge who may act as the arbitrator, by e-mail, however the respondents though replied to the said letter but it was only mentioned by the respondent no. 2 that her husband i.e. respondent no. 1 was in the judicial custody and she was not aware of the said deed or the transaction. In the aforesaid backdrop when no further communication took place relating to appointment of a sole Arbitrator, the petitioner has approached this Court.

5. Sri Rajesh Chandra Mishra, learned counsel for the respondents while disputing the aforesaid contentions has urged that the petition itself is not 2 ARBT No. 41 of 2025 maintainable, inasmuch as, a dispute relating to a mortgage is a dispute not in personam but in rem and in light thereof such disputes can only be adjudicated in the regular forum before the civil court and Arbitrator has no jurisdiction and in view thereof the arbitration clause will not survive as all the disputes which arise are from the mortgage deed that would entail that the dispute is non-arbitral, hence no issue of appointing an arbitrator arises in the given circumstances.

6. Refuting the aforesaid submissions, learned counsel for the petitioner has urged that since the matter is primarily in respect of the lending the money and this fact is not disputed by the respondents, hence, the parties who had agreed to get the disputes resolved through arbitration and the Arbitrator can always look into the aspect of the arbitrability coupled with the fact that the issue as to whether the dispute is arbitrable or not in terms of the Section 11(6) of the Act, 1996 and this Court while exercising powers under Section 11(6) of the Act, can only look into the existence of the arbitration clause, the dispute between the parties and whether they are before the correct jurisdictional high court and on all these three counts, the petitioner do qualify to have approached this Court and in such circumstances the sole arbitrator be appointed leaving all contentious issues to be considered before the arbitrator.

7. Having considered the aforesaid submissions and from perusal of the material on record, it is not in dispute that the parties who had entered into an agreement had styled it as mortgage deed(mortgage deed with deposit of title). The Transfer of the Property Act, 1882 describes different type of mortgages and one type of the mortgage also includes the mortgage by deposit of title deeds. Even in the petition filed before this Court on 2.4.2025 and from the notice dated 19.7.2024 it would reveal that the petitioner always accepted and acted upon the said document as mortgage deed.

8. In this regard, it is worthwhile to notice the decision of the Apex Court passed in the case of Booz Allen and Hamilton Inc versus SBI Home Finance Ltd and others reported in (2011) 5 Supreme Court Cases 532. For ready reference, the relevant paragraphs are extracted below :- "35. Arbitral tribunals are private fora chosen voluntarily by the parties to the dispute, to adjudicate their disputes in place of courts and tribunals which are public fora constituted under the laws of the country. Every civil or commercial dispute, either contractual or non-contractual, which can be decided by a court, is in principle capable of being adjudicated and resolved by arbitration unless the jurisdiction of arbitral tribunals is excluded either expressly or by necessary implication. Adjudication of certain categories of proceedings are reserved by the Legislature exclusively for public fora as a matter of public policy. Certain other categories of cases, though not expressly reserved for 3 ARBT No. 41 of 2025 adjudication by a public fora (courts and Tribunals), may by necessary implication stand excluded from the purview of private fora. Consequently, where the cause/dispute is inarbitrable, the court where a suit is pending, will refuse to refer the parties to arbitration, under Section 8 of the Act, even if the parties might have agreed upon arbitration as the forum for settlement of such disputes.

36. The well recognized examples of non-arbitrable disputes are : (i) disputes relating to rights and liabilities which give rise to or arise out of criminal offences; (ii) matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights, child custody; (iii) guardianship matters; (iv) insolvency and winding up matters; (v) testamentary matters (grant of probate, letters of administration and succession certificate); and (vi) eviction or tenancy matters governed by special statutes where the tenant enjoys statutory protection against eviction and only the specified courts are conferred jurisdiction to grant eviction or decide the disputes. XXXXXX 46. An agreement to sell or an agreement to mortgage does not involve any transfer of right in rem but create only a personal obligation. Therefore if specific performance is sought either in regard to an agreement to sell or an agreement to mortgage, the claim for specific performance will be arbitrable. On the other hand, a mortgage is a transfer of a right in rem. A mortgage suit for sale of the mortgaged property is an action in rem, for enforcement of a right in rem. A suit on mortgage is not a mere suit for money. A suit for enforcement of a mortgage being the enforcement of a right in rem, will have to be decided by courts of law and not by arbitral tribunals. XXXXXXX 51. If the three issues referred by the appellant are the only disputes, it may be possible to refer them to arbitration. But a mortgage suit is not only about determination of the existence of the mortgage or determination of the amount due. It is about enforcement of the mortgage with reference to an immovable property and adjudicating upon the rights and obligations of several classes of persons (referred to in para 48.2 above), who have the right to participate in the proceedings relating to the enforcement of the mortgage, vis-a-vis the mortgagor and mortgagee. Even if some of the issues or questions in a mortgage suit (as pointed out by the appellant) are arbitrable or could be decided by a private forum, the issues in a mortgage suit cannot be divided. XXXXXXX 53. Having regard to our finding on question (iv) it has to be held that the suit being one for enforcement of a mortgage by sale, it should be tried by the court and not by an arbitral tribunal. Therefore we uphold the dismissal of the application under Section 8 of the Act, though for different reasons.

