Case Note & Summary
The petitioners, Sri B.G. Anjanappa and M/s Aryan Hometec Pvt Ltd, filed two writ petitions before the High Court of Karnataka. In W.P. No.8164/2020, they sought a direction to the respondent, Anand Rathi Global Finance Limited, to release/return title documents that were mortgaged under a Mortgage Deed dated 31.05.2017. In W.P. No.8489/2020, they sought to quash an order dated 05.06.2020 recalling a revolving credit facility. The petitioners were represented by Sri Sunil Kumar H, Advocate (NOC). The respondents were Anand Rathi Global Finance Limited and its authorized signatory. The court, presided over by Justice P.B. Bajanthri, heard the matters through video conference. Upon perusal of the petitions and the annexed documents, the court noted that the mortgage deed and the credit facility agreement contained an arbitration clause. The court observed that the disputes between the parties were essentially contractual in nature and that an efficacious alternative remedy of arbitration was available to the petitioners. The court held that writ jurisdiction under Articles 226 and 227 of the Constitution of India should not be exercised when there is an alternative remedy, especially when the parties have agreed to resolve disputes through arbitration. Consequently, the court dismissed both writ petitions as not maintainable, granting the petitioners liberty to invoke the arbitration clause and seek appropriate remedies in accordance with law. The court did not express any opinion on the merits of the case.
Headnote
A) Constitutional Law - Writ Jurisdiction - Alternative Remedy - Availability of Arbitration - Writ petitions under Articles 226 and 227 of the Constitution of India seeking return of title documents and quashing of recall of credit facility were dismissed as not maintainable because the agreements contained an arbitration clause providing an efficacious alternative remedy. The Court held that parties must resort to arbitration as agreed, and writ jurisdiction cannot be invoked to bypass contractual remedies. (Paras 1-3) B) Arbitration Law - Arbitration Agreement - Binding Effect - Section 7 of the Arbitration and Conciliation Act, 1996 - The mortgage deed and credit facility agreement contained an arbitration clause. The Court held that the parties are bound by the arbitration agreement and must seek remedy through arbitration, not through writ petitions. (Paras 1-3)
Issue of Consideration
Whether writ petitions under Articles 226 and 227 of the Constitution of India are maintainable for disputes arising out of a mortgage deed and credit facility agreement containing an arbitration clause.
Final Decision
Both writ petitions are dismissed as not maintainable. Petitioners are at liberty to invoke the arbitration clause and seek appropriate remedy in accordance with law. No opinion on merits.
Law Points
- Writ jurisdiction not maintainable when alternative remedy of arbitration is available
- Arbitration agreement binding on parties
- Courts should not entertain writ petitions when efficacious alternative remedy exists
