Gopaldas Estates And Housing Pvt. ... vs Indusind Bank Limited
2006 Latest Caselaw 1095 Del

JUDGMENT

Vikramajit Sen, J.

1. This is a Suit for the grant of a mandatory injunction directing the Defendants to release and deliver to the Plaintiff the original Title Deeds in respect of land measuring 8.17 acres at Ardee City, Gurgaon. It is not in dispute that the Plaintiff had availed of various financial facilities and loans from the Defendant in connection with which this land was pledged to the Defendant as collateral. However, it also stands admitted that all dues against those financial transactions stand squared and fully paid up.

2. Learned Counsel for the Defendant contends that the Plaintiff is holding a sum of Rs. 3,00,00,000/- (Rupees Three Crores Only) by way of Security with regard to the Lease Agreement entered into between the parties. The Defendant is the Lessee of the Plaintiff. As per registered Lease Deed the aforementioned sum of Rs. 3,00,00,000/- (Rupees Three Crores Only) had been furnished as a Security by the Defendant. The contention of learned Counsel for the Defendant is that till such time as this Security remains in the hands of the Plaintiff, a right to retain the Title Deeds accrues in favor of the Defendant.

3. There are distinct transactions between the parties. The collateral of the land was given in respect of financial arrangements/loans extended by the Defendant to the Plaintiff. As soon as the outsandings connected with those transactions stand squared, there will be no justification for retaining possession of the Title Deeds which was offered as security for those loans.

4. In the course of these proceedings an application under Section 8 of the Arbitration and Conciliation Act, 1996, being IA No. 7498/2005, has been filed by the Defendant. A reading of the statute makes it palpably clear that an application under Section 8 can only be brought in respect of an action pending before the Court/Judicial Authority which is the subject matter of an arbitration clause. The action that is pending before this Court pertains to the financial transactions and not in any aspect of the Lease Agreement which contains the arbitration clause. If a dispute exists between the parties pertaining to the Lease Agreement that dispute must be raised in accordance with law and in distinct proceedings a prayer for initiation of arbitral proceedings should be preferred.

5. In view of the admission of the Defendant that there are no outstandings against the Plaintiff in respect of the loans extended by the Defendant to the Plaintiff, the Suit deserves to be decreed forthwith.

6. Mr. Mukul Rohtagi, learned Senior Counsel for the Plaintiff has submitted that upon the return by the Defendant of the subject Title Deeds to the Plaintiff, the latter shall hold them as the Receiver of this Court, for a period of sixty days. This shall, in my view, adequately safeguard the interest of the Defendant Bank, should they initiate steps in the way of arbitral proceedings.

7. The Suit is decreed with the issuance of a direction to the Defendant to release and deliver to the Plaintiff the original Title Deeds in respect of the land measuring 8.17 acres at Ardee City, Gurgaon within a period of fifteen days from today. In the circumstances of the case costs shall be borne by the parties themselves.

8. IA No. 7498/2005, under Section 8 of the Arbitration and Conciliation Act, 1996, is rejected with liberty to file a fresh application if the cause of action warrants.