9. In the aforesaid paragraphs, it has been held that those disputes which operate in rem cannot be made the subject matter of arbitration which testamentary matters, company matters, inter alia relates 4 ARBT No. 41 of 2025 guardianship, matrimonial and matters relating to mortgage.

10. In this view of the matter where there is no quarrel on the fact that all the rights and liabilities which arise between the parties is in respect of the mortgage deed and the dispute under a mortgage deed cannot be made arbitrable. Hence, where the dispute in itself is not arbitrable, this Court does not find that it would have a jurisdiction to refer the matter to the arbitrator, even by providing that all contentious issues are left open.

11. This can be seen from another angle that is to say that in case if the dispute itself is arbitrable but for certain other contentious issues which arise from the valid transaction that may be left open for the parties to agitate before the Arbitrator but the fact that that if prima facie on the very basis of the averments contained in the petition and the manner in which the petitioner himself has accepted the transaction to be mortgage in such circumstances it cannot be said that this issue remains contentious any more. The petitioner has stated it to be a mortgage and has invoked the jurisdiction of this Court treating it to be a mortgage and in the aforesaid circumstances this Court find that referring the matter for arbitration would be futile in light of the above referred decision of the Apex Court.

12. Accordingly, this Court is not inclined to entertain the petition. The petition is dismissed leaving it open to the petitioner to take recourse as may be available to him under law. September 19, 2025 kanhaiya (Jaspreet Singh,J.) KANHAIYA KUMAR High Court of Judicature at Allahabad, Lucknow Bench

Rohit Srivastava And Another Versus .....Applicant(s) .....Opposite Party(s) Counsel for Applicant(s) Counsel for Opposite Party(s) : Aditya Tewari : Rajesh Chandra Mishra Court No. - 7 HON'BLE JASPREET SINGH, J.

1. Heard learned counsel for the petitioner and Sri Rajesh Chandra Mishra, learned counsel for the respondents.

2. By means of the instant petition, the petitioner seeks appointment of the sole Arbitrator in terms of Section 11(6) of the Arbitration and Conciliation Act, 1996.

3. The contention of the learned counsel for the petitioner is that the petitioner and the respondents had entered into a mortgage agreement with deposit of title deed and in furtherance thereof a sum of rupees seven lacs was advanced by the petitioner to the respondents which was to be repaid in terms of the said mortgage. The said deed of mortgage also contained an arbitration clause indicating that in case of any dispute the same shall be referred to a sole Arbitrator.

4. It is the case of the petitioner that the respondents did not deposit the title deed in terms of the said mortgage nor returned the money and in such circumstances the petitioner had no option but to invoke the arbitration clause and by means of the notice dated 19.7.2024 the petitioner recalled the outstanding amount and also invoked the arbitration clause suggesting the name of a retired District and Sessions Judge who may act as the arbitrator, by e-mail, however the respondents though replied to the said letter but it was only mentioned by the respondent no. 2 that her husband i.e. respondent no. 1 was in the judicial custody and she was not aware of the said deed or the transaction. In the aforesaid backdrop when no further communication took place relating to appointment of a sole Arbitrator, the petitioner has approached this Court.

5. Sri Rajesh Chandra Mishra, learned counsel for the respondents while disputing the aforesaid contentions has urged that the petition itself is not 2 ARBT No. 41 of 2025 maintainable, inasmuch as, a dispute relating to a mortgage is a dispute not in personam but in rem and in light thereof such disputes can only be adjudicated in the regular forum before the civil court and Arbitrator has no jurisdiction and in view thereof the arbitration clause will not survive as all the disputes which arise are from the mortgage deed that would entail that the dispute is non-arbitral, hence no issue of appointing an arbitrator arises in the given circumstances.

6. Refuting the aforesaid submissions, learned counsel for the petitioner has urged that since the matter is primarily in respect of the lending the money and this fact is not disputed by the respondents, hence, the parties who had agreed to get the disputes resolved through arbitration and the Arbitrator can always look into the aspect of the arbitrability coupled with the fact that the issue as to whether the dispute is arbitrable or not in terms of the Section 11(6) of the Act, 1996 and this Court while exercising powers under Section 11(6) of the Act, can only look into the existence of the arbitration clause, the dispute between the parties and whether they are before the correct jurisdictional high court and on all these three counts, the petitioner do qualify to have approached this Court and in such circumstances the sole arbitrator be appointed leaving all contentious issues to be considered before the arbitrator.

