A prayer for declaration of title to property is an action in personam, binding only on the parties to the suit under the Specific Relief Act, 1963, and is therefore amenable to arbitration.

PRAYER : Civil Miscellaneous Appeal has been filed under Section 37 (2) (a) of the Arbitration and Conciliation Act, 1996, to set aside the order dated 28.01.2023 passed by the learned Sole Arbitrator in O.P.No.73 of 2021.

JUDGMENT

The above appeal has been filed challenging the order passed by the learned Sole Arbitrator in O.P.No.73 of 2021 dated 28.01.2023, holding that the Arbitral Tribunal lacks Jurisdiction to adjudicate the claim of the appellants/claimants.

2. The brief facts leading to the above appeal are as follows:

(a) The appellants/claimants in their claim petition had inter alia prayed for the following reliefs:

''...(iii) Pass an order Declaring the Item 1 Petition Schedule properties as the 2nd Petitioner's exclusive property,

(iv) Pass an order Declaring the Item 2 Petition Schedule properties as the 1st Petitioner's Firm's property for due apportionment amongst its partners and consequently thereafter

(v) Direct an amount of Rs.69,92,000/- be paid to the 2nd petitioner by the 1st respondent as per Arrear details enumerated in the Item 3 of Petition Schedule, together with interest at 24% p.a. until date of discharge...''

(b) The respondents herein filed an objection under Section 16 of the Arbitration and Conciliation Act, 1996 inter alia stating that the Arbitral Tribunal cannot decide the title of the properties and that the declaration of title touching upon the title of property is an adjudication in rem and therefore, cannot be decided by the learned Sole Arbitrator. The respondents raised other objections as well.

(c) The learned Sole Arbitrator found that prayers - (iii), (iv) and (v) extracted above are claims made in furtherance of actions in rem and not qua the respondents alone and hence, it is not arbitrable. The learned Sole Arbitrator further found that these three prayers cannot severed from the other claims made by the claimants/appellants as they are inextricably linked with each other and hence, the claim is liable to be dismissed.

(d) The learned Arbitrator rejected the other objections which may not be necessary for adjudicating the present appeal.

3. Mr.Sharath Chandran, the learned counsel for the appellants submitted that the prayer for declaration of title cannot be said to be an action in rem. The learned counsel relied upon the Judgment of the Hon’ble Supreme Court in Deccan Paper Mills Company Limited Vs. Regency Mahavir Properties and others reported in (2021) 4 SCC 786 and submitted that the prayer for declaration of title is an action inter parties and thus, is in personam. The learned counsel relied upon the Judgment of the Punjab and Haryana High Court in Ashok Kumar Malhotra and others Vs. Kasturi Lal Malhotra reported in 2012 SCC Online P & H 2002 in support of his submission that all disputes relating to rights in personam are amenable to arbitration. The learned counsel further submitted that this Court in K. Kasinathan and another Vs. N. Umasankar reported in 2019 SCC Online Madras 36244 held that a Decree for declaration of title is not one in rem. The learned counsel also pointed out Section 35 of the Specific Relief Act, 1963. The learned counsel therefore submitted that the prayers (iii) and (iv) which seek declaration of title is an action in personam and therefore, arbitrable.

4. Mr.S.Rajendra Kumar, the learned counsel for the respondents, per contra submitted that the Hon’ble Supreme Court in Vidya Drolia Vs. Durga Trading Corporation reported in (2021) 2 SCC 1 had laid fourfold test to determine whether a dispute is arbitrable; that the Hon'ble Supreme Court held