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INTERIM APPLICATION (L) NO. 25700 OF 2025

High Court: Bombay High Court Bench: BOMBAY
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2026-09-21 16:31:14
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Issue of Consideration

Whether the dispute in the Suit for enforcement of mortgage can be referred to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996, in view of the arbitration clause in the Loan and Mortgage Agreements and the presence of non-signatory Defendant No.5.

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Case Details

2025 LawText (BOM) (10) 51

Interim Application (L) No. 25700 of 2025 in Commercial Suit (L) No. 23360 of 2025

2025-10-09

Sandeep V. Marne, J.

2025:BHC-OS:18363

Mr. Nausher Kohli with Ms. Shikha Ginodia, Mr. Gaurav Suryawanshi and Ms. Simran K. i/b M/s ANM Global for the Plaintiff. Mr. Savita Nangare with Mr. Vinod Nagula and Ms. Disha Shah i/b M/s Law Focus For Defendant Nos. 1 to 4 and for Applicant in IA(L) No. 25700 of 2025. Mr. Shanay Shah with Ms. Riya Thakkar i/b Mr. Tushar Goradia for Defendant No.5.

Capri Global Capital Limited

M/s Divya Enterprise (Partnership Firm) and Others

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Nature of Litigation

Application under Section 8 of the Arbitration and Conciliation Act, 1996 seeking reference of disputes in a commercial suit for enforcement of mortgage to arbitration.

Remedy Sought

Defendants Nos. 1 to 4 seek an order referring the disputes raised in the suit to arbitration.

Filing Reason

The Plaintiff filed a suit for recovery of outstanding loan amounts and enforcement of mortgage, which Defendants contend is subject to an arbitration agreement contained in the loan and mortgage agreements.

Issues

Whether a suit for enforcement of mortgage falls within the scope of an arbitration clause in loan and mortgage agreements, and whether such dispute is arbitrable. Whether the presence of Defendant No.5 (Society), a non-signatory to the arbitration agreement, bars reference to arbitration under Section 8 of the Arbitration Act. Whether the court can bifurcate claims and parties while deciding an application under Section 8.

Submissions/Arguments

Defendants: The suit is not maintainable because of the arbitration clause; Plaintiff's claim is a right in personam and arbitrable; the presence of non-signatory Defendant No.5 should not affect reference as the dispute with the society is distinct; claims can be consolidated before a single Arbitral Tribunal. Plaintiff: Enforcement of mortgage is a right in rem and is not arbitrable; under amended Section 8 the court can examine arbitrability; reliance on Booz Allen and Hamilton, Vidya Drolia, and Emaar MGF Land; the suit involves a non-signatory party and specific prayers against it, so partial reference is impermissible under Sukanya Holdings. Defendant No.5: Opposes the application; the subject matter of the suit and the arbitration agreement are distinct; the parties are not identical; reliefs claimed against Defendant No.5 cannot be subject to arbitration; bifurcation is impermissible.

Judgment Excerpts

Defendant Nos.1 to 4 have filed the present Application under Section 8 of the Arbitration Act for reference of the dispute to Arbitrator. Ms. Nangare, the learned counsel appearing for Applicants/ Defendant Nos.1 to 4 would submit that the Suit is not maintainable in view of existence of express Agreement between the parties for resolution of disputes through Arbitrator.

Procedural History

The suit was filed by the Plaintiff. Defendants Nos. 1 to 4 appeared and filed the present Interim Application under Section 8 of the Arbitration Act seeking reference to arbitration. Arguments were heard on 30 September 2025. Judgment reserved and pronounced on 9 October 2025.

Acts & Sections

  • Arbitration and Conciliation Act, 1996: Section 8
  • Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act): Section 13(2)
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arbitration Section 8 application mortgage enforcement arbitrability right in rem non-signatory party SARFAESI loan agreement Bombay High Court commercial suit

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