7. Having considered the aforesaid submissions and from perusal of the material on record, it is not in dispute that the parties who had entered into an agreement had styled it as mortgage deed(mortgage deed with deposit of title). The Transfer of the Property Act, 1882 describes different type of mortgages and one type of the mortgage also includes the mortgage by deposit of title deeds. Even in the petition filed before this Court on 2.4.2025 and from the notice dated 19.7.2024 it would reveal that the petitioner always accepted and acted upon the said document as mortgage deed.

8. In this regard, it is worthwhile to notice the decision of the Apex Court passed in the case of Booz Allen and Hamilton Inc versus SBI Home Finance Ltd and others reported in (2011) 5 Supreme Court Cases 532. For ready reference, the relevant paragraphs are extracted below :- "35. Arbitral tribunals are private fora chosen voluntarily by the parties to the dispute, to adjudicate their disputes in place of courts and tribunals which are public fora constituted under the laws of the country. Every civil or commercial dispute, either contractual or non-contractual, which can be decided by a court, is in principle capable of being adjudicated and resolved by arbitration unless the jurisdiction of arbitral tribunals is excluded either expressly or by necessary implication. Adjudication of certain categories of proceedings are reserved by the Legislature exclusively for public fora as a matter of public policy. Certain other categories of cases, though not expressly reserved for 3 ARBT No. 41 of 2025 adjudication by a public fora (courts and Tribunals), may by necessary implication stand excluded from the purview of private fora. Consequently, where the cause/dispute is inarbitrable, the court where a suit is pending, will refuse to refer the parties to arbitration, under Section 8 of the Act, even if the parties might have agreed upon arbitration as the forum for settlement of such disputes.

36. The well recognized examples of non-arbitrable disputes are : (i) disputes relating to rights and liabilities which give rise to or arise out of criminal offences; (ii) matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights, child custody; (iii) guardianship matters; (iv) insolvency and winding up matters; (v) testamentary matters (grant of probate, letters of administration and succession certificate); and (vi) eviction or tenancy matters governed by special statutes where the tenant enjoys statutory protection against eviction and only the specified courts are conferred jurisdiction to grant eviction or decide the disputes. XXXXXX 46. An agreement to sell or an agreement to mortgage does not involve any transfer of right in rem but create only a personal obligation. Therefore if specific performance is sought either in regard to an agreement to sell or an agreement to mortgage, the claim for specific performance will be arbitrable. On the other hand, a mortgage is a transfer of a right in rem. A mortgage suit for sale of the mortgaged property is an action in rem, for enforcement of a right in rem. A suit on mortgage is not a mere suit for money. A suit for enforcement of a mortgage being the enforcement of a right in rem, will have to be decided by courts of law and not by arbitral tribunals. XXXXXXX 51. If the three issues referred by the appellant are the only disputes, it may be possible to refer them to arbitration. But a mortgage suit is not only about determination of the existence of the mortgage or determination of the amount due. It is about enforcement of the mortgage with reference to an immovable property and adjudicating upon the rights and obligations of several classes of persons (referred to in para 48.2 above), who have the right to participate in the proceedings relating to the enforcement of the mortgage, vis-a-vis the mortgagor and mortgagee. Even if some of the issues or questions in a mortgage suit (as pointed out by the appellant) are arbitrable or could be decided by a private forum, the issues in a mortgage suit cannot be divided. XXXXXXX 53. Having regard to our finding on question (iv) it has to be held that the suit being one for enforcement of a mortgage by sale, it should be tried by the court and not by an arbitral tribunal. Therefore we uphold the dismissal of the application under Section 8 of the Act, though for different reasons.

9. In the aforesaid paragraphs, it has been held that those disputes which operate in rem cannot be made the subject matter of arbitration which testamentary matters, company matters, inter alia relates 4 ARBT No. 41 of 2025 guardianship, matrimonial and matters relating to mortgage.

10. In this view of the matter where there is no quarrel on the fact that all the rights and liabilities which arise between the parties is in respect of the mortgage deed and the dispute under a mortgage deed cannot be made arbitrable. Hence, where the dispute in itself is not arbitrable, this Court does not find that it would have a jurisdiction to refer the matter to the arbitrator, even by providing that all contentious issues are left open.

11. This can be seen from another angle that is to say that in case if the dispute itself is arbitrable but for certain other contentious issues which arise from the valid transaction that may be left open for the parties to agitate before the Arbitrator but the fact that that if prima facie on the very basis of the averments contained in the petition and the manner in which the petitioner himself has accepted the transaction to be mortgage in such circumstances it cannot be said that this issue remains contentious any more. The petitioner has stated it to be a mortgage and has invoked the jurisdiction of this Court treating it to be a mortgage and in the aforesaid circumstances this Court find that referring the matter for arbitration would be futile in light of the above referred decision of the Apex Court.

12. Accordingly, this Court is not inclined to entertain the petition. The petition is dismissed leaving it open to the petitioner to take recourse as may be available to him under law. September 19, 2025 kanhaiya (Jaspreet Singh,J.) KANHAIYA KUMAR High Court of Judicature at Allahabad, Lucknow Bench