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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
SANDEEP V.MARNE
In the matter between : Capri Global Capital Limited – Appellant
Versus
Divya Enterprise (Partnership Firm ) – Respondent
SANDEEP V. MARNE, J.
1) The Defendants have filed the present Application for reference of the dispute in the Suit to Arbitration.
2) Plaintiff has filed the present Suit for enforcement of mortgage under Section 8 of the Arbitration and Conciliation Act, 1996 (the Arbitration Act). Defendant Nos.1 to 4 have appeared in the Suit and have filed the present Application seeking reference of dispute raised in the Suit to Arbitration under the provisions of Section 8 of the Arbitration Act. Defendant No.1 and his partners are developers appointed for redevelopment of Defendant No.5- Society under Development Agreement dated 28 February 2014 and Supplemental Development Agreement dated 16 March 2021. Plaintiff extended various credit facilities to Defendant No.1 under various loans/facility Agreements as security. Defendant No.1 created mortgage in favour of the Plaintiff in respect of certain rights derived under the Development Agreement. According to Defendant Nos.1 to 4, Clause-34 of the Loan Agreements and Clause-24 of the Indenture of Mortgage contains clause for resolution of disputes through Arbitration. Accordingly, Defendant Nos.1 to 4 have filed the present Application
Suits involving the enforcement of mortgages constitute non-arbitrable rights in rem, necessitating resolution through public courts rather than arbitration.
Arbitration agreements remain enforceable despite allegations of fraud unless serious fraud is established, which requires evidential assessment outside arbitration proceedings.
Disputes capable of being adjudicated by the Civil Court are generally amenable to arbitration, unless expressly excluded. The importance of appointing an eligible arbitrator was also emphasized.
Arbitral Tribunal is competent to decide on its own competence – Plea of fraud must be serious in nature in order to oust jurisdiction of Arbitrator.
The court held that the dispute was arbitrable despite the existence of a statutory remedy under the Real Estate (Regulation and Development) Act, and appointed a single Arbitrator to settle the disp....
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