Arbitral tribunal lacks authority to enforce attachment orders without civil court validation, safeguarding property rights.

JUDGMENT

(Dated this the 12^th day of January 2026)

The petitioner availed a personal loan of 50,000/- from the 3^rd respondent, which subsequently fell into default and consequently, arbitration proceedings were initiated by the respondent as Arb.Ref. No.50/2023. The Arbitrator passed an order dated 12.06.2023 permitting conditional attachment of the petitioner's property. The said order was directly communicated to the Sub Registrar, Chengamanadu, and the Village Officer, Kunnukara, resulting in an entry in the Encumbrance Certificate. Subsequently, the petitioner cleared all outstanding dues payable to the 3^rd respondent and obtained Ext.P3 No Due Certificate confirming that the petitioner has paid all amounts towards the loan account and there is no further amount due from him. However, despite full settlement, the attachment entry continues to subsist in the registration and revenue records, as the authorities have expressed inability to remove it without a court order.

2. This writ petition has been filed by the petitioner seeking a writ of mandamus or any other appropriate writ, order, or direction to the 1^st and 2^nd respondents, to efface and remove the entry of attachment made pursuant to Exhibit P1 Order in the registration and revenue records relating to the petitioner's property comprised in Old Survey No. 464/1-9 of Kunnukara Village, Ernakulam District, within the jurisdiction of the Sub Registrar Office, Chengamanadu.

3. The learned counsel for the petitioner relies on a judgment of a Division Bench of this Court in M/s.Shriram Transport Finance Co. Ltd. v. Saneesha M.S and Ors. [2024 SCC online Ker 5233]

wherein, it was held as follows:

“10. The question is what is the remedy then available for a third party who is aggrieved by an order of attachment. So long as the order is not enforced, the same is not self workable. If it is enforced through a civil court, necessarily, the third party, who is aggrieved can raise his objection against the enforcement or even after the enforcement, the third party can very well raise an objection as against the enforcement by claiming that the property belongs to him. The Code of Civil Procedure provides necessary mechanism for the third party to raise a claim or title over the property. We are of the view that the writ petitioner -Saneesha M S, is not deprived of any remedy as the Code of Civil Procedure safeguard such interest of the third parties. The law is very clear that the tribunal cannot exercise sovereign function of enforcement and such power is vested with civil court. Therefore, writ petitioner - Saneesha M S can very well resist the enforcement or can raise a claim before the civil court when an order is sought to be enforced. So long as it is not enforced, no right of the writ petitioner - Saneesha M S is deprived of to enjoy the property in accordance with law, if the writ petitioner - Saneesha M S is the real owner of the property. As we noted earlier, we have not decided the maintainability of such challenge in appeal before civil court under Section 37 of the Arbitration and Conciliation Act . That will have to be worked out independently as it is not for us to observe whether such appeal is maintainable or not in this proceedings.

11. On conclusion, we are of the view that the arbitral tribunal usurped the power of civil court by directly intimating the order of attachment to the Sub Registrar and the Village Officer. That direction will have to be nullified. Accordingly, we nullify the direction. The Sub Registrar or any revenue officials is not bound by any orders passed by the arbitral tribunal unless such an order is enforced through the civil court. We make it clear that the Sub Registrar or any revenue officials shall not act on the direct intimation of the arbitral tribunal reg