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Disputes relating to redemption of mortgage are not arbitrable

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The Plaintiff filed the suit for enforcement of the mortgage and recovery of Rs.17.31 crores.  Defendant Nos. 1 to 4 filed application under Section 8 for reference to arbitration.

Defendant No.1 and partners appointed as developers for re-development of the defendant no.5 society vide Agreements dated 28.2.2014 and 16.3.2021.  The plaintiff extended credit facilities to the defendant no.1.   The defendant no.1 created mortgage of certain rights derived from the Development Agreements in favour of the Plaintiff. The Loan Agreement and the Mortgage contained arbitration clause.

However, there is no arbitration agreement between defendant no.5 society and defendant Nos.1 to 4.   There is no inter-connectivity between the plaintiff and the defendant No.5 society and the dispute between defendant no.5 society and defendant nos.1 to 4.

HELD that the disputes relating to the redemption of mortgage involved in the suit cannot be referred to arbitration in the absence of arbitration clause.  Enforcement of mortgage being a right in rem the same is not arbitrable.

 Judgment dated 9.10.2025 of the High Court of Bombay (OS) in Interim Application (L) No.25700 of 2025 in Commercial Suit (L) No.23360 of 2025 in the matter between Capri Global Capital Limited  Vs.  M/s. Divya Enterprise (Partnership firm) and others

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