The main legal point established in the judgment is that claims for the recovery of monies due and outstanding in arbitration do not relinquish the rights of secured creditors to bring the mortgaged property to sale, and the principles guiding the grant of interlocutory reliefs in applications under Section 9 of the Arbitration and Conciliation Act, 1996 must be borne in mind.

Dr. D.Y. Chandrachud, J.

1. Admit. Learned counsel for the Respondents waive service. The appeals are taken up for hearing and final disposal, by consent and on the request of the learned counsel.

2. Both the appeals arise out of a judgment and order of a learned Single Judge dated 5 February 2013 on two petitions which were filed by Tata Capital Financial Services Limited and L & T Finance Limited against the Appellant. The Petitioners before the learned Single Judge under Section 9 of the Arbitration and Conciliation Act, 1996 are the Respondents to the appeals.

3. The claim of Tata Capital Financial Services Limited (`Tata Capital') is Rs.100.86 crores on which interest would be liable to be paid. The dues of L & T Finance Limited (`L & T Finance') are Rs.25.02 crores together with interest. These dues arise out of the credit facilities extended to the Appellant. Tata Capital has invoked the arbitration agreement between the parties and has submitted a claim in the arbitration, which is pending adjudication. L & T Finance has an award dated 15 March 2013 of a sole arbitrator allowing its claim in the amount of Rs.25.02 crores together with interest at the rate of 15% p.a. Although the creditors have mortgages in their favour, the claim in the arbitral proceedings has been restricted to a money claim. No relief for the enforcement of the mortgaged security has been sought in arbitration.

4. On applications under Section 9 of the Arbitration and Conciliation Act, 1996, the learned Single Judge issued the following directions in the two petitions :

Tata Capital :

(i) A direction to the Appellant to furnish security in the amount of Rs.101.71 crores together with further interest;

(ii) Failing (i) above, the appointment of the Court Receiver as Receiver in respect of the mortgaged properties at Exhibit-P and other properties in Exhibit-Q with a direction to appoint the Appellant as an agent on usual terms and conditions of the payment of royalty and/or furnishing security;

(iii) An attachment of bank accounts;

(iv) A disclosure of assets and properties on oath.

L & T Finance :

(i) A direction to furnish security of Rs.25.02 crores together with overdue compensation;

(ii) Failing (i) above, the appointment of the Court Receiver as Receiver in respect of the properties at Exhibit-G, with a direction to appoint the Appellant as agent on usual terms and conditions on payment of royalty and/or furnishing security;

(iii) A disclosure on oath of unencumbered property;

(iv) An injunction against alienation of the properties till the Receiver takes possession.

5. The following submissions have been urged by counsel in the appeals, while assailing the order of the learned Single Judge :

(i) In view of the judgment of the Supreme Court in Booz Allen and Hamilton Inc. Vs. SBI Home Finance Limited and others (20115-SCC-532)the arbitral tribunal would have no jurisdiction to entertain a claim in the nature of a suit for the enforcement of a mortgage since that constitutes an action for the enforcement of a right in rem;

(ii) Once the mortgage claim is given up in the arbitration proceedings, the Respondents take the position of an unsecured creditor and an attachment can be ordered only on a ground contained in Order XXXVIII, Rule 5 of the Code of Civil Procedure, 1908; and

(iii) The extent of the attachment which has been ordered is excessive in comparison with the claim in arbitration.

6. We will deal with each of the three submissions separately. In Booz Allen and Hamilton Inc. (supra), the Supreme Court held that a suit on a mortgage is not a mere suit for recovery of monies but constitutes an action in rem which is to be decided by a Court and not by an arbitral tribunal. The principle which has been laid down is as follows:

"An agreement to sell or an agreement to mortgage does not involve any transfer of right in rem but creates only a personal obligation. Therefore if specific performance is sought either in